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1. LOADSTAR SHIPPING INC. V.

CA
DECISION
DAVIDE, JR., C.J.:
Petitioner Loadstar Shipping Co., Inc. (hereafter LOADSTAR), in this petition for review on certiorari under Rule 45
of the 1997 Rules of Civil Procedure, seeks to reverse and set aside the following:(a) the 30 January 1997 decision[1] of the
Court of Appeals in CA-G.R. CV No. 36401, which affirmed the decision of 4 October 1991[2] of the Regional Trial Court
of Manila, Branch 16, in Civil Case No. 85-29110, ordering LOADSTAR to pay private respondent Manila Insurance Co.
(hereafter MIC) the amount of P6,067,178, with legal interest from the filing of the complaint until fully paid, P8,000 as
attorneys fees, and the costs of the suit; and (b) its resolution of 19 November 1997, [3] denying LOADSTARs motion for
reconsideration of said decision.
The facts are undisputed.
On 19 November 1984, LOADSTAR received on board its M/V Cherokee (hereafter, the vessel) the following goods
for shipment:
a) 705 bales of lawanit hardwood;
b) 27 boxes and crates of tilewood assemblies and others; and
c) 49 bundles of mouldings R & W (3) Apitong Bolidenized.
The goods, amounting to P6,067,178, were insured for the same amount with MIC against various risks including TOTAL
LOSS BY TOTAL LOSS OF THE VESSEL. The vessel, in turn, was insured by Prudential Guarantee & Assurance, Inc.
(hereafter PGAI) for P4 million. On 20 November 1984, on its way to Manila from the port of Nasipit, Agusan del Norte,
the vessel, along with its cargo, sank off Limasawa Island. As a result of the total loss of its shipment, the consignee made
a claim with LOADSTAR which, however, ignored the same. As the insurer, MIC paid P6,075,000 to the insured in full
settlement of its claim, and the latter executed a subrogation receipt therefor.
On 4 February 1985, MIC filed a complaint against LOADSTAR and PGAI, alleging that the sinking of the vessel was
due to the fault and negligence of LOADSTAR and its employees. It also prayed that PGAI be ordered to pay the insurance
proceeds from the loss of the vessel directly to MIC, said amount to be deducted from MICs claim from LOADSTAR.
In its answer, LOADSTAR denied any liability for the loss of the shippers goods and claimed that the sinking of its
vessel was due to force majeure. PGAI, on the other hand, averred that MIC had no cause of action against it, LOADSTAR
being the party insured. In any event, PGAI was later dropped as a party defendant after it paid the insurance proceeds to
LOADSTAR.
As stated at the outset, the court a quo rendered judgment in favor of MIC, prompting LOADSTAR to elevate the
matter to the Court of Appeals, which, however, agreed with the trial court and affirmed its decision in toto.
In dismissing LOADSTARs appeal, the appellate court made the following observations:
1) LOADSTAR cannot be considered a private carrier on the sole ground that there was a single shipper on that
fateful voyage. The court noted that the charter of the vessel was limited to the ship, but LOADSTAR retained
control over its crew.[4]
2) As a common carrier, it is the Code of Commerce, not the Civil Code, which should be applied in determining
the rights and liabilities of the parties.
3) The vessel was not seaworthy because it was undermanned on the day of the voyage. If it had been seaworthy,
it could have withstood the natural and inevitable action of the sea on 20 November 1984, when the condition
of the sea was moderate. The vessel sank, not because of force majeure, but because it was not
seaworthy. LOADSTARS allegation that the sinking was probably due to the convergence of the winds, as
stated by a PAGASA expert, was not duly proven at the trial. The limited liability rule, therefore, is not
applicable considering that, in this case, there was an actual finding of negligence on the part of the carrier.[5]
4) Between MIC and LOADSTAR, the provisions of the Bill of Lading do not apply because said provisions bind
only the shipper/consignee and the carrier. When MIC paid the shipper for the goods insured, it was subrogated
to the latters rights as against the carrier, LOADSTAR.[6]
5) There was a clear breach of the contract of carriage when the shippers goods never reached their
destination. LOADSTARs defense of diligence of a good father of a family in the training and selection of its
crew is unavailing because this is not a proper or complete defense in culpa contractual.
6) Art. 361 (of the Code of Commerce) has been judicially construed to mean that when goods are delivered on
board a ship in good order and condition, and the shipowner delivers them to the shipper in bad order and
condition, it then devolves upon the shipowner to both allege and prove that the goods were damaged by reason
of some fact which legally exempts him from liability. Transportation of the merchandise at the risk and
venture of the shipper means that the latter bears the risk of loss or deterioration of his goods arising from
fortuitous events, force majeure, or the inherent nature and defects of the goods, but not those caused by the
presumed negligence or fault of the carrier, unless otherwise proved.[7]
The errors assigned by LOADSTAR boil down to a determination of the following issues:
(1) Is the M/V Cherokee a private or a common carrier?
(2) Did LOADSTAR observe due and/or ordinary diligence in these premises?
Regarding the first issue, LOADSTAR submits that the vessel was a private carrier because it was not issued a
certificate of public convenience, it did not have a regular trip or schedule nor a fixed route, and there was only one shipper,
one consignee for a special cargo.
In refutation, MIC argues that the issue as to the classification of the M/V Cherokee was not timely raised below;
hence, it is barred by estoppel. While it is true that the vessel had on board only the cargo of wood products for delivery to
one consignee, it was also carrying passengers as part of its regular business. Moreover, the bills of lading in this case made
no mention of any charter party but only a statement that the vessel was a general cargo carrier. Neither was there any
special arrangement between LOADSTAR and the shipper regarding the shipment of the cargo. The singular fact that the
vessel was carrying a particular type of cargo for one shipper is not sufficient to convert the vessel into a private carrier.
As regards the second error, LOADSTAR argues that as a private carrier, it cannot be presumed to have been negligent,
and the burden of proving otherwise devolved upon MIC.[8]
LOADSTAR also maintains that the vessel was seaworthy. Before the fateful voyage on 19 November 1984, the vessel
was allegedly dry docked at Keppel Philippines Shipyard and was duly inspected by the maritime safety engineers of the
Philippine Coast Guard, who certified that the ship was fit to undertake a voyage. Its crew at the time was experienced,
licensed and unquestionably competent. With all these precautions, there could be no other conclusion except that
LOADSTAR exercised the diligence of a good father of a family in ensuring the vessels seaworthiness.
LOADSTAR further claims that it was not responsible for the loss of the cargo, such loss being due to force majeure. It
points out that when the vessel left Nasipit, Agusan del Norte, on 19 November 1984, the weather was fine until the next
day when the vessel sank due to strong waves. MICs witness, Gracelia Tapel, fully established the existence of two
typhoons, WELFRING and YOLING, inside the Philippine area of responsibility. In fact, on 20 November 1984, signal no.
1 was declared over Eastern Visayas, which includes Limasawa Island. Tapel also testified that the convergence of winds
brought about by these two typhoons strengthened wind velocity in the area, naturally producing strong waves and winds,
in turn, causing the vessel to list and eventually sink.
LOADSTAR goes on to argue that, being a private carrier, any agreement limiting its liability, such as what transpired
in this case, is valid. Since the cargo was being shipped at owners risk, LOADSTAR was not liable for any loss or damage
to the same. Therefore, the Court of Appeals erred in holding that the provisions of the bills of lading apply only to the
shipper and the carrier, and not to the insurer of the goods, which conclusion runs counter to the Supreme Courts ruling in
the case of St. Paul Fire & Marine Insurance Co. v. Macondray & Co., Inc.,[9] and National Union Fire Insurance Company
of Pittsburg v. Stolt-Nielsen Phils., Inc.[10]
Finally, LOADSTAR avers that MICs claim had already prescribed, the case having been instituted beyond the period
stated in the bills of lading for instituting the same suits based upon claims arising from shortage, damage, or non-delivery
of shipment shall be instituted within sixty days from the accrual of the right of action. The vessel sank on 20 November
1984; yet, the case for recovery was filed only on 4 February 1985.
MIC, on the other hand, claims that LOADSTAR was liable, notwithstanding that the loss of the cargo was due to force
majeure, because the same concurred with LOADSTARs fault or negligence.
Secondly, LOADSTAR did not raise the issue of prescription in the court below; hence, the same must be deemed
waived.
Thirdly, the limited liability theory is not applicable in the case at bar because LOADSTAR was at fault or negligent,
and because it failed to maintain a seaworthy vessel. Authorizing the voyage notwithstanding its knowledge of a typhoon is
tantamount to negligence.
We find no merit in this petition.
Anent the first assigned error, we hold that LOADSTAR is a common carrier. It is not necessary that the carrier be
issued a certificate of public convenience, and this public character is not altered by the fact that the carriage of the goods
in question was periodic, occasional, episodic or unscheduled.
In support of its position, LOADSTAR relied on the 1968 case of Home Insurance Co. v. American Steamship
Agencies, Inc.,[11] where this Court held that a common carrier transporting special cargo or chartering the vessel to a special
person becomes a private carrier that is not subject to the provisions of the Civil Code. Any stipulation in the charter party
absolving the owner from liability for loss due to the negligence of its agent is void only if the strict policy governing
common carriers is upheld. Such policy has no force where the public at large is not involved, as in the case of a ship totally
chartered for the use of a single party. LOADSTAR also cited Valenzuela Hardwood and Industrial Supply, Inc. v. Court
of Appeals[12] and National Steel Corp. v. Court of Appeals,[13] both of which upheld the Home Insurance doctrine.
These cases invoked by LOADSTAR are not applicable in the case at bar for simple reason that the factual settings are
different. The records do not disclose that the M/V Cherokee, on the date in question, undertook to carry a special cargo or
was chartered to a special person only. There was no charter party. The bills of lading failed to show any special
arrangement, but only a general provision to the effect that the M/V Cherokee was a general cargo carrier.[14] Further, the
bare fact that the vessel was carrying a particular type of cargo for one shipper, which appears to be purely coincidental, is
not reason enough to convert the vessel from a common to a private carrier, especially where, as in this case, it was shown
that the vessel was also carrying passengers.
Under the facts and circumstances obtaining in this case, LOADSTAR fits the definition of a common carrier under
Article 1732 of the Civil Code. In the case of De Guzman v. Court of Appeals,[15] the Court juxtaposed the statutory
definition of common carriers with the peculiar circumstances of that case, viz.:
The Civil Code defines common carriers in the following terms:
Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public.
The above article makes no distinction between one whose principal business activity is the carrying of persons or goods
or both, and one who does such carrying only as an ancillary activity (in local idiom, as a sideline. Article 1732 also
carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the general public, i.e., the general community or population, and one
who offers services or solicits business only from a narrow segment of the general population. We think that Article 1733
deliberately refrained from making such distinctions.
xxx
It appears to the Court that private respondent is properly characterized as a common carrier even though he merely back-
hauled goods for other merchants from Manila to Pangasinan, although such backhauling was done on a periodic or
occasional rather than regular or scheduled manner, and even though private respondents principal occupation was not the
carriage of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their
goods; that that fee frequently fell below commercial freight rates is not relevant here.
The Court of Appeals referred to the fact that private respondent held no certificate of public convenience, and concluded
he was not a common carrier. This is palpable error. A certificate of public convenience is not a requisite for the incurring
of liability under the Civil Code provisions governing common carriers. That liability arises the moment a person or firm
acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the
applicable regulatory statute and implementing regulations and has been granted a certificate of public convenience or
other franchise. To exempt private respondent from the liabilities of a common carrier because he has not secured the
necessary certificate of public convenience, would be offensive to sound public policy; that would be to reward private
respondent precisely for failing to comply with applicable statutory requirements. The business of a common carrier
impinges directly and intimately upon the safety and well being and property of those members of the general community
who happen to deal with such carrier. The law imposes duties and liabilities upon common carriers for the safety and
protection of those who utilize their services and the law cannot allow a common carrier to render such duties and
liabilities merely facultative by simply failing to obtain the necessary permits and authorizations.
Moving on to the second assigned error, we find that the M/V Cherokee was not seaworthy when it embarked on its
voyage on 19 November 1984. The vessel was not even sufficiently manned at the time. For a vessel to be seaworthy, it
must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew. The
failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach
of its duty prescribed in Article 1755 of the Civil Code.[16]
Neither do we agree with LOADSTARs argument that the limited liability theory should be applied in this case. The
doctrine of limited liability does not apply where there was negligence on the part of the vessel owner or
agent.[17] LOADSTAR was at fault or negligent in not maintaining a seaworthy vessel and in having allowed its vessel to
sail despite knowledge of an approaching typhoon. In any event, it did not sink because of any storm that may be deemed
as force majeure, inasmuch as the wind condition in the area where it sank was determined to be moderate. Since it was
remiss in the performance of its duties, LOADSTAR cannot hide behind the limited liability doctrine to escape responsibility
for the loss of the vessel and its cargo.
LOADSTAR also claims that the Court of Appeals erred in holding it liable for the loss of the goods, in utter disregard
of this Courts pronouncements in St. Paul Fire & Marine Ins. Co. v. Macondray & Co., Inc., [18] and National Union Fire
Insurance v. Stolt-Nielsen Phils., Inc.[19] It was ruled in these two cases that after paying the claim of the insured for damages
under the insurance policy, the insurer is subrogated merely to the rights of the assured, that is, it can recover only the
amount that may, in turn, be recovered by the latter. Since the right of the assured in case of loss or damage to the goods is
limited or restricted by the provisions in the bills of lading, a suit by the insurer as subrogee is necessarily subject to the
same limitations and restrictions. We do not agree. In the first place, the cases relied on by LOADSTAR involved a
limitation on the carriers liability to an amount fixed in the bill of lading which the parties may enter into, provided that the
same was freely and fairly agreed upon (Articles 1749-1750). On the other hand, the stipulation in the case at bar effectively
reduces the common carriers liability for the loss or destruction of the goods to a degree less than extraordinary (Articles
1744 and 1745), that is, the carrier is not liable for any loss or damage to shipments made at owners risk. Such stipulation
is obviously null and void for being contrary to public policy.[20] It has been said:
Three kinds of stipulations have often been made in a bill of lading. The first is one exempting the carrier from any and all
liability for loss or damage occasioned by its own negligence. The second is one providing for an unqualified limitation of
such liability to an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation unless
the shipper declares a higher value and pays a higher rate of freight. According to an almost uniform weight of authority,
the first and second kinds of stipulations are invalid as being contrary to public policy, but the third is valid and
enforceable.[21]
Since the stipulation in question is null and void, it follows that when MIC paid the shipper, it was subrogated to all the
rights which the latter has against the common carrier, LOADSTAR.
Neither is there merit to the contention that the claim in this case was barred by prescription. MICs cause of action had
not yet prescribed at the time it was concerned. Inasmuch as neither the Civil Code nor the Code of Commerce states a
specific prescriptive period on the matter, the Carriage of Goods by Sea Act (COGSA) which provides for a one-year period
of limitation on claims for loss of, or damage to, cargoes sustained during transit may be applied suppletorily to the case at
bar. This one-year prescriptive period also applies to the insurer of the good.[22] In this case, the period for filing the action
for recovery has not yet elapsed. Moreover, a stipulation reducing the one-year period is null and void;[23] it must,
accordingly, be struck down.
WHEREFORE, the instant petition is DENIED and the challenged decision of 30 January 1997 of the Court of
Appeals in CA-G.R. CV No. 36401 is AFFIRMED. Costs against petitioner.
SO ORDERED.
Puno, Kapunan, Pardo, and Ynares-Santiago, JJ., concur.

