October 7 (Monday 3

rd
Week)

3. TRANSPORTATION OF PASSENGERS

a. Governing Law

i. NCC, Article 1754 to 1763

b. Extraordinary Diligence (NCC Art. 1755)

i. PAL v. Court of Appeals, 275 SCRA 621, G.R. No.120262, 17 July 1997.-
Facts:
On 23 October 1988, Leovigildo A. Pantejo, then City Fiscal of Surigao City, boarded a PAL
plane in Manila and disembarked in Cebu City where he was supposed to take his connecting
flight to Surigao City.
However, due to typhoon Osang, the connecting flight to Surigao City was cancelled.
To accommodate the needs of its stranded passengers, PAL initially gave out cash assistance of P
100.00 and, the next day, P200.00, for their expected stay of 2 days in Cebu.
Pantejo requested instead that he be billeted in a hotel at the PALs expense because he did not
have cash with him at that time, but PAL refused. Thus, Pantejo was forced to seek and accept the
generosity of a co-passenger, an engineer named Andoni Dumlao, and he shared a room with the
latter at Sky View Hotel with the promise to pay his share of the expenses upon reaching Surigao.
On 25 October 1988 when the flight for Surigao was resumed, Pantejo came to know that the hotel
expenses of his co-passengers, one Superintendent Ernesto Gonzales and a certain Mrs. Gloria
Rocha, an Auditor of the Philippine National Bank, were reimbursed by PAL.
At this point, Pantejo informed Oscar Jereza, PALs Manager for Departure Services at Mactan
Airport and who was in charge of cancelled flights, that he was going to sue the airline for
discriminating against him.
It was only then that Jereza offered to pay Pantejo P300.00 which, due to the ordeal and anguish
he had undergone, the latter declined.
Pantejo filed a suit for damages against PAL with the RTC of Surigao City. On 18 March 1991,
the trial court ordered PAL to pay Pantejo P300.00 for actual damages, P150,000.00 as moral
damages, P100,000.00 as exemplary damages, P15,000.00 as attorneys fees, and 6% interest from
the time of the filing of the complaint until said amounts shall have been fully paid, plus costs of
suit.
The appellate court affirmed the decision of the court a quo, but with the exclusion of the award of
attorneys fees and litigation expenses. Hence, the appeal by certiorari.
The Supreme Court affirmed the challenged judgment of Court of Appeals, subject to the modification
regarding the computation of the 6% legal rate of interest on the monetary awards granted therein to
Pantejo.
1. Contract to transport passenger different for any other contractual relation
A contract to transport passengers is quite different in kind and degree from any other contractual relation,
and this is because of the relation which an air carrier sustains with the public. Its business is mainly with
the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air
carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carriers
employees naturally could give ground for an action for damages.
2. Circumstance taken into consideration for lower court to declare bad faith existed
In declaring that bad faith existed, the appellate court took into consideration the following factual
circumstances: (1) Contrary to PALs claim that cash assistance was given instead because of non-
availability of rooms in hotels where PAL had existing tie-ups, the evidence shows that Sky View Hotel,
where Pantejo was billeted, had plenty of rooms available. (2) It is not true that the P300.00 paid to Ernesto
Gonzales, a co- passenger of Pantejo, was a refund for his plane ticket, the truth being that it was a
reimbursement for hotel and meal expenses. (3) It is likewise not denied that said Gonzales and Pantejo
came to know about the reimbursements only because another passenger, Mrs. Rocha, informed them that
she was able to obtain the refund for her own hotel expenses. (4) PAL offered to pay P300.00 to Pantejo
only after he had confronted the airlines manager about the discrimination committed against him, which
the latter realized was an actionable wrong. (5) Service Voucher 199351, presented by PAL to prove that it
gave cash assistance to its passengers, was based merely on the list of passengers already given cash
assistance and was purportedly prepared at around 10:00 A.M. of 23 October 1988. This was 2 hours
before Pantejo came to know of the cancellation of his flight to Surigao, hence Pantejo could not have
possibly refused the same.
4. Assuming hotel accommodations or cash assistance merely privilege, no reason for discriminatory
and prejudicial conduct
Assuming arguendo that the hotel accommodations or cash assistance given in case a flight is cancelled is
in the nature of an amenity and is merely a privilege that may be extended at its own discretion, but never a
right that may be demanded by its passengers, and that the airline passengers have no vested right to the
amenities in case a flight is cancelled due to force majeure, what makes PAL liable for damages in the
present case and under the facts obtaining herein is its blatant refusal to accord the so-called amenities
equally to all its stranded passengers who were bound for Surigao City. No compelling or justifying reason
was advanced for such discriminatory and prejudicial conduct.
5. Standard company policy as to cash assistance and hotel accommodations; Testimony relating to
said fact
It has been sufficiently established that it is PALs standard company policy, whenever a flight has been
cancelled, to extend to its hapless passengers cash assistance or to provide them accommodations in hotels
with which it has existing tie-ups. (1) PALs Mactan Airport Manager for departure services, Oscar Jereza,
admitted that the PAL has an existing arrangement with hotel to accommodate stranded passengers, and
that the hotel bills of Ernesto Gonzales were reimbursed obviously pursuant to that policy. (2) Two
witnesses presented by Pantejo, Teresita Azarcon and Nerie Bol, testified that sometime in November,
1988, when their flight from Cebu to Surigao was cancelled, they were billeted at Rajah Hotel for two
nights and three days at the expense of PAL. This was never denied by PAL. (3) Ernesto Gonzales,
Pantejos co- passenger on that fateful flight, testified that based on his previous experience hotel
accommodations were extended by PAL to its stranded passengers either in Magellan or Rajah Hotels, or
even in Cebu Plaza. Thus, the Court views as impressed with dubiety PALs present attempt to represent
such emergency assistance as being merely ex gratia and not ex debito.
6. Passengers not duly informed; Inferior quality of service and professionalism
While PAL insists that the passengers were duly informed that they would be reimbursed for their hotel
expenses, it miserably and significantly failed to explain why the other passengers were given
reimbursements while Pantejo was not. Although Gonzales was subsequently given a refund, this was only
so because he came to know about it by accident through Mrs. Rocha. PAL could only offer the strained
and flimsy pretext that possibly the passengers were not listening when the announcement was made. This
is absurd because when Pantejo came to know that his flight had been cancelled, he immediately proceeded
to PALs office and requested for hotel accommodations. He was not only refused accommodations, but he
was not even informed that he may later on be reimbursed for his hotel expenses. This explains why his co-
passenger, Andoni Dumlao, offered to answer for Pantejos hotel bill and the latter promised to pay him
when they arrive in Surigao. Had both known that they would be reimbursed by the airline, such
arrangement would not have been necessary.Therefore, the refund of hotel expenses was surreptitiously and
discriminatorily made by PAL since the same was not made known to everyone, except through word of
mouth to a handful of passengers. This is a sad commentary on the quality of service and professionalism
of an airline company, which is the countrys flag carrier at that.
7. PAL acted in bad faith
Herein, PAL acted in bad faith in disregarding its duties as a common carrier to its passengers and in
discriminating against Pantejo. It was even oblivious to the fact that Pantejo was exposed to humiliation
and embarrassment especially because of his government position and social prominence, which altogether
necessarily subjected him to ridicule, shame and anguish. It remains uncontroverted that at the time of the
incident, Pantejo was then the City Prosecutor of Surigao City, and that he is a member of the Philippine
Jaycee Senate, past Lt. Governor of the Kiwanis Club of Surigao, a past Master of the Mount Diwata Lodge
of Free Masons of the Philippines, member of the Philippine National Red Cross, Surigao Chapter, and past
Chairman of the Boy Scout of the Philippines, Surigao del Norte Chapter.
8. Refusal of Pantejo of offered amount justified
Herein, Pantejo had every right to make such refusal since it evidently could not meet his needs and that
was all that PAL claimed it could offer. His refusal to accept the P300.00 proffered as an afterthought when
he threatened suit was justified by his resentment when he belatedly found out that his co-passengers were
reimbursed for hotel expenses and he was not. Worse, he would not even have known about it were it not
for a co-passenger who verbally told him that she was reimbursed by the airline for hotel and meal
expenses. It may even be said that the amounts, the time and the circumstances under which those amounts
were offered could not solve the moral wounds inflicted by PAL on Pantejo but even approximated insult
added to injury.
9. Discriminatory act makes PAL liable for moral damages; Alitalia Airways vs. CA
The discriminatory act of PAL against Pantejo ineludibly makes the former liable for moral damages under
Article 21 in relation to Article 2219 (10) of the Civil Code. As held in Alitalia Airways vs. CA, et al., such
inattention to and lack of care by the airline for the interest of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount to bad faith which entitles the passenger to the
award of moral damages.
11. Awards for actual, moral and exemplary damages just and equitable; Travelling public should be
afforded protection and duties of common carriers enforced
Under the peculiar circumstances of the case, the awards for actual, moral and exemplary damages granted
in the judgment of the lower court, for the reasons meticulously analyzed and thoroughly explained in its
decision, are just and equitable. It is high time that the travelling public is afforded protection and that the
duties of common carriers, long detailed in our previous laws and jurisprudence and thereafter collated and
specially catalogued in our Civil Code in 1950, be enforced through appropriate sanctions.


