On July 12, 1997, the Government and PIATCO
AGAN VS PIATCO
FACTS:
This is a consolidated cases of the three (3) petitions
before the Supreme Court, to wit:
1. G.R. Nos 155001 and 155661
- Filed by the employees of various
service providers affected by the
issue having separate concession
contracts with MIAA and and
continuing service agreements with
various international airlines to
provide in-flight catering, passenger
handling, ramp and ground support,
aircraft maintenance and provisions,
cargo handling and warehousing and
other services. Also included as
petitioners are labor unions
MIASCOR Workers Union-National
Labor Union and Philippine Airlines
Employees Association.
2. G.R. No. 155547
- A petition for prohibition filed by the
members of the House of
Representatives, citizens and
taxpayers. hey cite provisions of the
PIATCO Contracts which require
disbursement of unappropriated
amounts in compliance with the
contractual obligations of the
Government.
On October 5, 1994, AEDC submitted an unsolicited
proposal to the Government through the
DOTC/MIAA for the development of NAIA
International Passenger Terminal III (NAIA IPT III).
DOTC constituted the Prequalification Bids and
Awards Committee (PBAC) for the implementation
of the project and submitted with its endorsement
proposal to the NEDA, which approved the project.
On June 7, 14, and 21, 1996, DOTC/MIAA caused
the publication in two daily newspapers of an
invitation for competitive or comparative proposals
on AEDC’s unsolicited proposal, in accordance with
Sec. 4-A of RA 6957, as amended.
On September 20, 1996, the consortium composed
of People’s Air Cargo and Warehousing Co., Inc.
(Paircargo), Phil. Air and Grounds Services, Inc.
(PAGS) and Security Bank Corp. (Security Bank)
(collectively, Paircargo Consortium) submitted their
competitive proposal to the PBAC. PBAC awarded
the project to Paircargo Consortium. Because of
that, it was incorporated into Philippine International
Airport Terminals Co., Inc.
AEDC subsequently protested the alleged undue
preference given to PIATCO and reiterated its
objections as regards the prequalification of
PIATCO.
signed the “Concession Agreement for the Build-
Operate-and-Transfer Arrangement of the NAIA
Passenger Terminal III” (1997 Concession
Agreement). The Government granted PIATCO the
franchise to operate and maintain the said terminal
during the concession period and to collect the fees,
rentals and other charges in accordance with the
rates or schedules stipulated in the 1997
Concession Agreement. The Agreement provided
that the concession period shall be for twenty-five
(25) years commencing from the in-service date,
and may be renewed at the option of the
Government for a period not exceeding twenty-five
(25) years. At the end of the concession period,
PIATCO shall transfer the development facility to
MIAA.
Meanwhile, the MIAA which is charged with the
maintenance and operation of the NAIA Terminals I
and II, had existing concession contracts with
various service providers to offer international airline
airport services, such as in-flight catering,
passenger handling, ramp and ground support,
aircraft maintenance and provisions, cargo handling
and warehousing, and other services, to several
international airlines at the NAIA.
On September 17, 2002, the workers of the
international airline service providers, claiming that
they would lose their job upon the implementation of
the questioned agreements, filed a petition for
prohibition. Several employees of MIAA likewise
filed a petition assailing the legality of the various
agreements.
During the pendency of the cases, PGMA, on her
speech, stated that she will not “honor (PIATCO)
contracts which the Executive Branch’s legal offices
have concluded (as) null and void.”
