Chapter Two : Actual or Compensatory Damages
G.R. No. L-11037 December 29, 1960
EDGARDO CARIAGA, ET AL., plaintiffs-appellants, vs.
LAGUNA TAYABAS BUS COMPANY, defendant-appellant. MANILA RAILROAD
COMPANY, defendant-appellee.
DIZON, J.:
At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the Laguna Tayabas Bus Co. — hereinafter
referred to as the LTB — driven by Alfredo Moncada, left its station at Azcarraga St., Manila, for
Lilio, Laguna, with Edgardo Cariaga, a fourth-year medical student of the University of Santo
Tomas, as one of its passengers. At about 3:00 p.m., as the bus reached that part of the
poblacion of Bay, Laguna, where the national highway crossed a railroad track, it bumped
against the engine of a train then passing by with such terrific force that the first six wheels of the
latter were derailed, the engine and the front part of the body of the bus was wrecked, the driver
of the bus died instantly, while many of its passengers, Edgardo among them, were severely
injured. Edgardo was first confined at the San Pablo City Hospital from 5:00 p.m., June 18, 1952,
to 8:25 a.m., June 20 of the same year when he was taken to the De los Santos Clinic, Quezon
City. He left that clinic on October 14 to be transferred to the University of Santo Tomas Hospital
where he stayed up to November 15. On this last date he was taken back to the De los Santos
Clinic where he stayed until January 15, 1953. He was unconscious during the first 35 days after
the accident; at the De los Santos Clinic Dr. Gustilo removed the fractured bones which
lacerated the right frontal lobe of his brain and at the University of Santo Tomas Hospital Dr.
Gustilo performed another operation to cover a big hole on the right frontal part of the head with
a tantalum plate.
The LTB paid the sum of P16,964.45 for all the hospital, medical and miscellaneous expenses
incurred from June 18, 1952 to April, 1953. From January 15, 1953 up to April of the same year
Edgardo stayed in a private house in Quezon, City, the LTB having agreed to give him a
subsistence allowance of P10.00 daily during his convalescence, having spent in this connection
the total sum of P775.30 in addition to the amount already referred to.
On April 24, 1953 the present action was filed to recover for Edgardo Cariaga, from the LTB and
the MRR Co., and total sum of P312,000.00 as actual, compensatory, moral and exemplary
damages, and for his parents, the sum of P18,00.00 in the same concepts. The LTB disclaimed
liability claiming that the accident was due to the negligence of its co-defendant, the Manila
Railroad Company, for not providing a crossing bar at the point where the national highway
crossed the railway track, and for this reason filed the corresponding cross-claim against the
latter company to recover the total sum of P18,194.75 representing the expenses paid to
Edgardo Cariaga. The Manila Railroad Company, in turn, denied liability upon the complaint and
cross-claim alleging that it was the reckless negligence of the bus driver that caused the
accident.
The lower court held that it was the negligence of the bus driver that caused the accident and, as
a result, rendered judgment sentencing the LTB to pay Edgardo Cariaga the sum of P10,490.00
as compensatory damages, with interest at the legal rate from the filing of the complaint, and
dismissing the cross-claim against the Manila Railroad Company. From this decision the
Cariagas and the LTB appealed.
Page | 1
The Cariagas claim that the trial court erred: in awarding only P10,490.00 as compensatory
damages to Edgardo; in not awarding them actual and moral damages, and in not sentencing
appellant LTB to pay attorney's fees.
On the other hand, the LTB's principal contention in this appeal is that the trial court should have
held that the collision was due to the fault of both the locomotive driver and the bus driver and
erred, as a consequence, in not holding the Manila Railroad Company liable upon the cross-
claim filed against it.
We shall first dispose of the appeal of the bus company. Its first contention is that the driver of
the train locomotive, like the bus driver, violated the law, first, in sounding the whistle only when
the collision was about to take place instead of at a distance at least 300 meters from the
crossing, and second, in not ringing the locomotive bell at all. Both contentions are without
merits.
After considering the evidence presented by both parties the lower court expressly found:
. . . While the train was approximately 300 meters from the crossing, the engineer
sounded two long and two short whistles and upon reaching a point about 100 meters
from the highway, he sounded a long whistle which lasted up to the time the train was
about to cross it. The bus proceeded on its way without slackening its speed and it
bumped against the train engine, causing the first six wheels of the latter to be derailed.
xxx xxx xxx
. . . that the train whistle had been sounded several times before it reached the
crossing. All witnesses for the plaintiffs and the defendants are uniform in stating that
they heard the train whistle sometime before the impact and considering that some of
them were in the bus at the time, the driver thereof must have heard it because he was
seated on the left front part of the bus and it was his duty and concern to observe such
fact in connection with the safe operation of the vehicle. The other L.T.B. bus which
arrived ahead at the crossing, heeded the warning by stopping and allowing the train to
pass and so nothing happened to said vehicle. On the other hand, the driver of the bus
No. 133 totally ignored the whistle and noise produced by the approaching train and
instead he tried to make the bus pass the crossing before the train by not stopping a
few meters from the railway track and in proceeding ahead.
The above findings of the lower court are predicated mainly upon the testimony of Gregorio
Ilusondo, a witness for the Manila Railroad Company. Notwithstanding the efforts exerted by the
LTB to assail his credibility, we do not find in the record any fact or circumstance sufficient to
discredit his testimony. We have, therefore, no other alternative but to accept the findings of the
trial court to the effect, firstly, that the whistle of locomotive was sounded four times — two long
and two short — "as the train was approximately 300 meters from the crossing"; secondly, that
another LTB bus which arrived at the crossing ahead of the one where Edgardo Cariaga was a
passenger, paid heed to the warning and stopped before the "crossing", while — as the LTB
itself now admits (Brief p. 5) — the driver of the bus in question totally disregarded the warning.
Chapter Two : Actual or Compensatory Damages Page | 2
But to charge the MRR Co. with contributory negligence, the LTB claims that the engineer of the
locomotive failed to ring the bell altogether, in violation of the section 91 of Article 1459,
incorporated in the charter of the said MRR Co. This contention — as is obvious — is the very
foundation of the cross-claim interposed by the LTB against its co-defendant. The former,
therefore, had the burden of proving it affirmatively because a violation of law is never
presumed. The record discloses that this burden has not been satisfactorily discharged.
The Cariagas, as appellants, claim that the award of P10,000.00 compensatory damages to
Eduardo is inadequate considering the nature and the after effects of the physical injuries
suffered by him. After a careful consideration of the evidence on this point we find their
contentions to be well-founded.
From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that, as a result of the
injuries suffered by Edgardo, his right forehead was fractured necessitating the removal of
practically all of the right frontal lobe of his brain. From the testimony of Dr. Jose A. Fernandez, a
psychiatrist, it may be gathered that, because of the physical injuries suffered by Edgardo, his
mentality has been so reduced that he can no longer finish his studies as a medical student; that
he has become completely misfit for any kind of work; that he can hardly walk around without
someone helping him, and has to use a brace on his left leg and feet.
Upon the whole evidence on the matter, the lower court found that the removal of the right frontal
lobe of the brain of Edgardo reduced his intelligence by about 50%; that due to the replacement
of the right frontal bone of his head with a tantalum plate Edgardo has to lead a quite and retired
life because "if the tantalum plate is pressed in or dented it would cause his death."
The impression one gathers from this evidence is that, as a result of the physical injuries
suffered by Edgardo Cariaga, he is now in a helpless condition, virtually an invalid, both
physically and mentally.
Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the obligor,
guilty of a breach of contract but who acted in good faith, is liable shall be those that are the
natural and probable consequences of the breach and which the parties had forseen or could
have reasonably forseen at the time the obligation was constituted, provided such damages,
according to Art. 2199 of the same Code, have been duly proved. Upon this premise it claims
that only the actual damages suffered by Edgardo Cariaga consisting of medical, hospital and
other expenses in the total sum of P17,719.75 are within this category. We are of the opinion,
however, that the income which Edgardo Cariaga could earn if he should finish the medical
course and pass the corresponding board examinations must be deemed to be within the same
category because they could have reasonably been foreseen by the parties at the time he
boarded the bus No. 133 owned and operated by the LTB. At that time he was already a fourth-
year student in medicine in a reputable university. While his scholastic may not be first rate
(Exhibits 4, 4-A to 4-C), it is, nevertheless, sufficient to justify the assumption that he could have
passed the board test in due time. As regards the income that he could possibly earn as a
medical practitioner, it appears that, according to Dr. Amado Doria, a witness for the LTB, the
amount of P300.00 could easily be expected as the minimum monthly income of Edgardo had he
finished his studies.
Upon consideration of all the facts mentioned heretofore this Court is of the opinion, and so
holds, that the compensatory damages awarded to Edgardo Cariaga should be increased to
P25,000.00.
Edgardo Cariaga's claim for moral damages and attorney's fees was denied by the trial court,
the pertinent portion of its decision reading as follows:
Plaintiffs' claim for moral damages cannot also be granted. Article 2219 of the Civil
Code enumerates the instances when moral damages may be covered and the case
under consideration does not fall under any one of them. The present action cannot
come under paragraph 2 of said article because it is not one of the quasi-delict and
cannot be considered as such because of the pre-existing contractual relation between
the Laguna Tayabas Bus Company and Edgardo Cariaga. Neither could defendant
Laguna Tayabas Bus Company be held liable to pay moral damages to Edgardo
Cariaga under Article 2220 of the Civil Code on account of breach of its contract of
carriage because said defendant did not act fraudulently or in bad faith in connection
therewith. Defendant Laguna Tayabas Bus Company had exercised due diligence in the
selection and supervision of its employees like the drivers of its buses in connection
with the discharge of their duties and so it must be considered an obligor in good faith.
The plaintiff Edgardo Cariaga is also not entitled to recover for attorney's fees, because
this case does not fall under any of the instances enumerated in Article 2208 of the Civil
Code.
We agree with the trial court and, to the reason given above, we add those given by this Court in
Cachero vs. Manila Yellow Taxicab Co., Inc.(101 Phil., 523, 530, 533):
A mere perusal of plaintiff's complaint will show that this action against the defendant is
predicated on an alleged breach of contract of carriage, i.e., the failure of the
defendants to bring him "safely and without mishaps" to his destination, and it is to be
noted that the chauffeur of defendant's taxicab that plaintiff used when he received the
injuries involved herein, Gregorio Mira, has not even made a party defendant to this
case.
Considering, therefore, the nature of plaintiff's action in this case, is he entitled to
compensation for moral damages? Article 2219 of the Civil Code says the following:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
Chapter Two : Actual or Compensatory Damages
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35. xxx
xxx xxx
Of course enumerated in the just quoted Article 2219 only the first two may have any
bearing on the case at bar. We find, however, with regard to the first that the defendant
herein has not committed in connection with this case any "criminal offense resulting in
physical injuries". The one that committed the offense against the plaintiff is Gregorio
Mira, and that is why he has been already prosecuted and punished therefor. Altho (a)
owners and managers of an establishment and enterprise are responsible for damages
caused by their employees in the service of the branches in which the latter are
employed or on the occasion of their functions; (b) employers are likewise liable for
damages caused by their employees and household helpers acting within the scope of
their assigned task (Article 218 of the Civil Code); and (c) employers and corporations
engaged in any kind of industry are subsidiary civilly liable for felonies committed by
their employees in the discharge of their duties (Art. 103, Revised Penal Code), plaintiff
herein does not maintain this action under the provisions of any of the articles of the
codes just mentioned and against all the persons who might be liable for the damages
caused, but as a result of an admitted breach of contract of carriage and against the
defendant employer alone. We, therefore, hold that the case at bar does not come
within the exception of paragraph 1, Article 2219 of the Civil Code.
The present complaint is not based either on a "quasi-delict causing physical injuries"
(Art. 2219, par. 2 of the Civil Code). From the report of the Code Commission on the
new Civil Code. We copy the following:
A question of nomenclature confronted the Commission. After a careful deliberation, it
was agreed to use the term "quasi-delict" for those obligations which do not arise from
law, contracts, quasi-contracts, or criminal offenses. They are known in Spanish legal
treaties as "culpa aquiliana", "culpa-extra-contractual" or "cuasi-delitos". The phrase
"culpa-extra-contractual" or its translation "extra-contractual-fault" was eliminated
because it did not exclude quasi-contractual or penal obligations. "Aquilian fault" might
have been selected, but it was thought inadvisable to refer to so ancient a law as the
"Lex Aquilia". So "quasi-delict" was chosen, which more nearly corresponds to the
Roman Law classification of the obligations and is in harmony with the nature of this
kind of liability.
The Commission also thought of the possibility of adopting the word "tort" from Anglo-
American law. But "tort" under that system is much broader than the Spanish-Philippine
concept of obligations arising from non-contractual negligence. "Tort" in Anglo-American
jurisprudence includes not only negligence, but also intentional criminal act, such as
assault and battery, false imprisonment and deceit. In the general plan of the Philippine
legal system, intentional and malicious acts are governed by the Penal Code, although
certain exceptions are made in the Project. (Report of the Code Commission, pp. 161-
162).
Page | 3
In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We established the distinction
between obligation derived from negligence and obligation as a result of a breach of
contract. Thus, we said:
It is important to note that the foundation of the legal liability of the defendant is the
contract of carriage, and that the obligation to respond for the damage which plaintiff
has suffered arises, if at all, from the breach of that contract by reason of the failure of
defendant to exercise due care in its performance. That is to say, its liability is direct
and immediate, differing essentially in the legal viewpoint from the presumptive
responsibility for the negligence of its servants, imposed by Article 1903 of the Civil
Code (Art. 2180 of the new), which can be rebutted by proof of the exercise of due care
in their selection of supervision. Article 1903 is not applicable to obligations arising EX
CONTRACTU, but only to extra-contractual obligations — or to use the technical form
of expression, that article relates only to CULPA AQUILIANA' and not to CULPA
CONTRACTUAL.lawphil.net
The decisions in the cases of Castro vs. Acro Taxicab Co., (82 Phil., 359; 46 Off. Gaz.,
No. 5, p. 2023); Lilius, et al. vs. Manila Railroad, 59 Phil., 758) and others, wherein
moral damages were awarded to the plaintiffs, are not applicable to the case at bar
because said decision were rendered before the effectivity of the new Civil Code
(August 30, 1950) and for the further reason that the complaints filed therein were
based on different causes of action.
In view of the foregoing the sum of P2,000 was awarded as moral damages by the trial
court has to be eliminated, for under the law it is not a compensation awardable in a
case like the one at bar.
What has been said heretofore relative to the moral damages claimed by Edgardo Cariaga
obviously applies with greater force to a similar claim (4th assignment of error) made by his
parents.
The claim made by said spouses for actual and compensatory damages is likewise without
merits. As held by the trial court, in so far as the LTB is concerned, the present action is based
upon a breach of contract of carriage to which said spouses were not a party, and neither can
they premise their claim upon the negligence or quasi-delict of the LTB for the simple reason that
they were not themselves injured as a result of the collision between the LTB bus and train
owned by the Manila Railroad Company.
Wherefore, modified as above indicated, the appealed judgement is hereby affirmed in all other
respects, with costs against appellant LTB.
Chapter Two : Actual or Compensatory Damages
G.R. No. L-25499 February 18, 1970
VILLA REY TRANSIT, INC., petitioner, vs.
THE COURT OF APPEALS, TRINIDAD A. QUINTOS, PRIMA A. QUINTOS, AND JULITA A.
QUINTOS, respondents.
CONCEPCION, C.J.:
Petitioner, Villa Rey Transit, Inc., seeks the review by certiorari of a decision of the Court of
Appeals affirming that of the Court of First Instance of Pangasinan. The basic facts are set forth
in said decision of the Court of Appeals, from which We quote:
At about 1:30 in the morning of March 17, 1960, an Izuzu First Class passenger bus
owned and operated by the defendant, bearing Plate No. TPU-14871-Bulacan and
driven by Laureano Casim, left Lingayen, Pangasinan, for Manila. Among its paying
passengers was the deceased, Policronio Quintos, Jr. who sat on the first seat, second
row, right side of the bus. At about 4:55 o'clock a.m. when the vehicle was nearing the
northern approach of the Sadsaran Bridge on the national highway in barrio Sto.
Domingo, municipality of Minalin, Pampanga, it frontally hit the rear side of a bullcart
filled with hay. As a result the end of a bamboo pole placed on top of the hayload and
tied to the cart to hold it in place, hit the right side of the windshield of the bus. The
protruding end of the bamboo pole, about 8 feet long from the rear of the bullcart,
penetrated through the glass windshield and landed on the face of Policronio Quintos,
Jr. who, because of the impact, fell from his seat and was sprawled on the floor. The
pole landed on his left eye and the bone of the left side of his face was fractured. He
suffered other multiple wounds and was rendered unconscious due, among other
causes to severe cerebral concussion. A La Mallorca passenger bus going in the
opposite direction towards San Fernando, Pampanga, reached the scene of the mishap
and it was stopped by Patrolman Felino Bacani of the municipal police force of Minalin
who, in the meantime, had gone to the scene to investigate. Patrolman Bacani placed
Policronio Quintos, Jr. and three other injured men who rode on the bullcart aboard the
La Mallorca bus and brought them to the provincial hospital of Pampanga at San
Fernando for medical assistance. Notwithstanding such assistance, Policronio Quintos,
Jr. died at 3:15 p.m. on the same day, March 17, 1960, due to traumatic shock due to
cerebral injuries.
The private respondents, Trinidad, Prima and Julita, all surnamed Quintos, are the sisters and
only surviving heirs of Policronio Quintos Jr., who died single, leaving no descendants nor
ascendants. Said respondents herein brought this action against herein petitioner, Villa Rey
Transit, Inc., as owner and operator of said passenger bus, bearing Plate No. TPU-14871-
Bulacan, for breach of the contract of carriage between said petitioner and the deceased
Policronio Quintos, Jr., to recover the aggregate sum of P63,750.00 as damages, including
attorney's fees. Said petitioner — defendant in the court of first instance — contended that the
mishap was due to a fortuitous event, but this pretense was rejected by the trial court and the
Court of Appeals, both of which found that the accident and the death of Policronio had been due
to the negligence of the bus driver, for whom petitioner was liable under its contract of carriage
with the deceased. In the language of His Honor, the trial Judge:
Page | 4
The mishap was not the result of any unforeseeable fortuitous event or emergency but
was the direct result of the negligence of the driver of the defendant. The defendant
must, therefore, respond for damages resulting from its breach of contract for carriage.
As the complaint alleged a total damage of only P63,750.00 although as elsewhere
shown in this decision the damages for wake and burial expenses, loss of income,
death of the victim, and attorneys fee reach the aggregate of P79,615.95, this Court
finds it just that said damages be assessed at total of only P63,750.00 as prayed for in
plaintiffs' amended complaint.
The despositive part of the decision of the trial Court reads:
WHEREFORE, judgment is hereby rendered ordering the defendant to pay to the
plaintiffs the amount of P63,750.00 as damages for breach of contract of carriage
resulting from the death of Policronio Quintos, Jr.
which, as above indicated, was affirmed by the Court of Appeals. Hence, the present petition for
review on certiorari, filed by Villa Rey Transit, Inc.
The only issue raised in this appeal is the amount of damages recoverable by private
respondents herein. The determination of such amount depends, mainly upon two (2) factors,
namely: (1) the number of years on the basis of which the damages shall be computed and (2)
the rate at which the losses sustained by said respondents should be fixed.
The first factor was based by the trial court — the view of which was concurred in by the Court of
Appeals — upon the life expectancy of Policronio Quintos, Jr., which was placed at 33-1/3 years
— he being over 29 years of age (or around 30 years for purposes of computation) at the time of
his demise — by applying the formula (2/3 x [80-301 = life expectancy) adopted in the American
Expectancy Table of Mortality or the actuarial of Combined Experience Table of Mortality. Upon
the other hand, petitioner maintains that the lower courts had erred in adopting said formula and
in not acting in accordance with Alcantara v. Surro1 in which the damages were computed on a
four (4) year basis, despite the fact that the victim therein was 39 years old, at the time of his
death, and had a life expectancy of 28.90 years.
The case cited is not, however, controlling in the one at bar. In the Alcantara case, none of the
parties had questioned the propriety of the four-year basis adopted by the trial court in making its
award of damages. Both parties appealed, but only as regards the amount thereof. The plaintiffs
assailed the non-inclusion, in its computation, of the bonus that the corporation, which was the
victim's employer, had awarded to deserving officers and employees, based upon the profits
earned less than two (2) months before the accident that resulted in his death. The defendants,
in turn, objected to the sum awarded for the fourth year, which was treble that of the previous
years, based upon the increases given, in that fourth year, to other employees of the same
corporation. Neither this objection nor said claim for inclusion of the bonus was sustained by this
Court. Accordingly, the same had not thereby laid down any rule on the length of time to be used
in the computation of damages. On the contrary, it declared:
The determination of the indemnity to be awarded to the heirs of a deceased person
has therefore no fixed basis. Much is left to the discretion of the court considering the
Chapter Two : Actual or Compensatory Damages Page | 5

moral and material damages involved, and so it has been said that "(t)here can be no
exact or uniform rule for measuring the value of a human life and the measure of
damages cannot be arrived at by precise mathematical calculation, but the amount
recoverable depends on the particular facts and circumstances of each case. The life
expectancy of the deceased or of the beneficiary, whichever is shorter, is an important
factor.' (25 C.J.S. 1241.) Other factors that are usually considered are: (1) pecuniary
loss to plaintiff or beneficiary (25 C.J.S. 1243-1250) ; (2) loss of support (25 C.J.S.,
1250-1251); (3) loss of service (25 C.J.S. 1251-1254); (4) loss of society (25 C.J.S.
1254-1255); (5) mental suffering of beneficiaries (25 C.J.S., 1258-1259) ; and (6)
medical and funeral expenses (26 C.J.S., 1254-1260)."2
Thus, life expectancy is, not only relevant, but, also, an important element in fixing the amount
recoverable by private respondents herein. Although it is not the sole element determinative of
said amount, no cogent reason has been given to warrant its disregard and the adoption, in the
case at bar, of a purely arbitrary standard, such as a four-year rule. In short, the Court of Appeals
has not erred in basing the computation of petitioner's liability upon the life expectancy of
Policronio Quintos, Jr.
All things considered, We are of the opinion that it is fair and reasonable to fix the deductible
living and other expenses of the deceased at the sum of P1,184.00 a year, or about P100.00 a
month, and that, consequently, the loss sustained by his sisters may be roughly estimated at
P1,000.00 a year or P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of
P33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts. 104 and 107 of the
Revised Penal Code, in relation to Article 2206 of our Civil Code, as construed and applied by
this Court;8 (b) P1,727.95, actually spent by private respondents for medical and burial
expenses; and (c) attorney's fee, which was fixed by the trial court, at P500.00, but which, in
view of the appeal taken by petitioner herein, first to the Court of Appeals and later to this
Supreme Court, should be increased to P2,500.00. In other words, the amount adjudged in the
decision appealed from should be reduced to the aggregate sum of P49,561.28, with interest
thereon, at the legal rate, from December 29, 1961, date of the promulgation of the decision of
the trial court.
Thus modified, said decision and that of the Court of Appeals are hereby affirmed, in all other
respects, with costs against petitioner, Villa Rey Transit, Inc. It is so ordered.

With respect to the rate at which the damages shall be computed, petitioner impugns the
decision appealed from upon the ground that the damages awarded therein will have to be
paid now, whereas most of those sought to be indemnified will be suffered years later. This
argument is basically true, and this is, perhaps, one of the reasons why the Alcantara case
points out the absence of a "fixed basis" for the ascertainment of the damages recoverable in
litigations like the one at bar. Just the same, the force of the said argument of petitioner herein is
offset by the fact that, although payment of the award in the case at bar will have to take place
upon the finality of the decision therein, the liability of petitioner herein had been fixed at the rate
only of P2,184.00 a year, which is the annual salary of Policronio Quintos, Jr. at the time of his
death, as a young "training assistant" in the Bacnotan Cement Industries, Inc. In other words,
unlike the Alcantara case, on which petitioner relies, the lower courts did not consider, in the
present case, Policronio's potentiality and capacity to increase his future income. Indeed, upon
the conclusion of his training period, he was supposed to have a better job and be promoted
from time to time, and, hence, to earn more, if not — considering the growing importance of
trade, commerce and industry and the concomitant rise in the income level of officers and
employees
therein — much more.

At this juncture, it should be noted, also, that We are mainly concerned with the determination of
the losses or damages sustained by the private respondents, as dependents and intestate heirs
of the deceased, and that said damages consist, not of the full amount of his earnings, but of the
support, they received or would have received from him had he not died in consequence of the
negligence of petitioner's agent. In fixing the amount of that support, We must reckon with the
"necessary expenses of his own living", which should be deducted from his earnings. Thus, it
has been consistently held that earning capacity, as an element of damages to one's estate for
his death by wrongful act is necessarily his net earning capacity or his capacity to acquire
money, "less the necessary expense for his own living.3 Stated otherwise, the amount
recoverable is not loss of the entire earning, but rather the loss of that portion of the earnings
which the beneficiary would have received.4 In other words, only net earnings, not gross earning,
are to be considered5 that is, the total of the earnings less expenses necessary in the creation of
such earnings or income6 and less living and other incidental expenses.7
Chapter Two : Actual or Compensatory Damages
G.R. No. 114061 August 3, 1994
KOREAN AIRLINES CO., LTD., petitioner, vs.
COURT OF APPEALS and JUANITO C. LAPUZ, respondents.
G.R. No. 113842 August 3, 1994
JUANITO C. LAPUZ, petitioner, vs.
COURT OF APPEALS and KOREAN AIRLINES CO., LTD., respondents.
CRUZ, J.:
Sometime in 1980, Juanito C. Lapuz, 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," which meant that he could only be accommodated if any of the confirmed
passengers failed to show up at the airport before departure. When two of such passengers did
not appear, Lapuz and another person by the name of Perico were given the 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 sections for routine
check-up and was cleared for departure as Passenger No. 157 of KAL Flight No. KE 903.
Together with the other passengers, he rode in the shuttle bus and proceeded to the ramp of the
KAL aircraft for boarding. However, when he was at the third or fourth rung of the stairs, a KAL
officer pointed to him and shouted "Down! Down!" He was thus 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.
KAL, on the other hand, alleged that on November 8, 1980, Pan Pacific Recruiting Services Inc.
coordinated with KAL for the departure of 30 contract workers, of whom only 21 were confirmed
and 9 were wait-listed passengers. The agent of Pan Pacific, Jimmie Joseph, after being
informed that there was a possibility of having one or two seats becoming available, gave priority
to Perico, who was one of the supervisors of the hiring company in Saudi Arabia. The other seat
was won through lottery by Lapuz. However, only one seat became available and so, pursuant to
the earlier agreement that Perico was to be given priority, he alone was allowed to board.
After trial, the Regional Trial Court of Manila, Branch 30, 1 adjudged KAL liable for damages,
disposing as follows:
WHEREFORE, in view of the foregoing consideration, judgment is hereby rendered
sentencing the defendant Korean Air Lines to pay plaintiff Juanito C. Lapuz the
following:
Page | 6
1. The amount of TWO HUNDRED SEVENTY-TWO THOUSAND ONE HUNDRED
SIXTY (P272,160.00) PESOS as actual/compensatory damages, with legal interest
thereon from the date of the filing of the complaint until fully paid.
2. The sum of TWENTY-FIVE THOUSAND (P25,000.00) PESOS as and for
attorney's fees; and
3. The costs of suit.
The case is hereby dismissed with respect to defendant Pan Pacific Overseas
Recruiting Services, Inc.
The counterclaims and cross-claim of defendant Korean Air Lines Co., Ltd. are likewise
dismissed.
On appeal, this decision was modified by the Court of Appeals 2 as follows:
WHEREFORE, in view of all the foregoing, the appealed judgment is hereby
AFFIRMED with the following modifications: the amount of actual damages and
compensatory damages is reduced to P60,000.00 and defendant-appellant is hereby
ordered to pay plaintiff-appellant the sum of One Hundred Thousand Pesos
(P100,000.00) by way of moral and exemplary damages, at 6% interest per annum
from the date of the filing of the Complaint until fully paid.
KAL and Lapuz filed their respective motions for reconsideration, which were both denied for
lack of merit. Hence, the present petitions for review which have been consolidated because of
the identity of the parties and the similarity of the issues.
In G. R. No. 114061, KAL assails the decision of the appellate court on the following grounds:
1. That the Court of Appeals erred in concluding that petitioner committed a breach of
contract of carriage notwithstanding lack of proper, competent and sufficient evidence
of the existence of such contract.
2. That the Court of Appeals erred in not according the proper evidentiary weight to some
evidence presented and the fact that private respondent did not have any boarding
pass to prove that he was allowed to board and to prove that his airline ticket was
confirmed.
3. That the Court of Appeals erred in concluding that the standby passenger status of
private respondent Lapuz was changed to a confirmed status when his name was
entered into the passenger manifest.
4. That the Court of Appeals abused its discretion in awarding moral and exemplary
damages in the amount of P100,000.00 in favor of private respondent notwithstanding
its lack of basis and private respondent did not state such amount in his complaint nor
had private respondent proven the said damages.
5. That the Court of Appeals erred in dismissing the counterclaims.
6. That the Court of Appeals erred in dismissing the counterclaim of petitioner against Pan
Pacific.
7. That the Court of Appeals erred in ruling that the 6% per annum legal interest on the
judgment shall be computed from the filing of the complaint.
Chapter Two : Actual or Compensatory Damages
In G. R. No. 113842, Lapuz seeks: (a) the setting aside of the decision of the Court of Appeals
insofar as it modifies the award of damages; b) actual and compensatory damages in the sum
equivalent to 5 years' loss of earnings based on the petitioner's monthly salary of 1,600 Saudi
rials at the current conversion rate plus the cost of baggage and personal belongings worth
P2,000 and the service fee of P3,000 paid to the recruiting agency, all with legal interest from the
filing of the complaint until fully paid; c) moral damages of not less than P1 million and exemplary
damages of not less than P500,000.00, both with interest at 6% per annum from the filing of the
complaint; and d) attorney's fees in the sum equivalent to 30% of the award of damages.
It is evident that the issues raised in these petitions relate mainly to the correctness of the factual
findings of the Court of Appeals and the award of damages. The Court has consistently affirmed
that the findings of fact of the Court of Appeals and the other lower courts are as a rule binding
upon it, subject to certain exceptions. As nothing in the record indicates any of such exceptions,
the factual conclusions of the appellate court must be affirmed.
The status of Lapuz as standby passenger was changed to that of a confirmed passenger when
his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance
through immigration and customs clearly shows that he had indeed been confirmed as a
passenger of KAL in that flight. KAL thus committed a breach of the contract of carriage between
them when it failed to bring Lapuz to his destination.
This Court has held that a contract to transport passengers is different in kind and degree from
any other contractual relation. 3 The business of the carrier is mainly with the traveling public. It
invites people to avail themselves of the comforts and advantages it offers. The contract of air
carriage generates a relation attended with a public duty. Passengers have the right to be
treated by the carrier's employees with kindness, respect, courtesy and due consideration. They
are entitled to be protected against personal misconduct, injurious language, indignities and
abuses from such employees. 4 So it is that any discourteous conduct on the part of these
employees toward a passenger gives the latter an action for damages against the carrier.
The breach of contract was aggravated in this case when, instead of courteously informing
Lapuz of his being a "wait-listed" passenger, a KAL officer rudely shouted "Down! Down!" while
pointing at him, thus causing him embarrassment and public humiliation.
KAL argues that "the evidence of confirmation of a chance passenger status is not through the
entry of the name of a chance passenger in the passenger manifest nor the clearance from the
Commission on Immigration and Deportation, because they are merely means of facilitating the
boarding of a chance passenger in case his status is confirmed." We are not persuaded.
The evidence presented by Lapuz shows that he had indeed checked in at the departure
counter, passed through customs and immigration, boarded the shuttle bus and proceeded to
the ramp of KAL's aircraft. In fact, his baggage had already been loaded in KAL's aircraft, to be
flown with him to Jeddah. The contract of carriage between him and KAL had already been
perfected when he was summarily and insolently prevented from boarding the aircraft.
KAL's allegation that the respondent court abused its discretion in awarding moral and
exemplary damages is also not tenable.
Page | 7
The Court of Appeals granted moral and exemplary damages because:
The findings of the court a quo that the defendant-appellant has committed breach of
contract of carriage in bad faith and in wanton, disregard of plaintiff-appellant's rights as
passenger laid the basis and justification of an award for moral damages.
xxxx
In the instant case, we find that defendant-appellant Korean Air Lines acted in a
wanton, fraudulent, reckless, oppressive or malevolent manner when it "bumped off"
plaintiff-appellant on November 8, 1980, and in addition treated him rudely and
arrogantly as a "patay gutom na contract worker fighting Korean Air Lines," which
clearly shows malice and bad faith, thus entitling plaintiff-appellant to moral damages.
xxxx
Considering that the plaintiff-appellant's entitlement to moral damages has been fully
established by oral and documentary evidence, exemplary damages may be awarded.
In fact, exemplary damages may be awarded, even though not so expressly pleaded in
the complaint (Kapoe vs. Masa, 134 SCRA 231). By the same token, to provide an
example for the public good, an award of exemplary damages is also proper (Armovit
vs. Court of Appeals, supra).
On the other hand, Lapuz's claim that the award of P100,000.00 as moral and exemplary
damages is inadequate is not acceptable either. His prayer for moral damages of not less than
P1 million and exemplary damages of not less than P500,000.00 is overblown.
The well-entrenched principle is that moral damages depend upon the discretion of the court
based on the circumstances of each case. 5 This discretion is limited by the principle that the
"amount awarded should not be palpably and scandalously excessive" as to indicate that it was
the result of prejudice or corruption on the part of the trial court. 6 Damages are not intended to
enrich the complainant at the expense of the defendant. They are awarded only to alleviate the
moral suffering that the injured party had undergone by reason of the defendant's culpable
action. 7 There is no hard-and-fast rule in the determination of what would be a fair amount of
moral damages since each case must be governed by its own peculiar facts.
A review of the record of this case shows that the injury suffered by Lapuz is not so serious or
extensive as to warrant an award of P1.5 million. The assessment of P100,000 as moral and
exemplary damages in his favor is, in our view, reasonable and realistic.
Lapuz likewise claims that the respondent court could not rule upon the propriety of the award of
actual damages because it had not been assigned as an error by KAL. Not so. The rule is that
only errors specifically assigned and properly argued in the brief will be considered except errors
affecting jurisdiction over the subject matter and plain as well as clerical errors. 8 But this is not
without qualification for, as the Court held in Vda. de Javellana vs. Court of Appeals: 9
. . . [T]he Court is clothed with ample authority to review matters,
even if they are not assigned as errors in their appeal, if it finds that
Chapter Two : Actual or Compensatory Damages Page | 8