ii. Jesusa Vda. De Nueca, v. The Manila Railroad Company, Court of Appeals C.A.
No. 31731, January 30, 1968.
iii. Calalas v. Court of Appeals, 332 SCRA 356, G.R. No. 122039, May 13, 2000.-
Calalas v. Court of Appeals 332 SCRA 356
Facts:
Private respondent Eliza Sunga, then freshman at Siliman University , took a passenger jeepney
owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity, Sunga
was given by the conductor an extension seat, a wooden stool at the back of the door at the rear
end of the vehicle. When the jeepney stopped to a let passenger off and Sunga was about to give
way to the outgoing passenger, an Izuzu truck driven by Verena and owned by Salva bumped the
left rear portion of the jeepney. Sunga sustained multiple injuries and remained on a cast for three
months.

Sunga filed a complaint for damages against Calalas, for breach of contract of carriage. Calalas, on
the other hand,filed a third party complaint against Francisco Salva, the owner of the truck.

The lower court rendered judgment against Salva and absolved Calalas of liability.
It took cognizance of other case (Civil Case No. 3490), filed by Calalas against Salva and
Verena ,for quasi-delict, in which branch 37 of the same court held Salva and his driver Verena
jointly liable to Calalas for the damage to his jeepney
The CA reversed the lower courts ruling on the ground the ground that Sungas cause of action
was based on a contract of carriage, not quasi-deplict, and that the common carrier failed to
exercise the diligence required under the Civil Code. The appellate court dismissed the third-party
complaint against Salva and adjudged Calalas liable for damages to Sunga.
Issue: w/n calalas negligent? Yes
Held:
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. In case of death or injuries to passengers,
Article 1756 of the Civil Code provides that common carriers are presumed to have been at fault
or have acted negligently unless they proved that they observed extraordinary diligence as defined
in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the
burden of proof.

It is immaterial that the proximate cause of the collision between the jeepney and the truck was the
negligence of the truck driver. The doctrine of proximate cause is applicable only in action for
quasi- delict, not in actions involving breach of contract. The doctrine is a device for imputing
liability to a person where there is no relation between him and another party. In such a case, the
obligation is created by law itself. But, where there is a pre-existing contractual relation between
parties, it is the parties themselves who create the obligation, and the function of the law is merely
to regulate the relation thus created.


iv. Japan Airlines v. Court of Appeals, G.R. No. 118664, August 07, 1998.-
Japan Airlines v. CA, Enrique Agana, Angela Agana, Adalia Francisco
(1998)

Doctrine: 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

Facts:
Private respondents separately boarded JAL flights from California to Mania
Incentive from JAL: free overnight stay at Hotel Nikko during layover at Narita, Japan
But connecting flight to Manila was cancelled as the major eruption of Mt. Pinatubo forced NAIA
to close indefinitely
JAL paid for 2 more nights of passengers at Hotel Nikko but said that it will no longer defray
succeeding hotel and meal expenses
This forced the respondents pay for their own stay and meals at Narita
JAL also reclassified the passengers from transit to new passengers
o The stranded passengers were obliged to make necessary arrangement for their flight to
Manila
o They were placed on waiting list and were compelled to stay at the airport the whole day
just so they can make sure that they get a flight.
The passengers filed complaint for damages with RTC

Issue: WON JAL is obliged to shoulder the passengers expenses as long as they were still stranded at
Narita?

Held: No. When party unable to fulfill his obligation due to force majeure, general rule is he cannot be
held liable for damages for non-performance
JAL prevented from resuming flight to Manila due to effects of MT. Pinatubo eruption
Whatever losses or damages hotel and meal expenses the stranded passengers incurred cannot
be charged to JAL
Predicament not due to JALs fault or negligence
Airline passengers take risk incident to mode of travel adverse weather condition, extreme
climatic changes,
o Common carrier not insurer of all risks
The Court deleted award of actual, moral and exemplary damages.
JAL ordered to pay only nominal damage of P100K as it declassified passengers from transit to
new passenger when it has an obligation to look after the comfort and convenience of its
passengers.



c. Duration of Responsibility

i. Dangwa v. Court of Appeals, 202 SCRA 574, G.R. No. 95582, October 7,
1991.-GAUDIEL

FACTS:
Private respondents filed a complaint 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. 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. Petitioners alleged that they had observed and continued to observe
the extraordinary diligence and that it was the victims own carelessness and
negligence which gave rise to the subject incident.

RTC pronounced that Pedrito Cudiamat was negligent, which negligence
was the proximate cause of his death. However, Court of Appeals set aside the
decision of the lower court, and ordered petitioners to pay private respondents
damages due to negligence.

ISSUE:
WON the CA erred in reversing the decision of the trial court and in
finding petitioners negligent and liable for the damages claimed.

HELD:

CA Decision AFFIRMED
The testimonies of the witnesses show that that the bus was at full stop when the
victim boarded the same. 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. Under such circumstances, it cannot be
said that the deceased was guilty of negligence.

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. 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.

Common carriers, from the nature of their business and reasons of public policy,
are bound to observe extraordinary diligence for the safety of the passengers
transported by the according to all the circumstances of each case. 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.

2. 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.

i. La Mallorca v. Court of Appeals, 17 SCRA 739, G.R. No. L-20761, 27 July
1966.-

Doctrine: Duration of Liability of Public Vehicle It is a recognized rule that the relation between carrier
and passengers does not cease at the moment the passenger alights from the carriers premises 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.




Facts:
1. Plaintiffs husband and wife Beltran, together with their minor children (Milagros paid bus fare
while Raquel 4 yrs old, and Fe-2 yrs. old were free-of-charges), boarded Pambusco Bus, which
is owned by La Mallorca bound for Anao, Mexico Pamapanga.
2. Upon arrival at their destination, plaintiffs and their children alighted from the bus and the father
led them to a shaded spot about 4-5 meters away from the bus.
3. However, the father returned to the bus to get a piece of baggage which was left behind. Unknown
to him, he was followed by her daughter Raquel.
4. While the father was still on the running board awaiting for the conductor to give his baggage, the
bus started to run (note that the bus engine was never turned off) notwithstanding the fact that the
conductor has not given the driver the customary signal to start, since said conductor was still
attending to the baggage left behind.
5. The bus was estimated to have moved about 10 meters.
6. Raquel, who was near the bus, was run over and killed.
7. Lower court rendered judgment against La Mallorca, holding it liable for breach of contract of
carriage. CA affirmed the award of damages and even increased the value of damages from
P3,000 to 6,000 but ruled that the case was a quasi-delict. La Mallorca the CA erred in holding it
liable under quasi-delict considering that the case was one for breach of contract of carriage,
however, when the child was killed, she was no longer a passenger and therefore the contract of
carriage also terminated.

Issue: Whether or not the contract of carriage between the parties ceases the moment the passenger
alighted form the vehicle, thus making La Mallorca not liable for the death of Racquel Belttran?

Held: NO. See Doctrine.
In the present case, the father returned to the bus to get one of his baggage which was not unloaded when
they alighted from the bus. Raquel, the child that she was, must have followed the father. However,
although the father was still on the running board of the bus awaiting 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. In the first place, the driver, although stopping the bus,
nevertheless did not put off the engine. Secondly, he started to run the bus even before the bus conductor
gave him the signal to go and while the latter was still unloading part of the baggage of the 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.