The 1997 Concession Agreement further provides
under Article, Section 5.10 that:
c) In the event the development Facility or any part
thereof and/or the operations of Concessionaire or
any part thereof, become the subject matter of or be
included in any notice, notification, or declaration
concerning or relating to acquisition, seizure or
appropriation by GRP in times of war or national
emergency, GRP shall, by written notice to
Concessionaire, immediately take over the
operations of the Terminal and/or the Terminal
Complex. During such take over by GRP, the
Concession Period shall be suspended; provided,
that upon termination of war, hostilities or national
emergency, the operations shall be returned to
Concessionaire, at which time, the Concession
period shall commence to run
again. Concessionaire shall be entitled to
reasonable compensation for the duration of the
temporary take over by GRP, which
compensation shall take into account the
reasonable cost for the use of the Terminal
and/or Terminal Complex, (which is in the
amount at least equal to the debt service
requirements of Concessionaire, if the temporary
take over should occur at the time when
Concessionaire is still servicing debts owed to
project lenders), any loss or damage to the
Development Facility, and other consequential
damages. If the parties cannot agree on the
reasonable compensation of Concessionaire, or on
the liability of GRP as aforesaid, the matter shall be
resolved in accordance with Section 10.01
[Arbitration]. Any amount determined to be payable
by GRP to Concessionaire shall be offset from the
amount next payable by Concessionaire to GRP.
ISSUE:
Whether or not the State can temporarily take over
a business affected with public interest without
compensation to the owner.
HELD:
YES. PIATCO cannot, by mere contractual
stipulation, contravene the Constitutional provision
on temporary government takeover and obligate the
government to pay “reasonable cost for the use of
the Terminal and/or Terminal Complex.” Article XII,
section 17 of the 1987 Constitution envisions a
situation wherein the exigencies of the times
necessitate the government to “temporarily take
over or direct the operation of any privately owned
public utility or business affected with public
interest.” It is the welfare and interest of the public
which is the paramount consideration in determining
whether or not to temporarily take over a particular
business. Clearly, the State in effecting the
temporary takeover is exercising its police power.
Police power is the “most essential, insistent, and
illimitable of powers.” Its exercise therefore must not
be unreasonably hampered nor its exercise be a
source of obligation by the government in the
absence of damage due to arbitrariness of its
exercise. Thus, requiring the government to pay
reasonable compensation for the reasonable use of
the property pursuant to the operation of the
business contravenes the Constitution.
When the government temporarily takes over a
business affected with public interest pursuant to
Article XII, Section 17 of the Constitution, it is not
required to compensate the private entity-owner of
the said business as there is no transfer of
ownership, whether permanent or temporary, and
the private entity-owner affected by the temporary
takeover cannot, likewise, claim just compensation
for the use of the said business and its properties as
the temporary takeover by the government is in
exercise of its police power and not of its power of
eminent domain.
AIR FRANCE, petitioner, vs. RAFAEL
CARRASCOSO and the HONORABLE COURT
OF APPEALS, respondents.
FACTS:
Plaintiff, a civil engineer, was a member of a group
of 48 Filipino pilgrims that left Manila for Lourdes on
March 30, 1958. On March 28, 1958, the defendant,
Air France, through its authorized agent, Philippine
Air Lines, Inc., issued to plaintiff a "first class" round
trip airplane ticket from Manila to Rome. From
Manila to Bangkok, plaintiff travelled in "first class",
but at Bangkok, the Manager of the defendant airline
forced plaintiff to vacate the "first class" seat that he
was occupying because, in the words of the witness
Ernesto G. Cuento, there was a "white man", who,
the Manager alleged, had a "better right" to the seat.
When asked to vacate his "first class" seat, the
plaintiff, as was to be expected, refused, and told
defendant's Manager that his seat would be taken
over his dead body. After some commotion, plaintiff
reluctantly gave his "first class" seat in the plane.
ISSUE:
Is Carrascoso entitled to damages?
RULING:
Yes. The manager not only prevented Carrascoso
from enjoying his right to a first class seat; worse, he
imposed his arbitrary will; he forcibly ejected him
from his seat, made him suffer the humiliation of
having to go to the tourist class compartment - just
to give way to another passenger whose right
thereto has not been established. Certainly, this is
bad faith. Unless, of course, bad faith has assumed
a meaning different from what is understood in law.
