Transpo Cases

Transportation Law Case Digests
Cases Applying Articles 1732, 1733

and 1766 of the New Civil Code
General Provisions on
Common Carriers
Articles Applied
1
Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by and, water, or air, for
compensation, offering their ser!ices to the pubic.
Art. 1733. Common carriers, from the nature of their business and for reasons of pubic poicy,
are bound to obser!e e"traordinary diigence in the !igiance o!er the goods and for the safety
of the passengers transported by them, according to a the circumstances of each case.
#uch e"traordinary diigence in the !igiance o!er the goods is further e"pressed in Artices
173$, 173%, and 17$%, &os. %, ', and 7, whie the e"traordinary diigence for the safety of the
passengers is further set forth in Artices 17%% and 17%'.
Art. 17''. (n a matters not reguated by this Code, the rights and obigations of common
carriers sha be go!erned by the Code of Commerce and by specia aws.
Pedro de G!"man v# Co!rt of Appeals
G#$# No# %&'7(22
2
)acts
)erein respondent *rnesto Cendana was engaged in buying up used bottes and scrap meta in
+angasinan. &ormay, after coection respondent woud bring such materia to ,ania for resae. )e
utii-ed .2/ two si"0wheeers truc1s which he owned for the purpose. 2pon returning to +angasinan, he
woud oad his !ehice with cargo beonging to different merchants to different estabishments in
+angasisnan which respondents charged a freight fee for.
#ometime in &o!ember 1374, herein petitioner +edro de 5u-man, a merchant and deaer of
5enera ,i1 Company (nc. in +angasinan contracted with respondent for hauing 7%4 cartons of mi1.
2nfortunatey, ony 1%4 cartons made it, as the other '44 cartons were intercepted by hi6ac1ers aong
,arcos )ighway. )ence, petitioners commenced an action against pri!ate respondent.
(n his defense, respondent argued that he cannot be hed iabe due to force ma6uere, and that he
is not a common carrier and hence is not re7uired to e"ercise e"traordinary diigence.
*ss!es
1. 8hether or not respondent can be hed iabe for oss of the cartons of mi1 due to force ma6eure.
2. 8hether or not respondent is a common carrier.
+eld
1. The court rued the affirmati!e. The circumstances do not fa under the e"emption from iabiity as
enumerated in Artice 173$ of the Ci!i Code. The genera rue is estabished by the artice that
common carriers are responsibe for the oss, destruction or deterioration of the goods which they
carry, uness the same is due to any of the foowing causes ony9
a. :ood, storm, earth7ua1e, ightning or other natura disasters;
b. Act of the pubic enemy, whether internationa or ci!i;
c. Act or omission of the shipper or owner of the goods;
d. Character of the goods or defects in the pac1ing;
e. <rder or act of competent pubic authority.
2. The court rued the affirmati!e. Artice 1732 of the &ew Ci!i Code a!oids any distinction between
one whose principa business acti!ity is the carrying of persons or goods or both and one who
does such carrying ony as an anciary acti!ity. (t aso a!oids a distinction between a person or
enterprise offering transportation ser!ices on a reguar or schedued basis and one offering such
ser!ices on an occasiona, episodic, and unschedued basis.
Planters Prod!cts, *nc# v# Co!rt of Appeals
G#$# No# 1,1-,3
3
)acts
+anters +roducts .+anters/ purchased from ,itsubishi (nternationa Corporation of 2#A of 3,444
metric tons of urea fertii-er which the atter shipped abroad the cargo !esse owned by pri!ate
respondent =yosei =isin =abushi1i =aisha .====/ from America to La 2nion. +rior to its !oyage, a time
charter party was entered into between ,itusbishi as shipper>charterer and ==== as ship0owner. After
the 2rea fertii-er was oaded in bu1 by ste!edored hired by the shipper, the stee hatches were cosed
with hea!y iron ids which remained cosed during the entire 6ourney.
2pon arri!a of the !esse, the hatches were opened with the use of the !esse boom. +anters
unoaded the cargo from the hoders into the stee bodied dump truc1s. *ach time the dump truc1s were
fied up, its oad of urea was co!ered with tarpauin before it was transported to the consignee?s
warehouse ocated some .%4/ fifty meteres from the wharf. (t too1 .11/ ee!en days from panters to
unoad the cargo. The report submitted by pri!ate marine and cargo sur!eyors re!eaed a shortage in the
cargo, and some portion in the cargo was contaminated with dirt, rendering the same unfit for commerce.
+anters fied an action for damages bu the appeate court abso!ed the carrier from iabiity.
*ss!es
1. 8hether or not the respondent is a common carrier.
2. 8hether or not the respondent is iabe for damages.
+eld
1. The court rues the affirmati!e as to the respondent being a common carrier. The term common
carrier is defined in Artice 1732 of the Ci!i Code. The definition refers to carriers either by and,
water, or air which hods themse!es out as ready to engage in carrying goods on transporting
passengers or both for compensation as a pubic empoyment and not as a casua occupation; if
the underta1ing is a singe transaction, not a part of the genera business or corporation, athough
in!o!ing the carriage of goods for a fee, then the person or corporation offering such ser!ices is
a pri!ate carrier. (n the case at bar respondent carrier transports goods indiscriminatey for a
persons. @eing such, he is a common carrier.
2. The court rues the negati!e. True, being a common carrier, respondent must ha!e obser!ed
e"traordinary diigence o!er the goods it carries. (n the case at bar it has been pro!en that the
respondent has sufficienty o!ercome this, by cear and con!incing proof, the prima facie
presumption of negigence, due to the manner of storage of the goas during the !ogyage. (n fact,
it was pointed out that there was a ris1 in shipping the urea due to its character.
)#C# )isher v# .angco /teamship Company
G#$# No# %&(,0-
4
)acts
<n Aune 14, 1312, the directors of Bangco #teamship Company which is duy icensced to
engage in the coastwise trade in the +hiippines, adopted a resoution which was thereafter ratified and
affirmed by the sharehoders of the company e"pressy decaring and pro!iding that the casses of
merchandise to be carried by the company in its business as a common carrier to incude dynamite,
power or other e"posi!es and other e"pressy prohibiting the officers, agents, and ser!atnts of the
company from offering to carry or accepting to carry said artices.
(n !iew of the resoution passed the coector of customs suspended the issuance of cearances
for the !esses uness they aow the carriage of such artices. )ence, herein petitioner a ma6or
stoc1hoder fied a petition for prohibition.
*ss!e
8hether or not the resoution of Banco is 6ustified.
+eld
The court rues the negati!e. Common carrier in the 6urisdiction cannot awfuy decine to accept
a particuar cass of goods, uness it appears that for some sufficient reason the discrimination is
reasonabe and necessary. Bangco #teamships Company has not met those conditions.
The nature of the business of a common carrier as a pubic empoyment is such that it is within
the power of the state to impose such 6ust reguation in the interest of the pubic as the egistaors may
deem proper.
1nited /tates v# 2!ina3on
G#$# No# (6(6
5
)acts
)erein defendants were charged with the !ioation of Act &o. 3C. The accused herein ha!e been
engaged for more than .$/ four years in the transportation of passengers and merchandise in the port of
Curimao, in the oading and unoading of passengers and merchandise by means of !oyages from the
shore. The facts state that sometime in #eptember 1312, the said accused, by means of !oyages,
unoaded %,3C' sac1s of rice beonging to the pro!incia go!ernment of (ocos &orte where they reguary
charge ' cents for the unoading and oading of each pac1age of merchandise.
*ss!e
8hether or not the pro!incia go!ernment was pre6udiced by the preferentia pri!ieges in fa!or of
the shippers.
+eld
The court rues the affirmati!e. #ec. % of Act &o. 3C, pro!ides that any person or corporation who
may be damaged by the common carrier of any matter or things prohibited sha be entited to sue or
reco!er a damges so incurred. (t is not beie!ed that that aw prohibits common carrier from ma1ing
specia rates for handing merchandise when the same are made for the purpose of increasing the
business which are regarded as sound. That does not re7uire absoute e7uaity in a cases; it ony
appies where the ser!ices perfomed in the different cases are substantiay the same and conditions
simiar.
%oadstar /hipping Co# *nc# v# Co!rt of Appelas
G#$# No# 131621
6
)acts
<n &o!ember 13, 13C$ herein petitioner shipping company carried, a shipment of .3/ three bu1
items on board its ,>D Chero1ee, which amounted to +',4'7,17C.44, the same being insured by the
,ania (nsurance Co. .,(C/. The !esse in turn was insured by +rudentia 5uarantee and Assurance, (nc.
of +$ miion. 2nfortunatey the ship san1 in the are of Limasawa.
,(C setted the insurance with the consignee and as1ed for the subrogation receipt, then ,(C
fied a caim against Loadstar. +5A( aeging the sin1ing was due to the faut and negigence of Loadstar.
(n their defense, Loadstar set up the argument of force ma6uere. +5A( was dropped from the case afer
pro!ing ,(C had no ocus standi against them. (nter aia a other defenses, Loadstar argues that it
cannot be considered a common carrier because it was issued a certificate of pubic con!enience and
that it carried a particuar type of cargo for a particuar shipper.
*ss!es
1. 8hether or not Loadstar?s Chero1ee is a common carrier;
2. 8heter or not, considering the type of carriage the ,>D is, the re7uired amount of diigence was
obser!ed;
+eld
1. The court rues the affirmati!e that the ,>D Chero1ee is a common carrier. (t is not necessary that
the carrier be issued a certificate of pubic con!enience and their pubic character is not atered by
the fact that the carriage of the goods in 7uestion was periodic, occasiona, episodic, or
unschedued. Additionay, the second argument of Loadstar must fai; that the ,>D Chero1ee was
carrying a particuar type of cargo for one shipper which appears to be purey coincidenta is not
reason enough to con!ert a !esse that is a common carrier to a pri!ate one, especiay where, as
in the case, it was shown that the !esse was aso carrying passengers.
2. The court rues the negati!e. Loadstar shoud ha!e e"ercised e"traordinary diigence since it is a
common carrier; and the fact that it sti aowed the !oyage despite the 1nowedge of a typhoon
present counters their e"ercise of e"tra ordinary diigence re7uired.
)irst Philippine *nd!strial Corp# v# Co!rt of Appeals
G#$# No# 12-0'(
7
)acts
)erein petitioner appied for a mayor?s permit to operate its pipeine concession. @efore such
permit was issued, the City treasurer re7uired petitioner to pay oca ta". (n order not to hamper its
operations, petitioner paid the ta" under protest.
Then the petitioner fied a etter protest addressed to the treasurer caiming e"emption from
payment of the ta" because according to the Loca 5o!ernment Code of 1331, transportation contractors
are not incuded in the enumeration of contractors which are iabe to pay ta"es. The city treasurer denied
the protest. The petitioner fied a case before the tria court for ta" refund, howe!er it was subse7uenty
dismissed. )ence, this petition.
*ss!e
8hether or not the petitioner is a common carrier as contempated to be e"empted under the aw.
+eld
The court rues the affirmati!e. The court enunciated the .$/ tests in determining whether the
carrier is that of a common carrier9
a. must be engaged int eh business of carrying goods for other as a pubic empoyment and
must hod itsef out as ready to engage in the transportation of goods generay as a business
and not a casua occupation
b. it must underta1e to carry goods of the 1ind which its business is confined;
c. it must underta1e the method by which his business is conducted and o!er its estabished
roads;
d. the transportation must be for hire.
(n the case at bar, the court categoricay rued that the transporting of oi through pipeines is sti
considered to be an acti!ity of a common carrier. The petitioner is a common carrier because it is
engaged in the business of transporting passengers or goods; i1e petroeum. (t underta1es to carry for
a persons indifferenty. The fact that the petitioner has imited cientee does not e"cude it from the
definition of common carrier. 2nder the petroeum act of the +hiippines, the petitioner is considered a
common carrier e!en if it is a pipeine concessionaire.
And e!en as regards the petroeum operation, it is of pubic utiity. #pecificay, the @ureau of
(nterna Ee!enue considers petitioners as common carrier not sub6ect to withhoding ta".
+ome *ns!rance Co# v American /teamship Agencies
23 /C$A 2' April ', 106(
)acts
8
Consorcio +as7uero De +erse of #outh America shipped a freight of 21,7$4 6ute bags of
+eru!ian fish mea through the ## Crowborough consigned to the #am ,igue @rewery and insured by
)ome (nsurance Company for F242,%4%.44. (t arri!ed in ,ania on ,arch 7, 13'3 and was oaded into
the ighters of Lu-on #te!edoring Company. )owe!er, it arri!ed with shortages. Thus #,@ demanded
that )ome (nsurance pay the caim of +1$,444.44. )ome (nsurance on the other hand fied for the
reco!ery of the +1$,444.44 from Lu-on #te!edoring. The Court of :irst (nstance abso!ed Lu-on
#te!edoring, but ordered the American #teamship Agencies to reimburse the amount to )ome
(nsurance, basing the ruing on Art. %C7 of the Code of Commerce which ma1es the ship agent ci!iy
iabe for damages in fa!or of third persons due to conduct of carrier?s captain and that the stipuation in
the charter party e"empting the owner from iabiity is against pubic poicy under Artice 17$$ of the &ew
Ci!i Code.
*ss!e
@etween the pro!isions of the &ew Ci!i Code and the Code of Commerce, which shoud appy.
+eld
The court rues the affirmati!e as to the non0appicabiity of the prohibition of the e"emption of the
carrier from iabiity. The pro!isions of our Ci!i Code on common carriers were ta1en from Ango0
American Law. 2nder American Aurisprudence, a common carrier underta1es to carry a specia cargo or
chartered to a specia person ony, becomes a pri!ate carrier. And thus, as a pri!ate carrier, a stipuation
e"empting the owner from iabiity for the negigence of its agent is not against pubic poicy. The reason
is that there is no strict pubic poicy appied.
/an Pa4lo v# PAN5$ANC6 /o!th 78press
G#$# No# %&61'61
)acts
9
Defendant +A&TEA&C< panned to operate a ferryboat ser!ice between ,atnog and Aen as a
common carrier. (t re7uested authority from the ,AE(&A to purchase the !esse ,>D @ac1 Doube in
accordance with the procedure pro!ided for by aw on such appication for a certificate of pubic
con!enience .C+C/. (ts re7uest was denied as the said routes are ade7uatey ser!iced by e"isting
authori-ed operators such as the Cardina #hipping Company. )owe!er, the defendant continued to
purchase the !esse and started operating. Defendant contends that what it proposed was to operate a
+E(DAT* :*EEB @<AT ser!ice across a Gsma body of waterH speciay for its buses and truc1s from
,atnog to Aen, Tacoban for the purpose of continuing the highway. Thus, the ferry is merey an
incident to its franchise to con!ey passengers and cargo from +asay to Tacoban and need not secure a
separate C+C. Defendants aso contend that they are not a +2@L(C :*EEB @<AT as they do not
accept wa1ins.
The @oard of Transportation .@<T/ en6oined +A&TEA&C< from operating the ferry. The
petitioner aong with Cardina #hipping interposed their opposition as they are abe to ser!ice the riding
pubic. @<T sought for the opinion of then ,inister of Austice Eicardo +uno that rendered and affirmati!e
opinion in fa!or of +A&TEAC<. Austice +uno ga!e an opinion to the effect that there is no need for bus
operators to secure a separate C+C to operate a ferryboat ser!ice. @<T rendered its decision hoding
that the ferry boat ser!ice is part of its C+C to operate from +asay to #amar>Leyte by amending
+A&TEA&C<Is C+C. +etitioners fied for motions of consideration and were denied by @<T.
*ss!e
8hether or not the water transport ser!ice is a ferry ser!ice for purpose of continuing the highway
or a coastwise> interand ser!ice.
+eld
The court hods that the water transport ser!ice between ,atnog and Aen is not a ferryboat
ser!ice but a coastwise or interand shipping ser!ice. 2nder no circumstance can the sea between
,atnog and Aen be considered a continuation of the highway. 8hie a ferry boat ser!ice has been
considered as a continuation of the highway when crossing ri!ers or e!en a1es, which are sma body of
waters 0 separating the and, howe!er, ,atnog and Aen are separated by an open sea it can not be
considered as a continuation of the highway. Eespondent +A&TEA&C< shoud secure a separate C+C
for the operation of an interisand or coastwise shipping ser!ice in accordance with the pro!isions of aw.
(ts C+C as a bus transportation cannot be merey amended to incude this water ser!ice under the guise
that it is a mere pri!ate ferry ser!ice.
Argumento, +A&TEA&C< is a a ferry ser!ice, it is absurd to be caed a +ri!ate ferry ser!ice. (t is
confusing that respondent +A&TEA&C< caims that it is a pri!ate carrier in reation to its ferry ser!ice but
it affirms its obigation as a common carrier to obser!e e"traordinary diigence and !igiance in the
transportation of its passengers and goods. @y considering that the authority granted to +A&TEA&C< is
to operate a pri!ate ferry, it can sti assert that it cannot be hed to account as a common carrier towards
its passengers and cargo. #uch an anomaous situation that wi 6eopardi-e the safety and interests of its
passengers and the cargo owners cannot be aowed.
National /teel Corporation v# Co!rt of Appeals
G#$# Nos# 1122(791123-,
)acts
10
)erein petitioner of 5.E. &o. 1123%4, Dasons #hipping entered into a contract of afreightment on
contract of !ogage$ charter ine with the petitioner of the other consoidated case, &ationa #tee
Corporation .&#C/, whereby the atter hired Dason?s !esse, the ,>D Dasons ( to ma1e a !oyage to oad
stee products from (agan City to ,ania. 2nder the agreement, the oading and unoading of the
cargoes are the responsibiity of the charter and the owner sha no be iabe of the oss or damage of the
cargo arising from the unseaworthiness uness counse by want of diigence on the part of the owners to
ma1e the !esse seaworthy and to secure that it is propery manned, e7uipped and suppied.
2pon arri!a on August 12, 137$, it was found that neary a the tin pates and hot roed sheets
were wet and rusty. The cargo was unoaded by the charterer )ence the petitioner fied for a caim of
damages amounting to +3$1,1$%.%C, aeging the negigence of the master and crew of the ship.
*ss!e
8hether or not Dasons #hipping is made iabe notwithstanding the Charter +arty stipuations.
+eld
The courts rue the negati!e. At bottom, this appea reay hinges on a factua issue as to then,
how, and who caused the damages to the cargo. Eanged against &#C are two formidabe truhs. :irst, it
was found that such damage was brought about during the unoading process when the rain seeped into
the cargo due to the negigence of the ste!edores empoyed by it.
#econd and more importanty, the agreement between the parties GThe Contact of Doyage
Charter +arty for )ireH paced the burden of proof of such oss or damage upon the shipper, not upon the
ship owner. #uch stipuation, whie disad!antageous to the &#C, is !aid because the parties entered into
a contract of pri!ate charter, not one of common carriage.
@asic too is the doctrine that courts cannot reie!e a party from the effects of a pri!ate contract
fuy entered into, on the ground that it is aegedy one0sided or unfair to the paintiff. (t has been hed that
the true test of a common carrier of passengers>goods is the carriage of the same, pro!ided it has space,
for a who opt to a!ai for its transportation ser!ice for a fee.
:il!sang ;ayo 1no %a4or Center vs# Garcia <r#
G#$# No# 11-3(1
)acts
11
+etition for certiorari assais the constitutionaity and !aidity of circuars reeased by the Land
Transportation :ranchising and Eeguatory @oard .LT:E@/. #uch circuars authori-ed pro!incia bus and
6eepney operators to increase or decrease the prescribed transportation fares without appication with the
LT:E@ fro a period of one year. Li1ewise, it estabished a presumption of pubic need for certificates of
pubic con!enience .C+C/. +etitioner =,2 caims howe!er that the authority gi!en by LT:E@ to
pro!incia bus operators to set a fare range is unconstitutiona, in!aid and iega. Aso, the estabishment
of the presumption of pubic need for a proposed transport ser!ice without ha!ing to pro!e pubic
necessity, is i1ewise iega it being !ioati!e of +ubic #er!ice Act and the Eues of Court.
*ss!e
8hether or not such circuars reeased by the LT:E@ is !aid.
+eld
The #upreme Court hed that the authority gi!en by the LT:E@ to the pro!incia bus operators to
set a fare range o!er and abo!e the authori-ed e"isting fare is iega and in!aid. This is tantamount to
an undue deegation of egisati!e authority. The poicy of aowing the pro!incia bus operators to
change and increase their fares woud resut not ony to a chaotic situation but aso to an anarchic state
of affairs. This woud ea!e the riding pubic at the mercy of transport operators who may change fares
e!ery hour, e!ery day, e!ery month as he may wish to do so. The #upreme Court hed that rate0fi"ing is
a deicate and sensiti!e go!ernment function that re7uires de"terity of 6udgment with a setted goa of
arri!ing at a 6ust and reasonabe rate accepted by both the pubic and the utiity. 8ith regard to the
presumption of pubic need, C+C is an authori-ation granted by the LT:E@ for the operation of and
transportation ser!ices for pubic use as re7uired by aw. +ubic con!enience or necessity generay
means something fitting for pubic need. Thus in the case at bar, it was founded that the LT:E@
committed gra!e abuse of discretion is issuing orders to reguate the transport sector. #uch circuars are
deemed nu and !oid and of no force or effect.
5atad v# Garcia
G#$# No# 11'222
)acts
12
*D#A LET Consortium, a foreign corporation, was awarded with the construction of Light Eai
Transit ((( .LET (((/ as the ony bidder who has 7uaified with the re7uirements pro!ided by the +@AC. The
said foreign corporation wi construct the LET ((( in a G@uit0Lease0TransferH agreement that such pubic
utiity wi be eased by the go!ernment through the Department of Transportation and Communication
.D<TC/ and then it woud be subse7uenty sod by the corporation to the go!ernment. An ob6ection was
raised by the petitioner stating that the awarding of the bid to the said corporation is against the
Constitution. (t was pro!ided in the Constitution that ony :iipinos are entited to operate a pubic utiity
such as the LET (((.
*ss!e
8hether or not the awarding of the bid to *D#A LET Consortium is against the Constitution.
+eld
The Court hed that there is a distinction in the GoperationH of a pubic utiity and ownership in the
faciities and e7uipment to ser!e the pubic. The *D#A LET Consortium fa under the atter because the
said corporation wi not operate the pubic utiity. The said corporation wi ony own the faciities and
e7uipment such as the train carts, the raiings and the booths. (n addition, such ownership wi then be
subse7uenty transferred to the go!ernment under G@uit0Lease0TransferH agreement. 8ith that said, the
operation of the pubic utiity wi fa to the :iipinos through its go!ernment. Therefore, the awarding of
the bid to *D#A LET Consortium is not against the pro!isions of the Constitution.
/amar ;ining Co# v# Norde!tscher %loyd = C#)# /harp = Co# *nc#
G#$# No# %&2(673
)acts
13
)erein petitioner and defendant entered into a contract where the former agreed to ship a crate of
optima wieded wedge wire see!es, with the @i of Lading indicated the effecti!e transportation from
5ermany to ,ania ony.
:rom ,ania, the crate was to be further transported to Da!ao. The carrier had unoaded and
dei!ered the goods in the rouded warehouse in ,ania.
2nfortunatey, the goods were ost and ne!er reached Da!ao City.
*ss!e
8hether or not herein petitioner is iabe for the oss.
+eld
The court rues the negati!e, when the carrier under the terms of the @i of Lading had dei!ered
the goods at the port of destination, at that point he merey becomes the agent of the consignee and
ceases to be iabe for any oss a damage of goods transported.
:urthermore, there is no appicabiity of Artice 173C of the &ew Ci!i Code, which contempates
iabiity of the carrier of the shipment of goods whie stored in the warehouse of the carrier. )owe!er, in
the present case, the warehouse beonged to a third person.
7astern /hipping %ines vs# *AC
1-, /C$A '63
)acts
14
(n 5E '34$$, the ,># A#(AT(CA, a !esse operated by *astern #hipping Lines oaded at =obe,
Aapan for ,ania9
.1/ %,444 pieces of caori-ed ance pipes in 2C pac1ages !aued at +2%',433.44 consigned to
+hiippine @ooming ,is Co., (nc.,
.2/ 7 cases of spare parts !aued at +32,3'1.7%, consigned to Centra Te"tie ,is, (nc.
