TRANSPO | Assign No 6 | 1

FIRST DIVISION
In G.R. No. 71478, during the same period, the same vessel took on board
[G.R. No. L-69044. May 29, 1987.] 128 cartons of garment fabrics and accessories, in two (2) containers,
consigned to Mariveles Apparel Corporation, and two cases of surveying
EASTERN SHIPPING LINES, INC., Petitioner, v. INTERMEDIATE instruments consigned to Aman Enterprises and General Merchandise. The
APPELLATE COURT and DEVELOPMENT INSURANCE & SURETY 128 cartons were insured for their stated value by respondent Nisshin Fire
CORPORATION, Respondents. & Marine Insurance Co., for US$46,583.00, and the 2 cases by respondent
Dowa Fire & Marine Insurance Co., Ltd., for US$11,385.00.
[G.R. No. L-71478. May 29, 1987.]
Enroute for Kobe, Japan, to Manila, the vessel caught fire and sank,
EASTERN SHIPPING LINES, INC., Petitioner, v. THE NISSHIN FIRE resulting in the total loss of ship and cargo. The respective respondent
AND MARINE INSURANCE CO., and DOWA FIRE & MARINE Insurers paid the corresponding marine insurance values to the consignees
INSURANCE CO., LTD., Respondents. concerned and were thus subrogated unto the rights of the latter as the
insured.

G.R. NO. 69044

DECISION On May 11, 1978, respondent Development Insurance & Surety Corporation
(Development Insurance, for short), having been subrogated unto the
rights of the two insured companies, filed suit against petitioner Carrier for
the recovery of the amounts it had paid to the insured before the then
Court of First Instance of Manila, Branch XXX (Civil Case No. 116087).
MELENCIO-HERRERA, J.:
Petitioner-Carrier denied liability mainly on the ground that the loss was
due to an extraordinary fortuitous event, hence, it is not liable under the
law.
These two cases, both for the recovery of the value of cargo insurance,
On August 31, 1979, the Trial Court rendered judgment in favor of
arose from the same incident, the sinking of the M/S ASIATICA when it
Development Insurance in the amounts of P256,039.00 and P92,361.75,
caught fire, resulting in the total loss of ship and cargo.
respectively, with legal interest, plus P35,000.00 as attorneys fees and
costs. Petitioner Carrier took an appeal to the then Court of Appeals which,
The basic facts are not in controversy:chanrob1es virtual 1aw library
on August 14, 1984, affirmed.chanrobles virtual lawlibrary
In G.R. No. 69044, sometime in or prior to June, 1977, the M/S ASIATICA,
Petitioner Carrier is now before us on a Petition for Review on Certiorari.
a vessel operated by petitioner Eastern Shipping Lines, Inc., (referred to
hereinafter as Petitioner Carrier) loaded at Kobe, Japan for transportation to
G.R. NO. 71478
Manila, 5,000 pieces of calorized lance pipes in 28 packages valued at
P256,039.00 consigned to Philippine Blooming Mills Co., Inc., and 7 cases of
On June 16, 1978, respondents Nisshin Fire & Marine Insurance Co.
spare parts valued at P92,361.75, consigned to Central Textile Mills, Inc.
(NISSHIN, for short), and Dowa Fire & Marine Insurance Co., Ltd. (DOWA,
Both sets of goods were insured against marine risk for their stated value
for brevity), as subrogees of the insured, filed suit against Petitioner Carrier
with respondent Development Insurance and Surety Corporation.
 TRANSPO | Assign No 6 | 2

for the recovery of the insured value of the cargo lost with the then Court of "There are about 22 cases of the ASIATICA pending in various courts
First Instance of Manila, Branch II (Civil Case No. 116151), imputing where various plaintiffs are represented by various counsel representing
unseaworthiness of the ship and non-observance of extraordinary diligence various consignees or insurance companies. The common defendant in
by petitioner Carrier. these cases is petitioner herein, being the operator of said vessel. . . ." 1

Petitioner Carrier denied liability on the principal grounds that the fire which Petitioner Carrier should be held bound to said admission. As a general rule,
caused the sinking of the ship is an exempting circumstance under Section the facts alleged in a partys pleading are deemed admissions of that party
4(2) (b) of the Carriage of Goods by Sea Act (COGSA); and that when the and binding upon it. 2 And an admission in one pleading in one action may
loss of fire is established, the burden of proving negligence of the vessel is be received in evidence against the pleader or his successor-in-interest on
shifted to the cargo shipper. the trial of another action to which he is a party, in favor of a party to the
latter action. 3
On September 15, 1980, the Trial Court rendered judgment in favor of
NISSHIN and DOWA in the amounts of US$46,583.00 and US$11,385.00, The threshold issues in both cases are: (1) which law should govern the
respectively, with legal interest, plus attorneys fees of P5,000.00 and costs. Civil Code provisions on Common carriers or the Carriage of Goods by Sea
On appeal by petitioner, the then Court of Appeals on September 10, 1984, Act? and (2) who has the burden of proof to show negligence of the carrier?
affirmed with modification the Trial Courts judgment by decreasing the
amount recoverable by DOWA to US$1,000.00 because of $500 per On the Law Applicable
package limitation of liability under the COGSA.
The law of the country to which the goods are to be transported governs
Hence, this Petition for Review on Certiorari by Petitioner
Carrier. the liability of the common carrier in case of their loss, destruction or
deterioration. 4 As the cargoes in question were transported from Japan to
Both Petitions were initially denied for lack of merit. G.R. No. 69044 on the Philippines, the liability of Petitioner Carrier is governed primarily by the
January 16, 1985 by the First Division, and G.R. No. 71478 on September Civil Code. 5 However, in all matters not regulated by said Code, the rights
25, 1985 by the Second Division. Upon Petitioner Carriers Motion for and obligations of common carrier shall be governed by the Code of
Reconsideration, however, G.R. No. 69044 was given due course on March Commerce and by special laws. 6 Thus, the Carriage of Goods by Sea Act, a
25,1985, and the parties were required to submit their respective special law, is suppletory to the provisions of the Civil Code. 7
Memoranda, which they have done.
On the Burden of Proof
On the other hand, in G.R. No. 71478, Petitioner Carrier sought
reconsideration of the Resolution denying the Petition for Review and Under the Civil Code, common carriers, from the nature of their business
moved for its consolidation with G.R. No. 69044, the lower-numbered case, and for reasons of public policy, are bound to observe extraordinary
which was then pending resolution with the First Division. The same was diligence in the vigilance over goods, according to all the circumstances of
granted; the Resolution of the Second Division of September 25, 1985 was each case. 8 Common carriers are responsible for the loss, destruction, or
set aside and the Petition was given due course.chanrobles virtual deterioration of the goods unless the same is due to any of the following
lawlibrary causes only:jgc:chanrobles.com.ph

At the outset, we reject Petitioner Carriers claim that it is not the operator "(1) Flood, storm, earthquake, lightning or other natural disaster or
of the M/S Asiatica but merely a charterer thereof. We note that in G.R. No. calamity;
69044, Petitioner Carrier stated in its Petition:jgc:chanrobles.com.ph
x x x" 9

Petitioner Carrier claims that the loss of the vessel by fire exempts it from
liability under the phrase "natural disaster or calamity." However, we are of
the opinion that fire may not be considered a natural disaster or calamity.
This must be so as it arises almost invariably from some act of man or by
human means. 10 It does not fall within the category of an act of God
unless caused by lightning 11 or by other natural disaster or calamity. 12 It
may even be caused by the actual fault or privity of the carrier. 13
Article 1680 of the Civil Code, which considers fire as an extraordinary
fortuitous event refers to leases of rural lands where a reduction of the rent
is allowed when more than one-half of the fruits have been lost due to such
event, considering that the law adopts a protective policy towards
agriculture. 14
As the peril of fire is not comprehended within the exceptions in Article
1734, supra, Article 1735 of the Civil Code provides that in all cases other
than those mentioned in Article 1734, the common carrier shall be
presumed to have been at fault or to have acted negligently, unless it
proves that it has observed the extraordinary diligence required by law.
In this case, the respective Insurers, as subrogees of the cargo shippers,
have proven that the transported goods have been lost. Petitioner Carrier
has also proven that the loss was caused by fire. The burden then is upon
Petitioner Carrier to prove that it has exercised the extraordinary diligence
required by law. In this regard, the Trial Court, concurred in by the
Appellate Court, made the following finding of fact:cralawnad
"The cargoes in question were, according to the witnesses for the
defendant, placed in hatches No. 2 and 3 of the vessel. Boatswain Ernesto
Pastrana noticed that smoke was coming out from hatch No. 2 and hatch
No. 3; that when the smoke was noticed, the fire was already big; that the
fire must have started twenty-four (24) hours before the same was noticed;
that carbon dioxide was ordered released and the crew was ordered to open
the hatch covers of No. 2 hold for commencement of fire fighting by sea
water; that all of these efforts were not enough to control the fire.
"Pursuant to Article 1733, common carriers are bound to observe
extraordinary diligence in the vigilance over the goods. The evidence of the
defendant did not show that extraordinary vigilance was observed by the
TRANSPO | Assign No 6 | 3
vessel to prevent the occurrence of fire at hatches numbers 2 and 3.
Defendants evidence did not likewise show the amount of diligence made
by the crew, on orders, in the care of the cargoes. What appears is that
after the cargoes were stored in the hatches, no regular inspection was
made as to their condition during the voyage. Consequently, the crew could
not have even explain what could have caused the fire. The defendant, in
the Courts mind, failed to satisfactorily show that extraordinary vigilance
and care had been made by the crew to prevent the occurrence of the fire.
The defendant, as a common carrier, is liable to the consignees for said lack
of diligence required of it under Article l733 of the Civil Code." 15
Having failed to discharge the burden of proving that it had exercised the
extraordinary diligence required by law, Petitioner Carrier cannot escape
liability for the loss of the cargo.
And even if fire were to be considered a "natural disaster" within the
meaning of Article 1734 of the Civil Code, it is required under Article 1739
of the same Code that the "natural disaster" must have been the
"proximate and only cause of the loss," and that the carrier has "exercised
due diligence to prevent or minimize the loss before, during or after the
occurrence of the disaster." This Petitioner Carrier has also failed to
establish satisfactorily.
Nor may Petitioner Carrier seek refuge from liability under the Carriage of
Goods by Sea Act. It is provided therein that:jgc:chanrobles.com.ph
"Sec. 4(2). Neither the carrier nor the ship shall be responsible for loss or
damage arising or resulting from.
(b) Fire, unless caused by the actual fault or privity of the carrier.
x x x"
In this case, both the Trial Court and the Appellate Court, in effect, found,
as a fact, that there was "actual fault" of the carrier shown by "lack of
diligence" in that "when the smoke was noticed, the fire was already big;
that the fire must have started twenty-four (24) hours before the same was
noticed;" and that "after the cargoes were stored in the hatches, no regular
inspection was made as to their condition during the voyage." The foregoing
suffices to show that the circumstances under which the fire originated and

spread are such as to show that Petitioner Carrier or its servants were
negligent in connection therewith. Consequently, the complete defense
afforded by the COGSA when loss results from fire is unavailing to Petitioner
Carrier.
On the US $500 Per Package Limitation:chanrob1es virtual 1aw library
Petitioner Carrier avers that its liability if any, should not exceed US$500
per package as provided in section 4(5) of the COGSA, which
reads:jgc:chanrobles.com.ph
"(5) Neither the carrier nor the ship shall in any event be or become liable
for any loss or damage to or in connection with the transportation of goods
in an amount exceeding $500 per package lawful money of the United
States, or in case of goods not shipped in packages, per customary freight
unit, or the equivalent of that sum in other currency, unless the nature and
value of such goods have been declared by the shipper before shipment and
inserted in bill of lading. This declaration if embodied in the bill of lading
shall be prima facie evidence, but all be conclusive on the carrier.
"By agreement between the carrier, master or agent of the carrier, and the
shipper another maximum amount than that mentioned in this paragraph
may be fixed: Provided, That such maximum shall not be less than the
figure above named. In no event shall the carrier be liable for more than
the amount of damage actually sustained."cralaw virtua1aw library
x x x With respect to the seven (7) cases of spare parts (Exhibit "I-3"), their
Article 1749 of the New Civil Code also allows the limitations of liability in
this wise:jgc:chanrobles.com.ph
"Art. 1749. A stipulation that the common carriers liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or
owner declares a greater value, is binding."cralaw virtua1aw library
It is to be noted that the Civil Code does not of itself limit the liability of the
common carrier to a fixed amount per package although the Code expressly
permits a stipulation limiting such liability. Thus, the COGSA, which is
TRANSPO | Assign No 6 | 4
suppletory to the provisions of the Civil Code, steps in and supplements the
Code by establishing a statutory provision limiting the carriers liability in
the absence of a declaration of a higher value of the goods by the shipper in
the bill of lading. The provisions of the Carriage of Goods by Sea Act on
limited liability are as much a part of a bill of lading as though physically in
it and as much a part thereof as though placed therein by agreement of the
parties. 16
In G.R. No. 69044, there is no stipulation in the respective Bills of Lading
(Exhibits "C-2" and "I-3") 17 limiting the carriers liability for the loss or
destruction of the goods. Nor is there a declaration of a higher value of the
goods. Hence, Petitioner Carriers liability should not exceed US$500 per
package, or its peso equivalent, at the time of payment of the value of the
goods lost, but in no case "more than the amount of damage actually
sustained."cralaw virtua1aw library
The actual total loss for the 5,000 pieces of calorized lance pipes was
P256,039 (Exhibit "C"), which was exactly the amount of the insurance
coverage by Development Insurance (Exhibit "A"), and the amount affirmed
to be paid by respondent Court. The goods were shipped in 28 packages
(Exhibit "C-2"). Multiplying 28 packages by $500 would result in a product
of $14,000 which, at the current exchange rate of P20.44 to US$1, would
be P286,160, or "more than the amount of damage actually sustained."
Consequently, the aforestated amount of P256,039 should be
upheld.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
actual value was P92,361.75 (Exhibit "I"), which is likewise the insured
value of the cargo (Exhibit "H") and which amount was affirmed to be paid
by respondent Court. However, multiplying seven (7) cases by $500 per
package at the present prevailing rate of P20.44 to US$1 (US$3,500 x
P20.44) would yield P71,540 only, which is the amount that should be paid
by Petitioner Carrier for those spare parts, and not P92,361.75.
In G.R. NO. 71478, in so far as the two (2) cases of surveying instruments
are concerned, the amount awarded to DOWA, which was already reduced
to $1,000 by the Appellate Court following the statutory $500 liability per
package, is in order.
In respect of the shipment of 128 cartons of garment fabrics in two (2)