For, "bad faith" contemplates a "state of mind
affirmatively operating with furtive design or with
some motive of self-interest or will or for ulterior
purpose." For the willful malevolent act of petitioner's
manager, petitioner, his employer, must answer.
Article 21 of the Civil Code says: ART. 21. Any
person who willfully causes loss or injury to another
in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the
damage. The contract of air carriage, therefore,
generates a relation attended with a public duty.
Neglect or malfeasance of the carrier's employees,
naturally, could give ground for an action for
damages. Passengers do not contract merely for
transportation. They have a right to be treated by the
carrier's employees with kindness, respect, courtesy
and due consideration. Although the relation of
passenger and carrier is "contractual both in origin
and nature" nevertheless "the act that breaks the
contract may be also a tort". The stress of
Carrascoso's action as we have said, is placed upon
his wrongful expulsion. This is a violation of public
duty by the petitioner air carrier — a case of quasi-
delict. Damages are proper.
Compania Maritima vs Court of Appeals and
Vicente Concepcion
Facts:
Vicente Concepcion is a Civil Engineer doing
business under Consolidated Construction and was
contracted by the Civil Aeronautics Administration in
1964 to construct the Airport in Cagayan De Oro City
Misamis Oriental. Since he is a Manila-based
contractor, he had to ship his construction
equipment to CDO through Compania Maritima. A
pay loader, 4 Reo trucks and a water truck was
loaded in MV Cebu and bound to be shipped in
CDO. The Reo trucks and water tank were
successfully delivered however, 2 meters above the
pier in the course of unloading, the swivel pin of the
heel block of the port block Hatch No. 2 gave way
causing the pay loader to fall causing total damage
thereto.
Concepcion demanded damages twice to no avail
since Compania Maritima allege that the damage
was caused by Concepcion's misrepresentation for
stating that the payloader weighed 2.5 tons in the bill
of lading when in fact it was 7.5 tons. Concepcion
filed a complaint in CFI Manila but it was dismissed
stating that the proximate cause of the fall was
Concepcion's misrepresentation of the weight of the
payloader. Concepcioan appealed and the CA ruled
in his favor. Thus, this petition.
Issue:
WON Compania Maritima is entitled to absolute
exemption due to Concepcion's misrepresentation
Held:
No. Compania Maritima is liable and responsible for
the damage. Article 1735 and 1752 of NCC provides
that common carriers are presumed to have been at
fault or to have acted negligently in case goods
transported by them are lost, destroyed or had
deteriorated. To overcome such presumption, the
carriers must prove that they observed extraordinary
diligence required under Article 1733. Mere proof of
delivery of goods in good order tona common carrier
and of their arrival at the place of destination in bad
order makes a prima facie case against the carrier.
If no explanationnas to how the loss, deterioration or
destruction if the goods occurred, the common
carrier must be held responsible.
In this case the court was not persuaded that
Concepcion's misrepresentation of the actual weight
of the payloader was the proximate cause of the fall.
The laxity and carelessness of the carrier was clearly
established by the factbthat they never checked the
weight provided in the bill of lading and assumed that
it was correct. The damage would have been
avoided throughbexercise of reasonable skill and
attention on overseeing the unloading of such
obviously heavy equipment. Extraordinary diligence
requires the common carrier to know and follow the
required precaution for avoiding damage to or
destruction of goods, and use all reasonable means
to ascertain the nature and characteristics of goods
tendered for shipment and tonexercise due care in
handling and stowage. Observance of extraordinary
diligence commences and lasts from the time goods
are unconditionally placed in possession of and
received by the carrier until delivery.
The damages awarded are reduced by 20% due to
the contributory negligence of Concepcion as
provided under Article 1741.
CHINA AIRLINES, LTD., vs.
