P1,660,000.
00, more or less, based on the average life span of 75
TRANSPORTATION LAW CASES - DEAN RODRIGUEZ
2001
G.R. No. 136048 January 23, 2001
JOSE BARITUA and JB LINE, petitioners, vs. NIMFA DIVINA
MERCADER in her capacity and as guardian of DARWIN,
GIOVANNI, RODEL and DENNIS, all surnamed MERCADER;
LEONIDA Vda. de MERCADER on her behalf and on behalf of her
minor child MARY JOY MERCADER; SHIRLEY MERCADER
DELA CRUZ; MARIA THERESA MERCADER-GARCIA;
DANILO MERCADER; JOSE DANTE MERCADER; JOSEFINA
MERCADER, respondents.
The Manchester ruling requiring the payment of docket and other fees as
a condition for the acquisition of jurisdiction has no retroactive effect and
applies only to cases filed after its finality.
The Case: Before us is a Petition for Review under Rule 45 of the Rules
of Court, assailing the April 17, 1998 Decision 1 and the October 28, 1998
Resolution2 of the Court of Appeals (CA) in CA-GR CY No. 40772. The
decretal portion of said Decision reads as follows: "WHEREFORE, upon
all the foregoing premises considered, the DECISION appealed from is
AFFIRMED with the MODIFICATION that the loss of earnings of the
late Dominador Mercader is reduced to P798,000.00."3
The assailed Resolution denied petitioners' Motion for Reconsideration.
The Court of Appeals sustained the Decision of the Regional Trial Court
(RTC) of Laoang, Northern Samar (Branch 21). Except for the
modification of the loss of earnings, it affirmed all the monetary damages
granted by the trial court to respondents. The decretal portion of the
assailed RTC Decision reads as follows:4
"WHEREFORE, on preponderance of evidence, judgment is for
[herein respondents] and against [herein petitioners], ordering the
latter to pay the former:
(a) As compensatory damages for the death of Dominador Mercader
-- P50,000.00;
(b) For the loss of earnings of the late Dominador Mercader --
years from the time of his death who earned a net income of
P5,000.00 monthly out of his business;
(c) Actual damages of P30,000.00 receipted purchases of goods in
Manila; P5,750.00 for the first class coffin and a 15-day wake
services evidenced by a receipt marked Exh. 'D'; [P.]850.00 for the
50 x 60 headstone, receipt marked Exh. 'E' and P1,590.00 -- Deed of
Absolute Sale of a burial lot, marked Exh. 'F';
(d) 25% of whatever amount is collected by [respondents] from
[petitioners] but no less than P50,000.00 plus P1 ,000.00 per hearing
by way of attorney's fees;
(e) As moral damages -- P50,000.00;
(f) As exemplary damages -- P30,000.00; and
(g) To pay the costs."
The Facts
The antecedents of the case are succinctly summarized by the Court of
Appeals in this wise: "The original complaint was filed against JB Lines,
Inc. [Petitioner JB Lines, Inc.] filed a motion to dismiss complaint, to
strike out false-impertinent matters therefrom, and/or for bill of
particulars on the primary grounds that [respondents] failed to implead
Jose Baritua as an indispensable party and that the cause of action is a
suit against a wrong and non-existent party. [Respondents] filed an
opposition to the said motion and an amended complaint.
"In an Order dated December 11, 1984 the trial court denied the aforesaid
motion and admitted the amended complaint of [respondents] impleading
Jose Baritua and alleged the following: The late Dominador Mercader is
a [b]usinessman mainly engaged in the buy and sell of dry goods in
Laoang, N. Samar. He buys his goods from Manila and bring[s] them to
Laoang, Northern Samar for sale at his store located in the said locality;
Sometime on March 16, 1983, the late Dominador Mercader boarded
[petitioners'] bus No. 142 with Plate No. 484 EU at [petitioners'] Manila
Station/terminal, bound for Brgy. Rawis, Laoang Northern Samar as a
paying passenger; At that time, Dominador Mercader had with him as his
baggage, assorted goods (i.e. long pants, short pants, dusters, etc.) which
he likewise loaded in [petitioners'] bus; The late Dominador Mercader
was not able to reach his destination considering that on March 17, 1983
at Beily (Bugco) Bridge, Barangay Roxas, Mondragon, Northern Samar,
while he was on board [petitioners'] bus no. 142 with Plate No. 484 EU,
the said bus fell into the river as a result of which the late Dominador
Mercader died. The accident happened because [petitioners'] driver
negligently and recklessly operated the bus at a fast speed in wanton
disregard of traffic rules and regulations and the prevailing conditions
then existing that caused [the] bus to fall into the river.'
"[Respondents] then filed a motion to declare [petitioners] in default
which motion was opposed by [petitioners]. [Respondents] withdrew the
said motion prompting the trial court to cancel the scheduled hearing of
the said motion to declare [petitioners] in default in an Order dated
January 23, 1985.
"In its answer, [petitioners] denied specifically all the material allegations
in the complaint and alleged the following: '2. The alleged person of
Dominador Mercader did not board bus 142 at [petitioners'] Manila
station/terminal x x x as a (supposed paying passenger). There is even no
statement in the complaint that Dominador Mercader (if it were true that
he was a passenger of bus 142 'at the [petitioners'] Manila
station/terminal') was issued any passenger-freight ticket conformably
with law and practice. It is a fact of public knowledge that, in compliance
with existing rules and laws, [Petitioner] Baritua, as a public utility
operator, issues, thru his conductors, in appropriate situations, to a true
passenger, the familiar and known passenger and freight ticket which
reads in part:
3. It is also a fact of public knowledge that [Petitioner] Baritua does not
have any 'Manila station/terminal,' because what he has is a Pasay city
station.
4. [Petitioner] Baritua had no prior knowledge that, on or about March
17, 1983, and/or previous thereto, the Bugko Bailey Bridge (across
Catarman-Laoang road) in Barangay Roxas, Mondragon, Northern
Samar, was in virtual' dilapida[ted] and dangerous condition, in a state of
decay and disrepair, thus calling for the concerned government and public
officials' performance of their coordinative and joint duties and
responsibilities, to repair, improve and maintain that bridge, in good and
reasonably safe condition, but, far from performing or complying with
said subject duties and responsibilities, the adverted officials concerned,
without just cause, not only failed and neglected to cause such needed
repair, improvement and maintenance of the Bugko Bailey Bridge, on or
prior to March 17, 1983, but also failed, and neglected to either close the
Bugko Bridge to public use and travel, and/or to put appropriate warning
and cautionary signs, for repair, improvement, maintenance, and safety
purposes. So that, as a proximate and direct consequence of the aggregate
officials' nonfeasance, bad faith, negligence, serious inefficiency, and
callous indifference to public safety, that Bugko Bridge collapsed inward
and caved in ruin, on that March 17, 1983, while Baritua's bus 142 was
cautiously and prudently passing and travelling across the said bridge, as
a result of which the bus fell into the river and sea waters, despite the
exercise and compliance by Baritua and his driver of their duties in the
matter of their requisite degree of diligence, caution and prudence,
Baritua also exercised and complied with the requisite duty of diligence,
care, and prudence in the selection and supervision over his driver,
contrary to the baseless imputation in paragraphs 14 and 20 of the
original and amended complaints. Moreover, Baritua and his driver did
not violate any traffic rule and regulation, contrary to plaintiffs'
insinuation.
5. Furthermore, [Petitioner] Baritua and his driver have no causative
connection with the alleged death of Dominador Mercader who,
according to a reliable source, was already seriously suffering from a
lingering illness even prior to his alleged demise. Baritua also learned
lately, and so it is herein alleged that Dominador Mercader contributed
considerably, to, and/or provided the proximate and direct cause of his
own death, hence, he himself is to be blamed for whatever may have
happened to him or for whatever may have been sustained by his
supposed heirs, vis-à-vis the suit against the wrong party.
6. Baritua and his driver, as earlier stated, did not commit any actionable
breach of contract with the alleged Dominador Mercader or the latter's
supposed heirs.
7. There is no factual nor any legal basis for plaintiffs' proffered claims
for damages.
II. AFFIRMATIVE DEFENSES
8. Based on the preceding averments, plaintiffs have neither a cause nor a
right of action against [Petitioner] Baritua and his driver.
8.1. The allegation that supposedly the 'x x x [p]laintiffs are the
compulsory heirs of the late DOMINADOR MERCADER x x x' (par. 8,
complaint) is too vague and too broad, as the subject allegation is a bare
and pure conclusionary averment unaccompanied by the requisite
statement of ultimate facts constitutive of a cause or right of action.
8.2. Even assuming arguendo, without however conceding, plaintiffs
statement of a cause of action, the complaint is nonetheless replete with
false and impertinent matters which fit the rule on striking out pleadings
or parts thereof. To mention only a glaring few:
8.2.a. The allegation on exemplary damages x x x is impertinent and
immaterial in the complaint against a supposed employer. For, even
theoretically assuming, without however admitting a negligent act-
omission on the part of a driver, nevertheless, in such a hypothetical
situation, the causative negligence, if any there was, is personal to the
wrongdoer, i.e., the employee-driver, to the exclusion of the employer.
8.2.b. The allegation on supposed 'minimum life of 75 years' and on 'he
expects to earn no less than P1,680,000.00 x x x is false, a pure
hyperbole, and bereft of factual and legal basis. Besides, what
jurisprudential rule refers to is only net earning. The law abhors a claim,
akin to plaintiffs' allegation, which is manifestly speculative, as it may
not exist at all. Furthermore, the questioned allegation in the plaintiff's
original and amended complaints is not preceded by the requisite
statement of definitive facts, nor of any specific fact, which could
possibly afford a rational basis for a reasonable expectation of supposed
earning that could be lost, or impaired.
8.2.c. Likewise, the allegations that allegedly 'x x x the late Dominador
Mercader boarded x x x Bus No. 142 x x x and that supposedly the latter
had a baggage x x x containing drygoods x x x in which case [petitioners
have] to pay the value thereof in such amount as may be proven by
[respondents] in court during the trial x x x, apart from being false, are
offensive to the rule on concise statement of ultimate facts. The assailed
allegations also contravene Interim Rule 11, '(i)f any demand is for
damages in a civil action the amount thereof must be specifically alleged.'
In consequence of this averment, [respondents] have not yet paid the
correct docket fee, for which reason, [respondents'] case may be
dismissed on that ground alone.
8.3. In violation also of the same Interim Rule 11, regarding the requisite
definitive amount of claim, the allegation on the supposed funeral
expense x x x does not also indicate any specific amount. So with the
averment on supposed moral damage which may not be warranted
because of absence of allegation of fraud or bad faith, if any, there was,
apart from want of causative connection with the defendant.
8.4. The allegation in paragraph 15 of the original and amended
complaint is also a pure conclusionary averment, without a factual
premise.
9. [Petitioner] JB LINE, impleaded in the amended, complaint, is merely
a business name and sole proprietorship of defendant Baritua. As such,
JB Line is not a juridical person, nor an entity authorized by law to sue
and be sued, hence, it cannot legally be a party to any action. With this
averment, correlated with that in paragraphs 4-5 hereof, [respondents']
amended complaint is essentially a suit against a wrong party."5
The RTC, after due trial, rendered the aforesaid assailed Decision.
Ruling of the Court of Appeals: As earlier stated, the Court of Appeals
affirmed the trial court's award of monetary damages in favor of
respondents, except the amount of Dominador Mercader's lost earnings,
which it reduced to P798,000. It held that petitioners failed to rebut the
presumption that in the event a passenger died or was injured, the carrier
had acted negligently. Petitioners, it added, presented no sufficient proof
that they had exercised extraordinary diligence.
Hence, this Petition.6
The Issues: In their Memorandum, petitioners submit the following
issues for our consideration:
I. Did the honorable Court of Appeals (CA) gravely abuse its discretion
when it allowed to pass sub silencio the trial court's failure to rule
frontally on petitioners' plea for a bill of particulars, and ignored the
nature of respondents' prayer in the complaint pleading for an award of a)
P12,000.00 -- representing the death compensation;
b) An amount to be proven in court. representing actual damages;
c) P1,660,000.00 or more as may be proven during the trial, by way of
loss of earnings;
d) An amount to be proven in court as and by way of funeral expenses;
e) An amount to be proven during the trial representing moral damages;
f) An amount to be determined by this Honorable Court, representing
exemplary damages;
g) An amount equivalent to 25% of whatever amount the plaintiffs would
be able to collect from the defendant but in no case less than P50,000.00
plus an additional amount of P1,000.00 per hearing as and by way of
Attorney's fees;'
II. Did the CA also ignore the fact that the trial court was not paid the
correct amount of the docket and other lawful fees; hence, without
jurisdiction over the original and amended complaints or over the subject
matter of the case;
III. Did the CA likewise arbitrarily disregard petitioners' constitutional
right to procedural due process and fairness when it ignored and thrust
aside their right to present evidence and to expect that their evidence will
be duly considered and appreciated; and
IV. In awarding excessive and extravagant damages, did the CA and the
trial court adhere to the rule that their assailed decision must state clearly
and distinctly the facts and the laws on which they are based?"7
Distilling the alleged errors cited above, petitioners raise two main issues
for our consideration: (1) whether the CA erred in holding that the RTC
had jurisdiction over the subject matter of the case, and (2) whether the
CA disregarded petitioners' procedural rights.
The Court's Ruling: The Petition is devoid of merit.
First Issue: Jurisdiction
Petitioners contend that since the correct amounts of docket and other
lawful fees were not paid by respondents, then the trial court did not
acquire jurisdiction over the subject matter of the case.
The Court, in Manchester Development Corporation v. CA,8 held that
"[t]he court acquires jurisdiction over any case only upon the payment of
the prescribed docket fee. An amendment of the complaint or similar
pleading will not thereby vest jurisdiction in the court, much less the
payment of the docket fee based on the amounts sought in the amended
pleading. x x x."
Generally, the jurisdiction of a court is determined by the statute in force
at the commencement of the action,9unless such statute provides for its
retroactive application.10 Once the jurisdiction of a court attaches, it
continues until the case is finally terminated. 11 The trial court cannot be
ousted therefrom by subsequent happenings or events, although of a
character that would have prevented jurisdiction from attaching in the
first instance.12
The Manchester ruling, which became final in 1987, has no retroactive
application and cannot be invoked in the subject Complaint filed in 1984.
The Court explicitly declared:
"To put a stop to this irregularity, henceforth all complaints,
petitions, answers and other similar pleadings should specify the
amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be
considered in the assessment of the filing fees in any case. Any
pleading that fails to comply with this requirement shall not be
accepted nor admitted, or shall otherwise be expunged from the
record."13 (emphasis supplied)
Second Issue: Petitioners' Procedural Rights - Motion for a Bill of
Particulars
Petitioners argue that the Court of Appeals erred when it passed sub
silencio on the trial court's failure to rule frontally on their plea for a bill
of particulars.
We are not impressed. It must be noted that petitioners' counsel
manifested in open court his desire to file a motion for a bill of
particulars. The RTC gave him ten days from March 12, 1985 within
which to do so.14 He, however, filed the aforesaid motion only on April 2,
1985 or eleven days past the deadline set by the trial court. 15 Moreover,
such motion was already moot and academic because, prior to its filing,
petitioners had already filed their answer and several other pleadings to
the amended Complaint. Section 1, Rule 12 of the Rules of Court,
provides:
"Section 1. When applied for; purpose. -- Before responding to a
pleading, a party may move for a more definite statement or for a bill
of particulars of any matter which is not averred with sufficient
definiteness or particularity to enable him properly to prepare his
 responsive pleading. If the pleading is a reply, the motion must be
filed within ten (10) days from service thereof. Such motion shall
point out the defects complained of, the paragraphs wherein they are
contained, and the details desired."16
Petitioners' Right to Adduce Evidence
Petitioners also argue that their right to present evidence was violated by
the CA, because it did not consider their contention that the trial judges
who heard the case were biased and impartial. Petitioners contend, as
they did before the CA, that Judge Tomas B. Noynay based his Decision"
on certain chosen partial testimonies of [respondents'] witnesses x x x."
They further maintain that Judge Fortunato Operario, who initially
handled the case, questioned some witnesses in an overzealous manner
and "assum[ed] the dual role of magistrate and advocate."17
These arguments are not meritorious. First, judges cannot be expected to
rely on the testimonies of every witness. In ascertaining the facts, they
determine who are credible and who are not. In doing so, they consider
all the evidence before them. In other words, the mere fact that Judge
Noynay based his decision on the testimonies of respondents' witnesses
does not necessarily mean that he did not consider those of petitioners.
Second, we find no sufficient showing that Judge Operario was
overzealous in questioning the witnesses. His questions merely sought to
clarify their testimonies. In all, we reject petitioners' contention that their
right to adduce evidence was violated.
Alleged Failure to State Clearly the Facts and the Law
We are not convinced by petitioners' contention, either, that both the trial
and the appellate courts failed to state clearly and distinctly the facts and
the law involved in the case. As can be gleaned from their Decisions,
both courts clearly laid down their bases for awarding monetary damages
to respondents.
Both the RTC and the CA found that a contract of carriage existed
between petitioners and Dominador Mercader when he boarded Bus No.
142 in Pasay City on March 16, 1983. Petitioners failed to transport him
to his destination, because the bus fell into a river while traversing the
Bugko Bailey Bridge. Although he survived the fall, he later died of
asphyxia secondary to drowning.
We agree with the findings of both courts that petitioners failed to
observe extraordinary diligence18 that fateful morning. It must be noted
that a common carrier, by the nature of its business and for reasons of
public policy, is bound to carry passengers safely as far as human care
and foresight can provide. It is supposed to do so by using the utmost
diligence of very cautious persons, with due regard for all the
circunistances.19 In case of death or injuries to passengers, it is presumed
to have been at fault or to have acted negligently, unless it proves that it
observed extraordinary diligence as prescribed in Articles 1733 and
175520 of the Civil Code.1âwphi1.nêt
We sustain the ruling of the CA that petitioners failed to prove that they
had observed extraordinary diligence.
First, petitioners did not present evidence on the skill or expertise of the
driver of Bus No. 142 or the condition of that vehicle at the time of the
incident.
Second, the bus was overloaded at the time. In fact, several individuals
were standing when the incident occurred.21
Third, the bus was overspeeding. Its conductor testified that it had
overtaken several buses before it reached the Bugko Bailey Bridge.22
Moreover, prior to crossing the bridge, it had accelerated and maintained
its speed towards the bridge.23
We therefore believe that there is no reason to overturn the assailed CA
Decision, which affirmed that of the RTC. It is a well-settled rule that the
trial court's factual findings, when affirmed by the appellate court, are
conclusive and binding, if they are not tainted with arbitrariness or
oversight of some fact or circumstance of significance and influence. 24 As
clearly discussed above, petitioners have not presented sufficient ground
to warrant a deviation from this rule.
Finally, we cannot fault the appellate court in its computation of the
damages and lost earnings, since it effectively computed only net
earnings in accordance with existing jurisprudence.25
WHEREFORE, the Petition is hereby DENIED, and the assailed
Decision AFFIRMED. Costs against petitioners. SO ORDERED.
G.R. No. 131588 March 27, 2001
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. GLENN DE
LOS SANTOS, accused-appellant.
One may perhaps easily recall the gruesome and tragic event in Cagayan
de Oro City, reported over print and broadcast media, which claimed the
lives of several members of the Philippine National Police (PNP) who
were undergoing an "endurance run" as part of the Special Counter
Insurgency Operation Unit Training. Not much effort was spared for the
search of the one responsible therefor, as herein accused-appellant Glenn
de los Santos (hereafter GLENN) immediately surrendered to cal
authorities. GLENN was then charged with the crimes of Multiple
Murder, Multiple Frustrated Murder, and Multiple Attempted Murder in
an information filed with the Regional Trial Court of Cagayan de Oro
City. The information reads as follows:
That on or about October 05, 1995, in the early morning, at Maitum
Highway, within Barangay Puerto, Cagayan de Oro City, Philippines, and
within the jurisdiction of this Honorable Court, the above-named
accused, with deliberate intent to kill, taking advantage of his driven
motor vehicle, an Isuzu Elf, and with treachery, did then and there
willfully, unlawfully and feloniously kill and inflict mortal wounds from
… behind in a sudden and unexpected manner with the use of said
vehicle … members of the Philippine National Police (PNP), undergoing
a Special Training Course (Scout Class 07-95), wearing black T-shirts
and black short pants, performing an "Endurance Run" of 35 kilometers
coming from their camp in Manolo Fortich, Bukidnon, heading to
Regional Training Headquarters in Camp Alagar, Cagayan de Oro City,
running in a column of 3, with a distance of two feet, more or less, from
one trainee to another, thus forming a [sic] three lines, with a length of
more or less 50 meters from the 1st man to the last man, unable to defend
themselves, because the accused ran or moved his driven vehicle on the
direction of the backs of the PNP joggers in spite of the continuous
warning signals made by six of the joggers, namely: PO1 Allan Tabacon
Espana, Waldon Sinda Sacro, Lemuel Ybanez Pangca, Artemio Jamil
Villaflor, Nardo Omasas Collantes and Joselito Buyser Escartin, who
were at the rear echelon of said run, acting as guards, by continuously
waving their hands at the accused for him to take the left lane of the
highway, going to the City proper, from a distance of 100 meters away
from the jogger’s rear portion, but which accused failed and refused to
heed; instead, he proceeded to operate his driven vehicle (an Isuzu Elf)
on high speed directly towards the joggers, thus forcing the rear hitting,
bumping, or ramming the first four (4) victims, causing the bodies to be
thrown towards the windshields of said Isuzu Elf, breaking said
windshield, and upon being aware that bodies of the victims flew on the
windshield of his driven vehicle, instead of applying his brake, continued
to travel on a high speed, this time putting off its headlights, thus hitting
the succeeding joggers on said 1st line, as a result thereof the following
were killed on the spot:
While another trainee/victim, Antonio Palomino Mino, died few days
after the incident, while the following eleven (11) other trainee/victims
were seriously wounded, the accused thus performing all the acts of
execution which would produce the crime of Murder as a consequence
but nevertheless did not produce it by reason of some cause other than
said accused’s spontaneous desistance, that is, by the timely and able
medical assistance rendered on the following victims which prevented
their death, to wit: After which said accused thereafter escaped from the
scene of the incident, leaving behind the victims afore-enumerated
helpless.
Contrary to Article 248, in relation to Article 6 of the Revised Penal
Code.
The evidence for the prosecution disclose that the Special Counter
Insurgency Operation Unit Training held at Camp Damilag, Manolo
Fortich, Bukidnon, started on 1 September 1995 and was to end on 15
October 1995. The last phase of the training was the "endurance run"
from said Camp to Camp Alagar, Cagayan de Oro City. The run on 5
October 1995 started at 2:20 a.m. The PNP trainees were divided into
three columns; the first and second of which had 22 trainees each, and the
third had 21. The trainees were wearing black T-shirts, black short pants,
and green and black combat shoes. At the start of the run, a Hummer
vehicle tailed the jogging trainees. When they reached Alae, the driver of
the Hummer vehicle was instructed to dispatch advanced security at
strategic locations in Carmen Hill. Since the jogging trainees were
occupying the right lane of the highway, two rear security guards were
assigned to each rear column. Their duty was to jog backwards facing the
oncoming vehicles and give hand signals for other vehicles to take the
left lane.1
Prosecution witnesses Lemuel Y. Pangca and Weldon Sacro testified that
they were assigned as rear guards of the first column. They recalled that
from Alae to Maitum Highway, Puerto, Cagayan de Oro City, about 20
vehicles passed them, all of which slowed down and took the left portion
of the road when signaled to do so.2
While they were negotiating Maitum Highway, they saw an Isuzu Elf
truck coming at high speed towards them. The vehicle lights were in the
high beam. At a distance of 100 meters, the rear security guards started
waving their hands for the vehicle to take the other side of the road, but
the vehicle just kept its speed, apparently ignoring their signals and
coming closer and closer to them. Realizing that the vehicle would hit
them, the rear guards told their co-trainees to "retract." The guards
forthwith jumped in different directions. Lemuel and Weldon saw their
co-trainees being hit by the said vehicle, falling like dominoes one after
the other. Some were thrown, and others were overrun by the vehicle. The
driver did not reduce his speed even after hitting the first and second
columns. The guards then stopped oncoming vehicles to prevent their
comrades from being hit again.3
The trial court judge, together with the City Prosecutor, GLENN and his
counsel, conducted an ocular inspection of the place where the incident
happened. They then proceeded to inspect the Isuzu Elf at the police
station. The City Prosecutor manifested, thus:
The vehicle which we are now inspecting at the police station is the
same vehicle which [was] involved in the October 5, 1995 incident,
an Isuzu Elf vehicle colored light blue with strips painting along the
side colored orange and yellow as well as in front. We further
manifest that … the windshield was totally damaged and 2/3 portion
of the front just below the windshield was heavily dented as a
consequence of the impact. The lower portion was likewise damaged
more particularly in the radiator guard. The bumper of said vehicle
was likewise heavily damaged in fact there is a cut of the plastic used
as a bumper; that the right side of the headlight was likewise totally
damaged. The front signal light, right side was likewise damaged.
The side mirror was likewise totally damaged. The height of the
truck from the ground to the lower portion of the windshield is 5 ft.
and the height of the truck on the front level is 5 ft.4
PO3 Jose Cabugwas testified that he was assigned at the Investigation
Division at Precinct 6, Cagayan de Oro City, and that at 4 a.m. of 5
October 1995, several members of the PNP came to their station and
reported that they had been bumped by a certain vehicle. Immediately
after receiving the report, he and two other policemen proceeded to the
traffic scene to conduct an ocular inspection. Only bloodstains and
broken particles of the hit-and-run vehicle remained on the highway.
They did not see any brake marks on the highway, which led him to
conclude that the brakes of the vehicle had not been applied. The
policemen measured the bloodstains and found them to be 70 ft. long.5
GLENN’s version of the events that transpired that evening is as follows:
At about 10:30 p.m. of 4 October 1995, he was asked by his friend Enting
Galindez and the latter’s fellow band members to provide them with
transportation, if possible an Isuzu Forward, that would bring their band
instruments, band utilities and band members from Macasandig and
Corrales, Cagayan de Oro City, to Balingoan. From there, they were
supposed to be taken to Mambajao, Camiguin, to participate in the San
Miguel-sponsored "Sabado Nights" of the Lanzones Festival from 5-7
October 1995. It was the thirteenth time that Enting had asked such a
favor from him.6 Since the arrangement was to fetch Galindez and his
group at 4:00 a.m. of 5 October 1995, GLENN immediately went to
Cugman, Cagayan de Oro City, to get his Isuzu Elf truck. After which, he
proceeded back to his house at Bugo, Cagayan de Oro City, and told his
wife that he would go to Bukidnon to get his aunt’s Isuzu Forward truck
because the twenty band members and nine utilities and band instruments
could not be accommodated in the Isuzu Elf truck. Three of his friends
asked to go along, namely, Roldan Paltonag, Andot Peña, and a certain
Akut.7
After leaving GLENN’s house, the group decided to stop at Celebrity
Plaza Restaurant. GLENN saw his "kumpare" Danilo Cosin and the
latter’s wife, and joined them at the table. GLENN finished three bottles
of pale pilsen beer. When the Cosin spouses left, GLENN joined his
travelling companions at their table. The group left at 12:00 midnight for
Bukidnon. The environment was dark and foggy, with occasional rains. It
took them sometime looking for the Isuzu Forward truck. Finally, they
saw the truck in Agusan Canyon. Much to their disappointment, the said
truck had mechanical problems. Hence, GLENN decided to go back to
Cagayan de Oro City to tell Enting that they would use the Isuzu Elf
truck instead.8
GLENN drove slowly because the road was slippery. The vicinity was
dark: there was no moon or star; neither were there lampposts. From the
Alae junction, he and his companions used the national highway,
traversing the right lane going to Cagayan de Oro City. At the vicinity of
Mambatangan junction, as the Elf was negotiating a left curve going
slightly downward, GLENN saw a very bright and glaring light coming
from the opposite direction of the national highway. GLENN blinked his
headlights as a signal for the other driver to switch his headlights from
bright to dim. GLENN switched his own lights from bright to dim and
reduced his speed from 80 to 60 kilometers per hour. It was only when
the vehicles were at a distance of 10 to 15 meters from each other that the
other car’s headlights were switched from bright to dim. As a result,
GLENN found it extremely hard to adjust from high brightness to sudden
darkness.9
It was while the truck was still cruising at a speed of 60 km./hr., and
immediately after passing the oncoming vehicle, that GLENN suddenly
heard and felt bumping thuds. At the sound of the first bumping thuds,
GLENN put his right foot on the brake pedal. But the impact was so
sudden that he was astonished and afraid. He was trembling and could
not see what were being bumped. At the succeeding bumping thuds, he
was not able to pump the brake, nor did he notice that his foot was
pushing the pedal. He returned to his senses only when one of his
companions woke up and said to him: "Gard, it seems we bumped on
something. Just relax, we might all die." Due to its momentum, the Elf
continued on its track and was able to stop only when it was already very
near the next curve.10
GLENN could not distinguish in the darkness what he had hit, especially
since the right headlights of the truck had been busted upon the first
bumping thuds. In his confusion and fear, he immediately proceeded
home. GLENN did not report the incident to the Puerto Police Station
because he was not aware of what exactly he had hit. It was only when he
reached his house that he noticed that the grill of the truck was broken;
the side mirror and round mirror, missing; and the windshield, splintered.