NB: TORTS - QUASI DELICT: While the court ruled that the case is breach of contract of carriage, it also
argued that the case may also fall within the ambit of quasi-delict, in the alternative. Averment of quasi-
delict is permissible under the Rules of Court, although incompatible with the contract of carriage. The
Rules of Court allows the plaintiffs to allege causes of action in the alternative, be they compatible with
each other or not (Sec. 2, Rule 1). Even assuming arguendo that the contract of carriage has already
terminated, herein petitioner can be held liable for the negligence of its driver pursuant to Art. 2180 of
NCC.

ii. Aboitiz Shipping v. Court of Appeals, 179 SCRA 95, G.R. No. 84458,
November 6, 1989.-
iii.
Facts: On May 11, 1975, Anacleto Viana boarded M/|V Antonio from Occidental Mindoro bound for
Manila. Upon arrival on May 12, 1975, the passengers therein disembarked through a gangplank
connecting the vessel to the pier. Viana, instead of disembarking through the gangplank, disembarked
through the third deck, which was at the same level with the pier. An hour after the passengers
disembarked, Pioneer stevedoring started to operate in unloading the cargo from the ship. Viana then went
back, remembering some of his cargoes left at the vessel. At that time, while he was pointing at the crew of
the vessel to where his cargoes were loaded, the crane hit him, pinning him between the crane and the side
of the vessel. He was brought to the hospital where he died 3 days after (May 15). The parents of Anacleto
filed a complaint against Aboitiz for breach of contract of carriage.

The trial court ruled in favor of the plaintiffs. Then both Aboitiz and Pioneer filed a motion for
reconsideration, upon which the trial court issued an order absolving Pioneer from liability but not Aboitiz.
On appeal, CA affirmed the trial court ruling. Hence, this petition.

Issue: Whether or not Viana is still considered a passenger at the time of the incident?

Held: Yes. The La Mallorca case is applicable in 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 owners dock or premises. Once created, the relationship will not
ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carriers
conveyance or had a reasonable opportunity to leave the carriers 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. 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 carriers premises to claim his baggage.

The reasonableness of the 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.

Where a passenger dies or is injured, the common carrier is presumed to have been at fault or to have acted
negligently. This gives rise to an action for breach of contract 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, which, in the instant case, necessarily includes its
failure to safeguard its passenger with extraordinary diligence while such relation subsists.


b. Presumption of Negligence (NCC Art. 1756)

i. Pestano v. Sumayang, 346 SCRA 870, G.R. No. 139875, December 04, 2000.-
Doctrine:
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

Facts:
At around 2:00pm 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 by petitioner Gregorio Pestao and owned by Metro Cebu Autobus Corporation (Metro
Cebu), which had tried to overtake them, sending the motorcycle and its passengers hurtling upon the
pavement.
Sumayang was pronounced dead on arrival in the hospital in Sogod while Romagos died the day after.
Pestao blamed Sumayang for the accident. He testified that when he first blew the horn, the
motorcycle which was about 15-20 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 Tabagon Road and was bumped by his bus;
that he was able to apply his break only after the impact. His testimony was corroborated by one of the
passengers; that the motorcycle suddenly turned left without giving any signal to indicate its
maneuver; that the bus was going at 40kph when the accident occurred.
RTC ruled against Pestao, finding him to have been negligent in driving the passenger bus that hit the
deceased. Also, the court ruled the Metro Cebu is directly and primarily liable, along with Pestao, as
the latters employer under Art. 2180 of the CC for failing 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 the maintenance of its vehicles.
CA affirmed RTCs ruling
o Note CA found that the bus speedometer was faulty

Issue:
W/N CA correctly ruled in applying Sec. 45 of RA 4136 when it ruled that negligence in driving was the
proximate cause of the accident?

Held:
Yes. Based on the testimony of respondents witness (eyewitness) who 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 the latter and his companion were thrown off the motorcycle after it was bumped by the
overspeeding bus.
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
Petitioners aver that the CA was wrong in attributing the accident to a faulty speedometer and
implying that the accident could have been avoided had this instrument been properly functioning.
o This contention has no factual basis. Under Articles 2180 and 2176 of the CC, 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
The CA said that allowing Pestao 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.
o The 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.


ii. Ludo v. Court of Appeals, 351 SCRA 35, G.R. No. 125483, February 01, 2001.-
FACTS
Petitioner Ludo and Luym Corporation owns and operates a private wharf used by vessels for
loading and unloading of copra and other processed products. Among its fender facilities are
fender pile clusters for docking and mooring.
Private Respondent Gabisan Shipping Lines was the registered owner and operator of the motor
vessel MV Miguela, while the other private respondent, Anselmo Olasiman, was its captain.
On May 1990, while MV Miguela was docking at petitioners wharf, it rammed and destroyed a
fender pile cluster. Petitioners demanded damages from private respondents.
Petitioners evidence showed that at 1:30pm, MV Miguela came to dock at petitioners wharf.
Naval, petitioners employee, guided the vessel to its docking place. After the guide (small rope)
was thrown from the vessel and while the petitioners security guard was pulling the big rope to be
tied to the bolar, the vessel did not slow down. Naval shouted reverse to the vessel, but it was
too late. The impact disinclined the pile cluster and deformed the cable wires wound around it.
Naval immediately informed the vessels captain and its chiefmate of the incident, and instructed
the guard-on-duty, Alfredo Espina, to make a spot report.
Private respondents denied the incident. Their witness claimed the damage, if any, must have
occurred prior to their arrival and caused by another vessel or ordinary wear and tear.
ISSUE: Are respondents liable for damages, specifically res ipsa loquitour?
HELD: Yes. Res Ipsa Loquitur means that where the thing which causes injury is shown to be under the
management of the defendant, and the accident is such as in the ordinary course of things does not happen
if those who have the management use proper care, it affords reasonable evidence, in the absence of an
explanation by the defendant, that the accident arose from want of care. The doctrine recognizes that
parties may establish prima facie negligence without direct proof and allows the principle to substitute for
specific proof of negligence.
All the requisites of Res Ipsa Loquitur are present in this case. First, MV Miguela was under the exclusive
control of its officers and crew. Petitioner did not have direct evidence on what transpired within as the
officers and crew maneuvered the vessel to its berthing place. We note the Court of Appeals finding that
Naval and Espina were not knowledgeable on the vessels maneuverings, and could not testify on the
negligence of the officers and crew. Second, aside from the testimony that MV Miguela rammed the cluster
pile, private respondent did not show persuasively other possible causes of the damage.
There exists a presumption of negligence against private respondents which we opine the latter failed to
overcome. Additionally, petitioner presented tangible proof that demonstrated private respondents
negligence. As testified by Capt. Olasiman, from command of slow ahead to stop engine, the vessel
will still travel 100 meters before it finally stops. However, he ordered stop engine when the vessel was
only 50 meters from the pier. Further, he testified that before the vessel is put to slow astern, the engine has
to be restarted. However, Olasiman can not estimate how long it takes before the engine goes to slow astern
after the engine is restarted. From these declarations, the conclusion is that it was already too late when the
captain ordered reverse. By then, the vessel was only 4 meters from the pier, and thus rammed it.
Respondent companys negligence consists in allowing incompetent crew to man its vessel. As shown also
by petitioner, both Captain Olasiman and Chief Mate Gabisan did not have a formal training in marine
navigation. The former was a mere elementary graduatewhile the latter is a high school graduate. Their
experience in navigationwas only as a watchman and a quartermaster, respectively. The petition is
GRANTED.

iii. Philippine Rabbit v. Intermediate Appellate Court, 189 SCRA 158, G.R. No.
66102-04, 30 August 1990.
Facts:

About 11:00 o'clock in the morning on December 24, 1966, Catalina Pascua, Caridad Pascua, Adelaida Estomo,
Erlinda Meriales, Mercedes Lorenzo, Alejandro Morales and Zenaida Parejas boarded the jeepney owned by spouses
Isidro Mangune and Guillerma Carreon and driven by Tranquilino

Upon reaching barrio Sinayoan, San Manuel, Tarlac, the right rear wheel of the jeepney was detached. Manalo
stepped on the brake, as a result of which, the jeepney which was then running on the eastern lane (its right of way)
made a sudden U-turn, invading and eventually stopping on the western lane of the road in such a manner that the
jeepney's front faced the south (from where it came) and its rear faced the north (towards where it was going).

The jeepney practically occupied and blocked the greater portion of the western lane, which is the right of way of
vehicles coming from the north, among which was Bus No. 753 of petitioner Philippine Rabbit Bus Lines, Inc. (Rabbit)
driven by Tomas delos Reyes. Almost at the time when the jeepney made a sudden U-turn and encroached on the
western lane of the highway the bus bumped from behind the right rear portion of the jeepney. As a result of the
collision, three passengers of the jeepney (Catalina Pascua, Erlinda Meriales and Adelaida Estomo) died while the
other jeepney passengers sustained physical injuries
After conducting the investigation, the police filed with the Municipal Court of San Manuel, Tarlac, a criminal complaint
against the two drivers for Multiple Homicide. At the preliminary investigation, a probable cause was found with respect
to the case of Manalo, thus, his case was elevated to the Court of First Instance. However, finding no sufficiency of
evidence as regards the case of delos Reyes, the Court dismissed it. Manalo was convicted and sentenced to suffer
imprisonment. Not having appealed, he served his sentence.
Complaints for recovery of damages were then filed before the Court of First Instance of Pangasinan. The heirs of the
victims anchored their suits against spouses Mangune and Carreon and Manalo on their contractual liability. As against
Rabbit and delos Reyes, plaintiffs based their suits on their culpability for a quasi-delict

On December 27, 1978, the trial court rendered its decision finding Manalo negligent and made Mangune, Carreon and
Manalo liable jointly and severally to the victims and the bus company (Bus Company made a cross claim)

On appeal, the CA reversed the decision on the liability to the Bus Company by finding delos Reyes negligent. This
decision also made the bus company liable for damages against the victims. The CA used as basis for its ruling the 1)
the doctrine of last clear chance, (2) the presumption that drivers who bump the rear of another vehicle guilty and the
cause of the accident unless contradicted by other evidence, and (3) the substantial factor test.