INTERMEDIATE APPELLATE COURT and
CLAUDIA B. OSORIO,
FACTS:
petitioner china airlines, ltd., as originally scheduled,
was to bring Claudia Osorio to Taipei in time for her
flight bound for Los Angeles. An engine malfunction
caused a four-day delay so the parties agreed, prior
to their departure from Manila that private
respondent and the nine (9) other passengers
similarly situated would spend the night in Taipei at
petitioner's expense and would be brought the
following day to San Francisco, U.S.A., where they
would be furnished an immediate flight connection to
Los Angeles. Upon arriving in San Francisco, they
were asked to deplane and wait since no instructions
from Manila were received regarding them due to the
delay in the transmission of the telex messages.
Later, when it appeared that they might have to
spend the night in San Francisco, they asked that
they be provided food and overnight
accommodations as transit passengers, but were
refused by petitioner's passenger service agent,
Dennis Cheng. Apparently private respondent and
some fellow passengers angrily left the airport
without leaving a contact address. It was only on the
following day, that private respondent learned that
her ticket for Los Angeles was already issued.
Notwithstanding, she preferred to pick up her
luggage a day after and fly with a Western Airlines
ticket which she purchased.
ISSUE:
WHETHER there was palpable breach of the
contract of carriage failure of petitioner airline to
arrange for private respondent's immediate flight to
Los Angeles?
RULING:
Verily, petitioner airlines committed a breach of
contract in failing to secure an immediate flight
connection for private respondent. Under Article
1755 of the Civil Code of the Philippines, petitioner,
as a common carrier, is duty bound to "carry
passengers safely as far as human care and
foresight can provide, using the utmost diligence of
very cautious persons, with due regard for all the
circumstances." The reliance of petitioner on the
subject telex communications falls short of the
utmost diligence of a very cautious person expected
of it. However, we find that the breach of contract
committed by petitioner was not attended by gross
negligence, recklessness or wanton disregard of the
rights of private respondent as a passenger. Telex
was the established mode of communication
between petitioner's Manila and San Francisco
offices. They cannot be faulted for wanting to verify
private respondent's status before acting upon her
request for tickets to Los Angeles.
The breach of contract under consideration having
been incurred in good faith, petitioner airlines is
liable for damages which are the natural and
probable consequences of said breach and which
the parties have foreseen at the time the obligation
was constituted. With respect to moral damages, the
rule is that the same are recoverable in a damage
suit predicated upon a breach of contract of carriage
only where [1] the mishap results in the death of a
passenger and [2] it is proved that the carrier was
guilty of fraud or bad faith, even if death does not
result. As the present case does not fall under either
of the cited instances, the award of moral damages
should be, as it is hereby disallowed.
Spouses Perena vs. Zarate Digest
TOPIC: CIVIL LAW: common carrier;
extraordinary diligence
CASE NO: G.R. No. 157917 : August 29, 2012
Facts: SPOUSES TEODORO and NANETTE
PERENA, Petitioners, v. SPOUSES NICOLAS and
TERESITA L. ZARATE, PHILIPPINE NATIONAL
RAILWAYS, and the COURT OF APPEALS,
Respondents.
FACTS: Spouses Teodoro and Nanette Peres
(Peres) were engaged in the business of
transporting students from their respective
residences in Paraque City to Don Bosco in
Pasong Tamo, Makati City, and back. They
employed Clemente Alfaro (Alfaro) as driver of the
van. Spouses Nicolas and Teresita Zarate
(Zarates) contracted the Peres to transport their
son Aaron to and from Don Bosco.
Considering that the students were due at Don
Bosco by 7:15 a.m., and that they were already
running late because of the heavy vehicular traffic
on the South Superhighway, Alfaro took the van to
an alternate route at about 6:45 a.m. by traversing
the narrow path underneath the Magallanes
Interchange. The railroad crossing in the narrow
path had no railroad warning signs, or watchmen,
or other responsible persons manning the crossing.
In fact, the bamboo barandilla was up, leaving the
railroad crossing open to traversing motorists.