containers and insured with NISSHIN, the Appellate Court also limited
Petitioner Carriers liability to $500 per package and affirmed the award of
$46,583 to NISSHIN. It multiplied 128 cartons (considered as COGSA
packages) by $500 to arrive at the figure of $64,000, and explained that
"since this amount is more than the insured value of the goods, that is
$46,583, the Trial Court was correct in awarding said amount only for the
128 cartons, which amount is less than the maximum limitation of the
carriers liability."cralaw virtua1aw library
We find no reversible error. The 128 cartons and not the two (2) containers
should be considered as the shipping unit.
In Mitsui & Co., Ltd. v. American Export Lines, Inc. 636 F 2d 807 (1981),
the consignees of tin ingots and the shipper of floor covering brought action
against the vessel owner and operator to recover for loss of ingots and floor
covering, which had been shipped in vessel-supplied containers. The U.S.
District Court for the Southern District of New York rendered judgment for
the plaintiffs, and the defendant appealed. The United States Court of
Appeals, Second Division, modified and affirmed holding
that:jgc:chanrobles.com.ph
"When what would ordinarily be considered packages are shipped in a
container supplied by the carrier and the number of such units is disclosed
in the shipping documents, each of those units and not the container
constitutes the package referred to in liability limitation provision of
Carriage of Goods by Sea Act. Carriage of Goods by Sea Act, . . . 4(5), 46
U.S.C.A. . . . 1304(5).
"Even if language and purposes of Carriage of Goods by Sea Act left doubt
as to whether carrier-furnished containers whose contents are disclosed
should be treated as packages, the interest in securing international
uniformity would suggest that they should not be so treated. Carriage of
Goods by Sea Act, . . . 4(5), 46 U.S.C.A. . . . 1304(5).
". . . After quoting the statement in Leathers Best, supra, 451 F 2d at 815,
that treating a container as a package is inconsistent with the congressional
purpose of establishing a reasonable minimum level of liability, Judge Beeks
wrote, 414 F. Supp. at 907 (footnotes omitted):chanrob1es virtual 1aw
library
TRANSPO | Assign No 6 | 5
Although this approach has not completely escaped criticism, there is,
nonetheless, much to commend it. It gives needed recognition to the
responsibility of the courts to construe and apply the statute as enacted,
however great might be the temptation to modernize or reconstitute it by
artful judicial gloss. If COGSAs package limitation scheme suffers from
internal illness, Congress alone must undertake the surgery. There is, in
this regard, obvious wisdom in the Ninth Circuits conclusion in Hartford
that technological advancements, whether or not forseeable by the COGSA
promulgators, do not warrant a distortion or artificial construction of the
statutory term package. A ruling that these large reusable metal pieces of
transport equipment qualify as COGSA packages at least where, as here,
they were carrier-owned and supplied would amount to just such a
distortion.
Certainly, if the individual crates or cartons prepared by the shipper and
containing his goods can rightly be considered packages standing by
themselves, they do not suddenly lose that character upon being showed in
a carriers container. I would liken these containers to detachable stowage
compartments of the ship. They simply serve to divide the ships overall
cargo stowage space into smaller, more serviceable loci. Shippers packages
are quite literally stowed in the containers utilizing stevedoring practices
and materials analogous to those employed in traditional on board
stowage.chanrobles law library : red
"In Yeramex International v. S.S. Tando, 1977 A.M.C. 1807 (E.D. Va.), revd
on other grounds, 595 F 2d 943 (4 Cir. 1979), another district with many
maritime cases followed Judge Beeks reasoning in Matsushita and similarly
rejected the functional economics test. Judge Kellam held that when rolls of
polyester goods are packed into cardboard cartons which are then placed in
containers, the cartons and not the containers are the packages.
"x x x"
The case of Smithgreyhound v. M/V Eurygenes 18 followed the Mitsui
test:jgc:chanrobles.com.ph
"Eurygenes concerned a shipment of stereo equipment packaged by the
shipper into cartons which were then placed by the shipper into a carrier-
furnished container. The number of cartons was disclosed to the carrier in
the bill of lading. Eurygenes followed the Mitsui test and treated the
 TRANSPO | Assign No 6 | 6

cartons, not the container, as the COGSA packages. However, Eurygenes the time of receipt, the Carrier shall be at liberty to pack and carry them in
indicated that a carrier could limit its liability to $500 per container if the any type of container(s)."cralaw virtua1aw library
bill of lading failed to disclose the number of cartons or units within the
container, or if the parties indicated, in clear and unambiguous language, an The foregoing would explain the use of the estimate "Say: Two (2)
agreement to treat the container as the package."cralaw virtua1aw library Containers Only" in the Bill of Lading, meaning that the goods could
probably fit in two (2) containers only. It cannot mean that the shipper had
(Admiralty Litigation in Perpetuum: The Continuing Saga of Package furnished the containers for if so, "Two (2) Containers" appearing as the
Limitations and Third World Delivery Problems by Chester D. Hooper & Keith first entry would have sufficed. and if there is any ambiguity in the Bill of
L. Flicker, published in Fordham International Law Journal, Vol. 6, 1982-83, Lading, it is a cardinal principle in the construction of contracts that the
Number 1) (Emphasis supplied) interpretation of obscure words or stipulations in a contract shall not favor
the party who caused the obscurity. 20 This applies with even greater force
In this case, the Bill of Lading (Exhibit "A") disclosed the following in a contract of adhesion where a contract is already prepared and the
data:jgc:chanrobles.com.ph other party merely adheres to it, like the Bill of Lading in this case, which is
drawn up by the carrier. 21
"2 Containers.
On Alleged Denial of Opportunity to Present Deposition of Its Witnesses: (in
"(128) Cartons) G.R. No. 69044 only)

========== Petitioner Carrier claims that the Trial Court did not give it sufficient time to
take the depositions of its witnesses in Japan by written interrogatories.
"Mens Garments Fabrics and Accessories Freight Prepaid.
We do not agree. petitioner Carrier was given full opportunity to present its
"Say: Two (2) Containers Only."cralaw virtua1aw library evidence but it failed to do so. On this point, the Trial Court
found:jgc:chanrobles.com.ph
Considering, therefore, that the Bill of Lading clearly disclosed the contents
of the containers, the number of cartons or units, as well as the nature of "x x x
the goods, and applying the ruling in the Mitsui and Eurygenes cases it is
clear that the 128 cartons, not the two (2) containers should be considered "Indeed, since after November 6, 1978, to August 27, 1979, not to mention
as the shipping unit subject to the $500 limitation of liability. the time from June 27, 1978, when its answer was prepared and filed in
Court, until September 26, 1978, when the pre-trial conference was
True, the evidence does not disclose whether the containers involved herein conducted for the last time, the defendant had more than nine months to
were carrier-furnished or not. Usually, however, containers are provided by prepare its evidence. Its belated notice to take deposition on written
the carrier. 19 In this case, the probability is that they were so furnished for interrogatories of its witnesses in Japan, served upon the plaintiff on August
Petitioner Carrier was at liberty to pack and carry the goods in containers if 25th, just two days before the hearing set for August 27th, knowing fully
they were not so packed. Thus, at the dorsal side of the Bill of Lading well that it was its undertaking on July 11th that the deposition of the
(Exhibit "A") appears the following stipulation in fine witnesses would be dispensed with if by next time it had not yet been
print:jgc:chanrobles.com.ph obtained, only proves the lack of merit of the defendants motion for
postponement, for which reason it deserves no sympathy from the Court in
"11. (Use of Container) Where the goods receipt of which is acknowledged that regard. The defendant has told the Court since February 16, 1979, that
on the face of this Bill of Lading are not already packed into container(s) at it was going to take the deposition of its witnesses in Japan. Why did it take
 TRANSPO | Assign No 6 | 7

until August 25, 1979, or more than six months, to prepare its written
interrogatories. Only the defendant itself is to blame for its failure to With respect to G.R. No. 71478, the majority opinion holds that the 128
adduce evidence in support of its defenses. cartons of textile materials, and not the two (2) containers, should be
considered as the shipping unit for the purpose of applying the $500.00
x x x" 22 limitation under the Carriage of Goods by Sea Act (COGSA).

Petitioner Carrier was afforded ample time to present its side of the case. The majority opinion followed and applied the interpretation of the COGSA
23 It cannot complain now that it was denied due process when the Trial "package" limitation adopted by the Second Circuit, United States Court of
Court rendered its Decision on the basis of the evidence adduced. What due Appeals, in Mitsui & Co., Ltd. v. American Export Lines, Inc., 636 F. 2d 807
process abhors is absolute lack of opportunity to be heard. 24 (1981) and the Smithgreyhound v. M/V Eurygenes, 666, F 2d, 746. Both
cases adopted the rule that carrier-furnished containers whose contents are
On the Award of Attorneys Fees:chanrob1es virtual 1aw library fully disclosed are not "packages" within the meaning of Section 4 (5) of
COGSA.chanrobles.com.ph : virtual law library
Petitioner Carrier questions the award of attorneys fees. In both cases,
respondent Court affirmed the award by the Trial Court of attorneys fees of I cannot go along with the majority in applying the Mitsui and Eurygenes
P35,000.00 in favor of Development Insurance in G.R. No. 69044, and decisions to the present case, for the following reasons: (1) The facts in
P5,000.00 in favor of NISSHIN and DOWA in G.R. No. 71478. those cases differ materially from those obtaining in the present case; and
(2) the rule laid down in those two cases is by no means settled doctrine.
Courts being vested with discretion in fixing the amount of attorneys fees,
it is believed that the amount of P5,000.00 would be more reasonable in In Mitsui and Eurygenes, the containers were supplied by the carrier or
G.R. No. 69044. The award of P5,000.00 in G.R. No. 71478 is affirmed. shipping company. In Mitsui, the Court held: "Certainly, if the individual
crates or cartons prepared by the shipper and containing his goods can
WHEREFORE, 1) in G.R. No. 69044, the judgment is modified in that rightly be considered packages standing by themselves, they do not
petitioner Eastern Shipping Lines shall pay the Development Insurance and suddenly lose that character upon being stowed in a carriers container. I
Surety Corporation the amount of P256,039 for the twenty-eight (28) would liken these containers to detachable stowage compartments of the
packages of calorized lance pipes, and P71,540 for the seven (7) cases of ship." Cartons or crates placed inside carrier-furnished containers are
spare parts, with interest at the legal rate from the date of the filing of the deemed stowed in the vessel itself, and do not lose their character as
Complaint on June 13, 1978, plus P5,000 as attorneys fees, and the costs. individual units simply by being placed inside container provided by the
carrier, which are merely "detachable stowage compartments of the
2) In G.R. No. 71478, the judgment is hereby affirmed. ship."cralaw virtua1aw library

SO ORDERED. In the case at bar, there is no evidence showing that the two containers in
question were carrier-supplied. This fact cannot be presumed. The facts of
Narvasa, Cruz, Feliciano and Gancayco, JJ., concur. the case in fact show that this was the only shipment placed in containers.
The other shipment involved in the case, consisting of surveying
Separate Opinions instruments, was packed in two "cases."cralaw virtua1aw library

We cannot speculate on the meaning of the words "Say: Two (2) Containers
Only," which appear in the bill of lading. Absent any positive evidence on
YAP, J., concurring and dissenting:chanrob1es virtual 1aw library
this point, we cannot say that those words constitute a mere estimate that
 TRANSPO | Assign No 6 | 8

the shipment could fit in two containers, thereby showing that when the insurance company can recover from the carrier only what the shipper itself
goods were delivered by the shipper, they were not yet placed inside the is entitled to recover, not the amount it actually paid the shipper under the
containers and that it was the petitioner carrier which packed the goods insurance policy.
into its own containers, as authorized under paragraph 11 on the dorsal
side of the bill of lading, Exhibit A. Such assumption cannot be made in In our view, under the circumstances, the container should be regarded as
view of the following words clearly stamped in red ink on the face of the bill the shipping unit or "package" within the purview of COGSA. However, we
of lading: "Shippers Load, Count and Seal Said to Contain." This clearly realize that this may not be equitable as far as the shipper is concerned. If
indicates that it was the shipper which loaded and counted the goods placed the container is not regarded as a "package" within the terms of COGSA,
inside the container and sealed the latter. then, the $500.00 liability limitation should be based on "the customary
freight unit." Sec. 4 (5) of COGSA provides that in case of goods not
The two containers were delivered by the shipper to the carrier already shipped in packages, the limit of the carriers liability shall be $500.00 "per
sealed for shipment, and the number of cartons said to be contained inside customary freight unit." In the case at bar, the petitioners liability for the
them was indicated in the bill of lading, on the mere say-so of the shipper. shipment in question based on "freight unit" would be $21,950.00 for the
The freight paid to the carrier on the shipment was based on the shipment of 43.9 cubic meters.
measurement (by volume) of the two containers at $34.50 per cubic meter.
The shipper must have saved on the freight charges by using containers for I concur with the rest of the decision.
the shipment. Under the circumstances, it would be unfair to the carrier to
have the limitation of its liability under COGSA fixed on the number of Sarmiento, J., concur.
cartons inside the containers, rather than on the containers themselves,
since the freight revenue was based on the latter.chanrobles lawlibrary :
rednad

The Mitsui and Eurygenes decisions are not the last word on the subject.
The interpretation of the COGSA package limitation is in a state of flux, 1 as
the courts continue to wrestle with the troublesome problem of applying the
statutory limitation under COGSA to containerized shipments. The law was
adopted before modern technological changes have revolutionized the
shipping industry. There is need for the law itself to be updated to meet the
changes brought about by the container revolution, but this is a task which
should be addressed by the legislative body. Until then, this Court, while
mindful of American jurisprudence on the subject, should make its own
interpretation of the COGSA provisions, consistent with what is equitable to
the parties concerned. There is need to balance the interests of the shipper
and those of the carrier.

In the case at bar, the shipper opted to ship the goods in two containers,
and paid freight charges based on the freight unit, i.e., cubic meters. The
shipper did not declare the value of the shipment, for that would have
entailed higher freight charges; instead of paying higher freight charges,
the shipper protected itself by insuring the shipment. As subrogee, the

FIRST DIVISION
G.R. No. L-34597 November 5, 1982
ROSITO Z. BACARRO, WILLIAM SEVILLA, and FELARIO
MONTEFALCON, petitioners, vs.GERUNDIO B. CASTAO, and the
COURT OF APPEALS, Respondents.
Felipe G. Tac-an counsel for petitioner.chanrobles virtual law library
Gerundio B. Castao counsel for private respondent.
RELOVA, J.:
Appeal taken by petitioners from a decision of the Court of Appeals,
affirming that of the Court of First Instance of Misamis Occidental, the
dispositive portion of which reads: chanrobles virtual law library
WHEREFORE, judgment is hereby rendered, ordering the defendants to
jointly and severally pay to the plaintiff the sum of (1) P973.10 for medical
treatment and hospitalization; (2) P840.20 for loss of salary during
treatment; and (3) P2,000.00 for partial permanent deformity, with costs
against the defendants.
The facts are set forth in the decision of the Court of Appeals, from which
We quote: chanrobles virtual law library
... In the afternoon of April 1, 1960, he (appellee) boarded the said jeep as
a paying passenger at Oroquieta bound for Jimenez, Misamis Occidental. It
was then fined to capacity, with twelve (12) passengers in all. 'The jeep was
running quite fast and the jeep while approaching the (Sumasap) bridge
there was a cargo truck which blew its horn for a right of way. The jeep
gave way but did not change speed. ... When the jeep gave way it turned to
the right and continued running with the same speed. In so doing ...the
driver was not able to return the jeep to the proper place ... instead, it ran
obliquely towards the canal; that is why, we fell to the ditch. ... When the
jeep was running in the side of the road for few meters, naturally, the jeep
was already inclined and two passengers beside me were the ones who
pushed me. I was pushed by the two passengers beside me; that is why,
when I was clinging, my leg and half of my body were outside the jeep
when it reached the canal. ... My right leg was sandwiched by the body of
the jeep and the right side of the ditch. ... My right leg was broken.' He was
rushed to the Saint Mary's Hospital where he stayed for about two (2)
TRANSPO | Assign No 6 | 9
months. 'My right leg is now shorter by one and one-half inches causing me
to use specially made shoes. ... I could not squat for a long time; I could
not kneel for a long time; and I could not even sit for a long time because I
will suffer cramp. ... With my three fingers I am still uneasy with my three
fingers in my right hand. There is a feeling of numbness with my three
fingers even right now.chanroblesvirtualawlibrarychanrobles virtual law
library
xxx xxx xxxchanrobles virtual law library
From appellee's version just set out, it appears that after he boarded the
jeep in question at Oroquieta, it was driven by defendant Montefalcon at
around forty (40) kilometers per hour bound for Jimenez; that while
approaching Sumasap Bridge at the said speed, a cargo truck coming from
behind blew its horn to signal its intention to overtake the jeep; that the
latter, without changing its speed, gave way by swerving to the right, such
that both vehicles ran side by side for a distance of around twenty (20)
meters, and that thereafter as the jeep was left behind, its driver was
unable to return it to its former lane and instead it obliquely or diagonally
ran down an inclined terrain towards the right until it fell into a ditch
pinning down and crushing appellee's right leg in the
process.chanroblesvirtualawlibrary chanrobles virtual law library
Throwing the blame for this accident on the driver of the cargo truck,
appellants, in turn, state the facts to be as follows: chanrobles virtual law
library
In the afternoon of April 1, 1960, plaintiff Gerundio Castao boarded the
said jeepney at Oroquieta bound for Jimenez, Misamis occidental. While
said jeepney was negotiating the upgrade approach of the Sumasap Bridge
at Jimenez, Misamis Occidental and at a distance of about 44 meters
therefrom, a cargo truck, owned and operated by a certain Te Tiong alias
Chinggim, then driven by Nicostrato Digal, a person not duly licensed to
drive motor vehicles, overtook the jeepney so closely that in the process of
overtaking sideswiped the jeepney, hitting the reserve tire placed at the left
side of the jeepney with the hinge or bolt of the siding of the cargo truck,
causing the jeepney to swerve from its course and after running 14 meters
from the road it finally fell into the canal. The right side of the jeep fell on
the right leg of the plaintiff-appellee, crushing said leg against the ditch
resulting in the injury to plaintiff-appellee consisting of a broken right
thigh.chanroblesvirtualawlibrary chanrobles virtual law library

