Republic of the Philippines On January 20, 1994, petitioner filed a letter-protest addressed
SUPREME COURT to the respondent City Treasurer, the pertinent portion of which
Manila
SECOND DIVISION
G.R. No. 125948 December 29, 1998
FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner,
vs.
COURT OF APPEALS, HONORABLE PATERNO V. TAC-AN,
BATANGAS CITY and ADORACION C. ARELLANO, in her official
capacity as City Treasurer of Batangas, respondents.
MARTINEZ, J.:
This petition for review on certiorari assails the Decision of the
Court of Appeals dated November 29, 1995, in CA-G.R. SP No.
36801, affirming the decision of the Regional Trial Court of
Batangas City, Branch 84, in Civil Case No. 4293, which dismissed
petitioners' complaint for a business tax refund imposed by the
City of Batangas.
Petitioner is a grantee of a pipeline concession under Republic
Act No. 387, as amended, to contract, install and operate oil
pipelines. The original pipeline concession was granted in
1967 1 and renewed by the Energy Regulatory Board in 1992. 2
Sometime in January 1995, petitioner applied for a mayor's
permit with the Office of the Mayor of Batangas City. However,
before the mayor's permit could be issued, the respondent City
Treasurer required petitioner to pay a local tax based on its
gross receipts for the fiscal year 1993 pursuant to the Local
Government Code 3. The respondent City Treasurer assessed a
business tax on the petitioner amounting to P956,076.04 payable
in four installments based on the gross receipts for products
pumped at GPS-1 for the fiscal year 1993 which amounted to
P181,681,151.00. In order not to hamper its operations,
petitioner paid the tax under protest in the amount of
P239,019.01 for the first quarter of 1993.
reads:
Please note that our Company (FPIC) is a pipeline
operator with a government concession granted
under the Petroleum Act. It is engaged in the
business of transporting petroleum products from
the Batangas refineries, via pipeline, to Sucat and
JTF Pandacan Terminals. As such, our Company is
exempt from paying tax on gross receipts under
Section 133 of the Local Government Code of
1991 . . . .
Moreover, Transportation contractors are not
included in the enumeration of contractors under
Section 131, Paragraph (h) of the Local
Government Code. Therefore, the authority to
impose tax "on contractors and other independent
contractors" under Section 143, Paragraph (e) of
the Local Government Code does not include the
power to levy on transportation contractors.
The imposition and assessment cannot be
categorized as a mere fee authorized under
Section 147 of the Local Government Code. The
said section limits the imposition of fees and
charges on business to such amounts as may be
commensurate to the cost of regulation,
inspection, and licensing. Hence, assuming
arguendo that FPIC is liable for the license fee, the
imposition thereof based on gross receipts is
violative of the aforecited provision. The amount of
P956,076.04 (P239,019.01 per quarter) is not
commensurate to the cost of regulation, inspection
and licensing. The fee is already a revenue raising
measure, and not a mere regulatory imposition. 4
On March 8, 1994, the respondent City Treasurer denied the
protest contending that petitioner cannot be considered
engaged in transportation business, thus it cannot claim
exemption under Section 133 (j) of the Local Government Code. 5
On June 15, 1994, petitioner filed with the Regional Trial Court of
Batangas City a complaint 6 for tax refund with prayer for writ of
preliminary injunction against respondents City of Batangas and
Adoracion Arellano in her capacity as City Treasurer. In its
complaint, petitioner alleged, inter alia, that: (1) the imposition
and collection of the business tax on its gross receipts violates resort to distinctions or other considerations may
Section 133 of the Local Government Code; (2) the authority of be of help:
cities to impose and collect a tax on the gross receipts of
"contractors and independent contractors" under Sec. 141 (e) 1. That the exemption
and 151 does not include the authority to collect such taxes on granted under Sec.
transportation contractors for, as defined under Sec. 131 (h), the 133 (j) encompasses
term "contractors" excludes transportation contractors; and, (3) onlycommon
the City Treasurer illegally and erroneously imposed and carriers so as not to
collected the said tax, thus meriting the immediate refund of the overburden the riding
tax paid. 7 public or commuters
with taxes. Plaintiff is
Traversing the complaint, the respondents argued that petitioner not a common carrier,
cannot be exempt from taxes under Section 133 (j) of the Local but a special carrier
Government Code as said exemption applies only to extending its services
"transportation contractors and persons engaged in the and facilities to a
transportation by hire and common carriers by air, land and single specific or
water." Respondents assert that pipelines are not included in the "special customer"
term "common carrier" which refers solely to ordinary carriers under a "special
such as trucks, trains, ships and the like. Respondents further contract."
posit that the term "common carrier" under the said code
pertains to the mode or manner by which a product is delivered 2. The Local Tax Code
to its destination. 8 of 1992 was basically
enacted to give more
On October 3, 1994, the trial court rendered a decision and effective local
dismissing the complaint, ruling in this wise: autonomy to local
governments than the
. . . Plaintiff is either a contractor or other previous enactments,
independent contractor. to make them
economically and
financially viable to
. . . the exemption to tax claimed by the plaintiff serve the people and
has become unclear. It is a rule that tax discharge their
exemptions are to be strictly construed against the functions with a
taxpayer, taxes being the lifeblood of the concomitant obligation
government. Exemption may therefore be granted to accept certain
only by clear and unequivocal provisions of law. devolution of powers, .
. . So, consistent with
Plaintiff claims that it is a grantee of a pipeline this policy even
concession under Republic Act 387. (Exhibit A) franchise grantees are
whose concession was lately renewed by the taxed (Sec. 137) and
Energy Regulatory Board (Exhibit B). Yet neither contractors are also
said law nor the deed of concession grant any tax taxed under Sec. 143
exemption upon the plaintiff. (e) and 151 of the
Code. 9
Even the Local Government Code imposes a tax on
franchise holders under Sec. 137 of the Local Tax Petitioner assailed the aforesaid decision before this Court via a
Code. Such being the situation obtained in this petition for review. On February 27, 1995, we referred the case
case (exemption being unclear and equivocal) to the respondent Court of Appeals for consideration and
adjudication. 10On November 29, 1995, the respondent court
rendered a decision 11 affirming the trial court's dismissal of kind to which his
petitioner's complaint. Petitioner's motion for reconsideration business is confined;
was denied on July 18, 1996. 12
3. He must undertake
Hence, this petition. At first, the petition was denied due course to carry by the method
in a Resolution dated November 11, 1996. 13 Petitioner moved for by which his business
a reconsideration which was granted by this Court in a is conducted and over
Resolution 14 of January 22, 1997. Thus, the petition was his established roads;
reinstated. and

Petitioner claims that the respondent Court of Appeals erred in 4. The transportation
holding that (1) the petitioner is not a common carrier or a must be for hire. 15
transportation contractor, and (2) the exemption sought for by
petitioner is not clear under the law. Based on the above definitions and requirements, there is no
doubt that petitioner is a common carrier. It is engaged in the
There is merit in the petition. business of transporting or carrying goods, i.e. petroleum
products, for hire as a public employment. It undertakes to carry
A "common carrier" may be defined, broadly, as one who holds for all persons indifferently, that is, to all persons who choose to
himself out to the public as engaged in the business of employ its services, and transports the goods by land and for
transporting persons or property from place to place, for compensation. The fact that petitioner has a limited clientele
compensation, offering his services to the public generally. does not exclude it from the definition of a common carrier.
In De Guzman vs. Court of Appeals 16 we ruled that:
Art. 1732 of the Civil Code defines a "common carrier" as "any
person, corporation, firm or association engaged in the business The above article (Art. 1732, Civil
of carrying or transporting passengers or goods or both, by land, Code) makes no distinction between
water, or air, for compensation, offering their services to the one whose principal business activity
public." is the carrying of persons or goods
or both, and one who does such
carrying only as an ancillary activity
The test for determining whether a party is a common carrier of (in local idiom, as a "sideline").
goods is: Article 1732 . . . avoids making any
distinction between a person or
1. He must be engaged enterprise offering transportation
in the business of service on a regular or scheduled
carrying goods for basis and one offering such service
others as a public on an occasional, episodic or
employment, and must unscheduled basis. Neither does
hold himself out as Article 1732 distinguish between a
ready to engage in the carrier offering its services to the
transportation of "general public," i.e., the general
goods for person community or population, and one
generally as a who offers services or solicits
business and not as a business only from a narrow
casual occupation; segment of the general population.
We think that Article 1877
2. He must undertake deliberately refrained from making
to carry goods of the such distinctions.
So understood, the concept of canal, irrigation
"common carrier" under Article 1732 system gas, electric
may be seen to coincide neatly with light heat and power,
the notion of "public service," under water supply
the Public Service Act and power
(Commonwealth Act No. 1416, as petroleum, sewerage
amended) which at least partially system, wire or
supplements the law on common wireless
carriers set forth in the Civil Code. communications
Under Section 13, paragraph (b) of systems, wire or
the Public Service Act, "public wireless broadcasting
service" includes: stations and other
similar public services.
every person that now (Emphasis Supplied)
or hereafter may own,
operate. manage, or Also, respondent's argument that the term "common carrier" as
control in the used in Section 133 (j) of the Local Government Code refers only
Philippines, for hire or to common carriers transporting goods and passengers through
compensation, with moving vehicles or vessels either by land, sea or water, is
general or limited erroneous.
clientele, whether
permanent, occasional As correctly pointed out by petitioner, the definition of "common
or accidental, and carriers" in the Civil Code makes no distinction as to the means
done for general of transporting, as long as it is by land, water or air. It does not
business purposes, provide that the transportation of the passengers or goods
any common carrier, should be by motor vehicle. In fact, in the United States, oil pipe
railroad, street line operators are considered common carriers. 17
railway, traction
railway, subway motor
vehicle, either for Under the Petroleum Act of the Philippines (Republic Act 387),
freight or passenger, petitioner is considered a "common carrier." Thus, Article 86
or both, with or thereof provides that:
without fixed route
and whatever may be Art. 86. Pipe line concessionaire as
its classification, common carrier. — A pipe line shall
freight or carrier have the preferential right to utilize
service of any class, installations for the transportation of
express service, petroleum owned by him, but is
steamboat, or obligated to utilize the remaining
steamship line, transportation capacity pro rata for
pontines, ferries and the transportation of such other
water craft, engaged petroleum as may be offered by
in the transportation others for transport, and to charge
of passengers or without discrimination such rates as
freight or both, may have been approved by the
shipyard, marine Secretary of Agriculture and Natural
repair shop, wharf or Resources.
dock, ice plant, ice-
refrigeration plant,
Republic Act 387 also regards petroleum operation as a public tation
utility. Pertinent portion of Article 7 thereof provides: contract
ors and
that everything relating to the persons
exploration for and exploitation of engaged
petroleum . . . and everything in the
relating to the manufacture, transpor
refining, storage, or transportation tation of
by special methods of petroleum, is passeng
hereby declared to be a public ers or
utility. (Emphasis Supplied) freight
by hire
and
The Bureau of Internal Revenue likewise considers the petitioner common
a "common carrier." In BIR Ruling No. 069-83, it declared: carriers
by air,
. . . since [petitioner] is a pipeline land or
concessionaire that is engaged only water,
in transporting petroleum products, except
it is considered a common carrier as
under Republic Act No. 387 . . . . provided
Such being the case, it is not subject in this
to withholding tax prescribed by Code.
Revenue Regulations No. 13-78, as
amended. The deliberations conducted in the House of Representatives on
the Local Government Code of 1991 are illuminating:
From the foregoing disquisition, there is no doubt that petitioner
is a "common carrier" and, therefore, exempt from the business MR. AQUINO (A). Thank you, Mr.
tax as provided for in Section 133 (j), of the Local Government Speaker.
Code, to wit:
Mr. Speaker, we would like to
Sec. 133. Common Limitations on the proceed to page 95, line
Taxing Powers of Local Government
Units. — Unless otherwise provided
herein, the exercise of the taxing 1. It states: "SEC. 121 [now Sec.
powers of provinces, cities, 131]. Common Limitations on the
municipalities, and barangays shall Taxing Powers of Local Government
not extend to the levy of the Units." . . .
following:
MR. AQUINO (A.). Thank you Mr.
xxx xxx xxx Speaker.

(j) Taxes Still on page 95, subparagraph 5, on

on the taxes on the business of
gross transportation. This appears to be
receipts one of those being deemed to be
of exempted from the taxing powers of
transpor the local government units. May we
know the reason why the
 transportation business is being
excluded from the taxing powers of
the local government units?
MR. JAVIER (E.). Mr. Speaker, there is
an exception contained in Section
121 (now Sec. 131), line 16,
paragraph 5. It states that local
government units may not impose
taxes on the business of
transportation, except as otherwise
provided in this code.
Petitioner is already paying three (3%) percent common carrier's
tax on its gross sales/earnings under the National Internal
Revenue Code. 19 To tax petitioner again on its gross receipts in
its transportation of petroleum business would defeat the
purpose of the Local Government Code.
WHEREFORE, the petition is hereby GRANTED. The decision of
the respondent Court of Appeals dated November 29, 1995 in CA-
G.R. SP No. 36801 is REVERSED and SET ASIDE.
SO ORDERED.

Now, Mr. Speaker, if the Gentleman

would care to go to page 98 of Book
II, one can see there that provinces
have the power to impose a tax on
business enjoying a franchise at the
rate of not more than one-half of 1
percent of the gross annual receipts.
So, transportation contractors who
are enjoying a franchise would be
subject to tax by the province. That
is the exception, Mr. Speaker.

What we want to guard against here,

Mr. Speaker, is the imposition of
taxes by local government units on
the carrier business. Local
government units may impose taxes
on top of what is already being
imposed by the National Internal
Revenue Code which is the so-called
"common carriers tax." We do not
want a duplication of this tax, so we
just provided for an exception under
Section 125 [now Sec. 137] that a
province may impose this tax at a
specific rate.

MR. AQUINO (A.). Thank you for that

clarification, Mr. Speaker. . . . 18

It is clear that the legislative intent in excluding from the taxing

power of the local government unit the imposition of business
tax against common carriers is to prevent a duplication of the so-
called "common carrier's tax."

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-15122 March 10, 1920
THE UNITED STATES, plaintiff-appellee,
vs.
TAN PIACO, VENTURA ESTUYA, PEDRO HOMERES, MAXIMINO
GALSA and EMILIO LEOPANDO, defendants.
TAN PIACO, appellant.
Recaredo Ma. Calvo for appellant.
Attorney-General Paredes for appellee.
JOHNSON, J.:
Said defendants were charged with a violation of the Public Utility Law
(Act No. 2307 as amended by Acts Nos. 2362 and 2694), in that they
were operating a public utility without permission from the Public Utility
Commissioner.
Upon the complain presented each of said defendants were arrested and
brought to trial. After hearing the evidence the Honorable Cayetano
Lukban, judge, found that the evidence was insufficient to support the
charges against Ventura Estuya, Pedro Homeres, Maximino Galsa and
Emilio Leopando, and absolved them from all liability under the complaint
and discharged them from all liability under the complaint and
discharged them from the custody of the law. The lower court found the
defendant Tan Piaco guilty of the crime charged in the complaint and
sentence him to pay a fine of P100, and, in case of insolvency, to suffer
subsidiary imprisonment, and to pay one-fifth part of the costs. From that
sentence Tan Piaco appealed to this court.
The facts proved during the trial of the cause may be stated as follows:
The appellant rented two automobile trucks and was using them upon
the highways of the Province of Leyte for the purpose of carrying some
passengers and freight; that he carried passengers and freight under a
special contract in each case; that he had not held himself out to carry all
passengers and all freight for all persons who might offer passengers and
freight.
The Attorney-General, in a carefully prepared brief, says: "The question is
whether the appellant, under the above facts, was a public utility under
the foregoing definitions," and was therefore subject to the control and
regulation of the Public Utility Commission. "We have not found anything
in the evidence showing that the appellant operated the trucks in
question for public use. These trucks, so far as indicated by the evidence
and as far as the appellant is concerned, furnished service under special
agreements to carry particular persons and property. . . . For all that we
can deduce from the evidence, these passengers, or the owners of the
freight, may have controlled the whole vehicles 'both as to content,
direction, and time of use,' which facts, under all the circumstances of
the case, would, in our opinion, take away the defendant's business from
the provisions of the Public Utility Act."
In support of the conclusion of the Attorney-General, he cites the case
of Terminal Taxicab Co. vs. Kutz (241 U. S.. 252). In that case the
Terminal Taxicab Co. furnished automobiles from its central garage on
special orders and did not hold itself out to accommodate any and all
persons. The plaintiff reserve to itself the right to refuse service. The
Supreme Court of the United States, speaking through Mr. Justice
Holmes, said: "The bargains made by the plaintiff are individual, and
however much they may tend towards uniformity in price, probably have
not the mechanical fixity of charges that attend the use of taxicabs from
the stations to the hotels. The court is of the opinion that that part of the
business is not to be regarded as a public utility. It is true that all
business, and for the matter of that, every life in all its details, has a
public aspect, some bearing upon the welfare of the country in which it is
passed." The court held that by virtue of the fact that said company did
not hold itself out to serve any and all persons, it was not a public utility
and was not subject to the jurisdiction of the public utility commission.
Upon the facts adduced during the trial of the cause, and for the
foregoing reasons, the Attorney-General recommends that the sentence
of the lower court be revoked and that the appellant be absolved from all
liability under the complaint.
Section 14 of Act No. 2307, as amended by section 9 of Act No. 2694,
provides that: "The Public Utility Commission or Commissioners shall
have general supervision and regulation of, jurisdiction and control over,
all public utilities. . . . The term 'public utility' is hereby defined to include
every individual, copartnership, association, corporation or joint stock
company, etc., etc., that now or hereafter may own, operate, managed,
or control any common carrier, railroad, street railway, etc., etc.,
engaged in the transportation of passengers, cargo, etc., etc.,for public
use."
Under the provisions of said section, two things are necessary: (a) The
individual, copartnership, etc., etc., must be a public utility; and (b) the
business in which such individual, copartnership, etc. etc., is engaged
must be for public use. So long as the individual or copartnership, etc.,
etc., is engaged in a purely private enterprise, without attempting to
render service to all who may apply, he can in no sense be considered a
public utility, for public use.

"Public use" means the same as "use by the public." The essential feature
of the public use is that it is not confined to privilege individuals, but is
open to the indefinite public. It is this indefinite or unrestricted quality
that gives it its public character. In determining whether a use is public,
we must look not only the character of the business to be done, but also
to the proposed mode of doing it. If the use is merely optional with the
owners, or the public benefit is merely incidental, it is not a public use,
authorizing the exercise of the jurisdiction of the public utility
commission. There must be, in general, a right which the law compels the
power to give to the general public. It is not enough that the general
prosperity of the public is promoted. Public use is not synonymous with
public interest. The true criterion by which to judge of the character of
the use is whether the public may enjoy it by rightor only by permission.

For all of the foregoing reasons, we agree with the Attorney-General that
the appellant was not operating a public utility, for public use, and was
not, therefore, subject to the jurisdiction of the Public Utility Commission.

Therefore, the sentence of the lower court is hereby revoked, and it is

hereby ordered and decreed that the complaint be dismissed and that
the defendant be absolved from all liability under the same, and that he
be discharged from the custody of the law, without any finding as to
costs. So ordered.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-25599 April 4, 1968
HOME INSURANCE COMPANY, plaintiff-appellee,
vs.
AMERICAN STEAMSHIP AGENCIES, INC. and LUZON STEVEDORING
CORPORATION, defendants,
AMERICAN STEAMSHIP AGENCIES, INC., defendant-appellant.
William H. Quasha and Associates for plaintiff-appellee.
Ross, Selph, Salcedo and Associates for defendant-appellant.
BENGZON, J.P., J.:
"Consorcio Pesquero del Peru of South America" shipped freight pre-paid
at Chimbate, Peru, 21,740 jute bags of Peruvian fish meal through SS
Crowborough, covered by clean bills of lading Numbers 1 and 2, both
dated January 17, 1963. The cargo, consigned to San Miguel Brewery,
Inc., now San Miguel Corporation, and insured by Home Insurance
Company for $202,505, arrived in Manila on March 7, 1963 and was
discharged into the lighters of Luzon Stevedoring Company. When the
cargo was delivered to consignee San Miguel Brewery Inc., there were
shortages amounting to P12,033.85, causing the latter to lay claims
against Luzon Stevedoring Corporation, Home Insurance Company and
the American Steamship Agencies, owner and operator of SS
Crowborough.
Because the others denied liability, Home Insurance Company paid the
consignee P14,870.71 — the insurance value of the loss, as full
settlement of the claim. Having been refused reimbursement by both the
Luzon Stevedoring Corporation and American Steamship Agencies, Home
Insurance Company, as subrogee to the consignee, filed against them on
March 6, 1964 before the Court of First Instance of Manila a complaint for
recovery of P14,870.71 with legal interest, plus attorney's fees.
In answer, Luzon Stevedoring Corporation alleged that it delivered with
due diligence the goods in the same quantity and quality that it had
received the same from the carrier. It also claimed that plaintiff's claim
had prescribed under Article 366 of the Code of Commerce stating that
the claim must be made within 24 hours from receipt of the cargo.
American Steamship Agencies denied liability by alleging that under the
provisions of the Charter party referred to in the bills of lading, the
charterer, not the shipowner, was responsible for any loss or damage of
the cargo. Furthermore, it claimed to have exercised due diligence in
stowing the goods and that as a mere forwarding agent, it was not
responsible for losses or damages to the cargo.
On November 17, 1965, the Court of First Instance, after trial, absolved
Luzon Stevedoring Corporation, having found the latter to have merely
delivered what it received from the carrier in the same condition and
quality, and ordered American Steamship Agencies to pay plaintiff
P14,870.71 with legal interest plus P1,000 attorney's fees. Said court
cited the following grounds:
(a) The non-liability claim of American Steamship Agencies under
the charter party contract is not tenable because Article 587 of
the Code of Commerce makes the ship agent also civilly liable for
damages in favor of third persons due to the conduct of the
captain of the carrier;
(b) The stipulation in the charter party contract exempting the
owner from liability is against public policy under Article 1744 of
the Civil Code;
(c) In case of loss, destruction or deterioration of goods, common
carriers are presumed at fault or negligent under Article 1735 of
the Civil Code unless they prove extraordinary diligence, and
they cannot by contract exempt themselves from liability
resulting from their negligence or that of their servants; and
(d) When goods are delivered to the carrier in good order and the
same are in bad order at the place of destination, the carrier
is prima facie liable.
Disagreeing with such judgment, American Steamship Agencies appealed
directly to Us. The appeal brings forth for determination this legal issue:
Is the stipulation in the charter party of the owner's non-liability valid so
as to absolve the American Steamship Agencies from liability for loss?
The bills of lading,1 covering the shipment of Peruvian fish meal provide
at the back thereof that the bills of lading shall be governed by and
subject to the terms and conditions of the charter party, if any,
otherwise, the bills of lading prevail over all the agreements.2 On the of
the bills are stamped "Freight prepaid as per charter party. Subject to all
terms, conditions and exceptions of charter party dated London, Dec. 13,
1962."
A perusal of the charter party3 referred to shows that while the
possession and control of the ship were not entirely transferred to the
charterer,4 the vessel was chartered to its full and complete capacity
(Exh. 3). Furthermore, the, charter had the option to go north or south
or vice-versa,5 loading, stowing and discharging at its risk and
expense.6 Accordingly, the charter party contract is one of affreightment
over the whole vessel rather than a demise. As such, the liability of the
shipowner for acts or negligence of its captain and crew, would remain in
the absence of stipulation.
Section 2, paragraph 2 of the charter party, provides that the owner is
liable for loss or damage to the goods caused by personal want of due
diligence on its part or its manager to make the vessel in all respects
seaworthy and to secure that she be properly manned, equipped and
supplied or by the personal act or default of the owner or its manager.
Said paragraph, however, exempts the owner of the vessel from any loss
or damage or delay arising from any other source, even from the neglect
or fault of the captain or crew or some other person employed by the
owner on board, for whose acts the owner would ordinarily be liable
except for said paragraph..
And furthermore, in a charter of the entire vessel, the bill of lading issued
by the master to the charterer, as shipper, is in fact and legal
contemplation merely a receipt and a document of title not a contract, for
the contract is the charter party.10 The consignee may not claim
ignorance of said charter party because the bills of lading expressly
referred to the same. Accordingly, the consignees under the bills of
lading must likewise abide by the terms of the charter party. And as
stated, recovery cannot be had thereunder, for loss or damage to the
cargo, against the shipowners, unless the same is due to personal acts or
negligence of said owner or its manager, as distinguished from its other
agents or employees. In this case, no such personal act or negligence has
been proved.
WHEREFORE, the judgment appealed from is hereby reversed and
appellant is absolved from liability to plaintiff. No costs. So ordered.

Regarding the stipulation, the Court of First Instance declared the

contract as contrary to Article 587 of the Code of Commerce making the
ship agent civilly liable for indemnities suffered by third persons arising
from acts or omissions of the captain in the care of the goods and Article
1744 of the Civil Code under which a stipulation between the common
carrier and the shipper or owner limiting the liability of the former for loss
or destruction of the goods to a degree less than extraordinary diligence
is valid provided it be reasonable, just and not contrary to public policy.
The release from liability in this case was held unreasonable and contrary
to the public policy on common carriers.

The provisions of our Civil Code on common carriers were taken from
Anglo-American law.7 Under American jurisprudence, a common carrier
undertaking to carry a special cargo or chartered to a special person
only, becomes a private carrier.8 As a private carrier, a stipulation
exempting the owner from liability for the negligence of its agent is not
against public policy,9 and is deemed valid.

Such doctrine We find reasonable. The Civil Code provisions on common

carriers should not be applied where the carrier is not acting as such but
as a private carrier. The stipulation in the charter party absolving the
owner from liability for loss due to the negligence of its agent would be
void only if the strict public policy governing common carriers is applied.
Such policy has no force where the public at large is not involved, as in
the case of a ship totally chartered for the use of a single party.