2.EVERETT STEAMSHIP CO. V CA


MARTINEZ, J.:
Petitioner Everett Steamship Corporation, through this petition for review, seeks the reversal of the decision [1] of the
Court of Appeals, dated June 14, 1995, in CA-G.R. No. 428093, which affirmed the decision of the Regional Trial Court of
Kalookan City, Branch 126, in Civil Case No. C-15532, finding petitioner liable to private respondent Hernandez Trading
Co., Inc. for the value of the lost cargo.
Private respondent imported three crates of bus spare parts marked as MARCO C/No. 12, MARCO C/No. 13
and MARCO C/No. 14, from its supplier, Maruman Trading Company, Ltd. (Maruman Trading), a foreign corporation
based in Inazawa, Aichi, Japan. The crates were shipped from Nagoya, Japan to Manila on board ADELFAEVERETTE, a
vessel owned by petitioners principal, Everett Orient Lines. The said crates were covered by Bill of Lading No. NGO53MN.
Upon arrival at the port of Manila, it was discovered that the crate marked MARCO C/No. 14 was missing. This was
confirmed and admitted by petitioner in its letter of January 13, 1992 addressed to private respondent, which thereafter
made a formal claim upon petitioner for the value of the lost cargo amounting to One Million Five Hundred Fifty Two
Thousand Five Hundred (Y1,552,500.00) Yen, the amount shown in an Invoice No. MTM-941, dated November 14,
1991. However, petitioner offered to pay only One Hundred Thousand (Y100,000.00) Yen, the maximum amount stipulated
under Clause 18 of the covering bill of lading which limits the liability of petitioner.
Private respondent rejected the offer and thereafter instituted a suit for collection docketed as Civil Case No. C-15532,
against petitioner before the Regional Trial Court of Caloocan City, Branch 126.
At the pre-trial conference, both parties manifested that they have no testimonial evidence to offer and agreed instead
to file their respective memoranda.
On July 16, 1993, the trial court rendered judgment[2] in favor of private respondent, ordering petitioner to pay: (a)
Y1,552,500.00; (b) Y20,000.00 or its peso equivalent representing the actual value of the lost cargo and the material and
packaging cost; (c) 10% of the total amount as an award for and as contingent attorneys fees; and (d) to pay the cost of the
suit. The trial court ruled:
Considering defendants categorical admission of loss and its failure to overcome the presumption of negligence
and fault, the Court conclusively finds defendant liable to the plaintiff. The next point of inquiry the Court wants
to resolve is the extent of the liability of the defendant. As stated earlier, plaintiff contends that defendant should
be held liable for the whole value for the loss of the goods in the amount of Y1,552,500.00 because the terms
appearing at the back of the bill of lading was so written in fine prints and that the same was not signed by
plaintiff or shipper thus, they are not bound by the clause stated in paragraph 18 of the bill of lading. On the
other hand, defendant merely admitted that it lost the shipment but shall be liable only up to the amount of
Y100,000.00.
The Court subscribes to the provisions of Article 1750 of the New Civil Code -
Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss,
destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and
has been fairly and freely agreed upon.
It is required, however, that the contract must be reasonable and just under the circumstances and has been fairly
and freely agreed upon. The requirements provided in Art. 1750 of the New Civil Code must be complied with
before a common carrier can claim a limitation of its pecuniary liability in case of loss, destruction or
deterioration of the goods it has undertaken to transport.
In the case at bar, the Court is of the view that the requirements of said article have not been met. The fact that
those conditions are printed at the back of the bill of lading in letters so small that they are hard to read would
not warrant the presumption that the plaintiff or its supplier was aware of these conditions such that he had fairly
and freely agreed to these conditions. It can not be said that the plaintiff had actually entered into a contract with
the defendant, embodying the conditions as printed at the back of the bill of lading that was issued by the
defendant to plaintiff.
On appeal, the Court of Appeals deleted the award of attorneys fees but affirmed the trial courts findings with the
additional observation that private respondent can not be bound by the terms and conditions of the bill of lading because it
was not privy to the contract of carriage. It said:
As to the amount of liability, no evidence appears on record to show that the appellee (Hernandez Trading Co.)
consented to the terms of the Bill of Lading. The shipper named in the Bill of Lading is Maruman Trading Co.,
Ltd. whom the appellant (Everett Steamship Corp.) contracted with for the transportation of the lost goods.
Even assuming arguendo that the shipper Maruman Trading Co., Ltd. accepted the terms of the bill of lading
when it delivered the cargo to the appellant, still it does not necessarily follow that appellee Hernandez Trading
Company as consignee is bound thereby considering that the latter was never privy to the shipping contract.
xxxxxxxxx
Never having entered into a contract with the appellant, appellee should therefore not be bound by any of the
terms and conditions in the bill of lading.
Hence, it follows that the appellee may recover the full value of the shipment lost, the basis of which is not the
breach of contract as appellee was never a privy to the any contract with the appellant, but is based on Article
1735 of the New Civil Code, there being no evidence to prove satisfactorily that the appellant has overcome the
presumption of negligence provided for in the law.
Petitioner now comes to us arguing that the Court of Appeals erred (1) in ruling that the consent of the consignee to
the terms and conditions of the bill of lading is necessary to make such stipulations binding upon it; (2) in holding that the
carriers limited package liability as stipulated in the bill of lading does not apply in the instant case; and (3) in allowing
private respondent to fully recover the full alleged value of its lost cargo.
We shall first resolve the validity of the limited liability clause in the bill of lading.
A stipulation in the bill of lading limiting the common carriers liability for loss or destruction of a cargo to a certain
sum, unless the shipper or owner declares a greater value, is sanctioned by law, particularly Articles 1749 and 1750 of the
Civil Code which provide:
ART. 1749. A stipulation that the common carriers liability is limited to the value of the goods appearing in the
bill of lading, unless the shipper or owner declares a greater value, is binding.
ART. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been freely and
fairly agreed upon.
Such limited-liability clause has also been consistently upheld by this Court in a number of cases.[3] Thus, in Sea Land
Service, Inc. vs Intermediate Appellate Court[4], we ruled:
It seems clear that even if said section 4 (5) of the Carriage of Goods by Sea Act did not exist, the validity and binding
effect of the liability limitation clause in the bill of lading here are nevertheless fully sustainable on the basis alone of the
cited Civil Code Provisions. That said stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750
itself in providing a limit to liability only if a greater value is not declared for the shipment in the bill of lading. To hold
otherwise would amount to questioning the justness and fairness of the law itself, and this the private respondent does not
pretend to do. But over and above that consideration, the just and reasonable character of such stipulation is implicit in it
giving the shipper or owner the option of avoiding accrual of liability limitation by the simple and surely far from onerous
expedient of declaring the nature and value of the shipment in the bill of lading..
Pursuant to the afore-quoted provisions of law, it is required that the stipulation limiting the common carriers liability
for loss must be reasonable and just under the circumstances, and has been freely and fairly agreed upon.
The bill of lading subject of the present controversy specifically provides, among others:
18. All claims for which the carrier may be liable shall be adjusted and settled on the basis of the shippers net
invoice cost plus freight and insurance premiums, if paid, and in no event shall the carrier be liable for any loss
of possible profits or any consequential loss.
The carrier shall not be liable for any loss of or any damage to or in any connection with, goods in an amount
exceeding One Hundred Thousand Yen in Japanese Currency (Y100,000.00) or its equivalent in any other
currency per package or customary freight unit (whichever is least) unless the value of the goods higher than this
amount is declared in writing by the shipper before receipt of the goods by the carrier and inserted in the Bill of
Lading and extra freight is paid as required. (Emphasis supplied)
The above stipulations are, to our mind, reasonable and just. In the bill of lading, the carrier made it clear that its
liability would only be up to One Hundred Thousand (Y100,000.00) Yen. However, the shipper, Maruman Trading, had
the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the
carrier. Considering that the shipper did not declare a higher valuation, it had itself to blame for not complying with
the stipulations.
The trial courts ratiocination that private respondent could not have fairly and freely agreed to the limited liability
clause in the bill of lading because the said conditions were printed in small letters does not make the bill of lading invalid.
We ruled in PAL, Inc. vs. Court of Appeals[5] that the jurisprudence on the matter reveals the consistent holding of the
court that contracts of adhesion are not invalid per se and that it has on numerous occasions upheld the binding effect
thereof. Also, in Philippine American General Insurance Co., Inc. vs. Sweet Lines , Inc.[6] this Court , speaking through
the learned Justice Florenz D. Regalado, held:
x x x Ong Yiu vs. Court of Appeals, et.al., instructs us that contracts of adhesion wherein one party imposes a
ready-made form of contract on the other x x x are contracts not entirely prohibited. The one who adheres to the
contract is in reality free to reject it entirely; if he adheres he gives his consent. In the present case, not even an
allegation of ignorance of a party excuses non-compliance with the contractual stipulations since the
responsibility for ensuring full comprehension of the provisions of a contract of carriage devolves not on the
carrier but on the owner, shipper, or consignee as the case may be. (Emphasis supplied)
It was further explained in Ong Yiu vs Court of Appeals[7] that stipulations in contracts of adhesion are valid and
binding.
While it may be true that petitioner had not signed the plane ticket x x, he is nevertheless bound by the
provisions thereof. Such provisions have been held to be a part of the contract of carriage, and valid and binding
upon the passenger regardless of the latters lack of knowledge or assent to the regulation. It is what is known as a
contract of adhesion, in regards which it has been said that contracts of adhesion wherein one party imposes a
ready-made form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely
prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his
consent. x x x , a contract limiting liability upon an agreed valuation does not offend against the policy of the
law forbidding one from contracting against his own negligence. (Emphasis supplied)
Greater vigilance, however, is required of the courts when dealing with contracts of adhesion in that the said contracts
must be carefully scrutinized in order to shield the unwary (or weaker party) from deceptive schemes contained in ready-
made covenants,[8] such as the bill of lading in question. The stringent requirement which the courts are enjoined to observe
is in recognition of Article 24 of the Civil Code which mandates that (i)n all contractual, property or other relations, when
one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness,
tender age or other handicap, the courts must be vigilant for his protection.
The shipper, Maruman Trading, we assume, has been extensively engaged in the trading business. It can not be said to
be ignorant of the business transactions it entered into involving the shipment of its goods to its customers. The shipper
could not have known, or should know the stipulations in the bill of lading and there it should have declared a higher
valuation of the goods shipped. Moreover, Maruman Trading has not been heard to complain that it has been deceived or
rushed into agreeing to ship the cargo in petitioners vessel. In fact, it was not even impleaded in this case.
The next issue to be resolved is whether or not private respondent, as consignee, who is not a signatory to the bill of
lading is bound by the stipulations thereof.
Again, in Sea-Land Service, Inc. vs. Intermediate Appellate Court (supra), we held that even if the consignee was not
a signatory to the contract of carriage between the shipper and the carrier, the consignee can still be bound by the
contract. Speaking through Mr. Chief Justice Narvasa, we ruled:
To begin with, there is no question of the right, in principle, of a consignee in a bill of lading to recover from the
carrier or shipper for loss of, or damage to goods being transported under said bill, although that document
may have been- as in practice it oftentimes is-drawn up only by the consignor and the carrier without the
intervention of the consignee. x x x.

x x x the right of a party in the same situation as respondent here, to recover for loss of a shipment
consigned to him under a bill of lading drawn up only by and between the shipper and the carrier, springs
from either a relation of agency that may exist between him and the shipper or consignor, or his status as
stranger in whose favor some stipulation is made in said contract, and who becomes a party thereto when
he demands fulfillment of that stipulation, in this case the delivery of the goods or cargo shipped. In
neither capacity can he assert personally, in bar to any provision of the bill of lading, the alleged
circumstance that fair and free agreement to such provision was vitiated by its being in such fine print as
to be hardly readable. Parenthetically, it may be observed that in one comparatively recent case (Phoenix
Assurance Company vs. Macondray & Co., Inc., 64 SCRA 15) where this Court found that a similar package
limitation clause was printed in the smallest type on the back of the bill of lading, it nonetheless ruled that
the consignee was bound thereby on the strength of authority holding that such provisions on liability
limitation are as much a part of a bill of lading as though physically in it and as though placed therein by
agreement of the parties.

There can, therefore, be no doubt or equivocation about the validity and enforceability of freely-agreed-upon
stipulations in a contract of carriage or bill of lading limiting the liability of the carrier to an agreed
valuation unless the shipper declares a higher value and inserts it into said contract or bill. This
proposition, moreover, rests upon an almost uniform weight of authority. (Underscoring supplied)

When private respondent formally claimed reimbursement for the missing goods from petitioner and subsequently filed
a case against the latter based on the very same bill of lading, it (private respondent) accepted the provisions of the contract
and thereby made itself a party thereto, or at least has come to court to enforce it. [9] Thus, private respondent cannot now
reject or disregard the carriers limited liability stipulation in the bill of lading. In other words, private respondent is bound
by the whole stipulations in the bill of lading and must respect the same.
Private respondent, however, insists that the carrier should be liable for the full value of the lost cargo in the amount
of Y1,552,500.00, considering that the shipper, Maruman Trading, had "fully declared the shipment x x x, the contents of
each crate, the dimensions, weight and value of the contents,"[10] as shown in the commercial Invoice No. MTM-941.
This claim was denied by petitioner, contending that it did not know of the contents, quantity and value of "the shipment
which consisted of three pre-packed crates described in Bill of Lading No. NGO-53MN merely as 3 CASES SPARE
PARTS.[11]
The bill of lading in question confirms petitioners contention. To defeat the carriers limited liability, the aforecited
Clause 18 of the bill of lading requires that the shipper should have declared in writing a higher valuation of its goods
before receipt thereof by the carrier and insert the said declaration in the bill of lading, with the extra freight paid. These
requirements in the bill of lading were never complied with by the shipper, hence, the liability of the carrier under the limited
liability clause stands. The commercial Invoice No. MTM-941 does not in itself sufficiently and convincingly show that
petitioner has knowledge of the value of the cargo as contended by private respondent. No other evidence was proffered by
private respondent to support is contention. Thus, we are convinced that petitioner should be liable for the full value of the
lost cargo.
In fine, the liability of petitioner for the loss of the cargo is limited to One Hundred Thousand (Y100,000.00) Yen,
pursuant to Clause 18 of the bill of lading.
WHEREFORE, the decision of the Court of Appeals dated June 14, 1995 in C.A.-G.R. CV No. 42803 is hereby
REVERSED and SET ASIDE.
SO ORDERED.
Regalado, (Acting Chief Justice), Melo, Puno, and Mendoza, JJ., concur.