and take the following stand: 'The main defense of defendants appellants is
anchored on the fact that the jeepney was sideswiped by the overtaking
cargo truck' (Appellants' Brief, pp. 3-4,
7).chanroblesvirtualawlibrary chanrobles virtual law library
It must be admitted, out of candor, that there is evidence of the sideswiping
relied upon by appellants. ....
This appeal by certiorari to review the decision of respondent Court of
Appeals asserts that the latter decided questions of substance which are
contrary to law and the approved decisions of this Court. Petitioners alleged
that respondent Court of Appeals erred (1) in finding contributory
negligence on the part of jeepney driver appellant Montefalcon for having
raced with the overtaking cargo truck to the bridge instead of slackening its
speed, when the person solely responsible for the sideswiping is the
unlicensed driver of the overtaking cargo truck; (2) in finding the jeepney
driver not to have exercised extraordinary diligence, human care, foresight
and utmost. diligence of very cautious persons, when the diligence required
pursuant to Article 1763 of the New Civil Code is only that of a good father
of a family since the injuries were caused by the negligence of a stranger;
and (3) in not considering that appellants were freed from any liability since
the accident was due to fortuitous event - the sideswiping of the jeepney by
the overtaking cargo truck.chanroblesvirtualawlibrary chanrobles virtual law
library
We are not persuaded. The fact is, petitioner-driver Montefalcon did not
slacken his speed but instead continued to run the jeep at about forty (40)
kilometers per hour even at the time the overtaking cargo truck was
running side by side for about twenty (20) meters and at which time he
even shouted to the driver of the truck. Hereunder is the testimony of
private respondent Gerundio B. Castao on this point:
Q At that time when you rode that jeep on your way to Jimenez, you said
that the jeep was running quite fast for a jeep, is that correct? chanrobles
virtual law library
A Yes, sir.chanroblesvirtualawlibrary chanrobles virtual law library
xxx xxx xxx chanrobles virtual law library
TRANSPO | Assign No 6 | 10
Q When you said that it is quite fast for a jeep, do you mean to tell this
Court that the speed of that jeep could not be made by that particular
jeepney? chanrobles virtual law library
A It can be made but it will not be very safe for that kind of transportation
to run that kind of speed.chanroblesvirtualawlibrary chanrobles virtual law
library
Q What was the speed of that jeep in terms of miles or kilometers per
hour? chanrobles virtual law library
A About 40 kilometers or about that time during that trip per
hour.chanroblesvirtualawlibrary chanrobles virtual law library
Q And you said also that there was a cargo truck that was behind the jeep,
is that correct, while you were already approaching the Sumasap
bridge? chanrobles virtual law library
A Yes.
xxx xxx xxxchanrobles virtual law library
Q How about the speed of that truck as the jeep you were riding was
approaching the Sumasap bridge? What was the speed of that truck, fast or
not fast? chanrobles virtual law library
A Naturally, the truck when it asks for a clearance that he will overtake it
will run fast.chanroblesvirtualawlibrary chanrobles virtual law library
xxx xxx xxx chanrobles virtual law library
Q Now comparing the speed that you mentioned that the jeep was
negotiating in that place and the cargo truck, which ran faster-the jeep or
the cargo truck? chanrobles virtual law library
xxx xxx xxx chanrobles virtual law library
A Naturally, the truck was a little bit faster because he was able to
overtake.chanroblesvirtualawlibrarychanrobles virtual law library
xxx xxx xxx chanrobles virtual law library

Q Now, how far more or less was the jeep from the bridge when the truck
was about to or in the process of overtaking the jeep you were
riding? chanrobles virtual law library
A When the truck was asking for a clearance it was yet about less than 100
meters from the bridge when he was asking for a clearance to
overtake.chanroblesvirtualawlibrary chanrobles virtual law library
xxx xxx xxx chanrobles virtual law library
Q Do you remember the distance when the truck and the jeep were already
side by side as they approach the bridge in relation to the
bridge? chanrobles virtual law library
xxx xxx xxx chanrobles virtual law library
A They were about fifty meters ... from fifty to thirty meters when they
were side by side from the bridge.
xxx xxx xxxchanrobles virtual law library
Q .... You said before that the jeep and the truck were running side by side
for a few meters, is that correct? chanrobles virtual law library
A Yes, sir.chanroblesvirtualawlibrary chanrobles virtual law library
Q I am asking you now, how long were they running side by side-the jeep
and the cargo truck? chanrobles virtual law library
A About 20 meters, they were running side by
side.chanroblesvirtualawlibrary chanrobles virtual law library
Q And after running side by side for 20 meters, the jeep and its passengers
went to the canal? chanrobles virtual law library
A Yes.chanroblesvirtualawlibrary chanrobles virtual law library
Q You said on direct examinaton that when the jeep (should be truck) was
blowing its horn and asking for a way, you said that the jeep gave way and
turned to the right and did not recover its position and the jeep fell into the
ditch, is that what you said before? chanrobles virtual law library
TRANSPO | Assign No 6 | 11
A The jeep did not recover. It was not able to return to the center of the
road. It was running outside until it reached the canal, running
diagonally.chanroblesvirtualawlibrary chanrobles virtual law library
Q When the jeep gave way to the cargo truck, the jeep was at the right side
of the road? chanrobles virtual law library
A Already on the right side of the
road.chanroblesvirtualawlibrary chanrobles virtual law library
Q And this jeep was running steadily at the right side of the
road.chanroblesvirtualawlibrarychanrobles virtual law library
A Yes, sir.
xxx xxx xxxchanrobles virtual law library
Q When the jeep gave way to the cargo truck and it kept its path to the
right, it was still able to maintain that path to the right for about twenty
meters and while the jeep and the cargo truck were running side by
side? chanrobles virtual law library
A Yes.chanroblesvirtualawlibrary chanrobles virtual law library
Q When the truck and the jeep were already running side by side and after
having run twenty meters side by side, do you know why the jeep careened
to the ditch or to the canal? chanrobles virtual law library
A I do not know why but I know it slowly got to the canal but I do not know
why it goes there.chanroblesvirtualawlibrary chanrobles virtual law library
xxx xxx xxx chanrobles virtual law library
Q You said when the jeep was about to be lodged in the canal, you stated
that the jeep was running upright, is that a fact? chanrobles virtual law
library
A Yes.chanroblesvirtualawlibrary chanrobles virtual law library
Q So that the terrain was more or less level because the jeep was already
running upright, is that not correct? chanrobles virtual law library

A The jeep was running on its wheels but it is running on the side, the side
was inclining until it reached the ditch.chanroblesvirtualawlibrary chanrobles
virtual law library
Q You mean to tell the Court that from the entire of the fifteen meters
distance from the side of the road up to the place where the jeep was
finally lodged that place is inclining towards the right?chanrobles virtual law
library
A When the jeep left the road it was already inclining because it was
running part side of the road which is inclining. (Transcript of March 25 and
26, 1963).
Thus, had Montefalcon slackened the speed of the jeep at the time the
truck was overtaking it, instead of running side by side with the cargo
truck, there would have been no contact and accident. He should have
foreseen that at the speed he was running, the vehicles were getting nearer
the bridge and as the road was getting narrower the truck would be to close
to the jeep and would eventually sideswiped it. Otherwise stated, he should
have slackened his jeep when he swerved it to the right to give way to the
truck because the two vehicles could not cross the bridge at the same
time.chanroblesvirtualawlibrarychanrobles virtual law library
The second assigned error is centered on the alleged failure on the part of
the jeepney driver to exercise extraordinary diligence, human care,
foresight and utmost diligence of a very cautious person, when the
diligence required pursuant to Article 1763 of the Civil Code is only that of a
good father of a family. Petitioners contend that the proximate cause of the
accident was the negligence of the driver of the truck. However, the fact is,
there was a contract of carriage between the private respondent and the
herein petitioners in which case the Court of Appeals correctly applied
Articles 1733, 1755 and 1766 of the Civil Code which require the exercise of
extraordinary diligence on the part of petitioner
Montefalcon.chanroblesvirtualawlibrarychanrobles virtual law library
Art. 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported
by them, according to all the circumstances of each
case.chanroblesvirtualawlibrarychanrobles virtual law library
TRANSPO | Assign No 6 | 12
Art. 1755. A common carrier is bound to carry the Passengers safely as far
as human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the
circumstances.chanroblesvirtualawlibrarychanrobles virtual law library
Art. 1766. In all matters not regulated by this Code, the rights and
obligations of common carriers shall be governed by the Code of Commerce
and by special laws.
Indeed, the hazards of modern transportation demand extraordinary
diligence. A common carrier is vested with public interest. Under the new
Civil Code, instead of being required to exercise mere ordinary diligence a
common carrier is exhorted to carry the passengers safely as far as human
care and foresight can provide "using the utmost diligence of very cautious
persons." (Article 1755). Once a passenger in the course of travel is
injured, or does not reach his destination safely, the carrier and driver are
presumed to be at fault.chanroblesvirtualawlibrarychanrobles virtual law
library
The third assigned error of the petitioners would find fault upon respondent
court in not freeing petitioners from any liability, since the accident was due
to a fortuitous event. But, We repeat that the alleged fortuitous event in
this case - the sideswiping of the jeepney by the cargo truck, was
something which could have been avoided considering the narrowness of
the Sumasap Bridge which was not wide enough to admit two vehicles. As
found by the Court of Appeals, Montefalcon contributed to the occurrence of
the mishap.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, the decision of the respondent Court of Appeals, dated
September 30,1971, is hereby AFFIRMED. With
costs.chanroblesvirtualawlibrarychanrobles virtual law library
SO ORDERED.
 TRANSPO | Assign No 6 | 13

SECOND DIVISION have the effect of increasing the peril to a passenger while he was
attempting to board the same. The premature acceleration of the bus in
[G.R. No. 95582. October 7, 1991.] this case was a breach of such duty. It is the duty of common carriers of
passengers, including common carriers by railroad train, streetcar, or
DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL motorbus, to stop their conveyances a reasonable length of time in order to
y MALECDAN, Petitioners, v. COURT OF APPEALS, INOCENCIA afford passengers an opportunity to board and enter, and they are liable for
CUDIAMAT, EMILIA CUDIAMAT BANDOY, FERNANDO CUDIAMAT, injuries suffered by boarding passengers resulting from the sudden starting
MARRIETA CUDIAMAT, NORMA CUDIAMAT, DANTE CUDIAMAT, up or jerking of their conveyances while they are doing so.
SAMUEL CUDIAMAT and LIGAYA CUDIAMAT, all Heirs of the late
Pedrito Cudiamat represented by Inocencia Cudiamat, Respondents. 3. ID.; ID.; ID.; BOARDING AND ALIGHTING FROM A SLOWLY MOVING
VEHICLE; NOT A NEGLIGENCE PER SE. It is not negligence per se, or as
Francisco S. Reyes Law Office, for Petitioners. a matter of law, for one to attempt to board a train or streetcar which is
moving slowly. An ordinarily prudent person would have made the attempt
Antonio C. de Guzman for private-respondents. to board the moving conveyance under the same or similar circumstances.
The fact that passengers board and alight from a slowly moving vehicle is a
matter of common experience and both the driver and conductor in this
case could not have been unaware of such an ordinary practice.

SYLLABUS 4. ID.; ID.; ID.; LIABILITY THEREOF; EXTENDS TO PERSONS BOARDING

THE VEHICLE AS WELL AS THOSE ALIGHTING THEREFROM. The victim
herein, by stepping and standing on the platform of the bus, is already
considered a passenger and is entitled to all the rights and protection
pertaining to such a contractual relation. Hence, it has been held that the
1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE COURT OF
duty which the carrier of passengers owes to its patrons extends to persons
APPEALS; RULE AND EXCEPTION. It is an established principle that the
boarding the cars as well as to those alighting therefrom. (Del Prado v.
factual findings of the Court of Appeals as a rule are final and may not be
Manila Electric Co., supra.)
reviewed by this Court on appeal. However, this is subject to settle
exceptions, one which is when the findings of the appellate court are
5. ID.; ID.; ID.; BOUND TO OBSERVE EXTRAORDINARY DILIGENCE FOR
contrary to those of the trial court, in which case a reexamination of the
THE SAFETY OF THE PASSENGERS TRANSPORTED BY THEM. Common
facts and evidence may be undertaken.
carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary diligence for the safety of the
2. CIVIL LAW; COMMON CARRIERS; LIABLE FOR INJURIES SUFFERED BY
passengers transported by them, according to all the circumstances of each
BOARDING PASSENGERS RESULTING FROM THE PREMATURE
case. A common carrier is bound to carry the passengers safely as far as
ACCELERATION OF THEIR CONVEYANCES. The contention of petitioners
human care and foresight can provide, using the utmost diligence of very
that the driver and the conductor had no knowledge that the victim would
cautious persons, with a due regard for all the circumstances. (Art. 1755,
ride on the bus, since the latter had supposedly not manifested his
Civil Code.)
intention to board the same, does not merit consideration. When the bus is
not motion there is no necessity for a person who wants to ride the same to
6. ID.; DAMAGES; ACTION BASED ON A CONTRACT OF CARRIAGE;
signal his intention to board. A public utility bus, once it stops, is in effect
FINDING OF FAULT OR NEGLIGENCE ON THE PART OF CARRIER NEED NOT
making a continuous offer to bus riders. Hence, it becomes the duty of the
BE EXPRESS. It has also been repeatedly held that in an action based on
driver and the conductor, every time the bus stops, to do no act that would
 TRANSPO | Assign No 6 | 14

a contract of carriage, the court need not make an express finding of fault petitioner corporation in a reckless and imprudent manner and without due
or negligence on the part of the carrier in order to hold it responsible to pay regard to traffic rules and regulations and safety to persons and property, it
the damages sought by the passenger. By the contract of carriage, the ran over its passenger, Pedrito Cudiamat. However, instead of bringing
carrier assumes the express obligation to transport the passenger to Pedrito immediately to the nearest hospital, the said driver, in utter bad
destination safety and to observe extraordinary diligence with a cure regard faith and without regard to the welfare of the victim, first brought his other
for all the circumstances, and any injury that might be suffered by the passengers and cargo to their respective destinations before bringing said
passenger is right away attributable to the fault or negligence of the carrier. victim to the Lepanto Hospital where he expired.
This is an exception to the general rule that negligence must be proved,
and it is therefore incumbent upon the carrier to prove that it has exercised On the other hand, petitioners alleged that they had observed and
extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil continued to observe the extraordinary diligence required in the operation
Code. of the transportation company and the supervision of the employees, even
as they add that they are not absolute insurers of the safety of the public at
7. ID.; ID.; ID.; ACTUAL OR COMPENSATORY DAMAGES; RULE IN large. Further, it was alleged that it was the victims own carelessness and
DETERMINING THE AMOUNT THEREOF. With respect to the award of negligence which gave rise to the subject incident, hence they prayed for
damages, an oversight was, however, committed by respondent Court of the dismissal of the complaint plus an award of damages in their favor by
Appeals in computing the actual damages based on the gross income of the way of a counterclaim.chanrobles.com:cralaw:red
victim. The rule is that the amount recoverable by the heirs of a victim of a
tort is not the loss of the entire earnings, but rather the loss of that portion On July 29, 1988, the trial court rendered a decision, effectively in favor of
of the earnings which the beneficiary would have received. In other words, petitioners, with this decretal portion:jgc:chanrobles.com.ph
only net earnings, not gross earnings, are to be considered, that is, the
total of the earnings less expenses necessary in the creation of such "IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that
earnings or income and minus living and other incidental expenses. Pedrito Cudiamat was negligent, which negligence was the proximate cause
of his death. Nonetheless, defendants in equity, are hereby ordered to pay
the heirs of Pedrito Cudiamat the sum of P10,000.00 which approximates
the amount defendants initially offered said heirs for the amicable
settlement of the case. No costs.
DECISION
"SO ORDERED." 2

