G.R. No.

95582 October 7, 1991

DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y MALECDAN, petitioners,
vs.
COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT BANDOY, FERNANDO CUDLAMAT, MARRIETA
CUDIAMAT, NORMA CUDIAMAT, DANTE CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of
the late Pedrito Cudiamat represented by Inocencia Cudiamat, respondents.
Francisco S. Reyes Law Office for petitioners.
Antonio C. de Guzman for private respondents.

REGALADO, J.:
On May 13, 1985, private respondents filed a complaint 1 for damages against petitioners for the death of Pedrito
Cudiamat as a result of a vehicular accident which occurred on March 25, 1985 at Marivic, Sapid, Mankayan, Benguet.
Among others, it was alleged that on said date, while petitioner Theodore M. Lardizabal was driving a passenger bus
belonging to petitioner corporation in a reckless and imprudent manner and without due regard to traffic rules and
regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat. However, instead of
bringing Pedrito immediately to the nearest hospital, the said driver, in utter bad faith and without regard to the
welfare of the victim, first brought his other passengers and cargo to their respective destinations before banging said
victim to the Lepanto Hospital where he expired.
On the other hand, petitioners alleged that they had observed and continued to observe the extraordinary diligence
required in the operation of the transportation company and the supervision of the employees, even as they add that
they are not absolute insurers of the safety of the public at large. Further, it was alleged that it was the victim's own
carelessness and negligence which gave rise to the subject incident, hence they prayed for the dismissal of the
complaint plus an award of damages in their favor by way of a counterclaim.
On July 29, 1988, the trial court rendered a decision, effectively in favor of petitioners, with this decretal portion:
IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that Pedrito Cudiamat was negligent, which
negligence was the proximate cause of his death. Nonetheless, defendants in equity, are hereby ordered to pay
the heirs of Pedrito Cudiamat the sum of P10,000.00 which approximates the amount defendants initially
offered said heirs for the amicable settlement of the case. No costs.
SO ORDERED. 2
Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision 3 in CA-G.R. CV No.
19504 promulgated on August 14, 1990, set aside the decision of the lower court, and ordered petitioners to pay
private respondents:
1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for death of the victim Pedrito
Cudiamat;
2. The sum of Twenty Thousand (P20,000.00) by way of moral damages;
3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as actual and compensatory damages;
4. The costs of this suit. 4
Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution dated October 4,
1990, 5 hence this petition with the central issue herein being whether respondent court erred in reversing the decision
of the trial court and in finding petitioners negligent and liable for the damages claimed.
It is an established principle that the factual findings of the Court of Appeals as a rule are final and may not be
reviewed by this Court on appeal. However, this is subject to settled exceptions, one of which is when the findings of
the appellate court are contrary to those of the trial court, in which case a reexamination of the facts and evidence may
be undertaken. 6

In the case at bar, the trial court and the Court of Appeal have discordant positions as to who between the petitioners
an the victim is guilty of negligence. Perforce, we have had to conduct an evaluation of the evidence in this case for the
prope calibration of their conflicting factual findings and legal conclusions.
The lower court, in declaring that the victim was negligent, made the following findings:

This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a moving vehicle, especially with
one of his hands holding an umbrella. And, without having given the driver or the conductor any indication
that he wishes to board the bus. But defendants can also be found wanting of the necessary diligence. In this
connection, it is safe to assume that when the deceased Cudiamat attempted to board defendants' bus, the
vehicle's door was open instead of being closed. This should be so, for it is hard to believe that one would even
attempt to board a vehicle (i)n motion if the door of said vehicle is closed. Here lies the defendant's lack of
diligence. Under such circumstances, equity demands that there must be something given to the heirs of the
victim to assuage their feelings. This, also considering that initially, defendant common carrier had made
overtures to amicably settle the case. It did offer a certain monetary consideration to the victim's heirs. 7

However, respondent court, in arriving at a different opinion, declares that:

From the testimony of appellees'own witness in the person of Vitaliano Safarita, it is evident that the subject
bus was at full stop when the victim Pedrito Cudiamat boarded the same as it was precisely on this instance
where a certain Miss Abenoja alighted from the bus. Moreover, contrary to the assertion of the appellees, the
victim did indicate his intention to board the bus as can be seen from the testimony of the said witness when
he declared that Pedrito Cudiamat was no longer walking and made a sign to board the bus when the latter
 was still at a distance from him. It was at the instance when Pedrito Cudiamat was closing his umbrella at the
platform of the bus when the latter made a sudden jerk movement (as) the driver commenced to accelerate the
bus.

Evidently, the incident took place due to the gross negligence of the appellee-driver in prematurely stepping
on the accelerator and in not waiting for the passenger to first secure his seat especially so when we take into
account that the platform of the bus was at the time slippery and wet because of a drizzle. The defendants-
appellees utterly failed to observe their duty and obligation as common carrier to the end that they should
observe extra-ordinary diligence in the vigilance over the goods and for the safety of the passengers
transported by them according to the circumstances of each case (Article 1733, New Civil Code). 8

After a careful review of the evidence on record, we find no reason to disturb the above holding of the Court of
Appeals. Its aforesaid findings are supported by the testimony of petitioners' own witnesses. One of them, Virginia
Abalos, testified on cross-examination as follows:

Q It is not a fact Madam witness, that at bunkhouse 54, that is before the place of the incident, there is a
crossing?
A The way going to the mines but it is not being pass(ed) by the bus.
Q And the incident happened before bunkhouse 56, is that not correct?

A It happened between 54 and 53 bunkhouses. 9

The bus conductor, Martin Anglog, also declared:

Q When you arrived at Lepanto on March 25, 1985, will you please inform this Honorable Court if there was anv
unusual incident that occurred?
A When we delivered a baggage at Marivic because a person alighted there between Bunkhouse 53 and 54.
Q What happened when you delivered this passenger at this particular place in Lepanto?
A When we reached the place, a passenger alighted and I signalled my driver. When we stopped we went out
because I saw an umbrella about a split second and I signalled again the driver, so the driver stopped and we
went down and we saw Pedrito Cudiamat asking for help because he was lying down.
Q How far away was this certain person, Pedrito Cudiamat, when you saw him lying down — from the bus how
far was he?
A It is about two to three meters.
Q On what direction of the bus was he found about three meters from the bus, was it at the front or at the back?

A At the back, sir. 10 (Emphasis supplied.)

The foregoing testimonies show that the place of the accident and the place where one of the passengers alighted
were both between Bunkhouses 53 and 54, hence the finding of the Court of Appeals that the bus was at full stop when
the victim boarded the same is correct. They further confirm the conclusion that the victim fell from the platform of the
bus when it suddenly accelerated forward and was run over by the rear right tires of the vehicle, as shown by the
physical evidence on where he was thereafter found in relation to the bus when it stopped. Under such circumstances,
it cannot be said that the deceased was guilty of negligence.

The contention of petitioners that the driver and the conductor had no knowledge that the victim would ride on the
bus, since the latter had supposedly not manifested his intention to board the same, does not merit consideration.
When the bus is not in motion there is no necessity for a person who wants to ride the same to signal his intention to
board. A public utility bus, once it stops, is in effect making a continuous offer to bus riders. Hence, it becomes the duty
of the driver and the conductor, every time the bus stops, to do no act that would have the effect of increasing the peril
to a passenger while he was attempting to board the same. The premature acceleration of the bus in this case was a
breach of such duty. 11
It is the duty of common carriers of passengers, including common carriers by railroad train, streetcar, or motorbus, to
stop their conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter,
and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their
conveyances while they are doing so. 12
Further, even assuming that the bus was moving, the act of the victim in boarding the same cannot be considered
negligent under the circumstances. As clearly explained in the testimony of the aforestated witness for petitioners,
Virginia Abalos, th bus had "just started" and "was still in slow motion" at the point where the victim had boarded and
was on its platform. 13
It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving
slowly. 14 An ordinarily prudent person would have made the attempt board the moving conveyance under the same
or similar circumstances. The fact that passengers board and alight from slowly moving vehicle is a matter of common
experience both the driver and conductor in this case could not have been unaware of such an ordinary practice.
The victim herein, by stepping and standing on the platform of the bus, is already considered a passenger and is
entitled all the rights and protection pertaining to such a contractual relation. Hence, it has been held that the duty
which the carrier passengers owes to its patrons extends to persons boarding cars as well as to those alighting
therefrom. 15
Common carriers, from the nature of their business and reasons of public policy, are bound to observe extraordina
diligence for the safety of the passengers transported by the according to all the circumstances of each case. 16 A
common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the
utmost diligence very cautious persons, with a due regard for all the circumstances. 17
It has also been repeatedly held that in an action based on a contract of carriage, the court need not make an express
finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damages sought by
the passenger. By contract of carriage, the carrier assumes the express obligation to transport the passenger to his
destination safely and observe extraordinary diligence with a due regard for all the circumstances, and any injury that
might be suffered by the passenger is right away attributable to the fault or negligence of the carrier. This is an
exception to the general rule that negligence must be proved, and it is therefore incumbent upon the carrier to prove
that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. 18

Moreover, the circumstances under which the driver and the conductor failed to bring the gravely injured victim
immediately to the hospital for medical treatment is a patent and incontrovertible proof of their negligence. It defies
understanding and can even be stigmatized as callous indifference. The evidence shows that after the accident the bus
could have forthwith turned at Bunk 56 and thence to the hospital, but its driver instead opted to first proceed to Bunk
70 to allow a passenger to alight and to deliver a refrigerator, despite the serious condition of the victim. The vacuous
reason given by petitioners that it was the wife of the deceased who caused the delay was tersely and correctly
confuted by respondent court:

... The pretension of the appellees that the delay was due to the fact that they had to wait for about twenty
minutes for Inocencia Cudiamat to get dressed deserves scant consideration. It is rather scandalous and
deplorable for a wife whose husband is at the verge of dying to have the luxury of dressing herself up for about
twenty minutes before attending to help her distressed and helpless husband. 19
Further, it cannot be said that the main intention of petitioner Lardizabal in going to Bunk 70 was to inform the victim's
family of the mishap, since it was not said bus driver nor the conductor but the companion of the victim who informed
his family thereof. 20 In fact, it was only after the refrigerator was unloaded that one of the passengers thought of
sending somebody to the house of the victim, as shown by the testimony of Virginia Abalos again, to wit:
Q Why, what happened to your refrigerator at that particular time?
A I asked them to bring it down because that is the nearest place to our house and when I went down and
asked somebody to bring down the refrigerator, I also asked somebody to call the family of Mr. Cudiamat.
COURT:
Q Why did you ask somebody to call the family of Mr. Cudiamat?
A Because Mr. Cudiamat met an accident, so I ask somebody to call for the family of Mr. Cudiamat.
Q But nobody ask(ed) you to call for the family of Mr. Cudiamat?
A No sir. 21
With respect to the award of damages, an oversight was, however, committed by respondent Court of Appeals in
computing the actual damages based on the gross income of the victim. The rule is that the amount recoverable by the
heirs of a victim of a tort is not the loss of the entire earnings, but rather the loss of that portion of the earnings which
the beneficiary would have received. In other words, only net earnings, not gross earnings, are to be considered, that is,
the total of the earnings less expenses necessary in the creation of such earnings or income and minus living and other
incidental expenses. 22
We are of the opinion that the deductible living and other expense of the deceased may fairly and reasonably be fixed
at P500.00 a month or P6,000.00 a year. In adjudicating the actual or compensatory damages, respondent court found
that the deceased was 48 years old, in good health with a remaining productive life expectancy of 12 years, and then
earning P24,000.00 a year. Using the gross annual income as the basis, and multiplying the same by 12 years, it
accordingly awarded P288,000. Applying the aforestated rule on computation based on the net earnings, said award
must be, as it hereby is, rectified and reduced to P216,000.00. However, in accordance with prevailing jurisprudence, the
death indemnity is hereby increased to P50,000.00. 23

WHEREFORE, subject to the above modifications, the challenged judgment and resolution of respondent Court of
Appeals are hereby AFFIRMED in all other respects.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.

# Footnotes
1 Civil Case No. 584-R, Regional Trial Court, Branch 7, Baguio City.
2 Rollo, 51.
3 Penned by Justice Bonifacio A. Cacdac, Jr., with Justices Gloria C. Paras and Serafin V.C. Guingona concurring.
4 Rollo, 26-27.
5 Ibid., 48.
6 Sabinosa vs. Court of Appeals, et al., 175 SCRA 552 (1989).
7 Original Record, 169; Judge Rodolfo D. Rodrigo, presiding.
8 Rollo, 25.
9 TSN, January 20, 1987, 26-27.
10 TSN, November 18, 1986, 3-4.
11 See Del Prado vs. Manila Electric Co., 52 Phil. 900 (1929).
12 14 Am. Jur. 2d 436.
13 TSN, January 20, 1987, 11.
14 Am. Jur. 2d 414.
15 Del Prado vs. Manila Electric Co., supra.
16 Art. 1733, Civil Code.
17 Art. 1755, Civil Code.
18 Sy vs. Malate Tajdcab & Garage, Inc., 102 Phil. 482 (1957); Batangas Transportation Co. vs. Caguimbal, et al.,
22 SCRA 171 (1968).
19 Rollo, 25.
20 TSN, June 20, 1986, 3-4.
21 TSN, January 20, 1987, 16.
22 Villa Rey Transit, Inc. vs. Court of Appeals, et al., 31 SCRA 511 (1970); Davila, et al. vs. Philippine Airlines, Inc.,
49 SCRA 497 (1973).
23 People vs. Sazon, 189 SCRA 700 (1990).
G.R. No. 157658 October 15, 2007
PHILIPPINE NATIONAL RAILWAYS and VIRGILIO J. BORJA, Petitioners,
vs.
COURT OF APPEALS (Second Division), CORAZON C. AMORES, MA. EMILIE A. MOJICA, CECILE C. SISON, DINO C.
AMORES, LARISA C. AMORES, ARMAND JINO C. AMORES and JOHN C. AMORES, Respondents.
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended,
seeking to annul and set aside the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 54906 which reversed the
Decision2 of the Regional Trial Court (RTC) of Manila, Branch 28, in Civil Case No. 92-61987.
The factual antecedents are as follows:
In the early afternoon of April 27, 1992, Jose Amores (Amores) was traversing the railroad tracks in Kahilum II Street,
Pandacan, Manila. Before crossing the railroad track, he stopped for a while then proceeded
accordingly.3 Unfortunately, just as Amores was at the intersection, a Philippine National Railways’ (PNR) train with
locomotive number T-517 turned up and collided with the car.4
At the time of the mishap, there was neither a signal nor a crossing bar at the intersection to warn motorists of an
approaching train. Aside from the railroad track, the only visible warning sign at that time was the defective standard
signboard "STOP, LOOK and LISTEN" wherein the sign "Listen" was lacking while that of "Look" was bent.5 No whistle
blow from the train was likewise heard before it finally bumped the car of Amores.6 After impact, the car was dragged
about ten (10) meters beyond the center of the crossing.7 Amores died as a consequence thereof.
On July 22, 1992, the heirs of Amores, consisting of his surviving wife and six children, herein respondents, filed a
Complaint for Damages8 against petitioners PNR and Virgilio J. Borja (Borja), PNR’s locomotive driver at the time of the
incident, before the RTC of Manila. The case was raffled to Branch 28 and was docketed as Civil Case No. 92-61987. In
their complaint, respondents averred that the train’s speedometer was defective, and that the petitioners’ negligence
was the proximate cause of the mishap for their failure to take precautions to prevent injury to persons and property
despite the dense population in the vicinity. They then prayed for actual and moral damages, as well as attorney’s
fees.9
In their Answer,10 the petitioners denied the allegations, stating that the train was railroad-worthy and without any
defect. According to them, the proximate cause of the death of Amores was his own carelessness and negligence, and
Amores wantonly disregarded traffic rules and regulations in crossing the railroad tracks and trying to beat the
approaching train. They admitted that there was no crossing bar at the site of the accident because it was merely a
barangay road.11 PNR stressed that it exercised the diligence of a good father of a family in the selection and
supervision of the locomotive driver and train engineer, Borja, and that the latter likewise used extraordinary diligence
and caution to avoid the accident. Petitioners further asserted that respondents had the last clear chance to avoid the
accident but recklessly failed to do so.
After trial on the merits, on August 22, 1996, the RTC rendered judgment in favor of the petitioners, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered dismissing the complaint of the plaintiffs and the defendants’ counterclaim.
The costs shall be halved and paid equally by the parties.
The counsel for the defendants is hereby ordered to inform this court who is the legal representative of the deceased
defendant, Virgilio Borja, within ten (10) days from receipt of a copy of this decision.
SO ORDERED.12
The RTC rationalized that the proximate cause of the collision was Amores’ fatal misjudgment and the reckless course
of action he took in crossing the railroad track even after seeing or hearing the oncoming train.
On appeal, the CA reversed the RTC decision, as follows:
WHEREFORE, the assailed Decision of the Regional Trial Court of Manila, Branch 28 is hereby REVERSED. The
defendants PNR and the estate of Virgilio J. Borja are jointly and severally liable to pay plaintiffs the following:
1) The amount of ₱122,300.00 for the cost of damage to the car; and,
2) The amount of ₱50,000 as moral damages.
For lack of official receipts for funeral expenses and specimen of the last pay slip of the deceased, the claim for
reimbursement of funeral expenses and claim for payment of support is hereby DENIED for lack of basis. Costs against
Defendants.
SO ORDERED.13
In reversing the trial court’s decision, the appellate court found the petitioners negligent. The court based the
petitioners’ negligence on the failure of PNR to install a semaphore or at the very least, to post a flagman, considering
that the crossing is located in a thickly populated area. Moreover, the signboard "Stop, Look and Listen" was found
insufficient because of its defective condition as described above. Lastly, no negligence could be attributed to Amores
as he exercised reasonable diligence in crossing the railroad track.
Aggrieved by this reversal, the petitioners filed the present petition for review on certiorari, raising the following
grounds:
I
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN RENDERING ITS DECISION
REVERSING THE DECISION OF THE REGIONAL TRIAL COURT OF MANILA BRANCH 28, IN NOT TAKING INTO
CONSIDERATION THE PROVISION OF SECTION 42, R.A. 4136 OF THE LAND TRANSPORTATION AND TRAFFIC
CODE.
II
 THE DECISION OF THE COURT OF APPEALS IS CONTRARY TO THE EVIDENCE ON RECORD ADDUCED IN THE
TRIAL ON THE MERIT IN CIVIL CASE NO. 92-61987.14
The petitioners insist that Amores must have heard the train’s whistle and heeded the warning but, noting that the train
was still a distance away and moving slowly, he must have calculated that he could beat it to the other side of the track
before the train would arrive at the intersection. The petitioners likewise add that the train was railroad-worthy and that
its defective speedometer did not affect the train’s operation. Lastly, they insist that evidence showed sufficient warning
signs strategically installed at the crossing to alert both motorists and pedestrians.
Respondents, on the other hand, argue that the cause of the accident was petitioners’ carelessness, imprudence and
laxity in failing to provide a crossing bar and keeper at the Kahilum II railway intersection. Considering that Kahilum II
Street is in the middle of a thickly populated squatters’ area, and many pedestrians cross the railroad track,
notwithstanding the fact that it is a public street and a main thoroughfare utilized in going to Herran Street, the
presence of adequate warning signals would have prevented the untimely death of Amores. Another crucial point
raised by the respondents is the manner in which Borja applied the brakes of the train only when the locomotive was
already very near Amores’ car, as admitted by witness Querimit. Finally, respondents claim that Borja’s failure to blow
the locomotive’s horn, pursuant to the usual practice of doing the same 100 meters before reaching the Kahilum II
crossing point is an earmark of recklessness on the part of the petitioners.
The petition must fail.
The only issue to be resolved in the present case is whether the appellate court was correct in ascribing negligence on
the part of the petitioners. It was ascertained beyond quandary that the proximate cause of the collision is the
negligence and imprudence of the petitioner PNR and its locomotive driver, Borja, in operating the passenger train.
As the action is predicated on negligence, the relevant provision is Article 2176 of the New Civil Code, which states that:
Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there was no pre-existing contractual relation between the parties, is called
quasi-delict and is governed by the provisions of this chapter.
We have thoroughly reviewed the records of the case and we find no cogent reason to reverse the appellate court’s
decision. Negligence has been defined as "the failure to observe for the protection of the interests of another person
that degree of care, precaution, and vigilance which the circumstances justly demand, whereby such other person
suffers injury."15 Using the aforementioned philosophy, it may be reliably concluded that there is no hard and fast rule
whereby such degree of care and vigilance is calibrated; it is dependent upon the circumstances in which a person finds
himself. All that the law requires is that it is perpetually compelling upon a person to use that care and diligence
expected of sensible men under comparable circumstances.16
We hold that the petitioners were negligent when the collision took place. The transcript of stenographic notes reveals
that the train was running at a fast speed because notwithstanding the application of the ordinary and emergency
brakes, the train still dragged the car some distance away from the point of impact. Evidence likewise unveils the
inadequate precautions taken by petitioner PNR to forewarn the public of the impending danger. Aside from not
having any crossing bar, no flagman or guard to man the intersection at all times was posted on the day of the
incident. A reliable signaling device in good condition, not just a dilapidated "Stop, Look and Listen" signage because
of many years of neglect, is needed to give notice to the public. It is the responsibility of the railroad company to use
reasonable care to keep the signal devices in working order. Failure to do so would be an indication of negligence.
As held in the case of Philippine National Railway v. Brunty,17 it may broadly be stated that railroad companies owe to
the public a duty of exercising a reasonable degree of care to avoid injury to persons and property at railroad crossings,
which duties pertain both to the operation of trains and to the maintenance of the crossings. Moreover, every
corporation constructing or operating a railway shall make and construct at all points where such railway crosses any
public road, good, sufficient, and safe crossings, and erect at such points, at sufficient elevation from such road as to
admit a free passage of vehicles of every kind, a sign with large and distinct letters placed thereon, to give notice of the
proximity of the railway, and warn persons of the necessity of looking out for trains.18 The failure of the PNR to put a
cross bar, or signal light, flagman or switchman, or semaphore is evidence of negligence and disregard of the safety of
the public, even if there is no law or ordinance requiring it, because public safety demands that said device or
equipment be installed.
The petitioners insist that a train has a right-of-way in a railroad crossing under the existing laws. They derive their
theory from Section 42 (d), Article III of R.A. 4136, otherwise known as the Land Transportation and Traffic Code, which
states that:
The driver of a vehicle upon a highway shall bring to a full stop such vehicle before traversing any "through highway"
or railroad crossing: Provided, That when it is apparent that no hazard exists, the vehicle may be slowed down to five
miles per hour instead of bringing it to a full stop.
They claim that motorists are enjoined by law to stop, look and listen before crossing railroad tracks and that a heavier
responsibility rests upon the motorists in avoiding accidents at level crossings.
It is true that one driving an automobile must use his faculties of seeing and hearing when nearing a railroad
crossing.1âwphi1 However, the obligation to bring to a full stop vehicles moving in public highways before traversing
any "through street" only accrues from the time the said "through street" or crossing is so designated and sign-posted.
From the records of the case, it can be inferred that Amores exercised all the necessary precautions required of him as
to avoid injury to himself and to others.1âwphi1 The witnesses’ testimonies showed that Amores slackened his speed,
made a full stop, and then proceeded to cross the tracks when he saw that there was no impending danger to his life.
Under these circumstances, we are convinced that Amores did everything, with absolute care and caution, to avoid the
collision.
It is settled that every person or motorist crossing a railroad track should use ordinary prudence and alertness to
determine the proximity of a train before attempting to cross. We are persuaded that the circumstances were beyond
the control of Amores for no person would sacrifice his precious life if he had the slightest opportunity to evade the
catastrophe. Besides, the authority in this jurisdiction is that the failure of a railroad company to install a semaphore or
at the very least, to post a flagman or watchman to warn the public of the passing train amounts to
negligence.191âwphi1
In view of the foregoing, We will now discuss the liability of petitioner PNR. Article 218020 of the New Civil Code
discusses the liability of the employer once negligence or fault on the part of the employee has been established. The
employer is actually liable on the assumption of juris tantum that the employer failed to exercise diligentissimi patris
families in
the selection and supervision of its employees. The liability is primary and can only be negated by showing due
diligence in the selection and supervision of the employee, a factual matter that has not been demonstrated.21 Even
the existence of hiring procedures and supervisory employees cannot be incidentally invoked to overturn the
presumption of negligence on the part of the employer.22
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated March 31, 2003 in CA-G.R. CV No.
54906 is hereby AFFIRMED.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ MINITA V. CHICO-NAZARIO
Associate Justice Associate Justice
RUBEN T. REYES
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO S. PUNO
Chief Justice

Footnotes
1 Penned by Associate Justice Teodoro P. Regino, with Associate Justices Buenaventura J. Guerrero and
Mariano C. Del Castillo, concurring; rollo, pp. 37-43.
2 Penned by Judge Eudoxia T. Gualberto; rollo, pp. 44-58.
3 TSN, March 4, 1994, pp. 6, 10.
4 Rollo, p. 37.
5 Id. at 41.
6 TSN, March 4, 1994, pp. 17-18..
7 Rollo, p. 40.
8 Records, pp. 1-5.
9 Id. at 4.
10 Id. at 14-17.
11 TSN, July 3, 1995, p. 23.
12 Rollo, p. 58.
13 Id. at 42.
14 Id. at 15.
15 Corliss v. The Manila Railroad Company, 137 Phil. 101, 107.
16 Cusi v. Philippine National Railways, No. L-29889, 31 May 1979, 90 SCRA 357, 362.
17 G.R. No. 169891, November 2, 2006, 506 SCRA 685, 699 citing 37 Am.Jur. PO F.2d 439.
18 Id.
19 Phil. National Railways v. Intermediate Appellate Court, G.R. No. 70547, 22 January 1993, 271 SCRA 401, 416,
citing Lilius v. Manila Railroad Company, 59 Phil. 758 (1934).
20 Art. 2180. 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.
The father and, in case of his death or incapacity, the mother, are responsible for the damages caused
by the minor children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under their
authority and live in their company.
 The owners and managers of an establishment or enterprise are likewise 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.
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.
The State is responsible in like manner when it acts through a special agent, but not when the damage
has been caused by the official to whom the task done properly pertains, in which case what is
provided in Article 2176 shall be applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by
their pupils and students or apprentices, so ling as they remain in their custody.
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.
21 Light Rail Transit Authority v. Navidad, G.R. No. 145804, 6 February 2003, 397 SCRA 75, 82.
22 Fabre, Jr. v. Court of Appeals, G.R. No. 111127, 26 July 1996, 259 SCRA 426, 434-435, citing Metro Manila
Transit Corp. v. Court of Appeals, 233 SCRA 521 (1993), Campo v. Camarote, 100 Phil 459 (1956).
G.R. No. 84458 November 6, 1989
ABOITIZ SHIPPING CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO VIANA and GORGONIA
VIANA, and PIONEER STEVEDORING CORPORATION, respondents.
Herenio E. Martinez for petitioner.
M.R. Villaluz Law Office for private respondent.

REGALADO, J.:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of the decision 1 of respondent
Court of Appeals, dated July 29, 1988, the decretal portion of which reads:
WHEREFORE, the judgment appealed from as modified by the order of October 27, 1982, is hereby
affirmed with the modification that appellant Aboitiz Shipping is hereby ordered to pay plaintiff-
appellees the amount of P30,000.00 for the death of Anacleto Viana; actual damages of P9,800.00;
P150,000.00 for unearned income; P7,200.00 as support for deceased's parents; P20,000.00 as moral
damages; P10,000.00 as attorney's fees; and to pay the costs.
The undisputed facts of the case, as found by the court a quo and adopted by respondent court, are as follows: .
The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the vessel M/V Antonia, owned
by defendant, at the port at San Jose, Occidental Mindoro, bound for Manila, having purchased a ticket
(No. 117392) in the sum of P23.10 (Exh. 'B'). On May 12, 1975, said vessel arrived at Pier 4, North
Harbor, Manila, and the passengers therein disembarked, a gangplank having been provided
connecting the side of the vessel to the pier. Instead of using said gangplank Anacleto Viana
disembarked on the third deck which was on the level with the pier. After said vessel had landed, the
Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel
pursuant to the Memorandum of Agreement dated July 26, 1975 (Exh. '2') between the third party
defendant Pioneer Stevedoring Corporation and defendant Aboitiz Shipping Corporation.
The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was
placed alongside the vessel and one (1) hour after the passengers of said vessel had disembarked, it
started operation by unloading the cargoes from said vessel. While the crane was being operated,
Anacleto Viana who had already disembarked from said vessel obviously remembering that some of
his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to
the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning
him between the side of the vessel and the crane. He was thereafter brought to the hospital where he
later expired three (3) days thereafter, on May 15, 1975, the cause of his death according to the Death
Certificate (Exh. "C") being "hypostatic pneumonia secondary to traumatic fracture of the pubic bone
lacerating the urinary bladder" (See also Exh. "B"). For his hospitalization, medical, burial and other
miscellaneous expenses, Anacleto's wife, herein plaintiff, spent a total of P9,800.00 (Exhibits "E", "E-1",
to "E-5"). Anacleto Viana who was only forty (40) years old when he met said fateful accident (Exh. 'E')
was in good health. His average annual income as a farmer or a farm supervisor was 400 cavans of
palay annually. His parents, herein plaintiffs Antonio and Gorgonia Viana, prior to his death had been
recipient of twenty (20) cavans of palay as support or P120.00 monthly. Because of Anacleto's death,
plaintiffs suffered mental anguish and extreme worry or moral damages. For the filing of the instant
case, they had to hire a lawyer for an agreed fee of ten thousand (P10,000.00) pesos. 2
Private respondents Vianas filed a complaint 3 for damages against petitioner corporation (Aboitiz, for brevity) for
breach of contract of carriage.
In its answer. 4 Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely
under the control of respondent Pioneer Stevedoring Corporation (Pioneer, for short) as the exclusive stevedoring
contractor of Aboitiz, which handled the unloading of cargoes from the vessel of Aboitiz. It is also averred that since
the crane operator was not an employee of Aboitiz, the latter cannot be held liable under the fellow-servant rule.
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint 5 against Pioneer imputing liability thereto for
Anacleto Viana's death as having been allegedly caused by the negligence of the crane operator who was an employee
of Pioneer under its exclusive control and supervision.
Pioneer, in its answer to the third-party complaint, 6 raised the defenses that Aboitiz had no cause of action against
Pioneer considering that Aboitiz is being sued by the Vianas for breach of contract of carriage to which Pioneer is not a
party; that Pioneer had observed the diligence of a good father of a family both in the selection and supervision of its
employees as well as in the prevention of damage or injury to anyone including the victim Anacleto Viana; that
Anacleto Viana's gross negligence was the direct and proximate cause of his death; and that the filing of the third-party
complaint was premature by reason of the pendency of the criminal case for homicide through reckless imprudence
filed against the crane operator, Alejo Figueroa.
In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was ordered to pay the Vianas for damages
incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter paid the Vianas. The dispositive
portion of said decision provides:
WHEREFORE, judgment is hereby rendered in favor of the plantiffs:
(1) ordering defendant Aboitiz Shipping Corporation to pay to plaintiffs the sum of P12,000.00 for the
death of Anacleto Viana P9,800.00 as actual damages; P533,200.00 value of the 10,664 cavans of palay
computed at P50.00 per cavan; P10,000.00 as attorney's fees; F 5,000.00, value of the 100 cavans of
palay as support for five (5) years for deceased (sic) parents, herein plaintiffs Antonio and Gorgonia
 Viana computed at P50.00 per cavan; P7,200.00 as support for deceased's parents computed at
P120.00 a month for five years pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as moral
damages, and costs; and
(2) ordering the third party defendant Pioneer Stevedoring Corporation to reimburse defendant and
third party plaintiff Aboitiz Shipping Corporation the said amounts that it is ordered to pay to herein
plaintiffs.
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein they similarly raised the trial court's failure
to declare that Anacleto Viana acted with gross negligence despite the overwhelming evidence presented in support
thereof. In addition, Aboitiz alleged, in opposition to Pioneer's motion, that under the memorandum of agreement the
liability of Pioneer as contractor is automatic for any damages or losses whatsoever occasioned by and arising from the
operation of its arrastre and stevedoring service.
In an order dated October 27, 1982, 8 the trial court absolved Pioneer from liability for failure of the Vianas and Aboitiz
to preponderantly establish a case of negligence against the crane operator which the court a quo ruled is never
presumed, aside from the fact that the memorandum of agreement supposedly refers only to Pioneer's liability in case
of loss or damage to goods handled by it but not in the case of personal injuries, and, finally that Aboitiz cannot
properly invoke the fellow-servant rule simply because its liability stems from a breach of contract of carriage. The
dispositive portion of said order reads:
WHEREFORE, judgment is hereby modified insofar as third party defendant Pioneer Stevedoring
Corporation is concerned rendered in favor of the plaintiffs-,:
(1) Ordering defendant Aboitiz Shipping Corporation to pay the plaintiffs the sum of P12,000.00 for the
death of Anacleto Viana; P9,000.00 (sic) as actual damages; P533,200.00 value of the 10,664 cavans of
palay computed at P50.00 per cavan; P10,000.00 as attorney's fees; P5,000.00 value of the 100 cavans
of palay as support for five (5) years for deceased's parents, herein plaintiffs Antonio and Gorgonia
Viana,computed at P50.00 per cavan; P7,200.00 as support for deceased's parents computed at
P120.00 a month for five years pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as moral
damages, and costs; and
(2) Absolving third-party defendant Pioneer Stevedoring Corporation for (sic) any liability for the death
of Anacleto Viana the passenger of M/V Antonia owned by defendant third party plaintiff Aboitiz
Shipping Corporation it appearing that the negligence of its crane operator has not been established
therein.
Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to respondent Court of Appeals
which affirmed the findings of of the trial court except as to the amount of damages awarded to the Vianas.
Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:
(A) In holding that the doctrine laid down by this honorable Court in La Mallorca vs. Court of Appeals,
et al. (17 SCRA 739, July 27, 1966) is applicable to the case in the face of the undisputable fact that the
factual situation under the La Mallorca case is radically different from the facts obtaining in this case;
(B) In holding petitioner liable for damages in the face of the finding of the court a quo and confirmed
by the Honorable respondent court of Appeals that the deceased, Anacleto Viana was guilty of
contributory negligence, which, We respectfully submit contributory negligence was the proximate
cause of his death; specifically the honorable respondent Court of Appeals failed to apply Art. 1762 of
the New Civil Code;
(C) In the alternative assuming the holding of the Honorable respondent Court of Appears that
petitioner may be legally condemned to pay damages to the private respondents we respectfully
submit that it committed a reversible error when it dismissed petitioner's third party complaint against
private respondent Pioneer Stevedoring Corporation instead of compelling the latter to reimburse the
petitioner for whatever damages it may be compelled to pay to the private respondents Vianas. 9
At threshold, it is to be observed that both the trial court and respondent Court of Appeals found the victim Anacleto
Viana guilty of contributory negligence, but holding that it was the negligence of Aboitiz in prematurely turning over
the vessel to the arrastre operator for the unloading of cargoes which was the direct, immediate and proximate cause
of the victim's death.
I. Petitioner contends that since one (1) hour had already elapsed from the time Anacleto Viana disembarked from the
vessel and that he was given more than ample opportunity to unload his cargoes prior to the operation of the crane,
his presence on the vessel was no longer reasonable e and he consequently ceased to be a passenger. Corollarily, it
insists that the doctrine in La Mallorca vs. Court of Appeals, et al. 10 is not applicable to the case at bar.
The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of
destination and has left the vessel owner's dock or premises. 11 Once created, the relationship will not ordinarily
terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a
reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after
leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this
rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and
prepare for his departure.12 The carrier-passenger relationship is not terminated merely by the fact that the person
transported has been carried to his destination if, for example, such person remains in the carrier's premises to claim
his baggage.13
It was in accordance with this rationale that the doctrine in the aforesaid case of La Mallorca was enunciated, to wit:
It has been recognized as a rule that the relation of carrier and passenger does not cease at the
moment the passenger alights from the carrier's vehicle at a place selected by the carrier at the point
of destination, but continues until the passenger has had a reasonable time or a reasonable
 opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within
this rule is to be determined from all the circumstances. Thus, a person who, after alighting from a
train, walks along the station platform is considered still a passenger. So also, where a passenger has
alighted at his destination and is proceeding by the usual way to leave the company's premises, but
before actually doing so is halted by the report that his brother, a fellow passenger, has been shot, and
he in good faith and without intent of engaging in the difficulty, returns to relieve his brother, he is
deemed reasonably and necessarily delayed and thus continues to be a passenger entitled as such to
the protection of the railroad company and its agents.
In the present case, the father returned to the bus to get one of his baggages which was not unloaded
when they alighted from the bus. Racquel, the child that she was, must have followed the father.
However, although the father was still on the running board of the bus waiting for the conductor to
hand him the bag or bayong, the bus started to run, so that even he (the father) had to jump down
from the moving vehicle. It was at this instance that the child, who must be near the bus, was run over
and killed. In the circumstances, it cannot be claimed that the carrier's agent had exercised the 'utmost
diligence' of a 'very cautious person' required by Article 1755 of the Civil Code to be observed by a
common carrier in the discharge of its obligation to transport safely its passengers. ... The presence of
said passengers near the bus was not unreasonable and they are, therefore, to be considered still as
passengers of the carrier, entitled to the protection under their contract of carriage. 14
It is apparent from the foregoing that what prompted the Court to rule as it did in said case is the fact of the
passenger's reasonable presence within the carrier's premises. That reasonableness of time should be made to depend
on the attending circumstances of the case, such as the kind of common carrier, the nature of its business, the customs
of the place, and so forth, and therefore precludes a consideration of the time element per se without taking into
account such other factors. It is thus of no moment whether in the cited case of La Mallorca there was no appreciable
interregnum for the passenger therein to leave the carrier's premises whereas in the case at bar, an interval of one (1)
hour had elapsed before the victim met the accident. The primary factor to be considered is the existence of a
reasonable cause as will justify the presence of the victim on or near the petitioner's vessel. We believe there exists such
a justifiable cause.
It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers of vessels are
allotted a longer period of time to disembark from the ship than other common carriers such as a passenger bus. With
respect to the bulk of cargoes and the number of passengers it can load, such vessels are capable of accommodating a
bigger volume of both as compared to the capacity of a regular commuter bus. Consequently, a ship passenger will
need at least an hour as is the usual practice, to disembark from the vessel and claim his baggage whereas a bus
passenger can easily get off the bus and retrieve his luggage in a very short period of time. Verily, petitioner cannot
categorically claim, through the bare expedient of comparing the period of time entailed in getting the passenger's
cargoes, that the ruling in La Mallorca is inapplicable to the case at bar. On the contrary, if we are to apply the doctrine
enunciated therein to the instant petition, we cannot in reason doubt that the victim Anacleto Viana was still a
passenger at the time of the incident. When the accident occurred, the victim was in the act of unloading his cargoes,
which he had every right to do, from petitioner's vessel. As earlier stated, a carrier is duty bound not only to bring its
passengers safely to their destination but also to afford them a reasonable time to claim their baggage.
It is not definitely shown that one (1) hour prior to the incident, the victim had already disembarked from the vessel.
Petitioner failed to prove this. What is clear to us is that at the time the victim was taking his cargoes, the vessel had
already docked an hour earlier. In consonance with common shipping procedure as to the minimum time of one (1)
hour allowed for the passengers to disembark, it may be presumed that the victim had just gotten off the vessel when
he went to retrieve his baggage. Yet, even if he had already disembarked an hour earlier, his presence in petitioner's
premises was not without cause. The victim had to claim his baggage which was possible only one (1) hour after the
vessel arrived since it was admittedly standard procedure in the case of petitioner's vessels that the unloading
operations shall start only after that time. Consequently, under the foregoing circumstances, the victim Anacleto Viana
is still deemed a passenger of said carrier at the time of his tragic death.
II. Under the law, common carriers are, from the nature of their business and for reasons of public policy, bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case. 15 More particularly, a common carrier is bound to carry the
passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons,
with a due regard for all the circumstances. 16 Thus, where a passenger dies or is injured, the common carrier is
presumed to have been at fault or to have acted negligently. 17 This gives rise to an action for breach of contract of
carriage where all that is required of plaintiff is to prove the existence of the contract of carriage and its non-
performance by the carrier, that is, the failure of the carrier to carry the passenger safely to his destination, 18 which, in
the instant case, necessarily includes its failure to safeguard its passenger with extraordinary diligence while such
relation subsists.
The presumption is, therefore, established by law that in case of a passenger's death or injury the operator of the vessel
was at fault or negligent, having failed to exercise extraordinary diligence, and it is incumbent upon it to rebut the
same. This is in consonance with the avowed policy of the State to afford full protection to the passengers of common
carriers which can be carried out only by imposing a stringent statutory obligation upon the latter. Concomitantly, this
Court has likewise adopted a rigid posture in the application of the law by exacting the highest degree of care and
diligence from common carriers, bearing utmost in mind the welfare of the passengers who often become hapless
victims of indifferent and profit-oriented carriers. We cannot in reason deny that petitioner failed to rebut the
presumption against it. Under the facts obtaining in the present case, it cannot be gainsaid that petitioner had
inadequately complied with the required degree of diligence to prevent the accident from happening.
As found by the Court of Appeals, the evidence does not show that there was a cordon of drums around the perimeter
of the crane, as claimed by petitioner. It also adverted to the fact that the alleged presence of visible warning signs in
the vicinity was disputable and not indubitably established. Thus, we are not inclined to accept petitioner's explanation
that the victim and other passengers were sufficiently warned that merely venturing into the area in question was
fraught with serious peril. Definitely, even assuming the existence of the supposed cordon of drums loosely placed
around the unloading area and the guard's admonitions against entry therein, these were at most insufficient
precautions which pale into insignificance if considered vis-a-vis the gravity of the danger to which the deceased was
exposed. There is no showing that petitioner was extraordinarily diligent in requiring or seeing to it that said
precautionary measures were strictly and actually enforced to subserve their purpose of preventing entry into the
forbidden area. By no stretch of liberal evaluation can such perfunctory acts approximate the "utmost diligence of very
cautious persons" to be exercised "as far as human care and foresight can provide" which is required by law of common
carriers with respect to their passengers.
While the victim was admittedly contributorily negligent, still petitioner's aforesaid failure to exercise extraordinary
diligence was the proximate and direct cause of, because it could definitely have prevented, the former's death.
Moreover, in paragraph 5.6 of its petition, at bar, 19 petitioner has expressly conceded the factual finding of
respondent Court of Appeals that petitioner did not present sufficient evidence in support of its submission that the
deceased Anacleto Viana was guilty of gross negligence. Petitioner cannot now be heard to claim otherwise.
No excepting circumstance being present, we are likewise bound by respondent court's declaration that there was no
negligence on the part of Pioneer Stevedoring Corporation, a confirmation of the trial court's finding to that effect,
hence our conformity to Pioneer's being absolved of any liability.
As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged gross negligence of the victim,
hence its present contention that the death of the passenger was due to the negligence of the crane operator cannot
be sustained both on grounds, of estoppel and for lack of evidence on its present theory. Even in its answer filed in the
court below it readily alleged that Pioneer had taken the necessary safeguards insofar as its unloading operations were
concerned, a fact which appears to have been accepted by the plaintiff therein by not impleading Pioneer as a
defendant, and likewise inceptively by Aboitiz by filing its third-party complaint only after ten (10) months from the
institution of the suit against it. Parenthetically, Pioneer is not within the ambit of the rule on extraordinary diligence
required of, and the corresponding presumption of negligence foisted on, common carriers like Aboitiz. This, of course,
does not detract from what we have said that no negligence can be imputed to Pioneer but, that on the contrary, the
failure of Aboitiz to exercise extraordinary diligence for the safety of its passenger is the rationale for our finding on its
liability.
WHEREFORE, the petition is DENIED and the judgment appealed from is hereby AFFIRMED in toto.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.

Footnotes
1 Penned by Justice Nicolas P. Lapena, Jr. and concurred in by Associate Justices Fidel P. Purisima and
Segundino G. Chua, Rollo, 79-100.
2 Rollo, 88-89.
3 Annex A, Petition: Rollo, 23-27.
4 Annex B, id.; ibid., 28-30.
5 Annex C, id.; ibid., 31-32.
6 Annex D, id.; ibid 33-38.
7 Penned by Judge Willelmo C. Fortun; Annex E, id.; ibid., 39- 44.
8 Penned by Judge Jose H. Tecson; Annex F, id.; ibid., 45-61.
9 Petition, 4; Rollo, 9.
10 7 SCRA 739 (1966).
11 80 C.J.S. 1086.
12 13 C.J.S. 1073.
13 14 Am. Jur 2d 250.
14 Supra, 743-744.
15 Art. 1733, Civil Code.
16 Art. 1755, id.
17 Art. 1756, id.
18 Castro vs. Acro Taxicab Co., Inc., 82 Phil. 359 (1948); Brito Sy vs. Malate, Taxicab and Garage, Inc.,
102 Phil. 482 (1957).
19 Rollo, 16-17.
G.R. No. L-34597 November 5, 1982
ROSITO Z. BACARRO, WILLIAM SEVILLA, and FELARIO MONTEFALCON, petitioners,
vs.
GERUNDIO B. CASTAÑO, and the COURT OF APPEALS, respondents.
Felipe G. Tac-an counsel for petitioner.
Gerundio B. Castaño counsel for private respondent.

RELOVA, J.:
Appeal taken by petitioners from a decision of the Court of Appeals, affirming that of the Court of First Instance of
Misamis Occidental, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered, ordering the defendants to jointly and severally pay to the
plaintiff the sum of (1) P973.10 for medical treatment and hospitalization; (2) P840.20 for loss of salary
during treatment; and (3) P2,000.00 for partial permanent deformity, with costs against the defendants.
The facts are set forth in the decision of the Court of Appeals, from which We quote:
... In the afternoon of April 1, 1960, he (appellee) boarded the said jeep as a paying passenger at
Oroquieta bound for Jimenez, Misamis Occidental. It was then fined to capacity, with twelve (12)
passengers in all. 'The jeep was running quite fast and the jeep while approaching the (Sumasap)
bridge there was a cargo truck which blew its horn for a right of way. The jeep gave way but did not
change speed. ... When the jeep gave way it turned to the right and continued running with the same
speed. In so doing ...the driver was not able to return the jeep to the proper place ... instead, it ran
obliquely towards the canal; that is why, we fell to the ditch. ... When the jeep was running in the side
of the road for few meters, naturally, the jeep was already inclined and two passengers beside me were
the ones who pushed me. I was pushed by the two passengers beside me; that is why, when I was
clinging, my leg and half of my body were outside the jeep when it reached the canal. ... My right leg
was sandwiched by the body of the jeep and the right side of the ditch. ... My right leg was broken.' He
was rushed to the Saint Mary's Hospital where he stayed for about two (2) months. 'My right leg is now
shorter by one and one-half inches causing me to use specially made shoes. ... I could not squat for a
long time; I could not kneel for a long time; and I could not even sit for a long time because I will suffer
cramp. ... With my three fingers I am still uneasy with my three fingers in my right hand. There is a
feeling of numbness with my three fingers even right now.
xxx xxx xxx
From appellee's version just set out, it appears that after he boarded the jeep in question at Oroquieta,
it was driven by defendant Montefalcon at around forty (40) kilometers per hour bound for Jimenez;
that while approaching Sumasap Bridge at the said speed, a cargo truck coming from behind blew its
horn to signal its intention to overtake the jeep; that the latter, without changing its speed, gave way
by swerving to the right, such that both vehicles ran side by side for a distance of around twenty (20)
meters, and that thereafter as the jeep was left behind, its driver was unable to return it to its former
lane and instead it obliquely or diagonally ran down an inclined terrain towards the right until it fell
into a ditch pinning down and crushing appellee's right leg in the process.
Throwing the blame for this accident on the driver of the cargo truck, appellants, in turn, state the facts
to be as follows:
In the afternoon of April 1, 1960, plaintiff Gerundio Castaño boarded the said jeepney at Oroquieta
bound for Jimenez, Misamis occidental. While said jeepney was negotiating the upgrade approach of
the Sumasap Bridge at Jimenez, Misamis Occidental and at a distance of about 44 meters therefrom, a
cargo truck, owned and operated by a certain Te Tiong alias Chinggim, then driven by Nicostrato Digal,
a person not duly licensed to drive motor vehicles, overtook the jeepney so closely that in the process
of overtaking sideswiped the jeepney, hitting the reserve tire placed at the left side of the jeepney with
the hinge or bolt of the siding of the cargo truck, causing the jeepney to swerve from its course and
after running 14 meters from the road it finally fell into the canal. The right side of the jeep fell on the
right leg of the plaintiff-appellee, crushing said leg against the ditch resulting in the injury to plaintiff-
appellee consisting of a broken right thigh.
and take the following stand: 'The main defense of defendants appellants is anchored on the fact that
the jeepney was sideswiped by the overtaking cargo truck' (Appellants' Brief, pp. 3-4, 7).
It must be admitted, out of candor, that there is evidence of the sideswiping relied upon by appellants.
....
This appeal by certiorari to review the decision of respondent Court of Appeals asserts that the latter decided questions
of substance which are contrary to law and the approved decisions of this Court. Petitioners alleged that respondent
Court of Appeals erred (1) in finding contributory negligence on the part of jeepney driver appellant Montefalcon for
having raced with the overtaking cargo truck to the bridge instead of slackening its speed, when the person solely
responsible for the sideswiping is the unlicensed driver of the overtaking cargo truck; (2) in finding the jeepney driver
not to have exercised extraordinary diligence, human care, foresight and utmost. diligence of very cautious persons,
when the diligence required pursuant to Article 1763 of the New Civil Code is only that of a good father of a family
since the injuries were caused by the negligence of a stranger; and (3) in not considering that appellants were freed
from any liability since the accident was due to fortuitous event - the sideswiping of the jeepney by the overtaking
cargo truck.
We are not persuaded. The fact is, petitioner-driver Montefalcon did not slacken his speed but instead continued to run
the jeep at about forty (40) kilometers per hour even at the time the overtaking cargo truck was running side by side
for about twenty (20) meters and at which time he even shouted to the driver of the truck. Hereunder is the testimony
of private respondent Gerundio B. Castaño on this point:
Q At that time when you rode that jeep on your way to Jimenez, you said that the jeep
was running quite fast for a jeep, is that correct?
A Yes, sir.
xxx xxx xxx
Q When you said that it is quite fast for a jeep, do you mean to tell this Court that the
speed of that jeep could not be made by that particular jeepney?
A It can be made but it will not be very safe for that kind of transportation to run that
kind of speed.
Q What was the speed of that jeep in terms of miles or kilometers per hour?
A About 40 kilometers or about that time during that trip per hour.
Q And you said also that there was a cargo truck that was behind the jeep, is that
correct, while you were already approaching the Sumasap bridge?
A Yes.
xxx xxx xxx
Q How about the speed of that truck as the jeep you were riding was approaching the
Sumasap bridge? What was the speed of that truck, fast or not fast?
A Naturally, the truck when it asks for a clearance that he will overtake it will run fast.
xxx xxx xxx
Q Now comparing the speed that you mentioned that the jeep was negotiating in that
place and the cargo truck, which ran faster-the jeep or the cargo truck?
xxx xxx xxx
A Naturally, the truck was a little bit faster because he was able to overtake.
xxx xxx xxx
Q Now, how far more or less was the jeep from the bridge when the truck was about
to or in the process of overtaking the jeep you were riding?
A When the truck was asking for a clearance it was yet about less than 100 meters
from the bridge when he was asking for a clearance to overtake.
xxx xxx xxx
Q Do you remember the distance when the truck and the jeep were already side by
side as they approach the bridge in relation to the bridge?
xxx xxx xxx
A They were about fifty meters ... from fifty to thirty meters when they were side by
side from the bridge.
xxx xxx xxx
Q .... You said before that the jeep and the truck were running side by side for a few
meters, is that correct?
A Yes, sir.
Q I am asking you now, how long were they running side by side-the jeep and the
cargo truck?
A About 20 meters, they were running side by side.
Q And after running side by side for 20 meters, the jeep and its passengers went to the
canal?
A Yes.
Q You said on direct examinaton that when the jeep (should be truck) was blowing its
horn and asking for a way, you said that the jeep gave way and turned to the right and
did not recover its position and the jeep fell into the ditch, is that what you said
before?
A The jeep did not recover. It was not able to return to the center of the road. It was
running outside until it reached the canal, running diagonally.
Q When the jeep gave way to the cargo truck, the jeep was at the right side of the
road?
A Already on the right side of the road.
Q And this jeep was running steadily at the right side of the road.
A Yes, sir.
xxx xxx xxx
Q When the jeep gave way to the cargo truck and it kept its path to the right, it was
still able to maintain that path to the right for about twenty meters and while the jeep
and the cargo truck were running side by side?
A Yes.
Q When the truck and the jeep were already running side by side and after having run
twenty meters side by side, do you know why the jeep careened to the ditch or to the
canal?
A I do not know why but I know it slowly got to the canal but I do not know why it
goes there.
xxx xxx xxx
 Q You said when the jeep was about to be lodged in the canal, you stated that the
jeep was running upright, is that a fact?
A Yes.
Q So that the terrain was more or less level because the jeep was already running
upright, is that not correct?
A The jeep was running on its wheels but it is running on the side, the side was
inclining until it reached the ditch.
Q You mean to tell the Court that from the entire of the fifteen meters distance from
the side of the road up to the place where the jeep was finally lodged that place is
inclining towards the right?
A When the jeep left the road it was already inclining because it was running part side
of the road which is inclining. (Transcript of March 25 and 26, 1963).
Thus, had Montefalcon slackened the speed of the jeep at the time the truck was overtaking it, instead of running side
by side with the cargo truck, there would have been no contact and accident. He should have foreseen that at the
speed he was running, the vehicles were getting nearer the bridge and as the road was getting narrower the truck
would be to close to the jeep and would eventually sideswiped it. Otherwise stated, he should have slackened his jeep
when he swerved it to the right to give way to the truck because the two vehicles could not cross the bridge at the
same time.
The second assigned error is centered on the alleged failure on the part of the jeepney driver to exercise extraordinary
diligence, human care, foresight and utmost diligence of a very cautious person, when the diligence required pursuant
to Article 1763 of the Civil Code is only that of a good father of a family. Petitioners contend that the proximate cause
of the accident was the negligence of the driver of the truck. However, the fact is, there was a contract of carriage
between the private respondent and the herein petitioners in which case the Court of Appeals correctly applied Articles
1733, 1755 and 1766 of the Civil Code which require the exercise of extraordinary diligence on the part of petitioner
Montefalcon.
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.
Art. 1755. A common carrier is bound to carry the Passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.
Art. 1766. In all matters not regulated by this Code, the rights and obligations of common carriers shall
be governed by the Code of Commerce and by special laws.
Indeed, the hazards of modern transportation demand extraordinary diligence. A common carrier is vested with public
interest. Under the new Civil Code, instead of being required to exercise mere ordinary diligence a common carrier is
exhorted to carry the passengers safely as far as human care and foresight can provide "using the utmost diligence of
very cautious persons." (Article 1755). Once a passenger in the course of travel is injured, or does not reach his
destination safely, the carrier and driver are presumed to be at fault.
The third assigned error of the petitioners would find fault upon respondent court in not freeing petitioners from any
liability, since the accident was due to a fortuitous event. But, We repeat that the alleged fortuitous event in this case -
the sideswiping of the jeepney by the cargo truck, was something which could have been avoided considering the
narrowness of the Sumasap Bridge which was not wide enough to admit two vehicles. As found by the Court of
Appeals, Montefalcon contributed to the occurrence of the mishap.
WHEREFORE, the decision of the respondent Court of Appeals, dated September 30,1971, is hereby AFFIRMED. With
costs.
SO ORDERED.
Melencio-Herrera, ** Plana, Vasquez and Gutierrez, Jr., JJ., concur.
Teehankee, J., is on leave.

Footnotes
** Acting Chairman.
G.R. No. 118126 March 4, 1996
TRANS-ASIA SHIPPING LINES, INC., petitioner,
vs.
COURT OF APPEALS and ATTY. RENATO T. ARROYO, respondents.

DAVIDE, JR., J.:p

As formulated by the petitioner, the issue in this petition for review on certiorari under Rule 45 of the Rules of Court is
as follows:
In case of interruption of a vessel's voyage and the consequent delay in that vessel's arrival at its port
of destination, is the right of a passenger affected thereby to be determined and governed by the
vague Civil Code provision on common carriers, or shall it be, in the absence of a specific provision
thereon governed by Art. 698 of the Code of Commerce?1
The petitioner considers it a "novel question of law."
Upon a closer evaluation, however, of the challenged decision of the Court of Appeals of 23 November 1994,2 vis-a-vis,
the decision of 29 June 1992 in Civil Case No. 91-491 of the Regional Trial Court (RTC) of Cagayan de Oro City, Branch
24,3 as well as the allegations and arguments adduced by the parties, we find the petitioner's formulation of the issue
imprecise. As this Court sees it, what stands for resolution is a common carrier's liability for damages to a passenger
who disembarked from the vessel upon its return to the port of origin, after it suffered engine trouble and had to stop
at sea, having commenced the contracted voyage on one engine.
The antecedents are summarized by the Court of Appeals as follows:
Plaintiff [herein private respondent Atty. Renato Arroyo], a public attorney, bought a ticket [from]
defendant [herein petitioner], a corporation engaged in . . . inter-island shipping, for the voyage of M/V
Asia Thailand vessel to Cagayan de Oro City from Cebu City on November 12, 1991.
At around 5:30 in the evening of November 12, 1991, plaintiff boarded the M/V Asia Thailand vessel. At
that instance, plaintiff noticed that some repair works [sic] were being undertaken on the engine of the
vessel. The vessel departed at around 11:00 in the evening with only one (1) engine running.
After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor thereat.
After half an hour of stillness, some passengers demanded that they should be allowed to return to
Cebu City for they were no longer willing to continue their voyage to, Cagayan de Oro City. The captain
acceeded [sic] to their request and thus the vessel headed back to Cebu City.
At Cebu City, plaintiff together with the other passengers who requested to be brought back to Cebu
City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Plaintiff, the
next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of
defendant.
On account of this failure of defendant to transport him to the place of destination on November 12,
1991, plaintiff filed before the trial court a complaint for damages against defendant.4
In his complaint, docketed as Civil Case No. 91-491, plaintiff (hereinafter private respondent) alleged that the engines
of the M/V Asia Thailand conked out in the open sea, and for more than an hour it was stalled and at the mercy of the
waves, thus causing fear in the passengers. It sailed back to Cebu City after it regained power, but for unexplained
reasons, the passengers, including the private respondent, were arrogantly told to disembark without the necessary
precautions against possible injury to them. They were thus unceremoniously dumped, which only exacerbated the
private respondent's mental distress. He further alleged that by reason of the petitioner's wanton, reckless, and willful
acts, he was unnecessarily exposed to danger and, having been stranded in Cebu City for a day, incurred additional
expenses and loss of income. He then prayed that he be awarded P1,100.00, P50,000.00, and P25,000.00 as
compensatory, moral; and exemplary damages, respectively.5
In his pre-trial brief, the private respondent asserted that his complaint was "an action for damages arising from bad
faith, breach of contract and from tort," with the former arising from the petitioner's "failure to carry [him] to his place
of destination as contracted," while the latter from the "conduct of the [petitioner] resulting [in] the infliction of
emotional distress" to the private respondent.6
After due trial, the trial court rendered its decision7 and ruled that the action was only for breach of contract, with
Articles 1170, 1172, and 1173 of the Civil Code as applicable law — not Article 2180 of the same Code. It was of the
opinion that Article 1170 made a person liable for damages if, in the performance of his obligation, he was guilty of
fraud, negligence, or delay, or in any manner contravened the tenor thereof; moreover, pursuant to Article 2201 of the
same Code, to be entitled to damages, the non-performance of the obligation must have been tainted not only by
fraud, negligence, or delay, but also bad faith, malice, and wanton attitude. It then disposed of the case as follows:
WHEREFORE, it not appearing from the evidence that plaintiff was left in the Port of Cebu because of
the fault, negligence, malice or wanton attitude of defendant's employees, the complaint is DISMISSED.
Defendant's counterclaim is likewise dismissed it not appearing also that filing of the case by plaintiff
was motivated by malice or bad faith.8
The trial court made the following findings to support its disposition:
In the light of the evidence adduced by the parties and of the above provisions of the New Civil Code,
the issue to be resolved, in the resolution of this case is whether or not, defendant thru its employees
in [sic] the night of November 12, 1991, committed fraud, negligence, bad faith or malice when it left
plaintiff in the Port of Cebu when it sailed back to Cagayan de Oro City after it has [sic] returned from
Kawit Island.
Evaluation of the evidence of the parties tended to show nothing that defendant committed fraud. As
early as 3:00 p.m. of November 12, 1991, defendant did not hide the fact that the cylinder head
 cracked. Plaintiff even saw during its repair. If he had doubts as to the vessel's capacity to sail, he had
time yet to take another boat. The ticket could be returned to defendant and corresponding cash
[would] be returned to him.
Neither could negligence, bad faith or malice on the part of defendant be inferred from the evidence
of the parties. When the boat arrived at [the] Port of Cebu after it returned from Kawit Island, there was
an announcement that passengers who would like to disembark were given ten (10) minutes only to do
so. By this announcement, it could be inferred that the boat will [sic] proceed to Cagayan de Oro City. If
plaintiff entertained doubts, he should have asked a member of the crew of the boat or better still, the
captain of the boat. But as admitted by him, he was of the impression only that the boat will not
proceed to Cagayan de Oro that evening so he disembarked. He was instead, the ones [sic] negligent.
Had he been prudent, with the announcement that those who will disembark were given ten minutes
only, he should have lingered a little by staying in his cot and inquired whether the boat will proceed
to Cagayan de Oro City or not. Defendant cannot be expected to be telling [sic] the reasons to each
passenger. Announcement by microphone was enough.
The court is inclined to believe that the story of defendant that the boat returned to the Port of Cebu
because of the request of the passengers in view of the waves. That it did not return because of the
defective engines as shown by the fact that fifteen (15) minutes after the boat docked [at] the Port of
Cebu and those who wanted to proceed to Cagayan de Oro disembarked, it left for Cagayan de Oro
City.
The defendant got nothing when the boat returned to Cebu to let those who did not want to proceed
to Cagayan de Oro City including plaintiff disembarked. On the contrary, this would mean its loss
instead because it will have to refund their tickets or they will use it the next trip without paying
anymore. It is hard therefore, to imagine how defendant by leaving plaintiff in Cebu could have acted
in bad faith, negligently, wantonly and with malice.
If plaintiff, therefore, was not able to [m]ake the trip that night of November 12, 1991, it was not
because defendant maliciously did it to exclude him [from] the trip. If he was left, it was because of his
fault or negligence.9
Unsatisfied, the private respondent appealed to the Court of Appeals (CA-G.R. CV No. 39901) and submitted for its
determination the following assignment of errors: (1) the trial court erred in not finding that the defendant-appellee
was guilty of fraud, delay, negligence, and bad faith; and (2) the trial court. erred in not awarding moral and exemplary
damages.10
In its decision of 23 November 1994,11 the Court of Appeals reversed the trial court's decision by applying Article 1755
in relation to Articles 2201, 2208, 2217, and 2232 of the Civil Code and, accordingly, awarded compensatory, moral, and
exemplary damages as follows:
WHEREFORE, premises considered, the appealed decision is hereby REVERSED and SET ASIDE and
another one is rendered ordering defendant-appellee to pay plaintiff-appellant:
1. P20,000.00 as moral damages;
2. P10,000.00 as exemplary damages;
3. P5,000.00 as attorney's fees;
4. Cost of suit.
SO ORDERED.12
It did not, however, allow the grant of damages for the delay in the performance of the petitioner's obligation as the
requirement of demand set forth in Article 1169 of the Civil Code had not been met by the private respondent. Besides,
it found that the private respondent offered no evidence to prove that his contract of carriage with the petitioner
provided for liability in case of delay in departure, nor that a designation of the time of departure was the controlling
motive for the establishment of the contract. On the latter, the court a quo observed that the private respondent even
admitted he was unaware of the vessel's departure time, and it was only when he boarded the vessel that he became
aware of such. Finally, the respondent Court found no reasonable basis for the private respondent's belief that demand
was useless because the petitioner had rendered it beyond its power to perform its obligation; on the contrary, he even
admitted that the petitioner had been assuring the passengers that the vessel would leave on time, and that it could
still perform its obligation to transport them as scheduled.
To justify its award of damages, the Court of Appeals ratiocinated as follows:
It is an established and admitted fact that the vessel before the voyage had undergone some repair
work on the cylinder head of the engine. It is likewise admitted by defendant-appellee that it left the
port of Cebu City with only one engine running. Defendant-appellee averred:
. . . The dropping of the vessel's anchor after running slowly on only one engine when it
departed earlier must have alarmed some nervous passengers . . .
The entries in the logbook which defendant-appellee itself offered as evidence categorically stated
therein that the vessel stopped at Kawit Island because of engine trouble. It reads:
2330 HRS STBD ENGINE' EMERGENCY STOP
2350 HRS DROP ANCHOR DUE TO ENGINE TROUBLE, 2 ENGINE STOP.
The stoppage was not to start and synchronized [sic] the engines of the vessel as claimed by
defendant-appellee. It was because one of the engines of the vessel broke down; it was because of the
disability of the vessel which from the very beginning of the voyage was known to defendant-appellee.
Defendant-appellee from the very start of the voyage knew for a fact that the vessel was not yet in its
sailing condition because the second engine was still being repaired. Inspite of this knowledge,
defendant-appellee still proceeded to sail with only one engine running.
 Defendant-appellee at that instant failed to exercise the diligence which all common carriers should
exercise in transporting or carrying passengers. The law does not merely require extraordinary
diligence in the performance of the obligation. The law mandates that common carrier[s] should
exercise utmost diligence the transport of passengers.
Article 1755 of the New Civil Code provides:
Art. 1755. A common carrier is bound to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons,
with a due regard for all the circumstances.
Utmost diligence of a VERY CAUTIOUS person dictates that defendant-appellee should have pursued
the voyage only when its vessel was already fit to sail. Defendant-appellee should have made certain
that the vessel [could] complete the voyage before starting [to] sail. Anything less than this, the vessel
[could not] sail . . . with so many passengers on board it.
However, defendant-appellant [sic] in complete disregard of the safety of the passengers, chose to
proceed with its voyage even if only one engine was running as the second engine was still being
repaired during the voyage. Defendant-appellee disregarded the not very remote possibility that
because of the disability of the vessel, other problems might occur which would endanger the lives of
the passengers sailing with a disabled vessel.
As expected, . . . engine trouble occurred. Fortunate[ly] for defendant-appellee, such trouble only
necessitated the stoppage of the vessel and did not cause the vessel to capsize. No wonder why some
passengers requested to be brought back to Cebu City. Common carriers which are mandated to
exercise utmost diligence should not be taking these risks.
On this premise, plaintiff-appellant should not be faulted why he chose to disembark from the vessel
with the other passengers when it returned back to Cebu City. Defendant-appellee may call him a very
"panicky passenger" or a "nervous person", but this will not relieve defendant-appellee from the
liability it incurred for its failure to exercise utmost diligence.13
xxx xxx xxx
As to the second assigned error, we find that plaintiff-appellant is entitled to the award of moral and
exemplary damages for the breach committed by defendant-appellee.
As discussed, defendant-appellee in sailing to Cagayan de Oro City with only one engine and with full
knowledge of the true condition of the vessel, acted. in bad faith with malice, in complete disregard for
the safety of the passengers and only for its own personal advancement/interest.
The Civil Code provides:
Art. 2201.
xxx xxx xxx
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.
Plaintiff-appellant is entitled to moral damages for the mental anguish, fright and serious anxiety he
suffered during the voyage when the vessel's engine broke down and when he disembarked from the
vessel during the wee hours of the morning at Cebu City when it returned.14
Moral damages are recoverable in a damage suit predicated upon a breach of contract of carriage
where it is proved that the carrier was guilty of fraud or bad faith even if death does not result. 15
Fraud and bad faith by defendant-appellee having been established, the award of moral damages is in
order.16
To serve as a deterrent to the commission of similar acts in the future, exemplary damages should be
imposed upon defendant-appellee. 17 Exemplary damages are designed by our civil law to permit the
courts to reshape behavior that is socially deleterious in its consequence by creating . . . negative
incentives or deterrents against such behavior.18
Moral damages having been awarded, exemplary damages maybe properly awarded. When
entitlement to moral damages has been established, the award of exemplary damages is proper.19
The petitioner then instituted this petition and submitted the question of law earlier adverted to.
Undoubtedly, there was, between the petitioner and the private respondent, a contract of common carriage. The laws
of primary application then are the provisions on common carriers under Section 4, Chapter 3, Title VIII, Book IV of the
Civil Code, while for all other matters not regulated thereby, the Code of Commerce and special laws.20
Under Article 1733 of the Civil Code, the petitioner was bound to observe extraordinary diligence in ensuring the safety
of the private respondent. That meant that the petitioner was, pursuant to Article 1755 of the said Code, bound to carry
the private respondent safely as far as human care and foresight could provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances. In this case, we are in full accord with the Court of Appeals
that the petitioner failed to discharge this obligation.
Before commencing the contracted voyage, the petitioner undertook some repairs on the cylinder head of one of the
vessel's engines. But even before it could finish these repairs, it allowed the vessel to leave the port of origin on only
one functioning engine, instead of two. Moreover, even the lone functioning engine was not in perfect condition as
sometime after it had run its course, it conked out. This caused the vessel to stop and remain a drift at sea, thus in
order to prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel was unseaworthy even before the
voyage began. For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a
sufficient number of competent officers and crew. 21 The failure of a common carrier to maintain in seaworthy
condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil
Code.
As to its liability for damages to the private respondent, Article 1764 of the Civil Code expressly provides:
Art. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of
this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the
breach of contract by common carrier.
The damages comprised in Title XVIII of the Civil Code are actual or compensatory, moral, nominal, temperate
or moderate, liquidated, and exemplary.
In his complaint, the private respondent claims actual or compensatory, moral, and exemplary damages.
Actual or compensatory damages represent the adequate compensation for pecuniary loss suffered and for profits the
obligee failed to obtain.22
In contracts or quasi-contracts, the obligor is liable for all the damages which may be reasonably attributed to the non-
performance of the obligation if he is guilty of fraud, bad faith, malice, or wanton attitude.23
Moral damages include moral suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded
feelings, moral shock, social humiliation, or similar injury. They may be recovered in the cases enumerated in Article
2219 of the Civil Code, likewise, if they are the proximate result of, as in this case, the petitioner's breach of the contract
of carriage.24 Anent a breach of a contract of common carriage, moral damages may be awarded if the common
carrier, like the petitioner, acted fraudulently or in bad faith.25
Exemplary damages are imposed by way of example or correction for the public good, in addition to moral, temperate,
liquidated or compensatory damages.26 In contracts and quasi-contracts, exemplary damages may be awarded if the
defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.27 It cannot, however, be
considered as a matter of right; the court having to decide whether or not they should be adjudicated.28 Before the
court may consider an award for exemplary damages, the plaintiff must first show that he is entitled to moral,
temperate or compensatory damages; but it is not necessary that he prove the monetary value thereof.29
The Court of Appeals did not grant the private respondent actual or compensatory damages, reasoning that no delay
was incurred since there was no demand, as required by Article 1169 of the Civil Code. This article, however, finds no
application in this case because, as found by the respondent Court, there was in fact no delay in the commencement of
the contracted voyage. If any delay was incurred, it was after the commencement of such voyage, more specifically,
when the voyage was subsequently interrupted when the vessel had to stop near Kawit Island after the only functioning
engine conked out.
As to the rights and duties of the parties strictly arising out of such delay, the Civil Code is silent. However, as correctly
pointed out by the petitioner, Article 698 of the Code of Commerce specifically provides for such a situation. It reads:
In case a voyage already begun should be interrupted, the passengers shall be obliged to pay the fare
in proportion to the distance covered, without right to recover for losses and damages if the
interruption is due to fortuitous event or force majeure, but with a right to indemnity if the interruption
should have been caused by the captain exclusively. If the interruption should be caused by the
disability of the vessel and a passenger should agree to await the repairs, he may not be required to
pay any increased price of passage, but his living expenses during the stay shall be for his own account.
This article applies suppletorily pursuant to Article 1766 of the Civil Code.
Of course, this does not suffice for a resolution of the case at bench for, as earlier stated, the cause of the delay or
interruption was the petitioner's failure to observe extraordinary diligence. Article 698 must then be read together with
Articles 2199, 2200, 2201, and 2208 in relation to Article 21 of the Civil Code. So read, it means that the petitioner is
liable for any pecuniary loss or loss of profits which the private respondent may have suffered by reason thereof. For
the private respondent, such would be the loss of income if unable to report to his office on the day he was supposed
to arrive were it not for the delay. This, however, assumes that he stayed on the vessel and was with it when it
thereafter resumed its voyage; but he did not. As he and some passengers resolved not to complete the voyage, the
vessel had to return to its port of origin and allow them to disembark. The private respondent then took the petitioner's
other vessel the following day, using the ticket he had purchased for the previous day's voyage.
Any further delay then in the private respondent's arrival at the port of destination was caused by his decision to
disembark. Had he remained on the first vessel, he would have reached his destination at noon of 13 November 1991,
thus been able to report to his office in the afternoon. He, therefore, would have lost only the salary for half of a day.
But actual or compensatory damages must be proved,30 which the private respondent failed to do. There is no
convincing evidence that he did not receive his salary for 13 November 1991 nor that his absence was not excused.
We likewise fully agree with the Court of Appeals that the petitioner is liable for moral and exemplary damages. In
allowing its unseaworthy M/V Asia Thailand to leave the port of origin and undertake the contracted voyage, with full
awareness that it was exposed to perils of the sea, it deliberately disregarded its solemn duty to exercise extraordinary
diligence and obviously acted with bad faith and in a wanton and reckless manner. On this score, however, the
petitioner asserts that the safety or the vessel and passengers was never at stake because the sea was "calm" in the
vicinity where it stopped as faithfully recorded in the vessel's log book (Exhibit "4"). Hence, the petitioner concludes, the
private respondent was merely "over-reacting" to the situation obtaining then.31
We hold that the petitioner's defense cannot exculpate it nor mitigate its liability. On the contrary, such a claim
demonstrates beyond cavil the petitioner's lack of genuine concern for the safety of its passengers. It was, perhaps,
only providential then the sea happened to be calm. Even so, the petitioner should not expect its passengers to act in
the manner it desired. The passengers were not stoics; becoming alarmed, anxious, or frightened at the stoppage of a
vessel at sea in an unfamiliar zone as nighttime is not the sole prerogative of the faint-hearted. More so in the light of
the many tragedies at sea resulting in the loss of lives of hopeless passengers and damage to property simply because
common carriers failed in their duty to exercise extraordinary diligence in the performance of their obligations.
We cannot, however, give our affirmance to the award of attorney's fees. Under Article 2208 of the Civil Code, these are
recoverable only in the concept of actual damages,32 not as moral damages33 nor judicial costs. 34 Hence, to merit
such an award, it is settled that the amount thereof must be proven. 35 Moreover, such must be specifically prayed for
— as was not done in this case—and may not be deemed incorporated within a general prayer for "such other relief
and remedy as this court may deem just and equitable."36 Finally, it must be noted that aside from the following, the
body of the respondent Court's decision was devoid of any statement regarding attorney's fees:
Plaintiff-appellant was forced to litigate in order that he can claim moral and exemplary damages for
the suffering he encurred [sic]. He is entitled to attorney's fees pursuant to Article 2208 of the Civil
Code. It states:
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.
This Court holds that the above does not satisfy the benchmark of "factual, legal and equitable justification"
needed as basis for an award of attorney's fees.3 7 In sum, for lack of factual and legal basis, the award of
attorney's fees must be deleted.
WHEREFORE, the instant petition is DENIED and the challenged decision of the Court of Appeals in CA-G.R. CV No.
39901 is AFFIRMED subject to the modification as to the award for attorney's fees which is hereby SET ASIDE.
Costs against the petitioner.
SO ORDERED.
Narvasa, C.J., Melo, Francisco and Panganiban, JJ., concur
Footnotes
1 Rollo, 3.
2 Annex "A" of Petition; Id., 11-22. Per Labitoria, E., J., with Abad-Santos, Jr., Q., and Hofilefia, H., JJ., concurring.
3 Original Records (OR), Civil Case No. 91-491, 92-99; 100-107; 108-115. Per Judge Leonardo N. Demecillo.
4 Rollo, 12-13.
5 OR, Civil Case No. 91-491, 2-5.
6 Id., 43.
7 Supra note 3.
8 OR, Civil Case No. 91-491, 99.
9 OR, Civil Case No. 91-491, 97-99.
10 Rollo, 12.
11 Supra note 2.
12 Rollo, 21.
13 Rollo, 14-16.
14 Id., 19-20, citing Article 2217, Civil Code.
15 Id., citing China Airlines Ltd. vs. Intermediate Appellate Court, 169 SCRA 226 [1989]; Sabena Belgina World
Airlines vs. Court of Appeals, 171 SCRA 620 [1989].
16 Id., citing Bert Osmeña & Associates vs. Court of Appeals, 120 SCRA 395 [1983].
17 Rollo 19-20, citing Rotea vs. Halili, 109 Phil. 495 [1960].
18 Id., citing Mecenas vs. Court of Appeals, 180 SCRA 83 [1989].
19 Id., citing De Leon vs. Court of Appeals, 165 SCRA 166 [1988].
20 Article 1766, Civil Code.
21 Chan Keep vs. Chan Gioco, 14 Phil. 5 [1909].
22 Articles 2199 and 2200.
23 Article 2201.
24 Article 2217.
25 Article 2220. See Necesito vs. Paras, 104 Phil. 75, 82-83 [1958].
26 Article 2229.
27 Article 2232.
28 Article 2233.
29 Article 2234.
30 Article 2199.
31 Brief for Defendant Appellee, 9; Rollo, 33.
32 Fores vs. Miranda, 105 Phil. 266, 272 [1959]; PCIB vs. Intermediate Appellate Court, 196 SCRA 29, 39 [1991].
33 Mirasol vs. de la Cruz, 84 SCRA 337, 342 [1978].
34 Damasen vs. Hernando, 104 SCRA 111, 116-117 [1981].
35 See Warner, Barnes & Co., Ltd. vs. Luzon Surety Co., Inc., 95 Phil. 925 [1954].
36 Mirasol vs. de la Crur, supra note 33, at 343.
37 See Scott Consultants & Resource Development vs. Court of Appeals, 242 SCRA 393, 405-406 [1995].
G.R. No. 122308 July 8, 1997
PURITA S. MAPA, CARMINA S. MAPA and CORNELIO P. MAPA, petitioners,
vs.
COURT OF APPEALS and TRANS-WORLD AIRLINES INC., respondents.