their consideration is necessary in arriving at a just decision of the The obligation to pay interest on a sum filed in a judgment exists from the date of the
case. sentence, when so declared; for until the net amount of the debtor's liability has been
determined, he cannot he considered delinquent in the fulfillment of his obligation to
A similar pronouncement was made in Baquiran vs. Court of Appeals 10 in this wise: pay the debt with interest thereon. 12

Issues, though not specifically raised in the pleading in the appellate
court, may, in the interest of justice, be properly considered by said
court in deciding a case, if they are questions raised in the trial court
and are matters of record having some bearing on the issue
submitted which the parties failed to raise or the lower court ignored.
The Court of Appeals was therefore justified in decreasing the award of actual damages even if
the issue was not assigned as an error by KAL. Consideration of this question was necessary for
the just and complete resolution of the present case. Furthermore, there was enough evidence
to warrant the reduction of the original award, as the challenged decision correctly observed:
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 employment is at most speculative. Damages
may not be awarded on the basis of speculation or conjecture (Gachalian vs. Delim,
203 SCRA 126). Hence, defendant-appellant's liability is limited to the one year contract
only. Plaintiff-appellant is, therefore, entitled only to his lost earnings 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.
Finally, we find that the respondent court did not err in sustaining the trial court's dismissal of
KAL's counterclaim against Pan Pacific Overseas Recruiting Services Inc., whose responsibility
ended with the confirmation by KAL of Lapuz as its passenger in its Flight No. 903.
This is still another case of the maltreatment of our overseas contract workers, this time by the
airline supposed to bring the passenger to his foreign assignment. Our OCW's sacrifice much in
seeking employment abroad, where they are deprived of the company of their loved ones, the
direct protection of our laws, and the comfort of our own native culture and way of life. This Court
shall exert every effort to vindicate their rights when they are abused and shall accord them the
commensurate reparation of their injuries consistent with their dignity and worth as members of
the working class.
WHEREFORE, the appealed judgment is AFFIRMED, but with the modification that the legal
interest on the damages awarded to private respondent should commence from the date of the
decision of the trial court on November 14, 1990. The parties shall bear their own costs.
SO ORDERED.

Plaintiff-appellant's contention that in computing his lost earnings, the current rate of the
Saudi Rial to the Philippine Peso at the time of payment should be used, is untenable,
considering that in his Complaint, plaintiff-appellant has quantified in Philippine Peso
his lost earnings for five years.

We disagree with the respondent court, however, on the date when the legal interest should
commence to run. The rule is that the legal interest of six percent (6%) on the amounts adjudged
in favor of Lapuz should resume from the time of the rendition of the trial court's decision instead
of November 28, 1980, the date of the filing of the complaint.

On this matter, the Court has held:

If suit were for payment of a definite sum of money, the contention might be tenable.
However, if it is for damages, unliquidated and not known until definitely ascertained,
assessed and determined by the courts after proof, interest should be from the date of
the decision. xxxx
Chapter Three : Other Kinds of Damages
G.R. No. L-68102 July 16, 1992
GEORGE MCKEE and ARACELI KOH MCKEE, petitioners, vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA
MANALO, respondents.
G.R. No. L-68103 July 16, 1992
CARMEN DAYRIT KOH, LETICIA KOH, JULIETA KOH TUQUERO, ARACELI KOH MCKEE,
ANTONIO KOH and ELIZABETH KOH TURLA, petitioners, vs.
INTERMEDIATE APPELLATE COURT, JAIME TAYAG and ROSALINDA
MANALO, respondents.
DAVIDE, JR., J.:
Petitioners urge this Court to review and reverse the Resolution of the Court of Appeals in C.A.-
G.R. CV Nos. 69040-41, promulgated on 3 April 1984, which set aside its previous Decision
dated 29 November 1983 reversing the Decision of the trial court which dismissed petitioners'
complaints in Civil Case No. 4477 and Civil Case No. 4478 of the then Court of First Instance
(now Regional Trial Court) of Pampanga entitled "Carmen Dayrit Koh, Leticia Koh, Julieta Koh
Tuquero, Araceli Koh McKee and Elizabeth Koh Turla vs. Jaime Tayag and Rosalinda Manalo,"
and "George McKee and Araceli Koh McKee vs. Jaime Tayag and Rosalinda Manalo,"
respectively, and granted the private respondents' counterclaim for moral damages, attorney's
fees and litigation expenses.
The said civil cases for damages based on quasi-delict were filed as a result of a vehicular
accident which led to the deaths of Jose Koh, Kim Koh McKee and Loida Bondoc and caused
physical injuries to George Koh McKee, Christopher Koh McKee and petitioner Araceli Koh
McKee.
Petitioners in G.R. No. 68102, parents of the minors George Koh McKee, Christopher Koh
McKee and the deceased Kim Koh McKee, were the plaintiffs in Civil Case No. 4478, while
petitioner Carmen Dayrit Koh and her co-petitioners in G.R. No. 68103, who are the wife and
children, respectively, of the late Jose Koh, were the plaintiffs in Civil Case No. 4477. Upon the
other hand, private respondents are the owners of the cargo truck which figured in the mishap; a
certain Ruben Galang was the driver of the truck at the time of the accident.
The antecedent facts are not disputed.
Between nine and ten o'clock in the morning of 8 January 1977, in Pulong Pulo Bridge along
MacArthur Highway, between Angeles City and San Fernando, Pampanga, a head-on-collision
took place between an International cargo truck, Loadstar, with Plate No. RF912-T Philippines
'76 owned by private respondents, and driven by Ruben Galang, and a Ford Escort car bearing
Plate No. S2-850 Pampanga '76 driven by Jose Koh. The collision resulted in the deaths of Jose
Page | 9
Koh, Kim Koh McKee and Loida Bondoc, and physical injuries to George Koh McKee,
Christopher Koh McKee and Araceli Koh McKee, all passengers of the Ford Escort.
Jose Koh was the father of petitioner Araceli Koh McKee, the mother of minors George,
Christopher and Kim Koh McKee. Loida Bondoc, on the other hand, was the baby sitter of one
and a half year old Kim. At the time of the collision, Kim was seated on the lap of Loida Bondoc
who was at the front passenger's seat of the car while Araceli and her two (2) sons were seated
at the car's back seat.
Immediately before the collision, the cargo truck, which was loaded with two hundred (200)
cavans of rice weighing about 10,000 kilos, was traveling southward from Angeles City to San
Fernando Pampanga, and was bound for Manila. The Ford Escort, on the other hand, was on its
way to Angeles City from San Fernando. When the northbound car was about (10) meters away
from the southern approach of the bridge, two (2) boys suddenly darted from the right side of the
road and into the lane of the car. The boys were moving back and forth, unsure of whether to
cross all the way to the other side or turn back. Jose Koh blew the horn of the car, swerved to
the left and entered the lane of the truck; he then switched on the headlights of the car, applied
the brakes and thereafter attempted to return to his lane. Before he could do so, his car collided
with the truck. The collision occurred in the lane of the truck, which was the opposite lane, on the
said bridge.
The incident was immediately reported to the police station in Angeles City; consequently, a
team of police officers was forthwith dispatched to conduct an on the spot investigation. In the
sketch 1 prepared by the investigating officers, the bridge is described to be sixty (60) "footsteps"
long and fourteen (14) "footsteps" wide — seven (7) "footsteps" from the center line to the inner
edge of the side walk on both sides. 2 Pulong Pulo Bridge, which spans a dry brook, is made of
concrete with soft shoulders and concrete railings on both sides about three (3) feet high.
The sketch of the investigating officer discloses that the right rear portion of the cargo truck was
two (2) "footsteps" from the edge of the right sidewalk, while its left front portion was touching the
center line of the bridge, with the smashed front side of the car resting on its front bumper. The
truck was about sixteen (16) "footsteps" away from the northern end of the bridge while the car
was about thirty-six (36) "footsteps" from the opposite end. Skid marks produced by the right
front tire of the truck measured nine (9) "footsteps", while skid marks produced by the left front
tire measured five (5) "footsteps." The two (2) rear tires of the truck, however, produced no skid
marks.
In his statement to the investigating police officers immediately after the accident, Galang
admitted that he was traveling at thirty (30) miles (48 kilometers) per hour.
As a consequence of the collision, two (2) cases, Civil Case No. 4477 and No. 4478, were filed
on 31 January 1977 before the then Court of First Instance of Pampanga and were raffled to
Branch III and Branch V of the said court, respectively. In the first, herein petitioners in G.R. No.
68103 prayed for the award of P12,000.00 as indemnity for the death of Jose Koh, P150,000.00
as moral damages, P60,000.00 as exemplary damages, P10,000.00 for litigation expenses,
P6,000.00 for burial expenses, P3,650.00 for the burial lot and P9,500.00 for the tomb, plus
attorney's fees. 3 In the second case, petitioners in G.R. No. 68102 prayed for the following: (a)
in connection with the death of Kim McKee, the sum of P12,000.00 as death benefit, P3,150.00
Chapter Three : Other Kinds of Damages
for funeral services, P3,650.00 for the cemetery lot, P3,000.00 for the tomb, P50,000.00 as
moral damages, P10,000.00 as exemplary damages and P2,000.00 as miscellaneous damages;
(b) in the case of Araceli Koh McKee, in connection with the serious physical injuries suffered,
the sum of P100,000.00 as moral damages, P20,000.00 as exemplary damages, P12,000.00 for
loss of earnings, P5,000.00 for the hospitalization expenses up to the date of the filing of the
complaint; and (c) with respect to George McKee, Jr., in connection with the serious physical
injuries suffered, the sum of P50,000.00 as moral damages, P20,000.00 as exemplary damages
and the following medical expenses: P3,400 payable to the Medical Center, P3,500.00 payable
to the St. Francis Medical Center, P5,175.00 payable to the Clark Air Base Hospital, and
miscellaneous expenses amounting to P5,000.00. They also sought an award of attorney's fees
amounting to 25% of the total award plus traveling and hotel expenses, with costs. 4
On 1 March 1977, an Information charging Ruben Galang with the crime of "Reckless
Imprudence Resulting to (sic) Multiple Homicide and Physical Injuries and Damage to Property"
was filed with the trial court. It was docketed as Criminal Case No. 3751 and was raffled to
Branch V of the court, the same Branch where Civil Case No. 4478 was assigned. 5
In their Answer with Counterclaim in Civil Case No. 4477, private respondents asserted that it
was the Ford Escort car which "invaded and bumped (sic) the lane of the truck driven by Ruben
Galang and, as counterclaim, prayed for the award of P15,000.00 as attorney's fees, P20,000.00
as actual and liquidated damages, P100,000.00 as moral damages and P30,000.00 as business
losses. 6 In Civil Case No. 4478, private respondents first filed a motion to dismiss on grounds of
pendency of another action (Civil Case No. 4477) and failure to implead an indispensable party,
Ruben Galang, the truck driver; they also filed a motion to consolidate the case with Civil Case
No. 4477 pending before Branch III of the same court, which was opposed by the
plaintiffs. 7 Both motions were denied by Branch V, then presided over by Judge Ignacio
Capulong. Thereupon, private respondents filed their Answer with Counter-claim 8 wherein they
alleged that Jose Koh was the person "at fault having approached the lane of the truck driven by
Ruben Galang, . . . which was on the right lane going towards Manila and at a moderate speed
observing all traffic rules and regulations applicable under the circumstances then prevailing;" in
their counterclaim, they prayed for an award of damages as may be determined by the court
after due hearing, and the sums of P10,000.00 as attorney's fees and P5,000.00 as expenses of
litigation.
Petitioners filed their Answers to the Counterclaims in both cases.
To expedite the proceedings, the plaintiffs in Civil Case No. 4478 filed on 27 March 1978 a
motion to adopt the testimonies of witnesses taken during the hearing of Criminal Case No.
3751, which private respondents opposed and which the court denied. 9 Petitioners subsequently
moved to reconsider the order denying the motion for consolidation, 10 which Judge Capulong
granted in the Order of 5 September 1978; he then directed that Civil Case No. 4478 be
consolidated with Civil Case No. 4477 in Branch III of the court then presided over by Judge
Mario Castañeda, Jr.
Left then with Branch V of the trial court was Criminal Case No. 3751.
In the civil cases, the plaintiffs presented as witnesses Araceli Koh McKee, Fernando Nuñag,
Col. Robert Fitzgerald, Primitivo Parel, Eugenio Tanhueco, Carmen Koh and Antonio Koh, 11 and
Page | 10
offered several documentary exhibits. Upon the other hand, private respondents presented as
witnesses Ruben Galang, Zenaida Soliman, Jaime Tayag and Roman Dayrit. 12
In the criminal case, the prosecution presented as witnesses Mrs. Araceli McKee, Salud Samia,
Pfc. Fernando Nuñag, Dr. Ramon Panlilio, Dr. Robert Fitzgerald, Dr. Roberto Yuson, Dr. Hector,
Ulanday, Pfc. Benigno de Leon, Marina Bolos, Primitivo Parel, Rogelio Pineda, Benito Caraan
and Eugenio Tanhueco, and offered several documentary exhibits. 13 Upon the other hand, the
defense presented the accused Ruben Galang, Luciano Punzalan, Zenaida Soliman and Roman
Dayrit, and offered documentary exhibits. 14
On 1 October 1980, Judge Capulong rendered a decision against the accused Ruben Galang in
the aforesaid criminal case. The dispositive portion of the decision reads as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered finding the
accused Ruben Galang guilty beyond reasonable doubt of the crime charged in the
information and after applying the provisions of Article 365 of the Revised Penal Code
and indeterminate sentence law, this Court, imposes upon said accused Ruben Galang
the penalty of six (6) months of arresto mayor as minimum to two (2) years, four (4)
months and one (1) day of prision correccional as maximum; the accused is further
sentenced to pay and indemnify the heirs of Loida Bondoc the amount of P12,000.00
as indemnity for her death; to reimburse the heirs of Loida Bondoc the amount of
P2,000.00 representing the funeral expenses; to pay the heirs of Loida Bondoc the
amount of P20,000.00 representing her loss of income; to indemnify and pay the heirs
of the deceased Jose Koh the value of the car in the amount of P53,910.95, and to pay
the costs. 15
The aforecited decision was promulgated only on 17 November 1980; on the same day, counsel
for petitioners filed with Branch III of the court — where the two (2) civil cases were pending — a
manifestation to that effect and attached thereto a copy of the decision. 16
Upon the other hand, Judge Mario Castañeda, Jr. dismissed the two (2) civil cases on 12
November 1980 and awarded the private respondents moral damages, exemplary damages and
attorney's fees. 17 The dispositive portion of the said decision reads as follows:
WHEREFORE, finding the preponderance of evidence to be in favor of the defendants
and against the plaintiffs, these cases are hereby ordered DISMISSED with costs
against the plaintiffs. The defendants had proven their counter-claim, thru evidences
(sic) presented and unrebutted. Hence, they are hereby awarded moral and exemplary
damages in the amount of P100,000.00 plus attorney's fee of P15,000.00 and litigation
expenses for (sic) P2,000.00. The actual damages claimed for (sic) by the defendants
is (sic) hereby dismissing for lack of proof to that effect (sic). 18
A copy of the decision was sent by registered mail to the petitioners on 28 November 1980 and
was received on 2 December 1980. 19
Accused Ruben Galang appealed the judgment of conviction to the Court of Appeals. The
appeal was docketed as C.A.-G.R. Blg. 24764-CR and was assigned to the court's Third
Chapter Three : Other Kinds of Damages Page | 11

Division. Plaintiffs in Civil Cases Nos. 4477 and 4478 likewise separately appealed the 12 P 4,384.00 paid to Angeles Medical Clinic (Exhs. D, D-1 and
November 1980 decision to the appellate court. The appeals were docketed as C.A.-G.R. No. D-2)
69041-R and C.A.-G.R. No. 69040-R, respectively, and were assigned to the Fourth Civil Cases P 1,555.00 paid to St. Francis Medical Center (Exhs. B and
Division. B-1)

On 4 October 1982, the respondent Court promulgated its decision 20 in C.A.-G.R. Blg. 24764- For the physical injuries suffered by Araceli Koh McKee:
CR affirming the conviction of Galang. 21 The dispositive portion of the decision reads:
P 25,000.00 as moral damages
DAHIL DITO, ang hatol na paksa ng naritong paghahabol ay Aming pinagtitibay sa P 1,055.00 paid to St. Francis Medical Center (Exhs. G and
kanyang kabuuan. Ang naghahabol pa rin ang pinagbabayad ng gugol ng paghahabol. G-1)
P 75.00 paid to St. Francis Medical Center (Exhs. G-2 and
A motion for reconsideration of the decision was denied by the respondent Court in G-3)
its Kapasiyahan promulgated on 25 November 1982. 22 A petition for its review 23 was filed with P 428.00 to Carmelite General Hospital (Exh. F)
this Court; said petition was subsequently denied. A motion for its reconsideration was denied P 114.20 to Muñoz Clinic (Exh. MM)
with finality in the Resolution of 20 April 1983. 24
For the physical injuries suffered by Christopher Koh McKee:
On 29 November 1983, respondent Court, by then known as the Intermediate Appellate Court,
promulgated its consolidated decision in A.C.-G.R. CV Nos. 69040 and 69041, 25 the dispositive P 10,000.00 as moral damages
portion of which reads: P 1,231.10 to St. Francis Medical Center (Exhs. L and L-1)
P 321.95 to F.C.E.A. Hospital (Exhs. G and D-1)
WHEREFORE, the decision appealed from it hereby reversed and set aside and
another one is rendered, ordering defendants-appellees to pay plaintiffs-appellants as In addition, We award P10,000.00 as counsel (sic) fees in Civil Case No. 4477 and
follows: another P10,000.00; as counsel (sic) fees in Civil Case No. 4478.

For the death of Jose Koh: No pronouncement as to costs. SO ORDERED. 26

P 50,000.00 as moral damages The decision is anchored principally on the respondent Court's findings that it was Ruben
P 12,000.00 as death indemnity Galang's inattentiveness or reckless imprudence which caused the accident. The appellate court
P 16,000.00 for the lot and tomb (Exhs. U and U-1) further said that the law presumes negligence on the part of the defendants (private
P 4,000.00 expenses for holding a wake (p. 9, tsn April 19, respondents), as employers of Galang, in the selection and supervision of the latter; it was
1979) further asserted that these defendants did not allege in their Answers the defense of having
P 950.00 for the casket (Exh. M) exercised the diligence of a good father of a family in selecting and supervising the said
P 375.00 for the vault services (Exhs. V and V-1) employee.27 This conclusion of reckless imprudence is based on the following findings of fact:

For the death of Kim Koh McKee: In the face of these diametrically opposed judicial positions, the determinative issue in
this appeal is posited in the fourth assigned error as follows:
P 50,000.00 as moral damages
P 12,000.00 as death indemnity IV THE TRIAL COURT ERRED WHEN IT HELD THE (sic) DRIVER OF
P 1,000.00 for the purchase of the burial lot (Exh. M) THE TRUCK STOPPED HIS TRUCK BLEW HIS HORN SWITCHED
P 950.00 for funeral services (Exh. M-1) ON HIS HEADLIGHTS AND COULD NOT SWERVE TO THE RIGHT.
P 375.00 for vault services (Exhs. V and V-1)
Supportive of plaintiffs' version, principal witness Araceli Koh McKee testified thus:
For the physical injuries suffered by George Koh McKee:
Q: What happened after that, as you approached the bridge?
P 25,000.00 as moral damages A: When we were approaching the bridge, two (2) boys tried to cross the right lane on
P 672.00 for Clark Field Hospital (Exh. E) the right side of the highway going to San Fernando. My father, who is (sic) the driver of
Chapter Three : Other Kinds of Damages
the car tried to avoid the two (2) boys who were crossing, he blew his horn and swerved
to the left to avoid hitting the two (2) boys. We noticed the truck, he switched on the
headlights to warn the truck driver, to slow down to give us the right of way to come
back to our right lane.
Q: Did the truck slow down?
A: No, sir, it did not, just (sic) continued on its way.
Q: What happened after that?
A: After avoiding the two (2) boys, the car tried to go back to the right lane since the
truck is (sic) coming, my father stepped on the brakes and all what (sic) I heard is the
sound of impact (sic), sir. (tsn, pp. 5-6, July 22, 1977); or (Exhibit "O" in these Civil
Cases). xxx xxx xxx
Q: Mrs. how did you know that the truck driven by the herein accused, Ruben Galang
did not reduce its speed before the actual impact of collision (sic) as you narrated in this
Exhibit "1," how did you know (sic)?
A: It just kept on coming, sir. If only he reduced his speed, we could have got (sic) back
to our right lane on side (sic) of the highway, sir. (tsn. pp. 33-34 July 22, 1977) or
(Exhibit "O" in these Civil Cases) (pp. 30-31, Appellants' Brief).
Plaintiffs' version was successfully corroborated to Our satisfaction by the following facts and
circumstances:
1. An impartial eye-witness to the mishap, Eugenio Tanhueco, declared that the truck
stopped only when it had already collided with the car: xxx xxx xxx
Tanhueco repeated the same testimony during the hearing in the criminal case:
xxx xxx xxx
Tanhueco could (sic) not be tagged as an accommodation witness because he was one
of the first to arrive at the scene of the accident. As a matter of fact, he brought one of
the injured passengers to the hospital.
We are not prepared to accord faith and credit to defendants' witnesses, Zenaida
Soliman, a passenger of the truck, and Roman Dayrit, who supposedly lived across the
street.
Regarding Soliman, experience has shown that in the ordinary course of events people
usually take the side of the person with whom they are associated at the time of the
accident, because, as a general rule, they do not wish to be identified with the person
who was at fault. Thus an imaginary bond is unconsciously created among the several
persons within the same group (People vs. Vivencio, CA-G.R. No. 00310-CR, Jan. 31,
1962).
With respect to Dayrit, We can not help suspecting (sic) that he is an accommodation
witness. He did not go to the succor of the injured persons. He said he wanted to call
the police authorities about the mishap, but his phone had no dial tone. Be this (sic) as
it may, the trial court in the criminal case acted correctly in refusing to believe Dayrit.
Page | 12
2. Exhibit 2, the statement of Galang, does not include the claim that Galang stopped
his truck at a safe distance from the car, according to plaintiffs (p. 25, Appellants' Brief).
This contention of appellants was completely passed sub-silencio or was not refuted by
appellees in their brief. Exhibit 2 is one of the exhibits not included in the record.
According to the Table of Contents submitted by the court below, said Exhibit 2 was not
submitted by defendants-appellees. In this light, it is not far-fetched to surmise that
Galang's claim that he stopped was an eleventh-hour desperate attempt to exculpate
himself from imprisonment and damages.
3. Galang divulged that he stopped after seeing the car about 10 meters away:
ATTY. SOTTO:
Q Do I understand from your testimony that inspite of the fact that you
admitted that the road is straight and you may be able to (sic) see 500-1000
meters away from you any vehicle, you first saw that car only about ten (10)
meters away from you for the first time? xxx xxx x
xx
A I noticed it, sir, that it was about ten (10) meters away.
ATTY. SOTTO:
Q So, for clarification, you clarify and state under your oath that you have (sic)
not noticed it before that ten (10) meters? (Tsn. 3 to 5, Sept. 18, 1979). (p. 16,
Appellants' Brief)
Galang's testimony substantiate (sic) Tanhueco's statement that Galang stopped only
because of the impact. At ten (10) meters away, with the truck running at 30 miles per
hour, as revealed in Galang's affidavit (Exh. 2; p. 25, Appellants' brief), it is well-nigh
impossible to avoid a collision on a bridge.
5. Galang's truck stopped because of the collision, and not because he waited for Jose
Koh to return to his proper lane. The police investigator, Pfc. Fernando L. Nuñag, stated
that he found skid marks under the truck but there were not (sic) skid marks behind the
truck (pp. 19-20, t.s.n., Nov. 3, 1978). The presence of skid marks show (sic) that the
truck was speeding. Since the skid marks were found under the truck and none were
found at the rear of the truck, the reasonable conclusion is that the skid marks under
the truck were caused by the truck's front wheels when the trucks (sic) suddenly
stopped seconds before the mishap in an endeavor to avoid the same. But, as
aforesaid, Galang saw the car at barely 10 meters away, a very short distance to avoid
a collision, and in his futile endeavor to avoid the collision he abruptly stepped on his
brakes but the smashup happened just the same.
For the inattentiveness or reckless imprudence of Galang, the law presumes
negligence on the part of the defendants in the selection of their driver or in the
supervision over him. Appellees did not allege such defense of having exercised the
duties of a good father of a family in the selection and supervision of their employees in
their answers. They did not even adduce evidence that they did in fact have methods of
selection and programs of supervision. The inattentiveness or negligence of Galang
was the proximate cause of the mishap. If Galang's attention was on the highway, he
would have sighted the car earlier or at a very safe distance than (sic) 10 meters. He
Chapter Three : Other Kinds of Damages
proceeded to cross the bridge, and tried to stop when a collision was already inevitable,
because at the time that he entered the bridge his attention was not riveted to the road
in front of him.
On the question of damages, the claims of appellants were amply proven, but the items
must be reduced. 28
A motion for reconsideration alleging improper appreciation of the facts was subsequently filed
by private respondents on the basis of which the respondent Court, in its Resolution of 3 April
1984, 29 reconsidered and set aside its 29 November 1983 decision and affirmed in toto the trial
court's judgment of 12 November 1980. A motion to reconsider this Resolution was denied by
the respondent Court on 4 July 1984.30
Hence, this petition.
Petitioners allege that respondent Court:
I . . . COMMITTED A VERY SERIOUS AND GRAVE ERROR WHEN IT
TOTALLY REVERSED ITS DECISION BY MERELY BASING IT
FROM (sic) A MERE "PRESUMPTION," TOTALLY DISREGARDING
THE PRIVATE RESPONDENTS' DRIVER'S ADMISSIONS AND
CONFESSIONS, WHO EXCLUSIVELY COMMITTED THE
PROXIMATE CAUSE OF THE ACCIDENT (sic), FURTHER, IT ALSO
DISREGARDED THE EVIDENCE ADDUCED AND FOUND IN THE
RECORDS; THEREFORE, RESPONDENT COURT'S
RESOLUTIONS (ANNEXES A and B, PETITION) ARE CLEARLY
ERRONEOUS, PURELY BASED ON SPECULATIONS,
CONJECTURES AND WITHOUT SURE FOUNDATION IN THE
EVIDENCE.
II . . . GRAVELY ABUSED ITS DISCRETION AND ERRED WHEN IN
EFFECT IT DISREGARDED A DOCTRINE LAID DOWN BY THIS
HONORABLE COURT BY STATING AMONG OTHERS, "IT CANNOT
CATEGORICALLY ADOPT THE FINDINGS OF GUILT IN THE
CRIMINAL CASE WHERE THE DRIVER OF THE TRUCK
INVOLVED IN THE ACCIDENT WAS INDICTED.
III . . . PATENTLY COMMITTED GRAVE ABUSE OF DISCRETION AND
MADE A MISLEADING PRONOUNCEMENT, WHEN IT HELD: "IT IS
THUS INCUMBENT UPON THE PLAINTIFFS-APPELLANTS
(APPELLEES WRONGLY MENTIONED IN THE RESOLUTION) TO
PROVE THEIR ALLEGATIONS THAT THE PROXIMATE CAUSE OF
THE ACCIDENT WAS THE NEGLIGENCE OF PRIVATE
RESPONDENTS' DRIVER.
IV . . . COMMITTED ANOTHER GRIEVIOUS (sic) ERROR;
COMMITTED GRAVE ABUSE OF DISCRETION AND CITED
Page | 13
ANOTHER CASE WHICH IS CLEARLY INAPPLICABLE TO THESE
CASES.
V . . . COMMITTED A PATENT ERROR AND GRAVELY ABUSED ITS
DISCRETION IN ADOPTING THE FINDINGS OF THE TRIAL
COURT WHICH ARE CLEARLY ERRONEOUS AND CONTRARY TO
THE EVIDENCE FOUND IN THE RECORDS, SPECIALLY THEY
(sic) ARE CONTRARY TO THE ADMITTED FACTS AND JUDICIAL
ADMISSIONS MADE BY THE PRIVATE RESPONDENTS' DRIVER.
VI . . . EXCEEDED ITS JURISDICTION, COMMITTED GRAVE ABUSE
OF DISCRETION AND GRAVELY ERRED WHEN IT AWARDED
DAMAGES TO THE PRIVATE RESPONDENTS WHEN SAID
AWARD IS NOT SUPPORTED BY EVIDENCE, IN THE RECORDS,
AND SAID AWARD IS NOT ALLOWED BY LAW AND THE
CONSISTENT DECISIONS OF THIS HONORABLE COURT.
VII . . . EXCEEDED ITS JURISDICTION, COMMITTED GRAVE ABUSE
OF DISCRETION AND GRAVELY ERRED WHEN IT
ERRONEOUSLY SET ASIDE ITS DECISION AWARDING
DAMAGES TO PETITIONERS WHICH IS CLEARLY IN
ACCORDANCE WITH THE EVIDENCE, THE LAW AND
JURISPRUDENCE RELATIVE TO THE AWARD OF DAMAGES. 31
In the Resolution of 12 September 1984, We required private respondents to Comment on the
petition. 32 After the said Comment 33 was filed, petitioners submitted a Reply 34 thereto; this
Court then gave due course to the instant petitions and required petitioners to file their
Brief, 35 which they accordingly complied with.
There is merit in the petition. Before We take on the main task of dissecting the arguments and
counter-arguments, some observations on the procedural vicissitudes of these cases are in
order.
Civil Cases Nos. 4477 and 4478, which were for the recovery of civil liability arising from
a quasi-delict under Article 2176 in relation to Article 2180 of the Civil Code, were filed ahead of
Criminal Case No. 3751. Civil Case No. 4478 was eventually consolidated with Civil Case No.
4477 for joint trial in Branch III of the trial court. The records do not indicate any attempt on the
part of the parties, and it may therefore be reasonably concluded that none was made, to
consolidate Criminal Case No. 3751 with the civil cases, or vice-versa. The parties may have
then believed, and understandably so, since by then no specific provision of law or ruling of this
Court expressly allowed such a consolidation, that an independent civil action, authorized under
Article 33 in relation to Article 2177 of the Civil Code, such as the civil cases in this case, cannot
be consolidated with the criminal case. Indeed, such consolidation could have been farthest from
their minds as Article 33 itself expressly provides that the "civil action shall proceed
independently of the criminal prosecution, and shall require only a preponderance of evidence."
Be that as it may, there was then no legal impediment against such consolidation. Section 1,
Rule 31 of the Rules of Court, which seeks to avoid a multiplicity of suits, guard against
oppression and abuse, prevent delays, clear congested dockets to simplify the work of the trial
Chapter Three : Other Kinds of Damages
36
court, or in short, attain justice with the least expense to the parties litigants, would have easily
sustained a consolidation, thereby preventing the unseeming, if no ludicrous, spectacle of two
(2) judges appreciating, according to their respective orientation, perception and perhaps even
prejudice, the same facts differently, and thereafter rendering conflicting decisions. Such was
what happened in this case. It should not, hopefully, happen anymore. In the recent case
of Cojuangco vs. Court or Appeals, 37 this Court held that the present provisions of Rule 111 of
the Revised Rules of Court allow a consolidation of an independent civil action for the recovery
of civil liability authorized under Articles 32, 33, 34 or 2176 of the Civil Code with the criminal
action subject, however, to the condition that no final judgment has been rendered in that
criminal case.
Let it be stressed, however, that the judgment in Criminal Case No. 3751 finding Galang guilty of
reckless imprudence, although already final by virtue of the denial by no less than this Court of
his last attempt to set aside the respondent Court's affirmance of the verdict of conviction, has no
relevance or importance to this case.
As We held in Dionisio vs. Alvendia, 38 the responsibility arising from fault or negligence in
a quasi-delict is entirely separate and distinct from the civil liability arising from negligence under
the Penal Code. And, as more concretely stated in the concurring opinion of Justice J.B.L.
Reyes, "in the case of independent civil actions under the new Civil Code, the result of the
criminal case, whether acquittal or conviction, would be entirely irrelevant to the civil
action." 39 In Salta vs. De Veyra and PNB vs. Purisima, 40 this Court stated:
. . . It seems perfectly reasonable to conclude that the civil actions mentioned in Article
33, permitted in the same manner to be filed separately from the criminal case, may
proceed similarly regardless of the result of the criminal case.
Indeed, when the law has allowed a civil case related to a criminal case, to be filed
separately and to proceed independently even during the pendency of the latter case,
the intention is patent to make the court's disposition of the criminal case of no effect
whatsoever on the separate civil case. This must be so because the offenses specified
in Article 33 are of such a nature, unlike other offenses not mentioned, that they may be
made the subject of a separate civil action because of the distinct separability of their
respective juridical cause or basis of action . . . .
What remains to be the most important consideration as to why the decision in the criminal case
should not be considered in this appeal is the fact that private respondents were not parties
therein. It would have been entirely different if the petitioners' cause of action was for damages
arising from a delict, in which case private respondents' liability could only be subsidiary
pursuant to Article 103 of the Revised Penal Code. In the absence of any collusion, the judgment
of conviction in the criminal case against Galang would have been conclusive in the civil cases
for the subsidiary liability of the private respondents. 41
And now to the merits of the petition.
Page | 14
It is readily apparent from the pleadings that the principal issue raised in this petition is whether
or not respondent Court's findings in its challenged resolution are supported by evidence or are
based on mere speculations, conjectures and presumptions.
The principle is well-established that this Court is not a trier of facts. Therefore, in an appeal
by certiorari under Rule 45 of the Revised Rules of Court, only questions of law may be raised.
The resolution of factual issues is the function of the lower courts whose findings on these
matters are received with respect and are, as a rule, binding on this Court. 42
The foregoing rule, however, is not without exceptions. Findings of facts of the trial courts and
the Court of Appeals may be set aside when such findings are not supported by the evidence or
when the trial court failed to consider the material facts which would have led to a conclusion
different from what was stated in its judgment. 43 The same is true where the appellate court's
conclusions are grounded entirely on conjectures, speculations and surmises 44 or where the
conclusions of the lower courts are based on a misapprehension of facts. 45
It is at once obvious to this Court that the instant case qualifies as one of the aforementioned
exceptions as the findings and conclusions of the trial court and the respondent Court in its
challenged resolution are not supported by the evidence, are based on an misapprehension of
facts and the inferences made therefrom are manifestly mistaken. The respondent Court's
decision of 29 November 1983 makes the correct findings of fact.
In the assailed resolution, the respondent Court held that the fact that the car improperly invaded
the lane of the truck and that the collision occurred in said lane gave rise to the presumption that
the driver of the car, Jose Koh, was negligent. On the basis of this presumed negligence, the
appellate court immediately concluded that it was Jose Koh's negligence that was the immediate
and proximate cause of the collision. This is an unwarranted deduction as the evidence for the
petitioners convincingly shows that the car swerved into the truck's lane because as it
approached the southern end of the bridge, two (2) boys darted across the road from the right
sidewalk into the lane of the car. As testified to by petitioner Araceli Koh McKee:
Q What happened after that, as you approached the bridge?
A When we were approaching the bridge, two (2) boys tried to cross the right lane on
the right side of the highway going to San Fernando. My father, who is (sic) the driver of
the car tried to avoid the two (2) boys who were crossing, he blew his horn and swerved
to the left to avoid hitting the two (2) boys. We noticed the truck, he switched on the
headlights to warn the truck driver, to slow down to give us the right of way to come
back to our right lane.
Q Did the truck slow down?
A No sir, it did not, just (sic) continued on its way.
Q What happened after that?
A After avoiding the two (2) boys, the car tried to go back to the right lane since the
truck is (sic) coming, my father stepped on the brakes and all what (sic) I heard is the
sound of impact (sic), sir. 46
Her credibility and testimony remained intact even during cross examination. Jose Koh's entry
into the lane of the truck was necessary in order to avoid what was, in his mind at that time, a
greater peril — death or injury to the two (2) boys. Such act can hardly be classified as negligent.
Chapter Three : Other Kinds of Damages
Negligence was defined and described by this Court in Layugan vs. Intermediate Appellate
Court, 47 thus:
. . . Negligence is the omission to do something which a reasonable man, guided by
those considerations which ordinarily regulate the conduct of human affairs, would do,
or the doing of something which a prudent and reasonable man would not do (Black's
Law Dictionary, Fifth Edition, 930), or as Judge Cooley defines it, "(T)he failure to
observe for the protection of the interests of another person, that degree of care,
precaution, and vigilance which the circumstances justly demand, whereby such other
person suffers injury." (Cooley on Torts, Fourth Edition, vol. 3, 265)
In Picart vs. Smith (37 Phil 809, 813), decided more than seventy years ago but still a
sound rule, (W)e held:
The test by which to determine the existence of negligence in a particular case
may be stated as follows: Did the defendant in doing the alleged negligent act
use that (reasonable care and caution which an ordinarily prudent person
would have used in the same situation?) If not, then he is guilty of negligence.
The law here in effect adopts the standard supposed to be supplied by the
imaginary conduct of the discreet paterfamiliasof the Roman
law. . . .
In Corliss vs. Manila Railroad Company, 48 We held:
. . . Negligence is want of the care required by the circumstances. It is a relative or
comparative, not an absolute, term and its application depends upon the situation of the
parties and the degree of care and vigilance which the circumstances reasonably
require. Where the danger is great, a high degree of care is necessary, and the failure
to observe it is a want of ordinary care under the circumstances. (citing Ahern v. Oregon
Telephone Co., 35 Pac. 549 (1894).
On the basis of the foregoing definition, the test of negligence and the facts obtaining in this
case, it is manifest that no negligence could be imputed to Jose Koh. Any reasonable and
ordinary prudent man would have tried to avoid running over the two boys by swerving the car
away from where they were even if this would mean entering the opposite lane. Avoiding such
immediate peril would be the natural course to take particularly where the vehicle in the opposite
lane would be several meters away and could very well slow down, move to the side of the road
and give way to the oncoming car. Moreover, under what is known as the emergency rule, "one
who suddenly finds himself in a place of danger, and is required to act without time to consider
the best means that may be adopted to avoid the impending danger, is not guilty of negligence, if
he fails to adopt what subsequently and upon reflection may appear to have been a better
method, unless the emergency in which he finds himself is brought about by his own
negligence." 49
Considering the sudden intrusion of the two (2) boys into the lane of the car, We find that Jose
Koh adopted the best means possible in the given situation to avoid hitting them. Applying the
above test, therefore, it is clear that he was not guilty of negligence.
Page | 15
In any case, assuming, arguendo that Jose Koh is negligent, it cannot be said that his
negligence was the proximate cause of the collision. Proximate cause has been defined as:
. . . that cause, which, in natural and continuous sequence, unbroken by any efficient
intervening cause, produces the injury, and without which the result would not have
occurred. And more comprehensively, the proximate legal cause is that acting first and
producing the injury, either immediately or by setting other events in motion, all
constituting a natural and continuous chain of events, each having a close causal
connection with its immediate predecessor, the final event in the chain immediately
effecting the injury as a natural and probable result of the cause which first acted, under
such circumstances that the person responsible for the first event should, as an
ordinary prudent and intelligent person, have reasonable ground to expect at the
moment of his act or default that an injury to some person might probably result
therefrom. 50
Applying the above definition, although it may be said that the act of Jose Koh, if at all negligent,
was the initial act in the chain of events, it cannot be said that the same caused the eventual
injuries and deaths because of the occurrence of a sufficient intervening event, the negligent act
of the truck driver, which was the actual cause of the tragedy. The entry of the car into the lane of
the truck would not have resulted in the collision had the latter heeded the emergency signals
given by the former to slow down and give the car an opportunity to go back into its proper lane.
Instead of slowing down and swerving to the far right of the road, which was the proper
precautionary measure under the given circumstances, the truck driver continued at full speed
towards the car. The truck driver's negligence becomes more apparent in view of the fact that the
road is 7.50 meters wide while the car measures 1.598 meters and the truck, 2.286 meters, in
width. This would mean that both car and truck could pass side by side with a clearance of 3.661
meters to spare. 51 Furthermore, the bridge has a level sidewalk which could have partially
accommodated the truck. Any reasonable man finding himself in the given situation would have
tried to avoid the car instead of meeting it head-on.
The truck driver's negligence is apparent in the records. He himself said that his truck was
running at 30 miles (48 kilometers) per hour along the bridge while the maximum speed allowed
by law on a bridge 52 is only 30 kilometers per hour. Under Article 2185 of the Civil Code, a
person driving a vehicle is presumed negligent if at the time of the mishap, he was violating any
traffic regulation. We cannot give credence to private respondents' claim that there was an error
in the translation by the investigating officer of the truck driver's response in Pampango as to
whether the speed cited was in kilometers per hour or miles per hour. The law presumes that
official duty has been regularly performed; 53 unless there is proof to the contrary, this
presumption holds. In the instant case, private respondents' claim is based on mere conjecture.
The truck driver's negligence was likewise duly established through the earlier quoted testimony
of petitioner Araceli Koh McKee which was duly corroborated by the testimony of Eugenio
Tanhueco, an impartial eyewitness to the mishap.
Araceli Koh McKee testified further, thus: xxx xxx xxx
Chapter Three : Other Kinds of Damages
Q Mrs. how did you know that the truck driven by the herein accused, Ruben Galang
did not reduce its speed before the actual impact of collision as you narrated in this
Exhibit "1," how did you know?
A It just kept on coming, sir. If only he reduced his speed, we could have got (sic) back
to our right lane on side (sic) of the highway, sir. (tsn, pp. 33-34, July 22, 1977) or
(Exhibit; "O" in these Civil Cases) (pp. 30-31, Appellants' Brief)54
while Eugenio Tanhueco testified thus:
Q When you saw the truck, how was it moving?
A It was moving 50 to 60 kilometers per hour, sir.
Q Immediately after you saw this truck, do you know what happened?
A I saw the truck and a car collided (sic), sir, and I went to the place to help the victims.
(tsn. 28, April 19, 1979) xxx xxx xxx
Q From the time you saw the truck to the time of the impact, will you tell us if the said
truck ever stopped?
A I saw it stopped (sic) when it has (sic) already collided with the car and it was already
motionless. (tsn. 31, April 19, 1979; Emphasis Supplied). (p. 27, Appellants' Brief). 55
Clearly, therefore, it was the truck driver's subsequent negligence in failing to take the proper
measures and degree of care necessary to avoid the collision which was the proximate cause of
the resulting accident.
Even if Jose Koh was indeed negligent, the doctrine of last clear chance finds application here.
Last clear chance is a doctrine in the law of torts which states that the contributory negligence of
the party injured will not defeat the claim for damages if it is shown that the defendant might, by
the exercise of reasonable care and prudence, have avoided the consequences of the
negligence of the injured party. In such cases, the person who had the last clear chance to avoid
the mishap is considered in law solely responsible for the consequences thereof.56
In Bustamante vs. Court of Appeals, 57 We held:
The respondent court adopted the doctrine of "last clear chance." The doctrine, stated
broadly, is that the negligence of the plaintiff does not preclude a recovery for the
negligence of the defendant where it appears that the defendant, by exercising
reasonable care and prudence, might have avoided injurious consequences to the
plaintiff notwithstanding the plaintiff's negligence. In other words, the doctrine of last
clear chance means that even though a person's own acts may have placed him in a
position of peril, and an injury results, the injured person is entitled to recovery (sic). As
the doctrine is usually stated, a person who has the last clear chance or opportunity of
avoiding an accident, notwithstanding the negligent acts of his opponent or that of a
third person imputed to the opponent is considered in law solely responsible for the
consequences of the accident. (Sangco, Torts and Damages, 4th Ed., 1986, p. 165).
The practical import of the doctrine is that a negligent defendant is held liable to a
negligent plaintiff, or even to a plaintiff who has been grossly negligent in placing
Page | 16
himself in peril, if he, aware of the plaintiff's peril, or according to some authorities,
should have been aware of it in the reasonable exercise of due care, had in fact an
opportunity later than that of the plaintiff to avoid an accident (57 Am. Jur., 2d, pp. 798-
799).
In Pantranco North Express, Inc., vs. Baesa, 58 We ruled:
The doctrine of last clear chance was defined by this Court in the case of Ong v.
Metropolitan Water District, 104 Phil. 397 (1958), in this wise:
The doctrine of the last clear chance simply, means that the negligence of a
claimant does not preclude a recovery for the negligence of defendant where it
appears that the latter, by exercising reasonable care and prudence, might
have avoided injurious consequences to claimant notwithstanding his
negligence.
The doctrine applies only in a situation where the plaintiff was guilty of prior or
antecedent negligence but the defendant, who had the last fair chance to avoid the
impending harm and failed to do so, is made liable for all the consequences of the
accident notwithstanding the prior negligence of the plaintiff [Picart v. Smith, 37 Phil.
809 (1918); Glan People's Lumber and Hardware, et al. vs. Intermediate Appellate
Court, Cecilia Alferez Vda. de Calibo, et al., G.R. No. 70493, May, 18, 1989]. The
subsequent negligence of the defendant in failing to exercise ordinary care to avoid
injury to plaintiff becomes the immediate or proximate cause of the accident which
intervenes between the accident and the more remote negligence of the plaintiff, thus
making the defendant liable to the plaintiff [Picart v. Smith, supra].
Generally, the last clear chance doctrine is invoked for the purpose of making a
defendant liable to a plaintiff who was guilty of prior or antecedent negligence, although
it may also be raised as a defense to defeat claim (sic) for damages.
Applying the foregoing doctrine, it is not difficult to rule, as We now rule, that it was the truck
driver's negligence in failing to exert ordinary care to avoid the collision which was, in law, the
proximate cause of the collision. As employers of the truck driver, the private respondents are,
under Article 2180 of the Civil Code, directly and primarily liable for the resulting damages. The
presumption that they are negligent flows from the negligence of their employee. That
presumption, however, is only juris tantum, not juris et de jure. 59 Their only possible defense is
that they exercised all the diligence of a good father of a family to prevent the damage. Article
2180 reads as follows:
The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible. xxx
xxx xxx
Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry. xxx xxx xxx
Chapter Three : Other Kinds of Damages Page | 17

The responsibility treated of in this article shall cease when the persons herein
mentioned prove that they observed all the diligence of a good father of a family to
prevent damage.

The diligence of a good father referred to means the diligence in the selection and supervision of
employees. 60 The answers of the private respondents in Civil Cases Nos. 4477 and 4478 did not
interpose this defense. Neither did they attempt to prove it.

The respondent Court was then correct in its Decision of 29 November 1983 in reversing the
decision of the trial court which dismissed Civil Cases Nos. 4477 and 4478. Its assailed
Resolution of 3 April 1984 finds no sufficient legal and factual moorings.

In the light of recent decisions of this Court, 61 the indemnity for death must, however, be
increased from P12,000.00 to P50,000.00.

WHEREFORE, the instant petition is GRANTED. The assailed Resolution of the respondent
Court of 3 April 1984 is SET ASIDE while its Decision of 29 November 1983 in C.A.-G.R. CV
Nos. 69040-41 is REINSTATED, subject to the modification that the indemnity for death is
increased from P12,000.00 to P50,000.00 each for the death of Jose Koh and Kim Koh McKee.

Costs against private respondents.

SO ORDERED.
Chapter Three : Other Kinds of Damages Page | 18

On August 23, 1955 defendant failed to appear before court. Instead, on the following day his
G.R. No. L-20089 December 26, 1964 counsel filed a motion to defer for two weeks the resolution on defendants petition for relief. The
counsel stated that he would confer with defendant in Cagayan de Oro City — the latter's
residence — on the possibility of an amicable element. The court granted two weeks counted
BEATRIZ P. WASSMER, plaintiff-appellee, vs. from August 25, 1955.
FRANCISCO X. VELEZ, defendant-appellant.
Plaintiff manifested on June 15, 1956 that the two weeks given by the court had expired on
BENGZON, J.P., J.: September 8, 1955 but that defendant and his counsel had failed to appear.

The facts that culminated in this case started with dreams and hopes, followed by appropriate Another chance for amicable settlement was given by the court in its order of July 6, 1956 calling
planning and serious endeavors, but terminated in frustration and, what is worse, complete the parties and their attorneys to appear on July 13, 1956. This time. however, defendant's
public humiliation. counsel informed the court that chances of settling the case amicably were nil.

Francisco X. Velez and Beatriz P. Wassmer, following their mutual promise of love, decided to On July 20, 1956 the court issued an order denying defendant's aforesaid petition. Defendant
get married and set September 4, 1954 as the big day. On September 2, 1954 Velez left this has appealed to this Court. In his petition of June 21, 1955 in the court a quo defendant alleged
note for his bride-to-be: excusable negligence as ground to set aside the judgment by default. Specifically, it was stated
that defendant filed no answer in the belief that an amicable settlement was being negotiated.
Dear Bet —
A petition for relief from judgment on grounds of fraud, accident, mistake or excusable
Will have to postpone wedding — My mother opposes it. Am leaving on the negligence, must be duly supported by an affidavit of merits stating facts constituting a valid
Convair today. defense. (Sec. 3, Rule 38, Rules of Court.) Defendant's affidavit of merits attached to his petition
Please do not ask too many people about the reason why — That would only of June 21, 1955 stated: "That he has a good and valid defense against plaintiff's cause of
create a scandal. action, his failure to marry the plaintiff as scheduled having been due to fortuitous event and/or
Paquing circumstances beyond his control." An affidavit of merits like this stating mere conclusions or
opinions instead of facts is not valid. (Cortes vs. Co Bun Kim, L-3926, Oct. 10, 1951; Vaswani vs.
But the next day, September 3, he sent her the following telegram: P. Tarrachand Bros., L-15800, December 29, 1960.)

NOTHING CHANGED REST ASSURED RETURNING VERY SOON
APOLOGIZE MAMA PAPA LOVE .
PAKING
Thereafter Velez did not appear nor was he heard from again.
Sued by Beatriz for damages, Velez filed no answer and was declared in default. Plaintiff
adduced evidence before the clerk of court as commissioner, and on April 29, 1955, judgment
was rendered ordering defendant to pay plaintiff P2,000.00 as actual damages; P25,000.00 as
moral and exemplary damages; P2,500.00 as attorney's fees; and the costs.
On June 21, 1955 defendant filed a "petition for relief from orders, judgment and proceedings
and motion for new trial and reconsideration." Plaintiff moved to strike it cut. But the court, on
August 2, 1955, ordered the parties and their attorneys to appear before it on August 23, 1955
"to explore at this stage of the proceedings the possibility of arriving at an amicable settlement."
It added that should any of them fail to appear "the petition for relief and the opposition thereto
will be deemed submitted for resolution."
Defendant, however, would contend that the affidavit of merits was in fact unnecessary, or a
mere surplusage, because the judgment sought to be set aside was null and void, it having been
based on evidence adduced before the clerk of court. In Province of Pangasinan vs. Palisoc, L-
16519, October 30, 1962, this Court pointed out that the procedure of designating the clerk of
court as commissioner to receive evidence is sanctioned by Rule 34 (now Rule 33) of the Rules
of Court. Now as to defendant's consent to said procedure, the same did not have to be obtained
for he was declared in default and thus had no standing in court (Velez vs. Ramas, 40 Phil. 787;
Alano vs. Court of First Instance, L-14557, October 30, 1959).
In support of his "motion for new trial and reconsideration," defendant asserts that the judgment
is contrary to law. The reason given is that "there is no provision of the Civil Code authorizing" an
action for breach of promise to marry. Indeed, our ruling in Hermosisima vs. Court of Appeals (L-
14628, Sept. 30, 1960), as reiterated in Estopa vs. Biansay (L-14733, Sept. 30, 1960), is that
"mere breach of a promise to marry" is not an actionable wrong. We pointed out that Congress
deliberately eliminated from the draft of the new Civil Code the provisions that would have it so.
It must not be overlooked, however, that the extent to which acts not contrary to law may be
perpetrated with impunity, is not limitless for Article 21 of said Code provides that "any person
who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage."
Chapter Three : Other Kinds of Damages Page | 19

The record reveals that on August 23, 1954 plaintiff and defendant applied for a license to
contract marriage, which was subsequently issued (Exhs. A, A-1). Their wedding was set for
September 4, 1954. Invitations were printed and distributed to relatives, friends and
acquaintances (Tsn., 5; Exh. C). The bride-to-be's trousseau, party drsrses and other apparel for
the important occasion were purchased (Tsn., 7-8). Dresses for the maid of honor and the flower
girl were prepared. A matrimonial bed, with accessories, was bought. Bridal showers were given
and gifts received (Tsn., 6; Exh. E). And then, with but two days before the wedding, defendant,
who was then 28 years old,: simply left a note for plaintiff stating: "Will have to postpone wedding
— My mother opposes it ... " He enplaned to his home city in Mindanao, and the next day, the
day before the wedding, he wired plaintiff: "Nothing changed rest assured returning soon." But
he never returned and was never heard from again.

Surely this is not a case of mere breach of promise to marry. As stated, mere breach of promise
to marry is not an actionable wrong. But to formally set a wedding and go through all the above-
described preparation and publicity, only to walk out of it when the matrimony is about to be
solemnized, is quite different. This is palpably and unjustifiably contrary to good customs for
which defendant must be held answerable in damages in accordance with Article 21 aforesaid.

Defendant urges in his afore-stated petition that the damages awarded were excessive. No
question is raised as to the award of actual damages. What defendant would really assert
hereunder is that the award of moral and exemplary damages, in the amount of P25,000.00,
should be totally eliminated.

Per express provision of Article 2219 (10) of the New Civil Code, moral damages are
recoverable in the cases mentioned in Article 21 of said Code. As to exemplary damages,
defendant contends that the same could not be adjudged against him because under Article
2232 of the New Civil Code the condition precedent is that "the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner." The argument is devoid of merit as
under the above-narrated circumstances of this case defendant clearly acted in a "wanton ... ,
reckless [and] oppressive manner." This Court's opinion, however, is that considering the
particular circumstances of this case, P15,000.00 as moral and exemplary damages is deemed
to be a reasonable award.