At about the time the van was to traverse the
railroad crossing, PNR Commuter No. 302 (train),
was in the vicinity of the Magallanes Interchange
travelling northbound. As the train neared the
railroad crossing, Alfaro drove the van eastward
across the railroad tracks, closely tailing a large
passenger bus. His view of the oncoming train was
blocked because he overtook the passenger bus on
its left side. The train blew its horn to warn
motorists of its approach. The passenger bus
successfully crossed the railroad tracks, but the van
driven by Alfaro did not. The impact threw nine of
the 12 students in the rear, including Aaron, out of
the van. Aaron landed in the path of the train, which
dragged his body and severed his head,
instantaneously killing him.
Thus, the Zarates sued the Peres for breach of
contract of carriage and the PNR for quasi-delict.
The RTC ruled in favor of the Zarates. On appeal,
the CA affirmed the findings of the RTC.
ISSUE: Whether or not the Peres are liable for
breach of contract of carriage.
HELD: The Supreme Court ruled that the petition
has no merit.
A common carrier is a person, corporation, firm or
association engaged in the business of carrying or
transporting passengers or goods or both, by land,
water, or air, for compensation, offering such
services to the public. Contracts of common carriage
are governed by the provisions on common carriers
of the Civil Code, the Public Service Act, and other
special laws relating to transportation. A common
carrier is required to observe extraordinary
diligence, and is presumed to be at fault or to have
acted negligently in case of the loss of the effects of
passengers, or the death or injuries to passengers.
The true test for a common carrier is not the quantity
or extent of the business actually transacted, or the
number and character of the conveyances used in
the activity, but whether the undertaking is a part of
the activity engaged in by the carrier that he has held
out to the general public as his business or
occupation.
Applying these considerations to the case before the
SC, there is no question that the Perena as the
operators of a school bus service were: (a) engaged
in transporting passengers generally as a business,
not just as a casual occupation; (b) undertaking to
carry passengers over established roads by the
method by which the business was conducted; and
(c) transporting students for a fee. Despite catering
to a limited clientele, the Peres operated as a
common carrier because they held themselves out
as a ready transportation indiscriminately to the
students of a particular school living within or near
where they operated the service and for a fee.
Article 1755 of the Civil Code specifies that the
common carrier should "carry the passengers safely
as far as human care and foresight can provide,
using the utmost diligence of very cautious persons,
with a due regard for all the circumstances." To
successfully fend off liability in an action upon the
death or injury to a passenger, the common carrier
must prove his or its observance of that
extraordinary diligence; otherwise, the legal
presumption that he or it was at fault or acted
negligently would stand.
According to Article 1759 of the Civil Code, their
liability as a common carrier did not cease upon
proof that they exercised all the diligence of a good
father of a family in the selection and supervision of
their employee. The Peres were liable for the death
of Aaron despite the fact that their driver might have
acted beyond the scope of his authority or even in
violation of the orders of the common carrier.
DE GUZMAN VS CA Case Digest
CASE TITLE: DE GUZMAN VS. COURT OF
APPEALS
CASE NO.: 168 SCRA 612
Facts: Cendena was a junk dealer and was engaged
in buying used bottles and scrap materials in
Pangasinan and brought these to Manila for resale.
He used two 6-wheeler trucks. On the return trip to
Pangasinan, he would load his vehicles with cargo
which various merchants wanted delivered to
Pangasinan. For that service, he charged freight
lower than regular rates. General Milk Co. contacted
with him for the hauling of 750 cartons of milk. On
the way to Pangasinan, one of the trucks was
hijacked by armed men who took with them the truck
and its cargo and kidnapped the driver and his
helper. Only 150 cartons of milk were delivered. The
Milk Co. sued to claim the value of the lost
merchandise based on an alleged contract of
carriage. Cendena denied that he was a common
carrier and contended that he could not be liable for
the loss it was due to force majeure. The trial court
ruled that he was a common carrier. The CA
reversed.