ISSUE: WON De Los Reyes was negligent

HELD:NO
According to the SC, "the principle about "the last clear" chance, would call for application in a suit between the owners
and drivers of the two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to
enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its
owners on the ground that the other driver was likewise guilty of negligence
On the presumption that drivers who bump the rear of another vehicle guilty and the cause of the accident unless
contradicted by other evidence, it was held that this presumption has been contradicted by evidence through the
undisputed fact that the U-turn made by the jeepney was abrupt that delos Reyes could not have anticipated the
sudden U-turn executed by Manalo
On the substantial factor test, it was held that De Los Reyes had little time to react to the situation. To require de los
Reyes to avoid the collision is to ask too much from him. Aside from the time element involved (2-3 seconds to react),
there were no options available to him.
Note: Substantial factor test: under the substantial factor test that if the actor's conduct is a substantial factor in
bringing about harm to another, the fact that the actor neither foresaw nor should have foreseen the extent of the harm
or the manner in which it occurred does not prevent him from being liable
Also, other pieces of evidence shows Manalo as clearly negligent such as the testimony of his passenger Caridad
Pascua that a long ways before reaching the point of collision, the Mangune jeepney was "running fast" that his
passengers cautioned driver Manalo to slow down but did not heed the warning: that the right rear wheel was detached
causing
Therefore, the SC using the factual matters and duly proven evidence, found that the proximate cause of the accident
was the negligence of Manalo and spouses Mangune and Carreon. They all failed to exercise the precautions that are
needed precisely.
Note: The SC also modified the ruling making only Mangune and Carreon as liable (absolving Manalo) as under the
breach of a contract of carriage, only the carrier is liable to the victims as the contract is only between the carrier and
the passengers.






iv. Juntilla v. Fontanar, 136 SCRA 624, G.R. No. L-45637, May 31, 1985.-
Facts
Plaintiff was a passenger of a public utility jeepney. Jeepney was driven by
defendant Camoro.
Jeepney was registered under defendant Fontanar but actually owned by
defendant Banzon.
When the vehicle reached Mandaue City, rear right tire exploded, causing it
to turn turtle.
Plaintiff was thrown out of the vehicle, sustained injuries, and lost
consciousness. When he came to his senses, he discovered that his Omega
watch was lost. He had his wounds treated in Danao City Hospital
Plaintiff asked his father in law to look for the watch in the place of the
accident but this proved fruitless.
Issue
1. W/N defendants failed to exercise utmost and extraordinary diligence
required of common carriers contemplated under Art. 1755 of the Civil Code
of the Philippine
Held/Ratio
1. YES
CFI Ruled that it was a fortuitous even therefore defendant is exonerated of
liability
CFI relied on the ruling of the CA in Rodriguez v. Red Line Transportation A tire
blow-out does not constitute negligence unless the tire was already old and should not
have been used at all. Indeed, this would be a clear case of fortuitous event.
SC misapprehension of facts by the CFI. There are specific acts of negligence on the
part of the respondents.
The evidence shows that the jeepney was running at a very fast speed
before the accident. A jeep running at a regular and safe speed will not
jump into a ditch when its right rear tire blows up.
Also, jeepney was overloaded at the time of the accident.
Elements of fortuitous event:
NOT (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. It
was caused by negligence or mechanical defects therefore not fortuitous
(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.
(4) the obligor (debtor) must be free from any participation in the aggravation of the
injury resulting to the creditor.
Common carriers should teach their drivers not to overload their vehicles,
not to exceed safe and legal speed limits, and to know the correct
measures to take when a tire blows up, insuring the safety of passengers
at all times.



c. Non-Exemption from Liability (NCC Art. 1756-1760)

i. Ong Yiu v. Court of Appeals, 91 SCRA 223, G.R. No. L-40597, 29 June 1979.-
Source:
Facts: On august 26, 1967, Ong Yiu was a fare paying passenger of respondent PAL from Mactan, Cebu to
Butuan City wherein he was scheduled to attend a trial. As a passenger, he checked in one piece of luggae,
blue maleta for which he was issued a claim ticket. Upon arrival at Butuan City, petitioner claimed his
luggage but it could not be found. PAL Butuan sent a message to PAL Cebu which in turn sent a message
to PAL Manila that same afternoon. PAL Manila advised PAL Cebu that the luggage has been overcarried
to Manila and that it would be forwarded to PAL Cebu that same day. PAL Cebu then advised PAL Butuan
that the luggage will be forwarded the following day, on scheduled morning flight. This message was not
received by PAL Butuan as all the personnel had already gone for the day. Meanwhile, Ong Yiu was
worried about the missing luggage because it contained vital documents needed for the trial the next day so
he wired PAL Cebu demanding delivery of his luggage before noon that next day or he would hold PAL
liable for damages based on gross negligence. Early morning, petitioner went to the Butuan Airport to
inquire about the luggage but did not wait for the arrival of the morning flight at 10:00am. which carried
his luggage. A certain Dagorro, a driver of a colorum car, who also used to drive the petitioner volunteered
to take the luggage to the petitioner. He revelaed that the documents were lost. Ong Yiu demanded from
PAL Cebu actual and compensatory damages as an incident of breach of contract of carriage.

Issue:
1. Whether or not PAL is guilty of only simple negligence and not gross negligence?
2. Whether the doctrine of limited liability doctrine applies in the instant case?

Held: PAL had not acted in bad faith. It exercised due diligence in looking for petitioners luggage which
had been miscarried. Had petitioner waited or caused someone to wait at the airport for the arrival of the
morning flight which carried his luggage, he would have been able to retrieve his luggage sooner. In the
absence of a wrongful act or omission or fraud, the petitioner is not entitled to moral damages. Neither is he
entitled to exemplary damages absent any proof that the defendant acted in a wanton, fraudulent, reckless
manner.

The limited liability applies in this case. On the presumed negligence of PAL, its liability for the loss
however, is limited on the stipulation written on the back of the plane

Ticket which is P100 per baggage. The petitioner not having declared a greater value and not having called
the attention of PAL on its true value and paid the tariff therefore. The stipulation is printed in reasonably
and fairly big letters and is easily readable. Moreso, petitioner had been a frequent passenger of PAL from
Cebu to Butuan City and back and he being a lawyer and a businessman, must be fully aware of these
conditions.

ii. Savellano v. Northeast, 405 SCRA 416, G.R. No. 151783, July 08, 2003.-
Facts:
Petitioner (Savellano) was an Ilocos Sur Mayor for many terms, former
Chairman of COMELEC and RTC judge. His wife is a businesswoman and
operates several rural banks in Ilocos Sur. Their son, at the time of the incident
was the Vice-Government of Ilocos Sur.
On October 27, 1991 @1:45pm, petitioners departed from San Francisco on
board Northwest Airlines (business class) bound for Manila using NW roundtrip
tickets issued at respondents Manila office.
After being on board for 2 hours NWs pilot made an emergency landing in
Seattle after announcing that a fire had started in one of the planes engine.
Petitioners and other passengers were instructed that they will be instead going
home to Manila the next day using the same boarding passes with the same
seating arrangement.
Passengers were brought to Seattle Red Lion Hotel at the expense of the
respondent and was advised to be at the Seattle Airport at 7am the following day.
Before leaving the hotel, petitioner met co-passenger who was also traveling
Business Class and informed them that they will be leaving October 29 with the
same plane and itinerary.
Because of the engine failure, Virginia (petitioners wife) developed
nervousness and took valium to calm her nerves and cough syrup for the fever
and colds she had developed during the trip
When they reached the Seattle airport, ground crew advised them that instead of
flying directly to Manila they will take the connecting flight from Seattle-LA-
Manila. When petitioner insisted for a direct flight the ground crew just told
them to hurry up as they were the last passenger to board.
Before finally boarding for Manila via Seoul their 3 small handcarried items
which were not padlocked were not allowed to be placed in the passengers
baggage compartments by an arrogant NW crew
Upon arrival to NAIA and when passengers were claiming their luggage, they
discovered that the would have been handcarried items that were not allowed to
be placed in the passengers baggage compartment had been ransacked and the
contents thereof were stolen (jewelries, watches, computer, camera, clothes and
shoes)
Petitioner demanded P3M as damages but respondent refused to accede to the
demand
Issue: W/N petitioners discriminatory bump-off from NW flight on October 28 (not being the
diversion of the distressed plane on October 27) is a breach of contract?