Two hours later, he heard on Bombo Radyo that an accident had occurred,
and he realized that it was the PNP group that he had hit. GLENN
surrendered that same day to Governor Emano.11
The defense also presented Crescente Galindez, as well as Shirley
Almazan of the PAG-ASA Office, Cagayan de Oro City. The former
testified that when he went to GLENN’s house at about 10:00 p.m. of 4
October 1995, there was heavy rain; and at 12:00 midnight, the rain was
moderate. He corroborated GLENN’s testimony that he (Cerscente) went
to GLENN’s house that evening in order to hire a truck that would bring
the band instruments, band utilities and band members from Cagayan de
Oro to Camiguin for the Lanzones Festival.12 Almazan, on the other hand,
testified that based on an observed weather report within the vicinity of
Cagayan de Oro City, there was rain from 8:00 p.m. of October 1995 to
2:00 a.m. the next day; and the sky was overcast from 11:00 p.m. of 4
October 1995 to 5:00 a.m. of 5 October 1995. What she meant by
"overcast" is that there was no break in the sky; and, definitely, the moon
and stars could not be seen.13
The prosecution presented rebuttal witness Danilo Olarita whose house
was just 100 meters away from the place where the incident occurred. He
testified that he was awakened on that fateful night by a series of loud
thuds. Thereafter, a man came to his house and asked for a glass of water,
claiming to have been hit by a vehicle. Danilo further stated that the
weather at the time was fair, and that the soil was dry and not muddy.14
In its decision of 26 August 1997, the trial court convicted GLENN of the
complex crime of multiple murder, multiple frustrated murder and
multiple attempted murder, with the use of motor vehicle as the
qualifying circumstance. It sentenced him to suffer the penalty of death
and ordered him to indemnify each group of the heirs of the deceased in
the amount of P75,000; each of the victims of frustrated murder in the
amount of P30,000; and each of the victims of attempted murder in the
amount of P10,000.
Hence, this automatic review, wherein GLENN contends that the trial
court erred (a) in finding that he caused the Isuzu Elf truck to hit the
trainees even after seeing the rear guards waving and the PNP trainees
jogging; (b) in finding that he caused the truck to run even faster after
noticing the first thuds; and (c) in finding that he could still have avoided
the accident from a distance of 150 meters, despite the bright and glaring
light from the oncoming vehicle.
In convicting GLENN, the trial court found that "the accused out of
mischief and dare-devilness [sic], in the exhilaration of the night breeze
and having dr[u]nk at least three bottles of beer earlier, merely wanted to
scare the rear guard[s] and see them scamper away as they saw him and
his vehicle coming at them to ram them down."15
Likewise, the OSG posits that "the evil motive of the appellant in injuring
the jogging trainees was probably brought by the fact that he had dr[u]nk
a total of three (3) bottles of beer earlier before the incident."16
Not to be outdone, the defense also advances another speculation, i.e.,
"the possibility that [GLENN] could have fallen asleep out of sheer
fatigue in that unholy hour of 3:30 in the early morning, and thus was not
able to stop his Isuzu Elf truck when the bumping thuds were occurring
in rapid succession; and after he was able to wake up upon hearing the
shout of his companions, it was already too late, as the bumping thuds
had already occurred."17
Considering that death penalty is involved, the trial court should have
been more scrupulous in weighing the evidence. It we are to subscribe to
the trial court’s finding that GLENN must have merely wanted to scare
the rear guards, then intent to kill was wanting. In the absence of a
criminal intent, he cannot be held liable for an intentional felony. All
reasonable doubt intended to demonstrate negligence, and not criminal
intent, should be indulged.18
From the convergence of circumstances, we are inclined to believe that
the tragic event was more a product of reckless imprudence than of a
malicious intent on GLENN’s part.
First, as testified to by prosecution rebuttal witness Danilo Olarita, the
place of the incident was "very dark," as there was no moon. And
according to PAG-ASA’s observed weather report within the vicinity of
Cagayan de Oro City covering a radius of 50 kilometers, at the time the
event took place, the sky was overcast, i.e., there was absolutely no break
in the thick clouds covering the celestial dome globe; hence, there was no
way for the moon and stars to be seen. Neither were there lampposts that
illuminated the highway.
Second, the jogging trainees and the rear guards were all wearing black
T-shirts, black short pants, and black and green combat shoes, which
made them hard to make out on that dark and cloudy night. The rear
guards had neither reflectorized vests or gloves nor flashlights in giving
hand signals.
Third, GLENN was driving on the proper side of the road, the right lane.
On the other hand, the jogging trainees were occupying the wrong lane,
the same lane as GLENN’s vehicle was traversing. Worse, they were
facing the same direction as GLENN’s truck such that their backs were
turned towards the oncoming vehicles from behind.
Fourth, no convincing evidence was presented to rebut GLENN’s
testimony that he had been momentarily blinded by the very bright and
glaring lights of the oncoming vehicle at the opposite direction as his
truck rounded the curve. He must have been still reeling from the
blinding effect of the lights coming from the other vehicle when he
plowed into the group of police trainees.
Indeed, as pointed out by appellant, instinct tells one ‘to stop or swerve to
a safe place the moment he sees a cow, dog, or cat on the road, in order to
avoid bumping or killing the same"; and more so if the one on the road is
a person. It would therefore be inconceivable for GLENN, then a young
college graduate with a pregnant wife and three very young children who
were dependent on him for support, to have deliberately hit the group
with his truck.
The conclusion of the trial court and the OSG the GLENN intentionally
rammed and hit the jogging trainees was premised on the assumption that
despite the first bumping thuds, he continued to accelerate his vehicle
instead of applying his brakes, as shown by the absence of brake marks or
skid marks along the traffic scene.
For its part, the defense attributed the continuous movement of GLENN’s
vehicle to the confluence of the following factors:
1. The Isuzu Elf truck, a huge vehicle, was moving fast that even if
the brakes were applied the truck would have still proceeded further
on account of its momentum, albeit at a reduced speed, and would
have stopped only after a certain distance.
2. The national highway, from Alae to Puerto, Cagayan de Oro City,
was made of fine and smooth asphalt, free from obstructions on the
road such as potholes or excavations. Moreover, the highway was
going a little bit downward, more particularly from the first curve to
the place of incident. Hence, it was easier and faster to traverse a
distance "20 to 25 meters which was the approximate aggregate
distance" from the first elements up to the 22 nd or 23rd elements of the
columns.
 3. The weight of each of the trainees (the average of which could be
50 kilograms only) could hardly make an impact on the 3,900
kilograms truck, which was moving at a speed ranging from 60 to 70
kilometers per hour.
4. Considering that the width of the truck from the right to the left
tires was wide and the under chassis was elevated, the truck could
just pass over two persons lying flat on the ground without its rubber
tires running over the bodies. Thus, GLENN would not notice any
destabilization of the rubber tires.
5. Since the police trainees were jogging in the same direction as the
truck was proceeding, the forward movements constituted a force
parallel to the momentum of the forward-moving truck such that
there was even much lesser force resisting the said ongoing
momentum.
It is a well-entrenched rule that if the inculpatory facts are capable of two
or more explanations – one consistent with the innocence or lesser degree
of liability of the accused, and the other consistent with his guilt or graver
responsibility – the Court should adopt the explanation which is more
favorable to the accused.19
We are convinced that the incident, tragic though it was in light of the
number of persons killed and seriously injured, was an accident and not
an intentional felony. It is significant to note that there is no shred of
evidence that GLENN had an axe to grind against the police trainees that
would drive him into deliberately hitting them with intent to kill.
Although proof of motive is not indispensable to a conviction especially
where the assailant is positively identified, such proof is, nonetheless,
important in determining which of two conflicting theories of the incident
is more likely to be true.20 Thus, in People v. Godinez,21 this Court said
that the existence of a motive on the part of the accused becomes decisive
in determining the probability or credibility of his version that the
shooting was purely accidental.
Neither is there any showing of "a political angle of a leftist-sponsored
massacre of police elements disguised in a vehicular accident."22 Even if
there be such evidence, i.e., that the motive of the killing was in
furtherance of a rebellion movement, GLENN cannot be convicted
because if such were the case, the proper charge would be rebellion, and
not murder.23
GLENN’s offense is in failing to apply the brakes, or to swerve his
vehicle to the left or to a safe place the movement he heard and felt the
first bumping thuds. Had he done so, many trainees would have been
spared.
We have once said: A man must use common sense, and exercise due
reflection in all his acts; it is his duty to be cautious, careful, and prudent,
if not from instinct, then through fear of incurring punishment. He is
responsible for such results as anyone might foresee and for acts which
no one would have performed except through culpable abandon.
Otherwise his own person, rights and property, and those of his fellow-
beings, would ever be exposed to all manner of danger and injury.24
The test for determining whether a person is negligent in doing an act
whereby injury or damage results to the person or property of another is
this: Could a prudent man, in the position of the person to whom
negligence is attributed, foresee harm to the person injured as a
reasonable consequence of the course actually pursued? If so, the law
imposes a duty on the actor to refrain from that course or to take
precautions to guard against its mischievous results, and the failure to do
so constitutes negligence. Reasonable foresight of harm, followed by the
ignoring of the admonition born of this prevision, is always necessary
before negligence can be held to exist.25
GLENN showed an inexcusable lack of precaution. Article 365 of the
Revised Penal Code states that reckless imprudence consists in
voluntarily, but without malice, doing or failing to do an act from which
material damage results by reason of inexcusable lack of precaution on
the part of the person performing or failing to perform such act, taking
into consideration (1) his employment or occupation; (2) his degree of
intelligence; (4) his physical condition; and (3) other circumstances
regarding persons, time and place.
GLENN, being then a young college graduate and an experienced driver,
should have known to apply the brakes or swerve to a safe place
immediately upon hearing the first bumping thuds to avoid further hitting
the other trainees. By his own testimony, it was established that the road
was slippery and slightly going downward; and, worse, the place of the
incident was foggy and dark. He should have observed due care in
accordance with the conduct of a reasonably prudent man, such as by
slackening his speed, applying his brakes, or turning to the left side even
if it would mean entering the opposite lane (there being no evidence that
a vehicle was coming from the opposite direction). It is highly probable
that he was driving at high speed at the time. And even if he was driving
within the speed limits, this did not mean that he was exercising due care
under the existing circumstances and conditions at the time.
Considering that the incident was not a product of a malicious intent but
rather the result of a single act of reckless driving, GLENN should be
held guilty of the complex crime of reckless imprudence resulting in
multiple homicide with serious physical injuries and less serious physical
injuries.
Article 48 of the Revised Penal Code provides that when the single act
constitutes two or more grave or less grave felonies, or when an offense
is a necessary means for committing the other, the penalty for the most
serious crime shall be imposed, the same to be applied in its maximum
period. Since Article 48 speaks of felonies, it is applicable to crimes
through negligence in view of the definition of felonies in Article 3 as
"acts or omissions punishable by law" committed either by means of
deceit {dolo) or fault (culpa).26 In Reodica v. Court of Appeals,27 we ruled
that if a reckless, imprudent, or negligent act results in two or more grave
or less grave felonies, a complex crime is committed. Thus, in Lapuz v.
Court of Appeals,28 the accused was convicted, in conformity with Article
48 of the Revised Penal Code, of the complex crime of "homicide with
serious physical injuries and damage to property through reckless
imprudence," and was sentenced to a single penalty of imprisonment,
instead of the two penalties imposed by the trial court. Also, in Soriao v.
Court of Appeals,29 the accused was convicted of the complex crime of
"multiple homicide with damage to property through reckless
imprudence" for causing a motor boat to capsize, thereby drowning to
death its twenty-eight passengers.
The slight physical injuries caused by GLENN to the ten other victims
through reckless imprudence, would, had they been intentional, have
constituted light felonies. Being light felonies, which are not covered by
Article 48, they should be treated and punished as separate offenses.
Separate informations should have, therefore, been filed.
It must be noted that only one information (for multiple murder, multiple
frustrated murder and multiple attempted murder) was filed with the trial
court. However, nothing appears in the record that GLENN objected to
the multiplicity of the information in a motion to quash before his
arraignment. Hence, he is deemed to have waived such defect. 30Under
Section 3, Rule 120 of the Rules of Court, when two or more offenses are
charged in a single complaint or information and the accused fails to
object to it before trial, the court may convict the accused of as many
offenses as are charged and proved, and impose on him the penalty for
each of them.
Now, we come to the penalty. Under Article 365 of the Revised Penal
Code, any person who, by reckless imprudence, shall commit any act
which, had it been intentional, would constitute a grave felony shall
suffer the penalty of arresto mayor in its maximum period to prision
correccional in its medium period; and if it would have constituted a light
felony, the penalty of arresto menor in its maximum period shall be
imposed. The last paragraph thereof provides that the penalty next higher
in degree shall be imposed upon the offender who fails to lend on the spot
to the injured parties such help as may be in his hand to give. This failure
to render assistance to the victim, therefore, constitutes a qualifying
circumstance because the presence thereof raises the penalty by one
degree.31Moreover, the fifth paragraph thereof provides that in the
imposition of the penalty, the court shall exercise its sound discretion
without regard to the rules prescribed in Article 64. Elsewise stated, in
felonies through imprudence or negligence, modifying circumstances
need not be considered in the imposition of the penalty.32
In the case at bar, it has been alleged in the information and proved
during the trial that GLENN "escaped from the scene of the incident,
leaving behind the victims." It being crystal clear that GLENN failed to
render aid to the victims, the penalty provided for under Article 365 shall
be raised by one degree. Hence, for reckless imprudence resulting in
multiple homicide with serious physical injuries and less serious physical
injuries, the penalty would be prision correccional in its maximum period
to prision mayor in its medium period. Applying Article 48, the
maximum of said penalty, which is prision mayor in its medium period,
should be imposed. For the separate offenses of reckless imprudence
resulting in slight physical injuries, GLENN may be sentenced to suffer,
for each count, the penalty of arresto mayor in its minimum period.
Although it was established through the testimonies of prosecution
witness Lemuel Pangca33 and of GLENN that the latter surrendered to
Governor Emano of Misamis Oriental, such mitigating circumstance need
not be considered pursuant to the aforestated fifth paragraph of Article
365.
Under the Indeterminate Sentence Law, GLENN may be sentenced to
suffer an indeterminate penalty whose minimum is within the range of the
penalty next lower in degree to that prescribed for the offense, and whose
maximum is that which could properly be imposed taking into account
the modifying circumstances. Hence, for the complex crime of reckless
imprudence resulting in multiple homicide with serious physical injuries
and less serious physical injuries, qualified by his failure to render
assistance to the victims, he may be sentenced to suffer an indeterminate
penalty ranging from arresto mayor in its maximum period to prision
correccional in its medium period, as minimum, to prision mayor in its
medium period, as maximum. As to the crimes of reckless imprudence
resulting in slight physical injuries, since the maximum term for each
count is only two months the Indeterminate Sentence Law will not apply.
As far as the award of damages is concerned, we find a necessity to
modify the same. Conformably with current jurisprudence, 34 we reduce
the trial court’s award of death indemnity from P75,000 to P50,000 for
each group of heirs of the trainees killed. Likewise, for lack of factual
basis, we delete the awards of P30,000 to each of those who suffered
serious physical injuries and of P10,000 to each of those who suffered
minor physical injuries.
WHEREFORE, the decision of the Regional Trial Court, Branch 38,
Cagayan de Oro City, is hereby SET ASIDE, and another one is rendered
holding herein accused-appellant GLENN DE LOS SANTOS guilty
beyond reasonable doubt of (1) the complex crime of reckless
imprudence resulting in multiple homicide with serious physical injuries
and less serious physical injuries, and sentencing him to suffer an
indeterminate penalty of four (4) years of prision correccional, as
minimum, to ten (10) years of prision mayor, as maximum; and (2) ten
(10) counts of reckless imprudence resulting in slight physical injuries
and sentencing him, for each count, to the penalty of two (2) months of
arresto mayor. Furthermore, the awards of death indemnity for each
group of heirs of the trainees killed are reduced to P50,000; and the
awards in favor of the other victims are deleted. Costs against accused-
appellant.
G.R. No. 124110 April 20, 2001
UNITED AIRLINES, INC., Petitioner vs. COURT OF APPEALS,
ANICETO FONTANILLA, in his personal capacity and in behalf of his
minor son MYCHAL ANDREW FONTANILLA, Respondents.
On March 1, 1989, private respondent Aniceto Fontanilla purchased from
petitioner United Airlines, through the Philippine Travel Bureau in
Manila three (3) "Visit the U.S.A." tickets for himself, his wife and his
minor son Mychal for the following routes:
a. San Francisco to Washinton (15 April 1989);
b. Washington to Chicago (25 April 1989);
c. Chicago to Los Angeles (29 April 1989);
d. Los Angeles to San Francisco (01 may 1989 for petitioner’s wife
and 05 May 1989 for petitioner and his son). 1
All flights had been confirmed previously by United Airlines. 2
The Fontanillas proceeded to the United States as planned, where they
used the first coupon from San Francisco to Washington. On April 24,
1989, Aniceto Fontanilla bought two (2) additional coupons each for
himself, his wife and his son from petitioner at its office in Washington
Dulles Airport. After paying the penalty for rewriting their tickets, the
Fontanillas were issued tickets with corresponding boarding passes with
the words "CHECK-IN REQUIRED," for United Airlines Flight No.
1108, set to leave from Los Angeles to San Francisco at 10:30 a.m. on
May 5, 1989.3
The cause of the non-boarding of the Fontanillas on United Airlines
Flight No. 1108 makes up the bone of contention of this
controversy.1âwphi1.nêt
Private respondents’ version is as follows:
Aniceto Fontanilla and his son Mychal claim that on May 5, 1989, upon
their arrival at the los Angeles Airport for their flight, they proceeded to
united Airlines counter where they were attended by an employee
wearing a nameplate bearing the name "LINDA." Linda examined their
tickets, punched something into her computer and then told them that
boarding would be in fifteen minutes.4
When the flight was called, the Fontanillas proceeded to the plane. To
their surprise, the stewardess at the gate did not allow them to board the
plane, as they had no assigned seat numbers. They were then directed to
go back to the "check-in" counter where Linda subsequently informed
them that the flight had been overbooked and asked them to wait.5
The Fontanillas tried to explain to Linda the special circumstances of
their visit. However, Linda told them in arrogant manner, "So what, I can
not do anything about it."6
Subsequently, three other passengers with Caucasian features were
graciously allowed to baord, after the Fontanillas were told that the flight
had been overbooked.7
The plane then took off with the Fontanillas’ baggage in tow, leaving
them behind.8
The Fontanillas then complained to Linda, who in turn gave them an ugly
stare and rudely uttered, "it’s not my fault. It’s the fault of the company.
Just sit down and wait."9 When Mr. Fontanilla reminded Linda of the
inconvenience being caused to them, she bluntly retorted, "Who do you
think you are? You lousy Flips are good for nothing beggars. You always
ask for American aid." After which she remarked "Don’t worry about
your baggage. Anyway there is nothing in there. What are you doing here
anyway? I will report you to immigration. You Filipinos should go
home."10 Such rude statements were made in front of other people in the
airport causing the Fontanillas to suffer shame, humiliation and
embarrassment. The chastening situation even caused the younger
Fontanilla to break into tears.11
After some time, Linda, without any explanation, offered the Fontanillas
$50.00 each. She simply said "Take it or leave it." This, the Fontanillas
declined.12
The Fontanillas then proceeded to the United Airlines customer service
counter to plead their case. The male employee at the counter reacted by
shouting that he was ready for it and left without saying anything.13
The Fontanillas were not booked on the next flight, which departed for
San Francisco at 11:00 a.m. It was only at 12:00 noon that they were able
to leave Los Angeles on United Airlines Flight No. 803.
Petitioner United Airlines has a different version of what occurred at the
Los Angeles Airport on May 5, 1989.
According to United Airlines, the Fontanillas did not initially go to the
check-in counter to get their seat assignments for UA Flight 1108. They
instead proceeded to join the queue boarding the aircraft without first
securing their seat assignments as required in their ticket and boarding
passes. Having no seat assignments, the stewardess at the door of the
plane instructed them to go to the check-in counter. When the Fontanillas
proceeded to the check-in counter, Linda Allen, the United Airlines
Customer Representative at the counter informed them that the flight was
overbooked. She booked them on the next available flight and offered
them denied boarding compensation. Allen vehemently denies uttering
the derogatory and racist words attributed to her by the Fontanillas.14
The incident prompted the Fontanillas to file Civil Case No. 89-4268 for
damages before the Regional Trial Court of Makati. After trial on the
merits, the trial court rendered a decision, the dispositive portion of
which reads as follows:
WHEREFORE, judgment is rendered dismissing the complaint.
The counterclaim is likewise dismissed as it appears that
plaintiffs were not actuated by legal malice when they filed the
instant complaint.15
On appeal, the Court of Appeals ruled in favor of the Fontanillas. The
appellate court found that there was an admission on the part of United
Airlines that the Fontanillas did in fact observe the check-in requirement.
It ruled further that even assuming there was a failure to observe the
check-in requirement, United Airlines failed to comply with the
procedure laid down in cases where a passenger is denied boarding. The
appellate court likewise gave credence to the claim of Aniceto Fontanilla
that the employees of United Airlines were discourteous and arbitrary
and, worse, discriminatory. In light of such treatment, the Fontanillas
were entitled to moral damages. The dispositive portion of the decision of
the respondent Court of Appeals dated 29 September 1995, states as
follows: WHEREFORE, in view of the foregoing, judgment appealed
herefrom is hereby REVERSED and SET ASIDE, and a new judgment is
entered ordering defendant-appellee to pay plaintiff-appellant the
following: P200,000.00 as moral damages; P200,000.00 as exemplary
damages; P50,000.00 as attorney’s fees; No pronouncement as to costs.
SO ORDERED.16
Petitioner United Airlines now comes to this Court raising the following
assignments of errors;
I. RESPONDENT COURT OF APPEALS GRVAELY ERRED IN
RULING THAT THE TRIAL COURT WAS WRONG IN FAILING
TO CONSIDER THE ALLEGED ADMISSION THAT PRIVATE
RESPONDENT OBSERVED THE CHECK-IN REQUIREMENT.
II. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENT’S FAILURE TO
CHECK-IN WILL NOT DEFEAT HIS CLAIMS BECAUSE THE
DENIED BOARDING RULES WERE NOT COMPLIED WITH.
III. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENT IS ENTITLED TO
MORAL DAMAGES OF P200,000.
IV. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENT IS ENTITLED TO
EXEMPLARY DAMAGES OF P200,000.
V. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENT IS ENTITLED TO
ATTORNEY’S FEES OF P50,000.17
On the first issue raised by the petitioner, the respondent Court of
Appeals ruled that when Rule 9, Section 1 of the Rules of Court, 18 there
was an implied admission in petitioner’s answer in the allegations in the
complaint that private respondent and his son observed the "check-in
requirement at the Los Angeles Airport." Thus:
A perusal of the above pleadings filed before the trial court
disclosed that there exist a blatant admission on the part of the
defendant-appellee that the plaintiffs-appellants indeed observed
the "check-in" requirement at the Los Angeles Airport on May 5,
1989. In view of defendant-appellee’s admission of plaintiffs-
appellants’ material averment in the complaint. We find no
reason why the trial court should rule against such admission.19
We disagree with the above conclusion reached by respondent Court of
Appeals. Paragraph 7 of private respondents’ complaint states:
7. On May 5, 1989 at 9:45 a.m., plaintiff and his son checked in
at defendant’s designated counter at the airport in Los Angeles
for their scheduled flight to San Francisco on defendant’s Flight
No. 1108.20
Responding to the above allegations, petitioner averred in paragraph 4 of
its answer, thus:
4. Admits the allegation set forth in paragraph 7 of the complaint
except to deny that plaintiff and his son checked in at 9:45 a.m.,
for lack of knowledge or information at this point in time as to
the truth thereof.21
The rule authorizing an answer that the defendant has no knowledge or
information sufficient to form a belief as to the truth of an averment
giving such answer is asserted is so plainly and necessarily within the
defendant’s knowledge that his averment of ignorance must be palpably
untrue.22 Whether or not private respondents checked in at petitioner’s
designated counter at the airport at 9:45 a.m. on May 5, 1989 must
necessarily be within petitioner’s knowledge.
While there was no specific denial as to the fact of compliance with the
"check-in" requirement by private respondents, petitioner presented
evidence to support its contention that there indeed was no compliance.
Private respondents then are said to have waived the rule on admission. It
not only presented evidence to support its contention that there was
compliance with the check-in requirement, it even allowed petitioner to
present rebutal evidence. In the case of Yu Chuck vs. "Kong Li Po," we
ruled that: The object of the rule is to relieve a party of the trouble and
expense in proving in the first instance an alleged fact, the existence or
non-existence of which is necessarily within the knowledge of the
adverse party, and of the necessity (to his opponent’s case) of establishing
which such adverse party is notified by his opponent’s pleadings. The
plaintiff may, of course, waive the rule and that is what must be
considered to have done (sic) by introducing evidence as to the execution
of the document and failing to object to the defendant’s evidence in
refutation; all this evidence is now competent and the case must be
decided thereupon.23
The determination of the other issues raised is dependent on whether or
not there was a breach of contract in bad faith on the part of the petitioner
in not allowing the Fontanillas to board United Airlines Flight 1108.
It must be remembered that the general rule in civil cases is that the party
having the burden of proof of an essential fact must produce a
preponderance of evidence thereon.24 Although the evidence adduced by
the plaintiff is stronger than that presented by the defendant, a judgment
cannot be entered in favor of the former, if his evidence is not sufficient
to sustain his cause of action. The plaintiff must rely on the strength of
his own evidence and not upon the weakness of the defendant’s. 25
Proceeding from this, and considering the contradictory findings of facts
by the Regional Trial Court and the Court of Appeals, the question before
this Court is whether or not private respondents were able to prove with
adequate evidence his allegations of breach of contract in bad faith.
We rule in the negative.
Time and again, the Court has pronounced that appellate courts should
not, unless for strong and cogent reasons, reverse the findings of facts of
trial courts. This is so because trial judges are in better position to
examine real evidence and at a vantage point to observe the actuation and
the demeanor of the witnesses.26 While not the sole indicator of the
credibility of a witness, it is of such weight that it has been said to be the
touchstone of credibility.27
Aniceto Fontanilla’s assertion that upon arrival at the airport at 9:45 a.m.,
he immediately proceeded to the check-in counter, and that Linda Allen
punched in something into the computer is specious and not supported by
the evidence on record. In support of their allegations, private
respondents submitted a copy of the boarding pass. Explicitly printed on
the boarding pass are the words "Check-In Required." Curiously, the said
pass did not indicate any seat number. If indeed the Fontanillas checked
in at the designated time as they claimed, why then were they not
assigned seat numbers? Absent any showing that Linda was so motivated,
we do not buy into private respondents’ claim that Linda intentionally
deceived him, and made him the laughing stock among the
passengers.28Hence, as correctly observed by the trial court: Plaintiffs fail
to realize that their failure to check in, as expressly required in their
boarding passes, is they very reason why they were not given their
respective seat numbers, which resulted in their being denied boarding.29
Neither do we agree with the conclusion reached by the appellate court
that private respondents’ failure to comply with the check-in requirement
will not defeat his claim as the denied boarding rules were not complied
with. Notably, the appellate court relied on the Code of Federal
Regulation Part on Oversales which states:
250.6 Exceptions to eligibility for denied boarding compensation. A
passenger denied board involuntarily from an oversold flight shall not be
eligible for denied board compensation if: The passenger does not
comply with the carrier’s contract of carriage or tariff provisions
regarding ticketing, reconfirmation, check-in, and acceptability for
transformation.
The appellate court, however, erred in applying the laws of the United
States as, in the case at bar, Philippine law is the applicable law.
Although, the contract of carriage was to be performed in the United
States, the tickets were purchased through petitioner’s agent in Manila. It
is true that the tickets were "rewritten" in Washington, D.C. however,
such fact did not change the nature of the original contract of carriage
entered into by the parties in Manila.
In the case of Zalanea vs. Court of Appeals,30 this Court applied the
doctrine of lex loci contractus. According to the doctrine, as a general
rule, the law of the place where a contract is made or entered into governs
with respect to its nature and validity, obligation and interpretation. This
has been said to be the rule even though the place where the contract was
made is different from the place where it is to be performed, and
particularly so, if the place of the making and the place of performance
are the same. Hence, the court should apply the law of the place where
the airline ticket was issued, when the passengers are residents and
nationals of the forum and the ticket is issued in such State by the
defendant airline.
The law of the forum on the subject matter is Economic Regulations No.
7 as amended by Boarding Priority and Denied Board Compensation of
the Civil Aeronautics Board which provides that the check-in requirement
be complied with before a passenger may claim against a carrier for being
denied boarding: Sec. 5. Amount of Denied Boarding Compensation
Subject to the exceptions provided hereinafter under Section 6, carriers
shall pay to passengers holding confirmed reserved space and who have
presented themselves at the proper place and time and fully complied
with the carrier’s check-in and reconfirmation procedures and who are
acceptable for carriage under the Carrier’s tariff but who have been
denied boarding for lack of space, a compensation at the rate of:
Private respondents’ narration that they were subjected to harsh and
derogatory remarks seems incredulous. However, this Court will not
attempt to surmise what really happened, suffice to say, private
respondent was not able to prove his cause of action, for as the trial court
correctly observed: plaintiffs claim to have been discriminated against
and insulted in the presence of several people. Unfortunately, plaintiffs
limited their evidence to the testimony of Aniceto Fontanilla, without any
corroboration by the people who saw or heard the discriminatory remarks
and insults; while such limited testimony could possibly be true, it does
not enable the Court to reach the conclusion that plaintiffs have, by a
preponderance of evidence, proven that they are entitled to P1,650,000.00
damages from defendant.31
As to the award of moral and exemplary damages, we find error in the
award of such by the Court of Appeals. For the plaintiff to be entitled to
an award of moral damages arising from a breach of contract of carriage,
the carrier must have acted with fraud or bad faith. The appellate court
predicated its award on our pronouncement in the case of Zalanea vs.