3. BRITISH AIRWAYS V. CA
ROMERO, J.:
In this appeal by certiorari, petitioner British Airways (BA) seeks to set aside the decision of respondent Court of
Appeals[1] promulgated on September 7, 1995, which affirmed the award of damages and attorneys fees made by the
Regional Trial Court of Cebu, 7th Judicial Region, Branch 17, in favor of private respondent GOP Mahtani as well as the
dismissal of its third-party complaint against Philippine Airlines (PAL).[2]
The material and relevant facts are as follows:
On April 16, 1989, Mahtani decided to visit his relatives in Bombay, India. In anticipation of his visit, he obtained the
services of a certain Mr. Gumar to prepare his travel plans. The latter, in turn, purchased a ticket from BA where the
following itinerary was indicated:[3]
CARRIER FLIGHT DATE TIME STATUS
MANILA MNL PR 310Y 16 APR 1730 OK
HONGKONG HKG BA 20 M 16 APR 2100 OK
BOMBAY BOM BA 19 M 23 APR 0840 OK
MANILA MNL"
Since BA had no direct flights from Manila to Bombay, Mahtani had to take a flight to Hongkong via PAL, and upon
arrival in Hongkong he had to take a connecting flight to Bombay on board BA.
Prior to his departure, Mahtani checked in at the PAL counter in Manila his two pieces of luggage containing his
clothings and personal effects, confident that upon reaching Hongkong, the same would be transferred to the BA flight
bound for Bombay.
Unfortunately, when Mahtani arrived in Bombay he discovered that his luggage was missing and that upon inquiry
from the BA representatives, he was told that the same might have been diverted to London. After patiently waiting for his
luggage for one week, BA finally advised him to file a claim by accomplishing the Property Irregularity Report.[4]
Back in the Philippines, specifically on June 11, 1990, Mahtani filed his complaint for damages and attorneys
fees[5] against BA and Mr. Gumar before the trial court, docketed as Civil Case No. CEB-9076.
On September 4, 1990, BA filed its answer with counter claim[6] to the complaint raising, as special and affirmative
defenses, that Mahtani did not have a cause of action against it.Likewise, on November 9, 1990, BA filed a third-party
complaint[7] against PAL alleging that the reason for the non-transfer of the luggage was due to the latters late arrival in
Hongkong, thus leaving hardly any time for the proper transfer of Mahtanis luggage to the BA aircraft bound for Bombay.
On February 25, 1991, PAL filed its answer to the third-party complaint, wherein it disclaimed any liability, arguing
that there was, in fact, adequate time to transfer the luggage to BA facilities in Hongkong. Furthermore, the transfer of the
luggage to Hongkong authorities should be considered as transfer to BA.[8]
After appropriate proceedings and trial, on March 4, 1993, the trial court rendered its decision in favor of Mahtani,[9] the
dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is rendered for the plaintiff and against the defendant for which
defendant is ordered to pay plaintiff the sum of Seven Thousand (P7,000.00) Pesos for the value of the two (2)
suit cases; Four Hundred U.S. ($400.00) Dollars representing the value of the contents of plaintiffs luggage;
Fifty Thousand (P50,000.00) Pesos for moral and actual damages and twenty percent (20%) of the total amount
imposed against the defendant for attorneys fees and costs of this action.
The Third-Party Complaint against third-party defendant Philippine Airlines is DISMISSED for lack of cause of
action.
SO ORDERED.
Dissatisfied, BA appealed to the Court of Appeals, which however, affirmed the trial courts findings. Thus:
WHEREFORE, in view of all the foregoing considerations, finding the Decision appealed from to be in
accordance with law and evidence, the same is hereby AFFIRMED in toto, with costs against defendant-
appellant.
SO ORDERED.[10]
BA is now before us seeking the reversal of the Court of Appeals decision.
In essence, BA assails the award of compensatory damages and attorneys fees, as well as the dismissal of its third-
party complaint against PAL.[11]
Regarding the first assigned issue, BA asserts that the award of compensatory damages in the separate sum of P7,000.00
for the loss of Mahtanis two pieces of luggage was without basis since Mahtani in his complaint[12] stated the following as
the value of his personal belongings:
8. On said travel, plaintiff took with him the following items and its corresponding value, to wit:
1. personal belonging - - - - - - - - - - - - - - P10,000.00
2. gifts for his parents and relatives - - - - - $5,000.00
Moreover, he failed to declare a higher valuation with respect to his luggage, a condition provided for in the ticket,
which reads:[13]
Liability for loss, delay, or damage to baggage is limited unless a higher value is declared in advance and
additional charges are paid:
1. For most international travel (including domestic corporations of international journeys) the liability limit is
approximately U.S. $9.07 per pound (U.S. $20.00) per kilo for checked baggage and U.S. $400 per passenger for
unchecked baggage.
Before we resolve the issues raised by BA, it is needful to state that the nature of an airlines contract of carriage partakes
of two types, namely: a contract to deliver a cargo or merchandise to its destination and a contract to transport passengers
to their destination. A business intended to serve the travelling public primarily, it is imbued with public interest, hence, the
law governing common carriers imposes an exacting standard.[14] Neglect or malfeasance by the carriers employees could
predictably furnish bases for an action for damages.[15]
In the instant case, it is apparent that the contract of carriage was between Mahtani and BA. Moreover, it is indubitable
that his luggage never arrived in Bombay on time. Therefore, as in a number of cases[16] we have assessed the airlines
culpability in the form of damages for breach of contract involving misplaced luggage.
In determining the amount of compensatory damages in this kind of cases, it is vital that the claimant satisfactorily
prove during the trial the existence of the factual basis of the damages and its causal connection to defendants acts. [17]
In this regard, the trial court granted the following award as compensatory damages:
Since plaintiff did not declare the value of the contents in his luggage and even failed to show receipts of the
alleged gifts for the members of his family in Bombay, the most that can be expected for compensation of his
lost luggage (2 suit cases) is Twenty U.S. Dollars ($20.00) per kilo, or a combined value of Four Hundred
($400.00) U.S. Dollars for Twenty kilos representing the contents plus Seven Thousand (P7,000.00) Pesos
representing the purchase price of the two (2) suit cases.
However, as earlier stated, it is the position of BA that there should have been no separate award for the luggage and
the contents thereof since Mahtani failed to declare a separate higher valuation for the luggage,[18] and therefore, its liability
is limited, at most, only to the amount stated in the ticket.
Considering the facts of the case, we cannot assent to such specious argument.
Admittedly, in a contract of air carriage a declaration by the passenger of a higher value is needed to recover a greater
amount. Article 22(1) of the Warsaw Convention,[19] provides as follows:
xxxxxxxxx
(2) In the transportation of checked baggage and goods, the liability of the carrier shall be limited to a sum of
250 francs per kilogram, unless the consignor has made, at the time the package was handed over to the carrier, a
special declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that case
the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that the sum is greater
than the actual value to the consignor at delivery.
American jurisprudence provides that an air carrier is not liable for the loss of baggage in an amount in excess of the
limits specified in the tariff which was filed with the proper authorities, such tariff being binding on the passenger regardless
of the passengers lack of knowledge thereof or assent thereto.[20] This doctrine is recognized in this jurisdiction.[21]
Notwithstanding the foregoing, we have, nevertheless, ruled against blind reliance on adhesion contracts where the
facts and circumstances justify that they should be disregarded.[22]
In addition, we have held that benefits of limited liability are subject to waiver such as when the air carrier failed to
raise timely objections during the trial when questions and answers regarding the actual claims and damages sustained by
the passenger were asked.[23]
Given the foregoing postulates, the inescapable conclusion is that BA had waived the defense of limited liability when
it allowed Mahtani to testify as to the actual damages he incurred due to the misplacement of his luggage, without any
objection. In this regard, we quote the pertinent transcript of stenographic notes of Mahtanis direct testimony: [24]
Q - How much are you going to ask from this court?
A - P100,000.00.
Q - What else?
A - Exemplary damages.
Q - How much?
A - P100,000.00.
Q - What else?
A - The things I lost, $5,000.00 for the gifts I lost and my
personal belongings, P10,000.00.
Q - What about the filing of this case?
A - The court expenses and attorneys fees is 30%.
Indeed, it is a well-settled doctrine that where the proponent offers evidence deemed by counsel of the adverse party
to be inadmissible for any reason, the latter has the right to object.However, such right is a mere privilege which can be
waived. Necessarily, the objection must be made at the earliest opportunity, lest silence when there is opportunity to speak
may operate as a waiver of objections.[25] BA has precisely failed in this regard.
To compound matters for BA, its counsel failed, not only to interpose a timely objection, but even conducted his own
cross-examination as well.[26] In the early case of Abrenica v. Gonda,[27] we ruled that:
x x x (I)t has been repeatedly laid down as a rule of evidence that a protest or objection against the admission of
any evidence must be made at the proper time, and that if not so made it will be understood to have been
waived. The proper time to make a protest or objection is when, from the question addressed to the witness, or
from the answer thereto, or from the presentation of proof, the inadmissibility of evidence is, or may be inferred.
Needless to say, factual findings of the trial court, as affirmed by the Court of Appeals, are entitled to great
respect.[28] Since the actual value of the luggage involved appreciation of evidence, a task within the competence of the
Court of Appeals, its ruling regarding the amount is assuredly a question of fact, thus, a finding not reviewable by this
Court.[29]
As to the issue of the dismissal of BAs third-party complaint against PAL, the Court of Appeals justified its ruling in
this wise, and we quote:[30]
Lastly, we sustain the trial courts ruling dismissing appellants third-party complaint against PAL.
The contract of air transportation in this case pursuant to the ticket issued by appellant to plaintiff-appellee was
exclusively between the plaintiff Mahtani and defendant-appellant BA. When plaintiff boarded the PAL plane
from Manila to Hongkong, PAL was merely acting as a subcontractor or agent of BA. This is shown by the fact
that in the ticket issued by appellant to plaintiff-appellee, it is specifically provided on the Conditions of
Contract, paragraph 4 thereof that:
4. x x x carriage to be performed hereunder by several successive carriers is regarded as a single
operation.
The rule that carriage by plane although performed by successive carriers is regarded as a single operation and
that the carrier issuing the passengers ticket is considered the principal party and the other carrier merely
subcontractors or agent, is a settled issue.
We cannot agree with the dismissal of the third-complaint.
In Firestone Tire and Rubber Company of the Philippines v. Tempengko,[31] we expounded on the nature of a third-
party complaint thus:
The third-party complaint is, therefore, a procedural device whereby a third party who is neither a party nor
privy to the act or deed complained of by the plaintiff, may be brought into the case with leave of court, by the
defendant, who acts as third-party plaintiff to enforce against such third-party defendant a right for contribution,
indemnity, subrogation or any other relief, in respect of the plaintiffs claim. The third-party complaint is actually
independent of and separate and distinct from the plaintiffs complaint. Were it not for this provision of the Rules
of Court, it would have to be filed independently and separately from the original complaint by the defendant
against the third-party. But the Rules permit defendant to bring in a third-party defendant or so to speak, to
litigate his separate cause of action in respect of plaintiffs claim against a third-party in the original and principal
case with the object of avoiding circuitry of action and unnecessary proliferation of law suits and of disposing
expeditiously in one litigation the entire subject matter arising from one particular set of facts.
Undeniably, for the loss of his luggage, Mahtani is entitled to damages from BA, in view of their contract of
carriage. Yet, BA adamantly disclaimed its liability and instead imputed it to PAL which the latter naturally denies. In other
words, BA and PAL are blaming each other for the incident.
In resolving this issue, it is worth observing that the contract of air transportation was exclusively between Mahtani
and BA, the latter merely endorsing the Manila to Hongkong leg of the formers journey to PAL, as its subcontractor or
agent. In fact, the fourth paragraph of the Conditions of Contracts of the ticket [32] issued by BA to Mahtani confirms that
the contract was one of continuous air transportation from Manila to Bombay.
4. x x x carriage to be performed hereunder by several successive carriers is regarded as a single operation.
Prescinding from the above discussion, it is undisputed that PAL, in transporting Mahtani from Manila to Hongkong
acted as the agent of BA.
Parenthetically, the Court of Appeals should have been cognizant of the well-settled rule that an agent
is also responsible for any negligence in the performance of its function[33] and is liable for damages which the principal
may suffer by reason of its negligent act.[34] Hence, the Court of Appeals erred when it opined that BA, being the principal,
had no cause of action against PAL, its agent or sub-contractor.
Also, it is worth mentioning that both BA and PAL are members of the International Air Transport Association (IATA),
wherein member airlines are regarded as agents of each other in the issuance of the tickets and other matters pertaining to
their relationship.[35] Therefore, in the instant case, the contractual relationship between BA and PAL is one of agency, the
former being the principal, since it was the one which issued the confirmed ticket, and the latter the agent.
Our pronouncement that BA is the principal is consistent with our ruling in Lufthansa German Airlines v. Court of
Appeals.[36] In that case, Lufthansa issued a confirmed ticket to Tirso Antiporda covering five-leg trip aboard different
airlines. Unfortunately, Air Kenya, one of the airlines which was to carry Antiporda to a specific destination bumped him
off.
An action for damages was filed against Lufthansa which, however, denied any liability, contending that its
responsibility towards its passenger is limited to the occurrence of a mishap on its own line. Consequently, when Antiporda
transferred to Air Kenya, its obligation as a principal in the contract of carriage ceased; from there on, it merely acted as a
ticketing agent for Air Kenya.

In rejecting Lufthansas argument, we ruled:


In the very nature of their contract, Lufthansa is clearly the principal in the contract of carriage with Antiporda
and remains to be so, regardless of those instances when actual carriage was to be performed by various
carriers. The issuance of confirmed Lufthansa ticket in favor of Antiporda covering his entire five-leg trip
aboard successive carriers concretely attest to this.

Since the instant petition was based on breach of contract of carriage, Mahtani can only sue BA alone, and not PAL,
since the latter was not a party to the contract. However, this is not to say that PAL is relieved from any liability due to any
of its negligent acts. In China Air Lines, Ltd. v. Court of Appeals,[37] while not exactly in point, the case, however, illustrates
the principle which governs this particular situation. In that case, we recognized that a carrier (PAL), acting as an agent of
another carrier, is also liable for its own negligent acts or omission in the performance of its duties.

Accordingly, to deny BA the procedural remedy of filing a third-party complaint against PAL for the purpose of
ultimately determining who was primarily at fault as between them, is without legal basis. After all, such proceeding is in
accord with the doctrine against multiplicity of cases which would entail receiving the same or similar evidence for both
cases and enforcing separate judgments therefor. It must be borne in mind that the purpose of a third-party complaint is
precisely to avoid delay and circuity of action and to enable the controversy to be disposed of in one suit.[38] It is but logical,
fair and equitable to allow BA to sue PAL for indemnification, if it is proven that the latters negligence was the proximate
cause of Mahtanis unfortunate experience, instead of totally absolving PAL from any liability.

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R. CV No. 43309 dated
September 7, 1995 is hereby MODIFIED, reinstating the third-party complaint filed by British Airways dated November 9,
1990 against Philippine Airlines. No costs.
SO ORDERED.
Narvasa C.J., (Chairman), Melo, Francisco, and Panganiban, JJ., concur.

4. NOCUM V. LAGUNA TAYABAS BUS COMPANY


BARREDO, J.:
Appeal of the Laguna Tayabas Bus Co., defendant in the Court below, from a judgment of the said court (Court of First
Instance of Batangas) in its Civil Case No. 834, wherein appellee Herminio L. Nocum was plaintiff, sentencing appellant
to pay appellee the sum of P1,351.00 for actual damages and P500.00 as attorney's fees with legal interest from the filing
of the complaint plus costs. Appellee, who was a passenger in appellant's Bus No. 120 then making a trip within the barrio
of Dita, Municipality of Bay, Laguna, was injured as a consequence of the explosion of firecrackers, contained in a box,
loaded in said bus and declared to its conductor as containing clothes and miscellaneous items by a co-passenger. The
findings of fact of the trial court are not assailed. The appeal is purely on legal questions.
Appellee has not filed any brief. All that We have before Us is appellant's brief with the following assignment of errors:
I
BASED ON THE FACTS THE LOWER COURT FOUND AS ESTABLISHED, IT ERRED AS A MATTER OF
LAW IN NOT ABSOLVING APPELLANT FROM LIABILITY RESULTING FROM THE EXPLOSION OF
FIRECRACKERS CONTAINED IN A PACKAGE, THE CONTENTS OF WHICH WERE
MISREPRESENTED BY A PASSENGER.
II
THE LOWER COURT ERRED, AS A MATTER OF LAW, IN AWARDING DAMAGES WITH LEGAL
INTEREST IN FAVOR OF THE APPELLEE.
III
THE LOWER COURT ERRED IN NOT DISMISSING THE COMPLAINT, WITH COSTS AGAINST THE
APPELLEE.
Upon consideration of the points raised and discussed by appellant, We find the appeal to be well taken.
The main basis of the trial court's decision is that appellant did not observe the extraordinary or utmost diligence of a very
cautious person required by the following articles of the Civil Code:
ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745,
Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles
1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
ART 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733
and 1755.
Analyzing the evidence presented by the parties, His Honor found:
According to Severino Andaya, a witness for the plaintiff, a man with a box went up the baggage compartment of
the bus where he already was and said box was placed under the seat. They left Azcarraga at about 11:30 in the
morning and when the explosion occurred, he was thrown out. PC investigation report states that thirty seven (37)
passengers were injured (Exhibits "O" and "2").
The bus conductor, Sancho Mendoza, testified that the box belonged to a passenger whose name he does not
know and who told him that it contained miscellaneous items and clothes. He helped the owner in loading the
baggage which weighed about twelve (12) kilos and because of company regulation, he charged him for it twenty-
five centavos (P0.25). From its appearance there was no indication at all that the contents were explosives or
firecrackers. Neither did he open the box because he just relied on the word of the owner.
Dispatcher Nicolas Cornista of defendant company corroborrated the testimony of Mendoza and he said, among
other things, that he was present when the box was loaded in the truck and the owner agreed to pay its fare. He
added that they were not authorized to open the baggages of passengers because instruction from the management
was to call the police if there were packages containing articles which were against regulations.
xxx xxx xxx
There is no question that Bus No. 120 was road worthy when it left its Manila Terminal for Lucena that morning
of December 5, 1960. The injuries suffered by the plaintiff were not due to mechanical defects but to the
explosion of firecrackers inside the bus which was loaded by a co-passenger.
... Turning to the present case, it is quite clear that extraordinary or utmost diligence of a very cautious person was
not observed by the defendant company. The service manual, exhibits "3" and "3-A," prohibits the employees to
allow explosives, such as dynamite and firecrackers to be transported on its buses. To implement this particular
rule for 'the safety of passengers, it was therefore incumbent upon the employees of the company to make the
proper inspection of all the baggages which are carried by the passengers.
But then, can it not be said that the breach of the contract was due to fortuitous event? The Supreme Court in the
case of Lasam vs. Smith, 45 Phil. 657, quoted Escriche's definition of caso fortuito as "an unexpected event or act
of God which could neither be foreseen nor resisted, such as floods, torrents, shipwrecks, conflagrations,
lightning, compulsions, insurrections, destructions of buildings by unforeseen accidents and other occurrences of
a similar nature." In other words, the cause of the unexpected event must be independent of the will of man or
something which cannot be avoided. This cannot be said of the instant case. If proper and rigid inspection were
observed by the defendant, the contents of the box could have been discovered and the accident avoided. Refusal
by the passenger to have the package opened was no excuse because, as stated by Dispatcher Cornista, employees
should call the police if there were packages containing articles against company regulations. Neither was failure
by employees of defendant company to detect the contents of the packages of passengers because like the
rationale in the Necesito vs. Paras case (supra), a passenger has neither choice nor control in the exercise of their
discretion in determining what are inside the package of co-passengers which may eventually prove fatal.
We cannot agree. No doubt, the views of His Honor do seem to be in line with the reasons that the Code Commission had
for incorporating the above-quoted provisions in its draft of the Civil Code. Indeed, in approving the said draft, Congress
must have concurred with the Commission that by requiring the highest degree of diligence from common carriers in the
safe transport of their passengers and by creating a presumption of negligence against them, the recklessness of their
drivers which is a common sight even in crowded areas and, particularly, on the highways throughout the country may,
somehow, if not in a large measure, be curbed. We are not convinced, however, that the exacting criterion of said
provisions has not been met by appellant in the circumstances of this particular case.
It is undisputed that before the box containing the firecrackers were allowed to be loaded in the bus by the conductor,
inquiry was made with the passenger carrying the same as to what was in it, since its "opening ... was folded and tied with
abaca." (Decision p. 16, Record on Appeal.) According to His Honor, "if proper and rigid inspection were observed by the
defendant, the contents of the box could have been discovered and the accident avoided. Refusal by the passenger to have
the package opened was no excuse because, as stated by Dispatcher Cornista, employees should call the police if there
were packages containing articles against company regulations." That may be true, but it is Our considered opinion that
the law does not require as much. Article 1733 is not as unbending as His Honor has held, for it reasonably qualifies the
extraordinary diligence required of common carriers for the safety of the passengers transported by them to be "according
to all the circumstances of each case." In fact, Article 1755 repeats this same qualification: "A common carrier is bound to
carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with due regard for all the circumstances."
In this particular case before Us, it must be considered that while it is true the passengers of appellant's bus should not be
made to suffer for something over which they had no control, as enunciated in the decision of this Court cited by His
Honor,1 fairness demands that in measuring a common carrier's duty towards its passengers, allowance must be given to
the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. It
is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers,
not to speak of his own. Not to be lightly considered must be the right to privacy to which each passenger is entitled. He
cannot be subjected to any unusual search, when he protests the innocuousness of his baggage and nothing appears to
indicate the contrary, as in the case at bar. In other words, inquiry may be verbally made as to the nature of a passenger's
baggage when such is not outwardly perceptible, but beyond this, constitutional boundaries are already in danger of being
transgressed. Calling a policeman to his aid, as suggested by the service manual invoked by the trial judge, in compelling
the passenger to submit to more rigid inspection, after the passenger had already declared that the box contained mere
clothes and other miscellaneous, could not have justified invasion of a constitutionally protected domain. Police officers
acting without judicial authority secured in the manner provided by law are not beyond the pale of constitutional
inhibitions designed to protect individual human rights and liberties. Withal, what must be importantly considered here is
not so much the infringement of the fundamental sacred rights of the particular passenger herein involved, but the constant
threat any contrary ruling would pose on the right of privacy of all passengers of all common carriers, considering how
easily the duty to inspect can be made an excuse for mischief and abuse. Of course, when there are sufficient indications
that the representations of the passenger regarding the nature of his baggage may not be true, in the interest of the
common safety of all, the assistance of the police authorities may be solicited, not necessarily to force the passenger to
open his baggage, but to conduct the needed investigation consistent with the rules of propriety and, above all, the
constitutional rights of the passenger. It is in this sense that the mentioned service manual issued by appellant to its
conductors must be understood.
Decisions in other jurisdictions cited by appellant in its brief, evidently because of the paucity of local precedents squarely
in point, emphasize that there is need, as We hold here, for evidence of circumstances indicating cause or causes for
apprehension that the passenger's baggage is dangerous and that it is failure of the common carrier's employee to act in the
face of such evidence that constitutes the cornerstone of the common carrier's liability in cases similar to the present one.
The principle that must control the servants of the carrier in a case like the one before us is correctly stated in the
opinion in the case of Clarke v. Louisville & N.R. Co. 20 Ky L. Rep. 839, 49 S.W. 1120. In that case Clarke was
a passenger on the defendant's train. Another passenger took a quantity of gasoline into the same coach in which
Clarke was riding. It ignited and exploded, by reason of which he was severely injured. The trial court
peremptorily instructed the jury to find for the defendant. In the opinion, affirming the judgment, it is said: "It
may be stated briefly, in assuming the liability of a railroad to its passengers for injury done by another passenger,
only where the conduct of this passenger had been such before the injury as to induce a reasonably prudent and
vigilant conductor to believe that there was reasonable ground to apprehend violence and danger to the other
passengers, and in that case asserting it to be the duty of the conductor of the railroad train to use all reasonable
means to prevent such injury, and if he neglects this reasonable duty, and injury is done, that then the company is
responsible; that otherwise the railroad is not responsible."
The opinion quotes with approval from the case of Gulf, C. & S. F. R. Co. vs. Shields, 9 Tex. Civ. App. 652, 29 S.
W. 652, in which case the plaintiff was injured by alcohol which had been carried upon the train by another
passenger. In the opinion in that case it is said: "It was but a short period of time after the alcohol was spilt when
it was set on fire and the accident occurred, and it was not shown that appellant's employees knew that the jug
contained alcohol. In fact, it is not shown that the conductor or any other employee knew that Harris had a jug
with him until it fell out of the sack, though the conductor had collected ... (his) fare, and doubtless knew that he
had the sack on the seat with him. ... It cannot be successfully denied that Harris had the right as a passenger to
carry baggage on the train, and that he had a right to carry it in a sack if he chose to do so. We think it is equally
clear that, in the absence of some intimation or circumstance indicating that the sack contained something
dangerous to other passengers, it was not the duty of appellant's conductor or any other employee to open the sack
and examine its contents." Quinn v. Louisville & N. R. Co. 98 Ky. 231, 32 S. W. 742; Wood v. Louisville & N.
R. Co. 101 Ky. 703, 42 S. W. 349; Louisville & N. R. Co. v. Vincent, 29 Ky. L. Rep. 1049, 96 S. W. 898;
Louisville & N. R. Co. v. Renfro, 142 Ky. 590, 33 L. R. A. (N. S.) 133, 135 S. W. 266.2 (Emphasis supplied)
Explosive or Dangerous Contents. A carrier is ordinarily not liable for injuries to passengers from fires or
explosions caused by articles brought into its conveyances by other passengers, in the absence of any evidence
that the carrier, through its employees, was aware of the nature of the article or had any reason to anticipate
danger therefrom. (Bogard v. Illinois C. R Co. 144 Ky. 649, 139 S. W. 855, 36 L. R. A.[N. S.] 337; Clarke v.
Louisville & N. R. Co. 101 Ky. 34, 39 S. W. 840, 36 L. R. A. 123 [explosion of can of gasoline]; East Indian R.
Co. v. Mukerjee [1901] A. C. [Eng.] 396, 3 B. R. C. 420 P. C. [explosion of fireworks]; Annotation: 37 L. R.
A. [N. S.] 725.)3
Appellant further invokes Article 1174 of the Civil Code which relieves all obligors, including, of course, common
carriers like appellant, from the consequence of fortuitous events. The court a quo held that "the breach of contract (in this
case) was not due to fortuitous event and that, therefore, the defendant is liable in damages." Since We hold that appellant
has succeeded in rebutting the presumption of negligence by showing that it has exercised extraordinary diligence for the
safety of its passengers, "according to the circumstances of the (each) case", We deem it unnecessary to rule whether or
not there was any fortuitous event in this case.
ACCORDINGLY, the appealed judgment of the trial court is reversed and the case is dismissed, without costs.

