5.

3 7

Guerrero vs. Madrigal Shipping

Facts:

Petitioners are the wife and daughter of the deceased. They alleged that on
November 1, 1949 Pacifico Acacio entered into a contract of carriage with
defendant whereby for certain consideration the latter undertook to carry the
former on it vessel "M.S. Regulus" from Malangas, Zamboanga, to the City of
Manila; that while the vessel was passing San Jose, Antique, its crew without
taking the necessary precaution managed and steered the same in a reckless
and imprudent manner thereby causing the vessel to capsized and resulting to
the death of Pacifico Acacio.

They brought the action some 7 years later, on November 1, 1955. Defendants
sought to have the case dismissed as it is allegedly already barred the statute of
limitations, arguing that the since the nature of the action is one for recovery of
damages which is not based on a written contract, the action is already barred
by the statute of limitations.

Issue:
W/N the ticket itself could serve as the written contract

Held:

Yes. The ticket contains the terms of the contract.

This ticket is in itself a complete written contract by and between the shipper
and the passenger. It has all the elements of a complete contract, namely: (1)
the consent of the contracting parties manifested by the fact that the passenger
boarded the ship and the shipper consents or accepts him in the sip for
transportation; (2) cause or consideration which is the fare paid by the passenger
as stated in the ticket; and (3) object, which is the transportation of the
passenger from the place of departure to the place of destination which are
stated in the ticket.

*case is remanded to the lower court

Phil Am Gen vs. Sweet Lines

Facts:
A foreign common carrier took on board cargoes for shipment to Manila and later
on for transshipment to Davao. The consignee, Tagum, insured the cargoes with
PhilAm Gen. Upon discharge, it was found out that there was shortages in the
cargo, while some were damaged. After trial, the TC ordered Sweet Lines, among
others, liable to PhilAm Gen & Tagum. CA however reversed the decision, on the
ground that the action of Phil Am Gen & Tagum prescribed relying on the
stipulations of the bill of lading as to the shortened periods in the institution of
an action in case of damage, loss, etc. on the cargo. PhilAm Gen & Tagum asserts
that such stipulation is void, being a contract of adhesion.
Issue:
1.) W/N it is necessary that the bill of lading be presented in court
2.) WON the stipulation as to the shortened period is valid.
Held:
1.) No.

Section 7 of Rule 8 of the Rules of Court states:

SEC. 7. Action or defense based on document. Whenever an action or defense

is based upon a written instrument or document, the substance of such
instrument or document shall be set forth in the pleading, and the original
or a copy thereof shall be attached to the pleading as an exhibit, which shall
be deemed to be a part of the pleading, or said copy may with like effect be set forth in
the pleading. (Emphasis supplied.)

as actionable documents which under the Rules must be properly pleaded either
as causes of action or defenses, 18 and the genuineness and due execution of
which are deemed admitted unless specifically denied under oath by the adverse
party. 19

thereby failed to controvert the existence of the bills of lading and the
aforequoted provisions therein, hence they impliedly admitted the same when
they merely assailed the validity of subject stipulations.

Petitioners' failure to specifically deny the existence, much less the genuineness
and due execution, of the instruments in question amounts to an admission.
Judicial admissions, verbal or written, made by the parties in the pleadings or in
the course of the trial or other proceedings in the same case are conclusive, no
evidence being required to prove the same, and cannot be contradicted unless
shown to have been made through palpable mistake or that no such admission
was made. 23 Moreover, when the due execution and genuineness of an
instrument are deemed admitted because of the adverse party's failure to make
a specific verified denial thereof, the instrument need not be presented formally
in evidence for it may be considered an admitted fact. 24

Even granting that petitioners' averment in their reply amounts to a denial, it has
the procedural earmarks of what in the law on pleadings is called a negative
pregnant, that is, a denial pregnant with the admission of the substantial facts in
the pleading responded to which are not squarely denied. It is in effect an
admission of the averment it is directed to. 25 Thus, while petitioners objected to
the validity of such agreement for being contrary to public policy, the existence
of the bills of lading and said stipulations were nevertheless impliedly admitted
by them.