Court of Appeals, supra, where we stated: Existing jurisprudence
explicitly states that overbooking amounts to bad faith, entitling
passengers concerned to an award of moral damages. In Alitalia Airways
vs. Court of Appeals, where passengers with confirmed booking were
refused carriage on the last minute, this Court held 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
except 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.
Where an airline had deliberately overbooked, it took the risk of having
to deprive some passengers of their seats in case all of them would show
up for check in. For the indignity and inconvenience of being refused a
confirmed seat on the last minute, said passenger is entitled to moral
damages. (Emphasis supplied).
However, the Court’s ruling in said case should be read in consonance
with existing laws, particularly, Economic Regulations No. 7, as
amended, of the Civil Aeronautics Board: Sec. 3. Scope. – This
regulation shall apply to every Philippine and foreign air carrier with
respect to its operation of flights or portions of flights originating from or
terminating at, or serving a point within the territory of the Republic of
the Philippines insofar as it denies boarding to a passenger on a flight, or
portion of a flight inside or outside the Philippines, for which he holds
confirmed reserved space. Furthermore, this Regulation is designed to
cover only honest mistakes on the part of the carriers and excludes
deliberate and willful acts of non-accommodation. Provided, however,
that overbooking not exceeding 10% of the seating capacity of the
aircraft shall not be considered as a deliberate and willful act of non-
accommodation.
What this Court considers as bad faith is the willful and deliberate
overbooking on the part of the airline carrier. The above-mentioned law
clearly states that when the overbooking does not exceed ten percent
(10%), it is not considered as deliberate and therefore does not amount to
bad faith. While there may have been overbooking in this case, private
respondents were not able to prove that the overbooking on United
Airlines Flight 1108 exceeded ten percent.
As earlier stated, the Court is of the opinion that the private respondents
were not able to prove that they were subjected to coarse and harsh
treatment by the ground crew of united Airlines. Neither were they able
to show that there was bad faith on part of the carrier airline. Hence, the
award of moral and exemplary damages by the Court of Appeals is
improper. Corollarily, the award of attorney’s fees is, likewise, denied for
lack of any legal and factual basis.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals in CA-G.R. CV No. 37044 is hereby REVERSED and SET
ASIDE. The decision of the Regional Trial Court of Makati City in Civil
Case No. 89-4268 dated April 8, 1991 is hereby REINSTATED.
G.R. No. 127897 November 15, 2001
DELSAN TRANSPORT LINES, INC., petitioner, vs.
THE HON. COURT OF APPEALS and AMERICAN HOME
ASSURANCE CORPORATION, respondents.
Before us is a petition for review on certiorari of the Decision 1 of the
Court of Appeals in CA-G.R. CV No. 39836 promulgated on June 17,
1996, reversing the decision of the Regional Trial Court of Makati City,
Branch 137, ordering petitioner to pay private respondent the sum of Five
Million Ninety-Six Thousand Six Hundred Thirty-Five Pesos and Fifty-
Seven Centavos (P5,096,635.57) and costs and the Resolution 2 dated
January 21, 1997 which denied the subsequent motion for
reconsideration.
The facts show that Caltex Philippines (Caltex for brevity) entered into a
contract of affreightment with the petitioner, Delsan Transport Lines,
Inc., for a period of one year whereby the said common carrier agreed to
transport Caltex’s industrial fuel oil from the Batangas-Bataan Refinery
to different parts of the country. Under the contract, petitioner took on
board its vessel, MT Maysun 2,277.314 kiloliters of industrial fuel oil of
Caltex to be delivered to the Caltex Oil Terminal in Zamboanga City. The
shipment was insured with the private respondent, American Home
Assurance Corporation.
On August 14, 1986, MT Maysum set sail from Batangas for Zamboanga
City. Unfortunately, the vessel sank in the early morning of August 16,
1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel
oil.
Subsequently, private respondent paid Caltex the sum of Five Million
Ninety-Six Thousand Six Hundred Thirty-Five Pesos and Fifty-Seven
Centavos (P5,096,635.67) representing the insured value of the lost
cargo. Exercising its right of subrogation under Article 2207 of the New
Civil Code, the private respondent demanded of the petitioner the same
amount it paid to Caltex.1âwphi1.nêt
Due to its failure to collect from the petitioner despite prior demand,
private respondent filed a complaint with the Regional Trial Court of
Makati City, Branch 137, for collection of a sum of money. After the trial
and upon analyzing the evidence adduced, the trial court rendered a
decision on November 29, 1990 dismissing the complaint against herein
petitioner without pronouncement as to cost. The trial court found that the
vessel, MT Maysum, was seaworthy to undertake the voyage as
determined by the Philippine Coast Guard per Survey Certificate Report
No. M5-016-MH upon inspection during its annual dry-docking and that
the incident was caused by unexpected inclement weather condition or
force majeure, thus exempting the common carrier (herein petitioner)
from liability for the loss of its cargo.3
The decision of the trial court, however, was reversed, on appeal, by the
Court of Appeals. The appellate court gave credence to the weather report
issued by the Philippine Atmospheric, Geophysical and Astronomical
Services Administration (PAGASA for brevity) which showed that from
2:00 o’clock to 8:oo o’clock in the morning on August 16, 1986, the wind
speed remained at 10 to 20 knots per hour while the waves measured
from .7 to two (2) meters in height only in the vicinity of the Panay Gulf
where the subject vessel sank, in contrast to herein petitioner’s allegation
that the waves were twenty (20) feet high. In the absence of any
explanation as to what may have caused the sinking of the vessel coupled
with the finding that the same was improperly manned, the appellate
court ruled that the petitioner is liable on its obligation as common
carrier4 to herein private respondent insurance company as subrogee of
Caltex. The subsequent motion for reconsideration of herein petitioner
was denied by the appellate court.
Petitioner raised the following assignments of error in support of the
instant petition,5 to wit:
1. THE COURT OF APPEALS ERRED IN REVERSING THE
DECISION OF THE REGIONAL TRIAL COURT.
2. THE COURT OF APPEALS ERRED AND WAS NOT
JUSTIFIED IN REBUTTING THE LEGAL PRESUMPTION
THAT THE VESSEL MT "MAYSUN" WAS SEAWORTHY.
3. THE COURT OF APPEALS ERRED IN NOT APPLYING THE
DOCTRINE OF THE SUPREME COURT IN THE CASE OF
HOME INSURANCE CORPORATION V. COURT OF
APPEALS.
Petitioner Delsan Transport Lines, Inc. invokes the provision of Section
113 of the Insurance Code of the Philippines, which states that in every
marine insurance upon a ship or freight, or freightage, or upon any thin
which is the subject of marine insurance there is an implied warranty by
the shipper that the ship is seaworthy. Consequently, the insurer will not
be liable to the assured for any loss under the policy in case the vessel
would later on be found as not seaworthy at the inception of the
insurance. It theorized that when private respondent paid Caltex the value
of its lost cargo, the act of the private respondent is equivalent to a tacit
recognition that the ill-fated vessel was seaworthy; otherwise, private
respondent was not legally liable to Caltex due to the latter’s breach of
implied warranty under the marine insurance policy that the vessel was
seaworthy.
The petitioner also alleges that the Court of Appeals erred in ruling that
MT Maysun was not seaworthy on the ground that the marine officer who
served as the chief mate of the vessel, Francisco Berina, was allegedly
not qualified. Under Section 116 of the Insurance Code of the
Philippines, the implied warranty of seaworthiness of the vessel, which
the private respondent admitted as having been fulfilled by its payment of
the insurance proceeds to Caltex of its lost cargo, extends to the vessel’s
complement. Besides, petitioner avers that although Berina had merely a
2nd officer’s license, he was qualified to act as the vessel’s chief officer
under Chapter IV(403), Category III(a)(3)(ii)(aa) of the Philippine
Merchant Marine Rules and Regulations. In fact, all the crew and officers
of MT Maysun were exonerated in the administrative investigation
conducted by the Board of Marine Inquiry after the subject accident.6
In any event, petitioner further avers that private respondent failed, for
unknown reason, to present in evidence during the trial of the instant case
the subject marine cargo insurance policy it entered into with Caltex. By
virtue of the doctrine laid down in the case of Home Insurance
Corporation vs. CA,7 the failure of the private respondent to present the
insurance policy in evidence is allegedly fatal to its claim inasmuch as
there is no way to determine the rights of the parties thereto.
Hence, the legal issues posed before the Court are:
I. Whether or not the payment made by the private respondent to
Caltex for the insured value of the lost cargo amounted to an
admission that the vessel was seaworthy, thus precluding any action
for recovery against the petitioner.
II. Whether or not the non-presentation of the marine insurance policy
bars the complaint for recovery of sum of money for lack of cause of
action.
We rule in the negative on both issues.
The payment made by the private respondent for the insured value of the
lost cargo operates as waiver of its (private respondent) right to enforce
the term of the implied warranty against Caltex under the marine
insurance policy. However, the same cannot be validly interpreted as an
automatic admission of the vessel’s seaworthiness by the private
respondent as to foreclose recourse against the petitioner for any liability
under its contractual obligation as a common carrier. The fact of payment
grants the private respondent subrogatory right which enables it to
exercise legal remedies that would otherwise be available to Caltex as
owner of the lost cargo against the petitioner common carrier. 8 Article
2207 of the New civil Code provides that:
Art. 2207. If the plaintiff’s property has been insured, and he has
received indemnity from the insurance company for the injury or loss
arising out of the wrong or breach of contract complained of, the
insurance company shall be subrogated to the rights of the insured
against the wrongdoer or the person who has violated the contract. If
the amount paid by the insurance company does not fully cover the
injury or loss, the aggrieved party shall be entitled to recover the
deficiency from the person causing the loss or injury.
The right of subrogation has its roots in equity. It is designed to promote
and to accomplish justice and is the mode which equity adopts to compel
the ultimate payment of a debt by one who in justice and good conscience
ought to pay.9 It is not dependent upon, nor does it grow out of, any
privity of contract or upon written assignment of claim. It accrues simply
upon payment by the insurance company of the insurance claim. 10
Consequently, the payment made by the private respondent (insurer) to
Caltex (assured) operates as an equitable assignment to the former of all
the remedies which the latter may have against the petitioner.
From the nature of their business and for reasons of public policy,
common carriers are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of passengers transported by
them, according to all the circumstance of each case.11 In the event of
loss, destruction or deterioration of the insured goods, common carriers
shall be responsible unless the same is brought about, among others, by
flood, storm, earthquake, lightning or other natural disaster or calamity. 12
In all other cases, if the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence.13
In order to escape liability for the loss of its cargo of industrial fuel oil
belonging to Caltex, petitioner attributes the sinking of MT Maysun to
fortuitous even or force majeure. From the testimonies of Jaime Jarabe
and Francisco Berina, captain and chief mate, respectively of the ill-fated seaworthiness does not satisfy the vessel owner’s obligation. Also
vessel, it appears that a sudden and unexpected change of weather securing the approval of the shipper of the cargo, or his surveyor, of the
condition occurred in the early morning of August 16, 1986; that at condition of the vessel or her stowage does not establish due diligence if
around 3:15 o’clock in the morning a squall ("unos") carrying strong the vessel was in fact unseaworthy, for the cargo owner has no obligation
winds with an approximate velocity of 30 knots per hour and big waves in relation to seaworthiness. (Ibid.)17
averaging eighteen (18) to twenty (20) feet high, repeatedly buffeted MT
Additionally, the exoneration of MT Maysun’s officers and crew by the
Maysun causing it to tilt, take in water and eventually sink with its
Board of Marine Inquiry merely concerns their respective administrative
cargo.14 This tale of strong winds and big waves by the said officers of the
liabilities. It does not in any way operate to absolve the petitioner
petitioner however, was effectively rebutted and belied by the weather
common carrier from its civil liabilities. It does not in any way operate to
report15 from the Philippine Atmospheric, Geophysical and Astronomical
absolve the petitioner common carrier from its civil liability arising from
Services Administration (PAGASA), the independent government agency
its failure to observe extraordinary diligence in the vigilance over the
charged with monitoring weather and sea conditions, showing that from
goods it was transporting and for the negligent acts or omissions of its
2:00 o’clock to 8:00 o’clock in the morning on August 16, 1986, the wind
employees, the determination of which properly belongs to the courts. 18
speed remained at ten (10) to twenty (20) knots per hour while the height
In the case at bar, petitioner is liable for the insured value of the lost
of the waves ranged from .7 to two (2) meters in the vicinity of Cuyo East
cargo of industrial fuel oil belonging to Caltex for its failure to rebut the
Pass and Panay Gulf where the subject vessel sank. Thus, as the appellate
presumption of fault or negligence as common carrier 19 occasioned by the
court correctly ruled, petitioner’s vessel, MT Maysun, sank with its entire
unexplained sinking of its vessel, MT Maysun, while in transit.
cargo for the reason that it was not seaworthy. There was no squall or bad
weather or extremely poor sea condition in the vicinity when the said Anent the second issue, it is our view and so hold that the presentation in
vessel sank. evidence of the marine insurance policy is not indispensable in this case
before the insurer may recover from the common carrier the insured
The appellate court also correctly opined that the petitioner’s witnesses,
value of the lost cargo in the exercise of its subrogatory right. The
Jaime Jarabe and Francisco Berina, ship captain and chief mate,
subrogation receipt, by itself, is sufficient to establish not only the
respectively, of the said vessel, could not be expected to testify against
relationship of herein private respondent as insurer and Caltex, as the
the interest of their employer, the herein petitioner common carrier.
assured shipper of the lost cargo of industrial fuel oil, but also the amount
Neither may petitioner escape liability by presenting in evidence paid to settle the insurance claim. The right of subrogation accrues simply
certificates16 that tend to show that at the time of dry-docking and upon payment by the insurance company of the insurance claim.20
inspection by the Philippine Coast Guard, the vessel MT Maysun, was fit
The presentation of the insurance policy was necessary in the case of
for voyage. These pieces of evidence do not necessarily take into account
Home Insurance Corporation v. CA21 (a case cited by petitioner) because
the actual condition of the vessel at the time of the commencement of the
the shipment therein (hydraulic engines) passed through several stages
voyage. As correctly observed by the Court of appeals: At the time of
with different parties involved in each stage. First, from the shipper to the
dry-docking and inspection, the ship may have appeared fit. The
port of departure; second, from the port of departure to the M/S Oriental
certificates issued, however, do not negate the presumption of
Statesman; third, from the M/S Oriental Statesman to the M/S Pacific
unseaworthiness triggered by an unexplained sinking. Of certificates
Conveyor; fourth, from the M/S Pacific Conveyor to the port or arrival;
issued in this regard, authorities are likewise clear as to their probative
fifth, from the port of arrival to the arrastre operator; sixth, from the
value, (thus): Seaworthiness relates to a vessel’s actual condition. Neither
arrastre operator to the hauler, Mabuhay Brokerage Co., Inc. (private
the granting of classification or the issuance of certificates established
respondent therein); and lastly, from the hauler to the consignee. We
seaworthiness. (2-A Benedict on Admiralty, 7-3, Sec. 62).
emphasized in that case that in the absence of proof of stipulations to the
And also: Authorities are clear that diligence in securing certificates of contrary, the hauler can be liable only for any damage that occurred from
the time it received the cargo until it finally delivered it to the consignee.
Ordinarily, it cannot be held responsible for the handling of the cargo
before it actually received it. The insurance contract, which was not
presented in evidence in that case would have indicated the scope of the
insurer’s liability, if any, since no evidence was adduced indicating at
what stage in the handling process the damage to the cargo was sustained.
Hence, our ruling on the presentation of the insurance policy in the said
case of Home Insurance Corporation is not applicable to the case at bar.
In contrast, there is no doubt that the cargo of industrial fuel oil belonging
to Caltex, in the case at bar, was lost while on board petitioner’s vessel,
MT Maysun, which sank while in transit in the vicinity of Panay Gulf and
Cuyo East Pass in the early morning of August 16, 1986. WHEREFORE,
the instant petition is DENIED. The Decision dated June 17, 1996 of the
Court of Appeals in CA-G.R. CV No. 39836 is AFFIRMED. Costs
against the petitioner.
2002
G.R. No. 141716 July 4, 2002
SAN MIGUEL CORPORATION, petitioner, vs. HEIRS OF
SABINIANO INGUITO, and JULIUS OUANO, respondents.
G.R. No. 142025 July 4, 2002
JULIUS C. OUANO, petitioner, vs. THE COURT OF APPEALS,
SAN MIGUEL CORPORATION and THE HEIRS OF SABINIANO
INGIUTO, FELIPE PUSA, ABUNDIO GALON, ISIDRO
CELETARIA, GILBERT GONZAGA, HENRY CABIGAS, RAFAEL
MACAIRAN, ROGELIO MORENO, PETER ABAYON, SIMEON
ASENTISTA, NORMAN LOON, EUGENIO GESTOPA,
CHRISTOPHER SAVELLON, GEORGE BASILGO, RAMIL
PABAYO, FLAVIANO WABENA, NESTOR GESTOPA, respondents.
San Miguel Corporation entered into a Time Charter Party Agreement
with Julius Ouano, doing business under the name and style J. Ouano
Marine Services. Under the terms of the agreement, SMC chartered the
M/V Doña Roberta owned by Julius Ouano for a period of two years,
from June 1, 1989 to May 31, 1991, for the purpose of transporting
SMC’s beverage products from its Mandaue City plant to various points
in Visayas and Mindanao. Pertinent portions of the Time Charter Party
Agreement state:
1. OWNER [i.e., Ouano] warrants ownership, title and interest over
the vessel DOÑA ROBERTA and represents that on the date the
vessel is placed at CHARTERER’s San Miguel Corporation] disposal
the following shall be the accurate or approximate description of the
particulars and capacities of the vessel and her equipment:
2. That for and in consideration of the premises hereinafter
stipulated, the OWNER hereby lets, demises and the CHARTERER
hereby hires the use and service of the aforementioned vessel;
4. OWNER warrants that the vessel is seaworthy and in proper,
useful and operational condition and in the event that CHARTERER
finds any defect in the vessel with regards to its working order,
condition and function, CHARTERER shall immediately notify
OWNER of this fact;
9. There shall be no employer-employee relations between the
OWNER and/or its vessel’s crew on one hand and the CHARTERER
on the other. The crew of the vessel shall continue to be under the
 employ, control and supervision of the OWNER. Consequently,
damage or loss that may be attributable to the crew, including loss of
the vessel used shall continue to be the responsibility of, and shall be
borne, by the OWNER; the OWNER further covenants to hold the
CHARTERER free from all claims and liabilities arising out of the
acts of the crew and the condition of the vessel;
10. The OWNER shall undertake to pay all compensation of all the
vessel’s crew, including the benefits, premia and protection in
accordance with the provisions of the New Labor Code and other
applicable laws and decrees and the rules and regulations
promulgated by competent authorities as well as all of the SSS
premium. Thus, it is understood that the crew of he vessel shall and
always remain the employees of the OWNER;
11. The OWNER shall be responsible to and shall indemnify the
CHARTERER for damages and losses arising from the incompetence
and/or negligence of, and/or the failure to observe the required extra-
ordinary diligence by the crew. It shall be automatically liable to the
CHARTERER for shortlanded shipment and wrong levels, the value
of which shall be withheld from the OWNER’s collectibles with the
CHARTERER. However, in the case of wrong levels, CHARTERER
shall immediately reimburse OWNER after the former’s laboratory
shall be able to determine that the bottles were never opened after it
left the Plant;
On November 11, 1990, during the term of the charter, SMC issued
sailing orders to the Master of the MN Doña Roberta, Captain Sabiniano
Inguito, instructing him as follows:
1. Sail for Opol, Cagayan 0500H Nov. 12, 1990, or as soon as
loading of FGS is completed, with load:
SEE BILL OF LADING
2. You are expected to arrive Opol 0900H Nov. 13, 1990.
3. You are expected to depart Opol 0900H Nov. 14, 1990, or as soon
as loading of empties is completed, back to Mandaue.
4. You are expected to arrive Mandaue 1300H Nov. 15, 1990.
5. In case you need cash advance, send your request thru radio
addressed to us for needed authority.
6. Maintain communications and keep us posted of your
developments.
7. Observe weather condition, exercise utmost precautionary
measures.
BON VOYAGE AND GOOD LUCK.2
In accordance with the sailing orders, Captain Inguito obtained the
necessary sailing clearance from the Philippine Coast Guard.3 Loading of
the cargo on the M/V Doña Roberta was completed at 8:30 p.m. of
November 11, 1990. However, the vessel did not leave Mandaue City
until 6:00 a.m. of the following day, November 12, 1990.
Meanwhile, at 4:00 a.m. of November 12, 1990, typhoon Ruping was
spotted 570 kilometers east-southeast of Borongan, Samar, moving west-
northwest at 22 kilometers per hour in the general direction of Eastern
Visayas. The typhoon had maximum sustained winds of 240 kilometers
per hour near the center with gustiness of up to 280 kilometers per hour.4
At 7:00 a.m., November 12, 1990, one hour after the M/V Doña Roberta
departed from Mandaue City and while it was abeam Cawit Island off
Cebu, SMC Radio Operator Rogelio P. Moreno contacted Captain Inguito
through the radio and advised him to take shelter. Captain Inguito replied
that they will proceed since the typhoon was far away from them, and
that the winds were in their favor.5
At 2:00 p.m., while the vessel was two kilometers abeam Boljoon Point,
Moreno again communicated with Captain Inguito and advised him to
take shelter. The captain responded that they can manage. 6 Hearing this,
Moreno immediately tried to get in touch with Rico Ouano to tell him
that Captain Inguito did not heed their advice. However, Rico Ouano was
out of his office, so Moreno left the message with the secretary.7
Moreno again contacted Captain Inguito at 4:00 p.m. of November 12,
1990. By then the vessel was already 9.5 miles southeast of Balicasag
Island heading towards Sulauan Point. The sky was cloudy with
southwesterly winds and the sea was choppy.8 Moreno reiterated the
advice and pointed out that it will be difficult to take shelter after passing
Balicasag Island because they were approaching an open sea. Still, the
captain refused to heed his advice.9
At 8:00 p.m., the vessel was 38 miles southeast of Balicasag Island.
West-southwest winds were prevailing. At 10:00 p.m., the M/V Doña
Roberta was 25 miles approaching Sulauan Point.10 Moments later, power
went out in Moreno’s office and resumed at 11:40 p.m. He immediately
made a series of calls to the M/V Doña Roberta but he failed to get in
touch with anyone in the vessel.11
At 1:15 a.m., November 13, 1990, Captain Inguito called Moreno over
the radio and requested him to contact Rico Ouano, son of Julius Ouano,
because they needed a helicopter to rescue them. The vessel was about 20
miles west of Sulauan Point.12
Upon being told by SMC’s radio operator, Rico Ouano turned on his
radio and read the distress signal from Captain Ingiuto. When he talked to
the captain, the latter requested for a helicopter to rescue them. 13 Rico
Ouano talked to the Chief Engineer who informed him that they can no
longer stop the water from coming into the vessel because the crew
members were feeling dizzy from the petroleum fumes.14
At 2:30 a.m. of November 13, 1990, the M/V Doña Roberta sank. Out of
the 25 officers and crew on board the vessel, only five survived, namely,
Fernando Bucod, Rafael Macairan, Chenito Sugabo, Ramil Pabayo and
Gilbert Gonzaga.15
On November 24, 1990, shipowner Julius Ouano, in lieu of the captain
who perished in the sea tragedy, filed a Marine Protest.16
The heirs of the deceased captain and crew, as well as the survivors, 17 of
the ill-fated M/V Doña Roberta filed a complaint for tort against San
Miguel Corporation and Julius Ouano, docketed as Civil Case No. 2472-
L of the Regional Trial Court of Lapu-Lapu City, Branch 27.18
Julius Ouano filed an answer with cross-claim,19 alleging that the
proximate cause of the loss of the vessel and its officers and crew was the
fault and negligence of SMC, which had complete control and disposal of
the vessel as charterer and which issued the sailing order for its departure
despite being forewarned of the impending typhoon. Thus, he prayed that
SMC indemnify him for the cost of the vessel and the unrealized rentals
and earnings thereof.
In its answer to the complaint19 and answer to the cross-claim, 20 SMC
countered that it was Ouano who had the control, supervision and
responsibilities over the navigation of the vessel. This notwithstanding,
and despite his knowledge of the incoming typhoon, Ouano never
bothered to initiate contact with his vessel. Contrary to his allegation,
SMC argued that the proximate cause of the sinking was Ouano’s breach
of his obligation to provide SMC with a seaworthy vessel duly manned
by competent crew members. SMC interposed counterclaims against
Ouano for the value of the cargo lost in the sea tragedy.
After trial, the court a quo rendered judgment finding that the proximate
cause of the loss of the M/V Doña Roberta was attributable to SMC.
Thus, it disposed of the case as follows:
WHEREFORE, PREMISES CONSIDERED, judgment is hereby
rendered:
1. Declaring defendant San Miguel Corporation and its acts or
omissions as having produced the proximate cause which resulted in
the death of the crew members of MN Doña Roberta at past midnight
of November 12, 1990 during the height of super typhoon "Ruping"
and as such said defendant is hereby ordered and sentenced to pay to
the heirs of the deceased crew members the following sum[s] plus
12% per annum from the filing of the Complaint:
A. For loss of life. . . . . . . P50,000.00 each of the deceased crew
members, namely: Sabiniano Inguito Felipe Pusa, Abundio
Galon, Isidro Celetaria, Henry Cabigas, Pedro Abayon, Simeon
Asentista, Norman Loon, Leonardo Presbitero, Renato Suscano,
Antonio Du, George Basilgo, Isagani Dayondon;
B. For loss of earnings based on life expectancy less 50%
representing estimated living expenses except for the apprentices
as they were presumed at the time of their deaths to be
dependent on their parents:
C. P300,000.00 for moral damages and P200,000.00 for
exemplary damages for the heirs of each of the deceased crew
members of the M/V Doña Roberta named in the Amended
Complaint including survivor Gilbert Gonzaga;
D. To pay plaintiffs’ counsel attorney’s fees in the sum of
P500,000.00;
2. Under the cross-claim of defendant, Ouano, San Miguel
 Corporation is further ordered and sentenced to pay defendant cross-
claimant Engr. Julius C. Ouano the total sum of P32,893,300.00 plus
12% per annum from the filing of his crossclaim, broken down as
follows:
1) P9.8 million for the value of the total loss of the vessel M/V
Doña Roberta;
2) P1,833,300.00 for unrealized rental earnings (P3,666,600.00
less 50% for operating expenses and taxes) from November 19,
1990 to May 31, 1991 as stipulated in the Charter Party
Agreement;
3) P21,000,000.00 for unrealized earnings of M/V Doña Roberta
based on the expected additional lifetime of the vessel estimated
at seven (7) years (42,000,000.00 less 50% for operating
expenses and taxes);
4) P250,000.00 for and as attorney’s fees and P 10,000.00 as
expenses of litigation;
3. The counter-claims against plaintiffs and the cross-claim of
defendant San Miguel Corporation against defendant Engr. Julius C.
Ouano are hereby dismissed for lack of merit. With costs against
defendant San Miguel Corporation. SO ORDERED.22
Both SMC and Ouano appealed to the Court of Appeals, docketed as CA-
G.R. CV No. 48296. SMC argued that as mere charterer, it did not have
control of the vessel and that the proximate cause of the loss of the vessel
and its cargo was the negligence of the ship captain. For his part, Ouano
complained of the reduced damages awarded to him by the trial court.
On December 10, 1998, the Court of Appeals rendered the decision
subject of the instant petitions for review, to wit:
WHEREFORE, judgment is hereby rendered, modifying the decision
appealed from, declaring defendant-appellants San Miguel
Corporation and Julian C. Ouano jointly and severally liable to
plaintiffs-appellees, except to the heirs of Capt. Sabiniano Inguito,
for the following reduced amounts:
A. P50,000.00 death indemnity (loss of life) for each of the deceased
officers and crew of M/V Doña Roberta.
B. Loss of earning for each of the deceased officers and crew, in the
amount awarded by the trial court.
C. P100,000.00 moral damages and P50,000.00 exemplary damages for
each deceased officer and crew members, including Gilbert Gonzaga.
D. P300,000,00 attorney’s fees to plaintiffs-appellees.
E. The counter-claims of defendants-appellants against plaintiffs-
appellees are dismissed.
F. The cross-claims of defendants-appellants SMC and Julius Ouano
against each other are likewise dismissed.
G. Costs against defendants-appellants.
SMC and Ouano filed separate motions for reconsideration, which were
denied by the Court of Appeals for lack of merit.24
Petitioner SMC, in G.R. No. 141716, raises the following arguments:
I. SMC COULD NOT BE A TORTFEASOR CONSIDERING THE
UNDISPUTED FACT THAT:
A. SMC HAS NO LEGAL OR CONTRACTUAL DUTY TO
INFORM OUANO ABOUT THE SITUATION OF THE
VESSEL.
B. EVEN WITHOUT SUCH DUTY, SMC NEVERTHELESS
EXERCISED THE NECESSARY DEGREE OF PRUDENCE
BY INFORMING OUANO ABOUT INGUITO’S REFUSAL
TO TAKE SHELTER.
C. THE COURT OF APPEALS ITSELF FOUND THAT THE
PROXIMATE CAUSE OF THE LOSS OF THE VESSEL WAS
INGUITO’S FAILURE TO HEED SMC’S ADVICE TO TAKE
SHELTER, AND INGUITO WAS AN EMPLOYEE OF
OUANO AND NOT OF SMC.