@oth sets of goods were insured for their !aue with De!eopment (nsurance and #urety
Corporation.
(n 5E 71$7C, the same !esse too1 on board 9
1. 12C cartons of garment fabrics and accessories, in 2 containers, consigned to ,ari!ees
Appare Corporation
2. two cases of sur!eying instruments consigned to Aman *nterprises and 5enera
,erchandise.
The 12C cartons were insured for their !aue by &isshin :ire J ,arine (nsurance Co., for
2#F$',%C3.44. The 2 cases by Dowa :ire J ,arine (nsurance Co., Ltd., for 2#F11,3C%.44. *nroute for
=obe, Aapan, to ,ania, the !esse caught fire and san1, resuting in the tota oss of ship and cargo. The
respecti!e (nsurers paid the corresponding marine insurance !aues to the consignees concerned and
were thus subrogated unto the rights of the atter as the insured.
*astern #hipping denied iabiity mainy on the ground that the oss was due to an e"traordinary
fortuitous e!ent; hence, it is not iabe under the aw. The Tria Court rendered 6udgment in fa!or of
De!eopment (nsurance in the amounts of +2%',433.44 and +32,3'1.7%, respecti!ey, with ega interest,
pus +3%,444.44 as attorney?s fees and costs. *astern #hipping too1 an appea to the then Court of
Appeas which, on 1$ August 13C$, affirmed the decision of the tria court. *astern #hipping fied a
petition for re!iew on certiorari.
&isshin, and Dowa, as subrogees of the insured, fied suit against *astern #hipping for the
reco!ery of the insured !aue of the cargo ost imputing unseaworthiness of the ship and non0obser!ance
of e"traordinary diigence by *astern #hipping. *astern #hipping denied iabiity on the principa grounds
that the fire which caused the sin1ing of the ship is an e"empting circumstance under #ection $.2/ .b/ of
the Carriage of 5oods by #ea Act .C<5#A/; and that when the oss of fire is estabished, the burden of
pro!ing negigence of the !esse is shifted to the cargo shipper. Tria Court rendered 6udgment in fa!or of
&isshin and Dowa. CA affirmed decision. )ence this petition on certiorari.
*ss!e
8hether or not the carrier e"ercised e"traordinary diigence.
+eld
*astern #hipping sha pay the De!eopment (nsurance the amount of +2%',433 for the 2C
pac1ages of caori-ed ance pipes, and +71,%$4 for the 7 cases of spare parts, with interest at the ega
rate from the date of the fiing of the Compaint on 13 Aune 137C, pus +%,444 as attorney?s fees, and the
costs. The Court, on the other hand, in 5E 71$7C, affirmed the 6udgment.
The e!idence of the defendant did not show that e"traordinary diigence was obser!ed by the
!esse to pre!ent the occurrence of fire at hatches nos. 2 and 3. Defendant?s e!idence did not i1ewise
show the amount of diigence made by the crew, on orders, in the care of the cargoes. 8hat appears is
15
that after the cargoes were stored in the hatches, no reguar inspection was made as to their condition
during the !oyage. The compete defense afforded by the C<5#A when oss resuts from fire is
una!aiing to *astern #hipping. The Carriage of 5oods by #ea Act .C<5#A/, a specia aw, is merey
suppetory to the pro!isions of the Ci!i Code The fire may not be considered a natura disaster or
caamity, as it arises amost in!ariaby from some act of man or by human means. (t does not fa within
the category of an act of 5od uness caused by ightning or by other natura disaster or caamity. (t may
e!en be caused by the actua faut or pri!ity of the carrier.
National >evelopment Company v# Co!rt of Appeals
16' /C$A -03
)acts
16
(n accordance with a memorandum entered into between defendants &ationa De!eopment
Company .&DC/ and ,aritime Company of the +hiippines .,C+/ on #eptember 13, 13'2, defendant
&DC as the first preferred mortgagee of three ocean0going !esses incuding one the name GDoKa &atiH
appointed defendant ,C+ as its agent to manage and operate said !esses in its behaf.The *. +hiipp
Corporation of the &ew Bor1 oaded on board the !esse GDoKa &atiH at #an :rancisco, Caifornia, a tota
of 1,244 baes of American raw cotton consigned to ,ania @an1ing Corporation, ,ania and the
+eope?s @an1 and Trust Company acting for and in behaf of the +an Asiatic Commercia Company, (nc.,
who represents Ei!erside ,is Corporation.The !esse figured in a coision at (se @ay, Aapan with a
6apanese !esse as a resut of which %%4 baes of aforesaid cargo were ost and>or destroyed The
damage and ost cargo was worth +3$$,377.C' which amount, the paintiff De!eopment (nsurance and
#urety Corporation as insurer, paid to the Ei!erside ,is Corporation as hoder of the negotiabe bis of
ading duy endorsed.The insurer fied before the C:( of ,ania an action for the reco!ery of said amount
from &DC and ,C+.
*ss!e
8hether or not the aw of country or port of destination sha appy.
+eld
(n *aster #hipping Lines, (nc., !. (AC, 1%4 #CEA $'3 .13C7/, we hed under simiar
circumstances that the aw of the country to which the goods are to be transported go!erns the iabiity of
the common carrier in case of their oss, destruction or deterioration. Thus, the rue was specificay aid
down that for cargoes transported from Aapan to the +hiippines, the iabiity of the carrier is go!erned
primariy by the Ci!i Code and in a matters not reguated by said Code, the rights and obigations of
common carrier sha be go!erned by the Code of Commerce and by especia aws .Artice 17'', Ci!i
Code/. )ence, the carriage of 5oods by #ea Act, a specia aw, is merey suppetory to the pro!isions of
the Ci!i Code. The goods in 7uestion were being transported from #an :rancisco, Caifornia and To1yo,
Aapan to the +hiippines and that they were ost or damaged due to a coision which was found to ha!e
been caused by negigence or faut of both captains of the coiding !esses.2nder the abo!e ruing, it is
e!ident that aws of the +hiippines wi appy, and it is immateria that the coision actuay occurred in
foreign waters, such as (se @ay, Aapan. (t appears, howe!er, that coision fas among matters not
specificay reguated by the Ci!i Code, so that no re!ersibe error can be found in respondent
courtLMNs appication to the case at bar of Artices C2' to C33, @oo1 Three of the Code of Commerce,
which dea e"cusi!ey with coision of !esses. Artice C2' of the Code of Commerce pro!ides that where
coision is imputabe to the personne of a !esse, the owner of the !esse at faut sha indemnify the
osses and damages incurred after an e"pert appraisa. @ut more in point to the instant case in is Artice
C27 of the same Code, which pro!ides that if the coision is imputabe to both !esses, each one sha
suffer its own damages and both sha be soidariy responsibe for the osses and damages suffered by
their cargoes.There is, therefore, no room for &DCs interpretation that the Code of Commerce shoud
appy ony to domestic trade and not to foreign trade.,C+ ne"t contends that it cannot be iabe soidariy
with &DC because it is merey the manager and operator of the !esse GDoKa &atiH, nor a ship agent. As
the genera managing agent, according, to ,C+, it can ony be iabe if it acted in e"cess of its authority.
The ,emorandum Agreement of #eptember 13, 13'2 shows that &DC appointed ,C+ as agent, a term
broad enough to incude the concept of ship agent in ,aritime Law. (n fact, ,C+ was e!en conferred a
the powers of the owner of the !esse, incuding the power to contract in the name of the &DC.
Conse7uenty, under the circumstances, ,C+ cannot escape iabiity. (t is we0setted that both the owner
and agent of the offending !esse are iabe for the damage done where both are impeaded.
17
18
Cases Applying Articles 173' ? 17'3
of the New Civil Code
@igilance 6ver Goods
of Common Carriers
Articles Applied
Art. 173$. Common carriers are responsibe for the oss, destruction, or deterioration of the goods,
uness the same is due to any of the foowing causes ony9
.1/ :ood, storm, earth7ua1e, ightning, or other natura disaster or caamity;
19
.2/ Act of the pubic enemy in war, whether internationa or ci!i;
.3/ Act of omission of the shipper or owner of the goods;
.$/ The character of the goods or defects in the pac1ing or in the containers;
.%/ <rder or act of competent pubic authority.
Art. 173%. (n a cases other than those mentioned in &os. 1, 2, 3, $, and % of the preceding artice, if the
goods are ost, destroyed or deteriorated, common carriers are presumed to ha!e been at faut or to
ha!e acted negigenty, uness they pro!e that they obser!ed e"traordinary diigence as re7uired in Artice
1733.
Art. 173'. The e"traordinary responsibiity of the common carrier asts from the time the goods are
unconditionay paced in the possession of, and recei!ed by the carrier for transportation unti the same
are dei!ered, actuay or constructi!ey, by the carrier to the consignee, or to the person who has a right
to recei!e them, without pre6udice to the pro!isions of Artice 173C.
Art. 1737. The common carrierIs duty to obser!e e"traordinary diigence o!er the goods remains in fu
force and effect e!en when they are temporariy unoaded or stored in transit, uness the shipper or
owner has made use of the right of stoppage in transitu.
Art. 173C. The e"traordinary iabiity of the common carrier continues to be operati!e e!en during the
time the goods are stored in a warehouse of the carrier at the pace of destination, unti the consignee
has been ad!ised of the arri!a of the goods and has had reasonabe opportunity thereafter to remo!e
them or otherwise dispose of them.
Art. 1733. (n order that the common carrier may be e"empted from responsibiity, the natura disaster
must ha!e been the pro"imate and ony cause of the oss. )owe!er, the common carrier must e"ercise
due diigence to pre!ent or minimi-e oss before, during and after the occurrence of food, storm or other
natura disaster in order that the common carrier may be e"empted from iabiity for the oss, destruction,
or deterioration of the goods. The same duty is incumbent upon the common carrier in case of an act of
the pubic enemy referred to in Artice 173$, &o. 2.
Art. 17$4. (f the common carrier negigenty incurs in deay in transporting the goods, a natura disaster
sha not free such carrier from responsibiity.
20
Art. 17$1. (f the shipper or owner merey contributed to the oss, destruction or deterioration of the goods,
the pro"imate cause thereof being the negigence of the common carrier, the atter sha be iabe in
damages, which howe!er, sha be e7uitaby reduced.
Art. 17$2. *!en if the oss, destruction, or deterioration of the goods shoud be caused by the character
of the goods, or the fauty nature of the pac1ing or of the containers, the common carrier must e"ercise
due diigence to foresta or essen the oss.
Art. 17$3. (f through the order of pubic authority the goods are sei-ed or destroyed, the common carrier
is not responsibe, pro!ided said pubic authority had power to issue the order.
Gelisan v# Alday
1-' /C$A 3((
)acts
21
)erein petitioner is @ien!enido 5eisan, is the owner of a freight truc1. )e and Eoberto *spiritu
entered into a contract under which *spiritu hired the freight truc1 5eisan for the purpose of hauing
sugar, four, and fertii-ers. (t aso stipuated that *spiritu sha bear the oss and damage attending the
goods to be haued by him.
@enito Aday, a truc1ing operator who 1new of *spiritu, had a contract to hau the fertii-ers of
Atas :ertii-er Corporation from +ier $, &orth )arborn, to ,andauyong.
Aday met *spiritu at the gate of +ier $ and the atter offered the use of his truc1 with the dri!er
and heper. Aday accepted and instructed the chec1er to et *spiritu hau fertii-er.
*spiritu managed 244 bags of fertii-er per trip. The fertii-er was dei!ered to the dri!er and maid
with the necessary way bi receipt. )owe!er, *spiritu ne!er dei!ered the fertii-er to the Atas :ertii-er
bodega in ,andauyong.
)ence, Aday was compeed to pay for the oss of $44 tags to Atas :ertii-er Corporation and
fied a compaint against *spiritu and 5eisan with the C:( ,ania.
8hie the C:( rued that *spiritu aone is iabe, the Court of Appeas rued to incude 5eisan.
*ss!e
8hether or not 5eisan be hed soidariy iabe with *spiritu.
+eld
The court rues the affirmati!e, 5eisan being the registered owner of the truc1. The court has
hed in!ariaby in se!era decisions that the registered owner of a pubic ser!ice !ehice is responsibe for
damages that may arise from conse7uences incidenta to its operation or that may be caused by any of
the passengers therein.
The caim that the petitioner is not iabe in !iew of the ease contract e"ecuted by and between
him and Eoberto *spiritu which e"empts him from iabiity to third persons cannot be sustained because
it appears that the ease contract, ad!erted to, had not been appro!ed by the +ubic Dercric Commision.
(t is setted in our 6urisprudence that if a property co!ered by a franchise is transferred or eased
to another without the re7uisite appro!a, the transfer is not binding upon the pubic and third persons,
)owe!er, 5eisan is not without recourse as he may be indemnified by *spiritu the amount he
many ha!e been udered to pay for the damages.

Aenedicto v# *ntermediate Appellate Co!rt
1(7 /C$A -'7
22
)acts
)erein pri!ate respondent 5reenhis 8ood (ndustries Co., (nc. operates saw hi in Ouirino.
#ometime in ,ay 13C4, pri!ate respondents bound itsef to se and dei!er to @ue #tar ,ahogany, (nc.
.@ue #tar/, a company in @uacan 144,444 board feet of sawn umber with the understanding that an
initia dei!ery woud be made on ,ay 1%, 13C4. to effect its first dei!ery, pri!ate respondents? resident
manager, Dominador Cru-, contracted Dirgitio Licuden, the dri!ear of a cargo truc1 to transport its sawn
umber to the consignee, @ue #tar, in Daen-uea, @uacan. The cargo truc1 was registered in the name
of herein petitioner Luisa @enedicto, the proprietor of ,acorem Truc1ing, a business enterprise engaged
in hauing freight.
<n ,ay 1%, 13C4, Cru- in the presence and with the consent of the dri!er Licuden, super!ised
the oading of san umber with in!oice aboard the cargo truc1. Thereafter, the manager of @ue #tar
caed up the manager of 5reenhis informing the former that the sawn umber had not yet arri!ed in
@uacan. The manager of 5reenhis was this informed. #ti, @ue #tar was constrained to oo1 for other
suppiers.
Thus 5reenhis fied a crimina case against Luciden for *stafa and aso against @enedicto for
reco!ery of the !aue of the ost sawn umber pus damages. The ETC rued against @enedicto and
Luciden. )ence this petition from the (AC.
*ss!e
8hether or not @enedicto, being the registered owner of the truc1 shoud be hed iabe for the
!aue of the undei!ered or ost sawn umber.
+eld
The court rues the affirmati!e. There is no dispute that petitioner @enedicto has been hoding
hersef out to the pubic as engaged in the business of hauing or transporting goods for hire or
compensation. (n sum, @enedicto is a common carrier.
The pre!aiing doctrine on common carriers ma1es the registered owner iabe for conse7uences
fowing from the operations of the carrier , e!en though the specific !ehice in!o!ed may ha!e aready
been transferred to another person. The doctrine rests upon the principe that in deaing with !ehices
registered under the +ubic #er!ice Law, the pubic has the right to assume that the registered owner is
the actua or awfu owner thereof.
(t woud be !ery difficut and often impossibe as a practica matter, for members of the genera
pubic to enforce their right of action against those that may ha!e inficted in6uries shoud they be
re7uired to pro!e who the actua owner is. The registered owner is not aowed to deny iabiity by pro!ing
the identity of the aeged transferee.

Philtranco /ervice 7nterprise v# Co!rt of Appeals
273 /C$A -63
23
)acts
The !ictim herein, Eamon Asuesta was riding in his easy rider tricyce aong Cabayog City. Aso
in the city, herein defendant +hitranco?s bus was dri!en by defendant Eogasiones Doira ,anibing was
being pushed by some persons in order to start its engine. As the bus was pushed, its engine started
thereby the bus continued on its running motion and it occurred at the time when Eamon Asuesta, who
was sti riding on his bicyce was directy .was/ in front of the said bus. Due to the abrupt start of the bus?
engine, it thereby bumped on the !ictim Eamon. As a resut, he fe and was run o!er by the bus
#ti, the bus did not hat after hitting the !ictim. Thereafter +>#gt. Babao, who was then 6ogging
approached the dri!er defendant and signaed him to stop, but the dri!er ony stopped when the former
introduced himsef as a poice officer. The tria court rendered a decision ordering the petitioner
.+hitranco/ to 6ointy and se!eray pay the pri!ate respondents. <n appea, the CA affirmed the decision.
*ss!e
8hether or not the court erred in hoding +hitranco iabe being the registered owner of a pubic
ser!ice for the tortuous act of the dri!er.
+eld
The courts rued the negati!e. The Appeate court was correct in hoding herein petitioner iabe.
Artice 217' of the &ew Ci!i Code pro!ides that Gwhoe!er by act or omission causes damage to another,
these being faut or negigence, is obigated to pay for the damage done.H #uch faut or negigence, if
there is no pre0e"isting contractua reation between the parties is caed a 7uasi0deict. :urther, Artice
21C4 of the Ci!i Code states that GThe obigation imposed by Artice 217' is demandabe not ony for
ones owns acts or omissions, but for whom one is responsibe.H
(n the case at bar, the iabiity of the registered owner of a pubic ser!ice !ehice, i1e petitioner
+hitranco, for damages arising from the tortuous acts of the dri!er are primary, direct and 6oint and
soidary, its ony recourse if the 6udgement for damages is satisfied by it is to be reco!ered what it has
paid from its empoyee who committed the faut or negigence which ga!e rise to the action based on the
7uasi0deict.

/antos v# /i4!g
G#$# No# %&26(1-
)acts
24
#antos, who owns a 6eep, entered into an arrangement with Di!ad that the atter wi fictitiousy
purchase the 6eep so that #antos may use the Certificate of +ubic Con!enience .C+C/ of Di!ad.
#ubse7uenty, the #ibug was bumped by the said 6eep. Damages was then awarded to #ibug against
Di!ad and his dri!er. The #heriff of ,ania then e!ied the 6eep and sod it in a pubic auction. #antos then
fies of the third0party caim with the #heriff stating that he owns the 6eep and such sae is nu and !oid
because the property e!ied is not owned by Di!ad.
*ss!e
8hether or not the e!y and auction sae made on the 6eep is nu and !oid.
+eld
The Court hed that the agreement entered into by #antos and Di!ad is a G=abit #ystem,H which is
prohibited by aw. #uch system was not appro!ed by the +ubic #er!ice Commission .+#C/ therefore
Di!ad is the owner of the 6eep in ega contempation. #ince Di!ad is the owner of the 6eep according to
aw, then it cannot be said that the #heriff sei-ed the property beonging to a stranger. The auction sae is
sti !aid according to the Court.
%ita 7nterprises, *nc# v# *AC
25
G#$# No# %&6'603
)acts
#pouse ocampo purchased % toyota standard cars from deta motors in instaments to be used
as ta"i cabs. )owe!er, since they do not ha!e any franchise to operate a ta"icabs, they entered in an
agreement with ita enterprises for the use of the atter?s certificate of pubic con!enience, commony
1nown as =abit system. Later on, the ta"i coided into a motorcyce resuting to the death of the dri!er of
the motorcyce *meterio ,artin. Lita enterprises were ad6udged iabe and two of the ta"icabs were
e!ied upon and sod at a pubic auction. Thereafter the spouses ocampo decided to register the ta"icabs
in their own name and as1 Lita enterprise to return the papers but the atter refused. )ence this petition.
*ss!e
8hether or not the agreement between the parties is !aid.
+eld
The Court hed that the agreement between the parties is not !aid.2nder the arrangement of
1abit system, whereby a person who has been granted a certificate of con!enience aows another
person who owns motor !ehices to operate under such for a fee. The =abit #ystem has been identifies
as one of the root causes of pre!aence of graft and corruption in the go!ernment transportation offices.
(t is !oid being contrary to pubic poicy. And the parties ha!e no right of action against each other
because they are in pari deicto, the court wi ea!e them both where it finds them.

26
5e3a ;arBeting vs# *AC
1'( /C$A 3'7
)acts
Eespondent purchased from petitioner a tiya6e. #uch tiya6e amounted to a tota !aue of +C44.
Eespondent was abe to pay the purchase price but howe!er eft a baance of +1, 744. #ubse7uenty, a
chatte mortgage was e"ecuted o!er the said baance. (t was found by the court that the defendant
purchased the motorcyce for the purpose of engaging and using the same for transportation business.
To be abe to use the !ehice, the tricyce was attached to the paintiff?s transportation ine, which had the
franchise. (n effect, the registration certificate is under petitioner?s name. (t appeared that they agreed
that the petitioner woud underta1e the yeary registration of the unit in the Land Transportation
Commission.
*ss!e
8hether or not reief may be granted to any of the parties.
+eld
The #upreme Court hed that neither of the two parties are entited for reief. @oth parties ha!e
entered into an iega contract, thus no action arises out from any iicit transaction. The parties operated
under an agreement 1nown as the G=abit #ystemH. #uch system operates when a person who has been
granted a certificate of pubic con!enience aows another person who owns a motor !ehice to operate
under such franchise for a fee. A certificate of pubic con!enience is a specia pri!iege which cannot be
countenanced. This iegitimate arrangement has been recogni-ed as one of the root causes of the
fre7uency of graft and corruption in the go!ernment transportation affairs. (t is decared !oid it being
against pubic poicy. (t is a fundamenta principe that the court wi not aid either party to enforce an
iega contract and wi ea!e both where it finds them. The defects of the contract are permanent and
cannot be ratified. Thus, both parties are cupabe of their iicit indenture.
27
;ag4oo v# Aernardo
G#$# No# %&1670,
)acts
The petitioners fied an action against the respondent who is the owner of the 6eep and who is
being caimed to be responsibe for the death of the petitioner?s C year od chid in a !ehicuar accident.
The respondent denies being iabe for the death of the said chid because he caimed that there was no
empoyer0empoyee reationship between him and the dri!er of the said 6eep because of the boundary
system that they are foowing. The respondent caims that ony the dri!er shoud be iabe because the
reationship between the two is that of a essor0essee. Eespondent aso caims that he shoud not be
hed subsidiary iabe because the dri!er of the 6eep peaded guity to a crimina case without
respondent?s 1nowedge.
*ss!e
8hether or not the respondent is iabe for the death of the chid of the petitioners.
+eld
The Court hed that the respondent shoud be iabe because the ease he made with the dri!er of
the 6eep was not appro!ed by the +ubic #er!ice Commission .+#C/. #ince the ease was made without
such appro!a, the owner continued to be the operator of the 6eep in ega contempation and such was
responsibe for the conse7uences of his operation. The Court aso hed that the caim of the respondent
in stating that he did not 1now of the pea made by the dri!er, which pre!ented him from pro!ing his
innocence, was raised too ate in the case therefore the respondent is estopped from enforcing any caim
regarding to that matter.
28
7astern /hipping %ines vs# *AC
1%4 scra $'3
)acts (n 5E '34$$, the ,># A#(AT(CA, a !esse operated by *astern #hipping Lines oaded at
=obe, Aapan for ,ania9
1./ %,444 pieces of caori-ed ance pipes in 2C pac1ages !aued at +2%',433.44 consigned to
+hiippine @ooming ,is Co., (nc.,
2./ 7 cases of spare parts !aued at +32,3'1.7%, consigned to Centra Te"tie ,is, (nc.
@oth sets of goods were insured for their !aue with De!eopment
(nsurance and #urety Corporation.
(n 5E 71$7C, the same !esse too1 on board 9
3. 12C cartons of garment fabrics and accessories, in 2 containers, consigned to ,ari!ees
Appare Corporation
$. two cases of sur!eying instruments consigned to Aman *nterprises and 5enera
,erchandise.