5. FORTUNE EXPRESS, INC. V. CA


MENDOZA, J.:
This is an appeal by petition for review on certiorari of the decision, dated July 29, 1994, of the Court of Appeals,
which reversed the decision of the Regional Trial Court, Branch VI, Iligan City. The aforesaid decision of the trial court
dismissed the complaint of private respondents against petitioner for damages for breach of contract of carriage filed on the
ground that petitioner had not exercised the required degree of diligence in the operation of one of its buses. Atty. Talib
Caorong, whose heirs are private respondents herein, was a passenger of the bus and was killed in the ambush involving
said bus.
The facts of the instant case are as follows:
Petitioner is a bus company in northern Mindanao. Private respondent Paulie Caorong is the widow of Atty. Caorong,
while private respondents Yasser King, Rose Heinni, and Prince Alexander are their minor children.
On November 18, 1989, a bus of petitioner figured in an accident with a jeepney in Kauswagan, Lanao del Norte,
resulting in the death of several passengers of the jeepney, including two Maranaos.Crisanto Generalao, a volunteer field
agent of the Constabulary Regional Security Unit No. X, conducted an investigation of the accident. He found that the owner
of the jeepney was a Maranao residing in Delabayan, Lanao del Norte and that certain Maranaos were planning to take
revenge on the petitioner by burning some of its buses. Generalao rendered a report on his findings to Sgt. Reynaldo Bastasa
of the Philippine Constabulary Regional Hearquarters at Cagayan de Oro. Upon the instruction of Sgt. Bastasa, he went to
see Diosdado Bravo, operations manager of petitioner, at its main office in Cagayan de Oro City. Bravo assured him that
the necessary precautions to insure the safety of lives and property would be taken.[1]
At about 6:45 P.M. on November 22, 1989, three armed Maranaos who pretended to be passengers, seized a bus of
petitioner at Linamon, Lanao del Norte while on its way to Iligan City. Among the passengers of the bus was Atty.
Caorong. The leader of the Maranaos, identified as one Bashier Mananggolo, ordered the driver, Godofredo Cabatuan, to
stop the bus on the side of the highway. Mananggolo then shot Cabatuan on the arm, which caused him to slump on the
steering wheel. Then one of the companions of Mananggolo started pouring gasoline inside the bus, as the other held the
passengers at bay with a handgun. Mananggolo then ordered the passengers to get off the bus. The passengers, including
Atty. Caorong, stepped out of the bus and went behind the bushes in a field some distance from the highway.[2]
However, Atty. Caorong returned to the bus to retrieve something from the overhead rack. At that time, one of the
armed men was pouring gasoline on the head of the driver. Cabatuan, who had meantime regained consciousness, heard
Atty. Caorong pleading with the armed men to spare the driver as he was innocent of any wrong doing and was only trying
to make a living. The armed men were, however, adamant as they repeated their warning that they were going to burn the
bus along with its driver. During this exchange between Atty. Caorong and the assailants, Cabatuan climbed out of the left
window of the bus and crawled to the canal on the opposite side of the highway. He heard shots from inside the bus. Larry
de la Cruz, one of the passengers, saw that Atty. Caorong was hit. Then the bus was set on fire.Some of the passengers were
able to pull Atty. Caorong out of the burning bus and rush him to the Mercy Community Hospital in Iligan City, but he died
while undergoing operation.[3]
The private respondents brought this suit for breach of contract of carriage in the Regional Trial Court, Branch VI,
Iligan City. In his decision, dated December 28, 1990, the trial court dismissed the complaint, holding as follows:
The fact that defendant, through Operations Manager Diosdado Bravo, was informed of the rumors that the Moslems
intended to take revenge by burning five buses of defendant is established since the latter also utilized Crisanto
Generalaos as a witness. Yet despite this information, the plaintiffs charge, defendant did not take proper precautions. . .
. Consequently, plaintiffs now fault the defendant for ignoring the report. Their position is that the defendant should have
provided its buses with security guards. Does the law require common carriers to install security guards in its buses for the
protection and safety of its passengers? Is the failure to post guards an omission of the duty to exercise the diligence of a
good father of the family which could have prevented the killing of Atty. Caorong? To our mind, the diligence demanded
by law does not include the posting of security guards in buses. It is an obligation that properly belongs to the
State. Besides, will the presence of one or two security guards suffice to deter a determined assault of the lawless and thus
prevent the injury complained of? Maybe so, but again, perhaps not. In other words, the presence of a security guard is not
a guarantee that the killing of Atty. Caorong would have been definitely avoided.
.
Accordingly, the failure of defendant to accord faith and credit to the report of Mr. Generalao and the fact that it did not
provide security to its buses cannot, in the light of the circumstances, be characterized as negligence.
Finally, the evidence clearly shows that the assailants did not have the least intention of harming any of the
passengers. They ordered all the passengers to alight and set fire on the bus only after all the passengers were out of
danger. The death of Atty. Caorong was an unexpected and unforseen occurrence over which defendant had no
control. Atty. Caorong performed an act of charity and heroism in coming to the succor of the driver even in the face of
danger. He deserves the undying gratitude of the driver whose life he saved. No one should blame him for an act of
extraordinary charity and altruism which cost his life. But neither should any blame be laid on the doorstep of
defendant. His death was solely due to the willful acts of the lawless which defendant could neither prevent nor stop.
.
WHEREFORE, in view of the foregoing, the complaint is hereby dismissed. For lack of merit, the counter-claim is
likewise dismissed. No cost.[4]

On appeal, however, the Court of Appeals reversed. It held:


In the case at bench, how did defendant-appellee react to the tip or information that certain Maranao hotheads were
planning to burn five of its buses out of revenge for the deaths of two Maranaos in an earlier collision involving appellees
bus? Except for the remarks of appellees operations manager that we will have our action . . . . and Ill be the one to settle
it personally, nothing concrete whatsoever was taken by appellee or its employees to prevent the execution of the
threat. Defendant-appellee never adopted even a single safety measure for the protection of its paying passengers. Were
there available safeguards? Of course, there were: one was frisking passengers particularly those en route to the area
where the threats were likely to be carried out such as where the earlier accident occurred or the place of influence of the
victims or their locality. If frisking was resorted to, even temporarily, . . . . appellee might be legally excused from
liability. Frisking of passengers picked up along the route could have been implemented by the bus conductor; for those
boarding at the bus terminal, frisking could have been conducted by him and perhaps by additional personnel of
defendant-appellee. On hindsight, the handguns and especially the gallon of gasoline used by the felons all of which were
brought inside the bus would have been discovered, thus preventing the burning of the bus and the fatal shooting of the
victim.

Appellees argument that there is no law requiring it to provide guards on its buses and that the safety of citizens is the
duty of the government, is not well taken. To be sure, appellee is not expected to assign security guards on all of its buses;
if at all, it has the duty to post guards only on its buses plying predominantly Maranao areas. As discussed in the next
preceding paragraph, the least appellee could have done in response to the report was to adopt a system of verification
such as frisking of passengers boarding its buses. Nothing, and to repeat, nothing at all, was done by defendant-appellee to
protect its innocent passengers from the danger arising from the Maranao threats. It must be observed that frisking is not a
novelty as a safety measure in our society. Sensitive places in fact, nearly all important places have applied this method of
security enhancement. Gadgets and devices are available in the market for this purpose. It would not have weighed much
against the budget of the bus company if such items were made available to its personnel to cope up with situations such
as the Maranao threats.
In view of the constitutional right to personal privacy, our pronouncement in this decision should not be construed as an
advocacy of mandatory frisking in all public conveyances. What we are saying is that given the circumstances obtaining
in the case at bench that: (a) two Maranaos died because of a vehicular collision involving one of appellees vehicles; (b)
appellee received a written report from a member of the Regional Security Unit, Constabulary Security Group, that the
tribal/ethnic group of the two deceased were planning to burn five buses of appellee out of revenge; and (c) appellee did
nothing absolutely nothing for the safety of its passengers travelling in the area of influence of the victims, appellee has
failed to exercise the degree of diligence required of common carriers. Hence, appellee must be adjudged liable.
WHEREFORE, the decision appealed from is hereby REVERSED and another rendered ordering defendant-appellee to
pay plaintiffs-appellants the following:
1) P3,399,649.20 as death indemnity;
2) P50,000.00 and P500.00 per appearance as attorneys fees; and
Costs against defendant-appellee.[5]
Hence, this appeal. Petitioner contends:
(A) THAT PUBLIC RESPONDENT ERRED IN REVERSING THE DECISION OF THE REGIONAL TRIAL
COURT DATED DECEMBER 28, 1990 DISMISSING THE COMPLAINT AS WELL AS THE
COUNTERCLAIM, AND FINDING FOR PRIVATE RESPONDENTS BY ORDERING PETITIONER
TO PAY THE GARGANTUAN SUM OF P3,449,649.20 PLUS P500.00 PER APPEARANCE AS
ATTORNEYS FEES, AS WELL AS DENYING PETITIONERS MOTION FOR RECONSIDERATION
AND THE SUPPLEMENT TO SAID MOTION, WHILE HOLDING, AMONG OTHERS, THAT
PETITIONER BREACHED THE CONTRACT OF CARIAGE BY ITS FAILURE TO EXERCISE THE
REQUIRED DEGREE OF DILIGENCE;
(B) THAT THE ACTS OF THE MARANAO OUTLAWS WERE SO GRAVE, IRRESISTIBLE, VIOLENT,
AND FORCEFUL, AS TO BE REGARDED AS CASO FORTUITO; AND
(C) THAT PUBLIC RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER COULD HAVE PROVIDED ADEQUATE SECURITY IN PREDOMINANTLY MUSLIM
AREAS AS PART OF ITS DUTY TO OBSERVE EXTRA-ORDINARY DILIGENCE AS A COMMON
CARRIER.
The instant petition has no merit.
First. Petitioners Breach of the Contract of Carriage

Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on
account of the wilful acts of other passengers, if the employees of the common carrier could have prevented the act the
exercise of the diligence of a good father of a family. In the present case, it is clear that because of the negligence of
petitioners employees, the seizure of the bus by Mananggolo and his men was made possible.
Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge
on the petitioner by burning some of its buses and the assurance of petitioners operation manager, Diosdado Bravo, that the
necessary precautions would be taken, petitioner did nothing to protect the safety of its passengers.
Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large
quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of passengers,
such as frisking passengers and inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors,
before allowing them on board could have been employed without violating the passengers constitutional rights. As this
Court intimated in Gacal v. Philippine Air Lines, Inc.,[6] a common carrier can be held liable for failing to prevent a hijacking
by frisking passengers and inspecting their baggages.
From the foregoing, it is evident that petitioners employees failed to prevent the attack on one of petitioners buses
because they did not exercise the diligence of a good father of a family. Hence, petitioner should be held liable for the death
of Atty. Caorong.
Second. Seizure of Petitioners Bus not a Case of Force Majeure

The petitioner contends that the seizure of its bus by the armed assailants was a fortuitous event for which it could not
be held liable.
Art. 1174 of the Civil Code defines a fortuitous even as an occurrence which could not be foreseen or which though
foreseen, is inevitable. In Yobido v. Court of Appeals,[7] we held that to be considered as force majeure, it is necessary that:
(1) the cause of the breach of the obligation must be independent of the human will; (2) the event must be either
unforeseeable or unavoidable; (3) the occurrence must be such as to render it impossible for the debtor to fulfill the
obligation in a normal manner; and (4) the obligor must be free of participation in, or aggravation of, the injury to the
creditor. The absence of any of the requisites mentioned above would prevent the obligor from being excused from liability.
Thus, in Vasquez v. Court of Appeals,[8] it was held that the common carrier was liable for its failure to take the
necessary precautions against an approaching typhoon, of which it was warned, resulting in the loss of the lives of several
passengers. The event was foreseeable, and, thus, the second requisite mentioned above was not fulfilled. This ruling applies
by analogy to the present case. Despite the report of PC agent Generalao that the Maranaos were going to attack its buses,
petitioner took no steps to safeguard the lives and properties of its passengers. The seizure of the bus of the petitioner was
foreseeable and, therefore, was not a fortuitous event which would exempt petitioner from liability.
Petitioner invokes the ruling in Pilapil v. Court of Appeals[9] and De Guzman v. Court of Appeals[10] in support of its
contention that the seizure of its bus by the assailants constitutes force majeure. In Pilapil v. Court of Appeals,[11] it was held
that a common carrier is not liable for failing to install window grills on its buses to protect passengers from injuries caused
by rocks hurled at the bus by lawless elements. On the other hand, in De Guzman v. Court of Appeals,[12] it was ruled that a
common carrier is not responsible for goods lost as a result of a robbery which is attended by grave or irresistible threat,
violence, or force.
It is clear that the cases of Pilapil and De Guzman do not apply to the present case. Art. 1755 of the Civil Code provides
that a common carrier is bound to carry the passengers as far as human care and foresight can provide, using the utmost
diligence of very cautious person, with due regard for all the circumstances. Thus, we held in Pilapil and De Guzman that
the respondents therein were not negligent in failing to take special precautions against threats to the safety of passengers
which could not be foreseen, such as tortious or criminal acts of third persons. In the present case, this factor of
unforeseeablility (the second requisite for an event to be considered force majeure) is lacking. As already stated, despite the
report of PC agent Generalao that the Maranaos were planning to burn some of petitioners buses and the assurance of
petitioners operations manager (Diosdado Bravo) that the necessary precautions would be taken, nothing was really done
by petitioner to protect the safety of passengers.
Third. Deceased not Guilty of Contributory Negligence