Not satisfied therewith, private respondents appealed to the Court of

Appeals which, in a decision 3 in CA-G.R CV No. 19504 promulgated on
REGALADO, J.:
August 14, 1990, set aside the decision of the lower court, and ordered
petitioners to pay private respondents:jgc:chanrobles.com.ph

"1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for
death of the victim Pedrito Cudiamat;
On May 13, 1985, private respondents filed a complaint 1 for damages
against petitioners for the death of Pedrito Cudiamat as a result of a
2. The sum of Twenty Thousand (P20,000.00) by way of moral damages;
vehicular accident which occurred on March 25, 1985 at Marivic, Sapid,
Mankayan, Benguet. Among others, it was alleged that on said date, while
3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as
petitioner Theodore M. Lardizabal was driving a passenger bus belonging to

actual and compensatory damages;
4. The costs of this suit." 4 that:jgc:chanrobles.com.ph
Petitioners motion for reconsideration was denied by the Court of Appeals
in its resolution dated October 4, 1990, 5 hence this petition with the
central issue herein being whether respondent court erred in reversing the
decision of the trial court and in finding petitioners negligent and liable for
the damages claimed.
It is an established principle that the factual findings of the Court of Appeals
as a rule are final and may not be reviewed by this Court on appeal.
However, this is subject to settled exceptions, one of which is when the
findings of the appellate court are contrary to those of the trial court, in
which case a reexamination of the facts and evidence may be undertaken.
6
In the case at bar, the trial court and the Court of Appeals have discordant
positions as to who between the petitioners and the victim is guilty of
negligence. Perforce, we have had to conduct an evaluation of the evidence
in this case for the proper calibration of their conflicting factual findings and
legal conclusions.
The lower court, in declaring that the victim was negligent, made the
following findings:jgc:chanrobles.com.ph
"This Court is satisfied that Pedrito Cudiamat was negligent in trying to
board a moving vehicle, especially with one of his hands holding an
umbrella. And, without having given the driver or the conductor any
indication that he wishes to board the bus. But defendants can also be
found wanting of the necessary diligence. In this connection, it is safe to
assume that when the deceased Cudiamat attempted to board defendants
bus, the vehicles door was open instead of being closed. This should be so,
for it is hard to believe that one would even attempt to board a vehicle (i)n
motion if the door of said vehicle is closed. Here lies the defendants lack of
diligence. Under such circumstances, equity demands that there must be
something given to the heirs of the victim to assuage their feelings. This,
also considering that initially, defendant common carrier had made
overtures to amicably settle the case. It did offer a certain monetary
consideration to the victims heirs." 7 A
TRANSPO | Assign No 6 | 15
However, respondent court, in arriving at a different opinion, declares
"From the testimony of appellees own witness in the person of Vitaliano
Safarita, it is evident that the subject bus was at full stop when the victim
Pedrito Cudiamat boarded the same as it was precisely on this instance
where a certain Miss Abenoja alighted from the bus. Moreover, contrary to
the assertion of the appellees, the victim did indicate his intention to board
the bus as can be seen from the testimony of the said witness when he
declared that Pedrito Cudiamat was no longer walking and made a sign to
board the bus when the latter was still at a distance from him. It was at the
instance when Pedrito Cudiamat was closing his umbrella at the platform of
the bus when the latter made a sudden jerk movement (as) the driver
commenced to accelerate the bus.chanrobles.com.ph : virtual law library
"Evidently, the incident took place due to the gross negligence of the
appellee-driver in prematurely stepping on the accelerator and in not
waiting for the passenger to first secure his seat especially so when we take
into account that the platform of the bus was at the time slippery and wet
because of a drizzle. The defendants-appellees utterly failed to observe
their duty and obligation as common carrier to the end that they should
observe extra-ordinary diligence in the vigilance over the goods and for the
safety of the passengers transported by them according to the
circumstances of each case (Article 1733, New Civil Code)." 8
After a careful review of the evidence on record, we find no reason to
disturb the above holding of the Court of Appeals. Its aforesaid findings are
supported by the testimony of petitioners own witnesses. One of them,
Virginia Abalos, testified on cross-examination as
follows:jgc:chanrobles.com.ph
"Q It is not a fact Madam witness, that at bunkhouse 54, that is before the
place of the incident, there is a crossing?
A The way going to the mines but it is not being pass(ed) by the bus.
Q And the incident happened before bunkhouse 56, is that not correct?
It happened between 54 and 53 bunkhouses." 9
 TRANSPO | Assign No 6 | 16

supposedly not manifested his intention to board the same, does not merit
The bus conductor, Martin Anglog, also declared:jgc:chanrobles.com.ph consideration. When the bus is not in motion there is no necessity for a
person who wants to ride the same to signal his intention to board. A public
"Q When you arrived at Lepanto on March 25, 1985, will you please inform utility bus, once it stops, is in effect making a continuous offer to bus
this Honorable Court if there was any unusual incident that occurred? riders. Hence, it becomes the duty of the driver and the conductor, every
time the bus stops, to do no act that would have the effect of increasing the
A When we delivered a baggage at Marivic because a person alighted there peril to a passenger while he was attempting to board the same. The
between Bunkhouse 53 and 54. premature acceleration of the bus in this case was a breach of such duty.
11
Q What happened when you delivered this passenger at this particular place
in Lepanto? It is the duty of common carriers of passengers, including common carriers
by railroad train, streetcar, or motorbus, to stop their conveyances a
A When we reached the place, a passenger alighted and I signalled my reasonable length of time in order to afford passengers an opportunity to
driver. When we stopped we went out because I saw an umbrella about a board and enter, and they are liable for injuries suffered by boarding
split second and I signalled again the driver, so the driver stopped and we passengers resulting from the sudden starting up or jerking of their
went down and we saw Pedrito Cudiamat asking for help because he was conveyances while they are doing so. 12
lying down.
Further, even assuming that the bus was moving, the act of the victim in
Q How far away was this certain person, Pedrito Cudiamat, when you saw boarding the same cannot be considered negligent under the
him lying down from the bus how far was he? circumstances. As clearly explained in the testimony of the aforestated
witness for petitioners, Virginia Abalos, the bus had "just started" and "was
A It is about two to three meters. still in slow motion" at the point where the victim had boarded and was on
its platform. 13
Q On what direction of the bus was he found about three meters from the
bus, was it at the front or at the back? It is not negligence per se, or as a matter of law, for one to attempt to
board a train or streetcar which is moving slowly. 14 An ordinarily prudent
A At the back, sir." 10 (Emphasis supplied.) person would have made the attempt to board the moving conveyance
under the same or similar circumstances. The fact that passengers board
The foregoing testimonies show that the place of the accident and the place and alight from a slowly moving vehicle is a matter of common experience
where one of the passengers alighted were both between Bunkhouses 53 and both the driver and conductor in this case could not have been unaware
and 54, hence the finding of the Court of Appeals that the bus was at full of such an ordinary practice.
stop when the victim boarded the same is correct. They further confirm the
conclusion that the victim fell from the platform of the bus when it suddenly The victim herein, by stepping and standing on the platform of the bus, is
accelerated forward and was run over by the rear right tires of the vehicle, already considered a passenger and is entitled to all the rights and
as shown by the physical evidence on where he was thereafter found in protection pertaining to such a contractual relation. Hence, it has been held
relation to the bus when it stopped. Under such circumstances, it cannot be that the duty which the carrier of passengers owes to its patrons extends to
said that the deceased was guilty of negligence.chanrobles law library persons boarding the cars as well as to those alighting therefrom. 15

The contention of petitioners that the driver and the conductor had no Common carriers, from the nature of their business and for reasons of
knowledge that the victim would ride on the bus, since the latter had public policy, are bound to observe extraordinary diligence for the safety of

the passengers transported by them, according to all the circumstances of
each case. 16 A common carrier is bound to carry the passengers safely as
far as human care and foresight can provide, using the utmost diligence of
very cautious persons, with a due regard for all the circumstances. 17
It has also been repeatedly held that in an action based on a contract of
carriage, the court need not make an express finding of fault or negligence
on the part of the carrier in order to hold it responsible to pay the damages
sought by the passenger. By the contract of carriage, the carrier assumes
the express obligation to transport the passenger to his destination safely
and to observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by the passenger is
right away attributable to the fault or negligence of the carrier. This is an
exception to the general rule that negligence must be proved, and it is
therefore incumbent upon the carrier to prove that it has exercised
extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil
Code. 18
Moreover, the circumstances under which the driver and the conductor
failed to bring the gravely injured victim immediately to the hospital for
medical treatment is a patent and incontrovertible proof of their negligence.
It defies understanding and can even be stigmatized as callous indifference.
The evidence shows that after the accident the bus could have forthwith
turned at Bunk 56 and thence to the hospital, but its driver instead opted to
first proceed to Bunk 70 to allow a passenger to alight and to deliver a
refrigerator, despite the serious condition of the victim. The vacuous reason
given by petitioners that it was the wife of the deceased who caused the
delay was tersely and correctly confuted by respondent
court:jgc:chanrobles.com.ph
". . . The pretension of the appellees that the delay was due to the fact that
they had to wait for about twenty minutes for Inocencia Cudiamat to get
dressed deserves scant consideration. It is rather scandalous and
deplorable for a wife whose husband is at the verge of dying to have the
luxury of dressing herself up for about twenty minutes before attending to
help her distressed and helpless husband." 19
Further, it cannot be said that the main intention of petitioner Lardizabal in
going to Bunk 70 was to inform the victims family of the mishap, since it
was not said bus driver nor the conductor but the companion of the victim
TRANSPO | Assign No 6 | 17
who informed his family thereof. 20 In fact, it was only after the refrigerator
was unloaded that one of the passengers thought of sending somebody to
the house of the victim, as shown by the testimony of Virginia Abalos again,
to wit:jgc:chanrobles.com.ph
"Q Why, what happened to your refrigerator at that particular time?
A I asked them to bring it down because that is the nearest place to our
house and when I went down and asked somebody to bring down the
refrigerator, I also asked somebody to call the family of Mr.
Cudiamat.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
COURT:chanrob1es virtual 1aw library
Q Why did you ask somebody to call the family of Mr. Cudiamat?
A Because Mr. Cudiamat met an accident, so I ask somebody to call for the
family of Mr. Cudiamat.
Q But nobody ask(ed) you to call for the family of Mr. Cudiamat?
A No sir." 21
With respect to the award of damages, an oversight was, however,
committed by respondent Court of Appeals in computing the actual
damages based on the gross income of the victim. The rule is that the
amount recoverable by the heirs of a victim of a tort is not the loss of the
entire earnings, but rather the loss of that portion of the earnings which the
beneficiary would have received. In other words, only net earnings, not
gross earnings, are to be considered, that is, the total of the earnings less
expenses necessary in the creation of such earnings or income and minus
living and other incidental expenses. 22
We are of the opinion that the deductible living and other expense of the
deceased may fairly and reasonably be fixed at P500.00 a month or
P6,000.00 a year. In adjudicating the actual or compensatory damages,
respondent court found that the deceased was 48 years old, in good health
with a remaining productive life expectancy of 12 years, and then earning
P24,000.00 a year. Using the gross annual income as the basis, and
multiplying the same by 12 years, it accordingly awarded P288,000.
 TRANSPO | Assign No 6 | 18

Applying the aforestated rule on computation based on the net earnings,

said award must be, as it hereby is, rectified and reduced to P216,000.00.
However, in accordance with prevailing jurisprudence, the death indemnity
is hereby increased to P50,000.00. 23

WHEREFORE, subject to the above modifications, the challenged judgment

and resolution of respondent Court of Appeals are hereby AFFIRMED in all
other respects.SO ORDERED.
 TRANSPO | Assign No 6 | 19

EN BANC 3. ID.; ID.; CARRIERS RESPONSIBILITY FOR NEGLIGENCE; CASE AT BAR.

In the present case, the father returned to the bus to get one of his
[G.R. No. L-20761. July 27, 1966.] baggages which was not unloaded when he end other members of his
family alighted from the bus. The victim, one of his minor daughters, must
LA MALLORCA, Petitioner, v. HONORABLE COURT OF APPEALS, have followed her father. However, although the father was still on the
MARIANO BELTRAN, ET AL., Respondents. running board of the bus awaiting for the conductor to hand to him the bag
or bayong, the bus started to run, so that even he (the father) had to jump
G. E. Yabut, R. Monterey and M. C. Lagman for Petitioner. down from the moving vehicle. It was at this instance that the child, who
must be near the bus, was run over and killed. Held: In the circumstances,
Achmed Garcia for Respondents. it cannot be claimed that the carriers agent had exercised the "utmost
diligence" of a "very cautious person" required by Article 1755 of the Civil
Code to be observed by a common carrier in the discharge of its obligation
to transport safely its passengers. In the first place, the driver, although
stopping the bus, did not put off the engine. Secondly, he started to run the
SYLLABUS bus even before the bus conductor gave him the signal to go and while the
latter was still unloading a baggage of some passengers. The presence of
said passengers near the bus was not unreasonable and they are,
therefore, to be considered still as passengers of the carrier, entitled to the
protection under their contract of carriage.
1. COMMON CARRIERS; CARRIER - PASSENGER RELATION CONTINUES
UNTIL PASSENGER HAS REASONABLE TIME TO LEAVE CARRIERS
4. ID.; ID.; ID.; AVERMENT FOR QUASI-DELICT, ALTHOUGH INCOMPATIBLE
PREMISES. The relation of carrier and passenger does not cease at the
WITH CLAIM UNDER CONTRACT OF CARRIAGE, PERMISSIBLE. The
moment the passenger alights from the carriers vehicle at a place selected
inclusion of the averment for quasi-delict in appellees complaint in the
by the carrier at the point of destination, but continues until the passenger
court a quo, while incompatible with the other claim under the contract of
has had a reasonable time or a reasonable opportunity to leave the carriers
carriage, is permissible under Section 2, Rule 8 of the new Rules of Court,
premises (Ormond v. Hayes, 60 Tex. 180, cited in 10 C.J. 626).
which allows a plaintiff to allege causes of action in the alternative, be they
compatible with each other or not, to the end that the real matter in
2. ID.; ID.; "REASONABLE TIME" CONSTRUED. What is a reasonable time
controversy may be resolved and determined (Nelayan, Et. Al. v. Nelayan,
or a reasonable delay is to be determined from all the circumstances. Thus,
Et Al., 109 Phil., 183).
a person who, after alighting from a train, walks along the station platform,
is considered still a passenger (Keefe v. Boston, etc. R. Co., 142 Mass. 251,
5. ID.; ID.; ID.; ID.; EFFECT OF PRESENTATION OF PROOF OF CARRIERS
7 N.E. 874). So also, where a passenger has alighted at his destination and
NEGLIGENCE; CASE AT BAR. - The presentation of proof of the negligence
is proceeding by the usual way to leave the companys premises, but before
of its employee gave rise to the presumption that the defendant employer
actually doing so is halted by the report that his brother, a fellow passenger,
did not exercise the diligence of a good father of the family in the selection
has been shot, and he in good faith and without intent of engaging in the
and supervision of its employees. This presumption not having been
difficulty, returns to relieve his brother, he is deemed reasonably and
overcome, the employer must be adjudged pecuniarily liable for the death
necessarily delayed and thus continues to be a passenger entitled as such
of the passenger.
to the protection of the railroad and company and its agents (Layne v.
Chesapeake, etc., R. Co., 68 W. Va. 213, 69 S.E. 700, 31 L.R.A., [N.S.]
6. ID.; ID.; ID.; ID.; ID.; SUFFICIENT ALLEGATION IN THE COMPLAINT;
414).
CASE AT BAR. The allegation in the complaint to the effect that "the