2.) Yes.
In this jurisdiction, this time limitation is actually a condition precedent to the
accrual of a right of action against a carrier for damages caused to the
merchandise. The shipper or the consignee must allege and prove the fulfillment
of the condition and if he omits such allegations and proof, no right of action
against the carrier can accrue in his favor.
These are reasonable conditions precedent, they are not limitations of action.
Being conditions precedent, their performance must precede a suit for
enforcement and the vesting of the right to file spit does not take place until the
happening of these conditions.
 ------------------------------------------
In this case, the action was filed way beyond the stipulated period of filing in the
bill of lading.

The validity of a contractual limitation of time for filing the suit itself against a
carrier shorter than the statutory period therefor has generally been upheld as
such stipulation merely affects the shipper's remedy and does not affect the
liability of the carrier. In the absence of any statutory limitation and subject only
to the requirement on the reasonableness of the stipulated limitation period, the
parties to a contract of carriage may fix by agreement a shorter time for the
bringing of suit on a claim for the loss of or damage to the shipment than that
provided by the statute of limitations. Such limitation is not contrary to public
policy for it does not in any way defeat the complete vestiture of the right to
recover, but merely requires the assertion of that right by action at an earlier
period than would be necessary to defeat it through the operation of the ordinary
statute of limitations.

Saludo vs. CA 207 SCRA 498

Facts:
Crispina Saludo died in Illinois. Preparations were made by a funeral home for the
shipment of the remains to the Phil. The shipment was booked with TWA for the
first route, and with PAL for the second. Airway bills were issued. But somehow,
the remains of Crispina were switched with another. Thus, there was delay in the
delivery of the cargo. Saludo then instituted an action for damages alleging that
the carriers failed to exercise extraordinary diligence over the cargo received by
them for shipment. To support such assertion, Saludo invoked the dictum that a
bill of lading is prima facie evidence of the receipt of the goods by the carrier.
Respondents, however, deny liability alleging that they did not receive the
remains.
Issue:
WON TWA and PAL should be held liable.
Held:
No.
The airway bills issued was not an evidence of receipt of delivery to the airline
but merely a confirmation of the booking.
A bill of lading, when properly executed and delivered to a shipper, is evidence
that the carrier has received the goods described therein for shipment.
Alhough an airway bill estops the carrier from denying receipt of goods of the
quantity and quality described in the bill, a further reading and a more faithful
quotation of this authority would reveal that (a) bill of lading may contain
constituent elements of estoppel and thus become something more than a
contract between the shipper and the carrier. . . . However, as between the
shipper and the carrier, when no goods have been delivered for shipment no
recitals in the bill can estop the carrier from showing the true facts . . . Between
the consignor of goods and receiving carrier, recitals in a bill of lading as to the
goods shipped raise only a rebuttable presumption that such goods were
delivered for shipment. As between the consignor and a receiving carrier, the
fact must outweigh the recital.

Wallem Philippines vs. Prudential Guarantee

Facts: General Milling Corporation (GMC) contracted Wallem Philippines Shipping

Inc. (WALLEM) to ship Indian Toasted Soyabean Extraction Meal to its warehouse
in Pasig. During the weighing of the cargo in Batangas, and after comparing its
supposed weight from that indicated in the bill of lading, it was found that there
was a shortage of 295.682 M/Tons in the shipment. The said bill of lading was
prepared by GMC.

Prudential Guarantee & Assurance Inc (PRUDENTIAL), being GMCs insurer,

received a claim from the latter because of the shortage in the shipment.
Prudential paid GMC P995, 677.09, and the latter issued a subrogation receipt to
PRUDENTIAL. PRUDENTIAL thereafter sent a demand letter to WALLEM to recover
the amount paid to GMC. WALLEM denied liability for the loss in the shipment.

PRUDENTIAL brought an action for damages against WALLEM and Seacoast

Maritime Corp. with the RTC of Makati City. The trial court ruled that PRUDENTIAL
failed to prove that there was shortage in the shipment. Since PRUDENTIAL failed
to establish that the bill of lading was duly executed, the true and exact weight
of the shipment when it was loaded unto the vessel cannot be determined.
Hence, there was no way by which a shortage could be determined. Also, since
PRUDENTIAL failed to present the contract of insurance executed between it and
GMC, it had no cause of action against WALLEM.

On appeal, the CA reversed.