The petitioner contends that Atty. Caorong was guilty of contributory negligence in returning to the bus to retrieve
something. But Atty. Caorong did not act recklessly. It should be pointed out that the intended targets of the violence were
petitioner and its employees, not its passengers. The assailants motive was to retaliate for the loss of life of two Maranaos
as a result of the collision between petitioners bus and the jeepney in which the two Maranaos were riding. Mananggolo,
the leader of the group which had hijacked the bus, ordered the passengers to get off the bus as they intended to burn it and
its driver.The armed men actually allowed Atty. Caorong to retrieve something from the bus. What apparently angered them
was his attempt to help the driver of the bus by pleading for his life. He was playing the role of the good Samaritan. Certainly,
this act cannot be considered an act of negligence, let alone recklessness.
Fourth. Petitioner Liable to Private Respondents for Damages

We now consider the question of damages that the heirs of Atty. Caorong, private respondents herein, are entitled to
recover from the petitioner.
Indemnity for Death. Art. 1764 of the Civil Code, in relation to Art. 2206 thereof, provides for the payment of
indemnity for the death of passengers caused by the breached of contract of carriage by a common carrier. Initially fixed in
Art. 2206 at P3,000.00, the amount of the said indemnity for death has through the years been gradually increased in view
of the declining value of the peso. It is presently fixed at P50,000.00.[13] Private respondents are entitled to this amount.
Actual damages. Art. 2199 provides that Except as provided by law or by stipulation, one is entitled to an adequate
compensation only for such pecuniary loss suffered by him as he has duly proved. The trial court found that the private
respondents spent P30,000.00 for the wake and burial of Atty. Caorong.[14] Since petitioner does not question this finding
of the trial court, it is liable to private respondents in the said amount as actual damages.
Moral Damages. Under Art. 2206, 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. The trial court found that private
respondent Paulie Caorong suffered pain from the death of her husband and worry on how to provide support for their minor
children, private respondents Yasser King, Rose Heinni, and Prince Alexander.[15] The petitioner likewise does not question
this finding of the trial court. Thus, in accordance with recent decisions of this Court,[16] we hold that the petitioner is liable
to the private respondents in the amount of P100,000.00 as moral damages for the death of Atty. Caorong.
Exemplary Damages. Art. 2232 provides that in contracts and quasi-contracts, the court may award exemplary damages
if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. In the present case, the petitioner
acted in a wanton and reckless manner. Despite warning that the Maranaos were planning to take revenge against the
petitioner by burning some of its buses, and contrary to the assurance made by its operations manager that the necessary
precautions would be taken, the petitioner and its employees did nothing to protect the safety of passengers. Under the
circumstances, we deem it reasonable to award private respondents exemplary damages in the amount of P100,000.00.[17]
Attorneys Fees. Pursuant to Art. 2208, attorneys fees may be recovered when, as in the instant case, exemplary damages
are awarded. In the recent case of Sulpicio Lines, Inc. v. Court of Appeals,[18] we held an award of P50,000.00 as attorneys
fees to be reasonable. Hence, the private respondents are entitled to attorneys fees in that amount.
Compensation for Loss of Earning Capacity. Art. 1764 of the Civil Code, in relation to Art. 2206 thereof, provides that
in addition to the indemnity for death arising from the breach of contract of carriage by a common carrier, the defendant
shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the
latter. The formula established in decided cases for computing net earning capacity is as follows: [19]
Gross Necessary
Net earning = Life x Annual - Living
Capacity Expectancy Income Expenses
Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of eighty (80) and the age of the
deceased.[20] Since Atty. Caorong was 37 years old at the time of his death,[21] he had a life expectancy of 28 2/3 more
years.[22] His projected gross annual income, computed based on his monthly salary of P11,385.00[23] as a lawyer in the
Department of Agrarian Reform at the time of his death, was P148,005.00.[24] allowing for necessary living expenses of fifty
percent (50%)[25]of his projected gross annual income, his total earning capacity amounts to P2,121,404.90.[26] Hence, the
petitioner is liable to the private respondents in the said amount as compensation for loss of earning capacity.

WHEREFORE, the decision, dated July 29, 1994, of the Court of Appeals is hereby AFFIRMED with the
MODIFICATION that petitioner Fortune Express, Inc. is ordered to pay the following amounts to private respondents
Paulie, Yasser King, Rose Heinni, and Prince Alexander Caorong:
1. death indemnity in the amount of fifty thousand pesos (P50,000.00);
2. actual damages in the amount of thirty thousand pesos (P30,000.00);
3. moral damages in the amount of one hundred thousand pesos(P100,000.00);
4. exemplary damages in the amount of one hundred thousand pesos (P100,000.00);
5. attorneys fees in the amount of fifty thousand pesos (P50,000.00);
6. compensation for loss of earning capacity in the amount of two million one hundred twenty-one thousand four
hundred four pesos and ninety centavos (P2,121,404.90); and
7) costs of suits.
SO ORDERED.

5. QUISUMBING V CA

NARVASA, J.:

Having met with no success in the Court of First Instance of Rizal and in the Court of Appeals, the petitioners are now in
this Court in a third and final attempt to recover from the Philippine Airlines, Inc. (hereafter, simply PAL) the value of
jewelry, other valuables and money taken from them by four (4) armed robbers on board one of the latter's airplanes while
on a flight from Mactan City to Manila, as well as moral and exemplary damages, attorney's fees and expenses of
litigation.

The petitioners accept the correctness of the basic facts adopted by the Court of Appeals from the judgment of the Court
of First Instance, to wit: 1

1. . . . Norberto Quisumbing, Sr. and Gunther Leoffler were among the of ... (PAL's) Fokker 'Friendship'
PIC-536 plane in its flight of November 6,1968 which left Mactan City at about 7:30 in the evening with
Manila for its destination.

2. After the plane had taken off, Florencio O. Villarin, a Senior NBI Agent who was also a passenger of
the said plane, noticed a certain 'Zaldy,' a suspect in the killing of Judge Valdez, seated at the front seat
near the door leading to the cockpit of the plane. A check by Villarin with the passenger's ticket in the
possession of flight Stewardess Annie Bontigao, who was seated at the last seat right row, revealed that
'Zaldy' had used the name 'Cardente,' one of his aliases known to Villarin. Villarin also came to know
from the stewardess that 'Zaldy' had three companions on board the plane."

3. Villarin then scribbled a note addressed to the pilot of the plane requesting the latter to contact NBI
duty agents in Manila for the said agents to ask the Director of the NBI to send about six NBI agents to
meet the plane because the suspect in the killing of Judge Valdez was on board (Exh. 'G'). The said note
was handed by Villarin to the stewardess who in tum gave the same to the pilot.

4. After receiving the note, which was about 15 minutes after take off, the pilot of the plane, Capt. Luis
Bonnevie, Jr., came out of the cockpit and sat beside Villarin at the rear portion of the plane and
explained that he could not send the message because it would be heard by all ground aircraft stations.
Villarin, however, told the pilot of the danger of commission of violent acts on board the plane by the
notorious 'Zaldy' and his three companions.
5. While the pilot and Villarin were talking, 'Zaldy' and one of his companions walked to the rear and
stood behind them. Capt. Bonnevie then stood up and went back to the cockpit. 'Zaldy' and his
companions returned to their seats, but after a few minutes they moved back to the rear throwing ugly
looks at Villarin who, sensing danger, stood up and went back to his original seat across the aisle on the
second to the last seat near the window. 'Zaldy and his companion likewise went back to their respective
seats in front.

6. Soon thereafter an exchange of gunshots ensued between Villarin and 'Zaldy' and the latter's
companions. 'Zaldy' announced to the passengers and the pilots in the cockpit that it was a hold-up and
ordered the pilot not to send any SOS. The hold-uppers divested passengers of their belongings.

7. Specifically, ... Norberto Quisumbing, Sr. was divested of jewelries and cash in the total amount of
P18,650.00 out of which recoveries were made amounting to P4,550.00. . . Gunther Leoffler was divested
of a wrist watch, cash and a wallet in the total of P1,700.00. As a result of the incident ... Quisumbing,
Sr.suffered shock, because a gun had been pointed at him by one of the holduppers.

8. Upon landing at the Manila International Airport. 'Zaldy' and his three companions succeeded in
escaping.

Demands were thereafter made on PAL by Quisumbing and Loeffler "to indemnify ... (them) on their aforesaid loss, but ...
(PAL) refused ... (averring that) it is not liable to (them) in law or in fact." 2

Contending that the "aforesaid loss is a result of breach of ... (PAL's) contractual obligation to carry ... (them) and their
belongings and effects to their Manila destination without loss or damage, and constitutes a serious dereliction of ...
(PAL's) legal duty to exercise extraordinary diligence in the vigilance over the same." , Quisumbing and Loeffler brought
suit against PAL in the Court of First Instance of Rizal, as stated in this opinion's opening paragraph, to recover the value
of the property lost by them to the robbers as well as moral and exemplary damages, attorney's fees and expenses of
litigation. 3 The plaintiffs declared that their suit was instituted "... pursuant to Civil Code articles 1754, 998, 2000 and
2001 and on the ground that in relation to said Civil Code article 2001 the complained-of act of the armed robbers is not
a force majeure, as the 'use of arms' or 'irresistible force' was not taken advantage of by said armed robbers in gaining
entrance to defendant's ill-fated plane in questions. And, with respect to said Civil Code article 1998, it is not essential that
the lost effects and belongings of plaintiffs were actually delivered to defendant's plane personnel or that the latter were
notified thereof (De los Santos v. Tamn Khey, [CA] 58 O.G. 7693)."4

PAL filed answer denying liability, alleging inter alia that the robbery during the flight and after the aircraft was forcibly
landed at the Manila Airport did indeed constitute force majeure, and neither of the plaintiffs had notified PAL "or its
crew or employees that they were in possession of cash, German marks and valuable jewelries and watches" or
surrendered said items to "the crew or personnel on board the aircraft."5

After trial, the Court of First Instance rendered judgment 'dismissing plaintiffs' complaint with costs against ...
(them)." 6 The Court opined that since the plaintiffs "did not notify defendant or its employees that they were in
possession of the cash, jewelries, and the wallet they are now claiming," the very provision of law invoked by them,
Article 1998 of the Civil Code, denies them any recourse against PAL. The Court also pointed out that-

... while it is true that the use of gems was not taken advantage of by the robbers in gaining entrance to
defendant's ill-fated plane, the armed robbery that took place constitutes force majeure for which
defendant is not liable because the robbers were able to gain entrance to the plane with the guns they used
already in their possession, which fact could not have been prevented nor avoided by the defendant since
it was not authorized to search its passengers for firearms and deadly weapons as shown in Exhibits '6',
'7', '8,' and '8-A.' As its robbery constitutes force majeure, defendant is not liable.

The plaintiffs appealed to the Court of Appeals.7 The Court affirmed the trial court's judgment.8 It rejected the argument
that "the use of arms or ... irresistible force" referred to in Article 2001 constitutes force majeure only if resorted to gain
entry into the airplane, and not if it attends "the robbery itself." The Court ruled that under the facts, "the highjacking-
robbery was force majeure," observing that
... hijackers do not board an airplane through a blatant display of firepower and violent fury. Firearms,
hand-grenades, dynamite, and explosives are introduced into the airplane surreptitiously and with the
utmost cunning and stealth, although there is an occasional use of innocent hostages who will be coldly
murdered unless a plane is given to the hijackers' complete disposal. The objective of modern-day
hijackers is to display the irresistible force amounting to force majeure only when it is most effective and
that is when the jetliner is winging its way at Himalayan altitudes and ill-advised heroics by either crew or
passengers would send the multi-million peso airplane and the priceless lives of all its occupants into
certain death and destruction. ...

The Appellate Court also ruled that in light of the evidence PAL could not be faulted for want of diligence, particularly
for failing "to take positive measures to implement Civil Aeronautics Administration regulations prohibiting civilians
from carrying firearms on board aircrafts;" and that "the absence of coded transmissions, the amateurish behaviour of the
pilot in dealing with the NBI agent, the allegedly open cockpit door, and the failure to return to Mactan, in the light of the
circumstances of the case ..., were not negligent acts sufficient to overcome the force majeure nature of the armed
robbery." In fact, the Court went on to says, 9

... it is illusive to assume that had these precautions been taken, the hijacking or the robbery would not
have succeeded. The mandatory use of the most sophisticated electronic detection devices and
magnetometers, the imposition of severe penalties, the development of screening procedures, the
compilation of hijacker behavioural profiles, the assignment of sky marshals, and the weight of outraged
world opinion may have minimized hijackings but all these have proved ineffective against truly
determined hijackers. World experience shows that if a group of armed hijackers want to take over a
plane in flight, they can elude the latest combined government and airline industry measures. And as our
own experience in Zamboanga City illustrates, the use of force to overcome hijackers, results in the death
and injury of innocent passengers and crew members. We are not in the least bit suggesting that the
Philippine Airlines should not do everything humanly possible to protect passengers from hijackers' acts.
We merely state that where the defendant has faithfully complied with the requirements of government
agencies and adhered to the established procedures and precautions of the airline industry at any
particular time, its failure to take certain steps that a passenger in hindsight believes should have been
taken is not the negligence or misconduct which mingles with force majeure as an active and cooperative
cause.

Under the circumstance of the instant case, the acts of the airline and its crew cannot be faulted as
negligence. The hijackers had already shown their willingness to kill. One passenger was in fact killed
and another survived gunshot wounds. The lives of the rest of the passengers and crew were more
important than their properties. Cooperation with the hijackers until they released their hostages at the
runway end near the South Superhighway was dictated by the circumstances.

Insisting that the evidence demonstrates negligence on the part of the PAL crew "occurring before and exposing them to
hijacking," Quisumbing and Loeffler have come up to this Court praying that the judgments of the trial Court and the
Court of Appeals be reversed and another rendered in their favor. Once again, the issue will be resolved against them.

A careful analysis of the record in relation to the memoranda and other pleadings of the parties, convinces this Court of
the correctness of the essential conclusion of both the trial and appellate courts that the evidence does indeed fail to prove
any want of diligence on the part of PAL, or that, more specifically, it had failed to comply with applicable regulations or
universally accepted and observed procedures to preclude hijacking; and that the particular acts singled out by the
petitioners as supposedly demonstrative of negligence were, in the light of the circumstances of the case, not in truth
negligent acts "sufficient to overcome the force majeure nature of the armed robbery." The Court quite agrees, too, with
the Appellate Tribunal's wry observation that PAL's "failure to take certain steps that a passenger in hindsight believes
should have been taken is not the negligence or misconduct which mingles with force majeure as an active and
cooperative cause."

No success can therefore attend petitioners' appeal, not only because they wish to have a review and modification of
factual conclusions of the Court of Appeals, which established and uniformly observed axiom proscribes, 10 but also
because those factual conclusions have in this Court's view been correctly drawn from the proofs on record.
WHEREFORE, the petition is DENIED and the appealed Decision of the Court of Appeals is AFFIRMED, with costs
against petitioners.

SO ORDERED.

Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

6. LA MALLORCA V. CA

La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No. 23267-R, holding it liable for quasi-
delict and ordering it to pay to respondents Mariano Beltran, et al., P6,000.00 for the death of his minor daughter Raquel
Beltran, plus P400.00 as actual damages.

The facts of the case as found by the Court of Appeals, briefly are:

On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with their minor daughters,
namely, Milagros, 13 years old, Raquel, about 4 years old, and Fe, over 2 years old, boarded the Pambusco Bus
No. 352, bearing plate TPU No. 757 (1953 Pampanga), owned and operated by the defendant, at San Fernando,
Pampanga, bound for Anao, Mexico, Pampanga. At the time, they were carrying with them four pieces of
baggages containing their personal belonging. The conductor of the bus, who happened to be a half-brother of
plaintiff Mariano Beltran, issued three tickets (Exhs. A, B, & C) covering the full fares of the plaintiff and their
eldest child, Milagros. No fare was charged on Raquel and Fe, since both were below the height at which fare is
charged in accordance with the appellant's rules and regulations.

After about an hour's trip, the bus reached Anao whereat it stopped to allow the passengers bound therefor, among
whom were the plaintiffs and their children to get off. With respect to the group of the plaintiffs, Mariano Beltran,
then carrying some of their baggages, was the first to get down the bus, followed by his wife and his children.
Mariano led his companions to a shaded spot on the left pedestrians side of the road about four or five meters
away from the vehicle. Afterwards, he returned to the bus in controversy to get his other bayong, which he had
left behind, but in so doing, his daughter Raquel followed him, unnoticed by her father. While said Mariano
Beltran was on the running board of the bus waiting for the conductor to hand him his bayong which he left under
one of its seats near the door, the bus, whose motor was not shut off while unloading, suddenly started moving
forward, evidently to resume its trip, 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 by Mariano Beltran.
Incidentally, when the bus was again placed into a complete stop, it had travelled about ten meters from the point
where the plaintiffs had gotten off.

Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the running board without
getting his bayong from the conductor. He landed on the side of the road almost in front of the shaded place
where he left his wife and children. At that precise time, he saw people beginning to gather around the body of a
child lying prostrate on the ground, her skull crushed, and without life. The child was none other than his daughter
Raquel, who was run over by the bus in which she rode earlier together with her parents.

For the death of their said child, the plaintiffs commenced the present suit against the defendant seeking to
recover from the latter an aggregate amount of P16,000 to cover moral damages and actual damages sustained as
a result thereof and attorney's fees. After trial on the merits, the court below rendered the judgment in question.

On the basis of these facts, the trial court found defendant liable for breach of contract of carriage and sentenced it to pay
P3,000.00 for the death of the child and P400.00 as compensatory damages representing burial expenses and costs.