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-47822 December 22, 1988
PEDRO DE GUZMAN, petitioner,
vs.
COURT OF APPEALS and ERNESTO CENDANA, respondents.
Vicente D. Millora for petitioner.
Jacinto Callanta for private respondent.
FELICIANO, J.:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up
used bottles and scrap metal in Pangasinan. Upon gathering sufficient
quantities of such scrap material, respondent would bring such material
to Manila for resale. He utilized two (2) six-wheeler trucks which he
owned for hauling the material to Manila. On the return trip to
Pangasinan, respondent would load his vehicles with cargo which various
merchants wanted delivered to differing establishments in Pangasinan.
For that service, respondent charged freight rates which were commonly
lower than regular commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman a merchant
and authorized dealer of General Milk Company (Philippines), Inc. in
Urdaneta, Pangasinan, contracted with respondent for the hauling of 750
cartons of Liberty filled milk from a warehouse of General Milk in Makati,
Rizal, to petitioner's establishment in Urdaneta on or before 4 December
1970. Accordingly, on 1 December 1970, respondent loaded in Makati the
merchandise on to his trucks: 150 cartons were loaded on a truck driven
by respondent himself, while 600 cartons were placed on board the other
truck which was driven by Manuel Estrada, respondent's driver and
employee.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The
other 600 boxes never reached petitioner, since the truck which carried
these boxes was hijacked somewhere along the MacArthur Highway in
Paniqui, Tarlac, by armed men who took with them the truck, its driver,
his helper and the cargo.
On 6 January 1971, petitioner commenced action against private
respondent in the Court of First Instance of Pangasinan, demanding
payment of P 22,150.00, the claimed value of the lost merchandise, plus
damages and attorney's fees. Petitioner argued that private respondent,
being a common carrier, and having failed to exercise the extraordinary
diligence required of him by the law, should be held liable for the value of
the undelivered goods.
In his Answer, private respondent denied that he was a common carrier
and argued that he could not be held responsible for the value of the lost
goods, such loss having been due to force majeure.
On 10 December 1975, the trial court rendered a Decision 1 finding
private respondent to be a common carrier and holding him liable for the
value of the undelivered goods (P 22,150.00) as well as for P 4,000.00 as
damages and P 2,000.00 as attorney's fees.
On appeal before the Court of Appeals, respondent urged that the trial
court had erred in considering him a common carrier; in finding that he
had habitually offered trucking services to the public; in not exempting
him from liability on the ground of force majeure; and in ordering him to
pay damages and attorney's fees.
The Court of Appeals reversed the judgment of the trial court and held
that respondent had been engaged in transporting return loads of freight
"as a casual
occupation — a sideline to his scrap iron business" and not as a common
carrier. Petitioner came to this Court by way of a Petition for Review
assigning as errors the following conclusions of the Court of Appeals:
1. that private respondent was not a common carrier;
2. that the hijacking of respondent's truck was force
majeure; and
3. that respondent was not liable for the value of the
undelivered cargo. (Rollo, p. 111)
We consider first the issue of whether or not private respondent Ernesto
Cendana may, under the facts earlier set forth, be properly characterized
as a common carrier.
The Civil Code defines "common carriers" in the following terms:
 Article 1732. Common carriers are persons, corporations,
firms or associations engaged in the business of carrying
or transporting passengers or goods or both, by land,
water, or air for compensation, offering their services to
the public.
The above article makes no distinction between one
whose principal business activity is the carrying of persons or goods or
both, and one who does such carrying only as an ancillary activity (in
local Idiom as "a sideline"). Article 1732 also carefully avoids making any
distinction between a person or enterprise offering transportation service
on a regular or scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population.
We think that Article 1733 deliberaom 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:
... 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. ... (Emphasis
supplied)
It appears to the Court that private respondent is properly characterized
as a common carrier even though he merely "back-hauled" goods for
other merchants from Manila to Pangasinan, although such back-hauling
was done on a periodic or occasional rather than regular or scheduled
manner, and even though private respondent'sprincipal occupation was
not the carriage of goods for others. There is no dispute that private
respondent charged his customers a fee for hauling their goods; that fee
frequently fell below commercial freight rates is not relevant here.
The Court of Appeals referred to the fact that private respondent held no
certificate of public convenience, and concluded he was not a common
carrier. This is palpable error. A certificate of public convenience is not a
requisite for the incurring of liability under the Civil Code provisions
governing common carriers. That liability arises the moment a person or
firm acts as a common carrier, without regard to whether or not such
carrier has also complied with the requirements of the applicable
regulatory statute and implementing regulations and has been granted a
certificate of public convenience or other franchise. To exempt private
respondent from the liabilities of a common carrier because he has not
secured the necessary certificate of public convenience, would be
offensive to sound public policy; that would be to reward private
respondent precisely for failing to comply with applicable statutory
requirements. The business of a common carrier impinges directly and
intimately upon the safety and well being and property of those members
of the general community who happen to deal with such carrier. The law
imposes duties and liabilities upon common carriers for the safety and
protection of those who utilize their services and the law cannot allow a
common carrier to render such duties and liabilities merely facultative by
simply failing to obtain the necessary permits and authorizations.
We turn then to the liability of private respondent as a common carrier.
Common carriers, "by the nature of their business and for reasons of
public policy" 2 are held to a very high degree of care and diligence
("extraordinary diligence") in the carriage of goods as well as of
passengers. The specific import of extraordinary diligence in the care of
goods transported by a common carrier is, according to Article 1733,
"further expressed in Articles 1734,1735 and 1745, numbers 5, 6 and 7"
of the Civil Code.
Article 1734 establishes the general rule that common carriers are
responsible for the loss, destruction or deterioration of the goods which
they carry, "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; and
(5) Order or act of competent public
authority.
It is important to point out that the above list of causes of loss,
destruction or deterioration which exempt the common carrier for
responsibility therefor, is a closed list. Causes falling outside the
foregoing list, even if they appear to constitute a species of force
majeure fall within the scope of Article 1735, which provides as follows:
In all cases other than those mentioned in numbers 1, 2,
3, 4 and 5 of the preceding article, 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 as required in Article 1733.
(Emphasis supplied)
Applying the above-quoted Articles 1734 and 1735, we note firstly that
the specific cause alleged in the instant case — the hijacking of the
carrier's truck — does not fall within any of the five (5) categories of
exempting causes listed in Article 1734. It would follow, therefore, that
the hijacking of the carrier's vehicle must be dealt with under the
provisions of Article 1735, in other words, that the private respondent as
common carrier is presumed to have been at fault or to have acted
negligently. This presumption, however, may be overthrown by proof of
extraordinary diligence on the part of private respondent.
Petitioner insists that private respondent had not observed extraordinary
diligence in the care of petitioner's goods. Petitioner argues that in the
circumstances of this case, private respondent should have hired a
security guard presumably to ride with the truck carrying the 600 cartons
of Liberty filled milk. We do not believe, however, that in the instant case,
the standard of extraordinary diligence required private respondent to
retain a security guard to ride with the truck and to engage brigands in a
firelight at the risk of his own life and the lives of the driver and his
helper.
The precise issue that we address here relates to the specific
requirements of the duty of extraordinary diligence in the vigilance over
the goods carried in the specific context of hijacking or armed robbery.
As noted earlier, the duty of extraordinary diligence in the vigilance over
goods is, under Article 1733, given additional specification not only by
Articles 1734 and 1735 but also by Article 1745, numbers 4, 5 and 6,
Article 1745 provides in relevant part:
Any of the following or similar stipulations shall be
considered unreasonable, unjust and contrary to public
policy:
xxx xxx xxx
(5) that the common carrier shall not be
responsible for the acts or omissions of
his or its employees;
(6) that the common carrier's liability for
acts committed by thieves, or of
robbers who donot act with grave or
irresistible threat, violence or force, is
dispensed with or diminished; and
(7) that the common carrier shall not
responsible for the loss, destruction or
deterioration of goods on account of the
defective condition of the car vehicle,
ship, airplane or other equipment used in
the contract of carriage. (Emphasis
supplied)
Under Article 1745 (6) above, a common carrier is held responsible —
and will not be allowed to divest or to diminish such responsibility — even
for acts of strangers like thieves or robbers, except where such thieves or
robbers in fact acted "with grave or irresistible threat, violence or force."
We believe and so hold that the limits of the duty of extraordinary
diligence in the vigilance over the goods carried are reached where the
goods are lost as a result of a robbery which is attended by "grave or
irresistible threat, violence or force."
In the instant case, armed men held up the second truck owned by
private respondent which carried petitioner's cargo. The record shows
that an information for robbery in band was filed in the Court of First
Instance of Tarlac, Branch 2, in Criminal Case No. 198 entitled "People of
the Philippines v. Felipe Boncorno, Napoleon Presno, Armando Mesina,
Oscar Oria and one John Doe." There, the accused were charged with
willfully and unlawfully taking and carrying away with them the second
truck, driven by Manuel Estrada and loaded with the 600 cartons of
Liberty filled milk destined for delivery at petitioner's store in Urdaneta,
Pangasinan. The decision of the trial court shows that the accused acted
with grave, if not irresistible, threat, violence or force. 3 Three (3) of the
five (5) hold-uppers were armed with firearms. The robbers not only took
away the truck and its cargo but also kidnapped the driver and his
helper, detaining them for several days and later releasing them in
another province (in Zambales). The hijacked truck was subsequently
found by the police in Quezon City. The Court of First Instance convicted
all the accused of robbery, though not of robbery in band. 4

In these circumstances, we hold that the occurrence of the loss must

reasonably be regarded as quite beyond the control of the common
carrier and properly regarded as a fortuitous event. It is necessary to
recall that even common carriers are not made absolute insurers against
all risks of travel and of transport of goods, and are not held liable for
acts or events which cannot be foreseen or are inevitable, provided that
they shall have complied with the rigorous standard of extraordinary
diligence.

We, therefore, agree with the result reached by the Court of Appeals that
private respondent Cendana is not liable for the value of the undelivered
merchandise which was lost because of an event entirely beyond private
respondent's control.

ACCORDINGLY, the Petition for Review on certiorari is hereby DENIED and

the Decision of the Court of Appeals dated 3 August 1977 is AFFIRMED.
No pronouncement as to costs.

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 101089. April 7, 1993.
ESTRELLITA M. BASCOS, petitioners,
vs.
COURT OF APPEALS and RODOLFO A. CIPRIANO, respondents.
Modesto S. Bascos for petitioner.
Pelaez, Adriano & Gregorio for private respondent.
SYLLABUS
1. CIVIL LAW; COMMON CARRIERS; DEFINED; TEST TO DETERMINE
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." . . . The holding of the
Court in De Guzman vs. Court of Appeals is instructive. In referring to
Article 1732 of the Civil Code, it held thus: "The above article makes no
distinction between one whose principal business activity is the carrying
of persons or goods or both, and one who does such carrying only as an
ancillary activity (in local idiom, as a "sideline"). Article 1732 also
carefully avoids making any distinction between a person or enterprise
offering transportation service on a regular or scheduled basis and one
offering such service on an occasional, episodic or unscheduled basis.
Neither does Article 1732 distinguished 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."
2. ID.; ID.; DILIGENCE REQUIRED IN VIGILANCE OVER GOODS
TRANSPORTED; WHEN PRESUMPTION OF NEGLIGENCE ARISES; HOW
PRESUMPTION OVERCAME; WHEN PRESUMPTION MADE ABSOLUTE. —
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.
3. ID.; ID.; HIJACKING OF GOODS; CARRIER PRESUMED NEGLIGENT; HOW
CARRIER ABSOLVED FROM LIABILITY. — In De Guzman vs. Court of
Appeals, the Court held that hijacking, not being included in the
provisions of Article 1734, must be dealt with under the provisions of
Article 1735 and thus, the common carrier is presumed to have been at
fault or negligent. To exculpate the carrier from liability arising from
hijacking, he must prove that the robbers or the hijackers acted with
grave or irresistible threat, violence, or force. This is in accordance with
Article 1745 of the Civil Code which provides: "Art. 1745. Any of the
following or similar stipulations shall be considered unreasonable, unjust
and contrary to public policy . . . (6) That the common carrier's liability for
acts committed by thieves, or of robbers who do not act with grave or
irresistible threat, violences or force, is dispensed with or diminished"; In
the same case, the Supreme Court also held that: "Under Article 1745 (6)
above, a common carrier is held responsible — and will not be allowed to
divest or to diminish such responsibility — even for acts of strangers like
thieves or robbers, except where such thieves or robbers in fact acted
"with grave of irresistible threat, violence of force," We believe and so
hold that the limits of the duty of extraordinary diligence in the vigilance
over the goods carried are reached where the goods are lost as a result
of a robbery which is attended by "grave or irresistible threat, violence or
force."
4. REMEDIAL LAW; EVIDENCE; JUDICIAL ADMISSIONS CONCLUSIVE. — 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.
5. ID.; ID.; BURDEN OF PROOF RESTS WITH PARTY WHO ALLEGES A FACT.
— Petitioner presented no other proof of the existence of the contract of
lease. He who alleges a fact has the burden of proving it.
6. ID.; ID.; AFFIDAVITS NOT CONSIDERED BEST EVIDENCE IF AFFIANTS
AVAILABLE AS WITNESSES. — While the affidavit of Juanito Morden, the
truck helper in the hijacked truck, was presented as evidence in court, he
himself was a witness as could be gleaned from the contents of the
petition. Affidavits are not considered the best evidence if the affiants are
available as witnesses.
7. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACT IS WHAT LAW
DEFINES IT TO BE. — Granting that the said evidence were not self-
serving, the same were not sufficient to prove that the contract was one
of lease. It must be understood that a contract is what the law defines it
to be and not what it is called by the contracting parties.
DECISION
CAMPOS, JR., J p:
This is a petition for review on certiorari of the decision ** of the Court of
Appeals in "RODOLFO A. CIPRIANO, doing business under the name
CIPRIANO TRADING ENTERPRISES plaintiff-appellee, vs. ESTRELLITA M.
BASCOS, doing business under the name of BASCOS TRUCKING,
defendant-appellant," C.A.-G.R. CV No. 25216, the dispositive portion of
which is quoted hereunder:
"PREMISES considered, We find no reversible error in the decision
appealed from, which is hereby affirmed in toto. Costs against appellant."
1 truck carrying the cargo was hijacked along Canonigo St., Paco, Manila on
The facts, as gathered by this Court, are as follows:
Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE
for short) entered into a hauling contract 2 with Jibfair Shipping Agency
Corporation whereby the former bound itself to haul the latter's 2,000
m/tons of soya bean meal from Magallanes Drive, Del Pan, Manila to the
warehouse of Purefoods Corporation in Calamba, Laguna. To carry out its
obligation, CIPTRADE, through Rodolfo Cipriano, subcontracted with
Estrellita Bascos (petitioner) to transport and to deliver 400 sacks of soya
bean meal worth P156,404.00 from the Manila Port Area to Calamba,
Laguna at the rate of P50.00 per metric ton. 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 the
contract which stated that:
"1. CIPTRADE shall be held liable and answerable for any loss in bags due
to theft, hijacking and non-delivery or damages to the cargo during
transport at market value, . . ." 3
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 4 for breach of a contract of
carriage. The prayer for a Writ of Preliminary Attachment was supported
by an affidavit 5 which contained the following allegations:
"4. That this action is one of those specifically mentioned in Sec. 1, Rule
57 the Rules of Court, whereby a writ of preliminary attachment may
lawfully issue, namely:
"(e) in an action against a party who has removed or disposed of his
property, or is about to do so, with intent to defraud his creditors;"
5. That there is no sufficient security for the claim sought to be enforced
by the present action;
6. That the amount due to the plaintiff in the above-entitled case is above
all legal counterclaims;"
The trial court granted the writ of preliminary attachment on February
17, 1987.
In her answer, petitioner interposed the following defenses: that there
was no contract of carriage since CIPTRADE leased her cargo truck to
load the cargo from Manila Port Area to Laguna; that CIPTRADE was liable
to petitioner in the amount of P11,000.00 for loading the cargo; that the
the night of October 21, 1988; that the hijacking was immediately
reported to CIPTRADE and that petitioner and the police exerted all
efforts to locate the hijacked properties; that after preliminary
investigation, an information for robbery and carnapping were filed
against Jose Opriano, et al.; and that hijacking, being a force majeure,
exculpated petitioner from any liability to CIPTRADE.
After trial, the trial court rendered a decision *** the dispositive portion of
which reads as follows:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and
against defendant ordering the latter to pay the former:
1. The amount of ONE HUNDRED FIFTY-SIX THOUSAND FOUR HUNDRED
FOUR PESOS (P156,404.00) as an (sic) for actual damages with legal
interest of 12% per cent per annum to be counted from December 4,
1986 until fully paid;
2. The amount of FIVE THOUSAND PESOS (P5,000.00) as and for
attorney's fees; and
3. The costs of the suit.
The "Urgent Motion To Dissolve/Lift preliminary Attachment" dated March
10, 1987 filed by defendant is DENIED for being moot and academic.
SO ORDERED." 6
Petitioner appealed to the Court of Appeals but respondent Court
affirmed the trial court's judgment.
Consequently, petitioner filed this petition where she makes the following
assignment of errors; to wit:
"I. THE RESPONDENT COURT ERRED IN HOLDING THAT THE
CONTRACTUAL RELATIONSHIP BETWEEN PETITIONER AND PRIVATE
RESPONDENT WAS CARRIAGE OF GOODS AND NOT LEASE OF CARGO
TRUCK.
II. GRANTING, EX GRATIA ARGUMENTI, THAT THE FINDING OF THE
RESPONDENT COURT THAT THE CONTRACTUAL RELATIONSHIP BETWEEN
PETITIONER AND PRIVATE RESPONDENT WAS CARRIAGE OF GOODS IS
CORRECT, NEVERTHELESS, IT ERRED IN FINDING PETITIONER LIABLE
THEREUNDER BECAUSE THE LOSS OF THE CARGO WAS DUE TO FORCE
MAJEURE, NAMELY, HIJACKING.
III. THE RESPONDENT COURT ERRED IN AFFIRMING THE FINDING OF THE
TRIAL COURT THAT PETITIONER'S MOTION TO DISSOLVE/LIFT THE WRIT
OF PRELIMINARY ATTACHMENT HAS BEEN RENDERED MOOT AND
ACADEMIC BY THE DECISION OF THE MERITS OF THE CASE." 7
The petition presents the following issues for resolution: (1) was
petitioner a common carrier?; and (2) was the hijacking referred to a
force majeure?
The Court of Appeals, in holding that petitioner was a common carrier,
found that she admitted in her answer that she did business under the
name A.M. Bascos Trucking and that said admission dispensed with the
presentation by private respondent, Rodolfo Cipriano, of proofs that
petitioner was a common carrier. The respondent Court also adopted in
toto the trial court's decision that petitioner was a common carrier,
Moreover, both courts appreciated the following pieces of evidence as
indicators that petitioner was a common carrier: the fact that the truck
driver of petitioner, Maximo Sanglay, received the cargo consisting of
400 bags of soya bean meal as evidenced by a cargo receipt signed by
Maximo Sanglay; the fact that the truck helper, Juanito Morden, was also
an employee of petitioner; and the fact that control of the cargo was
placed in petitioner's care.
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 Rodolfo A. Cipriano, representing CIPTRADE, was lease
of the truck. She cited as evidence certain affidavits which referred to the
contract as "lease". These affidavits were made by Jesus Bascos 8 and by
petitioner herself. 9 She further averred that Jesus Bascos confirmed in
his testimony his statement that the contract was a lease contract. 10
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. 11
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." 12 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. 13
But petitioner argues that there was only a contract of lease because
they offer their services only to a select group of people and because the
private respondents, plaintiffs in the lower court, did not object to the
presentation of affidavits by petitioner where the transaction was
referred to as a lease contract.
Regarding the first contention, the holding of the Court in De Guzman vs.
Court of Appeals 14 is instructive. In referring to Article 1732 of the Civil
Code, it held thus:
"The above article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity (in local idiom, as a
"sideline"). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population.
We think that Article 1732 deliberately refrained from making such
distinctions."
Regarding the affidavits presented by petitioner to the court, both the
trial and appellate courts have dismissed them as self-serving and
petitioner contests the conclusion. We are bound by the appellate court's
factual conclusions. Yet, granting that the said evidence were not self-
serving, the same were not sufficient to prove that the contract was one
of lease. It must be understood that a contract is what the law defines it
to be and not what it is called by the contracting parties. 15 Furthermore,
petitioner presented no other proof of the existence of the contract of
lease. He who alleges a fact has the burden of proving it. 16
Likewise, We affirm the holding of the respondent court that the loss of
the goods was not due to force majeure.
Common carriers are obliged to observe extraordinary diligence in the
vigilance over the goods transported by them. 17 Accordingly, they are
presumed to have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated. 18 There are very few instances when
the presumption of negligence does not attach and these instances are
enumerated in Article 1734. 19 In those cases where the presumption is
applied, the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption.
In this case, petitioner alleged that hijacking constituted force majeure
which exculpated her from liability for the loss of the cargo. In De
Guzman vs. Court of Appeals, 20 the Court held that hijacking, not being
included in the provisions of Article 1734, must be dealt with under the
provisions of Article 1735 and thus, the common carrier is presumed to
have been at fault or negligent. To exculpate the carrier from liability
arising from hijacking, he must prove that the robbers or the hijackers
acted with grave or irresistible threat, violence, or force. This is in
accordance with Article 1745 of the Civil Code which provides:
"Art. 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy;
xxx xxx xxx
(6) That the common carrier's liability for acts committed by thieves, or
of robbers who do not act with grave or irresistible threat, violences or
force, is dispensed with or diminished;"
In the same case, 21 the Supreme Court also held that:
"Under Article 1745 (6) above, a common carrier is held responsible —
and will not be allowed to divest or to diminish such responsibility — even
for acts of strangers like thieves or robbers except where such thieves or
robbers in fact acted with grave or irresistible threat, violence or force.
We believe and so hold that the limits of the duty of extraordinary
diligence in the vigilance over the goods carried are reached where the
goods are lost as a result of a robbery which is attended by "grave or
irresistible threat, violence or force."
To establish grave and irresistible force, petitioner presented her
accusatory affidavit, 22 Jesus Bascos' affidavit, 23 and Juanito Morden's
24 "Salaysay". However, both the trial court and the Court of Appeals
have concluded that these affidavits were not enough to overcome the
presumption. Petitioner's affidavit about the hijacking was based on what
had been told her by Juanito Morden. It was not a first-hand account.
While it had been admitted in court for lack of objection on the part of
private respondent, the respondent Court had discretion in assigning
weight to such evidence. We are bound by the conclusion of the
appellate court. In a petition for review on certiorari, We are not to
determine the probative value of evidence but to resolve questions of
law. Secondly, the affidavit of Jesus Bascos did not dwell on how the
hijacking took place. Thirdly, while the affidavit of Juanito Morden, the
truck helper in the hijacked truck, was presented as evidence in court, he
himself was a witness as could be gleaned from the contents of the
petition. Affidavits are not considered the best evidence if the affiants are
available as witnesses. 25 The subsequent filing of the information for
carnapping and robbery against the accused named in said affidavits did
not necessarily mean that the contents of the affidavits were true
because they were yet to be determined in the trial of the criminal cases.
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.
Having affirmed the findings of the respondent Court on the substantial
issues involved, We find no reason to disturb the conclusion that the
motion to lift/dissolve the writ of preliminary attachment has been
rendered moot and academic by the decision on the merits.
In the light of the foregoing analysis, it is Our opinion that the petitioner's
claim cannot be sustained. The petition is DISMISSED and the decision of
the Court of Appeals is hereby AFFIRMED.