Issue: Whether or not PRUDENTIAL became subrogated to the rights of GMC to

claim indemnity against WALLEM

Held: No, PRUDENTIAL did not become subrogated to GMCs rights.

PRUDENTIAL claims that it is subrogated to the rights of GMC pursuant to their

insurance contract. For this purpose, it submitted a subrogation receipt and a
marine cargo risk note. However, this is not sufficient. As GMCs subrogee,
PRUDENTIAL can exercise only those rights granted to GMC under the insurance
contract. The contract of insurance must be presented in evidence to indicate
the extent of its coverage. By itself alone, the subrogation receipt is not sufficient
to prove the PRUDENTIALs claim holding WALLEM liable for the loss in the
shipment.

Code of Commerce
ARTICLE 366. Within the twenty-four hours following the receipt of the
merchandise, the claim against the carrier for damage or average be found
therein upon opening the packages, may be made, provided that the indications
of the damage or average which gives rise to the claim cannot be ascertained
from the outside part of such packages, in which case the claim shall be
admitted only at the time of receipt.
After the periods mentioned have elapsed, or the transportation charges have
been paid, no claim shall be admitted against the carrier with regard to the
condition in which the goods transported were delivered.

Cordoba vs. Warner Barnes

This action was commenced in the Court of First Instance, Intramuros (Manila),
by the plaintiff Cordoba, to recover from the defendants, Warner, Barnes, & Co.,
the sum of $479.57, Mexican currency, the value of certain merchandise alleged
to have been short delivered by them as common carriers of the plaintiff, with 50
per cent of such value added as liquidated damages and also the costs of suit. In
the court below judgment went for the defendants and plaintiff appealed.

The record discloses without contradiction that some time prior to June, 1900,
the firms of Cahn, Nickelsberg & Co. and Trieste & Co. delivered at San Francisco,
California, to the Pacific Mail Steamship Company on board its steamship Rio de
Janeiro, for shipment to Manila via Hongkong, twenty cases of shoes and five
cases of hats, respectively, freight prepaid as per "accountable receipt" or "way-
bill." The goods were consigned to plaintiff, Manila, and properly marked with his
name. On arrival at Hongkong they were delivered by the Pacific Mail to the
steamer Diamante in good condition, for transshipment to Manila Bay, at which
place the vessel arrived June 11, 1900, under consignment to the defendants.
Ten days later the five cases of hats and six of the twenty cases of shoes were
discharged into the lighters of Carman & Co., agents of the plaintiff, empowered
to receive and transport them from the ship's side to the custom-house.

The court finds as a fact and the managing agent of the defendants positively
testifies that before receiving the consignment of plaintiff, Carman & Co. called
the attention of the defendants to the condition of the cases, and then and there
protested their receipt on account of their "bad condition." Nevertheless, the
carrier, without verifying the contents of the packages and without demanding
an examination of them on board, voluntarily delivered them to the lighter men
who, under customs supervision and control, brought them to the custom-house,
where they were deposited in the bodega set apart for broken packages.

On the 25th and 27th of June, 1900, and while the goods were still in the custom-
house, the plaintiff wrote to the defendants, notifying them that the five cases of
hats and the six cases of shoes bore evidence of having been tampered with,
and asking that they name a representative to be present at the customs
examination of the cases in order to note any shortage which might be disclosed
thereby. Warner, Barnes & Co. named Seor Abren as their representative for the
purpose, and he, conjointly with the customs officials, examined the cases in bad
condition and reported to his principals that the packages were short 119 hats
and 9 pairs of shoes. The merchandise found in the cases was received by the
plaintiff from the custom-house some time subsequent to the 29th of June, 1900,
on which date the duties were paid. Notwithstanding the report of their
representative, the defendants declined to settle the claim presented for the
missing goods, first, because the protested packages were not opened and
examined before they left the ship's side as required by the bill of lading, and
second, because the claim of loss was not presented within twenty-four hours
after delivery of the goods to the lighter for transportation to the custom-house.
Both contentions of defendants were sustained by the court below in the suit
which was subsequently commenced against them, and plaintiff appealed.