II. UNDER THE CHARTER, OUANO WAS RESPONSIBLE AND
UNDERTOOK TO INDEMNIFY SMC FOR ALL DAMAGES
ARISING FROM THE NEGLIGENCE OF HIS CREW,
PARTICULARLY INGUITO.25
Meanwhile, petitioner Ouano, in G.R. No. 142025, anchors his petition
on the following assignment of errors:
First Error: The Court of Appeals committed serious error of law and/or
grave abuse of discretion in not finding that the Charter Party between
SMC and Ouano is legally and in fact a demise charter, an issue raised by
petitioner from the very start in the Trial Court
Second Error: The Court of Appeals committed serious error of law
and/or grave abuse of discretion in not finding that Capt. Inguito, master
of the ill-fated M/V Doña Roberta, was legally and in fact an
agent/servant of SMC demise charterer as correctly characterized by the
Trial Court
Third Error: The Court of Appeals committed serious error of law and/or
grave abuse of discretion in completely disregarding or suppressing the
findings of fact of the Trial Court on the issues of possession and control
of M/V Doña Roberta by SMC and its actions relating thereto as demise
charterer/owner pro hac vice which led to the tragedy and in not
declaring that said actions of SMC constituted the proximate cause of the
sinking and loss of the vessel and the death of most of its crew members
Fourth Error: The Court of Appeals committed serious error of law
and/or grave abuse of discretion in finding Ouano at fault in the sinking
of M/V Doña Roberta against the evidence on record which is largely
undisputed
Fifth Error: The Court of Appeals committed serious error of law and/or
grave abuse of discretion insofar as it failed to find and declare
respondent SMC’s tort or negligence as the proximate cause which
resulted in the sinking and total loss of M/V Doña Roberta as well as the
death of its officers and crew members and correspondingly in not
awarding to petitioner Ouano the sums of money as awarded by the Trial
Court in the dispositive part of its decision dated 10 December 1998.
Sixth Error: In any event, the Court of Appeals committed serious error
of law and/or grave abuse of discretion in not declaring and holding
petitioner Ouano not liable for the claims of private respondents heirs of
Sabiniano Inguito, et al. and SMC under the well-established principle in
Maritime Law that the owner’s liability sinks with the vessel.26
The two petitions were consolidated.
In deciding the cases at bar, the Court of Appeals correctly resolved the
issues with an initial discussion of the definition and kinds of charter
parties. Preliminarily, a charter party is a contract by virtue of which the
owner or the agent of a vessel binds himself to transport merchandise or
persons for a fixed price. It has also been defined as a contract by virtue
of which the owner or the agent of the vessel leases for a certain price the
whole or a portion of the vessel for the transportation of goods or persons
from one port to another.27
A charter party may either be a (1) bareboat or demise charter or (2)
contract of affreightment. Under a demise or bareboat charter, the
charterer mans the vessel with his own people and becomes, in effect, the
owner of the ship for the voyage or service stipulated, subject to liability
for damages caused by negligence.28
In a contract of affreightment, on the other hand, the owner of the vessel
leases part or all of its space to haul goods for others. It is a contract for
special service to be rendered by the owner of the vessel. Under such
contract the ship owner retains the possession, command and navigation
of the ship, the charterer or freighter merely having use of the space in
the vessel in return for his payment of the charter hire. 29 Otherwise put, a
contract of affreightment is one by which the owner of a ship or other
vessel lets the whole or part of her to a merchant or other person for the
conveyance of goods, on a particular voyage, in consideration of the
payment of freight.
A contract of affreightment may be either time charter, wherein the leased
vessel is leased to the charterer for a fixed period of time, or voyage
charter, wherein the ship is leased for a single voyage. In both cases, the
charterer provides for the hire of the vessel only, either for a determinate
period of time or for a single or consecutive voyage, the ship owner to
supply the ship’s store, pay for the wages of the master of the crew, and
defray the expenses for the maintenance of the ship.
If the charter is a contract of affreightment, which leaves the general
owner in possession of the ship as owner for the voyage, the rights and
the responsibilities of ownership rest on the owner. The charterer is free
from liability to third persons in respect of the ship.30
We concur with the findings of the Court of Appeals that the charter party
in these cases was a contract of affreightment, contrary to petitioner
Ouano’s protestation that it was a demise charter, as shown by the
following stipulations in the Time Charter Party Agreement:
 9. There shall be no employer-employee relations between the
OWNER and/or its vessel’s crew on one hand and the CHARTERER
on the other. The crew of the vessel shall continue to be under the
employ, control and supervision of the OWNER. Consequently,
damage or loss that may be attributable to the crew, including loss of
the vessel used shall continue to be the responsibility of, and shall be
borne, by the OWNER; the OWNER further covenants to hold the
CHARTERER free from all claims and liabilities arising out of the
acts of the crew and the condition of the vessel;
10. The OWNER shall undertake to pay all compensation of all the
vessel’s crew, including the benefits, premia and protection in
accordance with the provisions of the New Labor Code and other
applicable laws and decrees and the rules and regulations
promulgated by competent authorities as well as all of the SSS
premium. Thus, it is understood that the crew of he vessel shall and
always remain the employees of the OWNER;
11. The OWNER shall be responsible to and shall indemnify the
CHARTERER for damages and losses arising from the incompetence
and/or, negligence of, and/or the failure to observe the required
extraordinary diligence by the crew. It shall be automatically liable to
the CHARTERER for shortlanded shipment and wrong levels, the
value of which shall be withheld from the OWNER’s collectibles
with the CHARTERER. However, in the case of wrong levels,
CHARTERER shall immediately reimburse OWNER after the
former’s laboratory shall be able to determine that the bottles were
never opened after it left the Plant;
It appearing that Ouano was the employer of the captain and crew of the
M/V Doña Roberta during the term of the charter, he therefore had
command and control over the vessel. His son, Rico Ouano, even testified
that during the period that the vessel was under charter to SMC, the
Captain thereof had control of the navigation of all voyages.31
Under the foregoing definitions, as well as the clear terms of the Charter
Party Agreement between the parties, the charterer, SMC, should be free
from liability for any loss or damage sustained during the voyage, 32
unless it be shown that the same was due to its fault or negligence.
The evidence does not show that SMC or its employees were amiss in
their duties. The facts indubitably establish that SMC’s Radio Operator,
Rogelio P. Moreno, who was tasked to monitor every shipment of its
cargo, contacted Captain Inguito as early as 7:00 a.m., one hour after the
M/V Doña Roberta departed from Mandaue, and advised him to take
shelter from typhoon Ruping. This advice was reiterated at 2:00 p.m. At
that point, Moreno thought of calling Ouano’s son, Rico, but failed to
find him. At 4:00 p.m., Moreno again advised Captain Inguito to take
shelter and stressed the danger of venturing into the open sea. The
Captain insisted that he can handle the situation.
That evening, Moreno tried in vain to contact the captain. Later at 1:15
a.m., Captain Inguito himself radioed a distress signal and asked that the
same be relayed to Rico Ouano.
In contrast to the care exercised by Moreno, Rico Ouano tried to
communicate with the captain only after receiving the S.O.S. message.
Neither Ouano nor his son was available during the entire time that the
vessel set out and encountered foul weather. Considering that the charter
was a contract of affreightment, the shipowner had the clear duty to
ensure the safe carriage and arrival of goods transported on board its
vessels. More specifically, Ouano expressly warranted in the Time
Charter Party that his vessel was seaworthy.
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.33 Seaworthiness is defined as the sufficiency of the vessel in
materials, construction, equipment, officers, men, and outfit, for the trade
or service in which it is employed.34 It includes the fitness of a ship for a
particular voyage with reference to its physical and mechanical condition,
the extent of its fuel and provisions supply, the quality of its officers and
crew, and its adaptability for the time of voyage proposed.35
In the assailed decision, the Court of Appeals found that the proximate
cause of the sinking of the vessel was the negligence of Captain
Sabiniano Inguito, thus:
It appears that the proximate cause of the sinking of the vessel was
the gross failure of the captain of the vessel to observe due care and
to heed SMC’s advices to take shelter. Gilbert Gonsaga, Chief
Engineer of Doña Roberta, testified that the ship sank at 2:30 in the
early morning of November 13th. On the other hand, from the time
the vessel left the port of Mandaue at six o’clock in the morning, Exh
"15 SMC", Exh "16 SMC", Exh "17 SMC" and Exh "18 SMC"
 would show that Captain Sabiniano Inguito was able to contact the
radio operator of SMC. He was fully apprised of typhoon "Ruping"
and its strength. Due diligence dictates that at any time before the
vessel was in distress, he should have taken shelter in order to
safeguard the vessel and its crew. Gonsaga testified that at 7:00 a.m.
of November 12, 1990, he was able to talk to the captain and
inquired from him what the message was of the radio operator of
SMC. The captain answered that they would take shelter in
Tagbilaran if the wind would grow stronger. But Gonsaga was
surprised when they did not take shelter and, instead, proceeded with
the voyage.
Gonsaga further testified that at 7:00 in the evening of November 12,
1990, he went up to the office of the captain when the wind was
getting stronger and asked him, "What is this captain, the wind is
already very strong and the waves are very big, what is the message
of SMC?" The captain plotted the position of the typhoon and said
that the typhoon is still very far per the data supplied by SMC. It is
very clear that Captain Sabiniano Inguito had sufficient time within
which to secure his men and the vessel. But he waited until the vessel
was already in distress at 1:15 in the early morning of November
13m, 1990 to seek help in saving his men and the vessel. In any
event, Capt. Inguito had full control and responsibility, whether to
follow a sailing order or to take shelter when already at sea. In fact,
there was an incident when a sailing order was issued by SMC to
Inguito but he decided not to proceed with the voyage because of a
tropical storm.36
The foregoing factual conclusions are binding on us. Settled is the rule
that findings of fact of the Court of Appeals are conclusive and are not
reviewable by this Court,37 unless the case falls under any of the
recognized exceptions, such as: (1) when the conclusion is a finding
grounded entirely on speculation, surmises and conjectures; (2) when the
inference made is manifestly mistaken, absurd or impossible; (3) where
there is a grave abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are conflicting;
(6) when the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both
appellant and appellee; (7) when the findings are contrary to those of the
trial court; (8) when the findings of fact are conclusions without citation
of specific evidence on which they are based; (9) when the facts set forth
in the petition as well as in the petitioners’ main and reply briefs are not
disputed by the respondents; and (10) when the findings of fact of the
Court of Appeals are premised on the supposed absence of evidence and
contradicted by the evidence on record.38 None of these exceptions obtain
in the case at bar.
We likewise agree with the Court of Appeals that Ouano is vicariously
liable for the negligent acts of his employee, Captain Inguito. Under
Articles 2176 and 2180 of the Civil Code, owners and managers are
responsible for damages caused by the negligence of a servant or an
employee, the master or employer is presumed to be negligent either in
the selection or in the supervision of that employee. This presumption
may be overcome only by satisfactorily showing that the employer
exercised the care and the diligence of a good father of a family in the
selection and the supervision of its employee.39
Ouano miserably failed to overcome the presumption of his negligence.
He failed to present proof that he exercised the due diligence of a bonus
paterfamilias in the selection and supervision of the captain of the M/V
Doña Roberta. Hence, he is vicariously liable for the loss of lives and
property occasioned by the lack of care and negligence of his employee.
However, we cannot sustain the appellate court’s finding that SMC was
likewise liable for the losses. The contention that it was the issuance of
the sailing order by SMC which was the proximate cause of the sinking is
untenable. The fact that there was an approaching typhoon is of no
moment. It appears that on one previous occasion, SMC issued a sailing
order to the captain of the M/V Doña Roberta, but the vessel cancelled its
voyage due to typhoon.40Likewise, it appears from the records that SMC
issued the sailing order on November 11, 1990, before typhoon "Ruping"
was first spotted at 4:00 a.m. of November 12, 1990.41
Consequently, Ouano should answer for the loss of lives and damages
suffered by the heirs of the officers and crew members who perished on
board the M/V Doña Roberta, except Captain Sabiniano Inguito. The
award of damages granted by the Court of Appeals is affirmed only
against Ouano, who should also indemnify SMC for the cost of the lost
cargo, in the total amount of P10,278,542.40.42
WHEREFORE, in view of the foregoing, the decision of the Court of
Appeals in CA-G.R. CV No. 48296 is MODIFIED as follows: Julius C.
Ouano is ordered to pay each of the deceased officers and crew of the
M/V Doña Roberta, except Captain Sabinano Inguito, death indemnity in
the amount of P50,000.00 and damages for loss of earnings in the
amounts awarded by the trial court. Further, Julius C. Ouano is ordered to
pay each deceased officer and crew members, except Captain Sabiniano
Inguito, including Gilbert Gonzaga, P100,000.00 as moral damages,
P50,000.00 as exemplary damages and P300,000.00 as attorney’s fees.
Finally, Julius C. Ouano is ordered to pay San Miguel Corporation the
sums of P10,278,542.40 as actual damages.
G.R. No. 135645 March 8, 2002
THE PHILIPPINE AMERICAN GENERAL INSURANCE CO.,
INC., petitioner, vs.
MGG MARINE SERVICES, INC. and DOROTEO GAERLAN,
respondents.
This petition for review seeks the reversal of the Decision, dated
September 23, 1998, of the Court of Appeals in CA-G.R. CV No. 43915, 1
which absolved private respondents MCG Marine Services, Inc. and
Doroteo Gaerlan of any liability regarding the loss of the cargo belonging
to San Miguel Corporation due to the sinking of the M/V Peatheray
Patrick-G owned by Gaerlan with MCG Marine Services, Inc. as agent.
On March 1, 1987, San Miguel Corporation insured several beer bottle
cases with an aggregate value of P5,836,222.80 with petitioner Philippine
American General Insurance Company.2 The cargo were loaded on board
the M/V Peatheray Patrick-G to be transported from Mandaue City to
Bislig, Surigao del Sur.
After having been cleared by the Coast Guard Station in Cebu the
previous day, the vessel left the port of Mandaue City for Bislig, Surigao
del Sur on March 2, 1987. The weather was calm when the vessel started
its voyage.
The following day, March 3, 1987, M/V Peatheray Patrick-G listed and
subsequently sunk off Cawit Point, Cortes, Surigao del Sur. As a
consequence thereof, the cargo belonging to San Miguel Corporation was
lost.
Subsequently, San Miguel Corporation claimed the amount of its loss
from petitioner.
Upon petitioner's request, on March 18, 1987, Mr. Eduardo Sayo, a
surveyor from the Manila Adjusters and Surveyors Co., went to
Taganauan Island, Cortes, Surigao del Sur where the vessel was cast
ashore, to investigate the circumstances surrounding the loss of the cargo.
In his report, Mr. Sayo stated that the vessel was structurally sound and
that he did not see any damage or crack thereon. He concluded that the
proximate cause of the listing and subsequent sinking of the vessel was
the shifting of ballast water from starboard to portside. The said shifting
of ballast water allegedly affected the stability of the M/V Peatheray
Patrick-G.
Thereafter, petitioner paid San Miguel Corporation the full amount of
P5,836,222.80 pursuant to the terms of their insurance
contract.1âwphi1.nêt
On November 3, 1987, petitioner as subrogee of San Miguel Corporation
filed with the Regional Trial Court (RTC) of Makati City a case for
collection against private respondents to recover the amount it paid to
San Miguel Corporation for the loss of the latter's cargo.
Meanwhile, the Board of Marine Inquiry conducted its own investigation
of the sinking of the M/V Peatheray Patrick-G to determine whether or
not the captain and crew of the vessel should be held responsible for the
incident.3 On May 11, 1989, the Board rendered its decision exonerating
the captain and crew of the ill-fated vessel for any administrative liability.
It found that the cause of the sinking of the vessel was the existence of
strong winds and enormous waves in Surigao del Sur, a fortuitous event
that could not have been for seen at the time the M/V Peatheray Patrick-G
left the port of Mandaue City. It was further held by the Board that said
fortuitous event was the proximate and only cause of the vessel's sinking.
On April 15, 1993, the RTC of Makati City, Branch 134, promulgated its
Decision finding private respondents solidarily liable for the loss of San
Miguel Corporation's cargo and ordering them to pay petitioner the full
amount of the lost cargo plus legal interest, attorney's fees and costs of
suit.4
Private respondents appealed the trial court's decision to the Court of
Appeals. On September 23, 1998, the appellate court issued the assailed
Decision, which reversed the ruling of the RTC. It held that private
respondents could not be held liable for the loss of San Miguel
Corporation's cargo because said loss occurred as a consequence of a
fortuitous event, and that such fortuitous event was the proximate and
only cause of the loss.5
Petitioner thus filed the present petition, contending that:
I. IN REVERSING AND SETTING ASIDE THE DECISION OF
RTC BR. 134 OF MAKATI CITY ON THE BASIS OF THE FINDINGS
OF THE BOARD OF MARINE INQUIRY, APPELLATE COURT
DECIDED THE CASE AT BAR NOT IN ACCORD WITH LAW OR
WITH THE APPLICABLE DECISIONS OF THE HONORABLE
COURT;
II. IN REVERSING THE TRIAL COURT'S DECISION, THE
APPELLATE COURT GRAVELY ERRED IN CONTRADICTING AND
IN DISTURBING THE FINDINGS OF THE FORMER;
III. THE APPELLATE COURT GRAVELY ERRED IN
REVERSING THE DECISION OF THE TRIAL COURT AND IN
DISMISSING THE COMPLAINT.6
Common carriers, from the nature of their business and for reasons of
public policy, are mandated to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported
by them.7Owing to this high degree of diligence required of them,
common carriers, as a general rule, are presumed to have been at fault or
negligent if the goods transported by them are lost, destroyed or if the
same deteriorated.8
However, this presumption of fault or negligence does not arise in the
cases enumerated under Article 1734 of the Civil Code:
Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the
following causes only:
(1) Flood, storm, earthquake, lightning or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers;
(5) Order or act of competent public authority.
In order that a common carrier may be absolved from liability where the
loss, destruction or deterioration of the goods is due to a natural disaster
or calamity, it must further be shown that the such natural disaster or
calamity was the proximate and only cause of the loss;9 there must be "an
entire exclusion of human agency from the cause of the injury of the
loss."10
Moreover, even in cases where a natural disaster is the proximate and
only cause of the loss, a common carrier is still required to exercise due
diligence to prevent or minimize loss before, during and after the
occurrence of the natural disaster, for it to be exempt from liability under
the law for the loss of the goods. 11 If a common carrier fails to exercise
due diligence--or that ordinary care which the circumstances of the
particular case demand12 -- to preserve and protect the goods carried by it
on the occasion of a natural disaster, it will be deemed to have been
negligent, and the loss will not be considered as having been due to a
natural disaster under Article 1734 (1).
In the case at bar, the issues may be narrowed down to whether the loss of
the cargo was due to the occurrence of a natural disaster, and if so,
whether such natural disaster was the sole and proximate cause of the loss
or whether private respondents were partly to blame for failing to
exercise due diligence to prevent the loss of the cargo.
The parties do not dispute that on the day the M/V Peatheray Patrick-G
sunk, said vessel encountered strong winds and huge waves ranging from
six to ten feet in height. The vessel listed at the port side and eventually
sunk at Cawit Point, Cortes, Surigao del Sur.
The Court of Appeals, citing the decision of the Board of Marine Inquiry
in the administrative case against the vessel's crew (BMI--646-87), found
that the loss of the cargo was due solely to the existence of a fortuitous
event, particularly the presence of strong winds and huge waves at
Cortes, Surigao del Sur on March 3, 1987:
III. WHAT WAS THE PROXIMATE CAUSE OF SINKING?
Evidence shows that when "LCT Peatheray Patrick-G" left the port
of Mandawe, Cebu for Bislig, Surigao del Sur on March 2, 1987 the
Captain had observed the fair atmospheric condition of the area of
 the pier and confirmed this good weather condition with the Coast
Guard Detachment of Mandawe City. However, on March 3, 1987 at
about 10:00 o'clock in the evening, when the vessel had already
passed Surigao Strait. the vessel started to experience waves as high
as 6 to 7 feet and that the Northeasterly wind was blowing at about
five (5) knot velocity. At about 11:00 o'clock P.M. when the vessel
was already about 4.5 miles off Cawit Point, Cortes, Surigao del Sur,
the vessel was discovered to be listing 15 degrees to port side and
that the strength of the wind had increased to 15 knots and the waves
were about ten (10) feet high [Ramilo TSN 10-27-87 p. 32).
Immediately thereafter, emergency measures were taken by the crew.
The officers had suspected that a leak or crack might had developed
at the bottom hull particularly below one or two of the empty wing
tanks at port side serving as buoyancy tanks resulting in ingress of
sea water in the tanks was confirmed when the Captain ordered to
use the cargo pump. The suction valves to the said tanks of port side
were opened in order to suck or draw out any amount of water that
entered into the tanks. The suction pressure of the pump had drawn
out sea water in large quantity indicating therefore, that a leak or
crack had developed in the hull as the vessel was continuously batted
and pounded by the huge waves. Bailing out of the water through the
pump was done continuously in an effort of the crew to prevent the
vessel from sinking. but then efforts were in vain. The vessel still
continued to list even more despite the continuous pumping and
discharging of sea water from the wing tanks indicating that the
amount of the ingress of sea water was greater in volume that that
was being discharged by the pump. Considering therefore, the
location of the suspected source of the ingress of sea water which
was a crack or hole at the bottom hull below the buoyancy tank's port
side which was not accessible (sic) for the crew to check or control
the flow of sea water into the said tank. The accumulation of sea
water aggravated by the continuous pounding, rolling and pitching of
the vessel against huge waves and strong northeasterly wind, the
Captain then had no other recourse except to order abandonship to
save their lives.13
The presence of a crack in the ill-fated vessel through which water seeped
in was confirmed by the Greutzman Divers who were commissioned by
the private respondents to conduct an underwater survey and inspection
of the vessel to determine the cause and circumstances of its sinking. In
its report, Greutzman Divers stated that "along the port side platings, a
small hole and two separate cracks were found at about midship."14
The findings of the Board of Marine Inquiry indicate that the attendance
of strong winds and huge waves while the M/V Peatheray Patrick-G was
sailing through Cortes, Surigao del Norte on March 3, 1987 was indeed
fortuitous. A fortuitous event has been defined as one which could not be
foreseen, or which though foreseen, is inevitable.15 An event is considered
fortuitous if the following elements concur:
xxx (a) the cause of the unforeseen and unexpected occurrence, or
the failure of the debtor to comply with his obligations, must be
independent of human will; (b) it must be impossible to foresee the
event which constitutes the caso fortuito, or if it can be foreseen, it
must be impossible to avoid; (c) the occurrence must be such as to
render it impossible for the debtor to fulfill his obligation in a normal
manner; and (d) the obligor must be free from any participation in
the aggravation of the injury resulting to the creditor. xxx16
In the case at bar, it was adequately shown that before the M/V Peatheray
Patrick-G left the port of Mandaue City, the Captain confirmed with the
Coast Guard that the weather condition would permit the safe travel of
the vessel to Bislig, Surigao del Sur. Thus, he could not be expected to
have foreseen the unfavorable weather condition that awaited the vessel
in Cortes, Surigao del Sur. It was the presence of the strong winds and
enormous waves which caused the vessel to list, keel over, and
consequently lose the cargo contained therein. The appellate court
likewise found that there was no negligence on the part of the crew of the
M/V Peatheray Patrick-G, citing the following portion of the decision of
the Board of Marine Inquiry:
I. WAS LCT PEATHERAY PATRICK-G SEAWORTHY WHEN
SHE LEFT THE PORT OF MANDAWE, CEBU AND AT THE
TIME OF SINKING?
Evidence clearly shows that the vessel was propelled with three (3)
diesel engines of 250 BHP each or a total of 750 BHP. It had three
(3) propellers which were operating satisfactorily from the time the
vessel left the port of Mandawe up to the time when the hull on the
double bottom tank was heavily floaded (sic) by uncontrollable entry
of sea water resulting in the stoppage of engines. The vessel was also
equipped with operating generator pumps for emergency cases. This
 equipment was also operating satisfactorily up to the time when the
engine room was heavily floaded (sic) with sea water. Further, the
vessel had undergone emergency drydocking and repair before the
accident occurred (sic) on November 9, 1986 at Trigon Shipyard, San
Fernando, Cebu as shown by the billing for the Drydocking and
Repair and certificate of Inspection No. 2588-86 issued by the
Philippine coast Guard on December 5, 1986 which expired on
November 8, 1987.
LCT Peatheray Patrick-G was skippered by Mr. Manuel P. Ramilo,
competent and experienced licensed Major Patron who had been in
command of the vessel for more than three (3) years from July 1984
up to the time of sinking March 3, 1987. His Chief Mate Mr.
Mariano Alalin also a licensed Major Patron had been the Chief Mate
of " LCT Peatheray Patrick-G" for one year and three months at the
time of the accident. Further Chief Mate Alalin had commanded a
tanker vessel named M/T Mercedes of MGM Corporation for almost
two (2) years from 1983-1985 (Alalin TSN-4-13-88 pp. 32-33).
That the vessel was granted SOLAS clearance by the Philippine
Coast Guard on March 1, 1987 to depart from Mandawe City for
Bislig, Surigao del Sur as evidenced by a certification issued to D.C.
Gaerlan Oil Products by Coast Guard Station Cebu dated December
23, 1987.1âwphi1.nêt
Based on the foregoing circumstances, "LCT Peatheray Patrick-G"
should be considered seaworthy vessel at the time she undertook that
fateful voyage on March 2, 1987.
To be seaworthy, a vessel must not only be staunch and fit in the hull
for the voyage to be undertaken but also must be properly equipped
and for that purpose there is a duty upon the owner to provide a
competent master and a crew adequate in number and competent for
their duty and equals in disposition and seamanship to the ordinary in
that calling. (Ralph 299 F-52, 1924 AMC 942). American President
2td v. Ren Fen Fed 629. AMC 1723 LCA 9 CAL 1924).17
Overloading was also eliminated as a possible cause of the sinking of the
vessel, as the evidence showed that its freeboard clearance was
substantially greater than the authorized freeboard clearance.18
Although the Board of Marine Inquiry ruled only on the administrative
liability of the captain and crew of the M/V Peatheray Patrick-G, it had to
conduct a thorough investigation of the circumstances surrounding the
sinking of the vessel and the loss of its cargo in order to determine their
responsibility, if any. The results of its investigation as embodied in its
decision on the administrative case clearly indicate that the loss of the
cargo was due solely to the attendance of strong winds and huge waves
which caused the vessel accumulate water, tilt to the port side and to
eventually keel over. There was thus no error on the part of the Court of
Appeals in relying on the factual findings of the Board of Marine Inquiry,
for such factual findings, being supported by substantial evidence are
persuasive, considering that said administrative body is an expert in
matters concerning marine casualties.19
Since the presence of strong winds and enormous waves at Cortes,
Surigao del Sur on March 3, 1987 was shown to be the proximate and
only cause of the sinking of the M/V Peatheray Patrick-G and the loss of
the cargo belonging to San Miguel Corporation, private respondents
cannot be held liable for the said loss.
WHEREFORE, the assailed Decision of the Court of Appeals is hereby
AFFIRMED and the petition is hereby DENIED.
G.R. No. 148496 March 19, 2002
VIRGINES CALVO doing business under the name and style
TRANSORIENT CONTAINER TERMINAL SERVICES, INC.,
petitioner, vs. UCPB GENERAL INSURANCE CO., INC. (formerly
Allied Guarantee Ins. Co., Inc.) respondent.
This is a petition for review of the decision, 1 dated May 31, 2001, of the
Court of Appeals, affirming the decision2 of the Regional Trial Court,
Makati City, Branch 148, which ordered petitioner to pay respondent, as
subrogee, the amount of P93,112.00 with legal interest, representing the
value of damaged cargo handled by petitioner, 25% thereof as attorney's
fees, and the cost of the suit.1âwphi1.nêt
The facts are as follows:
Petitioner Virgines Calvo is the owner of Transorient Container Terminal
Services, Inc. (TCTSI), a sole proprietorship customs broker. At the time
material to this case, petitioner entered into a contract with San Miguel
Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting
paper and 124 reels of kraft liner board from the Port Area in Manila to
SMC's warehouse at the Tabacalera Compound, Romualdez St., Ermita,
Manila. The cargo was insured by respondent UCPB General Insurance
Co., Inc.
On July 14, 1990, the shipment in question, contained in 30 metal vans,
arrived in Manila on board "M/V Hayakawa Maru" and, after 24 hours,
were unloaded from the vessel to the custody of the arrastre operator,
Manila Port Services, Inc. From July 23 to July 25, 1990, petitioner,
pursuant to her contract with SMC, withdrew the cargo from the arrastre
operator and delivered it to SMC's warehouse in Ermita, Manila. On July
25, 1990, the goods were inspected by Marine Cargo Surveyors, who
found that 15 reels of the semi-chemical fluting paper were
"wet/stained/torn" and 3 reels of kraft liner board were likewise torn. The
damage was placed at P93,112.00.
SMC collected payment from respondent UCPB under its insurance
contract for the aforementioned amount. In turn, respondent, as subrogee
of SMC, brought suit against petitioner in the Regional Trial Court,
Branch 148, Makati City, which, on December 20, 1995, rendered
judgment finding petitioner liable to respondent for the damage to the
shipment.
The trial court held:
It cannot be denied . . . that the subject cargoes sustained damage
while in the custody of defendants. Evidence such as the Warehouse
Entry Slip (Exh. "E"); the Damage Report (Exh. "F") with entries
appearing therein, classified as "TED" and "TSN", which the claims
processor, Ms. Agrifina De Luna, claimed to be tearrage at the end
and tearrage at the middle of the subject damaged cargoes
respectively, coupled with the Marine Cargo Survey Report (Exh.