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 101503 September 15, 1993
PLANTERS PRODUCTS, INC., petitioner,
vs.
COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND
KYOSEI KISEN KABUSHIKI KAISHA,respondents.
Gonzales, Sinense, Jimenez & Associates for petitioner.
Siguion Reyna, Montecillo & Ongsiako Law Office for private respondents.
BELLOSILLO, J.:
Does a charter-party 1 between a shipowner and a charterer transform a
common carrier into a private one as to negate the civil law presumption
of negligence in case of loss or damage to its cargo?
Planters Products, Inc. (PPI), purchased from Mitsubishi International
Corporation (MITSUBISHI) of New York, U.S.A., 9,329.7069 metric tons
(M/T) of Urea 46% fertilizer which the latter shipped in bulk on 16 June
1974 aboard the cargo vessel M/V "Sun Plum" owned by private
respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska,
U.S.A., to Poro Point, San Fernando, La Union, Philippines, as evidenced
by Bill of Lading No. KP-1 signed by the master of the vessel and issued
on the date of departure.
On 17 May 1974, or prior to its voyage, a time charter-party on the vessel
M/V "Sun Plum" pursuant to the Uniform General Charter 2 was entered
into between Mitsubishi as shipper/charterer and KKKK as shipowner, in
Tokyo, Japan. 3 Riders to the aforesaid charter-party starting from par. 16
to 40 were attached to the pre-printed agreement. Addenda Nos. 1, 2, 3
and 4 to the charter-party were also subsequently entered into on the
18th, 20th, 21st and 27th of May 1974, respectively.
Before loading the fertilizer aboard the vessel, four (4) of her holds 4 were
all presumably inspected by the charterer's representative and found fit
to take a load of urea in bulk pursuant to par. 16 of the charter-party
which reads:
16. . . . At loading port, notice of readiness to be
accomplished by certificate from National Cargo Bureau
inspector or substitute appointed by charterers for his
account certifying the vessel's readiness to receive cargo
spaces. The vessel's hold to be properly swept, cleaned
and dried at the vessel's expense and the vessel to be
presented clean for use in bulk to the satisfaction of the
inspector before daytime commences. (emphasis
supplied)
After the Urea fertilizer was loaded in bulk by stevedores hired by and
under the supervision of the shipper, the steel hatches were closed with
heavy iron lids, covered with three (3) layers of tarpaulin, then tied with
steel bonds. The hatches remained closed and tightly sealed throughout
the entire voyage. 5
Upon arrival of the vessel at her port of call on 3 July 1974, the steel
pontoon hatches were opened with the use of the vessel's boom.
Petitioner unloaded the cargo from the holds into its steelbodied dump
trucks which were parked alongside the berth, using metal scoops
attached to the ship, pursuant to the terms and conditions of the charter-
partly (which provided for an F.I.O.S. clause). 6 The hatches remained
open throughout the duration of the discharge. 7
Each time a dump truck was filled up, its load of Urea was covered with
tarpaulin before it was transported to the consignee's warehouse located
some fifty (50) meters from the wharf. Midway to the warehouse, the
trucks were made to pass through a weighing scale where they were
individually weighed for the purpose of ascertaining the net weight of the
cargo. The port area was windy, certain portions of the route to the
warehouse were sandy and the weather was variable, raining
occasionally while the discharge was in progress. 8 The petitioner's
warehouse was made of corrugated galvanized iron (GI) sheets, with an
opening at the front where the dump trucks entered and unloaded the
fertilizer on the warehouse floor. Tarpaulins and GI sheets were placed in-
between and alongside the trucks to contain spillages of the ferilizer. 9
It took eleven (11) days for PPI to unload the cargo, from 5 July to 18 July
1974 (except July 12th, 14th and 18th).10 A private marine and cargo
surveyor, Cargo Superintendents Company Inc. (CSCI), was hired by PPI
to determine the "outturn" of the cargo shipped, by taking draft readings
of the vessel prior to and after discharge. 11The survey report submitted
by CSCI to the consignee (PPI) dated 19 July 1974 revealed a shortage in
the cargo of 106.726 M/T and that a portion of the Urea fertilizer
approximating 18 M/T was contaminated with dirt. The same results were
contained in a Certificate of Shortage/Damaged Cargo dated 18 July 1974
prepared by PPI which showed that the cargo delivered was indeed short
of 94.839 M/T and about 23 M/T were rendered unfit for commerce,
having been polluted with sand, rust and
dirt. 12
Consequently, PPI sent a claim letter dated 18 December 1974 to
Soriamont Steamship Agencies (SSA), the resident agent of the carrier,
KKKK, for P245,969.31 representing the cost of the alleged shortage in
the goods shipped and the diminution in value of that portion said to
have been contaminated with dirt. 13
Respondent SSA explained that they were not able to respond to the
consignee's claim for payment because, according to them, what they
received was just a request for shortlanded certificate and not a formal
claim, and that this "request" was denied by them because they "had
nothing to do with the discharge of the shipment." 14Hence, on 18 July
1975, PPI filed an action for damages with the Court of First Instance of
Manila. The defendant carrier argued that the strict public policy
governing common carriers does not apply to them because they have
become private carriers by reason of the provisions of the charter-party.
The court a quo however sustained the claim of the plaintiff against the
defendant carrier for the value of the goods lost or damaged when it
ruled thus: 15
. . . Prescinding from the provision of the law that a
common carrier is presumed negligent in case of loss or
damage of the goods it contracts to transport, all that a
shipper has to do in a suit to recover for loss or damage
is to show receipt by the carrier of the goods and to
delivery by it of less than what it received. After that, the
burden of proving that the loss or damage was due to
any of the causes which exempt him from liability is
shipted to the carrier, common or private he may be.
Even if the provisions of the charter-party aforequoted
are deemed valid, and the defendants considered private
carriers, it was still incumbent upon them to prove that
the shortage or contamination sustained by the cargo is
attributable to the fault or negligence on the part of the
shipper or consignee in the loading, stowing, trimming
and discharge of the cargo. This they failed to do. By this
omission, coupled with their failure to destroy the
presumption of negligence against them, the defendants
are liable (emphasis supplied).
On appeal, respondent Court of Appeals reversed the lower court and
absolved the carrier from liability for the value of the cargo that was lost
or damaged. 16 Relying on the 1968 case of Home Insurance
Co. v. American Steamship Agencies, Inc., 17 the appellate court ruled
that the cargo vessel M/V "Sun Plum" owned by private respondent KKKK
was a private carrier and not a common carrier by reason of the time
charterer-party. Accordingly, the Civil Code provisions on common
carriers which set forth a presumption of negligence do not find
application in the case at bar. Thus —
. . . In the absence of such presumption, it was
incumbent upon the plaintiff-appellee to adduce
sufficient evidence to prove the negligence of the
defendant carrier as alleged in its complaint. It is an old
and well settled rule that if the plaintiff, upon whom rests
the burden of proving his cause of action, fails to show in
a satisfactory manner the facts upon which he bases his
claim, the defendant is under no obligation to prove his
exception or defense (Moran, Commentaries on the Rules
of Court, Volume 6, p. 2, citing Belen v. Belen, 13 Phil.
202).
But, the record shows that the plaintiff-appellee dismally
failed to prove the basis of its cause of action, i.e. the
alleged negligence of defendant carrier. It appears that
the plaintiff was under the impression that it did not have
to establish defendant's negligence. Be that as it may,
contrary to the trial court's finding, the record of the
instant case discloses ample evidence showing that
defendant carrier was not negligent in performing its
obligation . . . 18 (emphasis supplied).
Petitioner PPI appeals to us by way of a petition for review assailing the
decision of the Court of Appeals. Petitioner theorizes that the Home
Insurance case has no bearing on the present controversy because the
issue raised therein is the validity of a stipulation in the charter-party
delimiting the liability of the shipowner for loss or damage to goods
cause by want of due deligence on its part or that of its manager to make
the vessel seaworthy in all respects, and not whether the presumption of
negligence provided under the Civil Code applies only to common carriers
and not to private carriers. 19 Petitioner further argues that since the
possession and control of the vessel remain with the shipowner, absent
any stipulation to the contrary, such shipowner should made liable for the
negligence of the captain and crew. In fine, PPI faults the appellate court
in not applying the presumption of negligence against respondent carrier,
and instead shifting the onus probandi on the shipper to show want of
due deligence on the part of the carrier, when he was not even at hand to
witness what transpired during the entire voyage.
As earlier stated, the primordial issue here is whether a common carrier
becomes a private carrier by reason of a charter-party; in the negative,
whether the shipowner in the instant case was able to prove that he had
exercised that degree of diligence required of him under the law.
It is said that etymology is the basis of reliable judicial decisions in
commercial cases. This being so, we find it fitting to first define important
terms which are relevant to our discussion.
A "charter-party" is defined as a contract by which an entire ship, or
some principal part thereof, is let by the owner to another person for a
specified time or use; 20 a contract of affreightment by which the owner
of a ship or other vessel lets the whole or a 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; 21 Charter parties are of two
types: (a) contract of affreightment which involves the use of shipping
space on vessels leased by the owner in part or as a whole, to carry
goods for others; and, (b) charter by demise or bareboat charter, by the
terms of which the whole vessel is let to the charterer with a transfer to
him of its entire command and possession and consequent control over
its navigation, including the master and the crew, who are his servants.
Contract of affreightment may either be time charter, wherein the vessel
is leased to the charterer for a fixed period of time, or voyage charter,
wherein the ship is leased for a single voyage. 22 In both cases, the
charter-party provides for the hire of vessel only, either for a determinate
period of time or for a single or consecutive voyage, the shipowner to
supply the ship's stores, pay for the wages of the master and the crew,
and defray the expenses for the maintenance of the ship.
Upon the other hand, the term "common or public carrier" is defined in
Art. 1732 of the Civil Code. 23 The definition extends to carriers either by
land, air or water which hold themselves out as ready to engage in
carrying goods or transporting passengers or both for compensation as a
public employment and not as a casual occupation. The distinction
between a "common or public carrier" and a "private or special carrier"
lies in the character of the business, such that if the undertaking is a
single transaction, not a part of the general business or occupation,
although involving the carriage of goods for a fee, the person or
corporation offering such service is a private carrier. 24
Article 1733 of the New Civil Code mandates that common carriers, by
reason of the nature of their business, should observe extraordinary
diligence in the vigilance over the goods they carry. 25 In the case of
private carriers, however, the exercise of ordinary diligence in the
carriage of goods will suffice. Moreover, in the case of loss, destruction or
deterioration of the goods, common carriers are presumed to have been
at fault or to have acted negligently, and the burden of proving otherwise
rests on them. 26 On the contrary, no such presumption applies to private
carriers, for whosoever alleges damage to or deterioration of the goods
carried has the onus of proving that the cause was the negligence of the
carrier.
It is not disputed that respondent carrier, in the ordinary course of
business, operates as a common carrier, transporting goods
indiscriminately for all persons. When petitioner chartered the vessel M/V
"Sun Plum", the ship captain, its officers and compliment were under the
employ of the shipowner and therefore continued to be under its direct
supervision and control. Hardly then can we charge the charterer, a
stranger to the crew and to the ship, with the duty of caring for his cargo
when the charterer did not have any control of the means in doing so.
This is evident in the present case considering that the steering of the
ship, the manning of the decks, the determination of the course of the
voyage and other technical incidents of maritime navigation were all
consigned to the officers and crew who were screened, chosen and hired
by the shipowner. 27
It is therefore imperative that a public carrier shall remain as such,
notwithstanding the charter of the whole or portion of a vessel by one or
more persons, provided the charter is limited to the ship only, as in the
case of a time-charter or voyage-charter. It is only when the charter
includes both the vessel and its crew, as in a bareboat or demise that a
common carrier becomes private, at least insofar as the particular
voyage covering the charter-party is concerned. Indubitably, a shipowner
in a time or voyage charter retains possession and control of the ship,
although her holds may, for the moment, be the property of the
charterer. 28
Respondent carrier's heavy reliance on the case of Home Insurance
Co. v. American Steamship Agencies, supra, is misplaced for the reason
that the meat of the controversy therein was the validity of a stipulation
in the charter-party exempting the shipowners from liability for loss due
to the negligence of its agent, and not the effects of a special charter on
common carriers. At any rate, the rule in the United States that a ship
chartered by a single shipper to carry special cargo is not a common
carrier, 29 does not find application in our jurisdiction, for we have
observed that the growing concern for safety in the transportation of
passengers and /or carriage of goods by sea requires a more exacting
interpretation of admiralty laws, more particularly, the rules governing
common carriers.
We quote with approval the observations of Raoul Colinvaux, the learned
barrister-at-law 30 —
As a matter of principle, it is difficult to find a valid
distinction between cases in which a ship is used to
convey the goods of one and of several persons. Where
 the ship herself is let to a charterer, so that he takes over
the charge and control of her, the case is different; the
shipowner is not then a carrier. But where her services
only are let, the same grounds for imposing a strict
responsibility exist, whether he is employed by one or
many. The master and the crew are in each case his
servants, the freighter in each case is usually without any
representative on board the ship; the same opportunities
for fraud or collusion occur; and the same difficulty in
discovering the truth as to what has taken place
arises . . .
In an action for recovery of damages against a common carrier on the
goods shipped, the shipper or consignee should first prove the fact of
shipment and its consequent loss or damage while the same was in the
possession, actual or constructive, of the carrier. Thereafter, the burden
of proof shifts to respondent to prove that he has exercised extraordinary
diligence required by law or that the loss, damage or deterioration of the
cargo was due to fortuitous event, or some other circumstances
inconsistent with its liability. 31
To our mind, respondent carrier has sufficiently overcome, by clear and
convincing proof, the prima faciepresumption of negligence.
The master of the carrying vessel, Captain Lee Tae Bo, in his deposition
taken on 19 April 1977 before the Philippine Consul and Legal Attache in
the Philippine Embassy in Tokyo, Japan, testified that before the fertilizer
was loaded, the four (4) hatches of the vessel were cleaned, dried and
fumigated. After completing the loading of the cargo in bulk in the ship's
holds, the steel pontoon hatches were closed and sealed with iron lids,
then covered with three (3) layers of serviceable tarpaulins which were
tied with steel bonds. The hatches remained close and tightly sealed
while the ship was in transit as the weight of the steel covers made it
impossible for a person to open without the use of the ship's boom. 32
It was also shown during the trial that the hull of the vessel was in good
condition, foreclosing the possibility of spillage of the cargo into the sea
or seepage of water inside the hull of the vessel. 33 When M/V "Sun Plum"
docked at its berthing place, representatives of the consignee boarded,
and in the presence of a representative of the shipowner, the foreman,
the stevedores, and a cargo surveyor representing CSCI, opened the
hatches and inspected the condition of the hull of the vessel. The
stevedores unloaded the cargo under the watchful eyes of the shipmates
who were overseeing the whole operation on rotation basis. 34
Verily, the presumption of negligence on the part of the respondent
carrier has been efficaciously overcome by the showing of extraordinary
zeal and assiduity exercised by the carrier in the care of the cargo. This
was confirmed by respondent appellate court thus —
. . . Be that as it may, contrary to the trial court's
finding, the record of the instant case discloses ample
evidence showing that defendant carrier was not
negligent in performing its obligations. Particularly, the
following testimonies of plaintiff-appellee's own witnesses
clearly show absence of negligence by the defendant
carrier; that the hull of the vessel at the time of the
discharge of the cargo was sealed and nobody could
open the same except in the presence of the owner of
the cargo and the representatives of the vessel (TSN, 20
July 1977, p. 14); that the cover of the hatches was made
of steel and it was overlaid with tarpaulins, three layers
of tarpaulins and therefore their contents were protected
from the weather (TSN, 5 April 1978, p. 24); and, that to
open these hatches, the seals would have to be broken,
all the seals were found to be intact (TSN, 20 July 1977,
pp. 15-16) (emphasis supplied).
The period during which private respondent was to observe the degree of
diligence required of it as a public carrier began from the time the cargo
was unconditionally placed in its charge after the vessel's holds were
duly inspected and passed scrutiny by the shipper, up to and until the
vessel reached its destination and its hull was reexamined by the
consignee, but prior to unloading. This is clear from the limitation clause
agreed upon by the parties in the Addendum to the standard "GENCON"
time charter-party which provided for an F.I.O.S., meaning, that the
loading, stowing, trimming and discharge of the cargo was to be done by
the charterer, free from all risk and expense to the carrier. 35 Moreover, a
shipowner is liable for damage to the cargo resulting from improper
stowage only when the stowing is done by stevedores employed by him,
and therefore under his control and supervision, not when the same is
done by the consignee or stevedores under the employ of the latter. 36
Article 1734 of the New Civil Code provides that common carriers are not
responsible for the loss, destruction or deterioration of the goods if
caused by the charterer of the goods or defects in the packaging or in the
containers. The Code of Commerce also provides that all losses and
deterioration which the goods may suffer during the transportation by
reason of fortuitous event, force majeure, or the inherent defect of the
goods, shall be for the account and risk of the shipper, and that proof of
these accidents is incumbent upon the carrier. 37 The carrier,
nonetheless, shall be liable for the loss and damage resulting from the
preceding causes if it is proved, as against him, that they arose through
his negligence or by reason of his having failed to take the precautions
which usage has established among careful persons. 38
Respondent carrier presented a witness who testified on the
characteristics of the fertilizer shipped and the expected risks of bulk
shipping. Mr. Estanislao Chupungco, a chemical engineer working with
Atlas Fertilizer, described Urea as a chemical compound consisting
mostly of ammonia and carbon monoxide compounds which are used as
fertilizer. Urea also contains 46% nitrogen and is highly soluble in water.
However, during storage, nitrogen and ammonia do not normally
evaporate even on a long voyage, provided that the temperature inside
the hull does not exceed eighty (80) degrees centigrade. Mr. Chupungco
further added that in unloading fertilizer in bulk with the use of a
clamped shell, losses due to spillage during such operation amounting to
one percent (1%) against the bill of lading is deemed "normal" or
"tolerable." The primary cause of these spillages is the clamped shell
which does not seal very tightly. Also, the wind tends to blow away some
of the materials during the unloading process.
The dissipation of quantities of fertilizer, or its daterioration in value, is
caused either by an extremely high temperature in its place of storage,
or when it comes in contact with water. When Urea is drenched in water,
either fresh or saline, some of its particles dissolve. But the salvaged
portion which is in liquid form still remains potent and usable although no
longer saleable in its original market value.
The probability of the cargo being damaged or getting mixed or
contaminated with foreign particles was made greater by the fact that
the fertilizer was transported in "bulk," thereby exposing it to the inimical
effects of the elements and the grimy condition of the various pieces of
equipment used in transporting and hauling it.
The evidence of respondent carrier also showed that it was highly
improbable for sea water to seep into the vessel's holds during the
voyage since the hull of the vessel was in good condition and her hatches
were tightly closed and firmly sealed, making the M/V "Sun Plum" in all
respects seaworthy to carry the cargo she was chartered for. If there was
loss or contamination of the cargo, it was more likely to have occurred
while the same was being transported from the ship to the dump trucks
and finally to the consignee's warehouse. This may be gleaned from the
testimony of the marine and cargo surveyor of CSCI who supervised the
unloading. He explained that the 18 M/T of alleged "bar order cargo" as
contained in their report to PPI was just an approximation or estimate
made by them after the fertilizer was discharged from the vessel and
segregated from the rest of the cargo.
The Court notes that it was in the month of July when the vessel arrived
port and unloaded her cargo. It rained from time to time at the harbor
area while the cargo was being discharged according to the supply officer
of PPI, who also testified that it was windy at the waterfront and along the
shoreline where the dump trucks passed enroute to the consignee's
warehouse.
Indeed, we agree with respondent carrier that bulk shipment of highly
soluble goods like fertilizer carries with it the risk of loss or damage. More
so, with a variable weather condition prevalent during its unloading, as
was the case at bar. This is a risk the shipper or the owner of the goods
has to face. Clearly, respondent carrier has sufficiently proved the
inherent character of the goods which makes it highly vulnerable to
deterioration; as well as the inadequacy of its packaging which further
contributed to the loss. On the other hand, no proof was adduced by the
petitioner showing that the carrier was remise in the exercise of due
diligence in order to minimize the loss or damage to the goods it carried.
WHEREFORE, the petition is DISMISSED. The assailed decision of the
Court of Appeals, which reversed the trial court, is AFFIRMED.
Consequently, Civil Case No. 98623 of the then Court of the First
Instance, now Regional Trial Court, of Manila should be, as it is
hereby DISMISSED.
Costs against petitioner.
SO ORDERED.
Davide, Jr. and Quiason, JJ., concur.
Cruz, J., took no part.
Griño-Aquino, J., is on leave.
# Footnotes
1 A charter-party is a contract by which an entire ship or
some principal part thereof, is let by the owner to another
person for a specified time or use (70 Am Jur 2d,
p. 580, citing Ward v. Thompson, 63 US 330, 16 L Ed 249;
a contract in which the owner of a vessel lets for
consideration the whole or part thereof for the
conveyance of goods and/or passengers on a particular
voyage to one or more places or until the expiration of a
specified time and surrender unto the lessee or charterer
the control, by vesting upon the latter the right to appoint
the captain, officers and members of the crew, of the
vessel leased or chartered during the duration of the
contract (R.A. 913).
2 The Baltic and International Maritime Uniform General
Charter (As Revised 1922 and 1976), Including "F.I.O.S."
Alternative, etc., Code Name: "GENCON" Adopted by the
Documentary Committee of the General Council of British
Shipping, London, and the Documentary Committee of
the Japan Shipping Exchange, Inc., Tokyo.
3 Rollo, pp. 105, 128.
4 Although par. 40 of the Rider (Description of "Sun
Plum") states that the vessel has 3 holds/3 hatches,
Hatch No. 4 which usually was not used for cargo, was
converted for such purpose. The time sheet for 12 July
1974 shows that Hatch
No. 4 was first to be discharge of cargo. This was also
testified by the master of the vessel, Captain Lee Tae Bo.
5 Id., p. 129.
6 Under the terms and conditions of the charter-party,
F.I.O.S. (Free In and Out Shipping/Stevedoring) means
that the shipper takes care of the loading, while the
unloading is the sole responsibility of the consignee
(Rollo, pp. 128, 184).
7 TSN, 20 July 1977, p. 17.
8 TSN, 20 July 1977, p. 18.
9 Rollo, p. 130.
10 Id., p. 129; ADDENDUM No. 4 dated 17 May 1974
provides: "The cargo to be discharged at the average rate
of 1,000 metric tons per day of 24 hours weather working
days, Sundays, holidays excluded unless used, assuming
four (4) sets of vessel's gear simultaneously workable a
vessel's bearthing side."
11 TSN, 5 April 1978, pp. 7-8. "Drop survey" is the drop of
the vessel showing certain meters or centimeters of the
vessel. In the ship there is a draft from one meter
upward. When the vessel arrives, (CSCI) conducted initial
draft survey before discharging, together with the ship's
representative by getting the draft forward and aft. They
divided it by 2 to get the mean draft and the average
draft. After getting the mean draft, they got the
displacement scale of the vessel to show certain tons of
the ship, then deducted the non-cargo weight, like the
fuel oil, the freshwater. Finally, the total load of the ship
is taken. After discharging, CSCI went over same
procedure to get the weight of the vessel. These figures
were then subtracted from the total load of the ships to
get the weight of the cargo.
12 Id., p. 106.
13 Id., pp. 49, 68.
14 TSN, 28 Aug. 1979, pp. 9-10.
15 Id., p. 68 "Planters Products, Inc. v. Soriamont
Steamship Agencies, et al., "Civil Case No. 98623, CFI of
Manila, Br. 27, decision penned by Judge E.L. Peralta, 24
March 1980.
16 The Court of Appeals (Twelfth Division) rendered its
decision on 13 August 1991 in CA-G.R. CV No. 02736
entitled "Planters Products, Inc. vs. Kyosei Kisen
Kabushiki Kaisha & Soriamont Steamship Agencies."
Decision penned by Justice Alfredo L. Benipayo,
concurred in by Justices Manuel C. Herrera and Cancio C.
Garcia, Rollo, pp. 13-24.
17 No. L-25599, 4 April 1968, 23 SCRA 24.
18 Rollo, p. 109.
19 Rollo, pp. 8 & 9.
20 Charter Partis; Charters of Demise and Contracts of
Affreightment; 70 Am Jur 2d, p. 580; citing Ward v.
Thompson, 63 US 330, 16 L d 249; E.R. Harvey Ivamy,
Carriage of Goods by Sea, 13th Ed., Chap. 2, pp. 5, 8-10.
The term is also defined under R.A. No. 913, known as
"An Act Defining 'Lease'or 'Charter' of Vessels" as to
mean a "contract in which the owner of a vessel lets for
consideration the whole or principal part thereof for the
conveyance of goods and/or passengers on a particular
voyage to one or more places or until the expiration of a
specified time and surrenders unto the lessee or
charterer the control, by vesting upon the latter the right 30 British Shipping Laws, Vol. 2, "Carver's Carriage by
to appoint the captain, officers and members of the crew, Sea," By Raoul Colinvaux, Vol. 1, 12th Ed., Published by
of the vessel leased or chartered during the duration of Stevens & Sons Limited of London, Printed in Great
the contract." Britain, 1971.

21 Bouvier's Law Dictionary, Third Rev., Vol. I, p. 470. 31 See Ynchausti Steamship Co. v. Dexter, No. 15652, 41
Phil. 289, 14 Dec. 1920; Mirasol v. Robert Dollar, Co., No.
22 Id., pp. 581-582. 29721, 53 Phil. 124, 27 March 1929.

23 Art. 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.
32 Deposition of Capt. Lee Tae Bo, Exh. "4", pp. 22-23.
33 TSN, 20 July 1977, p. 14.
34 TSN, 5 April 1978, pp. 24-25.

24 See De Guzman v. Court of Appeals, No. L-47822, 22 35 See Note 6.

December 1988, 168 SCRA 612; U.S. v. Quinajon, No.
8686, 30 July 1915.
36 70 Am Jur 2d, p. 603 S 230, citing Oxford Paper Co. v.
The Nidarholm, 282 US 681, 75L ed 614, 51 S Ct 266.
25 Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the 37 Art. 361, par. 4, Code of Commerce.
goods and for the safety of the passengers transported
by them, according to all the circumstances of each case. 38 Art. 362, par. 1, id.

Such extraordinary diligence in the vigilance over the

goods is further expressed in Arts. 1734, 1735 and 1745,
Nos. 5, 6 and 7, while the extraordinary diligence for the
safety of the passengers is further set forth in Arts. 1755
and 1756.

26 Art. 1735. In all cases other than those mentioned in

Nos. 1, 2, 3, 4 and 5 of the preceding article, 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 as required in article 1733.

27 E.R. Harvey Ivamy, pp. 8-10.

28 70 Am Jur 2nd, P, 608 S 238, citing Grace v. Palmer,

21 US 605, 5 L Ed 696, and Kerry v. Pacific Marine Co., 12
CAL 564, 54, p. 89.

29 30 C.J.S., pp. 269-693.


SECOND DIVISION
[G.R. No. 111127. July 26, 1996]
MR. & MRS. ENGRACIO FABRE, JR.* and PORFIRIO
CABIL, petitioners, vs. COURT OF APPEALS, THE WORD
FOR THE WORLD CHRISTIAN FELLOWSHIP, INC., AMYLINE
ANTONIO, JOHN RICHARDS, GONZALO GONZALES, VICENTE
V. QUE, JR., ICLI CORDOVA, ARLENE GOJOCCO, ALBERTO
ROXAS CORDERO, RICHARD BAUTISTA, JOCELYN GARCIA,
YOLANDA CORDOVA, NOEL ROQUE, EDWARD TAN,
ERNESTO NARCISO, ENRIQUETA LOCSIN, FRANCIS
NORMAN O. LOPEZ, JULIUS CAESAR GARCIA, ROSARIO MA.
V. ORTIZ, MARIETTA C. CLAVO, ELVIE SENIEL, ROSARIO
MARA-MARA, TERESITA REGALA, MELINDA TORRES,
MARELLA MIJARES, JOSEFA CABATINGAN, MARA NADOC,
DIANE MAYO, TESS PLATA, MAYETTE JOCSON, ARLENE Y.
MORTIZ, LIZA MAYO, CARLOS RANARIO, ROSAMARIA T.
RADOC and BERNADETTE FERRER, respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision of the Court
of Appeals[1] in CA-GR No. 28245, dated September 30, 1992, which
affirmed with modification the decision of the Regional Trial Court of
Makati, Branch 58, ordering petitioners jointly and severally to pay
damages to private respondent Amyline Antonio, and its resolution which
denied petitioners’ motion for reconsideration for lack of merit.
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982
model Mazda minibus. They used the bus principally in connection with a
bus service for school children which they operated in Manila. The couple
had a driver, Porfirio J. Cabil, whom they hired in 1981, after trying him
out for two weeks. His job was to take school children to and from the St.
Scholastica’s College in Malate, Manila.
On November 2, 1984 private respondent Word for the World
Christian Fellowship Inc. (WWCF) arranged with petitioners for the
transportation of 33 members of its Young Adults Ministry from Manila to
La Union and back in consideration of which private respondent paid
petitioners the amount of P3,000.00.
The group was scheduled to leave on November 2, 1984, at 5:00
o’clock in the afternoon. However, as several members of the party were
late, the bus did not leave the Tropical Hut at the corner of Ortigas
Avenue and EDSA until 8:00 o’clock in the evening. Petitioner Porfirio
Cabil drove the minibus.
The usual route to Caba, La Union was through Carmen,
Pangasinan. However, the bridge at Carmen was under repair, so that
petitioner Cabil, who was unfamiliar with the area (it being his first trip to
La Union), was forced to take a detour through the town of Ba-ay in
Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came upon a
sharp curve on the highway, running on a south to east direction, which
he described as “siete.” The road was slippery because it was raining,
causing the bus, which was running at the speed of 50 kilometers per
hour, to skid to the left road shoulder. The bus hit the left traffic steel
brace and sign along the road and rammed the fence of one Jesus
Escano, then turned over and landed on its left side, coming to a full stop
only after a series of impacts. The bus came to rest off the road. A
coconut tree which it had hit fell on it and smashed its front portion.
Several passengers were injured. Private respondent Amyline
Antonio was thrown on the floor of the bus and pinned down by a wooden
seat which came off after being unscrewed. It took three persons to
safely remove her from this position. She was in great pain and could not
move.
The driver, petitioner Cabil, claimed he did not see the curve until it
was too late. He said he was not familiar with the area and he could not
have seen the curve despite the care he took in driving the bus, because
it was dark and there was no sign on the road. He said that he saw the
curve when he was already within 15 to 30 meters of it. He allegedly
slowed down to 30 kilometers per hour, but it was too late.
The Lingayen police investigated the incident the next day,
November 3, 1984. On the basis of their finding they filed a criminal
complaint against the driver, Porfirio Cabil. The case was later filed with
the Lingayen Regional Trial Court. Petitioners Fabre paid Jesus Escano
P1,500.00 for the damage to the latter’s fence. On the basis of Escano’s
affidavit of desistance the case against petitioners Fabre was dismissed.
Amyline Antonio, who was seriously injured, brought this case in the
RTC of Makati, Metro Manila. As a result of the accident, she is now
suffering from paraplegia and is permanently paralyzed from the waist
down. During the trial she described the operations she underwent and
adduced evidence regarding the cost of her treatment and
therapy. Immediately after the accident, she was taken to the Nazareth
Hospital in Ba-ay, Lingayen. As this hospital was not adequately
equipped, she was transferred to the Sto. Niño Hospital, also in the town
of Ba-ay, where she was given sedatives. An x-ray was taken and the
damage to her spine was determined to be too severe to be treated
there. She was therefore brought to Manila, first to the Philippine
General Hospital and later to the Makati Medical Center where she
underwent an operation to correct the dislocation of her spine.
In its decision dated April 17, 1989, the trial court found that:
No convincing evidence was shown that the minibus was properly
checked for travel to a long distance trip and that the driver was properly
screened and tested before being admitted for employment. Indeed, all
the evidence presented have shown the negligent act of the defendants
which ultimately resulted to the accident subject of this case.
Accordingly, it gave judgment for private respondents holding:
Considering that plaintiffs Word for the World Christian Fellowship, Inc.
and Ms. Amyline Antonio were the only ones who adduced evidence in
support of their claim for damages, the Court is therefore not in a
position to award damages to the other plaintiffs.
WHEREFORE, premises considered, the Court hereby renders judgment
against defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y Jamil
pursuant to articles 2176 and 2180 of the Civil Code of the Philippines
and said defendants are ordered to pay jointly and severally to the
plaintiffs the following amount:
1) P93,657.11 as compensatory and actual damages;
2) P500,000.00 as the reasonable amount of loss of earning
capacity of plaintiff Amyline Antonio;
3) P20,000.00 as moral damages;
4) P20,000.00 as exemplary damages; and
5) 25% of the recoverable amount as attorney’s fees;
6) Costs of suit.
SO ORDERED.
The Court of Appeals affirmed the decision of the trial court with
respect to Amyline Antonio but dismissed it with respect to the other
plaintiffs on the ground that they failed to prove their respective
claims. The Court of Appeals modified the award of damages as follows:
1) P93,657.11 as actual damages;
2) P600,000.00 as compensatory damages;
3) P50,000.00 as moral damages;
4) P20,000.00 as exemplary damages;
5) P10,000.00 as attorney’s fees; and
6) Costs of suit.
The Court of Appeals sustained the trial court’s finding that
petitioner Cabil failed to exercise due care and precaution in the
operation of his vehicle considering the time and the place of the
accident. The Court of Appeals held that the Fabres were themselves
presumptively negligent. Hence, this petition. Petitioners raise the
following issues:
I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.
II. WHETHER OR NOT PETITIONERS WERE LIABLE FOR THE
INJURIES SUFFERED BY PRIVATE RESPONDENTS.
III. WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE
POSITIVE, UP TO WHAT EXTENT.
Petitioners challenge the propriety of the award of compensatory
damages in the amount of P600,000.00. It is insisted that, on the
assumption that petitioners are liable, an award of P600,000.00 is
unconscionable and highly speculative. Amyline Antonio testified that
she was a casual employee of a company called “Suaco,” earning
P1,650.00 a month, and a dealer of Avon products, earning an average of
P1,000.00 monthly. Petitioners contend that as casual employees do not
have security of tenure, the award of P600,000.00, considering Amyline
Antonio’s earnings, is without factual basis as there is no assurance that
she would be regularly earning these amounts.
With the exception of the award of damages, the petition is devoid
of merit.
First, it is unnecessary for our purpose to determine whether to
decide this case on the theory that petitioners are liable for breach of
contract of carriage or culpa contractual or on the theory of quasi
delict or culpa aquiliana as both the Regional Trial Court and the Court of
Appeals held, for 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.” [2] In either case, the question is whether
the bus driver, petitioner Porfirio Cabil, was negligent.
The finding that Cabil drove his bus negligently, while his employer,
the Fabres, who owned the bus, failed to exercise the diligence of a good
father of the family in the selection and supervision of their employee is
fully supported by the evidence on record. These factual findings of the
two courts we regard as final and conclusive, supported as they are by
the evidence. Indeed, it was admitted by Cabil that on the night in
question, it was raining, and, as a consequence, the road was slippery,
and it was dark. He averred these facts to justify his failure to see that
there lay a sharp curve ahead. However, it is undisputed that Cabil drove
his bus at the speed of 50 kilometers per hour and only slowed down
when he noticed the curve some 15 to 30 meters ahead.[3] By then it was
too late for him to avoid falling off the road. Given the conditions of the
road and considering that the trip was Cabil’s first one outside of Manila,
Cabil should have driven his vehicle at a moderate speed. There is
testimony[4] that the vehicles passing on that portion of the road should
only be running 20 kilometers per hour, so that at 50 kilometers per hour,
Cabil was running at a very high speed.
Considering the foregoing  the fact that it was raining and the road
was slippery, that it was dark, that he drove his bus at 50 kilometers an
hour when even on a good day the normal speed was only 20 kilometers
an hour, and that he was unfamiliar with the terrain, Cabil was grossly
negligent and should be held liable for the injuries suffered by private
respondent Amyline Antonio.
Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence
gave rise to the presumption that his employers, the Fabres, were
themselves negligent in the selection and supervision of their employee.
Due diligence in selection of employees is not satisfied by finding
that the applicant possessed a professional driver’s license. The
employer should also examine the applicant for his qualifications,
experience and record of service. [5] Due diligence in supervision, on the
other hand, requires the formulation of rules and regulations for the
guidance of employees and the issuance of proper instructions as well as
actual implementation and monitoring of consistent compliance with the
rules.[6]
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La
Union, apparently did not consider the fact that Cabil had been driving for
school children only, from their homes to the St. Scholastica’s College in
Metro Manila.[7] They had hired him only after a two-week
apprenticeship. They had tested him for certain matters, such as
whether he could remember the names of the children he would be
taking to school, which were irrelevant to his qualification to drive on a
long distance travel, especially considering that the trip to La Union was
his first. The existence of hiring procedures and supervisory policies
cannot be casually invoked to overturn the presumption of negligence on
the part of an employer.[8]
Petitioners argue that they are not liable because (1) an earlier
departure (made impossible by the congregation’s delayed meeting)
could have averted the mishap and (2) under the contract, the WWCF
was directly responsible for the conduct of the trip. Neither of these
contentions hold water. The hour of departure had not been fixed. Even
if it had been, the delay did not bear directly on the cause of the
accident. With respect to the second contention, it was held in an early
case that:
[A] person who hires a public automobile and gives the driver directions
as to the place to which he wishes to be conveyed, but exercises no other
control over the conduct of the driver, is not responsible for acts of
negligence of the latter or prevented from recovering for injuries suffered
from a collision between the automobile and a train, caused by the
negligence either of the locomotive engineer or the automobile driver.[9]
As already stated, this case actually involves a contract of
carriage. Petitioners, the Fabres, did not have to be engaged in the
business of public transportation for the provisions of the Civil Code on
common carriers to apply to them. As this Court has held:[10]
Art. 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air for compensation,
offering their services to the public.
The above article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity (in local idiom, as “a
sideline”). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the “general public,”
i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general
population. We think that Article 1732 deliberately refrained from
making such distinctions.
As common carriers, the Fabres were bound to exercise “extraordinary
diligence” for the safe transportation of the passengers to their
destination. This duty of care is not excused by proof that they exercised
the diligence of a good father of the family in the selection and
supervision of their employee. As Art. 1759 of the Code provides:
Common carriers are liable for the death of or injuries to passengers
through the negligence or wilful acts of the former’s employees, although
such employees may have acted beyond the scope of their authority or in
violation of the orders of the common carriers.
This liability of the common carriers does not cease upon proof that
they exercised all the diligence of a good father of a family in the
selection and supervision of their employees.
The same circumstances detailed above, supporting the finding of
the trial court and of the appellate court that petitioners are liable under
Arts. 2176 and 2180 for quasi delict, fully justify finding them guilty of
breach of contract of carriage under Arts. 1733, 1755 and 1759 of the
Civil Code.
 Secondly, we sustain the award of damages in favor of Amyline
Antonio. However, we think the Court of Appeals erred in increasing the
amount of compensatory damages because private respondents did not
question this award as inadequate.[11] To the contrary, the award of
P500,000.00 for compensatory damages which the Regional Trial Court
made is reasonable considering the contingent nature of her income as a
casual employee of a company and as distributor of beauty products and
the fact that the possibility that she might be able to work again has not
been foreclosed. In fact she testified that one of her previous employers
had expressed willingness to employ her again.
With respect to the other awards, while the decisions of the trial
court and the Court of Appeals do not sufficiently indicate the factual and
legal basis for them, we find that they are nevertheless supported by
evidence in the records of this case. Viewed as an action for quasi
delict,this case falls squarely within the purview of Art. 2219(2) providing
for the payment of moral damages in cases of quasi delict. On the theory
that petitioners are liable for breach of contract of carriage, the award of
moral damages is authorized by Art. 1764, in relation to Art. 2220, since
Cabil’s gross negligence amounted to bad faith. [12] Amyline Antonio’s
testimony, as well as the testimonies of her father and co-passengers,
fully establish the physical suffering and mental anguish she endured as
a result of the injuries caused by petitioners’ negligence.
The award of exemplary damages and attorney’s fees was also
properly made. However, for the same reason that it was error for the
appellate court to increase the award of compensatory damages, we hold
that it was also error for it to increase the award of moral damages and
reduce the award of attorney’s fees, inasmuch as private respondents, in
whose favor the awards were made, have not appealed.[13]
As above stated, the decision of the Court of Appeals can be
sustained either on the theory of quasi delict or on that of breach of
contract. The question is whether, as the two courts below held,
petitioners, who are the owners and driver of the bus, may be made to
respond jointly and severally to private respondent. We hold that they
may be. In Dangwa Trans. Co. Inc. v. Court of Appeals,[14] on facts similar
to those in this case, this Court held the bus company and the driver
jointly and severally liable for damages for injuries suffered by a
passenger. Again, inBachelor Express, Inc. v. Court of Appeals [15] a driver
found negligent in failing to stop the bus in order to let off passengers
when a fellow passenger ran amuck, as a result of which the passengers
jumped out of the speeding bus and suffered injuries, was held also
jointly and severally liable with the bus company to the injured
passengers.
The same rule of liability was applied in situations where the
negligence of the driver of the bus on which plaintiff was riding concurred
with the negligence of a third party who was the driver of another
vehicle, thus causing an accident. In Anuran v. Buño,[16] Batangas
Laguna Tayabas Bus Co. v. Intermediate Appellate Court,[17] and Metro
Manila Transit Corporation v. Court of Appeals,[18] the bus company, its
driver, the operator of the other vehicle and the driver of the vehicle
were jointly and severally held liable to the injured passenger or the
latter’s heirs. The basis of this allocation of liability was explained
in Viluan v. Court of Appeals,[19] thus:
Nor should it make any difference that the liability of petitioner [bus
owner] springs from contract while that of respondents [owner and driver
of other vehicle] arises from quasi-delict. As early as 1913, we already
ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a
passenger due to the negligence of the driver of the bus on which he was
riding and of the driver of another vehicle, the drivers as well as the
owners of the two vehicles are jointly and severally liable for
damages. Some members of the Court, though, are of the view that
under the circumstances they are liable on quasi-delict.[20]
It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of
Appeals[21] this Court exonerated the jeepney driver from liability to the
injured passengers and their families while holding the owners of the
jeepney jointly and severally liable, but that is because that case was
expressly tried and decided exclusively on the theory of culpa
contractual. As this Court there explained:
The trial court was therefore right in finding that Manalo [the driver] and
spouses Mangune and Carreon [the jeepney owners] were
negligent. However, its ruling that spouses Mangune and Carreon are
jointly and severally liable with Manalo is erroneous. The driver cannot
be held jointly and severally liable with the carrier in case of breach of
the contract of carriage. The rationale behind this is readily
discernible. Firstly, the contract of carriage is between the carrier and
the passenger, and in the event of contractual liability, the carrier is
exclusively responsible therefore to the passenger, even if such breach
be due to the negligence of his driver (see Viluan v. The Court of
Appeals, et al., G.R. Nos. L-21477-81, April 29, 1966, 16 SCRA 742) . . .[22]
As in the case of BLTB, private respondents in this case and her co-
plaintiffs did not stake out their claim against the carrier and the driver
exclusively on one theory, much less on that of breach of contract
alone. After all, it was permitted for them to allege alternative causes of
action and join as many parties as may be liable on such causes of
action[23] so long as private respondent and her co-plaintiffs do not
recover twice for the same injury. What is clear from the cases is the
intent of the plaintiff there to recover from both the carrier and the
driver, thus justifying the holding that the carrier and the driver were
jointly and severally liable because their separate and distinct acts
concurred to produce the same injury.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED with
MODIFICATION as to the award of damages. Petitioners are ORDERED to
PAY jointly and severally the private respondent Amyline Antonio the
following amounts:
1) P93,657.11 as actual damages;
2) P500,000.00 as the reasonable amount of loss of earning
capacity of plaintiff Amyline Antonio;
3) P20,000.00 as moral damages;
4) P20,000.00 as exemplary damages;
5) 25% of the recoverable amount as attorney’s fees; and
6) costs of suit.
SO ORDERED.