In our opinion neither one nor the other of the defenses set up by the consignees
of the vessel was well founded. The bill of lading which provides that "in the
event of any packages being refused on account of condition, they are, if in bad
order, to be examined on board the steamer and contents certified to, when
steamer's responsibility will cease," gave to the defendants the undoubted right
to retain on board and to examine all refused packages. This right, however,
being exclusively for their own protection, they could waive it and they did waive
it by discharging the goods, notwithstanding the protest, and accepting a receipt
which specified on its face that the cases were in "bad condition" when delivered
for transportation to the custom-house. It lay wholly with the carrier to say
whether the goods should or should not be discharged from the vessel without
examination, and having voluntarily elected to so discharge them the
respondents can not now be permitted to urge that the failure to examine the
cases on board was a bar to the claim of appellant. If the goods had been
examined on board the failure of the consignees to give the certificate of
shortage prescribed by the bill of lading would have constituted no defense to
the action, and on the same principle their failure to retain and examine the
packages after protest made can not be held to prejudice the rights of the
plaintiff.

Respondents claimed on the hearing of this appeal that the duplicate receipt
offered in evidence by the appellants could not be accepted as evidence, for the
reason that on its face it appeared to have been written in different inks and by
different persons. If the duplicate receipt was fictitious or manufactured for the
occasion it could have been shown in a moment by the production of the original
delivered to the carrier when the goods were discharged, and the failure to do so
by defendants must be considered against them and as fatal to their contention.

Defendants' second defense that plaintiff's suit must fail because his claim
was not presented to the carrier or consignees of the vessel within twenty-four
hours after receipt of the goods can not be sustained for the reason that
plaintiff's claim was presented not later than the 27th of June, 1900, and he did
not receive his consignment within the meaning of article 366 of the Commercial
Code before the 29th of the same month. The discharge of the merchandise into
the lighters of Carman & Co. for delivery at the custom-house under customs
supervision and control was not "the receipt of the merchandise" contemplated
by article 366. The packages were then in the hands of the Government, and
their owner could exercise no dominion whatever over them until the duties were
paid or secured to be paid. The time prescribed by article 366 within which
claims must be presented does not begin to run until the consignee has received
such possession of the merchandise that he may exercise over it the ordinary
control pertinent to ownership. For these reasons the judgment of the court
below must be reversed without special finding of costs, and it is so ordered.

DOCTRINE: Section 366 has no application in such cases wherein the goods
entrusted to the carrier are NOT delivered by the carrier to the consignee. In
such cases there can be no question of a claim for damages suffered by the
goods while in transport, since the claim for damages arises exclusively out of
the failure to make delivery.

FACTS:

Plaintiff Monico G. Roldan seeks to recover damages in the sum of P3,780.12

for the alleged failure of the defendant Lim Ponzo & Co to live up to its
contract for the transportation of 2,244 packages of sugar from the Roldans
hacienda to Iloilo.
 Counsel for defendant insists, however, that it should not be held responsible
for its failure to carry out the contract, because, the sugar was lost in a wreck,
without fault on the part of the owner, the patron, or the crew of the vessel.

o Defendant company's lorcha was wrecked in the river Jalaud, and that
of the 2,244 packages of plaintiff's sugar aboard the vessel, only 1,022
packages were saved in a more or less damaged condition.

After the plaintiff had submitted all his evidence to prove his claim and before
the defendant company had called any of its witnesses, the trial judge
peremptorily dismissed the complaint on the ground that it was
neither alleged or proved that the plaintiff had complied with the
provisions of section 366 of the Commercial Code.

Within the twenty-four hours following the receipt of the merchandise a

claim may be brought against the carrier on account of damage or
average found therein on opening the packages, provided that the
indication of the damage of average giving rise to the claim cannot be
case said claim would only admitted on the receipt of the packages.

After the periods mentioned have elapsed, or after the transportation

charges have been paid, no claim whatsoever shall be admitted against
the carrier with regards to the condition in which the goods transported
were delivered.

ISSUE: WON it the dismissal of the case was proper? WON Sec 366 of the
Commercial Code is applicable in this case? Both NO.