The 12C cartons were insured for their !aue by &isshin :ire J ,arine (nsurance Co., for
2#F$',%C3.44. The 2 cases by Dowa :ire J ,arine (nsurance Co., Ltd., for 2#F11,3C%.44. *nroute for
=obe, Aapan, to ,ania, the !esse caught fire and san1, resuting in the tota oss of ship and cargo. The
respecti!e (nsurers paid the corresponding marine insurance !aues to the consignees concerned and
were thus subrogated unto the rights of the atter as the insured.
*astern #hipping denied iabiity mainy on the ground that the oss was due to an e"traordinary
fortuitous e!ent; hence, it is not iabe under the aw. The Tria Court rendered 6udgment in fa!or of
De!eopment (nsurance in the amounts of +2%',433.44 and +32,3'1.7%, respecti!ey, with ega interest,
pus +3%,444.44 as attorney?s fees and costs. *astern #hipping too1 an appea to the then Court of
Appeas which, on 1$ August 13C$, affirmed the decision of the tria court. *astern #hipping fied a
petition for re!iew on certiorari.
&isshin, and Dowa, as subrogees of the insured, fied suit against *astern #hipping for the
reco!ery of the insured !aue of the cargo ost imputing unseaworthiness of the ship and non0obser!ance
of e"traordinary diigence by *astern #hipping. *astern #hipping denied iabiity on the principa grounds
that the fire which caused the sin1ing of the ship is an e"empting circumstance under #ection $.2/ .b/ of
the Carriage of 5oods by #ea Act .C<5#A/; and that when the oss of fire is estabished, the burden of
pro!ing negigence of the !esse is shifted to the cargo shipper. Tria Court rendered 6udgment in fa!or of
&isshin and Dowa. CA affirmed decision. )ence this petition on certiorari.
*ss!e 8hether or not the carrier e"ercised e"traordinary diigence.
+eld *astern #hipping sha pay the De!eopment (nsurance the amount of +2%',433 for the 2C
pac1ages of caori-ed ance pipes, and +71,%$4 for the 7 cases of spare parts, with interest at the ega
rate from the date of the fiing of the Compaint on 13 Aune 137C, pus +%,444 as attorney?s fees, and the
costs. The Court, on the other hand, in 5E 71$7C, affirmed the 6udgment.
29
The e!idence of the defendant did not show that e"traordinary diigence was obser!ed by
the !esse to pre!ent the occurrence of fire at hatches nos. 2 and 3. Defendant?s e!idence did not
i1ewise show the amount of diigence made by the crew, on orders, in the care of the cargoes. 8hat
appears is that after the cargoes were stored in the hatches, no reguar inspection was made as to their
condition during the !oyage. The compete defense afforded by the C<5#A when oss resuts from fire is
una!aiing to *astern #hipping. The Carriage of 5oods by #ea Act .C<5#A/, a specia aw, is merey
suppetory to the pro!isions of the Ci!i Code The fire may not be considered a natura disaster or
caamity, as it arises amost in!ariaby from some act of man or by human means. (t does not fa within
the category of an act of 5od uness caused by ightning or by other natura disaster or caamity. (t may
e!en be caused by the actua faut or pri!ity of the carrier.
30
Gan"on v# Co!rt of Appeals
161 /C$A 6'6
)acts
5an-on, petitioner herein, was hired by Tumambing to hau 34% tons of scrap iron. The contract
was for the petitioner to transport the scrap iron to ,ania from @ataan. Tumambing dei!ered the scrap
iron to &i-a, captain of the ighter LCT G@atmanH, to board it on the same. The crew of the @atman started
to oad the iron, and when they were about hafway through, ,ayor Ad!incua arri!ed and demanded
+%,444 from Tumambing. The atter resisted and a heated argument started. ,ayor Ad!incua drew his
gun and fired at Tumambing. )e was brought to the hospita for treatment, uc1y for him the wound was
not fata.
A few days after this incident, the oading of the scrap meta was resumed. )owe!er, the acting
,ayor this time went to the port where the @atman was doc1ed. )e was accompanied by 3 poicemen
and he ordered Captain &i-a to dump the scrap iron where the ighter was doc1ed. 8hat was eft or the
iron was confiscated by the Acting ,ayor and brought to &A##C<. A receipt was issued showing that
the municipaity had ta1en custody of the scraps or iron.
Tumambing fied a case in order to reco!er damages for the oss that he sustained. The ower
court rendered a decision in fa!or of 5an-on. )owe!er, on appea the Court of Appeas re!ersed the
decision ordering 5an-on to pay Tumambing +%,C3% as actua damages, +%,444 for e"empary
damages and attorney?s fees as we. )ence this petition by 5an-on.
*ss!e
8hether or not 5an-on is iabe for the oss that Tumambing sustained.
+eld
The Court hed that 5an-on is iabe for the oss of Tumambing. The defense that the scraps of
iron were not unconditionay paced in his custody and contro is untenabe. +etitioner herein admits that
the scraps of iron were dei!ered to Captain &i-a by Tumambing in order to oad the same on the ighter
@atman. The empoyees of 5an-on recei!ed the scraps of iron on his behaf, therefore the scraps of
meta were paced in his custody and contro. 2pon the receipt of the scraps by the carrier in order
transport the same, the contract of carriage was perfected. 2pon perfection of the contract, the e"ercise
of e"traordinary diigence in caring for the goods sha aso commence to begin.
Artice 173C of the &CC pro!ides that the e"ercise of e"traordinary diigence sha cease ony
upon dei!ery to the consignee or to the person who has the right to recei!e the same. (n this case, there
was no dei!ery made to the consignee, therefore the carrier shoud ha!e e"ercised e"traordinary
diigence in ta1ing care of the scraps of iron. (t is irree!ant that the scraps of iron were ony partiay
oaded on the ighter. The scraps of iron were aready under the custody and contro of the carrier,
therefore he sha be iabe for its oss.
31
7astern /hipping %ines, *nc# vs# Co!rt of Appeals
106 /C$A -7,
)acts
## *astern Comet, owned by defendant *astern #hipping Lines was engaged in the business of
shipment from Aapan to the +hiippines. Through the ## *astern Comet, two fiber drums of ribofa!in
were shipped from Bo1ohama to ,ania. The shipment was discharged upon arri!a into the custody of
defendant ,etro +ort #er!ice, (nc. )owe!er, the atter refused to one drum after caiming that such
unwanted drum was in bad order. Defendant Aied @ro1erage Corporation recei!ed the shipment from
,etro +ort and detected that one drum was opened and without sea. The goods were then dei!ered to
the consignee?s warehouse. The atter noted that one drum contained spiages, whie the rest of the
contents were aduterated. As a conse7uence of the damage ,ercantie (nsurance Company paid the
consignee under its marine poicy insurance and instituted ci!i action against defendants as subrogee.
The Court of Appeas affirmed 6udgment hoding the common carrier, arrastre operator, and customs
bro1ers 6ointy and se!eray iabe.
*ss!e
8hether *astern #hipping Lines, (nc. can be hed se!eray and 6ointy iabe with ,etro +ort and
Aied bro1erage.
+eld
The #upreme Court hed that *satern #hipping Lines, (nc can be hed iabe. As what was
aready decided in :ireman?s :und (surance, Co. !s ,etro +ort #er!ice, (nc, the ega reationship
between the consignee and the arrastre operator is anaogous to that of a depositor and a
warehouseman. :urther e"pained, the reationship between the consignee and the common carrier is
comparabe to that of the consignee and the arrastre operator. #ince it is the duty of the Arrastre to ta1e
good care of the goods that are in its custody and to dei!er them in good condition to the consignee,
such responsibiity aso de!o!es upon the carrier. The duty of the consignee to guard the goods and
sheter it from destruction or impairment is aso shoudered by the common carrier. @oth are therefore
charged with the obigation to dei!er the goods in good condition to the consignee.
32
/arBies 5o!rs Philipines, *nc# vs# CA
G#$# No# 1,((07
)acts
:atima :ortades was a passenger of one of the buses of petitioner #ar1ies Tours bound for
Lega-pi City. #he had onboard uggages which contained important documents and persona
beongings. )er beongings were 1ept in the baggage compartment of the bus, but during a stopo!er at
Daet, it was disco!ered that ony one bag remained in the open compartment. The others, incuding
:atimaIs things, were missing and might ha!e dropped aong the way. Despite the suggestion of the
passengers to retrace its route in order to reco!er their uggage, the dri!er ne!ertheess negected them
and continued dri!ing. Conse7uenty, respondents fied a case to reco!er the !aue of the remaining ost
items, as we as mora and e"empary damages, attorneyIs fees and e"penses of itigation. They caimed
that the oss was due to petitionerIs faiure to obser!e e"traordinary diigence in the care of :atimaIs
uggage and that petitioner deat with them in bad faith from the start. +etitioner, on the other hand,
disowned any iabiity for the oss on the ground that :atima aegedy did not decare any e"cess
baggage upon boarding its bus.
*ss!e
8hether or not #ar1ies is iabe for damages for ost propery of its passengers.
+eld
The #upreme Court hed that #ar1ies is iabe for the oss. The cause of the oss was petitionerIs
negigence in not ensuring that the doors of the baggage compartment of its bus were securey fastened.
As a resut of this ac1 of care, amost the entire uggage was ost, to the pre6udice of the paying
passengers. Common carriers, from the nature of their business and for reasons of pubic poicy, are
bound to obser!e e"traordinary diigence in the !igiance o!er the goods transported by them. This
iabiity asts from the time the goods are unconditionay paced in the possession of, and recei!ed by the
carrier for transportation unti the same are dei!ered, actuay or constructi!ey, by the carrier to the
person who has a right to recei!e them. The awarding of actua damages to respondents is 6ust because
their efforts in reco!ering the ost items must be we compensated. ,ora and e"empary damages must
aso be awarded in the presence of bad faith and negigence on the part of the common carrier.
33
@alen"!ela +ardwood = *nd!strial /!pply v# Co!rt of Appeals
27' /C$A 6'2
)acts
Daen-uea )ardwood J (ndustria #uppy .D)(#/, paintiff herein, hired the ser!ices of #e!en
@rothers #hipping Corporation .#@C/ to transport 3$4 round ogs. D)(# shipped the ogs at the port in
(sabea and said ogs were paced on the ,>D #e!en Ambassador owned by #@C for transport. D)(#
insured the ogs against oss or damage with #outh #ea #urety and (nsurance Co. for the amount of
+2,444,444. #ubse7uenty the ,>D #e!en Ambassador san1 which resuted in the oss of the ogs on
board the same. The paintiff then fied a caim with the insurance company and the #@C. )owe!er both
caims were denied. The insurance company denied iabiity under the poicy and #@C denied iabiity
caiming that they are a pri!ate carrier and that they cannot be hed iabe due to the stipuation that the
owners sha not be responsibe for the oss, spit, short0anding, brea1ages and any 1ind of damages to
the cargo.
+aintiff fied a case in order to caim damages for the oss it incurred. The ower court rendered a
decision in fa!or of the paintiff and ordered the insurance company and #@C to pay the paintiff. <n
appea, the Court of Appeas affirmed the decision but set aside the decision against #@C hoding that
the stipuation between the parties is !aid. )ence this petition.
*ss!e
1. 8hether or not the stipuation between the parties is !aid.
2. 8hether or not #@C is iabe for the oss of D)(#.
+eld
The Court hed that the stipuation between the parties is !aid. (t is cear in this case that the #@C
is a pri!ate carrier and therefore a stipuation between the parties imiting the iabiity of the carrier is
!aid. (n a contract of pri!ate carriage, the parties may !aidy stipuate that the responsibiity of the cargo
rests soey on the charterer. #uch stipuations sha be !aid as ong as they are not contrary to aw,
moras, good customs, pubic order and pubic poicy.
(t is a fact that the oss of the ogs was due to the sin1ing of the ,>D #e!en Ambassador. The
sin1ing of the !esse was caused by the snapping of the iron chains hoding the ogs. #aid snapping was
the conse7uence of the negigence of the captain in securing the ogs. )owe!er, since there is a
stipuation between the parties regarding the responsibiity of the oss of the cargo, the #@C cannot be
hed iabe for the oss of the ogs.
34
.o4ido v# Co!rt of Appeals
2(1 /C$A 1
)acts
The spouses Tumboy and their minor chidren boarded a bus operated by the Bobido @us Liner to
Da!ao City. <n the way to their destination, the front eft tire of the bus e"poded which ed to the bus
faing into a ra!ine and causing the death of Tito Tumboy and physica in6uries to the other passengers.
The defendants then fied a case against the petitioner for breach of the contract of carriage. The
petitioner caims that it is not iabe because the tire e"posion is a caso fortuito.
*ss!e
8hether or not the petitioner is iabe for the accident.
+eld
The Court hed that the tire e"posion cannot be considered as a fortuitous e!ent. The reason is
that the common carrier has the burden of proof that it e"ercised e"traordinary diigence in the carriage
of the passengers. There is aways a presumption of negigence on the common carrier in cases of death
or in6ury and that the carrier needs to present contrary e!idence that it was not negigent and that it
e"ercised the re7uired diigence of the aw. The carrier cannot rey on the defense that the tire was brand
new or that it had daiy chec1 ups regarding the parts of the bus.
35
Compania ;aritima v# *ns!rance Co# of North America
12 /C$A 213
)acts
,aceod J Co., contracted, first by teephone and ater confirmed by a forma written boo1ing
issued by ,aceod J Co., the ser!ices of the petitioner Comapania ,aritima for the shipment of baes of
amp from Da!ao to ,ania. Two ighters of the petitioners oaded the said cargo from ,aceod?s wharf
at Da!ao awaiting the arri!a of another !esse of the petitioner for reoading. <ne of the ighters sun1 of
which ,aceod suffered a tota of +'$,41C. Eespondent insurers of said cargo paid ,aceod, and being
subrogated to ,aceod?s right, fied a caim to coect from the petitioner the amount it paid to ,aceod.
+etitioner denied iabiity on the grounds that there was no bi of ading issued thereby resuting to be
non0e"istence of the contract; that the sin1ing was due to a fortuitous e!ent and the respondent has no
personaity.
*ss!e
8hether or not there was a contract and whether or not there was a fortuitous e!ent.
+eld
There was compete contract of carriage the consummation of which has aready begun when the
shipper dei!ered the cargo to the carrier and the atter too1 possession of the same by pacing it on a
ighter manned by its two authori-ed empoyers under which ,aceod become entited to the pri!iege of
aw. The responsibiity of the carrier commenced on the actua dei!ery and receipt by, the carrier or its
authori-ed agent of the goods. The barges or ighters were merey empoyed as the first step of the
!oyage. As to the issuance of the bi of ading, it is not re7uired or essentia to the contract, athough it
may become obigatory by reason of reguations or as a condition in6ured in the contract by the
agreement of the parties themse!es.
%! >o v# Ainamara
1,1 P+*% 12,
36
)acts
Deta Company of &ew Bor1 shipped ' cases of fim and photographic suppies to respondent
herein. )a!ing arri!ed at the Cebu port, it discharged her cargo pacing it in the custody of the arrastre
operator appointed by the @ureau of Customs. The cargo was chec1ed and found to be in good order.
Later on the goods were dei!ered to @inamara. After inspection it was found out that some cargo were
missing. @inamara demanded from the carrier indemnity for the oss it sustained. )owe!er, the carrier
denied iabiity reying on the stipuation in the contract of carriage. (t pro!ides that the carrier is no onger
iabe for the cargo after dei!ery of the same to the customs authorities. The ower court rendered a
decision in fa!or of @inamara. )ence this petition.
*ss!e
8hether or not the common carrier is iabe for the ost cargo.
+eld
The Court hed that the carrier is no onger iabe for the oss of the goods. The genera rue is that
dei!ery must be made to the consignee or the person authori-ed to recei!e the goods, without such
dei!ery the carrier sha be iabe for the oss or destruction of goods whie in their custody. )owe!er,
parties may agree to imit the iabiity of the carrier considering that the goods ha!e to go through the
inspection of the customs authorities before they are actuay turned o!er to the authorities. The
stipuation in this case is binding upon the parties it being not contrary to aw, moras, or pubic poicy.
American President %ines, %td# @s# :lepper
11, Phil 2'3
)acts
37
=epper on board ## +re. Ce!eand and Bo1ohama, Aapan and ift !an containing persona and
househod effects. 2pon its arri!a in ,ania and whie the ift !an was being unoaded by crane, it fe on
the pier and its contents were spied and scattered, as a resut of which, =epper bought an action for
damages against the carrier. 8hie the carrier does not dispute iabiity, it, howe!er, contends that the
same cannot e"ceed F%44, in!o1ing in its fa!or the bi of ading and #ec. $.%/ of the carriage of goods by
#ea Act .C<5#A/. The tria Court ordered the carrier to pay =epper with a right to reimbursement from
Degado @rothers, the operator of the crane. The CA affirmed the said decision. The carrier appeaed.
*ss!e
8hether or not the carrier can be hed iabe beyond that stated in the bi of ading and that
pro!ided in C<5#A.
+eld
The carrier shoud ony pay =epper the sum of F%44. The shipper who accepted the bi of ading
impiedy id bound by its items. 8hie regard to the contention of the carrier that C<5#A shoud contro in
this case, the same is of as moment. Art. 17'3 of the &ew Ci!i Code pro!ides that Gthe aws of the
country to which the goods are transported sha go!ern the iabiity of the common carrier in case of oss,
destruction and deterioration.H This means that the aw of the +hiippines on the &ew Ci!i Code. 2nder
17'' of &CC, Gin a mater not reguated by this Code, the rights and obigations of common carriers sha
be go!erned by the Code of Commerce and by #pecia Laws.H Art. 173'0173C, &CC go!ern said rights
and obigations. Therefore, athough #ec $.%/ of C<5#A states that the carrier sha not be iabe in an
amount e"ceeding F%44 per pac1age uness the !aue of the goods had been decared by the shipper
and asserted in the bi of ading, said section is merey suppementary to the pro!isions of the &ew Ci!i
Code.
/ervando v# Philippine /team Navigation Co#
117 /C$A (32
)acts
38
Cara 2y @ico and Amparo #er!ando oaded on board the appeantIs !esse, :#017', for carriage
from ,ania to +uupandan, &egros <ccidenta cargoes of ca!ans of rice and cartons of coored paper
which were e!idenced by bis of ading.
2pon arri!a of the !esse at +uupandan the cargoes were discharged, compete and in good
order, unto the warehouse of the @ureau of Customs. At about 2944 in the afternoon of the same day,
said warehouse was ra-ed by a fire of un1nown origin, destroying appeeesI cargoes. @efore the fire,
howe!er, appeee 2y @ico was abe to ta1e dei!ery of 347 ca!ans of rice

AppeeesI caims for the !aue
of said goods were re6ected by the appeant.
*ss!e
8hether or not carrier is iabe for the oss of the cargo.
+eld
The court a quo hed that the dei!ery of the shipment in 7uestion to the warehouse of the @ureau
of Customs is not the dei!ery contempated by Artice 173'; and since the burning of the warehouse
occurred before actua or constructi!e dei!ery of the goods to the appeees, the oss is chargeabe
against the appeant. Artice 173' of the Ci!i Code imposes upon common carriers the duty to obser!e
e"traordinary diigence from the moment the goods are unconditionay paced in their possession Punti
the same are dei!ered, actuay or constructi!ey, by the carrier to the consignee or to the person who
has a right to recei!e them, without pre6udice to the pro!isions of Artice 173C. P
(t shoud be pointed out, howe!er, that in the bis of ading issued for the cargoes in 7uestion, the
parties agreed to imit the responsibiity of the carrier for the oss or damage that may be caused to the
shipment by inserting therein the foowing stipuation9
Cause 1$. Carrier sha not be responsibe for oss or damage to shipments bied IownerIs ris1I
uness such oss or damage is due to negigence of carrier. &or sha carrier be responsibe for
oss or damage caused by force ma6eure, dangers or accidents of the sea or other waters; war;
pubic enemies; . . . fire . ...
The Court sustains the !aidity of the abo!e stipuation. There is nothing therein that is contrary to
aw, moras or pubic poicy. Therefore, the carrier is no onger iabe for the oss of the goods.
/al!do, <r# v# Co!rt of Appeals
2,7 /C$A '0(
)acts
39
+aintiff herein together with +omiers1i and #on :unera )ome of Chicago brought the remains of
paintiff?s mother to Continenta ,ortuary Air #er!ices which boo1ed the shipment of the remains from
Chicago to #an :rancisco by Trans 8ord Airways .T8A/ and from #an :rancisco to ,ania with
+hiippine Airines .+AL/. The remains were ta1en to the Chicago Airport, but it turned out that there were
2 bodies in the said airport. #omehow the 2 bodies were switched, and the remains of paintiff?s mother
was shipped to ,e"ico instead. The shipment was immediatey oaded on another +AL fight and it
arri!ed the day after the e"pected arri!a. +aintiff fied a caim for damages in court. The ower court
abso!ed both airines and upon appea it was affirmed by the court.
*ss!e
8hether or not the 2 airines shoud be hed iabe for damages.
+eld
*"picit is the rue under Artice 173' of the Ci!i Code that the e"traordinary responsibiity of the
common carrier begins from the time the goods are dei!ered to the carrier. This responsibiity remains in
fu force and effect e!en when they are temporariy unoaded or stored in transit, uness the shipper or
owner e"ercises the right of stoppage in transitu, and terminates ony after the apse of a reasonabe time
for the acceptance, of the goods by the consignee or such other person entited to recei!e them. And,
there is dei!ery to the carrier when the goods are ready for and ha!e been paced in the e"cusi!e
possession, custody and contro of the carrier for the purpose of their immediate transportation and the
carrier has accepted them. 8here such a dei!ery has thus been accepted by the carrier, the iabiity of
the common carrier commences eo instanti. )ence, whie we agree with petitioners that the e"traordinary
diigence statutoriy re7uired to be obser!ed by the carrier instantaneousy commences upon dei!ery of
the goods thereto, for such duty to commence there must in fact ha!e been dei!ery of the cargo sub6ect
of the contract of carriage. <ny when such fact of dei!ery has been une7ui!ocay estabished can the
iabiity for oss, destruction or deterioration of goods in the custody of the carrier, absent the e"cepting
causes under Artice 173$, attach and the presumption of faut of the carrier under Artice 173% be
in!o1ed.
As aready demonstrated, the facts in the case at bar beie the a!erment that there was dei!ery
of the cargo to the carrier on <ctober 2', 137'. Eather, as earier e"pained, the body intended to be
shipped as agreed upon was reay paced in the possession and contro of +AL on <ctober 2C, 137' and
it was from that date that pri!ate respondents became responsibe for the agreed cargo under their
underta1ings in +AL Airway @i &o. 4730411C4$%$. Conse7uenty, for the switching of cas1ets prior
thereto which was not caused by them, and subse7uent e!ents caused thereby, pri!ate respondents
cannot be hed iabe
;acam v# Co!rt of Appeals
313 /C$A 77
40
)acts
+etitioner ,acam e"ported watermeons and mangoes to )ong =ong, 5reat +rospect Company
is the consignee. The bi of ading stated that one of the bi must be presented by the +a1istan @an1 as
consignee and 5+C as the notify party. 2pon arri!a in )ong =ong, the shipment was dei!ered by the
carrier directy to 5+C and not to +a1istan @an1 and without surrendering the bi of ading.
*ss!e
8hether or not there was a !aid dei!ery.
+eld
5he e"traordinary responsibiity of common carriers ast unti actua or constructi!e dei!ery of the
cargo to the consignee or his agent. +a1istan was indicted as consignee and 5+C was the notify party.
)owe!er, in the e"port in!oice, 5+C was ceary named as buyer or importer. +etitioner referred to 5+C
as such in his demand etter to respondent and his compaint before the court. This premise brings into
concusion that the dei!eries of the cargo to 5+C as buyer or importer is in conformity with Art. 173' of
the Ci!i Code. Therefore, there was a !aid dei!ery.
41
Cases Applying Articles 17''&17-'
@igilance 6ver Goods
of Common Carriers
Articles Applied
Art. 17$$. A stipuation between the common carrier and the shipper or owner imiting the iabiity of the
former for the oss, destruction, or deterioration of the goods to a degree ess than e"traordinary
diigence sha be !aid, pro!ided it be9
.1/ (n writing, signed by the shipper or owner;
.2/ #upported by a !auabe consideration other than the ser!ice rendered by the common carrier;
and
42
.3/ Eeasonabe, 6ust and not contrary to pubic poicy.