On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach of contract in the case, for the
reason that when the child met her death, she was no longer a passenger of the bus involved in the incident and, therefore,
the contract of carriage had already terminated. Although the Court of Appeals sustained this theory, it nevertheless found
the defendant-appellant guilty of quasi-delict and held the latter liable for damages, for the negligence of its driver, in
accordance with Article 2180 of the Civil Code. And, the Court of Appeals did not only find the petitioner liable, but
increased the damages awarded the plaintiffs-appellees to P6,000.00, instead of P3,000.00 granted by the trial court.

In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in holding it liable for quasi-delict,
considering that respondents complaint was one for breach of contract, and (2) in raising the award of damages from
P3,000.00 to P6,000.00 although respondents did not appeal from the decision of the lower court.

Under the facts as found by the Court of Appeals, we have to sustain the judgement holding petitioner liable for damages
for the death of the child, Raquel Beltran. It may be pointed out that although it is true that respondent Mariano Beltran,
his wife, and their children (including the deceased child) had alighted from the bus at a place designated for
disembarking or unloading of passengers, it was also established that the father had to return to the vehicle (which was
still at a stop) to get one of his bags or bayong that was left under one of the seats of the bus. There can be no controversy
that as far as the father is concerned, when he returned to the bus for his bayongwhich was not unloaded, the relation of
passenger and carrier between him and the petitioner remained subsisting. For, the relation of carrier and passenger does
not necessarily cease where the latter, after alighting from the car, aids the carrier's servant or employee in removing his
baggage from the car.1 The issue to be determined here is whether as to the child, who was already led by the father to a
place about 5 meters away from the bus, the liability of the carrier for her safety under the contract of carriage also
persisted.

It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger
alights from the carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the
passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable
time or a reasonable delay within this rule is to be determined from all the circumstances. Thus, a person who, after
alighting from a train, walks along the station platform is considered still a passenger.2 So also, where a passenger has
alighted at his destination and is proceeding by the usual way to leave the company's premises, but before actually doing
so is halted by the report that his brother, a fellow passenger, has been shot, and he in good faith and without intent of
engaging in the difficulty, returns to relieve his brother, he is deemed reasonably and necessarily delayed and thus
continues to be a passenger entitled as such to the protection of the railroad and company and its agents.3

In the present case, the father returned to the bus to get one of his baggages which was not unloaded when they alighted
from the bus. 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 cautions 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 baggages of the passengers Mariano Beltran and family.
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.

But even assuming arguendo that the contract of carriage has already terminated, herein petitioner can be held liable for
the negligence of its driver, as ruled by the Court of Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of
the complaint, which reads

That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs' daughter, was caused by
the negligence and want of exercise of the utmost diligence of a very cautious person on the part of the defendants
and their agent, necessary to transport plaintiffs and their daughter safely as far as human care and foresight can
provide in the operation of their vehicle.

is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict, while incompatible with the other
claim under the contract of carriage, is permissible under Section 2 of Rule 8 of the New Rules of Court, which allows a
plaintiff to allege causes of action in the alternative, be they compatible with each other or not, to the end that the real
matter in controversy may be resolved and determined.4
The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated when it was alleged in the
complaint that "the death of Raquel Beltran, plaintiffs' daughter, was caused by the negligence and want of exercise of the
utmost diligence of a very cautious person on the part of the defendants and their agent." This allegation was also proved
when it was established during the trial that the driver, even before receiving the proper signal from the conductor, and
while there were still persons on the running board of the bus and near it, started to run off the vehicle. The presentation of
proof of the negligence of its employee gave rise to the presumption that the defendant employer did not exercise the
diligence of a good father of the family in the selection and supervision of its employees. And this presumption, as the
Court of Appeals found, petitioner had failed to overcome. Consequently, petitioner must be adjudged peculiarily liable
for the death of the child Raquel Beltran.

The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals, however, cannot be
sustained. Generally, the appellate court can only pass upon and consider questions or issues raised and argued in
appellant's brief. Plaintiffs did not appeal from that portion of the judgment of the trial court awarding them on P3,000.00
damages for the death of their daughter. Neither does it appear that, as appellees in the Court of Appeals, plaintiffs have
pointed out in their brief the inadequacy of the award, or that the inclusion of the figure P3,000.00 was merely a clerical
error, in order that the matter may be treated as an exception to the general rule.5Herein petitioner's contention, therefore,
that the Court of Appeals committed error in raising the amount of the award for damages is, evidently,
meritorious.1wph1.t

Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the petitioner to pay to the respondents
Mariano Beltran, et al., the sum of P3,000.00 for the death of the child, Raquel Beltran, and the amount of P400.00 as
actual damages. No costs in this instance. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur.
Makalintal, J., concurs in the result.

7. JAPAN AIRLINES V. CA

ROMERO, J.:
Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL) seeking the reversal of the decision
of the Court of Appeals,[1] which affirmed with modification the award of damages made by the trial court in favor of herein
private respondents Enrique Agana, Maria Angela Nina Agana, Adelia Francisco and Jose Miranda.
On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in San Francisco, California bound
for Manila. Likewise, on the same day private respondents Enrique Agana, Maria Angela Nina Agana and Adelia Francisco
left Los Angeles, California for Manila via JAL flight No. JL 061. As an incentive for travelling on the said airline, both
flights were to make an overnight stopover at Narita, Japan, at the airlines expense, thereafter proceeding to Manila the
following day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at Hotel Nikko Narita for the
night. The next day, private respondents, on the final leg of their journey, went to the airport to take their flight to
Manila. However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino International Airport
(NAIA), rendering it inaccessible to airline traffic. Hence, private respondents trip to Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-bound passengers on flight No.
741 due to depart on June 16, 1991 and also paid for the hotel expenses for their unexpected overnight stay. On June 16,
1991, much to the dismay of the private respondents, their long anticipated flight to Manila was again cancelled due to
NAIAs indefinite closure. At this point, JAL informed the private respondents that it would no longer defray their hotel and
accommodation expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991, private respondents were forced to pay for their
accommodations and meal expenses from their personal funds from June 16 to June 21, 1991. Their unexpected stay in
Narita ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741.
Obviously, still reeling from the experience, private respondents, on July 25, 1991, commenced an action for damages
against JAL before the Regional Trial Court of Quezon City, Branch 104.[2] To support their claim, private respondents
asserted that JAL failed to live up to its duty to provide care and comfort to its stranded passengers when it refused to pay
for their hotel and accommodation expenses from June 16 to 21, 1991 at Narita, Japan. In other words, they insisted that
JAL was obligated to shoulder their expenses as long as they were still stranded in Narita. On the other hand, JAL denied
this allegation and averred that airline passengers have no vested right to these amenities in case a flight is cancelled due to
force majeure.
On June 18, 1992, the trial court rendered its judgment in favor of private respondents holding JAL liable for damages,
viz.:
WHEREFORE, judgment is rendered in favor of plaintiffs ordering the defendant Japan Airlines to pay the plaintiffs
Enrique Agana, Adalia B. Francisco and Maria Angela Nina Agana the sum of One million Two Hundred forty-six
Thousand Nine Hundred Thirty-Six Pesos (P1,246,936.00) and Jose Miranda the sum of Three Hundred Twenty
Thousand Six Hundred sixteen and 31/100 (P320,616.31) as actual, moral and exemplary damages and pay attorneys fees
in the amount of Two Hundred Thousand Pesos (P200,000.00), and to pay the costs of suit.
Undaunted, JAL appealed the decision before the Court of Appeals, which, however, with the exception of lowering
the damages awarded affirmed the trial courts finding,[3] thus:
Thus, the award of moral damages should be as it is hereby reduced to P200,000.00 for each of the plaintiffs, the
exemplary damages to P300,000.00 and the attorneys fees to P100,000.00 plus the costs.
WHEREFORE, with the foregoing Modification, the judgment appealed from is hereby AFFIRMED in all other respects.
JAL filed a motion for reconsideration which proved futile and unavailing.[4]
Failing in its bid to reconsider the decision, JAL has now filed this instant petition.
The issue to be resolved is whether JAL, as a common carrier has the obligation to shoulder the hotel and meal expenses
of its stranded passengers until they have reached their final destination, even if the delay were caused by force majeure.
To begin with, there is no dispute that the Mt. Pinatubo eruption prevented JAL from proceeding to Manila on
schedule. Likewise, private respondents concede that such event can be considered as force majeure since their delayed
arrival in Manila was not imputable to JAL.[5]
However, private respondents contend that while JAL cannot be held responsible for the delayed arrival in Manila, it
was nevertheless liable for their living expenses during their unexpected stay in Narita since airlines have the obligation to
ensure the comfort and convenience of its passengers. While we sympathize with the private respondents plight, we are
unable to accept this contention.
We are not unmindful of the fact that in a plethora of cases we have consistently ruled that a contract to transport
passengers is quite different in kind and degree from any other contractual relation. It is safe to conclude that it is
a relationship imbued with public interest. Failure on the part of the common carrier to live up to the exacting standards
of care and diligence renders it liable for any damages that may be sustained by its passengers. However, this is not to say
that common carriers are absolutely responsible for all injuries or damages even if the same were caused by a fortuitous
event. To rule otherwise would render the defense of force majeure, as an exception from any liability, illusory and
ineffective.
Accordingly, there is no question that when a party is unable to fulfill his obligation because of force majeure, the
general rule is that he cannot be held liable for damages for non-performance.[6] Corollarily, when JAL was prevented from
resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever losses or damages in the form of hotel
and meal expenses the stranded passengers incurred, cannot be charged to JAL. Yet it is undeniable that JAL assumed the
hotel expenses of respondents for their unexpected overnight stay on June 15, 1991.
Admittedly, to be stranded for almost a week in a foreign land was an exasperating experience for the private
respondents. To be sure, they underwent distress and anxiety during their unanticipated stay in Narita, but their predicament
was not due to the fault or negligence of JAL but the closure of NAIA to international flights. Indeed, to hold JAL, in the
absence of bad faith or negligence, liable for the amenities of its stranded passengers by reason of a fortuitous event is too
much of a burden to assume.
Furthermore, it has been held that airline passengers must take such risks incident to the mode of travel.[7] In this regard,
adverse weather conditions or extreme climatic changes are some of the perils involved in air travel, the consequences of
which the passenger must assume or expect. After all, common carriers are not the insurer of all risks.[8]
Paradoxically, the Court of Appeals, despite the presence of force majeure, still ruled against JAL relying in our
decision in PAL v. Court of Appeals,[9] thus:
The position taken by PAL in this case clearly illustrates its failure to grasp the exacting standard required by
law. Undisputably, PALs diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such
occurrence did not terminate PALs contract with its passengers. Being in the business of air carriage and the sole one to
operate in the country, PAL is deemed equipped to deal with situations as in the case at bar. What we said in one case
once again must be stressed, i.e., the relation of carrier and passenger continues until the latter has been landed at the port
of destination and has left the carriers premises. Hence, PAL necessarily would still have to exercise extraordinary
diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they have reached their final
destination. On this score, PAL grossly failed considering the then ongoing battle between government forces and Muslim
rebels in Cotabato City and the fact that the private respondent was a stranger to the place.
The reliance is misplaced. The factual background of the PAL case is different from the instant petition. In that case
there was indeed a fortuitous event resulting in the diversion of the PAL flight. However, the unforeseen diversion was
worsened when private respondents (passenger) was left at the airport and could not even hitch a ride in a Ford Fiera loaded
with PAL personnel,[10] not to mention the apparent apathy of the PAL station manager as to the predicament of the stranded
passengers.[11] In light of these circumstances, we held that if the fortuitous event was accompanied by neglect and
malfeasance by the carriers employees, an action for damages against the carrier is permissible. Unfortunately, for private
respondents, none of these conditions are present in the instant petition.
We are not prepared, however, to completely absolve petitioner JAL from any liability. It must be noted that private
respondents bought tickets from the United States with Manila as their final destination. While JAL was no longer required
to defray private respondents living expenses during their stay in Narita on account of the fortuitous event, JAL had the
duty to make the necessary arrangements to transport private respondents on the first available connecting flight to Manila.
Petitioner JAL reneged on its obligation to look after the comfort and convenience of its passengers when it declassified
private respondents from transit passengers to new passengers as a result of which private respondents were obliged to make
the necessary arrangements themselves for the next flight to Manila. Private respondents were placed on the
waiting list from June 20 to June 24. To assure themselves of a seat on an available flight, they were compelled to stay in
the airport the whole day of June 22, 1991 and it was only at 8:00 p.m. of the aforesaid date that they were advised that they
could be accommodated in said flight which flew at about 9:00 a.m. the next day.
We are not oblivious to the fact that the cancellation of JAL flights to Manila from June 15 to June 21, 1991 caused
considerable disruption in passenger booking and reservation. In fact, it would be unreasonable to expect, considering
NAIAs closure, that JAL flight operations would be normal on the days affected. Nevertheless, this does not excuse JAL
from its obligation to make the necessary arrangements to transport private respondents on its first available flight to Manila.
After all, it had a contract to transport private respondents from the United States to Manila as their final destination.
Consequently, the award of nominal damages is in order. Nominal damages are adjudicated in order that a right of a
plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized and not for the purpose of
indemnifying any loss suffered by him.[12] The court may award nominal damages in every obligation arising from any
source enumerated in Article 1157, or in every case where any property right has been invaded.[13]
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dated December 22, 1993 is hereby
MODIFIED. The award of actual, moral and exemplary damages is hereby DELETED. Petitioner JAL is ordered to pay
each of the private respondents nominal damages in the sum of P100,000.00 each including attorneys fees of P50,000.00
plus costs.

8. BALIWAG TRANSIT V. CA
SYLLABUS
1. CIVIL LAW; CONTRACTS; SPECIAL CONTRACTS; COMMON CARRIERS; LIABILITY FOR DAMAGES;
ESTABLISHED IN CASE AT BAR. 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. The records are bereft of any proof to show that Baliwag exercised extraordinary diligence. On
the contrary, the evidence demonstrates its driver's recklessness. Leticia Garcia testified that the bus was running at a
very high speed despite the drizzle and the darkness of the highway. The passengers pleaded for its driver to slow
down, but their plea was ignored. Leticia also revealed that the driver was smelling of liquor. She could smell him as
she was seated right behind the driver. Another passenger, Felix Cruz testified that immediately before the collision,
the bus driver was conversing with a co-employee. All these prove the bus driver's wanton disregard for the physical
safety of his passengers, which make Baliwag as a common carrier liable for damages under Article 1759 of the Civil
Code.
2. ID.; ID.; ID.; ID.; LAND TRANSPORTATION AND TRAFFIC CODE; SECTION 34(g) THEREOF;
SUBSTANTIALLY COMPLIED WITH IN CASE AT BAR. Baliwag cannot evade its liability by insisting that the
accident was caused solely by the negligence of A & J Trading and Julio Recontique. It harps on their alleged non use
of early warning device as testified to by Col. Demetrio dela Cruz, the station commander of Gapan, Nueva Ecija who
investigated the incident, and Francisco Romano, the bus conductor. The records do not bear out Baliwag's
contention. Col. dela Cruz and Romano testified that they did not see any early warning device at the scene of the
accident. They were referring to the triangular reflectorized plates in red and yellow issued by the Land Transportation
Office. However, the evidence shows that Recontique and Ecala placed a kerosene lamp or torch at the edge of the
road, near the rear portion of the truck to serve as an early warning device. This substantially complies with Section 34
(g) of the Land Transportation and Traffic Code, to wit: "(g) lights and reflector when parked or disabled. Appropriate
parking lights or flares visible one hundred meters away shall be displayed at the corner of the vehicle whenever such
vehicle is parked on highways or in places that are not well-lighted or, is placed in such manner as to endanger passing
traffic. Furthermore, every motor vehicle shall be provided at all times with built-in reflectors or other similar warning
devices either pasted, painted or attached at its front and back which shall likewise be visible at night at least one
hundred meters away. No vehicle not provided with any of the requirements mentioned in this subsection shall be
registered." Baliwag's argument that the kerosene lamp or torch does not substantially comply with the law is
untenable. The aforequoted law clearly allows the use not only of an early warning device of the triangular reflectorized
plates variety but also parking lights or flares visible one hundred meters away. Indeed, Col. dela Cruz himself admitted
that a kerosene lamp is an acceptable substitute for the reflectorized plates. No negligence, therefore, may be imputed
to A & J Trading and its driver, Recontique.
3. ID.; DAMAGES; To PROVE ACTUAL DAMAGES, THE BEST EVIDENCE AVAILABLE TO THE PARTIES
MUST BE PRESENTED. The propriety of the amount awarded as hospitalization and medical fees. The award of
P25,000.00 is not supported by the evidence on record. The Garcias presented receipts marked as Exhibits "B-1 " to
"B-42" but their total amounted only to P5,017.74. To be sure, Leticia testified as to the extra amount spent for her
medical needs but without more reliable evidence, her lone testimony cannot justify the award of P25,000.00. To prove
actual damages, the best evidence available to the injured party must be presented. The court cannot rely on
uncorroborated testimony whose truth is suspect, but must depend upon competent proof that damages have been
actually suffered. Thus, we reduce the actual damages for medical and hospitalization expenses to P5,017.74.
4. ID.; ID.; MORAL DAMAGES; RECOVERABLE IF THE CARRIER THROUGH ITS AGENT, ACTED
FRAUDULENTLY OR IN BAD FAITH. The award of moral damages is in accord with law. In a breach of contract
of carriage, moral damages are recoverable if the carrier, through its agent, acted fraudulently or in bad faith. The
evidence shows the gross negligence of the driver of Baliwag bus which amounted to bad faith. Without doubt, Leticia
and Allan experienced physical suffering, mental anguish and serious anxiety by reason of the accident.
APPEARANCES OF COUNSEL
Leopoldo C. Sta. Maria for Baliwag Transit, Inc.
Arturo D. Vallar for Sps. Antonio & Leticia Garcia.
Allan A. Leynes for A & J Trading, and Julio Recontique.