HELD:

We agree with plaintiff's counsel that the dismissal of the complaint on this
ground was error which necessitates the return of the record to the court below

Article 366 of the Commercial Code is limited to cases of claims for

damage goods actually turned over by the carrier and received by the
consignee, whether those damages be apparent from the examination of the
packages in which the goods are delivered, or of such a character that the nature
and extent of the damage is not apparent until the packages are opened and the
contents examined. The object sought to be attained by the requirement of the
submission of claims in pursuance of this article is to compel the consignee of
goods entrusted to a carrier to make prompt demand for settlement of alleged
damages suffered by the goods while in transport, so that the carrier will be
enabled to verify all such claims at the time of delivery or within twenty-four
hours thereafter, and if necessary fix responsibility and secure evidence as to the
nature and extent of the alleged damages to the goods while the matter is still
fresh in the minds of the parties. To this end of provision is made in article 367 of
the Code for the prompt settlement of disputes as to the nature and extent of the
alleged damages, and for the final disposition of the damaged goods, which is
wholly inconsistent with the contention that these articles are applicable in cases
wherein the claim against the carrier is founded upon his failure to make delivery
of the goods entrusted to him.

Article 367 of the Commercial Code is as follows:

If there should occur doubts and disputes between the consignee and the
carrier with regard to the condition of goods transported at the time of
their delivery to the former, the said goods shall be examined by the
experts appointed by the parties, and a third one, in case of disagreement,
appointed by the judicial authority, the result of the examination always
being reduced to writing; and if the persons interested should not agree to
the report of the experts and could not reach an agreement, said judicial
authority shall have the merchandise deposited in a safe warehouse, and
the parties interested shall make use of their rights in the proper manner.

Clearly Section 366 has no application in such cases wherein the goods
entrusted to the carrier are NOT delivered by the carrier to the
consignee. In such cases there can be no question of a claim for damages
suffered by the goods while in transport, since the claim for damages arises
exclusively out of the failure to make delivery. It is very clear, then, that in so
far as this action seeks to recover damages for defendant's failure to
deliver 1,222 packages or bayones of sugar, the failure to make claim
for such damages under the provisions of article 366 of the Commercial
Code in no wise affects the respective rights of the parties.

In so far as this action is founded on a claim for damages resulting from the
wetting of the 1,022 packages of sugar which were saved from the wreck, it
seems clear that if these 1,022 packages of sugar were delivered by the carrier
and received by the consignee under and in pursuance of the terms of the
contract, this claim for damages would be defeated by the plaintiff's failure to
make claim therefor in accordance with the terms of article 366 of the Code.

We are of opinion, that the necessity for making the claim in accordance with
that article did not arise if, as it is alleged, these 1,022 packages of sugar were
recovered from the wreck by the plaintiff, himself, in an effort, by his own
activities, to save his property from total loss. The measures to be taken under
the terms of article 367 of the Code when the parties are unable to arrive at an
amicable settlement of claims for damages set up in accordance with article 366,
quite clearly indicate that the necessity for the presentation of claims under this
article arises only in those cases wherein the carrier makes delivery and the
consignee receives the goods in pursuance of the terms of the contract.
Until the defendant has had an opportunity to submit his evidence it is
impossible to determine under what conditions these 1,022 packages of sugar
came into the possession of the plaintiff, or to determine whether his claim for
damages by the wetting of this sugar, if well founded in every other respect, is or
should be defeated by his failure to make claim for such damages in the manner
and form indicated in article 366 of the Commercial Code.

SC: Reversed and Remanded

Villa Ray Transit vs. CA

Facts:

On March 17, 1960, Policronio Quintos, Jr. was riding the petitioners bus, when
the said bus frontally hit the rear side of a bullcart filled with hay. The protruding
end of the bamboo pole at the rear of the cart penetrated the windshield of the
bus and landed at Policronios face. He died of traumatic shock due to cerebral
injuries. Private respondents are sisters and surviving heirs of the deceased.
They brought this action against Villa Rey Transit for breach of contract of
carriage. The trial court found that the death was caused by the negligence of
the bus driver, for whom petitioner was liable under the contract of carriage with
the deceased.

Issues:

(1) The number of years to be used as basis of computation

(2) The rate at which the losses sustained by respondents should be fixed

Held:

(1) The determination of the indemnity to be awarded to the heirs of a deceased

person has no fixed basis. Much is left to the discretion of the court considering
the moral and material damages involved, and so it has been said that "(t)here
can be no exact or uniform rule for measuring the value of a human life and the
measure of damages cannot be arrived at by precise mathematical calculation,
but the amount recoverable depends on the particular facts and circumstances
of each case. The life expectancy of the deceased or of the beneficiary,
whichever is shorter, is an important factor.' Other factors that are usually
considered are: (1) pecuniary loss to plaintiff or beneficiary; (2) loss of support;
(3) loss of service; (4) loss of society; (5) mental suffering of beneficiaries; and
(6) medical and funeral expenses."