"H" - "H-4-A") confirms the fact of the damaged condition of the
subject cargoes. The surveyor[s'] report (Exh. "H-4-A") in particular,
which provides among others that:
" . . . we opine that damages sustained by shipment is
attributable to improper handling in transit presumably whilst in
the custody of the broker . . . ."
is a finding which cannot be traversed and overturned.
The evidence adduced by the defendants is not enough to sustain
[her] defense that [she is] are not liable. Defendant by reason of the
nature of [her] business should have devised ways and means in
order to prevent the damage to the cargoes which it is under
obligation to take custody of and to forthwith deliver to the
consignee. Defendant did not present any evidence on what
precaution [she] performed to prevent [the] said incident, hence the
presumption is that the moment the defendant accepts the cargo [she]
shall perform such extraordinary diligence because of the nature of
the cargo.
Generally speaking under Article 1735 of the Civil Code, if the goods are
proved to have been lost, destroyed or deteriorated, common carriers are
presumed to have been at fault or to have acted negligently, unless they
prove that they have observed the extraordinary diligence required by
law. The burden of the plaintiff, therefore, is to prove merely that the
goods he transported have been lost, destroyed or deteriorated.
Thereafter, the burden is shifted to the carrier to prove that he has
exercised the extraordinary diligence required by law. Thus, it has been
held that the mere proof of delivery of goods in good order to a carrier,
and of their arrival at the place of destination in bad order, makes out a
prima facie case against the carrier, so that if no explanation is given as to
how the injury occurred, the carrier must be held responsible. It is
incumbent upon the carrier to prove that the loss was due to accident or
some other circumstances inconsistent with its liability." (cited in
Commercial Laws of the Philippines by Agbayani, p. 31, Vol. IV, 1989
Ed.)
Defendant, being a customs brother, warehouseman and at the same
 time a common carrier is supposed [to] exercise [the] extraordinary
diligence required by law, hence the extraordinary responsibility lasts
from the time the goods are unconditionally placed in the possession
of and received by the carrier for transportation until the same are
delivered actually or constructively by the carrier to the consignee or
to the person who has the right to receive the same.3
Accordingly, the trial court ordered petitioner to pay the following
amounts --
1. The sum of P93,112.00 plus interest;
2. 25% thereof as lawyer's fee;
3. Costs of suit.4
The decision was affirmed by the Court of Appeals on appeal. Hence this
petition for review on certiorari.
Petitioner contends that:
I. THE COURT OF APPEALS COMMITTED SERIOUS AND
REVERSIBLE ERROR [IN] DECIDING THE CASE NOT ON THE
EVIDENCE PRESENTED BUT ON PURE SURMISES,
SPECULATIONS AND MANIFESTLY MISTAKEN INFERENCE.
II. THE COURT OF APPEALS COMMITTED SERIOUS AND
REVERSIBLE ERROR IN CLASSIFYING THE PETITIONER AS
A COMMON CARRIER AND NOT AS PRIVATE OR SPECIAL
CARRIER WHO DID NOT HOLD ITS SERVICES TO THE
PUBLIC.5
It will be convenient to deal with these contentions in the inverse order,
for if petitioner is not a common carrier, although both the trial court and
the Court of Appeals held otherwise, then she is indeed not liable beyond
what ordinary diligence in the vigilance over the goods transported by
her, would require.6 Consequently, any damage to the cargo she agrees to
transport cannot be presumed to have been due to her fault or negligence.
Petitioner contends that contrary to the findings of the trial court and the
Court of Appeals, she is not a common carrier but a private carrier
because, as a customs broker and warehouseman, she does not
indiscriminately hold her services out to the public but only offers the
same to select parties with whom she may contract in the conduct of her
business.
The contention has no merit. In De Guzman v. Court of Appeals,7 the
Court dismissed a similar contention and held the party to be a common
carrier, thus -
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 . . . 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 1732 deliberately refrained from making such
distinctions.
So understood, the concept of "common carrier" under Article 1732
may be seen to coincide neatly with the notion of "public service,"
under the Public Service Act (Commonwealth Act No. 1416, as
amended) which at least partially supplements the law on common
carriers set forth in the Civil Code. Under Section 13, paragraph (b)
of the Public Service Act, "public service" includes:
" x x x every person that now or hereafter may own, operate,
manage, or control in the Philippines, for hire or compensation,
with general or limited clientele, whether permanent, occasional
or accidental, and done for general business purposes, any
common carrier, railroad, street railway, traction railway, subway
motor vehicle, either for freight or passenger, or both, with or
without fixed route and whatever may be its classification,
freight or carrier service of any class, express service, steamboat,
or steamship line, pontines, ferries and water craft, engaged in
 the transportation of passengers or freight or both, shipyard,
marine repair shop, wharf or dock, ice plant, ice-refrigeration
plant, canal, irrigation system, gas, electric light, heat and power,
water supply and power petroleum, sewerage system, wire or
wireless communications systems, wire or wireless broadcasting
stations and other similar public services. x x x" 8
There is greater reason for holding petitioner to be a common carrier
because the transportation of goods is an integral part of her business. To
uphold petitioner's contention would be to deprive those with whom she
contracts the protection which the law affords them notwithstanding the
fact that the obligation to carry goods for her customers, as already noted,
is part and parcel of petitioner's business.
Now, as to petitioner's liability, Art. 1733 of the Civil Code provides:
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. . . .
In Compania Maritima v. Court of Appeals, 9 the meaning of
"extraordinary diligence in the vigilance over goods" was explained thus:
The extraordinary diligence in the vigilance over the goods tendered
for shipment requires the common carrier to know and to follow the
required precaution for avoiding damage to, or destruction of the
goods entrusted to it for sale, carriage and delivery. It requires
common carriers to render service with the greatest skill and
foresight and "to use all reasonable means to ascertain the nature and
characteristic of goods tendered for shipment, and to exercise due
care in the handling and stowage, including such methods as their
nature requires."
In the case at bar, petitioner denies liability for the damage to the cargo.
She claims that the "spoilage or wettage" took place while the goods were
in the custody of either the carrying vessel "M/V Hayakawa Maru,"
which transported the cargo to Manila, or the arrastre operator, to whom
the goods were unloaded and who allegedly kept them in open air for
nine days from July 14 to July 23, 1998 notwithstanding the fact that
some of the containers were deformed, cracked, or otherwise damaged, as
noted in the Marine Survey Report (Exh. H), to wit:
MAXU-2062880 - rain gutter deformed/cracked
ICSU-363461-3 - left side rubber gasket on door
distorted/partly loose
PERU-204209-4 - with pinholes on roof panel right portion
TOLU-213674-3 - wood flooring we[t] and/or with signs of
water soaked
MAXU-201406-0 - with dent/crack on roof panel
ICSU-412105-0 - rubber gasket on left side/door panel partly
10
detached loosened.
In addition, petitioner claims that Marine Cargo Surveyor Ernesto
Tolentino testified that he has no personal knowledge on whether the
container vans were first stored in petitioner's warehouse prior to their
delivery to the consignee. She likewise claims that after withdrawing the
container vans from the arrastre operator, her driver, Ricardo Nazarro,
immediately delivered the cargo to SMC's warehouse in Ermita, Manila,
which is a mere thirty-minute drive from the Port Area where the cargo
came from. Thus, the damage to the cargo could not have taken place
while these were in her custody.11
Contrary to petitioner's assertion, the Survey Report (Exh. H) of the
Marine Cargo Surveyors indicates that when the shipper transferred the
cargo in question to the arrastre operator, these were covered by clean
Equipment Interchange Report (EIR) and, when petitioner's employees
withdrew the cargo from the arrastre operator, they did so without
exception or protest either with regard to the condition of container vans
or their contents. The Survey Report pertinently reads --
Details of Discharge:
Shipment, provided with our protective supervision was noted
discharged ex vessel to dock of Pier #13 South Harbor, Manila on 14
July 1990, containerized onto 30' x 20' secure metal vans, covered by
clean EIRs. Except for slight dents and paint scratches on side and
roof panels, these containers were deemed to have [been] received in
good condition.
 Transfer/Delivery:
On July 23, 1990, shipment housed onto 30' x 20' cargo containers
was [withdrawn] by Transorient Container Services, Inc. . . . without
exception.
[The cargo] was finally delivered to the consignee's storage
warehouse located at Tabacalera Compound, Romualdez Street,
Ermita, Manila from July 23/25, 1990.12
As found by the Court of Appeals:
From the [Survey Report], it [is] clear that the shipment was
discharged from the vessel to the arrastre, Marina Port Services Inc.,
in good order and condition as evidenced by clean Equipment
Interchange Reports (EIRs). Had there been any damage to the
shipment, there would have been a report to that effect made by the
arrastre operator. The cargoes were withdrawn by the defendant-
appellant from the arrastre still in good order and condition as the
same were received by the former without exception, that is, without
any report of damage or loss. Surely, if the container vans were
deformed, cracked, distorted or dented, the defendant-appellant
would report it immediately to the consignee or make an exception
on the delivery receipt or note the same in the Warehouse Entry Slip
(WES). None of these took place. To put it simply, the defendant-
appellant received the shipment in good order and condition and
delivered the same to the consignee damaged. We can only conclude
that the damages to the cargo occurred while it was in the possession
of the defendant-appellant. Whenever the thing is lost (or damaged)
in the possession of the debtor (or obligor), it shall be presumed that
the loss (or damage) was due to his fault, unless there is proof to the
contrary. No proof was proffered to rebut this legal presumption and
the presumption of negligence attached to a common carrier in case
of loss or damage to the goods.13
Anent petitioner's insistence that the cargo could not have been damaged
while in her custody as she immediately delivered the containers to
SMC's compound, suffice it to say that to prove the exercise of
extraordinary diligence, petitioner must do more than merely show the
possibility that some other party could be responsible for the damage. It
must prove that it used "all reasonable means to ascertain the nature and
characteristic of goods tendered for [transport] and that [it] exercise[d]
due care in the handling [thereof]." Petitioner failed to do this.
Nor is there basis to exempt petitioner from liability under Art. 1734(4),
which provides --
Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the
following causes only:
(4) The character of the goods or defects in the packing or in the
containers.
For this provision to apply, the rule is that if the improper packing or, in
this case, the defect/s in the container, is/are known to the carrier or his
employees or apparent upon ordinary observation, but he nevertheless
accepts the same without protest or exception notwithstanding such
condition, he is not relieved of liability for damage resulting therefrom. 14
In this case, petitioner accepted the cargo without exception despite the
apparent defects in some of the container vans. Hence, for failure of
petitioner to prove that she exercised extraordinary diligence in the
carriage of goods in this case or that she is exempt from liability, the
presumption of negligence as provided under Art. 173515 holds.
WHEREFORE, the decision of the Court of Appeals, dated May 31,
2001, is AFFIRMED.
G.R. No. 120287 May 28, 2002
G & S TRANSPORT CORPORATION, petitioner, vs. COURT OF
APPEALS, HON. ENRICO A. LANZANAS, TWO THOUSAND
(2000) TRANSPORT CORPORATION, NISSAN CAR LEASE
PHILIPPINES, INC., MANILA INTERNATIONAL AIRPORT
AUTHORITY AND GUILLERMO G. CUNANAN, respondents.
This resolves the consolidated Petition for Review of the Decision of the
Court of Appeals in CA-G.R. SP No. 36345, "Two Thousand (2000)
Transport Corporation v. Hon. Guillermo L. Loja, Sr., as Judge, RTC,
Manila, Branch 26, and G & S Transport Corporation," and in CA-G.R.
SP No. 36356, "Nissan Car Lease Philippines, Inc. v. Hon. Guillermo L.
Loja, Sr., as Judge RTC of Manila, Branch 26, and G & S Transport
Corporation," and Petition for Certiorari of the Order of the Regional
Trial Court, Branch 7, Manila, in Civil Case No. 95-72586, "G & S
Transport Corporation v. Manila International Airport Authority,
Guillermo G. Cunanan, Two Thousand (2000) Transport Corporation
and Nissan Car Lease Philippines, Inc."
Petitioner G & S Transport Corporation (G & S), with the name and style
Avis Rent-A-Car, was the exclusive operator of coupon taxi services at
the Ninoy Aquino International Airport (NAIA) under a five (5)-year
contract of concession with respondent Manila International Airport
Authority (MIAA).1 The concession contract expired on 31 January 1994
but was renewed by the parties on a monthly basis "until such time when
a new concessionaire (shall have been) chosen."2 Under the arrangement,
G & S was able to operate the coupon taxi service uninterruptedly beyond
the period of five (5) years originally awarded by MIAA.1âwphi1.nêt
On 12 July 1994 MIAA initiated proceedings for public bidding to
choose two (2) concessionaires of the coupon taxi services at the NAIA.
Five (5) firms pre-qualified to join the bidding including petitioner G & S
and respondents Two Thousand (2000) Transport Corporation (2000
TRANSPORT) and Nissan Car Lease Philippines, Inc. (NISSAN), after
complying with the terms of reference, the instructions to bidders and the
invitation to bid.3 On 23 September 1994 MIAA announced the ranking
of the bidders on the basis of the fares per kilometer they each tendered -
The highest ranking bidder which offered the lowest rate per kilometer
was Philippine International Transport Service Cooperative but was
however disqualified as the bond it submitted was not a cash bond as
required by the bidding rules.5 Consequently, on 5 December 1994 MIAA
selected 2000 TRANSPORT and NISSAN as the winning bidders and
issued in their favor the respective notice of awards of the coupon taxi
service concession.6
On 10 January 1995 petitioner G & S filed a complaint for injunction and
mandamus with preliminary injunction and temporary restraining order
against MIAA and its General Manager Guillermo G. Cunanan, 2000
TRANSPORT and NISSAN, which was docketed as Civil Case No. 95-
72586 and subsequently raffled to RTC-Br. 26, Manila. The complaint
sought to disqualify 2000 TRANSPORT from the award of the
concession contract for submitting its Articles of Incorporation with the
signature of one (1) of its incorporators allegedly falsified and its income
tax returns falsely attested to by its treasurer, and for the existence of
allegedly reasonable grounds to believe that 2000 TRANSPORT was a
dummy corporation for two (2) Korean nationals. It also asserted that the
concession contract should have been executed in favor of G & S since it
was more deserving than both 2000 TRANSPORT and NISSAN in terms
of facilities, financial standing, organizational set-up and capability. G &
S subsequently amended the complaint to state that no new legitimate
concessionaire had been properly chosen as a result of the failure of
MIAA to disqualify 2000 TRANSPORT from the entire process of
selecting two (2) coupon taxi service concessionaires and to allege that G
& S remainded to be the only legitimate service provider, and prayed that
the month-to-month renewal of the concession contract with G & S
should instead be enforced until a more deserving concessionaire would
have been selected.
As prayed for in the complaint, the trial court issued a temporary
restraining order enjoining MIAA from awarding to 2000 TRANSPORT
and NISSAN the new concessions to operate the NAIA coupon taxi
service and from removing G & S as such concessionaire, and thereafter
scheduled for hearing the application for preliminary injunction.
Meanwhile respondents 2000 TRANSPORT and NISSAN each moved to
dismiss the complaint for failure to state a cause of action and for
improper venue and to lift the temporary restraining order. On 30 January
1995, after the parties were heard although the motions were still
pending, the trial court granted the writ of preliminary injunction which
barred MIAA from doing any of the acts earlier restrained.
Respondents 2000 TRANSPORT and NISSAN assailed before the Court
of Appeals the issuance of the writ of preliminary injunction through their
respective petitions for certiorari with prayer for temporary restraining
order and preliminary injunction under Rule 65 of the Revised Rules of
Court.7 Respondent 2000 TRANSPOT belied the claims that it falsified
its Articles of Incorporation and that it was a dummy corporation. On the
other hand, NISSAN alleged that the complaint of G & S did not state a
cause of action since the allegations concerned exclusively the
disqualification of 2000 TRANSPORT.
On 6 February 1995 the appellate court issued a temporary restraining
order prohibiting the enforcement of the writ of preliminary injunction.
While the temporary restraining order was in place, MIAA terminated the
month-to-month renewal of the concession contract with G & S and
executed the concession contracts with the winning bidders 2000
TRANSPORT and NISSAN which immediately commenced their
respective coupon taxi services at the NAIA. 8 The temporary restraining
order (issued by the Court of Appeals) had already expired when the
appellate court conducted hearings on the application of 2000
TRANSPORT and NISSAN for a writ of preliminary injunction.
On 3 March 1995, upon separate motions of 2000 TRANSPORT and
NISSAN, the presiding judge9 of RTC-Br. 26, Manila, inhibited himself
from hearing Civil Case No. 95-72586. The case was re-raffled and in
due time referred to the RTC-Br. 7 which extensively heard the motions
to dismiss separately filed by 2000 TRANSPORT and NISSAN.
On 11 April 1995 the trial court dismissed the complaint in Civil Case
No. 95-72586.10 It ruled that the complaint failed to state a cause of action
against herein respondents and that mandamus was unavailable to compel
the award of the concession contract in favor of G & S since such
decision was discretionary upon the MIAA. On 16 June 1995 the trial
court denied reconsideration of the Order of dismissal.
On 16 May 1995 the Court of Appeals granted the petitions for certiorari
of 2000 TRANSPORT and NISSAN in CA-G.R. SP No. 36345 and CA-
G.R. SP No. 36356, set aside the 30 January 1995 Order of the trial court
issuing the writ of preliminary injunction, and prohibited the trial court
from "hearing and taking further cognizance of Civil Case No. 95-72586
except to dismiss the same."11 The appellate court held that the trial court
gravely abused its discretion when it issued the writ of preliminary
injunction since under PD 1818 no court would have jurisdiction to
restrain the operation of a public utility and since the selection of winning
bidders was solely the discretion of the sponsoring government agency.
Hence, the instant petition for review under Rule 45 of the Revised Rules
of Courtassailing the 16 May 1995 Decision of the Court of Appeals,
which was joined with the instant petition for certiorari under Rule 65,
seeking to nullify and set aside the 11 April 1995 Order of the trial court
dismissing Civil Case No. 95-72586.
G & S argues in its petition for review that irregularities attending the
bidding for the coupon taxi service at the NAIA warranted the issuance of
the writ of preliminary injunction and that PD 1818 was not applicable to
divest the trial court of jurisdiction to hear the complaint in Civil Case
No. 95-72586. G & S asserts in its petition under Rule 65 that allegations
in the complaint that 2000 TRANSPORT falsified its Articles of
Incorporation and income tax returns, and was a dummy corporation for
two (2) Korean nationals, and that irregularities rigged the bidding stated
fully a cause of action against 2000 TRANSPORT and NISSAN which
would have justified the disqualification of respondent 2000
TRANSPORT from the bidding and the continuation of the month-to-
month renewal of the concession contract in favor of G & S. Petitioner
also justified resorting to Rule 65 in lieu of an ordinary appeal before the
Court of Appeals to question the Order of dismissal of the trial court on
grounds of expediency and necessity for a speedier remedy than appeal
and further explains that joining the petitions for review and for certiorari
in just one (1) pleading was essential to avoid conflicting rulings in case
the petitions were brought separately in different fora.
To begin with, petitioner could have joined together all his allegations of
error in one petition for review under Rule 45 of the 1997 Rules of Civil
Procedure since only questions of law are raised in the instant casse. At
any rate, there is nothing irregular in joining both petitions for review
(Rule 45) and certiorari (Rule 65) in one pleading for purposes of
resolving the issues raised by petitioner G & S. This procedural step may
even avoid inconsistency of rulings which might result in case the writ of
preliminary injunction is validated but the civil case from which the writ
emanated is ordered dismissed. Although a petition for review under Rule
45 is an appeal process while a petition for certiorari under Rule 65 is an
original action and the rule is that joinder of causes of action shall not
include special civil actions governed by special rules,12 the conceptual
and procedural differences between them are overshadowed by the more
significant probability of divergent rulings in case the two (2) petitions
are not joined which in the end would only cause difficulties in
determining which of the conflicting decisions should be enforced.
For the same reason, resort to certiorari under Rule 65 before this Court
in lieu of an ordinary appeal to the Court of Appeals to assail the final
Order of dismissal is fully justified by the necessity to bring all the issues
before one (1) forum to ensure harmony of rulings. It must however be
emphasized that in disposing of the issue regarding the propriety and
legality of the Order, the applicable standard will of course be whether
the trial court committed grave abuse of discretion amounting to lack or
excess of jurisdiction,13 and the only reversible errors will be errors of
jurisdiction and not errors of judgment.14
We find that the trial court did not abuse its discretion in dismissing the
complaint in Civil Case No. 95-72586 for failure to state a cause of action
against respondents 2000 TRANSPORT and NISSAN. As admitted by
petitioner G & S itself, the trial court used the correct "guidelines by
which the failure of the complaint to state a cause of action as a ground in
a motion to dismiss must be considered."15 Concededly therefore the only
errors involved in this petition are mere errors of judgment, if any, and
not errors of jurisdiction for which the instant petition would be the
inappropriate mode for seeking a reversal. The allegations of errors of
judgment are in fact fairly obvious on the face of the instant petition for
certiorari under Rule 65.
We nonetheless examine the Order of the trial court in the interest of
justice. The elementary test for failure to state a cause of action is
whether the complaint alleges facts which if true would justify the relief
demanded. Stated otherwise, may the court render a valid judgment upon
the facts alleged therein?16 Only ultimate facts and not legal conclusions
or evidentiary facts which in the first place should not have been alleged
in the complaint are considered for purposes of applying the test. 17
Furthermore, actions which are prematurely commenced would fall under
the objection.18
Petitioner G & S prayed for a permanent injunction to bar the award of
the concession contract to 2000 TRANSPORT and NISSAN; a writ of
mandamus compelling MIAA to grant to it the concession contract; the
disqualification of 2000 TRANSPORT from the bidding; the nullification
of the entire bidding process; and the payment of damages which would
of course be a mere consequence of the other relief sought.19 The ultimate
facts supposedly justifying the complaint for injunction and mandamus
were -
15. On October 26, 1994, the Manila Standard published a news item
reporting that (2000) Transport has been accused of submitting to
MIAA falsified documents in connection with their bid for the NAIA
coupon taxi service. Investigating this report, plaintiff [G & S]
discovered that on October 8, 1994, a certain Meliton Solpot had
executed an Affidavit, wherein he stated that the corporate tax returns
submitted by [2000 Transport] to MIAA during the bidding are (sic)
falsified as his purported signatures thereon are (sic) not his
signatures x x x x Plaintiff further discovered that on October 25,
1994, the same Meliton Solpot executed a Sworn Statement before
the National Bureau of Investigation (NBI) alleging that his
signatures on the partnership annual income tax return of [2000
Transport] dated December 1993 and February 3, 1994 as well as
those found in the Articles of Incorporation of [2000 Transport] on
file with the Securities and Exchange Commission are (sic) not his
genuine signatures x x x x 17. In the meantime, plaintiff [G & S] was
able to secure from the SEC a copy of the Articles of Incorporation
of [2000 Transport]. In said Articles, it clearly appears that one of the
alleged incorporators is a certain Meliton Solpot. It further appears
that the two (2) Korean incorporators who appear to have subscribed
to twenty percent (20%) of the authorized capital stock of the
corporation had paid up eighty percent (80%) of the paid-in capital,
thereby indicating that in fact, and for all intents and purposes, the
Korean incorporators were in control of the corporation x x x x
Moreover, plaintiff was also able to secure a copy of the General
Information Sheet for 1994 filed by [2000 Transport] with the SEC
which shows that Sooja Park Lim, a Korean, is the Chairman and
President of [2000 Transport] while Young Kon Jo, a Korean, is the
Vice President of [2000 Transport] x x x x 23. Since [2000 Transport]
was not duly qualified to participate in the bidding and has flagrantly
violated the Constitution, MIAA and Cunanan have neither factual
nor legal basis to declare said defendant as one of the winning
bidders, to award to said defendant, a Contract of Concession for the
NAIA coupon taxi service and allowing it to operate the said service.
Furthermore, the participation of a disqualified bidder in the bidding
affects the integrity of the entire bidding process and renders the
same ineffective, null and void. Consequently, MIAA and Cunanan
should be finally and permanently enjoined from awarding to [2000
Transport and Nissan] a Contract of Concession for the NAIA
coupon taxi service and / or otherwise authorizing or allowing them
to operate the NAIA coupon taxi service x x x x 25. While plaintiff
had made the third lowest bid insofar as the fare is concerned, it
certainly is way ahead of all other bidders, insofar as the other factors
stated in the Instruction to Bidders are concerned. As the present
operator and concessionaire of the NAIA coupon taxi service for the
last five (5) years, its existing facilities, financial standing,
organizational set-up, relevant experience, quality, capability and
kind of services offered far outrank any of the other bidders. Thus,
assuming, without conceding, that [2000 Transport] was not
 disqualified to participate in the bidding and / or the bidding process
is not fatally flawed, plaintiff should be declared as one of the
winning bidders based on these other factors. The other winning
bidder should be determined between [2000 Transport and Nissan]
based on these other factors.20
It is clear that the allegations would not call for any relief against
respondent NISSAN. The alleged defects in the bidding process center on
the incapacity and fraudulent act of 2000 TRANSPORT in submitting its
Articles of Incorporation with one (1) falsified signature and in being a
dummy corporation for two (2) Korean nationals. Under these set of
facts, we see no basis for declaring NISSAN to be similarly disqualified
or for nullifying the entire bidding process. Indeed it has not been shown
that the alleged irregularities committed by 2000 TRANSPORT were
induced by or participated in by any of the other bidders. No rule would
justify compromising the interests of NISSAN for an act it was not the
author of or even privy to. If at all, liability should attack only to the
responsible party for the alleged prejudice sustained by G & S as a result
of the anomalies described above.
Neither would the allegations authorize us to issue the writ of mandamus
compelling MIAA to award the concession contract in favor of petitioner
G & S. It is a settled rule that mandamus will lie only to compel the
performance of a ministerial duty but does not lie to require anyone to
fulfill contractual obligations.21 Only such duties as are clearly and
peremptorily enjoined by law or by reason of official station are to be
enforced by the writ.22 Whether MIAA will enter into a contract for the
provision of a coupon taxi service at the international airport is entirely
and exclusively within its corporate discretion. It does not involve a duty
the performance of which is enjoined by law and thus this Court cannot
direct the exercise of this prerogative.
Indeed the determination of the winning bidders should be left to the
sound judgment of the MIAA which is the agency in the best position to
evaluate the proposals and to decide which bid would most complement
the NAIA's services. The Terms of Reference for Coupon Taxi Service
Concession observed, "[t]he professional transport service plays a very
important role in enhancing and maintaining a good image of the country
that will speak of trust, honesty, efficiency and modernity." 23 In this
regard only the most advantageous bids would be selected on the basis of
the best bid offer in relation to the bidders' existing facilities, financial
standing, organizational set-up, relevant experience, quality, capability
and kind of services offered.24 The exercise of such discretion is a policy
decision that necessitates such procedures as prior inquiry, investigation,
comparison, evaluation and deliberation.25 This process would necessarily
entail the technical expertise of MIAA which the courts do not possess in
order to evaluate the standards affecting this matter -
x x x x courts, as a rule, refuse to interfere with proceedings
undertaken by administrative bodies or officials in the exercise of
administrative functions. This is so because such bodies are generally
better equipped technically to decide administrative questions and
that non-legal factors, such as government policy on the matter, are
usually involved in the decision.26
Nor would the allegations, even if admitted to be true, compel a
permanent restraint on the execution of the respective concession
contracts of respondents 2000 TRANSPORT and NISSAN with MIAA.
In Bureau Veritas v. Office of the President27 we ruled that "the discretion
to accept or reject a bid and award contracts is vested in the Government
agencies entrusted with that function." Furthermore, Sec. 1 of PD 1818
(the governing statute in all the relevant dates alleged in the complaint)
distinctly provides that "[n]o court in the Philippines shall have
jurisdiction to issue any restraining order, preliminary injunction x x x in
any case, dispute, or controversy involving x x x any public utility
operated by the government, including among others public utilities for
the transport of the goods or commodities x x x to prohibit any person or
persons x x x from proceeding with, or continuing the execution or
implementation of any such project, or the operation of such public
utility, or pursuing any lawful activity necessary for such execution,
implementation or operation." We stress that the provision expressly
deprives courts of jurisdiction to issue injunctive writs against the
implementation or execution of contracts for the operation of a public
utility.28 Undeniably, both respondent MIAA and the concession contracts
it wanted to bid out involve a public utility which would therefore enjoy
the protective mantle of the decree.
While the rule is that courts may set aside or enjoin the award of a
contract made by a government entity, this may be done only upon a clear
showing of grave abuse of discretion29 or only in cases involving issues
definitely outside the exercise of discretion in technical cases and
questions of law.30 We however find nothing of this sort in the allegations
of petitioner G & S in Civil Case No. 95-72586. Even if admitted to be
true, the allegations do not demonstrate grave abuse of discretion nor
raise issues definitely outside the exercise of discretion in technical cases
which would survive a motion to dismiss for failure to state cause of
action and warrant a trial on the merits of the complaint.1âwphi1.nêt
Grave abuse of discretion implies a capricious, arbitrary and whimsical
exercise of power.31 The abuse of discretion must be patent and gross as
to amount to an evasion of positive duty or to a virtual refusal to perform
a duty enjoined by law, as not to act at all in contemplation of law, or
where the power is exercised in an arbitrary and despotic manner by
reason of passion or hostility.32 In the case at bar, the allegations of G & S
in the civil case do not call for the assumption that MIAA accepted the
bid of 2000 TRANSPORT and NISSAN and declared them winning
bidders with grave abuse of discretion.