DAVIDE, JR., J.:

The main issue in this petition for review under Rule 45 of the Rules of Court is the applicability of Article 28(1) of the
Warsaw Convention,1 which provides as follows:
Art. 28. (1) An action for damages must be brought, at the option of the plaintiff, in the territory of one of the
High Contracting Parties, either before the court of the domicile of the carrier or of his principal place of
business, or where he has a place of business through which the contract has been made, or before the court at
the place of destination.
We are urged by the petitioners to reverse the 31 May 1995 Decision of the Court of Appeals in CA-G.R. CV No.
398962 affirming the 24 July 1992 Order of the Regional Trial Court of Quezon City, Branch 102, which dismissed Civil
Case No. Q-91-96203 on the ground of lack of jurisdiction in view of the aforementioned Article 28(1) of the Warsaw
Convention.
The antecedent facts, as summarized by the Court of Appeals, are as follows:
Plaintiffs Cornelio P. Mapa and Purita S. Mapa are respectable members of the society. Mr. Mapa is an
established businessman and currently the Regional General Manager of Akerlund and Rausing, a multinational
packaging material manufacturer based in Manila. He was previously the Senior Vice President of Phimco
Industries, an affiliate company of Swedish Match Company. Mrs. Mapa is a successful businesswoman
engaged in the commercial transactions of high value antique and oriental arts decor items originating from
Asian countries. Carmina S. Mapa is the daughter of plaintiffs Purita and Cornelio and is a graduate of the
International School in Bangkok, Thailand, now presently enrolled at the Boston University where she is
majoring in communication.
Plaintiffs Mapa entered into contract of air transportation with defendant TWA as evidence by TWA ticket Nos.
015:9475:153:304 and 015:9475:153:305, purchased in Bangkok, Thailand. Said TWA tickets are for Los Angeles-
New York-Boston-St. Louis-Chicago. . . .
Domicile of carrier TWA is Kansas City, Missouri, USA. Its principal place of business is Kansas City, Missouri,
USA. TWA's place of business through which the contracts were made is Bangkok, Thailand. The place of
destination is Chicago, USA.
On August 10, 1990, plaintiffs Carmina and Purita left Manila on board PAL flight No. 104 for Los Angeles.
Carmina was to commence schooling and thus was accompanied by Purita to assist her in settling down at the
University.
They arrived Los Angeles on the same date and stayed there until August 14, 1990 when they left for New York
City.
On August 14, 1990, plaintiffs Purita and Carmina S. Mapa arrived at the John F. Kennedy (JFK) Airport, New
York, on TWA Flight No. 904.
On August 27, 1990, plaintiffs Purita and Carmina S. Mapa departed for Boston, taking a connecting flight on
TWA's carrier, TW 0901, from JFK Airport, New York, to Boston's Logan Airport, checking in seven (7) pieces of
luggage at the TWA counter in the JFK Airport. The seven baggages were received by a porter who issued
seven TWA baggage receipts numbered 17-8270, 71, 72, 73, 74, 75, and 76 therefor.
From the entrance gate of the terminal building, plaintiffs Purita and Carmina proceeded to TWA's ticket
counter and presented their confirmed TWA tickets numbered 015:9475:153:304 and 015:9475:153:305 with a
3:00 p.m. departure time. They were issued their boarding passes and were instructed to proceed to gate 35 for
boarding. At about 2:40 p.m., plaintiffs noticed that there was still no instruction to board the aircraft so they
made inquiries. The TWA ground stewardess informed plaintiffs that they were at the wrong gate because their
flight was boarding at gate 1. Upon hearing this, plaintiffs rushed to gate 1 which was in another building
terminal. At gate 1, they were told by a TWA ground stewardess that flight 901 had just departed. However,
they were consoled that another TWA flight was leaving for Boston after 30 minutes and plaintiffs could use
the same boarding pass for the next flight. At around 3:15 p.m., plaintiffs Purita and Carmina were able to
board the next flight. However, the plane was not immediately cleared for take off on account of a
thunderstorm. The passengers were instructed to stay inside the aircraft until 6:00 p.m. when the plane finally
left for Boston.
Upon arriving in Boston, plaintiffs Purita and Carmina proceeded to the carousel to claim their baggages and
found only three out of the seven they checked in, to wit: one Samsonite on the carousel, another Samsonite
lying on the floor near the carousel and a third baggage, an American Tourister, inside the unclaimed baggage
office. Plaintiffs immediately reported the loss of their four baggages to the TWA Baggage Office at Logan
Airport. TWA's representative confidently assured them that their baggages would be located within 24 hours
and not more than 48 hours.
On September 2, 1990, plaintiffs received a letter from TWA, signed by Mr. J.A. Butler, Customer Relations-
Baggage Service, apologizing for TWA's failure to locate the missing luggage and requesting plaintiffs to
accomplish a passenger property questionnaire to facilitate a further intensive and computerized search for the
lost luggage. Plaintiffs duly accomplished the passenger property questionnaire, taking pains to write down in
detail the contents of each missing baggage. The total value of the lost items amounted to $11,283.79.
 On September 20, 1990, plaintiff's counsel wrote TWA thru its General Sales Manager in the Philippines, Daniel
Tuason, with office address at Ground Floor, Saville Building, Sen. Gil. J. Puyat Avenue corner Paseo de Roxas,
Makati, Metro Manila demanding indemnification for the grave damage and injury suffered by the plaintiffs.
TWA again assured plaintiffs that intensive search was being conducted.
On October 8, 1990, TWA offered to amicably settle the case by giving plaintiffs-appellants two options: (a)
transportation credit for future TWA travel or (b) cash settlement. Five months lapsed without any result on
TWA's intensive search.
On January 3, 1991, plaintiffs-appellant opted for transportation credit for future TWA travel.
On January 11, 1991, TWA disregarded plaintiffs' option and unilaterally declared the payment of $2,560.00 as
constituting full satisfaction of the plaintiffs' claim.
On July 19, 1991, plaintiffs accepted the check for $2,560.00, as partial payment for the actual cost of their lost
baggages and their contents.
Despite demands by plaintiffs, TWA failed and refused without just cause to indemnify and redress plaintiffs for
the grave injury and damages they have suffered.4
Purita S. Mapa, Carmina S. Mapa, and Cornelio P. Mapa (herein petitioners) then filed with the trial court on 1 August
1991 a complaint5 for damages,6 which was docketed as Civil Case No. Q-91-9620. Before a responsive pleading was
filed, the petitioners filed an Amended Complaint.7 They prayed that after due trial private respondent Trans-World
Airlines, Inc. (hereafter, TWA), be ordered to pay them the following amounts: (1) US$8,723.79, or its equivalent in
Philippine currency, representing the cost of the lost luggage and its contents; (2) US$2,949.50, or its equivalent in
Philippine currency, representing the cost of hotel, board and lodging, and communication expenses; (3) P1 million, by
way of moral damages; (4) P1 million, by way of exemplary damages, with legal interest on said amounts from the date
of extrajudicial demand thereof; and (5) P500,000.00 as attorney's fees, costs of the suit, and other expenses of
litigation.8
On 26 February 1992, TWA filed its Answer to the Amended Complaint raising, as special and affirmative defense, lack
of jurisdiction of Philippine courts over the action for damages in the pursuant to Article 28(1) of the Warsaw
Convention, the action could only be brought either in Bangkok where the contract was entered into, or in Boston
which was the place of destination, or in Kansas City which is the carrier's domicile and principal place of business.
TWA further alleged that pursuant to the Warsaw Convention and the Notice of Baggage Limitations at the back of the
tickets, its liability to the petitioners is limited to US$9.07 per pound, or US$20.00 per kilo, which is in lieu of actual and
compensatory damages. Even assuming that petitioners' bag weighed the maximum acceptable weight of 70 pounds,
TWA's maximum liability is $640.00 per bag or $2,560.00 for the four pieces of baggage, which the petitioners have
been offered and have accepted. TWA also submitted that it could not be liable for moral and exemplary damages and
attorney's fees because it did not act in a wanton, fraudulent, reckless, oppressive, or malevolent manner.9
On 7 February 1992, the petitioners filed their second Amended Complaint10 to include a claim of US$2,500, or its
equivalent in Philippine Currency, representing the additional replacement cost of the items and personal effects
contained in their lost luggage; and US$4,500 representing the travel expenses, hotel, lodging, food and other
expenses of petitioner Cornelio Mapa, who was constrained to join his family in Boston to extend the necessary
assistance in connection with the lost luggage.
After the filing of TWA's Answer to the second Amended Complaint,11 and petitioners' Reply thereto, the trial court
gave TWA ten days within which to submit a memorandum in support of its affirmative defenses; after which the
incident would be deemed submitted for resolution.12 However, after TWA filed its Memorandum,13 the trial court
gave the petitioners five days within which to file a reply memorandum; and TWA, two days from receipt of the latter to
file its comment thereon.14 The petitioners then filed their Opposition (by way of Reply Memorandum)15 to which
TWA filed a Reply.16 Thereafter, the petitioners submitted a Rejoinder17; TWA, a Surrejoinder.18
On 24 July 1992, the trial court issued an Order19 dismissing the case for lack of jurisdiction in light of Article 28(1) of
the Warsaw Convention. Thus:
It is plaintiffs' theory that the Warsaw Convention does not apply to the instant case because plaintiffs' contract
of transportation does not constitute "international transportation" as defined in said convention. This however
is belied by the Passenger Property Questionnaire which is Annex C of plaintiffs' amended complaint. Page two
of said questionnaire accomplished by plaintiffs under the heading "Your Complete Itinerary" shows that the
TWA tickets issued to the plaintiffs form part of the contract of transportation to be performed from Manila to
the United States. Since the Philippines and the United States are parties to the convention, plaintiffs' contracts
of transportation come within the meaning of International Transportation.
xxx xxx xxx
On the basis of the foregoing, the Court holds that the Warsaw Convention is applicable to the case at bar,
even if the basis of plaintiffs' present action is breach of contract of carriage under the New Civil Code.
The next question to be resolved is whether or not the Court has jurisdiction to try the present case in the light
of the provision of Art. 28(1) above-quoted.
Under Art. 28(1) supra, a complaint for damages against an air carrier can be instituted only in any of the
following places/courts:
(1) The court of the domicile of the carrier;
(2) The court of its principal place of business;
(3) The court where it has a place of business through which the contract had
been made;
(4) The court of the place of destination.
In interpreting the provision of Art. 28(1) of the Warsaw Convention, the Supreme Court in the same case
of Augusto Benedicto Santos vs. Northwest Airlines held:
 Whether Article 28(1) refers to jurisdiction or only to venue is a question over which authorities are sharply
divided. While the petitioner cites several cases holding that Article 28(1) refers to venue rather that
jurisdiction, there are later cases cited by the private respondent supporting the conclusion that the provision is
jurisdictional.
Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred by consent or waiver
upon a court which otherwise would have no jurisdiction over the subject-matter of an action; but the venue of
an action as fixed by statute may be changed by the consent of the parties and an objection that the plaintiff
brought his suit in the wrong country may be waived by the failure of the defendant to make a timely
objection. In either case, the court may render a valid judgment. Rules as to jurisdiction can never be left to the
consent or agreement of the parties, whether or not prohibition exists against their alteration.
A number of reasons tends to support the characterization of Article 28(1) as a jurisdiction and not a venue
provision. First, the wording of Article 32, which indicates the places where the action for damages "must" be
brought, underscores the mandatory nature of Article 28(1). Second, this characterization is consistent with one
of the objectives of the Convention, which is to "regulate in a uniform manner the conditions of international
transportation by air." Third, the Convention does not contain any provision prescribing rules of jurisdiction
other than Article 28(1), which means that the phrase "rules as to jurisdiction" used in Article 32 must refer only
to Article 28(1). In fact, the last sentence of Article 32 specifically deals with the exclusive enumeration in Article
28(1) as "jurisdictions," which, as such, cannot be left to the will of the parties regardless of the time when the
damage occurred.
xxx xxx xxx
It has been shown by the defendant that the domicile of the defendant Trans World Airlines, Inc. is Kansas City,
Missouri, its principal place of business is also in Kansas City, Missouri, the carrier's place of business through
which the contracts were made is Bangkok (Annexes A and A-1, Amended Complaint), and the place of
destination was Boston.
The Philippines not being one of the places specified in Art. 28(1) abovequoted where the complaint may be
instituted, this Court therefore, does not have jurisdiction over the present case.
Evidently discontented with the trial court's order, the petitioners appealed to the Court of Appeals, contending that
the lower court erred in not holding that (1) it has jurisdiction over the instant case and (2) the Warsaw Convention is
inapplicable in the instant case because the subject matter of the case is not included within the coverage of the said
convention.20 They claimed that their cause of action could be based on breach of contract of air carriage founded on
Articles 1733, 1734, 1735, 1755, and 1756 of the New Civil Code governing common carriers or Article 2176 of the same
Code governing tort or quasi-delict.
The appellate court disagreed with the petitioners and affirmed the order of the trial court. It held that the Warsaw
Convention is the law which governs the dispute between the petitioners and TWA because what is involved
is international transportation defined by said Convention in Article I(2). This holding is founded on its determination
that the two TWA tickets for Los Angeles-New York-Boston-St. Louis-Chicago purchased in Bangkok, Thailand, were
issued in conjunction with, and therefore formed part of, the contract of transportation performed from Manila,
Philippines, to the United States.
The respondent court further held that the cause of action of the petitioners arose from the loss of the four checked
pieces of baggage, which then falls under Article 18(1), Chapter III (Liability of the Carrier) of the Warsaw
Conventions.21 Pursuant to Article 24(1) of the Convention, all actions for damages, whether based on tort, code law or
common law, arising from loss of baggage under Article 18 of the Warsaw Convention, can only be brought subject to
the conditions and limits set forth in the Warsaw Convention. Article 28(1) thereof sets forth conditions and limits in
that the action for damages may be instituted only in the territory of one of the High Contracting Parties, before the
court of (1) the domicile of the carrier, (2) the carrier's principal place of business, (3) the place of business through
which the contract has been made, or (4) the place of destination. Since the Philippines is not one of these places, a
Philippine Court, like the RTC, has no jurisdiction over the complaint for damages.
Respondent Court of Appeals likewise held that the petitioners could not claim application of Articles 1733, 1734, 1735,
1755, and 1756 of the New Civil Code on common carriers without taking into consideration Article 1753 of the same
Code, which provides that the law of the country to which the goods are to be transported shall govern the liability of
the common carrier for their loss, destruction, or deterioration. Since the country of ultimate destination is Chicago, the
law of Chicago shall govern the liability of TWA for the loss of the four pieces of baggage. Neither is Article 2176 of the
New Civil Code on torts or quasi-delicts applicable in view of the private international law principle of lex loci
delicti commissi.22 In addition, comformably with Santos III v. Northwest Orient Airlines,23 mere allegation of willful
misconduct resulting in a tort is insufficient to exclude the case from the comprehension of the Warsaw Convention.
Failing in their bid to reconsider the decision, the petitioners filed this petition. They aver that respondent Court of
Appeals gravely erred (1) in holding that the Warsaw Convention is applicable to this case and (2) in applying Article
1753 of the Civil Code and the principle of lex loci delicti commissi.24
We resolved to give due course to the petitioner after the filing by TWA of its Comment on the petition and noted
without action for the reasons stated in the resolution of 25 September 1996 petitioners' Reply and Rejoinder. We then
required the parties to submit their respective memoranda. They did in due time.
The petitioners insist that the Warsaw Convention is not applicable to their case because the contracts they had with
TWA did not involve an international transportation. Whether the contracts were of international transportation is to be
solely determined from the TWA tickets issued to them in Bangkok, Thailand, which showed that their itinerary was Los
Angeles-New York-Boston-St. Louis-Chicago. Accordingly, since the place of departure (Los Angeles) and the place of
destination (Chicago) are both within the territory of one High Contracting Party, with no agreed stopping place in a
territory subject to the sovereignty, mandate, suzerainty or authority of another Power, the contracts did not constitute
'international transportation' as defined by the convention. They also claim to be without legal basis the contention of
TWA that their transportation contracts were of international character because of the handwritten notations in the
tickets re "INT'S TKT #079-4402956821-2" and "INT'L TKT #079-4402956819." Notwithstanding such notations, the
TWA tickets, viz., (a) No. 015.9475:153:304 and (b) No. 015:9475:153:305 did not cease to be for the itinerary therein
designated. Besides, it is a fact that petitioners Purita and Carmina Mapa traveled from Manila to Los Angeles via
Philippine Airlines (PAL) by virtue of PAL tickets issued independently of the TWA tickets.
The pitch issue to be resolved under the petitioner's first assigned error is whether the contracts of transportation
between Purita and Carmina Mapa, on the one hand, and TWA, on the other, were contracts of "international
transportation" under the Warsaw Convention. If they were, then we should sustain the trial court and the Court of
Appeals in light of our ruling in Santos v. Northwest Orient Airlines.25 It appears clear to us that TWA itself, the trial
court, and the Court of Appeals impliedly admit that if the sole basis were the two TWA tickets for Los Angeles-New
York-Boston-St. Louis-Chicago, the contracts cannot be brought within the term "international transportation," as
defined in Article I(2) of the Warsaw Convention. As provided therein, a contract is one of international
transportation only if
according to the contract made by the parties, the place of departure and the place of destination, whether or
not there be a break in the transportation or a transshipment, are situated either within the territories of two
High Contracting Parties, or within the territory of a single High Contracting Party, if there is an agreed
stopping place within a territory subject to the sovereignty, mandate or authority of another power, even
though that power is not a party to this convention.
There are then two categories of international transportation, viz., (1) that where the place of departure and the place of
destination are situated within the territories of two High Contracting Parties regardless of whether or not there be a
break in the transportation or a transshipment; and (2) that where the place of departure and the place of destination
are within the territory of a single High Contracting Party if there is an agreed stopping place within a territory subject
to the sovereignty, mandate, or authority of another power, even though the power is not a party of the Convention.
The High Contracting Parties referred to in the Convention are the signatories thereto and those which subsequently
adhered to it. In the case of the Philippines, the Convention was concurred in by the Senate, through Resolution No. 19,
on 16 May 1950. The Philippine instrument of accession was signed by President Elpidio Quirino on 13 October 1950
and was deposited with the Polish Government on 9 November 1950. The Convention became applicable to the
Philippines on 9 February 1951. Then, on 23 September 1955, President Ramon Magsaysay issued Proclamation No.
201, declaring the Philippines' formal adherence thereto, "to the end that the same and every article and clause thereof
may be observed and fulfilled in good faith by the Republic of the Philippines and the citizens thereof.26
The contracts of transportation in this case are evidenced by the two TWA tickets, No. 015:9475:153:304 and No.
015:9475:153:305, both purchased and issued in Bangkok, Thailand. On the basis alone of the provisions therein, it is
obvious that the place of departure and the place of destination are all in the territory of the United States, or of a
single High Contracting Party. The contracts, therefore, cannot come within the purview of the first category
of international transportation. Neither can it be under the second category since there was NO agreed stopping place
within a territory subject to the sovereignty, mandate, or authority of another power.
The only way to bring the contracts between Purita and Carmina Mapa, on the one hand, and TWA, on the other, within
the first category of "international transportation" is to link them with, or to make them an integral part of, the Manila-
Los Angeles travel of Purita and Carmina through PAL aircraft. The "linkages" which have been pointed out by the TWA,
the trial court, and the Court of Appeals are (1) the handwritten notations, viz., INT'L TKT # 079-4402956821-2 and
INT'L TKT # 079-4402956819, on the two TWA tickets; and (2) the entries made by petitioners Purita and Carmina Mapa
in column YOUR COMPLETE ITINERARY in TWA's Passenger Property Questionnaire, wherein they mentioned their
travel from Manila to Los Angeles in flight PR 102.
The alleged "international tickets" mentioned in the notations in conjunction with which the two TWA tickets were
issued were not presented. Clearly then, there is at all no factual basis of the finding that the TWA tickets were issued in
conjunction with the international tickets, which are even, at least as of now, non-existent.
As regards the petitioner's entry in YOUR COMPLETE ITINERARY column of the Passenger Property Questionnaire
wherein they included the Manila-Los Angeles travel, it must be pointed out that this was made on 4 September
199027 by petitioners Purita and Carmina Mapa, and only in connection with their claim for their lost pieces of
baggage. The loss occurred much earlier, or on 27 August 1990. The entry can by no means be considered as a part of,
or supplement to, their contracts of transportation evidenced by the TWA tickets which covered transportation within
the United States only.
It must be underscored that the first category of international transportation under the Warsaw Convention is based on
"the contract made by the parties." TWA does not claim that the Manila-Los Angeles contracts of transportation which
brought Purita and Carmina to Los Angeles were also its contracts. It does not deny the assertion of the petitioners that
those contracts were independent of the TWA tickets issued in Bangkok, Thailand. No evidence was offered that TWA
and PAL had an agreement concerning transportation of passengers from points of departures not served with aircrafts
of one or the other. There could have been no difficulty for such agreement, since TWA admitted without qualification
in paragraph 1 of its Answer28 to the second Amended Complaint the allegation in paragraph 1.1 of the latter29 that
TWA "is a foreign corporation licensed to do business in the Philippines with office address at Ground Floor, Saville
Building, Sen. Gil. J. Puyat Avenue, corner Paseo de Roxas, Makati, Metro Manila."
TWA relies on Article I(3) of the Convention, which provides as follows:
3. A carriage to be performed by several successive air carriers is deemed, for the purposes of
this Convention, to be one undivided carriage, if it has been regarded by the parties as a single
operation, whether it had been agreed upon under the form of a single contract or of a series
of contracts, and it shall not lose its international character merely because one contract or a
 series of contracts is to be performed entirely within a territory subject to the sovereignty,
suzerainty, mandate, or authority of the same High Contracting Party.
It also points to Article 15 of the IATA Recommend Practice 1724, which provides: Carriage to be performed by a
several successive carriers under one ticket, or under a ticket and any conjunction ticket issued in connection therewith,
is regarded as a single operation."30
The flaw of respondent's position is the presumption that the parties have "regarded" as an "undivided carriage" or as a
"single operation" the carriage from Manila to Los Angeles through PAL then to New York-Boston-St. Louis-
Chicago through TWA. The dismissal then of the second Amended Complaint by the trial court and the Court of
Appeals' affirmance of the dismissal were not based on indubitable facts or grounds, but no inferences without
established factual basis.
TWA should have offered evidence for its affirmative defenses at the preliminary hearing therefor. Section 5 of Rule 16
of the Rules of Court expressly provides:
Sec. 5. Pleading grounds as affirmative defenses. — Any of the grounds for dismissal provided for in this rule,
except improper venue, may be pleaded as an affirmative defense, and a preliminary hearing may be had
thereon as if a motion to dismiss had been filed.
Without any further evidence as earlier discussed, the trial court should have denied the affirmative defense of lack of
jurisdiction because it did not appear to be indubitable. Section 3 of Rule 16 of the Rules of Court provides:
Sec. 3. Hearing and order. — After hearing the court may deny or grant the motion or allow amendment of
pleading, or may defer the hearing and determination of the motion until the trial if the ground alleged therein
does not appear to be indubitable.
WHEREFORE, the instant petition is GRANTED and the challenged decision of 31 May 1995 of respondent Court of
Appeals in CA-G.R. CV No. 39896, as well as the Order of 24 July 1992 of the Regional Trial Court of Quezon City,
Branch 102, in Civil Case No. Q-91-9620, is REVERSED and SET ASIDE.
The Regional Trial Court of Quezon City, Branch 102, is hereby DIRECTED to proceed with the pre-trial, if it has not been
terminated, and with the trial on the merits of the case and then to render judgment thereon, taking into account the
foregoing observations on the issue of jurisdiction.
SO ORDERED.
Narvasa, C.J., Melo, Francisco and Panganiban, JJ., concur.
Footnotes
1 The full title is Warsaw Convention for Unification of Certain Rules Relating to International Carriage
by Air. This was signed at Warsaw, Poland on 12 October 1929. See Philippine Treaty Series, Vol. II, 577-
590 [1968].
2 Rollo, 38-52. Per Lantin, J., J., with Austria-Martinez, A. and Salas, B., JJ., concurring.
3 Original Record (OR), Civil Case No. Q-91-9620, 259-264. Per Judge Perlita J. Tria Tirona.
4 Rollo, 41-45.
5 OR, 1-7.
6 For lost luggage and its contents; expenses for hotel, board and lodging, and communication; moral
damages; exemplary damages; attorney's fees; and expenses of litigation.
7 OR, 22 et seq.
8 Id., 27-28.
9 Id., 48-50.
10 OR, 73-82.
11 Id., 100-106.
12 Id., 118.
13 Id., 120-130.
14 Id., 173.
15 Id., 176-186.
16 Id., 197-202.
17 Id., 213-217.
18 Id., 218-225.
19 Id., 259-264.
20 Rollo, 41.
21 It provides:
Art. 18. (1) The carrier shall be liable for damage sustained in the event of the destruction or loss of, or
of damage to, any checked baggage or any goods, if the recurrence which caused the damage so
sustained took place during the transportation by air.
22 Law of the place of wrong.
23 210 SCRA 256, 274 [1992].
24 Rollo, 24-25.
25 Supra, note 23.
26 Santos III v. Northwest Orient Airlines, supra., note 23 at pages 260-261.
27 OR, 34.
28 OR, 100.
29 Id., 73.
30 OR, 137.
G.R. No. 60501. March 5, 1993.
CATHAY PACIFIC AIRWAYS, LTD, petitioner, vs. COURT OF APPEALS and TOMAS L. ALCANTARA, respondents.
Siguion-Reyna, Montecillo & Ongsiako and Tomacruz, Manguiat & Associates for petitioner.
Tanjuatco, Oreta, Tanjuatco, Berenger & Corpus for private respondent.
SYLLABUS
1. CIVIL LAW; CONTRACT OF CARRIAGE; BREACH THEREOF; PETITIONER BREACHED ITS CONTRACT OF CARRIAGE
WITH PRIVATE RESPONDENT WHEN IT FAILED TO DELIVER HIS LUGGAGE AT THE DESIGNATED PLACE AND TIME. —
Petitioner breached its contract of carriage with private respondent when it failed to deliver his luggage at the
designated place and time, it being the obligation of a common carrier to carry its passengers and their luggage safely
to their destination, which includes the duty not to delay their transportation, and the evidence shows that petitioner
acted fraudulently or in bad faith.
2. DAMAGES; MORAL AND EXEMPLARY DAMAGES PREDICATED UPON A BREACH OF CONTRACT OF CARRIAGE;
RECOVERABLE ONLY IN INSTANCES WHERE THE MISHAP RESULTS IN DEATH OF A PASSENGER, OR WHERE THE
CARRIER IS GUILTY OF FRAUD OR BAD FAITH; THE CONDUCT OF PETITIONER'S REPRESENTATIVE TOWARDS
RESPONDENT JUSTIFIES THE GRANT OF MORAL AND EXEMPLARY DAMAGES IN CASE AT BAR. — Moral damages
predicated upon a breach of contract of carriage may only be recoverable in instances where the mishap results in
death of a passenger, or where the carrier is guilty of fraud or bad faith. The language and conduct of petitioner's
representative towards respondent Alcantara was discourteous or arbitrary to justify the grant of moral damages. The
CATHAY representative was not only indifferent and impatient; he was also rude and insulting. He simply advised
Alcantara to buy anything he wanted. But even that was not sincere because the representative knew that the
passenger was limited only to $20.00 which, certainly, was not enough to purchase comfortable clothings appropriate
for an executive conference. Considering that Alcantara was not only a revenue passenger but even paid for a first class
airline accommodation and accompanied at the time by the Commercial Attache of the Philippine Embassy who was
assisting him in his problem, petitioner or its agents should have been more courteous and accommodating to private
respondent, instead of giving him a curt reply, "What can we do, the baggage is missing. I cannot do anything . . .
Anyhow, you can buy anything you need, charged to Cathay Pacific." 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. Conversely, if the defendant airline
is shown to have acted fraudulently or in bad faith, the award of moral and exemplary damages is proper.
3. TEMPERATE DAMAGES; RECOVERABLE ONLY UPON PROOF THAT THE CLAIMANT SUSTAINED SOME PECUNIARY
LOSS. — However, respondent Alcantara is not entitled to temperate damages, contrary to the ruling of the court a
quo, in the absence of any showing that he sustained some pecuniary loss. It cannot be gainsaid that respondent's
luggage was ultimately delivered to him without serious or appreciable damage.
4. WARSAW CONVENTION; DOES NOT OPERATE AS AN EXCLUSIVE ENUMERATION OF THE INSTANCES FOR
DECLARING A CARRIER LIABLE FOR BREACH OF CONTRACT OF CARRIAGE OR AS AN ABSOLUTE LIMIT OF THE EXTENT
OF THAT LIABILITY; DOES NOT PRECLUDE THE OPERATION OF THE CIVIL CODE AND OTHER PERTINENT LAWS. — As
We have repeatedly held, although the Warsaw Convention has the force and effect of law in this country, being a
treaty commitment assumed by the Philippine government, said convention does not operate as an exclusive
enumeration of the instances for declaring a carrier liable for breach of contract of carriage or as an absolute limit of
the extent of that liability. The Warsaw Convention declares the carrier liable for damages in the enumerated cases and
under certain limitations. However, it must not be construed to preclude the operation of the Civil Code and other
pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating the rights of
its passengers under the contract of carriage, especially if wilfull misconduct on the part of the carrier's employees is
found or established, which is clearly the case before Us.
DECISION
BELLOSILLO, J p:
This is a petition for review on certiorari of the decision of the Court of Appeals which affirmed with modification that
of the trial court by increasing the award of damages in favor of private respondent Tomas L. Alcantara.
The facts are undisputed: On 19 October 1975, respondent Tomas L. Alcantara was a first class passenger of petitioner
Cathay Pacific Airways, Ltd. (CATHAY for brevity) on its Flight No. CX-900 from Manila to Hongkong and onward from
Hongkong to Jakarta on Flight No. CX-711. The purpose of his trip was to attend the following day, 20 October 1975, a
conference with the Director General of Trade of Indonesia, Alcantara being the Executive Vice-President and General
Manager of Iligan Cement Corporation, Chairman of the Export Committee of the Philippine Cement Corporation, and
representative of the Cement Industry Authority and the Philippine Cement Corporation. He checked in his luggage
which contained not only his clothing and articles for personal use but also papers and documents he needed for the
conference.
Upon his arrival in Jakarta, respondent discovered that his luggage was missing. When he inquired about his luggage
from CATHAY's representative in Jakarta, private respondent was told that his luggage was left behind in Hongkong.
For this, respondent Alcantara was offered $20.00 as "inconvenience money" to buy his immediate personal needs until
the luggage could be delivered to him.
His luggage finally reached Jakarta more than twenty four (24) hours after his arrival. However, it was not delivered to
him at his hotel but was required by petitioner to be picked up by an official of the Philippine Embassy.
On 1 March 1976, respondent filed his complaint against petitioner with the Court of First Instance (now Regional Trial
Court) of Lanao del Norte praying for temperate, moral and exemplary damages, plus attorney's fees.
On 18 April 1976, the trial court rendered its decision ordering CATHAY to pay Plaintiff P20,000.00 for moral damages,
P5,000.00 for temperate damages, P10,000.00 for exemplary damages, and P25,000.00 for attorney's fees, and the
costs. 1
Both parties appealed to the Court of Appeals. CATHAY assailed the conclusion of the trial court that it was
accountable for breach of contract and questioned the non-application by the court of the Warsaw Convention as well
as the excessive damages awarded on the basis of its finding that respondent Alcantara was rudely treated by
petitioner's employees during the time that his luggage could not be found. For his part, respondent Alcantara
assigned as error the failure of the trial court to grant the full amount of damages sought in his complaint.
On 11 November 1981, respondent Court of Appeals rendered its decision affirming the findings of fact of the trial
court but modifying its award by increasing the moral damages to P80,000.00, exemplary damages to P20,000.00 and
temperate or moderate damages to P10,000.00. The award of P25,000.00 for attorney's fees was maintained.
The same grounds raised by petitioner in the Court of Appeals are reiterated before Us. CATHAY contends that: (1) the
Court of Appeals erred in holding petitioner liable to respondent Alcantara for moral, exemplary and temperate
damages as well as attorney's fees; and, (2) the Court of Appeals erred in failing to apply the Warsaw Convention on
the liability of a carrier to its passengers.
On its first assigned error, CATHAY argues that although it failed to transport respondent Alcantara's luggage on time,
the one-day delay was not made in bad faith so as to justify moral, exemplary and temperate damages. It submits that
the conclusion of respondent appellate court that private respondent was treated rudely and arrogantly when he
sought assistance from CATHAY's employees has no factual basis, hence, the award of moral damages has no leg to
stand on.
Petitioner's first assigned error involves findings of fact which are not reviewable by this Court. 2 At any rate, it is not
impressed with merit. Petitioner breached its contract of carriage with private respondent when it failed to deliver his
luggage at the designated place and time, it being the obligation of a common carrier to carry its passengers and their
luggage safely to their destination, which includes the duty not to delay their transportation, 3 and the evidence shows
that petitioner acted fraudulently or in bad faith.
Moral damages predicated upon a breach of contract of carriage may only be recoverable in instances where the
mishap results in death of a passenger, 4 or where the carrier is guilty of fraud or bad faith. 5
In the case at bar, both the trial court and the appellate court found that CATHAY was grossly negligent and reckless
when it failed to deliver the luggage of petitioner at the appointed place and time. We agree. CATHAY alleges that as a
result of mechanical trouble, all pieces of luggage on board the first aircraft bound for Jakarta were unloaded and
transferred to the second aircraft which departed an hour and a half later. Yet, as the Court of Appeals noted, petitioner
was not even aware that it left behind private respondent's luggage until its attention was called by the Hongkong
Customs authorities. More, bad faith or otherwise improper conduct may be attributed to the employees of petitioner.
While the mere failure of CATHAY to deliver respondent's luggage at the agreed place and time did not ipso facto
amount to willful misconduct since the luggage was eventually delivered to private respondent, albeit belatedly, 6 We
are persuaded that the employees of CATHAY acted in bad faith. We refer to the deposition of Romulo Palma,
Commercial Attache of the Philippine Embassy at Jakarta, who was with respondent Alcantara when the latter sought
assistance from the employees of CATHAY. This deposition was the basis of the findings of the lower courts when both
awarded moral damages to private respondent. Hereunder is part of Palma's testimony —
"Q: What did Mr. Alcantara say, if any?
A. Mr. Alcantara was of course . . . . I could understand his position. He was furious for the experience because probably
he was thinking he was going to meet the Director-General the following day and, well, he was with no change of
proper clothes and so, I would say, he was not happy about the situation.
Q: What did Mr. Alcantara say?
A: He was trying to press the fellow to make the report and if possible make the delivery of his baggage as soon as
possible.
Q: And what did the agent or duty officer say, if any?
A: The duty officer, of course, answered back saying 'What can we do, the baggage is missing. I cannot do anything.'
something like it. 'Anyhow you can buy anything you need, charged to Cathay Pacific.'
Q: What was the demeanor or comportment of the duty officer of Cathay Pacific when he said to Mr. Alcantara 'You can
buy anything chargeable to Cathay Pacific'?
A: If I had to look at it objectively, the duty officer would like to dismiss the affair as soon as possible by saying
indifferently 'Don't worry. It can be found.'" 7
Indeed, the aforequoted testimony shows that the language and conduct of petitioner's representative towards
respondent Alcantara was discourteous or arbitrary to justify the grant of moral damages. The CATHAY representative
was not only indifferent and impatient; he was also rude and insulting. He simply advised Alcantara to buy anything he
wanted. But even that was not sincere because the representative knew that the passenger was limited only to $20.00
which, certainly, was not enough to purchase comfortable clothings appropriate for an executive conference.
Considering that Alcantara was not only a revenue passenger but even paid for a first class airline accommodation and
accompanied at the time by the Commercial Attache of the Philippine Embassy who was assisting him in his problem,
petitioner or its agents should have been more courteous and accommodating to private respondent, instead of giving
him a curt reply, "What can we do, the baggage is missing. I cannot do anything . . . Anyhow, you can buy anything you
need, charged to Cathay Pacific." CATHAY's employees should have been more solicitous to a passenger in distress and
assuaged his anxieties and apprehensions. To compound matters, CATHAY refused to have the luggage of Alcantara
delivered to him at his hotel; instead, he was required to pick it up himself and an official of the Philippine Embassy.
Under the circumstances, it is evident that petitioner was remiss in its duty to provide proper and adequate assistance
to a paying passenger, more so one with first class accommodation.
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. 8 Conversely, if the defendant airline is shown to have acted fraudulently or in bad faith, the award
of moral and exemplary damages is proper.
However, respondent Alcantara is not entitled to temperate damages, contrary to the ruling of the court a quo, in the
absence of any showing that he sustained some pecuniary loss. 9 It cannot be gainsaid that respondent's luggage was
ultimately delivered to him without serious or appreciable damage.
As regards its second assigned error, petitioner airline contends that the extent of its liability for breach of contract
should be limited absolutely to that set forth in the Warsaw Convention. We do not agree. As We have repeatedly held,
although the Warsaw Convention has the force and effect of law in this country, being a treaty commitment assumed
by the Philippine government, said convention does not operate as an exclusive enumeration of the instances for
declaring a carrier liable for breach of contract of carriage or as an absolute limit of the extent of that liability. 10 The
Warsaw Convention declares the carrier liable for damages in the enumerated cases and under certain limitations. 11
However, it must not be construed to preclude the operation of the Civil Code and other pertinent laws. It does not
regulate, much less exempt, the carrier from liability for damages for violating the rights of its passengers under the
contract of carriage, 12 especially if wilfull misconduct on the part of the carrier's employees is found or established,
which is clearly the case before Us. For, the Warsaw Convention itself provides in Art. 25 that —
"(1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his
liability, if the damage is caused by his wilfull misconduct or by such default on his part as, in accordance with the law
of the court to which the case is submitted, is considered to be equivalent to wilfull misconduct."
(2) Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused under the
same circumstances by any agent of the carrier acting within the scope of his employment."
When petitioner airline misplaced respondent's luggage and failed to deliver it to its passenger at the appointed place
and time, some special species of injury must have been caused to him. For sure, the latter underwent profound
distress and anxiety, and the fear of losing the opportunity to fulfill the purpose of his trip. In fact, for want of
appropriate clothings for the occasion brought about by the delay of the arrival of his luggage, to his embarrassment
and consternation respondent Alcantara had to seek postponement of his pre-arranged conference with the Director
General of Trade of the host country.
In one case, 13 this Court observed that a traveller would naturally suffer mental anguish, anxiety and shock when he
finds that his luggage did not travel with him and he finds himself in a foreign land without any article of clothing other
than what he has on.
Thus, respondent is entitled to moral and exemplary damages. We however find the award by the Court of Appeals of
P80,000.00 for moral damages excessive, hence, We reduce the amount to P30,000.00. The exemplary damages of
P20,000.00 being reasonable is maintained, as well as the attorney's fees of P25,000.00 considering that petitioner's act
or omission has compelled Alcantara to litigate with third persons or to incur expenses to protect his interest. 14
WHEREFORE, the assailed decision of respondent Court of Appeals is AFFIRMED with the exception of the award of
temperate damages of P10,000.00 which is deleted, while the award of moral damages of P80,000.00 is reduced to
P30,000.00. The award of P20,000.00 for exemplary damages is maintained as reasonable together with the attorney's
fees of P25,000.00. The moral and exemplary damages shall earn interest at the legal rate from 1 March 1976 when the
complaint was filed until full payment.
SO ORDERED.
Cruz, Griño-Aquino and Quiason, JJ ., concur.
Footnotes
1. Record on Appeal, pp. 12-23; Rollo, p. 30.
2. Philippine Air Lines v. Court of Appeals, G.R. No. 92501, 6 March 1992, 207 SCRA 100.
3. Tan Liao v. American President Lines, 98 Phil 203.
4. Arts. 1764 and 2206, New Civil Code.
5. Art. 2220, New Civil Code; China Airlines, Ltd. v. IAC, G.R. No. 73835, 17 January 1989, 169 SCRA 226.
6. Alitalia v. IAC, G.R. No. 71929, 4 December 1990, 192 SCRA 9.
7. Records, pp. 12-13.
8. China Airlines Limited v. Court of Appeals, G.R. No. 94590, 29 July 1992.
9. Art. 2224, New Civil Code.
10. See Note 6; Northwest Airlines, Inc. v. Cuenca, No. L-22425, 31 August 1965, 14 SCRA 1063.
11. Art. 22. 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.
"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 the
sum is greater than the actual value to the consignor at delivery.
"2.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."
12. See Note 6.
13. Pan American World Airways, Inc. v. IAC, G.R. No. 68988, 21 June 1990, 186 SCRA 687.
14. Art. 2208, par. (2), New Civil Code.
 G.R. No. 119995 November 18, 1997
CARLOS SINGSON, Petitioner, v. COURT OF APPEALS and CATHAY PACIFIC AIRWAY, INC., Respondents.
BELLOSILLO, J.:
A contract of air carriage is a peculiar one. Imbued with public interest, common carriers are required by law to carry
passengers safely as far a human care and foresight can provide, using the utmost diligence of a very cautious person,
with due regard for all the circumstances. 1 A contract to transport passengers is quite different in kind and degree
from any other contractual relation. And this because its business is mainly with the traveling public. In invites people
to avail of the comforts and advantages it offers. The contract of carriage, therefore, generates a relation attended with
a public duty. 2 Failure of the carrier to observe this high degree of care and extraordinary diligence renders it liable for
any damage that may be sustained by its passengers.
The instant case is an illustration of the exacting standard demanded by the law of common carriers: On 24 May 1988
CARLOS SINGSON and his cousin Crescentino Tiongson bought from Cathay Pacific Airways, Ltd. (CATHAY), at its
Metro Manila ticket outlet two (2) open-dated, identically routed, round trip plane tickets for the purpose of spending
their vacation in the United States. Each ticket consisted of six (6) flight coupons corresponding to this itinerary: flight
coupon no. 1 - Manila to Hongkong; flight coupon no. 2 - Hongkong to San Francisco; flight coupon no. 3 - San
Francisco to Los Angeles; flight coupon no. 4 - Los Angeles back to San Francisco; flight coupon no. 5 - San Francisco to
Hongkong; and, finally, flight coupon no. 6 - Hongkong to Manila. The procedure was that at the start of each leg of
the trip a flight coupon corresponding to the particular sector of the travel would be removed from the ticket booklet
so that at the end of the trip no more coupon would be left in the ticket booklet.
On 6 June 1988 CARLOS SINGSON and Crescentino Tiongson left Manila on board CATHAY's Flight No. 902. They
arrived safely in Los Angeles and after staying there for about three (3) weeks they decided to return to the Philippines.
On 30 June 1988 they arranged for their return flight at CATHAY's Los Angeles Office and chose 1 July 1988, a Friday,
for their departure. While Tiongson easily got a booking for the flight, SINGSON was not as lucky. It was discovered
that his ticket booklet did not have flight coupon no. 5 corresponding to the San Francisco-Hongkong leg of the trip.
Instead, what was in his ticket was flight coupon no. 3 - San Francisco to Los Angeles - which was supposed to have
been used and removed from the ticket booklet. It was not until 6 July 1988 that CATHAY was finally able to arrange for
his return flight to Manila.
On 26 August 1988 SINGSON commenced an action for damages against CATHAY before the Regional Trial Court of
Vigan, Ilocos Sur. 3 He claimed that he insisted on CATHAY's confirmation of his return flight reservation because of
very important and urgent business engagements in the Philippines. But CATHAY allegedly shrugged off his
protestations and arrogantly directed him to go to San Francisco himself and do some investigations on the matter or
purchase a new ticket subject to refund if it turned out that the missing coupon was still unused or subsisting. He
remonstrated that it was the airline's agent/representative who must have committed the mistake of tearing off the
wrong flight coupon; that he did not have enough money to buy new tickets; and, CATHAY could conclude the
investigation in a matter of minutes because of its facilities. CATHAY, allegedly in scornful insolence, simply dismissed
him like an impertinent "brown pest." Thus he and his cousin Tiongson, who deferred his own flight to accompany him,
were forced to leave for San Francisco on the night of 1 July 1988 to verify the missing ticket.
CATHAY denied these allegations and averred that since petitioner was holding an "open-dated" ticket, which meant
that he was not booked on a specific flight on a particular date, there was no contract of carriage yet existing such that
CATHAY's refusal to immediately book him could not be construed as breach of contract of carriage. Moreover, the
coupon had been missing for almost a month hence CATHAY must first verify its status, i.e., whether the ticket was still
valid and outstanding, before it could issue a replacement ticket to petitioner. For that purpose, it sent a request by
telex on the same day, 1 July 1988, to its Hongkong Headquarters where such information could be
retrieved. 4 However, due to the time difference between Los Angeles and Hongkong, no response from the Hongkong
office was immediately received. Besides, since 2 and 3 July 1988 were a Saturday and a Sunday, respectively, and 4 July
1988 was an official holiday being U.S. Independence Day, the telex response of CATHAY Hongkong was not read until
5 July 1988. Lastly, CATHAY denied having required SINGSON to make a trip back to San Francisco; on the other hand,
it was the latter who informed CATHAY that he was making a side trip to San Francisco. Hence, CATHAY advised him
that the response of Hongkong would be copied in San Francisco so that he could conveniently verify thereat should
he wish to.
The trial court rendered a decision in favor of petitioner herein holding that CATHAY was guilty of gross negligence
amounting to malice and bad faith for which it was adjudged to pay petitioner P20,000.00 for actual damages with
interest at the legal rate of twelve percent (12%) per annum from 26 August 1988 when the complaint was filed until
fully paid, P500,000.00 for moral damages, P400,000.00 for exemplary damages, P100,000.00 for attorney's fees, and, to
pay the costs.
On appeal by CATHAY, the Court of Appeals reversed the trial court's finding that there was gross negligence
amounting to bad faith or fraud and, accordingly, modified its judgment by deleting the awards for moral and
exemplary damages, and the attorney's fees as well. Reproduced hereunder are the pertinent portions of the decision
of the appellate court 5 -
There is enough merit in this appeal to strike down the trial court's award of moral and exemplary damages and
attorney's fees . . . . In this material respect, the appellant correctly underscores the fact that the appellee held an open
dated ticket for his return flight from San Francisco to manila via Hongkong and that, as a consequence, the latter was
not actually confirmed on the July 1, 1988 flight or, for that matter, any of the appellant's flight . . . . . The appellant
certainly committed no breach of contract of carriage when it refused the appellee the booking he requested on the
said July 1, 1988 flight. As a "chance passenger," the latter had no automatic right to fly on that flight and on that date.
Even assuming arguendo that a breach of contract of carriage may be attributed the appellant, the appellee's travails
were directly traceable to the mistake in detaching the San Francisco-Hongkong flight coupon of his plane ticket which
led to the appellant's refusal to honor his plane ticket. While that may constitute negligence on the part of the air
carrier, the same cannot serve as basis for an award of moral damages. The rule is that moral damages are recoverable
in a damage suit predicated upon a breach of contract of carriage only where (a) the mishap results in the death of a
passenger and (b) it is proved that the carrier was guilty of fraud and bad faith even if death does not result . . . . In
disallowing the trial court's award of moral damages, the Court takes appropriate note of the necessity for the
appellant's verification of the status of the missing flight coupon as well as the justifiable delay thereto attendant . . . .
Contrary to the appellee's allegation that he was peremptorily refused confirmation of his flight, and arrogantly told to
verify the missing flight coupon on his own, the record shows that the appellant adopted such measures as were
reasonably required under the circumstances. Even the testimonies offered by the appellee and his witnesses
collectively show no trace of fraud or bad faith as would justify the trial court's award of moral damages.
The basis for the award of moral damages discounted, there exists little or no reason to allow the exemplary damages
and attorney's fees adjudicated in favor of the appellee.
Petitioner's subsequent motion for reconsideration having been denied for lack of merit and for being pro forma he
came to use for review. He claims that the trial court found CATHAY guilty of gross negligence amounting to malice
and bad faith in: (a) detaching the wrong coupon; (b) using that error to deny confirmation of his return flight; and, (c)
directing petitioner to prematurely return to San Francisco to verify his missing coupon. He also underscores the
scornful and demeaning posture of CATHAY's employees toward him. He argues that since findings of fact of the trial
court are entitled to the highest degree of respect from the appellate courts, especially when they were supported by
evidence, it was erroneous for the Court of Appeals to strike out the award of moral and exemplary damages as well as
attorney's fees allegedly for lack of basis.
In its Comment, CATHAY firmly maintains that it did not breach its contract of carriage with petitioner. It argues that it
is only when passenger is confirmed on a particular flight and on a particular date specifically stated in his ticket that its
refusal to board the passenger will result in a breach of contract. And even assuming that there was breach of contract,
there was no fraud or bad faith on the part of CATHAY as to justify the award of moral and exemplary damages plus
attorney's fees in favor of petitioner.
There are two (2) main issues that confront the Court: first, whether a breach of contract was committed by CATHAY
when it failed to confirm the booking of petitioner for its 1 July 1988 flight; and, second, whether the carrier was liable
not only for actual damages but also for moral and exemplary damages, and attorney's fees for failing to book
petitioner on his return flight to the Philippines.
We find merit in the petition. CATHAY undoubtedly committed a breach of contract when it refused to confirm
petitioner's flight reservation back to the Philippines on account of his missing flight coupon. Its contention that there
was no contract of carriage that was breached because petitioner's ticket was open-dated is untenable. To begin with,
the round trip ticket issued by the carrier to the passenger was in itself a complete written contract by and between the
carrier and the passenger. It has all the elements of a complete written contract, to wit: (a) the consent of the
contracting parties manifested by the fact that the passenger agreed to be transported by the carrier to and from Los
Angeles via San Francisco and Hongkong back to the Philippines, and the carrier's acceptance to bring him to his
destination and then back home; (b) cause or consideration, which was the fare paid by the passenger as stated in his
ticket; and, (c) object, which was the transportation of the passenger from the place of departure to the place of
destination and back, which are also stated in his ticket. 6 In fact, the contract of carriage in the instant case was already
partially executed as the carrier complied with its obligation to transport the passenger to his destination, i.e., Los
Angeles. Only the performance of the other half of the contract - which was to transport the passenger back to the
Philippines - was left to be done. Moreover, Timothy Remedios, CATHAY's reservation and ticketing agent,
unequivocally testified that petitioner indeed had reservations booked for travel -
Q: Were you able to grant what they wanted, if not, please state why?
A: I was able to obtain a record of Mr. Singson's computer profile from my flight reservations computer. I verified that
Mr. Singson did indeed have reservations booked for travel: Los Angeles to San Francisco, San Francisco to Hongkong to
Manila. I then proceeded to revalidate their tickets but was surprised to observe that Mr. Singson's ticket did not
contain a flight coupon for San Francisco to Hongkong. His ticket did, however, contain a flight coupon for San
Francisco to Los Angeles which was supposed to have been utilized already, that is, supposed to have been removed by
U.S. Air when he checked in San Francisco for his flight from San Francisco to Los Angeles 7 (emphasis supplied).
Clearly therefore petitioner was not a mere "chance passenger with no superior right to be boarded on a specific
flight," as erroneously claimed by CATHAY and sustained by the appellate court.
Interestingly, it appears that CATHAY was responsible for the loss of the ticket. One of two (2) things may be surmised
from the circumstances of this case: first, US Air (CATHAY's agent) had mistakenly detached the San Francisco-
Hongkong flight coupon thinking that it was the San Francisco-Los Angeles portion; or, second, petitioner's booklet of
tickets did not from issuance include a San Francisco-Hongkong flight coupon. In either case, the loss of the coupon
was attributed to the negligence of CATHAY's agents and was the proximate cause of the non-confirmation of
petitioner's return flight on 1 July 1988. It virtually prevented petitioner from demanding the fulfillment of the carrier's
obligations under the contract. Had CATHAY's agents been diligent in double checking the coupons they were
supposed to detach from the passengers' tickets, there would have been no reason for CATHAY not to confirm
petitioner's booking as exemplified in the case of his cousin and flight companion Tiongson whose ticket booklet was
found to be in order. Hence, to hold that no contractual breach was committed by CATHAY and totally absolve it from
any liability would in effect put a premium on the negligence of its agent, contrary to the policy of the law requiring
common carriers to exercise extraordinary diligence.
With regard to the second issue, we are of the firm view that the appellate court seriously erred in disallowing moral
and exemplary damages. Although the rule is that moral damages predicated upon a breach of contract of carriage
may only be recoverable in instances where the mishap results in the death of a passenger, 8 or where the carrier is
guilty of fraud or bad faith, 9 there are situations where the negligence of the carrier is so gross and reckless as to
virtually amount to bad faith, in which case, the passenger likewise becomes entitled to recover moral damages. 10
In the instant case, the following circumstances attended the breach of contract by CATHAY, to wit: First, as heretofore
discussed, the ticket coupon corresponding to the San Francisco-Hongkong flight was missing either due to
the negligence of CATHAY's agents in improperly detaching petitioner's flight coupons or failing to issue the flight
coupon for San Francisco-Hongkong in the ticket booklet; second, petitioner and his cousin presented their respective
ticket booklets bearing identical itineraries to prove that there had been a mistake in removing the coupons of
petitioner. Furthermore, CATHAY's Timothy Remedios testified that he was able to ascertain from his flight reservations
computer that petitioner indeed had reservations booked for travel on their return flight, but CATHAY apparently
ignored the clear evidential import of these facts and peremptorily refused to confirm petitioner's flight - while ready to
confirm his traveling companion's identically routed plane ticket - on the lame and flimsy excuse that the existence and
validity of the missing ticket must first be verified; third, petitioner was directed by CATHAY to go to its San Francisco
office and make the necessary verification concerning the lost coupon himself. This, notwithstanding the fact that
CATHAY was responsible for the loss of the ticket and had all the necessary equipment, e.g., computers, fax and telex
machines and telephones which could facilitate the verification right there at its Los Angeles Office.
CATHAY's allegation that it never required petitioner to go to San Francisco is unpersuasive. Petitioner categorically
testified that a lady employee of CATHAY in Los Angeles "insisted that we take the matter (up) with their office in San
Francisco." 11 In fact, it even appeared from the evidence that it was the San Francisco office which arranged for his
return flight to the Philippines and not the Los Angeles office. 12 Moreover, due deference must be accorded the trial
court's finding that petitioner was indeed sent by CATHAY to its San Francisco office to verify. For good and sound
reasons, this Court has consistently affirmed that review of the findings of fact of the trial court is not a function that
appellate courts ordinarily undertake, such findings being as a rule binding and conclusive. 13 It is true that certain
exceptions have become familiar. However, nothing in the records warrants a review based on any of these well-
recognized exceptions; and, fourth, private respondent endeavored to show that it undertook the verification of the lost
coupon by sending a telex to its Hongkong Office. It likewise tried to justify the five (5) days delay in completing the
verification process, claiming that it was due to the time difference between Hongkong and Los Angeles and the
coinciding non-working days in the United States. The following dialogue between Consul Cortez
and Cathay's reservation and ticketing agent Timothy Remedios can be enlightening -
Q: What official action did you in turn take?
A: While Mr. Singson was still in my office I sent a telex out at approximately 10:00 a.m. on 30 June 1988 to Hongkong
Accounting Office and copied San Francisco ticket office since Mr. Singson advised he might not be able to return to
my office but would be going to San Francisco. 10:00 a.m. 30 June 1988 in Los Angeles is however 2:00 a.m. on 1 July
1988 in Hongkong and since office hours start at 9:00 a.m. in Hongkong, no reply was instantly sent back to me. The
response was sent out from Hongkong on 2 July 1988 at approximately 12:00 noon (Hongkong time) and was received
immediately by the Los Angeles telex machine. However, 12:00 noon 2 July 1988 Hongkong time was 8:00 p.m. 1 July
1988 in Los Angeles where office hours close at 5: pm.. The Los Angeles office was closed on 2 and 3 July 1988 being
Saturday and Sunday and also closed 4 July 1988 for a public holiday (Independence day) so the reply from Hongkong
was not read until 5 July 1988, 8:30 Los Angeles time. 14
But far from helping private respondent's cause, the foregoing testimony only betrayed another act of negligence
committed by its employees in Hongkong. It will be observed that CATHAY's Hongkong Office received the telex from
Los Angeles on 1 July 1988 at approximately 2:00 a.m. (Hongkong time) and sent out their response only on 2 July 1988
at 12:00 noon. In spite of the fact that they had access to all records and facilities that would enable them to verify in a
matter of minutes, it strangely took them more than twenty-four (24) hours to complete the verification process and to
sent their reply to Los Angeles. The inevitable conclusion is that CATHAY's Hongkong personnel never acted promptly
and timely on the request for verification.
Besides, to be stranded for five (5) days in a foreign land because of an air carrier's negligence is too exasperating an
experience for a plane passenger. For sure, petitioner underwent profound distress and anxiety, not to mention the
worries brought by the thought that he did not have enough money to sustain himself, and the embarrassment of
having been forced to seek the generosity of relatives and friends.
Anent the accusation that private respondent's personnel were rude and arrogant, petitioner failed to adduce sufficient
evidence to substantiate his claim. Nonetheless, such fact will not in any manner affect the disposition of this case.
Private respondent's mistake in removing the wrong coupon was compounded by several other independent acts of
negligence above-enumerated. Taken together, they indubitably signify more than ordinary inadvertence or inattention
and thus constitute a radical departure from the extraordinary standard of care required of common carriers. Put
differently, these circumstances reflect the carrier's utter lack of care and sensitivity to the needs of its passengers,
clearly constitutive of gross negligence, recklessness and wanton disregard of the rights of the latter, acts evidently
indistinguishable or no different from fraud, malice and bad faith. As the rule now stands, where in breaching the
contract of carriage the defendant airline is shown to have acted fraudulently, with malice or in bad faith, the award of
moral and exemplary damages, in addition to actual damages, is proper. 15
However, the P500,000.00 moral damages and P400,000.00 exemplary damages awarded by the trial court have to be
reduced. The well-entrenched principle is that the grant of moral damages depends upon the discretion of the court
based on the circumstances of each case. 16 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. 17 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 partly had undergone by reason of the
defendant's culpable action. 18 There is not 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.
In the instant case, the injury suffered by petitioner is not so serious or extensive as to warrant an award amounting to
P900,000.00. The assessment of P200,000.00 as moral damages and P50,000.00 as exemplary damages in his favor is, in
our view, reasonable and realistic.
On the issue of actual damages, we agree with the Court of Appeals that the amount of P20,000.00 granted by the trial
court to petitioner should not be disturbed. Petitioner categorically testified that he incurred the amount during the
period of his delay in departing from the United States -
Q: Will you kindly tell the Court what expenses if any did you incur for these . . . days from July 1 until you were able to
leave on July 6, 1988?
A: Well, it is true we stayed in the house of my nephew but still we had to spend for our food and I left him some
around five hundred dollars for our stay for around five days.
Q: How about your meals?
A: For our meals, we have to eat outside.
Q: Will you tell, more or less, how much you spent for your meals?
xxx xxx xxx
A: For every meal we spend around thirty dollars each.
Q: And this is for how many days?
A: From July 1, up to the 6th in the morning, sir.
Q: So more or less how many in pesos did you spend for this period of waiting from July 1 to 6?
A: Twenty thousand pesos, sir. 19
In the absence of any countervailing evidence from private respondent, and in view of the negligence attributable to it,
the foregoing testimony suffices as basis for actual damages as determined by the court a quo.
As regards attorney's fees, they may be awarded when the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest. It was therefore erroneous for the Court of
Appeals to delete the award made by the trial court; consequently, petitioner should be awarded attorney's fees and
the amount of P25,000.00, instead of P100,000.00 earlier awarded, may be considered rational, fair and reasonable.
WHEREFORE, the petition is GRANTED and the 14 July 1994 Decision of the Court of Appeals is REVERSED. Private
respondent is ordered to pay petitioner P20,000.00 for actual damages as fixed by the trial court, plus P200,000.00 for
moral damages, P50,000.00 for exemplary damages and P25,000.00 for attorney's fees. No costs.
SO ORDERED.
Davide, Jr., Vitug and Kapunan, JJ., concur.