Issue: Whether or not Cendena is a common carrier.
Held: Yes, Cendena is properly characterized as a
common carrier even though he merely backhauled
goods for other merchants, and even if it was done
on a periodic basis rather than on a regular basis,
and even if his principal occupation was not the
carriage of goods.
Article 1732 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. It also avoids
making a distinction between a person or enterprise
offering transportation services on a regular or
scheduled basis and one offering service on an
occasional, episodic or unscheduled basis. Neither
does it make a distinction between a carrier offering
its services to the general public and one who offers
services or solicits business only from a narrow
segment of population.
CASE TITLE: Trans-Asia Shipping Lines vs. CA
CASE NO: GR 118126, 4 March 1996
FACTS: Respondent Atty. Renato Arroyo, a public
attorney, bought a ticket from herein petitioner for
the voyage of M/V Asia Thailand vessel to Cagayan
de Oro City from Cebu City on November 12, 1991.
At around 5:30 in the evening of November 12, 1991,
respondent boarded the M/V Asia Thailand vessel
during which he noticed that some repairs were
being undertaken on the engine of the vessel. The
vessel departed at around 11:00 in the evening with
only one (1) engine running.
After an hour of slow voyage, the vessel stopped
near Kawit Island and dropped its anchor thereat.
After half an hour of stillness, some passengers
demanded that they should be allowed to return to
Cebu City for they were no longer willing to continue
their voyage to Cagayan de Oro City. The captain
acceded to their request and thus the vessel headed
back to Cebu City.
In Cebu City, plaintiff together with the other
passengers who requested to be brought back to
Cebu City, were allowed to disembark. Thereafter,
the vessel proceeded to Cagayan de Oro City.
Petitioner, the next day, boarded the M/V Asia Japan
for its voyage to Cagayan de Oro City, likewise a
vessel of defendant.
On account of this failure of defendant to transport
him to the place of destination on November 12,
1991, respondent Arroyo filed before the trial court
“an action for damage arising from bad faith, breach
of contract and from tort,” against petitioner. The trial
court ruled only for breach of contract. The CA
reversed and set aside said decision on appeal.
ISSUE: Whether or not the petitioner Trans-Asia
was negligent.
HELD: Yes.
Before commencing the contracted voyage, the
petitioner undertook some repairs on the cylinder
head of one of the vessel’s engines. But even before
it could finish these repairs, it allowed the vessel to
leave the port of origin on only one functioning
engine, instead of two. Moreover, even the lone
functioning engine was not in perfect condition as
sometime after it had run its course, it conked out.
This caused the vessel to stop and remain adrift at
sea, thus in order to prevent the ship from capsizing,
it had to drop anchor. Plainly, the vessel was
unseaworthy even before the voyage began. For a
vessel to be seaworthy, it must be adequately
equipped for the voyage and manned with a
sufficient number of competent officers and
crew.The failure of a common carrier to maintain in
seaworthy condition its vessel involved in a contract
of carriage is a clear breach of is duty prescribed in
Article 1755 of the Civil Code.
CASE NO: G.R. No. 110398 November 7, 1997
CASE TITLE: NEGROS NAVIGATION CO., INC.,
vs.
THE COURT OF APPEALS, RAMON MIRANDA,
SPS. RICARDO and VIRGINIA DE LA VICTORIA,
Facts: Private respondent Ramon Miranda
purchased from the Negros Navigation Co., Inc. four
special cabin tickets. The tickets were for Voyage
No. 457-A of the M/V Don Juan, leaving Manila and
going to Bacolod.
Subsequently, the Don Juan collided off the Tablas
Strait in Mindoro, with the M/T Tacloban City, an oil
tanker owned by the Philippine National Oil
Company (PNOC) and the PNOC Shipping and
Transport Corporation (PNOC/STC). As a result, the
M/V Don Juan sank. Several of her passengers
perished in the sea tragedy. The bodies of some of
the victims were found and brought to shore, but the
four members of private respondents’ families were
never found.