PREMISES CONSIDERED, with the above-indicated modification, the lower court's judgment is
hereby affirmed, with costs.
Chapter Three : Other Kinds of Damages
G.R. No. L-8721 May 23, 1957
TRANQUILINO CACHERO, plaintiff-appellant, vs.
MANILA YELLOW TAXICAB CO., INC., defendant-appellant.
FELIX, J.:
There is no dispute as to the following facts: on December 13, 1952, Atty. Tranquilino F. Cachero
boarded a Yellow Taxicab, with plate No. 2159-52 driven by Gregorio Mira Abinion and owned by
the Manila Yellow Taxicab Co., Inc. On passing Oroquieta between Doroteo Jose and Lope de
Vega streets, Gregorio Mira Abinion bumped said taxicab against a Meralco post, No. 1-4/387,
with the result that the cab was badly smashed and the plaintiff fell out of the vehicle to the
ground, suffering thereby physical injuries, slight in nature.
The chauffeur was subsequently prosecuted by the City Fiscal and on February 26, 1963, upon
his plea of guilty the Municipal Court of Manila sentenced him to suffer 1 month and 1 day
of arresto mayor, and to pay the costs. On December 17, 1952, Tranquilino F. Cachero
addressed a letter to the Manila Yellow Taxicab Co., Inc., which was followed by another of
January 6, 1953, which reads as follows:
MANILA, January 6, 1953
The MANILA YELLOW TAXICAB CO., INC.
1338 Arlegui, Manila
Dear Sirs:
As you have been already advised by the letter dated December 17, 1952, on
December 13, 1952, while I was a passenger of your taxicab bearing plate No. 2159
and driven by your chauffeur Gregorio Mira and through his negligence and the bad
condition of the said car, he bumped the same against the pavement on the street
(Oroquieta — between Doroteo Jose and Lope de Vega streets, Manila) and hit the
Meralco post on said street, resulting in the smashing of the said taxicab, and as a
result thereof I was gravely injured and suffered and is still suffering physical, mental
and moral damages and not being able to resume my daily calling.
For the said damages, I hereby make a demand for the payment of the sum of
P79,245.65, covering expenses for transportation to the hospital for medical treatment,
medicines, doctors bills, actual monetary loss, moral, compensatory and exemplary
damages, etc., within 5 days from date of receipt hereof.
I trust to hear from you on the matter within the period of 5 days above specified.
Truly yours,
Page | 20
(Sgd.) TRANQUILINO F. CACHERO
2256 Int. B, Misericordia St.,
Sta. Cruz, Manila
(Exhibit K)
The Taxicab Co. to avoid expenses and time of litigation offered to settle the case amicably with
plaintiff but the latter only agreed to reduce his demand to the sum of P72,050.20 as his only
basis for settlement which, of course, was not accepted by said company. So plaintiff instituted
this action on February 2, 1953, in the Court of First Instance of Manila, praying in the complaint
that the defendant be condemned to pay him:
(a) The sum of P72,050.20, the total sum of the itemized losses and/or damages
under paragraph 7 of the complaint, with legal interest thereon from the date of the
filing of the complaint;
(b) The sum of P5,000 as attorney's fee; and the costs of the suit; and
Plaintiff further respectfully prays for such other and further reliefs as the facts and the
law pertaining to the case may warrant.
The defendant answered the complaint setting forth affirmative defenses and a counterclaim for
P930 as damages and praying for the dismissal of plaintiff's action. After hearing the Court
rendered decision only July 20, 1954, the dispositive part of which is as follows:
IN VIEW OF THE FOREGOING, the Court hereby renders judgment in favor of the
plaintiff and against the defendant, sentencing the latter to pay the former the following:
(1) For medicine, doctor's fees for services rendered and transportation, P700; (2)
professional fee as attorney for the defendant in Criminal Case No. 364, "People vs.
Manolo Maddela et al." of the Court of First Instance of Nueva Vizcaya, P3,000; (3)
professional fees as attorney for the defendant in Civil Case No. 23891 of the Municipal
Court of Manila, "Virginia Tangulan vs. Leonel da Silva," and for the taking of the
deposition of Gabina Angrepan in a case against the Philippine National Bank, P200;
and(4) moral damages in the amount of P2,000.
Defendant's counterclaim is hereby dismissed.
Defendant shall also pay the costs."
From this decision both parties appealed to Us, plaintiff limiting his appeal to the part of the
decision which refers to the moral damages awarded to him which he considered inadequate,
and to the failure of said judgment to grant the attorney's fees asked for in the prayer of his
complaint. Defendant in turn alleges that the trial Court erred in awarding to the plaintiff the
following:
(1) P700 — for medicine, doctor's fees and transportation expenses;
Chapter Three : Other Kinds of Damages
(2) P3,000 — as supposedly unearned full professional fees as attorney for the
defendant in Criminal Case No. 364, "People vs. Manolo Maddela et al.";
(3) P200 — as supposedly unearned professional fees as attorney for the defendant in
Civil Case No. 23891 of the Manila Municipal Court, "Virginia Tangulan vs. Leonel
de Silva", and for failure to take the deposition of a certain Gabina Angrepan in an
unnamed case; and
(4) P2,000 — as moral damages, amounting to the grand total of P5,900, these
amounts being very much greater than what plaintiff deserves.
In connection with his appeal, plaintiff calls attention to the testimonies of Dr. Modesto S.
Purisima and of Dr. Francisco Aguilar, a member of the staff of the National Orthopedic Hospital,
which he considers necessary as a basis for ascertaining not only the physical sufferings
undergone by him, but also for determining the adequate compensation for moral damages that
he should be awarded by reason of said accident.
The exact nature of plaintiff's injuries, their degree of seriousness and the period of his
involuntary disability can be determined by the medical certificate (Exhibit D) issued by the
National Orthopedic Hospital on December 16, 1952, and the testimonies of Dr. Francisco
Aguilar, physician in said hospital, and of Dr. Modesto Purisima, a private practitioner. The
medical certificate (Exhibit D) lists: (a) a subluxation of the right shoulder joint; (b) a contusion on
the right chest; and (c) a "suspicious fracture" of the upper end of the right humerus. Dr. Aguilar
who issued the medical certificate admitted, however, with regard to the "suspicious fracture",
that in his opinion with (the aid of) the x-ray there was no fracture. According to this doctor
plaintiff went to the National 0rthopedic Hospital at least six times during the period from
December 16, 1952, to April 7, 1953; that he strapped plaintiffs body (see Exhibit E), which strap
was not removed until after a period of six weeks had elapsed Dr. Modesto Purisima, a private
practitioner, testified that he advised and treated plaintiff from, December 14, 1952, to the end of
March (1953). Plaintiff was never hospitalized for treatment of the injuries he received in said
accident.
Counsel for the defendant delves quite extensively on these injuries. He says in his brief the
following:
Just what is a subluxation? Luxation is another term for dislocation (Dorland, W.A.N.,
The American Illustrated Medical Dictionary (13th ed.), p. 652), and hence,
a sublaxation is an incomplete or partial dislocation (Ibid., p. 1115). While a dislocation
is the displacement of a bone or bones from its or their normal setting (and, therefore,
applicable and occurs only to joints and not to rigid or non-movable parts of the skeletal
system) (Ibid., p. 358; Christopher, F., A Textbook of Surgery (5th ed.), p. 342), it should
be distinguished from a fracture which is a break or rupture in a bone or cartilage,
usually due to external violence (Christopher, F., A Textbook of Surgery (5th Ed.) p. 194;
Dorland, W.A.N., The American Illustrated Medical Dictionary (13th ed.), P.459).
Because, unlike fracture which may be partial (a crack in the bone) or total (a complete
break in the bone), there can be no half-way situations with regard to dislocations of the
shoulder joint (the head or ball of the humerus — the humerus is the bone from the
elbow to the shoulder) must be either inside the socket of the scapula or shoulder blade
(in which case there is no dislocation) or out of the latter (in which event there is a
dislocation), to denote a condition where due to external violence, the muscles and
Page | 21
ligaments connecting the humerus to the scapula have subjected to strain intense
enough to produce temporary distention or lessening of their tautness and
consequently resulting in the loosening or wrenching of the ball of the humerus from its
snug fit in the socket of the scapula, by using the terms subluxation or partial
dislocation(as used in the medical certificate), is to fall into a misnomer — a term often
used by "chiropractors" and by those who would want to sound impressive, but
generally unfavored by the medical profession. To describe the above condition more
aptly, the medical profession usually employs the expression luxatio imperfecta, or, in
simple language, a sprain (Dorland, W.A.N., The American Illustrated Medical
Dictionary (13th ed.), p. 652). The condition we have described is a paraphrase of the
definition of a sprain. Plaintiff suffered this very injury (a sprained or wrenched shoulder
joint) and a cursory scrutiny of his x-ray plates (Exhibits A and B) by a qualified
orthopedic surgeon or by a layman with a picture or x-ray plate of a normal shoulder
joint (found in any standard textbook on human anatomy; the one we used was
Schemer, J.P., Morris' Human Anatomy (10 ed., p. 194) for comparison will bear out our
claim.
Treatment for a sprain is by the use of adhesive or elastic bandage, elevation of the
joint, heat, effleurage and later massage (Christopher, F., A Textbook of Surgery (5th
ed., p. 116). The treatment given to the plaintiff was just exactly that Dr. Aguilar
bandaged (strapped) plaintiff's right shoulder and chest (t.s.n., p. 31) in an elevated
position (with the forearm horizontal to the chest (see photograph, Exhibit E), and
certain vitamins were prescribed for him (t.s.n., p. 131). He also underwent massage for
some time by Drs. Aguilar and Purisima. The medicines and appurtenances to
treatment purchased by plaintiff from the Orthopedic Hospital, Botica Boie and Metro
Drug Store were, by his own admission, adhesive plaster, bandage, gauze, oil and
"tintura arnica" (t.s.n., p. 3 — continuation of transcript ), and Dr. Purisima also
prescribed "Numotizin", a beat generating ointment (t.s.n., p. 23), all of which are
indicated for a sprain, and by their nature, can cure nothing more serious than a sprain
anyway. Fractures and true dislocations cannot be cured by the kind of treatment and
medicines which plaintiff received. A true dislocation, for instance, is treated by means
of reduction through traction of the arm until the humeral head returns to the proper
position in the scapular socket (pulling the arm at a 60 degree angle and guiding the
ball of the humerus into proper position, in its socket) while the patient is under deep
anaesthesia, and then, completely immobilizing the part until the injured capsule has
healed (Christopher, F., A Textbook of Surgery, pp. 343 and 344). No evidence was
submitted that plaintiff ever received the latter kind of treatment. Dr. Purisima even
declared that after the plaintiff's first visit to the Orthopedic Hospital the latter informed
him that there was no fracture or dislocation (t.s.n., p. 26). Dr. Purisima's statement is
the truth of the matter as we have already explained — joints of the shoulder being only
subject to total dislocation (due to their anatomical design), not to partial ones, and any
injury approximating dislocation but not completely, it being classified as mere sprains,
slight or bad.
The second and last injury plaintiff sustained was a contusion. What is a contusion? It is
just a high flown expression for a bruise or the act of bruising (Dorland, W.A.N., The
American Illustrated Medical Dictionary (13th ed. p. 290). No further discussion need be
made on this particular injury since the nature of a bruise is of common knowledge (it's
a bit uncomfortable but not disabling unless it occurs on movable parts like the fingers
Chapter Three : Other Kinds of Damages Page | 22

or elbow which is not the case, herein having occurred in the right chest) and the kind (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35.
of medical treatment or help it is also well known. (pp. 10-14, defendant-appellant's
brief). xxx xxx xxx

The trial Judge undoubtedly did not give much value to the testimonies of the doctors when in Of the cases enumerated in the just quoted Article 2219 only the first two may have any bearing
the statement of facts made in his decision he referred to the physical injuries received by the on the case at bar. We find, however, with regard to the first that the defendant herein has not
plaintiff as slight in nature and the latter is estopped from discussing the same in order to make committed in connection with this case any "criminal offense resulting in physical injuries". The
them appear as serious, because in the statement of facts made in his brief as appellant, he one that committed the offense against the plaintiff is Gregorio Mira, and that is why he has been
says the following: already prosecuted and punished therefor. Although (a) owners and managers of an
establishment or enterprise are responsible for damages caused by their employees in the
The facts of the case as found by the lower court in its decision, with the permission of service of the branches in which the latter are employed or on the occasion of their functions; (b)
this Honorable Court, we respectfully quote them hereunder as our STATEMENT OF employers are likewise liable for damages caused by their employees and household helpers
FACTS for the purpose of this appeal. acting within the scope of their assigned task (Article 2180 of the Civil Code); and (c) employers
and corporations engaged in any kind of industry are subsidiarily civilly liable for felonies
Before entering into a discussion of the merits of plaintiff's appeal, We will say a few words as to committed by their employees in the discharge of their duties (Art. 103, Revised Penal Code),
the nature of the action on which his demand for damages is predicated. plaintiff herein does not maintain this action under the provisions of any of the articles of the
codes just mentioned and against all the persons who might be liable for the damages caused,
but as a result of an admitted breach of contract of carriage and against the defendant employer
The nature of an action as in contract or in tort is determined from the essential alone. We, therefore, hold that the case at bar does not come within the exception of paragraph
elements of the complaint, taken as a whole, in the case of doubt a construction to 1, Article 2219 of the Civil Code.
sustain the action being given to it.
The present complaint is not based either on a "quasi delict causing physical injuries" (Art. 2219
While the prayer for relief or measure of damages sought does not necessarily par. 2, of the Civil Code). From the report of the Code Commission on the new Civil Code We
determine the character of the action, it may be material in the determination of the copy the following:
question and therefore entitled to consideration and in case of doubt will open
determine character of the action and indeed there are actions whose character is
necessarily determined thereby. (1 C.J.S. 1100) A question of nomenclature confronted the Commission. After a careful deliberation, it
was agreed to use the term "quasi-delict" for those obligations which do not arise from
law, contracts quasi-contracts or criminal offenses. They are known in Spanish legal
A mere perusal of plaintiff complaint will show that his action against the defendant is predicated treatises as "culpa aquiliana", "culpa-extra-contractual" or "cuasi-delitos". The phrase
on an alleged breach of contract of carriage, i.e., the failure of the defendant to bring him "safely "culpa-extra-contractual" or its translation "extra-contractual fault" was eliminated
and without mishaps" to his destination, and it is to be noted that the chauffeur of defendant's because it did not exclude quasi-contractual or penal obligations. "Aquilian fault" might
taxicab that plaintiff used when he received the injuries involved herein, Gregorio Mira, has not have been selected, but it was thought inadvisable to refer to so ancient a law as the
even been made a party defendant to this case. "Lex Aquilia". So "quasi-delicts" was chosen, which more nearly corresponds to the
Roman Law classification of obligations, and is in harmony with the nature of this kind
Considering, therefore, the nature of plaintiff's action in this case, is he entitled to compensation of liability.
for moral damages? Article 2219 of the Civil Code says the following:
The Commission also thought of the possibility of adopting the word "tort" from Anglo-
ART. 2219. Moral damages may be recovered in the following and analogous cases: American Law. But "tort" under that system is much broader than the Spanish-
Philippine concept of obligations arising from non-contractual negligence." "Tort" in
(1) A criminal offense resulting in physical injuries; Anglo-American jurisprudence includes not only negligence, but also intentional
(2) Quasi-delicts causing physical injuries; criminal acts, such as assault and battery, false imprisonment and deceit. In the general
(3) Seduction, abduction, rape, or other lascivious acts; plan of the Philippine legal system, intentional and malicious are governed by the Penal
(4) Adultery or concubinage; Code, although certain exceptions are made in the Project. (Report of the Code
(5) Illegal or arbitrary detention or arrest; Commission, pp. 161-162).
(6) Illegal search;
(7) Libel, slander or any other form of defamation; In the case of Cangco vs. Manila Railroad, 38 Phil. 768, We established the distinction between
(8) Malicious prosecution; obligation derived from negligence and obligation as a result of a breach of a contract. Thus, We
(9) Acts mentioned in Article 309; said:
Chapter Three : Other Kinds of Damages
It is important to note that the foundation of the legal liability of the defendant is the
contract of carriage, and that the obligation to respond for the damage which plaintiff
has suffered arises, if at all, from the breach of that contract by reason of the failure of
defendant to exercise due care in its performance. That is to say, its liability is direct
and immediate, differing essentially in the legal view point from that presumptive
responsibility for the negligence of its servants, imposed by Article 1903 of the Civil
Code (Art. 2180 of the new), which can be rebutted by proof of the exercise of due care
in their selection or supervision. Article 1903 is not applicable to obligation arising EX
CONTRACTU, but only to extra-contractual obligations or — to use the technical form
of expression, that article, relates only to CULPA AQUILIANA and not to CULPA
CONTRACTUAL.
The decisions in the cases of Castro vs. Acro Taxicab (82 Phil., 359, 46 Off. Gaz., Na. 5, p.
2023); Lilius et al. vs. Manila Railroad, (59 Phil. 758) and others, wherein moral damages, are
awarded to the plaintiffs, are not applicable to the case at bar because said decisions were
rendered before the effectivity of the new Civil Code (August 30, 1950) and for the further reason
that the complaints filed therein were based on different causes of action.
In view of the foregoing the sum of P2,000 awarded as moral damages by the trial Court has to
be eliminated, for under the law it is not a compensation awardable in a case like the one at bar.
As to plaintiff's demand for P5,000 as attorney's fees, the Civil Code provides the following:
ART, 2208. In the absence of stipulation, attorney's fees and expenses of litigation,
other than judicial costs, cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the plaintiff to litigate with
third persons or to incur expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident had faith in refusing to satisfy the
plaintiff's plainly valid, just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled
workers;
(8) in actions for indemnity under workmen's compensation and employers liability
laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorney's fees
and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
The present case does not come under any of exceptions enumerated in the preceding article,
specially of paragraph 2 thereof, because defendant's failure to meet its responsibility was not
Page | 23
the plaintiff to litigate or to incur expenses to protect his interests. The present action was
instituted because plaintiff an exorbitant amount for damages (P60,000) and naturally the
defendant did not and could not yield to such demand. This is neither a case that comes under
paragraph 11 of Article 2208 because the Lower Court did not deem it just and equitable to
award any amount for attorney's fees. As We agree with the trial Judge on this point, We cannot
declare that he erred for not awarding to plaintiff any such fees in this case.
Coming now to the appeal of the defendant, the Court, after due consideration of the evidence
appearing on record:
(1) Approves the award of P700 for medicine, doctors' fees and transportation expenses;
(2) Reduces the award of P3,000 as attorney's fees to the sum of P2,000, as Manolo
Maddela, defendant in Criminal Case No. 364 of the Court of First Instance of Nueva
Vizcaya testified that he has already paid to plaintiff part of the latter's fees of P3,000,
the amount of which was not disclosed, though it was incumbent upon the plaintiff to
establish how much he had been paid of said fees;
(3) Approves the award of P200 as unearned professional fees as attorney for the
defendant in Civil Case No. 238191 of the Municipal Court of Manila whom plaintiff was
unable to represent, and for the latter's failure to take the deposition of one Agripina
Angrepan due to the automobile accident referred to in this case.
Before closing this decision We deem it convenient to quote the following passage of
defendant's brief as appellant:
Realizing its obligation under its contract of carriage with the plaintiff, and because the
facts of the case, as have been shown, mark it as more proper for the Municipal Court
only, the defendant, to avoid the expense and time of litigation, offered to settle the
case amicably with plaintiff, but the latter refused and insisted on his demand for
P72,050.20 (Exhibit K) as the only basis for settlement, thus adding a clearly petty case
to the already overflowing desk of the Honorable Members of this Court.
We admire and respect at all times a man for standing up and fighting for his rights, and
when said right consists in injuries sustained due to a breach of a contract of carriage
with us, sympathy and understanding are added thereto. But when a person starts
demanding P72,050.20 for a solitary bruise and sprain, injuries for which the trial court,
even at its generous although erroneous best, could only grant P5,900, then respect
and sympathy give way to something else. It is time to fight, for, in our humble opinion,
there is nothing more loathsome nor truly worthy of condemnation than one who uses
his injuries for other purposes than just rectification. If plaintiff's claim is granted, it
would be a blessing, not a misfortune, to be injured. (p. 34-35)
This case was instituted by a lawyer who, as an officer of the courts, should be the first in
helping Us in the administration of justice, and after going over the record of this case, we do not
hesitate to say that the demand of P72,050.20 for a subluxation of the right humerus bone and
an insignificant contusion in the chest, has not even the semblance of reasonableness. As a
matter of fact, Dr. Aguilar himself said that the x-ray plates (Exhibits A, Band C) " did not show
anything significant except that it shows a slight subluxation of the right shoulder, and that there
is a suspicious fracture", which ultimately he admitted not to exist. The plaintiff himself must have
Chapter Three : Other Kinds of Damages Page | 24

felt embarrassed by his own attitude when after receiving defendant's brief as appellant, he
makes in his brief as appellee the categorical statement that he DOES NOT NOW INSIST NOR
PRETEND IN THE LEAST to Collect from the defendant all the damages he had claimed in his
complaint, but instead he is submitting his case to the sound discretion of the Honorable Court
for the award of a reasonable and equitable damages allowable by law, to compensate the
plaintiff of the suffering and losses he had undergone and incurred of the accident oftentimes
mentioned in this brief in which plaintiff was injured" (p. 17-18).This acknowledgment comes too
late, for plaintiff has already deprived the Court of Appeals of the occasion to exercise its
appellate jurisdiction over this case which he recklessly dumped to this Court. We certainly
cannot look with at favor at his attitude of plaintiff.

WHEREFORE, the decision appealed from is hereby modified by reducing the amount awarded
as professional fees from P3,000 to P2,000 and by eliminating the moral damages of P2,000
awarded by the Lower Court to the plaintiff. Said decision is in all other respects affirmed, without
pronouncement as to costs. It is so ordered.
Chapter Three : Other Kinds of Damages
G.R. No. L-12163 March 4, 1959
PAZ FORES, petitioner, vs.
IRENEO MIRANDA, respondent.
REYES, J.B.L., J.:
Defendant-petitioner Paz Fores brings this petition for review of the decision of the Court of
Appeals (C.A. Case No. 1437-R) awarding to the plaintiff-respondent Ireneo Miranda the sums
of P5,000 by way of actual damages and counsel fees, and P10,000 as moral damages, with
costs.
Respondent was one of the passengers on a jeepney driven by Eugenio Luga. While the vehicle
was descending the Sta. Mesa bridge at an excessive rate of speed, the driver lost control
thereof, causing it to swerve and to his the bridge wall. The accident occurred on the morning of
March 22, 1953. Five of the passengers were injured, including the respondent who 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; the first on May 23, 1953, when
wire loops were wound around the broken bones and screwed into place; a second, effected to
insert a metal splint, and a third one to remove such splint. 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 contention that the evidence did not sufficiently establish the identity of the vehicle as the
belonging to the petitioner was rejected by the appellate court which found, among other things,
that is carried plate No. TPU-1163, SERIES OF 1952, Quezon City, registered in the name of
Paz Fores, (appellant herein) and that the vehicle even had the name of "Doña Paz" painted
below its wind shield. No evidence to the contrary was introduced by the petitioner, who relied on
an attack upon the credibility of the two policemen who went to the scene of the incident.
A point to be further remarked is petitioner's contention that on March 21, 1953, or one day
before the accident happened, she allegedly sold the passenger jeep that was involved therein
to a certain Carmen Sackerman.
The initial problem raised by the petitioner in this appeal may be formulated thus — "Is the
approval of the Public Service Commission necessary for the sale of a public service
vehicle even without conveying therewith the authority to operate the same?" Assuming
the dubious sale to be a fact, the court of Appeals answered the query in the affirmative. The
ruling should be upheld.
Section 20 of the Public Service Act (Commonwealth Act No. 146) provides:
Page | 25
Sec. 20. Subject to established limitations and exceptions and saving provisions to the
contrary, it shall be unlawful for any public service or for the owner, lessee or operator
thereof, without the previous approval and authority of the Commission previously had
— xxx xxx xxx
(g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates,
privileges, or rights, or any part thereof; or merge or consolidate its property, franchises,
privileges or rights, or any part thereof, with those of any other public service. The
approval herein required shall be given, after notice to the public and after hearing the
persons interested at a public hearing, if it be shown that there are just and reasonable
grounds for making the mortgage or encumbrance, for liabilities of more than one year
maturity, or the sale, alienation, lease, merger, or consolidation to be approved and that
the same are not detrimental to the public interest, and in case of a sale, the date on
which the same is to be consummated shall be fixed in the order of
approval: Provided, however, That nothing herein contained shall be construed to
prevent the transaction from being negotiated or completed before its approval or to
prevent the sale, alienation, or lease by any public service of any of its property in the
ordinary course of its business.
Interpreting the effects of this particular provision of law, we have held in the recent cases
of Montoya vs. Ignacio, *50 Off. Gaz. No. 1, p. 108; Timbol vs. Osias, et al., G. R. No. L-7547,
April 30, 1955, and Medina vs. Cresencia, 99 Phil., 506; 52 Off. Gaz. No. 10, p. 4606, that a
transfer contemplated by the law, if made without the requisite approval of the Public Service
Commission, is not effective and binding in so far as the responsibility of the grantee under the
franchise in relation to the public is concerned. Petitioner assails, however, the applicability of
these rulings to the instant case, contending that in those cases, the operator did not convey, by
lease or by sale, the vehicle independently of his rights under the franchise. This line of
reasoning does not find support in the law. The provisions of the statute are clear and prohibit
the sale, alienation, lease, or encumbrance of the property, franchise, certificate, privileges or
rights, or any part thereof of the owner or operator of the public service Commission. The law
was designed primarily for the protection of the public interest; and until the approval of the
public Service Commission is obtained the vehicle is, in contemplation of law, still under the
service of the owner or operator standing in the records of the Commission which the public has
a right to rely upon.
The proviso contained in the aforequoted law, to the effect that nothing therein shall be
construed "to prevent the transaction from being negotiated or complete before its approval",
means only that the sale without the required approval is still valid and binding between the
parties (Montoya vs. Ignacio, supra). The phrase "in the ordinary course of its business" found in
the other proviso" or to prevent the sale, alienation, or lease by any public service of any of its
property". As correctly observed by the lower court, could not have been intended to include the
sale of the vehicle itself, but at most may refer only to such property that may be conceivably
disposed or by the carrier in the ordinary course of its business, like junked equipment or spare
parts.
The case of Indalecio de Torres vs. Vicente Ona (63 Phil., 594, 597) is enlightening; and there, it
was held:
Chapter Three : Other Kinds of Damages
Under the law, the Public Service Commission has not only general supervision and
regulation of, but also full jurisdiction and control over all public utilities including the
property, equipment and facilities used, and the property rights and franchise enjoyed
by every individual and company engaged i the performance of a public service in the
sense this phrase is used in the Public Service Act or Act No. 3108). By virtue of the
provisions of said Act, motor vehicles used in the performance of a service, as the
transportation of freight from one point to another, have to this date been considered —
and they cannot but be so considered-public service property; and, by reason of its own
nature, a TH truck, which means that the operator thereof places it at the disposal of
anybody who is willing to pay a rental of its use, when he desires to transfer or carry his
effects, merchandise or any other cargo from one place to another, is necessarily a
public service property. (Emphasis supplied)
Of course, this court has held in the case of Bachrach Motor co. vs. Zamboanga Transportation
Co., 52 Phil., 244, that there may be a nunc pro tunc authorization which has the effect of having
the approval retroact to the date of the transfer; but such outcome cannot prejudice rights
intervening in the meantime. It appears that no such approval was given by the Commission
before the accident occurred.
The P10,000 actual damages awarded by the Court of First Instance of Manila were reduced by
the Court of Appeals to only P2,000, on the ground that a review of the records failed to disclose
a sufficient basis for the trial court's appraisal, since the only evidence presented on this point
consisted of respondent's bare statement that his expenses and loss of income amounted to
P20,000. On the other hand, "it cannot be denied," the lower court said, "that appellee
(respondent) did incur expenses"' It is well to note further that respondent was a painter by
profession and a professor of Fine Arts, so that the amount of P2,000 awarded cannot be said to
be excessive (see Arts. 2224 and 2225, Civil Code of the Philippines). The attorney's fees in the
sum of P3,000 also awarded to the respondent are assailed on the ground that the Court of First
Instance did not provided for the same, and since no appeal was interposed by said respondent,
it was allegedly error for the Court of Appeals to award them motu proprio. Petitioner fails to note
that attorney's fees are included in the concept of actual damages under the Civil Code and may
be awarded whenever the court deems it is just and equitable (Art. 2208, Civil Code of the
Philippines). We see no reason to alter these awards.
Anent the moral damages ordered to be paid to the respondent, the same must be discarded.
We have repeatedly ruled (Cachero vs. Manila Yellow Taxicab Co. Inc., 101 Phil., 523; 54 Off.
Gaz., [26], 6599; Necesito, et al vs. Paras, 104 Phil., 75; 56 Off. Gaz., [23] 4023, that moral
damages are not recoverable in damage actions predicted on a breach of the contract of
transportation, in view of Articles 2219 and 2220 of the new Civil Code, which provide as follows:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
xxx xxx xxx
Page | 26
Art. 2220. Willful injury to property may be a legal ground for awarding moral damages
if the court should find that, under circumstances, such damages are justify due. The
same rule applies to breaches of contract where the defendant acted fraudulently or in
bad faith.
By contrasting the provisions of these two article it immediately becomes apparent that:
(a) In case of breach of contract (including one of transportation) proof of bad faith or fraud
(dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an award of
moral damages; and
(b) That a breach of contract can not be considered included in the descriptive term
"analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides
for the damages that are caused by contractual breach, but because the definition
of quasi-delict in Art. 2176 of the Code expressly excludes the cases where there is a
"preexisting contractual relation between the parties."
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage dome. Such fault or negligence, if there is
no pre-existing contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
The exception to the basic rule of damages now under consideration is a mishap resulting in the
death of a passenger, in which case Article 1764 makes the common carrier expressly subject to
the rule of Art. 2206, that entitles the deceased passenger to "demand moral damages for
mental anguish by reason of the death of the deceased" (Necesito vs. Paras, 104 Phil., 84,
Resolution on motion to reconsider, September 11, 1958). But the exceptional rule of Art. 1764
makes it all the more evident that where the injured passenger does not die, moral damages are
not recoverable unless it is proved that the carrier was guilty of malice or bad faith. We think it is
clear that the mere carelessness of the carrier's driver does not per se constitute of justify an
inference of malice or bad faith on the part of the carrier; and in the case at bar there is no other
evidence of such malice to support the award of moral damages by the Court of Appeals. To
award moral damages for breach of contract, therefore, without proof of bad faith or malice on
the part of the defendant, as required by Art. 220, would be to violate the clear provisions of the
law, and constitute unwarranted judicial legislation.
The Court of Appeals has invoked our rulings in Castro vs. Acro Taxicab Co., G.R. No. 49155,
December 14, 1948 and Layda vs. Court of Appeals, 90 Phil., 724; but these doctrines were
predicated upon our former law of damages, before judicial discretion in fixing them became
limited by the express provisions of the new Civil Code (previously quoted). Hence, the aforesaid
rulings are now inapplicable.
Upon the other hand, the advantageous position of a party suing a carrier for breach of the
contract of transportations explains, to some extent, the limitations imposed by the new Code on
the amount of the recovery. The action for breach of contract imposes on the defendant carrier a
presumption of liability upon mere proof of injury to the passenger; that latter is relieved from the
duty to established the fault of the carrier, or of his employees, and the burden is placed on the
carrier to prove that it was due to an unforseen event or to force majeure (Cangco vs. Manila
Railroad Co., 38 Phil., 768, 777). Moreover, the carrier, unlike in suits for quasi-delict, may not
Chapter Three : Other Kinds of Damages Page | 27

escape liability by proving that it has exercised due diligence in the selection and supervision of lightly inferred from a mere finding that the contract was breached through negligence of the
its employees (Art. 1759, new civil code; Cangco vs. Manila Railroad Co., supra; Prado vs. carrier's employees.
Manila Electric Co., 51 Phil., 900).
In view of the foregoing considerations, the decision of the Court of Appeals is modified by
The difference in conditions, defenses and proof, as well as the codal concept of quasi-delict as eliminating the award of P5,000.00 by way of moral damages. (Court of Appeals Resolution of
essentially extracontractual negligence, compel us to differentiate between action ex contractu, May 5, 1957). In all other respects, the judgment is affirmed. No costs in this instance. So
and actions quasi ex delicto, and prevent us from viewing the action for breach of contract as ordered.
simultaneously embodying an action on tort. Neither can this action be taken as one to enforce
on employee's liability under Art. 103 of the Revised Penal Code, since the responsibility is not
alleged to be subsidiary, nor is there on record any averment or proof that the driver of appellant
was insolvent. In fact, he is not even made a party to the suit.