Endnotes:
1 Art. 1755, New Civil Code.
2 Air France v. Carrascoso, No. L-21438, 28 September 1966, 18 SCRA 155, 167-168.
3 The case was raffled to the sala of Acting Presiding Judge Florencio A. Ruiz, Jr., RTC-Br. 20, Vigan, Ilocos Sur.
4 CATHAY centralizes all ticketing information at its Hongkong headquarters.
5 Decision penned by Justice Nathanael P. De Pano, Jr., and concurred in by Justices Cezar D. Francisco and Buenaventura
J. Guerrero, CA-G.R. CV No. 38124.
6 See Filipinas Peralta de Guerrero, et al. v. Madrigal Shipping Co., Inc. 106 Phil. 485 (1959).
7 Deposition of Mr. Timothy Remedios. See Original Records, p. 150.
8 Arts. 1764 and 2206, New Civil Code.
9 Art. 2220, New Civil Code; China Airlines, Ltd. v. Intermediate Appellate Court, G.R. No. 73835, 17 January 1989, 169
SCRA 226.
10 See Fores v. Miranda, 105 Phil. 266 (1959).
11 TSN, 2 February 1989, pp. 11 and 17.
12 Id., p. 22.
13 Alitalia Airway v. Court of Appeals, G.R. No. 77011, 24 July 1990, 187 SCRA 763, 769-770.
14 TSN, 29 September 1989, p. 9.
15 Cathay Pacific Airways, Ltd. v. Court of Appeals, G.R. No. 60501, 5 March 1993, 219 SCRA 520, 527.
16 Prudencio v. Alliance Transport System, Inc., No. L-33836, 16 March 1987, 148 SCRA 440.
17 Siguenza v. Court of Appeals, No. L-44050, 16 July 1985, 137 SCRA 570.
18 R & B Surety and Insurance Co., Inc. v. Intermediate Appellate Court, G.R. No. 64515, 22 June 1984, 129 SCRA 736.
19 TSN, 2 February 1989, pp. 23-24.
G.R. No. 118664 August 7, 1998
JAPAN AIRLINES, petitioner,
vs.
THE COURT OF APPEALS, ENRIQUE AGANA., MARIA ANGELA NINA AGANA, ADALIA B. FRANCISCO and JOSE
MIRANDA, respondents.

ROMERO, J.:
Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL) seeking the reversal of the decision of the
Court of Appeals, 1 which affirmed with modification the award of damages made by the trial court in favor of herein
private respondents Enrique Agana, Maria Angela Nina Agana, Adelia Francisco and Jose Miranda.
On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in San Francisco, California bound for
Manila. Likewise, on the same day private respondents Enrique Agana, Maria Angela Nina Agana and Adelia Francisco
left Los Angeles, California for Manila via JAL flight No. JL 061. As an incentive for travelling on the said airline, both
flights were to make an overnight stopover at Narita, Japan, at the airlines' expense, thereafter proceeding to Manila
the following day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at Hotel Nikko Narita for the night.
The next day, private respondents, on the final leg of their journey, went to the airport to take their flight to Manila.
However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino International Airport (NAIA),
rendering it inaccessible to airline traffic. Hence, private respondents' trip to Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-bound passengers on flight No.
741 due to depart on June 16, 1991 and also paid for the hotel expenses for their unexpected overnight stay. On June
16, 1991, much to the dismay of the private respondents, their long anticipated flight to Manila was again cancelled
due to NAIA's indefinite closure. At this point, JAL informed the private respondents that it would no longer defray their
hotel and accommodation expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991, private respondents were forced to pay for their
accommodations and meal expenses from their personal funds from June 16 to June 21, 1991. Their unexpected stay in
Narita ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741.
Obviously, still reeling from the experience, private respondents, on July 25, 1991, commenced an action for damages
against JAL before the Regional Trial Court of Quezon City, Branch 104. 2 To support their claim, private respondents
asserted that JAL failed to live up to its duty to provide care and comfort to its stranded passengers when it refused to
pay for their hotel and accommodation expenses from June 16 to 21, 1991 at Narita, Japan. In other words, they
insisted that JAL was obligated to shoulder their expenses as long as they were still stranded in Narita. On the other
hand, JAL denied this allegation and averred that airline passengers have no vested right to these amenities in case a
flight is cancelled due to "force majeure."
On June 18, 1992, the trial court rendered its judgment in favor of private respondents holding JAL liable for
damages, viz.:
WHEREFORE, judgment is rendered in favor of plaintiffs ordering the defendant Japan Airlines to pay
the plaintiffs Enrique Agana, Adalia B. Francisco and Maria Angela Nina Agana the sum of One million
Two Hundred forty-six Thousand Nine Hundred Thirty-Six Pesos (P1,246,936.00) and Jose Miranda the
sum of Three Hundred Twenty Thousand Six Hundred sixteen and 31/100 (P320,616.31) as actual,
moral and exemplary damages and pay attorney's fees in the amount of Two Hundred Thousand Pesos
(P200,000.00), and to pay the costs of suit.
Undaunted, JAL appealed the decision before the Court of Appeals, which, however, with the exception of lowering the
damages awarded affirmed the trial court's finding, 3 thus:
Thus, the award of moral damages should be as it is hereby reduced to P200,000.00 for each of the
plaintiffs, the exemplary damages to P300,000.00 and the attorney's fees to P100,000.00 plus the costs.
WHEREFORE, with the foregoing Modification, the judgment appealed from is hereby AFFIRMED in all
other respects.
JAL filed a motion for reconsideration which proved futile and
unavailing. 4
Failing in its bid to reconsider the decision, JAL has now filed this instant petition.
The issue to be resolved is whether JAL, as a common carrier has the obligation to shoulder the hotel and meal
expenses of its stranded passengers until they have reached their final destination, even if the delay were caused by
"force majeure."
To begin with, there is no dispute that the Mt. Pinatubo eruption prevented JAL from proceeding to Manila on
schedule. Likewise, private respondents concede that such event can be considered as "force majeure" since their
delayed arrival in Manila was not imputable to JAL. 5
However, private respondents contend that while JAL cannot be held responsible for the delayed arrival in Manila, it
was nevertheless liable for their living expenses during their unexpected stay in Narita since airlines have the obligation
to ensure the comfort and convenience of its passengers. While we sympathize with the private respondents' plight, we
are unable to accept this contention.
We are not unmindful of the fact that in a plethora of cases we have consistently ruled that a contract to transport
passengers is quite different in kind, and degree from any other contractual relation. It is safe to conclude that it is a
relationship imbued with public interest. Failure on the part of the common carrier to live up to the exacting standards
of care and diligence renders it liable for any damages that may be sustained by its passengers. However, this is not to
say that common carriers are absolutely responsible for all injuries or damages even if the same were caused by a
fortuitous event. To rule otherwise would render the defense of "force majeure," as an exception from any liability,
illusory and ineffective.
Accordingly, there is no question that when a party is unable to fulfill his obligation because of "force majeure," the
general rule is that he cannot be held liable for damages for non-performance.6 Corollarily, when JAL was prevented
from resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever losses or damages in the form
of hotel and meal expenses the stranded passengers incurred, cannot be charged to JAL. Yet it is undeniable that JAL
assumed the hotel expenses of respondents for their unexpected overnight stay on June 15, 1991.
Admittedly, to be stranded for almost a week in a foreign land was an exasperating experience for the private
respondents. To be sure, they underwent distress and anxiety during their unanticipated stay in Narita, but their
predicament was not due to the fault or negligence of JAL but the closure of NAIA to international flights. Indeed, to
hold JAL, in the absence of bad faith or negligence, liable for the amenities of its stranded passengers by reason of a
fortuitous event is too much of a burden to assume.
Furthermore, it has been held that airline passengers must take such risks incident to the mode of travel. 7 In this
regard, adverse weather conditions or extreme climatic changes are some of the perils involved in air travel, the
consequences of which the passenger must assume or expect. After all, common carriers are not the insurer of all
risks. 8
Paradoxically, the Court of Appeals, despite the presence of "force majeure," still ruled against JAL relying in our
decision in PAL v. Court of Appeals, 9 thus:
The position taken by PAL in this case clearly illustrates its failure to grasp the exacting standard
required by law. Undisputably, PAL's diversion of its flight due to inclement weather was a fortuitous
event. Nonetheless, such occurrence did not terminate PAL's contract with its passengers. Being in the
business of air carriage and the sole one to operate in the country, PAL is deemed equipped to deal
with situations as in the case at bar. What we said in one case once again must be stressed, i.e., the
relation of carrier and passenger continues until the latter has been landed at the port of destination
and has left the carrier's premises. Hence, PAL necessarily would still have to exercise extraordinary
diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they
have reached their final destination. On this score, PAL grossly failed considering the then ongoing
battle between government forces and Muslim rebels in Cotabato City and the fact that the private
respondent was a stranger to the place.
The reliance is misplaced. The factual background of the PAL case is different from the instant petition. In that case
there was indeed a fortuitous event resulting in the diversion of the PAL flight. However, the unforeseen diversion was
worsened when "private respondents (passenger) was left at the airport and could not even hitch a ride in a Ford Fiera
loaded with PAL personnel," 10 not to mention the apparent apathy of the PAL station manager as to the predicament
of the stranded passengers. 11 In light of these circumstances, we held that if the fortuitous event was accompanied by
neglect and malfeasance by the carrier's employees, an action for damages against the carrier is permissible.
Unfortunately, for private respondents, none of these conditions are present in the instant petition.
We are not prepared, however, to completely absolve petitioner JAL from any liability. It must be noted that private
respondents bought tickets from the United States with Manila as their final destination. While JAL was no longer
required to defray private respondents' living expenses during their stay in Narita on account of the fortuitous event,
JAL had the duty to make the necessary arrangements to transport private respondents on the first available
connecting flight to Manila. Petitioner JAL reneged on its obligation to look after the comfort and convenience of its
passengers when it declassified private respondents from "transit passengers" to "new passengers" as a result of which
private respondents were obliged to make the necessary arrangements themselves for the next flight to Manila. Private
respondents were placed on the waiting list from June 20 to June 24. To assure themselves of a seat on an available
flight, they were compelled to stay in the airport the whole day of June 22, 1991 and it was only at 8:00 p.m. of the
aforesaid date that they were advised that they could be accommodated in said flight which flew at about 9:00 a.m. the
next day.
We are not oblivious to the fact that the cancellation of JAL flights to Manila from June 15 to June 21, 1991 caused
considerable disruption in passenger booking and reservation. In fact, it would be unreasonable to expect, considering
NAIA's closure, that JAL flight operations would be normal on the days affected. Nevertheless, this does not excuse JAL
from its obligation to make the necessary arrangements to transport private respondents on its first available flight to
Manila. After all, it had a contract to transport private respondents from the United States to Manila as their final
destination.
Consequently, the award of nominal damages is in order. Nominal damages are adjudicated in order that a right of a
plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized and not for the
purpose of indemnifying any loss suffered by him. 12 The court may award nominal damages in every obligation
arising from any source enumerated in article 1157, or in every case where any property right has been invaded. 13
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dated December 22, 1993 is hereby
MODIFIED. The award of actual, moral and exemplary damages is hereby DELETED. Petitioner JAL is ordered to pay
each of the private respondents nominal damages in the sum of P100,000.00 each including attorney' s fees of
P50,000.00 plus costs.
SO ORDERED.
Narvasa, C.J., Kapunan and Purisima, JJ., concur.
Footnotes
1 CA - G.R. CV No. 39089, penned by Associate Justice Oscar Herrera with Justices Consuelo Ynares-Santiago
and Corona Ibay-Somera, concurring. Rollo, pp. 34-55.
2 RTC Records, p. 150.
3 Rollo, p. 55.
4 Rollo, p. 57.
5 Rollo, p. 61.
6 Tolentino, Civil Code of the Philippines, Vol. IV, p. 128.
7 8 AmJur 2d citing Thomas v. American Airlines, US Av 102.
8 Pilapil v. Court of Appeals. 180 SCRA 546 (1988).
9 226 SCRA 423 (1993).
10 Ibid, p. 428.
11 Id., p. 430.
12 Art. 2221, Civil Code.
13 Art. 2222, Civil Code.
G.R. No. 170141 April 22, 2008
JAPAN AIRLINES, petitioner,
vs.
JESUS SIMANGAN, respondent.
DECISION
REYES R.T., J.:
WHEN an airline issues a ticket to a passenger confirmed on a particular flight on a certain date, a contract of carriage
arises, and the passenger has every right to expect that he would fly on that flight and on that date. If he does not, then
the carrier opens itself to a suit for breach of contract of carriage.1
The power to admit or not an alien into the country is a sovereign act which cannot be interfered with even by Japan
Airlines (JAL).2
In this petition for review on certiorari,3 petitioner JAL appeals the: (1) Decision4 dated May 31, 2005 of the Court of
Appeals (CA) ordering it to pay respondent Jesus Simangan moral and exemplary damages; and (2) Resolution5 of the
same court dated September 28, 2005 denying JAL's motion for reconsideration.
The Facts
In 1991, respondent Jesus Simangan decided to donate a kidney to his ailing cousin, Loreto Simangan, in UCLA School
of Medicine in Los Angeles, California, U.S.A. Upon request of UCLA, respondent undertook a series of laboratory tests
at the National Kidney Institute in Quezon City to verify whether his blood and tissue type are compatible with
Loreto's.6 Fortunately, said tests proved that respondent's blood and tissue type were well-matched with Loreto's.7
Respondent needed to go to the United States to complete his preliminary work-up and donation surgery. Hence, to
facilitate respondent's travel to the United States, UCLA wrote a letter to the American Consulate in Manila to arrange
for his visa. In due time, respondent was issued an emergency U.S. visa by the American Embassy in Manila.8
Having obtained an emergency U.S. visa, respondent purchased a round trip plane ticket from petitioner JAL for
US$1,485.00 and was issued the corresponding boarding pass.9 He was scheduled to a particular flight bound for Los
Angeles, California, U.S.A. via Narita, Japan.10
On July 29, 1992, the date of his flight, respondent went to Ninoy Aquino International Airport in the company of
several relatives and friends.11 He was allowed to check-in at JAL's counter.12 His plane ticket, boarding pass, travel
authority and personal articles were subjected to rigid immigration and security routines.13 After passing through said
immigration and security procedures, respondent was allowed by JAL to enter its airplane.14
While inside the airplane, JAL's airline crew suspected respondent of carrying a falsified travel document and imputed
that he would only use the trip to the United States as a pretext to stay and work in Japan.15 The stewardess asked
respondent to show his travel documents. Shortly after, the stewardess along with a Japanese and a Filipino haughtily
ordered him to stand up and leave the plane.16 Respondent protested, explaining that he was issued a U.S. visa. Just to
allow him to board the plane, he pleaded with JAL to closely monitor his movements when the aircraft stops over in
Narita.17 His pleas were ignored. He was then constrained to go out of the plane.18 In a nutshell, respondent was
bumped off the flight.
Respondent went to JAL's ground office and waited there for three hours. Meanwhile, the plane took off and he was
left behind.19 Afterwards, he was informed that his travel documents were, indeed, in order.20 Respondent was
refunded the cost of his plane ticket less the sum of US$500.00 which was deducted by JAL.21 Subsequently,
respondent's U.S. visa was cancelled.22
Displeased by the turn of events, respondent filed an action for damages against JAL with the Regional Trial Court
(RTC) in Valenzuela City, docketed as Civil Case No. 4195-V-93. He claimed he was not able to donate his kidney to
Loreto; and that he suffered terrible embarrassment and mental anguish.23 He prayed that he be awarded P3 million as
moral damages, P1.5 million as exemplary damages and P500,000.00 as attorney's fees.24
JAL denied the material allegations of the complaint. It argued, among others, that its failure to allow respondent to fly
on his scheduled departure was due to "a need for his travel documents to be authenticated by the United States
Embassy"25 because no one from JAL's airport staff had encountered a parole visa before.26 It posited that the
authentication required additional time; that respondent was advised to take the flight the following day, July 30, 1992.
JAL alleged that respondent agreed to be rebooked on July 30, 1992.27
JAL also lodged a counterclaim anchored on respondent's alleged wrongful institution of the complaint. It prayed for
litigation expenses, exemplary damages and attorney's fees.28
On September 21, 2000, the RTC presided by Judge Floro P. Alejo rendered its decision in favor of respondent
(plaintiff), disposing as follows:
WHEREFORE, judgment is hereby rendered ordering the defendant to pay the plaintiff the amount
of P1,000,000.00 as moral damages, the amount of P500,000.00 as exemplary damages and the amount
of P250,000.00 as attorney's fees, plus the cost of suit.29
The RTC explained:
In summarily and insolently ordering the plaintiff to disembark while the latter was already settled in his
assigned seat, the defendant violated the contract of carriage; that when the plaintiff was ordered out of the
plane under the pretext that the genuineness of his travel documents would be verified it had caused him
embarrassment and besmirched reputation; and that when the plaintiff was finally not allowed to take the
flight, he suffered more wounded feelings and social humiliation for which the plaintiff was asking to be
awarded moral and exemplary damages as well as attorney's fees.
The reason given by the defendant that what prompted them to investigate the genuineness of the travel
documents of the plaintiff was that the plaintiff was not then carrying a regular visa but just a letter does not
appear satisfactory. The defendant is engaged in transporting passengers by plane from country to country
and is therefore conversant with the travel documents. The defendant should not be allowed to pretend, to the
 prejudice of the plaintiff not to know that the travel documents of the plaintiff are valid documents to allow
him entry in the United States.
The foregoing act of the defendant in ordering the plaintiff to deplane while already settled in his assigned seat
clearly demonstrated that the defendant breached its contract of carriage with the plaintiff as passenger in bad
faith and as such the plaintiff is entitled to moral and exemplary damages as well as to an award of attorney's
fees.30
Disagreeing with the RTC judgment, JAL appealed to the CA contending that it is not guilty of breach of contract of
carriage, hence, not liable for damages.31 It posited that it is the one entitled to recover on its counterclaim.32
CA Ruling
In a Decision33 dated May 31, 2005, the CA affirmed the decision of the RTC with modification in that it lowered the
amount of moral and exemplary damages and deleted the award of attorney's fees. The fallo of the CA decision reads:
WHEREFORE, the appealed Decision is AFFIRMED with MODIFICATION. Appellant JAPAN AIR LINES is ordered
to pay appellee JESUS SIMANGAN the reduced sums, as follows: Five Hundred Thousand Pesos (P500,000.00)
as moral damages, and Two Hundred Fifty Thousand Pesos (P250,000.00) as exemplary damages. The award of
attorney's fees is hereby DELETED.34
The CA elucidated that since JAL issued to respondent a round trip plane ticket for a lawful consideration, "there arose
a perfected contract between them."35 It found that respondent was "haughtily ejected"36 by JAL and that "he was
certainly embarrassed and humiliated"37 when, in the presence of other passengers, JAL's airline staff "shouted at him
to stand up and arrogantly asked him to produce his travel papers, without the least courtesy every human being is
entitled to";38 and that "he was compelled to deplane on the grounds that his papers were fake."39
The CA ratiocinated:
While the protection of passengers must take precedence over convenience, the implementation of security measures
must be attended by basic courtesies.
In fact, breach of the contract of carriage creates against the carrier a presumption of liability, by a simple proof
of injury, relieving the injured passenger of the duty to establish the fault of the carrier or of his employees; and
placing on the carrier the burden to prove that it was due to an unforeseen event or to force majeure.
That appellee possessed bogus travel documents and that he might stay illegally in Japan are allegations
without substantiation. Also, appellant's attempt to rebook appellee the following day was too late and did not
relieve it from liability. The damage had been done. Besides, its belated theory of novation, i.e., that appellant's
original obligation to carry appellee to Narita and Los Angeles on July 29, 1992 was extinguished by novation
when appellant and appellant agreed that appellee will instead take appellant's flight to Narita on the following
day, July 30, 1992, deserves little attention. It is inappropriate at bar. Questions not taken up during the trial
cannot be raised for the first time on appeal.40 (Underscoring ours and citations were omitted)
Citing Ortigas, Jr. v. Lufthansa German Airlines,41 the CA declared that "(i)n contracts of common carriage, inattention
and lack of care on the part of the carrier resulting in the failure of the passenger to be accommodated in the class
contracted for amounts to bad faith or fraud which entitles the passengers to the award of moral damages in
accordance with Article 2220 of the Civil Code."42
Nevertheless, the CA modified the damages awarded by the RTC. It explained:
Fundamental in the law on damages is that one injured by a breach of a contract, or by a wrongful or negligent
act or omission shall have a fair and just compensation commensurate to the loss sustained as consequence of
the defendant's act. Being discretionary on the court, the amount, however, should not be palpably and
scandalously excessive.
Here, the trial court's award of P1,000,000.00 as moral damages appears to be overblown. No other proof of
appellee's social standing, profession, financial capabilities was presented except that he was single and a
businessman. To Us, the sum of 500,000.00 is just and fair. For, moral damages are emphatically not intended
to enrich a complainant at the expense of the 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 defendant's culpable action.
Moreover, the grant of P500,000.00 as exemplary damages needs to be reduced to a reasonable level. The
award of exemplary damages is designed to permit the courts to mould behavior that has socially deleterious
consequences and its imposition is required by public policy to suppress the wanton acts of the offender.
Hence, the sum of P250,000.00 is adequate under the circumstances.
The award of P250,000.00 as attorney's fees lacks factual basis. Appellee was definitely compelled to litigate in
protecting his rights and in seeking relief from appellant's misdeeds. Yet, the record is devoid of evidence to
show the cost of the services of his counsel and/or the actual expenses incurred in prosecuting his
action.43 (Citations were omitted)
When JAL's motion for reconsideration was denied, it resorted to the petition at bar.
Issues
JAL poses the following issues -
I.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENT WAS ENTITLED TO MORAL
DAMAGES, CONSIDERING THAT:
A. JAL WAS NOT GUILTY OF BREACH OF CONTRACT.
B. MORAL DAMAGES MAY BE AWARDED IN BREACH OF CONTRACT CASES ONLY WHEN THE BREACH
IS ATTENDED BY FRAUD OR BAD FAITH. ASSUMING ARGUENDO THAT JAL WAS GUILTY OF BREACH,
JAL DID NOT ACT FRAUDULENTLY OR IN BAD FAITH AS TO ENTITLE RESPONDENT TO MORAL
DAMAGES.
 C. THE LAW DISTINGUISHES A CONTRACTUAL BREACH EFFECTED IN GOOD FAITH FROM ONE
ATTENDED BY BAD FAITH.
II.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN RULING THAT RESPONDENT WAS ENTITLED
TO EXEMPLARY DAMAGES CONSIDERING THAT:
A. EXEMPLARY DAMAGES ARE NOT RECOVERABLE IN BREACH OF CONTRACT OF CARRIAGE UNLESS
THE CARRIER IS GUILTY OF WANTON, FRAUDULENT, RECKLESS, OPPRESSIVE OR MALEVOLENT
CONDUCT.
B. ASSUMING ARGUENDO THAT JAL WAS GUILTY OF BREACH, JAL DID NOT ACT IN A WANTON
FRAUDULENT, RECKLESS, OPPRESSIVE OR MALEVOLENT MANNER AS TO ENTITLE RESPONDENT TO
EXEMPLARY DAMAGES.
III.
ASSUMING ARGUENDO THAT RESPONDENT WAS ENTITLED TO AN AWARD OF DAMAGES, WHETHER OR NOT
THE COURT OF APPEALS AWARD OF P750,000 IN DAMAGES WAS EXCESSIVE AND UNPRECEDENTED.
IV.
WHETHER OR NOT THE COURT OF APPEALS ERRED IN NOT FINDING FOR JAL ON
ITS COUNTERCLAIM.44 (Underscoring Ours)
Basically, there are three (3) issues to resolve here: (1) whether or not JAL is guilty of contract of carriage; (2) whether or
not respondent is entitled to moral and exemplary damages; and (3) whether or not JAL is entitled to its counterclaim
for damages.
Our Ruling
This Court is not a trier of facts.
Chiefly, the issues are factual. The RTC findings of facts were affirmed by the CA. The CA also gave its nod to the
reasoning of the RTC except as to the awards of damages, which were reduced, and that of attorney's fees, which was
deleted.
We are not a trier of facts. We generally rely upon, and are bound by, the conclusions on this matter of the lower
courts, which are better equipped and have better opportunity to assess the evidence first-hand, including the
testimony of the witnesses.45
We have repeatedly held that the findings of fact of the CA are final and conclusive and cannot be reviewed on appeal
to the Supreme Court provided they are based on substantial evidence.46 We have no jurisdiction, as a rule, to reverse
their findings.47 Among the exceptions to this rule are: (a) when the conclusion is a finding grounded entirely on
speculations, surmises or conjectures; (b) when the inference made is manifestly mistaken, absurd or impossible; (c)
where there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts; (e) when the
findings of facts are conflicting; (f) when the CA, in making its findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellant and appellee.48
The said exceptions, which are being invoked by JAL, are not found here. There is no indication that the findings of the
CA are contrary to the evidence on record or that vital testimonies of JAL's witnesses were disregarded. Neither did the
CA commit misapprehension of facts nor did it fail to consider relevant facts. Likewise, there was no grave abuse of
discretion in the appreciation of facts or mistaken and absurd inferences.
We thus sustain the coherent facts as established by the courts below, there being no sufficient showing that the said
courts committed reversible error in reaching their conclusions.
JAL is guilty of breach of
contract of carriage.
That respondent purchased a round trip plane ticket from JAL and was issued the corresponding boarding pass is
uncontroverted.49 His plane ticket, boarding pass, travel authority and personal articles were subjected to rigid
immigration and security procedure.50 After passing through said immigration and security procedure, he was allowed
by JAL to enter its airplane to fly to Los Angeles, California, U.S.A. via Narita, Japan.51 Concisely, there was a contract of
carriage between JAL and respondent.
Nevertheless, JAL made respondent get off the plane on his scheduled departure on July 29, 1992. He was not allowed
by JAL to fly. JAL thus failed to comply with its obligation under the contract of carriage.
JAL justifies its action by arguing that there was "a need to verify the authenticity of respondent's travel
document."52 It alleged that no one from its airport staff had encountered a parole visa before.53 It further contended
that respondent agreed to fly the next day so that it could first verify his travel document, hence, there was
novation.54 It maintained that it was not guilty of breach of contract of carriage as respondent was not able to travel to
the United States due to his own voluntary desistance.55
We cannot agree. JAL did not allow respondent to fly. It informed respondent that there was a need to first check the
authenticity of his travel documents with the U.S. Embassy.56 As admitted by JAL, "the flight could not wait for Mr.
Simangan because it was ready to depart."57
Since JAL definitely declared that the flight could not wait for respondent, it gave respondent no choice but to be left
behind. The latter was unceremoniously bumped off despite his protestations and valid travel documents and
notwithstanding his contract of carriage with JAL. Damage had already been done when respondent was offered to fly
the next day on July 30, 1992. Said offer did not cure JAL's default.
Considering that respondent was forced to get out of the plane and left behind against his will, he could not have
freely consented to be rebooked the next day. In short, he did not agree to the alleged novation. Since novation implies
a waiver of the right the creditor had before the novation, such waiver must be express.58 It cannot be supposed,
without clear proof, that respondent had willingly done away with his right to fly on July 29, 1992.
Moreover, the reason behind the bumping off incident, as found by the RTC and CA, was that JAL personnel imputed
that respondent would only use the trip to the United States as a pretext to stay and work in Japan.59
Apart from the fact that respondent's plane ticket, boarding pass, travel authority and personal articles already passed
the rigid immigration and security routines,60 JAL, as a common carrier, ought to know the kind of valid travel
documents respondent carried. As provided in Article 1755 of the New Civil Code: "A common carrier is bound to carry
the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances."61 Thus, We find untenable JAL's defense of "verification of
respondent's documents" in its breach of contract of carriage.
It bears repeating that the power to admit or not an alien into the country is a sovereign act which cannot be interfered
with even by JAL.62
In an action for breach of contract of carriage, all that is required of plaintiff is to prove the existence of such contract
and its non-performance by the carrier through the latter's failure to carry the passenger safely to his
destination.63 Respondent has complied with these twin requisites.
Respondent is entitled to moral and exemplary damages and attorney's fees plus legal interest.
With reference to moral damages, JAL alleged that they are not recoverable in actions ex contractu except only when
the breach is attended by fraud or bad faith. It is contended that it did not act fraudulently or in bad faith towards
respondent, hence, it may not be held liable for moral damages.
As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract for it is
not one of the items enumerated under Article 2219 of the Civil Code.64 As an exception, such damages are
recoverable: (1) in cases in which the mishap results in the death of a passenger, as provided in Article 1764, in relation
to Article 2206(3) of the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or bad faith, as provided in
Article 2220.65
The acts committed by JAL against respondent amounts to bad faith. As found by the RTC, JAL breached its contract of
carriage with respondent in bad faith. JAL personnel summarily and insolently ordered respondent to disembark while
the latter was already settled in his assigned seat. He was ordered out of the plane under the alleged reason that the
genuineness of his travel documents should be verified.
These findings of facts were upheld by the CA, to wit:
x x x he was haughtily ejected by appellant. He was certainly embarrassed and humiliated when, in the
presence of other passengers, the appellant's airline staff shouted at him to stand up and arrogantly asked him
to produce his travel papers, without the least courtesy every human being is entitled to. Then, he was
compelled to deplane on the grounds that his papers were fake. His protestation of having been issued a U.S.
visa coupled with his plea to appellant to closely monitor his movements when the aircraft stops over in Narita,
were ignored. Worse, he was made to wait for many hours at the office of appellant only to be told later that
he has valid travel documents.66 (Underscoring ours)
Clearly, JAL is liable for moral damages. It is firmly settled that moral damages are recoverable in suits predicated on
breach of a contract of carriage where it is proved that the carrier was guilty of fraud or bad faith, as in this case.
Inattention to and lack of care for the interests of its passengers who are entitled to its utmost consideration,
particularly as to their convenience, amount to bad faith which entitles the passenger to an award of moral damages.
What the law considers as bad faith which may furnish the ground for an award of moral damages would be bad faith
in securing the contract and in the execution thereof, as well as in the enforcement of its terms, or any other kind of
deceit.67
JAL is also liable for exemplary damages as its above-mentioned acts constitute wanton, oppressive and malevolent
acts against respondent. Exemplary damages, which are awarded by way of example or correction for the public good,
may be recovered in contractual obligations, as in this case, if defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner.68
Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious
in its consequence by creating negative incentives or deterrents against such behaviour. In requiring compliance with
the standard of extraordinary diligence, a standard which is, in fact, that of the highest possible degree of diligence,
from common carriers and in creating a presumption of negligence against them, the law seeks to compel them to
control their employees, to tame their reckless instincts and to force them to take adequate care of human beings and
their property.69
Neglect or malfeasance of the carrier's employees could give ground for an action for damages. Passengers have a
right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration and are entitled to
be protected against personal misconduct, injurious language, indignities and abuses from such employees.70
The assessment of P500,000.00 as moral damages and P100,000.00 as exemplary damages in respondent's favor is, in
Our view, reasonable and realistic. This award is reasonably sufficient to indemnify him for the humiliation and
embarrassment he suffered. This also serves as an example to discourage the repetition of similar oppressive acts.
With respect to attorney's fees, they may be awarded when defendant's act or omission has compelled plaintiff to
litigate with third persons or to incur expenses to protect his interest.71 The Court, in Construction Development
Corporation of the Philippines v. Estrella,72 citing Traders Royal Bank Employees Union-Independent v. National Labor
Relations Commission,73 elucidated thus:
There are two commonly accepted concepts of attorney's fees, the so-called ordinary and extraordinary. In its
ordinary concept, an attorney's fee is the reasonable compensation paid to a lawyer by his client for the legal
services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his
agreement with the client.
In its extraordinary concept, an attorney's fee is an indemnity for damages ordered by the court to be
paid by the losing party in a litigation. The basis of this is any of the cases provided by law where such
 award can be made, such as those authorized in Article 2208, Civil Code, and is payable not to the lawyer but
to the client, unless they have agreed that the award shall pertain to the lawyer as additional
compensation or as part thereof.74
It was therefore erroneous for the CA to delete the award of attorney's fees on the ground that the record is devoid of
evidence to show the cost of the services of respondent's counsel. The amount is actually discretionary upon the Court
so long as it passes the test of reasonableness. They may be recovered as actual or compensatory damages when
exemplary damages are awarded and whenever the court deems it just and equitable,75 as in this case.
Considering the factual backdrop of this case, attorney's fees in the amount of P200,000.00 is reasonably modest.
The above liabilities of JAL in the total amount of P800,000.00 earn legal interest pursuant to the Court's ruling
in Construction Development Corporation of the Philippines v. Estrella,76 citing Eastern Shipping Lines, Inc. v. Court of
Appeals,77 to wit:
Regarding the imposition of legal interest at the rate of 6% from the time of the filing of the complaint, we
held in Eastern Shipping Lines, Inc. v. Court of Appeals, that when an obligation, regardless of its source, i.e., law,
contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for payment
of interest in the concept of actual and compensatory damages, subject to the following rules, to wit -
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default,
i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or
until the demand can be established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably
established at the time the demand is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of damages may be deemed to
have been reasonably ascertained). The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be
12% per annum from such finality until its satisfaction, this interim period being deemed to be
by then an equivalent to a forbearance of credit.78 (Emphasis supplied and citations omitted)
Accordingly, in addition to the said total amount of P800,000.00, JAL is liable to pay respondent legal interest. Pursuant
to the above ruling of the Court, the legal interest is 6% and it shall be reckoned from September 21, 2000 when the
RTC rendered its judgment. From the time this Decision becomes final and executory, the interest rate shall be 12%
until its satisfaction.
JAL is not entitled to its counterclaim for damages.
The counterclaim of JAL in its Answer79 is a compulsory counterclaim for damages and attorney's fees arising from the
filing of the complaint. There is no mention of any other counter claims.
This compulsory counterclaim of JAL arising from the filing of the complaint may not be granted inasmuch as the
complaint against it is obviously not malicious or unfounded. It was filed by respondent precisely to claim his right to
damages against JAL. Well-settled is the rule that the commencement of an action does not per se make the action
wrongful and subject the action to damages, for the law could not have meant to impose a penalty on the right to
litigate.80
We reiterate case law that if damages result from a party's exercise of a right, it is damnum absque injuria.81 Lawful acts
give rise to no injury. Walang perhuwisyong maaring idulot ang paggamit sa sariling karapatan.
During the trial, however, JAL presented a witness who testified that JAL suffered further damages. Allegedly,
respondent caused the publications of his subject complaint against JAL in the newspaper for which JAL suffered
damages.82
Although these additional damages allegedly suffered by JAL were not incorporated in its Answer as they arose
subsequent to its filing, JAL's witness was able to testify on the same before the RTC.83 Hence, although these issues
were not raised by the pleadings, they shall be treated in all respects as if they had been raised in the pleadings.
As provided in Section 5, Rule 10 of the Rules of Court, "(w)hen issues not raised by the pleadings are tried with the
express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the
pleadings."
Nevertheless, JAL's counterclaim cannot be granted.
JAL is a common carrier. JAL's business is mainly with the traveling public. It invites people to avail themselves of the
comforts and advantages it offers.84 Since JAL deals with the public, its bumping off of respondent without a valid
reason naturally drew public attention and generated a public issue.
The publications involved matters about which the public has the right to be informed because they relate to a public
issue. This public issue or concern is a legitimate topic of a public comment that may be validly published.
Assuming that respondent, indeed, caused the publication of his complaint, he may not be held liable for damages for
it. The constitutional guarantee of freedom of the speech and of the press includes fair commentaries on matters of
public interest. This is explained by the Court in Borjal v. Court of Appeals,85 to wit:
 To reiterate, fair commentaries on matters of public interest are privileged and constitute a valid defense in an
action for libel or slander. The doctrine of fair comment means that while in general every discreditable
imputation publicly made is deemed false, because every man is presumed innocent until his guilt is judicially
proved, and every false imputation is deemed malicious, nevertheless, when the discreditable imputation is
directed against a public person in his public capacity, it is not necessarily actionable. In order that such
discreditable imputation to a public official may be actionable, it must either be a false allegation of fact or a
comment based on a false supposition. If the comment is an expression of opinion, based on established facts,
then it is immaterial that the opinion happens to be mistaken, as long as it might reasonably be inferred from
the facts.86 (Citations omitted and underscoring ours)
Even though JAL is not a public official, the rule on privileged commentaries on matters of public interest applies to it.
The privilege applies not only to public officials but extends to a great variety of subjects, and includes matters of
public concern, public men, and candidates for office.87
Hence, pursuant to the Borjal case, there must be an actual malice in order that a discreditable imputation to a public
person in his public capacity or to a public official may be actionable. To be considered malicious, the libelous
statements must be shown to have been written or published with the knowledge that they are false or in reckless
disregard of whether they are false or not.88
Considering that the published articles involve matters of public interest and that its expressed opinion is not malicious
but based on established facts, the imputations against JAL are not actionable. Therefore, JAL may not claim damages
for them.
WHEREFORE, the petition is DENIED. The appealed Decision of the Court of Appeals is AFFIRMED WITH
MODIFICATION. As modified, petitioner Japan Airlines is ordered to pay respondent Jesus Simangan the following:
(1) P500,000.00 as moral damages; (2) P100,000.00 as exemplary damages; and (3) P200,000.00 as attorney's fees.
The total amount adjudged shall earn legal interest at the rate of 6% per annum from the date of judgment of the
Regional Trial Court on September 21, 2000 until the finality of this Decision. From the time this Decision becomes final
and executory, the unpaid amount, if any, shall earn legal interest at the rate of 12% per annum until its satisfaction.
SO ORDERED.
RUBEN T. REYES
Associate Justice

WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ MINITA V. CHICO-NAZARIO

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court's Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the
opinion of the Court's Division.
REYNATO S. PUNO
Chief Justice

Footnotes
1 Yu Eng Cho v. Pan American World Airways, Inc., G.R. No. 123560, March 27, 2000, 328 SCRA 717, 735, citing
Alitalia Airways v. Court of Appeals, G.R. No. 77011, July 24, 1990, 187 SCRA 763, 770.
2 Japan Airlines v. Asuncion, G.R. No. 161730, January 28, 2005, 449 SCRA 544, 548.
3 Under Rule 45 of the 1997 Rules of Civil Procedure. The petition contains a prayer for the issuance of a
temporary restraining order and/or preliminary injunction.
4 Rollo, pp. 58-65. Penned by Associate Justice Magdangal M. De Leon, with Associate Justices Salvador J.
Valdez, Jr. (now deceased) and Mariano C. Del Castillo, concurring.
5 Id. at 66-67.
6 Id. at 126-127.
7 Id.
8 Id.
9 Id. at 59, 128.
10 Id.
11 Id. at 127.
12 Id. at 59.
13 Id. at 62.
14 Id. at 59, 128.
15 Id.
16 Id.
17 Id. at 62.
18 Id. at 62, 127-128.
19 Id. at 59, 127.
20 Id.
21 Id. at 60, 127.
22 Id.
23 Id.
24 Id.
25 Id. at 85.
26 Id.
27 Id.
28 Id. at 86-87.
29 Id. at 60, 129.
30 Id. at 128-129.
31 Id. at 61.
32 Id.
33 Id. at 58-65.
34 Id. at 65.
35 Id. at 62.
36 Id.
37 Id.
38 Id.
39 Id.
40 Id. at 63.
41 G.R. No. L-28773, June 30, 1975, 64 SCRA 610.
42 Rollo, p. 63.
43 Id. at 64.
44 Id. at 23-24.
45 Malaysian Airline System v. Court of Appeals, G.R. No. L-78015, December 11, 1987, 156 SCRA 321, 323.
46 Id., citing Alsua-Betts v. Court of Appeals, G.R. Nos. L-46430-31, July 30, 1979, 92 SCRA 332.
47 Korean Airlines Co., Ltd. v. Court of Appeals, G.R. No. L-61418, September 24, 1987, 154 SCRA 211, 213,
citing Tongoy v. Court of Appeals, G.R. No. L-45645, June 28, 1983, 123 SCRA 99; Olango v. Court of First
Instance of Misamis Oriental, G.R. No. L-55864, March 28, 1983, 121 SCRA 338.
48 Malaysian Airline System v. Court of Appeals, supra note 45, at 323-324, citing Ramos v. Pepsi-Cola Bottling
Co., G.R. No. L-22533, February 9, 1967, 19 SCRA 289.
49 Rollo, pp. 59, 128.
50 Id. at 62.
51 Id. at 59, 128.
52 Id. at 25, 85.
53 Id.
54 Id. at 25, 27.
55 Id. at 24.
56 Id. at 85.
57 Id. at 27.
58 Garcia v. Llamas, G.R. No. 154127, December 8, 2003, 417 SCRA 292, 302, citing Babst v. Court of Appeals,
G.R. No. 99398, January 26, 2001, 350 SCRA 341.
59 Rollo, pp. 59, 128.
60 Id. at 62.
61 Emphasis ours.
62 Japan Airlines v. Asuncion, supra note 2.
63 Tolentino, A.M., Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. V, 1992 ed., p.
299; Aboitiz v. Court of Appeals, G.R. No. 84458, November 6, 1989, 179 SCRA 95, 105.
64 Calalas v. Court of Appeals, G.R. No. 122039, May 31, 2000, 332 SCRA 356, 365, citing Flores v. Miranda, 105
Phil. 267 (1959).
65 Id., citing Philippine Rabbit Bus Lines, Inc. v. Esguerra, G.R. No. L-31420, October 23, 1982, 117 SCRA 741;
Sabena Belgian World Airlines v. Court of Appeals, G.R. No. 82068, March 31, 1989, 171 SCRA 620; China
Airlines, Ltd. v. Intermediate Appellate Court, G.R. No. 73835, January 17, 1989, 169 SCRA 226.
66 Rollo, p. 62.
67 Philippine Airlines v. Court of Appeals, G.R. No. 119641, May 17, 1996, 257 SCRA 33, 43.
68 Victory Liner v. Gammad, G.R. No. 159636, November 25, 2004, 444 SCRA 370, citing Yobido v. Court of
Appeals, 346 Phil. 1, 13 (1997).
69 Mecenas v. Court of Appeals, G.R. No. 88052, December 14, 1989, 180 SCRA 83.
70 See note 63, citing Zulueta v. Pan-Am Airways, G.R. No. L-28589, February 29, 1972, 43 SCRA 397.
71 Singson v. Court of Appeals, G.R. No. 119995, November 18, 1997, 282 SCRA 149, 165.
72 G.R. No. 147791, September 8, 2006, 501 SCRA 228, 243-244.
73 G.R. No. 120592, March 14, 1997, 269 SCRA 733.
74 Traders Royal Bank Employees Union-Independent v. National Labor Relations Commission, id. at 740.
75 Vital-Gozon v. Court of Appeals, G.R. No. 129132, July 8, 1998, 292 SCRA 124; Civil Code, Art. 2208.
76 Supra note 72, at 244-245.
77 G.R. No. 97412, July 12, 1994, 234 SCRA 78.
78 Eastern Shipping Lines, Inc. v. Court of Appeals, id. at 95-97.
79 Rollo, pp. 86-87.
80 United Coconut Planters Bank v. Basco, G.R. No. 142668, August 31, 2004, 437 SCRA 325, 344.
81 Id., citing ABS-CBN Broadcasting Corporation v. Court of Appeals, G.R. No. 128690, January 21, 1999, 301
SCRA 572.
82 Rollo, pp. 60, 128.
83 Id. at 60, 127-128.
84 Morris v. Court of Appeals, G.R. No. 127957, February 21, 2001, 352 SCRA 428, 435.
85 G.R. No. 126466, January 14, 1999, 301 SCRA 1.
86 Borjal v. Court of Appeals, id. at 23.
87 Baguio Midland Courier v. Court of Appeals, G.R. No. 107566, November 25, 2004, 444 SCRA 28.
88 Borjal v. Court of Appeals, supra note 85, at 28-29.

G.R. No. L-8937 November 29, 1957

 OLEGARIO BRITO SY, Plaintiff-Appellee, vs. MALATE TAXI CAB & GARAGE, INC., defendant-appelant;
MALATE TAXICAB & GARAGE, INC., third-party Plaintiff-Appellant, v. JESUS DEQUITO Y DUPY, third-party
defendant-appellee.
Paredes, Gaw and Acevedo for appellee.
Diaz and Baizas for appellant.
ENDENCIA, J.:
On June 26, 1952, at Dewey Boulevard in front of the Selecta Restaurant, Olegario Brito Sy engaged a taxicab bearing
plate No. Taxi-1130, owned and operated by Malate Taxicab and Garage, Inc. and driven by Catalino Ermino, to take
him to his place of business at Dencia's Restaurant on the Escolta where he was the general manager. Upon reaching
the Rizal Monument he told the driver to turn to the right, but the latter did not heed him and instead countered that
they better pass along Katigbak Drive. At the intersection of Dewey Bolevard and Katigbak Drive, the taxi collided with
an army wagon with plate No. TPI-695 driven by Sgt. Jesus De quito, as a result of which Olegario Brito Sy was jarred,
jammed and jolted. He was taken to the Santa Isabel Hospital suffering from bruises and contusions as well as fractured
right leg. Thereafter he was transferred to the Gonzales Orthopedic Clinic and was accordingly operated on. He spent
some P2,266.45 for medical bills and hospitalization.chanroblesvirtualawlibrary chanrobles virtual law library
On September 30, 1952, Sy filed action against the Malate Taxicab & Garage, Inc., based upon a contract of carriage, to
recover the sums of P7,200 as actual or compensatory damages, P20,000 as moral damages, P15,000 as nominal and
exemplary damages, and P3,000 a attorney's fees. On October 2, 1952, a copy of the complaint was served on and
received by the defendant, but the latter filed its answer only on October 20, 1952, wherein it alleged that the collision
subject of the complaint was not due to the negligence of its driver but to that of Sgt. Jesus Dequito, the driver of the
army wagon; and, by way of counterclaim, sought to recover the sum of P1,000 as damages caused by the alleged
malicious and frivolous action filed against it.chanroblesvirtualawlibrary chanrobles virtual law library
The record reveals that upon plaintiff's motion filed on October 23, 1952, the lower court ordered on October 25, 1952
that the answer which was filed by defendant out of time be stricken out, and declared the Malate Taxicab & Garage,
Inc. in default. Thereafter, on October 30, 1952, plaintiff presented his evidence, and on November 20, 1952 judgment
was rendered awarding plaintiff the sum of P14.000 as actual, compensatory, moral, nominal and exemplary damages
including attorney's fees and costs, with interest at the legal rate from the filing of the action. Defendant then filed a
motion on December 17, 1952, for relief from the order of default and for new trial, which was granted. Hence, plaintiff
filed his reply to defendant's answer and counterelaim, and by leave of court, the latter filed on February 24, 1953 a
third-party complaint against Sgt. Jesus Dequito alleging that the cause of the collision between the taxicab and the
army wagon was the negligence of the army sergeant, and praying that whatever amount the court may assess against
it in the action filed by plaintiff, be paid to said third-party plaintiff, plus an additional amount of P1,000 representing
attorney's fees. It appears, however, that the summons and copy of the third-party complaint were never served upon
third-party defendant Dequito in view of his continued assignment from place to place in connection with his army
duties, and for this reason the main case was set for trial on May 10, 1953, obviously for the sole purpose of disposing
of the issue arising from plaintiffs complaint. On the day of the trial, defendant failed to appear, whereupon plaintiff
presented his evidence, and judgment was rendered against the defendant in the total sum of P4,200 representing
actual, compensatory and moral damages, as well as attorney's fees, with interest at the legal rate from the filing of the
action, plus costs of suit. Aga nst said judgment defendant appealed to the Court of Appeals and assigned in its brief
two errors of the lower court, namely:
1. The trial court erred in not finding that the third-party complaint involves a prejudicial question, and therefore, the
main complaint cannot be decided until the third-party complaint is decided.chanroblesvirtualawlibrary chanrobles
virtual law library
2. The trial court erred in not deciding or making an express finding as to whether the defendant appellant Malate
Taxicab & Garage, Inc. was responsible for the collision, and hence, civilly responsible to the plaintiff-appellee.
Finding the quoted assignment of errors as involving a purely question of law, the Court of Appeals, by virtue of the
provisions of section 17, paragraph 6 of the judiciary Act of 1948, as amended, certified the case to this Court for
adjudication, in its Resolution of February 7, 1955.chanroblesvirtualawlibrary chanrobles virtual law library
We find no merit in the first assignment of error that the third-party complaint is a pre-judicial question. As enunciated
by this Court in Berbari vs. Concepcion, 40 Phil. 837, "Pre-judicial question in understood in law to be that which
precedes the criminal action, or that which requires a decision before final judgment is rendered in the principal action
with which said question is closely connected. Not all previous questions are pre-judicial questions are necessarily
previous", although all pre-judicial questions are necessarily previous." In the present case, the third-party complaint is
not a pre-judicial question, as the issue in the main action is not entirely dependent upon those in the third-party
complaint; on the contrary, it is the third-party complaint that is dependent upon the main case at least in the amount
of damages which defendant appellant seeks to be reimbursed in its third-party complaint. Furthermore, the complaint
is based on a contractual obligation of transportation of passenger which defendant-appellant failed to carry out, and
the action is entirely different and independent from that in the third-party complaint which is based an alleged
tortious act committed by the third-party defendant Sgt. Dequito. The main case, therefore, is entirely severable and
may be litigated independently. Moreover, whatever the outcome of the third-party complaint might be would not in
any way affect or alter the contractual liability of the appellant to plaintiff. If the collision was due to the negligence of
the third-party defendant, as alleged, then defendant appellant may file a separate civil action for damages based
on tort ex-delicto or upon quasi-delict, as the case may be.chanroblesvirtualawlibrary chanrobles virtual law library
Coming to the second assignment of error that the lower court erred in not making an express findings as to whether
defendant appellant was responsible for the collision, we find the same to be unjustified. The pertinent, provisions of
the new Civil Code under the heading Common Carriers, are the following:
ART. 1733. Common carriers, from the nature of their business and for reason of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them,
according to all the circumstances of each case.chanroblesvirtualawlibrary chanrobles virtual law library
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos.
5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in
articles 1755 and 1756.chanroblesvirtualawlibrary chanrobles virtual law library
ART. 1755. A common carrier is bound to carry the passengers to safety as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.chanroblesvirtualawlibrary chanrobles virtual law library
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755.
(Emphasis supplied.)
Evidently, under these provisions of law, the court need not make an express finding of fault or negligence on the part
of the defendant appellant in order to hold it responsible to pay the damages sought for by the plaintiff, for the action
initiated therefor is based on a contract of carriage and not on tort. When plaintiff rode on defendant-appellant's
taxicab, the latter assumed the express obligation to transport him to his destination safely, and to observe
extraordinary diligence with a due regard for all the circumstances, and any injury that might be suffered by the
passenger is right away attributable to the fault or negligence of the carrier (Article 1756, supra). This is an exception to
the general rule that negligence must be proved, and it was therefore incumbent upon the carrier to prove that it has
exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the new Civil Code. It is noteworthy,
however, that at the hearing in the lower court defendant-appellant failed to appear and has not presented any
evidence at all to overcome and overwhelm the presumption of negligence imposed upon it by law; hence, there was
no need for the lower court to make an express finding thereon in view of the provisions of the aforequoted Article
1756 of the new Civil Code.chanroblesvirtualawlibrary chanrobles virtual law library
Wherefore, the decision of the lower court is hereby affirmed with cost against the
appellant.chanroblesvirtualawlibrary chanrobles virtual law library
Paras, C. J., Bengzon, Montemayor, Bautista Angelo, Labrador, and Concepcion, JJ., concur,.

REYES, J. B. L., J. concurring:chanrobles virtual law library

I concur for the additional reason that the concurrent negligence of a third person will not exempt the appellant from
responsibility; in other words, if the driver of the taxicab was negligent and thereby caused the collision, the fact that
another driver's negligence also contributed thereto will not exempt the taxicab company. Hence, the negligence of the
other driver is not a prejudicial question to the present action.chanroblesvirtualawlibrary chanrobles virtual law library
Padilla, J., concur.
G.R. No. 142305 December 10, 2003
SINGAPORE AIRLINES LIMITED, petitioner,
vs.
ANDION FERNANDEZ, respondent.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari assailing the Decision1 of the Court of Appeals which affirmed in toto the
decision2 of the Regional Trial Court of Pasig City, Branch 164 in Civil Case No. 60985 filed by the respondent for
damages.
The Case for the Respondent
Respondent Andion Fernandez is an acclaimed soprano here in the Philippines and abroad. At the time of the incident,
she was availing an educational grant from the Federal Republic of Germany, pursuing a Master’s Degree in Music
majoring in Voice.3
She was invited to sing before the King and Queen of Malaysia on February 3 and 4, 1991. For this singing
engagement, an airline passage ticket was purchased from petitioner Singapore Airlines which would transport her to
Manila from Frankfurt, Germany on January 28, 1991. From Manila, she would proceed to Malaysia on the next day.4 It
was necessary for the respondent to pass by Manila in order to gather her wardrobe; and to rehearse and coordinate
with her pianist her repertoire for the aforesaid performance.
The petitioner issued the respondent a Singapore Airlines ticket for Flight No. SQ 27, leaving Frankfurt, Germany on
January 27, 1991 bound for Singapore with onward connections from Singapore to Manila. Flight No. SQ 27 was
scheduled to leave Frankfurt at 1:45 in the afternoon of January 27, 1991, arriving at Singapore at 8:50 in the morning
of January 28, 1991. The connecting flight from Singapore to Manila, Flight No. SQ 72, was leaving Singapore at 11:00
in the morning of January 28, 1991, arriving in Manila at 2:20 in the afternoon of the same day.5
On January 27, 1991, Flight No. SQ 27 left Frankfurt but arrived in Singapore two hours late or at about 11:00 in the
morning of January 28, 1991. By then, the aircraft bound for Manila had left as scheduled, leaving the respondent and
about 25 other passengers stranded in the Changi Airport in Singapore.6
Upon disembarkation at Singapore, the respondent approached the transit counter who referred her to the nightstop
counter and told the lady employee thereat that it was important for her to reach Manila on that day, January 28, 1991.
The lady employee told her that there were no more flights to Manila for that day and that respondent had no choice
but to stay in Singapore. Upon respondent’s persistence, she was told that she can actually fly to Hong Kong going to
Manila but since her ticket was non-transferable, she would have to pay for the ticket. The respondent could not accept
the offer because she had no money to pay for it.7 Her pleas for the respondent to make arrangements to transport
her to Manila were unheeded.8
The respondent then requested the lady employee to use their phone to make a call to Manila. Over the employees’
reluctance, the respondent telephoned her mother to inform the latter that she missed the connecting flight. The
respondent was able to contact a family friend who picked her up from the airport for her overnight stay in Singapore.9
The next day, after being brought back to the airport, the respondent proceeded to petitioner’s counter which says:
"Immediate Attention To Passengers with Immediate Booking." There were four or five passengers in line. The
respondent approached petitioner’s male employee at the counter to make arrangements for immediate booking only
to be told: "Can’t you see I am doing something." She explained her predicament but the male employee uncaringly
retorted: "It’s your problem, not ours."10
The respondent never made it to Manila and was forced to take a direct flight from Singapore to Malaysia on January
29, 1991, through the efforts of her mother and travel agency in Manila. Her mother also had to travel to Malaysia
bringing with her respondent’s wardrobe and personal things needed for the performance that caused them to incur
an expense of about P50,000.11
As a result of this incident, the respondent’s performance before the Royal Family of Malaysia was below par. Because
of the rude and unkind treatment she received from the petitioner’s personnel in Singapore, the respondent was
engulfed with fear, anxiety, humiliation and embarrassment causing her to suffer mental fatigue and skin rashes. She
was thereby compelled to seek immediate medical attention upon her return to Manila for "acute urticaria."12
On June 15, 1993, the RTC rendered a decision with the following dispositive portion:
ACCORDINGLY and as prayed for, defendant Singapore Airlines is ordered to pay herein plaintiff Andion H. Fernandez
the sum of:
1. FIFTY THOUSAND (P50,000.00) PESOS as compensatory or actual damages;
2. TWO HUNDRED and FIFTY THOUSAND (P250,000.00) PESOS as moral damages considering plaintiff’s
professional standing in the field of culture at home and abroad;
3. ONE HUNDRED THOUSAND (P100,000.00) PESOS as exemplary damages;
4. SEVENTY-FIVE THOUSAND (P75,000.00) PESOS as attorney’s fees; and
5. To pay the costs of suit.
SO ORDERED.13
The petitioner appealed the decision to the Court of Appeals.
On June 10, 1998, the CA promulgated the assailed decision finding no reversible error in the appealed decision of the
trial court.14
Forthwith, the petitioner filed the instant petition for review, raising the following errors:
I
THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING IN TOTO THE DECISION OF THE TRIAL COURT THAT
AWARDED DAMAGES TO RESPONDENT FOR THE ALLEGED FAILURE OF THE PETITIONER TO EXERCISE
EXTRAORDINARY DILIGENCE.
 II
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE PETITIONER ACTED IN BAD FAITH.
III
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITIONER’S COUNTERCLAIMS.15
The petitioner assails the award of damages contending that it exercised the extraordinary diligence required by law
under the given circumstances. The delay of Flight No. SQ 27 from Frankfurt to Singapore on January 28, 1991 for more
than two hours was due to a fortuitous event and beyond petitioner’s control. Inclement weather prevented the
petitioner’s plane coming from Copenhagen, Denmark to arrive in Frankfurt on time on January 27, 1991. The plane
could not take off from the airport as the place was shrouded with fog. This delay caused a "snowball effect" whereby
the other flights were consequently delayed. The plane carrying the respondent arrived in Singapore two (2) hours
behind schedule.16 The delay was even compounded when the plane could not travel the normal route which was
through the Middle East due to the raging Gulf War at that time. It had to pass through the restricted Russian airspace
which was more congested.17
Under these circumstances, petitioner therefore alleged that it cannot be faulted for the delay in arriving in Singapore
on January 28, 1991 and causing the respondent to miss her connecting flight to Manila.
The petitioner further contends that it could not also be held in bad faith because its personnel did their best to look
after the needs and interests of the passengers including the respondent. Because the respondent and the other 25
passengers missed their connecting flight to Manila, the petitioner automatically booked them to the flight the next
day and gave them free hotel accommodations for the night. It was respondent who did not take petitioner’s offer and
opted to stay with a family friend in Singapore.
The petitioner also alleges that the action of the respondent was baseless and it tarnished its good name and image
earned through the years for which, it was entitled to damages in the amount of ₱1,000,000; exemplary damages of
₱500,000; and attorney’s fees also in the amount of ₱500,000.18
The petition is barren of merit.
When an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of carriage
arises. The passenger then has every right to expect that he be transported on that flight and on that date. If he does
not, then the carrier opens itself to a suit for a breach of contract of carriage.19
The contract of air carriage is a peculiar one. Imbued with public interest, the law requires common carriers to carry the
passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons
with due regard for all the circumstances.20 In an action for breach of contract of carriage, the aggrieved party does
not have to prove that the common carrier was at fault or was negligent. All that is necessary to prove is the existence
of the contract and the fact of its non-performance by the carrier.21
In the case at bar, it is undisputed that the respondent carried a confirmed ticket for the two-legged trip from Frankfurt
to Manila: 1) Frankfurt-Singapore; and 2) Singapore-Manila. In her contract of carriage with the petitioner, the
respondent certainly expected that she would fly to Manila on Flight No. SQ 72 on January 28, 1991. Since the
petitioner did not transport the respondent as covenanted by it on said terms, the petitioner clearly breached its
contract of carriage with the respondent. The respondent had every right to sue the petitioner for this breach. The
defense that the delay was due to fortuitous events and beyond petitioner’s control is unavailing. In PAL vs. CA,22 we
held that:
.... Undisputably, PAL’s diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such
occurrence did not terminate PAL’s contract with its passengers. Being in the business of air carriage and the sole one
to operate in the country, PAL is deemed to be equipped to deal with situations as in the case at bar. What we said in
one case once again must be stressed, i.e., the relation of carrier and passenger continues until the latter has been
landed at the port of destination and has left the carrier’s premises. Hence, PAL necessarily would still have to exercise
extraordinary diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they have
reached their final destination...
...
"...If the cause of non-fulfillment of the contract is due to a fortuitous event, it has to be the sole and only cause (Art.
1755 C.C., Art. 1733 C.C.). Since part of the failure to comply with the obligation of common carrier to deliver its
passengers safely to their destination lay in the defendant’s failure to provide comfort and convenience to its stranded
passengers using extraordinary diligence, the cause of non-fulfillment is not solely and exclusively due to fortuitous
event, but due to something which defendant airline could have prevented, defendant becomes liable to plaintiff."
Indeed, in the instant case, petitioner was not without recourse to enable it to fulfill its obligation to transport the
respondent safely as scheduled as far as human care and foresight can provide to her destination. Tagged as a
premiere airline as it claims to be and with the complexities of air travel, it was certainly well-equipped to be able to
foresee and deal with such situation. The petitioner’s indifference and negligence by its absence and insensitivity was
exposed by the trial court, thus:
(a) Under Section 9.1 of its Traffic Manual (Exhibit 4) "…flights can be delayed to await the uplift of connecting
cargo and passengers arriving on a late in-bound flight…" As adverted to by the trial court,…"Flight SQ-27/28
maybe delayed for about half an hour to transfer plaintiff to her connecting flight. As pointed out above, delay
is normal in commercial air transportation" (RTC Decision, p. 22); or
(b) Petitioner airlines could have carried her on one of its flights bound for Hongkong and arranged for a
connecting flight from Hongkong to Manila all on the same date. But then the airline personnel who informed
her of such possibility told her that she has to pay for that flight. Regrettably, respondent did not have
sufficient funds to pay for it. (TSN, 30 March 1992, pp.8-9; RTC Decision, pp. 22-23) Knowing the predicament
of the respondent, petitioner did not offer to shoulder the cost of the ticket for that flight; or
 (c) As noted by the trial court from the account of petitioner’s witness, Bob Khkimyong, that "a passenger such
as the plaintiff could have been accommodated in another international airline such as Lufthansa to bring the
plaintiff to Singapore early enough from Frankfurt provided that there was prior communication from that
station to enable her to catch the connecting flight to Manila because of the urgency of her business in
Manila…(RTC Decision, p. 23)
The petitioner’s diligence in communicating to its passengers the consequences of the delay in their flights was
wanting. As elucidated by the trial court:
It maybe that delay in the take off and arrival of commercial aircraft could not be avoided and may be caused by
diverse factors such as those testified to by defendant’s pilot. However, knowing fully well that even before the plaintiff
boarded defendant’s Jumbo aircraft in Frankfurt bound for Singapore, it has already incurred a delay of two hours.
Nevertheless, defendant did not take the trouble of informing plaintiff, among its other passengers of such a delay and
that in such a case, the usual practice of defendant airline will be that they have to stay overnight at their connecting
airport; and much less did it inquire from the plaintiff and the other 25 passengers bound for Manila whether they are
amenable to stay overnight in Singapore and to take the connecting flight to Manila the next day. Such information
should have been given and inquiries made in Frankfurt because even the defendant airline’s manual provides that in
case of urgency to reach his or her destination on the same date, the head office of defendant in Singapore must be
informed by telephone or telefax so as the latter may make certain arrangements with other airlines in Frankfurt to
bring such a passenger with urgent business to Singapore in such a manner that the latter can catch up with her
connecting flight such as S-27/28 without spending the night in Singapore…23
The respondent was not remiss in conveying her apprehension about the delay of the flight when she was still in
Frankfurt. Upon the assurance of petitioner’s personnel in Frankfurt that she will be transported to Manila on the same
date, she had every right to expect that obligation fulfilled. She testified, to wit:
Q: Now, since you were late, when the plane that arrived from Frankfurt was late, did you not make arrangements so
that your flight from Singapore to Manila would be adjusted?
A: I asked the lady at the ticket counter, the one who gave the boarding pass in Frankfurt and I asked her, "Since my
flight going to Singapore would be late, what would happen to my Singapore-Manila flight?" and then she said, "Don’t
worry, Singapore Airlines would be responsible to bring you to Manila on the same date." And then they have informed
the name of the officer, or whatever, that our flight is going to be late.24
When a passenger contracts for a specific flight, he has a purpose in making that choice which must be respected. This
choice, once exercised, must not be impaired by a breach on the part of the airline without the latter incurring any
liability.25 For petitioner’s failure to bring the respondent to her destination, as scheduled, we find the petitioner clearly
liable for the breach of its contract of carriage with the respondent.
We are convinced that the petitioner acted in bad faith.1âwphi1 Bad faith means a breach of known duty through some
motive of interest or ill will. Self-enrichment or fraternal interest, and not personal ill will, may well have been the
motive; but it is malice nevertheless.26 Bad faith was imputed by the trial court when it found that the petitioner’s
employees at the Singapore airport did not accord the respondent the attention and treatment allegedly warranted
under the circumstances. The lady employee at the counter was unkind and of no help to her. The respondent further
alleged that without her threats of suing the company, she was not allowed to use the company’s phone to make long
distance calls to her mother in Manila. The male employee at the counter where it says: "Immediate Attention to
Passengers with Immediate Booking" was rude to her when he curtly retorted that he was busy attending to other
passengers in line. The trial court concluded that this inattentiveness and rudeness of petitioner’s personnel to
respondent’s plight was gross enough amounting to bad faith. This is a finding that is generally binding upon the Court
which we find no reason to disturb.
Article 2232 of the Civil Code provides that in a contractual or quasi-contractual relationship, exemplary damages may
be awarded only if the defendant had acted in a "wanton, fraudulent, reckless, oppressive or malevolent manner." In
this case, petitioner’s employees acted in a wanton, oppressive or malevolent manner. The award of exemplary
damages is, therefore, warranted in this case.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.

Footnotes
1 Penned by Associate Justice Corona Ibay-Somera with Associate Justices Oswaldo D. Agcaoili and Renato C.
Dacudao, concurring.
2 Penned by Judge Apolonio R. Chavez, Jr.
3 TSN, 30 March 1992, p. 22.
4 Id. at 11-12.
5 Records, p. 2.
6 TSN, 11 June 1992, p. 17.
7 TSN, 30 March 1992, p. 8.
8 Records, p. 3.
9 TSN, 30 March 1992, pp. 9-10.
10 Id. at 14.
11 Id. at 23.
12 TSN, 30 March 1992, p. 21; Exhibit "E"; Records, p. 80.
13 Records, p. 202.
14 Rollo, p. 36.
15 Rollo, pp. 15-16.
16 TSN, 28 May 1992, p. 8.
17 Id. at 15-16.
18 Records, pp. 45-47.
19 Alitalia Airways vs. CA, 187 SCRA 763 (1990).
20 PAL vs. CA, 226 SCRA 423 (1993).
21 China Airlines, Ltd. vs. Court of Appeals, et al., G.R. No. 129988, July 14, 2003.
22 Supra at note 28.
23 Records, pp. 198-199.
24 TSN, 30 March 1992, pp. 6-7.
25 Alitalia Airways vs. CA, supra.
26 Lopez vs. Pan American World Airways, 16 SCRA 431 (1966).
 [G.R. No. 139875. December 4, 2000.]

GREGORIO PESTAÑO and METRO CEBU AUTOBUS CORPORATION, Petitioners, v. Spouses TEOTIMO
SUMAYANG and PAZ C. SUMAYANG, Respondents.

DECISION
PANGANIBAN, J.:

Factual findings of the Court of Appeals, affirming those of the trial judge, are binding on this Court. In quasi-delicts,
such findings are crucial because negligence is largely a matter of evidence. In computing an award for lost earning
capacity, the life expectancy of the deceased, not that of the heir, is used as basis.chanrob1es virtua1 1aw 1ibrary
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the April 21, 1999 Decision
and the August 6, 1999 Resolution of the Court of Appeals 1 (CA) in CA-GR CV No. 30289. The questioned Decision
disposed as follows:jgc:chanrobles.com.ph

"WHEREFORE, premises considered, the instant appeal is hereby DENIED. The assailed Decision of the lower court is
hereby AFFIRMED with the aforesaid modification regarding the award of death penalty."cralaw virtua1aw library

The Resolution of August 6, 1999 denied reconsideration. 2

The Facts

The events leading to this Petition were summarized by the Court of Appeals as follows:jgc:chanrobles.com.ph

"It appears from the records that at around 2:00 o’clock [o]n the afternoon of August 9, 1986, Ananias Sumayang was
riding a motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with him was his friend Manuel
Romagos. As they came upon a junction where the highway connected with the road leading to Tabagon, they were hit
by a passenger bus driven by [Petitioner] Gregorio Pestaño and owned by [Petitioner] Metro Cebu Autobus
Corporation (Metro Cebu, for brevity), which had tried to overtake them, sending the motorcycle and its passengers
hurtling upon the pavement. Both Ananias Sumayang and Manuel Romagos were rushed to the hospital in Sogod,
where Sumayang was pronounced dead on arrival. Romagos was transferred to the Cebu Doctors’ Hospital, but he
succumbed to his injuries the day after.chanrob1es virtua1 1aw 1ibrary

"Apart from the institution of criminal charges against Gregorio Pestaño, [Respondents] Teotimo and Paz Sumayang, as
heirs of Ananias Sumayang, filed this civil action for damages against Gregorio Pestaño, as driver of the passenger bus
that rammed the deceased’s motorcycle, Metro Cebu, as owner and operator of the said bus, and Perla Compania de
Seguros, as insurer of Metro Cebu. The case was docketed as Civil Case No. CEB-6108.