death of Raquel Beltran, plaintiffs daughter, was caused by the negligence
and want of exercise of the utmost diligence of a very cautious person on
the part of the defendants and their agent," sufficiently pleads the culpa or
negligence upon which the claim was predicated. This allegation was proved
when it was established during the trial that the driver, even before
receiving the proper signal from the conductor, and while there were still
persons on the running board of the bus and near it, started to run off the
vehicle.
7. APPEALS; WHAT CAN BE PASSED UPON ON APPEAL; CASE AT BAR.
Generally, the appellate court can only pass upon and consider questions or
issues raised and argued in appellants brief. In the case at bar, plaintiffs did
not appeal from that portion of the judgment of the trial court awarding
them only P3,000.00 as damages for the death of their daughter. Neither
did they point out in their brief in the Court of Appeals that the award was
inadequate, or that the inclusion of that figure was merely a clerical error,
in order that the matter may be treated as an exception to the general rule
(Section 7, Rule 51, new Rules of Court). The Court of Appeals therefore
erred in raising the amount of the award.
DECISION
BARRERA, J.:
La Mallorca seeks the review of the decision of the Court of Appeals in CA-
G. R. No. 23267-R, holding it liable for quasi-delict and ordering it to pay to
respondents Mariano Beltran, Et. Al. P6,000.00 for the death of his minor
daughter Raquel Beltran, plus P400.00 as actual damages.chanrobles
virtual lawlibrary
The facts of the case, as found by the Court of Appeals, briefly
are:jgc:chanrobles.com.ph
TRANSPO | Assign No 6 | 20
"On December 20, 1953, at about noontime, plaintiffs, husband and wife,
together with their minor daughters, namely Milagros, 13 years old, Raquel,
about 4-1/2 years old, and Fe, over 2 years old, boarded the Pambusco Bus
No. 352, bearing plate TPU No. 757 (1953 Pampanga), owned and operated
by the defendant, at San Fernando, Pampanga, bound for Anao, Mexico,
Pampanga. At the time, they were carrying with them four pieces of
baggages containing their personal belongings. The conductor of the bus
who happened to be a half-brother of plaintiff Mariano Beltran, issued three
tickets (Exhs. A, B, & C) covering the full fares of the plaintiff and their
eldest child, Milagros. No fare was charged on Raquel and Fe, since both
were below the height at which fare is charged in accordance with the
appellants rules and regulations.
"After about an hours trip, the bus reached Anao, whereat it stopped to
allow the passengers bound therefor, among whom were the plaintiffs and
their children to get off. With respect to the group of the plaintiffs, Mariano
Beltran, then carrying some of their baggages, was the first to get down the
bus, followed by his wife and his children. Mariano led his companions to a
shaded spot on the left pedestrians side of the road about four or five
meters away from the vehicle. Afterwards, he returned to the bus in
controversy to get his other bayong, which he had left behind, but in so
doing, his daughter Raquel followed him unnoticed by her father. While said
Mariano Beltran was on the running board of the bus waiting for the
conductor to hand him his bayong which he left under one of its seats near
the door; the bus, whose motor was not shut off while unloading, suddenly
started moving forward, evidently to resume its trip, notwithstanding the
fact that the conductor has not given the driver the customary signal to
start, since said conductor was still attending to the baggage left behind by
Mariano Beltran. Incidentally, when the bus was again placed into a
complete stop, it had travelled about ten meters from the point where the
plaintiffs had gotten off.
"Sensing that the bus was again in motion, Mariano Beltran immediately
jumped from the running board without getting his bayong from the
conductor. He landed on the side of the road almost in front of the shaded
place where he left his wife and children. At that precise time, he saw
people beginning to gather around the body of the child lying prostrate on
the ground, her skull, crushed, and without life. The child was none other
than his daughter Raquel, who was run over by the bus in which she rode

earlier together with her parents.
"For the death of their said child, the plaintiffs commenced the present suit
against the defendant seeking to recover from the latter an aggregate
amount of P6,000 to cover moral damages and actual damages sustained
as a result thereof and attorneys fees. After trial on the merits the court
below rendered the judgment in question."cralaw virtua1aw library
On the basis of these facts, the trial court found defendant liable for breach
of contract of carriage and sentenced it to pay P3,000.00 for the death of
the child and P400.00 as compensatory damages representing burial
expenses and costs.chanrobles law library : red
On appeal to the Court of Appeals, La Mallorca claimed that there could not
be a breach of contract in the case, for the reason that when the child met
her death, she was no longer a passenger of the bus involved in the
incident and, therefore, the contract of carriage had already terminated.
Although the Court of Appeals sustained this theory, it nevertheless found
the defendant-appellant guilty of quasi- delict and held the latter liable for
damages, for the negligence of its driver, in accordance with Article 2180 of
the Civil Code. And, the Court of Appeals did not only find the petitioner
liable, but increased the damages awarded the plaintiffs-appellees to
P6,000.00, instead of P3,000.00 granted by the trial court.
In its brief now before us, La Mallorca contends that the Court of Appeals
erred (1) in holding it liable for quasi- delict, considering that respondents
complaint was one for breach of contract, and (2) in raising the award of
damages from P3,000.00 to P6,000.00 although respondents did not appeal
from the decision of the lower court.
Under the facts as found by the Court of Appeals we have to sustain the
judgment holding petitioner liable for damages for the death of the child,
Raquel Beltran. It may be pointed out that although it is true that
respondent Mariano Beltran, his wife, and their children (including the
deceased child) had alighted from the bus at a place designated for
disembarking or unloading of passengers, it was also established that the
father had to return to the vehicle (which was still at a stop) to get one of
his bags or bayong that was left under one of the seats of the bus. There
can be no controversy that as far as the father is concerned, when he
returned to the bus for his bayong which was not unloaded, the relation of
TRANSPO | Assign No 6 | 21
passenger and carrier between him and the petitioner remained subsisting.
For, the relation of carrier and passenger does not necessarily cease where
the latter, after alighting from the car, aids the carriers servant or employee
in removing his baggage from the car. 1 The issue to be determined here is
whether as to the child, who was already led by the father to a place about
5 meters away from the bus, the liability of the carrier for her safety under
the contract of carriage also persisted.cralawnad
It has been recognized as a rule that the relation of carrier and passenger
does not cease at the moment the passenger alights from the carriers
vehicle at a place selected by the carrier at the point of destination, but
continues until the passenger has had a reasonable time or a reasonable
opportunity to leave the carriers premises. And, what is a reasonable time
or a reasonable delay within this rule is to be determined from all the
circumstances. Thus, a person who, after alighting from a train, walks along
the station platform is considered still a passenger. 2 So also, where a
passenger has alighted at his destination and is proceeding by the usual
way to leave the companys premises, but before actually doing so is halted
by the report that his brother, a fellow passenger, has been shot, and he in
good faith and without intent of engaging in the difficulty, returns to relieve
his brother, he is deemed reasonably and necessarily delayed and thus
continues to be a passenger entitled as such to the protection of the
railroad and company and its agents. 3
In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when they alighted from the bus.
Raquel, the child that she was, must have followed the father. However,
although the father was still on the running board of the bus awaiting for
the conductor to hand him the bag or bayong, the bus started to run, so
that even he (the father) had to jump down from the moving vehicle. It was
at this instance that the child, who must be near the bus, was run over and
killed. In the circumstances, it cannot be claimed that the carriers agent
had exercised the "utmost diligence" of a "very cautious person" required
by Article 1755 of the Civil Code to be observed by a common carrier in the
discharge of its obligation to transport safely its passengers. In the first
place, the driver, although stopping the bus, nevertheless did not put off
the engine. Secondly, he started to run the bus even before the bus
conductor gave him the signal to go and while the latter was still unloading
part of the baggages of the passengers Mariano Beltran and family. The
presence of said passengers near the bus was not unreasonable and they
 TRANSPO | Assign No 6 | 22

are, therefore, to be considered still as passengers of the carrier, entitled to argued in appellants brief. Plaintiffs did not appeal from that portion of the
the protection under their contract of carriage. judgment of the trial court awarding them only P3,000.00 damages for the
death of their daughter. Neither does it appear that, as appellees in the
But even assuming arguendo that the contract of carriage has already Court of Appeals, plaintiffs have pointed out in their brief the inadequacy of
terminated, herein petitioner can be held liable for the negligence of its the award, or that the inclusion of the figure P3,000.00 was merely a
driver, as ruled by the Court of Appeals, pursuant to Article 2180 of the Civil clerical error, in order that the matter may be treated as an exception to
Code. Paragraph 7 of the complaint, which reads the general rule. 5 Herein petitioners contention, therefore, that the Court
of Appeals committed error in raising the amount of the award for damages
"That aside from the aforesaid breach of contract, the death of Raquel is, evidently, meritorious.chanrobles virtual lawlibrary
Beltran, plaintiffs daughter, was caused by the negligence and want of
uxorious of the utmost diligence of a very cautious person on the part of WHEREFORE, the decision of the Court of Appeals is hereby modified by
the defendants and their agent, necessary to transport plaintiffs and their sentencing the petitioner to pay to the respondents Mariano Beltran, Et Al.,
daughter safely as far as human and care and foresight can provide in the the sum of P3,000.00 for the death of the child, Raquel Beltran, and the
operation of their vehicle."cralaw virtua1aw library amount of P400.00 as actual damages. No costs in this instance. So
ordered.
is clearly an allegation for quasi-delict. The inclusion of this averment for
quasi-delict, while incompatible with the other claim under the contract of
carriage, is permissible under Section 2 of Rule 8 of the New Rules of Court,
which allows a plaintiff to allege causes of action in the alternative, be they
compatible with each other or not, to the end that the real matter in
controversy may be resolved and determined. 4

The plaintiffs sufficiently pleaded the culpa or negligence upon which the
claim was predicated when it was alleged in the complaint that "the death
of Raquel Beltran, plaintiffs daughter, was caused by the negligence and
want of exercise of the utmost diligence of a very cautious person on the
part of the defendants and their agent." This allegation was also proved
when it was established during the trial that the driver, even before
receiving the proper signal from the conductor, and while there were still
persons on the running board of the bus and near it, started to run off the
vehicle. The presentation of proof of the negligence of its employee gave
rise to the presumption that the defendant employer did not exercise the
diligence of a good father of the family in the selection and supervision of
its employees. And this presumption, as the Court of Appeals found,
petitioner had failed to overcome. Consequently, petitioner must be
adjudged pecuniarily liable for the death of the child Raquel Beltran.

The increase of the award of damages from P3,000.00 to P6,000.00 by the

Court of Appeals, however, cannot be sustained. Generally, the appellate
court can only pass upon and consider questions or issues raised and
 TRANSPO | Assign No 6 | 23

FIRST DIVISION

[G.R. No. 145804. February 6, 2003.]

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, Petitioners,

v. MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD &
PRUDENT SECURITY AGENCY, Respondents.

DECISION

VITUG, J.:

The case before the Court is an appeal from the decision and resolution of
the Court of Appeals, promulgated on 27 April 2000 and 10 October 2000,
respectively, in CA-G.R. CV No. 60720, entitled "Marjorie Navidad and Heirs
of the Late Nicanor Navidad v. Rodolfo Roman, et. al.," which has modified
the decision of 11 August 1998 of the Regional Trial Court, Branch 266,
Pasig City, exonerating Prudent Security Agency (Prudent) from liability and
finding Light Rail Transit Authority (LRTA) and Rodolfo Roman liable for
damages on account of the death of Nicanor Navidad.chanrob1es virtua1
1aw 1ibrary

On 14 October 1993, about half an hour past seven oclock in the evening,
Nicanor Navidad, then drunk, entered the EDSA LRT station after
purchasing a "token" (representing payment of the fare). While Navidad
was standing on the platform near the LRT tracks, Junelito Escartin, the
security guard assigned to the area approached Navidad. A
misunderstanding or an altercation between the two apparently ensued that
led to a fist fight. No evidence, however, was adduced to indicate how the
fight started or who, between the two, delivered the first blow or how
Navidad later fell on the LRT tracks. At the exact moment that Navidad fell,
an LRT train, operated by petitioner Rodolfo Roman, was coming in.
Navidad was struck by the moving train, and he was killed instantaneously.

On 08 December 1994, the widow of Nicanor, herein respondent Marjorie

 TRANSPO | Assign No 6 | 24

Navidad, along with her children, filed a complaint for damages against LRTA and Roman jointly and severally liable thusly:jgc:chanrobles.com.ph
Junelito Escartin, Rodolfo Roman, the LRTA, the Metro Transit Organization,
Inc. (Metro Transit), and Prudent for the death of her husband. LRTA and "WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating
Roman filed a counterclaim against Navidad and a cross-claim against the appellants from any liability for the death of Nicanor Navidad, Jr.
Escartin and Prudent. Prudent, in its answer, denied liability and averred Instead, appellees Rodolfo Roman and the Light Rail Transit Authority
that it had exercised due diligence in the selection and supervision of its (LRTA) are held liable for his death and are hereby directed to pay jointly
security guards. and severally to the plaintiffs-appellees, the following amounts:chanrob1es
virtual 1aw library
The LRTA and Roman presented their evidence while Prudent and Escartin,
instead of presenting evidence, filed a demurrer contending that Navidad a) P44,830.00 as actual damages;
had failed to prove that Escartin was negligent in his assigned task. On 11
August 1998, the trial court rendered its decision; it b) P50,000.00 as nominal damages;
adjudged:jgc:chanrobles.com.ph
c) P50,000.00 as moral damages;
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and
against the defendants Prudent Security and Junelito Escartin ordering the d) P50,000.00 as indemnity for the death of the deceased; and
latter to pay jointly and severally the plaintiffs the
following:jgc:chanrobles.com.ph e) P20,000.00 as and for attorneys fees." 2

"a) 1) Actual damages of P44,830.00; The appellate court ratiocinated that while the deceased might not have
then as yet boarded the train, a contract of carriage theretofore had already
2) Compensatory damages of P443,520.00; existed when the victim entered the place where passengers were supposed
to be after paying the fare and getting the corresponding token therefor. In
3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00; exempting Prudent from liability, the court stressed that there was nothing
to link the security agency to the death of Navidad. It said that Navidad
"b) Moral damages of P50,000.00; failed to show that Escartin inflicted fist blows upon the victim and the
evidence merely established the fact of death of Navidad by reason of his
"c) Attorneys fees of P20,000; having been hit by the train owned and managed by the LRTA and operated
at the time by Roman. The appellate court faulted petitioners for their
"d) Costs of suit. failure to present expert evidence to establish the fact that the application
of emergency brakes could not have stopped the train.
"The complaint against defendants LRTA and Rodolfo Roman are dismissed
for lack of merit. The appellate court denied petitioners motion for reconsideration in its
resolution of 10 October 2000.
"The compulsory counterclaim of LRTA and Roman are likewise dismissed."
1 In their present recourse, petitioners recite alleged errors on the part of the
appellate court; viz:chanrob1es virtual 1aw library
Prudent appealed to the Court of Appeals. On 27 August 2000, the
appellate court promulgated its now assailed decision exonerating Prudent "I.
from any liability for the death of Nicanor Navidad and, instead, holding the
 TRANSPO | Assign No 6 | 25

Code, governing the liability of a common carrier for death of or injury to its
passengers, provides:jgc:chanrobles.com.ph
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING
THE FINDINGS OF FACTS BY THE TRIAL COURT "Article 1755. A common carrier is bound to carry the passengers safely as
far as human care and foresight can provide, using the utmost diligence of
"II. very cautious persons, with a due regard for all the circumstances.