Art. 17$%. Any of the foowing or simiar stipuations sha be considered unreasonabe, un6ust and
contrary to pubic poicy9
.1/ That the goods are transported at the ris1 of the owner or shipper;
.2/ That the common carrier wi not be iabe for any oss, destruction, or deterioration of the
goods;
.3/ That the common carrier need not obser!e any diigence in the custody of the goods;
.$/ That the common carrier sha e"ercise a degree of diigence ess than that of a good father of
a famiy, or of a man of ordinary prudence in the !igiance o!er the mo!abes transported;
.%/ That the common carrier sha not be responsibe for the acts or omission of his or its
empoyees;
.'/ That the common carrierIs iabiity for acts committed by thie!es, or of robbers who do not act
with gra!e or irresistibe threat, !ioence or force, is dispensed with or diminished;
.7/ That the common carrier is not responsibe for the oss, destruction, or deterioration of goods
on account of the defecti!e condition of the car, !ehice, ship, airpane or other e7uipment used in
the contract of carriage.
Art. 17$'. An agreement imiting the common carrierIs iabiity may be annued by the shipper or owner if
the common carrier refused to carry the goods uness the former agreed to such stipuation.
Art. 17$7. (f the common carrier, without 6ust cause, deays the transportation of the goods or changes
the stipuated or usua route, the contract imiting the common carrierIs iabiity cannot be a!aied of in
case of the oss, destruction, or deterioration of the goods.
Art. 17$C. An agreement imiting the common carrierIs iabiity for deay on account of stri1es or riots is
!aid.
Art. 17$3. A stipuation that the common carrierIs iabiity is imited to the !aue of the goods appearing in
the bi of ading, uness the shipper or owner decares a greater !aue, is binding.
Art. 17%4. A contract fi"ing the sum that may be reco!ered. by the owner or shipper for the oss,
destruction, or deterioration of the goods is !aid, if it is reasonabe and 6ust under the circumstances,
and has been fairy and freey agreed upon.
43
Art. 17%1. The fact that the common carrier has no competitor aong the ine or route, or a part thereof, to
which the contract refers sha be ta1en into consideration on the 7uestion of whether or not a stipuation
imiting the common carrierIs iabiity is reasonabe, 6ust and in consonance with pubic poicy.
Art. 17%2. *!en when there is an agreement imiting the iabiity of the common carrier in the !igiance
o!er the goods, the common carrier is disputaby presumed to ha!e been negigent in case of their oss,
destruction or deterioration.
Art. 17%3. The aw of the country to which the goods are to be transported sha go!ern the iabiity of the
common carrier for their oss, destruction or deterioration.
Art. 17%$. The pro!isions of Artices 1733 to 17%3 sha appy to the passengerIs baggage which is not in
his persona custody or in that of his empoyee. As to other baggage, the rues in Artices 133C and 2444
to 2443 concerning the responsibiity of hote01eepers sha be appicabe.
<!an .smael = Co# v# Aarreto = Co#
-1 P+*% 0,
)acts
+aintiff see1s to reco!er from defendant the aeged !aue of the four cases of merchandise
which it dei!ered to the steamship A&DE*# on <ctober 23, 1322, at ,ania, to be shipped to #urogao.
#aid shipment was ne!er dei!ered to the consignee. The defendants rey ony on cause 7 of the bi of
ading whereby it was pro!ided that action not brought within '14 days from the time the cause of action
accrued sti be barred, and on cause 12 which pro!ided that the defendants are not iabe for any
pac1age in e"cess of +344 uness the !aue and contracts of such pac1age are correcty stated in the bi
44
of ading at the time of the shipment. The goods in 7uestion were shipped from ,ania on <ctober 2%,
1322, or a itte ess that ' months after the shipment was made.
*ss!e
8hether or not the action was brought within a reasonabe time.
+eld
The action was brought within a reasonabe time as those words are specified and defined in the
authorities sited. (t is true that both the paintiff and the defendants are residents of the City of ,ania,
but it is aso true that #urigao where the goods in 7uestion were to be dei!ered is one of the most distant
paces from ,ania in the +hiippine (sands. (n the !ery nature of things, paintiff woud not want to
commence its action unti such time as it had made a fu and carefu in!estigation of a of the materia
facts and e!en the aw of the case, so as to determine whether or not defendants were iabe for its oss.
Cause 12 paces a imit of +344 for Gany singe pac1age of si1.H The e!idence of each case !ery
near +2,%44. (n this situation, the imit of defendant?s iabiity for each pac1age of si1 for oss or damage
from any cause of for any reason, woud put it in the power of the defendant to ha!e ta1en the whoe
cargo of '$ cases of si1 at a !auation of +344 of each case, or ess than 1>C of its actua !aue. (f that
rue of aw shoud be sustained, no si1 woud e!er be shipped from one isand to another in the
+hiippines. #uch a imitation in !aue is !aid as against pubic poicy.

/hewaram v# Philippine Airlines
17 /C$A 6,6
)acts
#hewaram, petitioner herein, is a )indu from Da!ao. )e boarded a +AL pane for a trip to ,ania.
)e chec1ed in 3 pieces of baggage, a suitcase 2 other pieces. <ne of the suitcases were mistagged by
the defendant and as a resut the said suitcase did not arri!e with him in ,ania. )e was shown a simiar
bag, but the contents did not beong to him. Among his things in the suitcase was a Eofe" camera and
Transistor Eadio 7. )is baggage was ater on returned but the camera and radio were missing. )e
demanded indemnity for his oss from +AL. The atter offered to pay +144 for his oss but #hewaram.
Defendant herein caimed that the +AL tic1et, on the re!erse side, stated in fine print that if the !aue of
45
baggage is not stated, and the baggage is ost, the ma"imum iabiity of +AL is +144.44. (f !aue in
e"cess of +144.44 is stated, +AL wi charge e"tra because +AL is being hed iabe for an amount
e"ceeding +144.44. #hewaram re6ected the offer and demanded fu payment of +C44.44 for the amount
of the things he ost. +AL refused to do so.
*ss!e
8hether the stipuation imiting the iabiity of +AL sha appy in the case at bar.
+eld
The Court hed that +AL is iabe for the oss of the petitioner herein. The stipuation in at the bac1
of the tic1et sha not be binding against the petitioner. Artice 17%4 of the &CC pro!ides that Artice 17%4
the pecuniary iabiity of a common carrier may, by contract, be imited to a fi"ed amount. (t is re7uired,
howe!er, that the contract must be Preasonabe and 6ust under the circumstances and has been fairy
and freey agreed upon.P (n this case, the court beie!es that the re7uirements of said artice ha!e not
been met. (t cannot be said that the petitioner had actuay entered into a contract with the +AL,
embodying the conditions as printed at the bac1 of the tic1et stub that was to the petitioner. The fact that
those conditions are printed at the bac1 of the tic1et stub in etters so sma that they are hard to read
woud not warrant the presumption that the petitioner was aware of those conditions such that he had
Pfairy and freey agreedP to those conditions.
/ea&%and /ervice, *nc# v# *ntermediate Appellate Co!rt
1-3 /C$A --2
)acts
#ea0Land, a foreign shipping and forwarding company icensed to do business in the +hiippines,
recei!ed from #ea0borne Trading Company in Caifornia, a shipment consigned to #en )iap )ing, the
business name used by Cue. The shipper not ha!ing decared the !aue of the shipment , no !aue was
indicated in the bi of ading. The shipment was discharged in ,ania, and whie awaiting transshipment
to Cebu, the cargo was stoen and ne!er reco!ered.
46
The tria court sentenced #ea0Land to pay Cue +1C',4$C representing the +hiippine currency
!aue of the ost cargo, +%%, C1$ for unreai-ed profit and +2%,444 for attorney?s fees. CA affirmed the
tria court?s decision.
*ss!e
8hether or not #ea0Land is iabe to pay Cue.
+eld
There is no 7uestion of the right of a consignee in a bi of ading to reco!er from the carrier or
shipper for oss of, or damage to, goods being transported under said bi, athough that document may
ha!e been drawn up ony by the consignor and the carrier without the inter!ention of the consignee.
#ince the iabiity of a common carrier for oss of or damage to goods transported by it under a
contract of carriage os go!erned by the aws of the country of destination and the goods in 7uestion were
shipped from the 2nited #tates to the +hiippines, the iabiity of #ea0Land has Cue is go!erned primariy
by the Ci!i Code, and as ordained by the said Code, suppementary, in a matters not cuttered thereby,
by the Code of Commerce and specia aws. <ne of these suppementary specia aws is the Carriage of
goods by #ea Act .C<5#A/, made appicabe to a contracts for the carriage by sea to and from the
+hiippines +orts in :oreign Trade by Comm. Act. '%.
*!en if #ection $.%/ of C<5#A did not ist the !aidity and binding effect of the iabiity imitation
cause in the bi of ading here are fuy substantia on the basis aone of Artice 17$3 and 17%4 of the
Ci!i Code. The 6ustices of such stipuation is impicit in its gi!ing the owner or shipper the option of
a!oiding accrua of iabiity imitation by the simpe e"pedient of decaring the !aue of the shipment in the
bi of ading.
The stipuation in the bi of ading imiting the iabiity of #ea0Land for oss or damages to the
shipment co!ered by said rue to 2#F%44 per pac1age uness the shipper decares the !aue of the
shipment and pays additiona charges is !aid and binding on Cue.
Citadel %ines, *nc# v# Co!rt of Appeals
1(' /C$A -''
)acts
Citade Lines, (nc., petitioner herein is the genera agent of the !esse PCardigan @ay>#trait
*nterpriseP . ,ania 8ine ,erchants, (nc. .Consignee/ is the importer of the sub6ect shipment of Dunhi
cigarettes from *ngand. The said !esse oaded on board :ibrite cartons of manufactured cigarettes
caed PDunhi (nternationa :iterP and PDunhi (nternationa ,enthoP. The shipment arri!ed at the +ort
of ,ania in a container. The said container was recei!ed by ,etro +ort #er!ice, (nc., respondent herein.
47
#ubse7uenty the container !an, which contained two shipments was stripped. <ne shipment was
dei!ered and the other shipment containing cigarettes was paeti-ed. Due to ac1 of space at the
#pecia Cargo Cora, the aforesaid cigarettes were paced in two containers with two paets with both
containers duy padoc1ed and seaed by the representati!e of the petitioner.
The ne"t day, petitioners headchec1er disco!ered that the container !an of the cigarettes had a
different padoc1 and the sea was tampered with. This was reported to the +ier #uperintendent it was
found that 34 cases of imported @ritish manufactured cigarettes were missing. 8hen the Consignee
found out that 34 cases were missing it fied a caim demanding the payment of the mar1et !aue of the
missing cargo. +etitioner, in its repy etter, admitted the oss but aeged that the same occurred at +ier
13, an area absoutey under the contro of the arrastre .,etro +ort #er!ice, (nc/. ,ania 8ine ,erchants
fied a forma caim, with the arrastre and demanded payment of the !aue of the goods but said caim
was denied.
The ower court rendered a decision e"onerating the arrastre of any iabiity on the ground that the
sub6ect container !an was not formay turned o!er to its custody, and hed the petitioner iabe for the
amount representing the mar1et !aue of the ost shipment. <n appea the court of Appeas affirmed the
decision of the ower court but deeted the award of attorneyIs fees and costs of suit. )ence this petition.
*ss!e
8hether the stipuation imiting the iabiity of the carrier contained in the bi of ading is binding
on the consignee.
+eld
The Court hed that the stipuation imiting the iabiity of the carrier is !aid and binding upon the
consignee. (t was e"pressy stipuated in the bi of ading that the carrier?s iabiity is imited to F2.44 per
1io. (t has been hed in pre!ious cases that a stipuation appearing in the bi of ading imiting the iabiity
of the carrier is binding, uness the owner or shipper decares a higher !aue.
The consignee in this case did not decare a higher !aue and admits that the !aue of the goods
does not appear in the bi of ading. Therefore the stipuation in the bi of ading shoud be appied. The
contract had been freey agreed upon and the stipuation appears to be 6ust and reasonabe. Therefore,
the award of damages shoud be reduced and computed with regard to the bi of ading.
7verett /teamship Corporation v# Co!rt of Appeals
207 /C$A '06
)acts
)ernande- Trading Co., respondent herein, imported 3 crates of bus spare parts from its suppier,
,aruman Trading Company, Ltd., a foreign corporation based in Aapan. The crates were shipped from
Aapan to ,ania on board PAD*L:A*D*E*TT*,P a !esse owned by the principa of the petitioner herein,
*!erett <rient Lines. The said crates were co!ered by @i of Lading &o. &5<%3,&. The !esse arri!ed
in ,ania and it was disco!ered that the one crate was missing. This was confirmed and admitted by
petitioner in its etter of Aanuary 13, 1332 addressed to pri!ate respondent, which thereafter made a
48
forma caim upon petitioner for the !aue of the ost cargo amounting to <ne ,iion :i!e )undred :ifty
Two Thousand :i!e )undred .B1,%%2,%44.44/ Ben, the amount shown in an (n!oice &o. ,T,03$1, dated
&o!ember 1$, 1331. )owe!er, petitioner offered to pay ony <ne )undred Thousand .B144,444.44/ Ben,
the ma"imum amount stipuated under Cause 1C of the co!ering bi of ading which imits the iabiity of
petitioner. Eespondent re6ected the offer and fied a case to coect payment for the oss against the
petitioner.
*ss!e
8hether or not the petitioner is iabe for the actua !aue and not the ma"imum !aue reco!erabe
under the bi of ading.
+eld
A stipuation in the bi of ading imiting the iabiity of the common carrier for the oss, damages of cargo
to a certain sum, uness the shipper decares or a higher !aue is sanctioned by aw, particuary Artices
17$3 and 17C4 of the Ci!i Code. The stipuations in the bi of ading are reasonabe and 6ust. (n the bi
of ading, the carrier made it cear that its iabiity woud ony be up to B144,444.44 .Ben/. )owe!er, the
shipper, ,aruman Trading, had the option to decare a higher !auation if the !aue of its cargo was
higher than the imited iabiity of the carrier. Considering that the shipper did not decare a higher
!auation, it had itsef to bame for not compying with the stipuations. The tria court?s decision that
pri!ate respondent coud not ha!e fairy agreed to the imited iabiity cause in the bi of ading because
the said condition were printed in sma etters does not ma1e the bi of ading in!aid.
Aritish Airways v# Co!rt of Appeals
G#$# No# 121(2'
)acts
<n Apri ', 13C3, ,ahtani decided to !isit his reati!e in @ombay, (ndia. (n anticipation of his !isit,
he obtained the ser!ices of a certain ,r. 5emar to prepare his tra!e pan. #ince british Airways had no
tic1et fights from ,ania to @ombay, ,a1tani had to ta1e a connecting fight to @ombay on board @ritish
Airways. +rior to his departure, ,a1tani chec1ed in the +AL counter in ,ania his two pieces of uggage
containing his cothing and persona effects, confident that upon reaching )ong =ong, the same woud
be transferred to the @A fight bound for @ombay, 2nfortunatey, when ,a1tani arri!ed in @ombay, he
disco!ered that his uggage was missing and that upon in7uiry from the @A representati!es, he was tod
49
that the same might ha!e been di!erted to London. After paintiff waiting for his uggage for one wee1,
@A finay ad!ised him to fie a caim accompishing the property.
*ss!e
8hether or not defendant @A is iabe for compusory damages and attorney?s fee, as we as the
dismissa of its third party compaint against +AL
+eld
The contract of transportation was e"cusi!ey between ,a1tani and @A. The atter merey
endorsing the ,ania to )ong =ong og of the former?s 6ourney to +AL, as its subcontractor or agent.
Conditions of contacts was one of continuous air transportation from ,ania to @ombay. The Court of
Appeas shoud ha!e been cogni-ant of the we0setted rue that an agent is aso responsibe for any
negigence in the performance of its function and is iabe for damages which the principa may suffer by
reason of its negigent act. #ince the instant petition was based on breach of contract of carriage,
,a1tani can ony sue @A and not +AL, since the atter was not a party in the contract.
/weet %ines *nc# v# 5eves
G#$# No# %&377-,
)acts
+ri!ate respondents Atty. Leo!igido Tandog and Eogeio Tirog bought tic1ets at the branch office
of the petitioner, a shipping company transporting inter0isand passengers and cargoes, at the Cagayan
de <ro City. Eespondents were to board ,># G#weet )opeH,howe!er upon earning that it wi not be
proceeding to @oho they decided to board ,># G#weet Town.H <n such !esse the respondents agreed
to hide at the cargo section to a!oid inspection of the officers of the +hiippine Coast guard.
After suffering the incon!iences in the cargo section and paying other tic1ets because those that
are in their possession were no honored. The respondents sued the petitioners in the Court of :irst
(nstance of ,isamis <rienta for breach of contract of carriage in the aeged sum of +114,444.44.
50
+etitioners mo!ed for the dismissa of the compaint on the ground of improper !enue for
Conditon &o. 1$ printed on the tic1et essentiay pro!ides that any actions arising out of the tic1et wi be
fied at the competent court of Cebu.
The tria court rued in fa!or of the respondents after denying the motion for dismissa. )a!ing
e"hausted a the remedies a!aiabe and sti faied to obtain a ruing in their fa!or, the petitioner fied this
instant petition for prohibition with preiminary in6unction.
The #upreme Court ga!e due course to their petition and re7uired them to submit their
memoranda in support of their respecti!e contention.
Eespondents contend that condition &o. 1$ is not a part of the contract of carriage and that it is
an independent contract re7uiring the mutua consent of the parties. (n the case at bar the consent of the
respondents was not sought it was imposed on them uniateray. Denue of actions can ony be wai!ed if
there is a Gwritten agreement of the parties.H Condition &o.1$ not being agreed to by the respondents is
not !aid and enforceabe. #upposing that it is otherwise, it is not e"cusi!e and does not, therefore
e"cude the fiing of the action in ,isamis <rienta.
+etioner contend that condition &o. 1$ is !aid and enforceabe because pri!ate respondents
acceded to it when they purchased passage tic1ets and it is an effecti!e wai!er of !enue, !aid and
binding as such, since it is printed in bod and capita etters and not in fine print and merey assigns the
pace where the action arising from the contract is instituted. That condition &o. 1$ is une7ui!oca and
mandatory, the words and phrases Gany and aH, Girrespecti!e of where it is issued,H and GshaH ea!e no
doubt that the intention of Condition &o. 1$ is to fi" the !enue in the City of Cebu, to the e"cusion of a
other paces.
*ss!e
8hether or not condition &o. 1$ is !aid and enforceabe.
+eld
Condition &o. 1$ is sub!ersi!e of pubic poicy on transfers of !enue of actions. :or, athough
!enue may be changed or transferred from one pro!ince to another by agreement of the parties in writing
pursuant to Eue $, #ection 3, of the Eues of Court, such an agreement wi not be hed !aid where it
practicay negates the action of the caimants, such as the pri!ate respondents herein. The phiosophy
underying the pro!isions on transfer of !enue of actions is the con!enience of the paintiffs as we as his
witnesses and to promote the ends of 6ustice. Considering the e"pense and troube a passenger residing
outside of Cebu City woud incur to prosecute a caim in the City of Cebu, he woud most probaby decide
not to fie the action at a. The condition wi thus defeat, instead of enhance, the ends of 6ustice. 2pon
the other hand, petitioner has branches or offices in the respecti!e ports of ca of its !esses and can
afford to itigate in any of these paces. )ence, the fiing of the suit in the C:( of ,isamis <rienta, as was
done in the instant case, wi not cause incon!ience to, much ess pre6udice, petitioner.
+ubic poicy is G. . . that principe of the aw which hods that no sub6ect or citi-en can awfuy do
that which has a tendency to be in6urious to the pubic or against the pubic good . . .H. 2nder this
principe G. . . freedom of contract or pri!ate deaing is restricted by aw for the good of the pubic.H
Ceary, Condition &o. 1$, if enforced, wi be sub!ersi!e of the pubic good or interest, since it wi
frustrate in meritorious cases, actions of passenger caimants outside of Cebu City, thus pacing
petitioner company at a decided ad!antage o!er said persons, who may ha!e perfecty egitimate caims
against it. The said condition shoud, therefore, be decared !oid and unenforceabe, as contrary to pubic
poicy Q to ma1e the courts accessibe to a who may ha!e need of their ser!ices.
51
2!is!m4ing /r# vs# Co!rt of Appeals
1(0 /C$A 6,-
)acts
&orberto Ouisumbing and 5unther Loeffer were passengers of +AL?s :o11er G:riendshipH pane
fying from ,acatan City bound to ,ania. A senior &@( agent, :orencio <. Diarin, a senior &@( agent
and aso one of the passengers of the said pane, saw a certain GRadyH boarded on the same fight.
Rady was a suspect for the 1iing of a Audge Dade-. Diarin sent a note to the Captain of the pane
re7uesting that they contact the &@( director to send agents on their point of destination because of the
presence of Rady. )owe!er, Captain Luis @onne!ie came out of the coc1pit and informed Diarin the he
coud not send the message because it woud be heard by a ground aircraft stations. Diarin ad!ised the
52
Captain of the danger ha!ing Rady and his companions onboard. Conse7uenty, gunshots ensued
between Rady?s group and Diarin. Rady announced a hod0up and obtained the beongings of the
passengers. Rady and his companions successfuy escaped upon anding in ,ania. +etitioners now
demand from +AL indemnity for their ost beongings. The petitioners contended that +AL is iabe for
breach of contract of carriage, for not transporting them and their beongings at the point of destination
without oss or damage. As a defense, +AL interposed that the incident was force ma6eure.
*ss!e
8hether +AL can be hed iabe for the oss of petitioners? beongings due to the hi06ac1ingS
+eld
The #upreme Court hed that +AL cannot be hed iabe for the oss of property. 8here the
defendants has faithfuy compied with the re7uirements of go!ernment agencies and adhered to the
estabished procedures and precautions of the airine industry and particuar time, its faiure to ta1e
certain steps that a passenger in hindsight beie!es shoud ha!e been done is not the negigence or
misconduct which minges with force ma6eure as an acti!e and cooperati!e cause. (t was pro!en that
+AL cannot be fauted with negigence. )ence, there was no breach of contract of carriage because
there was no cear e!idence that +AL acted in bad faith in their obigation to transport the passengers
and their properties at the point of destination. The mandatory use of the most sophisticated eectronic
de!ices may ha!e minimi-ed hi6ac1ings but a these ha!e pro!ed ineffecti!e against truy determined
high6ac1ers. #uch incident which occurred was indeed force ma6eure.
Pan American Corld Airways vs# $apadas
G#$# No# 6,673
)acts
+ri!ate respondent Aose Eapadas hed passenger tic1et and baggage caim chec1 for petitioner?s
fight &o. C$1 with the route from 5uam to ,ania. 8hie standing inine to board the fight at the 5uam
Airport, Eapadas was ordered by petitioner?s hand carry contro agent to chec10in his samsonite attachT
case. Eapadas protested pointing to the fact that other co0pasengers were permitted to hand carry
baggage. )e stepped out of the ine ony to go bac1 again at the end of it to try of he can get through
without ha!ing to register his attachT case. )owe!er, the same man in charge of had carry contro did
not fai to notice him and ordered him again to register his baggage. 2pon arri!ing in ,ania on the
same day, Eapadas caimed and was gi!en a his chec1ed in baggage e"cept the attachT case.
*ss!e
53
8hether or not a passenger is bound by the terms of a passenger under the 8arsaw con!ention,
sha appy in case of oss, damage or destruction to a registered uggage of a passenger.