"On November 9, 1987, upon motion of [Petitioner] Pestaño, Judge Pedro C. Son ordered the consolidation of the said
case with Criminal Case No. 10624, pending in Branch 16 of the same Court, involving the criminal prosecution of
Gregorio Pestaño for [d]ouble [h]omicide thru [r]eckless [i]mprudence. Joint trial of the two cases thereafter ensued,
where the following assertions were made:chanrob1es virtual 1aw library

‘[Respondents] rely mainly on the testimonies of Ignacio Neis, Pat. Aquilino Dinoy and Teotimo Sumayang, father of the
deceased. Neis declared that he saw the incident while he was sitting on a bench beside the highway; that both vehicles
c[a]me from the North; that as the motorcycle approached the junction to Tab[a]gon, the driver Ananias Sumayang
signalled with his left arm to indicate that he was taking the Tab[a]gon Road; that the motorcycle did turn left but as it
did so, it was bumped by an overspeeding bus; that the force of the impact threw Ananias Sumayang and his
companion Manuel Romagos about 14 meters away. The motorcycle, Neis continued, was badly damaged as it was
dragged by the bus.

‘On the other hand, Pat. Dinoy testified that he was in the nearby house of Ruben Tiu [when] he heard the sound or
noise caused by the collision; that he immediately went to the scene where he found Ananias Sumayang and Manuel
Romagos lying on the road bleeding and badly injured; that he requested the driver of a PU vehicle to take them to a
hospital; that he took note of the various distances which he included in his sketch (Exh. J) that the probable point of
impact was at the left lane of the highway and right at the junction to Tab[a]gon (Exh J-11); that he based his
conclusion on the ‘scratches’ caused by the motorcycle’s footrest on the asphalt pavement; that he described the
damage caused to the motorcycle in his sketch (Exh J); that on the part of the bus, the right end of its front bumper was
bent and the right portion of the radiator grill was dented. Pat. Dinoy acknowledged that he met at the scene Ignacio
Neis who informed him that he saw the incident.

‘On the contrary, Pestaño blamed Sumayang for the accident. He testified that when he first blew the horn the
motorcycle which was about 15 or 20 meters ahead went to the right side of the highway that he again blew the horn
and accelerated in order to overtake the motorcycle; that when he was just one meter behind, the motorcycle suddenly
turned left towards the Tab[a]gon [R]oad and was bumped by his bus; that he was able to apply his break only after the
impact. Pestaño’s testimony was corroborated by Ireneo Casilia who declared that he was one of the passengers of the
bus; that the motorcycle suddenly turned left towards Tab[a]gon [R]oad without giving any signal to indicate its
 maneuver; that the bus was going at 40 kph when the accident occurred.

‘To substantiate its defense of bonos pater familias [petitioner] [c]orporation recalled to the witness box Gregorio
Pestaño who explained how his driving experience and ability were tested by the company before he was hired. He
further declared that the management gave regular lectures to drivers and conductors touching on various topics like
speeding, parking, loading and treatment of passengers, and that before he took to the road at 2:30 AM of that day he
checked together with the mechanic the tires, brake, signal lights as well as the tools to be brought along. He did the
same thing before commencing his return trip from Hagnaya, San Remegio later in the day.chanrob1es virtua1 1aw
1ibrary

‘The corporation also presented its maintenance supervisor, Agustin Pugeda, Jr., and its manager, Alfonso Corominas,
Jr. who corroborated Pestaño’s testimony that his driving ability was thoroughly tested, and that all drivers underwent
periodic lecture on various aspects of safety driving including pertinent traffic regulations. They also confirmed the
thorough checkup of every vehicle before it would depart and that the performance of the drivers was being monitored
by several inspectors posted at random places along the route.’

"In judgment, the lower court found [petitioners] liable to the [respondents], in the amounts of P30,000.00 for death
indemnity, P829,079 for loss of earning capacity of the deceased Ananias Sumayang, and P36,000.00 for necessary
interment expenses. The liability of defendant Perla Compania de Seguros, Inc., however, was limited only to the
amount stipulated in the insurance policy, which [was] P12,000 for death indemnity and P4,500.00 for burial expenses.

"In so ruling, the lower court found [Petitioner] Pestaño to have been negligent in driving the passenger bus that hit
the deceased. It was shown that Pestaño negligently attempted to overtake the motorcycle at a dangerous speed as
they were coming upon a junction in the road, and as the motorcycle was about to turn left towards Tabagon. The
court likewise found Metro Cebu directly and primarily liable, along with Pestaño, the latter’s employer under Article
2180 of the Civil Code, as [Petitioner] Metro Cebu failed to present evidence to prove that it had observed . . . [the]
diligence of a good father of a family to prevent damage. Nor has Metro Cebu proven that it had exercised due
diligence in the supervision of its employees and in the maintenance of vehicles." 3
Ruling of the Court of Appeals

The CA affirmed respondent’s liability for the accident and for Sumayang’s death. Pestaño was negligent when he tried
to overtake the victim’s motorcycle at the Tabagon junction. As a professional driver operating a public transport
vehicle, he should have taken extra precaution to avoid accidents, knowing that it was perilous to overtake at a
junction, where adjoining roads had brought about merging and diverging traffic.

The appellate court opined that Metro Cebu had shown laxity in the conduct of its operations and in the supervision of
its employees. By allowing the bus to ply its route despite the defective speedometer, said petitioner showed its
indifference towards the proper maintenance of its vehicles. Having failed to observe the extraordinary diligence
required of public transportation companies, it was held vicariously liable to the victims of the vehicular accident.

In accordance with prevailing jurisprudence, the CA raised to P50,000 the granted indemnity for the death of the victim.
It also affirmed the award of loss of earning capacity based on his life expectancy. Such liability was assessed, not as a
pension for the claiming heirs, but as a penalty and an indemnity for the driver’s negligent act.

Hence, this Petition. 4

Issues

Petitioners submit the following issues 5 for our consideration:jgc:chanrobles.com.ph

"1. The Court of Appeals misapplied facts of weight and substance affecting the result of the case.

"2. The Court of Appeals misapplied R.A. 4136 as regards the behavior of the deceased at the time of the accident.

"3. The Court of Appeals erred in ruling that the award of damages representing income that deceased could have
earned be considered a penalty.

"4. The Court of Appeals, contrary to Article 2204, Civil Code, raised the award of P30,000.00 damages representing
indemnity for death to P50,000.00.

"5. The Court of Appeals used as basis for the loss of earning capacity, the life expectancy of the [d]eceased instead of
that of the respondents which was shorter." 6

In short, they raise these questions: whether the CA erred (1) in applying Section 45 of RA 4136 when it ruled that
negligence in driving was the proximate cause of the accident; (2) in increasing the civil indemnity from P30,000 to
P50,000; and (3) in using the life expectancy of the deceased instead of the life expectancies of respondents.
 The Court’s Ruling
The Petition has no merit.

First Issue: Negligence

Petitioners contend that Pestaño was not under any obligation to slow down when he overtook the motorcycle,
because the deceased had given way to him upon hearing the bus horn. Seeing that the left side of the road was clearly
visible and free of oncoming traffic, Pestaño accelerated his speed to pass the motorcycle. Having given way to the bus,
the motorcycle driver should have slowed down until he had been overtaken.

They further contend that the motorcycle was not in the middle of the road nearest to the junction as found by the trial
and the appellate courts, but was on the inner lane. This explains why the damage on the bus were all on the right side
— the right end of the bumper and the right portion of the radiator grill were bent and dented. Hence, they insist that
it was the victim who was negligent.

We disagree. Petitioners are raising a question of fact based on Pestaño’s testimony contradicting that of Eyewitness
Ignacio Neis and on the location of the dents on the bumper and the grill. Neis testified that as the two vehicles
approached the junction, the victim raised his left arm to signal that he was turning left to Tabagon, but that the latter
and his companion were thrown off the motorcycle after it was bumped by the overspeeding bus.

These contentions have already been passed upon by the trial and the appellate courts. We find no cogent reason to
reverse or modify their factual findings. The CA agreed with the trial court that the vehicular collision was caused by
Pestaño’s negligence when he attempted to overtake the motorcycle. As a professional driver operating a public
transport bus, he should have anticipated that overtaking at a junction was a perilous maneuver and should thus have
exercised extreme caution.

Factual findings of the CA affirming those of the trial court are conclusive and binding on this Court. Petitioners failed
to demonstrate that this case falls under any of the recognized exceptions to this rule. 7 Indeed, the issue of negligence
is basically factual and, in quasi-delicts, crucial in the award of damages.

Petitioners aver that the CA was wrong in attributing the accident to a faulty speedometer and in implying that the
accident could have been avoided had this instrument been properly functioning.chanrob1es virtua1 1aw 1ibrary

This contention has no factual basis. Under Articles 2180 and 2176 of the Civil Code, owners and managers are
responsible for damages caused by their employees. When an injury is caused by the negligence of a servant or an
employee, the master or employer is presumed to be negligent either in the selection or in the supervision of that
employee. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and
the diligence of a good father of a family in the selection and the supervision of its employee. 8

The CA said that allowing Pestaño to ply his route with a defective speedometer showed laxity on the part of Metro
Cebu in the operation of its business and in the supervision of its employees. The negligence alluded to here is in its
supervision over its driver, not in that which directly caused the accident. The fact that Pestaño was able to use a bus
with a faulty speedometer shows that Metro Cebu was remiss in the supervision of its employees and in the proper care
of its vehicles. It had thus failed to conduct its business with the diligence required by law.

Second Issue: Life Indemnity

Petitioners aver that the CA erred in increasing the award for life indemnity from P30,000 to P50,000, without specifying
any aggravating circumstance to justify the increment as provided in the Civil Code. 9

This contention is untenable. The indemnity for death caused by a quasi-delict used to be pegged at P3,000, based on
Article 2206 of the Civil Code. However, the amount has been gradually increased through the years because of the
declining value of our currency. At present, prevailing jurisprudence fixes the amount at P50,000. 10

Third Issue: Loss of Earning Capacity

Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals, 11 which held:jgc:chanrobles.com.ph

"The determination of the indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis. . . .
The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important factor . . ."cralaw
virtua1aw library

They contend that the CA used the wrong basis for its computation of earning capacity.

We disagree. The Court has consistently computed the loss of earning capacity based on the life expectancy of the
deceased, 12 and not on that of the heir. 13 Even Villa Rey Transit did likewise.
The award for loss of earning capacity is based on two factors: (1) the number of years on which the computation of
damages is based and (2) the rate at which the loss sustained by the heirs is fixed. 14 The first factor refers to the life
expectancy, which takes into consideration the nature of the victim’s work, lifestyle, age and state of health prior to the
accident. The second refers to the victim’s earning capacity minus the necessary living expenses. Stated otherwise, the
amount recoverable is that portion of the earnings of the deceased which the beneficiary would have received — the
net earnings of the deceased. 15

WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution AFFIRMED. Cost against petitioners.

SO ORDERED.

Melo, Vitug and Gonzaga-Reyes, JJ., concur.

Endnotes:

1. Penned by Justice Rodrigo V. Cosico with the concurrence of Justices Artemon D. Luna, Division chairman; and
Delilah Vidallon-Magtolis, member.

2. Rollo, p. 38.

3. Rollo, pp. 29-32.

4. This case was deemed submitted for resolution on April 13, 2000 upon receipt by this Court of respondent’s
Memorandum, signed by Atty. Paterno S. Compra.

5. Rollo, p. 72. The Memorandum for Petitioners was signed by Atty. Expedito P. Bugarin Sr.

6. Rollo, p. 72.

7. Coca-Cola Bottlers Philippines, Inc. v. Court of Appeals, 229 SCRA 533, Civil Aeronautics Administration v. Court of
Appeals, 167 SCRA 28, 38, November 8, 1988; Cheesman v. Intermediate Appellate Court, 198 SCRA 93, 101, January 21,
1991; Philippine National Railroad v. Intermediate Appellate Court, 217 SCRA 401, 416, January 22, 1993; Cebu Shipyard
Engineering Works, Inc. v William Lines, Inc., 306 SCRA 762, 775, May 5, 1999; and Rafael Reyes Trucking Corp v. People,
GR No. 129029, April 3, 2000.

8. Baliwag Transit, Inc. v. Court of Appeals, 262 SCRA 230, 234, September 20, 1996; and Metro Manila Transit Corp. v.
Court of Appeals, 298 SCRA 495, 502-504, November 16, 1998.

9. "Art. 2204. In crimes, the damages to be adjudicated may be respectively increased or lessened according to the
aggravating or mitigating circumstances."cralaw virtua1aw library

10. Metro Manila Transit Corporation v. CA, 298 SCRA 495, November 16, 1998.

11. 31 SCRA 511, 515-516, February 18, 1970, per Concepcion, C.J.

12. Sanitary Steam Laundry, Inc. v. Court of Appeals, 300 SCRA 20, 35-36, December 10, 1998; Metro Manila Transit
Corp. v. CA, supra, pp. 510-514; Negros Navigation Co., Inc. v. Court of Appeals, 281 SCRA 534, 546-548, November 7,
1997; Villa Rey Transit, Inc. v. Court of Appeals, 31 SCRA 511, 516, February 18, 1970.

13. People v. Teehankee Jr., 249 SCRA 54,121, October 6, 1995; Philippine Airlines, Inc. v. Court of Appeals, 185 SCRA
110, 122, May 8, 1990; Davila v. Philippine Airlines, 49 SCRA 497,504-505, February 28, 1973.

14. Baliwag Transit, Inc. v. CA, supra, p. 235; Bachelor Express Incorporated v. Court of Appeals, 188 SCRA 216,227, July
31, 1990; Villa Rey Transit v. CA, supra, p. 514.

15. Davila v. PAL, supra, p. 505; Bachelor Express Inc. v. CA, ibid.
G.R. No. 128607. January 31, 2000
ALFREDO MALLARI SR. and ALFREDO MALLARI JR., Petitioners, v. COURT OF APPEALS and BULLETIN
PUBLISHING CORPORATION, Respondents.
DECISION
BELLOSILLO, J.:
ALFREDO MALLARI SR. and ALFREDO MALLARI JR. in this petition for review on certiorari seek to set aside the Decision
of the Court of Appeals1 which reversed the court a quo and adjudged petitioners to be liable for damages due to
negligence as a common carrier resulting in the death of a passenger.
On 14 October 1987, at about 5:00 o'clock in the morning, the passenger jeepney driven by petitioner Alfredo Mallari
Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with the delivery van of respondent Bulletin Publishing
Corp. (BULLETIN, for brevity) along the National Highway in Barangay San Pablo, Dinalupihan, Bataan. Petitioner Mallari
Jr. testified that he went to the left lane of the highway and overtook a Fiera which had stopped on the right lane.
Before he passed by the Fiera, he saw the van of respondent BULLETIN coming from the opposite direction. It was
driven by one Felix Angeles. The sketch of the accident showed that the collision occurred after Mallari Jr. overtook the
Fiera while negotiating a curve in the highway. The points of collision were the left rear portion of the passenger
jeepney and the left front side of the delivery van of BULLETIN. The two (2) right wheels of the delivery van were on the
right shoulder of the road and pieces of debris from the accident were found scattered along the shoulder of the road
up to a certain portion of the lane travelled by the passenger jeepney. The impact caused the jeepney to turn around
and fall on its left side resulting in injuries to its passengers one of whom was Israel Reyes who eventually died due to
the gravity of his injuries.
On 16 December 1987 Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for damages with the Regional
Trial Court of Olongapo City against Alfredo Mallari Sr. and Alfredo Mallari Jr., and also against BULLETIN, its driver Felix
Angeles, and the N.V. Netherlands Insurance Company. The complaint alleged that the collision which resulted in the
death of Israel Reyes was caused by the fault and negligence of both drivers of the passenger jeepney and the Bulletin
Isuzu delivery van. The complaint also prayed that the defendants be ordered jointly and severally to pay
plaintiff P1,006,777.40 in compensatory damages, P40,000.00 for hospital and medical expenses, P18,270.00 for burial
expenses plus such amounts as may be fixed by the trial court for exemplary damages and attorneys fees.
The trial court found that the proximate cause of the collision was the negligence of Felix Angeles, driver of the Bulletin
delivery van, considering the fact that the left front portion of the delivery truck driven by Felix Angeles hit and bumped
the left rear portion of the passenger jeepney driven by Alfredo Mallari Jr. Hence, the trial court ordered BULLETIN and
Felix Angeles to pay jointly and severally Claudia G. Reyes, widow of the deceased victim, the sums of P42,106.93 for
medical expenses; P8,600.00 for funeral and burial expenses; P1,006,777.40 for loss of earning capacity; P5,000.00 for
moral damages and P10,000.00 for attorneys fees. The trial court also ordered N.V. Netherlands Insurance Company to
indemnify Claudia G. Reyes P12,000.00 as death indemnity and P2,500.00 for funeral expenses which when paid should
be deducted from the liabilities of respondent BULLETIN and its driver Felix Angeles to the plaintiff. It also dismissed
the complaint against the other defendants Alfredo Mallari Sr. and Alfredo Mallari Jr.
On appeal the Court of Appeals modified the decision of the trial court and found no negligence on the part of Angeles
and consequently of his employer, respondent BULLETIN. Instead, the appellate court ruled that the collision was
caused by the sole negligence of petitioner Alfredo Mallari Jr. who admitted that immediately before the collision and
after he rounded a curve on the highway, he overtook a Fiera which had stopped on his lane and that he had seen the
van driven by Angeles before overtaking the Fiera. The Court of Appeals ordered petitioners Mallari Jr. and Mallari Sr.
to compensate Claudia G. Reyes P1,006,777.50 for loss of earning capacity, P50,000.00 as indemnity for death
and P10,000.00 for attorneys fees. It absolved from any liability respondent BULLETIN, Felix Angeles and N.V.
Netherlands Insurance Company. Hence this petition.
Petitioners contend that there is no evidence to show that petitioner Mallari Jr. overtook a vehicle at a curve on the
road at the time of the accident and that the testimony of Angeles on the overtaking made by Mallari Jr. was not
credible and unreliable. Petitioner also submits that the trial court was in a better position than the Court of Appeals to
assess the evidence and observe the witnesses as well as determine their credibility; hence, its finding that the
proximate cause of the collision was the negligence of respondent Angeles, driver of the delivery van owned by
respondent BULLETIN, should be given more weight and consideration.
We cannot sustain petitioners. Contrary to their allegation that there was no evidence whatsoever that petitioner
Mallari Jr. overtook a vehicle at a curve on the road at the time of or before the accident, the same petitioner himself
testified that such fact indeed did occur -
Q:.......And what was that accident all about?
A:.......Well, what happened, sir, is that at about that time 5:00 oclock in that morning of October 14 while I was
negotiating on the highway at San Pablo, Dinalupihan, Bataan, I was then following a blue Ford Fierra and my distance
behind was about twenty (20) feet and then I passed that blue Ford Fierra. I overtook and when I was almost on the
right lane of the highway towards Olongapo City there was an oncoming delivery van of the Bulletin Publishing
Corporation which bumped the left rear portion of the jeepney which I was driving and as a result of which the jeepney
x x x turned around and fell on its left side and as a result of which some of my passengers including me were injured,
sir x x x x
Q:.......Before you overtook the Ford Fierra jeepney did you look x x x whether there was any vehicle coming towards
you?
A:.......Yes, sir.
Q:.......Did you see the Bulletin van or the Press van coming towards you?
A:.......Yes, sir.
Q:.......At the moment the Ford Fierra xxx stop(ped) and in overtaking the Fierra, did you not have an option to stop and
not to overtake the Ford Fierra?
A:.......Well, at the time when the Ford Fierra stopped in front of me I slowed down with the intention of applying the
brake, however, when I saw the oncoming vehicle which is the Press van is very far x x x which is 100 feet distance, x x x
it is sufficient to overtake the Ford Fierra so I overt(ook) it x x x x
Q:.......You said that you took into consideration the speed of the oncoming Press van but you also could not estimate
the speed of the press van because it was dark at that time, which of these statements are true?
A:.......What I wanted to say, I took into consideration the speed of the oncoming vehicle, the Press van, although at the
moment I could not estimate the speed of the oncoming vehicle x x x x2cräläwvirtualibräry
The Court of Appeals correctly found, based on the sketch and spot report of the police authorities which were not
disputed by petitioners, that the collision occurred immediately after petitioner Mallari Jr. overtook a vehicle in front of
it while traversing a curve on the highway.3 This act of overtaking was in clear violation of Sec. 41, pars. (a) and (b), of
RA 4136 as amended, otherwise known as The Land Transportation and Traffic Code which provides:
Sec. 41. Restrictions on overtaking and passing. - (a) The driver of a vehicle shall not drive to the left side of the center
line of a highway in overtaking or passing another vehicle proceeding in the same direction, unless such left side is
clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or passing to be
made in safety.
(b) The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same direction when
approaching the crest of a grade, nor upon a curve in the highway, where the drivers view along the highway is
obstructed within a distance of five hundred feet ahead except on a highway having two or more lanes for movement
of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle:
Provided That on a highway, within a business or residential district, having two or more lanes for movement of traffic
in one direction, the driver of a vehicle may overtake or pass another vehicle on the right.
The rule is settled that a driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary
situation has the duty to see to it that the road is clear and not to proceed if he cannot do so in safety.4 When a motor
vehicle is approaching or rounding a curve, there is special necessity for keeping to the right side of the road and the
driver does not have the right to drive on the left hand side relying upon having time to turn to the right if a car
approaching from the opposite direction comes into view.5cräläwvirtualibräry
In the instant case, by his own admission, petitioner Mallari Jr. already saw that the BULLETIN delivery van was coming
from the opposite direction and failing to consider the speed thereof since it was still dark at 5:00 o'clock in the
morning mindlessly occupied the left lane and overtook two (2) vehicles in front of it at a curve in the highway. Clearly,
the proximate cause of the collision resulting in the death of Israel Reyes, a passenger of the jeepney, was the sole
negligence of the driver of the passenger jeepney, petitioner Alfredo Mallari Jr., who recklessly operated and drove his
jeepney in a lane where overtaking was not allowed by traffic rules. Under Art. 2185 of the Civil Code, unless there is
proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent if at the time of the
mishap he was violating a traffic regulation. As found by the appellate court, petitioners failed to present satisfactory
evidence to overcome this legal presumption.
The negligence and recklessness of the driver of the passenger jeepney is binding against petitioner Mallari Sr., who
admittedly was the owner of the passenger jeepney engaged as a common carrier, considering the fact that in an
action based on contract of carriage, the court need not make an express finding of fault or negligence on the part of
the carrier in order to hold it responsible for the payment of damages sought by the passenger. Under Art. 1755 of the
Civil Code, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide
using the utmost diligence of very cautious persons with due regard for all the circumstances. Moreover, under Art.
1756 of the Civil Code, in case of death or injuries to passengers, a common carrier is presumed to have been at fault or
to have acted negligently, unless it proves that it observed extraordinary diligence. Further, pursuant to Art. 1759 of the
same Code, it is liable for the death of or injuries to passengers through the negligence or willful acts of the formers
employees. This liability of the common carrier does not cease upon proof that it exercised all the diligence of a good
father of a family in the selection of its employees. Clearly, by the contract of carriage, the carrier jeepney owned by
Mallari Sr. assumed the express obligation to transport the passengers to their destination safely and to observe
extraordinary diligence with due regard for all the circumstances, and any injury or death that might be suffered by its
passengers is right away attributable to the fault or negligence of the carrier.
The monetary award ordered by the appellate court to be paid by petitioners to the widow of the deceased passenger
Israel M. Reyes of P1,006,777.50 for loss of earning capacity, P50,000.00 as civil indemnity for death, and P10,000.00 for
attorneys fees, all of which were not disputed by petitioners, is a factual matter binding and conclusive upon this Court.
WHEREFORE, the Petition is DENIED and the Decision of the Court of Appeals dated 20 September 1995 reversing the
decision of the trial court being in accord with law and evidence is AFFIRMED. Consequently, petitioners are ordered
jointly and severally to pay Claudia G. Reyes P1,006,777.50 for loss of earning capacity, P50,000.00 as civil indemnity for
death, and P10,000.00 for attorneys fees. Costs against petitioners.
SO ORDERED.
Mendoza, Quisumbing, Buena and De Leon, Jr., concur.

Endnotes:
1 Decision penned by Associate Justice Eubola Verzola, concurred in by Associate Justices Cesar D. Francisco and
Oswaldo D. Agcaoili.
2 TSN, 9 February 1989, pp. 13-14, 28-32.
3 Records, pp. 101-102.
4 BLTB Co. v. IAC, G.R. Nos. 74387-90, 14 November 1988, 167 SCRA 379, citing People v. Enriquez, 40 O.G. No. 5.
5 Ibid.
 [G.R. No. 120027. April 21, 1999]
EDNA A. RAYNERA, for herself and on behalf of the minors RIANNA and REIANNE RAYNERA, Petitioners, v. FREDDIE
HICETA and JIMMY ORPILLA, Respondents.
DECISION
PARDO, J.:
The case is a petition for review on certiorari of the decision of the Court of Appeals,1 reversing that of the Regional
Trial Court, Branch 45, Manila.2
The rule is well-settled that factual findings of the Court of Appeals are generally considered final and may not be
reviewed on appeal. However, this principle admits of certain exceptions, among which is when the findings of the
appellate court are contrary to those of the trial court, a re-examination of the facts and evidence may be
undertaken.3 This case falls under the cited exception.
The antecedent facts are as follows:
Petitioner Edna A. Raynera was the widow of Reynaldo Raynera and the mother and legal guardian of the minors
Rianna and Reianne, both surnamed Raynera. Respondents Freddie Hiceta and Jimmy Orpilla were the owner and
driver, respectively, of an Isuzu truck-trailer, with plate No. NXC 848, involved in the accident.
On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on his way home. He was riding a motorcycle
traveling on the southbound lane of East Service Road, Cupang, Muntinlupa. The Isuzu truck was travelling ahead of
him at 20 to 30 kilometers per hour.4 The truck was loaded with two (2) metal sheets extended on both sides, two (2)
feet on the left and three (3) feet on the right. There were two (2) pairs of red lights, about 35 watts each, on both sides
of the metal plates.5 The asphalt road was not well lighted.
At some point on the road, Reynaldo Raynera crashed his motorcycle into the left rear portion of the truck trailer, which
was without tail lights. Due to the collision, Reynaldo sustained head injuries and truck helper Geraldino D.
Lucelo6 rushed him to the Paraaque Medical Center. Upon arrival at the hospital, the attending physician, Dr. Marivic
Aguirre,7 pronounced Reynaldo Raynera dead on arrival.
At the time of his death, Reynaldo was manager of the Engineering Department, Kawasaki Motors (Phils.) Corporation.
He was 32 years old, had a life expectancy of sixty five (65) years, and an annual net earnings of not less than seventy
three thousand five hundred (P73,500.00) pesos,8 with a potential increase in annual net earnings of not less than ten
percent (10%) of his salary.9
On May 12, 1989, the heirs of the deceased demanded10 from respondents payment of damages arising from the
death of Reynaldo Raynera as a result of the vehicular accident. The respondents refused to pay the claims.
On September 13, 1989, petitioners filed with the Regional Trial Court, Manila11 a complaint12 for damages against
respondents owner and driver of the Isuzu truck.
In their complaint against respondents, petitioners sought recovery of damages for the death of Reynaldo Raynera
caused by the negligent operation of the truck-trailer at nighttime on the highway, without tail lights.
In their answer filed on April 4, 1990, respondents alleged that the truck was travelling slowly on the service road, not
parked improperly at a dark portion of the road, with no tail lights, license plate and early warning device.
At the trial, petitioners presented Virgilio Santos. He testified that at about 1:00 and 2:00 in the morning of March 23,
1989, he and his wife went to Alabang market, on board a tricycle. They passed by the service road going south, and
saw a parked truck trailer, with its hood open and without tail lights. They would have bumped the truck but the tricycle
driver was quick in avoiding a collision. The place was dark, and the truck had no early warning device to alert passing
motorists.13
On the other hand, respondents presented truck helper Geraldino Lucelo.14 He testified that at the time the incident
happened, the truck was slowly traveling at approximately 20 to 30 kilometers per hour. Another employee of
respondents, auto-mechanic Rogoberto Reyes,15 testified that at about 3:00 in the afternoon of March 22, 1989, with
the help of Lucelo, he installed two (2) pairs of red lights, about 30 to 40 watts each, on both sides of the steel
plates.16 On his part, traffic investigation officer Cpl. Virgilio del Monte17 admitted that these lights were visible at a
distance of 100 meters.
On December 19, 1991, the trial court rendered decision in favor of petitioners. It found respondents Freddie Hiceta
and Jimmy Orpilla negligent in view of these circumstances: (1) the truck trailer had no license plate and tail lights; (2)
there were only two pairs of red lights, 50 watts18 each, on both sides of the steel plates; and (3) the truck trailer was
improperly parked in a dark area.
The trial court held that respondents negligence was the immediate and proximate cause of Reynaldo Rayneras death,
for which they are jointly and severally liable to pay damages to petitioners. The trial court also held that the victim was
himself negligent, although this was insufficient to overcome respondents negligence. The trial court applied the
doctrine of contributory negligence19 and reduced the responsibility of respondents by 20% on account of the victims
own negligence.
The dispositive portion of the lower courts decision reads as follows:
All things considered, the Court is of the opinion that it is fair and reasonable to fix the living and other expenses of the
deceased the sum of P54,000.00 a year or about P4,500.00 a month (P150.00 p/d) and that, consequently, the loss or
damage sustained by the plaintiffs may be estimated at P1,674,000.00 for the 31 years of Reynaldo Rayneras life
expectancy.
Taking into account the cooperative negligence of the deceased Reynaldo Raynera, the Court believes that the demand
of substantial justice are satisfied by allocating the damages on 80-20 ratio. Thus, P1,337,200.00 shall be paid by the
defendants with interest thereon, at the legal rate, from date of decision, as damages for the loss of earnings. To this
sum, the following shall be added:
(a) P33,412.00, actually spent for funeral services, interment and memorial lot;
(b) P20,000.00 as attorneys fees;
(c) cost of suit.
SO ORDERED.20cräläwvirtualibräry
On January 10, 1992, respondents Hiceta and Orpilla appealed to the Court of Appeals.21
After due proceedings, on April 28, 1995, the Court of Appeals rendered decision setting aside the appealed decision.
The appellate court held that Reynaldo Rayneras bumping into the left rear portion of the truck was the proximate
cause of his death,22 and consequently, absolved respondents from liability.
Hence, this petition for review on certiorari.
In this petition, the heirs of Reynaldo Raynera contend that the appellate court erred in: (1) overturning the trial courts
finding that respondents negligent operation of the Isuzu truck was the proximate cause of the victims death; (2)
applying the doctrine of last clear chance; (3) setting aside the trial courts award of actual and compensatory damages.
The issues presented are (a) whether respondents were negligent, and if so, (b) whether such negligence was the
proximate cause of the death of Reynaldo Raynera.
Petitioners maintain that the proximate cause of Reynaldo Rayneras death was respondents negligence in operating
the truck trailer on the highway without tail lights and license plate.
The Court finds no reason to disturb the factual findings of the Court of Appeals.
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.23
Proximate cause is 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.24
During the trial, it was established that the truck had no tail lights. The photographs taken of the scene of the accident
showed that there were no tail lights or license plates installed on the Isuzu truck. Instead, what were installed were two
(2) pairs of lights on top of the steel plates, and one (1) pair of lights in front of the truck. With regard to the rear of the
truck, the photos taken and the sketch in the spot report proved that there were no tail lights.
Despite the absence of tail lights and license plate, respondents truck was visible in the highway. It was traveling at a
moderate speed, approximately 20 to 30 kilometers per hour. It used the service road, instead of the highway, because
the cargo they were hauling posed a danger to passing motorists. In compliance with the Land Transportation Traffic
Code (Republic Act No. 4136)25 respondents installed 2 pairs of lights on top of the steel plates, as the vehicles cargo
load extended beyond the bed or body thereof.
We find that the direct cause of the accident was the negligence of the victim. Traveling behind the truck, he had the
responsibility of avoiding bumping the vehicle in front of him. He was in control of the situation. His motorcycle was
equipped with headlights to enable him to see what was in front of him. He was traversing the service road where the
prescribed speed limit was less than that in the highway.
Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were on top of the steel
plates,26 which were visible from a distance of 100 meters.27 Virgilio Santos admitted that from the tricycle where he
was on board, he saw the truck and its cargo of iron plates from a distance of ten (10) meters.28 In light of these
circumstances, an accident could have been easily avoided, unless the victim had been driving too fast and did not
exercise due care and prudence demanded of him under the circumstances.
Virgilio Santos testimony strengthened respondents defense that it was the victim who was reckless and negligent in
driving his motorcycle at high speed. The tricycle where Santos was on board was not much different from the victims
motorcycle that figured in the accident. Although Santos claimed the tricycle almost bumped into the improperly
parked truck, the tricycle driver was able to avoid hitting the truck.
It has been said that drivers of vehicles who bump the rear of another vehicle are presumed to be the cause of the
accident, unless contradicted by other evidence.29 The rationale behind the presumption is that the driver of the rear
vehicle has full control of the situation as he is in a position to observe the vehicle in front of him.
We agree with the Court of Appeals that the responsibility to avoid the collision with the front vehicle lies with the
driver of the rear vehicle.
Consequently, no other person was to blame but the victim himself since he was the one who bumped his motorcycle
into the rear of the Isuzu truck. He had the last clear chance of avoiding the accident.
WHEREFORE, we DENYthe petition for review on certiorari and AFFIRMthe decision of the Court of Appeals in CA-G. R.
CV No. 35895, dismissing the amended complaint in Civil Case No. 89-50355, Regional Trial Court, Branch 45, Manila.
No costs.
SO ORDERED.
Davide, Jr., C.J. (Chairman), Melo, and Kapunan, JJ., concur.
Ynares-Santiago, J., no part.
Endnotes:

1 Promulgated on April 26, 1995, in CA-G. R. CV No. 35895, Eighth Division, Justice Bernardo Ll. Salas, ponente, concurred
in by Justices Jaime M. Lantin, Chairman, and Ma. Alicia Austria-Martinez.
2 Dated December 19, 1991, Judge Benito C. Se, Jr., presiding.
3 Cayabyab v. Intermediate Appellate Court, 123 SCRA 1, 4; see also Misa vs. Court of Appeals, 212 SCRA 217; Golangco
vs. Court of Appeals, 283 SCRA 493, 503; Fule vs. Court of Appeals, 286 SCRA 698, 710; Halili vs. Court of Appeals, 287
SCRA 465, 470; Remalante v. Tibe 158 SCRA 138; Ayala Corporation vs. Ray Burton Development Corporation, G.R. No.
126699, August 7, 1998.
4 tsn, February 8, 1991, p. 11.
5 tsn, February 8, 1991, pp. 5-9.
6 Police Spot Report, Exh. G, Original Records, p. 81.
7 Ibid.
8 Per certification issued by Digna S. Remolana, personnel manager, Kawasaki Motors (Phils.) Corporation on May 18,
1989; Exh. D, Original Records, p. 78.
9 Complaint, Original Records, p. 2.
10 Exh. K, Original Records, p. 85.
11 Docketed as Civil Case No. 89-50355.
12 Complaint, Records, pp. 1-5.
13 Memorandum for the Petitioners, Rollo, p. 186.
14 tsn, February 8, 1991.
15 In the decision of the trial court, he was referred to as Rogo Roberto Reyes.
16 tsn, January 29, 1991.
17 tsn, October 1, 1990.
18 The trial courts decision stated that the bulbs installed on top of the steel plates were 50 watts each, but from the
testimonies of the witnesses before the trial court, they said that the bulbs were 30 to 40 watts each.
19 Phoenix Construction, Inc. v. Intermediate Appellate Court, 148 SCRA 353.
20 Regional Trial Court Decision, CV Case No. 89-50355, Rollo, p. 66.
21 Docketed as CA-G. R. CV No. 35895.
22 Court of Appeals Decision, CA-G. R. CV No. 35895, Rollo, p. 51.
23 Philippine Bank of Commerce vs. Court of Appeals, 269 SCRA 695, 703.
24 Ibid, at pp. 706-707.
25 Article IV, Sec. 34 (I) Use of Red Flag- Whenever the load of any vehicle extends more than one meter beyond the bed
or body thereof, there shall be displayed at every projecting end of such load a red flag not less than thirty centimeters
both in length and width, except that during the hours fixed under sub-section (c) [not later than one-half hour after
sunset and until at least one-half hour before sunrise and whenever weather conditions so require], there shall be
displayed, in lieu of the required red flags, red lights, visible at least fifty meters away.
26 tsn, October 1, 1990, p. 13.
27 Ibid, p. 17.
28 tsn, October 15, 1990, pp. 4-6.
29 Cf. Philippine Rabbit Bus Lines, Inc. v. Intermediate Appellate Court, 189 SCRA 158, 168.
G.R. No. 113003 October 17, 1997
ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners,
vs.
COURT OF APPEALS, LENY TUMBOY, ARDEE TUMBOY and JASMIN TUMBOY, respondents.

ROMERO, J.:
In this petition for review on certiorari of the decision of the Court of Appeals, the issue is whether or not the explosion
of a newly installed tire of a passenger vehicle is a fortuitous event that exempts the carrier from liability for the death
of a passenger.
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin, bearded at
Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop Road in Km. 17, Sta. Maria, Agusan
del Sur, the left front tire of the bus exploded. The bus fell into a ravine around three (3) feet from the road and struck a
tree. The incident resulted in the death of 28-year-old Tito Tumboy and physical injuries to other passengers.
On November 21, 1988, a complaint for breach of contract of carriage, damages and attorney's fees was filed by Leny
and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido, its driver, before the Regional
Trial Court of Davao City. When the defendants therein filed their answer to the complaint, they raised the affirmative
defense of caso fortuito. They also filed a third-party complaint against Philippine Phoenix Surety and Insurance, Inc.
This third-party defendant filed an answer with compulsory counterclaim. At the pre-trial conference, the parties agreed
to a stipulation of facts.1
Upon a finding that the third party defendant was not liable under the insurance contract, the lower court dismissed
the third party complaint. No amicable settlement having been arrived at by the parties, trial on the merits ensued.
The plaintiffs asserted that violation of the contract of carriage between them and the defendants was brought about
by the driver's failure to exercise the diligence required of the carrier in transporting passengers safely to their place of
destination. According to Leny Tumboy, the bus left Mangagoy at 3:00 o'clock in the afternoon. The winding road it
traversed was not cemented and was wet due to the rain; it was rough with crushed rocks. The bus which was full of
passengers had cargoes on top. Since it was "running fast," she cautioned the driver to slow down but he merely stared
at her through the mirror. At around 3:30 p.m., in Trento, she heard something explode and immediately, the bus fell
into a ravine.
For their part, the defendants tried to establish that the accident was due to a fortuitous event. Abundio Salce, who was
the bus conductor when the incident happened, testified that the 42-seater bus was not full as there were only 32
passengers, such that he himself managed to get a seat. He added that the bus was running at a speed of "60 to 50"
and that it was going slow because of the zigzag road. He affirmed that the left front tire that exploded was a "brand
new tire" that he mounted on the bus on April 21, 1988 or only five (5) days before the incident. The Yobido Liner
secretary, Minerva Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20, 1988 and she was
present when it was mounted on the bus by Salce. She stated that all driver applicants in Yobido Liner underwent
actual driving tests before they were employed. Defendant Cresencio Yobido underwent such test and submitted his
professional driver's license and clearances from the barangay, the fiscal and the police.
On August 29, 1991, the lower court rendered a decision2 dismissing the action for lack of merit. On the issue of
whether or not the tire blowout was a caso fortuito, it found that "the falling of the bus to the cliff was a result of no
other outside factor than the tire blow-out." It held that the ruling in the La Mallorca and Pampanga Bus Co. v. De
Jesus3 that a tire blowout is "a mechanical defect of the conveyance or a fault in its equipment which was easily
discoverable if the bus had been subjected to a more thorough or rigid check-up before it took to the road that
morning" is inapplicable to this case. It reasoned out that in said case, it was found that the blowout was caused by the
established fact that the inner tube of the left front tire "was pressed between the inner circle of the left wheel and the
rim which had slipped out of the wheel." In this case, however, "the cause of the explosion remains a mystery until at
present." As such, the court added, the tire blowout was "a caso fortuito which is completely an extraordinary
circumstance independent of the will" of the defendants who should be relieved of "whatever liability the plaintiffs may
have suffered by reason of the explosion pursuant to Article 11744 of the Civil Code."
Dissatisfied, the plaintiffs appealed to the Court of Appeals. They ascribed to the lower court the following errors: (a)
finding that the tire blowout was a caso fortuito; (b) failing to hold that the defendants did not exercise utmost and/or
extraordinary diligence required of carriers under Article 1755 of the Civil Code, and (c) deciding the case contrary to
the ruling in Juntilla v. Fontanar,5 and Necesito v. Paras.6
On August 23, 1993, the Court of Appeals rendered the Decision7 reversing that of the lower court. It held that:
To Our mind, the explosion of the tire is not in itself a fortuitous event. The cause of the blow-out, if due to a
factory defect, improper mounting, excessive tire pressure, is not an unavoidable event. On the other hand,
there may have been adverse conditions on the road that were unforeseeable and/or inevitable, which could
make the blow-out a caso fortuito. The fact that the cause of the blow-out was not known does not relieve the
carrier of liability. Owing to the statutory presumption of negligence against the carrier and its obligation to
exercise the utmost diligence of very cautious persons to carry the passenger safely as far as human care and
foresight can provide, it is the burden of the defendants to prove that the cause of the blow-out was a
fortuitous event. It is not incumbent upon the plaintiff to prove that the cause of the blow-out is not caso-
fortuito.
Proving that the tire that exploded is a new Goodyear tire is not sufficient to discharge defendants' burden. As
enunciated in Necesito vs. Paras, the passenger has neither choice nor control over the carrier in the selection
and use of its equipment, and the good repute of the manufacturer will not necessarily relieve the carrier from
liability.
 Moreover, there is evidence that the bus was moving fast, and the road was wet and rough. The driver could
have explained that the blow-out that precipitated the accident that caused the death of Toto Tumboy could
not have been prevented even if he had exercised due care to avoid the same, but he was not presented as
witness.
The Court of Appeals thus disposed of the appeal as follows:
WHEREFORE, the judgment of the court a quo is set aside and another one entered ordering defendants to pay
plaintiffs the sum of P50,000.00 for the death of Tito Tumboy, P30,000.00 in moral damages, and P7,000.00 for
funeral and burial expenses.
SO ORDERED.
The defendants filed a motion for reconsideration of said decision which was denied on November 4, 1993 by the Court
of Appeals. Hence, the instant petition asserting the position that the tire blowout that caused the death of Tito
Tumboy was a caso fortuito. Petitioners claim further that the Court of Appeals, in ruling contrary to that of the lower
court, misapprehended facts and, therefore, its findings of fact cannot be considered final which shall bind this Court.
Hence, they pray that this Court review the facts of the case.
The Court did re-examine the facts and evidence in this case because of the inapplicability of the established principle
that the factual findings of the Court of Appeals are final and may not be reviewed on appeal by this Court. This general
principle is subject to exceptions such as the one present in this case, namely, that the lower court and the Court of
Appeals arrived at diverse factual findings.8 However, upon such re-examination, we found no reason to overturn the
findings and conclusions of the Court of Appeals.
As a rule, when a passenger boards a common carrier, he takes the risks incidental to the mode of travel he has taken.
After all, a carrier is not an insurer of the safety of its passengers and is not bound absolutely and at all events to carry
them safely and without injury.9 However, when a passenger is injured or dies while travelling, the law presumes that
the common carrier is negligent. Thus, the Civil Code provides:
Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles
1733 and 1755.
Article 1755 provides that "(a) common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances."
Accordingly, in culpa contractual, once a passenger dies or is injured, the carrier is presumed to have been at fault or to
have acted negligently. This disputable presumption may only be overcome by evidence that the carrier had observed
extraordinary diligence as prescribed by Articles 1733,10 1755 and 1756 of the Civil Code or that the death or injury of
the passenger was due to a fortuitous event.11 Consequently, the court need not make an express finding of fault or
negligence on the part of the carrier to hold it responsible for damages sought by the passenger.12
In view of the foregoing, petitioners' contention that they should be exempt from liability because the tire blowout was
no more than a fortuitous event that could not have been foreseen, must fail. A fortuitous event is possessed of the
following characteristics: (a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to
comply with his obligations, must be independent of human will; (b) it must be impossible to foresee the event which
constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as
to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obliger must be free from
any participation in the aggravation of the injury resulting to the creditor.13 As Article 1174 provides, no person shall
be responsible for a fortuitous event which could not be foreseen, or which, though foreseen, was inevitable. In other
words, there must be an entire exclusion of human agency from the cause of injury or loss.14
Under the circumstances of this case, the explosion of the new tire may not be considered a fortuitous event. There are
human factors involved in the situation. The fact that the tire was new did not imply that it was entirely free from
manufacturing defects or that it was properly mounted on the vehicle. Neither may the fact that the tire bought and
used in the vehicle is of a brand name noted for quality, resulting in the conclusion that it could not explode within five
days' use. Be that as it may, it is settled that an accident caused either by defects in the automobile or through the
negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages.15
Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. The
common carrier must still prove that it was not negligent in causing the death or injury resulting from an
accident.16 This Court has had occasion to state:
While it may be true that the tire that blew-up was still good because the grooves of the tire were still visible,
this fact alone does not make the explosion of the tire a fortuitous event. No evidence was presented to show
that the accident was due to adverse road conditions or that precautions were taken by the jeepney driver to
compensate for any conditions liable to cause accidents. The sudden blowing-up, therefore, could have been
caused by too much air pressure injected into the tire coupled by the fact that the jeepney was overloaded and
speeding at the time of the accident.17
It is interesting to note that petitioners proved through the bus conductor, Salce, that the bus was running at "60-50"
kilometers per hour only or within the prescribed lawful speed limit. However, they failed to rebut the testimony of
Leny Tumboy that the bus was running so fast that she cautioned the driver to slow down. These contradictory facts
must, therefore, be resolved in favor of liability in view of the presumption of negligence of the carrier in the law.
Coupled with this is the established condition of the road — rough, winding and wet due to the rain. It was incumbent
upon the defense to establish that it took precautionary measures considering partially dangerous condition of the
road. As stated above, proof that the tire was new and of good quality is not sufficient proof that it was not negligent.
Petitioners should have shown that it undertook extraordinary diligence in the care of its carrier, such as conducting
daily routinary check-ups of the vehicle's parts. As the late Justice J.B.L. Reyes said:
 It may be impracticable, as appellee argues, to require of carriers to test the strength of each and every part of
its vehicles before each trip; but we are of the opinion that a due regard for the carrier's obligations toward the
traveling public demands adequate periodical tests to determine the condition and strength of those vehicle
portions the failure of which may endanger the safety of the passengers.18
Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing evidence,
petitioners are hereby held liable for damages. Article 176419 in relation to Article 220620 of the Civil Code prescribes
the amount of at least three thousand pesos as damages for the death of a passenger. Under prevailing jurisprudence,
the award of damages under Article 2206 has been increased to fifty thousand pesos (P50,000.00).21
Moral damages are generally not recoverable in culpa contractual except when bad faith had been proven. However,
the same damages may be recovered when breach of contract of carriage results in the death of a passenger,22 as in
this case. Exemplary damages, awarded by way of example or correction for the public good when moral damages are
awarded,23 may likewise be recovered in contractual obligations if the defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner.24 Because petitioners failed to exercise the extraordinary diligence required of a
common carrier, which resulted in the death of Tito Tumboy, it is deemed to have acted recklessly.25 As such, private
respondents shall be entitled to exemplary damages.
WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject to the modification that petitioners
shall, in addition to the monetary awards therein, be liable for the award of exemplary damages in the amount of
P20,000.00. Costs against petitioners.
SO ORDERED.
Narvasa, C.J., Melo, Francisco and Panganiban, JJ., concur.
Footnotes
1 Record, pp. 77-78.
2 Penned by Judge William M. Layague.
3 123 Phil. 875 (1966).
4 Art. 1174. Except in cases expressly specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.
5 L-45637, May 31, 1985, 136 SCRA 624.
6 104 Phil. 75 (1958).
7 Penned by Associate Justice Minerva P. Gonzaga-Reyes and concurred in by Associate Justices
Vicente V. Mendoza and Pacita Cañizares-Nye.
8 Philippine Rabbit Bus Lines, Inc. v. IAC, G.R. Nos. 66102-04, August 30, 1990, 189 SCRA 158, 159.
9 TOLENTINO, CIVIL CODE OF THE PHILIPPINES, Vol. V, 1992 ed., p. 312.
10 Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles
1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the
passengers is further set forth in articles 1755 and 1756.
11 Phil. Rabbit Bus Lines, Inc. vs. IAC, supra, at pp. 171-172 citing Lasam v. Smith, Jr., 45 Phil. 657 (1924).
12 Batangas Trans. Co. v. Caguimbal, 130 Phil. 166, 171 (1968) citing Brito Sy v. Malate Taxicab &
Garage, Inc., 102 Phil. 482 (1957).
13 Metal Forming Corp. v. Office of the President, 317 Phil. 853, 859 (1995); Vasquez v. Court of
Appeals, L-42926, September 13, 1985, 138 SCRA 553, 557 citing Lasam v. Smith, supra at p. 661 and
Austria v. Court of Appeals, 148-A Phil. 462 (1971); Estrada v. Consolacion, L-40948, June 29, 1976, 71
SCRA 523, 530; Republic of the Phil. v. Luzon Stevedoring Corporation, 128 Phil. 313 (1967).
14 Vasquez v. Court of Appeals, supra, at p. 557.
15 Son v. Cebu Autobus Co., 94 Phil. 893, 896 (1954) citing Lasam v. Smith, supra.
16 Bachelor Express, Inc. v. Court of Appeals, G.R. No. 85691, July 31, 1990, 188 SCRA 216, 222-223.
17 Juntilla v. Fontanar, supra, at p. 630.
18 Necesito v. Paras, supra at p. 82.
19 Art. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title
XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger
caused, by the breach of contract by a common carrier.
20 Art. 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three
thousand pesos, even though there may have been mitigating circumstances. . . . .
21 Sulpicio Lines, Inc. v. Court of Appeals, 316 Phil. 455, 460 (1995) citing People v. Flores, G.R. Nos.
103801-02, October 19, 1994, 237 SCRA 653.
22 Sulpicio Lines, Inc. v. Court of Appeals, supra at pp. 460-461 citing Trans World Air Lines v. Court of
Appeals, G.R. No. 78656, August 30, 1988, 165 SCRA 143; Philippine Rabbit Bus Lines, Inc. v. Esguerra,
203 Phil. 107 (1982) and Vasquez v. Court of Appeals, supra.
23 Art. 2229, Civil Code.
24 Art. 2232, supra.
25 Sulpicio Lines, Inc. v. Court of Appeals, supra at p. 461.
G.R. No. 116110 May 15, 1996
BALIWAG TRANSIT, INC., petitioner,
vs.
COURT OF APPEALS, SPOUSES ANTONIO GARCIA & LETICIA GARCIA, A & J TRADING, AND JULIO
RECONTIQUE, respondents.

PUNO, J.:p
This is a petition for certiorari to review the Decision1 of the Court of Appeals in CA-G.R. CV-31246 awarding damages
in favor of the spouses Antonio and Leticia Garcia for breach of contract of carriage.2
The records show that on July 31, 1980, Leticia Garcia, and her five-year old son, Allan Garcia, boarded Baliwag Transit
Bus No. 2036 bound for Cabanatuan City driven by Jaime Santiago. They took the seat behind the driver.
At about 7:30 in the evening, in Malimba, Gapan, Nueva Ecija, the bus passengers saw a cargo truck parked at the
shoulder of the national highway. Its left rear portion jutted to the outer lane, as the shoulder of the road was too
narrow to accommodate the whole truck. A kerosene lamp appeared at the edge of the road obviously to serve as a
warning device. The truck driver, Julio Recontique, and his helper, Arturo Escala, were then replacing a flat tire. The
truck is owned by respondent A & J Trading.
Bus driver Santiago was driving at an in ordinately fast speed and failed to notice the truck and the kerosene lamp at
the edge of the road. Santiago's passengers urged him to slow down but he paid them no heed. Santiago even carried
animated conversations with his co-employees while driving. When the danger of collision became imminent, the bus
passengers shouted "Babangga tayo!". Santiago stepped on the brake, but it was too late. His bus rammed into the
stalled cargo truck. It caused the instant death of Santiago and Escala, and injury to several others. Leticia and Allan
Garcia were among the injured passengers.
Leticia suffered a fracture in her pelvis and right leg. They rushed her to the provincial hospital in Cabanatuan City
where she treatment. After three days, she was transferred to the National Orthopedic Hospital where she was confined
for more than a month.3 She underwent an operation for partial hip prosthesis.4
Allan, on the other hand, broke a leg. He was also given emergency treatment at the provincial hospital.
Spouses Antonio and Leticia Garcia sued Baliwag Transit, Inc., A & J Trading and Julio Recontique for damages in the
Regional Trial Court of Bulacan.5 Leticia sued as an injured passenger of Baliwag and as mother of Allan. At the time of
the complaint, Allan was a minor, hence, the suit initiated by his parents in his favor.
Baliwag, A & J Trading and Recontique disclaimed responsibility for the mishap. Baliwag alleged that the accident was
caused solely by the fault and negligence of A & J Trading and its driver, Recontique. Baliwag charged that Recontique
failed to place an early warning device at the corner of the disabled cargo truck to warn on coming vehicles.6 On the
other hand, A & J Trading and Recontique alleged that the accident was the result of the negligence and reckless
driving of Santiago, bus driver of Baliwag.7
After hearing, the trial court found all the defendants liable, thus:
xxx xxx xxx
In view thereof, the Court holds that both defendants should be held liable; the defendant Baliwag
Transit, Inc. for having failed to deliver the plaintiff and her son to their point of destination safely in
violation of plaintiff's and defendant Baliwag Transit's contractual relation.
The defendant A & J and Julio Recontique for failure to provide its cargo truck with an early warning
device in violation of the Motor Vehicle Law.8
The trial court ordered Baliwag, A & J Trading and Recontique to pay jointly and severally the Garcia spouses the
following: (1) P25,000,00 hospitalization and medication fee, (2) P450,000.00 loss of earnings in eight (8) years, (3)
P2,000.00 for the hospitalization of their son Allan Garcia, (4) P50,000.00 moral damages, and (5) P30,000.00 attorney's
fee.9
On appeal, the Court of Appeals modified the trial court's Decision by absolving A & J Trading from liability and by
reducing the award of attorney's fees to P10,000.00 and loss of earnings to P300,000.00, respectively. 10
Baliwag filed the present petition for review raising the following issues:
1. Did the Court of Appeals err in absolving A & J Trading from liability and holding Baliwag solely
liable for the injuries suffered by Leticia and Allan Garcia in the accident?
2. Is the amount of damages awarded by the Court of Appeals to the Garcia spouses correct?
We affirm the factual findings of the Court of Appeals.
I
As a common carrier, Baliwag breached its contract of carriage when it failed to deliver its passengers, Leticia and Allan
Garcia to their destination safe and sound. A common carrier is bound to carry its passengers safely as far as human
care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the
circumstances. 11 In a contract of carriage, it is presumed that the common carrier was at fault or was negligent when a
passenger dies or is injured. Unless the presumption is rebutted, the court need not even make an express finding of
fault or negligence on the part of the common carrier. This statutory presumption may only be overcome by evidence
that the carrier exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. 12
The records are bereft of any proof to show that Baliwag exercised extra ordinary diligence. On the contrary, the
evidence demonstrates its driver's recklessness. Leticia Garcia testified that the bus was running at a very high speed
despite the drizzle and the darkness of the highway. The passengers pleaded for its driver to slow down, but their plea
was ignored. 13 Leticia also revealed that the driver was smelling of liquor. 14 She could smell him as she was seated
right behind the driver. Another passenger, Felix Cruz testified that immediately before the collision, the bus driver was
conversing with a co-employee. 15 All these prove the bus driver's wanton disregard for the physical safety of his
passengers, which makes Baliwag as a common carrier liable for damages under Article 1759 of the Civil Code:
 Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence
or willfull acts of the former's employees, although such employees may have acted beyond the scope
of their authority or in violation of the orders of the common carriers.
This liability of the common carriers do not cease upon proof that they exercised all the diligence of a
good father of a family in the selection or supervision of their employees.
Baliwag cannot evade its liability by insisting that the accident was caused solely by the negligence of A & J Trading
and Julio Recontique. It harps on their alleged non use of an early warning device as testified to by Col. Demetrio dela
Cruz, the station commander of Gapan, Nueva Ecija who investigated the incident, and Francisco Romano, the bus
conductor.
The records do not bear out Baliwag's contention. Col. dela Cruz and Romano testified that they did not see any early
warning device at the scene of the accident. 16 They were referring to the triangular reflectorized plates in red and
yellow issued by the Land Transportation Office. However, the evidence shows that Recontique and Ecala placed a
kerosene lamp or torch at the edge of the road, near the rear portion of the truck to serve as an early warning
device. 17 This substantially complies with Section 34 (g) of the Land Transportation and Traffic Code, to wit:
(g) Lights and reflector when parked or disabled. — Appropriate parking lights or flares visible one
hundred meters away shall be displayed at the corner of the vehicle whenever such vehicle is parked on
highways or in places that are not well-lighted or, is placed in such manner as to endanger passing
traffic. Furthermore, every motor vehicle shall be provided at all times with built-in reflectors or other
similar warning devices either pasted, painted or attached at its front and back which shall likewise be
visible at night at least one hundred meters away. No vehicle not provided with any of the
requirements mentioned in this subsection shall be registered. (emphasis supplied)
Baliwag's argument that the kerosene lamp or torch does not substantially comply with the law is untenable. The
aforequoted law clearly allows the use not only of an early warning device of the triangular reflectorized plates variety
but also parking lights or flares visible one hundred meters away. Indeed, Col. dela Cruz himself admitted that a
kerosene lamp is an acceptable substitute for the reflectorized plates. 18 No negligence, therefore, may be imputed to
A & J Trading and its driver, Recontique.
Anent this factual issue, the analysis of evidence made by the Court of Appeals deserves our concurrence, viz:
xxx xxx xxx
In the case at bar, both the injured passengers of the Baliwag involved in the accident testified that
they saw some sort of kerosene or a torch on the rear portion of the truck before the accident. Baliwag
Transit's conductor attempted to defeat such testimony by declaring that he noticed no early warning
device in front of the truck.
Among the testimonies offered by the witnesses who were present at the scene of the accident, we
rule to uphold the affirmative testimonies given by the two injured passengers and give less credence
to the testimony of the bus conductor who solely testified that no such early warning device exists.
The testimonies of injured passengers who may well be considered as disinterested witness appear to
be natural and more probable than the testimony given by; Francisco Romano who is undoubtedly
interested in the outcome of the case, being the conductor of the defendant-appellant Baliwag Transit
Inc.
It must be borne in mind that the situation then prevailing at the time of the accident was admittedly
drizzly and all dark. This being so, it would be improbable and perhaps impossible on the part of the
truck helper without the torch nor the kerosene to remove the flat tires of the truck . Moreover, witness
including the bus conductor himself admitted that the passengers shouted, that they are going to
bump before the collision which consequently caused the bus driver to apply the brake 3 to 4 meters
away from the truck. Again, without the kerosene nor the torch in front of the truck, it would be
improbable for the driver, more so the passengers to notice the truck to be bumped by the bus
considering the darkness of the place at the time of the accident.
xxx xxx xxx
While it is true that the investigating officer testified that he found no early warning device at the time
of his investigation, We rule to give less credence to such testimony insofar as he himself admitted on
cross examination that he did not notice the presence of any kerosene lamp at the back of the truck
because when he arrived at the scene of the accident, there were already many people surrounding the
place (TSN, Aug. 22, 1989, p. 13). He further admitted that there exists a probability that the lights of
the truck may have been smashed by the bus at the time of the accident considering the location of
the truck where its rear portion was connected with the front portion of the bus (TSN, March 29, 1985,
pp. Investigator's testimony therefore did not confirm nor deny the existence of such warning device,
making his testimony of little probative value. 19
We now review the amount of damages awarded to the Garcia spouses.
First, the propriety of the amount awarded as hospitalization and medical fees. The award of P25,000.00 is not
supported by the evidence on record. The Garcias presented receipts marked as Exhibits "B-1" to "B-42" but their total
amounted only to P5,017.74. To be sure, Leticia testified as to the extra amount spent for her medical needs but
without more reliable evidence, her lone testimony cannot justify the award of P25,000.00. To prove actual damages,
the best evidence available to the injured party must be presented. The court cannot rely on uncorroborated testimony
whose truth is suspect, but must depend upon competent proof that damages have been actually suffered. 20 Thus, we
reduce the actual damages for medical and hospitalization expenses to P5,017.74.
Second, we find as reasonable the award of P300,000.00 representing Leticia's lost earnings. Before the accident, Leticia
was engaged in embroidery, earning P5,000.00 per month. 21 Her injuries forced her to stop working. Considering the
nature and extent of her injuries and the length of time it would take her to recover, 22 we find it proper that Baliwag
should compensate her lost income for five (5) years. 23
Third, the award of moral damages is in accord with law. In a breach of contract of carriage, moral damages are
recoverable if the carrier, through its agent, acted fraudulently or in bad faith. 24 The evidence show the gross
negligence of the driver of Baliwag bus which amounted to bad faith. Without doubt, Leticia and Allan experienced
physical suffering, mental anguish and serious anxiety by reason of the accident. Leticia underwent an operation to
replace her broken hip bone with a metal plate. She was confined at the National Orthopedic Hospital for 45 days. The
young Allan was also confined in the hospital for his foot injury. Contrary to the contention of Baliwag, the decision of
the trial court as affirmed by, the Court of Appeals awarded moral damages to Antonio and Leticia Garcia not in their
capacity as parents of Allan. Leticia was given moral damages as an injured party. Allan was also granted moral
damages as an injured party but because of his minority, the award in his favor has to be given to his father who
represented him in the suit.
Finally, we find the award of attorney's fees justified. The complaint for damages was instituted by the Garcia spouses
on December 15, 1982, following the unjustified refusal of Baliwag to settle their claim. The Decision was promulgated
by the trial court only on January 29, 1991 or about nine years later. Numerous pleadings were filed before the trial
court, the appellate court and to this Court. Given the complexity of the case and the amount of damages
involved, 25 the award of attorney's fee for P10,000.00 is just and reasonable.
IN VIEW WHEREOF, the Decision of the respondent Court of Appeals in CA-G.R. CV-31246 is AFFIRMED with the
MODIFICATION reducing the actual damages for hospitalization and medical fees to P5,017.74. No costs.
SO ORDERED.
Regalado, Romero, Mendoza and Torres, Jr., JJ., concur.
Footnotes
1 Penned by Associate Justice Corona Ibay-Somera, with Associate Justices Fidel P. Purisima and Asaali S. Isnani
concurring.
2 The case at bar is related with GR No. 117152 filed by the spouses Garcia questioning the same Court of
Appeal's Decision which reduced their award of damages. On November 13, 1995, we denied their petition for
review.
3 From August 2, 1980 to September 15, 1980.
4 Exhibit "A", Records, p. 116.
5 Annex "A" of the Petition, Rollo, pp. 23-25.
6 Records, p. 43.
7 Records, pp. 17-18.
8 Decision of Regional Trial Court of Malolos Bulacan Branch 14, Rollo, pp. 47-48.
9 Decision of Regional Trial Court of Malolos Bulacan Branch 14, Rollo, p. 48.
10 Decision of the Court of Appeals, Rollo, p. 62.
11 Article 1755, Civil Code.
12 Article 1756, Civil Code; Philippine Rabbit Bus Lines, Inc. vs. Intermediate Appellate Court, 189 SCRA 158
(1990).
13 TSN, February 9, 1989, p. 4.
14 TSN, February 9, 1989, p. 10.
15 Exhibit "6" (A & J Trading), Records, p. 206.
16 TSN, August 22, 1989, p. 5; Exhibit "5" (Baliwag), Records, pp. 196-197.
17 TSN, February 9, 1989, p. 18; Exhibit "6" (A & J Trading), Records, p. 207.
18 TSN, August 22, 1989, p. 12.
19 Decision of the Court of Appeals, Rollo, pp. 55-57.
20 Development Bank of the Philippines vs. Court of Appeals, et al., G.R. No. 110053, October 15, 1995;
Alejandro Fuentes, Jr. vs. Court of Appeals and People, G.R. No. 111692, February 9, 1996.
21 TSN, February 9, 1989, p. 13.
22 The Medical Report issued by the attending physician, Dr. Jaime Tamayo, indicates that Leticia Garcia
sufferred partial permanent disability (Annex "A", Records, p. 116).
23 See Manuel. vs. Court of Appeals, 227 SCRA 29, (1993).
24 Philippine National Railways vs. Intermediate Appellate Court, 217 SCRA 401 (1994); Metro Manila Transit
corp. vs. Court of Appeals, 223 SCRA 521 (1994).
G.R. No. 85691 July 31, 1990
BACHELOR EXPRESS, INCORPORATED, and CRESENCIO RIVERA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (Sixth Division), RICARDO BETER, SERGIA BETER, TEOFILO RAUTRAUT
and ZOETERA RAUTRAUT, respondents.
Aquino W. Gambe for petitioners.
Tranquilino O. Calo, Jr. for private respondents.