Ruling:
YES.
A contract is the law between the parties. In determining whether petitioners rights were
violated, we must look into its provisions, which are printed on the airline ticket. Condition 9
in the agreement states that a x x x [c]arrier may without notice substitute alternate carriers
or aircraft, and may alter or omit stopping places shown on the ticket in case of necessity. x x
x

SC finds nothing authorizing Northwest to decide unilaterally, after the distressed flight
landed in Seattle, what other stopping places petitioners should take and when they should
fly. Although, Condition 9 on the ticket allowed respondent to substitute alternate carriers or
aircraft without notice. However, nothing there permits shuttling passengers -- without so
much as a by your-leave -- to stopping places that they have not been previously notified of,
much less agreed to or been prepared for. Substituting aircrafts or carriers without notice is
entirely different from changing stopping places or connecting cities without notice.

The ambiguities in the contract, being one of adhesion, should be construed against the
party that caused its preparation -- in this case, respondent.Since the conditions enumerated on
the ticket do not specifically allow it to change stopping places or to fly the passengers to
alternate connecting cities without consulting them, then it must be construed to mean that
such unilateral change was not permitted.
Lastly, change in petitioners flight itinerary does not fall under the situation covered by
the phrase may alter or omit stopping places shown on the ticket in case of necessity. A
case of necessity must first be proven where the respondent failed to prove.
Hence, SC held that in the absence of a demonstrated necessity thereof and their
rerouting to Los Angeles and Seoul as stopping places without their consent, respondent
committed a breach of the contract of carriage.


d. Limited Liability and Defenses (NCC Art. 1757-1758)

i. Yobido v. Court of Appeals, 281 SCRA 1, G.R. No. 113003, October 17, 1997.-
Facts:
On 26 April 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and
Jasmin, boarded 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 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 21 November 1988, a complaint for breach of contract of carriage, damages and attorneys
fees was filed by Leny and her children against Alberta Yobido, the owner of the bus, and
Cresencio Yobido, its driver, before the RTC of Davao City.
When the Yobidos 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.
The Supreme Court affirmed the Decision of the Court of Appeals subject to the modification that the
Yobidos shall, in addition to the monetary awards 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, be liable for the award of exemplary
damages in the amount of P20,000.00; with costs against the Yobidos.
1. Ruling of the Court of Appeals; Explosion of the tire not in itself a fortuitous event
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 the passenger could not have been prevented even if he had exercised due care to avoid the same,
but he was not presented as witness.
3. Carrier not an insurer of safety of its passengers; However, when passenger injured or dies,
common carrier presumed negligent
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. However, when a passenger is injured or dies, while
traveling, the law presumes that the common carrier is negligent.
4. Article 1755 NCC; Diligence required
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.
5. Article 1756 of the Civil Code; Presumption of negligence
Article 1756 of the Civil Code provides that 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.
6. Culpa contractual; Disputable presumption of negligence, how to overcome
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, 1755 and 1756 of the Civil Code or that
the death or injury of the passenger was due to a fortuitous event. 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.
7. Characteristics of a fortuitous event
A fortuitous event is possessed of the following characteristics: (a) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent of
human will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free from any participation
in the aggravation of the injury resulting to the creditor.
8. Article 1174 NCC
As Article 1174 provides, no person shall be responsible for a fortuitous event which could not be foreseen,
or which, though foreseen, was inevitable.
9. There must be an entire exclusion of human agency from the cause of injury or loss
Herein, 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 5 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.
10. Common carrier not absolved by force majeure alone, should prove not negligent
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.
11. Contradictory facts as to bus speed resolved in favor of liability due to presumption of negligence
of carrier
The Yobidos 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.
12. Routinary check-ups of vehicles parts part of exercise of extraordinary diligence of the carrier
Proof that the tire was new and of good quality is not sufficient proof that it was not negligent. The
Yobidos should have shown that it undertook extraordinary diligence in the care of its carrier, such as
conducting daily routinary check-ups of the vehicles parts. Although it may be impracticable, to require of
carriers to test the strength of each and every part of its vehicles before each trip; due regard for the
carriers 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.
13. Failure of carrier to overthrow presumption of negligence makes it liable for damages
Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing
evidence, the Yobidos held liable for damages.

ii. Bayasen v. Court of Appeals, 103 SCRA 197, G.R. No. L-25785, February 26,
1981.-
Facts: Saturnino Bayasen, a Rural Health Physician in Sagada went to barrio Ambasing to visit a patient.
Two nurses from Saint Theodores Hospital in Sagada, Elena Awichen and Dolores Balcita, rode with him
in a jeep assigned for the use of the Rural Health Unit. Later, at Ambasing, the girls, who wanted to gather
flowers, again asked if they could ride with him up to a certain place on the way to barrio Suyo which he
intended to visit anyway. Dr. Bayasen again allowed them to ride, Elena sitting herself between him and
Dolores. On the way, at Barrio Langtiw, the jeep went over a precipice. About 8 feet below the road, it was
blocked by a pine tree. The three, were thrown out of the jeep. Elena was found dead lying in a creek
further below; she suffered a skull fracture.
Saturnino Bayasen was then charged with Homicide Thru Reckless Imprudence.
Issue: Whether the proximate cause of the death of Awichen was Bayasens negligence in driving at an
unreasonable speed
Held: The Court ruled that the proximate cause of the tragedy was the skidding of the rear wheels of the
jeep and not the unreasonable speed of the petitioner because there was no evidence on record to prove or
support the finding that the petitioner was driving at an unreasonable speed. Dolores Balcita, the star
witness, stated the following:
1. Bayasen was driving his jeep moderately (8 to 10 kph) just before the accident;
2. She did not notice anything wrong with the jeep;
3. Road was fair enough to drive on, but was moist or wet and weather was fair;
4. Bayasen not under the influence of alcohol; and
5. She also categorically stated that she did not know what caused the jeep to fall into the precipice.
It is a well-known physical fact that cars may skid on greasy or slippery roads, as in the instant case,
without fault on account of the manner of handling the car. Skidding means partial or complete loss of
control of the car under circumstances not necessarily implying negligence. It may occur without fault.
Herein, under the particular circumstances, Bayasen who skidded could not be regarded as negligent, the
skidding being an unforeseen event, so that Bayasen had a valid excuse for his departure from his regular
course.
Additional note: Bayasen alleged that he avoided the embankment and stayed along the side of the
mountain (not touching the mountain), that while doing so, Awichen suddenly held the stirring wheel and
stepped on his foot (that is on the accelerator) thereby accelerating the jeep. The jeep then swerved right
and went off. *Balcita, when questioned though categorically denied this allegation of Bayasen*
Relevance of case to our topic for tonight:
Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in
Articles 1733 and 1755.
Art. 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.

iii. Gatchalian v. Delim, 203 SCRA 126, G.R. No. 56487, 21 October 1991.-
Facts:
Petitioner Reynalda Gatchalian boarded, as a paying passenger, respondent's "Thames" mini bus.
On the way, while the bus was running along the highway, "a snapping sound" was suddenly
heard at one part of the bus and, shortly thereafter, the vehicle bumped a cement flower pot on the
side of the road, went off the road, turned turtle and fell into a ditch. Several passengers, including
petitioner Gatchalian, were injured. They were promptly taken to Bethany Hospital at San
Fernando, for medical treatment. Upon medical examination, petitioner was found to have
sustained physical injuries.
While injured. passengers were confined in the hospital, Mrs. Adela Delim, wife of respondent, visited
them and later paid for their hospitalization and medical expenses. She also gave petitioner P12.00
with which to pay her transportation expense in going home from the hospital. However, before Mrs.
Delim left, she had the injured passengers, including petitioner, sign an already prepared Joint
Affidavit which stated, among other things:
xxx xxx xxx
That we are no longer interested to file a complaint, criminal or civil against the said driver and
owner of the said Thames, because it was an accident and the said driver and owner of the said
Thames have gone to the extent of helping us to be treated upon our injuries.
xxx xxx xxx
Notwithstanding this document, petitioner Gathalian filed with the then Court of First Instance of La
Union an action extra contractu to recover compensatory and moral damages.
In defense, respondent averred that the vehicular mishap was due to force majeure, and that petitioner
had already been paid and moreover had waived any right to institute any action against him (private
respondent) and his driver, when petitioner Gatchalian signed the Joint Affidavit
Issue 1: W/n waiver is valid? No
A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms
which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains
to him. 4 A waiver may not casually be attributed to a person when the terms thereof do not explicitly
and clearly evidence an intent to abandon a right vested in such person.
Because what is involved here is the liability of a common carrier for injuries sustained by passengers
in respect of whose safety a common carrier must exercise extraordinary diligence, we must construe
any such purported waiver most strictly against the common carrier. For a waiver to be valid and
effective, it must not be contrary to law, morals, public policy or good customs. To uphold a
supposed waiver of any right to claim damages by an injured passenger, under circumstances like those
exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted
by the law from common carriers and hence to render that standard unenforceable. We believe such a
purported waiver is offensive to public policy.
Issue 2: Whether or not private respondent has successfully proved that he had exercised extraordinary
diligence to prevent the mishap involving his mini-bus? No