For one, the claim that 2000 TRANSPORT is a dummy corporation for
two (2) Korean nationals is a legal conclusion from allegations which
would not even compel the adoption of such inference -
It further appears that the two (2) Korean incorporators who appear
to have subscribed to twenty percent (20%) of the authorized capital
stock of the corporation had paid up eighty percent (80%) of the
paid-in capital, thereby indicating that in fact, and for all intents and
purposes, the Korean incorporators were in control of the corporation
x x x x Moreover, plaintiff was also able to secure a copy of the
General Information Sheet for 1994 filed by [2000 Transport] with
the SEC which shows that Sooja Park Lim, a Korean, is the
Chairman and President of [2000 Transport] while Young Kon Jo, a
Korean, is the Vice President of [2000 Transport] x x x x
Judicial notice of the Articles of Incorporation referred to in the
allegations and attached as one of the annexes to the instant petition
would show that the two (2) Korean nationals subscribed to only 1,000
shares out of the total 20,000 shares, which were fully paid up by them at
P100.00 per share for P50,000.00 each. 33 On its face, the Articles of
Incorporation merely showed the subscription by the two (2) Korean
nationals of only five percent (5%) of the capital stock and the full
payment thereof in the total amount of P100,000.00.
Since factual premises as well as legal conclusions which by judicial
notice are determined to be false are not deemed admitted to be true for
purposes of disposing of an objection on the ground of failure to state a
cause of action,34 it was incumbent upon G & S to have alleged additional
facts from which could be inferred that 2000 TRANSPORT was truly a
front of the Korean shareholders.
In the same manner, it is irrelevant that the Korean nationals were the
President and the Vice President, respectively, of 2000 TRANSPORT as
shown in the General Information Sheet on file with the Securities and
Exchange Commission. What is material for purposes of stating a cause
of action are allegations showing that they were such officers during the
operational stages of the coupon taxi service. As we have held in Tatad v.
Garcia35 -
x x x x Private respondent EDSA LRT Corporation, Ltd., to whom
the contract to construct the EDSA LRT III was awarded by public
respondent, is admittedly a foreign corporation "duly incorporated
and existing under the laws of Hong Kong" x x x x What private
respondent owns are the rail tracks, rolling stocks like the coaches,
rail station, tracks, rolling stocks like the coaches, rail stations,
terminals and the power plant, not a public utility. While a franchise
is needed to operate these facilities to serve the public, they do not by
themselves constitute a public utility. What constitutes a public utility
is not their ownership but their use to serve the public x x x x The
Constitution, in no uncertain terms, requires a franchise for the
operation of a public utility. However, it does not require a franchise
before one can own the facilities needed to operate a public utility so
long as it does not operate them to serve the public x x x x In law,
there is a clear distinction between the "operation" of a public utility
and the ownership of the facilities and equipment used to serve the
public. The exercise of the rights encompassed in ownership is
limited by law so that a property cannot be operated and used to
serve the public as a public utility unless the operator has a franchise
x x x x The right to operate a public utility may exist independently
and separately from the ownership of the facilities thereof. One can
own said facilities without operating them as a public utility, or
conversely, one may operate a public utility without owning the
facilities used to serve the public. The devotion of property to serve
the public may be done by the owner or by the person in control
thereof who may not necessarily be the owner thereof x x x x Indeed,
a mere owner and lessor of the facilities used by a public utility is not
 a public utility x x x x Even the mere formation of a public utility
corporation does not ipso facto characterize the corporation as one
operating a public utility.
Moreover, the allegations that the documents submitted by 2000
TRANSPORT, i.e., Article of Incorporation and income tax returns,
contained one (1) falsified signature even if admitted to be true court not
be characterized as showing grave abuse of discretion on the part of
MIAA in not disqualifying 2000 TRANSPORT from the bidding and in
not nullifying the bidding process. It is clear that under the Terms of
Reference for Coupon Taxi Service Concession the required pre-
qualification documents consisted of, among others, certified true copy of
the Article of Incorporation and certified true copy of the income tax
returns of the corporation for the last two (2) years immediately
preceding the date of the bidding. 36 MIAA acted within the bounds of
reasonable discretion when it accepted the Articles of Incorporation and
income tax returns of 2000 TRANSPORT since they were duly verified
by the proper administrative agencies. It appears from the records that
2000 TRANSPORT had long been operating as a corporation engaged in
common carriage so that MIAA had reasonable ground to rely upon the
documents submitted to it to prove the corporate personality and status as
public carrier of the bidder for purposes of the bidding. Moreover,
because of the presumption of regular performance of powers and
functions, MIAA should be deemed to have performed its functions in
accordance with law and duly considered all the relevant documents
before pre-qualifying 2000 TRANSPORT.
It goes without saying that the action in Civil Case No. 95-72586 is
premature and consequently fails to state a cause of action. The
allegations of the complaint therein focused on the irregularity in the
process of obtaining corporate personality, that is, the alleged falsification
of the Article of Incorporation of 2000 TRANSPORT, and the misdeed in
securing a certificate of public convenience for operating taxi services
when 2000 TRANSPORT was allegedly a dummy corporation for two (2)
Korean nationals. Clearly, in the absence of any finding of irregularity
from the appropriate government agencies tasked to deal with these
concerns, which at all the time relevant to the civil case would be the
Securities and Exchange Commission37 and the Land Transportation
Franchising and Regulatory Board,38 courts must defer to the presumption
that these agencies had performed their functions regularly. The ultimate
facts upon which depends the complaint in Civil Case No. 95-72586
would be matters which fall within the technical competence of
government agencies over which courts could not prematurely rule upon
and enter relief as prayed for in the complaint -
In recent years, it has been the jurisprudential trend to apply the
doctrine of primary jurisdiction in many cases involving matters that
demand the special competence of administrative agencies. It may
occur that the Court has jurisdiction to take cognizance of a
particular case, which means that the matter involved is also judicial
in character. However, if the case is such that its determination
requires the expertise, specialized skills and knowledge of the proper
administrative bodies because technical matters or intricate questions
of facts are involved, then relief must first be obtained in an
administrative proceeding before a remedy will be supplied by the
courts even though the matter is within the proper jurisdiction of a
court. This is the doctrine of primary jurisdiction. It applies "where a
claim is originally cognizable in the courts, and comes into play
whenever enforcement of the claim requires the resolution of issues
which, under a regulatory scheme, have been placed within the
special competence of an administrative body; in such case the
judicial process is suspended pending referral of such issues to the
administrative body for its view" x x x x "Uniformity and
consistency in the regulation of business entrusted to an
administrative agency are secured, and the limited function of review
by the judiciary are more rationally exercised, by preliminary resort,
for ascertaining and interpreting the circumstances underling legal
issues, to agencies that are better equipped than courts by
specialization, by insight gained through experience, and by more
flexible procedure" x x x x39
The propriety of the Order of dismissal of Civil Case No. 95-72586
should render moot and academic the instant petition for review of the
Decision of the Court of Appeals in CA-G.R. SP No. 36345, "Two
Thousand (2000) Transport Corporation v. Hon. Guillermo L. Loja, Sr.,
as Judge, RTC of Manila, Branch 26, and G & S Transport Corporation,"
and in CA-G.R. SP No. 36356, "Nissan Car Lease Philippines, Inc. v.
Hon. Guillermo L. Loja, Sr., as Judge, RTC of Manila, Branch 26, and G
& S Transport Corporation." It is well settled that the issue of propriety
of obtaining a preliminary injunction dies with the main case from which
it logically sprang. Such a provisional remedy, like any other
interlocutory order, cannot survive the main case of which it is but an
incident.40 Indeed what more could this Court enjoin when the complaint
has already been dismissed? To be sure, even a ruling granting the
petition at bar would not revive the civil case much less change our ruling
in the petition for certiorari under Rule 65.41 The remedy in question is
precisely termed preliminary since it is meant to restrain acts prior to the
rendition of a judgment or a final order.42
Be that as it may, we find the assailed Decision of the Court of Appeals to
be in accord with law and jurisprudence. For starters, it is well settled that
before a writ of preliminary injunction may be issued, there must be a
clear showing by the complainant that there exists a right to be protected
and that the acts against which the writ is to be directed are violative of
established right.43 In the instant case, it is an undisputed fact that the
contract of petitioner G & S for coupon taxi service with MIAA had
already expired and that a new concessionaire had been chosen.
Admittedly there was no existing contractual relationship between MIAA
and petitioner G & S since the former was under no legal obligation to
renew the concession contract. Consequently petitioner had no right
which needed protection by a writ of preliminary injunction.
Furthermore, PD 1818 was clearly applicable to divest the trial court of
authority to issue the injunctive writ against the execution of the
concession contracts with 2000 TRANSPORT and NISSAN. Their
respective contracts involved public utility which were within the
protective mantle of the decree. Moreover, as shown above, the issues
raised in the complaint in Civil Case No. 95-72586 did not involve
matters outside the technical competence of MIAA or veritable questions
of law. The contentions of petitioner G & S were precisely directed
towards urging the trial court to substitute its judgment for that of MIAA
in determining to which bidders the concession contracts should be
awarded. Hence, the appellate court correctly nullified the injunctive writ
on the ground that it violated PD 1818.
We also share the view of the Court of Appeals that determination of the
winning bidders is a matter falling within the exclusive jurisdiction of the
sponsoring government agency. While petitioner G & S asserts that
MIAA committed grave abuse of discretion in pre-qualifying 2000
TRANSPORT, there certainly was no cause of action in similarly seeking
the nullification of the winning bid of NISSAN. From the beginning, G &
S had no reason to restrain NISSAN from the fruits of its efforts in
winning the bid. Similarly, MIAA was merely relying upon the Terms of
Reference for Coupon Taxi Service Concession when it pre-qualified
2000 TRANSPORT and proceeded with the bidding, hence, MIAA could
not have abused its discretion in doing so. On the contrary, it would have
been grave abuse of discretion if MIAA were to suddenly abandon the
Terms of Reference if only to accommodate the objections of G & S.
Be it understood that in the instant proceedings we have confined
ourselves within the parameters of the propriety of the dismissal of Civil
Case No. 95-72586 and the impropriety of the issuance of a writ of
preliminary injunction by the trial court. Hence we are not putting to rest,
indeed not by a long shot on the ground of res judicata, the contentions
ardently raised by petitioner G & S on the absence of qualifications of
respondent 2000 TRANSPORT as a corporate entity to operate a public
utility. In the instant case, our emphasis has been the proper observance
of the procedure in the assertion of grievances which in this regard would
be to bring up the alleged irregularities in the creation and operation of
2000 TRANSPORT to the proper authorities as discussed above.
It is important to note that the claims of petitioner G & S assume great
importance when argued in the proper forum in light of the sudden
desertion by respondent 2000 TRANSPORT from the instant proceedings
without leaving word on its new address nor advice as to its new counsel
or attorney-in-fact. Without so much as a by-your-leave, 2000
TRANSPORT abandoned the instant case after filing its comment to the
instant petition and ignored all court processes requiring the submission
of a memorandum in its behalf. The contemptuous conduct of 2000
TRANSPORT has unfortunately wasted our efforts in trying to deliver
the various court orders to its address on record, 44 and has embarrassingly
caused the imposition of fine upon and the detention of one (1) of its
lawyers for direct contempt of court arising from his failure to file the
memorandum for 2000 TRANSPORT despite repeated warnings.45
WHEREFORE, the consolidated Petition for Review under Rule 45 and
Petition for Certiorari under Rule 65 are DENIED and DISMISSED,
respectively. The Decision of the Court of Appeals in CA-G.R. SP No.
36345, "Two Thousand (2000) Transport Corporation v. Hon. Guillermo
L. Loja, Sr., as Judge, RTC of Manila, Branch 26, and G & S Transport
Corporation," and in CA-G.R. SP No. 36356, "Nissan Car Lease
Philippines, Inc. v. Hon. Guillermo L. Loja, Sr., as Judge, RTC of Manila,
Branch 26, and G & S Transport Corporation," as well as the Order of
the RTC-Br. 7, Manila, in Civil Case No. 95-72586, "G & S Transport
Corporation v. Manila International Airport Authority, Guillermo G.
Cunanan, Two Thousand (2000) Transport Corporation and Nissan Car
Lease Philippines, Inc." is AFFIRMED. The writ of preliminary
injunction issued in Civil Case No. 95-72586 is SET ASIDE and
NULLIFIED, and Civil Case No. 95-72586 is DISMISSED without
prejudice to the filing of the appropriate complaint/action with the
concerned regulatory agencies.
Let copy of this Decision be served upon the Land Transportation
Franchising and Regulatory Board and the Securities and Exchange
Commission for their information and appropriate action. No
pronouncement as to costs. SO ORDERED.
G.R. No. 145956 May 29, 2002
NORTHWEST AIRLINES, petitioner, vs. DR. JAIME F. LAYA,
respondent.
This is a petition for review of the decision, promulgated on August 16,
2000, and the resolution, promulgated on November 14, 2000, of the
Court of Appeals in CA-G.R. No. 45688.1âwphi1.nêt
The facts of the case, as stated in the appellate court's decision, are as
follows:
On May 3, 1991, herein respondent Dr. Jaime F. Laya, a medical
practitioner, was bound for San Francisco via a first class booking with
Northwest Airlines (NWA) where, being a frequent passenger, he was a
member of the World Perks Club. After is luggage passed, and was
cleared, through the x-ray machine of the Ninoy Aquino International
Airport (NAIA), Dr. Laya proceeded to NWA's check-in counter and was
issued a boarding pass. However, while on his way to the first class
waiting lounge, Dr. Laya was approached by a NWA employee who
requested him to proceed to a long table where passengers were lined up.
There, the passengers' Samsonite hand-carried attaché cases were being
subjected to further inspection. Since he noticed that he was carrying an
attaché case similar to those being inspected, Dr. Laya acceded to the
request. However, in the course of the inspection, Dr. Laya noticed that
his attaché case was treated differently. While the other passengers were
eventually allowed to carry their cases on board the plane, Dr. Laya was
asked to place his attaché case in a black garbage bag and he was given
two (2) paper envelopes where he could put its contents.
Since Dr. Laya felt that he was singled out for this extraordinary
treatment, he requested that he be allowed to talk with the manager to
discuss his situation, and a certain Mr. Barreto approached him. While Dr.
Laya was explaining his plight, Mr. Rommel Evangelista, NWA's
assistant manager, told him that "even if you are the President of the
Philippines or the President of the United States we are going to do the
same."
Dr. Laya's situation was aggravated when the two (2) paper envelopes
proved to be too fragile for the contents of his attaché case. The
envelopes were eventually torn. Dr. Laya asked for a replacement and
was provided with a used Duty-Free bag.
Upon his arrival at San Francisco, Dr. Laya was accorded VIP 1 treatment
by NWA's ground personnel. Two (2) ground stewardesses asked for his
travel documents and declarations and they took care of his clearance and
admission papers. Dr. Laya was spared the trouble of having to fall in line
to have his papers processed. When he proceeded to the baggage claim
area, his check-in luggage and his Samsonite attaché case were already
ready for pick up.
On May 25, 1991, Dr. Laya wrote to NWA and reported the rude
treatment accorded him by its personnel. An exchange of communication
ensued but NWA did not heed his complaint. On October 9, 1991, Dr.
Laya's counsel sent a demand letter to NWA. NWA responded by
apologizing for whatever inconvenience Dr. Laya suffered but it refused
Dr. Laya's demand for indemnity. Instead, on October 31, 1991, the NWA
Customer Relations Office sent Dr. Laya a letter with a transportation
credit voucher worth US$100.00. Dr. Laya refused to accept the voucher
but kept it for evidentiary purposes, and he promptly filed a complaint for
damages against NWA before the Regional Trial Court of Quezon City,
Branch 84.
After trial, judgment was rendered in favor of Dr. Laya, and against
NWA, as follows:
VIEWED IN THE LIGHT OF THE ENTIRE RECORD, judgment is
hereby rendered ordering defendant to pay unto plaintiff:
 1. moral damages in the sum of P1Million;
2. exemplary damages of P500,000.00; and
3. attorney's fees of P50,000.00, plus costs.
SO ORDERED.2
Both parties appealed the decision. NWA appealed the unfavorable ruling
against it while Dr. Laya appealed the award in his favor of only
P1,000,000.00 moral damages and P500,000.00 exemplary damages.
In its decision, promulgated on August 16, 2000, the Court of Appeals
affirmed the trial court's decision with modifications by reducing the
award of moral damages to P500,000.00 and the exemplary damages to
P250,000.00.3
Its motion for reconsideration having been denied, NWA came to this
Court for relief, alleging that:
THE COURT OF APPEALS GRAVELY ERRED IN RULING
THAT RESPONDENT IS ENTITLED TO THE AWARD OF
DAMAGES.
THE COURT OF APPEALS GRAVELY ERRED IN NOT RULING
THAT THE LOWER COURT ERRED IN FINDING THAT
UNITED STATES FEDERAL AVIATION ADMINISTRATION
("FAA") SECURITY DIRECTIVE NO. 91-11 IS
UNREASONABLE AND DID NOT COINCIDE WITH THE
CARRIER'S PROMISE OF POLITE AND GRACIOUS SERVICE.
THE COURT OF APPEALS GRAVELY (ERRED) IN AWARDING
RESPONDENT MORAL DAMAGES OF P500,000.00, AND
EXEMPLARY DAMAGES OF P250,000.00 AND IN AFFIRMING
THE AWARD OF ATTORNEY'S FEES OF P50,000.00 AND
PAYMENT OF COSTS. THE DAMAGES AWARDED BY THE
COURT OF APPEALS TO RESPONDENT ARE EXORBITANT
AND CONSTITUTE IMPERMISSIBLE UNJUST ENRICHMENT.
THE COURT OF APPEALS GRAVELY ERRED IN NOT
AWARDING NORTHWEST EXEMPLARY DAMAGES,
ATTORNEY'S FEES AND EXPENSES OF LITIGATION AS
PRAYED FOR.4
The tragic event that unfolded on September 11, 2001 underscored, more
than ever, that airport and airline personnel could not afford any lapse in
the implementation of security measures meant to ensure the safety of
airplane crew and passengers. Airline carriers hold the lives of passengers
in their hands and they must at all times be vigilant on matters affecting
their safety.
After a careful review of the records of this case, the Court finds that the
security procedures adopted by NWA was only the result of a directive
issued by the Federal Aviation Administration (FAA) of which NWA,
being a U.S. carrier, is subject to. FAA Security Directive No. 91-11,
which was in effect at the time of the incident, states:
Threat Information:
A. SD 91-06 provided the following information: FAA has received
information stating that two-man terrorist teams have been trained in
the use of briefcase bombs. The bombs are concealed in brown
Samsonite briefcases which contain a total of two (2) kilograms of
high explosives concealed throughout the briefcase under the liner.
The devise is armed by attaching a battery to a nine-volt battery
connector concealed behind the briefcases' combination lock.
Several members of the terms are Middle Easterners in their 20s
selected due to their athletic ability, and were either well-travelled or
had business experience. The teams may be targeting areas in Asia,
Africa, and possibly Western Europe.
B. SC 91-09 provided additional information which indicated that
there were at least two additional devices which might be used in
terrorist attacks. The additional devices also contain two kilograms of
high explosives in the briefcase liners.
- A second bomb may be concealed in a black Samsonite briefcase.
Detonation of the explosive concealed in this device requires the use
of a timer, blasting cap, and power supply.
- A third type of bomb is concealed in a burgundy Samsonite
briefcase. This configuration has an ANTI-DISTURBANCE type
device which is activated by pulling an arming pin concealed either
near the briefcase handle or one of the lock latches. Once the pin is
pulled, the bomb arms after a short delay. The duration of the delay
was not specified.
Action required by U.S. Air Carriers:
A. The following procedures shall be applied to all hard-shell
black, brown, or burgundy Samsonite briefcases by all U.S. air
carriers on flights departing Asia, Africa and Europe.
1. If the briefcase is discovered unattended in an airport or in the
terminal area, isolate the briefcase, ensure that the briefcase is not
moved or opened, and immediately notify local police/security
authorities, proving them with the information in this
Directive.1âwphi1.nêt
2. All black, brown, or burgundy Samsonite Briefcases shall only
be transported as checked baggage.All such briefcases shall be
externally examined for signs of alteration. If at any time during this
initial examination the briefcase is suspected of having been altered
or appears to conceal a battery, blasting cap, or electrical component,
isolate the briefcase, ensure that the briefcase is not moved or
opened, and immediately notify local police/security authorities,
providing them with the information in this Directive.
3. Briefcases which exhibit no signs of alteration shall be x-rayed.
The briefcase shall then be emptied, all batteries (C, D, AA, AAA, 9v
and 6v lantern) shall be removed, the empty briefcase shall be
internally examined for signs of alteration and excess weight, and the
empty briefcase shall be subjected to a two-lane x-ray examination.
If at any time during this inspection process the briefcase is
suspected of having been altered or appear to conceal a battery,
blasting cap, or electrical component, isolate the briefcase and
immediately notify local police/security authorities, providing them
with the information in this directive.
4. The air carrier shall deny the passenger any access to the
briefcase after it has been tendered until the briefcase is claimed
by the passenger upon arrival at destination. Following the
application of the procedures above, the briefcase shall be
transported as checked baggage. However, the contents of the
briefcase may be returned to the passenger for personal use
aboard the flight.5
It may be true that Dr. Laya was greatly inconvenienced by the act of
NWA when his attaché case was subjected to further inspection and he
was not allowed to bring it on board the plane. However, it does not
appear that he was singled out and discriminated by the employees of
NWA. According to Dr. Laya himself, other Caucasians and Asian
passengers carrying attaché case similar to his were also required to
undergo further inspection.6
The Court disagrees with both the trial court and the appellate court that
the letter of NWA to Dr. Laya was an admission of guilt as there was
nothing in the tenor of the letter that would support such conclusion. The
letter read:
Dear Dr. Laya:
Thank you for your letter to Northwest Airlines. I am terribly sorry it
has taken me longer than I had hoped to personally reply to your
correspondence.
Our goal at Northwest is to be the carrier of distinct preference, and
feedback like yours is critical to our success. Customer observations,
suggestions, and experiences form the basis for improved operations.
With that in mind, I have shared your comments with my colleagues
in the responsible departments.
We hope to have another chance to show that we can provide the
high quality of service our customers expect and deserve. As a
gesture of goodwill, I am enclosing transportation credit which may
be applied to travel on our airline within twelve months from the date
of issue.
We recognize that travelers have a choice a airlines, and we deeply
appreciate those who choose Northwest. We hope to have the
privilege of serving your future travel needs.
Indeed, the credit voucher appears nothing more than a "gesture of
goodwill" rather than an acknowledgment of guilt.
Nevertheless, while the protection of passengers must take precedence
over convenience, the implementation of security measures must be
attended by basic courtesies. The Court is inclined to believe the
testimony of Dr. Laya that the personnel who examined his attaché case
were rude, brusque, arrogant and domineering 8 and that the manager who
attended to him answered his queries in a reprehensible manner,9 thus
causing him humiliation as the other passengers were already looking at
him.10 Hence:
ATTY. ERMITAÑO: Q: Now, who removed the contents as you claimed
that the contents of black Samsonite attaché case was ransacked by
whom?
A. Well, they said, they were employees of the Northwest Airlines and
they said there was an instruction to examine my luggage which I readily
consented. For I believed, it's for security reason.
ATTY. ERMITAÑO: Q. How was the examination conducted?
A. That's precisely, the problem, Sir, it's the manner it was conducted.
COURT: Q. How?
A. They were rude to me, brusque, arrogant and they were domineering,
they don't even like to listen to what I was saying and they were
autocratic.
ATTY. ERMITAÑO: Q. Why do you say that they were domineering and
autocratic?
A. Because I wanted these things (my personal effects) to be placed in the
briefcase after thorough examination, but they said in a loud voice – No.
That's an order they said and you cannot go against them and everything I
say or explain they say no.
ATTY. ERMITAÑO: Q. In what tone of voice was this reply "no" made
to you?
A. Well, in a loud voice attracting other passengers while others were
looking at them with dismay and I was so embarrassed because as I said,
I was singled out. The others I saw did not have the same experience
before me.
ATTY. ERMITAÑO: Q. So you said that the contents of your attaché case
were placed in these two (2) paper envelopes which are now quite torn
was this in the same condition at the time that the contents of your attaché
case was placed in the envelopes or in the different condition?
A. No, it looks brand new when it was first given to me but when they
put the contents (my personal effects) and it was bulging I have to carry it
on my breast on my way to the VIP room that's why it started a little bit
one by one falling apart. That's why I have to call the attention of the lady
in waiting there in the VIP room so that I could talk to the manager.
Q. Was the manager as requested by you attended to you?
A. No, it was not the manager but the assistant managers by the name of
Barreto and Evangelista one after the other in that order.
COURT: Q. Manager of whom?
A. Manager of Northwest Airlines.
ATTY. ERMITAÑO: Q. How do you know that they were officers of the
Northwest Airlines?
A. Because they were called by the lady on the World Perk Club
room upon my request. And when I told Barreto about the incident he
cannot answer and suddenly Evangelista barged in who was arrogant,
brusque and rude.
Q. What transpired, if any, between you and Evangelista?
A. Well, that's where again I was so infuriated because I was
explaining to him what happened and I was trying to show that
bulging bag that I placed in one corner of the VIP room while the
other passengers were watching it. While I was continuously
explaining to him what happened, he told me, look, Dr. Laya even if
you are the president of the Philippines or president of the United
States you are going to undergo the same.
Q. In what tone of voice made by Mr. Evangelista?
A. It's exactly a loud voice with unwarranted pride. It's a
reprehensible way of talking.
ATTY. ERMITAÑO: Q. At that particular instance of conversation
was going on between you and Evangelista defendant corporation,
did you notice, if any, what the other passengers were doing in the
lounge?
A. Precisely, Sir, they were watching me and some of them are trying
to hold his head this way. (Witness turning his head from one to the
other). And I don't know what that mean. Anyway, they were just
curious looking and no one was smiling. They were turning their
 head this way with a facial expression of pity. Some of them were
busy arranging their personal effects on their respective briefcases.
On this score, we agree with the trial court and the Court of Appeals in
saying that "(a)ny security measure must coincide with the passenger's
right to be treated by the carrier with kindness, respect and utmost
consideration in all matters relative to their trip." 12 The Court is satisfied
that Dr. Laya suffered mental anguish and serious anxiety because of his
experience with NWA personnel for which he should be awarded moral
damages. Dr. Laya is also entitled to exemplary damages by way of
correction to the NWA for the public good13 and in view of the
malevolent manner by which the NWA personnel treated Dr.
Laya.1âwphi1.nêt
Still, the Court wishes to reiterate that damages are not intended to enrich
a plaintiff at the expense of the defendant.14 Hence, we are further
reducing the award of moral damages from P500,000.00 to P100,000.00
and the amount of exemplary damages is reduced from P250,000.00 to
P50,000.00. The Court, likewise, awards the attorney's fees in the amount
of P25,000.00.15
WHEREFORE, the petition is PARTIALLY GRANTED by ordering
Northwest Airlines to pay Dr. Jaime F. Laya the sum of P100,000.00 as
moral damages, P50,000.00 as exemplary damages and P25,000.00
representing attorney's fees. SO ORDERED.
G.R. No. 143133 June 5, 2002
BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and
JARDINE DAVIES TRANSPORT SERVICES, INC., petitioners, vs.
PHILIPPINE FIRST INSURANCE CO., INC., respondents.
Proof of the delivery of goods in good order to a common carrier and of
their arrival in bad order at their destination constitutes prima facie fault
or negligence on the part of the carrier. If no adequate explanation is
given as to how the loss, the destruction or the deterioration of the goods
happened, the carrier shall be held liable therefor.
Statement of the Case Before us is a Petition for Review under Rule 45
of the Rules of Court, assailing the July 15, 1998 Decision 1 and the May
2, 2000 Resolution2 of the Court of Appeals3 (CA) in CA-GR CV No.
53571. The decretal portion of the Decision reads as follows:
"WHEREFORE, in the light of the foregoing disquisition, the
decision appealed from is hereby REVERSED and SET ASIDE.
Defendants-appellees are ORDERED to jointly and severally pay
plaintiffs-appellants the following:
'1) FOUR Hundred Fifty One Thousand Twenty-Seven Pesos
and 32/100 (P451,027.32) as actual damages, representing the
value of the damaged cargo, plus interest at the legal rate from
the time of filing of the complaint on July 25, 1991, until fully
paid;
'2) Attorney's fees amounting to 20% of the claim; and
'3) Costs of suit.'"4
The assailed Resolution denied petitioner's Motion for Reconsideration.
The CA reversed the Decision of the Regional Trial Court (RTC) of
Makati City (Branch 134), which had disposed as follows:
"WHEREFORE, in view of the foregoing, judgment is hereby
rendered, dismissing the complaint, as well as defendant's
counterclaim."5
The Facts The factual antecedents of the case are summarized by the
Court of Appeals in this wise:
"On June 13, 1990, CMC Trading A.G. shipped on board the M/V
'Anangel Sky' at Hamburg, Germany 242 coils of various Prime Cold
Rolled Steel sheets for transportation to Manila consigned to the
Philippine Steel Trading Corporation. On July 28, 1990, M/V
Anangel Sky arrived at the port of Manila and, within the subsequent
days, discharged the subject cargo. Four (4) coils were found to be in
bad order B.O. Tally sheet No. 154974. Finding the four (4) coils in
their damaged state to be unfit for the intended purpose, the
consignee Philippine Steel Trading Corporation declared the same as
total loss.1âwphi1.nêt
"Despite receipt of a formal demand, defendants-appellees refused to
submit to the consignee's claim. Consequently, plaintiff-appellant
paid the consignee five hundred six thousand eighty six & 50/100
pesos (P506,086.50), and was subrogated to the latter's rights and
causes of action against defendants-appellees. Subsequently,
plaintiff-appellant instituted this complaint for recovery of the
amount paid by them, to the consignee as insured.