It is also suggested that a carrier's violation of its engagement to safety transport the passenger
involves a breach of the passenger's confidence, and therefore should be regarded as a breach
of contract in bad faith, justifying recovery of moral damages under Art. 2220. This theory is
untenable, for under it the carrier would always be deemed in bad faith, in every case its
obligation to the passenger is infringed, and it would be never accountable for simple
negligence; while under the law (Art. 1756). the presumption is that common carriers
acted negligently (and not maliciously), and Art. 1762 speaks of negligence of the common
carrier.

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 article 1733 and 1755.

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.

The distinction between fraud, bad faith or malice in the sense of deliberate or wanton wrong
doing and negligence (as mere carelessness) is too fundamental in our law to be ignored (Arts.
1170-1172); their consequences being clearly differentiated by the Code.

ART. 2201. In contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is liable shall be those that are the natural and probable
consequences of the breach of the obligation, and which the parties have foreseen or
could have reasonably foreseen at the time the obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for
all damages which may be reasonably attributed to the non-performance of the
obligation.

It is to be presumed, in the absence of statutory provision to the contrary, that this difference was
in the mind of the lawmakers when in Art. 2220 they limited recovery of moral damages to
breaches of contract in bad faith. It is true that negligence may be occasionally so gross as to
amount to malice; but that fact must be shown in evidence, and a carrier's bad faith is not to be
Chapter Three : Other Kinds of Damages Page | 28

When petitioner received her baggages in damaged condition, Northwest offered to either (1)
G.R. No. 135802 March 3, 2000 reimburse the cost or repair of the bags; or (2) reimburse the cost for the purchase of new bags,
upon submission of receipts.
PRISCILLA L. TAN, petitioner, vs.
NORTHWEST AIRLINES, INC., respondent. After due trial, on June 10, 1996, the trial court rendered decision finding respondent Northwest
Airlines, Inc. liable for damages, as follows:
PARDO, J.:
WHEREFORE judgment is rendered ordering the defendant to pay the plaintiff the
following amounts:
Petitioner Priscilla L. Tan appeals via certiorari from the decision of the Court of
Appeals 1 affirming with modification 2 the decision of the trial court, 3 ordering respondent to pay
petitioner the following amounts: (1) P15,000.00, as actual damages; (2) P100,000.00, as moral 1. P15,000.00, as actual damages;
damages; (3) P50,000.00, as exemplary damages; (4) P30,000.00, as and for attorney's fees; 2. P100,000.00, as moral damages;
and (6) costs. 3. P50,000.00, as exemplary damages;
4. P30,000.00, as and for attorney's fees and
5. Costs.
The case before the Court traces its roots from an action for damages for breach of contract of
air carriage for failure to deliver petitioner's baggages on the date of her arrival filed on June 29,
1994 with the Regional Trial Court, Makati, Branch 150 against respondent Northwest Airlines, SO ORDERED.
Inc., a foreign corporation engaged in the business of air transportation.
Given this 10th day of June, 1996 at Makati City.
The antecedent facts are as follows:
ERNA FALLORAN ALIPOSA
On May 31, 1994, Priscilla L. Tan and Connie Tan boarded Northwest Airlines Flight 29 in Judge4
Chicago, U. S. A. bound for the Philippines, with a stop-over at Detroit, U. S. A. They arrived at
the Ninoy Aquino International Airport (NAIA) on June 1, 1994 at about 10:40 in the evening. Respondent Northwest Airlines, Inc. appealed from the trial court's decision to the Court of
Appeals contending that the court a quo erred in finding it guilty of breach of contract of carriage
Upon their arrival, petitioner and her companion Connie Tan found that their baggages were and of willful misconduct and awarded damages which had no basis in fact or were otherwise
missing. They returned to the airport in the evening of the following day and they were informed excessive.
that their baggages might still be in another plane in Tokyo, Japan.
On September 30, 1998, the Court of Appeals promulgated its decision partially granting the
On June 3, 1994, they recovered their baggages and discovered that some of its contents were appeal by deleting the award of moral and exemplary damages and reducing the attorney's fees,
destroyed and soiled. specifically providing that:

Claiming that they "suffered mental anguish, sleepless nights and great damage" because of
Northwest's failure to inform them in advance that their baggages would not be loaded on the
same flight they boarded and because of their delayed arrival, they demanded from Northwest
Airlines compensation for the damages they suffered. On June 15, 1994 and June 22, 1994,
petitioner sent demand letters to Northwest Airlines, but the latter did not respond. Hence, the
filing of the case with the regional trial court.
WHEREFORE, PREMISES CONSIDERED, the appeal is hereby GRANTED partially.
The Decision of the lower court dated June 10, 1996 is AFFIRMED with the
modification that the award of moral and exemplary damages is deleted and the
amount of attorney's fees is reduced to ten thousand pesos (P10,000.00).
No pronouncement as to costs.

In its answer to the complaint, respondent Northwest Airlines did not deny that the baggages of SO ORDERED. 5
petitioners were not loaded on Northwest Flight 29. Petitioner's baggages could not be carried
on the same flight because of "weight and balance restrictions." However, the baggages were Hence, this appeal. 6
loaded in another Northwest Airlines flight, which arrived in the evening of June 2, 1994.
The issue is whether respondent is liable for moral and exemplary damages for willful
misconduct and breach of the contract of air carriage.
Chapter Three : Other Kinds of Damages Page | 29

The petition is without merit.

We agree with the Court of Appeals that respondent was not guilty of willful misconduct. "For
willful misconduct to exist there must be a showing that the acts complained of were impelled by
an intention to violate the law, or were in persistent disregard of one's rights. It must be
evidenced by a flagrantly or shamefully wrong or improper conduct." 7

Contrary to petitioner's contention, there was nothing in the conduct of respondent which
showed that they were motivated by malice or bad faith in loading her baggages on another
plane. Due to weight and balance restrictions, as a safety measure, respondent airline had to
transport the baggages on a different flight, but with the same expected date and time of arrival
in the Philippines. As aptly explained by respondent:

To ensure the safety of each flight, Northwest's personnel determine every flight's
compliance with "weight and balance restrictions." They check the factors like weight of
the aircraft used for the flight gas input, passenger and crew load, baggage weight, all
in relation to the wind factor anticipated on the flight. If there is an overload, i.e., a
perceived safety risk, the aircraft's load will be reduced by off-loading cargo, which will
then be placed on the next available flight. 8

It is admitted that respondent failed to deliver petitioner's luggages on time. However, there was
no showing of malice in such failure. By its concern for safety, respondent had to ship the
baggages in another flight with the same date of arrival.

Hence, the Court of Appeals correctly held that respondent did not act in bad faith. 9

"Bad faith does not simply connote bad judgment or negligence, it imports a dishonest purpose
or some moral obliquity and conscious doing of a wrong, a breach of known duty through some
motive or interest or ill-will that partakes of the nature of fraud." 10

"Where in breaching the contract of carriage the defendant airline is not shown to have acted
fraudulently or in bad faith, liability for damages is limited to the natural and probable
consequences of the breach of obligation which the parties had foreseen or could have
reasonably foreseen. In that case, such liability does not include moral and exemplary
damages." 11

Consequently, we have no reason to reverse the decision of the Court of Appeals.

WHEREFORE, the Court DENIES the petition for lack of merit. The Court AFFIRMS the decision
of the Court of Appeals deleting, however, the award of attorney's fees.1âwphi1.nêt

No costs.

SO ORDERED.
Chapter Three : Other Kinds of Damages
[G.R. No. 71929 : December 4, 1990.] 192 SCRA 9
ALITALIA, Petitioner, vs. INTERMEDIATE APPELLATE COURT and FELIPA E.
PABLO, Respondents.
DECISION
NARVASA, J.:
Dr. Felipa Pablo — an associate professor in the University of the Philippines, 1 and
a research grantee of the Philippine Atomic Energy Agency — was invited to take
part at a meeting of the Department of Research and Isotopes of the Joint FAO-IAEA
Division of Atomic Energy in Food and Agriculture of the United Nations in Ispra,
Italy. 2 She was invited in view of her specialized knowledge in "foreign substances
in food and the agriculture environment." She accepted the invitation, and was then
scheduled by the organizers, to read a paper on "The Fate of Radioactive Fusion
Products Contaminating Vegetable Crops." 3 The program announced that she would
be the second speaker on the first day of the meeting. 4 To fulfill this engagement,
Dr. Pablo booked passage on petitioner airline, ALITALIA.
She arrived in Milan on the day before the meeting in accordance with the itinerary
and time table set for her by ALITALIA. She was however told by the ALITALIA
personnel there at Milan that her luggage was "delayed inasmuch as the same . . .
(was) in one of the succeeding flights from Rome to Milan." 5 Her luggage consisted
of two (2) suitcases: one contained her clothing and other personal items; the
other, her scientific papers, slides and other research material. But the other flights
arriving from Rome did not have her baggage on board.
By then feeling desperate, she went to Rome to try to locate her bags herself.
There, she inquired about her suitcases in the domestic and international airports,
and filled out the forms prescribed by ALITALIA for people in her predicament.
However, her baggage could not be found. Completely distraught and discouraged,
she returned to Manila without attending the meeting in Ispra, Italy. : nad
Once back in Manila she demanded that ALITALIA make reparation for the damages
thus suffered by her. ALITALIA offered her "free airline tickets to compensate her for
any alleged damages. . . ." She rejected the offer, and forthwith commenced the
action 6 which has given rise to the present appellate proceedings.
As it turned out, Prof. Pablo's suitcases were in fact located and forwarded to Ispra,
7 Italy, but only on the day after her scheduled appearance and participation at the
U.N. meeting there. 8 Of course Dr. Pablo was no longer there to accept delivery;
she was already on her way home to Manila. And for some reason or other, the
suitcases were not actually restored to Prof. Pablo by ALITALIA until eleven (11)
months later, and four (4) months after institution of her action. 9
Page | 30
After appropriate proceedings and trial, the Court of First Instance rendered
judgment in Dr. Pablo's favor: 10
"(1) Ordering the defendant (ALITALIA) to pay . . . (her) the sum of
TWENTY THOUSAND PESOS (P20,000.00), Philippine Currency, by way of
nominal damages;
(2) Ordering the defendant to pay . . . (her) the sum of FIVE THOUSAND
PESOS (P5,000.00), Philippine Currency, as and for attorney's fees; (and)
(3) Ordering the defendant to pay the costs of the suit."
ALITALIA appealed to the Intermediate Appellate Court but failed to obtain a
reversal of the judgment. 11 Indeed, the Appellate Court not only affirmed the Trial
Court's decision but also increased the award of nominal damages payable by
ALITALIA to P40,000.00. 12 That increase it justified as follows: 13
"Considering the circumstances, as found by the Trial Court and the
negligence committed by defendant, the amount of P20,000.00 under
present inflationary conditions as awarded . . . to the plaintiff as nominal
damages, is too little to make up for the plaintiff's frustration and
disappointment in not being able to appear at said conference; and for the
embarrassment and humiliation she suffered from the academic community
for failure to carry out an official mission for which she was singled out by
the faculty to represent her institution and the country. After weighing
carefully all the considerations, the amount awarded to the plaintiff for
nominal damages and attorney's fees should be increased to the cost of her
round trip air fare or at the present rate of peso to the dollar at
P40,000,00."
ALITALIA has appealed to this Court on Certiorari. Here, it seeks to make basically
the same points it tried to make before the Trial Court and the Intermediate
Appellate Court, i.e.:
1) that the Warsaw Convention should have been applied to limit ALITALIA'S
liability; and
2) that there is no warrant in fact or in law for the award to Dr. Pablo of
nominal damages and attorney's fees. 14
In addition, ALITALIA postulates that it was error for the Intermediate Appellate
Court to have refused to pass on all the assigned errors and in not stating the facts
and the law on which its decision is based. 15
Under the Warsaw Convention, 16 an air carrier is made liable for damages for:
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; 17
Chapter Three : Other Kinds of Damages
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;" 18 and
3) delay in the transportation by air of passengers, luggage or goods. 19
In these cases, it is provided in the Convention that the "action for damages,
however, founded, can only be brought subject to conditions and limits set out"
therein. 20
The Convention also purports to limit the liability of the carriers in the following
manner: 21
1. In the carriage of passengers the liability of the carrier for each
passenger is limited to the sum of 250,000 francs . . . Nevertheless, by
special contract, the carrier and the passenger may agree to a higher limit
of liability.: nad
2. a) In the carriage of registered baggage and of cargo, the liability of the
carrier is limited to a sum of 250 francs per kilogramme, unless the
passenger or consignor has made, at the time when the package was
handed over to the carrier, a special declaration of interest in delivery at
destination and has paid a supplementary sum if the case so requires. In
that case the carrier will be liable to pay a sum not exceeding the declared
sum, unless he proves that sum is greater than the actual value to the
consignor at delivery.
b) In the case of loss, damage or delay of part of registered baggage or
cargo, or of any object contained therein, the weight to be taken into
consideration in determining the amount to which the carrier's liability is
limited shall be only the total weight of the package or packages concerned.
Nevertheless, when the loss, damage or delay of a part of the registered
baggage or cargo, or of an object contained therein, affects the value of
other packages covered by the same baggage check or the same air way
bill, the total weight of such package or packages shall also be taken into
consideration in determining the limit of liability.
3. As regards objects of which the passenger takes charge himself the
liability of the carrier is limited to 5000 francs per passenger.
4. The limits prescribed . . shall not prevent the court from awarding, in
accordance with its own law, in addition, the whole or part of the court costs
and of the other expenses of litigation incurred by the plaintiff. The
foregoing provision shall not apply if the amount of the damages awarded,
excluding court costs and other expenses of the litigation, does not exceed
the sum which the carrier has offered in writing to the plaintiff within a
period of six months from the date of the occurrence causing the damage,
or before the commencement of the action, if that is later.
The Warsaw Convention however denies to the carrier availment "of the provisions
which exclude or limit his liability, if the damage is caused by his wilful misconduct
Page | 31
or by such default on his part as, in accordance with the law of the court seized of
the case, is considered to be equivalent to wilful misconduct," or "if the damage is
(similarly) caused . . by any agent of the carrier acting within the scope of his
employment." 22 The Hague Protocol amended the Warsaw Convention by
removing the provision that if the airline took all necessary steps to avoid the
damage, it could exculpate itself completely, 23 and declaring the stated limits of
liability not applicable "if it is proved that the damage resulted from an act or
omission of the carrier, its servants or agents, done with intent to cause damage or
recklessly and with knowledge that damage would probably result." The same
deletion was effected by the Montreal Agreement of 1966, with the result that a
passenger could recover unlimited damages upon proof of wilful misconduct. 24
The Convention does not thus operate as an exclusive enumeration of the instances
of an airline's liability, or as an absolute limit of the extent of that liability. Such a
proposition is not borne out by the language of the Convention, as this Court has
now, and at an earlier time, pointed out. 25 Moreover, slight reflection readily leads
to the conclusion that it should be deemed a limit of liability only in those cases
where the cause of the death or injury to person, or destruction, loss or damage to
property or delay in its transport is not attributable to or attended by any wilful
misconduct, bad faith, recklessness, or otherwise improper conduct on the part of
any official or employee for which the carrier is responsible, and there is otherwise
no special or extraordinary form of resulting injury. The Convention's provisions, in
short, do not "regulate or exclude liability for other breaches of contract by the
carrier" 26 or misconduct of its officers and employees, or for some particular or
exceptional type of damage. Otherwise, "an air carrier would be exempt from any
liability for damages in the event of its absolute refusal, in bad faith, to comply with
a contract of carriage, which is absurd." 27 Nor may it for a moment be supposed
that if a member of the aircraft complement should inflict some physical injury on a
passenger, or maliciously destroy or damage the latter's property, the Convention
might successfully be pleaded as the sole gauge to determine the carrier's liability to
the passenger. Neither may the Convention be invoked to justify the disregard of
some extraordinary sort of damage resulting to a passenger and preclude recovery
therefor beyond the limits set by said Convention. It is in this sense that the
Convention has been applied, or ignored, depending on the peculiar facts presented
by each case.:-cralaw
In Pan American World Airways, Inc. v. I.A.C., 28 for example, the Warsaw
Convention was applied as regards the limitation on the carrier's liability, there
being a simple loss of baggage without any otherwise improper conduct on the part
of the officials or employees of the airline or other special injury sustained by the
passenger.
On the other hand, the Warsaw Convention has invariably been held inapplicable, or
as not restrictive of the carrier's liability, where there was satisfactory evidence of
malice or bad faith attributable to its officers and employees. 29 Thus, an air carrier
was sentenced to pay not only compensatory but also moral and exemplary
damages, and attorney's fees, for instance, where its employees rudely put a
passenger holding a first-class ticket in the tourist or economy section, 30 or
Chapter Three : Other Kinds of Damages Page | 32