"Article 1756. In case of death of or injuries to passengers, common

carriers are presumed to have been at fault or to have acted negligently,
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT
unless they prove that they observed extraordinary diligence as prescribed
PETITIONERS ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR.
in articles 1733 and 1755."cralaw virtua1aw library
"III.
"Article 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the formers
employees, although such employees may have acted beyond the scope of
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT their authority or in violation of the orders of the common carriers.
RODOLFO ROMAN IS AN EMPLOYEE OF LRTA." 3
"This liability of the common carriers does not cease upon proof that they
Petitioners would contend that the appellate court ignored the evidence and exercised all the diligence of a good father of a family in the selection and
the factual findings of the trial court by holding them liable on the basis of a supervision of their employees."cralaw virtua1aw library
sweeping conclusion that the presumption of negligence on the part of a
common carrier was not overcome. Petitioners would insist that Escartins "Article 1763. A common carrier is responsible for injuries suffered by a
assault upon Navidad, which caused the latter to fall on the tracks, was an passenger on account of the willful acts or negligence of other passengers
act of a stranger that could not have been foreseen or prevented. The LRTA or of strangers, if the common carriers employees through the exercise of
would add that the appellate courts conclusion on the existence of an the diligence of a good father of a family could have prevented or stopped
employer-employee relationship between Roman and LRTA lacked basis the act or omission."cralaw virtua1aw library
because Roman himself had testified being an employee of Metro Transit
and not of the LRTA. The law requires common carriers to carry passengers safely using the
utmost diligence of very cautious persons with due regard for all
Respondents, supporting the decision of the appellate court, contended that circumstances. 5 Such duty of a common carrier to provide safety to its
a contract of carriage was deemed created from the moment Navidad paid passengers so obligates it not only during the course of the trip but for so
the fare at the LRT station and entered the premises of the latter, entitling long as the passengers are within its premises and where they ought to be
Navidad to all the rights and protection under a contractual relation, and in pursuance to the contract of carriage. 6 The statutory provisions render a
that the appellate court had correctly held LRTA and Roman liable for the common carrier liable for death of or injury to passengers (a) through the
death of Navidad in failing to exercise extraordinary diligence imposed upon negligence or wilful acts of its employees or b) on account of wilful acts or
a common carrier. negligence of other passengers or of strangers if the common carriers
employees through the exercise of due diligence could have prevented or
Law and jurisprudence dictate that a common carrier, both from the nature stopped the act or omission. 7 In case of such death or injury, a carrier is
of its business and for reasons of public policy, is burdened with the duty of presumed to have been at fault or been negligent, and 8 by simple proof of
exercising utmost diligence in ensuring the safety of passengers. 4 The Civil injury, the passenger is relieved of the duty to still establish the fault or
 TRANSPO | Assign No 6 | 26

negligence of the carrier or of its employees and the burden shifts upon the the Court of Appeals that "there is nothing to link (Prudent) to the death of
carrier to prove that the injury is due to an unforeseen event or to force Nicanor (Navidad), for the reason that the negligence of its employee,
majeure. 9 In the absence of satisfactory explanation by the carrier on how Escartin, has not been duly proven . . . ." This finding of the appellate court
the accident occurred, which petitioners, according to the appellate court, is not without substantial justification in our own review of the records of
have failed to show, the presumption would be that it has been at fault, 10 the case.
an exception from the general rule that negligence must be proved. 11
There being, similarly, no showing that petitioner Rodolfo Roman himself is
The foundation of LRTAs liability is the contract of carriage and its guilty of any culpable act or omission, he must also be absolved from
obligation to indemnify the victim arises from the breach of that contract by liability. Needless to say, the contractual tie between the LRT and Navidad is
reason of its failure to exercise the high diligence required of the common not itself a juridical relation between the latter and Roman; thus, Roman
carrier. In the discharge of its commitment to ensure the safety of can be made liable only for his own fault or negligence.
passengers, a carrier may choose to hire its own employees or avail itself of
the services of an outsider or an independent firm to undertake the task. In The award of nominal damages in addition to actual damages is untenable.
either case, the common carrier is not relieved of its responsibilities under Nominal damages are adjudicated in order that a right of the plaintiff, which
the contract of carriage. has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss
Should Prudent be made likewise liable? If at all, that liability could only be suffered by him. 18 It is an established rule that nominal damages cannot
for tort under the provisions of Article 2176 12 and related provisions, in co-exist with compensatory damages. 19
conjunction with Article 2180, 13 of the Civil Code. The premise, however,
for the employers liability is negligence or fault on the part of the WHEREFORE, the assailed decision of the appellate court is AFFIRMED with
employee. Once such fault is established, the employer can then be made MODIFICATION but only in that (a) the award of nominal damages is
liable on the basis of the presumption juris tantum that the employer failed DELETED and (b) petitioner Rodolfo Roman is absolved from liability. No
to exercise diligentissimi patris families in the selection and supervision of costs.chanrob1es virtua1 1aw 1ibrary
its employees. The liability is primary and can only be negated by showing
due diligence in the selection and supervision of the employee, a factual SO ORDERED.
matter that has not been shown. Absent such a showing, one might ask
further, how then must the liability of the common carrier, on the one hand,
and an independent contractor, on the other hand, be described? It would
be solidary. A contractual obligation can be breached by tort and when the
same act or omission causes the injury, one resulting in culpa contractual
and the other in culpa aquiliana, Article 2194 14 of the Civil Code can well
apply. 15 In fine, a liability for tort may arise even under a contract, where
tort is that which breaches the contract. 16 Stated differently, when an act
which constitutes a breach of contract would have itself constituted the
source of a quasi-delictual liability had no contract existed between the
parties, the contract can be said to have been breached by tort, thereby
allowing the rules on tort to apply. 17

Regrettably for LRT, as well as perhaps the surviving spouse and heirs of
the late Nicanor Navidad, this Court is concluded by the factual finding of

THIRD DIVISION
[G.R. NO. 157658 : October 15, 2007]
PHILIPPINE NATIONAL RAILWAYS and VIRGILIO J.
BORJA, Petitioners, v. COURT OF APPEALS (Second Division),
CORAZON C. AMORES, MA. EMILIE A. MOJICA, CECILE C. SISON,
DINO C. AMORES, LARISA C. AMORES, ARMAND JINO C. AMORES
and JOHN C. AMORES, Respondents.
DECISION
NACHURA, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the
1997 Rules of Civil Procedure, as amended, seeking to annul and set aside
the Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 54906 which
reversed the Decision2 of the Regional Trial Court (RTC) of Manila, Branch
28, in Civil Case No. 92-61987.
The factual antecedents are as follows:
In the early afternoon of April 27, 1992, Jose Amores (Amores) was
traversing the railroad tracks in Kahilum II Street, Pandacan, Manila. Before
crossing the railroad track, he stopped for a while then proceeded
accordingly.3 Unfortunately, just as Amores was at the intersection, a
Philippine National Railways' (PNR) train with locomotive number T-517
turned up and collided with the car.4
At the time of the mishap, there was neither a signal nor a crossing bar at
the intersection to warn motorists of an approaching train. Aside from the
railroad track, the only visible warning sign at that time was the defective
standard signboard "STOP, LOOK and LISTEN" wherein the sign "Listen" was
lacking while that of "Look" was bent. 5 No whistle blow from the train was
likewise heard before it finally bumped the car of Amores. 6 After impact, the
car was dragged about ten (10) meters beyond the center of the
crossing.7 Amores died as a consequence thereof.
On July 22, 1992, the heirs of Amores, consisting of his surviving wife and On appeal, the CA reversed the RTC decision, as follows:
six children, herein respondents, filed a Complaint for Damages 8 against
petitioners PNR and Virgilio J. Borja (Borja), PNR's locomotive driver at the
time of the incident, before the RTC of Manila. The case was raffled to
TRANSPO | Assign No 6 | 27
Branch 28 and was docketed as Civil Case No. 92-61987. In their
complaint, respondents averred that the train's speedometer was defective,
and that the petitioners' negligence was the proximate cause of the mishap
for their failure to take precautions to prevent injury to persons and
property despite the dense population in the vicinity. They then prayed for
actual and moral damages, as well as attorney's fees. 9
In their Answer,10 the petitioners denied the allegations, stating that the
train was railroad-worthy and without any defect. According to them, the
proximate cause of the death of Amores was his own carelessness and
negligence, and Amores wantonly disregarded traffic rules and regulations
in crossing the railroad tracks and trying to beat the approaching train.
They admitted that there was no crossing bar at the site of the accident
because it was merely a barangay road. 11 PNR stressed that it exercised the
diligence of a good father of a family in the selection and supervision of the
locomotive driver and train engineer, Borja, and that the latter likewise
used extraordinary diligence and caution to avoid the accident. Petitioners
further asserted that respondents had the last clear chance to avoid the
accident but recklessly failed to do so.
After trial on the merits, on August 22, 1996, the RTC rendered judgment in
favor of the petitioners, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered dismissing the complaint of the
plaintiffs and the defendants' counterclaim.
The costs shall be halved and paid equally by the parties.
The counsel for the defendants is hereby ordered to inform this court who is
the legal representative of the deceased defendant, Virgilio Borja, within
ten (10) days from receipt of a copy of this decision.
SO ORDERED.12
The RTC rationalized that the proximate cause of the collision was Amores'
fatal misjudgment and the reckless course of action he took in crossing the
railroad track even after seeing or hearing the oncoming train.

WHEREFORE, the assailed Decision of the Regional Trial Court of Manila,
Branch 28 is hereby REVERSED. The defendants PNR and the estate of
Virgilio J. Borja are jointly and severally liable to pay plaintiffs the following:
1) The amount of P122,300.00 for the cost of damage to the car; and,
2) The amount of P50,000 as moral damages.
For lack of official receipts for funeral expenses and specimen of the last
pay slip of the deceased, the claim for reimbursement of funeral expenses
and claim for payment of support is hereby DENIED for lack of basis. Costs
against Defendants.
SO ORDERED.13
In reversing the trial court's decision, the appellate court found the
petitioners negligent. The court based the petitioners' negligence on the
failure of PNR to install a semaphore or at the very least, to post a flagman,
considering that the crossing is located in a thickly populated area.
Moreover, the signboard "Stop, Look and Listen" was found insufficient
because of its defective condition as described above. Lastly, no negligence
could be attributed to Amores as he exercised reasonable diligence in
crossing the railroad track.
Aggrieved by this reversal, the petitioners filed the present Petition for
Review on Certiorari, raising the following grounds:
I The only issue to be resolved in the present case is whether the appellate
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN
RENDERING ITS DECISION REVERSING THE DECISION OF THE REGIONAL
TRIAL COURT OF MANILA BRANCH 28, IN NOT TAKING INTO
CONSIDERATION THE PROVISION OF SECTION 42, R.A. 4136 OF THE LAND
TRANSPORTATION AND TRAFFIC CODE.
II
THE DECISION OF THE COURT OF APPEALS IS CONTRARY TO THE
EVIDENCE ON RECORD ADDUCED IN THE TRIAL ON THE MERIT IN CIVIL
CASE NO. 92-61987.14
TRANSPO | Assign No 6 | 28
The petitioners insist that Amores must have heard the train's whistle and
heeded the warning but, noting that the train was still a distance away and
moving slowly, he must have calculated that he could beat it to the other
side of the track before the train would arrive at the intersection. The
petitioners likewise add that the train was railroad-worthy and that its
defective speedometer did not affect the train's operation. Lastly, they insist
that evidence showed sufficient warning signs strategically installed at the
crossing to alert both motorists and pedestrians.
Respondents, on the other hand, argue that the cause of the accident was
petitioners' carelessness, imprudence and laxity in failing to provide a
crossing bar and keeper at the Kahilum II railway intersection. Considering
that Kahilum II Street is in the middle of a thickly populated squatters'
area, and many pedestrians cross the railroad track, notwithstanding the
fact that it is a public street and a main thoroughfare utilized in going to
Herran Street, the presence of adequate warning signals would have
prevented the untimely death of Amores. Another crucial point raised by
the respondents is the manner in which Borja applied the brakes of the
train only when the locomotive was already very near Amores' car, as
admitted by witness Querimit. Finally, respondents claim that Borja's failure
to blow the locomotive's horn, pursuant to the usual practice of doing the
same 100 meters before reaching the Kahilum II crossing point is an
earmark of recklessness on the part of the petitioners.
The petition must fail.
court was correct in ascribing negligence on the part of the petitioners. It
was ascertained beyond quandary that the proximate cause of the collision
is the negligence and imprudence of the petitioner PNR and its locomotive
driver, Borja, in operating the passenger train.
As the action is predicated on negligence, the relevant provision is Article
2176 of the New Civil Code, which states that:
Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or
negligence, if there was no pre-existing contractual relation between the
parties, is called quasi-delict and is governed by the provisions of this
chapter.

We have thoroughly reviewed the records of the case and we find no cogent
reason to reverse the appellate court's decision. Negligence has been
defined as "the failure to observe for the protection of the interests of
another person that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers
injury."15 Using the aforementioned philosophy, it may be reliably concluded
that there is no hard and fast rule whereby such degree of care and
vigilance is calibrated; it is dependent upon the circumstances in which a
person finds himself. All that the law requires is that it is perpetually
compelling upon a person to use that care and diligence expected of
sensible men under comparable circumstances. 16
We hold that the petitioners were negligent when the collision took place.
The transcript of stenographic notes reveals that the train was running at a
fast speed because notwithstanding the application of the ordinary and
emergency brakes, the train still dragged the car some distance away from
the point of impact. Evidence likewise unveils the inadequate precautions
taken by petitioner PNR to forewarn the public of the impending danger.
Aside from not having any crossing bar, no flagman or guard to man the
intersection at all times was posted on the day of the incident. A reliable
signaling device in good condition, not just a dilapidated "Stop, Look and
Listen" signage because of many years of neglect, is needed to give notice
to the public. It is the responsibility of the railroad company to use
reasonable care to keep the signal devices in working order. Failure to do so
would be an indication of negligence.
TRANSPO | Assign No 6 | 29
As held in the case of Philippine National Railway v. Brunty,17 it may broadly
be stated that railroad companies owe to the public a duty of exercising a
reasonable degree of care to avoid injury to persons and property at
railroad crossings, which duties pertain both to the operation of trains and
to the maintenance of the crossings. Moreover, every corporation
constructing or operating a railway shall make and construct at all points
where such railway crosses any public road, good, sufficient, and safe
crossings, and erect at such points, at sufficient elevation from such road as
to admit a free passage of vehicles of every kind, a sign with large and
distinct letters placed thereon, to give notice of the proximity of the railway,
and warn persons of the necessity of looking out for trains. 18 The failure of
the PNR to put a cross bar, or signal light, flagman or switchman, or
semaphore is evidence of negligence and disregard of the safety of the
public, even if there is no law or ordinance requiring it, because public
safety demands that said device or equipment be installed.
The petitioners insist that a train has a right-of-way in a railroad crossing
under the existing laws. They derive their theory from Section 42 (d),
Article III of R.A. 4136, otherwise known as the Land Transportation and
Traffic Code, which states that:
The driver of a vehicle upon a highway shall bring to a full stop such vehicle
before traversing any "through highway" or railroad crossing: Provided,
That when it is apparent that no hazard exists, the vehicle may be slowed
down to five miles per hour instead of bringing it to a full stop.
They claim that motorists are enjoined by law to stop, look and listen
before crossing railroad tracks and that a heavier responsibility rests upon
the motorists in avoiding accidents at level crossings.
It is true that one driving an automobile must use his faculties of seeing
and hearing when nearing a railroad crossing.rbl r
l l lbrr
However, the obligation to bring to a full stop vehicles moving in public
highways before traversing any "through street" only accrues from the time
the said "through street" or crossing is so designated and sign-posted.
From the records of the case, it can be inferred that Amores exercised all
the necessary precautions required of him as to avoid injury to himself and
to others.rbl r l l lbrr
 TRANSPO | Assign No 6 | 30

The witnesses' testimonies showed that Amores slackened his speed, made
a full stop, and then proceeded to cross the tracks when he saw that there
was no impending danger to his life. Under these circumstances, we are
convinced that Amores did everything, with absolute care and caution, to
avoid the collision.