Private respondents filed a complaint against the
Negros Navigation, the Philippine National Oil
Company (PNOC), and the PNOC Shipping and
Transport Corporation (PNOC/STC), seeking
damages for the death. Petitioner, however, denied
that the four relatives of private respondents actually
boarded the vessel as shown by the fact that their
bodies were never recovered. Petitioner further
averred that the Don Juan was seaworthy and
manned by a full and competent crew, and that the
collision was entirely due to the fault of the crew of
the M/T Tacloban City.
In finding petitioner guilty of negligence and in failing
to exercise the extraordinary diligence required of it
in the carriage of passengers, both the trial court and
the appellate court relied on the findings of this Court
in Mecenas v. Intermediate Appellate Court, which
case was brought for the death of other passengers.
In Mecenas, SC found petitioner guilty of negligence
in (1) allowing or tolerating the ship captain and crew
members in playing mahjong during the voyage, (2)
in failing to maintain the vessel seaworthy and (3) in
allowing the ship to carry more passengers than it
was allowed to carry. Petitioner is, therefore, clearly
liable for damages to the full extent.
Petitioner criticizes the lower court’s reliance on the
Mecenas case, arguing that, although this case
arose out of the same incident as that involved in
Mecenas, the parties are different and trial was
conducted separately. Petitioner contends that the
decision in this case should be based on the
allegations and defenses pleaded and evidence
adduced in it or, in short, on the record of this case.
Issues:
1. Whether the ruling in Mecenas v. Court of
Appeals, finding the crew members of petitioner to
be grossly negligent in the performance of their
duties, is binding in this case;
2. Whether the award for damages in Mecenas v.
Court of Appeals is applicable in this case.
Held:
1. No. The contention is without merit.
Adherence to the Mecenas case is dictated by this
Court’s policy of maintaining stability in
jurisprudence. Where, as in this case, the same
questions relating to the same event have been put
forward by parties similarly situated as in a previous
case litigated and decided by a competent court, the
rule of stare decisis is a bar to any attempt to
relitigate the same issue.
2. No, it is not applicable.
Petitioner contends that, assuming that the Mecenas
case applies, private respondents should be allowed
to claim only P43,857.14 each as moral damages
because in the Mecenascase, the amount of
P307,500.00 was awarded to the seven children of
the Mecenas couple. Here is where the principle of
stare decisis does not apply in view of differences in
the personal circumstances of the victims. For that
matter, differentiation would be justified even if
private respondents had joined the private
respondents in the Mecenas case.
The doctrine of stare decisis works as a bar only
against issues litigated in a previous case. Where
the issue involved was not raised nor presented to
the court and not passed upon by the court in the
previous case, the decision in the previous case is
not stare decisis of the question presently
presented.
The Mecenas case cannot be made the basis for
determining the award for attorney’s fees. The
award would naturally vary or differ in each case.
WHEREFORE, the decision of the Court of Appeals
is AFFIRMED with modification and petitioner is
ORDERED to pay private respondents damages.
CASE TITLE: THE PHILIPPINE AMERICAN
GENERAL INSURANCE CO., INC., , vs. MGG
MARINE SERVICES, INC. and DOROTEO
GAERLAN,
CASE no.: G.R. No. 135645. March 8, 2002
FACTS: San Miguel Corporation insured several
beer bottle cases with an aggregate value of
P5,836,222.80 with petitioner Philippine American
General Insurance Company.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 petitioners 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.
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 latters cargo.
The RTC found that private respondents solidarily
liable for the loss of San Miguel Corporations
cargo. On appeal to the CA, the CA reversed the
decision of the RTC.
ISSUE: Whether or not the private respondent is
liable for the loss of the cargo.
RULING: NO, the private respondent is not liable
for the loss of the cargo.