"Impugning the propriety of the suit against them, defendants-
appellees imputed that the damage and/or loss was due to pre-
shipment damage, to the inherent nature, vice or defect of the goods,
or to perils, danger and accidents of the sea, or to insufficiency of
packing thereof, or to the act or omission of the shipper of the goods
or their representatives. In addition thereto, defendants-appellees
argued that their liability, if there be any, should not exceed the
limitations of liability provided for in the bill of lading and other
pertinent laws. Finally, defendants-appellees averred that, in any
event, they exercised due diligence and foresight required by law to
prevent any damage/loss to said shipment."6
Ruling of the Trial Court The RTC dismissed the Complaint because
respondent had failed to prove its claims with the quantum of proof
required by law.7
It likewise debunked petitioners' counterclaim, because respondent's suit
was not manifestly frivolous or primarily intended to harass them.8
Ruling of the Court of Appeals In reversing the trial court, the CA ruled
that petitioners were liable for the loss or the damage of the goods
shipped, because they had failed to overcome the presumption of
negligence imposed on common carriers.
The CA further held as inadequately proven petitioners' claim that the
loss or the deterioration of the goods was due to pre-shipment damage. 9 It
likewise opined that the notation "metal envelopes rust stained and
slightly dented" placed on the Bill of Lading had not been the proximate
cause of the damage to the four (4) coils.10
As to the extent of petitioners' liability, the CA held that the package
limitation under COGSA was not applicable, because the words "L/C No.
90/02447" indicated that a higher valuation of the cargo had been
declared by the shipper. The CA, however, affirmed the award of
attorney's fees.
Hence, this Petition.11
Issues In their Memorandum, petitioners raise the following issues for
the Court's consideration:
A. "Whether or not plaintiff by presenting only one witness who
has never seen the subject shipment and whose testimony is purely
hearsay is sufficient to pave the way for the applicability of Article 1735
of the Civil Code;
B. "Whether or not the consignee/plaintiff filed the required notice
of loss within the time required by law;
C. "Whether or not a notation in the bill of lading at the time of
loading is sufficient to show pre-shipment damage and to exempt herein
defendants from liability;
D. "Whether or not the "PACKAGE LIMITATION" of liability
under Section 4 (5) of COGSA is applicable to the case at bar."12
In sum, the issues boil down to three:
1. Whether petitioners have overcome the presumption of negligence
of a common carrier
2. Whether the notice of loss was timely filed
3. Whether the package limitation of liability is applicable
This Court's Ruling The Petition is partly meritorious.
First Issue: Proof of Negligence Petitioners contend that the
presumption of fault imposed on common carriers should not be applied
on the basis of the lone testimony offered by private respondent. The
contention is untenable.
Well-settled is the rule that common carriers, from the nature of their
business and for reasons of public policy, are bound to observe
extraordinary diligence and vigilance with respect to the safety of the
goods and the passengers they transport.13 Thus, common carriers are
required to render service with the greatest skill and foresight and "to use
all reason[a]ble means to ascertain the nature and characteristics of the
goods tendered for shipment, and to exercise due care in the handling and
stowage, including such methods as their nature requires."14 The
extraordinary responsibility lasts from the time the goods are
unconditionally placed in the possession of and received for
transportation by the carrier until they are delivered, actually or
constructively, to the consignee or to the person who has a right to
receive them.15
This strict requirement is justified by the fact that, without a hand or a
voice in the preparation of such contract, the riding public enters into a
contract of transportation with common carriers.16 Even if it wants to, it
cannot submit its own stipulations for their approval. 17 Hence, it merely
adheres to the agreement prepared by them.
Owing to this high degree of diligence required of them, common
carriers, as a general rule, are presumed to have been at fault or negligent
if the goods they transported deteriorated or got lost or destroyed.18 That
is, unless they prove that they exercised extraordinary diligence in
transporting the goods.19 In order to avoid responsibility for any loss or
damage, therefore, they have the burden of proving that they observed
such diligence.20
21
However, the presumption of fault or negligence will not arise if the
loss is due to any of the following causes: (1) flood, storm, earthquake,
lightning, or other natural disaster or calamity; (2) an act of the public
enemy in war, whether international or civil; (3) an act or omission of the
shipper or owner of the goods; (4) the character of the goods or defects in
the packing or the container; or (5) an order or act of competent public
authority.22 This is a closed list. If the cause of destruction, loss or
deterioration is other than the enumerated circumstances, then the carrier
is liable therefor.23
Corollary to the foregoing, mere proof of delivery of the goods in good
order to a common carrier and of their arrival in bad order at their
destination constitutes a prima facie case of fault or negligence against
the carrier. If no adequate explanation is given as to how the
deterioration, the loss or the destruction of the goods happened, the
transporter shall be held responsible.24
That petitioners failed to rebut the prima facie presumption of negligence
is revealed in the case at bar by a review of the records and more so by
the evidence adduced by respondent.25
First, as stated in the Bill of Lading, petitioners received the subject
shipment in good order and condition in Hamburg, Germany.26
Second, prior to the unloading of the cargo, an Inspection Report 27
prepared and signed by representatives of both parties showed the steel
bands broken, the metal envelopes rust-stained and heavily buckled, and
the contents thereof exposed and rusty.
Third, Bad Order Tally Sheet No. 15497928 issued by Jardine Davies
Transport Services, Inc., stated that the four coils were in bad order and
condition. Normally, a request for a bad order survey is made in case
there is an apparent or a presumed loss or damage.29
Fourth, the Certificate of Analysis30 stated that, based on the sample
submitted and tested, the steel sheets found in bad order were wet with
fresh water.
Fifth, petitioners -- in a letter 31 addressed to the Philippine Steel Coating
Corporation and dated October 12, 1990 -- admitted that they were aware
of the condition of the four coils found in bad order and condition.
These facts were confirmed by Ruperto Esmerio, head checker of BM
Santos Checkers Agency. Pertinent portions of his testimony are
reproduce hereunder:
Q. Mr. Esmerio, you mentioned that you are a Head Checker. Will you
inform the Honorable Court with what company you are connected?
A. BM Santos Checkers Agency, sir.
Q. How is BM Santos checkers Agency related or connected with
defendant Jardine Davies Transport Services?
A. It is the company who contracts the checkers, sir.
Q. You mentioned that you are a Head Checker, will you inform this
Honorable Court your duties and responsibilities?
A. I am the representative of BM Santos on board the vessel, sir, to
supervise the discharge of cargoes.
Q. On or about August 1, 1990, were you still connected or employed
with BM Santos as a Head Checker?
A. Yes, sir.
Q. And, on or about that date, do you recall having attended the
discharging and inspection of cold steel sheets in coil on board the
MV/AN ANGEL SKY?
A. Yes, sir, I was there.
Q. Based on your inspection since you were also present at that time, will
you inform this Honorable Court the condition or the appearance of the
bad order cargoes that were unloaded from the MV/ANANGEL SKY?
ATTY. MACAMAY: Objection, Your Honor, I think the document itself
reflects the condition of the cold steel sheets and the best evidence is the
document itself, Your Honor that shows the condition of the steel sheets.
COURT: Let the witness answer.
A. The scrap of the cargoes is broken already and the rope is loosen and
the cargoes are dent on the sides."32
All these conclusively prove the fact of shipment in good order and
condition and the consequent damage to the four coils while in the
possession of petitioner,33 who notably failed to explain why.34
Further, petitioners failed to prove that they observed the extraordinary
diligence and precaution which the law requires a common carrier to
know and to follow to avoid damage to or destruction of the goods
entrusted to it for safe carriage and delivery.35
True, the words "metal envelopes rust stained and slightly dented" were
noted on the Bill of Lading; however, there is no showing that petitioners
exercised due diligence to forestall or lessen the loss.36 Having been in
the service for several years, the master of the vessel should have known
at the outset that metal envelopes in the said state would eventually
deteriorate when not properly stored while in transit. 37 Equipped with the
proper knowledge of the nature of steel sheets in coils and of the proper
way of transporting them, the master of the vessel and his crew should
have undertaken precautionary measures to avoid possible deterioration
of the cargo. But none of these measures was taken.38 Having failed to
discharge the burden of proving that they have exercised the
extraordinary diligence required by law, petitioners cannot escape
liability for the damage to the four coils.39
In their attempt to escape liability, petitioners further contend that they
are exempted from liability under Article 1734(4) of the Civil Code. They
cite the notation "metal envelopes rust stained and slightly dented"
printed on the Bill of Lading as evidence that the character of the goods
or defect in the packing or the containers was the proximate cause of the
damage. We are not convinced.
From the evidence on record, it cannot be reasonably concluded that the
damage to the four coils was due to the condition noted on the Bill of
Lading.40 The aforecited exception refers to cases when goods are lost or
damaged while in transit as a result of the natural decay of perishable
goods or the fermentation or evaporation of substances liable therefor, the
necessary and natural wear of goods in transport, defects in packages in
which they are shipped, or the natural propensities of animals. 41 None of
these is present in the instant case.
Further, even if the fact of improper packing was known to the carrier or
its crew or was apparent upon ordinary observation, it is not relieved of
liability for loss or injury resulting therefrom, once it accepts the goods
notwithstanding such condition.42 Thus, petitioners have not successfully
proven the application of any of the aforecited exceptions in the present
case.43
Second Issue: Notice of Loss Petitioners claim that pursuant to Section
3, paragraph 6 of the Carriage of Goods by Sea Act 44 (COGSA),
respondent should have filed its Notice of Loss within three days from
delivery. They assert that the cargo was discharged on July 31, 1990, but
that respondent filed its Notice of Claim only on September 18, 1990.45
We are not persuaded. First, the above-cited provision of COGSA
provides that the notice of claim need not be given if the state of the
goods, at the time of their receipt, has been the subject of a joint
inspection or survey. As stated earlier, prior to unloading the cargo, an
Inspection Report46 as to the condition of the goods was prepared and
signed by representatives of both parties.47
Second, as stated in the same provision, a failure to file a notice of claim
within three days will not bar recovery if it is nonetheless filed within one
year.48 This one-year prescriptive period also applies to the shipper, the
consignee, the insurer of the goods or any legal holder of the bill of
lading.49
In Loadstar Shipping Co., Inc, v. Court of Appeals,50 we ruled that a claim
is not barred by prescription as long as the one-year period has not
lapsed. Thus, in the words of the ponente, Chief Justice Hilario G. Davide
Jr.:
"Inasmuch as the 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."
In the present case, the cargo was discharged on July 31, 1990, while the
Complaint51 was filed by respondent on July 25, 1991, within the one-
year prescriptive period.
Third Issue: Package Limitation Assuming arguendo they are liable for
respondent's claims, petitioners contend that their liability should be
limited to US$500 per package as provided in the Bill of Lading and by
Section 4(5)52 of COGSA.53
On the other hand, respondent argues that Section 4(5) of COGSA is
inapplicable, because the value of the subject shipment was declared by
petitioners beforehand, as evidenced by the reference to and the insertion
of the Letter of Credit or "L/C No. 90/02447" in the said Bill of Lading.54
A bill of lading serves two functions. First, it is a receipt for the goods
shipped.53 Second, it is a contract by which three parties -- namely, the
shipper, the carrier, and the consignee -- undertake specific
responsibilities and assume stipulated obligations.56 In a nutshell, the
acceptance of the bill of lading by the shipper and the consignee, with full
knowledge of its contents, gives rise to the presumption that it constituted
a perfected and binding contract.57
Further, a stipulation in the bill of lading limiting to a certain sum the
common carrier's liability for loss or destruction of a cargo -- unless the
shipper or owner declares a greater value58 -- is sanctioned by law.59
There are, however, two conditions to be satisfied: (1) the contract is
reasonable and just under the circumstances, and (2) it has been fairly and
freely agreed upon by the parties.60 The rationale for this rule is to bind
the shippers by their agreement to the value (maximum valuation) of their
goods.61
It is to be noted, however, that the Civil Code does not limit the liability
of the common carrier to a fixed amount per package.62 In all matters not
regulated by the Civil Code, the right and the obligations of common
carriers shall be governed by the Code of Commerce and special laws. 63
Thus, the COGSA, which is suppletory to the provisions of the Civil
Code, supplements the latter by establishing a statutory provision limiting
the carrier's liability in the absence of a shipper's declaration of a higher
value in the bill of lading.64 The provisions on limited liability are as
much a part of the bill of lading as though physically in it and as though
placed there by agreement of the parties.65
In the case before us, there was no stipulation in the Bill of Lading 66
limiting the carrier's liability. Neither did the shipper declare a higher
valuation of the goods to be shipped. This fact notwithstanding, the
insertion of the words "L/C No. 90/02447 cannot be the basis for
petitioners' liability.
First, a notation in the Bill of Lading which indicated the amount of the
Letter of Credit obtained by the shipper for the importation of steel sheets
did not effect a declaration of the value of the goods as required by the
bill.67 That notation was made only for the convenience of the shipper and
the bank processing the Letter of Credit.68
Second, in Keng Hua Paper Products v. Court of Appeals,69 we held that a
bill of lading was separate from the Other Letter of Credit arrangements.
We ruled thus:
"(T)he contract of carriage, as stipulated in the bill of lading in the
present case, must be treated independently of the contract of sale
between the seller and the buyer, and the contract of issuance of a
 letter of credit between the amount of goods described in the
commercial invoice in the contract of sale and the amount allowed in
the letter of credit will not affect the validity and enforceability of the
contract of carriage as embodied in the bill of lading. As the bank
cannot be expected to look beyond the documents presented to it by
the seller pursuant to the letter of credit, neither can the carrier be
expected to go beyond the representations of the shipper in the bill of
lading and to verify their accuracy vis-à-vis the commercial invoice
and the letter of credit. Thus, the discrepancy between the amount of
goods indicated in the invoice and the amount in the bill of lading
cannot negate petitioner's obligation to private respondent arising
from the contract of transportation."70
In the light of the foregoing, petitioners' liability should be computed
based on US$500 per package and not on the per metric ton price
declared in the Letter of Credit.71 In Eastern Shipping Lines, Inc. v.
Intermediate Appellate Court,72 we explained the meaning of packages:
"When what would ordinarily be considered packages are shipped in
a container supplied by the carrier and the number of such units is
disclosed in the shipping documents, each of those units and not the
container constitutes the 'package' referred to in the liability
limitation provision of Carriage of Goods by Sea Act."
Considering, therefore, the ruling in Eastern Shipping Lines and the fact
that the Bill of Lading clearly disclosed the contents of the containers, the
number of units, as well as the nature of the steel sheets, the four
damaged coils should be considered as the shipping unit subject to the
US$500 limitation.1âwphi1.nêt
WHEREFORE, the Petition is partly granted and the assailed Decision
MODIFIED. Petitioners' liability is reduced to US$2,000 plus interest at
the legal rate of six percent from the time of the filing of the Complaint
on July 25, 1991 until the finality of this Decision, and 12 percent
thereafter until fully paid. No pronouncement as to costs.
SO ORDERED.
G.R. No. 143008 June 10, 2002
SMITH BELL DODWELL SHIPPING AGENCY CORPORATION,
petitioner, vs.
CATALINO BORJA and INTERNATIONAL TO WAGE AND
TRANSPORT CORPORATION, respondents.
The owner or the person in possession and control of a vessel is liable for
all natural and proximate damages caused to persons and property by
reason of negligence in its management or navigation. The liability for
the loss of the earning capacity of the deceased is fixed by taking into
account the net income of the victim at the time of death -- of the incident
in this case -- and that person's probable life expectancy.
The Case Before us is a Petition for Review on Certiorari under Rule 45
of the Rules of Court, challenging the March 6, 2000 Decision 1 and the
April 25, 2000 Resolution2 of the Court of Appeals3 (CA) in CA-GR CV
No. 57470. The assailed Decision disposed as follows:
"WHEREFORE, premises considered, the instant appeal is hereby
DENIED. The questioned decision of the lower court is hereby
AFFIRMED in toto. No pronouncement as to costs."4
Reconsideration was denied in the assailed Resolution.
The Facts The facts of the case are set forth by the CA as follows:
"It appears that on September 23, 1987, Smith Bell [herein petitioner]
filed a written request with the Bureau of Customs for the attendance of
the latter's inspection team on vessel M/T King Family which was due to
arrive at the port of Manila on September 24, 1987.
"Said vessel contained 750 metric tons of alkyl benzene and methyl
methacrylate monomer.
"On the same day, Supervising Customs Inspector Manuel Ma. D. Nalgan
instructed [Respondent Catalino Borja] to board said vessel and perform
his duties as inspector upon the vessel's arrival until its departure. At that
time, [Borja] was a customs inspector of the Bureau of Customs receiving
a salay of P31,188.25 per annum.
"At about 11 o'clock in the morning on September 24, 1987, while M/T
King Family was unloading chemicals unto two (2) barges [--] ITTC 101
and CLC-1002 [--] owned by [Respondent] ITTC, a sudden explosion
occurred setting the vessels afire. Upon hearing the explosion, [Borja],
who was at that time inside the cabin preparing reports, ran outside to
check what happened. Again, another explosion was heard.
"Seeing the fire and fearing for his life, [Borja] hurriedly jumped over
board to save himself. However, the [water] [was] likewise on fire due
mainly to the spilled chemicals. Despite the tremendous heat, [Borja]
swam his way for one (1) hour until he was rescued by the people living
in the squatters' area and sent to San Juan De Dios Hospital.
"After weeks of intensive care at the hospital, his attending physician
diagnosed [Borja] to be permanently disabled due to the incident. [Borja]
made demands against Smith Bell and ITTC for the damages caused by
the explosion. However, both denied liabilities and attributed to each
other negligence."5
The trial court6 (RTC) ruled in favor of Respondent Borja and held
petitioner liable for damages and loss of income. The RTC disposed as
follows:
"WHEREFORE, premises considered, judgment is hereby rendered
ordering [Petitioner] Smith Bell Dodwell [S]hipping Agency
Corporation to pay [Borja]:
1. The amount of P495,360.00 as actual damages for loss of
earning capacity:
2. The amount of P100,000.00 for moral damages; and
3. The amount of P50,000.00 for and as reasonable attorney's
fees.
"The cross-claim of [Petitioner] Smith Bell Dodwell Shipping Agency
Corporation against co-defendant International Towage and Transport
Corporation and the latter's counterclaim against [Borja] and cross-claim
with compulsory counterclaim against Smith Bell are hereby ordered
dismissed."7
Ruling of the Court of Appeals Affirming the trial court, the CA
rejected the plea of petitioner that it be exonerated from liability for
Respondent Borja's injuries. Contrary to the claim of petitioner that no
physical evidence was shown to prove that the explosion had originated
from its vessel, the CA held that the fire had originated from M/T King
Family. This conclusion was amply supported by the testimonies of Borja
and Eulogio Laurente (the eyewitness of International Towage and
Transport Corporation or ITTC) as well as by the investigation conducted
by the Special Board of Marine Inquiry and affirmed by the secretary of
the Department of National Defense. On the other hand, the RTC, which
the CA sustained, had not given probative value to the evidence of
petitioner, whose sole eyewitness had not shown up for cross-
examination.
Hence, this Petition.8
The Issues In its Memorandum,9 petitioner raises the following issues:
"1. Whether petitioner should be held liable for the injuries of
Respondent Catalino Borja.
"2. Whether Respondent ITTC should be held liable for the injuries
of Respondent Catalino Borja.
"3. Assuming without admitting that Respondent Catalino Borja is
entitled to damages, whether Respondent Borja is entitled to the
amount of damages awarded to him by the trial court."10
Simply put, these issues can be summed up in these two questions: (1)
Who, if any, is liable for Borja's injuries? (2) What is the proper amount
of liability?
This Court's Ruling The Petition is partly meritorious.
First Issue: Responsibility for Injuries Petitioner avers that both lower
courts labored under a misapprehension of the facts. It claims that the
documents adduced in the RTC conclusively revealed that the explosion
that caused the fire on M/T King Family had originated from the barge
ITTC-101, a conclusion based on three grounds. First, the Survey Report
(Exh. "10") dated October 21, 1987 submitted by the Admiral Surveyors
and Adjusters, Inc., showed that no part of M/T King Family sustained
any sharp or violent damage that would otherwise be observed if indeed
an explosion had occurred on it. On the other hand, the fact that the
vessel sustained cracks on its shell plating was noted in two Survey
Reports from Greutzman Divers Underwater Specialist, dated October 6,
1987 (Exh. "11"), and during the underwater inspection on the sunken
barge ITTC-101.
Second, external fire damage on the hull of M/T King Family indicated
that the fire had started from outside the vessel and from ITTC-101. The
port side of the vessel to which the ITTC barge was tied was completely
gutted by fire, while the starboard side to which the barge CLC-1002 was
tied sustained only slight fire damage.
Third, testimonial evidence proved that the explosion came from the
barge of the ITTC and not from its vessel. Security Guard Vivencio
Estrella testified that he had seen the sudden explosion of monomer on
the barge with fire that went up to about 60 meters. Third Mate Choi
Seong Hwan and Second Mate Nam Bang Choun of M/T King Family
narrated that while they were discharging the chemicals, they saw and
heard an explosion from the barge ITTC-101. Chief Security Guard
Reynaldo Patron, in turn, testified that he was 7 to 10 meters away from
the barge when he heard the explosion from the port side of M/T King
Family and saw the barge already on fire.
We are not persuaded. Both the RTC and the CA ruled that the fire and
the explosion had originated from petitioner's vessel. Said the trial court:
"The attempts of [Petitioner] Smith Bell to shift the blame on x x x
ITTC were all for naught. First, the testimony of its alleged
eyewitness was stricken off the record for his failure to appear for
cross-examination (p. 361, Record). Second, the documents offered
to prove that the fire originated from barge ITTC-101 were all denied
admission by the [c]ourt for being, in effect, hearsay (pp. 335 and
362). x x x Thus, there is nothing in the record to support
[petitioner's] contention that the fire and explosion originated from
barge ITTC-101."11
We find no cogent reason to overturn these factual findings. Nothing is
more settled in jurisprudence than that this Court is bound by the factual
findings of the Court of Appeals when these are supported by substantial
evidence and are not under any of the exceptions in Fuentes v. Court of
Appeals;12 more so, when such findings affirm those of the trial court. 13
Verily, this Court reviews only issues of law.
Negligence is conduct that creates undue risk of harm to another. It is the
failure to observe that degree of care, precaution and vigilance that the
circumstances justly demand, whereby that other person suffers
injury.14Petitioner's vessel was carrying chemical cargo -- alkyl benzene
and methyl methacrylate monomer.15 While knowing that their vessel was
carrying dangerous inflammable chemicals, its officers and crew failed to
take all the necessary precautions to prevent an accident. Petitioner was,
therefore, negligent.
The three elements of quasi delict are: (a) damages suffered by the
plaintiff, (b) fault or negligence of the defendant, and (c) the connection
of cause and effect between the fault or negligence of the defendant and
the damages inflicted on the plaintiff. 16 All these elements were
established in this case. Knowing fully well that it was carrying
dangerous chemicals, petitioner was negligent in not taking all the
necessary precautions in transporting the cargo.
As a result of the fire and the explosion during the unloading of the
chemicals from petitioner's vessel, Respondent Borja suffered the
following damage: and injuries: "(1) chemical burns of the face and arms;
(2) inhalation of fumes from burning chemicals; (3) exposure to the
elements [while] floating in sea water for about three (3) hours; (4)
homonymous hemianopsia or blurring of the right eye [which was of]
possible toxic origin; and (5) [c]erebral infract with neo-vascularization,
left occipital region with right sided headache and the blurring of vision
of right eye."17
Hence, the owner or the person in possession and control of a vessel and
the vessel are liable for all natural and proximate damage caused to
persons and property by reason of negligent management or navigation.18
Second Issue: Amount of Liability Petitioner insists that Borja is not
entitled to the full amount of damages awarded by the lower courts. It
disputes the use of his gross earning as basis for the computation of the
award for loss of earning capacity. Both courts, in computing the value of
such loss, used the remaining years of the victim as a government
employee and the amount he had been receiving per annum at the time of
the incident.
Counsel for Respondent Borja, on the other hand, claims that petitioner
had no cause to complain, because the miscomputation had ironically
been in its favor. The multiplier used in the computation was erroneously
based on the remaining years in government service, instead of the life
expectancy, of the victim. Borja's counsel also points out that the award
was based on the former's meager salary in 1987, or about 23 years ago
when the foreign exchange was still P14 to $1. Hence, the questioned
award is consistent with the primary purpose of giving what is just, moral
and legally due the victim as the aggrieved party.
Both parties have a point. In determining the reasonableness of the
damages awarded under Article 1764 in conjunction with Article 2206 of
the Civil Code, the factors to be considered are: (1) life expectancy
(considering the health of the victim and the mortality table which is
deemed conclusive) and loss of earning capacity; (b) pecuniary loss, loss
of support and service; and (c) moral and mental sufferings. 19 The loss of
earning capacity is based mainly on the number of years remaining in the
person's expected life span. In turn, this number is the basis of the
damages that shall be computed and the rate at which the loss sustained
by the heirs shall be fixed.20
The formula for the computation of loss of earning capacity is as
follows:21
Net earning capacity = Life expectancy x [Gross Annual
Income - Living Expenses (50% of gross annual income)], where life
expectancy = 2/3 (80 - the age of the deceased).22
Petitioner is correct in arguing that it is net income (or gross income less
living expenses) which is to be used in the computation of the award for
loss of income. Villa Rey Transit v. Court of Appeals23 explained that "the
amount recoverable is not the loss of the entire earning, but rather the loss
of that portion of the earnings which the beneficiary would have
received." Hence, in fixing the amount of the said damages, the necessary
expenses of the deceased should be deducted from his earnings.
In other words, only net earnings, not gross earnings, are to be
considered; that is, the total of the earnings less expenses necessary in the
creation of such earnings or income, less living and other incidental
expenses. When there is no showing that the living expenses constituted a
smaller percentage of the gross income, we fix the living expenses at half
of the gross income. To hold that one would have used only a small part
of the income, with the larger part going to the support of one's children,
would be conjectural and unreasonable.24
Counsel for Respondent Borja is also correct in saying that life
expectancy should not be based on the retirement age of government
employees, which is pegged at 65. In Negros Navigation Co, Inc. v. CA,25
the Court resolved that in calculating the life expectancy of an individual
for the purpose of determining loss of earning capacity under Article
2206(1) of the Civil Code, it is assumed that the deceased would have
earned income even after retirement from a particular job.1âwphi1.nêt
Respondent Borja should not be situated differently just because he was a
government employee. Private employees, given the retirement packages
provided by their companies, usually retire earlier than government
employees; yet, the life expectancy of the former is not pegged at 65
years.
Petitioner avers that Respondent Borja died nine years after the incident
and, hence, his life expectancy of 80 years should yield to the reality that
he was only 59 when he actually died.
We disagree. The Court uses the American Experience/Expectancy Table
of Mortality or the Actuarial or Combined Experience Table of Mortality,
which consistently pegs the life span of the average Filipino at 80 years,
from which it extrapolates the estimated income to be earned by the
deceased had he or she not been killed.26
Respondent Borja's demise earlier than the estimated life span is of no
moment. For purposes of determining loss of earning capacity, life
expectancy remains at 80. Otherwise, the computation of loss of earning
capacity will never become final, being always subject to the eventuality
of the victim's death. The computation should not change even if Borja
lived beyond 80 years. Fair is fair.
Based on the foregoing discussion, the award for loss of earning capacity
should be computed as follows:
Having been duly proven, the moral damages and attorney's fees awarded
are justified under the Civil Code's Article 2219, paragraph 2; and Article
2208, paragraph 11, respectively.
WHEREFORE, the Petition is PARTLY GRANTED. The assailed
Decision is AFFIRMED with the following MODIFICATIONS:
petitioner is ordered to pay the heirs of the victim damages in the amount
of P320,240 as loss of earning capacity, moral damages in the amount of
P100,000, plus another P50,000 as attorney's fees. Costs against
petitioner.
SO ORDERED.

G.R. No. 141910 August 6, 2002
FGU INSURANCE CORPORATION, petitioner, vs. G.P.
SARMIENTO TRUCKING CORPORATION and LAMBERT M.
EROLES, respondents.
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18
June 1994 thirty (30) units of Condura S.D. white refrigerators aboard
one of its Isuzu truck, driven by Lambert Eroles, from the plant site of
Concepcion Industries, Inc., along South Superhighway in Alabang,
Metro Manila, to the Central Luzon Appliances in Dagupan City. While
the truck was traversing the north diversion road along McArthur
highway in Barangay Anupol, Bamban, Tarlac, it collided with an
unidentified truck, causing it to fall into a deep canal, resulting in damage
to the cargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to
Concepcion Industries, Inc., the value of the covered cargoes in the sum
of P204,450.00. FGU, in turn, being the subrogee of the rights and
interests of Concepcion Industries, Inc., sought reimbursement of the
amount it had paid to the latter from GPS. Since the trucking company
failed to heed the claim, FGU filed a complaint for damages and breach
of contract of carriage against GPS and its driver Lambert Eroles with the
Regional Trial Court, Branch 66, of Makati City. In its answer,
respondents asserted that GPS was the exclusive hauler only of
Concepcion Industries, Inc., since 1988, and it was not so engaged in
business as a common carrier. Respondents further claimed that the cause
of damage was purely accidental.1âwphi1.nêt
The issues having thus been joined, FGU presented its evidence,
establishing the extent of damage to the cargoes and the amount it had
paid to the assured. GPS, instead of submitting its evidence, filed with
leave of court a motion to dismiss the complaint by way of demurrer to
evidence on the ground that petitioner had failed to prove that it was a
common carrier.