+eld
After a re!iew of the !arious arguments of the appointing parties, the court found sufficient basis
under the particuar facts of the case for the a!aiment of the iabiity imitations under the 8arsaw
Con!ention. There is no dispute and the courts beow admit that there was such a notice appearing on
page 2 of the airine tic1et stating that the 8arsaw Con!ention go!erns in case of death or in6ury of
passengers or of oss, damage or destructionto a passenger?s uggage. Art. 22.$/ of the 8arsaw
Con!ention does not precude an award of attorney?s fees. That pro!ision states that the imits of iabiity
prescribed in the instrument sha not pre!ent the court from awarding in accordance with its own aw, in
addition, the whoe or part of the court costs and other e"penses of itigation incurred by the paintiff.
+#7# +eacocB Co# v# ;acondray = Co#
'2 P+*% 2,-
)acts
The paintiff shipped *dmonton coc1s from &ew Bor1 to ,ania on board a !esse of the
defendant. (t was agreed in the bi of ading that the !aue of the goods recei!ed does not e"ceed F%44
per freight or on in proportion for any part of a ton, uness the !aue be e"pressy stated in the bi and
freight Uaid. (t was aso agreed that in the e!ent of caims for shortage or damages the carrier sha not
be iabe for than the net in!oice price pus freight and insurances oss charges, and any oss or damage
for which the carrier may be iabe sha be ad6usted pro rata on said basis. The coc1s were not
dei!ered despite demands. +aintiff caimed +$24.44, the mar1et !aue of the coc1s, whie defendant
tendered ony +7'.3', the proportionate freight for !aue. The tria court decided in fa!or of the paintiff
freight ton !aue. The tria !aue pus freight and insurance.
54
*ss!e
8hether or not the stipuation in the bi og ading in the case at bar be foowed.
+eld
Three 1inds of stipuation ha!e after been made in a bi of ading. :irst, one e"empting the
carrier from any and a iabiity for ton and damage occasioned by its own negigence. #econd, one
pro!iding for an agreed !auation. Third, one imiting the iabiity of the carrier to an agreed !auation
uness the shipper decares a higher !aue and pay of authority, the first and second 1inds of stipuations
are in!o!ed as being contrary to pubic poicy, but the third is !aid and enforceabe.
The stipuation in a bi of ading which imits the iabiity of the carrier to a specified amount uness
the shipper decares a higher !aue and pays a higher freight !aid and enforceabe. Thus, if a carrier
gi!es to a shipper the choice of two ta1es, the ower of them cautioned upon his agreeing to a stipuated
!auation of his property in case of oss e!en by carrier?s negigence, if the shipper ma1es the choice
understandingy and freey, and names his !auation, he cannot thereafter reco!er mo!e than the !aue
which he puts on this paces upon his property.
A!g!sto 6ng .i! v# Co!rt of Appeals
01 /C$A 223
)acts
+etitioner was paying passenger of respondent +hiippine Airines on board fight &o. 3$'0E from
,actan Cebu bound for @utuan City. )e was schedued to attend the tria in the Court of :irst instance ,
@r. (( thereat. As a passenger, he chec1ed in one piece of uggage, a bu maeta. The pane eft ,actan
Airport, Cebu City at about 1pm and arri!ed at @acasi Airport, @utuan City at past 2pm of the same day.
2pon arri!a, petitioner caimed his uggage but it coud not be found. According to petitioner, it was ony
after reacting indignanty to the oss that the matter was attended by the porter cer1 which howe!er, the
ater denied. 8hen the uggage was dei!ered to the petitioner with the information that the oc1 was
open, he found out that the foder containing documents and transcripts were missing, aside from the two
gift items for his parents0in0aw. +etitioner refused to accept the uggage.
*ss!e
55
8hether or not +AL acted with gross negigence so as to entite petitioner to an award of mora
and e"empary damages.
+eld
+AL did not act in bad faith. (t was the duty of +AL to oo1 for petitioner?s uggage which had
been miscarried. +AL e"erted diigent efforts to ocate the paintiff?s baggage. +etitioner is neither
entited to e"empary damages. *"empary damages can ony be granted if the defendant as1ed in a
wanton, frauduent, rec1ess, oppressi!e or mae!oent manner, which oss, in accordance with the
stipuation written at the bac1 of the tic1et is imited to +144 per uggage paintiff not ha!ing decared a
greater !aue and not ha!ing caed the attention of the defendant on its !aue ad paid the tariff thereon.
8herefore, for ac1 of merit, the instant petition is hereby denied, and 6udgment sought to be re!iewed is
hereby affirmed.
Alitalia v# *ntermediate Appellate Co!rt
102 /C$A 0
)acts
Dr. :eipa +abo, a professor from 2+ was in!ited to attend a meeting by the 2nited &ations in
(spra, (tay. #he was to read a paper regarding foreign substances in food and the agricuture
en!ironment which she had speciai-ed 1nowedge of. #he boo1ed a fight to (tay with Aitaia airines,
petitioner herein. #he had arri!ed in ,ian the day before the meeting howe!er her uggage did not arri!e
with her. The airine informed her that her uggage was deayed because it was paced in one of the
succeeding fights to (tay. #he ne!er got her uggage.
8hen she got bac1 to ,ania she demanded that Aitaia compensate her for the damages that
she suffered. +etitioner herein offered free airine tic1ets in order to compensate for the aeged
damages, howe!er she re6ected this offer and instead fied a case. #ubse7uenty it was found out that
56
the uggages of Dr. +abo were not paced in the succeeding fights. #he recei!ed her uggage 11 months
after and after she had aready instituted a case against Aitaia.
The ower court rendered a decision in fa!or of Dr. +abo and ordered paintiff to pay damages.
<n appea, the Court of Appeas affirmed the decision and e!en increased the amount of damages to be
awarded to Dr. +abo. )ence this petition for certiorari.
*ss!e
8hether or not Aitaia is iabe for damages incurred by Dr. +abo.
+eld
The Court hed that Aitaia is iabe to pay Dr. +abo for nomina damages. The 8arsaw
Con!ention pro!ides that an air carrier is made iabe for damages when9 .1/ the death, wounding or
other bodiy in6ury of a passenger if the accident causing it too1 pace on board the aircraft or in the
course of its operations of embar1ing or disembar1ing; .2/ the destruction or oss of, or damage to, any
registered uggage or goods, if the occurrence causing it too1 pace during the carriage by airP; and .3/
deay in the transportation by air of passengers, uggage or goods. )owe!er, the caim for damages may
be brought sub6ect to imitations pro!ided in the said con!ention.
(n this case, Dr. +abo did not suffer any other in6ury other than not being abe to read her paper
in (tay. This was due to the fact that Aitaia mispaced her uggage. There was no bad faith or maice on
the part of Aitaia in the said deay in the arri!a of her uggage. Dr. +abo recei!ed a her things which
were returned to her in good condition athough 11 months ate. Therefore she sha recei!e nomina
damages for the specia in6ury caused.
;aersBline v# Co!rt of Appeals
222 /C$A 1,(
)acts
Eespondent herein is a firm engaged in the manufacture of pharmaceutica products. (t ordered
from *i Liy, (nc. of +uerto Eico empty geatin capsues. #aid capsues were paced in ' drums
containing 144 capsues each. The drums were paced on board the ,>D Anders ,aeers1ine. )owe!er
the capsues were shipped to Dirginia, 2#A instead of the +hiippines. The goods arri!ed in the
+hiippines 2 months after the origina date of arri!a, and respondent herein refused to accept the goods
due to its ate arri!a.
An action was fied by respondent to rescind the contract with *i Liy, (nc. and ,aers1 together
with a caim for damages. The ower court dismissed the compaint against *i Liy, (nc. and hed ,aers1
to be iabe for breach of the contract of common carriage. <n appea, the court affirmed the ower court?s
decision. )ence this appea.
57
*ss!e
8hether or not ,aers1 is iabe for breach of contract of common carriage.
+eld
The Court hed that ,aers1 is iabe for the breach of contract of common carriage. Common
carriers are not obigated by aw to carry and dei!er merchandise prompty uness the common carrier
pre!iousy assumes to dei!er the goods at a gi!en date or time. )owe!er, such dei!ery shoud be made
within a reasonabe time.
(n this case, it appears in the bi of ading that the goods wi arri!e on Apri 3. There was no
contract between the parties in this case, howe!er the petitioner was aware of the date of the e"pected
arri!a of the goods. The court finds that the deay of the dei!ery was unreasonabe. (t was due to the
negigence of the petitioner why the cargo arri!ed so ate. +etitioner did not e!en e"pain the reason for
such deay. Therefore, petitioner herein is hed iabe for the breach of contract.
Noc!m v# %ag!na 5aya4as A!s Co#
G#$# No# %&23733
)acts
+etitioner boarded the respondent?s bus. #ubse7uenty, a bo" containing firewor1s inside the bus
e"poded which cause the petitioner to be thrown out of the bus and obtained in6uries. The petitioner then
fied a case against the respondent for breach of the contract of carriage. The petitioner caims that the
respondent was careess and did not e"ercised the diigence re7uired of it when the atter?s empoyees
did not inspect the bo" which contained the firewor1s and aowed such dangerous ob6ects inside the
bus. The respondent in its defense caimed that it ony reied on the statement of the person who carried
the bo" that such item is safe to be transported inside the bus.
*ss!e
8hether or not the respondent committed a breach in the contract of carriage.
58
+eld
The Court hed that the respondent did not commit a breach in the contract of carriage, The Court
appied Art. 17%% of the Ci!i Code stating that the common carrier is bound to carry the passengers
safey as far as human care and foresight can pro!ide, using the utmost diigence of !ery cautious
person, with due regard to a circumstances. The Court emphasi-ed that there was utmost diigence on
the part of the carrier when it as1ed the person who bought the bo" what its contents are. (t is not duy
bound to open the bo" and inspect the contents. The carrier had regard to a the circumstances in the
case because aowances shoud be gi!en to the passengers and their property bought for it is presumed
that passengers wi not bring anything that wi cause damage to him or to others. (n addition, the Court
stressed the constitutiona right to pri!acy which is aways present. Therefore, the carrier is not iabe.
;ecenas v# CA
1(, /C$A (3
)acts
,>T Tacoban City, owned by +hiippine &ationa <i Company .+&<C/ coided with ,>T Don
Auan, was owned by respondents &egros &a!igation Co., (nc. The petitioners in this case are the heirs of
two passengers who boarded the ,>T Don Auan and perished due to the coision. The tria court hed the
respondents iabe for damages. <n appea, the respondents denied the iabiity by stating that between
the two !esses, the ,>T Tacoban City was the one who is negigent and faied to foow the (nternationa
Eues of the Eoad when it did not turn starboard .right/ to pre!ent the coision. The respondent court
re!ersed the decision appying the doctrine of ast cear chance raised by the respondent. +etitioners
then appeaed.
*ss!e
59
8hether or not the respondent shoud be hed iabe.
+eld
The Court hed that the respondent shoud be hed iabe and the respondent court erred in
re!ersing the decision of the tria court. The Court found the respondent to be gross negigent based on
certain instances. #uch instances are first, the captain was paying mah6ong at the time of the coision
and the captain stated that he was on brea1 during the emergency when he shoud ta1e charge of the
ship, second, the crew of the !esse faied to deay the sin1ing of the !esse because the ship san1
around ten to fifteen minutes, third, the ship was o!eroaded with passengers than that prescribed
number of passengers and asty, there was no ampe number of ife sa!ing de!ices such as rafts due to
the o!eroading of passengers. The respondent can not aso raise the defense that it foowed the
(nternationa Eues of the Eoad when it had the chance to pre!ent the coision with proper care and s1i.
The doctrine of ast cear chance cannot be appied in the case as we because the doctrine is ony
appicabe between two dri!ers that are negigent against each other and not to a passenger caiming for
damages to the carrier.
Negros Navigation Co#, *nc# v# Co!rt of Appeals
2(1 /C$A -3'
)acts
Eamon ,iranda purchased tic1ets for his wife, daughter, son and niece for a trip to @acood on
board the ,>D Don Auan. The said !esse is operated by the &egros &a!igation Co., petitioner herein.
2nfortunatey, the ,>D Don Auan coided with the ,>T Tacoban City which resuted to the sin1ing of the
former. ,any perished in this accident and some of the bodies of the !ictims were washed to the shore.
2nfortunatey, the bodies of his famiy members were ne!er found.
,iranda fied a case in order to reco!er damages from &egros &a!igation for the oss of his
famiy. +etitioner herein aeges that since the bodies of his famiy cannot be found there is no proof that
his famiy was in fact on board the !esse, hence they cannot be hed iabe for the oss of his famiy. The
ower court rendered a 6udgment in fa!or of ,iranda. +ursuant to the ega ma"im of "stare decisis et non
quieta movere", the court appied the ruing in the case of ,ecenas !. Court of Appeas, and hed that
60
&egros &a!igation was negigent and that it is iabe for the oss of the famiy of ,iranda. <n appea the
court affirmed the decision of the ower court. )ence this petition.
*ss!e
1. 8hether or not the famiy members of ,iranda were on the ,>D Don Auan therefore ma1ing
them iabe for the said oss.
2. 8hether or not the ega ma"im of stare decisis et non quieta movere is appicabe in this
case.
+eld
The Court hed that there was sufficient e!idence to pro!e that ,iranda?s famiy was in fact on
board the ,>D Don Auan. ,iranda testified that he personay brought his famiy to the !esse and
watched the departure of the same. This was further pro!en when the numbers of the purchased tic1ets
appeared on the passenger?s manifest of the !esse. There is no reason for ,iranda to caim that he had
ost his whoe famiy in the tragedy and e!en went through the anguish of oo1ing for their bodies. (n the
,ecenas case the bodies of the !ictims were i1ewise ne!er reco!ered.
The ega ma"im of stare decisis et non quieta movere .:oow past precedents and do not disturb
what has been setted/ was propery appied in this case. 8hen the same 7uestions reating to the same
e!ent ha!e been put forward by parties simiary situated as in a pre!ious case itigated and decided by a
competent court, the rue of stare decisis is a bar to any attempt to reitigate the same issue. Therefore,
&egros &a!igation is iabe to pay for the damages incurred by ,iranda for the oss of his famiy.
:orean Airlines Co#, %td# @# Co!rt of Appeals
23' /C$A 717
)acts
(n 13C4, Auanito C. Lope-, an automoti!e eectrician, was contracted for empoyment in Aeddah ,
#audi Arabia , for a period of one year through +an +acific <!erseas Eecruiting #er!ices, (nc. Lapu- was
supposed to ea!e on &o!ember C, 13C4, !ia =orean Airines. (nitiay, he was wait isted. 8hen two of
such passengers did not appear, Lapu- and another person by the name of +erico were gi!en two
uncaimed seats.
According to Lapu-, he was aowed to chec1 in with one suitcase and one shouder bag at the
chec10in counter of =AL. )e passed through the customs and immigration section for routine chec10up
and was ceared by departure. )e rode on the shutte bus and proceeded to the ramp of the =AL aircraft
for boarding. )owe!er, when he was the third or fourth rung of the stairs, a =AL officer pointed to him
and shouted. GD<8&V D<8&VHand was barred from ta1ing the fight. 8hen he ater as1ed for another
61
boo1ing, his tic1et was canceed by =AL. Conse7uenty, he was unabe to report for his wor1 in #audi
Arabia within the stipuated 2 wee1 period and so ost his empoyment.
*ss!e
8hether or not the petitioner shoud be iabe for damages.
+eld
A perusa of the paintiff0appeant?s contract of empoyment shows that the effecti!ity of the
contract is for ony one year, renewabe e!ery year for fi!e years. Athough paintiff0appeant intends to
renew his contract, such renewa wi sti be sub6ect to his foreign empoyer. +aintiff appeant had not
yet started wor1ing with his foreign, empoyer, hence, there can be no basis as to whether his contract
wi be renewed by his foreign empoyer or not. Thus, the damages representing the oss of earnings of
paintiff0appeant in the renewa of the contract of the empoyment is at most specuati!e. Damages may
not be awarded on the basis of specuation or con6ecture .5atchaian !s. Deim, 243 #CEA
12'/. Defendant appeant?s iabiity is imited to the one year contract ony. +aintiff appeant is therefore
entited ony to his ost earning for one year, i.e., +'4,444.44 which is 1>% of +344,444.44 the tota
amount of actua damages , representing ost earnings for fi!e years prayed for in the compaint. The
ega interest of 'W on the damages awarded to pri!ate respondent shoud commence from the date of
the decision of the tria court on &o!ember 1$, 1334.
)ort!ne 78press vs# Co!rt of Appeals
3,- /C$A 1'
)acts
A bus of petitioner :ortune *"press, (nc. figured an accident with a 6eepney in Lanao de &orte
which resuted to the death of se!era passengers of the 6eepney incuding two ,aranaos. A
Constabuary agent in!estigated that the 6eepney was owned by a ,aranao and certain ,aranaos were
panning to ta1e re!enge on petitioner by burning some of its buses. #ubse7uenty, the <perations
,anager of :ortune *"press was ad!ised to ta1e precautionary measures. :our days after the accident,
three armed ,aranaos pretended to be passengers of a bus of petitioner. They sei-ed such bus and set
it on fire. The passengers of the bus were as1ed to get off, but one passenger, Atty. Taib Caorong went
bac1 to retrie!e something. )e was shot and 1ied during the incident. +etitioner contends that the
sei-ure by the armed assaiants was a fortuitous e!ent thus it cannot be hed iabe.
62
*ss!e
8hether or not :ortune *"press is iabe for the death of Atty. Caorong.
+eld
The #upreme Court hed that the sei-ure of the bus by the armed ,aranaos cannot be assaied
as a fortuitous e!ent. The re7uisite of unforseeabiity to be considered forced ma6eure is ac1ing. :ortune
*"press 1new that ,aranaos were panning to burn some of its passenger buses and yet petitioner did
nothing to protect the safety of its passengers. +etitioner?s empoyees faied to pre!ent the attac1 on one
of its passengers because they did not e"ercise the diigence of a good father of a famiy. )ence,
petitioner shoud be hed iabe for the death of Atty. Caorong. Art. 17'3 of the &ew Ci!i Code pro!ides
that the common carrier is responsibe for in6uries suffered by a passenger on account of wifu acts of
other passengers, if the empoyees of the common carrier coud ha!e pre!ented the act through proper
diigence. @ecause of :ortune *"press?s negigence, the sei-ure of the bus by the armed ,aranaos was
made possibe.
Philippine $a44it A!s %ines, *nc# v# *ntermediate Appellate Co!rt
1(0 /C$A 1-(
)acts
#e!era peope boarded a 6eepney owned by the spouses (sidro ,angue and 5uiermo Carreon.
#aid 6eepney was dri!en by ,anao and was tra!eing to +ampanga to +angasinan. The passengers
wre on their way home to spend Christmas together with their famiies. <n its way to +angasinan, one of
the rear tires of the 6eepney was detached and it prompted the dri!er to step on the bra1es. 2pon
appying the bra1es the 6eepney made a sudden u0turn and it stopped on the opposite ane of the
highway. #ubse7uent to the une"pected u0turn a +hiippine Eabbit bus bumped the 6eepney from behind.
As a resut of the coision, three passengers died and the others sustained physica in6uries.
The heirs of the passengers fied a case to caim for damages. The ower court hed that ,anao,
the dri!er of the 6eep, was negigent. <n appea the Court of Appeas re!ersed the decision with regard to
the payment of damages to +hiippine Eabbit @us Lines. )ence this petition.
63
*ss!e
1. 8hether or not the doctrine of ast cear chance is appicabe in this case.
2. 8hether or not ,anao is soey iabe for the death and physica in6uries of the !ictims.
+eld
The Court hed that the doctrine of ast cear chance is not appicabe in this case. This doctrine
sha ony appy to suits between the owners and dri!ers of the two coiding !ehices. The case at bar is a
case where the passengers are demanding indemnity from the carrier due to the contract of common
carriage.
(t is cear from the e!idence that it is ,anao and the owners of the 6eepney who are negigent in
this case. There was no proper e"panation as to why the rear whee of the !ehice suddeny became
detached. Therefore the Court affirms the decision of the ower court and hods ,anao and the owners
iabe to pay damages.
A!stamante v# Co!rt of Appeals
G#$# No# (0((,
)acts
A sand and gra!e truc1 was descending on a road, on the opposite direction, was a ,a-ada
passenger bus. The dri!er of the bus noticed that the truc1 was wigging howe!er; the dri!er sti
increased its speed in order to o!erta1e a tractor in front of it. This act of the bus ed to the two !ehices
side swiping each other. #e!era passengers were thrown and caused death and in6ury to them. The
petitioners then fied a suit against the owner and dri!er of the truc1 and the owner and dri!er of the bus.
The tria court hed that both dri!ers shoud be soidariy iabe to the petitioners. :rom the decision, ony
the owner and dri!er of the truc1 appeaed. The respondent court re!ersed the decision as to the two
who appeaed. The petitioners now fied this petition.
*ss!e
64
8hether or not the respondents are iabe.
+eld
The Court hed that the respondents shoud be iabe to the petitioners. The reason is that the
owner of the truc1 is negigent in hiring the dri!er and using the od truc1 in his business which is
detrimenta to other due to its poor condition. <n the other hand, the dri!er is iabe for he was dri!ing the
od truc1 in a descending road and in a fast rate. The dri!er aso noticed the wigging of the tires and did
not gi!e regard to it. :urthermore, the !ehice which is going down or descending is more iabe to get out
of contro because it has added momentum as pro!ided by the Court. The petitioners raised the doctrine
of ast cear chance which the Court disregarded because such doctrine appy ony to two dri!ers against
each other in a case and not in a case where the passenger is caiming for damages against the carrier.
%ara v# @alencia
1,' P+*% 6-
)acts
The deceased was an inspector of the @ureau of :orestry in Da!ao who went to cassify ogs with
defendant in his Cotabato concession. Lara got sic1 of maaria. )e as1ed defendant if he coud ta1e
him in pic10up bac1 to Da!ao. Lara sat at the bac1 of the !ehice on a bag. Lara fe off and ater died.
C:( rendered 6udgment ordering defendant to pay damages.
*ss!e
8hether or not defendant, as owner of the truc1, iabe to the death of Lara when the ater fe off
his !ehice.
+eld
65
As accommodation passenger or in!ited guests, defendant as owner and dri!er of the pic10up
truc1 owes them merey the duty to e"ercise reasonabe care so that they may be transported safey to
their destination. Thus, the rue is estabished by the weight of authority that the owner or operator of an
automobie owes the duty to an in!ited guest to e"ercise reasonabe care and in6ury by increasing the
ha-ards of tra!es. The rue is that n owner of an automobie owes a guest the duty to e"ercise ordinary
or reasonabe care to a!oid in6uring him. #ince one riding in an automobie is no ess a guest because
he as1ed for the pri!iege of doing so, the same obigation of care is imposed upon the dri!er as in case
of one e"pressing in!itation to ride. The e"traordinary diigence re7uired of common carriers is not
re7uired.
(n the case at bar, decared himsef chose the pace where he woud sit and he was haf0aseep
when the accident too1 pace so that the incident is attributed to his ac1 of care considering that the pic10
up was open and he was then in a crouching position. <n the other hand, there is no showing that the
defendant faied to ta1e the precautions necessary to conduct his passengers safey to this pace of
destination. Defendant therefore is not iabe for damages.
Necesito v# Paras
1,' P+*% 7-
)acts
A mother and her son boarded a passenger auto0truc1 of the +hiippine Eabbit @us Line. 8hie
entering a wooden bridge, its front whees swer!ed to the right, the dri!er ost contro and the truc1 fe
into a breast0deep cree1. The mother drowned and the son sustained in6uries. These cases in!o!e
action e" contractu against the owner of +E@L fied by the son and heirs of the mother. Lower Court
dismissed the actions, hoding that the accident was a fortuitous e!ent.
*ss!e
8hether or not the accident was considered a fortuitous e!ent.
66
+eld
8hie the carrier is not an insurer of the safety of the passenger, it shoud ne!ertheess be hed to
answer for the faws of its e7uipment it such defects were disco!erabe. (n this connection, the
manufacturer of the defecti!e appiance is considered in aw the agent of the carrier, and the good repute
of the manufacturer wi not reie!e the carrier from iabiity. The rationae of the carrier?s iabiity is the
fact that the passenger has no pri!ity with the manufacturer of the defecti!e e7uipment; hence he has
no remedy against him, whie the carrier has. 8e find that the defect coud be detected. The periodica,
usua inspection of the steering 1nuc1e did not measure up to the utmost diigence of a !ery cautious
person as far as human care and foresight can pro!ide and therefore the 1nuc1e?s faiure can not be
considered a fortuitous e!ent that e"empts the carrier from responsibiity. Audgment E*D*E#*D, +E@L
to pay indemnity.