The Supreme Court ruled that 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. 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 transported by them are lost,
destroyed or if the same deteriorated.
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; there must be
an entire exclusion of human agency from the
cause of the injury of the loss.
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. If a common carrier fails to
exercise due diligence--or that ordinary care which
the circumstances of the particular case
demand[12] --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 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.
As concluded out by the Court of Appeals, citing
the decision of the Board of Marine Inquiry in the
administrative case against the vessels 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.
CASE TITLE: BASCOS vs. COURT OF APPEALS
and RODOLFO A. CIPRIANO
CASE NO.: G.R. No. 101089, April 7, 1993
FACTS: Rodolfo A. Cipriano representing Cipriano
Trading Enterprise (CIPTRADE for short) entered
into a hauling contract with Jibfair Shipping Agency
Corp whereby the former bound itself to haul the
latter’s 2,000 m/tons of soya bean meal to the
warehouse in Calamba, Laguna. To carry out its
obligation, CIPTRADE, through Cipriano,
subcontracted with Bascos to transport and to
deliver 400 sacks of soya bean meal from the Manila
Port Area to Calamba, Laguna. Petitioner failed to
deliver the said cargo. As a consequence of that
failure, Cipriano paid Jibfair Shipping Agency the
amount of the lost goods in accordance with their
contract.
Cipriano demanded reimbursement from petitioner
but the latter refused to pay. Eventually, Cipriano
filed a complaint for a sum of money and damages
with writ of preliminary attachment for breach of a
contract of carriage. The trial court granted the writ
of preliminary attachment.
In her answer, petitioner averred that there was no
contract of carriage since CIPTRADE leased her
cargo truck to load the cargo from Manila Port Area
to Laguna and that the truck carrying the cargo was
hijacked and being a force majeure, exculpated
petitioner from any liability.
After trial, the trial court rendered a decision in favor
of Cipriano and against Bascos ordering the latter to
pay the former for actual damages for attorney’s fees
and cost of suit.
Petitioner appealed to the Court of Appeals but the
respondent Court affirmed the trial court’s judgment.
ISSUES:
1) WON petitioner a common carrier
2) WON petitioner is obliged to reimburse the
amount of goods
RULING:
1)Yes.
In disputing the conclusion of the trial and appellate
courts that petitioner was a common carrier, she
alleged in this petition that the contract between her
and Cipriano was lease of the truck. She also stated
that: she was not catering to the general public.
Thus, in her answer to the amended complaint, she
said that she does business under the same style of
A.M. Bascos Trucking, offering her trucks for lease
to those who have cargo to move, not to the general
public but to a few customers only in view of the fact
that it is only a small business.
We agree with the respondent Court in its finding
that petitioner is a common carrier. Article 1732 of
the Civil Code defines a common carrier as “(a)
person, corporation or firm, or association 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 test to determine a common carrier is
“whether the given undertaking is a part of the
business engaged in by the carrier which he has
held out to the general public as his occupation
rather than the quantity or extent of the business
transacted.” In this case, petitioner herself has made
the admission that she was in the trucking business,
offering her trucks to those with cargo to move.
Judicial admissions are conclusive and no evidence
is required to prove the same.
2) Yes
Common carriers are obliged to observe
extraordinary diligence in the vigilance over the
goods transported by them. Accordingly, they are
presumed to have been at fault or to have acted
negligently if the goods are lost, destroyed or
deteriorated. There are very few instances when the
presumption of negligence does not attach and
these instances are enumerated in Article 1734. In
those cases where the presumption is applied, the
common carrier must prove that it exercised
extraordinary diligence in order to overcome the
presumption . . . The presumption of negligence was
raised against petitioner. It was petitioner's burden
to overcome it. Thus, contrary to her assertion,
private respondent need not introduce any evidence
to prove her negligence. Her own failure to adduce
sufficient proof of extraordinary diligence made the
presumption conclusive against her.