It is settled that every person or motorist crossing a railroad track should

use ordinary prudence and alertness to determine the proximity of a train
before attempting to cross. We are persuaded that the circumstances were
beyond the control of Amores for no person would sacrifice his precious life
if he had the slightest opportunity to evade the catastrophe. Besides, the
authority in this jurisdiction is that the failure of a railroad company to
install a semaphore or at the very least, to post a flagman or watchman to
warn the public of the passing train amounts to
negligence.19 rbl r l l lbrr

In view of the foregoing, We will now discuss the liability of petitioner PNR.
Article 218020 of the New Civil Code discusses the liability of the employer
once negligence or fault on the part of the employee has been established.
The employer is actually liable on the assumption of juris tantum that the
employer failed to exercise diligentissimi patris families in

the selection and supervision of its employees. The liability is primary and
can only be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been
demonstrated.21 Even the existence of hiring procedures and supervisory
employees cannot be incidentally invoked to overturn the presumption of
negligence on the part of the employer.22

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals

dated March 31, 2003 in CA-G.R. CV No. 54906 is hereby AFFIRMED.

SO ORDERED.

SECOND DIVISION
G.R. No. 84458 November 6, 1989
ABOITIZ SHIPPING CORPORATION, Petitioner, vs. HON. COURT OF
APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO
VIANA and GORGONIA VIANA, and PIONEER STEVEDORING
CORPORATION, Respondents.
Herenio E. Martinez for petitioner.chanrobles virtual law library
M.R. Villaluz Law Office for private respondent.
REGALADO, J.:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a
review of the decision 1of respondent Court of Appeals, dated July 29,
1988, the decretal portion of which reads:
WHEREFORE, the judgment appealed from as modified by the order of
October 27, 1982, is hereby affirmed with the modification that appellant
Aboitiz Shipping is hereby ordered to pay plaintiff-appellees the amount of
P30,000.00 for the death of Anacleto Viana; actual damages of P9,800.00;
P150,000.00 for unearned income; P7,200.00 as support for deceased's
parents; P20,000.00 as moral damages; P10,000.00 as attorney's fees; and
to pay the costs.
The undisputed facts of the case, as found by the court a quo and adopted
by respondent court, are as follows: .
The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the
vessel M/V Antonia, owned by defendant, at the port at San Jose,
Occidental Mindoro, bound for Manila, having purchased a ticket (No.
117392) in the sum of P23.10 (Exh. 'B'). On May 12, 1975, said vessel
arrived at Pier 4, North Harbor, Manila, and the passengers therein
disembarked, a gangplank having been provided connecting the side of the
vessel to the pier. Instead of using said gangplank Anacleto Viana
disembarked on the third deck which was on the level with the pier. After
said vessel had landed, the Pioneer Stevedoring Corporation took over the
exclusive control of the cargoes loaded on said vessel pursuant to the
Memorandum of Agreement dated July 26, 1975 (Exh. '2') between the
third party defendant Pioneer Stevedoring Corporation and defendant
TRANSPO | Assign No 6 | 31
Aboitiz Shipping Corporation.chanroblesvirtualawlibrarychanrobles virtual
law library
The crane owned by the third party defendant and operated by its crane
operator Alejo Figueroa was placed alongside the vessel and one (1) hour
after the passengers of said vessel had disembarked, it started operation by
unloading the cargoes from said vessel. While the crane was being
operated, Anacleto Viana who had already disembarked from said vessel
obviously remembering that some of his cargoes were still loaded in the
vessel, went back to the vessel, and it was while he was pointing to the
crew of the said vessel to the place where his cargoes were loaded that the
crane hit him, pinning him between the side of the vessel and the crane. He
was thereafter brought to the hospital where he later expired three (3) days
thereafter, on May 15, 1975, the cause of his death according to the Death
Certificate (Exh. "C") being "hypostatic pneumonia secondary to traumatic
fracture of the pubic bone lacerating the urinary bladder" (See also Exh.
"B"). For his hospitalization, medical, burial and other miscellaneous
expenses, Anacleto's wife, herein plaintiff, spent a total of P9,800.00
(Exhibits "E", "E-1", to "E-5"). Anacleto Viana who was only forty (40) years
old when he met said fateful accident (Exh. 'E') was in good health. His
average annual income as a farmer or a farm supervisor was 400 cavans of
palay annually. His parents, herein plaintiffs Antonio and Gorgonia Viana,
prior to his death had been recipient of twenty (20) cavans of palay as
support or P120.00 monthly. Because of Anacleto's death, plaintiffs suffered
mental anguish and extreme worry or moral damages. For the filing of the
instant case, they had to hire a lawyer for an agreed fee of ten thousand
(P10,000.00) pesos. 2chanrobles virtual law library
Private respondents Vianas filed a complaint 3 for damages against
petitioner corporation (Aboitiz, for brevity) for breach of contract of
carriage.chanroblesvirtualawlibrary chanrobles virtual law library
In its answer. 4 Aboitiz denied responsibility contending that at the time of
the accident, the vessel was completely under the control of respondent
Pioneer Stevedoring Corporation (Pioneer, for short) as the exclusive
stevedoring contractor of Aboitiz, which handled the unloading of cargoes
from the vessel of Aboitiz. It is also averred that since the crane operator
was not an employee of Aboitiz, the latter cannot be held liable under the
fellow-servant rule.chanroblesvirtualawlibrary chanrobles virtual law library

Thereafter, Aboitiz, as third-party plaintiff, filed a third-party
complaint 5against Pioneer imputing liability thereto for Anacleto Viana's
death as having been allegedly caused by the negligence of the crane
operator who was an employee of Pioneer under its exclusive control and
supervision.chanroblesvirtualawlibrarychanrobles virtual law library
Pioneer, in its answer to the third-party complaint, 6 raised the defenses
that Aboitiz had no cause of action against Pioneer considering that Aboitiz
is being sued by the Vianas for breach of contract of carriage to which
Pioneer is not a party; that Pioneer had observed the diligence of a good
father of a family both in the selection and supervision of its employees as
well as in the prevention of damage or injury to anyone including the victim
Anacleto Viana; that Anacleto Viana's gross negligence was the direct and
proximate cause of his death; and that the filing of the third-party
complaint was premature by reason of the pendency of the criminal case for
homicide through reckless imprudence filed against the crane operator,
Alejo Figueroa.chanroblesvirtualawlibrary chanrobles virtual law library
In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was
ordered to pay the Vianas for damages incurred, and Pioneer was ordered
to reimburse Aboitiz for whatever amount the latter paid the Vianas. The
dispositive portion of said decision provides:
WHEREFORE, judgment is hereby rendered in favor of the
plantiffs:chanrobles virtual law library
(1) ordering defendant Aboitiz Shipping Corporation to pay to plaintiffs the
sum of P12,000.00 for the death of Anacleto Viana P9,800.00 as actual
damages; P533,200.00 value of the 10,664 cavans of palay computed at
P50.00 per cavan; P10,000.00 as attorney's fees; F 5,000.00, value of the
100 cavans of palay as support for five (5) years for deceased (sic) parents,
herein plaintiffs Antonio and Gorgonia Viana computed at P50.00 per cavan;
P7,200.00 as support for deceased's parents computed at P120.00 a month
for five years pursuant to Art. 2206, Par. 2, of the Civil Code; P20,000.00 as
moral damages, and costs; and chanrobles virtual law library
(2) ordering the third party defendant Pioneer Stevedoring Corporation to
reimburse defendant and third party plaintiff Aboitiz Shipping Corporation
the said amounts that it is ordered to pay to herein plaintiffs.
TRANSPO | Assign No 6 | 32
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein
they similarly raised the trial court's failure to declare that Anacleto Viana
acted with gross negligence despite the overwhelming evidence presented
in support thereof. In addition, Aboitiz alleged, in opposition to Pioneer's
motion, that under the memorandum of agreement the liability of Pioneer
as contractor is automatic for any damages or losses whatsoever
occasioned by and arising from the operation of its arrastre and stevedoring
service.chanroblesvirtualawlibrary chanrobles virtual law library
In an order dated October 27, 1982, 8 the trial court absolved Pioneer from
liability for failure of the Vianas and Aboitiz to preponderantly establish a
case of negligence against the crane operator which the court a quo ruled is
never presumed, aside from the fact that the memorandum of agreement
supposedly refers only to Pioneer's liability in case of loss or damage to
goods handled by it but not in the case of personal injuries, and, finally that
Aboitiz cannot properly invoke the fellow-servant rule simply because its
liability stems from a breach of contract of carriage. The dispositive portion
of said order reads:
WHEREFORE, judgment is hereby modified insofar as third party defendant
Pioneer Stevedoring Corporation is concerned rendered in favor of the
plaintiffs-,:chanrobles virtual law library
(1) Ordering defendant Aboitiz Shipping Corporation to pay the plaintiffs the
sum of P12,000.00 for the death of Anacleto Viana; P9,000.00 (sic) as
actual damages; P533,200.00 value of the 10,664 cavans of palay
computed at P50.00 per cavan; P10,000.00 as attorney's fees; P5,000.00
value of the 100 cavans of palay as support for five (5) years for deceased's
parents, herein plaintiffs Antonio and Gorgonia Viana,computed at P50.00
per cavan; P7,200.00 as support for deceased's parents computed at
P120.00 a month for five years pursuant to Art. 2206, Par. 2, of the Civil
Code; P20,000.00 as moral damages, and costs; andchanrobles virtual law
library
(2) Absolving third-party defendant Pioneer Stevedoring Corporation for
(sic) any liability for the death of Anacleto Viana the passenger of M/V
Antonia owned by defendant third party plaintiff Aboitiz Shipping
Corporation it appearing that the negligence of its crane operator has not
been established therein.

Not satisfied with the modified judgment of the trial court, Aboitiz appealed
the same to respondent Court of Appeals which affirmed the findings of of
the trial court except as to the amount of damages awarded to the
Vianas.chanroblesvirtualawlibrarychanrobles virtual law library
Hence, this petition wherein petitioner Aboitiz postulates that respondent
court erred:
(A) In holding that the doctrine laid down by this honorable Court in La
Mallorca vs. Court of Appeals, et al. (17 SCRA 739, July 27, 1966) is
applicable to the case in the face of the undisputable fact that the factual
situation under the La Mallorca case is radically different from the facts
obtaining in this case; chanrobles virtual law library
(B) In holding petitioner liable for damages in the face of the finding of the
court a quo and confirmed by the Honorable respondent court of Appeals
that the deceased, Anacleto Viana was guilty of contributory negligence,
which, We respectfully submit contributory negligence was the proximate
cause of his death; specifically the honorable respondent Court of Appeals
failed to apply Art. 1762 of the New Civil Code;chanrobles virtual law library
(C) In the alternative assuming the holding of the Honorable respondent
Court of Appears that petitioner may be legally condemned to pay damages
to the private respondents we respectfully submit that it committed a
reversible error when it dismissed petitioner's third party complaint against
private respondent Pioneer Stevedoring Corporation instead of compelling
the latter to reimburse the petitioner for whatever damages it may be
compelled to pay to the private respondents Vianas. 9chanrobles virtual law
library
At threshold, it is to be observed that both the trial court and respondent
Court of Appeals found the victim Anacleto Viana guilty of contributory
negligence, but holding that it was the negligence of Aboitiz in prematurely
turning over the vessel to the arrastre operator for the unloading of cargoes
which was the direct, immediate and proximate cause of the victim's
death.chanroblesvirtualawlibrary chanrobles virtual law library
I. Petitioner contends that since one (1) hour had already elapsed from the
time Anacleto Viana disembarked from the vessel and that he was given
more than ample opportunity to unload his cargoes prior to the operation of
the crane, his presence on the vessel was no longer reasonable e and he
TRANSPO | Assign No 6 | 33
consequently ceased to be a passenger. Corollarily, it insists that the
doctrine in La Mallorca vs. Court of Appeals, et al. 10is not applicable to the
case at bar.chanroblesvirtualawlibrarychanrobles virtual law library
The rule is that the relation of carrier and passenger continues until the
passenger has been landed at the port of destination and has left the vessel
owner's dock or premises. 11 Once created, the relationship will not
ordinarily terminate until the passenger has, after reaching his destination,
safely alighted from the carrier's conveyance or had a reasonable
opportunity to leave the carrier's premises. All persons who remain on the
premises a reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this
rule is to be determined from all the circumstances, and includes a
reasonable time to see after his baggage and prepare for his
departure. 12 The carrier-passenger relationship is not terminated merely by
the fact that the person transported has been carried to his destination if,
for example, such person remains in the carrier's premises to claim his
baggage. 13chanrobles virtual law library
It was in accordance with this rationale that the doctrine in the aforesaid
case of La Mallorca was enunciated, to wit:
It has been recognized as a rule that the relation of carrier and passenger
does not cease at the moment the passenger alights from the carrier's
vehicle at a place selected by the carrier at the point of destination, but
continues until the passenger has had a reasonable time or a reasonable
opportunity to leave the carrier's premises. And, what is a reasonable time
or a reasonable delay within this rule is to be determined from all the
circumstances. Thus, a person who, after alighting from a train, walks along
the station platform is considered still a passenger. So also, where a
passenger has alighted at his destination and is proceeding by the usual
way to leave the company's premises, but before actually doing so is halted
by the report that his brother, a fellow passenger, has been shot, and he in
good faith and without intent of engaging in the difficulty, returns to relieve
his brother, he is deemed reasonably and necessarily delayed and thus
continues to be a passenger entitled as such to the protection of the
railroad company and its agents.chanroblesvirtualawlibrary chanrobles
virtual law library
In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when they alighted from the bus.