ousted a brown Asiatic from the plane to give his seat to a white man, 31 or gave thereof having been voluntarily deleted by Dr. Pablo upon the return to her of her
the seat of a passenger with a confirmed reservation to another, 32 or subjected a baggage — necessarily raised the issue of nominal damages.: rd
passenger to extremely rude, even barbaric treatment, as by calling him a
This Court also agrees that respondent Court of Appeals correctly awarded
"monkey." 33
attorney's fees to Dr. Pablo, and the amount of P5,000.00 set by it is reasonable in
In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the premises. The law authorizes recovery of attorney's fees inter alia where, as
the employees of petitioner airline; and Dr. Pablo's luggage was eventually returned here, "the defendant's act or omission has compelled the plaintiff to litigate with
to her, belatedly, it is true, but without appreciable damage. The fact is, third persons or to incur expenses to protect his interest," 34 or "where the court
nevertheless, that some special species of injury was caused to Dr. Pablo because deems it just and equitable." 35
petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the time
WHEREFORE, no error being perceived in the challenged decision of the Court of
appointed — a breach of its contract of carriage, to be sure — with the result that
Appeals, it appearing on the contrary to be entirely in accord with the facts and the
she was unable to read the paper and make the scientific presentation (consisting of
law, said decision is hereby AFFIRMED, with costs against the petitioner.
slides, autoradiograms or films, tables and tabulations) that she had painstakingly
labored over, at the prestigious international conference, to attend which she had SO ORDERED.
traveled hundreds of miles, to her chagrin and embarrassment and the
disappointment and annoyance of the organizers. She felt, not unreasonably, that
the invitation for her to participate at the conference, extended by the Joint
FAO/IAEA Division of Atomic Energy in Food and Agriculture of the United Nations,
was a singular honor not only to herself, but to the University of the Philippines and
the country as well, an opportunity to make some sort of impression among her
colleagues in that field of scientific activity. The opportunity to claim this honor or
distinction was irretrievably lost to her because of Alitalia's breach of its contract.
Apart from this, there can be no doubt that Dr. Pablo underwent profound distress
and anxiety, which gradually turned to panic and finally despair, from the time she
learned that her suitcases were missing up to the time when, having gone to Rome,
she finally realized that she would no longer be able to take part in the conference.
As she herself put it, she "was really shocked and distraught and confused."
Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the
circumstances be restricted to that prescribed by the Warsaw Convention for delay
in the transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to her luggage.
As already mentioned, her baggage was ultimately delivered to her in Manila, tardily
but safely. She is however entitled to nominal damages — which, as the law says, is
adjudicated in order that a right of the plaintiff, which has been violated or invaded
by the defendant, may be vindicated and recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered — and this Court agrees that the
respondent Court of Appeals correctly set the amount thereof at P40,000.00. As to
the purely technical argument that the award to her of such nominal damages is
precluded by her omission to include a specific claim therefor in her complaint, it
suffices to draw attention to her general prayer, following her plea for moral and
exemplary damages and attorney's fees, "for such other and further just and
equitable relief in the premises," which certainly is broad enough to comprehend an
application as well for nominal damages. Besides, petitioner should have realized
that the explicit assertion, and proof, that Dr. Pablo's right had been violated or
invaded by it — absent any claim for actual or compensatory damages, the prayer
Chapter Three : Other Kinds of Damages
G.R. No. 95536 March 23, 1992
ANICETO G. SALUDO, JR., MARIA SALVACION SALUDO, LEOPOLDO G. SALUDO and
SATURNINO G. SALUDO, petitioners, vs.
HON. COURT OF APPEALS, TRANS WORLD AIRLINES, INC., and PHILIPPINE AIRLINES,
INC., respondents.
REGALADO, J.:
Assailed in this petition for review on certiorari is the decision in CA-G.R. CV No. 20951 of
respondent Court of Appeals1 which affirmed the decision of the trial court 2 dismissing for lack of
evidence herein petitioners' complaint in Civil Case No R-2101 of the then Court of First Instance
of Southern Leyte, Branch I.
The facts, as recounted by the court a quo and adopted by respondent court after "considering
the evidence on record," are as follows:
After the death of plaintiffs' mother, Crispina Galdo Saludo, in Chicago Illinois, (on)
October 23, 1976 (Exh. A), Pomierski and Son Funeral Home of Chicago, made the
necessary preparations and arrangements for the shipment, of the remains from
Chicago to the Philippines. The funeral home had the remains embalmed (Exb. D) and
secured a permit for the disposition of dead human body on October 25, 1976 (Exh. C),
Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00 p.m. on
October 26, 1976 at the Pomierski & Son Funeral Home, sealed the shipping case
containing a hermetically sealed casket that is airtight and waterproof wherein was
contained the remains of Crispina Saludo Galdo (sic) (Exb. B). On the same date,
October 26, 1976, Pomierski brought the remains to C.M.A.S. (Continental Mortuary Air
Services) at the airport (Chicago) which made the necessary arrangements such as
flights, transfers, etc.; C.M.A.S. is a national service used by undertakers to throughout
the nation (U.S.A.), they furnish the air pouch which the casket is enclosed in, and they
see that the remains are taken to the proper air freight terminal (Exh. 6-TWA). C.M.A.S.
booked the shipment with PAL thru the carrier's agent Air Care International, with
Pomierski F.H. as the shipper and Mario (Maria) Saludo as the consignee. PAL Airway
Bill No. 079-01180454 Ordinary was issued wherein the requested routing was from
Chicago to San Francisco on board TWA Flight 131 of October 27, 1976 and from San
Francisco to Manila on board PAL Flight No. 107 of the same date, and from Manila to
Cebu on board PAL Flight 149 of October 29, 1976 (See Exh. E., Also Exh. 1-PAL).
In the meantime, plaintiffs Maria Salvacion Saludo and Saturnino Saludo, thru a travel
agent, were booked with United Airlines from Chicago to California, and with PAL from
California to Manila. She then went to the funeral director of Pomierski Funeral Home
who had her mother's remains and she told the director that they were booked with
United Airlines. But the director told her that the remains were booked with TWA flight to
California. This upset her, and she and her brother had to change reservations from UA
to the TWA flight after she confirmed by phone that her mother's remains should be on
that TWA flight. They went to the airport and watched from the look-out area. She saw
Page | 33
no body being brought. So, she went to the TWA counter again, and she was told there
was no body on that flight. Reluctantly, they took the TWA flight upon assurance of her
cousin, Ani Bantug, that he would look into the matter and inform her about it on the
plane or have it radioed to her. But no confirmation from her cousin reached her that
her mother was on the West Coast.
Upon arrival at San Francisco at about 5:00 p.m., she went to the TWA counter there to
inquire about her mother's remains. She was told they did not know anything about it.
She then called Pomierski that her mother's remains were not at the West Coast
terminal, and Pomierski immediately called C.M.A.S., which in a matter of 10 minutes
informed him that the remains were on a plane to Mexico City, that there were two
bodies at the terminal, and somehow they were switched; he relayed this information to
Miss Saludo in California; later C.M.A.S. called and told him they were sending the
remains back to California via Texas (see Exh. 6-TWA).
It-turned out that TWA had carried a shipment under PAL Airway Bill No. 079-ORD-
01180454 on TWA Flight 603 of October 27, 1976, a flight earlier than TWA Flight 131
of the same date. TWA delivered or transferred the said shipment said to contain
human remains to PAL at 1400H or 2:00 p.m. of the same date, October 27, 1976 (Bee
Exh. 1- TWA). "Due to a switch(ing) in Chicago", this shipment was withdrawn from PAL
by CMAS at 1805H (or 6:05 p.m.) of the same date, October 27 (Exh. 3-PAL, see Exh.
3-a-PAL).
What transpired at the Chicago (A)irport is explained in a memo or incident report by
Pomierski (Exh. 6-TWA) to Pomierski's lawyers who in turn referred to said' memo and
enclosed it in their (Pomierski's lawyers) answer dated July 18, 1981 to herein plaintiff's
counsel (See Exh. 5-TWA). In that memo or incident report (Exh. 6-TWA), it is stated
that the remains (of Crispina Saludo) were taken to CMAS at the airport; that there
were two bodies at the (Chicago Airport) terminal, and somehow they were switched,
that the remains (of Crispina Saludo) were on a plane to Mexico City; that CMAS is a
national service used by undertakers throughout the nation (U.S.A.), makes all the
necessary arrangements, such as flights, transfers, etc., and see(s) to it that the
remains are taken to the proper air freight terminal.
The following day October 28, 1976, the shipment or remains of Crispina Saludo
arrived (in) San Francisco from Mexico on board American Airlines. This shipment was
transferred to or received by PAL at 1945H or 7:45 p.m. (Exh. 2-PAL, Exh. 2-a-PAL).
This casket bearing the remains of Crispina Saludo, which was mistakenly sent to
Mexico and was opened (there), was resealed by Crispin F. Patagas for shipment to the
Philippines (See Exh. B-1). The shipment was immediately loaded on PAL flight for
Manila that same evening and arrived (in) Manila on October 30, 1976, a day after its
expected arrival on October 29, 1976.3
In a letter dated December 15, 1976,4 petitioners' counsel informed private respondent Trans
World Airlines (TWA) of the misshipment and eventual delay in the delivery of the cargo
containing the remains of the late Crispin Saludo, and of the discourtesy of its employees to
petitioners Maria Salvacion Saludo and Saturnino Saludo. In a separate letter on June 10, 1977
Chapter Three : Other Kinds of Damages
5
addressed to co-respondent Philippine Airlines (PAL), petitioners stated that they were holding
PAL liable for said delay in delivery and would commence judicial action should no favorable
explanation be given.
Both private respondents denied liability. Thus, a damage suit 6 was filed by petitioners before the
then Court of First Instance, Branch III, Leyte, praying for the award of actual damages of
P50,000.00, moral damages of P1,000,000.00, exemplary damages, attorney's fees and costs of
suit.
As earlier stated, the court below absolved the two respondent airlines companies of liability. The
Court of Appeals affirmed the decision of the lower court in toto, and in a subsequent
resolution,7 denied herein petitioners' motion for reconsideration for lack of merit.
In predictable disagreement and dissatisfaction with the conclusions reached by respondent
appellate court, petitioners now urge this Court to review the appealed decision and to resolve
whether or not (1) the delay in the delivery of the casketed remains of petitioners' mother was
due to the fault of respondent airline companies, (2) the one-day delay in the delivery of the
same constitutes contractual breach as would entitle petitioners to damages, (3) damages are
recoverable by petitioners for the humiliating, arrogant and indifferent acts of the employees of
TWA and PAL, and (4) private respondents should be held liable for actual, moral and exemplary
damages, aside from attorney's fees and litigation expenses.8
At the outset and in view of the spirited exchanges of the parties on this aspect, it is to be
stressed that only questions of law may be raised in a petition filed in this Court to review
on certiorari the decision of the Court of Appeals.9 This being so, the factual findings of the Court
of Appeals are final and conclusive and cannot be reviewed by the Supreme Court. The rule,
however, admits of established exceptions, to wit: (a) where there is grave abuse of discretion;
(b) when the finding is grounded entirely on speculations, surmises or conjectures;(c) when the
inference made is manifestly-mistaken, absurd or impossible; (d) when the judgment of the Court
of Appeals was based on a misapprehension of facts; (e) when the factual findings are
conflicting; (f) when the Court of Appeals, in making its findings, went beyond the issues of the
case and the same are contrary to the admissions of both appellant and appellee; 10 (g) when
the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and
which, if properly considered, would justify a different conclusion; 11 and (h) where the findings of
fact of the Court of Appeals are contrary to those of the trial court, or are mere conclusions
without citation of specific evidence, or where the facts of set forth by the petitioner are not
disputed by the respondent, or where the findings of fact of the Court of Appeals are premised
on the absence of evidence and are contradicted by the evidence on record. 12
To distinguish, a question of law is one which involves a doubt or controversy on what the law is
on a certain state of facts; and, a question of fact, contrarily, is one in which there is a doubt or
difference as to the truth or falsehood of the alleged facts. 13 One test, it has been held, is
whether the appellate court can determine the issue raised without reviewing or evaluating the
evidence, in which case it is a question of law, otherwise it will be a question of fact.14
Respondent airline companies object to the present recourse of petitioners on the ground that
this petition raises only factual questions. 15 Petitioners maintain otherwise or, alternatively, they
are of the position that, assuming that the petition raises factual questions, the same are within
Page | 34
the recognized exceptions to the general rule as would render the petition cognizable and worthy
of review by the Court. 16
Since it is precisely the soundness of the inferences or conclusions that may be drawn from the
factual issues which are here being assayed, we find that the issues raised in the instant petition
indeed warrant a second look if this litigation is to come to a reasonable denouement. A
discussion seriatim of said issues will further reveal that the sequence of the events involved is
in effect disputed. Likewise to be settled is whether or not the conclusions of the Court of
Appeals subject of this review indeed find evidentiary and legal support.
I. Petitioners fault respondent court for "not finding that private respondents failed to exercise
extraordinary diligence required by law which resulted in the switching and/or misdelivery of the
remains of Crispina Saludo to Mexico causing gross delay in its shipment to the Philippines, and
consequently, damages to petitioners." 17
Petitioner allege that private respondents received the casketed remains of petitioners' mother
on October 26, 1976, as evidenced by the issuance of PAL Air Waybill No. 079-01180454 18 by
Air Care International as carrier's agent; and from said date, private respondents were charged
with the responsibility to exercise extraordinary diligence so much so that for the alleged
switching of the caskets on October 27, 1976, or one day after private respondents received the
cargo, the latter must necessarily be liable.
To support their assertion, petitioners rely on the jurisprudential dictum, both under American and
Philippine law, that "(t)he issuance of a bill of lading carries the presumption that the goods were
delivered to the carrier issuing the bill, for immediate shipment, and it is nowhere questioned that
a bill of lading is prima facie evidence of the receipt of the goods by the carrier. . . . In the
absence of convincing testimony establishing mistake, recitals in the bill of lading showing that
the carrier received the goods for shipment on a specified date control (13 C.J.S. 235)." 19
A bill of lading is a written acknowledgment of the receipt of the goods and an agreement to
transport and deliver them at a specified place to a person named or on his order. Such
instrument may be called a shipping receipt, forwarder's receipt and receipt for
transportation. 20 The designation, however, is immaterial. It has been hold that freight tickets for
bus companies as well as receipts for cargo transported by all forms of transportation, whether
by sea or land, fall within the definition. Under the Tariff and Customs Code, a bill of lading
includes airway bills of lading. 21 The two-fold character of a bill of lading is all too familiar; it is a
receipt as to the quantity and description of the goods shipped and a contract to transport the
goods to the consignee or other person therein designated, on the terms specified in such
instrument. 22
Logically, since a bill of lading acknowledges receipt of goods to be transported, delivery of the
goods to the carrier normally precedes the issuance of the bill; or, to some extent, delivery of the
goods and issuance of the bill are regarded in commercial practice as simultaneous
acts. 23 However, except as may be prohibited by law, there is nothing to prevent an inverse
order of events, that is, the execution of the bill of lading even prior to actual possession and
control by the carrier of the cargo to be transported. There is no law which requires that the
delivery of the goods for carriage and the issuance of the covering bill of lading must coincide in
point of time or, for that matter, that the former should precede the latter.
Chapter Three : Other Kinds of Damages
Ordinarily, a receipt is not essential to a complete delivery of goods to the carrier for
transportation but, when issued, is competent and prima facie, but not conclusive, evidence of
delivery to the carrier. A bill of lading, when properly executed and delivered to a shipper, is
evidence that the carrier has received the goods described therein for shipment. Except as
modified by statute, it is a general rule as to the parties to a contract of carriage of goods in
connection with which a bill of lading is issued reciting that goods have been received for
transportation, that the recital being in essence a receipt alone, is not conclusive, but may be
explained, varied or contradicted by parol or other evidence. 24
While we agree with petitioners' statement that "an airway bill estops the carrier from denying
receipt of goods of the quantity and quality described in the bill," a further reading and a more
faithful quotation of the authority cited would reveal that "(a) bill of lading may contain constituent
elements of estoppel and thus become something more than a contract between the shipper and
the carrier. . . . (However), as between the shipper and the carrier, when no goods have been
delivered for shipment no recitals in the bill can estop the carrier from showing the true facts . . .
Between the consignor of goods and receiving carrier, recitals in a bill of lading as to the goods
shipped raise only a rebuttable presumption that such goods were delivered for shipment. As
between the consignor and a receiving carrier, the fact must outweigh the recital." 25 (Emphasis
supplied)
For this reason, we must perforce allow explanation by private respondents why, despite the
issuance of the airway bill and the date thereof, they deny having received the remains of
Crispina Saludo on October 26, 1976 as alleged by petitioners.
The findings of the trial court, as favorably adopted by the Court of Appeals and which we have
earner quoted, provide us with the explanation that sufficiently over comes the presumption
relied on by petitioners in insisting that the remains of their mother were delivered to and
received by private respondents on October 26, 1976. Thus —
. . . Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00 p.m. on
October 26, 1976 at the Pomierski & Son Funeral Home, sealed the shipping case
containing a hermetically sealed casket that is airtight and waterproof wherein was
contained the remains of Crispina Saludo Galdo (sic) (Exh. B). On the same date
October 26, 1976, Pomierski brought the remains to C.M.A.S. (Continental Mortuary Air
Services) at the airport (Chicago) which made the necessary arrangements such as
flights, transfers, etc; C.M.A.S. is a national service used by undertakers throughout the
nation (U.S.A.), they furnish the air pouch which the casket is enclosed in, and they see
that the remains are taken to the proper air freight terminal (Exh. G-TWA). C.M.A.S.
booked the shipment with PAL thru the carrier's agent Air Care International, with
Pomierski F.H. as the shipper and Mario (Maria) Saludo as the consignee. PAL Airway
Bill No. 079- 01180454 Ordinary was issued wherein the requested routing was from
Chicago to San Francisco on board TWA Flight-131 of October 27;1976, and from San
Francisco to Manila on board PAL Flight No. 107 of the same date, and from Manila to
Cebu on board PAL Flight 149 of October 29, 1976 (See Exh. E, also Exh. 1-
PAL).26 (Emphasis ours.)
Moreover, we are persuaded to believe private respondent PAL's account as to what transpired
October 26, 1976:
Page | 35
. . . Pursuant thereto, on 26 October 1976, CMAS acting upon the instruction of
Pomierski, F.H., the shipper requested booking of the casketed remains of Mrs. Cristina
(sic) Saludo on board PAL's San Francisco-Manila Flight No. PR 107 on October 27,
1976.
2. To signify acceptance and confirmation of said booking, PAL issued to said
Pomierski F.H., PAL Airway Bill No. 079-01180454 dated October 27, 1976 (sic,
"10/26/76"). PAL confirmed the booking and transporting of the shipment on board of its
Flight PR 107 on October 27, 1976 on the basis of the representation of the shipper
and/or CMAS that the said cargo would arrive in San Francisco from Chicago on board
United Airlines Flight US 121 on 27 October 1976.27
In other words, on October 26, 1976 the cargo containing the casketed remains of Crispina
Saludo was booked for PAL Flight Number PR-107 leaving San Francisco for Manila on October
27, 1976, PAL Airway Bill No. 079-01180454 was issued, not as evidence of receipt of delivery of
the cargo on October 26, 1976, but merely as a confirmation of the booking thus made for the
San Francisco-Manila flight scheduled on October 27, 1976. Actually, it was not until October 28,
1976 that PAL received physical delivery of the body at San Francisco, as duly evidenced by the
Interline Freight Transfer Manifest of the American Airline Freight System and signed for by
Virgilio Rosales at 1945H, or 7:45 P.M. on said date.28
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, 29 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. 30 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. 31 Where
such a delivery has thus been accepted by the carrier, the liability of the common carrier
commences eo instanti. 32
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 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.
Chapter Three : Other Kinds of Damages
Petitioners, proceeding on the premise that there was delivery of the cargo to private
respondents on October 26,1976 and that the latter's extraordinary responsibility had by then
become operative, insist on foisting the blame on private respondents for the switching of the
two caskets which occurred on October 27, 1976. It is argued that since there is no clear
evidence establishing the fault Continental Mortuary Air Services (CMAS) for the mix-up, private
respondents are presumably negligent pursuant to Article 1735 of the Civil Code and, for failure
to rebut such presumption, they must necessarily be held liable; or, assuming that CMAS was at
fault, the same does not absolve private respondents of liability because whoever brought the
cargo to the airport or loaded it on the plane did so as agent of private respondents.
This contention is without merit. As pithily explained by the Court of Appeals:
The airway bill expressly provides that "Carrier certifies goods described below were
received for carriage", and said cargo was "casketed human remains of Crispina
Saludo," with "Maria Saludo as Consignee; Pomierski F.H. as Shipper; Air Care
International as carrier's agent." On the face of the said airway bill, the specific flight
numbers, specific routes of shipment and dates of departure and arrival were
typewritten, to wit: Chicago TWA Flight 131/27 to San Francisco and from San
Francisco by PAL 107 on, October 27, 1976 to Philippines and to Cebu via PAL Flight
149 on October 29, 1976. The airway bill also contains the following typewritten words,
as follows: all documents have been examined (sic). Human remains of Crispina
Saludo. Please return back (sic) first available flight to SFO.
But, as it turned out and was discovered later the casketed human remains which was
issued PAL Airway Bill #079-1180454 was not the remains of Crispina Saludo, the
casket containing her remains having been shipped to Mexico City.
However, it should be noted that, Pomierski F.H., the shipper of Mrs. Saludo's remains,
hired Continental Mortuary Services (hereafter referred to as C.M.A.S.), which is
engaged in the business of transporting and forwarding human remains. Thus,
C.M.A.S. made all the necessary arrangements such as flights, transfers, etc. — for
shipment of the remains of Crispina Saludo.
The remains were taken on October 26th, 1976, to C.M.A.S. at the airport.
These people made all the necessary arrangements, such as flights, transfers,
etc. This is a national service used by undertakers throughout the nation. They
furnished the air pouch which the casket is enclosed in, and they see that the
remains are taken to the proper air frieght terminal. I was very surprised when
Miss Saludo called me to say that the remains were not at the west coast
terminal. I immediately called C.M.A.S. They called me back in a matter of ten
minutes to inform me that the remains were on a plane to Mexico City. The
man said that there were two bodies at the terminal, and somehow they were
switched. . . . (Exb. 6 — "TWA", which is the memo or incident report enclosed
in the stationery of Walter Pomierski & Sons Ltd.)
Consequently, when the cargo was received from C.M.A.S. at the Chicago airport
terminal for shipment, which was supposed to contain the remains of Crispina
Saludo, Air Care International and/or TWA, had no way of determining its actual
Page | 36
contents, since the casket was hermetically sealed by the Philippine Vice-Consul in
Chicago and in an air pouch of C.M.A.S., to the effect that Air Care International and/or
TWA had to rely on the information furnished by the shipper regarding the cargo's
content. Neither could Air Care International and/or TWA open the casket for further
verification, since they were not only without authority to do so, but even prohibited.
Thus, under said circumstances, no fault and/or negligence can be attributed to PAL
(even if Air Care International should be considered as an agent of PAL) and/or TWA,
the entire fault or negligence being exclusively with C.M.A.S.33 (Emphasis supplied.)
It can correctly and logically be concluded, therefore, that the switching occurred or, more
accurately, was discovered on October 27, 1976; and based on the above findings of the Court
of appeals, it happened while the cargo was still with CMAS, well before the same was place in
the custody of private respondents.
Thus, while the Air Cargo Transfer Manifest of TWA of October 27, 1976 34 was signed by Garry
Marcial of PAL at 1400H, or 2:00 P.M., on the same date, thereby indicating acknowledgment by
PAL of the transfer to them by TWA of what was in truth the erroneous cargo, said misshipped
cargo was in fact withdrawn by CMAS from PAL as shown by the notation on another copy of
said manifest35 stating "Received by CMAS — Due to switch in Chicago 10/27-1805H," the
authenticity of which was never challenged. This shows that said misshipped cargo was in fact
withdrawn by CMAS from PAL and the correct shipment containing the body of Crispina Saludo
was received by PAL only on October 28, 1976, at 1945H, or 7:45 P.M., per American Airlines
Interline Freight Transfer Manifest No. AA204312.36
Witness the deposition of TWA's ramp serviceman, Michael Giosso, on this matter:
ATTY. JUAN COLLAS, JR.:
On that date, do (sic) you have occasion to handle or deal with the transfer of cargo
from TWA Flight No. 603 to PAL San Francisco?
MICHAEL GIOSSO:
Yes, I did.
ATTY. JUAN COLLAS, JR.:
What was your participation with the transfer of the cargo?
MICHAEL GIOSSO:
I manifested the freight on a transfer manifest and physically moved it to PAL and
concluded the transfer by signing it off.
ATTY. JUAN COLLAS, JR.:
You brought it there yourself?
MICHAEL GIOSSO:
Yes sir.
ATTY. JUAN COLIAS, JR.:
Do you have anything to show that PAL received the cargo from TWA on October 27,
1976?
MICHAEL GIOSSO:
Yes, I do.
(Witness presenting a document)
ATTY. JUAN COLLAS, JR.:
Chapter Three : Other Kinds of Damages Page | 37

For purposes of clarity, Exhibit I is designated as Exhibit I-TWA. ATTY. CESAR P. MANALAYSAY:
xxx xxx xxx Do you have any proof with you to back the statement?
ATTY. JUAN COLLAS, JR.: ALBERTO A. LIM:
This Exhibit I-TWA, could you tell what it is, what it shows? Yes. We have on our records a Transfer Manifest from American Airlines Number
MICHAEL GIOSSO: 204312 showing that we received a human remains shipment belong to Mrs. Cristina
It shows transfer of manifest on 10-27-76 to PAL at 1400 and verified with two (sic) Saludo or the human remains of Mrs. Cristina (sic) Saludo.
signatures as it completed the transfer. ATTY. CESAR P. MAIALAYSAY:
ATTY. JUAN COLLAS, JR.: At this juncture, may I request that the Transfer Manifest referred to by the witness be
Very good,. Who was the PAL employee who received the cargo? marked as an evidence as Exhibit II-PAL.
MICHAEL GIOSSO: xxx xxx xxx
The name is Garry Marcial." 37 Mr. Lim, yesterday your co-defendant TWA presented as their Exhibit I evidence
tending to show that on October 27, 1976 at about 2:00 in the, afternoon they delivered
The deposition of Alberto A. Lim, PAL's cargo supervisor at San Francisco, as deponent-witness to you a cargo bearing human remains. Could you go over this Exhibit I and please give
for PAL, makes this further clarification: us your comments as to that exhibit?
ATTY. ALBERTO C. MENDOZA:
That is a vague question. I would rather request that counsel propound specific
ATTY. CESAR P. MANALAYSAY: questions rather than asking for comments on Exhibit I-TWA.
You mentioned Airway Bill, Mr. Lim. I am showing to you a PAL Airway Bill Number ATTY. CESAR P. MANALAYSAY:
01180454 which for purposes of evidence, I would like to request that the same be In that case, I will reform my question. Could you tell us whether TWA in fact delivered
marked as evidence Exhibit I for PAL. to you the human remains as indicated in that Transfer Manifest?
xxx xxx xxx ALBERTO A. LIM:
In what circumstances did you encounter Exhibit I-PAL? Yes, they did.
ALBERTO A. LIM: ATTY. CESAR P. MANALAYSAY:
If I recall correctly, I was queried by Manila, our Manila office with regard to a certain I noticed that the Transfer Manifest of TWA marked as Exhibit I-TWA bears the same
complaint that a consignee filed that this shipment did not arrive on the day that the numbers or the same entries as the Airway Bill marked as Exhibit I-A PAL tending to
consignee expects the shipment to arrive. show that this is the human remains of Mrs Cristina (sic) Saludo. Could you tell us
ATTY CESAR P. MANALAYSAY: whether this is true?
Okay. Now, upon receipt of that query from your Manila office, did you conduct any ALBERTO A. LIM:
investigation to pinpoint the possible causes of mishandling? It is true that we received human remains shipment from TWA as indicated on this
ALBERTO A. LIM: Transfer Manifest. But in the course of investigation, it was found out that the human
Yes. remains transferred to us is not the remains of Mrs. Cristina (sic) Saludo this is the
xxx xxx xxx reason why we did not board it on our flight. 38
ATTY. CESAR P. MANALAYSAY:
What is the result of your investigation?
ALBERTO A. LIM: Petitioners consider TWA's statement that "it had to rely on the information furnished by the
In the course of my investigation, I found that we received the body on October 28, shipper" a lame excuse and that its failure to prove that its personnel verified and identified the
1976, from American Airlines. contents of the casket before loading the same constituted negligence on the part of TWA.39
ATTY. CESAR P. MANALAYSAY:
What body are you referring to? We upbold the favorable consideration by the Court of Appeals of the following findings of the
xxx xxx xxx trial court:
ALBERTO A. LIM:
The remains of Mrs. Cristina (sic) Saludo. It was not (to) TWA, but to C.M.A.S. that the Pomierski & Son Funeral Home delivered
ATTY. CESAR P. MANALAYSAY: the casket containing the remains of Crispina Saludo. TWA would have no knowledge
Is that the same body mentioned in this Airway Bill? therefore that the remains of Crispina Saludo were not the ones inside the casket that
ALBERTO A. LIM: was being presented to it for shipment. TWA would have to rely on there presentations
Yes. of C.M.A.S. The casket was hermetically sealed and also sealed by the Philippine Vice
ATTY. CESAR P. MANALAYSAY: Consul in Chicago. TWA or any airline for that matter would not have opened such a
What time did you receive said body on October 28, 1976? sealed casket just for the purpose of ascertaining whose body was inside and to make
ALBERTO A. LIM: sure that the remains inside were those of the particular person indicated to be by
If I recall correctly, approximately 7:45 of October 28, 1976. C.M.A.S. TWA had to accept whatever information was being furnished by the shipper
Chapter Three : Other Kinds of Damages
or by the one presenting the casket for shipment. And so as a matter of fact, TWA
carried to San Francisco and transferred to defendant PAL a shipment covered by or
under PAL Airway Bill No. 079-ORD-01180454, the airway bill for the shipment of the
casketed remains of Crispina Saludo. Only, it turned out later, while the casket was
already with PAL, that what was inside the casket was not the body of Crispina Saludo
so much so that it had to be withdrawn by C.M.A.S. from PAL. The body of Crispina
Saludo had been shipped to Mexico. The casket containing the remains of Crispina
Saludo was transshipped from Mexico and arrived in San Francisco the following day
on board American Airlines. It was immediately loaded by PAL on its flight for Manila.
The foregoing points at C.M.A.S., not defendant TWA much less defendant PAL, as the
ONE responsible for the switching or mix-up of the two bodies at the Chicago Airport
terminal, and started a chain reaction of the misshipment of the body of Crispina Saludo
and a one-day delay in the delivery thereof to its destination.40
Verily, no amount of inspection by respondent airline companies could have guarded against the
switching that had already taken place. Or, granting that they could have opened the casket to
inspect its contents, private respondents had no means of ascertaining whether the body therein
contained was indeed that of Crispina Saludo except, possibly, if the body was that of a male
person and such fact was visually apparent upon opening the casket. However, to repeat, private
respondents had no authority to unseal and open the same nor did they have any reason or
justification to resort thereto.
It is the right of the carrier to require good faith on the part of those persons who deliver goods to
be carried, or enter into contracts with it, and inasmuch as the freight may depend on the value
of the article to be carried, the carrier ordinarily has the right to inquire as to its value. Ordinarily,
too, it is the duty of the carrier to make inquiry as to the general nature of the articles shipped
and of their value before it consents to carry them; and its failure to do so cannot defeat the
shipper's right to recovery of the full value of the package if lost, in the absence of showing of
fraud or deceit on the part of the shipper. In the absence of more definite information, the carrier
has a the right to accept shipper's marks as to the contents of the package offered for
transportation and is not bound to inquire particularly about them in order to take advantage of a
false classification and where a shipper expressly represents the contents of a package to be of
a designated character, it is not the duty of the carrier to ask for a repetition of the statement nor
disbelieve it and open the box and see for itself. 41 However, where a common carrier has
reasonable ground to suspect that the offered goods are of a dangerous or illegal character, the
carrier has the right to know the character of such goods and to insist on an inspection, if
reasonable and practical under the circumstances, as a condition of receiving and transporting
such goods.42
It can safely be said then that a common carrier is entitled to fair representation of the nature
and value of the goods to be carried, with the concomitant right to rely thereon, and further
noting at this juncture that a carrier has no obligation to inquire into the correctness or sufficiency
of such information. 43 The consequent duty to conduct an inspection thereof arises in the event
that there should be reason to doubt the veracity of such representations. Therefore, to be
subjected to unusual search, other than the routinary inspection procedure customarily
undertaken, there must exist proof that would justify cause for apprehension that the baggage is
dangerous as to warrant exhaustive inspection, or even refusal to accept carriage of the same;
Page | 38
and it is the failure of the carrier to act accordingly in the face of such proof that constitutes the
basis of the common carrier's liability. 44
In the case at bar, private respondents had no reason whatsoever to doubt the truth of the
shipper's representations. The airway bill expressly providing that "carrier certifies goods
received below were received for carriage," and that the cargo contained "casketed human
remains of Crispina Saludo," was issued on the basis of such representations. The reliance
thereon by private respondents was reasonable and, for so doing, they cannot be said to have
acted negligently. Likewise, no evidence was adduced to suggest even an iota of suspicion that
the cargo presented for transportation was anything other than what it was declared to be, as
would require more than routine inspection or call for the carrier to insist that the same be
opened for scrutiny of its contents per declaration.
Neither can private respondents be held accountable on the basis of petitioners' preposterous
proposition that whoever brought the cargo to the airport or loaded it on the airplane did so as
agent of private respondents, so that even if CMAS whose services were engaged for the transit
arrangements for the remains was indeed at fault, the liability therefor would supposedly still be
attributable to private respondents.
While we agree that the actual participation of CMAS has been sufficiently and correctly
established, to hold that it acted as agent for private respondents would be both an inaccurate
appraisal and an unwarranted categorization of the legal position it held in the entire transaction.
It bears repeating that CMAS was hired to handle all the necessary shipping arrangements for
the transportation of the human remains of Crispina Saludo to Manila. Hence, it was to CMAS
that the Pomierski & Son Funeral Home, as shipper, brought the remains of petitioners' mother
for shipment, with Maria Saludo as consignee. Thereafter, CMAS booked the shipment with PAL
through the carrier's agent, Air Care International. 45 With its aforestated functions, CMAS may
accordingly be classified as a forwarder which, by accepted commercial practice, is regarded as
an agent of the shipper and not of the carrier. As such, it merely contracts for the transportation
of goods by carriers, and has no interest in the freight but receives compensation from the
shipper as his agent. 46
At this point, it can be categorically stated that, as culled from the findings of both the trial court
and appellate courts, the entire chain of events which culminated in the present controversy was
not due to the fault or negligence of private respondents. Rather, the facts of the case would
point to CMAS as the culprit. Equally telling of the more likely possibility of CMAS' liability is
petitioners' letter to and demanding an explanation from CMAS regarding the statement of
private respondents laying the blame on CMAS for the incident, portions of which, reading as
follows:
. . . we were informed that the unfortunate a mix-up occurred due to your negligence. . .
.
Likewise, the two airlines pinpoint the responsibility upon your agents. Evidence were
presented to prove that allegation.
Chapter Three : Other Kinds of Damages
On the face of this overwhelming evidence we could and should have filed a case
against you. . . . 47
clearly allude to CMAS as the party at fault. This is tantamount to an admission by petitioners
that they consider private respondents without fault, or is at the very least indicative of the fact
that petitioners entertained serious doubts as to whether herein private respondents were
responsible for the unfortunate turn of events.
Undeniably, petitioners' grief over the death of their mother was aggravated by the unnecessary
inconvenience and anxiety that attended their efforts to bring her body home for a decent burial.
This is unfortunate and calls for sincere commiseration with petitioners. But, much as we would
like to give them consolation for their undeserved distress, we are barred by the inequity of
allowing recovery of the damages prayed for by them at the expense of private respondents
whose fault or negligence in the very acts imputed to them has not been convincingly and legally
demonstrated.
Neither are we prepared to delve into, much less definitively rule on, the possible liability of
CMAS as the evaluation and adjudication of the same is not what is presently at issue here and
is best deferred to another time and addressed to another forum.
II. Petitioners further fault the Court of Appeals for ruling that there was no contractual breach on
the part of private respondents as would entitle petitioners to damages.
Petitioners hold that respondent TWA, by agreeing to transport the remains of petitioners' mother
on its Flight 131 from Chicago to San Francisco on October 27, 1976, made itself a party to the
contract of carriage and, therefore, was bound by the terms of the issued airway bill. When TWA
undertook to ship the remains on its Flight 603, ten hours earlier than scheduled, it supposedly
violated the express agreement embodied in the airway bill. It was allegedly this breach of
obligation which compounded, if not directly caused, the switching of the caskets.
In addition, petitioners maintain that since there is no evidence as to who placed the body on
board Flight 603, or that CMAS actually put the cargo on that flight, or that the two caskets at the
Chicago airport were to be transported by the same airline, or that they came from the same
funeral home, or that both caskets were received by CMAS, then the employees or agents of
TWA presumably caused the mix-up by loading the wrong casket on the plane. For said error,
they contend, TWA must necessarily be presumed negligent and this presumption of negligence
stands undisturbed unless rebutting evidence is presented to show that the switching or
misdelivery was due to circumstances that would exempt the carrier from liability.
Private respondent TWA professes otherwise. Having duly delivered or transferred the cargo to
its co-respondent PAL on October 27, 1976 at 2:00 P.M., as supported by the TWA Transfer
Manifest, TWA faithfully complied with its obligation under the airway bill. Said faithful
compliance was not affected by the fact that the remains were shipped on an earlier flight as
there was no fixed time for completion of carriage stipulated on. Moreover, the carrier did not
undertake to carry the cargo aboard any specified aircraft, in view of the condition on the back of
the airway bill which provides:
Page | 39
CONDITIONS OF CONTRACT xxx xxx xxx
It is agreed that no time is fixed for the completion of carriage hereunder and
that Carrier may without notice substitute alternate carriers or aircraft. Carrier
assumes no obligation to carry the goods by any specified aircraft or over any
particular route or routes or to make connection at any point according to any
particular schedule, and Carrier is hereby authorized to select, or deviate from
the route or routes of shipment, notwithstanding that the same may be stated
on the face hereof. The shipper guarantees payment of all charges and
advances.48
Hence, when respondent TWA shipped the body on earlier flight and on a different aircraft, it was
acting well within its rights. We find this argument tenable.
The contention that there was contractual breach on the part of private respondents is founded
on the postulation that there was ambiguity in the terms of the airway bill, hence petitioners'
insistence on the application of the rules on interpretation of contracts and documents. We find
no such ambiguity. The terms are clear enough as to preclude the necessity to probe beyond the
apparent intendment of the contractual provisions.
The hornbook rule on interpretation of contracts consecrates the primacy of the intention of the
parties, the same having the force of law between them. When the terms of the agreement are
clear and explicit, that they do not justify an attempt to read into any alleged intention of the
parties, the terms are to be understood literally just as they appear on the face of the
contract.49 The various stipulations of a contract shall be interpreted together50 and such a
construction is to be adopted as will give effect to all provisions thereof. 51 A contract cannot be
construed by parts, but its clauses should be interpreted in relation to one another. The whole
contract must be interpreted or read together in order to arrive at its true meaning. Certain
stipulations cannot be segregated and then made to control; neither do particular words or
phrases necessarily determine the character of a contract. The legal effect of the contract is not
to be determined alone by any particular provision disconnected from all others, but in the ruling
intention of the parties as gathered from all the language they have used and from their
contemporaneous and subsequent acts. 52
Turning to the terms of the contract at hand, as presented by PAL Air Waybill No. 079-01180454,
respondent court approvingly quoted the trial court's disquisition on the aforequoted condition
appearing on the reverse side of the airway bill and its disposition of this particular assigned
error:
The foregoing stipulation fully answers plaintiffs' objections to the one-day
delay and the shipping of the remains in TWA Flight 603 instead of TWA Flight
131. Under the stipulation, parties agreed that no time was fixed to complete
the contract of carriage and that the carrier may, without notice, substitute
alternate carriers or aircraft. The carrier did not assume the obligation to carry
the shipment on any specified aircraft. xxx xxx xxx
Chapter Three : Other Kinds of Damages
Furthermore, contrary to the claim of plaintiffs-appellants, the conditions of the
Air Waybill are big enough to be read and noticed. Also, the mere fact that the
cargo in question was shipped in TWA Flight 603, a flight earlier on the same
day than TWA Flight 131, did not in any way cause or add to the one-day
delay complained of and/or the switching or mix-up of the bodies.53
Indubitably, that private respondent can use substitute aircraft even without notice and without
the assumption of any obligation whatsoever to carry the goods on any specified aircraft is
clearly sanctioned by the contract of carriage as specifically provided for under the conditions
thereof.
Petitioners' invocation of the interpretative rule in the Rules of Court that written words control
printed words in documents, 54 to bolster their assertion that the typewritten provisions regarding
the routing and flight schedule prevail over the printed conditions, is tenuous. Said rule may be
considered only when there is inconsistency between the written and printed words of the
contract.
As previously stated, we find no ambiguity in the contract subject of this case that would call for
the application of said rule. In any event, the contract has provided for such a situation by
explicitly stating that the above condition remains effective "notwithstanding that the same (fixed
time for completion of carriage, specified aircraft, or any particular route or schedule) may be
stated on the face hereof." While petitioners hinge private respondents' culpability on the fact
that the carrier "certifies goods described below were received for carriage," they may have
overlooked that the statement on the face of the airway bill properly and completely reads —
Carrier certifies goods described below were received for carriage subject to the
Conditions on the reverse hereof the goods then being in apparent good order and
condition except as noted hereon. 55(Emphasis ours.)
Private respondents further aptly observe that the carrier's certification regarding receipt of the
goods for carriage "was of a smaller print than the condition of the Air Waybill, including
Condition No. 5 — and thus if plaintiffs-appellants had recognized the former, then with more
reason they were aware of the latter. 56
In the same vein, it would also be incorrect to accede to the suggestion of petitioners that the
typewritten specifications of the flight, routes and dates of departures and arrivals on the face of
the airway bill constitute a special contract which modifies the printed conditions at the back
thereof. We reiterate that typewritten provisions of the contract are to be read and understood
subject to and in view of the printed conditions, fully reconciling and giving effect to the manifest
intention of the parties to the agreement.
The oft-repeated rule regarding a carrier's liability for delay is that in the absence of a special
contract, a carrier is not an insurer against delay in transportation of goods. When a common
carrier undertakes to convey goods, the law implies a contract that they shall be delivered at
destination within a reasonable time, in the absence, of any agreement as to the time of
delivery. 57 But where a carrier has made an express contract to transport and deliver property
within a specified time, it is bound to fulfill its contract and is liable for any delay, no matter from
Page | 40
what cause it may have arisen. 58 This result logically follows from the well-settled rule that
where the law creates a duty or charge, and the party is disabled from performing it without any
default in himself, and has no remedy over, then the law will excuse him, but where the party by
his own contract creates a duty or charge upon himself, he is bound to make it good
notwithstanding any accident or delay by inevitable necessity because he might
have provided against it by contract. Whether or not there has been such an undertaking on the
part of the carrier to be determined from the circumstances surrounding the case and by
application of the ordinary rules for the interpretation of contracts.59
Echoing the findings of the trial court, the respondent court correctly declared that —
In a similar case of delayed delivery of air cargo under a very similar stipulation
contained in the airway bill which reads: "The carrier does not obligate itself to carry the
goods by any specified aircraft or on a specified time. Said carrier being hereby
authorized to deviate from the route of the shipment without any liability therefor", our
Supreme Court ruled that common carriers are not obligated by law to carry and to
deliver merchandise, and persons are not vested with the right to prompt delivery,
unless such common carriers previously assume the obligation. Said rights and
obligations are created by a specific contract entered into by the parties (Mendoza vs.
PAL, 90 Phil. 836).
There is no showing by plaintiffs that such a special or specific contract had been
entered into between them and the defendant airline companies.
And this special contract for prompt delivery should call the attention of the carrier to
the circumstances surrounding the case and the approximate amount of damages to be
suffered in case of delay (See Mendoza vs. PAL, supra). There was no such contract
entered into in the instant case.60
Also, the theory of petitioners that the specification of the flights and dates of departure and
arrivals constitute a special contract that could prevail over the printed stipulations at the back of
the airway bill is vacuous. To countenance such a postulate would unduly burden the common
carrier for that would have the effect of unilaterally transforming every single bill of lading or trip
ticket into a special contract by the simple expedient of filling it up with the particulars of the
flight, trip or voyage, and thereby imposing upon the carrier duties and/or obligations which it
may not have been ready or willing to assume had it been timely, advised thereof.
Neither does the fact that the challenged condition No. 5 was printed at the back of the airway
bill militate against its binding effect on petitioners as parties to the contract, for there were
sufficient indications on the face of said bill that would alert them to the presence of such
additional condition to put them on their guard. Ordinary prudence on the part of any person
entering or contemplating to enter into a contract would prompt even a cursory examination of
any such conditions, terms and/or stipulations.
There is a holding in most jurisdictions that the acceptance of a bill of lading without dissent
raises a presumption that all terms therein were brought to the knowledge of the shipper and
agreed to by him, and in the absence of fraud or mistake, he is estopped from thereafter denying
Chapter Three : Other Kinds of Damages
that he assented to such terms. This rule applies with particular force where a shipper accepts a
bill of lading with full knowledge of its contents, and acceptance under such circumstances
makes it a binding contract. In order that any presumption of assent to a stipulation in a bill of
lading limiting the liability of a carrier may arise, it must appear that the clause containing this
exemption from liability plainly formed a part of the contract contained in the bill of lading. A
stipulation printed on the back of a receipt or bill of lading or on papers attached to such receipt
will be quite as effective as if printed on its face, if it is shown that the consignor knew of its
terms. Thus, where a shipper accepts a receipt which states that its conditions are to be found
on the back, such receipt comes within the general rule, and the shipper is held to have
accepted and to be bound by the conditions there to be found. 61
Granting arguendo that Condition No. 5 partakes of the nature of a contract of adhesion and as
such must be construed strictly against the party who drafted the same or gave rise to any
ambiguity therein, it should be borne in mind that a contract of adhesion may be struck down as
void and unenforceable, for being subversive of public policy, only when the weaker party is
imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of
taking it or leaving it, completely deprived of the opportunity to bargain on equal
footing. 62However, Ong Yiu vs. Court of Appeals, et al 63 instructs us that contracts of adhesion
are not entirely prohibited. The one who adheres to the contract is in reality free to reject it
entirely; if he adheres, be gives his consent. Accordingly, petitioners, far from being the weaker
party in this situation, duly signified their presumed assent to all terms of the contract through
their acceptance of the airway bill and are consequently bound thereby. It cannot be gainsaid
that petitioners' were not without several choices as to carriers in Chicago with its numerous
airways and airliner servicing the same.
We wish to allay petitioners' apprehension that Condition No. 5 of the airway bill is productive of
mischief as it would validate delay in delivery, sanction violations of contractual obligations with
impunity or put a premium on breaches of contract.
Just because we have said that condition No. 5 of the airway bill is binding upon the parties to
and fully operative in this transaction, it does not mean, and let this serve as fair warning to
respondent carriers, that they can at all times whimsically seek refuge from liability in the
exculpatory sanctuary of said Condition No. 5 or arbitrarily vary routes, flights and schedules to
the prejudice of their customers. This condition only serves to insulate the carrier from liability in
those instances when changes in routes, flights and schedules are clearly justified by the
peculiar circumstances of a particular case, or by general transportation practices, customs and
usages, or by contingencies or emergencies in aviation such as weather turbulence, mechanical
failure, requirements of national security and the like. And even as it is conceded that specific
routing and other navigational arrangements for a trip, flight or voyage, or variations therein,
generally lie within the discretion of the carrier in the absence of specific routing instructions or
directions by the shipper, it is plainly incumbent upon the carrier to exercise its rights with due
deference to the rights, interests and convenience of its customers.
A common carrier undertaking to transport property has the implicit duty to carry and deliver it
within reasonable time, absent any particular stipulation regarding time of delivery, and to guard
against delay. In case of any unreasonable delay, the carrier shall be liable for damages
immediately and proximately resulting from such neglect of duty. 64 As found by the trial court,
the delay in the delivery of the remains of Crispina Saludo, undeniable and regrettable as it was,
Page | 41
cannot be attributed to the fault, negligence or malice of private respondents, 65 a conclusion
concurred in by respondent court and which we are not inclined to disturb.
We are further convinced that when TWA opted to ship the remains of Crispina Saludo on an
earlier flight, it did so in the exercise of sound discretion and with reasonable prudence, as
shown by the explanation of its counsel in his letter of February 19, 1977 in response to
petitioners' demand letter:
Investigation of TWA's handling of this matter reveals that although the shipment was
scheduled on TWA Flight 131 of October 27, 1976, it was actually boarded on TWA
Flight 603 of the same day, approximately 10 hours earlier, in order to assure that the
shipment would be received in San Francisco in sufficient time for transfer to PAL. This
transfer was effected in San Francisco at 2:00 P.M. on October 27, 1976. 66
Precisely, private respondent TWA knew of the urgency of the shipment by reason of this
notation on the lower portion of the airway bill: "All documents have been certified. Human
remains of Cristina (sic) Saludo. Please return bag first available flight to SFO." Accordingly,
TWA took it upon itself to carry the remains of Crispina Saludo on an earlier flight, which we
emphasize it could do under the terms of the airway bill, to make sure that there would be
enough time for loading said remains on the transfer flight on board PAL.
III. Petitioners challenge the validity of respondent court's finding that private respondents are
not liable for tort on account of the humiliating, arrogant and indifferent acts of their officers and
personnel. They posit that since their mother's remains were transported ten hours earlier than
originally scheduled, there was no reason for private respondents' personnel to disclaim
knowledge of the arrival or whereabouts of the same other than their sheer arrogance,
indifference and extreme insensitivity to the feelings of petitioners. Moreover, being passengers
and not merely consignors of goods, petitioners had the right to be treated with courtesy,
respect, kindness and due consideration.
In riposte, TWA claims that its employees have always dealt politely with all clients, customers
and the public in general. PAL, on the other hand, declares that in the performance of its
obligation to the riding public, other customers and clients, it has always acted with justice,
honesty, courtesy and good faith.
Respondent appellate court found merit in and reproduced the trial court's refutation of this
assigned error:
About the only evidence of plaintiffs that may have reference to the manner with which
the personnel of defendants treated the two plaintiffs at the San Francisco Airport are
the following pertinent portions of Maria Saludo's testimony:
Q When you arrived there, what did you do, if any?
A I immediately went to the TWA counter and I inquired about whether my mother
was there or if' they knew anything about it.
Q What was the answer?
A They said they do not know. So, we waited.
Chapter Three : Other Kinds of Damages
Q About what time was that when you reached San Francisco from Chicago?
A I think 5 o'clock. Somewhere around that in the afternoon.
Q You made inquiry it was immediately thereafter?
A Right after we got off the plane.
Q Up to what time did you stay in the airport to wait until the TWA people could tell
you the whereabouts?
A Sorry, Sir, but the TWA did not tell us anything. We stayed there until about 9
o'clock. They have not heard anything about it. They did not say anything.
Q Do you want to convey to the Court that from 5 up to 9 o'clock in the evening you
yourself went back to the TWA and they could not tell you where the remains of
your mother were?
A Yes sir.
Q And after nine o'clock, what did you do?
A I told my brother my Mom was supposed to be on the Philippine Airlines flight.
"Why don't" we check with PAL instead to see if she was there?" We tried to
comfort each other. I told him anyway that was a shortest flight from Chicago to
California. We will be with our mother on this longer flight. So, we checked with the
PAL.
Q What did you find?
A We learned, Yes, my Mom would be on the flight.
Q Who was that brother?
A Saturnino Saludo.
Q And did you find what was your flight from San Francisco to the Philippines?
A I do not know the number. It was the evening flight of the Philippine Airline(s)
from San Francisco to Manila.
Q You took that flight with your mother?
A We were scheduled to, Sir.
Q Now, you could not locate the remains of your mother in San Francisco could
you tell us what did you feel?
A After we were told that my mother was not there?
Q After you learned that your mother could not fly with you from Chicago to
California?
A Well, I was very upset. Of course, I wanted the confirmation that my mother was
in the West Coast. The fliqht was about 5 hours from Chicago to California. We
waited anxiously all that time on the plane. I wanted to be assured about my
mother's remains. But there was nothing and we could not get any assurance from
anyone about it.
Q Your feeling when you reached San Francisco and you could not find out from
the TWA the whereabouts of the remains, what did you feel?
A Something nobody would be able to describe unless he experiences it himself. It
is a kind of panic. I think it's a feeling you are about to go crazy. It is something I do
not want to live through again. (Inting, t.s.n., Aug. 9, 1983, pp. 14-18).
The foregoing does not show any humiliating or arrogant manner with which the
personnel of both defendants treated the two plaintiffs. Even their alleged indifference is
not clearly established. The initial answer of the TWA personnel at the counter that they
did not know anything about the remains, and later, their answer that they have not
heard anything about the remains, and the inability of the TWA counter personnel to
inform the two plaintiffs of the whereabouts of the remains, cannot be said to be total or
Page | 42
complete indifference to the said plaintiffs. At any rate, it is any rude or discourteous
conduct, malfeasance or neglect, the use of abusive or insulting language calculated to
humiliate and shame passenger or had faith by or on the part of the employees of the
carrier that gives the passenger an action for damages against the carrier (Zulueta vs.
Pan American World Airways, 43 SCRA 397; Air France vs. Carrascoso, et al., 18
SCRA 155; Lopez, et al. vs. Pan American World Airways, 16 SCRA 431; Northwest
Airlines, Inc. vs. Cuenca, 14 SCRA 1063), and none of the above is obtaining in the
instant case. 67
We stand by respondent court's findings on this point, but only to the extent where it holds that
the manner in which private respondent TWA's employees dealt with petitioners was not grossly
humiliating, arrogant or indifferent as would assume the proportions of malice or bad faith and
lay the basis for an award of the damages claimed. It must however, be pointed out that the
lamentable actuations of respondent TWA's employees leave much to be desired, particularly so
in the face of petitioners' grief over the death of their mother, exacerbated by the tension and
anxiety wrought by the impasse and confusion over the failure to ascertain over an appreciable
period of time what happened to her remains.
Airline companies are hereby sternly admonished that it is their duty not only to cursorily instruct
but to strictly require their personnel to be more accommodating towards customers, passengers
and the general public. After all, common carriers such as airline companies are in the business
of rendering public service, which is the primary reason for their enfranchisement and
recognition in our law. Because the passengers in a contract of carriage do not contract merely
for transportation, they have a right to be treated with kindness, respect, courtesy and
consideration. 68 A contract to transport passengers is quite different in kind and degree from any
other contractual relation, and generates a relation attended with public duty. The operation of a
common carrier is a business affected with public interest and must be directed to serve the
comfort and convenience of passengers. 69 Passengers are human beings with human feelings
and emotions; they should not be treated as mere numbers or statistics for revenue.
The records reveal that petitioners, particularly Maria and Saturnino Saludo, agonized for nearly
five hours, over the possibility of losing their mother's mortal remains, unattended to and without
any assurance from the employees of TWA that they were doing anything about the situation.
This is not to say that petitioners were to be regaled with extra special attention. They were,
however, entitled to the understanding and humane consideration called for by and
commensurate with the extraordinary diligence required of common carriers, and not the cold
insensitivity to their predicament. It is hard to believe that the airline's counter personnel were
totally helpless about the situation. Common sense would and should have dictated that they
exert a little extra effort in making a more extensive inquiry, by themselves or through their
superiors, rather than just shrug off the problem with a callous and uncaring remark that they
had no knowledge about it. With all the modern communications equipment readily available to
them, which could have easily facilitated said inquiry and which are used as a matter of course
by airline companies in their daily operations, their apathetic stance while not legally
reprehensible is morally deplorable.
Losing a loved one, especially one's, parent, is a painful experience. Our culture accords the
tenderest human feelings toward and in reverence to the dead. That the remains of the
deceased were subsequently delivered, albeit belatedly, and eventually laid in her final resting
Chapter Three : Other Kinds of Damages Page | 43