DECISION
PUNO, J.:

This is a petition for certiorari to review the Decision[1] of the Court of Appeals in CA-G.R. CV-31246 awarding
damages in favor of the spouses Antonio and Leticia Garcia for breach of contract of carriage.[2] filed by the spouses Garcia
questioning the same Court of Appeals' Decision which reduced their award of damages. On November 13, 1995, we denied
their petition for review.
The records show that on July 31, 1980, Leticia Garcia, and her five-year old son, Allan Garcia, boarded Baliwag
Transit Bus No. 2036 bound for Cabanatuan City driven by Jaime Santiago. They took the seat behind the driver.
At about 7:30 in the evening, in Malimba, Gapan, Nueva Ecija, the bus passengers saw a cargo truck parked at the
shoulder of the national highway. Its left rear portion jutted to the outer lane, the shoulder of the road was too narrow to
accommodate the whole truck. A kerosene lamp appeared at the edge of the road obviously to serve as a warning device. The
truck driver, Julio Recontique, and his helper, Arturo Escala, were then replacing a flat tire. The truck is owned by
respondent A & J Trading.
Bus driver Santiago was driving at an inordinately fast speed and failed to notice the truck and the kerosene lamp at
the edge of the road. Santiago's passengers urged him to slow down but he paid them no heed. Santiago even carried
animated conversations with his co-employees while driving. When the danger of collision became imminent, the bus
passengers shouted "Babangga tayo!". Santiago stepped on the brake, but it was too late. His bus rammed into the stalled
cargo truck. It caused the instant death of Santiago and Escala, and injury to several others. Leticia and Allan Garcia were
among the injured passengers.
Leticia suffered a fracture in her pelvis and right leg. They rushed her to the provincial hospital in Cabanatuan City
where she was given emergency treatment. After three days, she was transferred to the National Orthopedic Hospital where
she was confined for more than a month.[3] She underwent an operation for partial hip prosthesis.[4]
Allan, on the other hand, broke a leg. He was also given emergency treatment at the provincial hospital.
Spouses Antonio and Leticia Garcia sued Baliwag Transit, Inc., A & J Trading and Julio Recontique for damages in
the Regional Trial Court of Bulacan.[5] Leticia sued as an injured passenger of Baliwag and as mother of Allan. At the time
of the complaint, Allan was a minor, hence, the suit initiated by his parents in his favor.
Baliwag, A & J Trading and Recontique disclaimed responsibility for the mishap. Baliwag alleged that the accident
was caused solely by the fault and negligence of A & J Trading and its driver, Recontique. Baliwag charged that Recontigue
failed to place an early warning device at the corner of the disabled cargo truck to warn oncoming vehicles. [6] On the other
hand, A & J Trading and Recontique alleged that the accident was the result of the negligence and reckless driving of
Santiago, bus driver of Baliwag.[7]
After hearing, the trial court found all the defendants liable, thus:
xxxxxxxxx

"In view thereof, the Court holds that both defendants should be held liable; the defendant Baliwag Transit, Inc. for
having failed to deliver the plaintiff and her son to their point of destination safely in violation of plaintiff's and defendant
Baliwag Transit's contractual relation.

The defendant A & J and Julio Recontique for failure to provide its cargo truck with an early warning device in violation
of the Motor Vehicle Law."[8]

The trial court ordered Baliwag, A & J Trading and Recontique to pay jointly and severally the Garcia spouses the
following: (1) P25,000.00 hospitalization and medication fee, (2) P450,000.00 loss of earnings in eight (8) years, (3)
P2,000.00 for the hospitalization of their son Allan Garcia, (4) P50,000.00 moral damages, and (5) P30,000.00 attorney's
fee.[9]
On appeal, the Court of Appeals modified the trial court's Decision by absolving A & J Trading from liability and by
reducing the award of attorney's fees to P10,000.00 and loss of earnings to P300,000.00, respectively.[10]
Baliwag filed the present petition for review raising the following issues:
1. Did the Court of Appeals err in absolving A & J Trading from liability and holding Baliwag solely liable for the injuries
suffered by Leticia and Allan Garcia in the accident?

2. Is the amount of damages awarded by the Court of Appeals to the Garcia spouses correct?

We affirm the factual findings of the Court of Appeals.


I
As a common carrier, Baliwag breached its contract of carriage when it failed to deliver its passengers, Leticia and
Allan Garcia to their destination safe and sound. A common carrier is bound to carry its passengers safely as far as human
care and foresight can provide, using the utmost diligence of a very cautious person, with due regard for all the
circumstances.[11] In a contract of carriage, it is presumed that the common carrier was at fault or was negligent when a
passenger dies or is injured. Unless the presumption is rebutted, the court need not even make an express finding of fault or
negligence on the part of the common carrier. This statutory presumption may only be overcome by evidence that the carrier
exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code.[12]
The records are bereft of any proof to show that Baliwag exercised extraordinary diligence. On the contrary, the
evidence demonstrates its driver's recklessness. Leticia Garcia testified that the bus was running at a very high speed despite
the drizzle and the darkness of the highway. The passengers pleaded for its driver to slow down, but their plea was
ignored.[13]Leticia also revealed that the driver was smelling of liquor.[14] She could smell him as she was seated right behind
the driver. Another passenger, Felix Cruz testified that immediately before the collision, the bus driver was conversing with
a co-employee.[15] All these prove the bus driver's wanton disregard for the physical safety of his passengers, which makes
Baliwag as a common carrier liable for damages under Article 1759 of the Civil Code:
Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or willfull acts of
the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the
orders of the common carriers.

This liability of the common carriers do not cease upon proof that they exercised all the diligence of a good father of a
family in the selection or supervision of their employees.

Baliwag cannot evade its liability by insisting that the accident was caused solely by the negligence of A & J Trading
and Julio Recontique. It harps on their alleged non use of an early warning device as testified to by Col. Demetrio dela Cruz,
the station commander of Gapan, Nueva Ecija who investigated the incident, and Francisco Romano, the bus conductor.
The records do not bear out Baliwag's contention. Col. dela Cruz and Romano testified that they did not see any early
warning device at the scene of the accident.[16] They were referring to the triangular reflectorized plates in red and yellow
issued by the Land Transportation Office. However, the evidence shows that Recontique and Ecala placed a kerosene lamp
or torch at the edge of the road, near the rear portion of the truck to serve as an early warning device.[17] This substantially
complies with Section 34 (g) of the Land Transportation and Traffic Code, to wit:
(g) Lights and reflector when parked or disabled. Appropriate parking lights or flares visible one hundred meters
away shall be displayed at the corner of the vehicle whenever such vehicle is parked on highways or in places that are not
well-lighted or, is placed in such manner as to endanger passing traffic. Furthermore, every motor vehicle shall be
provided at all times with built-in reflectors or other similar warning devices either pasted, painted or attached at its front
and back which shall likewise be visible at night at least one hundred meters away. No vehicle not provided with any of
the requirements mentioned in this subsection shall be registered. (Italics supplied)

Baliwag's argument that the kerosene lamp or torch does not substantially comply with the law is untenable. The
aforequoted law clearly allows the use not only of an early warning device of the triangular reflectorized plates variety but
also parking lights or flares visible one hundred meters away. Indeed, Col. dela Cruz himself admitted that a kerosene lamp
is an acceptable substitute for the reflectorized plates.[18] No negligence, therefore, may be imputed to A & J Trading and
its driver, Recontique.
Anent this factual issue, the analysis of evidence made by the Court of Appeals deserves our concurrence, viz:
xxx xxx xxx
In the case at bar, both the injured passengers of the Baliwag involved in the accident testified that they saw some sort of
kerosene or a torch on the rear portion of the truck before the accident. Baliwag Transit's conductor attempted to defeat
such testimony by declaring that he noticed no early warning device in front of the truck.

Among the testimonies offered by the witnesses who were present at the scene of the accident, we rule to uphold the
affirmative testimonies given by the two injured passengers and give less credence to the testimony of the bus conductor
who solely testified that no such early warning device exists.
The testimonies of injured passengers who may well be considered as disinterested witness appear to be natural and
more probable than the testimony given by Francisco Romano who is undoubtedly interested in the outcome of the case,
being the conductor of the defendant-appellant Baliwag Transit Inc.
It must be borne in mind that the situation then prevailing at the time of the accident was admittedly drizzly and all
dark. This being so, it would be improbable and perhaps impossible on the part of the truck helper without the torch nor
the kerosene to remove the flat tires of the truck. Moreover, witness including the bits conductor himself admitted that the
passengers shouted, that they are going to bump before the collision which consequently caused the bus driver to apply the
brake 3 to 4 meters away from the truck. Again, without the kerosene nor the torch in front of the truck, it would be
improbable for the driver, more so the passengers to notice the truck to be bumped by the bus considering the darkness of
the place at the time of the accident.
xxxxxxxxx
While it is true that the investigating officer testified that he found no early warning device at the time of his
investigation, We rule to give less credence to such testimony insofar as he himself admitted on cross examination that he
did not notice the presence of any kerosene lamp at the back of the truck because when he arrived at the scene of the
accident, there were already many people surrounding the place (TSN, Aug, 22, 1989, p. 13). He further admitted that there
exists a probability that the lights of the truck may have been smashed by the bus at the time of the accident considering the
location of the truck where its rear portion was connected with the front portion of the bus (TSN, March 29, 1985, pp. 11-
13). Investigator's testimony therefore did not confirm nor deny the existence of such warning device, making his testimony
of little probative value.[19]
II
We now review the amount of damages awarded to the Garcia spouses.
First, the propriety of the amount awarded as hospitalization and medical fees. The award of P25,000.00 is not
supported by the evidence on record. The Garcias presented receipts marked as Exhibits B-1 to B 42 but their total amounted
only to P5,017.74. To be sure, Leticia testified as to the extra amount spent for her medical needs but without more reliable
evidence, her lone testimony cannot justify the award of P25,000.00. To prove actual damages, the best evidence available
to the injured party must be presented. The court cannot rely on uncorroborated testimony whose truth is suspect, but must
depend upon competent proof that damages have been actually suffered[20] Thus, we reduce the actual damages for medical
and hospitalization expenses to P5,017.74.
Second, we find as reasonable the award of P300,000.00 representing Leticia's lost earnings. Before the accident,
Leticia was engaged in embroidery, earning P5,000.00 per month.[21] Her injuries forced her to stop working. Considering
the nature and extent of her injuries and the length of time it would take her to recover,[22] we find it proper that Baliwag
should compensate her lost income for five (5) years.[23]
Third, the award of moral damages is in accord with law. In a breach of contract of carriage, moral damages are
recoverable if the carrier, through its agent, acted fraudulently or in bad faith.[24] The evidence shows the gross negligence
of the driver of Baliwag bus which amounted to bad faith. Without doubt, Leticia and Allan experienced physical suffering,
mental anguish and serious anxiety by reason of the accident. Leticia underwent an operation to replace her broken hip bone
with a metal plate. She was confined at the National Orthopedic Hospital for 45 days. The young Allan was also confined
in the hospital for his foot injury. Contrary to the contention of Baliwag, the decision of the trial court as affirmed by the
Court of Appeals awarded moral damages to Antonio and Leticia Garcia not in their capacity as parents of Allan. Leticia
was given moral damages as an injured party. Allan was also granted moral damages as an injured party but because of his
minority, the award in his favor has to be given to his father who represented him in the suit.
Finally, we find the award of attorney's fees justified. The complaint for damages was instituted by the Garcia spouses
on December 15, 1982, following the unjustified refusal of Baliwag to settle their claim. The Decision was promulgated by
the trial court only on January 29, 1991 or about nine years later. Numerous pleadings were filed before the trial court, the
appellate court and to this Court. Given the complexity of the case and the amount of damages involved,[25] the award of
attorney's fee for P10,000.00 is just and reasonable.
IN VIEW WHEREOF, the Decision of the respondent Court of Appeals in CA-G.R. CV-31246 is AFFIRMED with
the MODIFICATION reducing the actual damages for hospitalization and medical fees to P5,017.74. No costs.
SO ORDERED.
Regalado (Chairman), Romero, Mendoza, and Torres, Jr., JJ., concur.

9. ALITALIA AIRWAYS V. CA

SARMIENTO, J.:

This petition for review on certiorari of the decision rendered by the respondent court in AC-G.R. CV No. 05340
entitled "Sps. Jose O. Juliano and Victoria G. Juliano v. Alitalia Airways," promulgated on April 11, 1986, and the
resolution of the same court dated January 6, 1987, denying the motion for reconsideration, is brought to the Court
allegedly on pure questions of law.' 1

The facts from which the case now on review arose have a familiar ring and thus this Court will echo a similar conclusion
decreed in jurisprudence.

On September 3, 1981, the private' respondents Spouses Jose and Victoria Juliano (hereinafter referred to as the Julianos),
arrived at the Fumicino Airport in Rome, Italy in order to board Flight AZ 1774 of Alitalia Airways scheduled to depart at
10:30 a.m. for Hongkong.
However, Flight AZ 1774 left Rome without the Julianos. When private respondent Jose O. Juliano arrived in Manila, he
returned to his employer Bristol-Myers, Inc., of which he was Vice-President for Operations, the unused Rome-Hongkong
leg of the Alitalia ticket. However, the cost of the Thai Airways tickets they had to purchase in lieu of Alitalia was not
refunded by his office.

On December 15, 1981, the Julianos filed a complaint with the Regional Trial Court of Quezon City against the petitioner
for damages from the alleged breach of its contractual obligations when the petitioner failed to transport the private
respondent to Hongkong on the Alitalia Flight AZ 1774. 2

The cause of the non-boarding of the Julianos makes up the bone of contention in this controversy.

According to the herein petitioner Alitalia, boarding time was 9:30 o'clock in the morning for Flight AZ 1774. The check-
in counter was then closed and all confirmed passengers who failed to check-in before that time were marked as NO
SHOW in the airline manifest as in the case of the Julianos. 3 Thereafter, chance passengers, or those without confirmed
reservations, were allowed to board.

On the other hand, the Julianos claim that, having left the hotel right after breakfast at 6:30 o'clock in the morning, they
arrived at the airport at around 9:15 o'clock in the morning. 4 Notwithstanding this timely arrival at the airport, the
Julianos had to contend with a long queue for the check-in because there were no individual counters specifically for
Alitalia passengers. 5

Realizing that it was already close to boarding time, the Julianos, armed with confirmed tickets, decided to approach the
check-in counter. 6

At the counter, a lady employee only brushed them aside and ordered them to fall in line, which they did. 7

At any rate, they were getting restless because the lines were no longer moving, so they decided to call the attention of the
airline authorities. 8

To make matters worse, the herein petitioner allegedly began to discriminate. The Julianos noticed that despite the fact
that their line was not moving, some of the passengers were being escorted ahead of the line in order to be checked-in. 9

For the second time, the Julianos approached the lady at the counter to explain that they would miss the flight 10 if they
were not checked in.

It was then that the Julianos ran into Ms. Chuchi Estanislao, 11 an employee of the University of the Philippines Asian
Institute of Tourism, who could not also check in, Together with Ms. Estanislao, they approached the Alitalia employee
wearing a uniform with the tag "supervisor". He only shrugged when shown the confirmed tickets and said that the
Julianos should try to check-in already because it was near departure time. 12

On the witness stand during the hearing at the trial court, Anthony Wong, commercial manager of Alitalia Airways at
Hong Kong, testified that as a matter of policy Alitalia would not deny to anyone the opportunity to board the airline. 13 It
would be contrary to the profit motive of an airline to fly any plane with vacant seats. In fact, the reason why even chance
passengers are admitted is to fill up all the seats not taken because of the number of NO SHOW (failure to appear)
passengers with confirmed tickets. 14

Just the same, an airline could overbook itself precisely to ensure that all seats would be taken and this is what the lower
court found with Alitalia. 15 As a consequence, some of the passengers in Rome has to be "bumped off to accommodate
the passengers embarking at the rest of the leg of the trip. In fact more passengers were picked up by the same flight as it
proceeded to Athens, Bangkok, and then Hongkong. 16

Thus, the lower court adjudged Alitalia liable for damages. The airlines appealed from the decision of the trial court, the
dispositive portion of which reads:
WHEREFORE, premises considered, the Court sentences defendant Alitalia Airways to pay to plaintiff
spouses Jose O. Juliano and Victoria G. Juliano the following:

1. U.S. $2,065.00 as actual damages payable in Philippine Currency at the official rate of exchange at the
time of payment;

2. P400,000.00 as moral damages;

3. P50,000.00 as attorney's fees, Costs. 17

This decision was motu proprio amended by the trial court on September 19, 1984 to include the award of P50,000.00 as
exemplary damages.

Both parties appealed.

The respondent Court of Appeals modified the judgment as follows:

WHEREFORE, the decision sought to be reconsidered is MODIFIED by

1) reducing the award of moral damages to P200,000.00;

2) reducing the award of exemplary damages to P25,000.00; and

3) reducing attorney's fees to P 30,000.00, the rest of the decision is maintained.

SO ORDERED. 18

Alitalia assails the decision of the respondent court on the grounds that the trial court had erred in awarding actual, moral,
and exemplary damages and prays for a reversal. 19 On the other hand, the Julianos question the award as inadequate as
compared with the damages awarded in the cases of Lopez, et al. v. Pan American World Airways 20or Ortigas, Jr. v.
Lufthansa German Airlines 21 and now pray that they be increased.

As adverted to at the outset, the present petition is alleged to invoke only pure questions of law, to wit:

1. The finding of the respondent Court of of Appeals to the effect that by Alitalia's own admission the
Julianos arrived for check-in with plenty of time to spare and should have been allowed to board the
plane" was (sic) a gross misapprehension and a quotation out of context of a statement made arguendo in
petitioner's brief and is contrary to private respondents' own admissions and other uncontroverted
evidence on record.