THIRD DIVISION
[G.R. No. 147246. August 19, 2003]
ASIA LIGHTERAGE AND SHIPPING, INC., petitioner, vs. COURT OF
APPEALS and PRUDENTIAL GUARANTEE AND ASSURANCE,
INC., respondents.
DECISION
PUNO, J.:
[1]
On appeal is the Court of Appeals’ May 11, 2000 Decision in CA-
G.R. CV No. 49195 and February 21, 2001 Resolution [2] affirming with
modification the April 6, 1994 Decision[3] of the Regional Trial Court of
Manila which found petitioner liable to pay private respondent the
amount of indemnity and attorney's fees.
First, the facts.
On June 13, 1990, 3,150 metric tons of Better Western White Wheat
in bulk, valued at US$423,192.35 [4] was shipped by Marubeni American
Corporation of Portland, Oregon on board the vessel M/V NEO CYMBIDIUM
V-26 for delivery to the consignee, General Milling Corporation in Manila,
evidenced by Bill of Lading No. PTD/Man-4.[5] The shipment was insured
by the private respondent Prudential Guarantee and Assurance, Inc.
against loss or damage for P14,621,771.75 under Marine Cargo Risk Note
RN 11859/90.[6]
On July 25, 1990, the carrying vessel arrived in Manila and the cargo
was transferred to the custody of the petitioner Asia Lighterage and
Shipping, Inc. The petitioner was contracted by the consignee as carrier
to deliver the cargo to consignee's warehouse at Bo. Ugong, Pasig City.
On August 15, 1990, 900 metric tons of the shipment was loaded on
barge PSTSI III, evidenced by Lighterage Receipt No. 0364[7] for delivery
to consignee. The cargo did not reach its destination.
It appears that on August 17, 1990, the transport of said cargo was
suspended due to a warning of an incoming typhoon. On August 22,
1990, the petitioner proceeded to pull the barge to Engineering Island off
Baseco to seek shelter from the approaching typhoon. PSTSI III was tied
down to other barges which arrived ahead of it while weathering out the
storm that night. A few days after, the barge developed a list because of
a hole it sustained after hitting an unseen protuberance underneath the
water. The petitioner filed a Marine Protest on August 28, 1990.[8] It
likewise secured the services of Gaspar Salvaging Corporation which
refloated the barge.[9] The hole was then patched with clay and cement.
The barge was then towed to ISLOFF terminal before it finally
headed towards the consignee's wharf on September 5, 1990. Upon
reaching the Sta. Mesa spillways, the barge again ran aground due to
strong current. To avoid the complete sinking of the barge, a portion of
the goods was transferred to three other barges.[10]
The next day, September 6, 1990, the towing bits of the barge
broke. It sank completely, resulting in the total loss of the remaining
cargo.[11]A second Marine Protest was filed on September 7, 1990.[12]
On September 14, 1990, a bidding was conducted to dispose of the
damaged wheat retrieved and loaded on the three other barges. [13] The
total proceeds from the sale of the salvaged cargo was P201,379.75.[14]
On the same date, September 14, 1990, consignee sent a claim
letter to the petitioner, and another letter dated September 18, 1990 to
the private respondent for the value of the lost cargo.
On January 30, 1991, the private respondent indemnified the
consignee in the amount of P4,104,654.22.[15] Thereafter, as subrogee, it
sought recovery of said amount from the petitioner, but to no avail.
On July 3, 1991, the private respondent filed a complaint against the
petitioner for recovery of the amount of indemnity, attorney's fees and
cost of suit.[16] Petitioner filed its answer with counterclaim.[17]
The Regional Trial Court ruled in favor of the private
respondent. The dispositive portion of its Decision states:
WHEREFORE, premises considered, judgment is hereby rendered
ordering defendant Asia Lighterage & Shipping, Inc. liable to pay plaintiff
Prudential Guarantee & Assurance Co., Inc. the sum of P4,104,654.22
with interest from the date complaint was filed on July 3, 1991 until fully
satisfied plus 10% of the amount awarded as and for attorney's
fees. Defendant's counterclaim is hereby DISMISSED. With costs against
defendant.[18]
Petitioner appealed to the Court of Appeals insisting that it is not a
common carrier. The appellate court affirmed the decision of the trial
court with modification. The dispositive portion of its decision reads:
WHEREFORE, the decision appealed from is hereby AFFIRMED with
modification in the sense that the salvage value of P201,379.75 shall be
deducted from the amount of P4,104,654.22. Costs against appellant.
SO ORDERED.
 Petitioner’s Motion for Reconsideration dated June 3, 2000 was
likewise denied by the appellate court in a Resolution promulgated on
February 21, 2001.
Hence, this petition. Petitioner submits the following errors allegedly
committed by the appellate court, viz:[19]
(1) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A
WAY NOT IN ACCORD WITH LAW AND/OR WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT
HELD THAT PETITIONER IS A COMMON CARRIER.
(2) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A
WAY NOT IN ACCORD WITH LAW AND/OR WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT
AFFIRMED THE FINDING OF THE LOWER COURT A
QUO THAT ON THE BASIS OF THE PROVISIONS OF THE
CIVIL CODE APPLICABLE TO COMMON CARRIERS, “THE
LOSS OF THE CARGO IS, THEREFORE, BORNE BY THE
CARRIER IN ALL CASES EXCEPT IN THE FIVE (5) CASES
ENUMERATED.”
(3) THE COURT OF APPEALS DECIDED THE CASE A QUO IN A
WAY NOT IN ACCORD WITH LAW AND/OR WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT WHEN IT
EFFECTIVELY CONCLUDED THAT PETITIONER FAILED TO
EXERCISE DUE DILIGENCE AND/OR WAS NEGLIGENT IN ITS
CARE AND CUSTODY OF THE CONSIGNEE’S CARGO.
The issues to be resolved are:
(1) Whether the petitioner is a common carrier; and,
(2) Assuming the petitioner is a common carrier, whether it
exercised extraordinary diligence in its care and custody of the
consignee’s cargo.
On the first issue, we rule that petitioner is a common carrier.
Article 1732 of the Civil Code defines common carriers as 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.
Petitioner contends that it is not a common carrier but a private
carrier. Allegedly, it has no fixed and publicly known route, maintains no
terminals, and issues no tickets. It points out that it is not obliged to
carry indiscriminately for any person. It is not bound to carry goods
unless it consents. In short, it does not hold out its services to the
general public.[20]
We disagree.
In De Guzman vs. Court of Appeals,[21] we held that the definition
of common carriers in Article 1732 of the Civil Code 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. We also did not distinguish 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. Further, we ruled that Article 1732 does not distinguish between a
carrier offering its services to the general public, and one who offers
services or solicits business only from a narrow segment of the general
population.
In the case at bar, the principal business of the petitioner is that of
lighterage and drayage[22] and it offers its barges to the public for
carrying or transporting goods by water for compensation. Petitioner is
clearly a common carrier. In De Guzman, supra,[23] we considered
private respondent Ernesto Cendaña to be a common carrier even if his
principal occupation was not the carriage of goods for others, but that of
buying used bottles and scrap metal in Pangasinan and selling these
items in Manila.
We therefore hold that petitioner is a common carrier whether its
carrying of goods is done on an irregular rather than scheduled manner,
and with an only limited clientele. A common carrier need not have fixed
and publicly known routes. Neither does it have to maintain terminals or
issue tickets.
To be sure, petitioner fits the test of a common carrier as laid down
in Bascos vs. Court of Appeals.[24] 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.”[25] In the case at bar, the petitioner admitted that it is
engaged in the business of shipping and lighterage, [26] offering its barges
to the public, despite its limited clientele for carrying or transporting
goods by water for compensation.[27]
On the second issue, we uphold the findings of the lower courts that
petitioner failed to exercise extraordinary diligence in its care and
custody of the consignee’s goods.
Common carriers are bound to observe extraordinary diligence in
the vigilance over the goods transported by them.[28] They are presumed
to have been at fault or to have acted negligently if the goods are lost,
destroyed or deteriorated.[29] To overcome the presumption of
negligence in the case of loss, destruction or deterioration of the goods,
the common carrier must prove that it exercised extraordinary
diligence. There are, however, exceptions to this rule. Article 1734 of
the Civil Code enumerates the instances when the presumption of
negligence does not attach:
Art. 1734. 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 the case at bar, the barge completely sank after its towing bits
broke, resulting in the total loss of its cargo. Petitioner claims that this
was caused by a typhoon, hence, it should not be held liable for the loss
of the cargo. However, petitioner failed to prove that the typhoon is the
proximate and only cause of the loss of the goods, and that it has
exercised due diligence before, during and after the occurrence of the
typhoon to prevent or minimize the loss. [30] The evidence show that, even
before the towing bits of the barge broke, it had already previously
sustained damage when it hit a sunken object while docked at the
Engineering Island. It even suffered a hole. Clearly, this could not be
solely attributed to the typhoon. The partly-submerged vessel was
refloated but its hole was patched with only clay and cement. The patch
work was merely a provisional remedy, not enough for the barge to sail
safely. Thus, when petitioner persisted to proceed with the voyage, it
recklessly exposed the cargo to further damage. A portion of the cross-
examination of Alfredo Cunanan, cargo-surveyor of Tan-Gatue
Adjustment Co., Inc., states:
[31]
CROSS-EXAMINATION BY ATTY. DONN LEE:
x x x x
x xxx
q - Can you tell us what else transpired after that incident?
a - After the first accident, through the initiative of the barge
owners, they tried to pull out the barge from the place of
the accident, and bring it to the anchor terminal for safety,
then after deciding if the vessel is stabilized, they tried to
pull it to the consignee’s warehouse, now while on route
another accident occurred, now this time the barge totally
hitting something in the course.
q - You said there was another accident, can you tell the court
the nature of the second accident?
a - The sinking, sir.
q - Can you tell the nature . . . can you tell the court, if you
know what caused the sinking?
a - Mostly it was related to the first accident because there
was already a whole (sic) on the bottom part of the barge.
x x x x x
x xxx
This is not all. Petitioner still headed to the consignee’s wharf
despite knowledge of an incoming typhoon. During the time that the
barge was heading towards the consignee's wharf on September 5, 1990,
typhoon “Loleng” has already entered the Philippine area of
responsibility.[32] A part of the testimony of Robert Boyd, Cargo
Operations Supervisor of the petitioner, reveals:
DIRECT-EXAMINATION BY ATTY. LEE:[33]
x x x x x
x xxx
q - Now, Mr. Witness, did it not occur to you it might be safer
to just allow the Barge to lie where she was instead of
towing it?
a - Since that time that the Barge was refloated, GMC (General
Milling Corporation, the consignee) as I have said was in a
hurry for their goods to be delivered at their Wharf since
they needed badly the wheat that was loaded in PSTSI-
3. It was needed badly by the consignee.
q - And this is the reason why you towed the Barge as you did?
a - Yes, sir.
x x x x x
x
x xxx
CROSS-EXAMINATION BY ATTY. IGNACIO:[34]
x x x x x
x xxx
 q- And then from ISLOFF Terminal you proceeded to the Resolution dated February 21, 2001 are hereby AFFIRMED. Costs against
premises of the GMC? Am I correct? petitioner.
SO ORDERED.
a- The next day, in the morning, we hired for additional two
(2) tugboats as I have stated.

q- Despite of the threats of an incoming typhoon as you

testified a while ago?

a- It is already in an inner portion of Pasig River. The

typhoon would be coming and it would be dangerous if
we are in the vicinity of Manila Bay.

q- But the fact is, the typhoon was incoming? Yes or no?

a- Yes.

q- And yet as a standard operating procedure of your

Company, you have to secure a sort of Certification to
determine the weather condition, am I correct?

a- Yes, sir.

q- So, more or less, you had the knowledge of the incoming

typhoon, right?

a- Yes, sir.

q- And yet you proceeded to the premises of the GMC?

a- ISLOFF Terminal is far from Manila Bay and anytime even

with the typhoon if you are already inside the vicinity or
inside Pasig entrance, it is a safe place to tow upstream.

Accordingly, the petitioner cannot invoke the occurrence of the

typhoon as force majeure to escape liability for the loss sustained by the
private respondent. Surely, meeting a typhoon head-on falls short of due
diligence required from a common carrier. More importantly, the
officers/employees themselves of petitioner admitted that when the
towing bits of the vessel broke that caused its sinking and the total loss
of the cargo upon reaching the Pasig River, it was no longer affected by
the typhoon. The typhoon then is not the proximate cause of the loss of
the cargo; a human factor, i.e., negligence had intervened.
IN VIEW THEREOF, the petition is DENIED. The Decision of the
Court of Appeals in CA-G.R. CV No. 49195 dated May 11, 2000 and its

FIRST DIVISION
[G.R. No. 138334. August 25, 2003]
ESTELA L. CRISOSTOMO, petitioner, vs. THE COURT OF
APPEALS and CARAVAN TRAVEL & TOURSINTERNATIONAL,
INC., respondents.
DECISION
YNARES-SANTIAGO, J.:
In May 1991, petitioner Estela L. Crisostomo contracted the services
of respondent Caravan Travel and Tours International, Inc. to arrange and
facilitate her booking, ticketing and accommodation in a tour dubbed
“Jewels of Europe”. The package tour included the countries of England,
Holland, Germany, Austria, Liechstenstein, Switzerland and France at a
total cost of P74,322.70. Petitioner was given a 5% discount on the
amount, which included airfare, and the booking fee was also waived
because petitioner’s niece, Meriam Menor, was respondent company’s
ticketing manager.
Pursuant to said contract, Menor went to her aunt’s residence on
June 12, 1991 – a Wednesday – to deliver petitioner’s travel documents
and plane tickets. Petitioner, in turn, gave Menor the full payment for the
package tour. Menor then told her to be at the Ninoy Aquino
International Airport (NAIA) on Saturday, two hours before her flight on
board British Airways.
Without checking her travel documents, petitioner went to NAIA on
Saturday, June 15, 1991, to take the flight for the first leg of her journey
from Manila to Hongkong. To petitioner’s dismay, she discovered that the
flight she was supposed to take had already departed the previous
day. She learned that her plane ticket was for the flight scheduled on
June 14, 1991. She thus called up Menor to complain.
Subsequently, Menor prevailed upon petitioner to take another tour
– the “British Pageant” – which included England, Scotland and Wales in
its itinerary. For this tour package, petitioner was asked anew to pay
US$785.00 or P20,881.00 (at the then prevailing exchange rate of
P26.60). She gave respondent US$300 or P7,980.00 as partial payment
and commenced the trip in July 1991.
Upon petitioner’s return from Europe, she demanded from
respondent the reimbursement of P61,421.70, representing the
difference between the sum she paid for “Jewels of Europe” and the
amount she owed respondent for the “British Pageant” tour. Despite
several demands, respondent company refused to reimburse the amount,
contending that the same was non-refundable. [1] Petitioner was thus
constrained to file a complaint against respondent for breach of contract
of carriage and damages, which was docketed as Civil Case No. 92-133
and raffled to Branch 59 of the Regional Trial Court of Makati City.
In her complaint,[2] petitioner alleged that her failure to join “Jewels
of Europe” was due to respondent’s fault since it did not clearly indicate
the departure date on the plane ticket. Respondent was also negligent in
informing her of the wrong flight schedule through its employee
Menor. She insisted that the “British Pageant” was merely a substitute for
the “Jewels of Europe” tour, such that the cost of the former should be
properly set-off against the sum paid for the latter.
For its part, respondent company, through its Operations Manager,
Concepcion Chipeco, denied responsibility for petitioner’s failure to join
the first tour. Chipeco insisted that petitioner was informed of the correct
departure date, which was clearly and legibly printed on the plane ticket.
The travel documents were given to petitioner two days ahead of the
scheduled trip. Petitioner had only herself to blame for missing the flight,
as she did not bother to read or confirm her flight schedule as printed on
the ticket.
Respondent explained that it can no longer reimburse the amount
paid for “Jewels of Europe”, considering that the same had already been
remitted to its principal in Singapore, Lotus Travel Ltd., which had
already billed the same even if petitioner did not join the tour. Lotus’
European tour organizer, Insight International Tours Ltd., determines the
cost of a package tour based on a minimum number of projected
participants. For this reason, it is accepted industry practice to disallow
refund for individuals who failed to take a booked tour.[3]
Lastly, respondent maintained that the “British Pageant” was not a
substitute for the package tour that petitioner missed. This tour was
independently procured by petitioner after realizing that she made a
mistake in missing her flight for “Jewels of Europe”. Petitioner was
allowed to make a partial payment of only US$300.00 for the second tour
because her niece was then an employee of the travel
agency. Consequently, respondent prayed that petitioner be ordered to
pay the balance of P12,901.00 for the “British Pageant” package tour.
After due proceedings, the trial court rendered a decision, [4] the
dispositive part of which reads:
WHEREFORE, premises considered, judgment is hereby rendered as
follows:
 1. Ordering the defendant to return and/or refund to the
plaintiff the amount of Fifty Three Thousand Nine
Hundred Eighty Nine Pesos and Forty Three Centavos
(P53,989.43) with legal interest thereon at the rate of
twelve percent (12%) per annum starting January 16,
1992, the date when the complaint was filed;
2. Ordering the defendant to pay the plaintiff the amount of
Five Thousand (P5,000.00) Pesos as and for reasonable
attorney’s fees;
3. Dismissing the defendant’s counterclaim, for lack of
merit; and
4. With costs against the defendant.
SO ORDERED.[5]
The trial court held that respondent was negligent in erroneously
advising petitioner of her departure date through its employee, Menor,
who was not presented as witness to rebut petitioner’s testimony.
However, petitioner should have verified the exact date and time of
departure by looking at her ticket and should have simply not relied on
Menor’s verbal representation. The trial court thus declared that
petitioner was guilty of contributory negligence and accordingly,
deducted 10% from the amount being claimed as refund.
Respondent appealed to the Court of Appeals, which likewise found
both parties to be at fault. However, the appellate court held that
petitioner is more negligent than respondent because as a lawyer and
well-traveled person, she should have known better than to simply rely
on what was told to her. This being so, she is not entitled to any form of
damages. Petitioner also forfeited her right to the “Jewels of Europe” tour
and must therefore pay respondent the balance of the price for the
“British Pageant” tour. The dispositive portion of the judgment appealed
from reads as follows:
WHEREFORE, premises considered, the decision of the Regional Trial
Court dated October 26, 1995 is hereby REVERSED and SET ASIDE. A new
judgment is hereby ENTERED requiring the plaintiff-appellee to pay to the
defendant-appellant the amount of P12,901.00, representing the balance
of the price of the British Pageant Package Tour, the same to earn legal
interest at the rate of SIX PERCENT (6%) per annum, to be computed
from the time the counterclaim was filed until the finality of this decision.
After this decision becomes final and executory, the rate of TWELVE
PERCENT (12%) interest per annum shall be additionally imposed on the
total obligation until payment thereof is satisfied. The award of attorney’s
fees is DELETED. Costs against the plaintiff-appellee.
SO ORDERED.[6]
Upon denial of her motion for reconsideration, [7] petitioner filed the
instant petition under Rule 45 on the following grounds:
I
It is respectfully submitted that the Honorable Court of Appeals
committed a reversible error in reversing and setting aside the decision
of the trial court by ruling that the petitioner is not entitled to a refund of
the cost of unavailed “Jewels of Europe” tour she being equally, if not
more, negligent than the private respondent, for in the contract of
carriage the common carrier is obliged to observe utmost care and extra-
ordinary diligence which is higher in degree than the ordinary diligence
required of the passenger. Thus, even if the petitioner and private
respondent were both negligent, the petitioner cannot be considered to
be equally, or worse, more guilty than the private respondent. At best,
petitioner’s negligence is only contributory while the private respondent
[is guilty] of gross negligence making the principle of pari delicto
inapplicable in the case;
II
The Honorable Court of Appeals also erred in not ruling that the “Jewels
of Europe” tour was not indivisible and the amount paid therefor
refundable;
III
The Honorable Court erred in not granting to the petitioner the
consequential damages due her as a result of breach of contract of
carriage.[8]
Petitioner contends that respondent did not observe the standard of
care required of a common carrier when it informed her wrongly of the
flight schedule. She could not be deemed more negligent than
respondent since the latter is required by law to exercise extraordinary
diligence in the fulfillment of its obligation. If she were negligent at all,
the same is merely contributory and not the proximate cause of the
damage she suffered. Her loss could only be attributed to respondent as
it was the direct consequence of its employee’s gross negligence.
Petitioner’s contention has no merit.
By definition, a contract of carriage or transportation is one whereby
a certain person or association of persons obligate themselves to
transport persons, things, or news from one place to another for a fixed
price.[9] Such person or association of persons are regarded as carriers
and are classified as private or special carriers and common or public
carriers.[10] A common carrier is defined under Article 1732 of the Civil
Code as 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.
It is obvious from the above definition that respondent is not an
entity engaged in the business of transporting either passengers or
goods and is therefore, neither a private nor a common carrier.
Respondent did not undertake to transport petitioner from one place to
another since its covenant with its customers is simply to make travel
arrangements in their behalf. Respondent’s services as a travel agency
include procuring tickets and facilitating travel permits or visas as well as
booking customers for tours.
While petitioner concededly bought her plane ticket through the
efforts of respondent company, this does not mean that the latter ipso
facto is a common carrier. At most, respondent acted merely as an agent
of the airline, with whom petitioner ultimately contracted for her carriage
to Europe. Respondent’s obligation to petitioner in this regard was simply
to see to it that petitioner was properly booked with the airline for the
appointed date and time. Her transport to the place of destination,
meanwhile, pertained directly to the airline.
The object of petitioner’s contractual relation with respondent is the
latter’s service of arranging and facilitating petitioner’s booking,
ticketing and accommodation in the package tour. In contrast, the object
of a contract of carriage is the transportation of passengers or goods. It
is in this sense that the contract between the parties in this case was an
ordinary one for services and not one of carriage. Petitioner’s submission
is premised on a wrong assumption.
The nature of the contractual relation between petitioner and
respondent is determinative of the degree of care required in the
performance of the latter’s obligation under the contract. For reasons of
public policy, a common carrier in a contract of carriage is bound by law
to carry passengers as far as human care and foresight can provide using
the utmost diligence of very cautious persons and with due regard for all
the circumstances.[11] As earlier stated, however, respondent is not a
common carrier but a travel agency. It is thus not bound under the law to
observe extraordinary diligence in the performance of its obligation, as
petitioner claims.
Since the contract between the parties is an ordinary one for
services, the standard of care required of respondent is that of a good
father of a family under Article 1173 of the Civil Code. [12] This connotes
reasonable care consistent with that which an ordinarily prudent person
would have observed when confronted with a similar situation. The test
to determine whether negligence attended the performance of an
obligation is: did the defendant in doing the alleged negligent act use
that reasonable care and caution which an ordinarily prudent person
would have used in the same situation? If not, then he is guilty of
negligence.[13]
In the case at bar, the lower court found Menor negligent when she
allegedly informed petitioner of the wrong day of departure. Petitioner’s
testimony was accepted as indubitable evidence of Menor’s alleged
negligent act since respondent did not call Menor to the witness stand to
refute the allegation. The lower court applied the presumption under Rule
131, Section 3 (e)[14] of the Rules of Court that evidence willfully
suppressed would be adverse if produced and thus considered
petitioner’s uncontradicted testimony to be sufficient proof of her claim.
On the other hand, respondent has consistently denied that Menor
was negligent and maintains that petitioner’s assertion is belied by the
evidence on record. The date and time of departure was legibly written
on the plane ticket and the travel papers were delivered two days in
advance precisely so that petitioner could prepare for the trip. It
performed all its obligations to enable petitioner to join the tour and
exercised due diligence in its dealings with the latter.
We agree with respondent.
Respondent’s failure to present Menor as witness to rebut
petitioner’s testimony could not give rise to an inference unfavorable to
the former. Menor was already working in France at the time of the filing
of the complaint,[15] thereby making it physically impossible for
respondent to present her as a witness. Then too, even if it were possible
for respondent to secure Menor’s testimony, the presumption under Rule
131, Section 3(e) would still not apply. The opportunity and possibility for
obtaining Menor’s testimony belonged to both parties, considering that
Menor was not just respondent’s employee, but also petitioner’s niece. It
was thus error for the lower court to invoke the presumption that
respondent willfully suppressed evidence under Rule 131, Section
3(e). Said presumption would logically be inoperative if the evidence is
not intentionally omitted but is simply unavailable, or when the same
could have been obtained by both parties.[16]
In sum, we do not agree with the finding of the lower court that
Menor’s negligence concurred with the negligence of petitioner and
resultantly caused damage to the latter. Menor’s negligence was not
sufficiently proved, considering that the only evidence presented on this
score was petitioner’s uncorroborated narration of the events. It is well-
settled that the party alleging a fact has the burden of proving it and a
mere allegation cannot take the place of evidence. [17] If the plaintiff, upon
whom rests the burden of proving his cause of action, fails to show in a
satisfactory manner facts upon which he bases his claim, the defendant
is under no obligation to prove his exception or defense.[18]
Contrary to petitioner’s claim, the evidence on record shows that
respondent exercised due diligence in performing its obligations under
the contract and followed standard procedure in rendering its services to
petitioner. As correctly observed by the lower court, the plane the finality of this Decision. After this Decision becomes final and
ticket[19]issued to petitioner clearly reflected the departure date and time, executory, the rate of 12% per annum shall be imposed until the
contrary to petitioner’s contention. The travel documents, consisting of obligation is fully settled, this interim period being deemed to be by then
the tour itinerary, vouchers and instructions, were likewise delivered to an equivalent to a forbearance of credit.[23]
petitioner two days prior to the trip. Respondent also properly booked
petitioner for the tour, prepared the necessary documents and procured SO ORDERED.
the plane tickets. It arranged petitioner’s hotel accommodation as well as
food, land transfers and sightseeing excursions, in accordance with its
avowed undertaking.
Therefore, it is clear that respondent performed its prestation under
the contract as well as everything else that was essential to book
petitioner for the tour. Had petitioner exercised due diligence in the
conduct of her affairs, there would have been no reason for her to miss
the flight. Needless to say, after the travel papers were delivered to
petitioner, it became incumbent upon her to take ordinary care of her
concerns. This undoubtedly would require that she at least read the
documents in order to assure herself of the important details regarding
the trip.
The negligence of the obligor in the performance of the obligation
renders him liable for damages for the resulting loss suffered by the
obligee. Fault or negligence of the obligor consists in his failure to
exercise due care and prudence in the performance of the obligation as
the nature of the obligation so demands.[20] There is no fixed standard of
diligence applicable to each and every contractual obligation and each
case must be determined upon its particular facts. The degree of
diligence required depends on the circumstances of the specific
obligation and whether one has been negligent is a question of fact that
is to be determined after taking into account the particulars of each case.
[21]