GUTIERREZ, JR., J.:

This is a petition for review of the decision of the Court of Appeals which reversed and set aside the order of the
Regional Trial Court, Branch I, Butuan City dismissing the private respondents' complaint for collection of "a sum of
money" and finding the petitioners solidarily liable for damages in the total amount of One Hundred Twenty Thousand
Pesos (P120,000.00). The petitioners also question the appellate court's resolution denying a motion for
reconsideration.
On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. and driven by Cresencio Rivera was the situs of a
stampede which resulted in the death of passengers Ornominio Beter and Narcisa Rautraut.
The evidence shows that the bus came from Davao City on its way to Cagayan de Oro City passing Butuan City; that
while at Tabon-Tabon, Butuan City, the bus picked up a passenger; that about fifteen (15) minutes later, a passenger at
the rear portion suddenly stabbed a PC soldier which caused commotion and panic among the passengers; that when
the bus stopped, passengers Ornominio Beter and Narcisa Rautraut were found lying down the road, the former
already dead as a result of head injuries and the latter also suffering from severe injuries which caused her death later.
The passenger assailant alighted from the bus and ran toward the bushes but was killed by the police. Thereafter, the
heirs of Ornominio Beter and Narcisa Rautraut, private respondents herein (Ricardo Beter and Sergia Beter are the
parents of Ornominio while Teofilo Rautraut and Zoetera [should be Zotera] Rautraut are the parents of Narcisa) filed a
complaint for "sum of money" against Bachelor Express, Inc. its alleged owner Samson Yasay and the driver Rivera.
In their answer, the petitioners denied liability for the death of Ornominio Beter and Narcisa Rautraut. They alleged that
... the driver was able to transport his passengers safely to their respective places of destination except Ornominio Beter
and Narcisa Rautraut who jumped off the bus without the knowledge and consent, much less, the fault of the driver
and conductor and the defendants in this case; the defendant corporation had exercised due diligence in the choice of
its employees to avoid as much as possible accidents; the incident on August 1, 1980 was not a traffic accident or
vehicular accident; it was an incident or event very much beyond the control of the defendants; defendants were not
parties to the incident complained of as it was an act of a third party who is not in any way connected with the
defendants and of which the latter have no control and supervision; ..." (Rollo, pp. 112-113).i•t•c-aüsl
After due trial, the trial court issued an order dated August 8, 1985 dismissing the complaint.
Upon appeal however, the trial court's decision was reversed and set aside. The dispositive portion of the decision of
the Court of Appeals states:
WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE and a new one entered finding
the appellees jointly and solidarily liable to pay the plaintiffs-appellants the following amounts:
1) To the heirs of Ornominio Beter, the amount of Seventy Five Thousand Pesos (P75,000.00) in loss of
earnings and support, moral damages, straight death indemnity and attorney's fees; and,
2) To the heirs of Narcisa Rautraut, the amount of Forty Five Thousand Pesos (P45,000.00) for straight
death indemnity, moral damages and attorney's fees. Costs against appellees. (Rollo, pp. 71-72)
The petitioners now pose the following questions
What was the proximate cause of the whole incident? Why were the passengers on board the bus
panicked (sic) and why were they shoving one another? Why did Narcisa Rautraut and Ornominio Beter
jump off from the running bus?
The petitioners opine that answers to these questions are material to arrive at "a fair, just and equitable judgment."
(Rollo, p. 5) They claim that the assailed decision is based on a misapprehension of facts and its conclusion is grounded
on speculation, surmises or conjectures.
As regards the proximate cause of the death of Ornominio Beter and Narcisa Rautraut, the petitioners maintain that it
was the act of the passenger who ran amuck and stabbed another passenger of the bus. They contend that the
stabbing incident triggered off the commotion and panic among the passengers who pushed one another and
that presumably out of fear and moved by that human instinct of self-preservation Beter and Rautraut jumped off the
bus while the bus was still running resulting in their untimely death." (Rollo, p. 6) Under these circumstances, the
petitioners asseverate that they were not negligent in the performance of their duties and that the incident was
completely and absolutely attributable to a third person, the passenger who ran amuck, for without his criminal act,
Beter and Rautraut could not have been subjected to fear and shock which compelled them to jump off the running
bus. They argue that they should not be made liable for damages arising from acts of third persons over whom they
have no control or supervision.
Furthermore, the petitioners maintain that the driver of the bus, before, during and after the incident was driving
cautiously giving due regard to traffic rules, laws and regulations. The petitioners also argue that they are not insurers
of their passengers as ruled by the trial court.
The liability, if any, of the petitioners is anchored on culpa contractual or breach of contract of carriage. The applicable
provisions of law under the New Civil Code are as follows:
ART. 1732. Common carriers are persons, corporations, firms or associations engaged in the business
of carrying or transporting passengers or goods or both by land, water, or air, for compensation,
offering their services to the public.
 ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.
xxx xxx xxx
ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed in Articles 1733 and 1755.
There is no question that Bachelor Express, Inc. is a common carrier. Hence, from the nature of its business and for
reasons of public policy Bachelor Express, Inc. is bound to carry its passengers safely as far as human care and foresight
can provide using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
In the case at bar, Ornominio Beter and Narcisa Rautraut were passengers of a bus belonging to petitioner Bachelor
Express, Inc. and, while passengers of the bus, suffered injuries which caused their death. Consequently, pursuant to
Article 1756 of the Civil Code, petitioner Bachelor Express, Inc. is presumed to have acted negligently unless it can prove
that it had observed extraordinary diligence in accordance with Articles 1733 and 1755 of the New Civil Code.
Bachelor Express, Inc. denies liability for the death of Beter and Rautraut on its posture that the death of the said
passengers was caused by a third person who was beyond its control and supervision. In effect, the petitioner, in order
to overcome the presumption of fault or negligence under the law, states that the vehicular incident resulting in the
death of passengers Beter and Rautraut was caused by force majeure or caso fortuito over which the common carrier
did not have any control.
Article 1174 of the present Civil Code states:
Except in cases expressly specified by law, or when it is otherwise declared by stipulations, or when the
nature of the obligation requires the assumption of risk, no person shall be responsible for those
events which could not be foreseen, or which though foreseen, were inevitable.
The above-mentioned provision was substantially copied from Article 1105 of the old Civil Code which states"
No one shall be liable for events which could not be foreseen or which, even if foreseen, were
inevitable, with the exception of the cases in which the law expressly provides otherwise and those in
which the obligation itself imposes liability.
In the case of Lasam v. Smith (45 Phil. 657 [1924]), we defined "events" which cannot be foreseen and which, having
been foreseen, are inevitable in the following manner:
... The Spanish authorities regard the language employed as an effort to define the term 'caso fortuito'
and hold that the two expressions are synonymous. (Manresa Comentarios al Codigo Civil Español, vol.
8, pp. 88 et seq.; Scaevola, Codigo Civil, vol. 19, pp. 526 et seq.)
The antecedent to Article 1105 is found in Law II, Title 33, Partida 7, which defines caso fortuito as
'occasion que acaese por aventura de que non se puede ante ver. E son estos, derrivamientos de casas
e fuego que enciende a so ora, e quebrantamiento de navio, fuerca de ladrones' (An event that takes
place by incident and could not have been foreseen. Examples of this are destruction of houses,
unexpected fire, shipwreck, violence of robbers ...)
Escriche defines caso fortuito as an unexpected event or act of God which could neither be foreseen
nor resisted, such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections,
destruction of buildings by unforeseen accidents and other occurrences of a similar nature.
In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Española says: 'In a legal
sense and, consequently, also in relation to contracts, a caso fortuito presents the following essential
characteristics: (1) The cause of the unforeseen and unexpected occurrence, or of the failure of the
debtor to comply with his obligation, must be independent of the human will. (2) It must be impossible
to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible
to avoid. (3) The occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner. And (4) the obligor (debtor) must be free from any participation in the
aggravation of the injury resulting to the creditor. (5) Enciclopedia Juridica Española, 309)
As will be seen, these authorities agree that some extraordinary circumstance independent of the will
of the obligor or of his employees, is an essential element of a caso fortuito. ...
The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic
among the passengers such that the passengers started running to the sole exit shoving each other resulting in the
falling off the bus by passengers Beter and Rautraut causing them fatal injuries. The sudden act of the passenger who
stabbed another passenger in the bus is within the context of force majeure.
However, in order that a common carrier may be absolved from liability in case of force majeure, it is not enough that
the accident was caused by force majeure. The common carrier must still prove that it was not negligent in causing the
injuries resulting from such accident. Thus, as early as 1912, we ruled:
From all the foregoing, it is concluded that the defendant is not liable for the loss and damage of the
goods shipped on the lorcha Pilar by the Chinaman, Ong Bien Sip, inasmuch as such loss and damage
were the result of a fortuitous event or force majeure, and there was no negligence or lack of care and
diligence on the part of the defendant company or its agents. (Tan Chiong Sian v. Inchausti & Co., 22
Phil. 152 [1912]; Emphasis supplied).
This principle was reiterated in a more recent case, Batangas Laguna Tayabas Co. v. Intermediate Appellate Court (167
SCRA 379 [1988]), wherein we ruled:
 ... [F]or their defense of force majeure or act of God to prosper the accident must be due to natural
causes and exclusively without human intervention. (Emphasis supplied)
Therefore, the next question to be determined is whether or not the petitioner's common carrier observed
extraordinary diligence to safeguard the lives of its passengers.
In this regard the trial court and the appellate court arrived at conflicting factual findings.
The trial court found the following facts:
The parties presented conflicting evidence as to how the two deceased Narcisa Rautruat and
Ornominio Beter met their deaths.
However, from the evidence adduced by the plaintiffs, the Court could not see why the two deceased
could have fallen off the bus when their own witnesses testified that when the commotion ensued
inside the bus, the passengers pushed and shoved each other towards the door apparently in order to
get off from the bus through the door. But the passengers also could not pass through the door
because according to the evidence the door was locked.
On the other hand, the Court is inclined to give credence to the evidence adduced by the defendants
that when the commotion ensued inside the bus, the two deceased panicked and, in state of shock and
fear, they jumped off from the bus by passing through the window.
It is the prevailing rule and settled jurisprudence that transportation companies are not insurers of their
passengers. The evidence on record does not show that defendants' personnel were negligent in their
duties. The defendants' personnel have every right to accept passengers absent any manifestation of
violence or drunkenness. If and when such passengers harm other passengers without the knowledge
of the transportation company's personnel, the latter should not be faulted. (Rollo, pp. 46-47)
A thorough examination of the records, however, show that there are material facts ignored by the trial court which
were discussed by the appellate court to arrive at a different conclusion. These circumstances show that the petitioner
common carrier was negligent in the provision of safety precautions so that its passengers may be transported safely to
their destinations. The appellate court states:
A critical eye must be accorded the lower court's conclusions of fact in its tersely written ratio
decidendi. The lower court concluded that the door of the bus was closed; secondly, the passengers,
specifically the two deceased, jumped out of the window. The lower court therefore concluded that the
defendant common carrier is not liable for the death of the said passengers which it implicitly
attributed to the unforeseen acts of the unidentified passenger who went amuck.
There is nothing in the record to support the conclusion that the solitary door of the bus was locked as
to prevent the passengers from passing through. Leonila Cullano, testifying for the defense, clearly
stated that the conductor opened the door when the passengers were shouting that the bus stop while
they were in a state of panic. Sergia Beter categorically stated that she actually saw her son fall from
the bus as the door was forced open by the force of the onrushing passengers.
Pedro Collango, on the other hand, testified that he shut the door after the last passenger had boarded
the bus. But he had quite conveniently neglected to say that when the passengers had panicked, he
himself panicked and had gone to open the door. Portions of the testimony of Leonila Cullano, quoted
below, are illuminating:
xxx xxx xxx
Q When you said the conductor opened the door, the door at the front or rear portion of the bus?
A Front door.
Q And these two persons whom you said alighted, where did they pass, the fron(t) door or rear door?
A Front door.
xxx xxx xxx
(Tsn., p. 4, Aug. 8, 1984)
xxx xxx xxx
Q What happened after there was a commotion at the rear portion of the bus?
A When the commotion occurred, I stood up and I noticed that there was a passenger who was
sounded (sic). The conductor panicked because the passengers were shouting 'stop, stop'. The
conductor opened the bus.'
(Tsn. p. 3, August 8, 1984).
Accordingly, there is no reason to believe that the deceased passengers jumped from the window
when it was entirely possible for them to have alighted through the door. The lower court's reliance on
the testimony of Pedro Collango, as the conductor and employee of the common carrier, is unjustified,
in the light of the clear testimony of Leonila Cullano as the sole uninterested eyewitness of the entire
episode. Instead we find Pedro Collango's testimony to be infused by bias and fraught with
inconsistencies, if not notably unreliable for lack of veracity. On direct examination, he testified:
xxx xxx xxx
Q So what happened to the passengers inside your bus?
A Some of the passengers jumped out of the window.
COURT:
Q While the bus was in motion?
A Yes, your Honor, but the speed was slow because we have just picked up a passenger.
Atty. Gambe:
Q You said that at the time of the incident the bus was running slow because you have just picked up a
passenger. Can you estimate what was your speed at that time?
 Atty. Calo:
No basis, your Honor, he is neither a driver nor a conductor.
COURT:
Let the witness answer. Estimate only, the conductor experienced.
Witness:
Not less than 30 to 40 miles.
COURT:
Kilometers or miles?
A Miles.
Atty. Gambe:
Q That is only your estimate by your experience?
A Yes, sir, estimate.
(Tsn., pp. 4-5, Oct. 17, 1983).
At such speed of not less than 30 to 40 miles ..., or about 48 to 65 kilometers per hour, the speed of
the bus could scarcely be considered slow considering that according to Collango himself, the bus had
just come from a full stop after picking a passenger (Tsn, p. 4, Id.) and that the bus was still on its
second or third gear (Tsn., p. 12, Id.).
In the light of the foregoing, the negligence of the common carrier, through its employees, consisted
of the lack of extraordinary diligence required of common carriers, in exercising vigilance and utmost
care of the safety of its passengers, exemplified by the driver's belated stop and the reckless opening
of the doors of the bus while the same was travelling at an appreciably fast speed. At the same time,
the common carrier itself acknowledged, through its administrative officer, Benjamin Granada, that the
bus was commissioned to travel and take on passengers and the public at large, while equipped with
only a solitary door for a bus its size and loading capacity, in contravention of rules and regulations
provided for under the Land Transportation and Traffic Code (RA 4136 as amended.) (Rollo, pp. 23-26)
Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height
of the commotion; the bus was speeding from a full stop; the victims fell from the bus door when it was opened or
gave way while the bus was still running; the conductor panicked and blew his whistle after people had already fallen
off the bus; and the bus was not properly equipped with doors in accordance with law-it is clear that the petitioners
have failed to overcome the presumption of fault and negligence found in the law governing common carriers.
The petitioners' argument that the petitioners "are not insurers of their passengers" deserves no merit in view of the
failure of the petitioners to prove that the deaths of the two passengers were exclusively due to force majeure and not
to the failure of the petitioners to observe extraordinary diligence in transporting safely the passengers to their
destinations as warranted by law. (See Batangas Laguna Tayabas Co. v. Intermediate Appellate Court, supra).
The petitioners also contend that the private respondents failed to show to the court that they are the parents of
Ornominio Beter and Narcisa Rautraut respectively and therefore have no legal personality to sue the petitioners. This
argument deserves scant consideration. We find this argument a belated attempt on the part of the petitioners to avoid
liability for the deaths of Beter and Rautraut. The private respondents were Identified as the parents of the victims by
witnesses during the trial and the trial court recognized them as such. The trial court dismissed the complaint solely on
the ground that the petitioners were not negligent.
Finally, the amount of damages awarded to the heirs of Beter and Rautraut by the appellate court is supported by the
evidence. The appellate court stated:
Ornominio Beter was 32 years of age at the time of his death, single, in good health and rendering
support and service to his mother. As far as Narcisa Rautraut is concerned, the only evidence adduced
is to the effect that at her death, she was 23 years of age, in good health and without visible means of
support.
In accordance with Art. 1764 in conjunction with Art. 2206 of the Civil Code, and established
jurisprudence, several factors may be considered in determining the award of damages, namely: 1) life
expectancy (considering the state of health of the deceased and the mortality tables are deemed
conclusive) and loss of earning capacity; (2) pecuniary loss, loss of support and service; and (3) moral
and mental suffering (Alcantara, et al. v. Surro, et al., 93 Phil. 470).
In the case of People v. Daniel (No. L-66551, April 25, 1985, 136 SCRA 92, at page 104), the High
Tribunal, reiterating the rule in Villa Rey Transit, Inc. v. Court of Appeals (31 SCRA 511), stated that the
amount of loss of earring capacity is based mainly on two 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
the heirs should be fixed.
As the formula adopted in the case of Davila v. Philippine Air Lines, 49 SCRA 497, at the age of 30 one's
normal life expectancy is 33-1/3 years based on the American Expectancy Table of Mortality (2/3 x 80-
32).i•t•c-aüsl By taking into account the pace and nature of the life of a carpenter, it is reasonable to
make allowances for these circumstances and reduce the life expectancy of the deceased Ornominio
Beter to 25 years (People v. Daniel, supra). To fix the rate of losses it must be noted that Art. 2206
refers to gross earnings less necessary living expenses of the deceased, in other words, only net
earnings are to be considered (People v. Daniel, supra; Villa Rey Transit, Inc. v. Court of Appeals, supra).
Applying the foregoing rules with respect to Ornominio Beter, it is both just and reasonable,
considering his social standing and position, to fix the deductible, living and incidental expenses at the
sum of Four Hundred Pesos (P400.00) a month, or Four Thousand Eight Hundred Pesos (P4,800.00)
annually. As to his income, considering the irregular nature of the work of a daily wage carpenter which
 is seasonal, it is safe to assume that he shall have work for twenty (20) days a month at Twenty Five
Pesos (P150,000.00) for twenty five years. Deducting therefrom his necessary expenses, his heirs would
be entitled to Thirty Thousand Pesos (P30,000.00) representing loss of support and service
(P150,000.00 less P120,000.00). In addition, his heirs are entitled to Thirty Thousand Pesos (P30,000.00)
as straight death indemnity pursuant to Article 2206 (People v. Daniel, supra). For damages for their
moral and mental anguish, his heirs are entitled to the reasonable sum of P10,000.00 as an exception
to the general rule against moral damages in case of breach of contract rule Art. 2200 (Necesito v.
Paras, 104 Phil. 75). As attorney's fees, Beter's heirs are entitled to P5,000.00. All in all, the plaintiff-
appellants Ricardo and Sergia Beter as heirs of their son Ornominio are entitled to an indemnity of
Seventy Five Thousand Pesos (P75,000.00).
In the case of Narcisa Rautraut, her heirs are entitled to a straight death indemnity of Thirty Thousand
Pesos (P30,000.00), to moral damages in the amount of Ten Thousand Pesos (P10,000.00) and Five
Thousand Pesos (P5,000.00) as attorney's fees, or a total of Forty Five Thousand Pesos (P45,000.00) as
total indemnity for her death in the absence of any evidence that she had visible means of support.
(Rollo, pp. 30-31)
WHEREFORE, the instant petition is DISMISSED. The questioned decision dated May 19, 1988 and the resolution dated
August 1, 1988 of the Court of Appeals are AFFIRMED.
SO ORDERED.
Fernan, C.J., (Chairman), Feliciano, Bidin and Cortes, JJ., concur.
G.R. No. L-55300 March 15, 1990
FRANKLIN G. GACAL and CORAZON M. GACAL, the latter assisted by her husband, FRANKLIN G.
GACAL, petitioners,
vs.
PHILIPPINE AIR LINES, INC., and THE HONORABLE PEDRO SAMSON C. ANIMAS, in his capacity as PRESIDING
JUDGE of the COURT OF FIRST INSTANCE OF SOUTH COTABATO, BRANCH I, respondents.
Vicente A. Mirabueno for petitioners.
Siguion Reyna, Montecillo & Ongsiako for private respondent.

PARAS, J.:
This is a, petition for review on certiorari of the decision of the Court of First Instance of South Cotabato, Branch
1, * promulgated on August 26, 1980 dismissing three (3) consolidated cases for damages: Civil Case No. 1701, Civil
Case No. 1773 and Civil Case No. 1797 (Rollo, p. 35).
The facts, as found by respondent court, are as follows:
Plaintiffs Franklin G. Gacal and his wife, Corazon M. Gacal, Bonifacio S. Anislag and his wife, Mansueta L.
Anislag, and the late Elma de Guzman, were then passengers boarding defendant's BAC 1-11 at Davao
Airport for a flight to Manila, not knowing that on the same flight, Macalinog, Taurac Pendatum known
as Commander Zapata, Nasser Omar, Liling Pusuan Radia, Dimantong Dimarosing and Mike Randa, all
of Marawi City and members of the Moro National Liberation Front (MNLF), were their co-passengers,
three (3) armed with grenades, two (2) with .45 caliber pistols, and one with a .22 caliber pistol. Ten (10)
minutes after take off at about 2:30 in the afternoon, the hijackers brandishing their respective firearms
announced the hijacking of the aircraft and directed its pilot to fly to Libya. With the pilot explaining to
them especially to its leader, Commander Zapata, of the inherent fuel limitations of the plane and that
they are not rated for international flights, the hijackers directed the pilot to fly to Sabah. With the
same explanation, they relented and directed the aircraft to land at Zamboanga Airport, Zamboanga
City for refueling. The aircraft landed at 3:00 o'clock in the afternoon of May 21, 1976 at Zamboanga
Airport. When the plane began to taxi at the runway, it was met by two armored cars of the military
with machine guns pointed at the plane, and it stopped there. The rebels thru its commander
demanded that a DC-aircraft take them to Libya with the President of the defendant company as
hostage and that they be given $375,000 and six (6) armalites, otherwise they will blow up the plane if
their demands will not be met by the government and Philippine Air Lines. Meanwhile, the passengers
were not served any food nor water and it was only on May 23, a Sunday, at about 1:00 o'clock in the
afternoon that they were served 1/4 slice of a sandwich and 1/10 cup of PAL water. After that, relatives
of the hijackers were allowed to board the plane but immediately after they alighted therefrom, an
armored car bumped the stairs. That commenced the battle between the military and the hijackers
which led ultimately to the liberation of the surviving crew and the passengers, with the final score of
ten (10) passengers and three (3) hijackers dead on the spot and three (3) hijackers captured.
City Fiscal Franklin G. Gacal was unhurt. Mrs. Corazon M. Gacal suffered injuries in the course of her
jumping out of the plane when it was peppered with bullets by the army and after two (2) hand
grenades exploded inside the plane. She was hospitalized at General Santos Doctors Hospital, General
Santos City, for two (2) days, spending P245.60 for hospital and medical expenses, Assistant City Fiscal
Bonifacio S. Anislag also escaped unhurt but Mrs. Anislag suffered a fracture at the radial bone of her
left elbow for which she was hospitalized and operated on at the San Pedro Hospital, Davao City, and
therefore, at Davao Regional Hospital, Davao City, spending P4,500.00. Elma de Guzman died because
of that battle. Hence, the action of damages instituted by the plaintiffs demanding the following
damages, to wit:
Civil Case No. 1701 —
City Fiscal Franklin G. Gacal and Mrs. Corazon M. Gacal — actual damages: P245.60 for
hospital and medical expenses of Mrs Gacal; P8,995.00 for their personal belongings
which were lost and not recovered; P50,000.00 each for moral damages; and P5,000.00
for attorney's fees, apart from the prayer for an award of exemplary damages (Record,
pp. 4-6, Civil Case No. 1701).
Civil Case No. 1773 —
xxx xxx xxx
Civil Case No. 1797 —
xxx xxx xxx
The trial court, on August 26, 1980, dismissed the complaints finding that all the damages sustained in the premises
were attributed to force majeure.
On September 12, 1980 the spouses Franklin G. Gacal and Corazon M. Gacal, plaintiffs in Civil Case No. 1701, filed a
notice of appeal with the lower court on pure questions of law (Rollo, p. 55) and the petition for review on certiorari was
filed with this Court on October 20, 1980 (Rollo, p. 30).
The Court gave due course to the petition (Rollo, p. 147) and both parties filed their respective briefs but petitioner
failed to file reply brief which was noted by the Court in the resolution dated May 3, 1982 (Rollo, p. 183).
Petitioners alleged that the main cause of the unfortunate incident is the gross, wanton and inexcusable negligence of
respondent Airline personnel in their failure to frisk the passengers adequately in order to discover hidden weapons in
the bodies of the six (6) hijackers. They claimed that despite the prevalence of skyjacking, PAL did not use a metal
detector which is the most effective means of discovering potential skyjackers among the passengers (Rollo, pp. 6-7).
Respondent Airline averred that in the performance of its obligation to safely transport passengers as far as human
care and foresight can provide, it has exercised the utmost diligence of a very cautious person with due regard to all
circumstances, but the security checks and measures and surveillance precautions in all flights, including the inspection
of baggages and cargo and frisking of passengers at the Davao Airport were performed and rendered solely by military
personnel who under appropriate authority had assumed exclusive jurisdiction over the same in all airports in the
Philippines.
Similarly, the negotiations with the hijackers were a purely government matter and a military operation, handled by and
subject to the absolute and exclusive jurisdiction of the military authorities. Hence, it concluded that the accident that
befell RP-C1161 was caused by fortuitous event, force majeure and other causes beyond the control of the respondent
Airline.
The determinative issue in this case is whether or not hijacking or air piracy during martial law and under the
circumstances obtaining herein, is a caso fortuito or force majeure which would exempt an aircraft from payment of
damages to its passengers whose lives were put in jeopardy and whose personal belongings were lost during the
incident.
Under the Civil Code, common carriers are required to exercise extraordinary diligence in their vigilance over the goods
and for the safety of passengers transported by them, according to all the circumstances of each case (Article 1733).
They are presumed at fault or to have acted negligently whenever a passenger dies or is injured (Philippine Airlines, Inc.
v. National Labor Relations Commission, 124 SCRA 583 [1983]) or for the loss, destruction or deterioration of goods in
cases other than those enumerated in Article 1734 of the Civil Code (Eastern Shipping Lines, Inc. v. Intermediate
Appellate Court, 150 SCRA 463 [1987]).
The source of a common carrier's legal liability is the contract of carriage, and by entering into said contract, it binds
itself to carry the passengers safely as far as human care and foresight can provide. There is breach of this obligation if
it fails to exert extraordinary diligence according to all the circumstances of the case in exercise of the utmost diligence
of a very cautious person (Isaac v. Ammen Transportation Co., 101 Phil. 1046 [1957]; Juntilla v. Fontanar, 136 SCRA 624
[1985]).
It is the duty of a common carrier to overcome the presumption of negligence (Philippine National Railways v. Court of
Appeals, 139 SCRA 87 [1985]) and it must be shown that the carrier had observed the required extraordinary diligence
of a very cautious person as far as human care and foresight can provide or that the accident was caused by a
fortuitous event (Estrada v. Consolacion, 71 SCRA 523 [1976]). Thus, as ruled by this Court, no person shall be
responsible for those "events which could not be foreseen or which though foreseen were inevitable. (Article 1174, Civil
Code). The term is synonymous with caso fortuito (Lasam v. Smith, 45 Phil. 657 [1924]) which is of the same sense as
"force majeure" (Words and Phrases Permanent Edition, Vol. 17, p. 362).
In order to constitute a caso fortuito or force majeure that would exempt a person from liability under Article 1174 of
the Civil Code, it is necessary that the following elements must concur: (a) the cause of the breach of the obligation
must be independent of the human will (the will of the debtor or the obligor); (b) the event must be either
unforeseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner; and (d) the debtor must be free from any participation in, or aggravation of the injury to
the creditor (Lasam v. Smith, 45 Phil. 657 [1924]; Austria v. Court of Appeals, 39 SCRA 527 [1971]; Estrada v.
Consolacion, supra; Vasquez v. Court of Appeals, 138 SCRA 553 [1985]; Juan F. Nakpil & Sons v. Court of Appeals, 144
SCRA 596 [1986]). Caso fortuito or force majeure, by definition, are extraordinary events not foreseeable or avoidable,
events that could not be foreseen, or which, though foreseen, are inevitable. It is, therefore, not enough that the event
should not have been foreseen or anticipated, as is commonly believed, but it must be one impossible to foresee or to
avoid. The mere difficulty to foresee the happening is not impossibility to foresee the same (Republic v. Luzon
Stevedoring Corporation, 21 SCRA 279 [1967]).
Applying the above guidelines to the case at bar, the failure to transport petitioners safely from Davao to Manila was
due to the skyjacking incident staged by six (6) passengers of the same plane, all members of the Moro National
Liberation Front (MNLF), without any connection with private respondent, hence, independent of the will of either the
PAL or of its passengers.
Under normal circumstances, PAL might have foreseen the skyjacking incident which could have been avoided had
there been a more thorough frisking of passengers and inspection of baggages as authorized by R.A. No. 6235. But the
incident in question occurred during Martial Law where there was a military take-over of airport security including the
frisking of passengers and the inspection of their luggage preparatory to boarding domestic and international flights.
In fact military take-over was specifically announced on October 20, 1973 by General Jose L. Rancudo, Commanding
General of the Philippine Air Force in a letter to Brig. Gen. Jesus Singson, then Director of the Civil Aeronautics
Administration (Rollo, pp. 71-72) later confirmed shortly before the hijacking incident of May 21, 1976 by Letter of
Instruction No. 399 issued on April 28, 1976 (Rollo, p. 72).
Otherwise stated, these events rendered it impossible for PAL to perform its obligations in a nominal manner and
obviously it cannot be faulted with negligence in the performance of duty taken over by the Armed Forces of the
Philippines to the exclusion of the former.
Finally, there is no dispute that the fourth element has also been satisfied. Consequently the existence of force
majeure has been established exempting respondent PAL from the payment of damages to its passengers who suffered
death or injuries in their persons and for loss of their baggages.
PREMISES CONSIDERED, the petition is hereby DISMISSED for lack of merit and the decision of the Court of First
Instance of South Cotabato, Branch I is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.
 [G.R. NO. 166640 : July 31, 2009]
HERMINIO MARIANO, JR., Petitioner, v. ILDEFONSO C. CALLEJAS and EDGAR DE BORJA, Respondents.
DECISION
PUNO, C.J.:
On appeal are the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No. 66891, dated May 21, 2004 and
January 7, 2005 respectively, which reversed the Decision3 of the Regional Trial Court (RTC) of Quezon City, dated
September 13, 1999, which found respondents jointly and severally liable to pay petitioner damages for the death of
his wife.
First, the facts:
Petitioner Herminio Mariano, Jr. is the surviving spouse of Dr. Frelinda Mariano who was a passenger of a Celyrosa
Express bus bound for Tagaytay when she met her death. Respondent Ildefonso C. Callejas is the registered owner of
Celyrosa Express, while respondent Edgar de Borja was the driver of the bus on which the deceased was a passenger.
At around 6:30 p.m. on November 12, 1991, along Aguinaldo Highway, San Agustin, Dasmariñas, Cavite, the Celyrosa
Express bus, carrying Dr. Mariano as its passenger, collided with an Isuzu truck with trailer bearing plate numbers PJH
906 and TRH 531. The passenger bus was bound for Tagaytay while the trailer truck came from the opposite direction,
bound for Manila. The trailer truck bumped the passenger bus on its left middle portion. Due to the impact, the
passenger bus fell on its right side on the right shoulder of the highway and caused the death of Dr. Mariano and
physical injuries to four other passengers. Dr. Mariano was 36 years old at the time of her death. She left behind three
minor children, aged four, three and two years.
Petitioner filed a complaint for breach of contract of carriage and damages against respondents for their failure to
transport his wife and mother of his three minor children safely to her destination. Respondents denied liability for the
death of Dr. Mariano. They claimed that the proximate cause of the accident was the recklessness of the driver of the
trailer truck which bumped their bus while allegedly at a halt on the shoulder of the road in its rightful lane. Thus,
respondent Callejas filed a third-party complaint against Liong Chio Chang, doing business under the name and style of
La Perla Sugar Supply, the owner of the trailer truck, for indemnity in the event that he would be held liable for
damages to petitioner.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
Other cases were filed. Callejas filed a complaint,4 docketed as Civil Case No. NC-397 before the RTC of Naic, Cavite,
against La Perla Sugar Supply and Arcadio Arcilla, the truck driver, for damages he incurred due to the vehicular
accident. On September 24, 1992, the said court dismissed the complaint against La Perla Sugar Supply for lack of
evidence. It, however, found Arcilla liable to pay Callejas the cost of the repairs of his passenger bus, his lost earnings,
exemplary damages and attorney's fees.5
A criminal case, Criminal Case No. 2223-92, was also filed against truck driver Arcilla in the RTC of Imus, Cavite. On May
3, 1994, the said court convicted truck driver Arcadio Arcilla of the crime of reckless imprudence resulting to homicide,
multiple slight physical injuries and damage to property.6
In the case at bar, the trial court, in its Decision dated September 13, 1999, found respondents Ildefonso Callejas and
Edgar de Borja, together with Liong Chio Chang, jointly and severally liable to pay petitioner damages and costs of suit.
The dispositive portion of the Decision reads:
ACCORDINGLY, the defendants are ordered to pay as follows:
1. The sum of P50,000.00 as civil indemnity for the loss of life;
2. The sum of P40,000.00 as actual and compensatory damages;
3. The sum of P1,829,200.00 as foregone income;
4. The sum of P30,000.00 as moral damages;
5. The sum of P20,000.00 as exemplary damages;
6. The costs of suit.
SO ORDERED.7
Respondents Callejas and De Borja appealed to the Court of Appeals, contending that the trial court erred in holding
them guilty of breach of contract of carriage.
On May 21, 2004, the Court of Appeals reversed the decision of the trial court. It reasoned:
. . . the presumption of fault or negligence against the carrier is only a disputable presumption. It gives in where
contrary facts are established proving either that the carrier had exercised the degree of diligence required by law or
the injury suffered by the passenger was due to a fortuitous event. Where, as in the instant case, the injury sustained by
the petitioner was in no way due to any defect in the means of transport or in the method of transporting or to the
negligent or wilful acts of private respondent's employees, and therefore involving no issue of negligence in its duty to
provide safe and suitable cars as well as competent employees, with the injury arising wholly from causes created by
strangers over which the carrier had no control or even knowledge or could not have prevented, the presumption is
rebutted and the carrier is not and ought not to be held liable. To rule otherwise would make the common carrier the
insurer of the absolute safety of its passengers which is not the intention of the lawmakers.8
The dispositive portion of the Decision reads:
WHEREFORE, the decision appealed from, insofar as it found defendants-appellants Ildefonso Callejas and Edgar de
Borja liable for damages to plaintiff-appellee Herminio E. Mariano, Jr., is REVERSED and SET ASIDE and another one
entered absolving them from any liability for the death of Dr. Frelinda Cargo Mariano.9
The appellate court also denied the motion for reconsideration filed by petitioner.
Hence, this appeal, relying on the following ground:
THE DECISION OF THE HONORABLE COURT OF APPEALS, SPECIAL FOURTEENTH DIVISION IS NOT IN ACCORD WITH
THE FACTUAL BASIS OF THE CASE.10
The following are the provisions of the Civil Code pertinent to the case at bar:
ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them,
according to all the circumstances of each case.
ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755.
In accord with the above provisions, Celyrosa Express, a common carrier, through its driver, respondent De Borja, and
its registered owner, respondent Callejas, has the express obligation "to carry the passengers safely as far as human
care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances,"11 and to observe extraordinary diligence in the discharge of its duty. The death of the wife of the
petitioner in the course of transporting her to her destination gave rise to the presumption of negligence of the carrier.
To overcome the presumption, respondents have to show that they observed extraordinary diligence in the discharge
of their duty, or that the accident was caused by a fortuitous event.
This Court interpreted the above quoted provisions in Pilapil v. Court of Appeals.12 We elucidated:
While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers
and creates a presumption of negligence against them, it does not, however, make the carrier an insurer of the
absolute safety of its passengers.
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of
passengers by common carriers to only such as human care and foresight can provide. What constitutes compliance
with said duty is adjudged with due regard to all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common carrier when
its passenger is injured, merely relieves the latter, for the time being, from introducing evidence to fasten the
negligence on the former, because the presumption stands in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common carrier had exercised extraordinary diligence as required by
law in the performance of its contractual obligation, or that the injury suffered by the passenger was solely due to a
fortuitous event.
In fine, we can only infer from the law the intention of the Code Commission and Congress to curb the recklessness of
drivers and operators of common carriers in the conduct of their business.
Thus, it is clear that neither the law nor the nature of the business of a transportation company makes it an insurer of
the passenger's safety, but that its liability for personal injuries sustained by its passenger rests upon its negligence, its
failure to exercise the degree of diligence that the law requires.
In the case at bar, petitioner cannot succeed in his contention that respondents failed to overcome the presumption of
negligence against them. The totality of evidence shows that the death of petitioner's spouse was caused by the
reckless negligence of the driver of the Isuzu trailer truck which lost its brakes and bumped the Celyrosa Express bus,
owned and operated by respondents.
First, we advert to the sketch prepared by PO3 Magno S. de Villa, who investigated the accident. The sketch13 shows
the passenger bus facing the direction of Tagaytay City and lying on its right side on the shoulder of the road, about
five meters away from the point of impact. On the other hand, the trailer truck was on the opposite direction, about
500 meters away from the point of impact. PO3 De Villa stated that he interviewed De Borja, respondent driver of the
passenger bus, who said that he was about to unload some passengers when his bus was bumped by the driver of the
trailer truck that lost its brakes. PO3 De Villa checked out the trailer truck and found that its brakes really failed. He
testified before the trial court, as follows:
ATTY. ESTELYDIZ:
q You pointed to the Isuzu truck beyond the point of impact. Did you investigate why did (sic) the Isuzu truck is beyond
the point of impact?cralawred
a Because the truck has no brakes.
COURT:
q What is the distance between that circle which is marked as Exh. 1-c to the place where you found the
same?cralawred
a More or less 500 meters.
q Why did you say that the truck has no brakes?cralawred
a I tested it.
q And you found no brakes?cralawred
a Yes, sir.
xxx
q When you went to the scene of accident, what was the position of Celyrosa bus?cralawred
a It was lying on its side.
COURT:
q Right side or left side?cralawred
a Right side.
ATTY. ESTELYDIZ:
q On what part of the road was it lying?cralawred
a On the shoulder of the road.
COURT:
q How many meters from the point of impact?cralawred
a Near, about 5 meters.14
His police report bolsters his testimony and states:
Said vehicle 1 [passenger bus] was running from Manila toward south direction when, in the course of its travel, it was
hit and bumped by vehicle 2 [truck with trailer] then running fast from opposite direction, causing said vehicle 1 to fall
on its side on the road shoulder, causing the death of one and injuries of some passengers thereof, and its damage,
after collission (sic), vehicle 2 continiously (sic) ran and stopped at approximately 500 meters away from the
piont (sic) of impact.15
In fine, the evidence shows that before the collision, the passenger bus was cruising on its rightful lane along the
Aguinaldo Highway when the trailer truck coming from the opposite direction, on full speed, suddenly swerved and
encroached on its lane, and bumped the passenger bus on its left middle portion. Respondent driver De Borja had
every right to expect that the trailer truck coming from the opposite direction would stay on its proper lane. He was not
expected to know that the trailer truck had lost its brakes. The swerving of the trailer truck was abrupt and it was
running on a fast speed as it was found 500 meters away from the point of collision. Secondly, any doubt as to the
culpability of the driver of the trailer truck ought to vanish when he pleaded guilty to the charge of reckless
imprudence resulting to multiple slight physical injuries and damage to property in Criminal Case No. 2223-92,
involving the same incident.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
IN VIEW WHEREOF, the petition is DENIED. The Decision dated May 21, 2004 and the Resolution dated January 7, 2005
of the Court of Appeals in CA-G.R. CV No. 66891 are AFFIRMED.
SO ORDERED.

Endnotes:

1 Rollo, pp. 20-31.

2 Id. at 41-42.
3 Id. at 58-64.
4 RTC Records, Exhibit "1," pp. 84-89.
5 RTC Records, Exhibit "3," pp. 90-93.
6 RTC Records, Exhibit "6," p. 165.
7 Rollo, p. 64.
8 Id. at 28.
9 Id. at 31.
10 Id. at 12.
11 Art. 1755, Civil Code.
12 G.R. No. 52159, December 22, 1989, 180 SCRA 546, 551-552.
13 RTC Records, pp. 26, 34.
14 TSN, November 4, 1994, pp. 6, 8.
15 RTC Records, p. 33.
G.R. No. 106279 July 14, 1995
SULPICIO LINES, INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS (Twelfth Division) and JACINTA L. PAMALARAN, respondents.

QUIASON, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court to reverse the Decision dated April
8, 1992 of the Court of Appeals in CA-G.R. CV No. 21919, affirming the decision of the Regional Trial Court of Bohol,
Branch 2, Tagbilaran City, which awarded the claim for damages filed by private respondent against CBL Timber
Corporation (CBL), AGO Lumber Company (ALC), Sulpicio Lines, Inc. (SLI) and Ernie Santiago (Civil Case No. 2864).
We deny the petition.
I
A contract of carriage was entered into between petitioner and ALC for the transport of the latter's timber from Pugad,
Lianga, Surigao del Sur.
On March 17, 1976, petitioner sent its tugboat "MT Edmund" and barge "Solid VI" to Lianga to pick up ALC's timber.
However, no loading could be made because of the heavy downpour. The next morning, several stevedores of CBL,
who were hired by ALC, boarded the "Solid VI" and opened its storeroom. The stevedores were warned of the gas and
heat generated by the copra stored in the holds of the ship. Not heeding the warning, a stevedore entered the
storeroom and fell unconscious. Two other stevedores followed, one of whom was Leoncio L. Pamalaran. He also lost
consciousness and eventually died of gas poisoning.
Thus, Civil Case No. 2864 for damages was filed with the Regional Trial Court of Bohol, Branch 2, Tagbilaran by
Pamalaran's heirs against petitioner CBL, ALC and its manager, Ernie Santiago. The trial court ruled in favor of plaintiffs,
disposing as follows:
WHEREFORE, finding a preponderance of evidence in favor of the plaintiffs, judgment is hereby
rendered:
Ordering defendants CBL Timber Corporation, AGO Lumber Company, Sulpicio Lines, Inc. and Ernie
Santiago to pay plaintiffs jointly and severally:
1. Actual and compensatory damages of P40,000.00;
2. Moral damages of P50,000.00;
3. Attorney's fees of P20,000.00 and the costs of the suit (Rollo, p. 57).
On appeal, the Court of Appeals in its Decision dated April 8, 1992 in CA-G.R. No. CV No. 21919, affirmed the lower
court's decision, the dispositive portion of which reads:
WHEREFORE, WE AFFIRM the appealed judgment there being no justifiable reason that warrants the
reversal thereof. Costs against defendant-appellant (Rollo, p. 32).
Not satisfied with the appellate court's decision, petitioner filed this petition.
II
Petitioner raises the following arguments:
1. Pamalaran was never a passenger of petitioner. Therefore, it is not liable as a common carrier;
2. Petitioner and its employees were not negligent in the series of events which led to the death of
Pamalaran;
3. Petitioner is not liable under Article 2180 of the New Civil Code;
4. It is CBL and/or ALC which should be held liable for the death of the victim; and,
5. Petitioner should have been granted its just and valid counterclaims and cross claims.
We agree with the Court of Appeals that although Pamalaran was never a passenger of petitioner, still the latter is liable
as a common carrier for his death. The Court of Appeals relied on Canas v. Dabatos, 8 Court of Appeals Report 918
(1965). In said case, 13 persons were on board the vessel of defendant not as passengers but as 'cargadores' of the
shipper's goods. They were there with the consent and knowledge of the owner of the vessel. Despite the absence of a
passenger-carrier relationship between them, the appellate court, just the same, held the patron thereof liable as a
common carrier. The appellate court ruled:
There is no debate as to the fact that not one of the thirteen passengers have paid an amount of
money as fare for their conveyance from Hingotanan to Cebu. The undisputed fact, however, is that all
of them were in the boat with the knowledge and consent of the patron. The eleven passengers, other
than Encarnacion and Diosdado were in the boat because they have helped in loading cargoes in the
boat, and "to serve as cargadores of the cargoes," presumably, in unloading them at the place of
destination. For those services they were permitted to be in the boat and to proceed to their destination in
Cebu. The services rendered were the valuable consideration in exchange for the transportation fare. "In
onerous contracts the cause is understood to be, for each contracting party, the prestation or promise
of a thing or service by the other; . . ." (at p. 925; emphasis supplied).
ALC had a contract of carriage with petitioner. The presence of the stevedores sent by ALC on board the barge of
petitioner was called for by the contract of carriage. For how else would its lumber be transported unless it is placed on
board? And by whom? Of course, the stevedores. Definitely, petitioner could not expect the shipper itself to load the
lumber without the aid of the stevedores. Furthermore, petitioner knew of the presence and role of the stevedores in its
barge and thus consented to their presence. Hence, petitioner was responsible for their safety while on board the
barge.
Petitioner next claims that its employees even warned the stevedores and tried to prevent their entry into the
storeroom. Such argument, again, is demolished by the findings of the Court of Appeals, thus:
 . . . . However, appellant failed to prove that its employees were actually trained or given specific
instructions to see to it that the barge is fit and safe not only in transporting goods but also for people
who would be loading the cargo into the bodega of the barge. It is not enough that appellant's
employees have warned the laborers not to enter the barge after the hatch was opened. Appellant's
employees should have been sufficiently instructed to see to it that the hatch of the barge is not opened
by any unauthorized person and that the hatch is not easily opened by anyone. At the very least,
precautionary measures should have been observed by appellant's employees to see to it that no one
could enter the bodega of the barge until after they have made sure that it is safe for anyone to enter
the same. Failing to exercise due diligence in the supervision of its employees, the lower court was correct
in holding appellant liable for damages (Rollo, pp. 31-32; Emphasis supplied).
Inasmuch as the findings of the Court of Appeals are merely an affirmance of the findings of the trial court, which
findings are supported by the evidence, we do not find any reason to reverse the same.
There is no quarrel that ALC and CBL are also liable as they were in fact held liable by both the trial and appellate
courts.
Both the counterclaims and cross claims of petitioner are without legal basis. The counterclaims and cross claims were
based on the assumption that the other defendants are the ones solely liable. However, inasmuch as its solidary liability
with the other defendants has clearly been established by both the trial and the appellate courts, which we find to be in
order, we cannot make a different conclusion contrary to that of the said courts.
Finally, the indemnity for the death of Leoncio L. Pamalaran is increased from P40,000.00 to P50,000.00 in accordance
with our ruling in People v. Flores, 237 SCRA 653 (1994).
WHEREFORE, the Decision of the Court of Appeals is AFFIRMED with the MODIFICATION that the award of actual and
compensatory damages is increased to P50,000.00.
SO ORDERED.
Padilla, Davide, Jr. and Kapunan, JJ., concur.
Bellosillo, J., is on leave.
 G.R. No. 172682, July 27, 2016
SULPICIO LINES, INC., Petitioner, v. NAPOLEON SESANTE, NOW SUBSTITUTED BY MARIBEL ATILANO, KRISTEN
MARIE, CHRISTIAN IONE, KENNETH KERRN AND KARISNA KATE, ALL SURNAMED SESANTE, Respondent.
DECISION
BERSAMIN, J.:
Moral damages are meant to enable the injured party to obtain the means, diversions or amusements in order to
alleviate the moral suffering. Exemplary damages are designed to permit the courts to reshape behavior that is socially
deleterious in its consequence by creating negative incentives or deterrents against such behavior.
The Case

This appeal seeks to undo and reverse the adverse decision promulgated on June 27, 2005,1 whereby the Court of
Appeals (CA) affirmed with modification the judgment of the Regional Trial Court (RTC), Branch 91, in Quezon City
holding the petitioner liable to pay temperate and moral damages due to breach of contract of carriage.2chanrobleslaw
Antecedents

On September 18, 1998, at around 12:55 p.m., the M/V Princess of the Orient, a passenger vessel owned and operated
by the petitioner, sank near Fortune Island in Batangas. Of the 388 recorded passengers, 150 were lost.3 Napoleon
Sesante, then a member of the Philippine National Police (PNP) and a lawyer, was one of the passengers who survived
the sinking. He sued the petitioner for breach of contract and damages.4chanrobleslaw

Sesante alleged in his complaint that the M/V Princess of the Orient left the Port of Manila while Metro Manila was
experiencing stormy weather; that at around 11:00 p.m., he had noticed the vessel listing starboard, so he had gone to
the uppermost deck where he witnessed the strong winds and big waves pounding the vessel; that at the same time, he
had seen how the passengers had been panicking, crying for help and frantically scrambling for life jackets in the
absence of the vessel's officers and crew; that sensing danger, he had called a certain Vency Ceballos through his
cellphone to request him to inform the proper authorities of the situation; that thereafter, big waves had rocked the
vessel, tossing him to the floor where he was pinned by a long steel bar; that he had freed himself only after another
wave had hit the vessel;5 that he had managed to stay afloat after the vessel had sunk, and had been carried by the
waves to the coastline of Cavite and Batangas until he had been rescued; that he had suffered tremendous hunger,
thirst, pain, fear, shock, serious anxiety and mental anguish; that he had sustained injuries,6 and had lost money,
jewelry, important documents, police uniforms and the .45 caliber pistol issued to him by the PNP; and that because it
had committed bad faith in allowing the vessel to sail despite the storm signal, the petitioner should pay him actual
and moral damages of P500,000.00 and P1,000,000.00, respectively.7chanrobleslaw

In its defense, the petitioner insisted on the seaworthiness of the M/V Princess of the Orient due to its having been
cleared to sail from the Port of Manila by the proper authorities; that the sinking had been due to force majeure; that it
had not been negligent; and that its officers and crew had also not been negligent because they had made
preparations to abandon the vessel because they had launched life rafts and had provided the passengers assistance in
that regard.8chanrobleslaw
Decision of the RTC

On October 12, 2001, the RTC rendered its judgment in favor of the respondent,9 holding as
follows:ChanRoblesVirtualawlibrary
WHEREFORE, judgment is hereby rendered in favor of plaintiff Napoleon Sesante and against defendant Sulpicio Lines,
Inc., ordering said defendant to pay plaintiff:
1. Temperate damages in the amount of P400,000.00;
2. Moral damages in the amount of One Million Pesos (P1,000,000.00);
3. Costs of suit.
SO ORDERED.10chanroblesvirtuallawlibrary
The RTC observed that the petitioner, being negligent, was liable to Sesante pursuant to Articles 1739 and 1759 of
the Civil Code; that the petitioner had not established its due diligence in the selection and supervision of the vessel
crew; that the ship officers had failed to inspect the stowage of cargoes despite being aware of the storm signal; that
the officers and crew of the vessel had not immediately sent a distress signal to the Philippine Coast Guard; that the
ship captain had not called for then "abandon ship" protocol; and that based on the report of the Board of Marine
Inquiry (BMI), the erroneous maneuvering of the vessel by the captain during the extreme weather condition had been
the immediate and proximate cause of the sinking.

The petitioner sought reconsideration, but the RTC only partly granted its motion by reducing the temperate damages
from P500,000.00 to P300,000.00.11chanrobleslaw

Dissatisfied, the petitioner appealed.12 It was pending the appeal in the CA when Sesante passed away. He was
substituted by his heirs.13chanrobleslaw
Judgment of the CA

On June 27, 2005, the CA promulgated its assailed decision. It lowered the temperate damages to P120,000.00, which
approximated the cost of Sesante's lost personal belongings; and held that despite the seaworthiness of the vessel, the
petitioner remained civilly liable because its officers and crew had been negligent in performing their
duties.14chanrobleslaw

Sttill aggrieved, Sulpicio Lines moved for reconsideration, but the CA denied the motion.15chanrobleslaw

Hence, this appeal.

Issues

The petitioner attributes the following errors to the CA, to wit:ChanRoblesVirtualawlibrary

I

THE ASSAILED DECISION ERRED IN SUSTAINING THE AWARD OF MORAL DAMAGES, AS THE INSTANT CASE IS FOR
ALLEGED PERSONAL INJURIES PREDICATED ON BREACH OF CONTRACT OF CARRIAGE, AND THERE BEING NO PROOF
OF BAD FAITH ON THE PART OF SULPICIO
II

THE ASSAILED DECISION ERRED IN SUSTAINING THE AMOUNT OF MORAL DAMAGES AWARDED, THE SAME BEING
UNREASONABLE, EXCESSIVE AND UNCONSCIONABLE, AND TRANSLATES TO UNJUST ENRICHMENT AGAINST
SULPICIO
III

THE ASSAILED DECISION ERRED IN SUSTAINING THE AWARD OF TEMPERATE DAMAGES AS THE SAME CANNOT
SUBSTITUTE FOR A FAILED CLAIM FOR ACTUAL DAMAGES, THERE BEING NO COMPETENT PROOF TO WARRANT SAID
AWARD
IV

THE AWARD OF TEMPERATE DAMAGES IS UNTENABLE AS THE REQUISITE NOTICE UNDER THE LAW WAS NOT GIVEN
TO SULPICIO IN ORDER TO HOLD IT LIABLE FOR THE ALLEGED LOSS OF SESANTE'S PERSONAL BELONGINGS
V

THE ASSAILED DECISION ERRED IN SUBSTITUTING THE HEIRS OF RESPONDENT SESANTE IN THE INSTANT CASE, THE
SAME BEING A PERSONAL ACTION WHICH DOES NOT SURVIVE
VI

THE ASSAILED DECISION ERRED IN APPLYING ARTICLE 1759 OF THE NEW CIVIL CODE AGAINST SULPICIO SANS A
CLEAR-CUT FINDING OF SULPICIO'S BAD FAITH IN THE INCIDENT16chanroblesvirtuallawlibrary
In other words, to be resolved are the following, namely: (1) Is the complaint for breach of contract and damages a
personal action that does not survive the death of the plaintiff?; (2) Is the petitioner liable for damages under Article
1759 of the Civil Code?; and (3) Is there sufficient basis for awarding moral and temperate damages?
Ruling of the Court

The appeal lacks merit.

I

An action for breach of contract of carriage survives the death of the plaintiff

The petitioner urges that Sesante's complaint for damages was purely personal and cannot be transferred to his heirs
upon his death. Hence, the complaint should be dismissed because the death of the plaintiff abates a personal action.

The petitioner's urging is unwarranted.

Section 16, Rule 3 of the Rules of Court lays down the proper procedure in the event of the death of a
litigant, viz.:ChanRoblesVirtualawlibrary
Section 16. Death of party; duty of counsel. - Whenever a party to a pending action dies, and the claim is not
thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after such death of
the fact thereof, and to give the name and address of his legal representative or representatives. Failure of counsel to
comply with his duty shall be a ground for disciplinary action.

The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the appointment
of an executor or administrator and the court may appoint a guardian ad litem for the minor heirs.

xxxx
Substitution by the heirs is not a matter of jurisdiction, but a requirement of due process.17 It protects the right of due
process belonging to any party, that in the event of death the deceased litigant continues to be protected and properly
represented in the suit through the duly appointed legal representative of his estate.18chanrobleslaw

The application of the rule on substitution depends on whether or not the action survives the death of the litigant.
Section 1, Rule 87 of the Rules of Court enumerates the following actions that survive the death of a party, namely: (1)
recovery of real or personal property, or an interest from the estate; (2) enforcement of liens on the estate; and (3)
recovery of damages for an injury to person or property. On the one hand, Section 5, Rule 86 of the Rules of Court lists
the actions abated by death as including: (1) claims for funeral expenses and those for the last sickness of the decedent;
(2) judgments for money; and (3) all claims for money against the deceased, arising from contract, express or implied.

A contract of carriage generates a relation attended with public duty, neglect or malfeasance of the carrier's employees
and gives ground for an action for damages.19 Sesante's claim against the petitioner involved his personal injury
caused by the breach of the contract of carriage. Pursuant to the aforecited rules, the complaint survived his death, and
could be continued by his heirs following the rule on substitution.
II

The petitioner is liable for breach of contract of carriage

The petitioner submits that an action for damages based on breach of contract of carriage under Article 1759 of
the Civil Code should be read in conjunction with Article 2201 of the same code; that although Article 1759 only
provides for a presumption of negligence, it does not envision automatic liability; and that it was not guilty of bad faith
considering that the sinking of M/V Princess of the Orient had been due to a fortuitous event, an exempting
circumstance under Article 1174 of the Civil Code.

The submission has no substance.

Article 1759 of the Civil Code does not establish a presumption of negligence because it explicitly makes the common
carrier liable in the event of death or injury to passengers due to the negligence or fault of the common carrier's
employees. It reads:ChanRoblesVirtualawlibrary
Article 1759. Common carriers are liable for the death or injuries to passengers through the negligence or willful
acts of the former's employees, although such employees may have acted beyond the scope of their authority or in
violation of the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence of a good father of
a family in the selection and supervision of their employees.
The liability of common carriers under Article 1759 is demanded by the duty of extraordinary diligence required of
common carriers in safely carrying their passengers.20chanrobleslaw

On the other hand, Article 1756 of the Civil Code lays down the presumption of negligence against the common carrier
in the event of death or injury of its passenger, viz.:ChanRoblesVirtualawlibrary
Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and
1755.
Clearly, the trial court is not required to make an express finding of the common carrier's fault or negligence.21 Even
the mere proof of injury relieves the passengers from establishing the fault or negligence of the carrier or its
employees.22 The presumption of negligence applies so long as there is evidence showing that: (a) a contract exists
between the passenger and the common carrier; and (b) the injury or death took place during the existence of such
contract.23 In such event, the burden shifts to the common carrier to prove its observance of extraordinary diligence,
and that an unforeseen event or force majeure had caused the injury.24chanrobleslaw

Sesante sustained injuries due to the buffeting by the waves and consequent sinking of M/V Princess of the Orient
where he was a passenger. To exculpate itself from liability, the common carrier vouched for the seaworthiness of M/V
Princess of the Orient, and referred to the BMI report to the effect that the severe weather condition - a force majeure -
had brought about the sinking of the vessel.

The petitioner was directly liable to Sesante and his heirs.

A common carrier may be relieved of any liability arising from a fortuitous event pursuant to Article 117425cralawred of
the Civil Code. But while it may free a common carrier from liability, the provision still requires exclusion of human
agency from the cause of injury or loss.26 Else stated, for a common carrier to be absolved from liability in case of force
majeure, it is not enough that the accident was caused by a fortuitous event. The common carrier must still prove that it
did not contribute to the occurrence of the incident due to its own or its employees' negligence.27 We explained
in Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc.,28 as follows:ChanRoblesVirtualawlibrary
In order to be considered a fortuitous event, however, (1) the cause of the unforeseen and unexpected occurrence, or
the failure of the debtor to comply with his obligation, must be independent of human will; (2) it must be impossible to
foresee the event which constitute the caso fortuito, or if it can be foreseen it must be impossible to avoid; (3) the
occurrence must be such as to render it impossible for the debtor to fulfill his obligation in any manner; and (4) the
obligor must be free from any participation in the aggravation of the injury resulting to the creditor.
[T]he principle embodied in the act of God doctrine strictly requires that the act must be occasioned solely by the
violence of nature. Human intervention is to be excluded from creating or entering into the cause of the
mischief. When the effect is found to be in part the result of the participation of man, whether due to his active
intervention or neglect or failure to act, the whole occurrence is then humanized and removed from the rules
applicable to the acts of God.29 (bold underscoring supplied for emphasis)
The petitioner has attributed the sinking of the vessel to the storm notwithstanding its position on the seaworthiness of
M/V Princess of the Orient. Yet, the findings of the BMI directly contradicted the petitioner's attribution, as
follows:ChanRoblesVirtualawlibrary
7. The Immediate and the Proximate Cause of the Sinking

The Captain's erroneous maneuvers of the M/V Princess of the Orient minutes before she sunk [sic] had caused the
accident. It should be noted that during the first two hours when the ship left North Harbor, she was navigating
smoothly towards Limbones Point. During the same period, the ship was only subjected to the normal weather stress
prevailing at the time. She was then inside Manila Bar. The waves were observed to be relatively small to endanger the
safety of the ship. It was only when the MV Princess of the Orient had cleared Limbones Pt. while navigating towards the
direction of the Fortune Island when this agonizing misfortune struck the ship.

Initially, a list of three degrees was observed. The listing of the ship to her portside had continuously increased. It was
at this point that the captain had misjudged the situation. While the ship continuously listed to her portside and was
battered by big waves, strong southwesterly winds, prudent judgement [sic] would dictate that the Captain should have
considerably reduced the ship's speed. He could have immediately ordered the Chief Engineer to slacken down the
speed. Meanwhile, the winds and waves continuously hit the ship on her starboard side. The waves were at least seven
to eight meters in height and the wind velocity was a[t] 25 knots. The MV Princess of the Orient being a close-type ship
(seven decks, wide and high superstructure) was vulnerable and exposed to the howling winds and ravaging seas.
Because of the excessive movement, the solid and liquid cargo below the decks must have shifted its weight to port,
which could have contributed to the tilted position of the ship.

Minutes later, the Captain finally ordered to reduce the speed of the ship to 14 knots. At the same time, he ordered to
put ballast water to the starboard-heeling tank to arrest the continuous listing of the ship. This was an exercise in
futility because the ship was already listing between 15 to 20 degrees to her portside. The ship had almost reached the
maximum angle of her loll. At this stage, she was about to lose her stability.

Despite this critical situation, the Captain executed several starboard maneuvers. Steering the course of the Princess to
starboard had greatly added to her tilting. In the open seas, with a fast speed of 14 knots, advance maneuvers such as
this would tend to bring the body of the ship in the opposite side. In navigational terms, this movement is described as
the centripetal force. This force is produced by the water acting on the side of the ship away from the center of the
turn. The force is considered to act at the center of lateral resistance which, in this case, is the centroid of the
underwater area of the ship's side away from the center of the turn. In the case of the Princess, when the Captain
maneuvered her to starboard, her body shifted its weight to port. Being already inclined to an angle of 15 degrees,
coupled with the instantaneous movement of the ship, the cargoes below deck could have completely shifted its
position and weight towards portside. By this time, the ship being ravaged simultaneously by ravaging waves and
howling winds on her starboard side, finally lost her grip.30chanroblesvirtuallawlibrary
Even assuming the seaworthiness of the MA/ Princess of the Orient, the petitioner could not escape liability considering
that, as borne out by the aforequoted findings of the BMI, the immediate and proximate cause of the sinking of the
vessel had been the gross negligence of its captain in maneuvering the vessel.

The Court also notes that Metro Manila was experiencing Storm Signal No. 1 during the time of the sinking.31 The BMI
observed that a vessel like the M/V Princess of the Orient, which had a volume of 13.734 gross tons, should have been
capable of withstanding a Storm Signal No. 1 considering that the responding fishing boats of less than 500 gross tons
had been able to weather through the same waves and winds to go to the succor of the sinking vessel and had actually
rescued several of the latter's distressed passengers.32chanrobleslaw
III

The award of moral damages and temperate damages is proper

The petitioner argues that moral damages could be meted against a common carrier only in the following instances, to
wit: (1) in the situations enumerated by Article 2201 of the Civil Code; (2) in cases of the death of a passenger; or
(3)where there was bad faith on the part of the common carrier. It contends that none of these instances obtained
herein; hence, the award should be deleted.

We agree with the petitioner that moral damages may be recovered in an action upon breach of contract of carriage
only when: (a) death of a passenger results, or (b) it is proved that the carrier was guilty of fraud and bad faith, even if
death does not result.33 However, moral damages may be awarded if the contractual breach is found to be wanton and
deliberately injurious, or if the one responsible acted fraudulently or with malice or bad faith.34chanrobleslaw

The CA enumerated the negligent acts committed by the officers and crew of M/V Princess of the
Orient, viz.:ChanRoblesVirtualawlibrary
x x x. [W]hile this Court yields to the findings of the said investigation report, yet it should be observed that what was
complied with by Sulpicio Lines were only the basic and minimal safety standards which would qualify the vessel as
seaworthy. In the same report however it also revealed that the immediate and proximate cause of the sinking of the
M/V Princess of the Orient was brought by the following: erroneous maneuvering command of Captain Esrum Mahilum
and due to the weather condition prevailing at the time of the tragedy. There is no doubt that under the circumstances
the crew of the vessel were negligent in manning it. In fact this was clearly established by the investigation of the Board
of Marine Inquiry where it was found that:ChanRoblesVirtualawlibrary
The Chief Mate, when interviewed under oath, had attested that he was not able to make stability calculation of the
ship vis-a-vis her cargo. He did not even know the metacentric height (GM) of the ship whether it be positive or
negative.

As cargo officer of the ship, he failed to prepare a detailed report of the ship's cargo stowage plan.
He likewise failed to conduct the soundings (measurement) of the ballast tanks before the ship departed from port. He
readily presumed that the ship was full of ballast since the ship was fully ballasted when she left Cebu for Manila on 16
September 1998 and had never discharge[d] its contents since that time.

Being the officer-in-charge for emergency situation (sic) like this, he failed to execute and supervise the actual
abandonship (sic) procedure. There was no announcement at the public address system of abandonship (sic), no
orderly distribution of life jackets and no orderly launching of life rafts. The witnesses have confirmed this finding on
their sworn statements.

There was miscalculation in judgment on the part of the Captain when he erroneously navigated the ship at her last
crucial moment. x x x

To aggravate his case, the Captain, having full command and responsibility of the MV Princess of the Orient, had failed
to ensure the proper execution of the actual abandoning of the ship.

The deck and engine officers (Second Mate, Third Mate, Chief Engineers, Second Engineer, Third Engineer and Fourth
Engineer), being in charge of their respective abandonship (sic) post, failed to supervise the crew and passengers in the
proper execution of abandonship (sic) procedure.

The Radio Officer (spark) failed to send the SOS message in the internationally accepted communication network (VHF
Channel 16). Instead, he used the Single Side Band (SSB) radio in informing the company about the emergency
situation. x x x x35chanroblesvirtuallawlibrary
The aforestated negligent acts of the officers and crew of M/V Princess of the Orient could not be ignored in view of
the extraordinary duty of the common carrier to ensure the safety of the passengers. The totality of the negligence by
the officers and crew of M/V Princess of the Orient, coupled with the seeming indifference of the petitioner to render
assistance to Sesante,36 warranted the award of moral damages.

While there is no hard-and-fast rule in determining what is a fair and reasonable amount of moral damages, the
discretion to make the determination is lodged in the trial court with the limitation that the amount should not be
palpably and scandalously excessive. The trial court then bears in mind that moral damages are not intended to impose
a penalty on the wrongdoer, or to enrich the plaintiff at the expense of the defendant.37 The amount of the moral
damages must always reasonably approximate the extent of injury and be proportional to the wrong
committed.38chanrobleslaw

The Court recognizes the mental anguish, agony and pain suffered by Sesante who fought to survive in the midst of the
raging waves of the sea while facing the immediate prospect of losing his life. His claim for moral and economic
vindication is a bitter remnant of that most infamous tragedy that left hundreds of families broken in its wake. The
anguish and moral sufferings he sustained after surviving the tragedy would always include the memory of facing the
prospect of his death from drowning, or dehydration, or being preyed upon by sharks. Based on the established
circumstances, his survival could only have been a miracle wrought by God's grace, by which he was guided in his
desperate swim for the safety of the shore. But even with the glory of survival, he still had to grapple with not just the
memory of having come face to face with almost certain death, but also with having to answer to the instinctive guilt
for the rest of his days of being chosen to live among the many who perished in the tragedy.39chanrobleslaw

While the anguish, anxiety, pain and stress experienced by Sesante during and after the sinking cannot be quantified,
the moral damages to be awarded should at least approximate the reparation of all the consequences of the
petitioner's negligence. With moral damages being meant to enable the injured party to obtain the means, diversions
or amusements in order to alleviate his moral and physical sufferings,40 the Court is called upon to ensure that proper
recompense be allowed to him, through his heirs. For this purpose, the amount of P1,000,000.00, as granted by the RTC
and affirmed by the CA, is maintained.

The petitioner contends that its liability for the loss of Sesante's personal belongings should conform with Article 1754,
in relation to Articles 1998, 2000 to 2003 of the Civil Code, which provide:ChanRoblesVirtualawlibrary
Article 1754. The provisions of Articles 1733 to 1753 shall apply to the passenger's baggage which is not in his personal
custody or in that of his employees. As to other baggage, the rules in Articles 1998 and 2000 to 2003 concerning the
responsibility of hotel-keepers shall be applicable.

xxxx
Article 1998. The deposit of effects made by travellers in hotels or inns shall also be regarded as necessary. The keepers
of hotels or inns shall be responsible for them as depositaries, provided that notice was given to them, or to their
employees, of the effects brought by the guests and that, on the part of the latter, they take the precautions which said
hotel-keepers or their substitutes advised relative to the care and vigilance of their effects.

xxxx

Article 2000. The responsibility referred to in the two preceding articles shall include the loss of, or injury to the
personal property of the guests caused by the servants or employees of the keepers of hotels or inns as well as by
strangers; but not that which may proceed from any force majeure. The fact that travellers are constrained to rely on the
vigilance of the keeper of the hotel or inn shall be considered in determining the degree of care required of him.

Article 2001. The act of a thief or robber, who has entered the hotel is not deemed force majeure, unless it is done with
the use of arms or through an irresistible force.

Article 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the guest, his family,
servants or visitors, or if the loss arises from the character of the things brought into the hotel.

Article 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not
liable for the articles brought by the guest. Any stipulation to the contrary between the hotel-keeper and the guest
whereby the responsibility of the former as set forth in Articles 1998 to 2001 is suppressed or diminished shall be void.
The petitioner denies liability because Sesante's belongings had remained in his custody all throughout the voyage
until the sinking, and he had not notified the petitioner or its employees about such belongings. Hence, absent such
notice, liability did not attach to the petitioner.

Is notification required before the common carrier becomes liable for lost belongings that remained in the custody of
the passenger?

We answer in the negative.

The rule that the common carrier is always responsible for the passenger's baggage during the voyage needs to be
emphasized. Article 1754 of the Civil Code does not exempt the common carrier from liability in case of loss, but only
highlights the degree of care required of it depending on who has the custody of the belongings. Hence, the law
requires the common carrier to observe the same diligence as the hotel keepers in case the baggage remains with the
passenger; otherwise, extraordinary diligence must be exercised.41 Furthermore, the liability of the common carrier
attaches even if the loss or damage to the belongings resulted from the acts of the common carrier's employees, the
only exception being where such loss or damages is due to force majeure.42chanrobleslaw

In YHT Realty Corporation v. Court of Appeals,43 we declared the actual delivery of the goods to the innkeepers or their
employees as unnecessary before liability could attach to the hotelkeepers in the event of loss of personal belongings
of their guests considering that the personal effects were inside the hotel or inn because the hotelkeeper shall remain
accountable.44 Accordingly, actual notification was not necessary to render the petitioner as the common carrier liable
for the lost personal belongings of Sesante. By allowing him to board the vessel with his belongings without any
protest, the petitioner became sufficiently notified of such belongings. So long as the belongings were brought inside
the premises of the vessel, the petitioner was thereby effectively notified and consequently duty-bound to observe the
required diligence in ensuring the safety of the belongings during the voyage. Applying Article 2000 of the Civil Code,
the petitioner assumed the liability for loss of the belongings caused by the negligence of its officers or crew. In view of
our finding that the negligence of the officers and crew of the petitioner was the immediate and proximate cause of the
sinking of the M/V Princess of the Orient, its liability for Sesante's lost personal belongings was beyond question.

The petitioner claims that temperate damages were erroneously awarded because Sesante had not proved pecuniary
loss; and that the CA merely relied on his self-serving testimony.

The award of temperate damages was proper.

Temperate damages may be recovered when some pecuniary loss has been suffered but the amount cannot, from the
nature of the case, be proven with certainty.45 Article 222446 of the Civil Code expressly authorizes the courts to award
temperate damages despite the lack of certain proof of actual damages.47chanrobleslaw

Indubitably, Sesante suffered some pecuniary loss from the sinking of the vessel, but the value of the loss could not be
established with certainty. The CA, which can try facts and appreciate evidence, pegged the value of the lost belongings
as itemized in the police report at P120,000.00. The valuation approximated the costs of the lost belongings. In that
context, the valuation of P120,000.00 is correct, but to be regarded as temperate damages.

In fine, the petitioner, as a common carrier, was required to observe extraordinary diligence in ensuring the safety of its
passengers and their personal belongings. It being found herein short of the required diligence rendered it liable for
the resulting injuries and damages sustained by Sesante as one of its passengers.

Should the petitioner be further held liable for exemplary damages?

In contracts and quasi-contracts, the Court has the discretion to award exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or malevolent manner.48 Indeed, exemplary damages cannot be recovered as
a matter of right, and it is left to the court to decide whether or not to award them.49 In consideration of these legal
premises for the exercise of the judicial discretion to grant or deny exemplary damages in contracts and quasi-
contracts against a defendant who acted in a wanton, fraudulent,' reckless, oppressive, or malevolent manner, the Court
hereby awards exemplary damages to Sesante.