Where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor
is exempt from liability non-performance.
Essential characteristics: (1) the cause of the unforeseen and unexpected occurence, 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 must be free from any participation in the
aggravation of the injury resulting to the creditor.
To exempt a common carrier from liability for death or physical injuries to passengers upon the ground
of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was
entirely independent of the human will, but also that it was impossible to avoid. Any participation by
the common carrier in the occurrence of the injury will defeat the defense of force majeure
The record yields affirmative evidence of fault or negligence on the part of respondent common carrier.
Driver refused or neglected to stop the mini bus after heard once again the snapping sound and the cry
of alarm from one of the passengers, constitute wanton disregard of the safety of the passengers, and
hence gross negligence.
iv. Fortune Express v. Court of Appeals, 305 SCRA 14, G.R. No. 119756, March
18, 1999.-
v.
Doctrine: Art. 1174 of the NCC: fortuitous event is an occurrence which could not be foreseen or which
though foreseen is inevitable. Factor of unforeseen-ability should be present.

Facts:
A bus of Fortune Express figure in accident with a jeep in Kauswagan, Lanao del Norte
Resulted to death of several passengers including 2 Maranaos
A Phil. Constabulary agent Generalao investigated
o Found that owner of jeep is a Maranao too
o Several members of Maranao tribe planning to take revenge
Burn buses of Fortune Express
The PC agent advised Fortunes operations manager Diosdado Bravo about this information and to
take necessary precautionary measures
4 days after the accident, armed Maranaos pretended to be passenters and seized a bus owned by
Fortune and set it on fire
o one of the passengers, Atty. Talib Caorong was shot and killed during the incident
Fortune disclaimed liability, contended that incident is fortuitous event

WON: Fortune Bus is liable to pay damages to the heirs of Atty. Caorong? - YES!

HELD:
Fortune liable for damages
Art. 1755 of the NCC: requires utmost diligence of a very cautious person with due regard for all
circumstances
Factor of unforeseen-ability (second requisite of force majeure is lacking)
Despite report from PC-agent that the Maranaos were planning to burn some of Fortunes buses
and assurances of Bravo that Fortune will take necessary precaution
o Fortune did not do anything to protect the safety of the passengers

vi. Singson v. Court of Appeals, 282 SCRA 149, G.R. No. 119995, November 18,
1997.-
FACTS:

Petitioner CARLOS SINGSON and his cousin Crescentino Tiongson
bought from respondent Cathay Pacific Airways two (2) open-dated,
identically routed, round trip plane tickets (Manila to LA and vice versa).
Each ticket consisted of six (6) flight coupons, each would be detached at
the start of each leg of the trip. Singson failed to obtain a booking in LA
for their to Manila; apparently, the coupon corresponding to the 5th leg of
the trip was missing and instead the 3rd was still attached. It was not until
few days later that the defendant finally was able to arrange for his return
to Manila.

Singson commenced an action for damages based on breach of contract of
carriage against CATHAY before the Regional Trial Court.

CATHAY alleged that there was no contract of carriage yet existing such
that CATHAYs refusal to immediately book him could not be construed
as breach of contract of carriage.

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 attorneys fees, and, to pay the costs.

On appeal by CATHAY, the Court of Appeals reversed the trial courts
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 attorneys fees as well.

ISSUES:

1.) whether a breach of contract was committed by CATHAY when it
failed to confirm the booking of petitioner.

2.) whether the carrier was liable not only for actual damages but also for
moral and exemplary damages, and attorneys fees.

HELD:

1.) Yes. 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 had 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 Hong Kong back to the Philippines, and the carriers
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. 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. , x x x the loss
of the coupon was attributable to the negligence of CATHAYs agents and
was the proximate cause of the non-confirmation of petitioner's return
flight.

2.) Yes. 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, or where the carrier is
guilty of fraud or bad faith, 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.

x x x these circumstances reflect the carriers 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.

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. 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. Damages are
not intended to enrich the complainant at the expense of the defendant.
They are awarded only to alleviate the moral suffering that the injured
party had undergone by reason of the defendant's culpable action. There
is no hard-and-fast rule in the determination of what would be a fair
amount of moral damages since each case must be governed by its own
peculiar facts.

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.

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.
3.
a. Acts of Passenger and Others (NCC Art. 1761-1763)

i. Manila Railroad v. Ballesteros, 16 SCRA 641, G.R. No. L-19161 April 29,
1966.-

Doctrine: Court only made use of the provisions of Article 1763 of the NCC and Section 48(b) of the
Motor Vehicle Law (copied in verbatim below) to uphold the culpability of the common carrier (who acted
below the standard diligence required) for willful act of passenger which injured other passengers.

Facts:
1. Macaria Ballesteros, Timoteo Camayo, Jose Reyes and Julian Maimban, Jr. were passengers
on petitioner's bus, driven by Jose Anastacio.
2. In Bayombong, Nueva Vizcaya, Anastacio stopped the bus and got off to replace a defective
spark plug.
3. While replacing the bus parts, one Dionisio Abello (not petitioners employee), an auditor
assigned to defendant company by the General Auditing Office, took the wheel and told the
driver to sit somewhere else.
4. With Abello driving, the bus proceeded on its way, picking up passengers from time to time.
Anastacio tried twice to take the wheel back but Abello never relinquished the post.
5. Accordingly, while the bus was traversing between Km. posts 328 and 329 (in Isabela) a
freight truck driven by Marcial Nocum bound for Manila, was also in the same place; when
these two vehicles were about to meet at the bend of the road, Marcial Nocum, in trying to
evade several holes on the right lane, where his truck was running, swerved his truck towards
the middle part of the road and in so doing, the left front fender and left side of the freight
truck smashed the left side of the bus resulting in extensive damages to the body of the bus
and injuries to seventeen of its passengers, including Ballesteros et.al.
6. Trial Court found that Abella was reckless when he was driving the bus at the rate of about
40-50 kph on a bumby road at that moment of the collision., and imputed culpability to the
petitioner, being the owner of the passenger bus.
7. Petitioner contented that Abello was not its employee it should not be held responsible for his
acts.

Issue: WON the common carrier may be held responsible injuries incurred by other passengers for the
willful act of its own passenger?

Held: YES. Court ruled on the negligence of common carrier considering the provisions of Article 1763 of
the Civil Code and section 48 (b) of the Motor Vehicle Law, which respectively provide as follows:
Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the
wilfull 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.