place is of little consolation. The imperviousness displayed by the airline's personnel, even for racial or societal culture which stultifies what would have been their accustomed human
just that fraction of time, was especially condemnable particularly in the hour of bereavement of response to a human need under a former and different ambience.
the family of Crispina Saludo, intensified by anguish due to the uncertainty of the whereabouts of
their mother's remains. Hence, it is quite apparent that private respondents' personnel were Nonetheless, the facts show that petitioners' right to be treated with due courtesy in accordance
remiss in the observance of that genuine human concern and professional attentiveness with the degree of diligence required by law to be exercised by every common carrier was
required and expected of them. violated by TWA and this entitles them, at least, to nominal damages from TWA alone. Articles
2221 and 2222 of the Civil Code make it clear that nominal damages are not intended for
The foregoing observations, however, do not appear to be applicable or imputable to respondent indemnification of loss suffered but for the vindication or recognition of a right violated of
PAL or its employees. No attribution of discourtesy or indifference has been made against PAL invaded. They are recoverable where some injury has been done but the amount of which the
by petitioners and, in fact, petitioner Maria Saludo testified that it was to PAL that they repaired evidence fails to show, the assessment of damages being left to the discretion of the court
after failing to receive proper attention from TWA. It was from PAL that they received according to the circumstances of the case. 76 In the exercise of our discretion, we find an award
confirmation that their mother's remains would be on the same flight to Manila with them. of P40,000.00 as nominal damages in favor of, petitioners to be a reasonable amount under the
circumstances of this case.
We find the following substantiation on this particular episode from the deposition of Alberto A.
Lim, PAL's cargo supervisor earlier adverted to, regarding their investigation of and the action WHEREFORE, with the modification that an award of P40,000.00 as and by way of nominal
taken on learning of petitioner's problem: damages is hereby granted in favor of petitioners to be paid by respondent Trans World Airlines,
the appealed decision is AFFIRMED in all other respects. SO ORDERED.
ATTY. ALBERTO C. MENDOZA:
Yes.
Mr. Lim, what exactly was your procedure adopted in your so called investigation?
ALBERTO A. LIM:
I called the lead agent on duty at that time and requested for a copy of airway bill,
transfer manifest and other documents concerning the shipment.
ATTY ALBERTO C. MENDOZA:
Then, what?
ALBERTO A. LIM:
They proceeded to analyze exactly where PAL failed, if any, in forwarding the human
remains of Mrs. Cristina (sic) Saludo. And I found out that there was not (sic) delay in
shipping the remains of Mrs. Saludo to Manila. Since we received the body from
American Airlines on 28 October at 7:45 and we expedited the shipment so that it could
have been loaded on our flight leaving at 9:00 in the evening or just barely one hour
and 15 minutes prior to the departure of the aircraft. That is so (sic) being the case, I
reported to Manila these circumstances. 70

IV. Finally, petitioners insist, as a consequence of the delay in the shipment of their mother's
remains allegedly caused by wilful contractual breach, on their entitlement to actual, moral and
exemplary damages as well as attorney's fees, litigation expenses, and legal interest.

The uniform decisional tenet in our jurisdiction bolds that moral damages may be awarded for
wilful or fraudulent breach of contract 71 or when such breach is attended by malice or bad
faith. 72 However, in the absence of strong and positive evidence of fraud, malice or bad faith,
said damages cannot be awarded.73 Neither can there be an award of exemplary damages 74 nor
of attorney's fees 75 as an item of damages in the absence of proof that defendant acted with
malice, fraud or bad faith.