<apan Airlines v# Co!rt of Appeals
G$# No# 11((6'
)acts
+ri!ate respondents were passengers of Aapan Airines from Caifornia bound for ,ania. The
fights were to ma1e an o!ernight stopo!er at &airita, Aapan as an incenti!e for tra!eing. )owe!er, due
to the eruption of ,t. +inatubo which rendered the &A(A inaccessibe, respondent?s fight from Aapan to
,ania was indefinitey. AAL assumed the hote e"penses for their une"pected o!ernight stay on Aune
1%, 1331. )owe!er, AAL no onger setted their hote and accommodation e"penses during stay at &auta,
Aapan. #ince &A(A was ony reopened for airine?s traffic on Aune 22, 1331, pri!ate respondent were
forced to pay for their accommodations and mea e"penses from their persona funds from Aune 1' to
Aune 21, 1331. )ence, they commenced an action for damages against AAL for faiing to pro!ide care
and comfort to its stranded passengers when it refused to pay for their hote and accommodation
e"penses from Aune 1' to Aune 21, 1331.
67
*ss!e
8hether or not AAL was iabe for the hote and mea e"penses defrayed by pri!ate respondents
whie pending destination.
+eld
The #upreme Court hed that AAL cannot be hed iabe. (n the case at bar, there was absence of
bad faith and negigence on the part of Aapan Airines. #uch occurrence of the eruption of ,t. +inatubo
amounts to a force ma6eure. 8hen a party is unabe to fufi his obigation because of force ma6eure, the
genera rue is that he cannot be hed iabe for damages for non0performance. Common carriers are not
insurer of a ris1s. Airine passengers must ta1e such ris1s incident to the mode of tra!e. )owe!er, AAL
is not competey abso!ed from iabiity. (t has the obigation to ma1e the necessary arrangements to
transport pri!ate respondents on its first a!aiabe fight to ,ania.
%ay!gan v# *ntermediate Appellate Co!rt
G#$# No# 7300(
)acts
+etitioner and a companion was repairing the tire of a par1ed truc1 aong the &ationa )ighway.
The respondent?s dri!er then rec1essy hit the par1ed truc1 from behind which caused in6uries to the
petitioner. The petitioner then fied for an action of damages against respondent. The ower court
awarded damages to the petitioner. <n appea, the respondent caimed that the petitioner was negigent
in not instaing an eary warning de!ice. The appeate court then re!ersed the decision of the ower court
by finding the petitioner negigent based on the doctrine of res ipsa o7uitur. Thus, the petitioner fied this
appea.
68
*ss!e
8hether or not the respondent shoud be hed iabe for the in6uries incurred by the petitioner.
+eld
The Court hed that the respondent court erred in appying the doctrine of res ipsa o7uitur
because there were pieces of concusi!e e!idence which points to the negigence of the respondent. The
said doctrine ony appies if there is no concusi!e e!idence to determine who is indeed negigent in the
accident. The respondent?s dri!er stated that when the accident occurred his bra1es were not wor1ing
and that he was dri!ing in a fast rate. This shows that the respondent was indeed negigent. The defense
of the respondent that there was no eary warning de!ice wi not stand for there was actuay a amp
ighted and paced at the bac1 of the truc1 which is considered as an eary warning de!ice. Therefore, the
Court found that the respondent is iabe for the in6uries of the petitioner.
>el Castillo v# <aymalin
112 /C$A 620
)acts
,ario a deaf mute is a son of +etitioner De Castio. They are paying passengers of defendant
@ico Transportation operated by A.L Ammen Transportation. ,ario fe upon aigting from the bus and
died.
An action for damages was fied against the dri!er, conductor and bus companies. The court
rendered a 6udgment in fa!or of the respondent. Tria court dismissed the petition based soey that
damages and iabiity of the carrier is based on the earning capacity of the !ictim. (n the case at bar, the
court considered there is no oss of earning capacity considering the !ictim was deaf0mute.
69
*ss!e
8hether or not the bus empoyees are iabe for damages.
+eld
Common carriers are responsibe for the death of their passengers as pro!ided in Artices 13'$
and 224' of the Ci!i Code. (t incudes the oss of the deceased earning capacity. The conductor was
tod and 1nowedgeabe of passenger ,ario being deaf and dumb. The court hed that the conductor
shoud ha!e ta1en e"traordinary care for the safety of the said deaf passenger.
Court procedure demands that the case be remanded to the ower court for determination of the
amount of damages to be awarded. )owe!er, the court considered the pendency of the case being on
ro for 13 years. The #upreme Court determined the damages at +hp12,444 as indemnity for the !ictims
death without interest and +hp2,444 attorney;s fees. The oss of earning capacity is not awarded since
the !i!tim is deaf0mute.
Gatchalian v# >elim
2,3 /C$A 126
)acts
Eeynada 5atchaian boarded a minibus owned and operated by respondent herein. #he boarded
the bus at La 2nion and it was bound for @auang. 8hie the bus was running, one of the passengers
noticed a snapping sound. #he was aarmed and as1ed the dri!er about it, he then repied that it was
norma. #ubse7uenty, the minibus hit a fower pot on the side of the road which caused the bus to turn
turte and it fe into a ditch. #e!era passengers were in6ured in the accident. 5atchaian suffered in6uries
on her eg, arm and face specificay the forehead.
The in6ured passengers were brought to the hospita for treatment of their in6uries. 8hie the
passengers were confined in the hospita, ,rs. Deim, wife of the respondent !isited them and paid for
70
the medica e"penses of the !ictims. @efore ea!ing the hospita, she made the in6ured passengers sign a
prepared affida!it which stated that they were no onger interested in fiing a compaint whether crimina
or ci!i against the dri!er and owner of the minibus. 5atchaian aso signed the said document.
#ubse7uenty, 5atchaian fied a compaint for damages e!en though she had aready signed the
affida!it prepared by ,rs. Deim. The ower court dismissed the compaint of 5atchaian and hed that
there was a !aid wai!er of the right to fie a compaint. The Court of Appeas re!ersed the decision that
there was a !aid wai!er but denied petitioner?s caim for damages. )ence this petition.
*ss!e 8hether or not 5atchaian is entited to the award of damages in ieu of the in6uries that she
suffered.
+eld
The Court hed that there was no !aid wai!er and that 5atchaian is entited to the award of
damages. A wai!er, in order to be !aid, must be couched in cear and e7ui!oca terms which ea!e no
doubt as to the intention of rein7uishing a right that is egay his or hers. A wai!er must not be contrary
to aw, moras, pubic poicy or good customs. The wai!er in this case is not !aid because the terms in
the affida!it did not ceary state the intention of gi!ing up the right to fie a compaint. The words Gno
onger interestedH do not manifesty show such intention. Aso, such wai!er is against pubic poicy
because it woud wea1en the standard of utmost diigence re7uired of common carriers in bringing their
passengers safey to their destination.
(t was estabished through e!idence that the common carrier is guity of negigence. The repy of
the dri!er when as1ed about the snapping sound is sufficient proof to indicate that such sound had been
there for a whie and that the common carrier did not oo1 after the roadworthiness of the !ehice to
assure the safety of the passengers. There was gross negigence on the part of the dri!er because there
was wanton disregard for the passengers safety when he did not stop the minibus after hearing the
snapping sound and the remar1 of one of the passengers.
Therefore the petitioner in this case is entited to recei!e actua or compensatory damages which
incude 1%,444 pesos for the cost of pastic surgery to remo!e the scar on 5atchaian?s face.
71
Cases Applying Articles17-6&1763
/afety of Passengers
Articles Applied
Art. 17%'. (n case of death of or in6uries to passengers, common carriers are presumed to ha!e been at
faut or to ha!e acted negigenty, uness they pro!e that they obser!ed e"traordinary diigence as
prescribed in Artices 1733 and 17%%.
Art. 17%7. The responsibiity of a common carrier for the safety of passengers as re7uired in Artices
1733 and 17%% cannot be dispensed with or essened by stipuation, by the posting of notices, by
statements on tic1ets, or otherwise.
72
Art. 17%C. 8hen a passenger is carried gratuitousy, a stipuation imiting the common carrierIs iabiity for
negigence is !aid, but not for wifu acts or gross negigence.
The reduction of fare does not 6ustify any imitation of the common carrierIs iabiity.
Art. 17%3. Common carriers are iabe for the death of or in6uries to passengers through the negigence or
wifu acts of the formerIs empoyees, athough such empoyees may ha!e acted beyond the scope of
their authority or in !ioation of the orders of the common carriers.
This iabiity of the common carriers does not cease upon proof that they e"ercised a the diigence of a
good father of a famiy in the seection and super!ision of their empoyees.
Art. 17'4. The common carrierIs responsibiity prescribed in the preceding artice cannot be eiminated or
imited by stipuation, by the posting of notices, by statements on the tic1ets or otherwise.
Art. 17'1. The passenger must obser!e the diigence of a good father of a famiy to a!oid in6ury to
himsef.
Art. 17'2. The contributory negigence of the passenger does not bar reco!ery of damages for his death
or in6uries, if the pro"imate cause thereof is the negigence of the common carrier, but the amount of
damages sha be e7uitaby reduced.
Art. 17'3. A common carrier is responsibe for in6uries suffered by a passenger on account of the wifu
acts or negigence of other passengers or of strangers, if the common carrierIs empoyees through the
e"ercise of the diigence of a good father of a famiy coud ha!e pre!ented or stopped the act or
omission.
%a ;allorca v# Co!rt of Appeals
17 /C$A 730
)acts
+aintiffs husband and wife, together with their minor chidren, boarded a La ,aorca bus. 2pon
arri!a at their destination, paintiffs and their chidren aighted from the bus and the father ed them to a
shaded spot about % meters from the !ehice. The father returned to the bus to get a piece of baggage
which was not unoaded. )e was foowed by her daughter Ea7ue. 8hie the father was sti on the
running board awaiting for the conductor to gi!e his baggage, the bus started to run so that the father
had to 6ump. Ea7ue, who was near the bus, was run o!er and 1ied.
73
Lower court rendered 6udgment for the paintiff which was affirmed by CA, hoding La ,aorca
iabe for 7uasi0deict and ordering it to pay +',444 pus +$44. La ,aorco contended that when the chid
was 1ied, she was no onger a passenger and therefore the contract of carriage terminated.
*ss!e
8hether or not the contractua obigation between the parties ceases the moment the passenger
aighted form the !ehice.
+eld
<n the 7uestion whether the iabiity of the carrier, as to the chid who was aready ed a pace %
meters from the bus under the contract of carrier, sti persists, we rue in the affirmati!e. (t is a
recogni-ed rues that the reation between carrier and passengers does not cease at the moment the
passenger aights from the carrier?s premises, to be determined from the circumstances. (n this case,
there was no utmost diigence. :irsty, the dri!er, athough stopping the bus, did not put off the engine.
#econdy, he started to run the bus e!en before the bus conductor ga!e him the signa and whie the
atter was unoading cargo. )ere, the presence of said passenger near the bus was not unreasonabe
and the duration of responsibiity sti e"ists. A!erment of 7uasi0deict is permissibe under the Eues of
Court, athough incompatibe with the contract of carriage. The Eues of Court aows the paintiffs to
aege causes of action in the aternati!e, be they compatibe with each other or not .#ec. 2, Eue 1/.
*!en assuming arguendo that the contract of carriage has aready terminated, herein petitioner can be
hed iabe for the negigence of its dri!er pursuant to Art. 21C4 of &CC. Decision ,<D(:(*D. <ny
7uestion raised in the briefs can be passed upon, and as paintiffs did not appeas the award of
+3,444.44 the increase by the CA of the award to +',444.44 cannot be sustained.
A4oiti" /hipping Corporation vs# Co!rt of Appeals
1(( /C$A 3(7
)acts
Anaceto Diana was a passenger of ,>D Antonia bound for ,ania which was owned by
defendant Aboiti-. After the said !esse has anded, the +ioneer #te!edoring Corp., as the arrastre
operator, too1 o!er the e"cusi!e contro of the cargoes oaded on it. <ne hour after the passengers had
disembar1ed, +ioneer #te!edoring started operation by unoading the cargoes using its crane. Diana
who had aready disembar1ed remembered that some of his cargoes were sti inside the !esse. 8hie
pointing to the crew of the !esse the pace where his cargoes were, the crane hit him, pinning him
between the side of the !esse and the crane which resuted to his death. Diana?s wife fied a compaint
74
for damages against Aboiti- for breach of contract f carriage. Aboiti-, howe!er fied a third party
compaint against +ioneer since it had contro competey o!er the !esse during the incident.
:urthermore, petitioner contends that one hour has aready eapsed from the time Diana disembar1ed,
thus he has aready ceased to be a passenger.
*ss!e
8hether or not Aboiti- is iabe for the death of Diana.
+eld
The #upreme Court hed that the faiure of Aboiti- to e"ercise e"traordinary diigence for the
safety of its passengers ma1es Aboiti- iabe. (t has been recogni-ed as a rue that the reation of the
carrier and passenger does not cease the moment the passenger aights from the carrier?s !ehice, but
continues unti the passenger has had a reasonabe time or a reasonabe opportunity to ea!e the
carrier?s premises. A reasonabe time or a reasonabe deay within this rue is to be determined from a
the circumstances. The primary factor to be considered is the e"istence of a reasonabe cause as wi
6ustify the presence of the !ictim on or near the petitioner?s !esse. (n the case at bar, such 6ustifiabe
cause e"ists because he had to come bac1 for his cargo. Aboiti- has faied to safeguard its passenger
with e"traordinary diigence in re7uiring or seeing to it that precautionary measures were stricty and
actuay enforced to subser!e their purpose of pre!enting entry into a forbidden area.
;allari, /r# v# Co!rt of Appeals
32' /C$A 1'7
)acts
,aari Ar. was the dri!ing a passenger 6eepney owned by his father, co0petitioner herein. The
6eep coided with the dei!ery !an of @uetin +ubishing Corp. whie tra!eing on the &ationa &ighway in
@ataan. ,aari Ar. proceeded to o!erta1e a fiera which had stopped in front of him. )e negotiated the
cur!e and mo!ed in the opposite ane in order to o!erta1e the fiera. As he passed the !ehice he saw the
dei!ery !an of @uetin and the !ehices coided. The points of coision were the and the eft rear portion
of the passenger 6eepney and the eft front side of the dei!ery !an. The 2 right whees of the dei!ery !an
were on the right shouder of the road and pieces of debris from the accident were found scattered aong
75
the shouder of the road up to a certain portion of the ane tra!eed by the passenger 6eepney. The
impact caused the 6eepney to turn around and fa on its eft side resuting in in6uries to its passengers
one of whom was (srae Eeyes who e!entuay died due to the gra!ity of his in6uries.
The widow of Eeyes fied a compaint to reco!er damages from ,aari, Ar. and #r. and @uetin
as we. The tria court found that the pro"imate cause of the coision was the negigence of the dri!er of
the @uetin dei!ery !an, considering the fact that the eft front portion of the dei!ery truc1 hit and
bumped the eft rear portion of the passenger 6eepney. <n appea, the court re!ersed the decision of the
ower court and hed that it was ,aari Ar. who was negigent. )ence this petition.
*ss!e 8hether or not petitioners herein shoud be hed iabe for the death of Eeyes.
+eld
The Court affirmed the decision of the Court of Appeas and hed that ,aari Ar. and #r. who are
responsibe for the death of Eeyes. The coision was caused by the soe negigence of petitioner Afredo
,aari Ar. who admitted that immediatey before the coision and after he rounded a cur!e on the
highway, he o!ertoo1 a :iera which had stopped on his ane and that he had seen the !an dri!en by
Angees before o!erta1ing the :iera. This act of o!erta1ing was in cear !ioation of #ec. $1, pars. .a/ and
.b/, of EA $13' as amended, otherwise 1nown as The Land Transportation and Traffic Code. The rue is
setted that a dri!er abandoning his proper ane for the purpose of o!erta1ing another !ehice in an
ordinary situation has the duty to see to it that the road is cear and not to proceed if he cannot do so in
safety. Artice 21C% of the &CC, there is a presumption of negigence on the part of a person dri!ing a
motor !ehice if at the time of the mishap he was !ioating a traffic reguation. +etitioners herein faied to
present satisfactory e!idence to o!ercome this ega presumption. Therefore they sha be iabe for the
oss of Eeyes? ife.
Aayasen v# Co!rt of Appeals
G#$# No# %&2-7(-
)acts
+etitioner #aturnino @ayasen, the Eura )eath +hysician in #agada, ,ountain +ro!ince, went to
barrio Ambasing to !isit a patient. Two nurses from the #aint Theodore?s )ospita in #agada, *ena
Awichen and Doores @acita, rode with him in the 6eep assigned for the use of the Eura )eath 2nit.
Later, at Ambasing, the girs, who wanted to gather fowers, again as1ed if they coud ride with him up to
a certain pace on the way to barrio #uyo which he intended to !isit anyway. Dr. @ayasen again aowed
them to ride, *ena sitting hersef between him and Doores.
76
<n the way, the 6eep went o!er a precipice. About C feet beow the road, it was boc1ed by a pine
tree. The three, were thrown out of the 6eep. *ena was found ying in a cree1 further beow. #he
suffered a s1u fracture which caused her death. #aturnino @ayasen was charged by with )omicide Thru
Eec1ess (mprudence. Tria Court found @ayasen sentenced him to an indeterminate penaty of $ ,onths
and 1 Day of arresto mayor as minimum, to 1 Bear, 7 ,onths and 14 Days of prision correcciona, as
ma"imum, indemnify the heirs *ena Awichen +3,444.44 as compensatory damages, +1,444.44 as
attorney?s fees and +1,CC'.44 for buria e"penses of the deceased, and to pay the costs. <n Appea, CA
affirmed the decision of the tria court with the modifications that the indemnity was increased to
+',444.44; the award of attorney?s fees was set aside; and that the ma"imum of the prison term was
raised to 1 Bear, 7 ,onths, and 17 Days of prision correcciona. The motion for reconsideration of
@ayasen was denied. )ence, the petition for re!iew on certiorari.
*ss!e
8hether or not the rec1ess dri!ing of accused0petitioner was the pro"imate cause of the death of
the !ictim.
+eld
The pro"imate cause of the tragedy was the s1idding of the rear whees of the 6eep and not the
unreasonabe speed of the petitioner because there was no e!idence on record to pro!e or support the
finding that the petitioner was dri!ing at Gan unreasonabe speedH. The star witness of the prosecution,
Doores @acita who was one of the passengers in the 6eep, testified that #aturnino @ayasen was dri!ing
his 6eep moderatey 6ust before the accident and categoricay stated that she did not 1now what caused
the 6eep to fa into the precipice. (t is a we01nown physica fact that cars may s1id on greasy or sippery
roads, as in the instant case, without faut on account of the manner of handing the car. #1idding means
partia or compete oss of contro of the car under circumstances not necessariy impying negigence. (t
may occur without faut. )erein, under the particuar circumstances, @ayasen who s1idded coud not be
regarded as negigent, the s1idding being an unforeseen e!ent, so that @ayasen had a !aid e"cuse for
his departure from his reguar course.
The negigence of @ayasen has not ha!ing been sufficienty estabished, his guit of the crime
charged has not been pro!en beyond reasonabe doubt. )e is, therefore, entited to ac7uitta. The
#upreme Court set aside the decision of the Court of Appeas sought to be re!iewed, and ac7uitted
@ayasen of the crime charged in the information in Crimina Case 14%' of the C:( of ,ountain +ro!ince,
with costs de oficio.
Cervantes vs# Co!rt of Appeals
3,' /C$A 2-
)acts
(n compiance with a Compromise Agreement entered into by the contending parties, +AL issued
to petitioner &ichoas Cer!antes on ,arch 27, 13C3, a round trip tic1et for ,ania0)onouu0Los Angees0
)onouu0,ania. #uch tic1et e"pressy pro!ided an e"piry date of one year from issuance. :our days
before the e"piration of the sub6ect tic1et, Cer!antes used it. 2pon his arri!a in Los Angees, he
immediatey boo1ed his return tic1et to ,ania with +AL. The same was confirmed for Apri 2, 1334. 2pon
earning that +AL was ma1ing a stop0o!er to #an :rancisco, Cer!antes made arrangements with +AL for
him to board such fight. <n Apri 2, when Cer!antes chec1ed in the +AL counter in #an :rancisco, he
77
was not aowed to board. The +AL personne mar1ed tic1et GT(C=*T &<T ACC*+T*D D2* T<
*X+(EAT(<& <: DAL(D(TBH on his tic1et. Cer!antes fied a compaint for breach of contract.
*ss!e
8hether or not +AL is iabe for breach of contract.
+eld
The #upreme Court hed that +AL is not iabe. +etitioner Cer!antes was fuy aware that there
was a need to send a etter to the ega counse of +AL for the e"tension of the period of !aidity of his
tic1et. The +AL agent was not pri!y to the said agreement, thus the agent acted without authority when
they confirmed the fights of the petitioner. 8hen the petitioner 1nows that the agent was acting beyond
his power, the principa cannot be hed iabe for the acts of the agent. (t further hed that Cer!antes acted
in bad faith since he bought a bac10up tic1et to ensure his departure. The empoyees of +AL were guity
ony of simpe negigence.
Calalas v# Co!rt of Appeals
332 /C$A 3-6

)acts
+ri!ate respondent *i-a #unga, then freshman at #iiman 2ni!ersity , too1 a passenger 6eepney
owned and operated by petitioner Dicente Caaas. As the 6eepney was fied to capacity, #unga was
gi!en by the conductor an e"tension seat, a wooden stoo at the bac1 of the door at the rear end of the
!ehice. 8hen the 6eepney stopped to a et passenger off and #unga was about to gi!e way to the
outgoing passenger, an (-u-u truc1 dri!en by Derena and owned by #a!a bumped the eft rear portion
of the 6eepney. #unga sustained mutipe in6uries and remained on a cast for three months.
78
#unga fied a compaint for damages against Caaas, for breach of contract of carriage. Caaas,
on the other hand,fied a third party compaint against :rancisco #a!a, the owner of the truc1. The ower
court rendered 6udgment against #a!a and abso!ed Caaas of iabiity.
(t too1 cogni-ance of other case .Ci!i Case &o. 3$34/, fied by Caaas against #a!a and
Derena ,for 7uasi0deict, in which branch 37 of the same court hed #a!a and his dri!er Derena 6ointy
iabe to Caaas for the damage to his 6eepney
The CA re!ersed the ower courts ruing on the ground the ground that #unga?s cause of action
was based on a contract of carriage, not 7uasi0depict, and that the common carrier faied to e"ercise the
diigence re7uired under the Ci!i Code. The appeate court dismissed the third0party compaint against
#a!a and ad6udged Caaas iabe for damages to #unga.

*ss!e
8hether or not there was a breach of contract of carriage.

+eld
(in 7uasi0deict, the negigence or faut shoud be ceary estabished because it is the basis of the
action, whereas in breach of contract, the action can be prosecuted merey by pro!ing the e"istence of
the contract and the fact that the obigor, in this case the common carrier, faied to transport his
passenger safey to his destination. (n case of death or in6uries to passengers, Artice 17%' of the Ci!i
Code pro!ides that common carriers are presumed to ha!e been at faut or ha!e acted negigenty
uness they pro!ed that they obser!ed e"traordinary diigence as defined in Arts. 1733 and 17%% of the
Code. This pro!ision necessariy shifts to the common carrier the burden of proof.
(t is immateria that the pro"imate cause of the coision between the 6eepney and the truc1 was
the negigence of the truc1 dri!er. The doctrine of pro"imate cause is appicabe ony in action for 7uasi0
deict, not in actions in!o!ing breach of contract. The doctrine is a de!ice for imputing iabiity to a person
where there is no reation between him and another party. (n such a case, the obigation is created by aw
itsef. @ut, where there is a pre0e"isting contractua reation between parties, it is the parties themse!es
who create the obigation, and the function of the aw is merey to reguate the reation thus created.