The lower court declared that respondent’s employee was

negligent. This factual finding, however, is not supported by the
evidence on record. While factual findings below are generally
conclusive upon this court, the rule is subject to certain exceptions, as
when the trial court overlooked, misunderstood, or misapplied some facts
or circumstances of weight and substance which will affect the result of
the case.[22]
In the case at bar, the evidence on record shows that respondent
company performed its duty diligently and did not commit any
contractual breach. Hence, petitioner cannot recover and must bear her
own damage.
WHEREFORE, the instant petition is DENIED for lack of merit. The
decision of the Court of Appeals in CA-G.R. CV No. 51932 is
AFFIRMED. Accordingly, petitioner is ordered to pay respondent the
amount of P12,901.00 representing the balance of the price of the British
Pageant Package Tour, with legal interest thereon at the rate of 6% per
annum, to be computed from the time the counterclaim was filed until

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 47065 June 26, 1940
PANGASINAN TRANSPORTATION CO., INC., petitioner,
vs.
THE PUBLIC SERVICE COMMISSION, respondent.
C. de G. Alvear for petitioner.
Evaristo R. Sandoval for respondent.
LAUREL, J.:
The petitioner has been engaged for the past twenty years in the
business of transporting passengers in the Province of Pangasinan and
Tarlac and, to a certain extent, in the Province of Nueva Ecija and
Zambales, by means of motor vehicles commonly known as TPU buses, in
accordance with the terms and conditions of the certificates of public
convenience issued in its favor by the former Public Utility Commission in
cases Nos. 24948, 30973, 36830, 32014 and 53090. On August 26, 1939,
the petitioner filed with the Public Service Commission an application for
authorization to operate ten additional new Brockway trucks (case No.
56641), on the ground that they were needed to comply with the terms
and conditions of its existing certificates and as a result of the application
of the Eight Hour Labor Law. In the decision of September 26, 1939,
granting the petitioner's application for increase of equipment, the Public
Service Commission ordered:
Y de acuerdo con que se provee por el articulo 15 de la ley No.
146 del Commonwealth, tal como ha sido enmendada por el
articulo 1 de la Ley No. 454, por la presente se enmienda las
condiciones de los certificados de convenciencia publica
expedidos en los expedientes Nos. 24948, 30973, 36831, 32014
y la authorizacion el el expediente No. 53090, asi que se
consideran incorporadas en los mismos las dos siguientes
condiciones:
Que los certificados de conveniencia publica y authorizacion
arriba mencionados seran validos y subsistentes solamente
durante de veinticinco (25) anos, contados desde la fecha de la
promulgacion de esta decision.
Que la empresa de la solicitante porda ser adquirida por el
Commonwealth de Filipinas o por alguna dependencia del mismo
en cualquier tiempo que lo deseare previo pago del precio d
costo de su equipo util, menos una depreciacion razonable que se
ha fijar por la Comision al tiempo de su adquisicion.
Not being agreeable to the two new conditions thus incorporated in its
existing certificates, the petitioner filed on October 9, 1939 a motion for
reconsideration which was denied by the Public Service Commission on
November 14, 1939. Whereupon, on November 20, 1939, the present
petition for a writ of certiorari was instituted in this court praying that an
order be issued directing the secretary of the Public Service Commission
to certify forthwith to this court the records of all proceedings in case No.
56641; that this court, after hearing, render a decision declaring section
1 of Commonwealth Act No. 454 unconstitutional and void; that, if this
court should be of the opinion that section 1 of Commonwealth Act No.
454 is constitutional, a decision be rendered declaring that the provisions
thereof are not applicable to valid and subsisting certificates issued prior
to June 8, 1939. Stated in the language of the petitioner, it is contended:
1. That the legislative powers granted to the Public Service
Commission by section 1 of Commonwealth Act No. 454, without
limitation, guide or rule except the unfettered discretion and
judgment of the Commission, constitute a complete and total
abdication by the Legislature of its functions in the premises, and
for that reason, the Act, in so far as those powers are concerned,
is unconstitutional and void.
2. That even if it be assumed that section 1 of Commonwealth
Act No. 454, is valid delegation of legislative powers, the Public
Service Commission has exceeded its authority because: (a) The
Act applies only to future certificates and not to valid and
subsisting certificates issued prior to June 8, 1939, when said Act
took effect, and (b) the Act, as applied by the Commission,
violates constitutional guarantees.
Section 15 of Commonwealth Act No. 146, as amended by section 1 of
Commonwealth Act No. 454, invoked by the respondent Public Service
Commission in the decision complained of in the present proceedings,
reads as follows:
With the exception to those enumerated in the preceding section,
no public service shall operate in the Philippines without
possessing a valid and subsisting certificate from the Public
Service Commission, known as "certificate of public
convenience," or "certificate of convenience and public
necessity," as the case may be, to the effect that the operation of
 said service and the authorization to do business will promote the
public interests in a proper and suitable manner.
The Commission may prescribed as a condition for the issuance
of the certificate provided in the preceding paragraph that the
service can be acquired by the Commonwealth of the Philippines
or by any instrumentality thereof upon payment of the cost price
of its useful equipment, less reasonable depreciation; and
likewise, that the certificate shall valid only for a definite period
of time; and that the violation of any of these conditions shall
produce the immediate cancellation of the certificate without the
necessity of any express action on the part of the Commission.
In estimating the depreciation, the effect of the use of the
equipment, its actual condition, the age of the model, or other
circumstances affecting its value in the market shall be taken
into consideration.
The foregoing is likewise applicable to any extension or
amendment of certificates actually force and to those which may
hereafter be issued, to permits to modify itineraries and time
schedules of public services and to authorization to renew and
increase equipment and properties.
Under the first paragraph of the aforequoted section 15 of Act No. 146, as
amended, no public service can operate without a certificate of public
convenience or certificate of convenience and public necessity to the
effect that the operation of said service and the authorization to do
business will "public interests in a proper and suitable manner." Under
the second paragraph, one of the conditions which the Public Service
Commission may prescribed the issuance of the certificate provided for in
the first paragraph is that "the service can be acquired by the
Commonwealth of the Philippines or by any instrumental thereof upon
payment of the cost price of its useful equipment, less reasonable
depreciation," a condition which is virtually a restatement of the principle
already embodied in the Constitution, section 6 of Article XII, which
provides that "the State may, in the interest of national welfare and
defense, establish and operate industries and means of transportation
and communication, and, upon payment of just compensation, transfer to
public ownership utilities and other private enterprises to be operated by
the Government. "Another condition which the Commission may
prescribed, and which is assailed by the petitioner, is that the certificate
"shall be valid only for a definite period of time." As there is a relation
between the first and second paragraphs of said section 15, the two
provisions must be read and interpreted together. That is to say, in
issuing a certificate, the Commission must necessarily be satisfied that
the operation of the service under said certificate during a definite period
fixed therein "will promote the public interests in a proper and suitable
manner." Under section 16 (a) of Commonwealth Act. No. 146 which is a
complement of section 15, the Commission is empowered to issue
certificates of public convenience whenever it "finds that the operation of
the public service proposed and the authorization to do business will
promote the public interests in a proper and suitable manner." Inasmuch
as the period to be fixed by the Commission under section 15 is
inseparable from the certificate itself, said period cannot be disregarded
by the Commission in determining the question whether the issuance of
the certificate will promote the public interests in a proper and suitable
manner. Conversely, in determining "a definite period of time," the
Commission will be guided by "public interests," the only limitation to its
power being that said period shall not exceed fifty years (sec. 16 (a),
Commonwealth Act No. 146; Constitution, Art. XIII, sec. 8.) We have
already ruled that "public interest" furnishes a sufficient standard.
(People vs. Fernandez and Trinidad, G. R. No. 45655, promulgated June
15, 1938; People vs. Rosenthal and Osmeña, G. R. Nos. 46076 and
46077, promulgated June 12, 1939, citing New York Central Securities
Corporation vs. U.S.A., 287 U.S. 12, 24, 25, 77 Law. ed. 138, 145, 146;
Schenchter Poultry Corporation vs. I.S., 295, 540, 79 Law. ed. 1570,
1585; Ferrazzini vs. Gsell, 34 Phil., 697, 711-712.)
Section 8 of Article XIII of the Constitution provides, among other things,
that no franchise, certificate, or any other form of authorization for the
operation of a public utility shall be "for a longer period than fifty years,"
and when it was ordained, in section 15 of Commonwealth Act No. 146,
as amended by Commonwealth Act No. 454, that the Public Service
Commission may prescribed as a condition for the issuance of a
certificate that it "shall be valid only for a definite period of time" and, in
section 16 (a) that "no such certificates shall be issued for a period of
more than fifty years," the National Assembly meant to give effect to the
aforesaid constitutional mandate. More than this, it has thereby also
declared its will that the period to be fixed by the Public Service
Commission shall not be longer than fifty years. All that has been
delegated to the Commission, therefore, is the administrative function,
involving the use discretion, to carry out the will of the National Assembly
having in view, in addition, the promotion of "public interests in a proper
and suitable manner." The fact that the National Assembly may itself
exercise the function and authority thus conferred upon the Public
Service Commission does not make the provision in question
constitutionally objectionable.
The theory of the separation of powers is designed by its originators to
secure action and at the same time to forestall overaction which
necessarily results from undue concentration of powers, and thereby
obtain efficiency and prevent deposition. Thereby, the "rule of law" was
established which narrows the range of governmental action and makes
it subject to control by certain devices. As a corollary, we find the rule
prohibiting delegation of legislative authority, and from the earliest time
American legal authorities have proceeded on the theory that legislative
power must be exercised by the legislature alone. It is frankness,
however, to confess that as one delves into the mass of judicial
pronouncement, he finds a great deal of confusion. One thing, however,
is apparent in the development of the principle of separation of powers
and that is that the maxim of delegatus non potest delegari or delegata
potestas non potest delegari, attributed to Bracton (De Legius et
Consuetedinious Angliae, edited by G. E. Woodbine, Yale University Press,
1922, vol. 2, p. 167) but which is also recognized in principle in the
Roman Law (D. 17.18.3), has been made to adapt itself to the
complexities of modern governments, giving rise to the adoption, within
certain limits, of the principle of "subordinate legislation," not only in the
United States and England but in practically all modern governments.
(People vs. Rosenthal and Osmeña, G. R. Nos. 46076 and 46077,
promulgated June 12, 1939.) Accordingly, with the growing complexity of
modern life, the multiplication of the subjects of governmental regulation,
and the increased difficulty of administering the laws, there is a
constantly growing tendency toward the delegation of greater powers by
the legislature, and toward the approval of the practice by the court.
(Dillon Catfish Drainage Dist, v. Bank of Dillon, 141 S. E. 274, 275, 143 S.
Ct. 178; State vs. Knox County, 54 S. W. 2d. 973, 976, 165 Tenn. 319.) In
harmony with such growing tendency, this Court, since the decision in
the case of Compañia General de Tabacos de Filipinas vs. Board of Public
Utility Commissioner (34 Phil., 136), relied upon by the petitioner, has, in
instances, extended its seal of approval to the "delegation of greater
powers by the legislature." (Inchausti Steamship Co. vs. Public Utility
Commissioner, 44 Phil., Autobus Co. vs. De Jesus, 56 Phil., 446;
People vs. Fernandez & Trinidad, G. R. No. 45655, promulgated June 15,
1938; People vs. Rosenthal & Osmeña, G. R. Nos. 46076, 46077,
promulgated June 12, 1939; and Robb and Hilscher vs. People, G. R. No.
45866, promulgated June 12, 1939.).
Under the fourth paragraph of section 15 of Commonwealth Act No. 146,
as amended by Commonwealth Act No. 454, the power of the Public
Service Commission to prescribed the conditions "that the service can be
acquired by the Commonwealth of the Philippines or by any
instrumentality thereof upon payment of the cost price of its useful
equipment, less reasonable," and "that the certificate shall be valid only
for a definite period of time" is expressly made applicable "to any
extension or amendment of certificates actually in force" and "to
authorizations to renew and increase equipment and properties." We
have examined the legislative proceedings on the subject and have found
that these conditions were purposely made applicable to existing
certificates of public convenience. The history of Commonwealth Act No.
454 reveals that there was an attempt to suppress, by way of
amendment, the sentence "and likewise, that the certificate shall be valid
only for a definite period of time," but the attempt failed:
xxx xxx xxx
Sr. CUENCO. Señor Presidente, para otra enmienda. En la misma
pagina, lineas 23 y 24, pido que se supriman las palabras 'and
likewise, that the certificate shall be valid only for a definite
period time.' Esta disposicion del proyecto autoriza a la Comision
de Servicios Publicos a fijar un plazo de vigencia certificado de
conveniencia publica. Todo el mundo sabe que bo se puede
determinar cuando los intereses del servicio publico requiren la
explotacion de un servicio publico y ha de saber la Comision de
Servisios, si en un tiempo determinado, la explotacion de algunos
buses en cierta ruta ya no tiene de ser, sobre todo, si tiene en
cuenta; que la explotacion de los servicios publicos depende de
condiciones flutuantes, asi como del volumen como trafico y de
otras condiciones. Ademas, el servicio publico se concede por la
Comision de Servicios Publicos el interes publico asi lo exige. El
interes publico no tiene duracion fija, no es permanente; es un
proceso mas o menos indefinido en cuanto al tiempo. Se ha
acordado eso en el caucus de anoche.
EL PRESIDENTE PRO TEMPORE. ¿Que dice el Comite?
Sr. ALANO. El Comite siente tener que rechazar esa enmienda, en
vista de que esto certificados de conveniencia publica es igual
que la franquicia: sepuede extender. Si los servicios presentados
por la compañia durante el tiempo de su certificado lo require,
puede pedir la extension y se le extendera; pero no creo
conveniente el que nosotros demos un certificado de
conveniencia publica de una manera que podria pasar de
cincuenta anos, porque seria anticonstitucional.
xxx xxx xxx
By a majority vote the proposed amendment was defeated. (Sesion de 17
de mayo de 1939, Asamblea Nacional.)
The petitioner is mistaken in the suggestion that, simply because its
existing certificates had been granted before June 8, 1939, the date when
Commonwealth Act No. 454, amendatory of section 15 of Commonwealth
Act No. 146, was approved, it must be deemed to have the right of
holding them in perpetuity. Section 74 of the Philippine Bill provided that
"no franchise, privilege, or concession shall be granted to any corporation
except under the conditions that it shall be subject to amendment,
alteration, or repeal by the Congress of the United States." The Jones
Law, incorporating a similar mandate, provided, in section 28, that "no
franchise or right shall be granted to any individual, firm, or corporation
except under the conditions that it shall be subject to amendment,
alteration, or repeal by the Congress of the United States." Lastly, the
Constitution of the Philippines provided, in section 8 of Article XIII, that
"no franchise or right shall be granted to any individual, firm, or
corporation, except under the condition that it shall be subject to
amendment, alteration, or repeal by the National Assembly when the
public interest so requires." The National Assembly, by virtue of the
Constitution, logically succeeded to the Congress of the United States in
the power to amend, alter or repeal any franchise or right granted prior
to or after the approval of the Constitution; and when Commonwealth
Acts Nos. 146 and 454 were enacted, the National Assembly, to the
extent therein provided, has declared its will and purpose to amend or
alter existing certificates of public convenience.
Upon the other hand, statutes enacted for the regulation of public
utilities, being a proper exercise by the state of its police power, are
applicable not only to those public utilities coming into existence after its
passage, but likewise to those already established and in operation.
Nor is there any merit in petitioner's contention, that, because of
the establishment of petitioner's operations prior to May 1, 1917,
they are not subject to the regulations of the Commission.
Statutes for the regulation of public utilities are a proper exercise
by the state of its police power. As soon as the power is
exercised, all phases of operation of established utilities, become
at once subject to the police power thus called into operation.
Procedures' Transportation Co. v. Railroad Commission, 251 U. S.
228, 40 Sup. Ct. 131, 64 Law. ed. 239, Law v. Railroad
Commission, 184 Cal. 737, 195 Pac. 423, 14 A. L. R. 249. The
statute is applicable not only to those public utilities coming into
existence after its passage, but likewise to those already
established and in operation. The 'Auto Stage and Truck
Transportation Act' (Stats. 1917, c. 213) is a statute passed in
pursuance of the police power. The only distinction recognized in
the statute between those established before and those
established after the passage of the act is in the method of the
creation of their operative rights. A certificate of public
convenience and necessity it required for any new operation, but
no such certificate is required of any transportation company for
the operation which was actually carried on in good faith on May
1, 1917, This distinction in the creation of their operative rights in
no way affects the power of the Commission to supervise and
regulate them. Obviously the power of the Commission to hear
and dispose of complaints is as effective against companies
securing their operative rights prior to May 1, 1917, as against
those subsequently securing such right under a certificate of
public convenience and necessity. (Motor Transit Co. et al. v.
Railroad Commission of California et al., 209 Pac. 586.)
Moreover, Commonwealth Acts Nos. 146 and 454 are not only the
organic acts of the Public Service Commission but are "a part of the
charter of every utility company operating or seeking to operate a
franchise" in the Philippines. (Streator Aqueduct Co. v. et al., 295 Fed.
385.) The business of a common carrier holds such a peculiar relation to
the public interest that there is superinduced upon it the right of public
regulation. When private property is "affected with a public interest it
ceased to be juris privati only." When, therefore, one devotes his
property to a use in which the public has an interest, he, in effect, grants
to the public an interest in that use, and must submit to be controlled by
the public for the common good, to the extent of the interest he has thus
created. He may withdraw his grant by discounting the use, but so long
as he maintains the use he must submit to control. Indeed, this right of
regulation is so far beyond question that it is well settled that the power
of the state to exercise legislative control over public utilities may be
exercised through boards of commissioners. (Fisher vs.Yangco Steamship
Company, 31 Phil., 1, citing Munn vs. Illinois, 94 U.S. 113; Georgia R. &
Bkg. Co. vs. Smith, 128 U.S. 174; Budd vs. New York, 143 U.S. 517; New
York etc. R. Co. vs. Bristol 151 U.S. 556, 571; Connecticut etc. R.
Co. vs. Woodruff, 153 U.S. 689; Louisville etc. Ry Co. vs. Kentucky, 161
U.S. 677, 695.) This right of the state to regulate public utilities is
founded upon the police power, and statutes for the control and
regulation of utilities are a legitimate exercise thereof, for the protection
of the public as well as of the utilities themselves. Such statutes are,
therefore, not unconstitutional, either impairing the obligation of
contracts, taking property without due process, or denying the equal
protection of the laws, especially inasmuch as the question whether or
not private property shall be devoted to a public and the consequent
burdens assumed is ordinarily for the owner to decide; and if he
voluntarily places his property in public service he cannot complain that
it becomes subject to the regulatory powers of the state. (51 C. J., sec.
21, pp. 9-10.) in the light of authorities which hold that a certificate of
public convenience constitutes neither a franchise nor contract, confers
no property right, and is mere license or privilege. (Burgess vs. Mayor &
Alderman of Brockton, 235 Mass. 95, 100, 126 N. E. 456;
Roberto vs.Commisioners of Department of Public Utilities, 262 Mass.
583, 160 N. E. 321; Scheible vs. Hogan, 113 Ohio St. 83, 148 N. E. 581;
Martz vs. Curtis [J. L.] Cartage Co. [1937], 132 Ohio St. 271, 7 N. E. [d]
220; Manila Yellow Taxicab Co. vs. Sabellano, 59 Phil., 773.)
Whilst the challenged provisions of Commonwealth Act No. 454 are valid
and constitutional, we are, however, of the opinion that the decision of
the Public Service Commission should be reversed and the case
remanded thereto for further proceedings for the reason now to be
stated. The Public Service Commission has power, upon proper notice
and hearing, "to amend, modify or revoke at any time any certificate
issued under the provisions of this Act, whenever the facts and
circumstances on the strength of which said certificate was issued have
been misrepresented or materially changed." (Section 16, par. [m],
Commonwealth Act No. 146.) The petitioner's application here was for an
increase of its equipment to enable it to comply with the conditions of its
certificates of public convenience. On the matter of limitation to twenty
five (25) years of the life of its certificates of public convenience, there
had been neither notice nor opportunity given the petitioner to be heard
or present evidence. The Commission appears to have taken advantage
of the petitioner to augment petitioner's equipment in imposing the
limitation of twenty-five (25) years which might as well be twenty or
fifteen or any number of years. This is, to say the least, irregular and
should not be sanctioned. There are cardinal primary rights which must
be respected even in proceedings of this character. The first of these
rights is the right to a hearing, which includes the right of the party
interested or affected to present his own case and submit evidence in
support thereof. In the language of Chief Justice Hughes, in Morgan v.
U.S., (304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129), "the liberty and
property of the citizen shall be protected by the rudimentary
requirements of fair play." Not only must the party be given an
opportunity to present his case and to adduce evidence tending to
establish the rights which he asserts but the tribunal must consider the
evidence presented. (Chief Justice Hughes in Morgan vs. U.S., 298 U.S.
468, 56 S. Ct. 906, 80 :Law. ed. 1288.) In the language of this Court
in Edwards vs. McCoy (22 Phil., 598), "the right to adduce evidence,
without the corresponding duty on the part of the board to consider it, is
vain. Such right is conspicuously futile if the person or persons to whom
the evidence is presented can thrust it aside without or consideration."
While the duty to deliberate does not impose the obligation to decide
right, it does imply a necessity which cannot be disregarded, namely,
that of having something to support its decision. A decision with
absolutely nothing to support it is a nullity, at least when directly
attacked. (Edwards vs. McCoy, supra.) This principle emanates from the
more fundamental principle that the genius of constitutional government
is contrary to the vesting of unlimited power anywhere. Law is both a
grant and a limitation upon power.