Sec. 48(b). No professional chauffeur shall permit any unlicensed person to drive the motor
vehicle under his control, or permit a person, sitting beside him or in any other part of the car, to
interfere with him in the operation of the motor vehicle, by allowing said person to take hold of
the steering wheel, or in any other manner take part in the manipulation or control of the car.

ii. Bachelor Express v. Court of Appeals, 188 SCRA 261, G.R. No. 85691, 31 July
1990

Facts: The bus owned by Petitioners came from Davao City on its way to Cagayan de Oro City passing
Butuan City. While at Tabon-Tabon, Butuan City, the bus picked up a passenger, that about fifteen minutes
later, a passenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic
among the passengers. 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 filed a complaint for "sum of money" against Bachelor Express, Inc.,
its alleged owner and the driver Rivera. The lower court dismissed the complaint. CA reversed the decision,
hence the instant petition.
Issue: Whether or not petitioner is negligent.
Held: Yes. The liability, if any, of the petitioners is anchored on culpa contractual or breach of contract of
carriage. Art. 1732, 1733, 1755 and 1756 are applicable. There is no question that Bachelor is a common
carrier. Hence, Bachelor 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 Bachelor and,
while passengers of the bus, suffered injuries which caused their death. Consequently, pursuant to Article
1756 of the Civil Code, Bachelor 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 denies liability for the death of Beter and Rautraut in that their death 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. 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. In this case,
Bachelor was negligent.
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.

iii. Smith Bell v. Borja 383 SCRA 341, G.R. No. 143008, June 10, 2002.-
Doctrine:
The owner or the person in possession and control of a vessel and the vessel are all liable for all natural
and proximate damage caused to persons and property by reason of negligent management or
navigation

Facts:
On Sept 23, 1987, Smith Bell filed a written request w/ the Bureau of Customs for the attendance of the
latters inspection team on vessel M/T King Family which was due to arrive at the port of Manila the
next day.
Said vessel contained 750 metric tons of alkyl benzene & methyl methacrylate monomer
On the same day, the supervising customs inspector instructed respondent Borja to board said vessel &
perform his duties as inspector upon the vessels arrival until its departure. At that time, Borja was a
customs inspector of the Bureau of Customs receiving a salary of P31,188.25 annually.
At around 11am, on Sept. 24, 197, while the vessel was unloading chemicals unto two barges owned by
ITTC, a sudden explosion occurred setting the vessels afire. Upon hearing the explosion, Borja, who
was at the time inside the cabin preparing reports, ran outside to check what happened. Again, another
explosion was heard.
Seeing the fire and fearing for his life, Borja hurriedly jumped overboard to save himself. However, the
water was likewise on fire due mainly to the spilled chemicals. Despite the tremendous heat, Borja
swam his way for 1 hour until he was rescued by the people living in the squatters area and sent to San
Juan De Dios Hospital.
o He was diagnosed to be permanently disabled due to the accident, and so, he made demands
against Smith Bell and ITTC for damages caused by the explosion. Both, however, denied
liabilities and attributed to each other negligence

Issue:
W/N Smith Bell should be held liable for the injuries of Borja? Yes
W/N ITTC should be held liable for the injuries of Borja? No.

Held:
The Court upheld RTCs and CAs ruling that the fire and explosion had originated from petitioners
vessel.
o The attempts of the petitioner to shift the blam on ITTC were all for naught. There is nothing
in the record to support petitioners contention that the fire and explosion originated from
the barge of ITTC.
Negligence is conduct that creates undue risk of harm to another. It is the failure to observe that degree
of care, precaution and vigilance that the circumstances justly demand, whereby that other person
suffers injury. Petitioners vessel was carrying chemical cargo. While knowing that their vessel was
carrying dangerous inflammable chemicals, its officers and crew failed to take all the necessary
precautions to prevent an accident. Petitioner was, therefore negligent.
The 3 elements of quasi-delict are
Damages suffered by the plaintiff
Fault or negligence of the defendant
Connection of cause and effect between the fault or negligence of the defendant and the
damages inflicted on the plaintiff.
All these were established in the case. Knowing fully well that it was carrying dangerous chemicals,
petitioner was negligent in not taking all the necessary precautions in transporting the cargo
As a result of the fire & the explosion during the unloading of the chemicals from petitioners vessel,
Respondent Borja suffered from a lot of injuries
o Hence, the owner or the person in possession and control of a vessel and the vessel are all
liable for all natural and proximate damage caused to persons and property by reason of
negligent management or navigation

4. RECOVERABLE DAMAGES(See NCC Part XVIII Damages)

i. Regional Container Lines v. Netherlands Insurance, 598 SCRA 304, G.R. No.
168151, September 4, 2009.-
FACTS
RCL is a foreign corporation based in Singapore. It does business in the Philippines through its
agent, EDSA Shipping, a domestic corporation. Respondent Netherlands Insurance Company
(Philippines), Inc. (Netherlands Insurance) is likewise a domestic corporation engaged in the
marine underwriting business.
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. (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.
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 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.
ISSUE : Can Netherlands recover damages from petitioners?
HELD: Yes. In maritime law, it is settled that cargoes while being unloaded generally remain under the
custody of the carrier. Thus Netherlands may recover damages. To overcome the presumption of
negligence, the common carrier must establish by adequate proof that it exercised extraordinary diligence
over the goodsit must do more than merely show that some other party could be responsible for the
damage. 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; and (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.
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 fanwhich caused the fluctuation of the
temperature in the refrigerated containerwas 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.


ii. Sulpicio Lines v.Curso, 615 SCRA 575, G.R. No. 157009. March 17, 2010.-
On October 23, 1988, Dr. Curso boarded at the port of Manila the MV Doa Marilyn, an inter-island vessel
owned and operated by petitioner Sulpicio Lines, Inc., bound for Tacloban City. Unfortunately, the MV
Doa Marilyn sank in the afternoon of October 24, 1988 due to Typhoon Unsang. The body of Dr. Curso
was not recovered

On January 21, 1993 the surviving brothers and sisters of Dr. Curso, sued the petitioner in the RTC in Naval,
Biliran to claim damages based on breach of contract of carriage by sea, averring that the petitioner had
acted negligently in transporting Dr. Curso and the other passengers. Dr. Curso does not have any
ascendants and descendants and as such, the brothers and sisters contend that they are entitled as heirs
to damages.

The Sulpicio Lines denied liability, insisting that the sinking of the vessel was due to force majeure, which
exempted a common carrier from liability. It averred that the MV Doa Marilyn was seaworthy in all
respects
On July 28, 1995, the RTC dismissed the complaint upon its finding that the sinking of the vessel was due
to force majeure. The RTC concluded that the officers of the MV Doa Marilyn had acted with the
diligence required of a common carrier

However, the CA found inadequate proof to show that Sulpicio Lines, Inc., or its officers and crew, had
exercised the required degree of diligence to acquit the appellee of liability

It was ruled by the CA that the defendant must compensate the plaintiffs for moral damages that they
suffered as a result of the negligence in the amount of P100,000.

Sulpicio Lines insists that the CA committed grievous errors in holding that the respondents were entitled
to moral damages as the brothers and sisters of the late Dr. Curso.

ISSUE: Are brothers and sisters of the victim entitled for moral damages?

HELD:NO

According to the SC, as a general rule, moral damages are not recoverable in actions for damages
predicated on a breach of contract, unless there is fraud or bad faith. As an exception, moral damages
may be awarded in case of breach of contract of carriage that results in the death of a passenger, in
accordance with Article 1764, in relation to Article 2206 (3), of the Civil Code:
Art. 2206 (3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may
demand moral damages for mental anguish by reason of the death of the deceased.
As clearly indicated, the SC held that brothers and sisters of the deceased are not included in the
enumeration.
Note: Essentially, the purpose of moral damages is indemnity or reparation, that is, to enable the injured
party to obtain the means, diversions, or amusements that will serve to alleviate the moral suffering he
has undergone by reason of the tragic event. According to Villanueva v. Salvador,
13
the conditions for
awarding moral damages are: (a) there must be an injury, whether physical, mental, or psychological,
clearly substantiated by the claimant; (b) there must be a culpable act or omission factually established;
(c) the wrongful act or omission of the defendant must be the proximate cause of the injury sustained by
the claimant; and (d) the award of damages is predicated on any of the cases stated in Article 2219 of the
Civil Code.
In fine, moral damages may be recovered in an action upon breach of contract of carriage only when: (a)
where 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.
iii. Air Frances v. Gillego, 638 SCRA 472, G.R. No. 165266, December 15, 2010.-