PestaDo vs# /po!ses /!mayang
G#$# No# 130(7-
)acts
<n August 3, 13C', Ananias #umayang aong with his friend ,anue Eomagos was riding a
motorcyce aong the &ationa highway in Cebu. 2pon a 6unction where the highway was connected, they
were hit by a passenger bus dri!en by 5regorio +estaKo and owned by ,etro Cebu Auto @us Corp.
#uch bus tried to o!erta1e them sending the motorcyce upon the pa!ement, resuting to the death pf the
passengers of the motorcyce. Actions were fied by the heirs of #umayang against the dri!er and the
owner of ,etro Cubu and its insurer.
79
*ss!e
8hether or not ,etro Cebu and +estaKo are iabe for the death of the passengers of the
motorcyce.
+eld
The #upreme Court hed that ,etro Cebu and +estaK are iabe for the death of #umayang and
Eomagos. As a professiona dri!er operating a pubic transport bus, he shoud ha!e anticipated that
o!erta1ing at a 6unction was a perious maneu!er and thus shoud ha!e e"ercised e"treme caution. The
!ehicuar coision was caused by +estaKo?s negigence when he attempted to o!erta1e the motorcyce.
(n addition, Artices 21C4 and 217' of the Ci!i Code pro!ide that owners and managers are responsibe
for damages caused by their empoyees. The empoyer is presumed to be negigent in the seection or
super!ision of its empoyees when an in6ury is caused by the atter?s negigence. As e!idence has shown
that the bus operated with a defecti!e speedometer, it further pro!ed that ,etro Cebu was negigent in
the super!ision o!er its dri!er. (t thus faied to conduct its business with the diigence re7uired by aw.
>e Gillaco v# ;anila $ailroad Co#
G#$# No# %&(,3'
)acts
Lt. Tomas 5iaco, husband of Corneia A. de 5iaco, was a passenger in the eary morning train
of the ,ania Eairoad Company .,EC/ from Caamba, Laguna to ,ania. 8hen the train reached the
+aco Eairoad station, *miio De!esa, a train guard of ,EC assigned in the ,ania0#an :ernando, La
2nion Line, happened to be in said station waiting for the same train which woud ta1e him to Tutuban
#tation, where he was going to report for duty. De!esa had a ong standing persona grudge against
Tomas 5iaco dating bac1 during the Aapanese occupation. And because of this persona grudge,
De!esa shot 5iaco upon seeing him inside the train. The carbine furnished by the ,EC for his use as
80
train guard. Tomas 5iaco died as a resut of the wound sustained from the shot. De!esa was con!icted
of homicide by fina 6udgment of the Court of Appeas.
8ife of deceased petitioner, fied an action against the ,EC at C:( Laguna. The tria court
sentenced the respondents to pay +$,444 damages to the petitioners. Thus this appea.
*ss!e
8hether or not the carrier shoud be hed iabe
+eld
8hie the passenger is entited to protection from persona !ioence by the carrier or its agents or
empoyees, the responsibiity of the carrier e"tends to those acts that the carrier coud foresee or a!oid
through the e"ercise of the degree of care or diigence re7uired of it. The <d Ci!i Code did not impose
upon the carrier absoute iabiity for assauts of their empoyees upon the passenger. (n the present
case, the act of De!esa is shooting the passenger was entirey unforeseeabe by ,EC. They had no
means to ascertain or anticipate that the two woud meet, or coud it reasonaby foresee e!ery persona
career that might e"ist between each of its may empoyee and any one of the thousands of passengers
riding in its train. The shooting was therefore, a caso fortuito, both being unforeseeabe and ine!itabe,
under the circumstances. The resuting breach of ,ania Eairoad?s contract of safe carriage with the
ate Tomas 5iaco was e"cused thereby. :urthermore, when the crime too1 pace, the guard De!esa had
no duties to discharge in connection with the transportation of the deceased from Caamba to ,ania.
The stipuation of facts is cear that when De!esa shot and 1ied 5iaco, De!esa was assigned to guard
the ,ania0#an :ernando .La 2nion/ trains, and he was at +aco #tation awaiting transportation to
Tutuban.
#C re!ersed the 6udgment appeaed from, and dismissed the compaint, without costs.
;aranan v# Pere"
2, /C$A '12
)acts
Eogeio Carachea was a passenger in a ta"icab operated by +ascua pere- when he was
stabbed and 1ied by the dri!er, who was found guity of homicide in the C:(. 8hie an appea at the CA,
Antonia ,aranan, Eogeio?s mother, fied an action to reco!er damages for the death of her son. The
C:( awarded her +3444 as damages against +ere- dismissing the caim against the dri!er.
*ss!e
8hether or not the carrier is iabe for the assauts of its empoyee upon the passengers.
+eld
81
2nder Art. 1733 of the Ci!i Code, Ga common carrier are iabe for the death of or in6uries to
passengers through the negigence or wifu acts of the former?s empoyees, athough such empoyees
may ha!e ached beyond the scope of their authority or in !ioation of the order of the common carrier.
(t is the carrier?s strict obigation to seect its dri!ers and simiar empoyees with due regard not
ony to technica competence but aso to this tota personaity, their beha!ior and thus mora fiber.
The dismissa of the caim against the dri!er is correct. +aintiff?s action was predicated in breach
of contract of carriage and the cab dri!er was not a part thereto. )is ci!i iabiity is co!ered on the
crimina case.
Philippine National $ailways vs# CA
130 /C$A (7
)acts
8inifredo Tupang was a paying passenger who boarded Train &o. %1' f the +hiippine &ationa
Eaiways at Camarines #ur bound for ,ania. Due to some mechanica defect, the train stopped which
too1 two hours before the train coud resume its trip to ,ania. 2nfortunatey, upon passing (yam @ridge
at Lucena, Tupang fe off the train resuting to his death. Aarm was raised by the passengers that
somebody fe but the train did not stop. (nstead, the train conductor caed the station agent and
re7uested for !erification of the confirmation. Eosario Tupang, the deceased?s widow fied a cmpaint
against +&E for breach of contract f carriage. )owe!er, +&E raised as a defense hat it was a mere
82
agency of the +hiippine go!ernment without distinct or separate personaity of it own. Li1ewise, they
contended that their funds are go!ernmenta in character, thus they are not sub6ect to garnishment or
e"ecution.
*ss!e
8hether or not +&E coud be hed iabe for damages for the death of 8inifredo Tupang.
+eld
The #upreme Court hed that +&E shoud be hed iabe. The +hiippine &ationa Eaiways is not
e"empt from garnishment. (t descends to a e!e of a citi-en, thus it cannot assai non0suabiity as a bar
for damages. 2nder +A $1%', +&E was created generay with a powers of a corporation under the
Corporation Law. )ence, the characteristics and attributes of a corporation is fuy appicabe to +&E.
+&E may sue and be sued and coud be sub6ected to court processes 6ust i1e any other corporation.
The #upreme Court hed that +&E shoud be hed iabe for the death of 8inifredo Tupang because it
acted in bad faith as it did not stop despite the aarm raised by its passengers. +&E has the obigation to
transport its passengers to their destination and to obser!e e"traordinary diigence in doing so.
*saac v# A# %# Ammen 5rans# Co#, *nc#
1,'6 /C$A 1,1
)acts
Cesar (saac boarded one of the buses operated by defendant A.L. Ammen Trans. Co., (nc. @ut
before reaching his destination, the bus coided with a pic1 up type !ehice. The coision caused the
amputation of the eft arm of the paintiff. Due to the incident, the paintiff went through se!era treatments
causing many e"penses. Thus, paintiff fied a case for damages aeging that the coision which resuted
in the oss of his eft arm was mainy due to the gross incompetence and rec1essness of the dri!er of the
bus operated by the defendant. (n addition, he contended that the defendant incurred iabiity in cupa
contractua arising from its non0compiance with its obigation to transport paintiff to his destination.
83
Defendant on its part set up the defense that the in6ury caused was due entirey to the faut or negigence
of the pic1 up car and a contributory negigence on the part of the paintiff.
*ss!e
8hether or not the common carrier iabe for the in6ury caused.
+eld
The #upreme Court hed that the defendant A.L. Ammen Trans. Co., (nc., e"ercised the diigence
re7uired from it and is abso!ed from iabiity for the in6ury caused to its passengers. (t was pro!en in the
case at bar, that the dri!er of the pic1 up car was the soe responsibe for the accident. Eeports show that
the bus was at moderate speed whie the pic1 up was at a fu speed and on the wrong ane. The
#upreme Court i1ewise hed that there was indeed contributory negigence on the part of the paintiff, as
he paced his ebow outside the window 1nowing that such was dangerous. The in6uries caused by the
accident worsen.
The #upreme Court hed that the foowing go!erns the iabiity of a common carrier9 1/ the iabiity
of a carrier is contractua and arises upon breach of its obigation. There is a breach if it fais to e"ert
e"traordinary diigence according to a the circumstances of each case; 2/ a carrier is obiged to carry its
passengers with the utmost diigence of a !ery cautious person, ha!ing due regard for a circumstances;
3/ a carrier is presumed to be at faut or to ha!e acted negigenty in case of death of, or in6ury to,
passengers, it being its duty to pro!e that it e"ercised e"traordinary diigence; and $/ the carrier is not an
insurer against a ris1 of tra!e.

Aachelor 78press, *nc# v# Co!rt of Appeals
G#$# No# (-601
)acts
<rnominio @eter and &arcisa Eautraut were passengers of a bus beonging to petitioner @acheor
*"press, (nc. 8hie the bus was on its way to Cagayan de <ro, a passenger at the rear portion suddeny
stabbed another passenger. The stabbing cause commotion and panic amount the passengers such
that the passengers started running to the soe e"it sho!ing each other resuting in the faing off the bus
by passengers @eter and Eautraut causing them fata in6uries. The heirs of the deceased sued the bus
company *!idence adduced showed that the bus dri!er did not immediatey stop the bus at the height of
the commotion; the bus was speeding from a fu stop; and the !ictims fe from the bus door when it was
opened or ga!e way whie the bus was sti running.
84
+etitioner denied iabiity on the ground that the death of its two passengers was caused by a
force ma6eure as it was due to the act of a third person who was beyond its contro and super!ision. (n
ine with this, petitioner aso argued that it is not an insurer of its passengers.
*ss!e
1. 8hether or not the case at bar is within the conte"t of force ma6eure.
2. 8hether or not the petitioner shoud be abso!ed from iabiity for the death of its passengers.
+eld
The sudden act o the passenger who stabbed another passenger in the bus is within the conte"t
of force ma6eure. )owe!er, in order that a common carrier may be abso!ed from iabiity in case of force
ma6eure, it is not enough that the accident was caused by force ma6eure. The common carrier must sti
pro!es that it was not negigent in causing the in6uries resuting from such accident. Considering the
factua findings in this case, it is cear that petitioner has faied to o!ercome the presumption of faut and
negigence found in the aw go!erning common carriers. The argument that the petitioners are not
insurers of their passengers deser!es no merit in !iew of the faiure of the petitioners to obser!e
e"traordinary diigence in transporting safey the passengers to their destination as warranted by aw.
)ort!ne 78press vs# Co!rt of Appeals
3,- /C$A 1'
)acts
A bus of petitioner :ortune *"press, (nc. figured an accident with a 6eepney in Lanao de &orte
which resuted to the death of se!era passengers of the 6eepney incuding two ,aranaos. A
Constabuary agent in!estigated that the 6eepney was owned by a ,aranao and certain ,aranaos were
panning to ta1e re!enge on petitioner by burning some of its buses. #ubse7uenty, the <perations
,anager of :ortune *"press was ad!ised to ta1e precautionary measures. :our days after the accident,
three armed ,aranaos pretended to be passengers of a bus of petitioner. They sei-ed such bus and set
it on fire. The passengers of the bus were as1ed to get off, but one passenger, Atty. Taib Caorong went
85
bac1 to retrie!e something. )e was shot and 1ied during the incident. +etitioner contends that the
sei-ure by the armed assaiants was a fortuitous e!ent thus it cannot be hed iabe.
*ss!e
8hether or not :ortune *"press is iabe for the death of Atty. Caorong.
+eld
The #upreme Court hed that the sei-ure of the bus by the armed ,aranaos cannot be assaied
as a fortuitous e!ent. The re7uisite of unforseeabiity to be considered forced ma6eure is ac1ing. :ortune
*"press 1new that ,aranaos were panning to burn some of its passenger buses and yet petitioner did
nothing to protect the safety of its passengers. +etitioner?s empoyees faied to pre!ent the attac1 on one
of its passengers because they did not e"ercise the diigence of a good father of a famiy. )ence,
petitioner shoud be hed iabe for the death of Atty. Caorong. Art. 17'3 of the &ew Ci!i Code pro!ides
that the common carrier is responsibe for in6uries suffered by a passenger on account of wifu acts of
other passengers, if the empoyees of the common carrier coud ha!e pre!ented the act through proper
diigence. @ecause of :ortune *"press?s negigence, the sei-ure of the bus by the armed ,aranaos was
made possibe.
86
%ia4ility of Common Carriers
Payment of
>amages
Cariaga v# %ag!na 5aya4as A!s
11, P+*% 3'6
)acts
*dgardo Cariaga, a fourth year medica student at the 2ni!ersity of #anto Tomas suffered
physica in6uries from a coision between a train of ,ania Eairoad and the Laguna Tayabas @us .LT@/
which he was on board. The bus coided with the train whie the former was about to cross the rairoad.
)e suffered a se!ere head in6ury which diminished his inteigence and he wi no onger be abe to
continue his studies as a medica student. The said in6ury that he sustained aso made him physicay
and mentay incapabe of wor1ing. A of the medica e"penses were paid LT@ pus aowances.
87
A case was fied by *dgardo?s parents against LT@ and ,ania Eairoad to reco!er actua,
compensatory, mora and e"empary damages amounting to 312,444 pesos. LT@ fied a cross0compaint
aeging that it was ,EE who was negigent by not bowing its whiste as a warning for the !ehices that
were crossing the rairoad and that there was no crossing bar at the said crossing. The ower court hed
that LT@ was negigent in crossing and the in6uries sustained by *dgardo Cariaga was due to the said
negigence of the dri!er of the bus. The cross0compaint was dismissed by the ower court and ordered
LT@ to pay 14,$34 pesos as compensatory damages pus interest. )ence this petition by LT@.
*ss!e
1. 8hether or not LT@ shoud be hed soey iabe for the in6uries of *dgardo Cariaga.
2. 8hether or not the award of damages by the ower court is proper.
+eld The Court hed that it was LT@ that was negigent and not the dri!er of the train. The dri!er of the
bus ignored the whiste of the train. )e shoud ha!e e"ercised utmost diigence in crossing the rairoad
trac1s. The coision between the bus and the train e!en caused the atter to be deraied. Therefore LT@
shoud be soey iabe for the payment of damages to the Cariaga?s.
As to the award of damages, the Court hed that the amount of 14,$34 pesos is inade7uate.
Artice 2241 of the &CC pro!ides that a common carrier sha be iabe for actua or compensatory
damages, those which are natura and probabe conse7uences of the breach of the contract of common
carriage and which the parties had foreseen or coud ha!e reasonaby foreseen at the time the obigation
was constituted, pro!ided such damages ha!e been duy pro!ided. This means that, actua or
compensatory damages are not ony imited to medica and other e"penses. (t incudes the possibe
income that *dgardo woud ha!e earned after graduating from medica schoo. Considering that *dgardo
was aready a fourth year med student at the time that he boarded the bus, such income coud be
foreseen. These circumstances woud ma1e it sufficient to presume that he woud ha!e finished schoo
and passed the board e"am. The award of actua damages shoud be increased to 2%,444 pesos
assuming that the income of *dgardo woud ha!e been 344 pesos a month.
The parents of *dgardo are not parties in this case because the contract of common carriage was
between LT@ and *dgardo. They were not in6ured in the accident therefore their caim for damages is
without merit. &o award of mora damages may be gi!en because the circumstances of this case do not
fa under the enumeration pro!ided in Artice 2213 and Artice 2224 of the &CC. Attorney?s fees cannot
be granted as we for the same reason that the circumstances do not fa under Artice 224C of the &CC.
@illa $ey 5ransit, *nc# v# Co!rt of Appeals
31 /C$A -11
)acts
+oicarpio Ouintos, Ar. boarded a Dia Eey Transit bus at +angasinan which was bound for
,ania. )e was seated at the first seat on the right side of the bus. The bus met an accident at a bridge
in +ampanga. (t hit the bac1 of a bucart fu of hay whie it was crossing the said bridge. 2nfortunatey,
there was a bamboo poe tied to the cart and the end of this bamboo poe penetrated through the wind
shied of the bus and hit the face of Ouintos. A La ,aorca bus was passing by the same bridge and
88
heped bring Ouintos, Ar. and those who were on board the bucart to the hospita. The bamboo poe
caused a se!ere in6ury to his eye and head which ater on resuted into his death.
A compaint was fied by the sisters of Ouintos to reco!er damages from Dia Eey Transit. The
Court of :irst (nstance hed that Dia Eey Transit is iabe to pay actua or compensatory damages in the
amount of '3,7%4 pesos as we as attorney?s fees. Dia Eey Transit appeaed the case and the Court of
Appeas affirmed the decision of the ower court. )ence this petition.
*ss!e
8hether or not the amount awarded as damages to the heirs of Ouintos is proper.
+eld
The Court modified the award of damages to the heirs of Ouintos. (t e"pained that the award of
damages is computed with regard to the ife e"pectancy of the deceased and the rate of osses
sustained by the deceased sisters. The court emphasi-ed that the ife e"pectancy of the !ictim is !ery
important in the computation of actua damages howe!er it is not the soe basis for computation of the
said amount. *"penses sha be deducted from the amount determined to be the monthy income of the
deceased. (t is proper to deduct i!ing e"penses that the !ictim woud ha!e aso incurred if he were ai!e.
Therefore the award of actua damages sha be 33,333 pesos with regard to Ouintos? possibe
earnings, the amount of medica and buria e"penses, and 12,444 pesos pursuant to Artices 14$ and
147 of the E+C in reation to Artice 224' of the &CC. (n addition to this, attorney?s fees sha be awarded
as we.
Gatchalian v# >elim
2,3 /C$A 126
)acts
Eeynada 5atchaian boarded a minibus owned and operated by respondent herein. #he boarded
the bus at La 2nion and it was bound for @auang. 8hie the bus was running, one of the passengers
noticed a snapping sound. #he was aarmed and as1ed the dri!er about it, he then repied that it was
norma. #ubse7uenty, the minibus hit a fower pot on the side of the road which caused the bus to turn
89
turte and it fe into a ditch. #e!era passengers were in6ured in the accident. 5atchaian suffered in6uries
on her eg, arm and face specificay the forehead.
The in6ured passengers were brought to the hospita for treatment of their in6uries. 8hie the
passengers were confined in the hospita, ,rs. Deim, wife of the respondent !isited them and paid for
the medica e"penses of the !ictims. @efore ea!ing the hospita, she made the in6ured passengers sign a
prepared affida!it which stated that they were no onger interested in fiing a compaint whether crimina
or ci!i against the dri!er and owner of the minibus. 5atchaian aso signed the said document.
#ubse7uenty, 5atchaian fied a compaint for damages e!en though she had aready signed the
affida!it prepared by ,rs. Deim. The ower court dismissed the compaint of 5atchaian and hed that
there was a !aid wai!er of the right to fie a compaint. The Court of Appeas re!ersed the decision that
there was a !aid wai!er but denied petitioner?s caim for damages. )ence this petition.
*ss!e
8hether or not 5atchaian is entited to the award of damages in ieu of the in6uries that she
suffered.
+eld
he Court hed that there was no !aid wai!er and that 5atchaian is entited to the award of
damages. A wai!er, in order to be !aid, must be couched in cear and e7ui!oca terms which ea!e no
doubt as to the intention of rein7uishing a right that is egay his or hers. A wai!er must not be contrary
to aw, moras, pubic poicy or good customs. The wai!er in this case is not !aid because the terms in
the affida!it did not ceary state the intention of gi!ing up the right to fie a compaint. The words Gno
onger interestedH do not manifesty show such intention. Aso, such wai!er is against pubic poicy
because it woud wea1en the standard of utmost diigence re7uired of common carriers in bringing their
passengers safey to their destination.
(t was estabished through e!idence that the common carrier is guity of negigence. The repy of
the dri!er when as1ed about the snapping sound is sufficient proof to indicate that such sound had been
there for a whie and that the common carrier did not oo1 after the roadworthiness of the !ehice to
assure the safety of the passengers. There was gross negigence on the part of the dri!er because there
was wanton disregard for the passengers safety when he did not stop the minibus after hearing the
snapping sound and the remar1 of one of the passengers.
Therefore the petitioner in this case is entited to recei!e actua or compensatory damages which
incude 1%,444 pesos for the cost of pastic surgery to remo!e the scar on 5atchaian?s face.
/o4erano v# ;anila $ailroad = Aeng!et A!to %ine
1( /C$A 732
)acts
Auana #oberano was a passenger of a @enguet Auto ine bus bound for @aguio from (ocos #ur.
#he has brought on board the bus some eggs which was her business. 8hen the bus reached &aguiian
road it hit a stone emban1ment, this caused the bus to fa from a '%0foot precipice. As a resut of the
90
accident 2 passengers died and se!era passengers were in6ured. #oberano was aso in6ured in the said
accident. A of her beongings were ost and destroyed as a resut of the accident.
The defendant in this case offered to pay %,444 pesos for the in6ury and oss caused by the
accident. )owe!er, #oberano re6ected the offer and instituted a case to reco!er damages in the amount
of 7',7%7.7' pesos. The ower court awarded %,444 pesos for actua or compensatory damages.
+etitioner herein caims that the award of damages is not enough and that the defendant herein was in
bad faith for not satisfying her caim. )ence this petition.
*ss!e
8hether or not #oberano is entited to reco!er a higher amount as to damages for the in6ury and
oss she sustained.
+eld The Court hed that the award of actua damages, in reation to oss of earning capacity shoud be
increased from %,444 to 1%,444 pesos. +etitioner herein suffered physica in6uries which resuted in a oss
of positi!e economic !aues. #he had been a merchant since 13%4 and she has been earning 1,%44
pesos a year. Therefore, the award of damages with regard to her oss of earning capacity shoud be
increased to 1%,444 pesos. (n addition to this amount, the defendant herein sha aso pay for the unpaid
aowances and the oss of profit for the eggs which were damaged in the accident.
Defendant herein cannot be hed to be in bad faith for not satisfying the caim of the petitioner. (t
was 6ustified in re6ecting the caim of the petitioner because the amount as1ed of them was too much.
The defendant in this case did not compe #oberano to fie a case, she re6ected the offer of the former
and decided to push through with this case. Therefore, no other damages shoud be awarded to the
petitioner.
;archan vs# ;endo"a
G#$# No# %&2''71
)acts
A passenger bus of the +hiippine Eabbit @us Lines, dri!en by #i!erio ,archan, fe into a ditch
whie tra!eing on its way to ,ania. As a resut of which respondents Arsenio ,endo-a, his wife and
chid, passengers of the said bus were thrown out to the ground resuting in their mutipe in6uries. (t was
pro!en that the bus was tra!eing at high speed without due regard to the safety of its passengers and
91
that passengers compained and as1ed ,achan, the dri!er to sow down. <n the contrary, ,archan
increased its speed whie approaching a truc1 which was then par1ed, apparenty to a!oid coision with
the incoming !ehice from the opposite direction. The rear tires of the bus s1idded because of its high
speed which caused the bus to fa into a ditch. #ubse7uenty, ,archan was con!icted for physica
in6uries through rec1ess imprudence.
*ss!e
8hether or not ,archan and +hiippine Eabbit @us Lines are iabe for the in6uries suffered by its
passengers.