First of all, exemplary damages did not have to be specifically pleaded or proved, because the courts had the discretion
to award them for as long as the evidence so warranted. In Marchan v. Mendoza,50 the Court has relevantly
discoursed:ChanRoblesVirtualawlibrary
x x x. It is argued that this Court is without jurisdiction to adjudicate this exemplary damages since there was no
allegation nor prayer, nor proof, nor counterclaim of error for the same by the appellees. It is to be observed
however, that in the complaint, plaintiffs "prayed for such other and further relief as this Court may deem just
and equitable." Now, since the body of the complaint sought to recover damages against the defendant-carrier
wherein plaintiffs prayed for indemnification for the damages they suffered as a result of the negligence of said
Silverio Marchan who is appellant's employee; and since exemplary damages is intimately connected with
general damages, plaintiffs may not be expected to single out by express term the kind of damages they are
trying to recover against the defendant's carrier. Suffice it to state that when plaintiffs prayed in their
complaint for such other relief and remedies that may be availed of under the premises, in effect, therefore, the
court is called upon to exercise and use its discretion whether the imposition of punitive or exemplary damages
even though not expressly prayed or pleaded in the plaintiffs' complaint.

x x x It further appears that the amount of exemplary damages need not be proved, because its determination
depends upon the amount of compensatory damages that may be awarded to the claimant. If the amount of
exemplary damages need not be proved, it need not also be alleged, and the reason is obvious because it is
merely incidental or dependent upon what the court may award as compensatory damages. Unless and until
this premise is determined and established, what may be claimed as exemplary damages would amount to a
mere surmise or speculation. It follows as a necessary consequence that the amount of exemplary damages
need not be pleaded in the complaint because the same cannot be predetermined. One can merely ask that it be
determined by the court if in the use of its discretion the same is warranted by the evidence, and this is just
what appellee has done. (Bold underscoring supplied for emphasis)
And, secondly, exemplary damages are designed by our civil law to "permit the courts to reshape behavior that is
socially deleterious in its consequence by creating negative incentives or deterrents against such behavior."51 The
nature and purpose for this kind of damages have been well-stated in People v. Dalisay,52 to
wit:ChanRoblesVirtualawlibrary
Also known as 'punitive' or 'vindictive' damages, exemplary or corrective damages are intended to serve as a
deterrent to serious wrong doings, and as a vindication of undue sufferings and wanton invasion of the rights
of an injured or a punishment for those guilty of outrageous conduct. These terms are generally, but not always,
used interchangeably. In common law, there is preference in the use of exemplary damages when the award is to
account for injury to feelings and for the sense of indignity and humiliation suffered by a person as a result of an injury
that has been maliciously and wantonly inflicted, the theory being that there should be compensation for the hurt
caused by the highly reprehensible conduct of the defendant - associated with such circumstances as willfulness,
wantonness, malice, gross negligence or recklessness, oppression, insult or fraud or gross fraud - that intensifies the
injury. The terms punitive or vindictive damages are often used to refer to those species of damages that may be
awarded against a person to punish him for his outrageous conduct. In either case, these damages are intended in
good measure to deter the wrongdoer and others like him from similar conduct in the future. (Bold underscoring
supplied for emphasis)
The BMI found that the "erroneous maneuvers" during the ill-fated voyage by the captain of the petitioner's vessel had
caused the sinking. After the vessel had cleared Limbones Point while navigating towards the direction of Fortune
Island, the captain already noticed the listing of the vessel by three degrees to the portside of the vessel, but, according
to the BMI, he did not exercise prudence as required by the situation in which his vessel was suffering the battering on
the starboard side by big waves of seven to eight meters high and strong southwesterly winds of 25 knots. The BMI
pointed out that he should have considerably reduced the speed of the vessel based on his experience about the vessel
- a close-type ship of seven decks, and of a wide and high superstructure - being vulnerable if exposed to strong winds
and high waves. He ought to have also known that maintaining a high speed under such circumstances would have
shifted the solid and liquid cargo of the vessel to port, worsening the tilted position of the vessel. It was only after a few
minutes thereafter that he finally ordered the speed to go down to 14 knots, and to put ballast water to the starboard-
heeling tank to arrest the continuous listing at portside. By then, his moves became an exercise in futility because,
according to the BMI, the vessel was already listing to her portside between 15 to 20 degrees, which was almost the
maximum angle of the vessel's loll. It then became inevitable for the vessel to lose her stability.

The BMI concluded that the captain had executed several starboard maneuvers despite the critical situation of the
vessel, and that the maneuvers had greatly added to the tilting of the vessel. It observed:ChanRoblesVirtualawlibrary
x x x In the open seas, with a fast speed of 14 knots, advance maneuvers such as this would tend to bring the
body of the ship in the opposite side. In navigational terms, this movement is described as the centripetal force.
This force is produced by the water acting on the side of the ship away from the center of the turn. The force is
considered to act at the center of lateral resistance which, in this case, is the centroid of the underwater area of
the ship's side away from the center of the turn. In the case of the Princess, when the Captain maneuvered her
to starboard, her body shifted its weight to port. Being already inclined to an angle of 15 degrees, coupled with
the instantaneous movement of the ship, the cargoes below deck could have completely shifted its position and
weight towards portside. By this time, the ship being ravaged simultaneously by ravaging waves and howling
winds on her starboard side, finally lost her grip.53chanroblesvirtuallawlibrary
Clearly, the petitioner and its agents on the scene acted wantonly and recklessly. Wanton and reckless are virtually
synonymous in meaning as respects liability for conduct towards others.54Wanton means characterized by extreme
recklessness and utter disregard for the rights of others; or marked by or manifesting arrogant recklessness of justice or
of rights or feelings of others.55 Conduct is reckless when it is an extreme departure from ordinary care, in a situation in
which a high degree of danger is apparent. It must be more than any mere mistake resulting from inexperience,
excitement, or confusion, and more than mere thoughtlessness or inadvertence, or simple inattention.56chanrobleslaw

The actuations of the petitioner and its agents during the incident attending the unfortunate sinking of the M/V
Princess of the Orient were far below the standard of care and circumspection that the law on common carriers
demanded. Accordingly, we hereby fix the sum of P1,000,000.00 in order to serve fully the objective of exemplarity
among those engaged in the business of transporting passengers and cargo by sea. The amount would not be
excessive, but proper. As the Court put it in Pereña v. Zarate:57
Anent the P1,000,000.00 allowed as exemplary damages, we should not reduce the amount if only to render effective
the desired example for the public good. As a common carrier, the Perenas needed to be vigorously reminded to
observe their duty to exercise extraordinary diligence to prevent a similarly senseless accident from happening again.
Only by an award of exemplary damages in that amount would suffice to instill in them and others similarly situated
like them the ever-present need for greater and constant vigilance in the conduct of a business imbued with public
interest.58 (Bold underscoring supplied for emphasis)
WHEREFORE, the Court AFFIRMS the decision promulgated on June 27, 2005 with the MODIFICATIONS that: (a) the
amount of moral damages is fixed at P1,000,000.00; (b) the amount of P1,000,000.00 is granted as exemplary damages;
and (c) the sum of P120,000.00 is allowed as temperate damages, all to be paid to the heirs of the late Napoleon
Sesante. In addition, all the amounts hereby awarded shall earn interest of 6% per annum from the finality of this
decision until fully paid. Costs of suit to be paid by the petitioner.

SO ORDERED.chanRoblesvirtualLawlibrary

Sereno, C.J., Leonardo-De Castro, Perlas-Bernabe, and Caguioa, JJ., concur.

Endnotes:

1Rollo, pp. 49-59; penned by CA Associate Justice Roberto A. Barrios (retired/deceased), with Associate Justice Amelita
G. Tolentino (retired) and Associate Justice Vicente S. Veloso (retired) concurring.

2 Id. at 64-76.

3 Id. at 49.

4 Records, pp. 1-5.

5 Id. at 2-3.

6 Id.

7Rollo, pp. 51, 68.

8 Id. at 65.

9 Id. at 76.

10 Id.

11 Id. at 77-80.

12 RTC records, pp. 292-293.

13 CA rollo, p. 229.

14 Id. at 54-58.
15 Id. at 77-80.

16 Id. at 15.

17Sarsaba v. Vda. de Te, G.R. No. 175910. July 30, 2009, 594 SCRA 410, 429.

18 Id.; see also Sumaljag v. Diosdidit, G.R. No. 149787, June 18, 2008, 555 SCRA 53, 59-60.

19 Tolentino, Civil Code of the Philippines, Book V (1992), p. 314, citing Pan American World Airways v. Intermediate
Appellate Court, 153 SCRA 521 and Sabena Belgian World Airlines v. Court of Appeals, 171 SCRA 620.

20 Article 1755. A common carrier is bound to carry the passengers safely as far as human care and diligence of very
cautious persons, with a due regard for all the circumstances.

21Diaz v. Court of Appeals, G.R. No. 149749, July 25, 2006, 496 SCRA 468, 472.

22Light Rail Transit Authority v. Navidad, G.R. No. 145804, February 6, 2003, 397 SCRA 75, 81.

23 Aquino and Hernando, Essentials of Transportation and Public Utilities Law, 2011, pp. 63-64.

24Light Rail Transit Authority v. Navidad, supra.

25cralawred Article 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation,
or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events
which, could not be foreseen, or which, though foreseen, were inevitable.

26Perla Compania De Seguros, Inc. v. Sarangaya III, G.R. No. 147746, October 25, 2005, 474 SCRA 191, 200; Yobido v.
Court of Appeals, G.R. No. 113003, October 17, 1997, 281 SCRA 1, 9.

27Bachelor Express, Inc. v. Court of Appeals, G.R. No. 85691, July 31, 1990, 188 SCRA 216, 222-223.

28 G.R. No. 150255, April 22, 2005, 456 SCRA 557.

29 Id. at 566.

30 RTC Records, p. 172.

31 Id. at 161.

32 Id at p. 163.

33Sulpicio Lines, Inc. v. Curso, G.R. No. 157009, March 17, 2010, 615 SCRA 575, 585; Trans-Asia Shipping Lines, Inc. v.
Court of Appeals, G.R. No. 118126, March 4, 1996, 254 SCRA 260, 273-274.

34Air France v. Gillego, G.R. No. 165266, December 15, 2010, 638 SCRA 472, 486.

35Rollo, pp. 56-57.

36 Testimony of Napoleon Sesante dated April 28, 1999, p. 46.

37Yuchengco v. The Manila Chronicle Publishing Corporation, G.R. No. 184315, November 28, 2011, 661 SCRA 392,
404; Cebu Country Club, Inc. v. Elizagaque, G.R. No. 160273, January 18, 2008, 542 SCRA 65, 75.

38Go v. Cordero, G.R. No. 164703 and G.R. No. 164747, May 4, 2010, 620 SCRA 1, 31; Cheng v. Donini, G.R. No. 167017,
June 22, 2009, 590 SCRA 406, 421.

39 Justice Caguioa has contributed during the deliberations that most victims like Sesante relive the events for years
through nightmares and flashbacks that later develop into sleeping disorders and serious psychological issues that scar
them for life; that many of them feel guilt and resentment for being alive, unable to express their feelings on what they
could have done to save others, while others manifest acute stress marked by agitation and panic attacks. He cites
thel997 study on the prolonged traumatic impact of a disaster conducted by Clinical Associate Professor Viola
Mecke of the Department of Psychiatry and Behavioral Sciences of the Stanford University School of Medicine, which
found that "man-induced" disasters were considered more harmful in their psychological effects than "natural"
disasters because the knowledge that the disaster could have been avoided seemed to release a rage and anger that
were not observable in those affected by natural disasters. The study opined that the victims' experiences heightened
distrust and suspicion of others and their motives; and that their unresolved grief would bring about personality
changes that involved guilt, rage, demoralization and a diminished elan vital.
40Lorzano v. Tabayag, Jr., G.R. No. 189647, February 6, 2012, 665 SCRA 38, 48.

41 Tolentino, Civil Code of the Philippines, Vol. V (1992), p. 311.

42 Article 2000, Civil Code.

43 G.R. No. 126780, February 17, 2005, 451 SCRA 638, 658.

44 Supra, citing De Los Santos v. Tan Khey, 58 O.G. No. 45-53, p. 7693.

45Philippine Hawk Corporation v. Lee, G.R. No. 166869, February 16, 2010, 612 SCRA 576, 594; Canada v. All
Commodities Marketing Corporation, G.R. No. 146141, October 17, 2008, 569 SCRA 321, 329.

46 Article 2224. Temperate or moderate damages, which are more than nominal but less than compensatory damages,
may be recovered when the court finds that some pecuniary loss has been suffered but its amount cannot, from the
nature of the case, be proved with certainty.

47Philtranco Service Enterprises, Inc. v. Paras, G.R. No. 161909, April 25, 2012, 671 SCRA 24, 43.

48 Article 2232, Civil Code.

49 Article 2233, Civil Code.

50 No. L-24471, August 30, 1968, 24 SCRA 888, 895-897; see also New World Developers and Management, Inc. v. AMA,
G.R. No. 187930, February 23, 2015.

51Trans-Asia Shipping Lines, Inc. v. Court of Appeals, G.R. No. 118126, March 4, 1996, 254 SCRA 260, 271.

52 G.R. No. 188106, November 25, 2009, 605 SCRA 807, 819-820, citing People v. Catubig, G.R. No. 137842, August 23,
2001, 363 SCRA 621, 634-635.

53 Supra note 30.

54 44A Words and Phrases, 473-474; citing Commonwealth v. Welansky, 55 N.E. 2d 902, 910, 316 Mass. 383 (1944).

55 Id.; citing Griffin v. State, 171 A.2d 717, 720, 225 Md. 422 (1961); Harkrider v. Cox, 321 S.W. 2d 226, 228, 230 Ark. 155
(1959).

56 36A Works and Phrases, 322; citing Schick v. Ferolito, 767 A. 2d 962, 167 N.J.7 (2001).

57Pereña v. Zarate, G.R. No. 157917, August 29, 2012, 679 SCRA 208.

58 Id. at 236.
 G.R. No. 199282, March 14, 2016
TRAVEL & TOURS ADVISERS, INCORPORATED, Petitioner, v. ALBERTO CRUZ, SR., EDGAR HERNANDEZ AND
VIRGINIA MUÑOZ, Respondents.
DECISION
PERALTA, J.:
For resolution of this Court is the Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court dated
December 28, 2011, of petitioner Travel & Tours Advisers, Inc. assailing the Decision1 dated May 16, 2011 and
Resolution2 dated November 10, 2011 of the Court of Appeals (CA), affirming with modifications the Decision3 dated
January 30, 2008 of the Regional Trial Court (RTC), Branch 61, Angeles City finding petitioner jointly and solidarity liable
for damages incurred in a vehicular accident.

The facts follow.

Respondent Edgar Hernandez was driving an Isuzu Passenger Jitney (jeepney) that he owns with plate number DSG-
944 along Angeles-Magalang Road, Barangay San Francisco, Magalang, Pampanga, on January 9, 1998, around 7:50
p.m. Meanwhile,. a Daewoo passenger bus (RCJ Bus Lines) with plate number NXM-116, owned by petitioner Travel and
Tours Advisers, Inc. and driven by Edgar Calaycay travelled in the same direction as that of respondent Edgar
Hernandez vehicle. Thereafter, the bus bumped the rear portion of the jeepney causing it to ram into an acacia tree
which resulted in the death of Alberto Cruz, Jr. and the serious physical injuries of Virginia Muñoz.

Thus, respondents Edgar Hernandez, Virginia Muñoz and Alberto Cruz, Sr., father of the deceased Alberto Cruz, Jr., filed
a complaint for damages, docketed as Civil Case No. 9006 before the RTC claiming that the collision was due to the
reckless, negligent and imprudent manner by which Edgar Calaycay was driving the bus, in complete disregard to
existing traffic laws, rules and regulations, and praying that judgment be rendered ordering Edgar Calaycay and
petitioner Travel & Tours Advisers, Inc. to pay the following:
chanRoblesvirtualLawlibrary
1. For plaintiff Alberto Cruz, Sr.

a. The sum of P140,000.00 for the reimbursement of the expenses incurred for coffin, funeral expenses, for vigil, food,
drinks for the internment (sic) of Alberto Cruz, Jr. as part of actual damages;

b. The sum of P300,000.00, Philippine Currency, as moral, compensatory and consequential damges.

c. The sum of P6,000.00 a month as lost of (sic) income from January 9, 1998 up to the time the Honorable Court may
fixed (sic);

2. For plaintiff Virginia Muñoz:

a. The sum of P40,000.00, Philippine Currency, for the reimbursement of expenses for hospitalization, medicine,
treatment and doctor's fee as part of actual damages;

b. The sum of P150,000.00 as moral, compensatory and consequential damages;

3. For plaintiff Edgar Hernandez:

a. The sum of P42,400.00 for the damage sustained by plaintiffs Isuzu Passenger Jitney as part of actual damages, plus
P500.00 a day as unrealized net income for four (4) months;

b. The sum of P150,000.00, Philippine Currency, as moral, compensatory and consequential damages;

4. The sum of P50,000.00 pesos, Philippine Currency, as attorney's fees, plus P1,000.00 per appearance fee in court;

5. Litigation expenses in the sum of P30,000.00; and

6. To pay the cost of their suit.

Other reliefs just and equitable are likewise prayed for.4ChanRoblesVirtualawlibrary

For its defense, the petitioner claimed that it exercised the diligence of a good father of a family in the selection and
supervision of its employee Edgar Calaycay and further argued that it was Edgar Hernandez who was driving his
passenger jeepney in a reckless and imprudent manner by suddenly entering the lane of the petitioner's bus without
seeing to it that the road was clear for him to enter said lane. In addition, petitioner alleged that at the time of the
incident, Edgar Hernandez violated his franchise by travelling along an unauthorized line/route and that the jeepney
was overloaded with passengers, and the deceased Alberto Cruz, Jr. was clinging at the back thereof.

On January 30, 2008, after trial on the merits, the RTC rendered judgment in favor of the respondents, the dispositive
portion of the decision reads:
chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, judgment is hereby rendered ordering the defendants Edgar Calaycay Ranese and
Travel & Tours Advisers, Inc. to jointly and solidarity pay the following:
chanRoblesvirtualLawlibrary
I. 1. To plaintiff Alberto Cruz, Sr. and his family -
a) the sum of P50,000.00 as actual and compensatory damages;

b) the sum of P250,000.00 for loss of earning capacity of the decedent Alberto Cruz, Jr. and;

c) the sum of P50,000.00 as moral damages.

2. To plaintiff Virginia Muñoz -
a) the sum of P16,744.00 as actual and compensatory damages; and

b) the sum of P150,000.00 as moral damages.

3. To Edgar Hernandez -
a) the sum of P50,000.00 as actual and compensatory damages.
II. The sum of P50,000.00 as attorney's fees, and

III. The sum of P4,470.00 as cost of litigation

SO ORDERED.

Angeles City, Philippines, January 30, 2008.5ChanRoblesVirtualawlibrary

Petitioner filed its appeal with the CA, and on May 16, 2011, the appellate court rendered its decision, the decretal
portion of which reads as follows:
chanRoblesvirtualLawlibrary
WHEREFORE, the instant appeal is PARTLY GRANTED. The assailed Decision of the RTC, Branch 61, Angeles City, dated
January 30, 2008, is AFFIRMED with MODIFICATIONS. The defendants are ordered to pay, jointly and severally, the
following:

1. To plaintiff Alberto Cruz, Sr. and family -

a) the sum of P25,000.00 as actual damages;

b) the sum of P250.000.00 for the loss of earning capacity of the decedent Alberto Cruz, Jr.;

c) the sum of P50,000.00 as civil indemnity for the death of Alberto Cruz, Jr.;

d) the sum of P50,000.00 as moral damages.

2. To plaintiff Virginia Muñoz -

a) the sum of P16,744.00 as actual damages; and

b) the sum of P30,000.00 as moral damages.

3. To plaintiff Edgar Hernandez -

a) The sum of P40,200.00 as actual damages.

4. The award of attorney's fees (P50,000.00) and cost of litigation (P4,470.00) remains.

SO ORDERED.6ChanRoblesVirtualawlibrary
Hence, the present petition wherein the petitioner assigned the following errors:
chanRoblesvirtualLawlibrary
I.

THE PETITIONER'S BUS WAS NOT "OUT OF LINE;"

II.

THE FACT THAT THE JEEPNEY WAS BUMPED ON ITS LEFT REAR PORTION DOES NOT PREPONDERANTLY PROVE THAT
THE DRIVER OF THE BUS WAS THE NEGLIGENT PARTY;
III.

THE DECEASED ALBERTO CRUZ, JR. WAS POSITIONED AT THE RUNNING BOARD OF THE JEEPNEY;
IV.

THE BUS DRIVER WAS NOT SPEEDING OR NEGLIGENT WHEN HE FAILED TO STEER THE BUS TO A COMPLETE STOP;
V.
THE PETITIONER EXERCISED EXTRAORDINARY DILIGENCE OF A GOOD FATHER OF A FAMILY IN ITS SELECTION AND
SUPERVISION OF DRIVER CALAYCAY; AND
VI.

THERE IS NO FACTUAL AND LEGAL BASIS FOR THE VARIOUS AWARDS OF MONETARY
DAMAGES.7ChanRoblesVirtualawlibrary
According to petitioner, contrary to the declaration of the RTC, the petitioner's passenger bus was not "out-of-line" and
that petitioner is actually the holder of a PUB (public utility bus) franchise for provincial operation from Manila-Ilocos
Norte/Cagayan-Manila, meaning the petitioner's passenger bus is allowed to traverse any point between Manila-Ilocos
Norte/Cagayan-Manila. Petitioner further asseverates that the fact that the driver of the passenger bus took the
Magalang Road instead of the Bamban Bridge is of no moment because the bridge was under construction due to the
effects of the lahar; hence closed to traffic and the Magalang Road is still in between the points of petitioner's
provincial operation. Furthermore, petitioner claims that the jeepney was traversing a road way out of its allowed route,
thus, the presumption that respondent Edgar Hernandez was the negligent party.

Petitioner further argues that respondent Edgar Hernandez failed to observe that degree of care, precaution and
vigilance that his role as a public utility called for when he allowed the deceased Alberto Cruz, Jr., to hang on to the rear
portion of the jeepney.

After due consideration of the issues and arguments presented by petitioner, this Court finds no merit to grant the
petition.

Jurisprudence teaches us that "(a)s a rule, the jurisdiction of this Court in cases brought to it from the Court of Appeals
x x x is limited to the review and revision of errors of law allegedly committed by the appellate court, as its findings of
fact are deemed conclusive. As such, this Court is not duty-bound to analyze and weigh all over again the evidence
already considered in the proceedings below.8 This rule, however, is not without exceptions."9 The findings of fact of
the Court of Appeals, which are, as a general rule, deemed conclusive, may admit of review by this Court:10
(1) when the factual findings of the Court of Appeals and the trial court are contradictory;

(2) when the findings are grounded entirely on speculation, surmises, or conjectures;

(3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd, or
impossible;

(4) when there is grave abuse of discretion in the appreciation of facts;

(5) when the appellate court, in making its findings, goes beyond the issues of the case, and such findings are contrary
to the admissions of both appellant and appellee;

(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;

(7) when the Court of Appeals fails to notice certain relevant facts which, if properly considered, will justify a different
conclusion;

(8) when the findings of fact are themselves conflicting;

(9) when the findings of fact are conclusions without citation of the specific evidence on which they are based; and

(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but such findings are
contradicted by the evidence on record.
The issues presented are all factual in nature and do not fall under any of the exceptions upon which this Court may
review. Moreover, well entrenched is the prevailing jurisprudence that only errors of law and not of facts are reviewable
by this Court in a petition for review on certiorari under Rule 45 of the Revised Rules of Court, which applies with
greater force to the Petition under consideration because the factual findings by the Court of Appeals are in full
agreement with what the trial court found.11

Nevertheless, a review of the issues presented in this petition would still lead to the finding that petitioner is still liable
for the damages awarded to the respondents but with certain modifications.

The RTC and the CA are one in finding that both vehicles were not in their authorized routes at the time of the incident.
The conductor of petitioner's bus admitted on cross-examination that the driver of the bus veered off from its usual
route to avoid heavy traffic. The CA thus observed:
chanRoblesvirtualLawlibrary
First. As pointed out in the assailed Decision, both vehicles were not in their authorized routes at the time of the
mishap. FRANCISCO TEJADA, the conductor of defendant-appellant's bus, admitted on cross-examination that the
driver of the bus passed through Magalang Road instead of Sta. Ines, which was the usual route, thus:
xxx

Q: What route did you take from Manila to Laoag, Ilocos Sur?
A: Instead of Sta. Ines, we took Magalang Road, sir.

Q: So that is not your usual route that you are taking?

A: No, sir, it so happened that there was heavy traffic at Bamban, Tarlac, that is why we took the Magalang
Road.

xxx

The foregoing testimony of defendant-appellant's own witness clearly belies the contention that its driver took the
Magalang Road instead of the Bamban Bridge because said bridge was closed and under construction due to the
effects of lahar. Regardless of the reason, however, the irrefutable fact remains that defendant-appellant's bus likewise
veered from its usual route.12ChanRoblesVirtualawlibrary
Petitioner now claims that the bus was not out of line when the vehicular accident happened because the PUB (public
utility bus) franchise that the petitioner holds is for provincial operation from Manila-Ilocos Norte/Cagayan-Manila,
thus, the bus is allowed to traverse any point between Manila-Ilocos Norte/Cagayan-Manila. Such assertion is correct.
"Veering away from the usual route" is different from being "out of line." A public utility vehicle can and may veer away
from its usual route as long as it does not go beyond its allowed route in its franchise, in this case, Manila-Ilocos
Norte/Cagayan-Manila. Therefore, the bus cannot be considered to have violated the contents of its franchise. On the
other hand, it is indisputable that the jeepney was traversing a road out of its allowed route. Necessarily, this case is not
that of "in pari delicto" because only one party has violated a traffic regulation. As such, it would seem that Article 2185
of the New Civil Code is applicable where it provides that:
chanRoblesvirtualLawlibrary
Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent
if at the time of the mishap, he was violating any traffic regulation.
The above provision, however, is merely a presumption. From the factual findings of both the RTC and the CA based on
the evidence presented, the proximate cause of the collision is the negligence of the driver of petitioner's bus. The
jeepney was bumped at the left rear portion. Thus, this Court's past ruling,13 that drivers of vehicles who bump the rear
of another vehicle are presumed to be the cause of the accident, unless contradicted by other evidence, can be applied.
The rationale behind the presumption is that the driver of the rear vehicle has full control of the situation as he is in a
position to observe the vehicle in front of him.14 Thus, as found by the CA:
chanRoblesvirtualLawlibrary
Second. The evidence on record preponderantly shows that it was the negligence of defendant-appellant's driver,
EDGAR CALAYCAY, that was the proximate cause of the collision.

Even without considering the photographs (Exhibit "N", " " and "N-2") showing the damage to the jeepney, it cannot
be denied that the said vehicle was bumped in its left rear portion by defendant-appellant's bus. The same was
established by the unrebutted testimonies of plaintiffs-appellees EDGAR HERNANDEZ and VIRGINIA MUÑOZ, as
follows:
chanRoblesvirtualLawlibrary
EDGAR HERNANDEZ

xxx

Q: Now, according to you, you were not able to reach the town proper of Magalang because your vehicle was bumped.
In what portion of your vehicle was it bumped, Mr. Witness?
A: At the left side edge portion of the vehicle, sir.

Q: When it was bumped on the rear left side portion, what happened to your vehicle?
A: It was bumped strongly, sir, and then, "sinulpit ya", sir.

Q: When your vehicle was "sinulpit" and hit an acacia tree, what happened to the acacia tree?
A: The jeepney stopped and Alberto Cruz died and some of my passengers were injured, sir.

xxx

VIRGINIA MUÑOZ

xxx

Q: what portion of the vehicle wherein you were boarded that was hit by the Travel Tours Bus?
A: The rear portion of the jeep, sir.

Q: It was hit by the Travel Tours Bus?

A: Yes, sir.

Q: What happened to you when the vehicle was bumped?

A: I was thrown off the vehicle, sir.

xxx
It has been held that drivers of vehicles "who bump the rear of another vehicle" are presumed to be "the cause of the
accident, unless contradicted by other evidence." The rationale behind the presumption is that the driver of the rear
vehicle has full control of the situation as he is in a position to observe the vehicle in front of him.

In the case at bar, defendant-appellant failed to overturn the foregoing presumption. FRANCISCO TEJADA, the
conductor of the bus who was admittedly "seated in front, beside the driver's seat," and thus had an unimpeded view
of the road, declared on direct examination that the jeepney was about 10 to 15 meters away from the bus when he
first saw said vehicle on the road. Clearly, the bus driver, EDGAR CALAYCAY, would have also been aware of the
presence of the jeepney and, thus, was expected to anticipate its movements.

However, on cross-examination, TEJADA claimed that the jeepney "suddenly appeared" before the bus, passing it
diagonally, and causing it to be hit in its left rear side. Such uncorroborated testimony cannot be accorded credence by
this Court because it is inconsistent with the physical evidence of the actual damage to the jeepney. On this score, We
quote with approval the following disquisition of the trial court:
chanRoblesvirtualLawlibrary
x x x (F)rom the evidence presented, it was established that it was the driver of the RCJ Line Bus which was negligent
and recklessly driving the bus of the defendant corporation.

Francisco Tejada, who claimed to be the conductor of the bus, testified that it was the passenger jeepney coming from
the pavement which suddenly entered diagonally the lane of the bus causing the bus to hit the rear left portion of the
passenger jeepney. But such testimony is belied by the photographs of the jeepney (Exhs. N and N-1). As shown by Exh.
N-1, the jeepney was hit at the rear left portion and not when the jeepney was in a diagonal position to the bus
otherwise, it should have been the left side of the passenger jeepney near the rear portion that could have been
bumped by the bus. It is clear from Exh. N-1 and it was even admitted that the rear left portion of the passenger
jeepney was bumped by the bus. Further, if the jeepney was in diagonal position when it was hit by the bus, it should
have been the left side of the body of the jeepney that could have sustained markings of such bumping. In this case, it
is clear that it is the left rear portion of the jeepney that shows the impact of the markings of the bumping. The jeepney
showed that it had great damage on the center of the front portion (Exh. N-2). It was the center of the front portion
that hit the acacia tree (Exh. N). As admitted by the parties, both vehicles were running along the same direction from
west to east. As testified to by Francisco Tejada, the jeepney was about ten (10) to fifteen (15) meters away from the
bus when he noticed the jeepney entering diagonally the lane of the bus. If this was so, the middle left side portion of
the jeepney could have been hit, not the rear portion. The evidence is clear that the bus was in fast running condition,
otherwise, it could have stopped to evade hitting the jeepney. The hitting of the acacia tree by the jeepney, and the
damages caused on the jeepney in its front (Exh. N-2) and on its rear left side show that the bus was running very fast.

xxxx
Assuming ex gratia argumenti that the jeepney was in a "stop position," as claimed by defendant-appellant, on the
pavement of the road 10 to 15 meters ahead of the bus before swerving to the left to merge into traffic, a cautious
public utility driver should have stepped on his brakes and slowed down. The distance of 10 to 15 meters would have
allowed the bus with slacked speed to give way to the jeepney until the latter could fully enter the lane. Obviously, as
correctly found by the court a quo, the bus was running very fast because even if the driver stepped on the brakes, it
still made contact with the jeepney with such force that sent the latter vehicle crashing head-on against an acacia tree.
In fact, FRANCISCO TEJADA effectively admitted that the bus was very fast when he declared that the driver "could not
suddenly apply the break (sic) in full stop because our bus might turn turtle xxx." Incidentally, the allegation in the
appeal brief that the driver could not apply the brakes with force because of the possibly that the bus might turn turtle
"as they were approaching the end of the gradient or the decline of the sloping terrain or topography of the roadway"
was only raised for the first time in this appeal and, thus, may not be considered. Besides, there is nothing on record to
substantiate the same.

Rate of speed, in connection with other circumstances, is one of the principal considerations in determining whether a
motorist has been reckless in driving a vehicle, and evidence of the extent of the damage caused may show the force of
the impact from which the rate of speed of the vehicle may be modestly inferred. From the evidence presented in this
case, it cannot be denied that the bus was running very fast. As held by the Supreme Court, the very fact of speeding is
indicative of imprudent behavior, as a motorist must exercise ordinary care and drive at a reasonable rate of speed
commensurate with the conditions encountered, which will enable him to keep the vehicle under control and avoid
injury to others using the highway.15ChanRoblesVirtualawlibrary
From the above findings, it is apparent that the proximate cause of the accident is the petitioner's bus and that the
petitioner was not able to present evidence that would show otherwise. Petitioner also raised the issue that the
deceased passenger, Alberto Cruz, Jr. was situated at the running board of the jeepney which is a violation of a traffic
regulation and an indication that the jeepney was overloaded with passengers. The CA correctly ruled that no evidence
was presented to show the same, thus:
chanRoblesvirtualLawlibrary
That the deceased passenger, ALBERTO CRUZ, JR., was clinging at the back of the jeepney at the time of the mishap
cannot be gleaned from the testimony of plaintifff-appellee VIRGINIA MUÑOZ that it was she who was sitting on the
left rearmost of the jeepney.

VIRGINIA MUÑOZ herself testified that there were only about 16 passengers on board the jeepney when the subject
incident happened. Considering the testimony of plaintiff-appellee EDGAR HERNANDEZ that the seating capacity of his
jeepney is 20 people, VIRGINIA'S declaration effectively overturned defendant-appellant's defense that plaintiff-
appellee overloaded his jeepney and allowed the deceased passenger to cling to the outside railings. Yet, curiously, the
defense declined to cross-examine VIRGINIA, the best witness from whom defendant-appellant could have extracted
the truth about the exact location of ALBERTO CRUZ, JR. in or out of the jeepney. Such failure is fatal to defendant-
appellant's case. The only other evidence left to support its claim is the testimony of the conductor, FRANCISCO
TEJADA, that there were 3 passengers who were clinging to the back of the jeepney, and it was the passenger
clinging to the left side that was bumped by the bus. However, in answer to the clarificatory question from the
court a quo, TEJADA admitted that he did not really see what happened, thus:
Q: What happened to the passenger clinging to the left side portion?
A: He was bumped, your Honor.

Q: Why, the passenger fell?

A: I did not really see what happened, Mam [sic], what I know he was bumped.
This, despite his earlier declaration that he was seated in front of the bus beside the driver's seat and knew what
happened to the passengers who were clinging to the back of the jeepney. Indubitably, therefore, TEJADA was not a
credible witness, and his testimony is not worthy of belief.16ChanRoblesVirtualawlibrary
Consequently, the petitioner, being the owner of the bus and the employer of the driver, Edgar Calaycay, cannot escape
liability. Article 2176 of the Civil Code provides:
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Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this Chapter.
Complementing Article 2176 is Article 2180 which states the following:
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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 x x x.

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 x x x.

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.
Article 2180, in relation to Article 2176, of the Civil Code provides that the employer of a negligent employee is liable
for the damages caused by the latter. When an injury is caused by the negligence of an employee there instantly arises
a presumption of the law that there was negligence on the part of the employer either in the selection of his employee
or in the supervision over him after such selection. The presumption, however, may be rebutted by a clear showing on
the part of the employer that it had exercised the care and diligence of a good father of a family in the selection and
supervision of his employee. Hence, to escape solidary liability for quasi-delict committed by an employee, the
employer must adduce sufficient proof that it exercised such degree of care.17 In this case, the petitioner failed to do
so. The RTC and the CA exhaustively and correctly ruled as to the matter, thus:
chanRoblesvirtualLawlibrary
Thus, whenever an employee's (defendant EDGAR ALAYCAY) negligence causes- damage or injury to another, there
instantly arises a presumption that the employer (defendant-appellant) failed to exercise the due diligence of a good
father of the family in the selection or supervision of its employees. To avoid liability for a quasi-delict committed by its
employee, an employer must overcome the presumption by presenting convincing proof that it exercised the care and
diligence of a good father of a family in the selection and supervision of its employee. The failure of the defendant-
appellant to overturn this presumption was meticulously explained by the court a quo as follows:
chanRoblesvirtualLawlibrary
The position of the defendant company that it cannot be held jointly and severally liable for such damages because it
exercised the diligence of a good father of a family, that (sic) does not merit great credence.

As admitted, Edgar Calaycay was duly authorized by the defendant company to drive the bus at the time of the
incident. Its claim that it has issued policies, rules and regulation's to be followed, conduct seminars and see to it that
their drivers and employees imbibe such policies, rules and regulations, have their drivers and conductors medically
checked-up and undergo drug-testing, did not show that all these rudiments were applied to Edgar Calaycay. No iota
of evidence was presented that Edgar Calaycay had undergone all these activities to ensure that he is a safe and
capable drivers [sic]. In fact, the defendant company did not put up a defense on the said driver. The defendant
company did not even secure a counsel to defend the driver. It did not present any evidence to show it ever counseled
such driver to be careful in his driving. As appearing from the evidence of the defendant corporation, the driver at the
time of the incident was Calaycay Francisco (Exh. 9) and the conductor was Tejada. This shows that the defendant
corporation does not exercise the diligence of a good father of a family in the selection and supervision of the
employees. It does not even know the correct and true name of its drivers. The testimony of Rolando Abadilla, Jr. that
they do not have the records of Edgar Calaycay because they ceased operation due to the death of his father is not
credible. Why only the records of Edgar Calaycay? It has the inspection and dispatcher reports for January 9, 1998 and
yet it could not find the records of Edgar Calaycay. As pointed out by the Supreme Court in a line of cases, the evidence
must not only be credible but must come from a credible witness. No proof was submitted that Edgar Calaycay
attended such alleged seminars and examinations. Thus, under Art. 2180 of the Civil Code, Employers shall be liable for
the damage caused by their employees and household helper acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry. The liability of the employer for the tortuous acts or
negligence of its employer [sic] is primary and solidary, direct and immediate, and not conditional upon the insolvency
of prior recourse against the negligent employee. The cash voucher for the alleged lecture on traffic rules and
regulations (Exh. 12) presented by the defendant corporation is for seminar allegedly conducted on May 20 and 21,
1995 when Edgar Calaycay was not yet in the employ of the defendant corporation. As testified to by Rolando Abadilla,
Jr., Edgar Calaycay stated his employment with the company only in 1996. Rolando Abadilla, Jr. testified that copies of
the manual (Exh. 8) are given to the drivers and conductors for them to memorize and know the same, but no proof
was presented that indeed Edgar Calaycay was among the recipients. Nobody testified categorically that indeed Edgar
Calaycay underwent any of the training before being employed by the defendant company. All the testimonies are
generalizations as to the alleged policies, rules and regulations but no concrete evidence was presented that indeed
Edgar Calaycay underwent such familiarization, trainings and seminars before he got employed and during that time
that he was performing his duties as a bus driver of the defendant corporation. Moreover, the driver's license of the
driver was not even presented. These omissions did not overcome the liability of the defendant corporation under
Article 2180 of the Civil Code. x x x
The observation of the court a quo that defendant-appellant failed to show proof that EDGAR CALAYCAY did in fact
undergo the seminars conducted by it assumes greater significance when viewed in the light of the following admission
made by ROLANDO ABADILLA, JR., General Manager of the defendant-appellant corporation, that suggest compulsory
attendance of said seminars only among drivers and conductors in Manila, thus:
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xxxx

Q: How many times does (sic) the seminars being conducted by your company a year?
A: Normally, it is a minimum of two (2) seminars per year, sir.

Q: In these seminars that you conduct, are all drivers and conductors obliged to attend?
A: Yes, sir, if they are presently in Manila.

Q: It is only in Manila that you conduct seminars?

A: Yes, sir.

xxx
Moreover, with respect to the selection process, ROLANDO ABADILLA, JR. categorically admitted in open court that
EDGAR CALAYCAY was not able to produce the clearances required by defendant-appellant upon employment, thus:
chanRoblesvirtualLawlibrary
xxxx

Q: By the way, Mr. Witness, do you know this Edgar Calaycay who was once employed by your company as a driver?
A: Yes, sir.

Q: Have you seen the application of Edgar Calaycay?

A: Yes, sir.

Q: From what I have seen, what documents did he submit in applying as a driver in your business?

Atty. De Guzman: Very leading, your Honor.

Q: Before a driver could be accepted, what document is he required to submit?

A: The company application form; NBI clearance; police clearance; barangay clearance; mayor's clearance and other
clearances, sir.

Q: Was he able to reproduce these clearances by Mr. Calaycay?

A: No, sir.

x x x18ChanRoblesVirtualawlibrary
In the selection of prospective employees, employers are required to examine them as to their qualifications,
experience, and service records.19 On the other hand, due diligence in the supervision of employees includes the
formulation of suitable rules and regulations for the guidance of employees, the issuance of proper instructions
intended for the protection of the public and persons with whom the employer has relations through his or its
employees and the imposition of necessary disciplinary measures upon employees in case of breach or as may be
warranted to ensure the performance of acts indispensable to the business of and beneficial to their employer. To this,
we add that actual implementation and monitoring of consistent compliance with said rules should be the constant
concern of the employer, acting through dependable supervisors who should regularly report on their supervisory
functions.20 In this case, as shown by the above findings of the RTC, petitioner was not able to prove that it exercised
the required diligence needed in the selection and supervision of its employee.

Be that as it may, this doesn't erase the fact that at the time of the vehicular accident, the jeepney was in violation of its
allowed route as found by the RTC and the CA, hence, the owner and driver of the jeepney likewise, are guilty of
negligence as defined under Article 2179 of the Civil Code, which reads as follows:
chanRoblesvirtualLawlibrary
When the plaintiffs negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if
his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of
due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.
The petitioner and its driver, therefore, are not solely liable for the damages caused to the victims. The petitioner must
thus be held liable only for the damages actually caused by his negligence.21 It is, therefore, proper to mitigate the
liability of the petitioner and its driver. The determination of the mitigation of the defendant's liability varies depending
on the circumstances of each case.22 The Court had sustained a mitigation of 50% in Rakes v. AG & P;23 20%
in Phoenix Construction, Inc. v. Intermediate Appellate Court24 and LBC Air Cargo, Inc. v. Court of Appeals;25 and 40%
in Bank of the Philippine Islands v. Court of Appeals26 and Philippine Bank of Commerce v. Court of Appeals.27cralawred

In the present case, it has been established that the proximate cause of the death of Alberto Cruz, Jr. is the negligence
of petitioner's bus driver, with the contributory negligence of respondent Edgar Hernandez, the driver and owner of the
jeepney, hence, the heirs of Alberto Cruz, Jr. shall recover damages of only 50% of the award from petitioner and its
driver. Necessarily, 50% shall be bourne by respondent Edgar Hernandez. This is pursuant to Rakes v. AG & P and after
considering the circumstances of this case.

In awarding damages for the death of Alberto Cruz, Jr., the CA ruled as follows:
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For the death of ALBERTO CRUZ, JR. the court a quo awarded his heirs P50,000.00 as actual and compensatory
damages; P250,000.00 for loss of earning capacity; and another P50,000.00 as moral damages. However, as pointed out
in the assailed Decision dated January 30, 2008, only the amount paid (P25,000.00) for funeral services rendered by
Magalena Memorial Home was duly receipted (Exhibit "E-1"). It is settled that actual damages must be substantiated by
documentary evidence, such as receipts, in order to prove expenses incurred as a result of the death of the victim. As
such, the award for actual damages in the amount of P50,000.00 must be modified accordingly.

Under Article 2206 of the Civil Code, the damages for death caused by a quasi-delict shall, in addition to the indemnity
for the death itself which is fixed by current jurisprudence at P50,000.00 and which the court a quo failed to award in
this case, include loss of the earning capacity of the deceased and moral damages for mental anguish by reason of such
death. The formula for the computation of loss of earning capacity is as follows:

Net earning capacity = Life expectancy x [Gross Annual Income - Living Expenses (50% of gross annual income)], where
life expectancy = 2/3 (80 - the age of the deceased)

Evidence on record shows that the deceased was earning P6,000.00 a month as smoke house operator at Pampanga's
Best, Inc., as per Certification (Exhibit "K") issued by the company's Production Manager, Enrico Ma. O. Hizon, on March
18, 1998, His gross income therefore amounted to P72,000.00 [P6,000.00 x 12]. Deducting 50% therefrom (P36,000.00)
representing the living expenses, his net annual income amounted to P36,000.00. Multiplying this by his life expectancy
of 40.67 years [2/3(80-19)] having died at the young age of 19, the award for loss of earning capacity should have been
P1,464,000.00. Considering, however, that his heirs represented by his father, ALBERTO CRUZ, SR., no longer appealed
from the assailed Decision dated January 30, 2008, and no discussion thereon was even attempted in plaintiffs-
appellees' appeal brief, the award for loss of earning capacity in the amount of P250,000.00 stands.

Moral damages in the amount of P50,000.00 is adequate and reasonable, bearing in mind that the purpose for making
such award is not to enrich the heirs of the victim but to compensate them however inexact for injuries to their feelings.

xxx28ChanRoblesVirtualawlibrary
In summary, the following were awarded to the heirs of Alberto Cruz, Jr.:
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1) P25,000.00 as actual damages;

2) P250,000.00 for the loss of earning;

3) P50,000.00 as civil indemnity for the death of Alberto Cruz, Jr.; and

4) P50,000.00 as moral damages

Petitioner contends that the CA erred in awarding an amount for the loss of earning capacity of Alberto Cruz, Jr. It
claims that the certification from the employer of the deceased stating that when he was still alive - he earned
P6,000.00 per month was not presented and identified in open court.

In that aspect, petitioner is correct. The records are bereft that such certification was presented and identified during
the trial. It bears stressing that compensation for lost income is in the nature of damages and as such requires due
proof of the damages suffered; there must be unbiased proof of the deceased's average income.29

Therefore, applying the above disquisitions, the heirs of Alberto Cruz, Jr. shall now be awarded the following:
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1) P12,500.00 as actual damages;

2) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and

3) P25,000.00 as moral damages.

In the same manner, petitioner is also partly responsible for the injuries sustained by respondent Virginia Muñoz hence,
of the P16,744.00 actual damages and P30,000.00 moral damages awarded by the CA, petitioner is liable for half of
those amounts. Anent respondent Edgar Hernandez, due to his contributory negligence, he is only entitled to receive
half the amount (P40,200.00) awarded by the CA as actual damages which is P20,100.00.

As to the award of attorney's fees, it is settled that the award of attorney's fees is the exception rather than the general
rule; counsel's fees are not awarded every time a party prevails in a suit because of the policy that no premium should
be placed on the right to litigate. Attorney's fees, as part of damages, are not necessarily equated to the amount paid
by a litigant to a lawyer. In the ordinary sense, attorney's fees represent the reasonable compensation paid to a lawyer
by his client for the legal services he has rendered to the latter; while in its extraordinary concept, they may be awarded
by the court as indemnity for damages to be paid by the losing party to the prevailing party. Attorney's fees as part of
damages are awarded only in the instances specified in Article 220830 of the Civil Code. As such, it is necessary for the
court to make findings of fact and law that would bring the case within the ambit of these enumerated instances to
justify the grant of such award, and in all cases it must be reasonable.31 In this case, the RTC, in awarding attorney's
fees, reasoned out that [w]hile there is no document submitted to prove that the plaintiffs spent attorney's fees, it is clear
that they paid their lawyer in the prosecution of this case for which they are entitled to the same.32 Such reason is
conjectural and does not justify the grant of the award, thus, the attorney's fees should be deleted. However, petitioner
shall still have to settle half of the cost of the suit.chanrobleslaw

WHEREFORE, the Petition for Review on Certiorari under Rule 45, dated December 28, 2011, of petitioner Travel &
Tours Advisers, Inc. is DENIED. However, the Decision dated May 16, 2011 of the Court of Appeals is MODIFIED as
follows:

The petitioner and Edgar Calaycay are ORDERED to jointly and severally PAY the following:
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1. To respondent Alberto Cruz, Sr. and family:
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a) P12,500.00 as actual damages;

b) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and

c) P25,000.00 as moral damages.

2. To respondent Virginia Muñoz:
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a) P8,372.00 as actual damages;

b) P15,000.00 as moral damages.

3. To respondent Edgar Hernandez:
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a) P20,100.00 as actual damages, and
4. The sum of P2,235.00 as cost of litigation.
Respondent Edgar Hernandez is also ORDERED to PAY the following:
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1. To respondent Alberto Cruz, Sr. and family:
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a) P12,500.00 as actual damages;

b) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and

c) P25,000.00 as moral damages.

2. To respondent Virginia Muñoz:
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a) P8,372.00 as actual damages;

b) P15,000.00 as moral damages, and

3. The sum of P2,235.00 as cost of litigation.
SO ORDERED.

Velasco, Jr., (Chairperson), Perez, Reyes, and Jardeleza, JJ., concur.chanroblesvirtuallawlibrary

Endnotes:

1 Penned by Associate Justice Ramon M. Bato, Jr. with Associate Justices Juan Q. Enriquez, Jr. and Florito S. Macalino,
concurring; rollo, pp. 39-57.

2Id. at 58.

3 Penned by Judge Bernardita Gabitan Erum, id. at 79-98.

4 Complaint dated April 22, 1998, id. at 70.

5Rollo, p. 98.

6Id. at 56.

7Id. at 14-15.

8Fuentes v. Court of Appeals, 335 Phil. 1163, 1168 (1993).

9Gaw v. Intermediate Appellate Court, G.R. No. 70451, March 24, 1993, 220 SCRA 405, 413; citing Morales v. Court of
Appeals, 21A Phil. 674 (1991); and Navarra v. Court of Appeals, G.R. No. 86237, December 17, 1991, 204 SCRA 850.

10Reyes v. Court of Appeals, 328 Phil. 171 (1996); Vda. de Alcantara v. Court of Appeals, 322 Phil. 490 (1996); Quebrai v.
Court of Appeals, G.R. No. 101941, January 25, 1996, 252 SCRA 353, 368 (citing Calde v. Court of Appeals, G.R. No.
93980, June 27, 1994, 233 SCRA 376. See also Cayabyab v. The Honorable Intermediate Appellate Court, G.R. No. 75120,
April 28, 1994, 232 SCRA 1), Engineering & Machinery Corporation v. Court of Appeals, 322 Phil. 161 (1996), Chua Tiong
Tay v. Court of Appeals, 312 Phil. 1128 (1995), Dee v. Court of Appeals, G.R. No. 111153, November 21, 1994, 238 SCRA
254, 263, and Asia Brewery, Inc. v. Court of Appeals, G.R. No. 103543, July 5, 1993, 224 SCRA 437, 443; Fuentes v. Court of
Appeals, supra note 8.

11Boneng y Bagawili v. People, 363 Phil. 594, 605 (1999).

12Rollo, p. 44. (Emphasis ours)

13Raynera v. Hiceta, 365 Phil. 546 (1999).

14Id.

15Rollo, pp. 44-48. (Citations omitted; emphasis ours)

16Id. at 48-49. (Citations omitted, emphasis ours)

17Baliwag Transit, Inc. v. CA, et al., 330 Phil. 785, 789-790 (1996), citing China Air Lines, Ltd. v. Court of Appeals, 264 Phil.
15, 26 (1990).

18Rollo, pp. 49-52. (Citations omitted).

19Metro Manila Transit Corporation v. Court of Appeals, 359 Phil. 18, 32 (1998).

20Metro Manila Transit Corporation v. Court of Appeals, G.R. No. 104408, June 21, 1993, 223 SCRA 521, 540-541.

21 See Syki v. Begasa, 460 Phil. 381, 391 (2003).

22Lambert v. Heirs of Castillon, 492 Phil. 384, 396 (2005).

23 7 Phil. 359 (1907).

24 232 Phil. 327 (1987).cralawred

25 311 Phil. 715 (1995).

26 G.R. No. 102383, November 26, 1992, 216 SCRA 51.cralawred

27 336 Phil. 667 (1997).

28Rollo, pp. 52-54. (Citations omitted)

29People v. Ereno, 383 Phil. 30, 46 (2000).

30 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 bad faith in refusing to satisfy the plaintiffs 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 employer's 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. (Emphasis supplied)

31Benedicto v. Villaflores, 646 Phil. 733, 742 (2010).

32Rollo, p. 98.
G.R. No. 52159 December 22, 1989
JOSE PILAPIL, petitioner,
vs.
HON. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC., respondents.
Martin Badong, Jr. for petitioner.
Eufronio K. Maristela for private respondent.

PADILLA, J.:
This is a petition to review on certiorari the decision* rendered by the Court of Appeals dated 19 October 1979 in CA-
G.R. No. 57354-R entitled "Jose Pilapil, plaintiff-appellee versus Alatco Transportation Co., Inc., defendant-appellant,"
which reversed and set aside the judgment of the Court of First Instance of Camarines Sur in Civil Case No. 7230
ordering respondent transportation company to pay to petitioner damages in the total sum of sixteen thousand three
hundred pesos (P 16,300.00).
The record discloses the following facts:
Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded respondent-defendant's bus bearing No. 409 at San
Nicolas, Iriga City on 16 September 1971 at about 6:00 P.M. While said bus No. 409 was in due course negotiating the
distance between Iriga City and Naga City, upon reaching the vicinity of the cemetery of the Municipality of Baao,
Camarines Sur, on the way to Naga City, an unidentified man, a bystander along said national highway, hurled a stone
at the left side of the bus, which hit petitioner above his left eye. Private respondent's personnel lost no time in
bringing the petitioner to the provincial hospital in Naga City where he was confined and treated.
Considering that the sight of his left eye was impaired, petitioner was taken to Dr. Malabanan of Iriga City where he was
treated for another week. Since there was no improvement in his left eye's vision, petitioner went to V. Luna Hospital,
Quezon City where he was treated by Dr. Capulong. Despite the treatment accorded to him by Dr. Capulong, petitioner
lost partially his left eye's vision and sustained a permanent scar above the left eye.
Thereupon, petitioner instituted before the Court of First Instance of Camarines Sur, Branch I an action for recovery of
damages sustained as a result of the stone-throwing incident. After trial, the court a quo rendered judgment with the
following dispositive part:
Wherefore, judgment is hereby entered:
1. Ordering defendant transportation company to pay plaintiff Jose Pilapil the sum of P
10,000.00, Philippine Currency, representing actual and material damages for causing a
permanent scar on the face and injuring the eye-sight of the plaintiff;
2. Ordering further defendant transportation company to pay the sum of P 5,000.00,
Philippine Currency, to the plaintiff as moral and exemplary damages;
3. Ordering furthermore, defendant transportation company to reimburse plaintiff the
sum of P 300.00 for his medical expenses and attorney's fees in the sum of P 1,000.00,
Philippine Currency; and
4. To pay the costs.
SO ORDERED 1
From the judgment, private respondent appealed to the Court of Appeals where the appeal was docketed as CA-G.R.
No. 57354R. On 19 October 1979, the Court of Appeals, in a Special Division of Five, rendered judgment reversing and
setting aside the judgment of the court a quo.
Hence the present petition.
In seeking a reversal of the decision of the Court of Appeals, petitioner contends that said court has decided the issue
not in accord with law. Specifically, petitioner argues that the nature of the business of a transportation company
requires the assumption of certain risks, and the stoning of the bus by a stranger resulting in injury to petitioner-
passenger is one such risk from which the common carrier may not exempt itself from liability.
We do not agree.
In consideration of the right granted to it by the public to engage in the business of transporting passengers and
goods, a common carrier does not give its consent to become an insurer of any and all risks to passengers and goods.
It merely undertakes to perform certain duties to the public as the law imposes, and holds itself liable for any breach
thereof.
Under Article 1733 of the Civil Code, common carriers are required to observe extraordinary diligence for the safety of
the passenger transported by them, according to all the circumstances of each case. The requirement of extraordinary
diligence imposed upon common carriers is restated in Article 1755: "A common carrier is bound to carry the
passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons,
with due regard for all the circumstances." Further, in case of death of or injuries to passengers, the law presumes said
common carriers to be at fault or to have acted negligently. 2
While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers
and creates a presumption of negligence against them, it does not, however, make the carrier an insurer of the
absolute safety of its passengers. 3
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of
passengers by common carriers to only such as human care and foresight can provide. what constitutes compliance
with said duty is adjudged with due regard to all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common carrier when
its passenger is injured, merely relieves the latter, for the time being, from introducing evidence to fasten the
negligence on the former, because the presumption stands in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common carrier had exercised extraordinary diligence as required by
law in the performance of its contractual obligation, or that the injury suffered by the passenger was solely due to a
fortuitous event. 4
In fine, we can only infer from the law the intention of the Code Commission and Congress to curb the recklessness of
drivers and operators of common carriers in the conduct of their business.
Thus, it is clear that neither the law nor the nature of the business of a transportation company makes it an insurer of
the passenger's safety, but that its liability for personal injuries sustained by its passenger rests upon its negligence, its
failure to exercise the degree of diligence that the law requires. 5
Petitioner contends that respondent common carrier failed to rebut the presumption of negligence against it by proof
on its part that it exercised extraordinary diligence for the safety of its passengers.
We do not agree.
First, as stated earlier, the presumption of fault or negligence against the carrier is only a disputable presumption. It
gives in where contrary facts are established proving either that the carrier had exercised the degree of diligence
required by law or the injury suffered by the passenger was due to a fortuitous event. Where, as in the instant case, the
injury sustained by the petitioner was in no way due to any defect in the means of transport or in the method of
transporting or to the negligent or willful acts of private respondent's employees, and therefore involving no issue of
negligence in its duty to provide safe and suitable cars as well as competent employees, with the injury arising wholly
from causes created by strangers over which the carrier had no control or even knowledge or could not have
prevented, the presumption is rebutted and the carrier is not and ought not to be held liable. To rule otherwise would
make the common carrier the insurer of the absolute safety of its passengers which is not the intention of the
lawmakers.
Second, while as a general rule, common carriers are bound to exercise extraordinary diligence in the safe transport of
their passengers, it would seem that this is not the standard by which its liability is to be determined when intervening
acts of strangers is to be determined directly cause the injury, while the contract of carriage Article 1763 governs:
Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the
wilful acts or negligence of other passengers or of strangers, if the common carrier's employees
through the exercise of the diligence of a good father of a family could have prevented or stopped the
act or omission.
Clearly under the above provision, a tort committed by a stranger which causes injury to a passenger does not accord
the latter a cause of action against the carrier. The negligence for which a common carrier is held responsible is the
negligent omission by the carrier's employees to prevent the tort from being committed when the same could have
been foreseen and prevented by them. Further, under the same provision, it is to be noted that when the violation of
the contract is due to the willful acts of strangers, as in the instant case, the degree of care essential to be exercised by
the common carrier for the protection of its passenger is only that of a good father of a family.
Petitioner has charged respondent carrier of negligence on the ground that the injury complained of could have been
prevented by the common carrier if something like mesh-work grills had covered the windows of its bus.
We do not agree.
Although the suggested precaution could have prevented the injury complained of, the rule of ordinary care and
prudence is not so exacting as to require one charged with its exercise to take doubtful or unreasonable precautions to
guard against unlawful acts of strangers. The carrier is not charged with the duty of providing or maintaining vehicles
as to absolutely prevent any and all injuries to passengers. Where the carrier uses cars of the most approved type, in
general use by others engaged in the same occupation, and exercises a high degree of care in maintaining them in
suitable condition, the carrier cannot be charged with negligence in this respect. 6
Finally, petitioner contends that it is to the greater interest of the State if a carrier were made liable for such stone-
throwing incidents rather than have the bus riding public lose confidence in the transportation system.
Sad to say, we are not in a position to so hold; such a policy would be better left to the consideration of Congress
which is empowered to enact laws to protect the public from the increasing risks and dangers of lawlessness in society.
WHEREFORE, the judgment appealed from is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera (Chairperson), Sarmiento and Regalado, concur.
Paras, J., took no part.

Footnotes
* .. Penned by Justice Hugo E. Gutierrez, Jr., with Justices Edgardo L. Paras, Milagros A. German, Jorge R.
Coquia, concurring. Justice Ramon G. Gaviola, Jr. dissented.
1. Record on Appeal, Annex "B", Rollo, p. 31.
2. Article 1756, New Civil Code.
3. Strong v. Iloilo-Negros Air Express Co., 40 OG Supp. 12 p. 274; Alfaro v. Ayson, 54 OG Dec. 1, 1958, p.
7920.
4. Art. 1174, Civil Code; Lasam v. Smith, 45 Phil. 657.
5. Art. 1170, 1173, Civil Code; Alfaro v. Ayson, Supra; Necesito, et al. vs. Paras, et al., 104 Phil. 75.
6 Irwin v. Louisville & N.R. Co., 50 Southern Reporter 62.
G.R. No. 119756 March 18, 1999
FORTUNE EXPRESS, INC., petitioner,
vs.
COURT OF APPEALS, PAULIE U.CAORONG, and minor childrenYASSER KING CAORONG, ROSE HEINNI and
PRINCE ALEXANDER, all surnamed CAORONG, and represented by their mother PAULIE U.
CAORONG, respondents.