Air France vs. Gillego

Facts
Respondent Gillego, a congressman, left Manila via petitioners aircraft
bound to Paris. When he got to Paris, he waited for his connecting flight to
Budapest.
Respondent found out there was an earlier flight bound for Budapest so he
made arrangements and changed his booking with petitioner.
When respondent arrived in Budapest, his check in baggage was nowhere to
be found. He informed the petitioners office about his situation and they
suggested that he wait in his hotel for the luggage but it never came despite
respondents repeated follow up inquiries
When respondent got back to the Philippines, his lawyer wrote petitioner
about the lost luggage and resulting damages suffered in Budapest.
Respondent was deprived of his personal effects and his speech and notes for
the conference he attended. Because of this, respondent had to spend $1000,
in addition to having to make a new speech, which was difficult because he
lacked data and information. A demand of $1M was made by respondent.
Petitioner continued to ignore follow ups regarding respondents lost
luggage
Respondent filed a complaint for damages against the petitioner alleging by
reason of its negligence and breach of obligation to transport and deliver his
luggage, respondent suffered inconvenience, serious anxiety, physical
suffering and sleepless nights. As a common carrier which advertises and
offers its services to the public, petitioner is under obligation to observe
extraordinary diligence in the vigilance over checked-in luggage
Petitioner filed their answer admitting to the allegations but claiming that
their liability is governed by the Warsaw Convention. Petitioners liability for
lost or delayed registered baggage of respondent is limited to 250 francs per
kilogram or US$20.00. Petitioner said that it has taken all necessary
measures to avoid loss of respondents baggage. The loss of respondents
luggage is due to or occasioned by force majeure or fortuitous event or other
causes beyond the carriers control.
ISSUES
1. The amounts for moral and exemplary awarded to respondent are excessive
and unreasonable.
2. There is no legal basis that petitioners actions were attended by gross
negligence, bad faith, and wilful misconduct.
HELD/RATIO
TC - found there was gross negligence on the part of petitioner which failed to
retrieve respondents checked-in luggage up to the time of the filing of the complaint
and ignored respondents repeated follow-ups. Also petitioner guilty of wilful
misconduct as it disregarded the rights of respondent who was no ordinary
individual but a high government official. As to the applicability of the limited
liability for lost baggage under the Warsaw Convention, the trial court rejected the
argument of petitioner citing the case of Alitalia v. Intermediate Appellate Court.
CA sustained TC ruling except removed actual damages because luggage was
finally found and returned to respondent
SC appeal via rule 45
The law governing common carriers consequently imposes an exacting
standard. Article 1735 of the Civil Code provides that in case of lost or
damaged goods, 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.
The aggrieved party does not have to prove that the common carrier was at
fault or was negligent. All that he has to prove is the existence of the contract
and the fact of its non-performance by the carrier. Respondents checked-in
luggage was not found upon arrival at his destination and was not returned
to him until about two years later.
The presumption of negligence was not overcome by the petitioner.
In awarding moral damages for breach of contract of carriage, the breach
must be wanton and deliberately injurious or the one responsible acted
fraudulently or with malice or bad faith.
Bad faith should be established by clear and convincing evidence. The settled
rule is that the law always presumes good faith such that any person who
seeks to be awarded damages due to the acts of another has the burden of
proving that the latter acted in bad faith or with ill motive.
Yes, petitioner is liable for moral damages. There was not even any attempt
to explain the reason for the loss of respondents luggage. Petitioner did not
give the attention and care due to its passenger whose baggage was not
transported and delivered to him at his travel destination and scheduled
time. Inattention to and lack of care for the interest of its passengers who are
entitled to its utmost consideration, amount to bad faith which entitles the
passenger to an award of moral damages.
Yes, petitioner is liable for exemplary damages. The aim of awarding
exemplary damages is to deter serious wrongdoings. Article 2216 of the Civil
Code provides that assessment of damages is left to the discretion of the
court according to the circumstances of each case. The amount of damages
must be fair, reasonable and proportionate to the injury suffered. In this case
the air carrier failed to act timely on the passengers predicament caused by
its employees mistake and more than ordinary inadvertence or inattention.
The passenger failed to show any act of arrogance, discourtesy or rudeness
committed by the air carriers employees, the amounts of P200,000.00,
P50,000.00 and P30,000.00 as moral damages, exemplary damages and
attorneys fees would be sufficient and justified.


iv. Northwest Airlines v. Catapang, 594 SCRA 401, G.R. No. 174364, July 30,
2009.-

FACTS: Delfin S. Catapang requested First United Travel, Inc. (FUT) to issue in his favor a ticket that
would allow rebooking or rerouting of flights within the United States. FUT informed him that Northwest
Airlines, Inc. (Northwest) was willing to accommodate his request provided that he will pay an additional
US$50 for every rebooking or rerouting of flight. Catapang agreed with the condition.

Upon Catapangs arrival in New York, he called up Northwests office, which informed him that his ticket
was not rebookable or reroutable. He thus proceeded to Northwests nearest ticketing office where he
was treated in a rude manner by an employee who informed him that his ticket was not rebookable or
reroutable. He was further informed that his ticket was of a restricted type, and he could not rebook
unless he pays US644.00. Catapang paid that amount for rebooking.

Catapang, upon his return, filed with RTC of Makati a complaint for damages against Northwest. The RTC
ruled that Northwest was liable for breach of contract of carriage. On appeal, the Court of Appeals,
affirmed the trial courts Decision.

ISSUES: Whether or not Northwest was right to assail the award to Catapang of moral and exemplary
damages by virtue of breach of contract

HELD: When Catapang inquired from Northwests agent FUT if he would be allowed to rebook/reroute
his flight, FUT advised him that he could, on the condition that he would pay $50 for every rebooking. He
was not told by FUT and the ticket did not reflect it that the ticket being issued to him was a "restricted
type" to call for its upgrading before a rebooking/rerouting Northwests breach in this case was aggravated
by the undenied treatment received by Catapang when he tried to rebook his ticket. Instead of civilly
informing Catapang that his ticket could not be rebooked, Northwsts agent in New York exhibited
rudeness in the presence of Catapangs brother-in-law and other customers, insulting Catapang by telling
him that he could not understand English.

Passengers have the right to be treated by a carriers employees with kindness, respect, courtesy and due
consideration. They are entitled to be protected against personal misconduct, injurious language, indignities
and abuses from such employees. So it is that any discourteous conduct on the part of these employees
toward a passenger gives the latter an action for damages against the carrier.

v. Cathay Pacific v. Spouses Vasquez, G.R. 150843, March 14, 2003, 399 SCRA
207-
Facts:
Cathay is a common carrier engaged in the business of transporting passengers
and goods by air.
As part of its marketing strategy, Cathay accords its frequent flyers membership
in its Marco Polo Club. The members enjoy several privileges, such as priority
for upgrading of booking without any extra charge whenever an opportunity
arises. Hence, frequent flyer booked in business class has priority got upgrading
to First Class if the Business Class section is fully booked.
The respondents (spouses Vasquez) are frequent flyers of Cathay and are gold
Card members of its Marco Polo Club
On September 24, the Vasquezes (w/their maid and 2 friends) went to HK for
pleasure and business.
For their return flight to Manila on September 28, 2hours before the departure
the Vasquezes and their companions checked in their luggage and were given
their Business Class boarding passes.
When boarding time was announced and as they approved the electronic
machine reader at the gate they was a message saying SEAT CHANGE from
business class to first class for the Vasquezes
Vasquez refused and informed the crew that they will not avail the privilege but
the crew insisted and told them that if they will not avail the privilege they will
not be allowed to take the flight so they gave in.
Upon their return, the Vasquezes demanded that they be indemnified for P1M
for the humiliation and embarrassment (they alleged that the crew obstinately,
uncompromisingly, and in a load, discourteous and harsh voice threatened them)
and a written apology for the management of Cathay.When Cathay failed to give
them feedback, Vasquezes filed a complaint.
Cathay claims that the crew in HK did not humiliate nor shouted at them and
further that the upgrading was done in good faith and that overbooking is an
accepted practice in airline industry and is in accordance with the International
Air Transport Association since a lot of passengers do not show up for their
flight.
Issue: W/N involuntary upgrading an airline passengers accommodation from one class
to a more superior class at no extra cost a breach of contract of carriage that would entitle
the passenger to an award for damages?

Ruling: YES. Breach of contract is defined as the failure without legal reason to comply
with the terms of the contract . In previous cases, the breach of contract of carriage
consisted in either bumping off of a passenger with confirmed reservation or the
downgrading of a passengers seat accommodation from one class to a lower class.
In this case, what happened was the reverse. Although Vasquez never denied
that they were members of Cathays Marco Polo Club which entitles them for a
priority upgrade of their seat accommodation at no extra cost. BUT just like any
other privileges, such may be waived. The Vasquezes should have been
consulted first if they wanted to avail the privilege or not before their seat
assignments were given to other passengers. It should not be imposed to them
over their vehement objection. Hence, by insisting on the upgrade, Cathay
breached its contract of carriage with the Vasquezes.

BUT, SC is not convinced that the upgrading or the breach of contract was attended by
fraud or bad faith hence the Vasquezes absence any persuasive proof. Vasquez were not
induced to agree to the upgrade through insidious words or deceitful machination or
through willful concealment of material facts and neither was the transfer of seat effected
for some evil or devious purpose. Upgrading was actually for better condition and
definitely for the benefit of the passenger.

SC was also not persuaded by Vasquezes argument that the overbooking itself
constitute bad faith. Sec 3 of Economic Regulation of the Civil Aeronotics
Board allows overbooking as long as it does not exceed to 10% of the seating
capacity.

Hence, since the breach of contract was not attended by fraud or bad faith SC deleted the
award for exemplary damages.