+eld
The #upreme Court hed that the pro"imate cause of the accident was the gross negigence of
,archan who when dri!ing is e"pected to ha!e empoyed the highest degree of care. )e shoud ha!e
been assiduousy prudent in handing his !ehice to insure the safety of his passengers. There is no
reason why he shoudn?t stop the !ehice upon noticing a par1ed truc1 in front of him. )e must ha!e
ta1en precautionary measures in securing the safety of his passengers. +hiippine Eabbit is aso iabe
because common carriers cannot escape iabiity for the death or in6uries to passengers through the
negigence and wifu acts of the formerIs empoyees, athough such empoyees may ha!e acted beyond
the scope of their authority or in !ioation of the orders. The awarding of compensatory damages is
reasonabe because Arsenio ,endo-a had suffered paraysis on the ower e"tremities, which wi
incapacitate him to engage in his customary occupation throughout the remaining years of his ife. The
awarding of e"empary damages i1ewise is found 6ust athough the paintiffs did not specify such caim.
The court is caed upon the e"ercise and can use its discretion in the imposition of puniti!e or e"empary
damages e!en though not e"pressy prayed or peaded in the paintiffsI compaint.
Philippine Airlines vs# Co!rt of Appeals
1(- /C$A 11,
)acts
The #traight :ight of +hiippine Airines .+AL/ with 33 passengers too1 off from (oio bpund for
,ania. An hour and fifteen after it crashed in ,indoro. The pane was manufacture 13$2 and was
ac7uired by the airine 13$C. (t has been certified as airworthy by the Ci!i Aeronautics Administration.
92
+assenger &icanor +adia is 23 years od, singe and dead. )is ony ega heir is his mother
&ati!idad +adia who fied for damages. #he demanded +hp'44,444 as actua and compensatory
damages, e"empary damages and +hp'4,444 attorney;s fees.
*ss!e
)ow are damages computed.
+eld
The award of damages for death is computed on the ife e"pectancy of the deceased and not of
the beneficiary. Artce 17'$ of the Ci!i Code pro!ides that artice 224' sha aso appu to death of
passenger caused by the breach of contract by the common carrier.
The manner of computing damages is ta1en from Da!ia !s. CA. &et yeary income mutipied by
the Life *"pectancy of the deceased. The Life *"pectancy is based on the American *"pectancy Tabe
of ,ortaity formua .2>3"UC4034Y/ cited from Dia Eey Transit (nc. !s. CA.
The income and saary of &icanor +adia is e!idenced by witnesses, the auditor and manager of
Aied <!erseas Trading, pay ros of the companies and his income ta" returns.
The tria court determined the deceased gross annua income to be +hp23,144 from his yeary
saary from +adia shipping Company and Aied <!erseas Trading Company. The court considered that
he is singe and thus deducted +hp3, 244 as yeary i!ing e"penses.
)is &*T (&C<,* is thus, 13,344 with a ife e"pectancy of 34 years. .&et income " Life
*"pectancy/ is +hp$17, 444. This is the amount of indemnity his mother is to recei!e.
This incudes a ega rate of interest of 'W annum from date of 6udgment on 31August1373 unti
fuy paid.
>e Caliston vs# Co!rt of Appeals
122 /C$A 0-(
)acts
Auana #on-a Dda. De Darrocha was run o!er by a passenger bus dri!en by Damacio which
resuted to the former?s death. Da Erocha was a 2#DA pensioner. #he was sur!i!ed by her ony chid,
5oria Darrocha de Caiston. Damacio was con!icted subse7uenty of homicide thru rec1ess
imprudence. )e was sentenced to imprisonment and was ordered to pay de Caiston +1%,444 for the
93
death of Darrocha, +%,444 as mora damages, +%,444 for buria e"penses and +14,444 for oss of
pension, which the deceased had faied to recei!e. <n appea, the CA modified the C:( decision and
abso!ed Damacio from the payment of the +14,444 for oss of pension and credited him for the amount
of +%,444, pre!iousy paid to de Caiston under a !ehicuar insurance poicy obtained by the bus owner.
*ss!e
8hether or not the deetion of the +14, 444 awarded for the oss of pension proper.
+eld
Bes the deetion of damages for oss of pension was unwarranted. The pension of the decedent
being a sure income was cut short by her death, for which Damacio was responsibe. The sur!i!ing heir,
de Caiston, is entited to the award of +14, 444, which is 6ust e7ui!aent to the pension the decedent
woud ha!e recei!ed for one year if she did not die. The +%, 444 paid to de Caiston by the insurer of the
passenger bus which figured in the accident may be deemed to ha!e come from the bus owner who
procured the insurance. #ince the ci!i iabiity .e"0deicto/ of the bus owner for the death caused by his
dri!er is subsidiary and, at bottom, arises from the same cupa, the insurance proceeds shoud be
credited in fa!or of the errant dri!er.
Philippine Airlines v# Co!rt of Appeals
1,6 /C$A 301
)acts
#amson is a icensed a!iator empoyed by the +hiippine Airines. )e was partnered with another
piot @ustamante. #amson had compained on pre!ious occasions to +AL that @ustamante was sow in
reacting and was ha!ing apses of poor 6udgment during fights. +AL howe!er sti aowed @ustamante to
continue fying.
94
<n a certain fight, @ustamante o!ershot the airfied whie anding the pane at the Daet airport.
#amson tried to contro the pane, but did not succeed. The pane crash0anded beyond the runway into
a mangro!e. #amson hit his head on the windshied due to the impact of the crash. )e suffered head
in6uries such as brain concussions and wounds on his forehead. To ma1e matters worse, paintiff was
discharged from empoyment. #amson then fied an action for damages against +AL.
*ss!e
8hether or not +AL is iabe for damages.
+eld
The Court hed that +AL is iabe for damages. There was gross negigence on the part of +AL
because despite the 1nowedge of @ustamante?s condition the sti aowed him to continue fying.
@ustamante had a tumor in his nasopharyn" which affected his !ision. As pro!ided in Artices 1732,
1733, and 17%' of the &CC, +AL being a common carrier shoud ha!e e"ercised e"traordinary diigence
in the super!ision of their empoyees and utmost diigence in bringing passengers to their destination.
The court affirmed the decision of the tria court in awaring damages. +ri!ate respondent is
entited to +13C,444.44 as unearned income or compusory damages, +C4,444.44 for mora damages,
+24,444 as attorney?s fees and +%,444 as e"penses for itigation. This caim of the paintiff for oss and
impairment of earning capacity is based on the pro!ision of Art. 224%, &CC. *!en from the standpoint of
the petitioner that there is empoyer0empoyee reationship between it and pri!ate respondent arising
from the contract of empoyment, pri!ate respondent is sti entited to mora damages in !iew of the
finding of bad faith or maice, appying the pro!isions of Art. 2224 of the &CC.
Cachero v# ;anila .ellow 5a8ica4
1,1 P+*% -23
)acts
Atty. Cachero, paintiff herein, boarded a ta"icab owned by the ,ania Beow Ta"icab Co., (nc.
The said ta"icab bumped against a ,eraco post. The ta"icab was bady smashed and the paintiff fe
out of the !ehice to the ground. As a resut of the accident, he suffered sight physica in6uries. The dri!er
of the ta"i was prosecuted and con!icted criminay. Eespondent herein offered to sette the case and the
95
paintiff demanded the amount of +73,2$%.'% as for damages. Eespondent refused to pay the said
amount. +aintiff then proceeded to fie a case to reco!er the same amount through the courts. The C:(
rendered a decision in fa!or of the paintiff and ordered that respondent pay the amount of +744 for
medica and transportation aowances, attorney?s fees and professiona fees. @oth parties appeaed and
the decision was affirmed. )ence this petition.
*ss!e 8hether or not Cachero is entited to reco!er damages other than those aready awarded.
+eld
The Court modified the decision of the ower court. The award of professiona fees were reduced
to +2,444 and the award of mora damages of +2,444. +aintiff in this case did not maintain his action
against a persons iabe for the breach of the contract of common carriage. #ince he did not incude the
dri!er in this compaint he may not reco!er mora damages. Eespondent herein did not commit any
crimina offense against the paintiff, it was the dri!er who was the reason behind the in6ury. This case
does not fa under Artice 2213 of the &CC therefore he is not entited to be awarded mora damages.
)ores v# ;iranda
1,- P+*% 266
)acts
(reneo ,iranda, a professor of :ine Arts, was a passenger of a passenger 6eepney registered to
:ores but actua operated by #ac1erman. The !ehice was descending the #ta. ,esa bridge at an
e"cessi!e rate of speed, and the dri!er ost contro of the same which caused it to swer!e and to hit the
bridge wa. As a resut of the accident, :i!e of the passengers were in6ured, incuding the respondent
96
herein. )e suffered a fracture of the upper right humerus. )e was ta1en to the &ationa <rthopedic
)ospita for treatment, and ater was sub6ected to a series of operations. At the time of the tria, it
appears that respondent had not yet reco!ered the use of his right arm. The dri!er was charged with
serious physica in6uries through rec1ess imprudence, and upon interposing a pea of guity was
sentenced accordingy. The ower court awarded actua damages to the respondent. <n appea, the
Court reduced the amount of actua damages and added the award of mora damages and attorney?s
fees. )ence this petition.
*ss!e
8hether or not the award of mora damages and attorney?s fee was proper.
+eld
The Court hed that the award of mora damages is not proper in this case. As a genera rue,
mora damages are not awarded to the !ictim in cases of breach of contract of common carriage. The
e"ception is that if such accident resuted in the death of the passenger, in which case Artice 17'$ of the
&CC, ma1es the carrier sub6ect to Artice 224' of the &CC. (n case death did not resut from the
accident, mora damages may be reco!ered if the common carrier is found guity of gross negigence
amounting to bad faith or maice. (n the case at bar there was no bad faith on the part of the common
carrier. Therefore, respondent is not entited to mora damages. As to the issue of attorney?s fee, the
court may moto proprio award mora damages as the case may be. Attorney?s fees may be awarded by
the court if it is deemed to be 6ust and e7uitabe. Therefore, the Court set aside the decision of the Court
of Appeas as far as mora damages are concerned.
%ope" v# Pan American Airways
16 /C$A '31
)acts
#enator Lope- and party .paintiffs/ made reser!ations for first cass accommodations with +an
American Airways .+an Am/ for a fight from To1yo to #an :rancisco. +an Am?s #an :rancisco )ead
<ffice confirmed the reser!ations made by the paintiffs. The first cass tic1ets for the said fight were
subse7uenty issued by +an Am in fa!or the paintiffs. As schedued, paintiffs eft ,ania by &orthwest
Airines and arri!ed in To1yo the same day. As soon they arri!ed, #enator Lope- re7uested ,inister
97
@usuego of the +hiippine *mbassy to contact +an Am?s To1yo <ffice regarding their first cass
accommodations for that e!ening?s fight. )owe!er, they found out that a first cass seats were boo1ed.
+an Am?s agent mista1eny canceed the reser!ation made by the paintiffs and deiberatey withhed the
incident from the atter. +an Am too1 the chance that some of the passengers woud cance their first
cass seats and they woud be abe to accommodate the paintiffs. This ne!er happened.
#ince the first cass seats therein were a ta1en, +an Am?s To1yo <ffice informed the paintiffs
that it coud not accommodate them in that trip as first0cass passengers. Due to the urgency of their
arri!a in the 2nited #tates they were constrained to ta1e the fight from To1yo to #an :rancisco as tourist
passengers.
*ss!e 8hether or not +an Am is iabe for mora, e"empary damages and attorney?s fees.
+eld
The Court hed that +an Am?s actions amounted to bad faith and maice which entited
the paintiffs herein to be awarded mora and e"empary damages. The act of miseading paintiffs to
beie!e that they had in fact purchased first cass tic1ets when in they ha!e not was a wifu breach of the
contract of common carriage. #aid actions of +an Am may indeed ha!e been prompted by nothing more
that the promotion of its sef0interest in hoding on to #enator Lope- and party as passengers in its fight
and forecosing their chances to see1 the ser!ices of other airines that may ha!e been abe to afford
them first cass accommodations. Therefore paintiffs are entited to recei!e the award of mora damages.
The award of e"empary damages is aso proper in this case because such damages are reco!erabe in
breach of contract where the defendant acted in a wanton, frauduent, rec1ess, oppressi!e or mae!oent
manner. Lasty, a wor1ing contract for an attorney?s fees, sha contro the amount to be paid therefore
uness found by the court to be unconscionabe or unreasonabe.
6rtigas, <r# v# %!fthansa
6' /C$A 61,
)acts
+etitioner is boo1ed on a first cass accommodation in defendants airine from Eome to ,ania.
The boo1ing was confirmed by its airines office. The airine empoyee upong seeing his :iipino
nationaity disaowed his boarding and the seat was gi!en to a @egian. +etitioner has a heart aiment
and is ad!ised by physician to ta1e ony frst cass accommodations. )e was promised to be transferred
98
to first cass on a succeeding ayo!ers from Cairo to )ong1ong to no a!ai. Damages was fied. Tria
court awarded ,ora and *"empary damages.
*ss!e
8hether or not defendant is iabe for damages.
+eld
Bes. (nattenton and ac1 of care on the carrier rsuting in the faiure of the passenger to be
accommodated in a cass a!aied of and contracted amounts to bad faith and fraud. :urthermore, the
preference to a @egian passenger is aso a wanton disregard of his right from discrimination. The
successi!e fase representations of transferring him to first cass is an act of maice and bad faith. This
entites petitioner to mora damages in accordance to Articec 2224. ,ora damages is increased to
+hp1%,444 and *"empary damages to +hp144,444.
Philippine $a44it A!s %ines v# 7sg!erra
117 /C$A 7'1
)acts
Eespondent herein boarded a bus of the paintiff herein which was bound for +ampanga from
,ania. )e sat a few seats behind the dri!er on the eft side of the bus near the window. 8hie on route
to +ampanga, the bus sideswiped with a freight truc1 owned and operated by Transport Contractors, the
atter coming from the opposite side of the highway. The window gass near the dri!erIs seat of the bus
was detached and the eft side of its body was damaged. During the course of the accident, the eft
99
forearm of *sguerra was hit by a hard bunt ob6ect. (t caused the brea1ing of its bones into sma
fragments whie the soft tissues of the musces and the s1in were mascerated. )e was immediatey
brought to the @uacan +ro!incia )ospita in ,aoos, @uacan for treatment. 2nfortunatey, because of
the se!ere damage caused, his eft arm was amputated.
Defendant herein fied a case to reco!er damages. The ower court rendered a decision in fa!or
of *sguerra, finding that both !ehices were rec1ess in dri!ing. <n appea, the court affirmed the
decision of the ower court and awarded actua and mora damages to the respondent herein. )ence this
petition.
*ss!e
8hether or not the respondent is entited to recei!e mora damages.
+eld
The Court hed that the Court of Appeas erred in awarding mora damages to the respondent
herein. As a genera rue mora damages are not reco!erabe in actions for damages predicated on a
breach of the contract of transportation, as in the instant case, in !iew of the pro!isions of Artices 2213
and 2224 of the &ew Ci!i Code. The e"ceptions are .1/ where the mishap resuts in the death of a
passenger, and .2/ where it is pro!ed that the carrier was guity of fraud or bad faith, e!en if death does
not resut. (n the case at bar, the Court finds that both !ehices were in their respecti!e anes and both
were e7uay negigent. The Court does not find that there was maice or bad faith on the part of the
dri!er of the petitioner herein. Therefore the award of mora damages is deeted and the rest affirmed.
/weet %ines v# Co!rt of Appeals
121 /C$A 760
)acts
The respondents, ha!ing first cass tic1ets, boarded the ,>D #weet 5race to Catbaogan. The
!esse had some engine probems which ed to a change of schedue and they were thus deayed for a
substantia amount of time. :urthermore, the !esse bought the respondents to Tacoban instead of
Catbaogan. This ed the respondents to purchase another set of tic1ets and to ride another ferryboat
100
going to Catbaogan. The respondents then sued the petitioner carrier for damages for the breach of
contract of carriage.
*ss!e
8hether or not the petitioner is iabe for damages.
+eld
The Court hed that the petitioner is iabe for damages specificay mora damages because there
was bad faith on its part. The Court found that such bad faith is present based on three circumstances
namey9
1. +etitioner did not gi!e any notice to the respondents as to the change of schedue of
the !esse.
2. The petitioner 1new fuy that it woud ta1e no ess than fifteen .1%/ hours to effect the
repairs of the damaged engine. The petitioner aso assured that the !esse wi ea!e
within a short period of time and when the defendants wanted to ea!e the trip
petitioner stated that the Gthe !esse is aready ea!ing.H
3. The petitioner did not e!en offer to refund the tic1ets and pro!ide for their
transportation from Tacoban to Catbaogan.
Pr!dencio v# Alliance 5ransport /ystem
1'( /C$A '',
)acts
Dra. #ofia L. +rudenciado was dri!ing her own car aong Taft A!enue to go to the +hiippine
&orma Coege Compound where she woud hod casses. As she was mo!ing sowy in a norma rate,
her car was then hit by the ta"i operated by the respondent. The accident caused the petitioner physica
in6uries and a brain concussion. #he then fied for an action for damages against respondent. The ower
101
court, finding the respondent?s dri!er to be negigent, granted the damages and the Court of Appeas
reduced the damages. The petitioner then appeaed from the decision of the appeate court.
*ss!e
8hether or not the award of damages by the Court of Appeas was correct.
+eld
The Court hed that the reduction of the mora damages by the appeate court to the petitioner
was unreasonabe and drastic. The reason was that the tria court found the respondent to be grossy
negigent in in6uring the petitioner. The award of mora damages was proper. The appea by the petitioner
is proper because, as a doctor, she has reasonabe fears that such accident due to the careessness of
the respondent?s dri!er can greaty affect her profession.
*"empary damages are aso awarded to the petitioner to pro!ide for an e"ampe or correction to
pubic good. The reason is that the respondent?s dri!er was dri!ing at a high speed on a rainy day and on
a sippery road with compete disregard with the safety of other peope.
Pan American Corld Airways, *nc# v# *ntermediate Appellate Co!rt
1-3 /C$A -21
)acts
+ri!ate respondent Tinitigan, fied a compaint against petitioner for damages arising from
defendantIs aeged refusa to accommodate her on +an Am :ight &o. $31 from #to. Domingo,
Eepubica Dominica to #an Auan, +uerto Eico notwithstanding that she possessed a confirmed pane
tic1et. #he is a businesswoman and a mutimiionaire .proprietor of #ampaguita Eestaurant, &ew Bor1
102
City 2#A; Treasurer of the ,oa!e De!eopment Corp., +hi., proprietor of Ca!ite )ousehod Appiances
and EowenaIs )andicraft, +hi./, was on a business trip with a +an0Am tic1et. 8hie in #to. Domingo,
Tinitigan is e"pected to be in #an Auan that same day to meet a cient to sign a contract or ose it. #he
was e"pected to ma1e a profit of F1,444 in said contract but her faiure to board the fight, said profit was
ost.
The refusa of accommodation caused her to suffer menta anguish, serious an"iety, besmirched
reputation, wounded feeings and socia humiiation #he prayed that she be awarded mora damages of
+%44,444.44, e"empary damages of +244,444.44, attorneyIs fees of +144,444.44 and actua damages
sustained by her in the amount of 2#F1,%$'.1%. Defendant denied that paintiff was a confirmed
passenger since the tic1et issued to her was on an open space basis, which meant that she coud ony
be accommodated if any of the confirmed passengers faied to show up at the airport before departure.
The ower court rendered 6udgment in fa!or of paintiff and awarded the amount of damages as prayed
for. #aid decision was affirmed hence the instant petition.
*ss!e 8hether or not the award of damages was proper.
+eld
Bes, but sub6ect to modifications. <ther instances which caused mora damage to the paintiff are
the foowing9
1. 8hie paintiff was standing in ine to board the aircraft, a +an Am empoyee ordered her in a oud
!oice to step out of ine because her tic1et was not confirmed to her embarrassment in the presence of
se!era peope who heard and order. Despite her +eas she was not aowed to board the aircraft. And
her seat was aso gi!en to a Caucasian.
2. 8hen the pane too1 off without her but with her uggage on board. #he was forced to return to her
hote without any uggage much ess an e"tra dress.
*!idence shows petitioner as confirmed passenger. 1./ Defendant issued a +assenger Tic1et and
@aggage Chec1 with assigned seat and the corresponding pass and baggage caim symbo. 2./ +aintiff
paid the fare and termina fee. 3./ paintiffIs passport was stamped by immigration. $./ +aintiffIs name
was incuded in the passenger manifest. There is a contract or carriage perfected between paintiff and
defendant for the atter to ta1e paintiff to her pace of destination. @y refusing to accommodate paintiff in
said fight, defendant had wifuy and 1nowingy !ioated the contract of carriage and faied to bring the
paintiff to her pace of destination under its contract with paintiff. There is showing of bad faith. #ef0
enrichment or fraterna interest and not persona i wi may ha!e been the moti!e of defendant, but it is
maice ne!ertheess. ,aice is shown by the fact that that paintiff was ordered out of the ine under some
prete"t in order to accommodate a white man.
*"empary damages and Attorney?s fees are aso awarded. The rationa behind e"empary or
correcti!e damages is, to pro!ide an e"ampe or correction for pubic good. #C reduced the mora and
e"empary damages to the combined tota sum of Two )undred Thousand .+244,444.44/ +esos and the
attorneyIs fees to Twenty Thousand .+24,444.44/ +esos. The award of actua damages in the amount of
<ne Thousand :i!e )undred :orty #i" American doars and fifteen cents .2#F1,%$'.1%/ computed at
the e"change rate pre!aiing at the time of payment is hereby retained and granted.
103
5rans Corld Airlines v# Co!rt of Appeals
16- /C$A 1'3
)acts
Atty. Dinuan purchased a first cass tic1et from the petitioner. #uch tic1et was twice confirmed
and yet the petitioner abrupty tod the respondent that there were no onger any a!aiabe seats in the
first cass and that he wi be downgraded to the economy cass. 8hen he protested an empoyee of the
petitioner arroganty threatened the respondent. (n addition, he aso saw that se!era Caucasians who
104
arri!ed much ater were accommodated in the first cass when the other passengers did not show up.
The respondent then sued the petitioner for damages.
*ss!e
8hether or not the petitioner is iabe for damages.
+eld
The Court hed that the petitioner is iabe for mora and e"empary damages. The discrimination
in this case is ob!ious and the humiiation brought to the respondent is indisputabe. The petitioner
showed ac1 of care in accommodating the respondent in the cass that the atter contracted. (n addition,
the petitioner rudey informed the respondent of such downgrading of cass. #uch awarding of damages
woud ser!e as an e"ampe and a discouragement to carriers who may repeat such oppressi!e and
discriminatory acts.
Armovit v# Co!rt of Appeals
1(' /C$A '76
)acts
The petitioners in this case a resided in the 2nited #tates and went home to the +hiippines for a
Christmas !isit. <n their return trip to the 2nited #tates, they were bumped off at the airport due to an
erroneous entry in their pane tic1ets reating to the departure time. The petitioners chec1ed in the airport
an hour and fifteen minutes earier than what was indicated in their airine tic1ets. 2pon their chec1 in,
105
the empoyees of the respondent airines impoitey informed them that the pane was aready ta1ing off
and that their chec1 in time was way earier and entirey different from what was stated in their tic1ets.
The petitioners then sued the respondent airines for damages.
*ss!e
8hether or not the respondent is iabe for damages.
+eld
The Court hed that the respondent is iabe for damages. Actua damages were awarded to the
petitioner due to bumped off that occurred. ,ora damages were aso awarded because the Court found
that the respondent was gross negigent in the issuance of the tic1ets as to the correct time of departure.
(n addition, the act of the respondent in rudey informing the petitioner of such bumped off is an indication
that there was bad faith and maice on the part of the respondent. :urthermore, the reati!e of the
petitioner stated how bady wounded the feeings of the petitioners were. *"empary damages were aso
awarded as to pro!ide for an e"ampe to the pubic good. Lasty, nomina damages were propery deeted
since such damages cannot co0e"ist with actua damages.
106

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