Thus, life expectancy is, not only relevant, but, also, an important element in
fixing the amount recoverable by private respondents herein. Although it is not
the sole element determinative of said amount, no cogent reason has been given
to warrant its disregard and the adoption, in the case at bar, of a purely arbitrary
standard, such as a four-year rule. In short, the Court of Appeals has not erred in
basing the computation of petitioner's liability upon the life expectancy of
Policronio Quintos, Jr.

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

Damages consist, not of the full amount of his earnings, but of the support, they
received or would have received from him had he not died in consequence of the
negligence of petitioner's agent. In fixing the amount of that support, We must
reckon with the "necessary expenses of his own living", which should be
deducted from his earnings. Only net earnings, not gross earning, are to be
considered that is, the total of the earnings less expenses necessary in the
creation of such earnings or income and less living and other incidental
expenses.

All things considered, We are of the opinion that it is fair and reasonable to fix
the deductible living and other expenses of the deceased at the sum of
P1,184.00 a year, or about P100.00 a month, and that, consequently, the loss
sustained by his sisters may be roughly estimated at P1,000.00 a year or
P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of P33,333.33,
the following should be added: (a) P12,000.00, pursuant to Arts. 104 and 107 of
the Revised Penal Code, in relation to Article 2206 of our Civil Code, as construed
and applied by this Court; (b) P1,727.95, actually spent by private respondents
for medical and burial expenses; and (c) attorney's fee, which was fixed by the
trial court, at P500.00, but which, in view of the appeal taken by petitioner
herein, first to the Court of Appeals and later to this Supreme Court, should be
increased to P2,500.00. In other words, the amount adjudged in the decision
appealed from should be reduced to the aggregate sum of P49,561.28, with
interest thereon, at the legal rate, from December 29, 1961, date of the
promulgation of the decision of the trial court.
 Baliwag Transit vs. CA
(GR 116110, 15 May 1996)

FACTS:

On 31 July 1980, Leticia Garcia, and her 5-year old son, Allan Garcia, boarded
Baliwag Transit Bus 2036 bound for Cabanatuan City driven by Jaime Santiago.
They took the seat behind the driver.

At about 7:30 p.m., in Malimba, Gapan, Nueva Ecija, the bus passengers saw a
cargo truck, owned by A & J Trading, parked at the shoulder of the national
highway. Its left rear portion jutted to the outer lane, as the shoulder of the road
was too narrow to accommodate the whole truck. A kerosene lamp appeared at
the edge of the road obviously to serve as a warning device. The truck driver,
and his helper were then replacing a flat tire.

Bus driver Santiago was driving at an inordinately fast speed and failed to notice
the truck and the kerosene lamp at the edge of the road. Santiagos passengers
urged him to slow down but he paid them no heed. Santiago even carried
animated conversations with his co-employees while driving. When the danger of
collision became imminent, the bus passengers shouted Babangga tayo!.
Santiago stepped on the brake, but it was too late. His bus rammed into the
stalled cargo truck killing him instantly and the trucks helper, and injury to
several others among them herein respondents.

Thus, a suit was filed against Baliwag Transit, Inc., A & J Trading and Julio
Recontique for damages in the RTC of Bulacan. After trial, it found Baliwag
Transit, Inc. liable for having failed to deliver Garcia and her son to their point of
destination safely in violation of Garcias and Baliwag Transits contractual
relation; and likewise found A & J and its truck driver liable for failure to provide
its cargo truck with an early warning device in violation of the Motor Vehicle Law.
All were ordered to pay solidarily the Garcia spouses.

On appeal, the CA modified the trial courts Decision by absolving A & J Trading
from liability.

ISSUE:

Whether or not Baliwag should be held solely liable for the injuries.

HELD:

Yes.