2. The respondent Court of Appeals' finding that Alitalia's Flight AZ 1774 on September 3, 1981 was
overbooked is contrary to all the evidence on record and is a clear misapprehension of this evidence, if
not a deliberate distortion of the same.

3. The finding of the respondent Court of Appeals that the tickets of private respondents are endorsable is
not supported by any evidence and is contrary to private respondents' own admission, the finding of the
trial court and other evidence on record.

4. The respondent Court of Appeals manifestly overlooked certain relevant facts which, if properly
considered, would justify a different conclusion.

5. There is no factual or legal basis for the award of moral and exemplary damages and attorney's fees. 22
From a consideration of the foregoing, it is evident that this petition for review raises no substantial question of law but
simply and essentially puts in issue the correctness of the factual findings of the Court of Appeals and the trial court.

For good and sound reasons, the Court has consistently affirmed that review of the findings of fact of the Court of
Appeals is not a function that it ordinarily undertakes such findings being as a nile binding and conclusive. 23 It is true that
certain exceptions have become familiar. However nothing in the records warrants a review based on any of these well-
recognized exceptions.? 24

Thus we re-affirm the ruling laid down by the Court in a long line of cases that when an airline issues a ticket to a
passenger confirmed on a particular flight, on a certain date, a contract of carriage arises, and the passenger has every
right to expect that he would fly on that flight and on that date. If he does not, then the carrier opens itself to a suit for
breach of contract of carriage.

Accordingly, the respondent court erred in holding that the Julianos are not entitled to a refund because the purchase of
the Thai Airways tickets was unnecessary.

After they were denied embarkation, the Julianos did not use their Alitalia tickets but bought passage on
Thai Airways International in order to get to where they were going. The question now is: was this
necessary? 25

xxx xxx xxx

The purchase of tickets on Thai Airways was by calculated choice, not by necessity. This being the case,
since the Julianos could have flown Alitalia just the same there being no compelling necessity anymore
for them to fly the same day, Our conclusion is that they are not entitled to a refund of the cost of their
Thai tickets. 26

When a passenger contracts for a specific flight he has a purpose in making that choice which must be respected. This
choice, once exercised, must not be impaired by a breach on the part of the airline without the latter incurring any liability.
Besides, why should the Julianos be compelled to wait for another Alitalia tight to risk a similar rebuff and suffer the
consequent further delay?

It was already too much of a coincidence that, at Fumicino Airport, the Julianos would find another Filipino, in the person
of Ms. Estanislao, in the same predicament that they were in. 27 We will no longer go to the extent of indulging in the
conjecture that Ms. Estanislao and the Julianos were singled out to be discriminated against because of their color. What is
plain to see is that the airline had deliberately overbooked and in doing so took the risk of having to deprive some
passengers of their seats in case all of them would show up for check-in.

That Alitalia had no intention to accommodate all who had 'confirmed their flight reservations could be seen in the
absence of any measure to contract all possible passengers for each flight who might be within the airport premises. 28 As
a result, some passengers would really be left behind in the long and disorderly queue at the check-in counter.

Common carriers, like commercial airlines, are in the business of rendering service, which is the primary reason for their
recognition in our law. They can not be allowed to disregard our laws as if they are doing the passengers any favor by
accommodating them.

Because the passengers in a contract of carriage do not contract merely for transportation, they have a right to be treated
by the carrier's employees with kindness, respect, courtesy, and consideration. 29 Hence the justification why passengers
must be spared from the indignity and inconvenience of being refused a confirmed seat on the last minute.

As held in Trans World Airlines v. Court of Appeals, 30 such inattention to and lack of care [by the petitioner 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. Ergo, we affirm the respondent court's award of
moral damages at P200.000.00. This award should be sufficient to indemnify the Julianos for the delay, inconvenience,
humiliation, and embarrassment they suffered.
Likewise the award of exemplary damages is well-grounded. With dismay, we note, that the imposition of substantial
amounts of damages notwithstanding, international carriers have not been dissuaded from repeating similar derogatory
acts. 31

Nonetheless, we agree with the injunction expressed by the Court of Appeals that passengers must not prey on
international airlines for damage awards, like "trophies in a safari." After all neither the social standing nor prestige of the
passenger should determine the extent to which he would suffer, because of a wrong done, since the dignity affronted in
the individual is a quality inherent in him and not conferred by these social indicators. Thus, as well and aptly put by
Justice Serafin Camilon, in his ponencia in this case, the

... Propriety of damage awards is judged by their fairness considering all the circumstances. A man's
stature is but an accident of life. The role it plays is secondary to the concepts of justice and fair play. 32

Nevertheless we have noted the proliferation of similar offenses by international carriers finding their way to this Court;
we have to advocate a punitive stands to stem, if not totally eliminate, this deplorable tide. In the discretion of the Court,
the award of exemplary damages should be increased to P200,000.00. 33

WHEREFORE, the decision of the respondent court is MODIFIED in that the petitioner Alitalia Airways is hereby
ordered to pay the private respondents Jose O. Juliano and Victoria G. Juliano the following amounts:

1) U.S.$2,065.00 as actual damages, payable in Philippine Currency at the official rate of exchange at the time of
payment;

2) P200,000.00, as and for moral damages;

3) P200,000.00, as and for exemplary damages; and

4) P30,000.00, as attorney's fees.

Costs against the petitioner.

SO ORDERED.

10. KOREAN AIRLINES V. CA

CRUZ, J.:

Sometime in 1980, Juanito C. Lapuz, an automotive electrician, was contracted for employment in Jeddah, Saudi Arabia,
for a period of one year through Pan Pacific Overseas Recruiting Services, Inc. Lapuz was supposed to leave on
November 8, 1980, via Korean Airlines. Initially, he was "wait-listed," which meant that he could only be accommodated
if any of the confirmed passengers failed to show up at the airport before departure. When two of such passengers did not
appear, Lapuz and another person by the name of Perico were given the two unclaimed seats.

According to Lapuz, he was allowed to check in with one suitcase and one shoulder bag at the check-in counter of KAL.
He passed through the customs and immigration sections for routine check-up and was cleared for departure as Passenger
No. 157 of KAL Flight No. KE 903. Together with the other passengers, he rode in the shuttle bus and proceeded to the
ramp of the KAL aircraft for boarding. However, when he was at the third or fourth rung of the stairs, a KAL officer
pointed to him and shouted "Down! Down!" He was thus barred from taking the flight. When he later asked for another
booking, his ticket was canceled by KAL. Consequently, he was unable to report for his work in Saudi Arabia within the
stipulated 2-week period and so lost his employment.

KAL, on the other hand, alleged that on November 8, 1980, Pan Pacific Recruiting Services Inc. coordinated with KAL
for the departure of 30 contract workers, of whom only 21 were confirmed and 9 were wait-listed passengers. The agent
of Pan Pacific, Jimmie Joseph, after being informed that there was a possibility of having one or two seats becoming
available, gave priority to Perico, who was one of the supervisors of the hiring company in Saudi Arabia. The other seat
was won through lottery by Lapuz. However, only one seat became available and so, pursuant to the earlier agreement
that Perico was to be given priority, he alone was allowed to board.

After trial, the Regional Trial Court of Manila, Branch 30, 1 adjudged KAL liable for damages, disposing as follows:

WHEREFORE, in view of the foregoing consideration, judgment is hereby rendered sentencing the
defendant Korean Air Lines to pay plaintiff Juanito C. Lapuz the following:

1. The amount of TWO HUNDRED SEVENTY-TWO THOUSAND ONE HUNDRED SIXTY


(P272,160.00) PESOS as actual/compensatory damages, with legal interest thereon from the date of the
filing of the complaint until fully paid.

2. The sum of TWENTY-FIVE THOUSAND (P25,000.00) PESOS as and for attorney's fees; and

3. The costs of suit.

The case is hereby dismissed with respect to defendant Pan Pacific Overseas Recruiting Services, Inc.

The counterclaims and cross-claim of defendant Korean Air Lines Co., Ltd. are likewise dismissed.

On appeal, this decision was modified by the Court of Appeals 2 as follows:

WHEREFORE, in view of all the foregoing, the appealed judgment is hereby AFFIRMED with
the following modifications: the amount of actual damages and compensatory damages is reduced
to P60,000.00 and defendant-appellant is hereby ordered to pay plaintiff-appellant the sum of One
Hundred Thousand Pesos (P100,000.00) by way of moral and exemplary damages, at 6% interest
per annum from the date of the filing of the Complaint until fully paid.

KAL and Lapuz filed their respective motions for reconsideration, which were both denied for lack of merit. Hence, the
present petitions for review which have been consolidated because of the identity of the parties and the similarity of the
issues.

In G. R. No. 114061, KAL assails the decision of the appellate court on the following grounds:

1. That the Court of Appeals erred in concluding that petitioner committed a breach of contract of
carriage notwithstanding lack of proper, competent and sufficient evidence of the existence of
such contract.

2. That the Court of Appeals erred in not according the proper evidentiary weight to some
evidence presented and the fact that private respondent did not have any boarding pass to prove
that he was allowed to board and to prove that his airline ticket was confirmed.

3. That the Court of Appeals erred in concluding that the standby passenger status of private
respondent Lapuz was changed to a confirmed status when his name was entered into the
passenger manifest.

4. That the Court of Appeals abused its discretion in awarding moral and exemplary damages in
the amount of P100,000.00 in favor of private respondent notwithstanding its lack of basis and
private respondent did not state such amount in his complaint nor had private respondent proven
the said damages.

5. That the Court of Appeals erred in dismissing the counterclaims.

6. That the Court of Appeals erred in dismissing the counterclaim of petitioner against Pan
Pacific.
7. That the Court of Appeals erred in ruling that the 6% per annum legal interest on the judgment
shall be computed from the filing of the complaint.

In G. R. No. 113842, Lapuz seeks: (a) the setting aside of the decision of the Court of Appeals insofar as it modifies the
award of damages; b) actual and compensatory damages in the sum equivalent to 5 years' loss of earnings based on the
petitioner's monthly salary of 1,600 Saudi rials at the current conversion rate plus the cost of baggage and personal
belongings worth P2,000 and the service fee of P3,000 paid to the recruiting agency, all with legal interest from the filing
of the complaint until fully paid; c) moral damages of not less than P1 million and exemplary damages of not less than
P500,000.00, both with interest at 6% per annum from the filing of the complaint; and d) attorney's fees in the sum
equivalent to 30% of the award of damages.

It is evident that the issues raised in these petitions relate mainly to the correctness of the factual findings of the Court of
Appeals and the award of damages. The Court has consistently affirmed that the findings of fact of the Court of Appeals
and the other lower courts are as a rule binding upon it, subject to certain exceptions. As nothing in the record indicates
any of such exceptions, the factual conclusions of the appellate court must be affirmed.

The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the
passenger manifest of KAL for its Flight No. KE 903. His clearance through immigration and customs clearly shows that
he had indeed been confirmed as a passenger of KAL in that flight. KAL thus committed a breach of the contract of
carriage between them when it failed to bring Lapuz to his destination.

This Court has held that a contract to transport passengers is different in kind and degree from any other contractual
relation. 3 The business of the carrier is mainly with the traveling public. It invites people to avail themselves of the
comforts and advantages it offers. The contract of air carriage generates a relation attended with a public duty. Passengers
have the right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are
entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. 4 So
it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for
damages against the carrier.

The breach of contract was aggravated in this case when, instead of courteously informing Lapuz of his being a "wait-
listed" passenger, a KAL officer rudely shouted "Down! Down!" while pointing at him, thus causing him embarrassment
and public humiliation.

KAL argues that "the evidence of confirmation of a chance passenger status is not through the entry of the name of a
chance passenger in the passenger manifest nor the clearance from the Commission on Immigration and Deportation,
because they are merely means of facilitating the boarding of a chance passenger in case his status is confirmed." We are
not persuaded.

The evidence presented by Lapuz shows that he had indeed checked in at the departure counter, passed through customs
and immigration, boarded the shuttle bus and proceeded to the ramp of KAL's aircraft. In fact, his baggage had already
been loaded in KAL's aircraft, to be flown with him to Jeddah. The contract of carriage between him and KAL had
already been perfected when he was summarily and insolently prevented from boarding the aircraft.

KAL's allegation that the respondent court abused its discretion in awarding moral and exemplary damages is also not
tenable.

The Court of Appeals granted moral and exemplary damages because:

The findings of the court a quo that the defendant-appellant has committed breach of contract of
carriage in bad faith and in wanton, disregard of plaintiff-appellant's rights as passenger laid the
basis and justification of an award for moral damages.

xxxx
In the instant case, we find that defendant-appellant Korean Air Lines acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner when it "bumped off" plaintiff-appellant
on November 8, 1980, and in addition treated him rudely and arrogantly as a "patay gutom na
contract worker fighting Korean Air Lines," which clearly shows malice and bad faith, thus
entitling plaintiff-appellant to moral damages.

xxxx

Considering that the plaintiff-appellant's entitlement to moral damages has been fully established
by oral and documentary evidence, exemplary damages may be awarded. In fact, exemplary
damages may be awarded, even though not so expressly pleaded in the complaint (Kapoe vs.
Masa, 134 SCRA 231). By the same token, to provide an example for the public good, an award
of exemplary damages is also proper (Armovit vs. Court of Appeals, supra).

On the other hand, Lapuz's claim that the award of P100,000.00 as moral and exemplary damages is inadequate is not
acceptable either. His prayer for moral damages of not less than P1 million and exemplary damages of not less than
P500,000.00 is overblown.

The well-entrenched principle is that moral damages depend upon the discretion of the court based on the circumstances
of each case. 5 This discretion is limited by the principle that the "amount awarded should not be palpably and
scandalously excessive" as to indicate that it was the result of prejudice or corruption on the part of the trial
court. 6 Damages are not intended to enrich the complainant at the expense of the defendant. They are awarded only to
alleviate the moral suffering that the injured party had undergone by reason of the defendant's culpable action. 7 There is
no hard-and-fast rule in the determination of what would be a fair amount of moral damages since each case must be
governed by its own peculiar facts.

A review of the record of this case shows that the injury suffered by Lapuz is not so serious or extensive as to warrant an
award of P1.5 million. The assessment of P100,000 as moral and exemplary damages in his favor is, in our view,
reasonable and realistic.

Lapuz likewise claims that the respondent court could not rule upon the propriety of the award of actual damages because
it had not been assigned as an error by KAL. Not so. The rule is that only errors specifically assigned and properly argued
in the brief will be considered except errors affecting jurisdiction over the subject matter and plain as well as clerical
errors. 8 But this is not without qualification for, as the Court held in Vda. de Javellana vs. Court of Appeals: 9

. . . [T]he Court is clothed with ample authority to review matters, even if they are not assigned as
errors in their appeal, if it finds that their consideration is necessary in arriving at a just decision
of the case.

A similar pronouncement was made in Baquiran vs. Court of Appeals 10 in this wise:

Issues, though not specifically raised in the pleading in the appellate court, may, in the interest of
justice, be properly considered by said court in deciding a case, if they are questions raised in the
trial court and are matters of record having some bearing on the issue submitted which the parties
failed to raise or the lower court ignored.

The Court of Appeals was therefore justified in decreasing the award of actual damages even if the issue was not assigned
as an error by KAL. Consideration of this question was necessary for the just and complete resolution of the present case.
Furthermore, there was enough evidence to warrant the reduction of the original award, as the challenged decision
correctly observed:

A perusal of the plaintiff-appellant's contract of employment shows that the effectivity of the
contract is for only one year, renewable every year for five years. Although plaintiff-appellant
intends to renew his contract, such renewal will still be subject to his foreign employer. Plaintiff-
appellant had not yet started working with his foreign employer, hence, there can be no basis as to
whether his contract will be renewed by his foreign employer or not. Thus, the damages
representing the loss of earnings of plaintiff-appellant in the renewal of the contract of
employment is at most speculative. Damages may not be awarded on the basis of speculation or
conjecture (Gachalian vs. Delim, 203 SCRA 126). Hence, defendant-appellant's liability is
limited to the one year contract only. Plaintiff-appellant is, therefore, entitled only to his lost
earnings for one year, i.e., P60,000.00, which is 1/5 of P300,000.00, the total amount of actual
damages, representing lost earnings for five years prayed for in the Complaint.

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

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

On this matter, the Court has held:

If suit were for payment of a definite sum of money, the contention might be tenable. However, if
it is for damages, unliquidated and not known until definitely ascertained, assessed and
determined by the courts after proof, interest should be from the date of the decision. 11

xxxx

The obligation to pay interest on a sum filed in a judgment exists from the date of the sentence,
when so declared; for until the net amount of the debtor's liability has been determined, he cannot
he considered delinquent in the fulfillment of his obligation to pay the debt with interest
thereon. 12

Finally, we find that the respondent court did not err in sustaining the trial court's dismissal of KAL's counterclaim against
Pan Pacific Overseas Recruiting Services Inc., whose responsibility ended with the confirmation by KAL of Lapuz as its
passenger in its Flight No. 903.

This is still another case of the maltreatment of our overseas contract workers, this time by the airline supposed to bring
the passenger to his foreign assignment. Our OCW's sacrifice much in seeking employment abroad, where they are
deprived of the company of their loved ones, the direct protection of our laws, and the comfort of our own native culture
and way of life. This Court shall exert every effort to vindicate their rights when they are abused and shall accord them the
commensurate reparation of their injuries consistent with their dignity and worth as members of the working class.

WHEREFORE, the appealed judgment is AFFIRMED, but with the modification that the legal interest on the damages
awarded to private respondent should commence from the date of the decision of the trial court on November 14, 1990.
The parties shall bear their own costs.

SO ORDERED.

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