The decision appealed from is hereby reversed and the case remanded to
the Public Service Commission for further proceedings in accordance with
law and this decision, without any pronouncement regarding costs. So
ordered.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12163 March 4, 1959
PAZ FORES, petitioner,
vs.
IRENEO MIRANDA, respondent.
Alberto O. Villaraza for petitioner.
Almazan and Ereneta for respondent.
REYES, J.B.L., J.:
Defendant-petitioner Paz Fores brings this petition for review of the
decision of the Court of Appeals (C.A. Case No. 1437-R) awarding to the
plaintiff-respondent Ireneo Miranda the sums of P5,000 by way of actual
damages and counsel fees, and P10,000 as moral damages, with costs.
Respondent was one of the passengers on a jeepney driven by Eugenio
Luga. While the vehicle was descending the Sta. Mesa bridge at an
excessive rate of speed, the driver lost control thereof, causing it to
swerve and to his the bridge wall. The accident occurred on the morning
of March 22, 1953. Five of the passengers were injured, including the
respondent who suffered a fracture of the upper right humerus. He was
taken to the National Orthopedic Hospital for treatment, and later was
subjected to a series of operations; the first on May 23, 1953, when wire
loops were wound around the broken bones and screwed into place; a
second, effected to insert a metal splint, and a third one to remove such
splint. At the time of the trial, it appears that respondent had not yet
recovered the use of his right arm.
The driver was charged with serious physical injuries through reckless
imprudence, and upon interposing a plea of guilty was sentenced
accordingly.
The contention that the evidence did not sufficiently establish the identity
of the vehicle as the belonging to the petitioner was rejected by the
appellate court which found, among other things, that is carried plate No.
TPU-1163, SERIES OF 1952, Quezon City, registered in the name of Paz
Fores, (appellant herein) and that the vehicle even had the name of
"Doña Paz" painted below its wind shield. No evidence to the contrary
was introduced by the petitioner, who relied on an attack upon the
credibility of the two policemen who went to the scene of the incident.
A point to be further remarked is petitioner's contention that on March
21, 1953, or one day before the accident happened, she allegedly sold
the passenger jeep that was involved therein to a certain Carmen
Sackerman.
The initial problem raised by the petitioner in this appeal may be
formulated thus — "Is the approval of the Public Service Commission
necessary for the sale of a public service vehicle even without conveying
therewith the authority to operate the same?" Assuming the dubious sale
to be a fact, the court of Appeals answered the query in the affirmative.
The ruling should be upheld.
Section 20 of the Public Service Act (Commonwealth Act No. 146)
provides:
Sec. 20. Subject to established limitations and exceptions and
saving provisions to the contrary, it shall be unlawful for any
public service or for the owner, lessee or operator thereof,
without the previous approval and authority of the Commission
previously had —
xxx xxx xxx
(g) To sell, alienate, mortgage, encumber or lease its property,
franchises, certificates, privileges, or rights, or any part thereof;
or merge or consolidate its property, franchises, privileges or
rights, or any part thereof, with those of any other public service.
The approval herein required shall be given, after notice to the
public and after hearing the persons interested at a public
hearing, if it be shown that there are just and reasonable grounds
for making the mortgage or encumbrance, for liabilities of more
than one year maturity, or the sale, alienation, lease, merger, or
consolidation to be approved and that the same are not
detrimental to the public interest, and in case of a sale, the date
on which the same is to be consummated shall be fixed in the
order of approval: Provided, however, That nothing herein
contained shall be construed to prevent the transaction from
being negotiated or completed before its approval or to prevent
the sale, alienation, or lease by any public service of any of its
property in the ordinary course of its business.
Interpreting the effects of this particular provision of law, we have held in
the recent cases of Montoya vs. Ignacio,* 50 Off. Gaz. No. 1, p.
108; Timbol vs. Osias, et al., G. R. No. L-7547, April 30, 1955, and Medina
vs. Cresencia, 99 Phil., 506; 52 Off. Gaz. No. 10, p. 4606, that a transfer
contemplated by the law, if made without the requisite approval of the
Public Service Commission, is not effective and binding in so far as the
responsibility of the grantee under the franchise in relation to the public
is concerned. Petitioner assails, however, the applicability of these rulings
to the instant case, contending that in those cases, the operator did not
convey, by lease or by sale, the vehicle independently of his rights under
the franchise. This line of reasoning does not find support in the law. The
provisions of the statute are clear and prohibit the sale, alienation, lease,
or encumbrance of the property, franchise, certificate, privileges or
rights, or any part thereof of the owner or operator of the public service
Commission. The law was designed primarily for the protection of the
public interest; and until the approval of the public Service Commission is
obtained the vehicle is, in contemplation of law, still under the service of
the owner or operator standing in the records of the Commission which
the public has a right to rely upon.
The proviso contained in the aforequoted law, to the effect that nothing
therein shall be construed "to prevent the transaction from being
negotiated or complete before its approval", means only that the sale
without the required approval is still valid and binding between the
parties (Montoya vs. Ignacio, supra). The phrase "in the ordinary course
of its business" found in the other proviso" or to prevent the sale,
alienation, or lease by any public service of any of its property". As
correctly observed by the lower court, could not have been intended to
include the sale of the vehicle itself, but at most may refer only to such
property that may be conceivably disposed or by the carrier in the
ordinary course of its business, like junked equipment or spare parts.
The case of Indalecio de Torres vs. Vicente Ona (63 Phil., 594, 597) is
enlightening; and there, it was held:
Under the law, the Public Service Commission has not only
general supervision and regulation of, but also full jurisdiction
and control over all public utilities including the property,
equipment and facilities used, and the property rights and
franchise enjoyed by every individual and company engaged i the
performance of a public service in the sense this phrase is used
in the Public Service Act or Act No. 3108). By virtue of the
provisions of said Act, motor vehicles used in the performance of
a service, as the transportation of freightfrom one point to
another, have to this date been considered — and they cannot
but be so considered-public service property; and, by reason of
its own nature, a TH truck, which means that the operator thereof
places it at the disposal of anybody who is willing to pay a rental
of its use, when he desires to transfer or carry his effects,
merchandise or any other cargo from one place to another, is
necessarily a public service property. (Emphasis supplied)
Of course, this court has held in the case of Bachrach Motor co. vs.
Zamboanga Transportation Co., 52 Phil., 244, that there may be a nunc
pro tunc authorization which has the effect of having the approval
retroact to the date of the transfer; but such outcome cannot prejudice
rights intervening in the meantime. It appears that no such approval was
given by the Commission before the accident occurred.
The P10,000 actual damages awarded by the Court of First Instance of
Manila were reduced by the Court of Appeals to only P2,000, on the
ground that a review of the records failed to disclose a sufficient basis for
the trial court's appraisal, since the only evidence presented on this point
consisted of respondent's bare statement that his expenses and loss of
income amounted to P20,000. On the other hand, "it cannot be denied,"
the lower court said, "that appellee (respondent) did incur expenses"' It is
well to note further that respondent was a painter by profession and a
professor of Fine Arts, so that the amount of P2,000 awarded cannot be
said to be excessive (see Arts. 2224 and 2225, Civil Code of the
Philippines). The attorney's fees in the sum of P3,000 also awarded to the
respondent are assailed on the ground that the Court of First Instance did
not provided for the same, and since no appeal was interposed by said
respondent, it was allegedly error for the Court of Appeals to award
themmotu proprio. Petitioner fails to note that attorney's fees are
included in the concept of actual damages under the Civil Code and may
be awarded whenever the court deems it is just and equitable (Art. 2208,
Civil Code of the Philippines). We see no reason to alter these awards.
Anent the moral damages ordered to be paid to the respondent, the
same must be discarded. We have repeatedly ruled (Cachero vs. Manila
Yellow Taxicab Co. Inc., 101 Phil., 523; 54 Off. Gaz., [26], 6599; Necesito,
et al vs. Paras, 104 Phil., 75; 56 Off. Gaz., [23] 4023, that moral damages
are not recoverable in damage actions predicted on a breach of the
contract of transportation, in view of Articles 2219 and 2220 of the new
Civil Code, which provide as follows:
Art. 2219. Moral damages may be recovered in the following and
analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
xxx xxx xxx
Art. 2220. Willful injury to property may be a legal ground for
awarding moral damages if the court should find that, under
circumstances, such damages are justify due. The same rule
 applies to breaches of contract where the defendant acted
fraudulently or in bad faith.
By contrasting the provisions of these two article it immediately becomes
apparent that:
(a) In case of breach of contract (including one of transportation) proof of
bad faith or fraud (dolus), i.e., wanton or deliberately injurious conduct, is
essential to justify an award of moral damages; and
(b) That a breach of contract can not be considered included in the
descriptive term "analogous cases" used in Art. 2219; not only because
Art. 2220 specifically provides for the damages that are caused by
contractual breach, but because the definition of quasi-delict in Art. 2176
of the Code expressly excludes the cases where there is a "preexisting
contractual relation between the parties."
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the
damage dome. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a
quasi-delict and is governed by the provisions of this Chapter.
The exception to the basic rule of damages now under consideration is a
mishap resulting in the death of a passenger, in which case Article 1764
makes the common carrier expressly subject to the rule of Art. 2206, that
entitles the deceased passenger to "demand moral damages for mental
anguish by reason of the death of the deceased" (Necesito vs. Paras, 104
Phil., 84, Resolution on motion to reconsider, September 11, 1958). But
the exceptional rule of Art. 1764 makes it all the more evident that where
the injured passenger does not die, moral damages are not recoverable
unless it is proved that the carrier was guilty of malice or bad faith. We
think it is clear that the mere carelessness of the carrier's driver does
not per se constitute of justify an inference of malice or bad faith on the
part of the carrier; and in the case at bar there is no other evidence of
such malice to support the award of moral damages by the Court of
Appeals. To award moral damages for breach of contract, therefore,
without proof of bad faith or malice on the part of the defendant, as
required by Art. 220, would be to violate the clear provisions of the law,
and constitute unwarranted judicial legislation.
The Court of Appeals has invoked our rulings in Castro vs. Acro Taxicab
Co., G.R. No. 49155, December 14, 1948 and Layda vs. Court of Appeals,
90 Phil., 724; but these doctrines were predicated upon our former law of
damages, before judicial discretion in fixing them became limited by the
express provisions of the new Civil Code (previously quoted). Hence, the
aforesaid rulings are now inapplicable.
Upon the other hand, the advantageous position of a party suing a carrier
for breach of the contract of transportations explains, to some extent, the
limitations imposed by the new Code on the amount of the recovery. The
action for breach of contract imposes on the defendant carrier a
presumption of liability upon mere proof of injury to the passenger; that
latter is relieved from the duty to established the fault of the carrier, or of
his employees, and the burden is placed on the carrier to prove that it
was due to an unforseen event or to force majeure (Cangco vs. Manila
Railroad Co., 38 Phil., 768, 777). Moreover, the carrier, unlike in suits for
quasi-delict, may not escape liability by proving that it has exercised due
diligence in the selection and supervision of its employees (Art. 1759,
new civil code; Cangco vs. Manila Railroad Co., supra; Prado vs. Manila
Electric Co., 51 Phil., 900).
The difference in conditions, defenses and proof, as well as the codal
concept of quasi-delict as essentially extracontractual negligence,
compel us to differentiate between action ex contractu, and actions quasi
ex delicto, and prevent us from viewing the action for breach of contract
as simultaneously embodying an action on tort. Neither can this action be
taken as one to enforce on employee's liability under Art. 103 of the
Revised Penal Code, since the responsibility is not alleged to be
subsidiary, nor is there on record any averment or proof that the driver of
appellant was insolvent. In fact, he is not even made a party to the suit.
It is also suggested that a carrier's violation of its engagement to safety
transport the passenger involves a breach of the passenger's confidence,
and therefore should be regarded as a breach of contract in bad faith,
justifying recovery of moral damages under Art. 2220. This theory is
untenable, for under it the carrier would always be deemed in bad faith,
in every case its obligation to the passenger is infringed, and it would be
never accountable for simple negligence; while under the law (Art. 1756).
the presumption is that common carriers acted negligently(and not
maliciously), and Art. 1762 speaks of negligence of the common carrier.
ART. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in article 1733 and 1755.
ART. 1762. The contributory negligence of the passenger does
not bar recovery of damages for his death or injuries, if the
proximate cause thereof is the negligence of the common carrier,
but the amount of damages shall be equitably reduced.
The distinction between fraud, bad faith or malice in the sense of
deliberate or wanton wrong doing and negligence (as mere carelessness)
is too fundamental in our law to be ignored (Arts. 1170-1172); their
consequences being clearly differentiated by the Code.
 ART. 2201. In contracts and quasi-contracts, the damages for
which the obligor who acted in good faith is liable shall be those
that are the natural and probable consequences of the breach of
the obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor

shall be responsible for all damages which may be reasonably
attributed to the non-performance of the obligation.

It is to be presumed, in the absence of statutory provision to the

contrary, that this difference was in the mind of the lawmakers when in
Art. 2220 they limited recovery of moral damages to breaches of contract
in bad faith. It is true that negligence may be occasionally so gross as to
amount to malice; but that fact must be shown in evidence, and a
carrier's bad faith is not to be lightly inferred from a mere finding that the
contract was breached through negligence of the carrier's employees.

In view of the foregoing considerations, the decision of the Court of

Appeals is modified by eliminating the award of P5,000.00 by way of
moral damages. (Court of Appeals Resolution of May 5, 1957). In all other
respects, the judgment is affirmed. No costs in this instance. So ordered.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12191 October 14, 1918
JOSE CANGCO, plaintiff-appellant,
vs.
MANILA RAILROAD CO., defendant-appellee.
Ramon Sotelo for appellant.
Kincaid & Hartigan for appellee.
FISHER, J.:
At the time of the occurrence which gave rise to this litigation the
plaintiff, Jose Cangco, was in the employment of Manila Railroad
Company in the capacity of clerk, with a monthly wage of P25. He lived in
the pueblo of San Mateo, in the province of Rizal, which is located upon
the line of the defendant railroad company; and in coming daily by train
to the company's office in the city of Manila where he worked, he used a
pass, supplied by the company, which entitled him to ride upon the
company's trains free of charge. Upon the occasion in question, January
20, 1915, the plaintiff arose from his seat in the second class-car where
he was riding and, making, his exit through the door, took his position
upon the steps of the coach, seizing the upright guardrail with his right
hand for support.
On the side of the train where passengers alight at the San Mateo
station there is a cement platform which begins to rise with a moderate
gradient some distance away from the company's office and extends
along in front of said office for a distance sufficient to cover the length of
several coaches. As the train slowed down another passenger, named
Emilio Zuñiga, also an employee of the railroad company, got off the
same car, alighting safely at the point where the platform begins to rise
from the level of the ground. When the train had proceeded a little
farther the plaintiff Jose Cangco stepped off also, but one or both of his
feet came in contact with a sack of watermelons with the result that his
feet slipped from under him and he fell violently on the platform. His
body at once rolled from the platform and was drawn under the moving
car, where his right arm was badly crushed and lacerated. It appears that
after the plaintiff alighted from the train the car moved forward possibly
six meters before it came to a full stop.
The accident occurred between 7 and 8 o'clock on a dark night,
and as the railroad station was lighted dimly by a single light located
some distance away, objects on the platform where the accident
occurred were difficult to discern especially to a person emerging from a
lighted car.
The explanation of the presence of a sack of melons on the
platform where the plaintiff alighted is found in the fact that it was the
customary season for harvesting these melons and a large lot had been
brought to the station for the shipment to the market. They were
contained in numerous sacks which has been piled on the platform in a
row one upon another. The testimony shows that this row of sacks was so
placed of melons and the edge of platform; and it is clear that the fall of
the plaintiff was due to the fact that his foot alighted upon one of these
melons at the moment he stepped upon the platform. His statement that
he failed to see these objects in the darkness is readily to be credited.
The plaintiff was drawn from under the car in an unconscious
condition, and it appeared that the injuries which he had received were
very serious. He was therefore brought at once to a certain hospital in
the city of Manila where an examination was made and his arm was
amputated. The result of this operation was unsatisfactory, and the
plaintiff was then carried to another hospital where a second operation
was performed and the member was again amputated higher up near the
shoulder. It appears in evidence that the plaintiff expended the sum of
P790.25 in the form of medical and surgical fees and for other expenses
in connection with the process of his curation.
Upon August 31, 1915, he instituted this proceeding in the Court of
First Instance of the city of Manila to recover damages of the defendant
company, founding his action upon the negligence of the servants and
employees of the defendant in placing the sacks of melons upon the
platform and leaving them so placed as to be a menace to the security of
passenger alighting from the company's trains. At the hearing in the
Court of First Instance, his Honor, the trial judge, found the facts
substantially as above stated, and drew therefrom his conclusion to the
effect that, although negligence was attributable to the defendant by
reason of the fact that the sacks of melons were so placed as to obstruct
passengers passing to and from the cars, nevertheless, the plaintiff
himself had failed to use due caution in alighting from the coach and was
therefore precluded form recovering. Judgment was accordingly entered
in favor of the defendant company, and the plaintiff appealed.
It can not be doubted that the employees of the railroad company
were guilty of negligence in piling these sacks on the platform in the
manner above stated; that their presence caused the plaintiff to fall as he
alighted from the train; and that they therefore constituted an effective
legal cause of the injuries sustained by the plaintiff. It necessarily follows
that the defendant company is liable for the damage thereby occasioned
unless recovery is barred by the plaintiff's own contributory negligence.
In resolving this problem it is necessary that each of these conceptions of
liability, to-wit, the primary responsibility of the defendant company and
the contributory negligence of the plaintiff should be separately
examined.
It is important to note that the foundation of the legal liability of
the defendant is the contract of carriage, and that the obligation to
respond for the damage which plaintiff has suffered arises, if at all, from
the breach of that contract by reason of the failure of defendant to
exercise due care in its performance. That is to say, its liability is direct
and immediate, differing essentially, in legal viewpoint from that
presumptive responsibility for the negligence of its servants, imposed by
article 1903 of the Civil Code, which can be rebutted by proof of the
exercise of due care in their selection and supervision. Article 1903 of the
Civil Code is not applicable to obligations arising ex contractu, but only to
extra-contractual obligations — or to use the technical form of
expression, that article relates only to culpa aquiliana and not to culpa
contractual.
Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and
1104 of the Civil Code, clearly points out this distinction, which was also
recognized by this Court in its decision in the case of Rakes vs. Atlantic,
Gulf and Pacific Co. (7 Phil. rep., 359). In commenting upon article 1093
Manresa clearly points out the difference between "culpa, substantive
and independent, which of itself constitutes the source of an obligation
between persons not formerly connected by any legal tie"
and culpa considered as an accident in the performance of an obligation
already existing . . . ."
In the Rakes case (supra) the decision of this court was made to
rest squarely upon the proposition that article 1903 of the Civil Code is
not applicable to acts of negligence which constitute the breach of a
contract.
Upon this point the Court said:
The acts to which these articles [1902 and 1903 of the Civil
Code] are applicable are understood to be those not growing out
of pre-existing duties of the parties to one another. But where
relations already formed give rise to duties, whether springing
from contract or quasi-contract, then breaches of those duties
are subject to article 1101, 1103, and 1104 of the same code.
(Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)
This distinction is of the utmost importance. The liability, which,
under the Spanish law, is, in certain cases imposed upon employers with
respect to damages occasioned by the negligence of their employees to
persons to whom they are not bound by contract, is not based, as in the
English Common Law, upon the principle ofrespondeat superior — if it
were, the master would be liable in every case and unconditionally — but
upon the principle announced in article 1902 of the Civil Code, which
imposes upon all persons who by their fault or negligence, do injury to
another, the obligation of making good the damage caused. One who
places a powerful automobile in the hands of a servant whom he knows
to be ignorant of the method of managing such a vehicle, is himself guilty
of an act of negligence which makes him liable for all the consequences
of his imprudence. The obligation to make good the damage arises at the
very instant that the unskillful servant, while acting within the scope of
his employment causes the injury. The liability of the master is personal
and direct. But, if the master has not been guilty of any negligence
whatever in the selection and direction of the servant, he is not liable for
the acts of the latter, whatever done within the scope of his employment
or not, if the damage done by the servant does not amount to a breach of
the contract between the master and the person injured.
It is not accurate to say that proof of diligence and care in the
selection and control of the servant relieves the master from liability for
the latter's acts — on the contrary, that proof shows that the
responsibility has never existed. As Manresa says (vol. 8, p. 68) the
liability arising from extra-contractual culpa is always based upon a
voluntary act or omission which, without willful intent, but by mere
negligence or inattention, has caused damage to another. A master who
exercises all possible care in the selection of his servant, taking into
consideration the qualifications they should possess for the discharge of
the duties which it is his purpose to confide to them, and directs them
with equal diligence, thereby performs his duty to third persons to whom
he is bound by no contractual ties, and he incurs no liability whatever if,
by reason of the negligence of his servants, even within the scope of
their employment, such third person suffer damage. True it is that under
article 1903 of the Civil Code the law creates a presumption that he has
been negligent in the selection or direction of his servant, but the
presumption is rebuttable and yield to proof of due care and diligence in
this respect.
The supreme court of Porto Rico, in interpreting identical
provisions, as found in the Porto Rico Code, has held that these articles
are applicable to cases of extra-contractual culpa exclusively.
(Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)
This distinction was again made patent by this Court in its decision
in the case of Bahia vs. Litonjua and Leynes, (30 Phil. rep., 624), which
was an action brought upon the theory of the extra-contractual liability of
the defendant to respond for the damage caused by the carelessness of
his employee while acting within the scope of his employment. The Court,
after citing the last paragraph of article 1903 of the Civil Code, said:
From this article two things are apparent: (1) That when an
injury is caused by the negligence of a servant or employee there
instantly arises a presumption of law that there was negligence
on the part of the master or employer either in selection of the
servant or employee, or in supervision over him after the
selection, or both; and (2) that that presumption is juris
tantum and not juris et de jure, and consequently, may be
rebutted. It follows necessarily that if the employer shows to the
satisfaction of the court that in selection and supervision he has
exercised the care and diligence of a good father of a family, the
presumption is overcome and he is relieved from liability.
This theory bases the responsibility of the master
ultimately on his own negligence and not on that of his servant.
This is the notable peculiarity of the Spanish law of negligence. It
is, of course, in striking contrast to the American doctrine that, in
relations with strangers, the negligence of the servant in
conclusively the negligence of the master.
The opinion there expressed by this Court, to the effect that in
case of extra-contractual culpa based upon negligence, it is necessary
that there shall have been some fault attributable to the defendant
personally, and that the last paragraph of article 1903 merely establishes
a rebuttable presumption, is in complete accord with the authoritative
opinion of Manresa, who says (vol. 12, p. 611) that the liability created by
article 1903 is imposed by reason of the breach of the duties inherent in
the special relations of authority or superiority existing between the
person called upon to repair the damage and the one who, by his act or
omission, was the cause of it.
On the other hand, the liability of masters and employers for the
negligent acts or omissions of their servants or agents, when such acts or
omissions cause damages which amount to the breach of a contact, is
not based upon a mere presumption of the master's negligence in their
selection or control, and proof of exercise of the utmost diligence and
care in this regard does not relieve the master of his liability for the
breach of his contract.
Every legal obligation must of necessity be extra-contractual or
contractual. Extra-contractual obligation has its source in the breach or
omission of those mutual duties which civilized society imposes upon it
members, or which arise from these relations, other than contractual, of
certain members of society to others, generally embraced in the concept
of status. The legal rights of each member of society constitute the
measure of the corresponding legal duties, mainly negative in character,
which the existence of those rights imposes upon all other members of
society. The breach of these general duties whether due to willful intent
or to mere inattention, if productive of injury, give rise to an obligation to
indemnify the injured party. The fundamental distinction between
obligations of this character and those which arise from contract, rests
upon the fact that in cases of non-contractual obligation it is the wrongful
or negligent act or omission itself which creates the vinculum juris,
whereas in contractual relations the vinculum exists independently of the
breach of the voluntary duty assumed by the parties when entering into
the contractual relation.
With respect to extra-contractual obligation arising from
negligence, whether of act or omission, it is competent for the legislature
to elect — and our Legislature has so elected — whom such an obligation
is imposed is morally culpable, or, on the contrary, for reasons of public
policy, to extend that liability, without regard to the lack of moral
culpability, so as to include responsibility for the negligence of those
person who acts or mission are imputable, by a legal fiction, to others
who are in a position to exercise an absolute or limited control over them.
The legislature which adopted our Civil Code has elected to limit extra-
contractual liability — with certain well-defined exceptions — to cases in
which moral culpability can be directly imputed to the persons to be
charged. This moral responsibility may consist in having failed to exercise
due care in the selection and control of one's agents or servants, or in the
control of persons who, by reason of their status, occupy a position of
dependency with respect to the person made liable for their conduct.
The position of a natural or juridical person who has undertaken by
contract to render service to another, is wholly different from that to
which article 1903 relates. When the sources of the obligation upon
which plaintiff's cause of action depends is a negligent act or omission,
the burden of proof rests upon plaintiff to prove the negligence — if he
does not his action fails. But when the facts averred show a contractual
undertaking by defendant for the benefit of plaintiff, and it is alleged that
plaintiff has failed or refused to perform the contract, it is not necessary
for plaintiff to specify in his pleadings whether the breach of the contract
is due to willful fault or to negligence on the part of the defendant, or of
his servants or agents. Proof of the contract and of its nonperformance is
sufficient prima facie to warrant a recovery.
As a general rule . . . it is logical that in case of extra-
contractual culpa, a suing creditor should assume the burden of
proof of its existence, as the only fact upon which his action is
based; while on the contrary, in a case of negligence which
presupposes the existence of a contractual obligation, if the
creditor shows that it exists and that it has been broken, it is not
necessary for him to prove negligence. (Manresa, vol. 8, p. 71
[1907 ed., p. 76]).
 As it is not necessary for the plaintiff in an action for the breach of
a contract to show that the breach was due to the negligent conduct of
defendant or of his servants, even though such be in fact the actual
cause of the breach, it is obvious that proof on the part of defendant that
the negligence or omission of his servants or agents caused the breach of
the contract would not constitute a defense to the action. If the
negligence of servants or agents could be invoked as a means of
discharging the liability arising from contract, the anomalous result would
be that person acting through the medium of agents or servants in the
performance of their contracts, would be in a better position than those
acting in person. If one delivers a valuable watch to watchmaker who
contract to repair it, and the bailee, by a personal negligent act causes its
destruction, he is unquestionably liable. Would it be logical to free him
from his liability for the breach of his contract, which involves the duty to
exercise due care in the preservation of the watch, if he shows that it was
his servant whose negligence caused the injury? If such a theory could be
accepted, juridical persons would enjoy practically complete immunity
from damages arising from the breach of their contracts if caused by
negligent acts as such juridical persons can of necessity only act through
agents or servants, and it would no doubt be true in most instances that
reasonable care had been taken in selection and direction of such
servants. If one delivers securities to a banking corporation as collateral,
and they are lost by reason of the negligence of some clerk employed by
the bank, would it be just and reasonable to permit the bank to relieve
itself of liability for the breach of its contract to return the collateral upon
the payment of the debt by proving that due care had been exercised in
the selection and direction of the clerk?
This distinction between culpa aquiliana, as the source of an
obligation, and culpa contractual as a mere incident to the performance
of a contract has frequently been recognized by the supreme court of
Spain. (Sentencias of June 27, 1894; November 20, 1896; and December
13, 1896.) In the decisions of November 20, 1896, it appeared that
plaintiff's action arose ex contractu, but that defendant sought to avail
himself of the provisions of article 1902 of the Civil Code as a defense.
The Spanish Supreme Court rejected defendant's contention, saying:
These are not cases of injury caused, without any pre-
existing obligation, by fault or negligence, such as those to which
article 1902 of the Civil Code relates, but of damages caused by
the defendant's failure to carry out the undertakings imposed by
the contracts . . . .
A brief review of the earlier decision of this court involving the
liability of employers for damage done by the negligent acts of their
servants will show that in no case has the court ever decided that the
negligence of the defendant's servants has been held to constitute a
defense to an action for damages for breach of contract.
In the case of Johnson vs. David (5 Phil. Rep., 663), the court held
that the owner of a carriage was not liable for the damages caused by
the negligence of his driver. In that case the court commented on the
fact that no evidence had been adduced in the trial court that the
defendant had been negligent in the employment of the driver, or that he
had any knowledge of his lack of skill or carefulness.
In the case of Baer Senior & Co's Successors vs. Compania
Maritima (6 Phil. Rep., 215), the plaintiff sued the defendant for damages
caused by the loss of a barge belonging to plaintiff which was allowed to
get adrift by the negligence of defendant's servants in the course of the
performance of a contract of towage. The court held, citing Manresa (vol.
8, pp. 29, 69) that if the "obligation of the defendant grew out of a
contract made between it and the plaintiff . . . we do not think that the
provisions of articles 1902 and 1903 are applicable to the case."
In the case of Chapman vs. Underwood (27 Phil. Rep., 374),
plaintiff sued the defendant to recover damages for the personal injuries
caused by the negligence of defendant's chauffeur while driving
defendant's automobile in which defendant was riding at the time. The
court found that the damages were caused by the negligence of the
driver of the automobile, but held that the master was not liable,
although he was present at the time, saying:
. . . unless the negligent acts of the driver are continued for
a length of time as to give the owner a reasonable opportunity to
observe them and to direct the driver to desist therefrom. . . .
The act complained of must be continued in the presence of the
owner for such length of time that the owner by his
acquiescence, makes the driver's acts his own.
In the case of Yamada vs. Manila Railroad Co. and Bachrach
Garage & Taxicab Co. (33 Phil. Rep., 8), it is true that the court rested its
conclusion as to the liability of the defendant upon article 1903, although
the facts disclosed that the injury complaint of by plaintiff constituted a
breach of the duty to him arising out of the contract of transportation.
The express ground of the decision in this case was that article 1903, in
dealing with the liability of a master for the negligent acts of his servants
"makes the distinction between private individuals and public enterprise;"
that as to the latter the law creates a rebuttable presumption of
negligence in the selection or direction of servants; and that in the
particular case the presumption of negligence had not been overcome.
It is evident, therefore that in its decision Yamada case, the court
treated plaintiff's action as though founded in tort rather than as based
upon the breach of the contract of carriage, and an examination of the
pleadings and of the briefs shows that the questions of law were in fact
discussed upon this theory. Viewed from the standpoint of the defendant
the practical result must have been the same in any event. The proof
disclosed beyond doubt that the defendant's servant was grossly
negligent and that his negligence was the proximate cause of plaintiff's
injury. It also affirmatively appeared that defendant had been guilty of
negligence in its failure to exercise proper discretion in the direction of
the servant. Defendant was, therefore, liable for the injury suffered by
plaintiff, whether the breach of the duty were to be regarded as
constituting culpa aquiliana or culpa contractual. As Manresa points out
(vol. 8, pp. 29 and 69) whether negligence occurs an incident in the
course of the performance of a contractual undertaking or its itself the
source of an extra-contractual undertaking obligation, its essential
characteristics are identical. There is always an act or omission
productive of damage due to carelessness or inattention on the part of
the defendant. Consequently, when the court holds that a defendant is
liable in damages for having failed to exercise due care, either directly, or
in failing to exercise proper care in the selection and direction of his
servants, the practical result is identical in either case. Therefore, it
follows that it is not to be inferred, because the court held in the Yamada
case that defendant was liable for the damages negligently caused by its
servants to a person to whom it was bound by contract, and made
reference to the fact that the defendant was negligent in the selection
and control of its servants, that in such a case the court would have held
that it would have been a good defense to the action, if presented
squarely upon the theory of the breach of the contract, for defendant to
have proved that it did in fact exercise care in the selection and control
of the servant.
The true explanation of such cases is to be found by directing the
attention to the relative spheres of contractual and extra-contractual
obligations. The field of non- contractual obligation is much more broader
than that of contractual obligations, comprising, as it does, the whole
extent of juridical human relations. These two fields, figuratively
speaking, concentric; that is to say, the mere fact that a person is bound
to another by contract does not relieve him from extra-contractual
liability to such person. When such a contractual relation exists the
obligor may break the contract under such conditions that the same act
which constitutes the source of an extra-contractual obligation had no
contract existed between the parties.
The contract of defendant to transport plaintiff carried with it, by
implication, the duty to carry him in safety and to provide safe means of
entering and leaving its trains (civil code, article 1258). That duty, being
contractual, was direct and immediate, and its non-performance could
not be excused by proof that the fault was morally imputable to
defendant's servants.
The railroad company's defense involves the assumption that even
granting that the negligent conduct of its servants in placing an
obstruction upon the platform was a breach of its contractual obligation
to maintain safe means of approaching and leaving its trains, the direct
and proximate cause of the injury suffered by plaintiff was his own
contributory negligence in failing to wait until the train had come to a
complete stop before alighting. Under the doctrine of comparative
negligence announced in the Rakes case (supra), if the accident was
caused by plaintiff's own negligence, no liability is imposed upon
defendant's negligence and plaintiff's negligence merely contributed to
his injury, the damages should be apportioned. It is, therefore, important
to ascertain if defendant was in fact guilty of negligence.
It may be admitted that had plaintiff waited until the train had
come to a full stop before alighting, the particular injury suffered by him
could not have occurred. Defendant contends, and cites many authorities
in support of the contention, that it is negligence per se for a passenger
to alight from a moving train. We are not disposed to subscribe to this
doctrine in its absolute form. We are of the opinion that this proposition is
too badly stated and is at variance with the experience of every-day life.
In this particular instance, that the train was barely moving when plaintiff
alighted is shown conclusively by the fact that it came to stop within six
meters from the place where he stepped from it. Thousands of person
alight from trains under these conditions every day of the year, and
sustain no injury where the company has kept its platform free from
dangerous obstructions. There is no reason to believe that plaintiff would
have suffered any injury whatever in alighting as he did had it not been
for defendant's negligent failure to perform its duty to provide a safe
alighting place.
We are of the opinion that the correct doctrine relating to this
subject is that expressed in Thompson's work on Negligence (vol. 3, sec.
3010) as follows:
The test by which to determine whether the passenger has
been guilty of negligence in attempting to alight from a moving
railway train, is that of ordinary or reasonable care. It is to be
considered whether an ordinarily prudent person, of the age, sex
and condition of the passenger, would have acted as the
passenger acted under the circumstances disclosed by the
evidence. This care has been defined to be, not the care which
may or should be used by the prudent man generally, but the
care which a man of ordinary prudence would use under similar
circumstances, to avoid injury." (Thompson, Commentaries on
Negligence, vol. 3, sec. 3010.)
Or, it we prefer to adopt the mode of exposition used by this court
in Picart vs. Smith (37 Phil. rep., 809), we may say that the test is this;
Was there anything in the circumstances surrounding the plaintiff at the
time he alighted from the train which would have admonished a person
of average prudence that to get off the train under the conditions then
existing was dangerous? If so, the plaintiff should have desisted from
alighting; and his failure so to desist was contributory negligence.1awph!
l.net
As the case now before us presents itself, the only fact from which
a conclusion can be drawn to the effect that plaintiff was guilty of
contributory negligence is that he stepped off the car without being able
to discern clearly the condition of the platform and while the train was
yet slowly moving. In considering the situation thus presented, it should
not be overlooked that the plaintiff was, as we find, ignorant of the fact
that the obstruction which was caused by the sacks of melons piled on
the platform existed; and as the defendant was bound by reason of its
duty as a public carrier to afford to its passengers facilities for safe
egress from its trains, the plaintiff had a right to assume, in the absence
of some circumstance to warn him to the contrary, that the platform was
clear. The place, as we have already stated, was dark, or dimly lighted,
and this also is proof of a failure upon the part of the defendant in the
performance of a duty owing by it to the plaintiff; for if it were by any
possibility concede that it had right to pile these sacks in the path of
alighting passengers, the placing of them adequately so that their
presence would be revealed.
The evidence shows that the plaintiff, at the time of the accident,
was earning P25 a month as a copyist clerk, and that the injuries he has
suffered have permanently disabled him from continuing that
employment. Defendant has not shown that any other gainful occupation
is open to plaintiff. His expectancy of life, according to the standard
mortality tables, is approximately thirty-three years. We are of the
opinion that a fair compensation for the damage suffered by him for his
permanent disability is the sum of P2,500, and that he is also entitled to
recover of defendant the additional sum of P790.25 for medical attention,
hospital services, and other incidental expenditures connected with the
treatment of his injuries.
The decision of lower court is reversed, and judgment is hereby
rendered plaintiff for the sum of P3,290.25, and for the costs of both
instances. So ordered.
Arellano, C.J., Torres, Street and Avanceña, JJ., concur.