The trial court, in its order of 30 April 1996, 1 granted the motion to
dismiss, explaining thusly:
"Under Section 1 of Rule 131 of the Rules of Court, it is provided
that ‘Each party must prove his own affirmative allegation, xxx.’
"In the instant case, plaintiff did not present any single evidence that
would prove that defendant is a common carrier.
"Accordingly, the application of the law on common carriers is not
warranted and the presumption of fault or negligence on the part of a
common carrier in case of loss, damage or deterioration of goods
during transport under 1735 of the Civil Code is not availing.
"Thus, the laws governing the contract between the owner of the
cargo to whom the plaintiff was subrogated and the owner of the
vehicle which transports the cargo are the laws on obligation and
contract of the Civil Code as well as the law on quasi delicts.
"Under the law on obligation and contract, negligence or fault is not
presumed. The law on quasi delict provides for some presumption of
negligence but only upon the attendance of some circumstances.
Thus, Article 2185 provides:
‘Art. 2185. Unless there is proof to the contrary, it is presumed
that a person driving a motor vehicle has been negligent if at the
time of the mishap, he was violating any traffic regulation.’
"Evidence for the plaintiff shows no proof that defendant was
violating any traffic regulation. Hence, the presumption of
negligence is not obtaining.
"Considering that plaintiff failed to adduce evidence that defendant is
a common carrier and defendant’s driver was the one negligent,
defendant cannot be made liable for the damages of the subject
cargoes."2
The subsequent motion for reconsideration having been denied,3 plaintiff
interposed an appeal to the Court of Appeals, contending that the trial
court had erred (a) in holding that the appellee corporation was not a
common carrier defined under the law and existing jurisprudence; and (b)
in dismissing the complaint on a demurrer to evidence.
The Court of Appeals rejected the appeal of petitioner and ruled in favor
of GPS. The appellate court, in its decision of 10 June 1999, 4 discoursed,
among other things, that -
"x x x in order for the presumption of negligence provided for under
the law governing common carrier (Article 1735, Civil Code) to
arise, the appellant must first prove that the appellee is a common
carrier. Should the appellant fail to prove that the appellee is a
common carrier, the presumption would not arise; consequently, the
appellant would have to prove that the carrier was negligent.
"Because it is the appellant who insists that the appellees can still be
considered as a common carrier, despite its `limited clientele,’
(assuming it was really a common carrier), it follows that it
(appellant) has the burden of proving the same. It (plaintiff-appellant)
`must establish his case by a preponderance of evidence, which
means that the evidence as a whole adduced by one side is superior
to that of the other.’ (Summa Insurance Corporation vs. Court of
Appeals, 243 SCRA 175). This, unfortunately, the appellant failed to
do -- hence, the dismissal of the plaintiff’s complaint by the trial
court is justified.
"Based on the foregoing disquisitions and considering the
circumstances that the appellee trucking corporation has been `its
exclusive contractor, hauler since 1970, defendant has no choice but
to comply with the directive of its principal,’ the inevitable
conclusion is that the appellee is a private carrier.
"x x x the lower court correctly ruled that 'the application of the law
on common carriers is not warranted and the presumption of fault or
negligence on the part of a common carrier in case of loss, damage or
deterioration of good[s] during transport under [article] 1735 of the
Civil Code is not availing.' x x x.
"Finally, We advert to the long established rule that conclusions and
findings of fact of a trial court are entitled to great weight on appeal
and should not be disturbed unless for strong and valid reasons."5
Petitioner's motion for reconsideration was likewise denied;6 hence, the
instant petition,7 raising the following issues:
I. WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A
COMMON CARRIER AS DEFINED UNDER THE LAW AND
EXISTING JURISPRUDENCE.
II. WHETHER RESPONDENT GPS, EITHER AS A COMMON
CARRIER OR A PRIVATE CARRIER, MAY BE PRESUMED TO
HAVE BEEN NEGLIGENT WHEN THE GOODS IT
UNDERTOOK TO TRANSPORT SAFELY WERE
SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE
CUSTODY AND POSSESSION.
III. WHETHER THE DOCTRINE OF RES IPSA LOQUITUR IS
APPLICABLE IN THE INSTANT CASE.
On the first issue, the Court finds the conclusion of the trial court and the
Court of Appeals to be amply justified. GPS, being an exclusive
contractor and hauler of Concepcion Industries, Inc., rendering or
offering its services to no other individual or entity, cannot be considered
a common carrier. 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 hire or
compensation, offering their services to the public,8 whether to the public
in general or to a limited clientele in particular, but never on an exclusive
basis.9 The true test of a common carrier is the carriage of passengers or
goods, providing space for those who opt to avail themselves of its
transportation service for a fee.10Given accepted standards, GPS scarcely
falls within the term "common carrier."
The above conclusion nothwithstanding, GPS cannot escape from
liability.
In culpa contractual, upon which the action of petitioner rests as being
the subrogee of Concepcion Industries, Inc., the mere proof of the
existence of the contract and the failure of its compliance justify, prima
facie, a corresponding right of relief.11 The law, recognizing the
obligatory force of contracts,12 will not permit a party to be set free from
liability for any kind of misperformance of the contractual undertaking or
a contravention of the tenor thereof. 13 A breach upon the contract confers
upon the injured party a valid cause for recovering that which may have
been lost or suffered. The remedy serves to preserve the interests of the
promisee that may include his "expectation interest," which is his interest
in having the benefit of his bargain by being put in as good a position as
he would have been in had the contract been performed, or his "reliance
interest," which is his interest in being reimbursed for loss caused by
reliance on the contract by being put in as good a position as he would
have been in had the contract not been made; or his "restitution interest,"
which is his interest in having restored to him any benefit that he has
conferred on the other party.14 Indeed, agreements can accomplish little,
either for their makers or for society, unless they are made the basis for
action.15 The effect of every infraction is to create a new duty, that is, to
make recompense to the one who has been injured by the failure of
another to observe his contractual obligation 16 unless he can show
extenuating circumstances, like proof of his exercise of due diligence
(normally that of the diligence of a good father of a family or,
exceptionally by stipulation or by law such as in the case of common
carriers, that of extraordinary diligence) or of the attendance of fortuitous
event, to excuse him from his ensuing liability.
Respondent trucking corporation recognizes the existence of a contract of
carriage between it and petitioner’s assured, and admits that the cargoes it
has assumed to deliver have been lost or damaged while in its custody. In
such a situation, a default on, or failure of compliance with, the
obligation – in this case, the delivery of the goods in its custody to the
place of destination - gives rise to a presumption of lack of care and
corresponding liability on the part of the contractual obligor the burden
being on him to establish otherwise. GPS has failed to do so.
Respondent driver, on the other hand, without concrete proof of his
negligence or fault, may not himself be ordered to pay petitioner. The
driver, not being a party to the contract of carriage between petitioner’s
principal and defendant, may not be held liable under the agreement. A
contract can only bind the parties who have entered into it or their
successors who have assumed their personality or their juridical
position.17 Consonantly with the axiom res inter alios acta aliis neque
nocet prodest, such contract can neither favor nor prejudice a third
person. Petitioner’s civil action against the driver can only be based on
culpa aquiliana, which, unlike culpa contractual, would require the
claimant for damages to prove negligence or fault on the part of the
defendant.18
A word in passing. Res ipsa loquitur, a doctrine being invoked by
petitioner, holds a defendant liable where the thing which caused the
injury complained of is shown to be under the latter’s management and
the accident is such that, in the ordinary course of things, cannot be
expected to happen if those who have its management or control use
proper care. It affords reasonable evidence, in the absence of explanation
by the defendant, that the accident arose from want of care. 19 It is not a
rule of substantive law and, as such, it does not create an independent
ground of liability. Instead, it is regarded as a mode of proof, or a mere
procedural convenience since it furnishes a substitute for, and relieves the
plaintiff of, the burden of producing specific proof of negligence. The
maxim simply places on the defendant the burden of going forward with
the proof.20 Resort to the doctrine, however, may be allowed only when
(a) the event is of a kind which does not ordinarily occur in the absence
of negligence; (b) other responsible causes, including the conduct of the
plaintiff and third persons, are sufficiently eliminated by the evidence;
and (c) the indicated negligence is within the scope of the defendant's
duty to the plaintiff.21 Thus, it is not applicable when an unexplained
accident may be attributable to one of several causes, for some of which
the defendant could not be responsible.22
Res ipsa loquitur generally finds relevance whether or not a contractual
relationship exists between the plaintiff and the defendant, for the
inference of negligence arises from the circumstances and nature of the
occurrence and not from the nature of the relation of the parties. 23
Nevertheless, the requirement that responsible causes other than those
due to defendant’s conduct must first be eliminated, for the doctrine to
apply, should be understood as being confined only to cases of pure (non-
contractual) tort since obviously the presumption of negligence in culpa
contractual, as previously so pointed out, immediately attaches by a
failure of the covenant or its tenor. In the case of the truck driver, whose
liability in a civil action is predicated on culpa acquiliana, while he
admittedly can be said to have been in control and management of the
vehicle which figured in the accident, it is not equally shown, however,
that the accident could have been exclusively due to his negligence, a
matter that can allow, forthwith, res ipsa loquitur to work against him.
If a demurrer to evidence is granted but on appeal the order of dismissal
is reversed, the movant shall be deemed to have waived the right to
present evidence.24 Thus, respondent corporation may no longer offer
proof to establish that it has exercised due care in transporting the cargoes
of the assured so as to still warrant a remand of the case to the trial
court.1âwphi1.nêt
WHEREFORE, the order, dated 30 April 1996, of the Regional Trial
Court, Branch 66, of Makati City, and the decision, dated 10 June 1999,
of the Court of Appeals, are AFFIRMED only insofar as respondent
Lambert M. Eroles is concerned, but said assailed order of the trial court
and decision of the appellate court are REVERSED as regards G.P.
Sarmiento Trucking Corporation which, instead, is hereby ordered to pay
FGU Insurance Corporation the value of the damaged and lost cargoes in
the amount of P204,450.00. No costs.
G.R. No. 134387. September 27, 2002
TEOFILO ABUEVA Y CAGASAN, petitioner, vs. PEOPLE OF THE
PHILIPPINES, respondent.
This petition for review seeks the reversal of the decision[1] of the Court
of Appeals dated November 27, 1997, in CA-G.R. No. 18212 and its
resolution[2] dated May 20, 1998, denying petitioners motion for
reconsideration. The assailed decision affirmed that of the trial court in
Criminal Case No. 28091-92, finding petitioner guilty of reckless
imprudence resulting in homicide.[3] Petitioner now prays for acquittal.
Petitioner Teofilo Abueva y Cagasan was charged before the Regional
Trial Court of Davao City, in an information which reads:
That on or about August 7, 1992, in the City of Davao, Philippines, and
within the jurisdiction of this Honorable Court, the above-mentioned
accused, being an employee of BACHELOR EXPRESS, INC., and while
driving a FUSO BUS (For Hire) with Plate No. KVA 211 registered under
VALLACAR TRANSIT, INC. along Ecoland Terminal, Matina Davao
City, and without taking due precaution to prevent injury to persons,
wilfully, unlawfully and suddenly drove and moved the said motor
vehicle out of the terminal building even before Lourdes Mangruban, a
passenger of said bus, could properly find and safely take her seat, and
that as a direct result of said negligence, recklessness and carelessness,
LOURDES MANGRUBAN fell down to the cemented pavement of the
terminal road and sustained the following injuries: Intracerebral Blood;
Subdural Hematoma; Cerebral Contusion and Laceration Left Temporal
Area; Subdural Contusion Right Temporal Area which caused her death.
That immediately after LOURDES MANGRUBAN fell down, the
accused wilfully, unlawfully and feloniously failed to render or lend
assistance on the spot to the victim such help as may be in the hands of
the accused to give.
CONTRARY TO LAW. Assisted by counsel de parte, petitioner pleaded
not guilty upon arraignment.
During trial, the prosecution and the defense presented different versions
of the occurrences that led to Lourdes Mangrubans death. For the
prosecution, IRENEO MANGRUBAN, the victims brother, testified[5]
that at around 6:00 A.M. of August 7, 1992, he was with his siblings
Lourdes and Abundio Mangruban, and their paralyzed aunt Ginobata
Mangruban. They went to the Ecoland Bus Terminal in Matina, Davao
City. Lourdes was tasked to accompany their aunt to Butuan City.
At the terminal, Raul Quiblat,[6] a dispatcher for the bus company
Bachelor Express, Inc., approached and informed them that a bus bound
for Tacloban via Cebu and Butuan was about to leave. They were told to
wait as the bus maneuvered to its proper position prior to departure. The
said bus, driven by petitioner, came to a full stop in front of the terminal
building. Ireneo, who was assisting his aunt, was the first one to board the
bus. Lourdes was close behind. Ireneo was already inside the bus, while
his aunt, on the lookout for available seats, was still standing on the
second stepboard of the middle entrance. As they negotiated their way
towards the back of the bus, Lourdes, with luggage in hand, was waiting
on the first stepboard when the bus suddenly moved.
Due to the sudden movement, according to the witness, Lourdes fell
off the bus and hit her head on the cement pavement below. The
conductor shouted that a passenger fell off the bus. The bus immediately
stopped, but only after moving about six meters. When the witness
learned that it was Lourdes who fell off the bus, he immediately
disembarked to help his sister.Ginobata, assisted by Abundio Mangruban,
likewise disembarked. According to the witness, the driver did not
disembark to assist Lourdes, while a dispatcher of the bus company
assured them that there was nothing to worry about because the victim
was not bleeding. Petitioner continued driving per his scheduled trip.
Lourdes was taken to the San Pedro Hospital where a brain scan
revealed the presence of a blood clot that needed immediate surgery. The
bus company refused to give financial assistance to the Mangrubans. On
their own, the family raised the amount required by the hospital as
downpayment for the operation. Surgery was performed but Lourdes
never regained consciousness and expired five days later.
For the defense, MELQUIADES ROJAS, [7] the bus conductor,
testified that on August 7, 1992, at about 6:00 A.M., while the bus of
Bachelor Express, Inc., which was bound for Butuan was parked in the off the bus. The bus was moving slowly at the time and the conductor
Ecoland Terminal, Ireneo, Lourdes, and their aunt Ginobata boarded the was issuing tickets inside. It was Manoling Gaviola, Jessie Aguirre, and
bus and took their seats. He handed to them their tickets, and collected the dispatcher Quiblat[10] who assisted the girl after her fall. Confronted
their fares, and then he disembarked to remit his collections to the with his conflicting testimony whether the girl jumped or fell, the witness
cashier. Thereafter, he asked for clearance from the dispatcher so the bus stated that she fell and she jumped.[11]He admitted, however, that he did
could leave the terminal. Raul Quiblat, the dispatcher of the bus, made a not know whether she had just boarded or was already inside the bus
final inspection of the exterior of the bus and then instructed the when he actually noticed her pass behind him.[12]
conductor to go. The conductor returned to the bus, made a final check on
MANOLING GAVIOLA testified that while he was at his
the passengers, and blew his whistle as a signal to petitioner to
workstation at the Ecoland Terminal that fateful day, he heard the
commence the trip.
passengers of a Bachelor bus shouting that a passenger had jumped. He
While the bus was already in motion, according to the witness, rushed to the aid of the passenger. Together with Jessie and the
Lourdes Mangruban suddenly knocked on the ceiling of the bus and companions of the passenger, they took her to the hospital.
informed Rojas that she wanted to get off the bus.He saw Lourdes kiss
RAUL QUIBLAT,[13] the dispatcher, testified that he saw Lourdes
and bid her aunt a safe trip. Lourdes started walking towards the exit.
jump from the bus at its rear right side. He testified that he actually saw
Rojas warned her to wait for the bus to come to a full stop before
Lourdes from the time she was in mid-air until she landed on the ground.
alighting but the victim did not heed the warning and continued to rush
She first landed on her buttocks and then her head hit the ground. [14] The
towards the exit. Rojas blew his whistle to tell petitioner to stop the bus.
bus left the terminal an hour after the incident, after the driver was told
However, although he already gave the signal and before petitioner could
by the officer-in-charge that the matter had been reported to the
put the bus to a stop at the side of the road, Lourdes, with her body facing
management and would be taken care of. The driver was in fact
the door, jumped out. Rojas tried to grab her arm but failed to prevent her
frightened, according to the witness, and did not leave until finally told to
from jumping off the bus.
do so.
TEOFILO ABUEVA, the driver of the bus and petitioner herein,
The trial court convicted petitioner, as follows: WHEREFORE, this
testified[8] that on the 6:00 A.M. trip of August 7, 1992, after he was given
Court finds the accused TEOFILO ABUEVA Y CAGASAN, GUILTY
the signal by the dispatcher to leave, he started the engine of the bus.
beyond reasonable doubt of the crime of RECKLESS IMPRUDENCE
After having traveled about five to six meters, he heard shouts from the
RESULTING TO HOMICIDE under Article 365 of the Revised Penal
people at the terminal, saying that someone had jumped from the bus. He
Code which is punishable with Arresto Mayor in its Maximum period as
stopped the bus, immediately alighted, and saw the dispatcher and a
Minimum to Prision Correccional in its Medium Period and accordingly
terminal helper assisting the woman who had jumped off. He saw them
sentence said accused to suffer Two (2) Year[s] Ten (10) months and
carry the woman to a public utility vehicle. He then asked the one in-
Twenty (20) Days of Prision Correccional. And as civil liability, accused
charge of the terminal if they could leave to continue the trip. After he
is held liable and ordered to pay to the surviving heirs or parents of
was told that they could and that the victim was going to be taken to the
Lourdes Mangruban the following:
hospital, he started to drive the bus on its way.
1. P50,000.00 for actual expenses for medicine and attending physicians
QUINTIN BORROMEO, a laborer at the Ecoland Terminal,
fees; 2. P4,500.00 as funeral expenses; and 3 P50,000.00 as indemnity to
testified[9] that he boarded the bus bound for Tacloban with the intention
(sic) the death of Lourdes Mangruban. 4. The cost.
of having breakfast in Ma-a, Davao City, a place the bus was going to
pass. He recalled that he was on the stepboard of the rear door, clinging Pursuant to a Motion for Reconsideration filed by the prosecution, the
to the handlebars and facing the direction of the driver when a girl passed trial court, in an Order dated March 10, 1995, increased the amount of
behind him. When he turned to look back at her, she had already fallen actual expenses for medicine and attending physicians fees from P50,000
to P148,202.70.[16]
On appeal, the Court of Appeals affirmed the trial courts judgment of
conviction. But the CA modified the RTC decision by increasing the
penalty imposed by one degree, in view of the presence of the qualifying
circumstance of failure to lend assistance on the spot to the injured party.
[17]
From the penalty meted by the RTC of two (2) years, ten (10) months
and twenty (20) days of prision correccional,[18] the Court of Appeals
imposed the indeterminate penalty of one (1) year, seven (7) months and
eleven (11) days of prision correccional as minimum, to six (6) years,
one (1) month and eleven (11) days of prision mayor as maximum.[19] The
dispositive portion of the CA decision states:
WHEREFORE, except for the modification of the indeterminate penalty
of the accused-appellant, as above indicated, the judgment of conviction
appealed from is hereby AFFIRMED in all other respects.
Costs against accused-appellant.
The Court of Appeals denied petitioners motion for reconsideration, for
lack of merit. Hence, this petition for review filed by petitioner on the
ground that:
IN AFFIRMING THE CONVICTION OF THE PETITIONER AND IN
INCREASING THE PENALTY, THE COURT OF APPEALS HAS
COMMITTED A MISAPPREHENSION OF FACTS AND HAS
DECIDED A QUESTION OF SUBSTANCE IN A WAY PROBABLY
NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT.[21]
There are two issues for our resolution: (1) whether or not the
prosecution has proven the guilt of the petitioner beyond reasonable
doubt; and (2) whether or not the qualifying circumstance, that the
offender failed to lend on the spot to the injured parties such assistance as
may be in his hands to give, should be considered against the petitioner.
On the first issue, petitioner urges us to re-examine the factual
findings of both the trial and appellate courts. Petitioner contends that the
Court of Appeals misapprehended facts and disregarded the evidence
presented by the defense. Conviction was allegedly based only on the
testimony of Ireneo Mangruban whose testimony should not be given
much weight and credit. Ireneo was clearly a biased witness whose
testimony was full of inconsistencies, according to petitioner. He
reiterates the testimonies of defense witnesses attesting to the fact that
Lourdes jumped off the bus and should be faulted for what befell her.
In contrast, the prosecution sticks to its version that Lourdes fell off
the bus as a result of petitioners reckless disregard for the safety of the
passengers, when he started the bus without making sure everyone was
properly seated or at least in a secure position. According to the
prosecution, petitioner failed to exercise extraordinary care and caution
when he drove off without verifying whether the passengers of the bus
were already safely seated.
After a careful review of the records, we agree with the factual
findings of the trial and appellate courts showing that the victim, Lourdes
Mangruban, fell rather than jumped off the bus.The trial court found
Ireneos testimony on this point to be credible and convincing, [22] and
declared the petitioner liable for reckless imprudence. The Court of
Appeals upheld the prosecutions version regarding the incident, saying
that it was more credible and consistent with human experience. [23] This
Court will not interfere with the trial courts assessment of the credibility
of the witnesses, except where it is shown that the trial court has
overlooked some material fact or circumstance that could lead to a
different result. This is especially true when said assessment is affirmed
by the Court of Appeals.[24]
As held by the appellate court: The claim of the defense that the deceased
jumped off the bus is incredible and contrary to human experience. If it is
indeed true that the deceased never intended to take a bus trip with her
aunt, she would never have taken a seat normally reserved for passengers
and waited until the very last moment when the bus was already moving
before informing the conductor that she was getting off. Even assuming
that the deceased indeed rushed towards the exit and jumped off the bus,
she would have been facing the exit. Had the deceased truly jumped, she
would have landed on her feet, and her momentum would have caused
her to fall face down. Hence, her injuries should have been located at the
frontal area of her body. However, Raul Quiblat, the dispatcher of
Bachelor Express, Inc., testified on cross examination that the deceased
landed on her buttocks then fell on her back, causing the back of her head
to hit the cemented pavement, Quiblats testimony gave credence to the
prosecutions contention that the deceased was standing on the stepboard
with her back facing the exit when she fell.[25]
 The appellate court also found that the alleged inconsistency in
witness Ireneos testimony is only in a minor detail. It only involves his
location or position inside the bus, relative to that of Lourdes. He remains
consistent in his testimony that Lourdes was only on the first stepboard of
the bus and that the sudden motion of the bus was what caused his sister
to fall. Like the trial and appellate courts, we find this more in
consonance with ordinary human experience. The prosecution has
provided sufficient, clear and convincing basis for the conclusion that
Lourdes fell off the bus due to the reckless act of the petitioner.
Article 365 of the Revised Penal Code states that reckless
imprudence consists in voluntarily, but without malice, doing or failing to
do an act from which material damage results by reason of inexcusable
lack of precaution on the part of the person performing or failing to
perform such act, taking into consideration (1) his employment or
occupation; (2) his degree of intelligence; (3) his physical condition; and
(4) other circumstances regarding persons, time and place.
Petitioner herein is a professional driver who has been in the employ
of the bus company for 18 years[26] and has undergone training courses
and seminars[27] to improve his skills as a driver. He is expected to be well
aware of his responsibilities to his passengers. Not only must he make
sure that they reach their destinations on time, he must also ensure their
safety while they are boarding, during the entire trip, and upon
disembarking from the vehicle.
Hereunder for appreciation of petitioners liability is a pertinent
excerpt from the transcript of his testimony in open court:
COURT: The Court would like to clarify
Q: Now, did the Court hear you right when you said that after
the signal for you to leave was given, your bus has just
covered about a distance of six (6) meters when you
suddenly heard the shouts that somebody had jumped out of
your bus, is that correct?
A: Yes, Your Honor.
Q: Now, according to you actually when you started the engine
and you began to move, you left the care, the welfare and
safety of your passengers to your conductor, is that correct?
A: Yes, Your Honor.
Q: In other words, you want the Court to understand, as far as
you are concerned, you simply concentrated on your driving
to move forward without bothering to check on the situation
or condition of your passengers on that occasion?
A: I relied on the dispatcher, Your Honor, because before the bus
leaves, he sees to it that everything is okay, Your Honor.
Q: That is why, your answer, as far as you are concerned, you
simply rely on them, on your part you do not seem to take
any pains or trouble?
A: It is only on the dispatchers order that I follow and on the
conductors advice.
Q: Precisely, that is why on your part you did not anymore take
the trouble or bother to check up further as to the actual
conditions or situation of your passengers because you just
relied completely on youryou allegedly rely only upon your
dispatcher or conductor, is that it?
A: Yes, Your Honor.
The lack of care and precaution with which petitioner started the bus
is inexcusable.
As held in People vs. de los Santos: A man must use common sense, and
exercise due reflection in all his acts; it is his duty to be cautious, careful,
and prudent, if not from instinct, then through fear of incurring
punishment.He is responsible for such results as anyone might foresee
and for acts which no one would have performed except through culpable
abandon. Otherwise his own person, rights and property, all those of his
fellow-beings, would ever be exposed to all manner of danger and injury.
Having failed to exercise due diligence that resulted in the tragic
incident, petitioners liability for the death of passenger Lourdes
Mangruban, as found by the lower courts, must be sustained.
However, while petitioners recklessness has been sufficiently
established, we cannot concur with the ruling of the Court of Appeals that
the circumstance defined in the last paragraph of Article 365, Revised
Penal Code, has been indubitably proved by the prosecution, with the
result that petitioners sentence was increased by one degree.
The assailed decision curtly ruled on this point, thus: In finding the
accused-appellant guilty, the trial court failed to take into account the
qualifying circumstance of failure to lend assistance on the spot to the
deceased.[29] Ireneo Mangruban testified that the accused-appellant did
not bother to disembark after the accident.[30]
Nothing is said by the CA decision regarding the limiting element in
the last paragraph of Article 365, which reads: The penalty next higher in
degree to those provided in this article shall be imposed upon the
offender who fails to lend on the spot such help as may be in his hands to
give. The obligation under this paragraph, in our view, is dependent on
the means in the hands of appellant, requiring adequate proof.
On this point, the appellate court merely relied upon the sparse one-
line testimony of Ireneo Mangruban that appellant did not bother to
disembark after the accident,[31] and by implication did not assist the
injured party. No other witness corroborated his statement on this matter.
But there are witnesses who testified to the contrary. The records show
that petitioner stated under oath that he alighted from the bus [32] and saw
that several people were assisting the injured party. Those who helped
included the terminal aide and the dispatcher.[33]Petitioners testimony here
was corroborated by other witnesses who testified that laborers Quintin
Borromeo and Manoling Gaviola, together with the bus dispatcher Raul
Quiblat and a certain Jessie, assisted the victim.[34] Petitioner saw that
Lourdes was carried and boarded onto a public utility vehicle.[35] He
testified that after the incident and before the bus left the terminal, he first
asked the dispatcher if he could already leave, and the dispatcher told him
that he could, since the victim would be brought to the hospital. [36] It took
some time (an hour) for the bus to leave the terminal because it waited for
the order of the dispatcher.[37] For that length of time the driver surely did
not stay rooted in his seat.
The assistance required by Article 365,[38] Revised Penal Code, is one
which may be in the hands of the offender to give. We must therefore
take into consideration the type and degree of assistance that the offender,
at the time and place of the incident, is capable of giving.
Under the circumstances of this case, we find that petitioner is not a
hit-and-run driver. He exerted efforts to see to it that the victim had been
attended to. There were several people assisting the victim, including his
co-employees working for the bus company. The injured party was
carried from the terminal, to a vehicle, then to the hospital. Before
petitioner was given clearance by the dispatcher to leave, an hour later, he
was assured that the victim was brought already to the hospital. We note
that petitioner had a bus full of passengers requiring also his attention. He
could only do so much, so that the burden of helping the injured party
was shared by the bus company personnel and other good Samaritans.
In sum, we hold that the attendant circumstance of failure to lend
assistance defined in the last paragraph of Article 365, Revised Penal
Code, was not adequately proved by the evidence for the prosecution.
The trial court did not err in disregarding said circumstance in the
sentencing of the accused. However, the penalty imposed on petitioner
ought to be modified.
The penalty prescribed in case of homicide resulting from reckless
imprudence in the use of a motor vehicle, under par. 2 of Article 365,
Revised Penal Code, is prision correccional in its medium and maximum
periods, or from two (2) years, four (4) months and one (1) day to six (6)
years.[39] Following the provisions of Act No. 4103, the Indeterminate
Sentence Law, the penalty to be actually imposed should be reduced as
therein provided. Accordingly, petitioner should be sentenced to four (4)
months and one (1) day of arresto mayor, as minimum, to four (4) years
and two (2) months of prision correccional, as maximum.[40]
WHEREFORE, the assailed decision of the Court of Appeals in
CA-G.R. No. 18212, is hereby MODIFIED. Petitioner TEOFILO
ABUEVA Y CAGASAN is declared guilty of reckless imprudence
resulting in homicide, and he is sentenced to suffer an indeterminate
prison term of four (4) months and one (1) day of arresto mayor, as
minimum, to four (4) years and two (2) months of prision correccional,
as maximum. The award of damages in the amounts of P148,202.70 for
actual expenses for medicine and attending physicians fees, P4,500.00 as
funeral expenses and P50,000.00 as civil indemnity for the death of
Lourdes Mangruban, are AFFIRMED.
No pronouncement as to cost. SO ORDERED.