MENDOZA, J.:
This is an appeal by petition for review on certiorari of the decision, dated July 29, 1994, of the Court of Appeals, which
reversed the decision of the Regional Trial Court, Branch VI, Iligan City. The aforesaid decision of the trial court
dismissed the complaint of public respondents against petitioner for damages for breach of contract of carriage filed
on the ground that petitioner had not exercised the required degree of diligence in the operation of one of its buses.
Atty. Talib Caorong, whose heirs are private respondents herein, was a passenger of the bus and was killed in the
ambush involving said bus.
The facts of the instant case are as follows:
Petitioner is a bus company in northern Mindanao. Private respondent Paulie Caorong is the widow of Atty. Caorong,
while private respondents Yasser King, Rose Heinni, and Prince Alexander are their minor children.
On November 18, 1989, a bus of petitioner figured in an accident with a jeepney in Kauswagan, Lanao del Norte,
resulting in the death of several passengers of the jeepney, including two Maranaos. Crisanto Generalao, a volunteer
field agent of the Constabulary Regional Security Unit No. X, conducted an investigation of the accident. He found that
the owner of the jeepney was a Maranao residing in Delabayan, Lanao del Norte and that certain Maranaos were
planning to take revenge on the petitioner by burning some of its buses. Generalao rendered a report on his findings
to Sgt. Reynaldo Bastasa of the Philippine Constabulary Regional Headquarters at Cagayan de Oro. Upon the
instruction of Sgt. Bastasa, he went to see Diosdado Bravo, operations manager of petitioner, its main office in Cagayan
de Oro City. Bravo assured him that the necessary precautions to insure the safety of lives and property would be
taken.1
At about 6:45 P.M. on November 22, 1989, three armed Maranaos who pretended to be passengers, seized a bus of
petitioner at Linamon, Lanao del Norte while on its way to Iligan City. Among the passengers of the bus was Atty.
Caorong. The leader of the Maranaos, identified as one Bashier Mananggolo, ordered the driver, Godofredo Cabatuan,
to stop the bus on the side of the highway. Mananggolo then shot Cabatuan on the arm, which caused him to slump
on the steering wheel. The one of the companions of Mananggolo started pouring gasoline inside the bus, as the other
held the passenger at bay with a handgun. Mananggolo then ordered the passenger to get off the bus. The passengers,
including Atty. Caorong, stepped out of the bus and went behind the bushes in a field some distance from the
highway.2
However, Atty. Caorong returned to the bus to retrieve something from the overhead rack. at that time, one of the
armed men was pouring gasoline on the head of the driver. Cabatuan, who had meantime regained consciousness,
heard Atty. Caorong pleading with the armed men to spare the driver as he was innocent of any wrong doing and was
only trying to make a living. The armed men were, however, adamant as they repeated the warning that they were
going to burn the bus along with its driver. During this exchange between Atty. Caorong and the assailants, Cabatuan
climbed out of the left window of the bus and crawled to the canal on the opposite side of the highway. He heard shots
from inside the bus. Larry de la Cruz, one of the passengers, saw that Atty. Caorong was hit. Then the bus was set on
fire. Some of the passengers were able to pull Atty. Caorong out of the burning bus and rush him to the Mercy
Community Hospital in Iligan City, but he died while undergoing operation.3
The private respondents brought this suit for breach of contract of carriage in the Regional Trial Court, Branch VI, Iligan
City. In its decision, dated December 28, 1990, the trial court dismissed the complaint, holding as follows:
The fact that defendant, through Operations Manager Diosdado Bravo, was informed of the "rumors"
that the Moslems intended to take revenge by burning five buses of defendant is established since the
latter also utilized Crisanto Generalao as a witness. Yet despite this information, the plaintiffs charge,
defendant did not take proper precautions. . . . Consequently, plaintiffs now fault the defendant for
ignoring the report. Their position is that the defendant should have provided its buses with security
guards. Does the law require common carriers to install security guards in its buses for the protection
and safety of its passengers? Is the failure to post guards on omission of the duty to "exercise the
diligence of a good father of the family" which could have prevented the killing of Atty. Caorong? To
our mind, the diligence demanded by law does not include the posting of security guard in buses. It is
an obligation that properly belongs to the State. Besides, will the presence of one or two security
guards suffice to deter a determined assault of the lawless and thus prevent the injury complained of?
Maybe so, but again, perhaps not. In other words, the presence of a security guard is not a guarantee
that the killing of Atty. Caorong would have been definitely avoided.
xxx xxx xxx
Accordingly, the failure of defendant to accord faith and credit to the report of Mr. Generalao and the
fact that it did not provide security to its buses cannot, in the light of the circumstances, be
characterized as negligence.
Finally, the evidence clearly shows that the assalants did not have the least intention of the harming
any of the passengers. They ordered all the passengers to alight and set fire on the bus only after all
the passengers were out of danger. The death of Atty. Caorong was an unexpected and unforseen
occurrense over which defendant had no control. Atty. Caorong performed an act of charity and
heroism in coming to the succor of the driver even in the face of danger. He deserves the undying
 gratitude of the driver whose life he saved. No one should blame him for an act of extraordinary
charity and altruism which cost his life. But neither should any blame be laid on the doorstep of
defendant. His death was solely due to the willfull acts of the lawless which defendant could neither
prevent nor to stop.
WHEREFORE, in view of the foregoing, the complaint is hereby dismissed. For lack of merit, the
counter-claim is likewise dismissed. No costs.4
On appeal, however, the Court of Appeals reversed. It held:
In the case at bench, how did defendant-appellee react to the tip or information that certain Maranao
hotheads were planning to burn five of its buses out of revenge for the deaths of two Maranaos in an
earlier collision involving appellee's bus? Except for the remarks of appellee's operations manager that
"we will have our action . . . . and I'll be the one to settle it personally," nothing concrete whatsoever
was taken by appellee or its employees to prevent the execution of the threat. Defendant-appellee
never adopted even a single safety measure for the protection of its paying passengers. Were there
available safeguards? Of course, there were: one was frisking passengers particularly those en route to
the area where the threats were likely to be carried out such as where the earlier accident occurred or
the place of influence of the victims or their locality. If frisking was resorted to, even temporarily, . . . .
appellee might be legally excused from liabilty. Frisking of passengers picked up along the route could
have been implemented by the bus conductor; for those boarding at the bus terminal, frisking could
have been conducted by him and perhaps by additional personnel of defendant-appellee. On
hindsight, the handguns and especially the gallon of gasoline used by the felons all of which were
brought inside the bus would have been discovered, thus preventing the burning of the bus and the
fatal shooting of the victim.
Appellee's argument that there is no law requiring it to provide guards on its buses and that the safety
of citizens is the duty of the government, is not well taken. To be sure, appellee is not expected to
assign security guards on all its buses; if at all, it has the duty to post guards only on its buses plying
predominantly Maranaos areas. As discussed in the next preceding paragraph, least appellee could
have done in response to the report was to adopt a system of verification such as the frisking of
passengers boarding at its buses. Nothing, and no repeat, nothing at all, was done by defendant-
appellee to protect its innocent passengers from the danger arising from the "Maranao threats." It
must be observed that frisking is not a novelty as a safety measure in our society. Sensitive places — in
fact, nearly all important places — have applied this method of security enhancement. Gadgets and
devices are avilable in the market for this purpose. It would not have weighed much against the budget
of the bus company if such items were made available to its personnel to cope up with situations such
as the "Maranaos threats."
In view of the constitutional right to personal privacy, our pronouncement in this decision should not
be construed as an advocacy of mandatory frisking in all public conveyances. What we are saying is
that given the circumstances obtaining in the case at bench that: (a) two Maranaos died because of a
vehicular collision involving one of appellee's vehicles; (b) appellee received a written report from a
member of the Regional Security Unit, Constabulary Security Group, that the tribal/ethnic group of the
two deceased were planning to burn five buses of appellee out of revenge; and (c) appelle did nothing
— absolutely nothing — for the safety of its passengers travelling in the area of influence of the
victims, appellee has failed to exercise the degree of dilegence required of common carriers. Hence,
appellee must be adjudge liable.
xxx xxx xxx
WHEREFORE the decision appealed from is hereby REVERSED and another rendered ordering
defendant-appellee to pay plaintiffs-appellants the following:
1) P3,399,649.20 as death indemnity;
2) P50,000.00 and P500.00 per appearance as attorney's fee and
Costs against defendant-appellee.5
Hence, this appeal. Petitioner contends:
(A) THAT PUBLIC RESPONDENT ERRED IN REVERSING THE DECISION
OF THE REGIONAL TRIAL COURT DATED DECEMBER 28, 1990
DISMISSING THE COMPLAINT AS WELL AS THE COUNTERCLAIM, AND
FINDING FOR PRIVATE RESPONDENTS BY ORDERING PETITIONER TO
PAY THE GARGANTUAN SUM OF P3,449,649.20 PLUS P500.00 PER
APPEARANCE AS ATTORNEY'S FEES, AS WELL AS DENYING
PETITIONERS MOTION FRO RECONSIDERATION AND THE
SUPPLEMENT TO SAID MOTION, WHILE HOLDING, AMONG OTHERS,
THAT THE PETITIONER BREACHED THE CONTRACT OF THE CARRIAGE
BY ITS FAILURE TO EXCERCISE THE REQUIRED DEGREE OF DILIGENCE;
(B) THAT THE ACTS OF THE MARANAO OUTLAWS WERE SO GRAVE,
IRRESISTABLE, VIOLENT, AND FORCEFULL, AS TO BE REGARDED
AS CASO FORTUITO; AND
(C) THAT PUBLIC RESPONDENT COURT OF APPEALS SERIOUSLY
ERRED IN HOLDING THAT PETITIONER COULD HAVE PROVIDED
ADEQUATE SECURITY IN PREDOMINANTLY MUSLIM AREAS AS PART
 OF ITS DUTY TO OBSERVE EXTRA-ORDINARY DILIGENCE AS A
COMMON CARRIER.
The instant has no merit.
First. Petitioner's Breach of the Contract of Carriage.
Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on
account of wilfull acts of other passengers, if the employees of the common carrier could have prevented the act
through the exercise of the diligence of a good father of a family. In the present case, it is clear that because of the
negligence of petitioner's employees, the seizure of the bus by Mananggolo and his men was made possible.
Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge
on the petitioner by burning some of its buses and the assurance of petitioner's operation manager, Diosdado Bravo,
that the necessary precautions would be taken, petitioner did nothing to protect the safety of its passengers.
Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large
quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of
passengers, such as frisking passengers and inspecting their baggages, preferably with non-intrusive gadgets such as
metal detectors, before allowing them on board could have been employed without violating the passenger's
constitutional rights. As this Court amended in Gacal v. Philippine Air Lines, Inc., 6 a common carrier can be held liable
for failing to prevent a hijacking by frisking passengers and inspecting their baggages.
G.R. No. 114167 July 12, 1995
COASTWISE LIGHTERAGE CORPORATION, petitioner,
vs.
COURT OF APPEALS and the PHILIPPINE GENERAL INSURANCE COMPANY, respondents.
RESOLUTION

FRANCISCO, R., J.:

This is a petition for review of a Decision rendered by the Court of Appeals, dated December 17, 1993, affirming Branch
35 of the Regional Trial Court, Manila in holding that herein petitioner is liable to pay herein private respondent the
amount of P700,000.00, plus legal interest thereon, another sum of P100,000.00 as attorney's fees and the cost of the
suit.
The factual background of this case is as follows:
Pag-asa Sales, Inc. entered into a contract to transport molasses from the province of Negros to Manila with Coastwise
Lighterage Corporation (Coastwise for brevity), using the latter's dumb barges. The barges were towed in tandem by
the tugboat MT Marica, which is likewise owned by Coastwise.
Upon reaching Manila Bay, while approaching Pier 18, one of the barges, "Coastwise 9", struck an unknown sunken
object. The forward buoyancy compartment was damaged, and water gushed in through a hole "two inches wide and
twenty-two inches long"1 As a consequence, the molasses at the cargo tanks were contaminated and rendered unfit for
the use it was intended. This prompted the consignee, Pag-asa Sales, Inc. to reject the shipment of molasses as a total
loss. Thereafter, Pag-asa Sales, Inc. filed a formal claim with the insurer of its lost cargo, herein private respondent,
Philippine General Insurance Company (PhilGen, for short) and against the carrier, herein petitioner, Coastwise
Lighterage. Coastwise Lighterage denied the claim and it was PhilGen which paid the consignee, Pag-asa Sales, Inc., the
amount of P700,000.00, representing the value of the damaged cargo of molasses.
In turn, PhilGen then filed an action against Coastwise Lighterage before the Regional Trial Court of Manila, seeking to
recover the amount of P700,000.00 which it paid to Pag-asa Sales, Inc. for the latter's lost cargo. PhilGen now claims to
be subrogated to all the contractual rights and claims which the consignee may have against the carrier, which is
presumed to have violated the contract of carriage.
The RTC awarded the amount prayed for by PhilGen. On Coastwise Lighterage's appeal to the Court of Appeals, the
award was affirmed.
Hence, this petition.
There are two main issues to be resolved herein. First, whether or not petitioner Coastwise Lighterage was transformed
into a private carrier, by virtue of the contract of affreightment which it entered into with the consignee, Pag-asa Sales,
Inc. Corollarily, if it were in fact transformed into a private carrier, did it exercise the ordinary diligence to which a
private carrier is in turn bound? Second, whether or not the insurer was subrogated into the rights of the consignee
against the carrier, upon payment by the insurer of the value of the consignee's goods lost while on board one of the
carrier's vessels.
On the first issue, petitioner contends that the RTC and the Court of Appeals erred in finding that it was a common
carrier. It stresses the fact that it contracted with Pag-asa Sales, Inc. to transport the shipment of molasses from Negros
Oriental to Manila and refers to this contract as a "charter agreement". It then proceeds to cite the case of Home
Insurance Company vs. American Steamship Agencies, Inc.2 wherein this Court held: ". . . a common carrier undertaking
to carry a special cargo or chartered to a special person only becomes a private carrier."
Petitioner's reliance on the aforementioned case is misplaced. In its entirety, the conclusions of the court are as follows:
Accordingly, the charter party contract is one of affreightment over the whole vessel, rather than a
demise. As such, the liability of the shipowner for acts or negligence of its captain and crew, would
remain in the absence of stipulation.3
The distinction between the two kinds of charter parties (i.e. bareboat or demise and contract of affreightment) is more
clearly set out in the case of Puromines, Inc. vs. Court of Appeals,4 wherein we ruled:
Under the demise or bareboat charter of the vessel, the charterer will generally be regarded as the
owner for the voyage or service stipulated. The charterer mans the vessel with his own people and
becomes the owner pro hac vice, subject to liability to others for damages caused by negligence. To
create a demise, the owner of a vessel must completely and exclusively relinquish possession,
command and navigation thereof to the charterer, anything short of such a complete transfer is a
contract of affreightment (time or voyage charter party) or not a charter party at all.
On the other hand a contract of affreightment is one in which the owner of the vessel leases part or all
of its space to haul goods for others. It is a contract for special service to be rendered by the owner of
the vessel and under such contract the general owner retains the possession, command and navigation
of the ship, the charterer or freighter merely having use of the space in the vessel in return for his
payment of the charter hire. . . . .
. . . . An owner who retains possession of the ship though the hold is the property of the charterer,
remains liable as carrier and must answer for any breach of duty as to the care, loading and unloading
of the cargo. . . .
Although a charter party may transform a common carrier into a private one, the same however is not true in a contract
of affreightment on account of the aforementioned distinctions between the two.
Petitioner admits that the contract it entered into with the consignee was one of affreightment.5 We agree. Pag-asa
Sales, Inc. only leased three of petitioner's vessels, in order to carry cargo from one point to another, but the
possession, command and navigation of the vessels remained with petitioner Coastwise Lighterage.
Pursuant therefore to the ruling in the aforecited Puromines case, Coastwise Lighterage, by the contract of
affreightment, was not converted into a private carrier, but remained a common carrier and was still liable as such.
The law and jurisprudence on common carriers both hold that the mere proof of delivery of goods in good order to a
carrier and the subsequent arrival of the same goods at the place of destination in bad order makes for a prima
facie case against the carrier.
It follows then that the presumption of negligence that attaches to common carriers, once the goods it transports are
lost, destroyed or deteriorated, applies to the petitioner. This presumption, which is overcome only by proof of the
exercise of extraordinary diligence, remained unrebutted in this case.
The records show that the damage to the barge which carried the cargo of molasses was caused by its hitting an
unknown sunken object as it was heading for Pier 18. The object turned out to be a submerged derelict vessel.
Petitioner contends that this navigational hazard was the efficient cause of the accident. Further it asserts that the fact
that the Philippine Coastguard "has not exerted any effort to prepare a chart to indicate the location of sunken derelicts
within Manila North Harbor to avoid navigational accidents"6 effectively contributed to the happening of this mishap.
Thus, being unaware of the hidden danger that lies in its path, it became impossible for the petitioner to avoid the
same. Nothing could have prevented the event, making it beyond the pale of even the exercise of extraordinary
diligence.
However, petitioner's assertion is belied by the evidence on record where it appeared that far from having rendered
service with the greatest skill and utmost foresight, and being free from fault, the carrier was culpably remiss in the
observance of its duties.
Jesus R. Constantino, the patron of the vessel "Coastwise 9" admitted that he was not licensed. The Code of Commerce,
which subsidiarily governs common carriers (which are primarily governed by the provisions of the Civil Code) provides:
Art. 609. — Captains, masters, or patrons of vessels must be Filipinos, have legal capacity to contract in
accordance with this code, and prove the skill capacity and qualifications necessary to command and
direct the vessel, as established by marine and navigation laws, ordinances or regulations, and must
not be disqualified according to the same for the discharge of the duties of the position. . . .
Clearly, petitioner Coastwise Lighterage's embarking on a voyage with an unlicensed patron violates this rule. It cannot
safely claim to have exercised extraordinary diligence, by placing a person whose navigational skills are questionable, at
the helm of the vessel which eventually met the fateful accident. It may also logically, follow that a person without
license to navigate, lacks not just the skill to do so, but also the utmost familiarity with the usual and safe routes taken
by seasoned and legally authorized ones. Had the patron been licensed, he could be presumed to have both the skill
and the knowledge that would have prevented the vessel's hitting the sunken derelict ship that lay on their way to Pier
18.
As a common carrier, petitioner is liable for breach of the contract of carriage, having failed to overcome the
presumption of negligence with the loss and destruction of goods it transported, by proof of its exercise of
extraordinary diligence.
On the issue of subrogation, which petitioner contends as inapplicable in this case, we once more rule against the
petitioner. We have already found petitioner liable for breach of the contract of carriage it entered into with Pag-asa
Sales, Inc. However, for the damage sustained by the loss of the cargo which petitioner-carrier was transporting, it was
not the carrier which paid the value thereof to Pag-asa Sales, Inc. but the latter's insurer, herein private respondent
PhilGen.
Article 2207 of the Civil Code is explicit on this point:
Art. 2207. If the plaintiffs property has been insured, and he has received indemnity from the insurance
company for the injury or loss arising out of the wrong or breach of contract complained of, the
insurance company shall be subrogated to the rights of the insured against the wrongdoer or the
person who violated the contract. . . .
This legal provision containing the equitable principle of subrogation has been applied in a long line of cases
including Compania Maritima v. Insurance Company of North America;7 Fireman's Fund Insurance Company v. Jamilla &
Company, Inc.,8 and Pan Malayan Insurance Corporation v. Court of Appeals,9 wherein this Court explained:
Article 2207 of the Civil Code is founded on the well-settled principle of subrogation. If the insured
property is destroyed or damaged through the fault or negligence of a party other than the assured,
then the insurer, upon payment to the assured will be subrogated to the rights of the assured to
recover from the wrongdoer to the extent that the insurer has been obligated to pay. Payment by the
insurer to the assured operated as an equitable assignment to the former of all remedies which the latter
may have against the third party whose negligence or wrongful act caused the loss. The right of
subrogation is not dependent upon, nor does it grow out of, any privity of contract or upon written
assignment of claim. It accrues simply upon payment of the insurance claim by the insurer.
Undoubtedly, upon payment by respondent insurer PhilGen of the amount of P700,000.00 to Pag-asa Sales, Inc., the
consignee of the cargo of molasses totally damaged while being transported by petitioner Coastwise Lighterage, the
former was subrogated into all the rights which Pag-asa Sales, Inc. may have had against the carrier, herein petitioner
Coastwise Lighterage.
WHEREFORE, premises considered, this petition is DENIED and the appealed decision affirming the order of Branch 35
of the Regional Trial Court of Manila for petitioner Coastwise Lighterage to pay respondent Philippine General
Insurance Company the "principal amount of P700,000.00 plus interest thereon at the legal rate computed from March
29, 1989, the date the complaint was filed until fully paid and another sum of P100,000.00 as attorney's fees and
costs"10 is likewise hereby AFFIRMED
SO ORDERED.
Feliciano, Romero, Melo and Vitug, JJ., concur.
Footnotes
1 Rollo, p. 25, Decision, Court of Appeals.
2 23 SCRA 24.
3 Ibid, p. 27.
4 220 SCRA 281.
5 Rollo, p. 11, Petition, p. 5.
6 Rollo, p. 85.
7 12 SCRA 213.
8 70 SCRA 323.
9 184 SCRA 54.
10 Rollo, p. 24.
 [G.R. NO. 168151 : September 4, 2009]
REGIONAL CONTAINER LINES (RCL) OF SINGAPORE and EDSA SHIPPING AGENCY, Petitioners, v. THE
NETHERLANDS INSURANCE CO. (PHILIPPINES), INC., Respondent.
DECISION
BRION, J.:
For our resolution is the Petition for Review on Certiorari filed by petitioners Regional Container Lines of Singapore
(RCL) and EDSA Shipping Agency (EDSA Shipping) to annul and set aside the decision1 and resolution2 of the Court of
Appeals (CA) dated May 26, 2004 and May 10, 2005, respectively, in CA-G.R. CV No. 76690.
RCL is a foreign corporation based in Singapore. It does business in the Philippines through its agent, EDSA Shipping, a
domestic corporation organized and existing under Philippine laws. Respondent Netherlands Insurance Company
(Philippines), Inc. (Netherlands Insurance) is likewise a domestic corporation engaged in the marine underwriting
business.
FACTUAL ANTECEDENTS
The pertinent facts, based on the records are summarized below.
On October 20, 1995, 405 cartons of Epoxy Molding Compound were consigned to be shipped from Singapore to
Manila for Temic Telefunken Microelectronics Philippines (Temic). U-Freight Singapore PTE Ltd.3 (U-Freight Singapore),
a forwarding agent based in Singapore, contracted the services of Pacific Eagle Lines PTE. Ltd. (Pacific Eagle) to
transport the subject cargo. The cargo was packed, stored, and sealed by Pacific Eagle in its Refrigerated Container No.
6105660 with Seal No. 13223. As the cargo was highly perishable, the inside of the container had to be kept at a
temperature of 0' Celsius. Pacific Eagle then loaded the refrigerated container on board the M/V Piya Bhum, a vessel
owned by RCL, with which Pacific Eagle had a slot charter agreement. RCL duly issued its own Bill of Lading in favor of
Pacific Eagle.
To insure the cargo against loss and damage, Netherlands Insurance issued a Marine Open Policy in favor of Temic, as
shown by MPO-21-05081-94 and Marine Risk Note MRN-21 14022, to cover all losses/damages to the shipment.
On October 25, 1995, the M/V Piya Bhum docked in Manila. After unloading the refrigerated container, it was plugged
to the power terminal of the pier to keep its temperature constant. Fidel Rocha (Rocha), Vice-President for Operations
of Marines Adjustment Corporation, accompanied by two surveyors, conducted a protective survey of the cargo. They
found that based on the temperature chart, the temperature reading was constant from October 18, 1995 to October
25, 1995 at 0' Celsius. However, at midnight of October 25, 1995 - when the cargo had already been unloaded from the
ship - the temperature fluctuated with a reading of 33' Celsius. Rocha believed the fluctuation was caused by the burnt
condenser fan motor of the refrigerated container.
On November 9, 1995, Temic received the shipment. It found the cargo completely damaged. Temic filed a claim for
cargo loss against Netherlands Insurance, with supporting claims documents. The Netherlands Insurance paid Temic
the sum of P1,036,497.00 under the terms of the Marine Open Policy. Temic then executed a loss and subrogation
receipt in favor of Netherlands Insurance.
Seven months from delivery of the cargo or on June 4, 1996, Netherlands Insurance filed a complaint for subrogation of
insurance settlement with the Regional Trial Court, Branch 5, Manila, against "the unknown owner of M/V Piya Bhum"
and TMS Ship Agencies (TMS), the latter thought to be the local agent of M/V Piya Bhum's unknown owner.4 The
complaint was docketed as Civil Case No. 96-78612.
Netherlands Insurance amended the complaint on January 17, 1997 to implead EDSA Shipping, RCL, Eagle Liner
Shipping Agencies, U-Freight Singapore, and U-Ocean (Phils.), Inc. (U-Ocean), as additional defendants. A third
amended complaint was later made, impleading Pacific Eagle in substitution of Eagle Liner Shipping Agencies.
TMS filed its answer to the original complaint. RCL and EDSA Shipping filed their answers with cross-claim and
compulsory counterclaim to the second amended complaint. U-Ocean likewise filed an answer with compulsory
counterclaim and cross-claim. During the pendency of the case, U-Ocean, jointly with U-Freight Singapore, filed
another answer with compulsory counterclaim. Only Pacific Eagle and TMS filed their answers to the third amended
complaint.
The defendants all disclaimed liability for the damage caused to the cargo, citing several reasons why Netherland
Insurance's claims must be rejected. Specifically, RCL and EDSA Shipping denied negligence in the transport of the
cargo; they attributed any negligence that may have caused the loss of the shipment to their co-defendants. They
likewise asserted that no valid subrogation exists, as the payment made by Netherlands Insurance to the consignee was
invalid. By way of affirmative defenses, RCL and EDSA Shipping averred that the Netherlands Insurance has no cause of
action, and is not the real party-in-interest, and that the claim is barred by laches/prescription.
After Netherlands Insurance had made its formal offer of evidence, the defendants including RCL and EDSA Shipping
sought leave of court to file their respective motions to dismiss based on demurrer to evidence.
RCL and EDSA Shipping, in their motion, insisted that Netherlands Insurance had (1) failed to prove any valid
subrogation, and (2) failed to establish that any negligence on their part or that the loss was sustained while the cargo
was in their custody.
On May 22, 2002, the trial court handed down an Order dismissing Civil Case No. 96-78612 on demurrer to evidence.
The trial court ruled that while there was valid subrogation, the defendants could not be held liable for the loss or
damage, as their respective liabilities ended at the time of the discharge of the cargo from the ship at the Port of
Manila.
Netherlands Insurance seasonably appealed the order of dismissal to the CA.
On May 26, 2004, the CA disposed of the appeal as follows:
WHEREFORE, in view of the foregoing, the dismissal of the complaint against defendants Regional Container Lines and
Its local agent, EDSA Shipping Agency, is REVERSED and SET ASIDE. The dismissal of the complaint against the other
defendants is AFFIRMED. Pursuant to Section 1, Rule 33 of the 1997 Rules of Civil Procedure, defendants Regional
Container Lines and EDSA Shipping Agency are deemed to have waived the right to present evidence.
As such, defendants Regional Container Lines and EDSA Shipping Agency are ordered to reimburse plaintiff in the sum
of P1,036,497.00 with interest from date hereof until fully paid.
No costs.
SO ORDERED. [Emphasis supplied.]
The CA dismissed Netherland Insurance's complaint against the other defendants after finding that the claim had
already been barred by prescription.5
Having been found liable for the damage to the cargo, RCL and EDSA Shipping filed a motion for reconsideration, but
the CA maintained its original conclusions.
The sole issue for our resolution is whether the CA correctly held RCL and EDSA Shipping liable as common carriers
under the theory of presumption of negligence.
THE COURT'S RULING
The present case is governed by the following provisions of the Civil Code:
ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them
according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos.
5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles1755 and
1756.
ART. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is
due to any of the following causes only:
1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
2) Act of the public enemy in war, whether international or civil;
3) Act of omission of the shipper or owner of the goods;
4) The character of the goods or defects in the packing or in the containers;
5) Order or act of competent public authority.
ART. 1735. In all cases other that those mentioned in Nos. 1, 2, 3, 4 and 5 of the preceding article, if the goods are lost,
destroyed, or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as required by article 1733.
ART. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for transportation until the sane are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to
the provisions of articles 1738.
ART. 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods
are stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival
of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them.
ART. 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character of the goods,
or the faulty nature of the packing or of the containers, the common carrier must exercise due diligence to forestall or
lessen the loss.
In Central Shipping Company, Inc. v. Insurance Company of North America,6 we reiterated the rules for the liability of a
common carrier for lost or damaged cargo as follows:
(1) Common carriers are bound to observe extraordinary diligence over the goods they transport, according to all the
circumstances of each case;
(2) In the event of loss, destruction, or deterioration of the insured goods, common carriers are responsible, unless they
can prove that such loss, destruction, or deterioration was brought about by, among others, "flood, storm, earthquake,
lightning, or other natural disaster or calamity"; andcralawlibrary
(3) In all other cases not specified under Article 1734 of the Civil Code, common carriers are presumed to have been at
fault or to have acted negligently, unless they observed extraordinary diligence.7
In the present case, RCL and EDSA Shipping disclaim any responsibility for the loss or damage to the goods in question.
They contend that the cause of the damage to the cargo was the "fluctuation of the temperature in the reefer van,"
which fluctuation occurred after the cargo had already been discharged from the vessel; no fluctuation, they point out,
arose when the cargo was still on board M/V Piya Bhum. As the cause of the damage to the cargo occurred after the
same was already discharged from the vessel and was under the custody of the arrastre operator (International
Container Terminal Services, Inc. or ICTSI), RCL and EDSA Shipping posit that the presumption of negligence provided
in Article 1735 of the Civil Code should not apply. What applies in this case is Article 1734, particularly paragraphs 3
and 4 thereof, which exempts the carrier from liability for loss or damage to the cargo when it is caused either by an act
or omission of the shipper or by the character of the goods or defects in the packing or in the containers. Thus, RCL
and EDSA Shipping seek to lay the blame at the feet of other parties.
We do not find the arguments of RCL and EDSA Shipping meritorious.
A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over
the goods it transported.8 When the goods shipped are either lost or arrived in damaged condition, a presumption
arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence
to hold it liable.9 ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
To overcome the presumption of negligence, the common carrier must establish by adequate proof that it exercised
extraordinary diligence over the goods. It must do more than merely show that some other party could be responsible
for the damage.10
In the present case, RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required by
law over the goods they transported. Indeed, there is sufficient evidence showing that the fluctuation of the
temperature in the refrigerated container van, as recorded in the temperature chart, occurred after the cargo had been
discharged from the vessel and was already under the custody of the arrastre operator, ICTSI. This evidence, however,
does not disprove that the condenser fan - which caused the fluctuation of the temperature in the refrigerated
container - was not damaged while the cargo was being unloaded from the ship. It is settled in maritime law
jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier;11 RCL and EDSA
Shipping failed to dispute this.ςηαñrοblεš νιr†υαl lαω lιbrαrÿ
RCL and EDSA Shipping could have offered evidence before the trial court to show that the damage to the condenser
fan did not occur: (1) while the cargo was in transit; (2) while they were in the act of discharging it from the vessel; or (3)
while they were delivering it actually or constructively to the consignee. They could have presented proof to show that
they exercised extraordinary care and diligence in the handling of the goods, but they opted to file a demurrer to
evidence. As the order granting their demurrer was reversed on appeal, the CA correctly ruled that they are deemed to
have waived their right to present evidence,12 and the presumption of negligence must stand.
It is for this reason as well that we find RCL and EDSA Shipping's claim that the loss or damage to the cargo was caused
by a defect in the packing or in the containers. To exculpate itself from liability for the loss/damage to the cargo under
any of the causes, the common carrier is burdened to prove any of the causes in Article 1734 of the Civil Code claimed
by it by a preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove
that the carrier is negligent.13 RCL and EDSA Shipping, however, failed to satisfy this standard of evidence and in fact
offered no evidence at all on this point; a reversal of a dismissal based on a demurrer to evidence bars the defendant
from presenting evidence supporting its allegations.
WHEREFORE, we DENY the Petition for Review on Certiorari filed by the Regional Container Lines of Singapore and
EDSA Shipping Agency. The decision of the Court of Appeals dated May 26, 2004 in CA-G.R. CV No. 76690 is AFFIRMED
IN TOTO. Costs against the petitioners.
SO ORDERED.
Endnotes:

1 Penned by Associate Justice Arcangelita M. Romilla-Lontok, and concurred in by Associate Justice Martin S. Villarama,
Jr., and Associate Justice Danilo B. Pine (retired); rollo, pp. 40, 45-53.
2 Id., pp. 44-54.
3 U-Freight issued its own Bill of Lading No. SINMNL 048/10/95 covering the cargo.
4 TMS was actually the local agent of Pacific Eagle.
5 The bill of lading issued by U-Freight provided that its liability shall be discharged "unless a suit is brought in the
proper forum and written notice thereof received by the carrier within nine (9) months after the delivery of the goods."
By the time U-Freight, U-Ocean, and Pacific Eagle were impleaded in the amended complaints, the period to file claims
had already lapsed.
6 G.R. 150751, September 20, 2004, 438 SCRA 511.
7 Ibid, citing Asia Lighterage and Shipping, Inc. v. Court of Appeal, 409 SCRA 340 (2003), and Delsan Transport Lines,
Inc. v. Court of Appeals, 369 SCRA 24 (2001).
8 Edgar Cokaliong Shipping Lines, Inc. v. UCPB General Insurance Company, Inc., G.R. No. 146018, June 25, 2003, 404
SCRA 706.
9 DSR-Senator Lines v. Federal Phoenix Assurance Co., Inc., G.R. No. 135377, October 7, 2003, 413 SCRA 14, citing
Eastern Shipping Lines, Inc. v. Court of Appeals, 234 SCRA 78 (1994) and cases cited therein.
10 Aboitiz Shipping Corporation v. Insurance Company of North America, G.R. No. 168402, August 6, 2008; Calvo v.
UCPB General Insurance Co., Inc., G.R. No. 148896, March 19, 2002, 379 SCRA 510.
11 Philippines First Insurance Co., Inc. v. Wallem Phils. Shipping, Inc., G.R. No. 165647, March 26, 2009.
12 RULES OF COURT, RULE 33. SEC. 1. Demurrer to evidence. - After the plaintiff has completed the presentation of his
evidence, the defendant may move for dismissal right to relief. If his motion is denied, he shall have the right to present
evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived
the right to present evidence.
13 Philippine Charter Insurance Corporation v. M/V National Honor, G.R. No. 161833, July 8, 2003, 463 SCRA 202.
G.R. No. 122039 May 31, 2000
VICENTE CALALAS, petitioner,
vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.

MENDOZA, J.:
This is a petition for review on certiorari of the decision1 of the Court of Appeals, dated March 31, 1991, reversing the
contrary decision of the Regional Trial Court, Branch 36, Dumaguete City, and awarding damages instead to private
respondent Eliza Jujeurche Sunga as plaintiff in an action for breach of contract of carriage.
The facts, as found by the Court of Appeals, are as follows:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G. Sunga, then a college freshman
majoring in Physical Education at the Siliman University, took a passenger jeepney owned and operated by petitioner
Vicente Calalas. As the jeepney was filled to capacity of about 24 passengers, Sunga was given by the conductor an
"extension seat," a wooden stool at the back of the door at the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she was seated at
the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck driven by
Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was
injured. She sustained a fracture of the "distal third of the left tibia-fibula with severe necrosis of the underlying skin."
Closed reduction of the fracture, long leg circular casting, and case wedging were done under sedation. Her
confinement in the hospital lasted from August 23 to September 7, 1989. Her attending physician, Dr. Danilo V.
Oligario, an orthopedic surgeon, certified she would remain on a cast for a period of three months and would have to
ambulate in crutches during said period.
On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation of the contract of carriage
by the former in failing to exercise the diligence required of him as a common carrier. Calalas, on the other hand, filed a
third-party complaint against Francisco Salva, the owner of the Isuzu truck.
The lower court rendered judgment against Salva as third-party defendant and absolved Calalas of liability, holding that
it was the driver of the Isuzu truck who was responsible for the accident. It took cognizance of another case (Civil Case
No. 3490), filed by Calalas against Salva and Verena, for quasi-delict, in which Branch 37 of the same court held Salva
and his driver Verena jointly liable to Calalas for the damage to his jeepney.
On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground that Sunga's cause of
action was based on a contract of carriage, not quasi-delict, and that the common carrier failed to exercise the
diligence required under the Civil Code. The appellate court dismissed the third-party complaint against Salva and
adjudged Calalas liable for damages to Sunga. The dispositive portion of its decision reads:
WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE, and another one is
entered ordering defendant-appellee Vicente Calalas to pay plaintiff-appellant:
(1) P50,000.00 as actual and compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorney's fees; and
(4) P1,000.00 as expenses of litigation; and
(5) to pay the costs.
SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the negligence of Verena was the
proximate cause of the accident negates his liability and that to rule otherwise would be to make the common carrier
an insurer of the safety of its passengers. He contends that the bumping of the jeepney by the truck owned by Salva
was a caso fortuito. Petitioner further assails the award of moral damages to Sunga on the ground that it is not
supported by evidence.
The petition has no merit.
The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and the owner of the truck
liable for quasi-delict ignores the fact that she was never a party to that case and, therefore, the principle of res
judicata does not apply.
Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil Case No. 3490 was whether
Salva and his driver Verena were liable for quasi-delict for the damage caused to petitioner's jeepney. On the other
hand, the issue in this case is whether petitioner is liable on his contract of carriage. The first, quasi-delict, also known
as culpa aquiliana or culpa extra contractual, has as its source the negligence of the tortfeasor. The second, breach of
contract or culpa contractual, is premised upon the negligence in the performance of a contractual obligation.
Consequently, in quasi-delict, the negligence or fault should be clearly established because it is the basis of the action,
whereas in breach of contract, the action can be prosecuted merely by proving the existence of the contract and the
fact that the obligor, in this case the common carrier, failed to transport his passenger safely to his destination.2 In case
of death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are presumed to have
been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in
Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof.
There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding Salva and his driver Verena
liable for the damage to petitioner's jeepney, should be binding on Sunga. It is immaterial that the proximate cause of
the collision between the jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause
is applicable only in actions for quasi-delict, not in actions involving breach of contract. The doctrine is a device for
imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is
created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties
themselves who create the obligation, and the function of the law is merely to regulate the relation thus created.
Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting the
diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence
in cases of death or injury to passengers. It provides:
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735,
and 1746, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further
set forth in articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.
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 by articles 1733 and 1755.
In the case at bar, upon the happening of the accident, the presumption of negligence at once arose, and it became the
duty of petitioner to prove that he had to observe extraordinary diligence in the care of his passengers.
Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances" as required by Art. 1755? We do not think
so. Several factors militate against petitioner's contention.
First, as found by the Court of Appeals, the jeepney was not properly parked, its rear portion being exposed about two
meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. This is a
violation of the R.A. No. 4136, as amended, or the Land Transportation and Traffic Code, which provides:
Sec. 54. Obstruction of Traffic. — No person shall drive his motor vehicle in such a manner as to
obstruct or impede the passage of any vehicle, nor, while discharging or taking on passengers or
loading or unloading freight, obstruct the free passage of other vehicles on the highway.
Second, it is undisputed that petitioner's driver took in more passengers than the allowed seating capacity of the
jeepney, a violation of §32(a) of the same law. It provides:
Exceeding registered capacity. — No person operating any motor vehicle shall allow more passengers
or more freight or cargo in his vehicle than its registered capacity.
The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to which the other
passengers were exposed. Therefore, not only was petitioner unable to overcome the presumption of negligence
imposed on him for the injury sustained by Sunga, but also, the evidence shows he was actually negligent in
transporting passengers.
We find it hard to give serious thought to petitioner's contention that Sunga's taking an "extension seat" amounted to
an implied assumption of risk. It is akin to arguing that the injuries to the many victims of the tragedies in our seas
should not be compensated merely because those passengers assumed a greater risk of drowning by boarding an
overloaded ferry. This is also true of petitioner's contention that the jeepney being bumped while it was improperly
parked constitutes caso fortuito. A caso fortuito is an event which could not be foreseen, or which, though foreseen, was
inevitable.3 This requires that the following requirements be present: (a) the cause of the breach is independent of the
debtor's will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to render it impossible for the
debtor to fulfill his obligation in a normal manner, and (d) the debtor did not take part in causing the injury to the
creditor.4 Petitioner should have foreseen the danger of parking his jeepney with its body protruding two meters into
the highway.
Finally, petitioner challenges the award of moral damages alleging that it is excessive and without basis in law. We find
this contention well taken.
In awarding moral damages, the Court of Appeals stated:
Plaintiff-appellant at the time of the accident was a first-year college student in that school year 1989-
1990 at the Silliman University, majoring in Physical Education. Because of the injury, she was not able
to enroll in the second semester of that school year. She testified that she had no more intention of
continuing with her schooling, because she could not walk and decided not to pursue her degree,
major in Physical Education "because of my leg which has a defect already."
Plaintiff-appellant likewise testified that even while she was under confinement, she cried in pain
because of her injured left foot. As a result of her injury, the Orthopedic Surgeon also certified that she
has "residual bowing of the fracture side." She likewise decided not to further pursue Physical
Education as her major subject, because "my left leg . . . has a defect already."
Those are her physical pains and moral sufferings, the inevitable bedfellows of the injuries that she
suffered. Under Article 2219 of the Civil Code, she is entitled to recover moral damages in the sum of
P50,000.00, which is fair, just and reasonable.
As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract for it is
not one of the items enumerated under Art. 2219 of the Civil Code.5 As an exception, such damages are recoverable:
(1) in cases in which the mishap results in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3)
of the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220.6
In this case, there is no legal basis for awarding moral damages since there was no factual finding by the appellate
court that petitioner acted in bad faith in the performance of the contract of carriage. Sunga's contention that
petitioner's admission in open court that the driver of the jeepney failed to assist her in going to a nearby hospital
cannot be construed as an admission of bad faith. The fact that it was the driver of the Isuzu truck who took her to the
hospital does not imply that petitioner was utterly indifferent to the plight of his injured passenger. If at all, it is merely
implied recognition by Verena that he was the one at fault for the accident.
WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its resolution, dated September 11, 1995,
are AFFIRMED, with the MODIFICATION that the award of moral damages is DELETED.
SO ORDERED.
Bellosillo and Buena, JJ., concur.
Quisumbing and De Leon, Jr., JJ., are on leave.
Footnotes
1 Per Justice Artemon D. Luna and concurred in by Justices Hector L. Hofilena and B.A. Adefuin-dela
Cruz.
2 See B. BALDERRAMA, THE PHILIPPINE LAW ON TROTS AND DAMAGES 20 (1953).
3 CIVIL CODE, ART. 1174.
4 Juan F. Nakpil & Sons v. Court of Appeals, 144 SCRA 596 (1986); Vasquez v. Court of Appeals, 138
SCRA 553 (1985); Republic v. Luzon Stevedoring Corp., 128 Phil. 313 (1967).
5 Fores v. Miranda, 67 105 Phil. 267 (1959); Mercado v. Lira, 3 SCRA 124 (1961).
6 Philippine Rabbit Bus Lines, Inc. v. Esguerra, 117 SCRA 741 (1982); Sabena Belgian World Airlines v.
Court of Appeals, 171 SCRA 620 (1989); China Airlines, Ltd. v. Intermediate Appellate Court, 169 SCRA
226 (1989).
G.R. No. L-31379 August 29, 1988
COMPAÑIA MARITIMA, petitioner,
vs.
COURT OF APPEALS and VICENTE CONCEPCION, respondents.
Rafael Dinglasan for petitioner.
Benjamin J. Molina for private respondent.

FERNAN, C.J.:
Petitioner Compañia Maritima seeks to set aside through this petition for review on certiorari the decision 1 of the
Court of Appeals dated December 5, 1965, adjudging petitioner liable to private respondent Vicente E. Concepcion for
damages in the amount of P24,652.97 with legal interest from the date said decision shall have become final, for
petitioner's failure to deliver safely private respondent's payloader, and for costs of suit. The payloader was declared
abandoned in favor of petitioner.
The facts of the case are as follows:
Private respondent Vicente E. Concepcion, a civil engineer doing business under the name and style of Consolidated
Construction with office address at Room 412, Don Santiago Bldg., Taft Avenue, Manila, had a contract with the Civil
Aeronautics Administration (CAA) sometime in 1964 for the construction of the airport in Cagayan de Oro City Misamis
Oriental.
Being a Manila — based contractor, Vicente E. Concepcion had to ship his construction equipment to Cagayan de Oro
City. Having shipped some of his equipment through petitioner and having settled the balance of P2,628.77 with
respect to said shipment, Concepcion negotiated anew with petitioner, thru its collector, Pacifico Fernandez, on August
28, 1964 for the shipment to Cagayan de Oro City of one (1) unit payloader, four (4) units 6x6 Reo trucks and two (2)
pieces of water tanks. He was issued Bill of Lading 113 on the same date upon delivery of the equipment at the Manila
North Harbor. 2
These equipment were loaded aboard the MV Cebu in its Voyage No. 316, which left Manila on August 30, 1964 and
arrived at Cagayan de Oro City in the afternoon of September 1, 1964. The Reo trucks and water tanks were safely
unloaded within a few hours after arrival, but while the payloader was about two (2) meters above the pier in the course
of unloading, the swivel pin of the heel block of the port block of Hatch No. 2 gave way, causing the payloader to
fall. 3 The payloader was damaged and was thereafter taken to petitioner's compound in Cagayan de Oro City.
On September 7, 1964, Consolidated Construction, thru Vicente E. Concepcion, wrote Compañia Maritima to demand a
replacement of the payloader which it was considering as a complete loss because of the extent of
damage. 4 Consolidated Construction likewise notified petitioner of its claim for damages. Unable to elicit response,
the demand was repeated in a letter dated October 2, 1964. 5
Meanwhile, petitioner shipped the payloader to Manila where it was weighed at the San Miguel Corporation. Finding
that the payloader weighed 7.5 tons and not 2.5 tons as declared in the B-111 of Lading, petitioner denied the claim for
damages of Consolidated Construction in its letter dated October 7, 1964, contending that had Vicente E. Concepcion
declared the actual weight of the payloader, damage to their ship as well as to his payloader could have been
prevented. 6
To replace the damaged payloader, Consolidated Construction in the meantime bought a new one at P45,000.00 from
Bormaheco Inc. on December 3, 1964, and on July 6, 1965., Vicente E. Concepcion filed an action for damages against
petitioner with the then Court of First Instance of Manila, Branch VII, docketed as Civil Case No. 61551, seeking to
recover damages in the amount of P41,225.00 allegedly suffered for the period of 97 days that he was not able to
employ a payloader in the construction job at the rate of P450.00 a day; P34,000.00 representing the cost of the
damaged payloader; Pl 1, 000. 00 representing the difference between the cost of the damaged payloader and that of
the new payloader; P20,000.00 representing the losses suffered by him due to the diversion of funds to enable him to
buy a new payloader; P10,000.00 as attorney's fees; P5,000.00 as exemplary damages; and cost of the suit. 7
After trial, the then Court of First Instance of Manila, Branch VII, dismissed on April 24, 1968 the complaint with costs
against therein plaintiff, herein private respondent Vicente E. Concepcion, stating that the proximate cause of the fall of
the payloader was Vicente E. Concepcion's act or omission in having misrepresented the weight of the payloader as 2.5
tons instead of its true weight of 7.5 tons, which underdeclaration was intended to defraud Compañia Maritima of the
payment of the freight charges and which likewise led the Chief Officer of the vessel to use the heel block of hatch No.
2 in unloading the payloader. 8
From the adverse decision against him, Vicente E. Concepcion appealed to the Court of Appeals which, on December 5,
1965 rendered a decision, the dispositive portion of which reads:
IN VIEW WHEREOF, judgment must have to be as it is hereby reversed; defendant is condemned to pay
unto plaintiff the sum in damages of P24,652.07 with legal interest from the date the present decision
shall have become final; the payloader is declared abandoned to defendant; costs against the latter. 9
Hence, the instant petition.
The principal issue in the instant case is whether or not the act of private respondent Vicente E. Concepcion in
furnishing petitioner Compañia Maritima with an inaccurate weight of 2.5 tons instead of the payloader's actual weight
of 7.5 tons was the proximate and only cause of the damage on the Oliver Payloader OC-12 when it fell while being
unloaded by petitioner's crew, as would absolutely exempt petitioner from liability for damages under paragraph 3 of
Article 1734 of the Civil Code, which provides:
Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following causes only:
xxx xxx xxx
(3) Act or omission of the shipper or owner of the goods.
Petitioner claims absolute exemption under this provision upon the reasoning that private respondent's act of
furnishing it with an inaccurate weight of the payloader constitutes misrepresentation within the meaning of "act or
omission of the shipper or owner of the goods" under the above- quoted article. It likewise faults the respondent Court
of Appeals for reversing the decision of the trial court notwithstanding that said appellate court also found that by
representing the weight of the payloader to be only 2.5 tons, private respondent had led petitioner's officer to believe
that the same was within the 5 tons capacity of the heel block of Hatch No. 2. Petitioner would thus insist that the
proximate and only cause of the damage to the payloader was private respondent's alleged misrepresentation of the
weight of the machinery in question; hence, any resultant damage to it must be borne by private respondent Vicente E.
Concepcion.
The general rule under Articles 1735 and 1752 of the Civil Code is that common carriers are presumed to have been at
fault or to have acted negligently in case the goods transported by them are lost, destroyed or had deteriorated. To
overcome the presumption of liability for the loss, destruction or deterioration of the goods under Article 1735, the
common carriers must prove that they observed extraordinary diligence as required in Article 1733 of the Civil Code.
The responsibility of observing extraordinary diligence in the vigilance over the goods is further expressed in Article
1734 of the same Code, the article invoked by petitioner to avoid liability for damages.
Corollary is the rule that mere proof of delivery of the goods in good order to a common carrier, and of their arrival at
the place of destination in bad order, makes out prima facie case against the common carrier, so that if no explanation
is given as to how the loss, deterioration or destruction of the goods occurred, the common carrier must be held
responsible. 10 Otherwise stated, it is incumbent upon the common carrier to prove that the loss, deterioration or
destruction was due to accident or some other circumstances inconsistent with its liability.
In the instant case, We are not persuaded by the proferred explanation of petitioner alleged to be the proximate cause
of the fall of the payloader while it was being unloaded at the Cagayan de Oro City pier. Petitioner seems to have
overlooked the extraordinary diligence required of common carriers in the vigilance over the goods transported by
them by virtue of the nature of their business, which is impressed with a special public duty.
Thus, Article 1733 of the Civil Code provides:
Art. 1733. Common carriers, from the nature of their business and for reason of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735
and 1745, Nos. 5, 6 and 7, ...
The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know
and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for safe
carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and "to use all
reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care
in the handling and stowage including such methods as their nature requires."11 Under Article 1736 of the Civil Code,
the responsibility to observe extraordinary diligence commences and lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has the right to receive them without prejudice to
the provisions of Article 1738.
Where, as in the instant case, petitioner, upon the testimonies of its own crew, failed to take the necessary and
adequate precautions for avoiding damage to, or destruction of, the payloader entrusted to it for safe carriage and
delivery to Cagayan de Oro City, it cannot be reasonably concluded that the damage caused to the payloader was due
to the alleged misrepresentation of private respondent Concepcion as to the correct and accurate weight of the
payloader. As found by the respondent Court of Appeals, the fact is that petitioner used a 5-ton capacity lifting
apparatus to lift and unload a visibly heavy cargo like a payloader. Private respondent has, likewise, sufficiently
established the laxity and carelessness of petitioner's crew in their methods of ascertaining the weight of heavy cargoes
offered for shipment before loading and unloading them, as is customary among careful persons.
It must be noted that the weight submitted by private respondent Concepcion appearing at the left-hand portion of
Exhibit 8 12 as an addendum to the original enumeration of equipment to be shipped was entered into the bill of
lading by petitioner, thru Pacifico Fernandez, a company collector, without seeing the equipment to be shipped.13 Mr.
Mariano Gupana, assistant traffic manager of petitioner, confirmed in his testimony that the company never checked
the information entered in the bill of lading. 14 Worse, the weight of the payloader as entered in the bill of lading was
assumed to be correct by Mr. Felix Pisang, Chief Officer of MV Cebu. 15
The weights stated in a bill of lading are prima facie evidence of the amount received and the fact that the weighing
was done by another will not relieve the common carrier where it accepted such weight and entered it on the bill of
lading. 16 Besides, common carriers can protect themselves against mistakes in the bill of lading as to weight by
exercising diligence before issuing the same. 17
While petitioner has proven that private respondent Concepcion did furnish it with an inaccurate weight of the
payloader, petitioner is nonetheless liable, for the damage caused to the machinery could have been avoided by the
exercise of reasonable skill and attention on its part in overseeing the unloading of such a heavy equipment. And
circumstances clearly show that the fall of the payloader could have been avoided by petitioner's crew. Evidence on
record sufficiently show that the crew of petitioner had been negligent in the performance of its obligation by reason
of their having failed to take the necessary precaution under the circumstances which usage has established among
careful persons, more particularly its Chief Officer, Mr. Felix Pisang, who is tasked with the over-all supervision of
loading and unloading heavy cargoes and upon whom rests the burden of deciding as to what particular winch the
unloading of the payloader should be undertaken. 18 While it was his duty to determine the weight of heavy cargoes
before accepting them. Mr. Felix Pisang took the bill of lading on its face value and presumed the same to be correct by
merely "seeing" it. 19 Acknowledging that there was a "jumbo" in the MV Cebu which has the capacity of lifting 20 to
25 ton cargoes, Mr. Felix Pisang chose not to use it, because according to him, since the ordinary boom has a capacity
of 5 tons while the payloader was only 2.5 tons, he did not bother to use the "jumbo" anymore. 20
In that sense, therefore, private respondent's act of furnishing petitioner with an inaccurate weight of the payloader
upon being asked by petitioner's collector, cannot be used by said petitioner as an excuse to avoid liability for the
damage caused, as the same could have been avoided had petitioner utilized the "jumbo" lifting apparatus which has a
capacity of lifting 20 to 25 tons of heavy cargoes. It is a fact known to the Chief Officer of MV Cebu that the payloader
was loaded aboard the MV Cebu at the Manila North Harbor on August 28, 1964 by means of a terminal crane. 21 Even
if petitioner chose not to take the necessary precaution to avoid damage by checking the correct weight of the
payloader, extraordinary care and diligence compel the use of the "jumbo" lifting apparatus as the most prudent course
for petitioner.
While the act of private respondent in furnishing petitioner with an inaccurate weight of the payloader cannot
successfully be used as an excuse by petitioner to avoid liability to the damage thus caused, said act constitutes a
contributory circumstance to the damage caused on the payloader, which mitigates the liability for damages of
petitioner in accordance with Article 1741 of the Civil Code, to wit:
Art. 1741. If the shipper or owner merely contributed to the loss, destruction or deterioration of the
goods, the proximate cause thereof being the negligence of the common carrier, the latter shall be
liable in damages, which however, shall be equitably reduced.
We find equitable the conclusion of the Court of Appeals reducing the recoverable amount of damages by 20% or 1/5
of the value of the payloader, which at the time the instant case arose, was valued at P34,000. 00, thereby reducing the
recoverable amount at 80% or 4/5 of P34,000.00 or the sum of P27,200.00. Considering that the freight charges for the
entire cargoes shipped by private respondent amounting to P2,318.40 remained unpaid.. the same would be deducted
from the P27,000.00 plus an additional deduction of P228.63 representing the freight charges for the undeclared
weight of 5 tons (difference between 7.5 and 2.5 tons) leaving, therefore, a final recoverable amount of damages of
P24,652.97 due to private respondent Concepcion.
Notwithstanding the favorable judgment in his favor, private respondent assailed the Court of Appeals' decision insofar
as it limited the damages due him to only P24,652.97 and the cost of the suit. Invoking the provisions on damages
under the Civil Code, more particularly Articles 2200 and 2208, private respondent further seeks additional damages
allegedly because the construction project was delayed and that in spite of his demands, petitioner failed to take any
steps to settle his valid, just and demandable claim for damages.
We find private respondent's submission erroneous. It is well- settled that an appellee, who is not an appellant, may
assign errors in his brief where his purpose is to maintain the judgment on other grounds, but he may not do so if his
purpose is to have the judgment modified or reversed, for, in such case, he must appeal. 22 Since private respondent
did not appeal from the judgment insofar as it limited the award of damages due him, the reduction of 20% or 1/5 of
the value of the payloader stands.
WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals is hereby AFFIRMED
in all respects with costs against petitioner. In view of the length of time this case has been pending, this decision is
immediately executory.
Gutierrez, Jr., Feliciano, Bidin and Cortes JJ., concur.

Footnotes
1 Penned by Justice Magno S. Gatmaitan and concurred in by Justices Julio Villamor and Ruperto G.
Martin.
2 Exhibit "A", p. 1, Records.
3 Exhibit '4", P. 25, Records.
4 Exhibit "D", p. 4, Records.
5 Exhibit "E", p. 5, Records.
6 Exhibit "F", p. 7, Records.
7 pp. 1-7, Record on Appeal, p. 28, Rollo.
8 pp. 34-47, lbid.
9 pp. 25-26, Rollo.
10 Mirasol vs. Robert Dollar Co., 53 Phil. 129; Ynchausti Steamship Co. vs. Dexter and Unson, 41 Phil.
289.
11 The Ensley City DC, Ma; 71 F. Suppl. 444, citing Schnell vs. The Vallescura, 293 U.S. 296, 55 Sct. 194,
79 L. Ed. 373; The Nichiyo Maru, 4 Cri, 89 F. 2d 539-1 Bank Line v. Porter, 4 Cir 25 F. 2d. 843.
12 p. 36, Records.
13 TSN December 16,1966, pp. 111-113.
14 TSN, January 19,1967, pp. 119-120.
15 TSN, September 29,1968, pp. 84-85.
16 Baker vs. H. Dittinger Roller Mills, Co., Tex, Civ. Appl 203 SW 798.
17 lbid.
18 TSN, September 29,1966, p. 57.
19 p. 80, Ibid.
20 p. 78, lbid.
21 p. 71, lbid.
22 Gorospe et al. vs. Peñaflorida et al., 101 Phil. 886, citing Pineda & Ampil Mfg. Co., et al. vs. Arsenio
Bartolome, et al., 95 Phil. 930; Saenz v. Mitchell, 60 Phil. 69: Mendoza v. Mendiola, 53 Phil. 267.
 [G.R. No. 146173. December 11, 2003.]

CECILIA YAMBAO, Petitioner, v. MELCHORITA C. ZUÑIGA, LEOVIGILDO C. ZUÑIGA, REGINALDO C. ZUÑIGA,

AND THE MINORS, HERMINIGILDO C. ZUÑIGA, JR., AND LOVELY EMILY C. ZUÑIGA — both represented by their
legal guardian, the aforenamed MELCHORITA C. ZUÑIGA, Respondents.

DECISION
QUISUMBING, J.:
This petition for review on certiorari seeks to reverse and set aside the decision 1 of the Court of Appeals, dated
September 8, 2000, in CA-G.R. CV No. 52275. The appellate court affirmed the judgment 2 of the Regional Trial Court
(RTC) of Malolos City, Bulacan, Branch 8, in Civil Case No. 581-M-92, finding herein petitioner, among others, liable for
the untimely death of Herminigildo Zuñiga in a vehicular accident and ordering her to indemnify his legal heirs, the
respondents herein. Also challenged in this petition is the resolution 3 of the Court of Appeals, dated November 27,
2000, denying the petitioner’s Motion for Reconsideration.chanrob1es virtua1 1aw 1ibrary

Petitioner Cecilia Yambao is the registered owner of "Lady Cecil and Rome Trans" passenger bus with Plate No. CVK
606, with a public transport franchise to ply the Novaliches-via Quirino-Alabang route.

The respondents are the legal heirs of the late Herminigildo Zuñiga. Melchorita Zuñiga is the surviving spouse, while
Leovigildo, Reginaldo, Herminigildo, Jr., and Lovely Emily are their children.

The facts, as established by the trial court and affirmed by the appellate court, are as follows:chanrob1es virtual 1aw
library

At around 3:30 p.m. of May 6, 1992, the bus owned by the petitioner was being driven by her driver, one Ceferino G.
Venturina along the northbound lane of Epifanio delos Santos Avenue (EDSA), within the vicinity of Bagong Barrio,
Kalookan City. With Venturina was the bus conductor, Fernando Dumaliang. Suddenly, the bus bumped Herminigildo
Zuñiga, a pedestrian. Such was the force of the impact that the left side of the front windshield of the bus was cracked.
Zuñiga was rushed to the Quezon City General Hospital where he was given medical attention, but due to the massive
injuries sustained, he succumbed shortly thereafter.

Private respondents, as heirs of the victim, filed a Complaint 4 against petitioner and her driver, Venturina, for damages,
docketed as Civil Case No. 581-M-92 at the RTC of Malolos City. The complaint essentially alleged that Venturina drove
the bus in a reckless, careless and imprudent manner, in violation of traffic rules and regulations, without due regard to
public safety, thus resulting in the victim’s premature death.

In her Answer, the petitioner vehemently denied the material allegations of the complaint. She tried to shift the blame
for the accident upon the victim, theorizing that Herminigildo bumped into her bus, while avoiding an unidentified
woman who was chasing him. She further alleged that she was not liable for any damages because as an employer, she
exercised the proper diligence of a good father of a family, both in the selection and supervision of her bus driver.

On September 8, 1995, the trial court rendered judgment, the dispositive portion of which reads:chanrob1es virtual 1aw
library

In view of the foregoing consideration, judgment is hereby rendered in favor of the plaintiffs and against the
defendants ordering the herein defendants jointly and severally, with Plaridel Surety & Insurance Co., and Times Surety
& Insurance Co. Inc. to the extent of their respective liabilities under their respective insurance policies to pay the
herein plaintiffs the following sums of money:chanrob1es virtual 1aw library

1. P50,000.00 as indemnity for the death of Herminigildo Zuñiga;

2. P92,000.00 as funeral expenses;

3. P200,000.00 as moral damages;

4. P30,000.00 as exemplary damages;

5. P30,000.00 as attorney’s fees;

6. P5,000.00 as litigation expenses; and

7. To pay the cost of the suit

to be paid by all the herein defendants and third party defendants within thirty (30) days from receipt of this Decision.

The counterclaim of the defendant Cecilia Yambao is hereby dismissed for lack of merit.
SO ORDERED. 5

In finding for the respondents herein, the trial court observed:chanrob1es virtual 1aw library

[T]he allegations and evidence presented by the defendants that it was the victim Herminigildo Zuñiga who bumped
the bus owned by defendant Cecilia Yambao and her husband . . . is incredible if not preposterous. No sane person
would bump his head or body against a running bus along a big highway like EDSA at Bagong Barrio, Caloocan City
and neither did any of the defendants presented (sic) any evidence or proof to show that the victim was mentally
deranged at the time of the accident and the presumption therefore is that he was in his normal senses. 6

In holding the petitioner liable for Herminigildo’s death, the trial court applied Article 1756 7 of the Civil Code,
observing that petitioner had failed to prove that she observed the diligence required by Articles 1733 8 and 1755 9 of
the said Code.

Dissatisfied, Yambao filed an appeal with the Court of Appeals, docketed as CA-G.R. CV No. 52275, faulting the trial
court for failing to appreciate that: (a) it was the victim who ran into her bus, and (b) she had exercised the proper
diligence of a bonus pater familias in the selection and supervision of her employee, the driver of said bus.

On September 8, 2000, the Court of Appeals decided CA-G.R. CV No. 52275 as follows:chanrob1es virtual 1aw library

WHEREFORE, on the foregoing modificatory premises, and considering that the same result has been reached by the
trial court, its Decision dated September 8, 1995 is hereby AFFIRMED.

Costs against defendant-appellant.chanrob1es virtua1 1aw 1ibrary

SO ORDERED. 10

While sustaining the trial court’s findings that Venturina had been reckless and negligent in driving the petitioner’s bus,
thus hitting the victim with fatal results, the appellate court, however, found the trial court’s reliance on Articles 1755
and 1756 of the Civil Code misplaced. It held that this was a case of quasi-delict, there being no pre-existing
contractual relationship between the parties. Hence, the law on common carriers was inapplicable. The court a quo then
found the petitioner directly and primarily liable as Venturina’s employer pursuant to Article 2180 of the Civil Code as
she failed to present evidence to prove that she has observed the diligence of a good father of a family in the selection
and supervision of her employees.

Yambao then duly moved for reconsideration, but her motion was denied for want of merit. 11

Hence, this petition for review, anchored on the following formulation of issues:chanrob1es virtual 1aw library
I
WHETHER OR NOT THE ALLEGATIONS AND EVIDENCE PRESENTED BY THE PETITIONER, THE VICTIM HERMINIGILDO
ZUÑIGA WAS THE ONE WHO BUMPED THE BUS OWNED BY HEREIN PETITIONER CECILIA YAMBAO AND HER
HUSBAND AND WHO DISREGARDED THE TRAFFIC RULES AND REGULATIONS AT THE PLACE AND TIME OF THE
INCIDENT WHICH UNDOUBTEDLY AND CONCLUSIVELY PROVED THAT IT WAS THE PLAINTIFF’S OWN NEGLIGENCE
THAT WAS THE IMMEDIATE AND PROXIMATE CAUSE OF HIS DEATH.
II
WHETHER OR NOT, PETITIONER CECILIA YAMBAO IS NOT LIABLE FOR ANY DAMAGES AND THAT SHE EXERCISED THE
PROPER DILIGENCE OF A GOOD FATHER OF THE FAMILY, BOTH IN THE SELECTION AND SUPERVISION OF HER DRIVER
AND/OR EMPLOYEE. 12

At the outset, we must state that the first issue raised by the petitioner is a factual one. Whether a person is negligent
or not is a question of fact, 13 which this Court cannot pass upon in a petition for review on certiorari, as our
jurisdiction is limited to reviewing errors of law. 14 The resolution of factual issues is the function of the trial court and
its findings on these matters are, as a general rule, binding on this Court, 15 more so where these have been affirmed
by the Court of Appeals. 16 We have carefully examined and weighed the petitioner’s arguments on the first issue
submitted, as well as the evidence on record, and find no cogent reason to disregard the cited general rule, much less
to reverse the factual findings of the trial court as upheld by the court a quo. Hence, we sustain the trial court’s finding,
as affirmed by the Court of Appeals, that it was Venturina’s reckless and imprudent driving of petitioner’s bus, which is
the proximate cause of the victim’s death.

To our mind, therefore, the only issue before the Court properly is whether petitioner exercised the diligence of a good
father of a family in the selection and supervision of her employees, thus absolving her from any liability.

Petitioner contends that as an employer, she observed the proper diligence of a good father of a family, both in the
selection and supervision of her driver and therefore, is relieved from any liability for the latter’s misdeed. To support
her claim, she points out that when Venturina applied with her as a driver in January 1992, she required him to produce
not just his driver’s license, but also clearances from the National Bureau of Investigation (NBI), the Philippine National
Police, and the barangay where he resides. She also required him to present his Social Security System (SSS) Number
 prior to accepting him for employment. She likewise stresses that she inquired from Venturina’s previous employer
about his employment record, and only hired him after it was shown to her satisfaction that he had no blot upon his
record.

The petitioner’s arguments ring hollow and fail to sway this Court.

The law governing petitioner’s liability, as the employer of bus driver Venturina, is Article 2180 of the Civil Code, the full
text of which reads:chanrob1es virtual 1aw library

Art. 2180. The obligation imposed by Article 2176 17 is demandable not only for one’s own acts or omissions, but also
for those of persons for whom one is responsible.

The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor
children who live in their company.

Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live
in their company.

The owners and managers of an establishment or enterprise are likewise 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.

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.

The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused
by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be
applicable.

Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and
students or apprentices, so long as they remain in their custody.

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. (Emphasis ours).

The "diligence of a good father" referred to in the last paragraph of the aforecited statute means diligence in the
selection and supervision of employees. 18 Thus, when an employee, while performing his duties, causes damage to
persons or property due to his own negligence, there arises the juris tantum presumption that the employer is
negligent, either in the selection of the employee or in the supervision over him after the selection. 19 For the employer
to avoid the solidary liability for a tort committed by his employee, an employer must rebut the presumption by
presenting adequate and convincing proof that in the selection and supervision of his employee, he or she exercises
the care and diligence of a good father of a family. 20 In the instant case, we find that petitioner has failed to rebut the
presumption of negligence on her part.

Petitioner’s claim that she exercised due diligence in the selection and supervision of her driver, Venturina, deserves but
scant consideration. Her allegation that before she hired Venturina she required him to submit his driver’s license and
clearances is worthless, in view of her failure to offer in evidence certified true copies of said license and clearances.
Bare allegations, unsubstantiated by evidence, are not equivalent to proof under the rules of evidence. 21 Moreover, as
the court a quo aptly observed, petitioner contradicts herself. She declared that Venturina applied with her sometime in
January 1992 and she then required him to submit his license and clearances. However, the record likewise shows that
she did admit that Venturina submitted the said requirements only on May 6, 1992, or on the very day of the fatal
accident itself (italics for emphasis). In other words, petitioner’s own admissions clearly and categorically show that she
did not exercise due diligence in the selection of her bus driver.

In any case, assuming arguendo that Venturina did submit his license and clearances when he applied with petitioner in
January 1992, the latter still fails the test of due diligence in the selection of her bus driver. Case law teaches that for an
employer to have exercised the diligence of a good father of a family, he should not be satisfied with the applicant’s
mere possession of a professional driver’s license; he must also carefully examine the applicant for employment as to
his qualifications, his experience and record of service. 22 Petitioner failed to present convincing proof that she went to
this extent of verifying Venturina’s qualifications, safety record, and driving history. The presumption juris tantum that
there was negligence in the selection of her bus driver, thus, remains unrebutted.

Nor did petitioner show that she exercised due supervision over Venturina after his selection. For as pointed out by the
Court of Appeals, petitioner did not present any proof that she drafted and implemented training programs and
guidelines on road safety for her employees. In fact, the record is bare of any showing that petitioner required
Venturina to attend periodic seminars on road safety and traffic efficiency. Hence, petitioner cannot claim exemption
from any liability arising from the recklessness or negligence of Venturina.
In sum, petitioner’s liability to private respondents for the negligent and imprudent acts of her driver, Venturina, under
Article 2180 of the Civil Code is both manifest and clear. Petitioner, having failed to rebut the legal presumption of
negligence in the selection and supervision of her driver, is responsible for damages, the basis of the liability being the
relationship of pater familias or on the employer’s own negligence. 23 Thus, this Court has no option but to uphold the
ruling of the appellate court.

WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of Appeals, dated September 8, 2000, in
CA-G.R. CV No. 52275, as well as its resolution dated November 27, 2000, denying petitioner Cecilia Yambao’s motion
for reconsideration are hereby AFFIRMED. Costs against the petitioner.

SO ORDERED.chanrob1es virtua1 1aw 1ibrary

Puno, Austria-Martinez, Callejo, Sr. and Tinga, JJ., concur.

Endnotes:

1. Rollo, pp. 14–26. Per Associate Justice Teodoro P. Regino, and concurred in by Associate Justices Conchita Carpio
Morales and Perlita J. Tria-Tirona.

2. CA Rollo, pp. 47–55.

3. Rollo, p. 27.

4. A separate criminal complaint for reckless imprudence resulting in homicide, docketed as Crim. Case No. 156134, was
also filed against Venturina before the Metropolitan Trial Court in Caloocan City, Branch 52. However, the lower court
could not proceed with the trial due to the failure and refusal of the accused Venturina to appear. See Rollo, p. 16.

5. Id. at 35–36.

6. CA Rollo, pp. 53–54.

7. Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and
1755.

8. Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them,
according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, nos. 5,
6, and 7 while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.

9. Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

10. Rollo, p. 25.

11. Supra, note 3.

12. Rollo, p. 97.

13. Thermochem Incorporated v. Naval, G.R. No. 131541, 20 October 2000, 344 SCRA 76, 82.

14. Almira v. Court of Appeals, G.R. No. 115966, 20 March 2003, p. 7.

15. Mckee v. Intermediate Appellate Court, G.R. Nos. 68102-03, 16 July 1992, 211 SCRA 517, 537.

16. Supra, note 13 at 83.

17. Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay
for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is
called a quasi-delict and is governed by the provisions of this Chapter.

18. Supra, note 15 at 544–545.

19. Pantranco North Express, Inc. v. Baesa, G.R. Nos. 79050-51, 14 November 1989, 179 SCRA 384, 393.
20. Metro Manila Transit Corp. v. Court of Appeals, G.R. No. 141089, 1 August 2002, pp. 8–9 citing Pantranco North
Express, Inc. v. Baesa, supra, note 19; Umali v. Hon. Bacani, 161 Phil. 351, 357 (1976).

21. Manzano v. Perez, Sr., 414 Phil., 728, 738 (2001).

22. Ramos v. Pepsi-Cola Bottling Co. of the Philippines, 125 Phil. 701, 703–704 (1967) citing Campo v. Camarote, 100
Phil. 459, 463 (1956).