As pertinent to the question of contributory negligence on the part

of the plaintiff in this case the following circumstances are to be noted: Separate Opinions
The company's platform was constructed upon a level higher than that of
the roadbed and the surrounding ground. The distance from the steps of
the car to the spot where the alighting passenger would place his feet on
the platform was thus reduced, thereby decreasing the risk incident to
stepping off. The nature of the platform, constructed as it was of cement MALCOLM, J., dissenting:
material, also assured to the passenger a stable and even surface on
which to alight. Furthermore, the plaintiff was possessed of the vigor and With one sentence in the majority decision, we are of full accord,
agility of young manhood, and it was by no means so risky for him to get namely, "It may be admitted that had plaintiff waited until the train had
off while the train was yet moving as the same act would have been in an come to a full stop before alighting, the particular injury suffered by him
aged or feeble person. In determining the question of contributory could not have occurred." With the general rule relative to a passenger's
negligence in performing such act — that is to say, whether the contributory negligence, we are likewise in full accord, namely, "An
passenger acted prudently or recklessly — the age, sex, and physical attempt to alight from a moving train is negligence per se." Adding these
condition of the passenger are circumstances necessarily affecting the two points together, should be absolved from the complaint, and
safety of the passenger, and should be considered. Women, it has been judgment affirmed.
observed, as a general rule are less capable than men of alighting with
safety under such conditions, as the nature of their wearing apparel Johnson, J., concur.
obstructs the free movement of the limbs. Again, it may be noted that
the place was perfectly familiar to the plaintiff as it was his daily custom
to get on and of the train at this station. There could, therefore, be no
uncertainty in his mind with regard either to the length of the step which
he was required to take or the character of the platform where he was
alighting. Our conclusion is that the conduct of the plaintiff in undertaking
to alight while the train was yet slightly under way was not characterized
by imprudence and that therefore he was not guilty of contributory
negligence.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-9671 August 23, 1957
CESAR L. ISAAC, plaintiff-appellant,
vs.
A. L. AMMEN TRANSPORTATION CO., INC., defendant-appellee.
Angel S. Gamboa for appellant.
Manuel O. Chan for appellee.
BAUTISTA ANGELO, J.:
A. L. Ammen Transportation Co., Inc., hereinafter referred to as
defendant, is a corporation engaged in the business of transporting
passengers by land for compensation in the Bicol provinces and one of
the lines it operates is the one connecting Legaspi City, Albay with Naga
City, Camarines Sur. One of the buses which defendant was operating is
Bus No. 31. On May 31, 1951, plaintiff boarded said bus as a passenger
paying the required fare from Ligao, Albay bound for Pili, Camarines Sur,
but before reaching his destination, the bus collided with a motor vehicle
of the pick-up type coming from the opposite direction, as a result of
which plaintiff's left arm was completely severed and the severed portion
fell inside the bus. Plaintiff was rushed to a hospital in Iriga, Camarines
Sur where he was given blood transfusion to save his life. After four days,
he was transferred to another hospital in Tabaco, Albay, where he under
went treatment for three months. He was moved later to the Orthopedic
Hospital where he was operated on and stayed there for another two
months. For these services, he incurred expenses amounting to P623.40,
excluding medical fees which were paid by defendant.
As an aftermath, plaintiff brought this action against defendants for
damages alleging that the collision which resulted in the loss of his left
arm was mainly due to the gross incompetence and recklessness of the
driver of the bus operated by defendant and that defendant incurred
in culpa contractual arising from its non-compliance with its obligation to
transport plaintiff safely to his, destination. Plaintiff prays for judgment
against defendant as follows: (1) P5,000 as expenses for his medical
treatment, and P3,000 as the cost of an artificial arm, or a total of
P8,000; (2) P6,000 representing loss of earning; (3) P75,000 for
diminution of his earning capacity; (4) P50,000 as moral damages; and
(5) P10,000 as attorneys' fees and costs of suit.
Defendant set up as special defense that the injury suffered by plaintiff
was due entirely to the fault or negligence of the driver of the pick-up car
which collided with the bus driven by its driver and to the contributory
negligence of plaintiff himself. Defendant further claims that the accident
which resulted in the injury of plaintiff is one which defendant could not
foresee or, though foreseen, was inevitable.
The after trial found that the collision occurred due to the negligence of
the driver of the pick-up car and not to that of the driver of the bus it
appearing that the latter did everything he could to avoid the same but
that notwithstanding his efforts, he was not able to avoid it. As a
consequence, the court dismissed complaint, with costs against plaintiff.
This is an appeal from said decision.
It appears that plaintiff boarded a bus of defendant as paying passenger
from Ligao, Albay, bound for Pili, Camarines Sur, but before reaching his
destination, the bus collided with a pick-up car which was coming from
the opposite direction and, as a, result, his left arm was completely
severed and fell inside the back part of the bus. Having this background
in view, and considering that plaintiff chose to hold defendant liable on
its contractual obligation to carry him safely to his place of destination, it
becomes important to determine the nature and extent of the liability of
a common carrier to a passenger in the light of the law applicable in this
jurisdiction.
In this connection, appellant invokes the rule that, "when an action is
based on a contract of carriage, as in this case, all that is necessary to
sustain recovery is proof of the existence of the contract of the breach
thereof by act or omission", and in support thereof, he cites several
Philippine cases.1 With the ruling in mind, appellant seems to imply that
once the contract of carriage is established and there is proof that the
same was broken by failure of the carrier to transport the passenger
safely to his destination, the liability of the former attaches. On the other
hand, appellee claims that is a wrong presentation of the rule. It claims
that the decisions of this Court in the cases cited do not warrant the
construction sought to be placed upon, them by appellant for a mere
perusal thereof would show that the liability of the carrier was predicated
not upon mere breach of its contract of carriage but upon the finding that
its negligence was found to be the direct or proximate cause of the injury
complained of. Thus, appellee contends that "if there is no negligence on
the part of the common carrier but that the accident resulting in injuries
is due to causes which are inevitable and which could not have been
avoided or anticipated notwithstanding the exercise of that high degree
of care and skill which the carrier is bound to exercise for the safety of
his passengers", neither the common carrier nor the driver is liable
therefor.
We believe that the law concerning the liability of a common carrier has
now suffered a substantial modification in view of the innovations
introduced by the new Civil Code. These innovations are the ones
embodied in Articles 1733, 1755 and 1756 in so far as the relation
between a common carrier and its passengers is concerned, which, for
ready reference, we quote hereunder:
ART. 1733. Common carriers, from the nature of their business
and for reasons of public policy, are bound to observe extra
ordinary diligence in the vigilance over the goods and for the
safety of the passengers transported by them according to all the
circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is
further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and
7, while the extraordinary diligence for the safety of the
passengers is further set forth in articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for
all the circumstances.
ART. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755.
The Code Commission, in justifying this extraordinary diligence required
of a common carrier, says the following:
A common carrier is bound to carry the passengers safely as far
as human care and foresight can provide, using the utmost
deligence of very cautions persons, with due regard for all
circumstances. This extraordinary diligence required of common
carriers is calculated to protect the passengers from the tragic
mishaps that frequently occur in connection with rapid modern
transportation. This high standard of care is imperatively
demanded by the precariousness of human life and by the
consideration that every person must in every way be
safeguarded against all injury. (Report of the Code Commission,
pp. 35-36)" (Padilla, Civil Code of the Philippines, Vol. IV, 1956
ed., p. 197).
From the above legal provisions, we can make the following restatement
of the principles governing the liability of a common carrier: (1) the
liability of a carrier is contractual and arises upon breach of its obligation.
There is breach if it fails to exert extraordinary diligence according to all
circumstances of each case; (2) a carrier is obliged to carry its passenger
with the utmost diligence of a very cautious person, having due regard
for all the circumstances; (3) a carrier is presumed to be at fault or to
have acted negligently in case of death of, or injury to, passengers, it
being its duty to prove that it exercised extraordinary diligence; and (4)
the carrier is not an insurer against all risks of travel.
The question that now arises is: Has defendant observed extraordinary
diligence or the utmost diligence of every cautious person, having due
regard for all circumstances, in avoiding the collision which resulted in
the injury caused to the plaintiff?
After examining the evidence in connection with how the collision
occurred, the lower court made the following finding:
Hemos examinado muy detenidamente las pruebas presentadas
en la vista, principalmente, las declaraciones que hemos acotado
arriba, y hernos Ilegado a la conclusion de que el demandado ha
hecho, todo cuanto estuviere de su parte para evitar el
accidente, pero sin embargo, no ha podido evitarlo.
EI hecho de que el demandado, antes del choque, tuvo que hacer
pasar su truck encima de los montones de grava que estaban
depositados en la orilla del camino, sin que haya ido mas alla, por
el grave riesgo que corrian las vidas de sus pasajeros, es prueba
concluyente de lo que tenemos dicho, a saber: — que el cuanto
esuba de su parte, para evitar el accidente, sin que haya
podidoevitardo, por estar fuera de su control.
The evidence would appear to support the above finding. Thus, it appears
that Bus No. 31, immediately prior to the collision, was running at a
moderate speed because it had just stopped at the school zone of
Matacong, Polangui, Albay. The pick-up car was at full speed and was
running outside of its proper lane. The driver of the bus, upon seeing the
manner in which the pick-up was then running, swerved the bus to the
very extreme right of the road until its front and rear wheels have gone
over the pile of stones or gravel situated on the rampart of the road. Said
driver could not move the bus farther right and run over a greater portion
of the pile, the peak of which was about 3 feet high, without endangering
the safety of his passengers. And notwithstanding all these efforts, the
rear left side of the bus was hit by the pick-up car.
Of course, this finding is disputed by appellant who cannot see eye to eye
with the evidence for the appellee and insists that the collision took place
because the driver of the bus was going at a fast speed. He contends
that, having seen that a car was coming from the opposite direction at a
distance which allows the use of moderate care and prudence to avoid an
accident, and knowing that on the side of the road along which he was
going there was a pile of gravel, the driver of the bus should have
stopped and waited for the vehicle from the opposite direction to pass,
and should have proceeded only after the other vehicle had passed. In
other words, according to appellant, the act of the driver of the bus in
squeezing his way through of the bus in squeezing his way through
between the oncoming pick-up and the pile of gravel under the
circumstances was considered negligent.
the injury would have been avoided as is the case with the other
passenger. It is to be noted that appellant was the only victim of the
collision.
It is true that such contributory negligence cannot relieve appellee of its
liability but will only entitle it to a reduction of the amount of damage
caused (Article 1762, new Civil Code), but this is a circumstance which
further militates against the position taken by appellant in this case.

But this matter is one of credibility and evaluation of the evidence. This is
evidence. This is the function of the trial court. The trial court has already
spoken on this matter as we have pointed out above. This is also a
matter of appreciation of the situation on the part of the driver. While the
position taken by appellant appeals more to the sense of caution that one
should observe in a given situation to avoid an accident or mishap, such
however can not always be expected from one who is placed suddenly in
a predicament where he is not given enough time to take the course of
action as he should under ordinary circumstances. One who is placed in
such a predicament cannot exercise such coolness or accuracy of
judgment as is required of him under ordinary circumstances and he
cannot therefore be expected to observe the same judgment, care and
precaution as in the latter. For this reason, authorities abound where
failure to observe the same degree of care that as ordinary prudent man
would exercise under ordinary circumstances when confronted with a
sadden emergency was held to be warranted and a justification to
exempt the carrier from liability. Thus, it was held that "where a carrier's
employee is confronted with a sudden emergency, the fact that he is
obliged to act quickly and without a chance for deliberation must be
taken into account, and he is held to the some degree of care that he
would otherwise be required to exercise in the absence of such
emergency but must exercise only such care as any ordinary prudent
person would exercise under like circumstances and conditions, and the
failure on his part to exercise the best judgement the case renders
possible does not establish lack of care and skill on his part which
renders the company, liable. . . . (13 C. J. S., 1412; 10 C. J.,970).
Considering all the circumstances, we are persuaded to conclude that the
driver of the bus has done what a prudent man could have done to avoid
the collision and in our opinion this relieves appellee from legibility under
our law.
It is the prevailing rule that it is negligence per se for a passenger
on a railroad voluntarily or inadvertently to protrude his arm,
hand, elbow, or any other part of his body through the window of
a moving car beyond the outer edge of the window or outer
surface of the car, so as to come in contact with objects or
obstacles near the track, and that no recovery can be had for an
injury which but for such negligence would not have been
sustained. (10 C. J. 1139)
Plaintiff, (passenger) while riding on an interurban car, to flick the
ashes, from his cigar, thrust his hand over the guard rail a
sufficient distance beyond the side line of the car to bring it in
contact with the trunk of a tree standing beside the track; the
force of the blow breaking his wrist. Held, that he was guilty of
contributory negligence as a matter of law. (Malakia vs. Rhode
Island Co., 89 A., 337.)
Wherefore, the decision appealed from is affirmed, with cost against
appellant.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Labrador,
Concepcion, Endencia and Felix, JJ., concur.

A circumstances which miliates against the stand of appellant is the fact

borne out by the evidence that when he boarded the bus in question, he
seated himself on the left side thereof resting his left arm on the window
sill but with his left elbow outside the window, this being his position in
the bus when the collision took place. It is for this reason that the
collision resulted in the severance of said left arm from the body of
appellant thus doing him a great damage. It is therefore apparent that
appellant is guilty of contributory negligence. Had he not placed his left
arm on the window sill with a portion thereof protruding outside, perhaps

SUPREME COURT
Manila
FIRST DIVISION
G.R. Nos. 66102-04 August 30, 1990
PHILIPPINE RABBIT BUS LINES, INC., petitioner,
vs.
THE HONORABLE INTERMEDIATE APPELLATE COURT AND
CASIANO PASCUA, ET AL., respondents.
Santiago & Santiago for petitioner.
Federico R. Vinluan for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari of the decision of the
Intermediate Appellate Court (now Court of Appeals) dated July 29, 1983
in AC-G.R. Nos. CV-65885, CV-65886 and CV-65887 which reversed the
decision of the Court of First Instance (now Regional Trial Court) of
Pangasinan dated December 27, 1978; and its resolution dated
November 28, 1983 denying the motion for reconsideration.
It is an established principle that the factual findings of the Court of
Appeals are final and may not be reviewed by this Court on appeal.
However, this principle is subject to certain exceptions. One of these is
when the findings of the appellate court are contrary to those of the trial
court (see Sabinosa v. The Honorable Court of Appeals, et al., G.R. No. L-
47981, July 24, 1989) in which case, a re-examination of the facts and
evidence may be undertaken. This is Our task now.
The antecedent facts are as follows:
About 11:00 o'clock in the morning on December 24, 1966, Catalina
Pascua, Caridad Pascua, Adelaida Estomo, Erlinda Meriales, Mercedes
Lorenzo, Alejandro Morales and Zenaida Parejas boarded the jeepney
owned by spouses Isidro Mangune and Guillerma Carreon and driven by
Tranquilino Manalo at Dau, Mabalacat, Pampanga bound for Carmen,
Rosales, Pangasinan to spend Christmas at their respective homes.
Although they usually ride in buses, they had to ride in a jeepney that
day because the buses were full. Their contract with Manalo was for them
to pay P24.00 for the trip. The private respondents' testimonial evidence
on this contractual relationship was not controverted by Mangune,
Carreon and Manalo, nor by Filriters Guaranty Assurance Corporation,
Inc., the insurer of the jeepney, with contrary evidence. Purportedly
riding on the front seat with Manalo was Mercedes Lorenzo. On the left
rear passenger seat were Caridad Pascua, Alejandro Morales and Zenaida
Parejas. On the right rear passenger seat were Catalina Pascua, Adelaida
Estomo, and Erlinda Meriales. After a brief stopover at Moncada, Tarlac
for refreshment, the jeepney proceeded towards Carmen, Rosales,
Pangasinan.
Upon reaching barrio Sinayoan, San Manuel, Tarlac, the right rear wheel
of the jeepney was detached, so it was running in an unbalanced
position. Manalo stepped on the brake, as a result of which, the jeepney
which was then running on the eastern lane (its right of way) made a U-
turn, invading and eventually stopping on the western lane of the road in
such a manner that the jeepney's front faced the south (from where it
came) and its rear faced the north (towards where it was going). The
jeepney practically occupied and blocked the greater portion of the
western lane, which is the right of way of vehicles coming from the north,
among which was Bus No. 753 of petitioner Philippine Rabbit Bus Lines,
Inc. (Rabbit) driven by Tomas delos Reyes. Almost at the time when the
jeepney made a sudden U-turn and encroached on the western lane of
the highway as claimed by Rabbit and delos Reyes, or after stopping for a
couple of minutes as claimed by Mangune, Carreon and Manalo, the bus
bumped from behind the right rear portion of the jeepney. As a result of
the collision, three passengers of the jeepney (Catalina Pascua, Erlinda
Meriales and Adelaida Estomo) died while the other jeepney passengers
sustained physical injuries. What could have been a festive Christmas
turned out to be tragic.
The causes of the death of the three jeepney passengers were as follows
(p. 101, Record on Appeal):
The deceased Catalina Pascua suffered the following
injuries, to wit: fracture of the left parietal and temporal
regions of the skull; fracture of the left mandible; fracture
of the right humenous; compound fracture of the left
radious and ullma middle third and lower third; fracture
of the upper third of the right tibia and fillnea; avulsion of
the head, left internal; and multiple abrasions. The cause
of her death was shock, secondary to fracture and
multiple hemorrhage. The fractures were produced as a
result of the hitting of the victim by a strong force. The
abrasions could be produced when a person falls from a
moving vehicles (sic) and rubs parts of her body against a
cement road pavement. . . .
 Erlinda Mariles (sic) sustained external lesions such as
contusion on the left parietal region of the skull;
hematoma on the right upper lid; and abrasions (sic) on
the left knee. Her internal lesions were: hematoma on the
left thorax; multiple lacerations of the left lower lobe of
the lungs; contusions on the left lower lobe of the lungs;
and simple fractures of the 2nd, 3rd, 4th, 5th, 6th, 7th,
and 8th ribs, left. The forcible impact of the jeep caused
the above injuries which resulted in her death. . . .
The cause of death of Erlinda or Florida Estomo (also
called as per autopsy of Dr. Panlasiqui was due to shock
due to internal hemorrhage, ruptured spleen and trauma.
...
Caridad Pascua suffered physical injuries as follows (p. 101, Record on
Appeal):
. . . lacerated wound on the forehead and occipital region,
hematoma on the forehead, multiple abrasions on the
forearm, right upper arm, back and right leg. . . .
The police investigators of Tacpal and policemen of San Manuel, Tarlac,
Tarlac, upon arrival at the scene of the mishap, prepared a sketch
(common exhibit "K" for private respondents "19" for Rabbit) showing the
relative positions of the two vehicles as well as the alleged point of
impact (p. 100, Record on Appeal):
. . . The point of collision was a cement pave-portion of
the Highway, about six (6) meters wide, with narrow
shoulders with grasses beyond which are canals on both
sides. The road was straight and points 200 meters north
and south of the point of collision are visible and
unobstructed. Purportedly, the point of impact or collision
(Exh. "K-4", Pascua on the sketch Exh. "K"-Pascua) was
on the western lane of the highway about 3 feet (or one
yard) from the center line as shown by the bedris (sic),
dirt and soil (obviously from the undercarriage of both
vehicles) as well as paint, marron (sic) from the Rabbit
bus and greenish from the jeepney. The point of impact
encircled and marked with the letter "X" in Exh. "K"-4
Pascua, had a diameter of two meters, the center of
which was about two meters from the western edge of
cement pavement of the roadway. Pictures taken by
witness Bisquera in the course of the investigation
showed the relative positions of the point of impact and
center line (Exh. "P"-Pascua) the back of the Rabbit bus
(Exh. "P"-1-Pascua"), the lifeless body of Catalina Pascua
(Exh. "P-2 Pascua"), and the damaged front part of the
Rabbit bus (Exh. "P-3 Pascua"). No skid marks of the
Rabbit bus was found in the vicinity of the collision,
before or after the point of impact. On the other hand,
there was a skid mark about 45 meters long purportedly
of the jeepney from the eastern shoulder of the road
south of, and extending up to the point of impact.
At the time and in the vicinity of the accident, there were no vehicles
following the jeepney, neither were there oncoming vehicles except the
bus. The weather condition of that day was fair.
After conducting the investigation, the police filed with the Municipal
Court of San Manuel, Tarlac, a criminal complaint against the two drivers
for Multiple Homicide. At the preliminary investigation, a probable cause
was found with respect to the case of Manalo, thus, his case was elevated
to the Court of First Instance. However, finding no sufficiency of evidence
as regards the case of delos Reyes, the Court dismissed it. Manalo was
convicted and sentenced to suffer imprisonment. Not having appealed,
he served his sentence.
Complaints for recovery of damages were then filed before the Court of
First Instance of Pangasinan. In Civil Case No. 1136, spouses Casiano
Pascua and Juana Valdez sued as heirs of Catalina Pascua while Caridad
Pascua sued in her behalf. In Civil Case No. 1139, spouses Manuel
Millares and Fidencia Arcica sued as heirs of Erlinda Meriales. In Civil
Case No. 1140, spouses Mariano Estomo and Dionisia Sarmiento also
sued as heirs of Adelaida Estomo.
In all three cases, spouses Mangune and Carreon, Manalo, Rabbit and
delos Reyes were all impleaded as defendants. Plaintiffs anchored their
suits against spouses Mangune and Carreon and Manalo on their
contractual liability. As against Rabbit and delos Reyes, plaintiffs based
their suits on their culpability for a quasi-delict. Filriters Guaranty
Assurance Corporation, Inc. was also impleaded as additional defendant
in Civil Case No. 1136 only.
For the death of Catalina Pascua, plaintiffs in Civil Case No. 1136 sought
to collect the aggregate amount of P70,060.00 in damages, itemized as
follows: P500.00 for burial expenses; P12,000.00 for loss of wages for 24
years; P10,000.00 for exemplary damages; P10,000.00 for moral
damages; and P3,000.00 for attorney's fees. In the same case, plaintiff
Caridad Pascua claimed P550.00 for medical expenses; P240.00 for loss
of wages for two months; P2,000.00 for disfigurement of her face;
P3,000.00 for physical pain and suffering; P2,500.00 as exemplary
damages and P2,000.00 for attorney's fees and expenses of litigation.
In Civil Case No. 1139, plaintiffs demanded P500.00 for burial expenses;
P6,000.00 for the death of Erlinda, P63,000.00 for loss of income;
P10,000.00 for moral damages and P3,000.00 for attorney's fees or total
of P80,000.00.
In Civil Case No. 1140, plaintiffs claimed P500.00 for burial expenses;
P6,000.00 for the death of Adelaide, P56,160.00 for loss of her income or
earning capacity; P10,000.00 for moral damages; and P3,000.00 for
attorney's fees.
Rabbit filed a cross-claim in the amount of P15,000.00 for attorney's fees
and expenses of litigation. On the other hand, spouses Mangune and
Carreon filed a cross-claim in the amount of P6,168.00 for the repair of
the jeepney and P3,000.00 for its non-use during the period of repairs.
On December 27, 1978, the trial court rendered its decision finding
Manalo negligent, the dispositive portion of which reads (pp. 113-114,
Record on Appeal):
PREMISES CONSIDERED, this Court is of the opinion and so holds:
1) That defendants Isidro Mangune, Guillerma Carreon
and Tranquilino Manalo thru their negligence, breached
contract of carriage with their passengers the plaintiffs'
and/or their heirs, and this Court renders judgment
ordering said defendants, jointly and severally, to pay the
plaintiffs —
a) In Civil Case No. 1136, for the death of Catalina
Pascua, to pay her heirs the amounts of P12,000.00 for
indemnity for loss of her life; P41,760.00 for loss of
earnings; P324.40 for actual expenses and P2,000.00 for
moral damages;
b) In the same Civil Case No.1136 for the injuries of
Caridad Pascua, to pay her the amounts of P240.00 for
loss of wages, P328.20 for actual expenses and P500.00
for moral damages;
c) In Civil Case No.1139 for the death of Erlinda Meriales,
to pay her heirs (the plaintiffs) the amount of P12,000.00
— for indemnity for loss of her life; P622.00 for actual
expenses, P60,480.00 for loss of wages or income and
P2,000.00 for moral damages;
d) In Civil Case No. 1140, for the death of Erlinda (also
called Florida or Adelaida Estomo), to pay her heirs (the
plaintiff the amount of P12,000.00 for indemnity for the
loss of her life; P580.00 for actual expenses; P53,160.00
for loss of wages or income and P2,000.00 for moral
damages.
2) The defendant Filriters Guaranty Insurance Co., having
contracted to ensure and answer for the obligations of
defendants Mangune and Carreon for damages due their
passengers, this Court renders judgment against the said
defendants Filriters Guaranty Insurance Co., jointly and
severally with said defendants (Mangune and Carreon) to
pay the plaintiffs the amount herein above adjudicated in
their favor in Civil Case No. 1136 only. All the amounts
awarded said plaintiff, as set forth in paragraph one (1)
hereinabove;
3) On the cross claim of Phil. Rabbit Bus Lines, Inc.
ordering the defendant, Isidro Mangune, Guillerma
Carreon and Tranquilino Manalo, to pay jointly and
severally, cross-claimant Phil. Rabbit Bus Lines, Inc., the
amounts of P216.27 as actual damages to its Bus No. 753
and P2,173.60 for loss of its earning.
All of the above amount, shall bear legal interest from the
filing of the complaints.
Costs are adjudged against defendants Mangune,
Carreon and Manalo and Filriters Guaranty.
SO ORDERED
On appeal, the Intermediate Appellate Court reversed the above-quoted
decision by finding delos Reyes negligent, the dispositive portion of which
reads (pp. 55-57, Rollo):
WHEREFORE, PREMISES CONSIDERED, the lower court's
decision is hereby REVERSED as to item No. 3 of the
decision which reads:
3) On the cross claim of Philippine Rabbit Bus Lines, Inc.
ordering the defendants Isidro Mangune, Guillerma
Carreon and Tranquilino Manalo, to pay jointly and
severally, the amounts of P216.27 as actual damages to
its Bus No. 753 and P2,173.60 for loss of its earnings.
and another judgment is hereby rendered in favor of
plaintiffs-appellants Casiana Pascua, Juan Valdez and
Caridad Pascua, ordering the Philippine Rabbit Bus Lines, For the death of Erlinda Arcega Meriales. the parents
Inc. and its driver Tomas delos Reyes to pay the former and/or heirs:
jointly and severally damages in amounts awarded as
follows: Civil Case No. 1139