As a common carrier, Baliwag breached its contract of carriage when it failed to

deliver its passengers, Leticia and Allan Garcia to their destination safe and
sound. A common carrier is bound to carry its passengers safely as far as human
care and foresight can provide, using the utmost diligence of a very cautious
person, with due regard for all the circumstances. In a contract of carriage, it is
presumed that the common carrier was at fault or was negligent when a
passenger dies or is injured. Unless the presumption is rebutted, the court need
not even make an express finding of fault or negligence on the part of the
common carrier. This statutory presumption may only be overcome by evidence
that the carrier exercised extraordinary diligence as prescribed in Articles 1733
and 1755 of the Civil Code.

Article 1759 of the Civil Code provides that Common carriers are liable for the
death of or injuries to passengers through the negligence or willfull acts of the
formers employees, although such employees may have acted beyond the
scope of their authority or in violation of the orders of the common carriers. This
liability of the common carriers do not cease upon proof that they exercised all
the diligence of a good father of a family in the selection or supervision of their
employees.

Section 34 (g) of the Land Transportation and Traffic Code provides Lights and
reflector when parked or disabled. Appropriate parking lights or flares visible
one hundred meters away shall be displayed at the corner of the vehicle
whenever such vehicle is parked on highways or in places that are not well-
lighted or, is placed in such manner as to endanger passing traffic. Furthermore,
every motor vehicle shall be provided at all times with built-in reflectors or other
similar warning devices either pasted, painted or attached at its front and back
which shall likewise be visible at night at least one hundred meters away. No
vehicle not provided with any of the requirements mentioned in this subsection
shall be registered.

x x x However, the evidence shows that Recontique and Ecala placed a kerosene
lamp or torch at the edge of the road, near the rear portion of the truck to serve
as an early warning device. This substantially complies with Section 34 (g) of the
Land Transportation and Traffic Code. The law clearly allows the use not only of
an early warning device of the triangular reflectorized plates variety but also
parking lights or flares visible 100 meters away. Indeed, Col. dela Cruz himself
admitted that a kerosene lamp is an acceptable substitute for the reflectorized
plates. No negligence, therefore, may be imputed to A & J Trading and its driver,
Recontique.

The Supreme Court affirmed the Decision of the Court of Appeals (CA-GR CV-
31246) with the modification reducing the actual damages for hospitalization and
medical fees to P5,017.74; without costs.

Philippine Air Lines vs. Court of Appeals

GR 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 which,
after trial, rendered judgment, ordering 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.

On appeal, the appellate court affirmed the decision of the court a quo, but with
the exclusion of the award of attorneys fees and litigation expenses.

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.

ISSUE:

Whether petitioner airlines acted in bad faith when it failed and refused to
provide hotel accommodations for respondent Pantejo or to reimburse him for
hotel expenses incurred by reason of the cancellation of its connecting flight to
Surigao City due to force majeur.

HELD:
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.

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.

Moral damages are emphatically not intended to enrich a plaintiff at the expense
of the defendant. They are awarded only to allow the former to obtain means,
diversion, or amusements that will serve to alleviate the moral suffering he has
undergone due to the defendants culpable action and must, perforce, be
proportional to the suffering inflicted. However, substantial damages do not
translate into excessive damages. Herein, except for attorneys fees and costs of
suit, it will be noted that the Courts of Appeals affirmed point by point the factual
findings of the lower court upon which the award of damages had been based.

The interest of 6% imposed by the court should be computed from the date of
rendition of judgment and not from the filing of the complaint.

The rule has been laid down in Eastern Shipping Lines, Inc. vs. Court of Appeals,
et. al. that when an obligation, not constituting a loan or forbearance of money,
is breached, an interest on the amount of damages awarded may be imposed at
the discretion of the court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall begin to run
from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code)
but when such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date the judgment
of the court is made (at which time the quantification of damages may be
deemed to have been reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the amount finally
adjudged. This is because at the time of the filling of the complaint, the amount
of the damages to which Pantejo may be entitled remains unliquidated and not
known, until it is definitely ascertained, assessed and determined by the court,
and only after the presentation of proof thereon.

SINGSON vs. COURT OF APPEALS and CATHAY PACIFIC AIRWAYS

(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. x x x the round trip ticket issued by the carrier to the passenger was in
itself a complete written contract by and between the carrier and the passenger.
It 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. x x x 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.