23. Metro Manila Transit Corp. v. Court of Appeals, G.R. No. 104408, 21 June 1993, 223 SCRA 521, 539.
 G. R. No. 141089. August 1, 2002
METRO MANILA TRANSIT CORPORATION and APOLINARIO AJOC, Petitioners, vs. THE COURT OF APPEALS and
COL. MARTIN P. SABALBURO, NAPOLEON G. SABALBURO, MARTIN G. SABALBURO, JR., BABY MARIFLOR G.
SABALBURO, and MIRASOL G. SABALBURO, Respondents.
DECISION
QUISUMBING, J.:
On appeal is the decision1 of the Court of Appeals promulgated on August 25, 1999 in CA-G.R. CV No. 45002, which
affirmed in toto the judgment of the Regional Trial Court of Makati, Branch 62, in Civil Case No. 16062. The trial court
found herein petitioners liable for the death of Florentina Sabalburo in a vehicular accident involving a passenger bus
owned by petitioner Metro Manila Transit Corporation (MMTC) and driven by petitioner Apolinario Ajoc, and ordered
them to pay damages to private Respondents.
The factual backdrop of this case, as found by the Court of Appeals, is as follows:
The eyewitness account of plaintiffs witness, Maria Zenaida Baylon, tends to show that in the afternoon of December
24, 1986, she, her daughter Maria Zenia and the victim, Florentina Sabalburo, were on their way to Baclaran to buy
foodstuffs for their Noche Buena. For some time, they stood on the island at the intersection of St. Andrews Street2 and
Domestic Road, [Pasay City] waiting for the traffic light to change so they could cross to the other side of St. Andrews
Street where they intended to take a ride for Baclaran. When the traffic light turned red and the vehicles along St.
Andrews Street had stopped, the three of them stepped off the island. Just as they started to cross the street, she
(Baylon) saw an MMTC bus coming from their right (Tramo) which was moving at a fast speed. The next moment, the
left front portion of the bus hit the victim on the right side of her head. The impact was of such force that the victims
right ear was slashed off and she thereupon fell on the cement and became unconscious. The victim was brought by
the bus driver, Apolinario Ajoc and the bus conductress to the San Juan de Dios Hospital where she was given medical
attention. Florentina Sabalburo never regained consciousness and it was on January 3, 1987 that she succumbed to her
injuries.3cräläwvirtualibräry
On February 16, 1987, private respondents filed a complaint4 for damages against MMTC and its driver, Ajoc, with the
Regional Trial Court of Makati. Docketed as Civil Case No. 16062, the complaint essentially alleged that Ajoc drove the
MMTC bus in a wanton and reckless manner, in gross violation of traffic rules and regulations, without due regard for
the safety of others, thus causing the untimely death of the victim.
Petitioners denied the material allegations of the complaint, disclaimed any liability for the incident, and insisted that
the accident was solely due to the victims own negligence. The appellate court summed up their version of the incident
as follows:
xxx
That at the time material to this case, bus no. 033, with defendant Ajoc driving, then bound towards the direction of
Baclaran proper, was slowly accelerating speed on the outer right lane of the road, in response to the go signal of the
traffic light situated in the intersection of Domestic Road [and Andrew Avenue], while the vehicles on the inner right
lane which were going to turn left towards Domestic Road were at a stop position, the deceased FLORENTINA G.
SABALBURO, whose stationary position was then covered from Ajocs peripheral vision by a big truck then bound to
MIA Road [that] was at a stop position, suddenly, without regard to her own safety and in total defiance of traffic signs
designed to protect pedestrian[s], suddenly darted across the road; Ajoc, thus caught by surprise, tried to prevent
impact by releasing his accelerator pedal and applying his brakes but the time lag between the deceaseds negligent act
and Ajocs prudent and diligent reaction to the former made the impact a certainty.5cräläwvirtualibräry
As special and affirmative defenses, petitioners also claimed that:
(1) MMTC hires its drivers, conductors and other employees only after they have successfully passed rigid and extensive
theoretical and practical examinations designed to determine their skills and competenceand imposes upon its drivers
the duty to undergo regular seminars in defensive driving techniques and road safety habits;6cräläwvirtualibräry
(2) MMTC had taken every human care and foresight possible in carrying their passengers safely to their respective
place (sic) of destination as well as in avoiding harm to the life and limbs or risk against pedestrians so that they not be
held liable;7 and
(3) [T]he buses of the defendant corporation, including its bus no. 033 were all properly maintainedbefore the buses left
the garage for their respective routes on that particular day, as in all other days, they were rigidly inspected and
examined and properly certified as roadworthy.8cräläwvirtualibräry
The trial court found private respondents version more credible and on August 12, 1993, decided the case as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against defendants as
follows:
1. Ordering defendants to jointly and severally pay plaintiff Martin Sabalburo actual damages in the sum of P63,943.88
representing the unpaid expenses of plaintiff in connection with the death of Florentina Sabalburo;
2. Ordering defendants to jointly and severally pay plaintiffs the sum of P180,000.00 for the loss of the earning capacity
of the deceased for a period of ten (10) years;
3. Ordering defendants to jointly and severally pay plaintiff Martin Sabalburo the amount of P500,000.00 as moral
damages;
4. Ordering defendants to jointly and severally pay plaintiff Martin Sabalburo the sum of P50,000.00 as exemplary
damages;
5. Ordering defendants [to] jointly and severally pay plaintiff Martin Sabalburo the sum of P50,000.00 as attorneys fees;
6. Ordering defendants jointly and severally to pay plaintiffs the costs of this suit.
SO ORDERED.9cräläwvirtualibräry
Petitioners seasonably appealed to the Court of Appeals, which docketed their appeal as CA-G.R. CV No. 45002. Before
the appellate court, petitioners insisted that the accident was solely the fault of the victim since she suddenly crossed a
 very busy street with complete disregard for her safety and in violation of traffic rules and regulations designed to
protect pedestrians.
As earlier stated, the appellate court, in CA-G.R. CV No. 45002, affirmed the trial courts decision, thus:
IN JUDGMENT, we hold that the appeal interposed by appellants is not meritorious and the judgment of the lower
court which we find to be in accordance with law and the evidence is therefore AFFIRMED in toto. Costs against
appellants.
SO ORDERED.10cräläwvirtualibräry
Petitioners then moved for reconsideration, but the appellate court denied their motion in its resolution of December
10, 1999.11cräläwvirtualibräry
Hence, the present petition.
Petitioners submit as sole issue for our resolution the following:
WHETHER OR NOT ARTICLE 217912 AS AN EXCEPTION TO ARTICLE 217613 OF THE CIVIL CODE IS APPLICABLE IN THE
INSTANT CASE.
Petitioners insist that a closer look at the facts established by the trial court would show that the incident happened at
around 3:30 in the afternoon of December 24, 1986 or barely eight (8) hours before Christmas Eve. Thus, the victims
thoughts were naturally directed towards the Noche Buena. The victim then crossed busy Andrew Avenue for the
purpose of getting a ride to Baclaran to buy food for the Christmas Eve celebration. Since her thoughts were on the
Christmas Eve feast, she crossed where there was no pedestrian lane and while the green light for vehicular traffic was
on. Petitioner MMTC submits that petitioner Ajoc cannot be charged with negligence considering that he cannot see
what is in the mind of a pedestrian. Considering that the victims own negligence was the direct and proximate cause of
her injuries and untimely demise, it was error for the Court of Appeals not to have applied Article 2179 of the Civil Code
to the instant case.
Petitioners claim that at the time of the incident, the victims mind was preoccupied with the preparations for the Noche
Buena, is naught but pure conjecture and speculation, with nary a scintilla of proof to support it, according to
respondents. Both the trial and appellate courts established that the immediate and proximate cause of the victims
death was the negligent and careless driving by petitioner Ajoc. Therefore, the full force of Article 2176 of the Civil
Code applies, concluded Respondents.
In asking us to apply Article 2179 of the Civil Code, we note that petitioners are asking us to make a finding that the
victims own negligence was the direct and proximate cause of her death. This we cannot do. The issue of whether a
person is negligent or not is a question of fact.14 The Supreme Court is not a trier of facts,15 although it has the power
and authority to review and reverse the factual findings of lower courts where these do not conform to the
evidence16 or where the courts below came up with contradictory factual findings.17cräläwvirtualibräry
We have thoroughly perused the records of this case, and nowhere do we find evidence to support petitioners claim
that the victim was so engrossed in thinking about Noche Buena while crossing a busy street. Petitioners stance
regarding the victims alleged negligence is non sequitur. It simply does not follow that one who is run over by a vehicle
on Christmas Eve (or any other holiday for that matter) is negligent because his thoughts were on the holiday festivities.
Instead, the records support private respondents claim that the MMTC bus was being driven carelessly. As found by the
trial court and affirmed by the Court of Appeals, the victim and her companions were standing on the island of Andrew
Avenue, waiting for the traffic light to change so they could cross. Upon seeing the red light, the victim and her
companions started to cross. It was then when petitioner Ajoc, who was trying to beat the red light, hit the victim. As
the court a quo noted, Ajocs claim that he failed to see the victim and her companions proves his recklessness and lack
of caution in driving his vehicle.18 Findings of fact of the trial court, especially when affirmed by the Court of Appeals,
are binding and conclusive on the Supreme Court.19 More so, as in this case, where petitioners have not adequately
shown that the courts below overlooked or disregarded certain facts or circumstances of such import as would have
altered the outcome of the case. Contrary to petitioners insistence, the applicable law in this case is Article 2176 of the
Civil Code and not Article 2179.
Petitioner MMTC next contends that the Court of Appeals erred in finding it solidarily liable for damages with its
driver/employee, Ajoc, pursuant to the relevant paragraphs of Article 218020 of the Civil Code. It argues that the act of
Ajoc in bringing the victim to a hospital reflects MMTCs diligence in the selection and supervision of its drivers,
particularly with regard to safety measures. Hence, having exercised the diligence of a good father of a family in the
selection and supervision of its employees to prevent damage, MMTC should not be held vicariously liable.
It should be stressed, however, that whenever an employees negligence causes damage or injury to another, there
instantly arises a presumption juris tantum that there was negligence on the part of the employer, either in the
selection of the employee (culpa in eligiendo) or the supervision over him after the selection (culpa in
vigilando).21 Hence, to escape solidary liability for a quasi-delict committed by his employee, an employer must rebut
the presumption by presenting convincing proof that in the selection and supervision of his employee, he has exercised
the care and diligence of a good father of a family.22 In the present case, petitioner MMTC failed to rebut the
presumption of negligence on its part.
The claim that Ajocs act of bringing the victim to the nearest medical facility shows adequate supervision by MMTC
over its employees deserves but scant consideration. For one, the act was after the fact of negligence on Ajocs part. For
another, the evidence on record shows that Ajocs act was neither voluntary nor spontaneous; he had to be prevailed
upon by the victims companions to render assistance to his victim.23 Moreover, the evidence to show that MMTC had
exercised due diligence in the selection and supervision of its employees consisted merely of the pertinent guidelines
for the screening and selection of its drivers, as well as periodic seminars on road safety. As found by the trial court,
and affirmed by the appellate court, petitioner MMTC failed to show that its driver, Ajoc, had actually undergone such
screening or had attended said seminars. As previously held, [t]he mere formulation of various company policies on
safety without showing that they were being complied with is not sufficient to exempt (an employer) from liability
 arising from negligence of its employees. It is incumbent upon petitioner to show that in recruiting and employing the
erring driver the recruitment procedures and company policies on efficiency and safety were followed.24 In this case,
MMTC has made no satisfactory showing that it had paid more than lip service to its guidelines and policies in hiring
and supervision. Its failure to do so cannot but warrant the proper sanctions from this Court, considering that MMTC is
a government-owned public utility organized for the public welfare. Having failed to rebut the presumption of
negligence on its part, MMTC is primarily and directly liable for the damages caused by its employee, the erring driver,
Ajoc, pursuant to Article 2180 of the Civil Code, which provides as follows:
ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions-, but also for
those of persons for whom one is responsible.
The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by the minor
children who live in their company.
Guardians are liable for damages caused by the minors or incapacitated persons who are under their authority and live
in their company.
The owners and managers of an establishment or enterprise are likewise 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.
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.
The State is responsible in like manner when it acts through a special agent; but not when the damage has been caused
by the official to whom the task done properly pertains, in which case what is provided in Article 2176 shall be
applicable.
Lastly, teachers or heads of establishments of arts and trades shall be liable for damages caused by their pupils and
students or apprentices, so long as they remain in their custody.
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 owners of public utilities fall within the scope of this article.25 As earlier stated, MMTC is a public utility, organized
and owned by the government for public transport service. Hence, its liability to private respondents, for the negligent
and reckless acts of its driver, Ajoc, under Article 2180 of the Civil Code is both manifest and clear.
WHEREFORE, the instant petition is DISMISSED. The assailed decision of the Court of Appeals in CA-G.R. CV No. 45002
is AFFIRMED. Costs against petitioners.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, and Corona, JJ., concur.

Endnotes:
1 Rollo, pp. 27-36.
2 The appellate court erroneously kept on referring to the thoroughfare where the accident took place as St. Andrews
Street. The records show that the proper name of the road is Andrew Avenue. See CA Rollo, p. 43. See also TSN, January
13, 1989, p. 3; TSN, March 5, 1991, pp. 3-4.
3 Rollo, pp. 27-28.
4 A separate criminal complaint for homicide through reckless imprudence, docketed as Crim. Case No. 87-11229-P,
was also filed against Ajoc before the Regional Trial Court of Pasay City, Branch 111. On July 10, 1990, Ajoc was found
guilty of the charge and sentenced to suffer a prison term ranging from two years and four months of prision
correccional as a minimum to six years of prision correccional as a maximum. Records, pp. 196-200.
5 Rollo, p. 29.
6 Id. at 28.
7 Supra note 5.
8 Id. at 29-30.
9 Records, p. 229.
10 CA Rollo, p. 78.
11 Id. at 88.
12 Civil Code, ART. 2179. When the plaintiffs own negligence was the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was only contributory, the immediate and proximate cause of the injury
being the defendants lack of due care, the plaintiff may recover damages, but the courts shall mitigate the damages to
be awarded.
13 Civil Code, ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between
the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
14 Thermochem Inc. v. Naval, G.R. No. 131541, 344 SCRA 76, 82 (2000).
15 Ceremonia v. Court of Appeals, G.R. No. 103453, 314 SCRA 731, 736 (1999).
16 Cang v. Court of Appeals, G.R. No. 105308, 296 SCRA 128, 144-145 (1998), citing Philippine National Bank v. Court of
Appeals, G.R. No. 43972, 187 SCRA 735, 739 (1990).
17 Yobido v. Court of Appeals, G.R. No. 113003, 281 SCRA 1, 7-8 (1997).
18 Rollo, p. 32.
19 Austria v. Court of Appeals, G.R. No. 133323, 327 SCRA 668, 674 (2000).
20 Civil Code, ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
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
21 Castro v. Acro Taxicab Co., No. 49155, 82 Phil. 359, 373 (1948). See also Phoenix Construction, Inc. v. IAC, No. L-
65295, 148 SCRA 353, 370 (1987); Pantranco North Express, Inc. v. Baesa, G.R. Nos. 79050-51, 179 SCRA 384, 393-394
(1989).
22 Pantranco North Express, Inc, v. Baesa, supra; Umali v. Bacani, No. L-40570, 69 SCRA 263, 267-268 (1976).
23 TSN, January 13, 1989, pp. 14-20.
24 Metro Manila Transit Corp. v. Court of Appeals, G.R. No. 104408, 223 SCRA 521, 541 (1993), citing Pantranco North
Express, Inc. v. Baesa, supra.
25 Tolentino, V Civil Code 615 (1992).
 [G.R. Nos. 79050-51. November 14, 1989.]

PANTRANCO NORTH EXPRESS, INC., Petitioner, v. MARICAR BASCOS BAESA, thru her personal guardian
FRANCISCA O. BASCOS, FE O. ICO, in her behalf and in behalf of her minor children, namely ERWIN, OLIVE,
EDMUNDO and SHARON ICO, Respondents.

Efren N. Ambrosio & Associates for petitioner PNEI.

Emiliano S. Micu for Respondents.

SYLLABUS
1. CIVIL LAW; DAMAGES; LAST CLEAR CHANCE DOCTRINE; WHEN APPLICABLE. — The doctrine of last clear chance
applies only in a situation where the defendant, having the last fair chance to avoid the impending harm and failed to
do so, becomes liable for all the consequences of the accident notwithstanding the prior negligence of the plaintiff.

2. ID.; ID.; ID.; CONDITION TO MAKE DOCTRINE APPLICABLE. — In order that the doctrine of last clear chance may be
applied, it must be shown that the person who allegedly had the last opportunity to avert the accident was aware of
the existence of the peril or with exercise of due care should have been aware of it.

3. ID.; ID.; ID.; NOT APPLICABLE TO PERSON ACTING INSTANTANEOUSLY OR BY AVAILABLE MEANS. — This doctrine of
last chance has no application to a case where a person is to act instantaneously, and if the injury cannot be avoided by
using all means available after the peril is or should have been discovered.

4. ID.; ID.; PROVISION OF R.A. NO. 4136 RE VEHICLE ENTERING A THROUGH HIGHWAY OR A STOP INTERSECTION. —
Section 43 (c), Article III, Chapter IV of Republic Act No. 1436 cannot apply to case a bar where at the time of the
accident, the jeepney had already crossed the intersection.

5. ID.; ID.; NEGLIGENCE; BURDEN OF PROOF LIES ON THE EMPLOYER. — A finding of negligence on the part of the
driver establishes a presumption that the employer has been negligent and the latter has the burden of proof that it
has exercised due negligence not only in the selection of its employees but also in adequately supervising their work.

6. ID.; ID.; FAILURE TO PRESENT EVIDENCE TO SUPPORT CLAIM FOR DAMAGES. — Plaintiff’s failure to present
documentary evidence to support their claim for damages for loss of earning capacity of the deceased victim does not
bar recovery of the damages, if such loss may be based sufficiently on their testimonies.

7. ID.; ID.; INDEMNITY FIXED AT P30,000. — The indemnity for the death of a person was fixed by this Court at
(P30,000.00).
DECISION
CORTES, J.:
In this Petition, Pantranco North Express Inc. (PANTRANCO), asks the Court to review the decision of the Court of
Appeals in CA-G.R. No. 05494-95 which affirmed the decisions of the Court of First Instance of Rosales, Pangasinan in
Civil Case No. 561-R and Civil Case No. 589-R wherein PANTRANCO was ordered to pay damages and attorney’s fees
to herein private respondents.chanrobles virtual lawlibrary

The pertinent fact are as follows:chanrob1es virtual 1aw library

At about 7:00 o’clock in the morning of June 12, 1981, the spouses Ceasar and Marilyn Baesa and their children Harold
Jim, Marcelino and Maricar, together with spouses David Ico and Fe O. Ico with their son Erwin Ico and seven other
persons, were aboard a passenger jeepney on their way to a picnic at Malalam River, Ilagan, Isabela, to celebrate the
fifth wedding anniversary of Ceasar and Marilyn Baesa.

The group, numbering fifteen (15) persons, rode in the passenger jeepney driven by David Ico, who was also the
registered owner thereof. From Ilagan, Isabela, they proceeded to Barrio Capayacan to deliver some viands to one Mrs.
Bascos and thenceforth to San Felipe, taking the highway going to Malalam River. Upon reaching the highway, the
jeepney turned right and proceeded to Malalam River at a speed of about 20 kph. While they were proceeding towards
Malalam River, a speeding PANTRANCO bus from Aparri, on its regular route to Manila, encroached on the jeepney’s
lane while negotiating a curve, and collided with it.

As a result of the accident David Ico, spouses Ceasar Baesa and Marilyn Baesa and their children, Harold Jim and
Marcelino Baesa, died while the rest of the passengers suffered injuries. The jeepney was extensively damaged. After
the accident the driver of the PANTRANCO Bus, Ambrosio Ramirez, boarded a car and proceeded to Santiago, Isabela.
From that time on up to the present, Ramirez has never been seen and has apparently remained in hiding.

All the victims and/or their surviving heirs except herein private respondents settled the case amicably under the "No
Fault" insurance coverage of PANTRANCO.

Maricar Baesa through her guardian Francisca O. Bascos and Fe O. Ico for herself and for her minor children, filed
separate actions for damages arising from quasi-delict against PANTRANCO, respectively docketed as Civil Case No.
561-R and 589-R of the Court of First Instance of Pangasinan.

In its answer, PANTRANCO, aside from pointing to the late David Ico’s alleged negligence as the proximate cause of the
accident, invoked the defense of due diligence in the selection and supervision of its driver, Ambrosio
Ramirez.chanroblesvirtualawlibrary

On July 3, 1984, the CFI of Pangasinan rendered a decision against PANTRANCO awarding the total amount of Two
Million Three Hundred Four Thousand Six Hundred Forty-Seven (P2,304,647.00) as damages, plus 10% thereof as
attorney’s fees and costs to Maricar Baesa in Civil Case No. 561-R, and the total amount of Six Hundred Fifty Two
Thousand Six Hundred Seventy-Two Pesos (P652,672.00) as damages, plus 10% thereof as attorney’s fees and costs to
Fe Ico and her children in Civil Case No. 589-R. On appeal, the cases were consolidated and the Court of Appeals
modified the decision of the trial court by ordering PANTRANCO to pay the total amount of One Million One Hundred
Eighty-Nine Thousand Nine Hundred Twenty Seven Pesos (P1,189,927.00) as damages, plus Twenty Thousand Pesos
(P20,000.00) as attorney’s fees to Maricar Baesa, and the total amount of Three Hundred Forty-Four Thousand Pesos
(P344,000.00) plus Ten Thousand Pesos (P10,000.00) as attorney’s fees to Fe Ico and her children, and to pay the costs
in both cases. The dispositive portion of the assailed decision reads as follows:chanrob1es virtual 1aw library

WHEREFORE, the decision appealed from is hereby modified by ordering the defendant PANTRANCO North Express,
Inc. to pay:chanrob1es virtual 1aw library

I. The plaintiff in Civil Case No. 561-R, Maricar Bascos Baesa, the following damages:chanrob1es virtual 1aw library

A) As compensatory damages for the death of Ceasar Baesa — P30,000.00;

B) As compensatory damages for the death of Marilyn Baesa — P30,000.00;

C) As compensatory damages for the death of Harold Jim Baesa and Marcelino Baesa — P30,000.00;

D) For the loss of earnings of Ceasar Baesa — P630,000.00;

E) For the loss of earnings of Marilyn Bascos Baesa — P375,000.00;

F) For the burial expenses of the deceased Ceasar and Marilyn Baesa — P41,200.00;

G) For hospitalization expenses of Maricar Baesa — P3,727.00;

H) As moral damages — P50,000.00;

I) As attorney’s fees — P20,000.00;

II. The plaintiffs in Civil Case No. 589-R, the following damages:chanrob1es virtual 1aw library

A) As compensatory damages for the death of David Ico — P30,000.00;

B) For loss of earning capacity of David Ico — P252,000.00;

C) As moral damages for the death of David Ico and the injury of Fe Ico — P30,000.00

D) As payment for the jeepney — P20,000.00;

E) For the hospitalization of Fe Ico — P12,000.000;

F) And for attorney’s fees — P10,000.00;

and to pay the costs in both cases.

The amount of P25,000 paid to Maricar Bascos Baesa, plaintiff in Civil Case No. 561-R, and the medical expenses in the
sum of P3,273.55, should be deducted from the award in her favor.chanrobles virtual lawlibrary

All the foregoing amounts herein awarded except the costs shall earn interest at the legal rate from date of this
decision until fully paid. [CA Decision, pp. 14-15; Rollo, pp. 57-58.]

PANTRANCO filed a motion for reconsideration of the Court of Appeal’s decision, but on June 26, 1987, it denied the
same for lack of merit. PANTRANCO then filed the instant petition for review.
I
Petitioner faults the Court of Appeals for not applying the doctrine of the "last clear chance" against the jeepney driver.
Petitioner claims that under the circumstances of the case, it was the driver of the passenger jeepney who had the last
clear chance to avoid the collision and was therefore negligent in failing to utilize with reasonable care and competence
his then existing opportunity to avoid the harm.

The doctrine of the last clear chance was defined by this Court in the case of Ong v. Metropolitan Water District, 104
Phil. 397 (1958), in this wise:chanrob1es virtual 1aw library

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. v. 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 for
damages.chanrobles lawlibrary : rednad

To avoid liability for the negligence of its driver, petitioner claims that the original negligence of its driver was not the
proximate cause of the accident and that the sole proximate cause was the supervening negligence of the jeepney
driver David Ico in failing to avoid the accident. It is petitioner’s position that even assuming arguendo, that the bus
encroached into the lane of the jeepney, the driver of the latter could have swerved the jeepney towards the spacious
dirt shoulder on his right without danger to himself or his passengers.

The above contention of petitioner is manifestly devoid of merit.

Contrary to the petitioner’s contention, the doctrine of "last clear chance" finds no application in this case. For the
doctrine to be applicable, it is necessary to show that the person who allegedly had the last opportunity to avert the
accident was aware of the existence of the peril or should, with exercise of due care, have been aware of it. One cannot
be expected to avoid an accident or injury if he does not know or could not have known the existence of the peril. In
this case, there is nothing to show that the jeepney driver David Ico knew of the impending danger. When he saw at a
distance that the approaching bus was encroaching on his lane, he did not immediately swerve the jeepney to the dirt
shoulder on his right since he must have assumed that the bus driver will return the bus to its own lane upon seeing
the jeepney approaching from the opposite direction. As held by this Court in the case of Vda. De Bonifacio v. BLTB,
G.R. No. L-26810, August 31, 1970, 34 SCRA 618, a motorist who is properly proceeding on his own side of the highway
is generally entitled to assume that an approaching vehicle coming towards him on the wrong side, will return to his
proper lane of traffic. There was nothing to indicate to David Ico that the bus could not return to its own lane or was
prevented from returning to the proper lane by anything beyond the control of its driver. Leo Marantan, an alternate
driver of the Pantranco bus who was seated beside the driver Ramirez at the time of the accident, testified that Ramirez
had no choice but to swerve the steering wheel to the left and encroach on the jeepney’s lane because there was a
steep precipice on the right [CA Decision, p. 2; Rollo, p. 45]. However, this is belied by the evidence on record which
clearly shows that there was enough space to swerve the bus back to its own lane without any danger [CA Decision, p.
7; Rollo, p. 50].

Moreover, both the trial court and the Court of Appeals found that at the time of the accident the Pantranco bus was
speeding towards Manila [CA Decision, p. 2; Rollo, p. 45]. By the time David Ico must have realized that the bus was not
returning to its own lane, it was already too late to swerve the jeepney to his right to prevent an accident. The speed at
which the approaching bus was running prevented David Ico from swerving the jeepney to the right shoulder of the
road in time to avoid the collision. Thus, even assuming that the jeepney driver perceived the danger a few seconds
before the actual collision, he had no opportunity to avoid it. This Court has held that the last clear chance doctrine
"can never apply where the party charged is required to act instantaneously, and if the injury cannot be avoided by the
application of all means at hand after the peril is or should have been discovered" [Ong v. Metropolitan Water District,
supra].chanrobles.com : virtual law library

Petitioner likewise insists that David Ico was negligent in failing to observe Section 43 (c), Article III Chapter IV of
Republic Act No. 4136 * which provides that the driver of a vehicle entering a through highway or a stop intersection
shall yield the right of way to all vehicles approaching in either direction on such through highway.

Petitioner’s misplaced reliance on the aforesaid law is readily apparent in this case. The cited law itself provides that it
applies only to vehicles entering a through highway or a stop intersection. At the time of the accident, the jeepney had
already crossed the intersection and was on its way to Malalam River. Petitioner itself cited Fe Ico’s testimony that the
accident occurred after the jeepney had travelled a distance of about two (2) meters from the point of intersection
[Petition p. 10; Rollo, p. 27]. In fact, even the witness for the petitioner, Leo Marantan, testified that both vehicles were
coming from opposite directions [CA Decision, p. 7; Rollo, p. 50], clearly indicating that the jeepney had already crossed
the intersection.

Considering the foregoing, the Court finds that the negligence of petitioner’s driver in encroaching into the lane of the
incoming jeepney and in failing to return the bus to its own lane immediately upon seeing the jeepney coming from
the opposite direction was the sole and proximate cause of the accident without which the collision would not have
occurred. There was no supervening or intervening negligence on the part of the jeepney driver which would have
made the prior negligence of petitioner’s driver a mere remote cause of the accident.
II

On the issue of its liability as an employer, petitioner claims that it had observed the diligence of a good father of a
family to prevent damage, conformably to the last paragraph of Article 2180 of the Civil Code. Petitioner adduced
evidence to show that in hiring its drivers, the latter are required to have professional driver’s license and police
clearance. The drivers must also pass written examinations, interviews and practical driving tests, and are required to
undergo a six-month training period. Rodrigo San Pedro, petitioner’s Training Coordinator, testified on petitioner’s
policy of conducting regular and continuing training programs and safety seminars for its drivers, conductors,
inspectors and supervisors at a frequency rate of at least two (2) seminars a month.

On this point, the Court quotes with approval the following findings of the trial court which was adopted by the Court
of Appeals in its challenged decision:chanrob1es virtual 1aw library

When an injury is caused by the negligence of an employee, there instantly arises a presumption that the employer has
been negligent either in the selection of his employees or in the supervision over their acts. Although this presumption
is only a disputable presumption which could be overcome by proof of diligence of a good father of a family, this Court
believes that the evidence submitted by the defendant to show that it exercised the diligence of a good father of a
family in the case of Ramirez, as a company driver is far from sufficient. No support evidence has been adduced. The
professional driver’s license of Ramirez has not been produced. There is no proof that he is between 25 to 38 years old.
There is also no proof as to his educational attainment, his age, his weight and the fact that he is married or not.
Neither are the result of the written test, psychological and physical test, among other tests, have been submitted in
evidence [sic]. His NBI or police clearances and clearances from previous employment were not marked in evidence. No
evidence was presented that Ramirez actually and really attended the seminars. Vital evidence should have been the
certificate of attendance or certificate of participation or evidence of such participation like a logbook signed by the
trainees when they attended the seminars. If such records are not available, the testimony of the classmates that
Ramirez was their classmate in said seminar (should have been presented) [CA Decision, pp. 8-9; Rollo, pp. 51-
52].chanrobles law library

Petitioner contends that the fact that Ambrosio Ramirez was employed and remained as its driver only means that he
underwent the same rigid selection process and was subjected to the same strict supervision imposed by petitioner on
all applicants and employees. It is argued by the petitioner that unless proven otherwise, it is presumed that petitioner
observed its usual recruitment procedure and company polices on safety and efficiency [Petition, p. 20; Rollo, p. 37].

The Court finds the above contention unmeritorious.

The finding of negligence on the part of its driver Ambrosio Ramirez gave rise to the presumption of negligence on the
part of petitioner and the burden of proving that it exercised due diligence not only in the selection of its employees
but also in adequately supervising their work rests with the petitioner [Lilius v. Manila Railroad Company, 59 Phil. 758
(1934); Umali v. Bacani, G.R. No. L-40570, June 30, 1976, 69 SCRA 623]. Contrary to petitioner’s claim, there is no
presumption that the usual recruitment procedures and safety standards were observed. The mere issuance of rules
and regulations and the formulation of various company policies on safety, without showing that they are being
complied with, are not sufficient to exempt petitioner from liability arising from the negligence of its employee. It is
incumbent upon petitioner to show that in recruiting and employing the erring driver, the recruitment procedures and
company policies on efficiency and safety were followed. Petitioner failed to do this. Hence, the Court finds no cogent
reason to disturb the finding of both the trial court and the Court of Appeals that the evidence presented by the
petitioner, which consists mainly of the uncorroborated testimony of its Training Coordinator, is insufficient to
overcome the presumption of negligence against petitioner.cralawnad
III

On the question of damages, petitioner claims that the Court of Appeals erred in fixing the damages for the loss of
earning capacity of the deceased victims. Petitioner assails respondent court’s findings because no documentary
evidence in support thereof, such as income tax returns, pay-rolls, pay slips or invoices obtained in the usual course of
business, were presented [Petition, p. 22; Rollo, p. 39]. Petitioner argues that the "bare and self-serving testimonies of
the wife of the deceased David Ico and the mother of the deceased Marilyn Baesa . . . have no probative value to
sustain in law the Court of Appeals’ conclusion on the respective earnings of the deceased victims." [Petition, pp. 21-22;
Rollo, pp. 38-39.] It is petitioner’s contention that the evidence presented by the private respondent does not meet the
requirements of clear and satisfactory evidence to prove actual and compensatory damages.

The Court finds that the Court of Appeals committed no reversible error in fixing the amount of damages for the loss of
earning capacity of the deceased victims. While it is true that private respondents should have presented documentary
evidence to support their claim for damages for loss of earning capacity of the deceased victims, the absence thereof
does not necessarily bar the recovery of the damages in question. The testimony of Fe Ico and Francisca Bascos as to
the earning capacity of David Ico, and the spouses Baesa, respectively, are sufficient to establish a basis from which the
court can make a fair and reasonable estimate of the damages for the loss of earning capacity of the three deceased
victims. Moreover, in fixing the damages for loss of earning capacity of a deceased victim, the court can consider the
nature of his occupation, his educational attainment and the state of his health at the time of death.

In the instant case, David Ico was thirty eight (38) years old at the time of his death in 1981 and was driving his own
passenger jeepney. The spouses Ceasar and Marilyn Baesa were both thirty (30) years old at the time of their death.
Ceasar Baesa was a commerce degree holder and the proprietor of the Cauayan Press, printer of the Cauayan Valley
Newspaper and the Valley Times at Cauayan, Isabela. Marilyn Baesa graduated as a nurse in 1976 and at the time of her
death, was the company nurse, personnel manager, treasurer and cashier of the Ilagan Press at Ilagan, Isabela.
Respondent court duly considered these factors, together with the uncontradicted testimonies of Fe Ico and Francisca
Bascos, in fixing the amount of damages for the loss of earning capacity of David Ico and the spouses
Baesa.chanrobles.com:cralaw:red

However, it should be pointed out that the Court of Appeals committed error in fixing the compensatory damages for
the death of Harold Jim Baesa and Marcelino Baesa. Respondent court awarded to plaintiff (private respondent) Maricar
Baesa Thirty Thousand Pesos (P30,000.00) as "compensatory damages for the death of Harold Jim Baesa and Marcelino
Baesa." [CA Decision, p. 14; Rollo, 57]. In other words, the Court of Appeals awarded only Fifteen Thousand Pesos
(P15,000.00) as indemnity for the death of Harold Jim Baesa and another Fifteen Thousand Pesos (P15,000.00) for the
death of Marcelino Baesa. This is clearly erroneous. In the case of People v. de la Fuente, G.R. Nos. 63251-52, December
29, 1983, 126 SCRA 518, the indemnity for the death of a person was fixed by this Court at Thirty Thousand Pesos
(P30,000.00). Plaintiff Maricar Baesa should therefore be awarded Sixty Thousand Pesos (P60,000.00) as indemnity for
the death of her brothers, Harold Jim Baesa and Marcelino Baesa or Thirty Thousand Pesos (P30,000.00) for the death
of each brother.

The other items of damages awarded by respondent court which were not challenged by the petitioner are hereby
affirmed.

WHEREFORE, premises considered, the petition is DENIED, and the decision of respondent Court of Appeals is hereby
AFFIRMED with the modification that the amount of compensatory damages for the death of Harold Jim Baesa and
Marcelino Baesa are increased to Thirty Thousand Pesos (P30,000.00) each.chanrobles law library

SO ORDERED.

Fernan (C.J.), Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

Endnotes:

* R.A. 4136 is entitled "An Act to Compile the Laws Relative to Land Transportation and Traffic Rules, To Create A Land
Transportation Commission and other Purposes."
 G.R. No. 199282, March 14, 2016
TRAVEL & TOURS ADVISERS, INCORPORATED, Petitioner, v. ALBERTO CRUZ, SR., EDGAR HERNANDEZ AND
VIRGINIA MUÑOZ, Respondents.
DECISION
PERALTA, J.:
For resolution of this Court is the Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court dated
December 28, 2011, of petitioner Travel & Tours Advisers, Inc. assailing the Decision1 dated May 16, 2011 and
Resolution2 dated November 10, 2011 of the Court of Appeals (CA), affirming with modifications the Decision3 dated
January 30, 2008 of the Regional Trial Court (RTC), Branch 61, Angeles City finding petitioner jointly and solidarity liable
for damages incurred in a vehicular accident.

The facts follow.

Respondent Edgar Hernandez was driving an Isuzu Passenger Jitney (jeepney) that he owns with plate number DSG-
944 along Angeles-Magalang Road, Barangay San Francisco, Magalang, Pampanga, on January 9, 1998, around 7:50
p.m. Meanwhile,. a Daewoo passenger bus (RCJ Bus Lines) with plate number NXM-116, owned by petitioner Travel and
Tours Advisers, Inc. and driven by Edgar Calaycay travelled in the same direction as that of respondent Edgar
Hernandez vehicle. Thereafter, the bus bumped the rear portion of the jeepney causing it to ram into an acacia tree
which resulted in the death of Alberto Cruz, Jr. and the serious physical injuries of Virginia Muñoz.

Thus, respondents Edgar Hernandez, Virginia Muñoz and Alberto Cruz, Sr., father of the deceased Alberto Cruz, Jr., filed
a complaint for damages, docketed as Civil Case No. 9006 before the RTC claiming that the collision was due to the
reckless, negligent and imprudent manner by which Edgar Calaycay was driving the bus, in complete disregard to
existing traffic laws, rules and regulations, and praying that judgment be rendered ordering Edgar Calaycay and
petitioner Travel & Tours Advisers, Inc. to pay the following:
chanRoblesvirtualLawlibrary
1. For plaintiff Alberto Cruz, Sr.

a. The sum of P140,000.00 for the reimbursement of the expenses incurred for coffin, funeral expenses, for vigil, food,
drinks for the internment (sic) of Alberto Cruz, Jr. as part of actual damages;

b. The sum of P300,000.00, Philippine Currency, as moral, compensatory and consequential damges.

c. The sum of P6,000.00 a month as lost of (sic) income from January 9, 1998 up to the time the Honorable Court may
fixed (sic);

2. For plaintiff Virginia Muñoz:

a. The sum of P40,000.00, Philippine Currency, for the reimbursement of expenses for hospitalization, medicine,
treatment and doctor's fee as part of actual damages;

b. The sum of P150,000.00 as moral, compensatory and consequential damages;

3. For plaintiff Edgar Hernandez:

a. The sum of P42,400.00 for the damage sustained by plaintiffs Isuzu Passenger Jitney as part of actual damages, plus
P500.00 a day as unrealized net income for four (4) months;

b. The sum of P150,000.00, Philippine Currency, as moral, compensatory and consequential damages;

4. The sum of P50,000.00 pesos, Philippine Currency, as attorney's fees, plus P1,000.00 per appearance fee in court;

5. Litigation expenses in the sum of P30,000.00; and

6. To pay the cost of their suit.

Other reliefs just and equitable are likewise prayed for.4ChanRoblesVirtualawlibrary

For its defense, the petitioner claimed that it exercised the diligence of a good father of a family in the selection and
supervision of its employee Edgar Calaycay and further argued that it was Edgar Hernandez who was driving his
passenger jeepney in a reckless and imprudent manner by suddenly entering the lane of the petitioner's bus without
seeing to it that the road was clear for him to enter said lane. In addition, petitioner alleged that at the time of the
incident, Edgar Hernandez violated his franchise by travelling along an unauthorized line/route and that the jeepney
was overloaded with passengers, and the deceased Alberto Cruz, Jr. was clinging at the back thereof.

On January 30, 2008, after trial on the merits, the RTC rendered judgment in favor of the respondents, the dispositive
portion of the decision reads:
chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, judgment is hereby rendered ordering the defendants Edgar Calaycay Ranese and
Travel & Tours Advisers, Inc. to jointly and solidarity pay the following:
chanRoblesvirtualLawlibrary
I. 1. To plaintiff Alberto Cruz, Sr. and his family -
a) the sum of P50,000.00 as actual and compensatory damages;

b) the sum of P250,000.00 for loss of earning capacity of the decedent Alberto Cruz, Jr. and;

c) the sum of P50,000.00 as moral damages.

2. To plaintiff Virginia Muñoz -
a) the sum of P16,744.00 as actual and compensatory damages; and

b) the sum of P150,000.00 as moral damages.

3. To Edgar Hernandez -
a) the sum of P50,000.00 as actual and compensatory damages.
II. The sum of P50,000.00 as attorney's fees, and

III. The sum of P4,470.00 as cost of litigation

SO ORDERED.

Angeles City, Philippines, January 30, 2008.5ChanRoblesVirtualawlibrary

Petitioner filed its appeal with the CA, and on May 16, 2011, the appellate court rendered its decision, the decretal
portion of which reads as follows:
chanRoblesvirtualLawlibrary
WHEREFORE, the instant appeal is PARTLY GRANTED. The assailed Decision of the RTC, Branch 61, Angeles City, dated
January 30, 2008, is AFFIRMED with MODIFICATIONS. The defendants are ordered to pay, jointly and severally, the
following:

1. To plaintiff Alberto Cruz, Sr. and family -

a) the sum of P25,000.00 as actual damages;

b) the sum of P250.000.00 for the loss of earning capacity of the decedent Alberto Cruz, Jr.;

c) the sum of P50,000.00 as civil indemnity for the death of Alberto Cruz, Jr.;

d) the sum of P50,000.00 as moral damages.

2. To plaintiff Virginia Muñoz -

a) the sum of P16,744.00 as actual damages; and

b) the sum of P30,000.00 as moral damages.

3. To plaintiff Edgar Hernandez -

a) The sum of P40,200.00 as actual damages.

4. The award of attorney's fees (P50,000.00) and cost of litigation (P4,470.00) remains.

SO ORDERED.6ChanRoblesVirtualawlibrary
Hence, the present petition wherein the petitioner assigned the following errors:
chanRoblesvirtualLawlibrary
I.

THE PETITIONER'S BUS WAS NOT "OUT OF LINE;"

II.

THE FACT THAT THE JEEPNEY WAS BUMPED ON ITS LEFT REAR PORTION DOES NOT PREPONDERANTLY PROVE THAT
THE DRIVER OF THE BUS WAS THE NEGLIGENT PARTY;
III.

THE DECEASED ALBERTO CRUZ, JR. WAS POSITIONED AT THE RUNNING BOARD OF THE JEEPNEY;
IV.

THE BUS DRIVER WAS NOT SPEEDING OR NEGLIGENT WHEN HE FAILED TO STEER THE BUS TO A COMPLETE STOP;
V.
THE PETITIONER EXERCISED EXTRAORDINARY DILIGENCE OF A GOOD FATHER OF A FAMILY IN ITS SELECTION AND
SUPERVISION OF DRIVER CALAYCAY; AND
VI.

THERE IS NO FACTUAL AND LEGAL BASIS FOR THE VARIOUS AWARDS OF MONETARY
DAMAGES.7ChanRoblesVirtualawlibrary
According to petitioner, contrary to the declaration of the RTC, the petitioner's passenger bus was not "out-of-line" and
that petitioner is actually the holder of a PUB (public utility bus) franchise for provincial operation from Manila-Ilocos
Norte/Cagayan-Manila, meaning the petitioner's passenger bus is allowed to traverse any point between Manila-Ilocos
Norte/Cagayan-Manila. Petitioner further asseverates that the fact that the driver of the passenger bus took the
Magalang Road instead of the Bamban Bridge is of no moment because the bridge was under construction due to the
effects of the lahar; hence closed to traffic and the Magalang Road is still in between the points of petitioner's
provincial operation. Furthermore, petitioner claims that the jeepney was traversing a road way out of its allowed route,
thus, the presumption that respondent Edgar Hernandez was the negligent party.

Petitioner further argues that respondent Edgar Hernandez failed to observe that degree of care, precaution and
vigilance that his role as a public utility called for when he allowed the deceased Alberto Cruz, Jr., to hang on to the rear
portion of the jeepney.

After due consideration of the issues and arguments presented by petitioner, this Court finds no merit to grant the
petition.

Jurisprudence teaches us that "(a)s a rule, the jurisdiction of this Court in cases brought to it from the Court of Appeals
x x x is limited to the review and revision of errors of law allegedly committed by the appellate court, as its findings of
fact are deemed conclusive. As such, this Court is not duty-bound to analyze and weigh all over again the evidence
already considered in the proceedings below.8 This rule, however, is not without exceptions."9 The findings of fact of
the Court of Appeals, which are, as a general rule, deemed conclusive, may admit of review by this Court:10
(1) when the factual findings of the Court of Appeals and the trial court are contradictory;

(2) when the findings are grounded entirely on speculation, surmises, or conjectures;

(3) when the inference made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd, or
impossible;

(4) when there is grave abuse of discretion in the appreciation of facts;

(5) when the appellate court, in making its findings, goes beyond the issues of the case, and such findings are contrary
to the admissions of both appellant and appellee;

(6) when the judgment of the Court of Appeals is premised on a misapprehension of facts;

(7) when the Court of Appeals fails to notice certain relevant facts which, if properly considered, will justify a different
conclusion;

(8) when the findings of fact are themselves conflicting;

(9) when the findings of fact are conclusions without citation of the specific evidence on which they are based; and

(10) when the findings of fact of the Court of Appeals are premised on the absence of evidence but such findings are
contradicted by the evidence on record.
The issues presented are all factual in nature and do not fall under any of the exceptions upon which this Court may
review. Moreover, well entrenched is the prevailing jurisprudence that only errors of law and not of facts are reviewable
by this Court in a petition for review on certiorari under Rule 45 of the Revised Rules of Court, which applies with
greater force to the Petition under consideration because the factual findings by the Court of Appeals are in full
agreement with what the trial court found.11

Nevertheless, a review of the issues presented in this petition would still lead to the finding that petitioner is still liable
for the damages awarded to the respondents but with certain modifications.

The RTC and the CA are one in finding that both vehicles were not in their authorized routes at the time of the incident.
The conductor of petitioner's bus admitted on cross-examination that the driver of the bus veered off from its usual
route to avoid heavy traffic. The CA thus observed:
chanRoblesvirtualLawlibrary
First. As pointed out in the assailed Decision, both vehicles were not in their authorized routes at the time of the
mishap. FRANCISCO TEJADA, the conductor of defendant-appellant's bus, admitted on cross-examination that the
driver of the bus passed through Magalang Road instead of Sta. Ines, which was the usual route, thus:
xxx

Q: What route did you take from Manila to Laoag, Ilocos Sur?
A: Instead of Sta. Ines, we took Magalang Road, sir.

Q: So that is not your usual route that you are taking?

A: No, sir, it so happened that there was heavy traffic at Bamban, Tarlac, that is why we took the Magalang
Road.

xxx

The foregoing testimony of defendant-appellant's own witness clearly belies the contention that its driver took the
Magalang Road instead of the Bamban Bridge because said bridge was closed and under construction due to the
effects of lahar. Regardless of the reason, however, the irrefutable fact remains that defendant-appellant's bus likewise
veered from its usual route.12ChanRoblesVirtualawlibrary
Petitioner now claims that the bus was not out of line when the vehicular accident happened because the PUB (public
utility bus) franchise that the petitioner holds is for provincial operation from Manila-Ilocos Norte/Cagayan-Manila,
thus, the bus is allowed to traverse any point between Manila-Ilocos Norte/Cagayan-Manila. Such assertion is correct.
"Veering away from the usual route" is different from being "out of line." A public utility vehicle can and may veer away
from its usual route as long as it does not go beyond its allowed route in its franchise, in this case, Manila-Ilocos
Norte/Cagayan-Manila. Therefore, the bus cannot be considered to have violated the contents of its franchise. On the
other hand, it is indisputable that the jeepney was traversing a road out of its allowed route. Necessarily, this case is not
that of "in pari delicto" because only one party has violated a traffic regulation. As such, it would seem that Article 2185
of the New Civil Code is applicable where it provides that:
chanRoblesvirtualLawlibrary
Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent
if at the time of the mishap, he was violating any traffic regulation.
The above provision, however, is merely a presumption. From the factual findings of both the RTC and the CA based on
the evidence presented, the proximate cause of the collision is the negligence of the driver of petitioner's bus. The
jeepney was bumped at the left rear portion. Thus, this Court's past ruling,13 that drivers of vehicles who bump the rear
of another vehicle are presumed to be the cause of the accident, unless contradicted by other evidence, can be applied.
The rationale behind the presumption is that the driver of the rear vehicle has full control of the situation as he is in a
position to observe the vehicle in front of him.14 Thus, as found by the CA:
chanRoblesvirtualLawlibrary
Second. The evidence on record preponderantly shows that it was the negligence of defendant-appellant's driver,
EDGAR CALAYCAY, that was the proximate cause of the collision.

Even without considering the photographs (Exhibit "N", " " and "N-2") showing the damage to the jeepney, it cannot
be denied that the said vehicle was bumped in its left rear portion by defendant-appellant's bus. The same was
established by the unrebutted testimonies of plaintiffs-appellees EDGAR HERNANDEZ and VIRGINIA MUÑOZ, as
follows:
chanRoblesvirtualLawlibrary
EDGAR HERNANDEZ

xxx

Q: Now, according to you, you were not able to reach the town proper of Magalang because your vehicle was bumped.
In what portion of your vehicle was it bumped, Mr. Witness?
A: At the left side edge portion of the vehicle, sir.

Q: When it was bumped on the rear left side portion, what happened to your vehicle?
A: It was bumped strongly, sir, and then, "sinulpit ya", sir.

Q: When your vehicle was "sinulpit" and hit an acacia tree, what happened to the acacia tree?
A: The jeepney stopped and Alberto Cruz died and some of my passengers were injured, sir.

xxx

VIRGINIA MUÑOZ

xxx

Q: what portion of the vehicle wherein you were boarded that was hit by the Travel Tours Bus?
A: The rear portion of the jeep, sir.

Q: It was hit by the Travel Tours Bus?

A: Yes, sir.

Q: What happened to you when the vehicle was bumped?

A: I was thrown off the vehicle, sir.

xxx
It has been held that drivers of vehicles "who bump the rear of another vehicle" are presumed to be "the cause of the
accident, unless contradicted by other evidence." The rationale behind the presumption is that the driver of the rear
vehicle has full control of the situation as he is in a position to observe the vehicle in front of him.

In the case at bar, defendant-appellant failed to overturn the foregoing presumption. FRANCISCO TEJADA, the
conductor of the bus who was admittedly "seated in front, beside the driver's seat," and thus had an unimpeded view
of the road, declared on direct examination that the jeepney was about 10 to 15 meters away from the bus when he
first saw said vehicle on the road. Clearly, the bus driver, EDGAR CALAYCAY, would have also been aware of the
presence of the jeepney and, thus, was expected to anticipate its movements.

However, on cross-examination, TEJADA claimed that the jeepney "suddenly appeared" before the bus, passing it
diagonally, and causing it to be hit in its left rear side. Such uncorroborated testimony cannot be accorded credence by
this Court because it is inconsistent with the physical evidence of the actual damage to the jeepney. On this score, We
quote with approval the following disquisition of the trial court:
chanRoblesvirtualLawlibrary
x x x (F)rom the evidence presented, it was established that it was the driver of the RCJ Line Bus which was negligent
and recklessly driving the bus of the defendant corporation.

Francisco Tejada, who claimed to be the conductor of the bus, testified that it was the passenger jeepney coming from
the pavement which suddenly entered diagonally the lane of the bus causing the bus to hit the rear left portion of the
passenger jeepney. But such testimony is belied by the photographs of the jeepney (Exhs. N and N-1). As shown by Exh.
N-1, the jeepney was hit at the rear left portion and not when the jeepney was in a diagonal position to the bus
otherwise, it should have been the left side of the passenger jeepney near the rear portion that could have been
bumped by the bus. It is clear from Exh. N-1 and it was even admitted that the rear left portion of the passenger
jeepney was bumped by the bus. Further, if the jeepney was in diagonal position when it was hit by the bus, it should
have been the left side of the body of the jeepney that could have sustained markings of such bumping. In this case, it
is clear that it is the left rear portion of the jeepney that shows the impact of the markings of the bumping. The jeepney
showed that it had great damage on the center of the front portion (Exh. N-2). It was the center of the front portion
that hit the acacia tree (Exh. N). As admitted by the parties, both vehicles were running along the same direction from
west to east. As testified to by Francisco Tejada, the jeepney was about ten (10) to fifteen (15) meters away from the
bus when he noticed the jeepney entering diagonally the lane of the bus. If this was so, the middle left side portion of
the jeepney could have been hit, not the rear portion. The evidence is clear that the bus was in fast running condition,
otherwise, it could have stopped to evade hitting the jeepney. The hitting of the acacia tree by the jeepney, and the
damages caused on the jeepney in its front (Exh. N-2) and on its rear left side show that the bus was running very fast.

xxxx
Assuming ex gratia argumenti that the jeepney was in a "stop position," as claimed by defendant-appellant, on the
pavement of the road 10 to 15 meters ahead of the bus before swerving to the left to merge into traffic, a cautious
public utility driver should have stepped on his brakes and slowed down. The distance of 10 to 15 meters would have
allowed the bus with slacked speed to give way to the jeepney until the latter could fully enter the lane. Obviously, as
correctly found by the court a quo, the bus was running very fast because even if the driver stepped on the brakes, it
still made contact with the jeepney with such force that sent the latter vehicle crashing head-on against an acacia tree.
In fact, FRANCISCO TEJADA effectively admitted that the bus was very fast when he declared that the driver "could not
suddenly apply the break (sic) in full stop because our bus might turn turtle xxx." Incidentally, the allegation in the
appeal brief that the driver could not apply the brakes with force because of the possibly that the bus might turn turtle
"as they were approaching the end of the gradient or the decline of the sloping terrain or topography of the roadway"
was only raised for the first time in this appeal and, thus, may not be considered. Besides, there is nothing on record to
substantiate the same.

Rate of speed, in connection with other circumstances, is one of the principal considerations in determining whether a
motorist has been reckless in driving a vehicle, and evidence of the extent of the damage caused may show the force of
the impact from which the rate of speed of the vehicle may be modestly inferred. From the evidence presented in this
case, it cannot be denied that the bus was running very fast. As held by the Supreme Court, the very fact of speeding is
indicative of imprudent behavior, as a motorist must exercise ordinary care and drive at a reasonable rate of speed
commensurate with the conditions encountered, which will enable him to keep the vehicle under control and avoid
injury to others using the highway.15ChanRoblesVirtualawlibrary
From the above findings, it is apparent that the proximate cause of the accident is the petitioner's bus and that the
petitioner was not able to present evidence that would show otherwise. Petitioner also raised the issue that the
deceased passenger, Alberto Cruz, Jr. was situated at the running board of the jeepney which is a violation of a traffic
regulation and an indication that the jeepney was overloaded with passengers. The CA correctly ruled that no evidence
was presented to show the same, thus:
chanRoblesvirtualLawlibrary
That the deceased passenger, ALBERTO CRUZ, JR., was clinging at the back of the jeepney at the time of the mishap
cannot be gleaned from the testimony of plaintifff-appellee VIRGINIA MUÑOZ that it was she who was sitting on the
left rearmost of the jeepney.

VIRGINIA MUÑOZ herself testified that there were only about 16 passengers on board the jeepney when the subject
incident happened. Considering the testimony of plaintiff-appellee EDGAR HERNANDEZ that the seating capacity of his
jeepney is 20 people, VIRGINIA'S declaration effectively overturned defendant-appellant's defense that plaintiff-
appellee overloaded his jeepney and allowed the deceased passenger to cling to the outside railings. Yet, curiously, the
defense declined to cross-examine VIRGINIA, the best witness from whom defendant-appellant could have extracted
the truth about the exact location of ALBERTO CRUZ, JR. in or out of the jeepney. Such failure is fatal to defendant-
appellant's case. The only other evidence left to support its claim is the testimony of the conductor, FRANCISCO
TEJADA, that there were 3 passengers who were clinging to the back of the jeepney, and it was the passenger
clinging to the left side that was bumped by the bus. However, in answer to the clarificatory question from the
court a quo, TEJADA admitted that he did not really see what happened, thus:
Q: What happened to the passenger clinging to the left side portion?
A: He was bumped, your Honor.

Q: Why, the passenger fell?

A: I did not really see what happened, Mam [sic], what I know he was bumped.
This, despite his earlier declaration that he was seated in front of the bus beside the driver's seat and knew what
happened to the passengers who were clinging to the back of the jeepney. Indubitably, therefore, TEJADA was not a
credible witness, and his testimony is not worthy of belief.16ChanRoblesVirtualawlibrary
Consequently, the petitioner, being the owner of the bus and the employer of the driver, Edgar Calaycay, cannot escape
liability. Article 2176 of the Civil Code provides:
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Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this Chapter.
Complementing Article 2176 is Article 2180 which states the following:
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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 x x x.

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 x x x.

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.
Article 2180, in relation to Article 2176, of the Civil Code provides that the employer of a negligent employee is liable
for the damages caused by the latter. When an injury is caused by the negligence of an employee there instantly arises
a presumption of the law that there was negligence on the part of the employer either in the selection of his employee
or in the supervision over him after such selection. The presumption, however, may be rebutted by a clear showing on
the part of the employer that it had exercised the care and diligence of a good father of a family in the selection and
supervision of his employee. Hence, to escape solidary liability for quasi-delict committed by an employee, the
employer must adduce sufficient proof that it exercised such degree of care.17 In this case, the petitioner failed to do
so. The RTC and the CA exhaustively and correctly ruled as to the matter, thus:
chanRoblesvirtualLawlibrary
Thus, whenever an employee's (defendant EDGAR ALAYCAY) negligence causes- damage or injury to another, there
instantly arises a presumption that the employer (defendant-appellant) failed to exercise the due diligence of a good
father of the family in the selection or supervision of its employees. To avoid liability for a quasi-delict committed by its
employee, an employer must overcome the presumption by presenting convincing proof that it exercised the care and
diligence of a good father of a family in the selection and supervision of its employee. The failure of the defendant-
appellant to overturn this presumption was meticulously explained by the court a quo as follows:
chanRoblesvirtualLawlibrary
The position of the defendant company that it cannot be held jointly and severally liable for such damages because it
exercised the diligence of a good father of a family, that (sic) does not merit great credence.

As admitted, Edgar Calaycay was duly authorized by the defendant company to drive the bus at the time of the
incident. Its claim that it has issued policies, rules and regulation's to be followed, conduct seminars and see to it that
their drivers and employees imbibe such policies, rules and regulations, have their drivers and conductors medically
checked-up and undergo drug-testing, did not show that all these rudiments were applied to Edgar Calaycay. No iota
of evidence was presented that Edgar Calaycay had undergone all these activities to ensure that he is a safe and
capable drivers [sic]. In fact, the defendant company did not put up a defense on the said driver. The defendant
company did not even secure a counsel to defend the driver. It did not present any evidence to show it ever counseled
such driver to be careful in his driving. As appearing from the evidence of the defendant corporation, the driver at the
time of the incident was Calaycay Francisco (Exh. 9) and the conductor was Tejada. This shows that the defendant
corporation does not exercise the diligence of a good father of a family in the selection and supervision of the
employees. It does not even know the correct and true name of its drivers. The testimony of Rolando Abadilla, Jr. that
they do not have the records of Edgar Calaycay because they ceased operation due to the death of his father is not
credible. Why only the records of Edgar Calaycay? It has the inspection and dispatcher reports for January 9, 1998 and
yet it could not find the records of Edgar Calaycay. As pointed out by the Supreme Court in a line of cases, the evidence
must not only be credible but must come from a credible witness. No proof was submitted that Edgar Calaycay
attended such alleged seminars and examinations. Thus, under Art. 2180 of the Civil Code, Employers shall be liable for
the damage caused by their employees and household helper acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry. The liability of the employer for the tortuous acts or
negligence of its employer [sic] is primary and solidary, direct and immediate, and not conditional upon the insolvency
of prior recourse against the negligent employee. The cash voucher for the alleged lecture on traffic rules and
regulations (Exh. 12) presented by the defendant corporation is for seminar allegedly conducted on May 20 and 21,
1995 when Edgar Calaycay was not yet in the employ of the defendant corporation. As testified to by Rolando Abadilla,
Jr., Edgar Calaycay stated his employment with the company only in 1996. Rolando Abadilla, Jr. testified that copies of
the manual (Exh. 8) are given to the drivers and conductors for them to memorize and know the same, but no proof
was presented that indeed Edgar Calaycay was among the recipients. Nobody testified categorically that indeed Edgar
Calaycay underwent any of the training before being employed by the defendant company. All the testimonies are
generalizations as to the alleged policies, rules and regulations but no concrete evidence was presented that indeed
Edgar Calaycay underwent such familiarization, trainings and seminars before he got employed and during that time
that he was performing his duties as a bus driver of the defendant corporation. Moreover, the driver's license of the
driver was not even presented. These omissions did not overcome the liability of the defendant corporation under
Article 2180 of the Civil Code. x x x
The observation of the court a quo that defendant-appellant failed to show proof that EDGAR CALAYCAY did in fact
undergo the seminars conducted by it assumes greater significance when viewed in the light of the following admission
made by ROLANDO ABADILLA, JR., General Manager of the defendant-appellant corporation, that suggest compulsory
attendance of said seminars only among drivers and conductors in Manila, thus:
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xxxx

Q: How many times does (sic) the seminars being conducted by your company a year?
A: Normally, it is a minimum of two (2) seminars per year, sir.

Q: In these seminars that you conduct, are all drivers and conductors obliged to attend?
A: Yes, sir, if they are presently in Manila.

Q: It is only in Manila that you conduct seminars?

A: Yes, sir.

xxx
Moreover, with respect to the selection process, ROLANDO ABADILLA, JR. categorically admitted in open court that
EDGAR CALAYCAY was not able to produce the clearances required by defendant-appellant upon employment, thus:
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xxxx

Q: By the way, Mr. Witness, do you know this Edgar Calaycay who was once employed by your company as a driver?
A: Yes, sir.

Q: Have you seen the application of Edgar Calaycay?

A: Yes, sir.

Q: From what I have seen, what documents did he submit in applying as a driver in your business?

Atty. De Guzman: Very leading, your Honor.

Q: Before a driver could be accepted, what document is he required to submit?

A: The company application form; NBI clearance; police clearance; barangay clearance; mayor's clearance and other
clearances, sir.

Q: Was he able to reproduce these clearances by Mr. Calaycay?

A: No, sir.

x x x18ChanRoblesVirtualawlibrary
In the selection of prospective employees, employers are required to examine them as to their qualifications,
experience, and service records.19 On the other hand, due diligence in the supervision of employees includes the
formulation of suitable rules and regulations for the guidance of employees, the issuance of proper instructions
intended for the protection of the public and persons with whom the employer has relations through his or its
employees and the imposition of necessary disciplinary measures upon employees in case of breach or as may be
warranted to ensure the performance of acts indispensable to the business of and beneficial to their employer. To this,
we add that actual implementation and monitoring of consistent compliance with said rules should be the constant
concern of the employer, acting through dependable supervisors who should regularly report on their supervisory
functions.20 In this case, as shown by the above findings of the RTC, petitioner was not able to prove that it exercised
the required diligence needed in the selection and supervision of its employee.

Be that as it may, this doesn't erase the fact that at the time of the vehicular accident, the jeepney was in violation of its
allowed route as found by the RTC and the CA, hence, the owner and driver of the jeepney likewise, are guilty of
negligence as defined under Article 2179 of the Civil Code, which reads as follows:
chanRoblesvirtualLawlibrary
When the plaintiffs negligence was the immediate and proximate cause of his injury, he cannot recover damages. But if
his negligence was only contributory, the immediate and proximate cause of the injury being the defendant's lack of
due care, the plaintiff may recover damages, but the courts shall mitigate the damages to be awarded.
The petitioner and its driver, therefore, are not solely liable for the damages caused to the victims. The petitioner must
thus be held liable only for the damages actually caused by his negligence.21 It is, therefore, proper to mitigate the
liability of the petitioner and its driver. The determination of the mitigation of the defendant's liability varies depending
on the circumstances of each case.22 The Court had sustained a mitigation of 50% in Rakes v. AG & P;23 20%
in Phoenix Construction, Inc. v. Intermediate Appellate Court24 and LBC Air Cargo, Inc. v. Court of Appeals;25 and 40%
in Bank of the Philippine Islands v. Court of Appeals26 and Philippine Bank of Commerce v. Court of Appeals.27cralawred

In the present case, it has been established that the proximate cause of the death of Alberto Cruz, Jr. is the negligence
of petitioner's bus driver, with the contributory negligence of respondent Edgar Hernandez, the driver and owner of the
jeepney, hence, the heirs of Alberto Cruz, Jr. shall recover damages of only 50% of the award from petitioner and its
driver. Necessarily, 50% shall be bourne by respondent Edgar Hernandez. This is pursuant to Rakes v. AG & P and after
considering the circumstances of this case.

In awarding damages for the death of Alberto Cruz, Jr., the CA ruled as follows:
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For the death of ALBERTO CRUZ, JR. the court a quo awarded his heirs P50,000.00 as actual and compensatory
damages; P250,000.00 for loss of earning capacity; and another P50,000.00 as moral damages. However, as pointed out
in the assailed Decision dated January 30, 2008, only the amount paid (P25,000.00) for funeral services rendered by
Magalena Memorial Home was duly receipted (Exhibit "E-1"). It is settled that actual damages must be substantiated by
documentary evidence, such as receipts, in order to prove expenses incurred as a result of the death of the victim. As
such, the award for actual damages in the amount of P50,000.00 must be modified accordingly.

Under Article 2206 of the Civil Code, the damages for death caused by a quasi-delict shall, in addition to the indemnity
for the death itself which is fixed by current jurisprudence at P50,000.00 and which the court a quo failed to award in
this case, include loss of the earning capacity of the deceased and moral damages for mental anguish by reason of such
death. The formula for the computation of loss of earning capacity is as follows:

Net earning capacity = Life expectancy x [Gross Annual Income - Living Expenses (50% of gross annual income)], where
life expectancy = 2/3 (80 - the age of the deceased)

Evidence on record shows that the deceased was earning P6,000.00 a month as smoke house operator at Pampanga's
Best, Inc., as per Certification (Exhibit "K") issued by the company's Production Manager, Enrico Ma. O. Hizon, on March
18, 1998, His gross income therefore amounted to P72,000.00 [P6,000.00 x 12]. Deducting 50% therefrom (P36,000.00)
representing the living expenses, his net annual income amounted to P36,000.00. Multiplying this by his life expectancy
of 40.67 years [2/3(80-19)] having died at the young age of 19, the award for loss of earning capacity should have been
P1,464,000.00. Considering, however, that his heirs represented by his father, ALBERTO CRUZ, SR., no longer appealed
from the assailed Decision dated January 30, 2008, and no discussion thereon was even attempted in plaintiffs-
appellees' appeal brief, the award for loss of earning capacity in the amount of P250,000.00 stands.

Moral damages in the amount of P50,000.00 is adequate and reasonable, bearing in mind that the purpose for making
such award is not to enrich the heirs of the victim but to compensate them however inexact for injuries to their feelings.

xxx28ChanRoblesVirtualawlibrary
In summary, the following were awarded to the heirs of Alberto Cruz, Jr.:
chanRoblesvirtualLawlibrary
1) P25,000.00 as actual damages;

2) P250,000.00 for the loss of earning;

3) P50,000.00 as civil indemnity for the death of Alberto Cruz, Jr.; and

4) P50,000.00 as moral damages

Petitioner contends that the CA erred in awarding an amount for the loss of earning capacity of Alberto Cruz, Jr. It
claims that the certification from the employer of the deceased stating that when he was still alive - he earned
P6,000.00 per month was not presented and identified in open court.

In that aspect, petitioner is correct. The records are bereft that such certification was presented and identified during
the trial. It bears stressing that compensation for lost income is in the nature of damages and as such requires due
proof of the damages suffered; there must be unbiased proof of the deceased's average income.29

Therefore, applying the above disquisitions, the heirs of Alberto Cruz, Jr. shall now be awarded the following:
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1) P12,500.00 as actual damages;

2) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and

3) P25,000.00 as moral damages.

In the same manner, petitioner is also partly responsible for the injuries sustained by respondent Virginia Muñoz hence,
of the P16,744.00 actual damages and P30,000.00 moral damages awarded by the CA, petitioner is liable for half of
those amounts. Anent respondent Edgar Hernandez, due to his contributory negligence, he is only entitled to receive
half the amount (P40,200.00) awarded by the CA as actual damages which is P20,100.00.

As to the award of attorney's fees, it is settled that the award of attorney's fees is the exception rather than the general
rule; counsel's fees are not awarded every time a party prevails in a suit because of the policy that no premium should
be placed on the right to litigate. Attorney's fees, as part of damages, are not necessarily equated to the amount paid
by a litigant to a lawyer. In the ordinary sense, attorney's fees represent the reasonable compensation paid to a lawyer
by his client for the legal services he has rendered to the latter; while in its extraordinary concept, they may be awarded
by the court as indemnity for damages to be paid by the losing party to the prevailing party. Attorney's fees as part of
damages are awarded only in the instances specified in Article 220830 of the Civil Code. As such, it is necessary for the
court to make findings of fact and law that would bring the case within the ambit of these enumerated instances to
justify the grant of such award, and in all cases it must be reasonable.31 In this case, the RTC, in awarding attorney's
fees, reasoned out that [w]hile there is no document submitted to prove that the plaintiffs spent attorney's fees, it is clear
that they paid their lawyer in the prosecution of this case for which they are entitled to the same.32 Such reason is
conjectural and does not justify the grant of the award, thus, the attorney's fees should be deleted. However, petitioner
shall still have to settle half of the cost of the suit.chanrobleslaw

WHEREFORE, the Petition for Review on Certiorari under Rule 45, dated December 28, 2011, of petitioner Travel &
Tours Advisers, Inc. is DENIED. However, the Decision dated May 16, 2011 of the Court of Appeals is MODIFIED as
follows:

The petitioner and Edgar Calaycay are ORDERED to jointly and severally PAY the following:
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1. To respondent Alberto Cruz, Sr. and family:
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a) P12,500.00 as actual damages;

b) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and

c) P25,000.00 as moral damages.

2. To respondent Virginia Muñoz:
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a) P8,372.00 as actual damages;

b) P15,000.00 as moral damages.

3. To respondent Edgar Hernandez:
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a) P20,100.00 as actual damages, and
4. The sum of P2,235.00 as cost of litigation.
Respondent Edgar Hernandez is also ORDERED to PAY the following:
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1. To respondent Alberto Cruz, Sr. and family:
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a) P12,500.00 as actual damages;

b) P25,000.00 as civil indemnity for the death of Alberto Cruz, Jr., and

c) P25,000.00 as moral damages.

2. To respondent Virginia Muñoz:
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a) P8,372.00 as actual damages;

b) P15,000.00 as moral damages, and

3. The sum of P2,235.00 as cost of litigation.
SO ORDERED.

Velasco, Jr., (Chairperson), Perez, Reyes, and Jardeleza, JJ., concur.chanroblesvirtuallawlibrary

Endnotes:

1 Penned by Associate Justice Ramon M. Bato, Jr. with Associate Justices Juan Q. Enriquez, Jr. and Florito S. Macalino,
concurring; rollo, pp. 39-57.

2Id. at 58.

3 Penned by Judge Bernardita Gabitan Erum, id. at 79-98.

4 Complaint dated April 22, 1998, id. at 70.

5Rollo, p. 98.

6Id. at 56.

7Id. at 14-15.

8Fuentes v. Court of Appeals, 335 Phil. 1163, 1168 (1993).

9Gaw v. Intermediate Appellate Court, G.R. No. 70451, March 24, 1993, 220 SCRA 405, 413; citing Morales v. Court of
Appeals, 21A Phil. 674 (1991); and Navarra v. Court of Appeals, G.R. No. 86237, December 17, 1991, 204 SCRA 850.

10Reyes v. Court of Appeals, 328 Phil. 171 (1996); Vda. de Alcantara v. Court of Appeals, 322 Phil. 490 (1996); Quebrai v.
Court of Appeals, G.R. No. 101941, January 25, 1996, 252 SCRA 353, 368 (citing Calde v. Court of Appeals, G.R. No.
93980, June 27, 1994, 233 SCRA 376. See also Cayabyab v. The Honorable Intermediate Appellate Court, G.R. No. 75120,
April 28, 1994, 232 SCRA 1), Engineering & Machinery Corporation v. Court of Appeals, 322 Phil. 161 (1996), Chua Tiong
Tay v. Court of Appeals, 312 Phil. 1128 (1995), Dee v. Court of Appeals, G.R. No. 111153, November 21, 1994, 238 SCRA
254, 263, and Asia Brewery, Inc. v. Court of Appeals, G.R. No. 103543, July 5, 1993, 224 SCRA 437, 443; Fuentes v. Court of
Appeals, supra note 8.

11Boneng y Bagawili v. People, 363 Phil. 594, 605 (1999).

12Rollo, p. 44. (Emphasis ours)

13Raynera v. Hiceta, 365 Phil. 546 (1999).

14Id.

15Rollo, pp. 44-48. (Citations omitted; emphasis ours)

16Id. at 48-49. (Citations omitted, emphasis ours)

17Baliwag Transit, Inc. v. CA, et al., 330 Phil. 785, 789-790 (1996), citing China Air Lines, Ltd. v. Court of Appeals, 264 Phil.
15, 26 (1990).

18Rollo, pp. 49-52. (Citations omitted).

19Metro Manila Transit Corporation v. Court of Appeals, 359 Phil. 18, 32 (1998).

20Metro Manila Transit Corporation v. Court of Appeals, G.R. No. 104408, June 21, 1993, 223 SCRA 521, 540-541.

21 See Syki v. Begasa, 460 Phil. 381, 391 (2003).

22Lambert v. Heirs of Castillon, 492 Phil. 384, 396 (2005).

23 7 Phil. 359 (1907).

24 232 Phil. 327 (1987).cralawred

25 311 Phil. 715 (1995).

26 G.R. No. 102383, November 26, 1992, 216 SCRA 51.cralawred

27 336 Phil. 667 (1997).

28Rollo, pp. 52-54. (Citations omitted)

29People v. Ereno, 383 Phil. 30, 46 (2000).

30 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 bad faith in refusing to satisfy the plaintiffs 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 employer's 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. (Emphasis supplied)

31Benedicto v. Villaflores, 646 Phil. 733, 742 (2010).

32Rollo, p. 98.