For the death of Catalina Pascua, the parents and/or heirs a) Indemnity for loss of life — P12,000.00
are awarded
b) Loss of Salary or Earning Capacity —
Civil Case No. 1136 — 20,000.00

a) Indemnity for the loss of life — P12,000.00 c) Actual damages (burial expenses) — 500.00

b) Loss of Salaries or earning capacity — d) Moral damages — 15,000.00

14,000.00
e) Exemplary damages — 15,000.00
c) Actual damages (burial expenses) — 800.00
f) Attorney's fees — 3,000.00
d) For moral damages — 10,000.00
—————
e) Exemplary damages — 3,000.00
Total — P65,500.00
f) For attorney's fees — 3,000.00
For the death of Florida Sarmiento Estomo:
—————
Civil Case No. 1140
Total — P38,200.00 (sic)
a) Indemnity for loss of life — P12,000.00
For the physical injuries suffered by Caridad Pascua:
b) Loss of Salary or Earning capacity — 20,000.00
Civil Case No. 1136
c) Actual damages (burial expenses) — 500.00
a) Actual damages (hospitalization expenses) —
P550.00
d) Moral damages — 3,000.00
b) Moral damages (disfigurement of the
e) Exemplary damages — 3,000.00
face and physical suffering — 8,000.00
f) Attorney's fees — 3,000.00
c) Exemplary damages — 2,000.00
—————
—————
Total — P41,500.00
Total — P10,550.00
With costs against the Philippine Rabbit Bus Lines, Inc.
 SO ORDERED.
The motion for reconsideration was denied. Hence, the present
petition.
The issue is who is liable for the death and physical injuries suffered by
the passengers of the jeepney?
The trial court, in declaring that Manalo was negligent, considered the
following (p. 106, Record on Appeal):
(1) That the unrebutted testimony of his passenger
plaintiff Caridad Pascua that a long ways (sic) before
reaching the point of collision, the Mangune jeepney was
"running fast" that his passengers cautioned driver
Manalo to slow down but did not heed the warning: that
the right rear wheel was detached causing the jeepney to
run to the eastern shoulder of the road then back to the
concrete pavement; that driver Manalo applied the
brakes after which the jeepney made a U-turn (half-turn)
in such a manner that it inverted its direction making it
face South instead of north; that the jeepney stopped on
the western lane of the road on the right of way of the
oncoming Phil. Rabbit Bus where it was bumped by the
latter;
(2) The likewise unrebutted testimony of Police
Investigator Tacpal of the San Manuel (Tarlac) Police who,
upon responding to the reported collission, found the real
evidence thereat indicate in his sketch (Exh. K, Pascua ),
the tracks of the jeepney of defendant Mangune and
Carreon running on the Eastern shoulder (outside the
concrete paved road) until it returned to the concrete
road at a sharp angle, crossing the Eastern lane and the
(imaginary) center line and encroaching fully into the
western lane where the collision took place as evidenced
by the point of impact;
(3) The observation of witness Police Corporal Cacalda
also of the San Manuel Police that the path of the jeepney
they found on the road and indicated in the sketch (Exh.
K-Pascua) was shown by skid marks which he described
as "scratches on the road caused by the iron of the jeep,
after its wheel was removed;"
(4) His conviction for the crime of Multiple Homicide and
Multiple Serious Physical Injuries with Damage to
Property thru Reckless Imprudence by the Court of First
Instance of Tarlac (Exh. 24-Rabbit) upon the criminal
Information by the Provincial Fiscal of Tarlac (Exh. 23-
Rabbit), as a result of the collision, and his commitment
to prison and service of his sentence (Exh. 25-Rabbit)
upon the finality of the decision and his failure to appeal
therefrom; and
(5) The application of the doctrine of res-ipsa
loquitar (sic) attesting to the circumstance that the
collision occured (sic) on the right of way of the Phil.
Rabbit Bus.
The respondent court had a contrary opinion. Applying primarily (1) the
doctrine of last clear chance, (2) the presumption that drivers who bump
the rear of another vehicle guilty and the cause of the accident unless
contradicted by other evidence, and (3) the substantial factor test.
concluded that delos Reyes was negligent.
The misappreciation of the facts and evidence and the misapplication of
the laws by the respondent court warrant a reversal of its questioned
decision and resolution.
We reiterate that "[t]he principle about "the last clear" chance, would call
for application in a suit between the owners and drivers of the two
colliding vehicles. It does not arise where a passenger demands
responsibility from the carrier to enforce its contractual obligations. For it
would be inequitable to exempt the negligent driver of the jeepney and
its owners on the ground that the other driver was likewise guilty of
negligence." This was Our ruling in Anuran, et al. v. Buño et al., G.R. Nos.
L-21353 and L-21354, May 20, 1966, 17 SCRA 224. 1 Thus, the
respondent court erred in applying said doctrine.
On the presumption that drivers who bump the rear of another vehicle
guilty and the cause of the accident, unless contradicted by other
evidence, the respondent court said (p. 49, Rollo):
. . . the jeepney had already executed a complete
turnabout and at the time of impact was already facing
the western side of the road. Thus the jeepney assumed
a new frontal position vis a vis, the bus, and the bus
assumed a new role of defensive driving. The spirit
behind the presumption of guilt on one who bumps the
rear end of another vehicle is for the driver following a
vehicle to be at all times prepared of a pending accident
should the driver in front suddenly come to a full stop, or
change its course either through change of mind of the
front driver, mechanical trouble, or to avoid an accident.
 The rear vehicle is given the responsibility of avoiding a
collision with the front vehicle for it is the rear vehicle
who has full control of the situation as it is in a position to
observe the vehicle in front of it.
The above discussion would have been correct were it not for the
undisputed fact that the U-turn made by the jeepney was abrupt (Exhibit
"K," Pascua). The jeepney, which was then traveling on the eastern
shoulder, making a straight, skid mark of approximately 35 meters,
crossed the eastern lane at a sharp angle, making a skid mark of
approximately 15 meters from the eastern shoulder to the point of
impact (Exhibit "K" Pascua). Hence, delos Reyes could not have
anticipated the sudden U-turn executed by Manalo. The respondent court
did not realize that the presumption was rebutted by this piece of
evidence.
With regard to the substantial factor test, it was the opinion of the
respondent court that (p. 52, Rollo):
. . . It is the rule under the substantial factor test that if
the actor's conduct is a substantial factor in bringing
about harm to another, the fact that the actor neither
foresaw nor should have foreseen the extent of the harm
or the manner in which it occurred does not prevent him
from being liable (Restatement, Torts, 2d). Here, We find
defendant bus running at a fast speed when the accident
occurred and did not even make the slightest effort to
avoid the accident, . . . . The bus driver's conduct is thus
a substantial factor in bringing about harm to the
passengers of the jeepney, not only because he was
driving fast and did not even attempt to avoid the mishap
but also because it was the bus which was the physical
force which brought about the injury and death to the
passengers of the jeepney.
The speed of the bus was calculated by respondent court as follows (pp.
54-55, Rollo):
According to the record of the case, the bus departed
from Laoag, Ilocos Norte, at 4:00 o'clock A.M. and the
accident took place at approximately around 12:30 P.M.,
after travelling roughly for 8 hours and 30 minutes.
Deduct from this the actual stopover time of two Hours
(computed from the testimony of the driver that he made
three 40-minute stop-overs), We will have an actual
travelling time of 6 hours and 30 minutes.
Under the circumstances, We calculate that the Laoag-
Tarlac route (365 kms.) driving at an average of 56 km.
per hour would take 6 hours and 30 minutes. Therefore,
the average speed of the bus, give and take 10 minutes,
from the point of impact on the highway with excellent
visibility factor would be 80 to 90 kms. per hour, as this is
the place where buses would make up for lost time in
traversing busy city streets.
Still, We are not convinced. It cannot be said that the bus was travelling
at a fast speed when the accident occurred because the speed of 80 to
90 kilometers per hour, assuming such calculation to be correct, is yet
within the speed limit allowed in highways. We cannot even fault delos
Reyes for not having avoided the collision. As aforestated, the jeepney
left a skid mark of about 45 meters, measured from the time its right rear
wheel was detached up to the point of collision. Delos Reyes must have
noticed the perilous condition of the jeepney from the time its right rear
wheel was detached or some 90 meters away, considering that the road
was straight and points 200 meters north and south of the point of
collision, visible and unobstructed. Delos Reyes admitted that he was
running more or less 50 kilometers per hour at the time of the accident.
Using this speed, delos Reyes covered the distance of 45 meters in 3.24
seconds. If We adopt the speed of 80 kilometers per hour, delos Reyes
would have covered that distance in only 2.025 seconds. Verily, he had
little time to react to the situation. To require delos Reyes to avoid the
collision is to ask too much from him. Aside from the time element
involved, there were no options available to him. As the trial court
remarked (pp. 107-108, Record on Appeal):
. . . They (plaintiffs) tried to impress this Court that
defendant de los Reyes, could have taken either of two
options: (1) to swerve to its right (western shoulder) or
(2) to swerve to its left (eastern lane), and thus steer
clear of the Mangune jeepney. This Court does not so
believe, considering the existing exigencies of space and
time.
As to the first option, Phil. Rabbit's evidence is convincing
and unrebutted that the Western shoulder of the road
was narrow and had tall grasses which would indicate
that it was not passable. Even plaintiffs own evidence,
the pictures (Exhs. P and P-2, Pascua) are mute
confirmation of such fact. Indeed, it can be noticed in the
picture (Exh. P-2, Pascua) after the Rabbit bus came to a
full stop, it was tilted to right front side, its front wheels
resting most probably on a canal on a much lower
elevation that of the shoulder or paved road. It too shows
that all of the wheels of the Rabbit bus were clear of the
roadway except the outer left rear wheel. These
 observation appearing in said picture (Exh P-2, Pascua)
clearly shows coupled with the finding the Rabbit bus
came to a full stop only five meters from the point of
impact (see sketch, Exh. K-Pascua) clearly show that
driver de los Reyes veered his Rabbit bus to the right
attempt to avoid hitting the Mangune's jeepney. That it
was not successful in fully clearing the Mangune jeepney
as its (Rabbit's) left front hit said jeepney (see picture
Exh. 10-A-Rabbit) must have been due to limitations of
space and time.
Plaintiffs alternatively claim that defendant delos Reyes
of the Rabbit bus could also have swerved to its left
(eastern lane) to avoid bumping the Mangune jeepney
which was then on the western lane. Such a claim is
premised on the hypothesis (sic) that the eastern lane
was then empty. This claim would appear to be good
copy of it were based alone on the sketch made after the
collision. Nonetheless, it loses force it one were to
consider the time element involved, for moments before
that, the Mangune jeepney was crossing that very
eastern lane at a sharp angle. Under such a situation
then, for driver delos Reyes to swerve to the eastern
lane, he would run the greater risk of running smack in
the Mangune jeepney either head on or broadside.
After a minute scrutiny of the factual matters and duly proven evidence,
We find that the proximate cause of the accident was the negligence of
Manalo and spouses Mangune and Carreon. They all failed to exercise the
precautions that are needed precisely pro hac vice.
In culpa contractual, the moment a passenger dies or is injured, the
carrier is presumed to have been at fault or to have acted negligently,
and this disputable presumption may only be overcome by evidence that
he had observed extra-ordinary diligence as prescribed in Articles 1733,
1755 and 1756 of the New Civil Code 2 or that the death or injury of the
passenger was due to a fortuitous event 3 (Lasam v. Smith, Jr., 45 Phil.
657).
The negligence of Manalo was proven during the trial by the unrebutted
testimonies of Caridad Pascua, Police Investigator Tacpal, Police Corporal
Cacalda, his (Manalo's) conviction for the crime of Multiple Homicide and
Multiple Serious Injuries with Damage to Property thru Reckless
Imprudence, and the application of the doctrine ofres ipsa loquitur
supra. The negligence of spouses Mangune and Carreon was likewise
proven during the trial (p. 110, Record on Appeal):
To escape liability, defendants Mangune and Carreon
offered to show thru their witness Natalio Navarro, an
alleged mechanic, that he periodically checks and
maintains the jeepney of said defendants, the last on
Dec. 23, the day before the collision, which included the
tightening of the bolts. This notwithstanding the right
rear wheel of the vehicle was detached while in transit.
As to the cause thereof no evidence was offered. Said
defendant did not even attempt to explain, much less
establish, it to be one caused by a caso fortuito. . . .
In any event, "[i]n an action for damages against the carrier for
his failure to safely carry his passenger to his destination, an
accident caused either by defects in the automobile or through
the negligence of its driver, is not a caso fortuito which would
avoid the carriers liability for damages (Son v. Cebu Autobus
Company, 94 Phil. 892 citing Lasam, et al. v. Smith, Jr., 45 Phil.
657; Necesito, etc. v. Paras, et al., 104 Phil. 75).
The trial court was therefore right in finding that Manalo and spouses
Mangune and Carreon were negligent. However, its ruling that spouses
Mangune and Carreon are jointly and severally liable with Manalo is
erroneous The driver cannot be held jointly and severally liable with the
carrier in case of breach of the contract of carriage. The rationale behind
this is readily discernible. Firstly, the contract of carriage is between the
carrier and the passenger, and in the event of contractual liability, the
carrier is exclusively responsible therefore to the passenger, even if such
breach be due to the negligence of his driver (see Viluan v. The Court of
Appeals, et al., G.R. Nos. L-21477-81, April 29, 1966, 16 SCRA 742). In
other words, the carrier can neither shift his liability on the contract to his
driver nor share it with him, for his driver's negligence is his. 4 Secondly,
if We make the driver jointly and severally liable with the carrier, that
would make the carrier's liability personal instead of merely vicarious and
consequently, entitled to recover only the share which corresponds to the
driver, 5 contradictory to the explicit provision of Article 2181 of the New
Civil Code. 6
We affirm the amount of damages adjudged by the trial court, except
with respect to the indemnity for loss of life. Under Article 1764 in
relation to Article 2206 of the New Civil Code, the amount of damages for
the death of a passenger is at least three thousand pesos (P3,000.00).
The prevailing jurisprudence has increased the amount of P3,000.00 to
P30,000.00 (see Heirs of Amparo delos Santos, et al. v. Honorable Court
of Appeals, et al., G.R. No. 51165, June 21, 1990 citing De Lima v. Laguna
Tayabas Co., G.R. Nos. L-35697-99, April 15, 1988, 160 SCRA 70).
ACCORDINGLY, the petition is hereby GRANTED. The decision of the
Intermediate Appellate Court dated July 29, 1983 and its resolution dated
November 28, 1983 are SET ASIDE. The decision of the Court of First
Instance dated December 27, 1978 is REINSTATED MODIFICATION that
only Isidro Mangune, Guillerma Carreon and Filriters Guaranty Assurance
Corporation, Inc. are liable to the victims or their heirs and that the
amount of indemnity for loss of life is increased to thirty thousand pesos
(P30,000.00).
SO ORDERED.
Narvasa (Chairman), Cruz, Gancayco and Griño-Aquino JJ., concur.
Footnotes
1 In this case, an improperly parked passenger jeepney
was bumped from behind by a speeding truck with such
violence that three of its passengers died whereas two
other passengers suffered injuries. The representatives of
the dead and of the injured passengers filed suits to
recover damages against the driver and the owners of
the truck and also against the driver and the owners of
the jeepney. The trial court rendered judgment absolving
the driver and the owners of the jeepney but required the
driver and the owners of the truck to compensate the
victims. The Plaintiffs appealed insisting that the driver
and the owners of the jeepney should also be made
liable. The appellate court, relying on the doctrine of last
clear chance, affirmed the trial court's decision. The
plaintiffs then filed a petition for review
on certiorari before this Court. We modified the
questioned decision by making all the defendants
solidarity liable.
2 Articles 1733, 1755 and 1756 of the New Civil Code,
respectively provides:
ART. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported
by them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the
goods is further expressed in articles 1734, 1735, and
1746. Nos. 5, 6, and 7, while the extraordinary diligence
for the safety of the passengers is further set forth in
articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.
ART. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or
to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in articles
1733 and 1755.
3 Article 1174 of the New Civil Code provides:
ART. 1174. Except in cases expressly specified by the
law, or when it is otherwise declared by stipulation, or
when the nature of the obligation requires the
assumption of risk, no person shall be responsible for
those events which could not be foreseen, or which,
though foreseen, were inevitable.
4 Article 1759 of the New Civil Code provides:
ART. 1759. Common carriers are liable for the death of or
injuries to passengers through the negligence or wilful
acts of the former's employees, although such employees
may have acted beyond the scope of their authority or in
violation of the orders of the common carriers.
This liability of the common carriers does not cease upon
proof that they exercised all the diligence of a good
father of a family in the selection and supervision of their
employees.
5 Article 1217 of the New Civil Code provides:
ART. 1217. Payment made by one of the solidary debtors
extinguishes the obligation. If two or more solidary
debtors offer to pay, the creditor may choose which offer
to accept.
He who made the payment may claim from his codebtors
only the share which corresponds to each, with the
interest for the payment already made. If the payment is
made before the debt is due, no interest for the
intervening period may de demanded.

When one of the solidary debtors cannot, because of his

insolvency, reimburse his share to the debtor paying the
obligation, such share shall be borne by all his co-
debtors, in proportion to the debt of each.

6 Article 2181 of the New Civil Code provides:

ART. 2181. Whoever pays for the damage caused by his

dependents or employees may recover from the latter
what he has paid or delivered in satisfaction of the claim.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 145804 February 6, 2003
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners,
vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD &
PRUDENT SECURITY AGENCY, respondents.
DECISION
VITUG, J.:
The case before the Court is an appeal from the decision and resolution
of the Court of Appeals, promulgated on 27 April 2000 and 10 October
2000, respectively, in CA-G.R. CV No. 60720, entitled "Marjorie Navidad
and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et. al.," which
has modified the decision of 11 August 1998 of the Regional Trial Court,
Branch 266, Pasig City, exonerating Prudent Security Agency (Prudent)
from liability and finding Light Rail Transit Authority (LRTA) and Rodolfo
Roman liable for damages on account of the death of Nicanor Navidad.
On 14 October 1993, about half an hour past seven o’clock in the
evening, Nicanor Navidad, then drunk, entered the EDSA LRT station
after purchasing a "token" (representing payment of the fare). While
Navidad was standing on the platform near the LRT tracks, Junelito
Escartin, the security guard assigned to the area approached Navidad. A
misunderstanding or an altercation between the two apparently ensued
that led to a fist fight. No evidence, however, was adduced to indicate
how the fight started or who, between the two, delivered the first blow or
how Navidad later fell on the LRT tracks. At the exact moment that
Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was
coming in. Navidad was struck by the moving train, and he was killed
instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie
Navidad, along with her children, filed a complaint for damages against
Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit
Organization, Inc. (Metro Transit), and Prudent for the death of her
husband. LRTA and Roman filed a counterclaim against Navidad and a
cross-claim against Escartin and Prudent. Prudent, in its answer, denied
liability and averred that it had exercised due diligence in the selection
and supervision of its security guards.
The LRTA and Roman presented their evidence while Prudent and
Escartin, instead of presenting evidence, filed a demurrer contending
that Navidad had failed to prove that Escartin was negligent in his
assigned task. On 11 August 1998, the trial court rendered its decision; it
adjudged:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and
against the defendants Prudent Security and Junelito Escartin ordering
the latter to pay jointly and severally the plaintiffs the following:
"a) 1) Actual damages of P44,830.00;
2) Compensatory damages of P443,520.00;
3) Indemnity for the death of Nicanor Navidad in the sum of
P50,000.00;
"b) Moral damages of P50,000.00;
"c) Attorney’s fees of P20,000;
"d) Costs of suit.
"The complaint against defendants LRTA and Rodolfo Roman are
dismissed for lack of merit.
"The compulsory counterclaim of LRTA and Roman are likewise
dismissed."1
Prudent appealed to the Court of Appeals. On 27 August 2000, the
appellate court promulgated its now assailed decision exonerating
Prudent from any liability for the death of Nicanor Navidad and, instead,
holding the LRTA and Roman jointly and severally liable thusly:
"WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating
the appellants from any liability for the death of Nicanor Navidad, Jr.
Instead, appellees Rodolfo Roman and the Light Rail Transit Authority
(LRTA) are held liable for his death and are hereby directed to pay jointly
and severally to the plaintiffs-appellees, the following amounts:
a) P44,830.00 as actual damages;
 b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;
d) P50,000.00 as indemnity for the death of the
deceased; and
e) P20,000.00 as and for attorney’s fees."2
The appellate court ratiocinated that while the deceased might not have
then as yet boarded the train, a contract of carriage theretofore had
already existed when the victim entered the place where passengers
were supposed to be after paying the fare and getting the corresponding
token therefor. In exempting Prudent from liability, the court stressed
that there was nothing to link the security agency to the death of
Navidad. It said that Navidad failed to show that Escartin inflicted fist
blows upon the victim and the evidence merely established the fact of
death of Navidad by reason of his having been hit by the train owned and
managed by the LRTA and operated at the time by Roman. The appellate
court faulted petitioners for their failure to present expert evidence to
establish the fact that the application of emergency brakes could not
have stopped the train.
The appellate court denied petitioners’ motion for reconsideration in its
resolution of 10 October 2000.
In their present recourse, petitioners recite alleged errors on the part of
the appellate court; viz:
"I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY
DISREGARDING THE FINDINGS OF FACTS BY THE TRIAL COURT
"II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
PETITIONERS ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR.
"III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
RODOLFO ROMAN IS AN EMPLOYEE OF LRTA."3
Petitioners would contend that the appellate court ignored the evidence
and the factual findings of the trial court by holding them liable on the
basis of a sweeping conclusion that the presumption of negligence on the
part of a common carrier was not overcome. Petitioners would insist that
Escartin’s assault upon Navidad, which caused the latter to fall on the
tracks, was an act of a stranger that could not have been foreseen or
prevented. The LRTA would add that the appellate court’s conclusion on
the existence of an employer-employee relationship between Roman and
LRTA lacked basis because Roman himself had testified being an
employee of Metro Transit and not of the LRTA.
Respondents, supporting the decision of the appellate court, contended
that a contract of carriage was deemed created from the moment
Navidad paid the fare at the LRT station and entered the premises of the
latter, entitling Navidad to all the rights and protection under a
contractual relation, and that the appellate court had correctly held LRTA
and Roman liable for the death of Navidad in failing to exercise
extraordinary diligence imposed upon a common carrier.
Law and jurisprudence dictate that a common carrier, both from the
nature of its business and for reasons of public policy, is burdened with
the duty of exercising utmost diligence in ensuring the safety of
passengers.4 The Civil Code, governing the liability of a common carrier
for death of or injury to its passengers, provides:
"Article 1755. A common carrier is bound to carry the passengers safely
as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with a due regard for all the
circumstances.
"Article 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as
prescribed in articles 1733 and 1755."
"Article 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the former’s
employees, although such employees may have acted beyond the scope
of their authority or in violation of the orders of the common carriers.
"This liability of the common carriers does not cease upon proof that they
exercised all the diligence of a good father of a family in the selection
and supervision of their employees."
"Article 1763. A common carrier is responsible for injuries suffered by a
passenger on account of the willful acts or negligence of other
passengers or of strangers, if the common carrier’s employees through
the exercise of the diligence of a good father of a family could have
prevented or stopped the act or omission."
The law requires common carriers to carry passengers safely using the
utmost diligence of very cautious persons with due regard for all
circumstances.5 Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so
long as the passengers are within its premises and where they ought to
be in pursuance to the contract of carriage.6 The statutory provisions
render a common carrier liable for death of or injury to passengers (a)
through the negligence or wilful acts of its employees or b) on account of
wilful acts or negligence of other passengers or of strangers if the
common carrier’s employees through the exercise of due diligence could
have prevented or stopped the act or omission.7 In case of such death or
injury, a carrier is presumed to have been at fault or been negligent,
and8 by simple proof of injury, the passenger is relieved of the duty to
still establish the fault or negligence of the carrier or of its employees and
the burden shifts upon the carrier to prove that the injury is due to an
unforeseen event or to force majeure.9 In the absence of satisfactory
explanation by the carrier on how the accident occurred, which
petitioners, according to the appellate court, have failed to show, the
presumption would be that it has been at fault,10 an exception from the
general rule that negligence must be proved.11
The foundation of LRTA’s liability is the contract of carriage and its
obligation to indemnify the victim arises from the breach of that contract
by reason of its failure to exercise the high diligence required of the
common carrier. In the discharge of its commitment to ensure the safety
of passengers, a carrier may choose to hire its own employees or avail
itself of the services of an outsider or an independent firm to undertake
the task. In either case, the common carrier is not relieved of its
responsibilities under the contract of carriage.
Should Prudent be made likewise liable? If at all, that liability could only
be for tort under the provisions of Article 217612 and related provisions, in
conjunction with Article 2180,13 of the Civil Code. The premise, however,
for the employer’s liability is negligence or fault on the part of the
employee. Once such fault is established, the employer can then be
made liable on the basis of the presumption juris tantum that the
employer failed to exercise diligentissimi patris families in the selection
and supervision of its employees. The liability is primary and can only be
negated by showing due diligence in the selection and supervision of the
employee, a factual matter that has not been shown. Absent such a
showing, one might ask further, how then must the liability of the
common carrier, on the one hand, and an independent contractor, on the
other hand, be described? It would be solidary. A contractual obligation
can be breached by tort and when the same act or omission causes the
injury, one resulting in culpa contractual and the other in culpa aquiliana,
Article 219414 of the Civil Code can well apply.15 In fine, a liability for tort
may arise even under a contract, where tort is that which breaches the
contract.16 Stated differently, when an act which constitutes a breach of
contract would have itself constituted the source of a quasi-delictual
liability had no contract existed between the parties, the contract can be
said to have been breached by tort, thereby allowing the rules on tort to
apply.17
Regrettably for LRT, as well as perhaps the surviving spouse and heirs of
the late Nicanor Navidad, this Court is concluded by the factual finding of
the Court of Appeals that "there is nothing to link (Prudent) to the death
of Nicanor (Navidad), for the reason that the negligence of its employee,
Escartin, has not been duly proven x x x." This finding of the appellate
court is not without substantial justification in our own review of the
records of the case.
There being, similarly, no showing that petitioner Rodolfo Roman himself
is guilty of any culpable act or omission, he must also be absolved from
liability. Needless to say, the contractual tie between the LRT and
Navidad is not itself a juridical relation between the latter and Roman;
thus, Roman can be made liable only for his own fault or negligence.
The award of nominal damages in addition to actual damages is
untenable. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.18 It is an established rule that
nominal damages cannot co-exist with compensatory damages.19
WHEREFORE, the assailed decision of the appellate court is AFFIRMED
with MODIFICATION but only in that (a) the award of nominal damages is
DELETED and (b) petitioner Rodolfo Roman is absolved from liability. No
costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ.,
concur.
Footnotes
1
Rollo, p. 16.
2
Rollo, pp. 46-47.
3
Rollo, pp. 18-19. Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope
4
Arada vs. Court of Appeals, 210 SCRA 624. of their assigned tasks, even though the former are not
engaged in any business or industry.
5
Philippine Airlines, Inc. vs. Court of Appeals, 226 SCRA 423.
The State is responsible in like manner when it acts
6
through a special agent, but not when the damage has
Dangwa Transportation Co., Inc. vs. Court of Appeals, 202 SCRA been caused by the official to whom the task done
575. properly pertains, in which case what is provided in
article 2176 shall be applicable.
7
Article 1763, Civil Code.
Lastly, teachers or heads of establishments of arts and
8
Gatchalian vs. Delim, 203 SCRA 126; Yobido vs. Court of trades shall be liable for damages caused by their pupils
Appeals, 281 SCRA 1; Landingin vs. Pangasinan Transportation and students or apprentices, so long as they remain in
Co., 33 SCRA 284. their custody.

9
Mercado vs. Lira, 3 SCRA 124.
10
Article 1756, Civil Code.
11
Vda. De Abeto vs. Phil. Air Lines, Inc., 30 July 1982.
12
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict
and is governed by the provisions of this Chapter.
The responsibility treated of in this article shall cease
when the persons herein mentioned prove that they
observed all the diligence of a good father of a family to
prevent damage.
14
Art. 2194. The responsibility of two or more persons who are
liable for a quasi-delict is solidary.
15
Air France vs. Carrascoso, 124 Phil. 722.
16
PSBA vs. CA, 205 SCRA 729.

13 17
Art. 2180. The obligation imposed by Article 2176 is Cangco vs. Manila Railroad, 38 Phil. 768; Manila Railroad vs.
demandable not only for one’s own acts or omissions, but also for Compania Transatlantica, 38 Phil. 875.
those of persons for whom one is responsible.
18
Article 2221, Civil Code.
The father and, in case of his death or incapacity, the
mother, are responsible for the damages caused by the 19
Medina, et al. vs. Cresencia, 99 Phil. 506.
minor children who live in their company.

Guardians are liable for damages caused by the minors or

incapacitated persons who are under their authority and
live in their company.

The owners and managers of an establishment or

enterprise are likewise responsible for damages caused
by their employees in the service of the branches in
which the latter are employed or on the occasion of their
functions.