The censurable conduct of TWA's employees cannot, however, be said to have approximated
the dimensions of fraud, malice or bad faith. It can be said to be more of a lethargic reaction
produced and engrained in some people by the mechanically routine nature of their work and a
Chapter Three : Other Kinds of Damages
G.R. No. L-33836 March 16, 1987
DRA. SOFIA L. PRUDENCIADO, petitioner, vs.
ALLIANCE TRANSPORT SYSTEM, INC. and JOSE LEYSON, et al., respondents.
PARAS, J.:
This is a petition for review on certiorari of the decision 1 of the Court of Appeals dated May
4,1971 in CA-G.R. No. 34832R entitled Dra. Sofia L. Prudenciado v. Alliance Transport System,
Inc. and Jose Leyson, which modified the decision 2 of the Court of First Instance of Rizal,
Quezon City, in Civil Case No. Q-5235 reducing the amount of moral damages from P25,000 to
P2,000 and eliminating the award of exemplary damages and attorney's fees but granting actual
damages of P2,451.27.
The decretal portion of said decision reads:
WHEREFORE, the decision appealed from is hereby modified, ordering appellants
jointly and severally to pay plaintiff the sum of P2,451.27 for actual damages
representing the cost of the repair of the car of Plaintiff; (2) the sum of P2,000.00 as
moral damages. No pronouncement as to costs.
The antecedent facts of this case as found by the trial court and by the Court of Appeals are as
follows:
At about 2:05 p.m. of May 11, 1960, Dra. Sofia L. Prudenciado was driving her own Chevrolet
Bel Air car along Arroceros Street with the intention of crossing Taft Avenue in order to turn left,
to go to the Philippine Normal College Compound where she would hold classes. She claimed
that she was driving her car at the rate of 10 kmph; that before crossing Taft Ave. she stopped
her car and looked to the right and to the left and not noticing any on-coming vehicle on either
side she slowly proceeded on first gear to cross the same, but when she was almost at the
center, near the island thereof, Jose Leyson who was driving People's Taxicab owned and
operated by Alliance Transport System, Inc., suddenly bumped and struck Dra. Prudenciado's
car, thereby causing physical injuries in different parts of her body, suffering more particularly
brain concussion which subjected her to several physical examinations and to an
encephalograph test while her car was damaged to the extent of P2,451.27. The damage to the
taxicab amounted to P190.00 (Decision in Civil Case No. Q-5235, CFI, Rizal; Record on Appeal,
pp. 63-64; Decision, CA-G.R. No. 34832-R, Rollo, pp. 37-38).
Dra. Prudenciado filed a complaint for damages at the Court of First Instance of Rizal, Quezon
City against the Alliance Transport System and Jose Leyson docketed as aforestated, Civil Case
No. Q-5232 (Record on Appeal, pp. 2-11).
After due hearing, the Court of First Instance of Rizal, Quezon City, found Jose Leyson guilty of
negligence in the performance of his duties as taxicab driver which is the proximate cause of the
accident in question. On the other hand, defendant Alliance Transport System, Inc. failed to
Page | 44
prove to the satisfaction of the court that it had exercised the required diligence of a good father
of the family in the selection, supervision and control of its employees including defendant
Leyson. Consequently, both defendants were held jointly and severally liable for the physical
injuries suffered by the plaintiff Dra. Sofia L. Prudenciado as well as for the damage to her car, in
addition to the other consequential damages prayed for. The dispositive portion of said decision
reads:
IN VIEW OF THE FOREGOING CONSIDERATIONS judgment is rendered, one in favor
of plaintiff and against the defendants, by ordering the said defendants, jointly and
severally, to pay the plaintiff the sum of P2,451.27 for actual damages representing the
cost for the repair of the car of plaintiff; P25,000.00 as moral damages; P5,000.00 as
exemplary damages; and the further sum of P3,000.00 as attorney's fees, with costs
against the defendants. (Record on Appeal, pp. 71-73).
On appeal, the Court of Appeals rendered the assailed decision on May 14, 1971 and denied
petitioner's motion for reconsideration in its resolution dated July 20, 1971.
Hence, this petition.
The petition was given due course in the resolution of this Court dated September 6, 1971 and
petitioner filed her brief on November 10, 1971 (Rollo, p. 69) while respondents filed their brief
on January 24, 1972 (Rollo, p. 86). Petitioner filed her Reply Brief on March 1, 1972 (Rollo, p.
96); after which the case was considered submitted for decision on the same date (Rollo, p. 99).
In her brief, petitioner raised the following assignment of errors:
I THE RESPONDENT COURT OF APPEALS ERRED IN REDUCING THE AWARD OF
MORAL DAMAGES TO THE PETITIONER FROM P25,000.00 AWARDED BY THE
COURT OF FIRST INSTANCE OF RIZAL, BRANCH V, QUEZON CITY, TO P2,000.00
NOTWITHSTANDING THE FACT THAT THERE WAS NO FINDING THAT THE
AWARD WAS PALPABLY AND SCANDALOUSLY EXCESSIVE AS TO INDICATE THAT
IT WAS THE RESULT OF PASSION OR CORRUPTION ON THE PART OF THE TRIAL
COURT;
II THE RESPONDENT COURT OF APPEALS ERRED IN ELIMINATING THE AWARD
OF EXEMPLARY DAMAGES OF P5,000.00 NOTWITHSTANDING THE FACT THAT
THE FINDING OF THE SAID COURT ON THE EVIDENCE AND THE LAW
APPLICABLE JUSTIFIED THE AWARD OF EXEMPLARY DAMAGES AS HELD BY
THE SAID TRIAL COURT;
III THE COURT OF APPEALS ERRED IN FINDING THAT HER DEMOTION IN RANK AS
A PROFESSOR IN THE UNITED STATES WAS NOT SUBSTANTIATED AND IN
MAKING THIS FINDING A BASIS FOR THE REDUCTION OF THE AWARD OF
MORAL DAMAGES, NOTWITHSTANDING THAT IT IS ALREADY TOO FAR FETCHED
AND IT MERELY CONFIRMS THE TRUTH OF THE FACT THAT THE ACCUSED
SUFFERED LOSS OF HER USUAL LIVELINESS; VIVACITY ACTIVITY SELF-
CONFIDENCE AND THAT SHE FEELS UNCERTAIN AND INSECURE AND THAT SHE
Chapter Three : Other Kinds of Damages
WAS SUBJECTED TO EXTREME FRIGHT AND SERIOUS ANXIETY, SERIOUS
APPREHENSION OF LOSING HER LIFE OR HER SENSES OR REASON AND OF
HER PHYSICAL MOBILITY ANYTIME AND THAT SHE SUFFERED GREAT SHOCK
AND SEVERE PAINS ON HER BACK NEAR THE LEFT SIDE OF HER SPINAL
COLUMN OF THE LUMBAR REGION;
IV THE RESPONDENT COURT OF APPEALS ALSO ERRED IN ELIMINATING THE
AWARD OF ATTORNEY'S FEES TO THE PETITIONERS NOTWITHSTANDING THE
FACT THAT SAID AWARD IS LEGAL AND PROPER;
V THE RESPONDENT COURT OF APPEALS ERRED IN ELIMINATING THE COSTS
TAXED AGAINST THE RESPONDENTS NOTWITHSTANDING THE FACT THAT SAID
COSTS ARE LEGAL AND PROPER;
VI THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT THE CLAIM
OF DR. SOFIA L. PRUDENCIADO OF HER LOSS OF HER USUAL LIVELINESS,
VIVACITY ACTIVITY AND HER USUAL SELF CONFIDENCE, SUCH THAT SHE NOW
FEELS UNCERTAIN AND INSECURE... EXTREME FRIGHT AND SERIOUS ANXIETY,
SERIOUS APPREHENSION OF LOSING HER LIFE OR HER SENSES OR REASON;
OF HER PHYSICAL MOBILITY ANYTIME ... GREAT SHOCK AND SEVERE PAINS ON
HER BACK NEAR THE LEFT SIDE OF HER SPINAL COLUMN IN THE LUMBAR
REGION IS UNCORROBORATED NOTWITHSTANDING THE FACT OF THE
CERTIFICATE, EXHIBIT "G" OF DR. DOMINADOR VERGARA, OF THE VETERANS
MEMORIAL HOSPITAL AND DR. CONRADO ARAMIL, BRAIN SPECIALIST AND THE
CORROBORATING TESTIMONY OF THE LATTER AFTER EXAMINATION AND
TREATMENT OF PETITIONER;
VII THE RESPONDENT COURT OF APPEALS ERRED IN SO MODIFYING THE
DECISION OF THE TRIAL COURT NOTWITHSTANDING THE FACT THAT IT HAD NO
POWER TO DO SO UNDER THE FACTS AND CIRCUMSTANCES OF THIS CASE AS
FOUND BY THE COURT OF APPEALS;
VIII THE RESPONDENT COURT OF APPEALS ERRED IN MODIFYING THE DECISION
OF THE TRIAL COURT NOTWITHSTANDING THE FACT THAT THE DECISION OF
SAID TRIAL COURT IS IN ACCORDANCE WITH LAW.
The Court of Appeals and the trial court are in accord in the finding that the accident was caused
by the negligence of the taxi driver. The bone of contention is however in the award of damages,
which crystalizes the errors assigned into one issue, which is whether or not the Court of
Appeals is justified in modifying or changing the grant of damages by the trial court.
It is well settled that factual findings of the Court of Appeals are binding on the Supreme Court,
but said findings are subject to scrutiny if such are diametrically opposed to those of the trial
court (Samson v. CA, et al. G.R. No. L-40071, January 29, 1986).
The Court of Appeals concedes that a concussion of the brain was suffered by Dra. Prudenciado
but as to how serious was the concussion or how it had later become, and the disastrous extent
Page | 45
of the injuries which she alleges to have sustained as a result of the accident, are seriously
doubted by said Appellate Court.
Specifically, said Court finds that Dra. Prudenciado's claim (which was sustained b the trial court)
that because of aforesaid concussion, she eventually lost her usual liveliness, vivacity activity
and her usual self- confidence, to the extent that now she feels uncertain and insecure, not to
mention a sense of extreme fright and serious anxiety, serious apprehension of losing her life, or
her senses or reason or her physical mobility momentarily, plus experiences of great shock and
severe pains on her back near the left side of her spinal column in the lumbar region, was not
supported by the deposition of Dr. Conrado Aramil the list who attended to the plaintiff from May
14 to May 26, 1960 (TSN, July 13, 1960, pp. 72-73). From said deposition, it was gathered that
Dra. Prudenciado suffered a mild abnormality, compatible with mold concussion of the brain
(TSN, July 13, 1960, pp. 47-48); that the symptoms of any brain concussion usually are
headache, dizziness, voting and lack of pep or alertness; and that the possible after effects that
may be produced are persistent or irregular headaches, fluctuating dizziness. Accordingly, Dra.
Prudenciado was advised "Just to watch herself if she would develop any alarming symptoms
such as headache, dizziness or vomitings, to have her re-checked after several months for her
to be sure." (Ibid, pp. 51-52). It might also produce intellectual deterioration or lessening of
intelligence, and even insanity.
Dra. Prudenciado sought to establish that she had precisely suffered are those after effects
except insanity; but the Court of Appeals ruled that her proof consisted merely in her own
uncorroborated testimony. In support of her allegation she could not show any medical certificate
tending to prove that she was indeed medically treated abroad for her brain ailment nor was
there any showing in the documents presented that she was demoted to the rank of technical
assistant because the San Francisco State College does not believe in her mental capacity any
more.
Finally, her statements that she is almost completely losing her voice, that she has a terrible
headache when her head is pressed, that she has lost her sense of taste, that she is nervous
and temperamental and that she has lapses of memory, are belied by the deposition of Dr.
Aramil that the patient's EEG was already normal on May 26, 1960; and on cross-examination
he declared that she was clinically symtomless when she was discharged from the hospital
(TSN, July 13, 1960, pp. 75-76; 78-79).
There is no argument that moral damages include physical suffering, mental anguish, fright,
serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury. Though incapable of pecuniary computation, moral damages may be recovered if
they are the proximate result of defendant's wrongful act or omission (People v. Baylon, 129
SCRA 62 [1984]).
In the same manner, it is undisputed that the trial courts are given discretion to determine the
amount of moral damages Alcantara v. Surro, 93 Phil. 472) and that the Court of Appeals can
only modify or change the amount awarded when they are palpably and scandalously excessive
"so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial
court (Gellada v. Warner Barnes & Co., Inc., 57 O.G. (4) 7347, 7358; Sadie v. Bachrach Motors
Co., Inc., 57 O.G. (4) 636 and Adone v. Bachrach Motor Co., Inc., 57 O.G. 656). But in more
recent cases where the awards of moral and exemplary damages are far too excessive
Chapter Three : Other Kinds of Damages
compared to the, actual losses sustained by the aggrieved party, this Court ruled that they
should be reduced to more reasonable amounts.
Thus, in the case of San Andres v. Court of Appeals (116 SCRA 85 [1982]) the Supreme Court
ruled that while the amount of moral damages is a matter left largely to the sound discretion of a
court, the same when found excessive should be reduced to more reasonable amounts,
considering the attendant facts and circumstances. Moral damages, though incapable of
pecuniary estimation, are in the category of an award designed to compensate the claimant for
actual injury suffered and not to impose a penalty on the wrongdoer.
In a much later case (Siguenza v. Court of Appeals, 137 SCRA 578-579 [1985]), the Supreme
court, reiterating the above ruling, reduced the awards of moral and exemplary damages which
were far too excessive compared to the actual losses sustained by the aggrieved parties and
where the records show that the injury suffered was not serious or gross and, therefore, out of
proportion to the amount of damages generously awarded by the trial court.
In any case the Court held that "moral damages are emphatically not intended to enrich a
complainant at the expense of a defendant. They are awarded only to enable the injured party to
obtain means, diversion or amusements that will serve to alleviate the moral suffering he has
undergone, by reason of the defendants' culpable action." The award of moral damages must be
proportionate to the suffering inflicted & B Surety & Insurance Co., Inc. v. Intermediate Appellate
Court, 129 SCRA 745 [1984] citing Grand Union Supermarket, Inc. v. Espino, Jr., 94 SCRA 966).
Coming back to the case at bar, a careful review of the records makes it readily apparent that the
injuries sustained by Dra. Prudenciado are not as serious or extensive as they were claimed to
be, to warrant the damages awarded by the trial court. In fact, a closer scrutiny of the exhibits
showing a moderate damage to the car can by no stretch of the imagination produce a logical
conclusion that such disastrous effects of the accident sought to be established, actually took
place, not to mention the fact that such were not supported by the medical findings presented.
Unquestionably, therefore, the damages imposed' by the lower court should be reduced to more
reasonable levels.
On the other hand, it will be observed that the reduction of the damages made by the Court of
Appeals is both too drastic and unrealistic, to pass the test of reasonableness, which appears to
be the underlying basis to justify such reduction.
While the damages sought to be recovered were not satisfactorily established to the extent
desired by the petitioner, it was nonetheless not disputed that an accident occurred due to the
fault and negligence of the respondents; that Dra. Prudenciado suffered a brain concussion
which although mild can admittedly produce the effects complained of by her and that these
symptoms can develop after several years and can lead to some, serious handicaps or
predispose the patient to other sickness (TSN, July 13, 1960, pp. 52-54). Being a doctor by
profession, her fears can be more real and intense than an ordinary person. Otherwise stated,
she is undeniably a proper recipient of moral damages which are proportionate to her suffering.
As to exemplary damages, Article 2231 of the Civil Code provides:
Page | 46
In quasi-delicts, exemplary damages may be granted if the defendant acted with grave
negligence.
The rationale behind exemplary or corrective damages is, as the name implies, to provide an
example or correction for the public good (Lopez, et al. v. Pan American World Airways, 16
SCRA 431).
The findings of the trial court in the case at bar which became the basis of the award of
exemplary damages are to the effect that it is more apparent from the facts, conditions and
circumstances obtaining in the record of the case that respondent driver was running at high
speed after turning to the right along Taft Ave. coming from Ayala Boulevard, considering that the
traffic was clear. Failing to notice petitioner's car, he failed to apply his brakes and did not even
swerve to the right to avoid the collision (Record on Appeal, pp. 69-70).
The Court of Appeals conforms with aforesaid findings of the trial court but is not prepared to
accept that there was gross negligence on the part of the driver to justify the imposition of
exemplary damages.
However, a driver running at full speed on a rainy day, on a slippery road in complete disregard
of the hazards to life and limb of other people cannot be said to be acting in anything less than
gross negligence. The frequent incidence of accidents of this nature caused by taxi drivers
indeed demands corrective measures.
PREMISES CONSIDERED, the assailed decision of the Court of Appeals is hereby MODIFIED
insofar as the award of damages is concerned; and respondents are ordered to jointly and
severally pay the petitioner; (1) the sum of P2,451.27 for actual damages representing the cost
of the repair of her car; (2) the sum of P15,000.00 as moral damages; (3) the sum of P5,000.00
as exemplary damages; and (4) the sum of P3,000.00 as attorney's fees. No pronouncement as
to costs.
SO ORDERED.
Chapter Three : Other Kinds of Damages
G.R. No. L-22415 March 30, 1966
FERNANDO LOPEZ, ET AL., plaintiffs-appellants, vs.
PAN AMERICAN WORLD AIRWAYS, defendant-appellant.
BENGZON, J.P., J.:
Plaintiffs and defendant appeal from a decision of the Court of First Instance of Rizal. Since the
value in controversy exceeds P200,000 the appeals were taken directly to this Court upon all
questions involved (Sec. 17, par. 3[5], Judiciary Act).
Stated briefly the facts not in dispute are as follows: Reservations for first class accommodations
in Flight No. 2 of Pan American World Airways — hereinafter otherwise called PAN-AM — from
Tokyo to San Francisco on May 24, 1960 were made with
PAN-AM on March 29, 1960, by "Your Travel Guide" agency, specifically, by Delfin Faustino, for
then Senator Fernando Lopez, his wife Maria J. Lopez, his son-in-law Alfredo Montelibano, Jr.,
and his daughter, Mrs. Alfredo Montelibano, Jr., (Milagros Lopez Montelibano). PAN-AM's San
Francisco head office confirmed the reservations on March 31, 1960.
First class tickets for the abovementioned flight were subsequently issued by PAN-AM on May
21 and 23, 1960, in favor of Senator Lopez and his party. The total fare of P9,444 for all of them
was fully paid before the tickets were issued.
As scheduled Senator Lopez and party left Manila by Northwest Airlines on May 24, 1960,
arriving in Tokyo at 5:30 P.M. of that day. As soon as 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. For the given reason that the first class seats
therein were all booked up, however, PAN-AM's Tokyo office informed Minister Busuego that
PAN-AM could not accommodate Senator Lopez and party in that trip as first class passengers.
Senator Lopez thereupon gave their first class tickets to Minister Busuego for him to show the
same to PAN-AM's Tokyo office, but the latter firmly reiterated that there was no accommodation
for them in the first class, stating that they could not go in that flight unless they took the tourist
class therein.
Due to pressing engagements awaiting Senator Lopez and his wife, in the United States — he
had to attend a business conference in San Francisco the next day and she had to undergo a
medical check-up in Mayo Clinic, Rochester, Minnesota, on May 28, 1960 and needed three
days rest before that in San Francisco — Senator Lopez and party were constrained to take
PAN-AM's flight from Tokyo to San Francisco as tourist passengers. Senator Lopez however
made it clear, as indicated in his letter to PAN-AM's Tokyo office on that date (Exh. A), that they
did so "under protest" and without prejudice to further action against the airline.1äwphï1.ñët
Suit for damages was thereafter filed by Senator Lopez and party against PAN-AM on June 2,
1960 in the Court of First Instance of Rizal. Alleging breach of contracts in bad faith by
defendant, plaintiffs asked for P500,000 actual and moral damages, P100,000 exemplary
damages, P25,000 attorney's fees plus costs. PAN-AM filed its answer on June 22, 1960,
Page | 47
asserting that its failure to provide first class accommodations to plaintiffs was due to honest
error of its employees. It also interposed a counterclaim for attorney's fees of P25,000.
Subsequently, further pleadings were filed, thus: plaintiffs' answer to the counterclaim, on July
25, 1960; plaintiffs' reply attached to motion for its admittance, on December 2, 1961;
defendant's supplemental answer, on March 8, 1962; plaintiffs' reply to supplemental answer, on
March 10, 1962; and defendant's amended supplemental answer, on July 10, 1962.
After trial — which took twenty-two (22) days ranging from November 25, 1960 to January 5,
1963 — the Court of First Instance rendered its decision on November 13, 1963, the dispositive
portion stating:
In view of the foregoing considerations, judgment is hereby rendered in favor of the
plaintiffs and against the defendant, which is accordingly ordered to pay the plaintiffs
the following: (a) P100,000.00 as moral damages; (b) P20,000.00 as exemplary
damages; (c) P25,000.00 as attorney's fees, and the costs of this action.
So ordered.
Plaintiffs, however, on November 21, 1963, moved for reconsideration of said judgment, asking
that moral damages be increased to P400,000 and that six per cent (6%) interest per annum on
the amount of the award be granted. And defendant opposed the same. Acting thereon the trial
court issued an order on December 14, 1963, reconsidering the dispositive part of its decision to
read as follows:
In view of the foregoing considerations, judgment is hereby rendered in favor of the
plaintiffs and against the defendant, which is accordingly ordered to pay the plaintiffs
the following: (a) P150,000.00 as moral damages; (b) P25,000.00 as exemplary
damages; with legal interest on both from the date of the filing of the complaint until
paid; and (c) P25,000.00 as attorney's fees; and the costs of this action.
So ordered.
It is from said judgment, as thus reconsidered, that both parties have appealed.
Defendant, as stated, has from the start admitted that it breached its contracts with plaintiffs to
provide them with first class accommodations in its Tokyo-San Francisco flight of May 24, 1960.
In its appeal, however, it takes issue with the finding of the court a quo that it acted in bad faith in
the branch of said contracts. Plaintiffs, on the other hand, raise questions on the amount of
damages awarded in their favor, seeking that the same be increased to a total of P650,000.
Anent the issue of bad faith the records show the respective contentions of the parties as
follows.
According to plaintiffs, defendant acted in bad faith because it deliberately refused to comply
with its contract to provide first class accommodations to plaintiffs, out of racial prejudice against
Chapter Three : Other Kinds of Damages
Orientals. And in support of its contention that what was done to plaintiffs is an oftrepeated
practice of defendant, evidence was adduced relating to two previous instances of alleged racial
discrimination by defendant against Filipinos in favor of "white" passengers. Said previous
occasions are what allegedly happened to (1) Benito Jalbuena and (2) Cenon S. Cervantes and
his wife.
And from plaintiffs' evidence this is what allegedly happened; Jalbuena bought a first class ticket
from PAN-AM on April 13, 1960; he confirmed it on April 15, 1960 as to the Tokyo-Hongkong
flight of April 20, 1960; PAN-AM similarly confirmed it on April 20, 1960. At the airport he and
another Oriental — Mr. Tung — were asked to step aside while other passengers - including
"white" passengers — boarded PAN-AM's plane. Then PAN-AM officials told them that one of
them had to stay behind. Since Mr. Tung was going all the way to London, Jalbuena was chosen
to be left behind. PAN-AM's officials could only explain by saying there was "some mistake".
Jalbuena thereafter wrote PAN-AM to protest the incident (Exh. B).
As to Cenon S. Cervantes it would appear that in Flight No. 6 of PAN-AM on September 29,
1958 from Bangkok to Hongkong, he and his wife had to take tourist class, although they had
first class tickets, which they had previously confirmed, because their seats in first class were
given to "passengers from London."
Against the foregoing, however, defendant's evidence would seek to establish its theory of
honest mistake, thus:
The first class reservations of Senator Lopez and party were made on March 29, 1960 together
with those of four members of the Rufino family, for a total of eight (8) seats, as shown in their
joint reservation card (Exh. 1). Subsequently on March 30, 1960, two other Rufinos secured
reservations and were given a separate reservation card (Exh. 2). A new reservation card
consisting of two pages (Exhs. 3 and 4) was then made for the original of eight passengers,
namely, Senator Lopez and party and four members of the Rufino family, the first page (Exh. 3)
referring to 2 Lopezes, 2 Montelibanos and 1 Rufino and the second page (Exh. 4) referring to 3
Rufinos. On April 18, 1960 "Your Travel Guide" agency cancelled the reservations of the Rufinos.
A telex message was thereupon sent on that date to PAN-AM's head office at San Francisco by
Mariano Herranz, PAN-AM's reservations employee at its office in Escolta, Manila. (Annex A-
Acker's to Exh. 6.) In said message, however, Herranz mistakenly cancelled all the seats that
had been reserved, that is, including those of Senator Lopez and party.
The next day — April 1960 — Herranz discovered his mistake, upon seeing the reservation card
newly prepared by his co-employee Pedro Asensi for Sen. Lopez and party to the exclusion of
the Rufinos (Exh. 5). It was then that Herranz sent another telex wire to the San Francisco head
office, stating his error and asking for the reinstatement of the four (4) first class seats reserved
for Senator Lopez and party (Annex A-Velasco's to Exh. 6). San Francisco head office replied on
April 22, 1960 that Senator Lopez and party are waitlisted and that said office is unable to
reinstate them (Annex B-Velasco's to Exh. 6).
Since the flight involved was still more than a month away and confident that reinstatement
would be made, Herranz forgot the matter and told no one about it except his co-employee,
either Armando Davila or Pedro Asensi or both of them (Tsn., 123-124, 127, Nov. 17, 1961).
Page | 48
Subsequently, on April 27, 1960, Armando Davila, PAN-AM's reservations employee working in
the same Escolta office as Herranz, phoned PAN-AM's ticket sellers at its other office in the
Manila Hotel, and confirmed the reservations of Senator Lopez and party.
PAN-AM's reservations supervisor Alberto Jose, discovered Herranz's mistake after "Your Travel
Guide" phone on May 18, 1960 to state that Senator Lopez and party were going to depart as
scheduled. Accordingly, Jose sent a telex wire on that date to PAN-AM's head office at San
Francisco to report the error and asked said office to continue holding the reservations of
Senator Lopez and party (Annex B-Acker's to Exh. 6). Said message was reiterated by Jose in
his telex wire of May 19, 1960 (Annex C-Acker's to Exh. 6). San Francisco head office replied on
May 19, 1960 that it regrets being unable to confirm Senator Lopez and party for the reason that
the flight was solidly booked (Exh. 7). Jose sent a third telex wire on May 20, 1960 addressed to
PAN-AM's offices at San Francisco, New York (Idlewild Airport), Tokyo and Hongkong, asking all-
out assistance towards restoring the cancelled spaces and for report of cancellations at their end
(Annex D-Acker's to Exh. 6). San Francisco head office reiterated on May 20, 1960 that it could
not reinstate the spaces and referred Jose to the Tokyo and Hongkong offices (Exh. 8). Also on
May 20, the Tokyo office of PAN-AM wired Jose stating it will do everything possible (Exh. 9).
Expecting that some cancellations of bookings would be made before the flight time, Jose
decided to withhold from Senator Lopez and party, or their agent, the information that their
reservations had been cancelled.
Armando Davila having previously confirmed Senator Lopez and party's first class reservations
to PAN-AM's ticket sellers at its Manila Hotel office, the latter sold and issued in their favor the
corresponding first class tickets on the 21st and 23rd of May, 1960.
From the foregoing evidence of defendant it is in effect admitted that defendant — through its
agents — first cancelled plaintiffs, reservations by mistake and thereafter deliberately and
intentionally withheld from plaintiffs or their travel agent the fact of said cancellation, letting them
go on believing that their first class reservations stood valid and confirmed. In so misleading
plaintiffs into purchasing first class tickets in the conviction that they had confirmed reservations
for the same, when in fact they had none, defendant wilfully and knowingly placed itself into the
position of having to breach its a foresaid contracts with plaintiffs should there be no last-minute
cancellation by other passengers before flight time, as it turned out in this case. Such actuation
of defendant may indeed have been prompted by nothing more than the promotion of its self-
interest in holding on to Senator Lopez and party as passengers in its flight and foreclosing on
their chances to seek the services of other airlines that may have been able to afford them first
class accommodations. All the time, in legal contemplation such conduct already amounts to
action in bad faith. For bad faith means a breach of a known duty through some motive
of interest or ill-will (Spiegel vs. Beacon Participations, 8 NE 2d 895, 907). As stated in Kamm v.
Flink, 113 N.J.L. 582, 175 A. 62, 99 A.L.R. 1, 7: "Self-enrichment or fraternal interest, and not
personal ill-will, may well have been the motive; but it is malice nevertheless."
As of May 18, 1960 defendant's reservations supervisor, Alberto Jose knew that plaintiffs'
reservations had been cancelled. As of May 20 he knew that the San Francisco head office
stated with finality that it could not reinstate plaintiffs' cancelled reservations. And yet said
reservations supervisor made the "decision" — to use his own, word — to withhold the
information from the plaintiffs. Said Alberto Jose in his testimony:
Chapter Three : Other Kinds of Damages
Q Why did you not notify them?
A Well, you see, sir, in my fifteen (15) years of service with the air lines business my
experience is that even if the flights are solidly booked months in advance, usually the
flight departs with plenty of empty seats both on the first class and tourist class. This is
due to late cancellation of passengers, or because passengers do not show up in the
airport, and it was our hope others come in from another flight and, therefore, are
delayed and, therefore, missed their connections. This experience of mine, coupled
with that wire from Tokyo that they would do everything possible prompted me to
withhold the information, but unfortunately, instead of the first class seat that I was
hoping for and which I anticipated only the tourists class was open on which Senator
and Mrs. Lopez, Mr. and Mrs. Montelibano were accommodated. Well, I fully realize
now the gravity of my decision in not advising Senator and Mrs. Lopez, Mr. and Mrs.
Montelibano nor their agents about the erroneous cancellation and for which I would
like them to know that I am very sorry. xxx xxx xxx
Q So it was not your duty to notify Sen. Lopez and parties that their reservations had
been cancelled since May 18, 1960?
A As I said before it was my duty. It was my duty but as I said again with respect to that
duty I have the power to make a decision or use my discretion and judgment whether I
should go ahead and tell the passenger about the cancellation. (Tsn., pp. 17-19, 28-29,
March 15, 1962.)
At the time plaintiffs bought their tickets, defendant, therefore, in breach of its known duty, made
plaintiffs believe that their reservation had not been cancelled. An additional indication of this is
the fact that upon the face of the two tickets of record, namely, the ticket issued to Alfredo
Montelibano, Jr. on May 21, 1960 (Exh. 22) and that issued to Mrs. Alfredo Montelibano, Jr., on
May 23, 1960 (Exh. 23), the reservation status is stated as "OK". Such willful-non-disclosure of
the cancellation or pretense that the reservations for plaintiffs stood — and not simply the
erroneous cancellation itself — is the factor to which is attributable the breach of the resulting
contracts. And, as above-stated, in this respect defendant clearly acted in bad faith.
As if to further emphasize its bad faith on the matter, defendant subsequently promoted the
employee who cancelled plaintiffs' reservations and told them nothing about it. The record shows
that said employee — Mariano Herranz — was not subjected to investigation and suspension by
defendant but instead was given a reward in the form of an increase of salary in June of the
following year (Tsn., 86-88, Nov. 20, 1961).
At any rate, granting all the mistakes advanced by the defendant, there would at least be
negligence so gross and reckless as to amount to malice or bad faith (Fores vs. Miranda, L-
12163, March 4, 1959; Necesito v. Paras, L-10605-06, June 30, 1958). Firstly, notwithstanding
the entries in the reservation cards (Exhs. 1 & 3) that the reservations cancelled are those of the
Rufinos only, Herranz made the mistake, after reading said entries, of sending a wire cancelling
all the reservations, including those of Senator Lopez and party (Tsn., pp. 108-109, Nov. 17,
1961). Secondly, after sending a wire to San Francisco head office on April 19, 1960 stating his
error and asking for reinstatement, Herranz simply forgot about the matter. Notwithstanding the
reply of San Francisco head Office on April 22, 1960 that it cannot reinstate Senator Lopez and
Page | 49
party (Annex B-Velasco's to Exh. 6), it was assumed and taken for granted that reinstatement
would be made. Thirdly, Armando Davila confirmed plaintiff's reservations in a phone call on April
27, 1960 to defendant's ticket sellers, when at the time it appeared in plaintiffs' reservation card
(Exh. 5) that they were only waitlisted passengers. Fourthly, defendant's ticket sellers issued
plaintiffs' tickets on May 21 and 23, 1960, without first checking their reservations just before
issuing said tickets. And, finally, no one among defendant's agents notified Senator Lopez and
party that their reservations had been cancelled, a precaution that could have averted their
entering with defendant into contracts that the latter had already placed beyond its power to
perform.
Accordingly, there being a clear admission in defendant's evidence of facts amounting to a bad
faith on its part in regard to the breach of its contracts with plaintiffs, it becomes unnecessary to
further discuss the evidence adduced by plaintiffs to establish defendant's bad faith. For what is
admitted in the course of the trial does not need to be proved (Sec. 2, Rule 129, Rules of Court).
Addressing ourselves now to the question of damages, it is well to state at the outset those rules
and principles. First, moral damages are recoverable in breach of contracts where the defendant
acted fraudulently or in bad faith (Art. 2220, New Civil Code). Second, in addition to moral
damages, exemplary or corrective damages may be imposed by way of example or correction
for the public good, in breach of contract where the defendant acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner (Articles 2229, 2232, New Civil Code). And, third, a
written contract for an attorney's services shall control the amount to be paid therefor unless
found by the court to be unconscionable or unreasonable (Sec. 24, Rule 138, Rules of Court).
First, then, as to moral damages. As a proximate result of defendant's breach in bad faith of its
contracts with plaintiffs, the latter suffered social humiliation, wounded feelings, serious anxiety
and mental anguish. For plaintiffs were travelling with first class tickets issued by defendant and
yet they were given only the tourist class. At stop-overs, they were expected to be among the
first-class passengers by those awaiting to welcome them, only to be found among the tourist
passengers. It may not be humiliating to travel as tourist passengers; it is humiliating to be
compelled to travel as such, contrary to what is rightfully to be expected from the contractual
undertaking.
Senator Lopez was then Senate President Pro Tempore. International carriers like defendant
know the prestige of such an office. For the Senate is not only the Upper Chamber of the
Philippine Congress, but the nation's treaty-ratifying body. It may also be mentioned that in his
aforesaid office Senator Lopez was in a position to preside in impeachment cases should the
Senate sit as Impeachment Tribunal. And he was former Vice-President of the Philippines.
Senator Lopez was going to the United States to attend a private business conference of the
Binalbagan-Isabela Sugar Company; but his aforesaid rank and position were by no means left
behind, and in fact he had a second engagement awaiting him in the United States: a banquet
tendered by Filipino friends in his honor as Senate President Pro Tempore (Tsn., pp. 14-15, Nov.
25, 1960). For the moral damages sustained by him, therefore, an award of P100,000.00 is
appropriate.
Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige and therefore his humiliation.
In addition she suffered physical discomfort during the 13-hour trip,(5 hours from Tokyo to
Honolulu and 8 hours from Honolulu to San Francisco). Although Senator Lopez stated that "she
Chapter Three : Other Kinds of Damages
was quite well" (Tsn., p. 22, Nov. 25, 1960) — he obviously meant relatively well, since the rest
of his statement is that two months before, she was attackedby severe flu and lost 10 pounds of
weight and that she was advised by Dr. Sison to go to the United States as soon as possible for
medical check-up and relaxation, (Ibid). In fact, Senator Lopez stated, as shown a few pages
after in the transcript of his testimony, that Mrs. Lopez was sick when she left the Philippines:
A. Well, my wife really felt very bad during the entire trip from Tokyo to San Francisco.
In the first place, she was sick when we left the Philippines, and then with that
discomfort which she [experienced] or suffered during that evening, it was her worst
experience. I myself, who was not sick, could not sleep because of the discomfort.
(Tsn., pp. 27-28, Nov. 25, 1960).
It is not hard to see that in her condition then a physical discomfort sustained for thirteen hours
may well be considered a physical suffering. And even without regard to the noise and
trepidation inside the plane — which defendant contends, upon the strengh of expert testimony,
to be practically the same in first class and tourist class — the fact that the seating spaces in the
tourist class are quite narrower than in first class, there beingsix seats to a row in the former as
against four to a row in the latter, and that in tourist class there is very little space for reclining in
view of the closer distance between rows (Tsn., p. 24, Nov. 25, 1960), will suffice to show that
the aforesaid passenger indeed experienced physical suffering during the trip. Added to this, of
course, was the painfull thought that she was deprived by defendant — after having paid for and
expected the same — of the most suitable, place for her, the first class, where evidently the best
of everything would have been given her, the best seat, service, food and treatment. Such
difference in comfort between first class and tourist class is too obvious to be recounted, is in
fact the reason for the former's existence, and is recognized by the airline in charging a higher
fare for it and by the passengers in paying said higher rate Accordingly, considering the totality of
her suffering and humiliation, an award to Mrs. Maria J. Lopez of P50,000.00 for moral damages
will be reasonable.
Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as immediate members of the family of
Senator Lopez. They formed part of the Senator's party as shown also by the reservation cards
of PAN-AM. As such they likewise shared his prestige and humiliation. Although defendant
contends that a few weeks before the flight they had asked their reservations to be charged from
first class to tourist class — which did not materialize due to alleged full booking in the tourist
class — the same does not mean they suffered no shared in having to take tourist class during
the flight. For by that time they had already been made to pay for first class seats and therefore
to expect first class accommodations. As stated, it is one thing to take the tourist class by free
choice; a far different thing to be compelled to take it notwithstanding having paid for first class
seats. Plaintiffs-appellants now ask P37,500.00 each for the two but we note that in their motion
for reconsideration filed in the court a quo, they were satisfied with P25,000.00 each for said
persons. (Record on Appeal, p. 102). For their social humiliation, therefore, the award to them of
P25,000.00 each is reasonable.
The rationale behind exemplary or corrective damages is, as the name implies, to provide an
example or correction for public good. Defendant having breached its contracts in bad faith, the
court, as stated earlier, may award exemplary damages in addition to moral damages (Articles
2229, 2232, New Civil Code).
Page | 50
In view of its nature, it should be imposed in such an amount as to sufficiently and effectively
deter similar breach of contracts in the future by defendant or other airlines. In this light, we find
it just to award P75,000.00 as exemplary or corrective damages.
Now, as to attorney's fees, the record shows a written contract of services executed on June 1,
1960 (Exh. F) whereunder plaintiffs-appellants engaged the services of their counsel — Atty.
Vicente J. Francisco — and agreedto pay the sum of P25,000.00 as attorney's fees upon the
termination of the case in the Court of First Instance, and an additional sum of P25,000.00 in the
event the case is appealed to the Supreme Court. As said earlier, a written contract for attorney's
services shall control the amount to be paid therefor unless found by the court to be
unconscionable or unreasonable. A consideration of the subject matter of the present
controversy, of the professional standing of the attorney for plaintiffs-appellants, and of the extent
of the service rendered by him, shows that said amount provided for in the written agreement is
reasonable. Said lawyer — whose prominence in the legal profession is well known — studied
the case, prepared and filed the complaint, conferred with witnesses, analyzed documentary
evidence, personally appeared at the trial of the case in twenty-two days, during a period of
three years, prepared four sets of cross-interrogatories for deposition taking, prepared several
memoranda and the motion for reconsideration, filed a joint record on appeal with defendant,
filed a brief for plaintiffs as appellants consisting of 45 printed pages and a brief for plaintiffs as
appellees consisting of 265 printed pages. And we are further convinced of its reasonableness
because defendant's counsel likewise valued at P50,000.00 the proper compensation for his
services rendered to defendant in the trial court and on appeal.
In concluding, let it be stressed that the amount of damages awarded in this appeal has been
determined by adequately considering the official, political, social, and financial standing of the
offended parties on one hand, and the business and financial position of the offender on the
other (Domingding v. Ng, 55 O.G. 10). And further considering the present rate of exchange and
the terms at which the amount of damages awarded would approximately be in U.S. dollars, this
Court is all the more of the view that said award is proper and reasonable.
Wherefore, the judgment appealed from is hereby modified so as to award in favor of plaintiffs
and against defendant, the following: (1) P200,000.00 as moral damages, divided among
plaintiffs, thus: P100,000.00 for Senate President Pro Tempore Fernando Lopez; P50,000.00 for
his wife Maria J. Lopez; P25,000.00 for his son-in-law Alfredo Montelibano, Jr.; and P25,000.00
for his daughter Mrs. Alfredo Montelibano, Jr.; (2) P75,000.00 as exemplary or corrective
damages; (3) interest at the legal rate of 6% per annum on the moral and exemplary damages
aforestated, from December 14, 1963, the date of the amended decision of the court a quo, until
said damages are fully paid; (4) P50,000.00 as attorney's fees; and (5) the costs. Counterclaim
dismissed. So ordered.