Racquel, the child that she was, must have followed the father. However,
although the father was still on the running board of the bus waiting for the
conductor to hand him the bag or bayong, the bus started to run, so that
even he (the father) had to jump down from the moving vehicle. It was at
this instance that the child, who must be near the bus, was run over and
killed. In the circumstances, it cannot be claimed that the carrier's agent
had exercised the 'utmost diligence' of a 'very cautious person' required by
Article 1755 of the Civil Code to be observed by a common carrier in the
discharge of its obligation to transport safely its passengers. ... The
presence of said passengers near the bus was not unreasonable and they
are, therefore, to be considered still as passengers of the carrier, entitled to
the protection under their contract of carriage. 14chanrobles virtual law
library
It is apparent from the foregoing that what prompted the Court to rule as it
did in said case is the fact of the passenger's reasonable presence within
the carrier's premises. That reasonableness of time should be made to
depend on the attending circumstances of the case, such as the kind of
common carrier, the nature of its business, the customs of the place, and so
forth, and therefore precludes a consideration of the time element per
se without taking into account such other factors. It is thus of no moment
whether in the cited case of La Mallorca there was no appreciable
interregnum for the passenger therein to leave the carrier's premises
whereas in the case at bar, an interval of one (1) hour had elapsed before
the victim met the accident. The primary factor to be considered is the
existence of a reasonable cause as will justify the presence of the victim on
or near the petitioner's vessel. We believe there exists such a justifiable
cause.chanroblesvirtualawlibrary chanrobles virtual law library
It is of common knowledge that, by the very nature of petitioner's business
as a shipper, the passengers of vessels are allotted a longer period of time
to disembark from the ship than other common carriers such as a
passenger bus. With respect to the bulk of cargoes and the number of
passengers it can load, such vessels are capable of accommodating a bigger
volume of both as compared to the capacity of a regular commuter bus.
Consequently, a ship passenger will need at least an hour as is the usual
practice, to disembark from the vessel and claim his baggage whereas a
bus passenger can easily get off the bus and retrieve his luggage in a very
short period of time. Verily, petitioner cannot categorically claim, through
the bare expedient of comparing the period of time entailed in getting the
TRANSPO | Assign No 6 | 34
passenger's cargoes, that the ruling in La Mallorca is inapplicable to the
case at bar. On the contrary, if we are to apply the doctrine enunciated
therein to the instant petition, we cannot in reason doubt that the victim
Anacleto Viana was still a passenger at the time of the incident. When the
accident occurred, the victim was in the act of unloading his cargoes, which
he had every right to do, from petitioner's vessel. As earlier stated, a
carrier is duty bound not only to bring its passengers safely to their
destination but also to afford them a reasonable time to claim their
baggage.chanroblesvirtualawlibrary chanrobles virtual law library
It is not definitely shown that one (1) hour prior to the incident, the victim
had already disembarked from the vessel. Petitioner failed to prove this.
What is clear to us is that at the time the victim was taking his cargoes, the
vessel had already docked an hour earlier. In consonance with common
shipping procedure as to the minimum time of one (1) hour allowed for the
passengers to disembark, it may be presumed that the victim had just
gotten off the vessel when he went to retrieve his baggage. Yet, even if he
had already disembarked an hour earlier, his presence in petitioner's
premises was not without cause. The victim had to claim his baggage which
was possible only one (1) hour after the vessel arrived since it was
admittedly standard procedure in the case of petitioner's vessels that the
unloading operations shall start only after that time. Consequently, under
the foregoing circumstances, the victim Anacleto Viana is still deemed a
passenger of said carrier at the time of his tragic
death.chanroblesvirtualawlibrarychanrobles virtual law library
II. Under the law, common carriers are, from the nature of their business
and for reasons of public policy, bound to observe extraordinary diligence in
the vigilance over the goods and for the safety of the passengers
transported by them, according to all the circumstances of each
case. 15More particularly, a common carrier is bound to carry the
passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for all the
circumstances. 16 Thus, where a passenger dies or is injured, the common
carrier is presumed to have been at fault or to have acted
negligently. 17 This gives rise to an action for breach of contract of carriage
where all that is required of plaintiff is to prove the existence of the
contract of carriage and its non-performance by the carrier, that is, the
failure of the carrier to carry the passenger safely to his
destination, 18 which, in the instant case, necessarily includes its failure to

safeguard its passenger with extraordinary diligence while such relation
subsists.chanroblesvirtualawlibrarychanrobles virtual law library
The presumption is, therefore, established by law that in case of a
passenger's death or injury the operator of the vessel was at fault or
negligent, having failed to exercise extraordinary diligence, and it is
incumbent upon it to rebut the same. This is in consonance with the
avowed policy of the State to afford full protection to the passengers of
common carriers which can be carried out only by imposing a stringent
statutory obligation upon the latter. Concomitantly, this Court has likewise
adopted a rigid posture in the application of the law by exacting the highest
degree of care and diligence from common carriers, bearing utmost in mind
the welfare of the passengers who often become hapless victims of
indifferent and profit-oriented carriers. We cannot in reason deny that
petitioner failed to rebut the presumption against it. Under the facts
obtaining in the present case, it cannot be gainsaid that petitioner had
inadequately complied with the required degree of diligence to prevent the
accident from happening.chanroblesvirtualawlibrary chanrobles virtual law
library
As found by the Court of Appeals, the evidence does not show that there
was a cordon of drums around the perimeter of the crane, as claimed by
petitioner. It also adverted to the fact that the alleged presence of visible
warning signs in the vicinity was disputable and not indubitably established.
Thus, we are not inclined to accept petitioner's explanation that the victim
and other passengers were sufficiently warned that merely venturing into
the area in question was fraught with serious peril. Definitely, even
assuming the existence of the supposed cordon of drums loosely placed
around the unloading area and the guard's admonitions against entry
therein, these were at most insufficient precautions which pale into
insignificance if considered vis-a-vis the gravity of the danger to which the
deceased was exposed. There is no showing that petitioner was
extraordinarily diligent in requiring or seeing to it that said precautionary
measures were strictly and actually enforced to subserve their purpose of
preventing entry into the forbidden area. By no stretch of liberal evaluation
can such perfunctory acts approximate the "utmost diligence of very
cautious persons" to be exercised "as far as human care and foresight can
provide" which is required by law of common carriers with respect to their
passengers.chanroblesvirtualawlibrary chanrobles virtual law library
TRANSPO | Assign No 6 | 35
While the victim was admittedly contributorily negligent, still petitioner's
aforesaid failure to exercise extraordinary diligence was the proximate and
direct cause of, because it could definitely have prevented, the former's
death. Moreover, in paragraph 5.6 of its petition, at bar, 19 petitioner has
expressly conceded the factual finding of respondent Court of Appeals that
petitioner did not present sufficient evidence in support of its submission
that the deceased Anacleto Viana was guilty of gross negligence. Petitioner
cannot now be heard to claim
otherwise.chanroblesvirtualawlibrary chanrobles virtual law library
No excepting circumstance being present, we are likewise bound by
respondent court's declaration that there was no negligence on the part of
Pioneer Stevedoring Corporation, a confirmation of the trial court's finding
to that effect, hence our conformity to Pioneer's being absolved of any
liability.chanroblesvirtualawlibrarychanrobles virtual law library
As correctly observed by both courts, Aboitiz joined Pioneer in proving the
alleged gross negligence of the victim, hence its present contention that the
death of the passenger was due to the negligence of the crane operator
cannot be sustained both on grounds, of estoppel and for lack of evidence
on its present theory. Even in its answer filed in the court below it readily
alleged that Pioneer had taken the necessary safeguards insofar as its
unloading operations were concerned, a fact which appears to have been
accepted by the plaintiff therein by not impleading Pioneer as a defendant,
and likewise inceptively by Aboitiz by filing its third-party complaint only
after ten (10) months from the institution of the suit against it.
Parenthetically, Pioneer is not within the ambit of the rule on extraordinary
diligence required of, and the corresponding presumption of negligence
foisted on, common carriers like Aboitiz. This, of course, does not detract
from what we have said that no negligence can be imputed to Pioneer but,
that on the contrary, the failure of Aboitiz to exercise extraordinary
diligence for the safety of its passenger is the rationale for our finding on its
liability.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, the petition is DENIED and the judgment appealed from is
hereby AFFIRMED in toto.chanroblesvirtualawlibrary chanrobles virtual law
library
SO ORDERED.
 TRANSPO | Assign No 6 | 36

EN BANC for damages caused by mechanical defects of the conveyance.

[G.R. No. L-10605. June 30, 1958.] 4. ID.; ID.; WHERE INJURY IS PATENT, INDEMNITY CANNOT BE DENIED.
Where the injury is patent and not denied, the court is empowered to
PRECILLANO NECESITO, ETC., Plaintiff-Appellant, v. NATIVIDAD calculate moderate damages, although there is no definite proof of the
PARAS, ET AL., Defendants-Appellees. pecuniary loss suffered by the injured party.

[G.R. No. L-10606. June 30, 1958.] 5. ID.; ID.; RIGHT OF HEIRS OF DECEASED PASSENGER TO RECOVER
MORAL DAMAGES. In case of accident due to a carriers negligence, the
GERMAN NECESITO, ET AL., Plaintiffs-Appellants, v. NATIVIDAD heirs of a deceased passenger may recover moral damages, even though a
PARAS, ET AL., Defendants-Appellees. passenger who is injured, but manages to survive, is not entitled to them.
This special rule (Arts. 1264 and 2206, No. 3) in case of death controls the
Tomas Besa and Federico Agrava for Appellants. general rule of Article 2220.

Jose W. Diokno for Appellees. 6. ATTORNEYS FEES; LITIGANT CANNOT BE DEPRIVED OF FEE IF HE IS
ENTITLED TO RECOVERY. A litigant who improvidently stipulates higher
counsel fees than those to which he is entitled, does not for that reason
earn the right to a larger indemnity; but, by parity of reasoning, he should
not be deprived of counsel fees if by law he is entitled to recover them.
SYLLABUS

DECISION
1. CARRIERS; LIABILITY FOR DAMAGES CAUSED BY MECHANICAL
DEFECTS. While the carrier is not an insurer of the safety of the
passengers, it should nevertheless be held to answer for the laws its
equipment if such flaws were at all discoverable. In this connection, the
manufacturer of the defective appliance is considered in law the agent of REYES, J.B.L., J.:
the carrier, and the good repute of the manufacturer will not relieve the
carrier from liability. The rationale of the carriers liability is the fact that the
passenger has no privity with the manufacturer of the defective equipment;
hence, he has no remedy against him, while the carrier usually has.
These cases involve actions ex contractu against the owners and operators
2. DAMAGES; MORAL DAMAGES FOR BREACH OF CONTRACT, WHEN of the common carrier known as Philippine Rabbit Bus Lines, filed by one
RECOVERABLE. Under Article 2220 of the new Civil Code, in case to suits passenger, and the heirs of another, who were injured as a result of the fall
for breach of contract, moral damages are recoverable only where the into a river of the vehicle in which they were riding.
defendant acted fraudulently or in bad faith, and there is none in the case
at bar. (But see Resolution on the Motion to Reconsider.) In the morning of January 28, 1954, Severina Garces and her one- year old
son, Precillano Necesito, carrying vegetables, boarded passenger auto truck
3. CARRIERS; MECHANICAL DEFECTS. A carrier is liable to its passengers or bus No. 199 of the Philippine Rabbit Bus Lines at Agno, Pangasinan. The

passenger truck, driven by Francisco Bandonell, then proceeded on its
regular run from Agno to Manila. After passing Mangatarem, Pangasinan,
truck No. 199 entered a wooden bridge, but the front wheels swerved to
the right; the driver lost control, and after wrecking the bridges wooden
rails, the truck fell on its right side into a creek where water was breast
deep. The mother, Severina Garces, was drowned; the son, Precillano
Necesito, was injured, suffering abrasions and fracture of the left femur. He
was brought to the Provincial Hospital at Dagupan, where the fracture was
set but with fragments one centimeter out of line. The money, wrist watch
and cargo of vegetables were lost.
Two actions for damages and attorneys fees totalling over P85,000 having
been filed in the Court of First Instance of Tarlac (Cases Nos. 908 and 909)
against the carrier, the latter pleaded that the accident was due to "engine
or mechanical trouble" independent or beyond the control of the defendants
or of the driver Bandonell.
After joint trial, the Court of First Instance found that the bus was
proceeding slowly due to the bad condition of the road; that the accident
was caused by the fracture of the right steering knuckle, which was
defective in that its center or core was not compact but "bubbled and
cellulous", a condition that could not be known or ascertained by the carrier
despite the fact that regular thirty-day inspections were made of the
steering knuckle, since the steel exterior was smooth and shiny to the
depth of 3/16 of an inch all around; that the knuckles are designed and
manufactured for heavy duty and may last up to ten years; that the
knuckle of bus No. 199 that broke on January 28, 1954, was last inspected
on January 5, 1954, and was due to be inspected again on February 5th.
Hence, the trial court, holding that the accident was exclusively due to
fortuitous event, dismissed both actions. Plaintiffs appealed directly to this
Court in view of the amount in controversy.
We are inclined to agree with the trial court that it is not likely that bus No.
199 of the Philippine Rabbit Lines was driven over the deeply rutted road
leading to the bridge at a speed of 50 miles per hour, as testified for the
plaintiffs. Such conduct on the part of the driver would have provoked
instant and vehement protest on the part of the passengers because of the
attendant discomfort, and there is no trace of any such complaint in the
records. We are thus forced to assume that the proximate cause of the
accident was the reduced strength of the steering knuckle of the vehicle
TRANSPO | Assign No 6 | 37
caused by defects in casting it. While appellants hint that the broken
knuckle exhibited in court was not the real fitting attached to the truck at
the time of the accident, the records show that they registered no objection
on that ground at the trial below.
The issue is thus reduced to the question whether or not the carrier is liable
for the manufacturing defect of the steering knuckle, and whether the
evidence discloses that in regard thereto the carrier exercised the diligence
required by law (Art. 1755, new Civil Code).
"ART. 1755. A common carrier is bound to carry the passengers safely as
far as human care and foresight can provide, using the utmost diligence of
very cautious persons, with a due regard for all the circumstances."cralaw
virtua1aw library
It is clear that the carrier is not an insurer of the passengers safety. His
liability rests upon negligence, his failure to exercise the "utmost" degree of
diligence that the law requires, and by Art. 1756, in case of a passengers
death or injury the carrier bears the burden of satisfying the court that he
has duly discharged the duty of prudence required. In the American law,
where the carrier is held to the same degree of diligence as under the new
Civil Code, the rule on the liability of carriers for defects of equipment is
thus expressed: "The preponderance of authority is in favor of the doctrine
that a passenger is entitled to recover damages from a carrier for an injury
resulting from a defect in an appliance purchased from a manufacturer,
whenever it appears that the defect would have been discovered by the
carrier if it had exercised the degree of care which under the circumstances
was incumbent upon it, with regard to inspection and application of the
necessary tests. For the purposes of this doctrine, the manufacturer is
considered as being in law the agent or servant of the carrier, as far as
regards the work of constructing the appliance. According to this theory, the
good repute of the manufacturer will not relieve the carrier from liability"
(10 Am. Jur. 205, s, 1324; see a]so Pennsylvania R. Co. v. Roy, 102 U. S.
451; 20 L. Ed. 141; Southern R. Co. v. Hussey, 74 ALR 1172; 42 Fed. 2d
70; and Ed Note, 29 ALR 788; Ann Cas. 1916E 929).
The rationale of the carriers liability is the fact that the passenger has
neither choice nor control over the carrier in the selection and use of the
equipment and appliances in use by the carrier. Having, no privity whatever
with the manufacturer or vendor of the defective equipment, the passenger

has no remedy against him, while the carrier usually has. It is but logical,
therefore, that the carrier, while not an insurer of the safety of his
passengers, should nevertheless be held to answer for the flaws of his
equipment if such flaws were at all discoverable. Thus Hannen, J., in Francis
v. Cockrell, LR 5 Q. P. 184, said:jgc:chanrobles.com.ph
"In the ordinary course of things, the passenger does not know whether the
carrier has himself manufactured the means of carriage, or contracted with
someone else for its manufacture. If the carrier has contracted with
someone else the passenger does not usually know who that person is, and
in no case has he any share in the selection. The liability of the
manufacturer must depend on the terms of the contract between him and
the carrier, of which the passenger has no knowledge, and over which he
can have no control, while the carrier can introduce what stipulations and
take what securities he may think proper. For injury resulting to the carrier
himself by the manufacturers want of care, the carrier has a remedy
against the manufacturer; but the passenger has no remedy against the
manufacturer for damage arising from a mere breach of contract with the
carrier . . . Unless, therefore, the presumed intention of the parties be that
the passenger should, in the event of his being injured by the breach of the
manufacturers contract, of which he has no knowledge, be without remedy,
the only way in which effect can be given to a different intention is by
supposing that the carrier is to be responsible to the passenger, and to look
for his indemnity to the person whom he selected and whose breach of
contract has caused the mischief." (29 ALR 789)
And in the leading case of Morgan v. Chesapeake & O. R. Co. 15 LRA (NS)
790, 16 Ann. Cas. 608, the Court, in holding the carrier responsible for
damages caused by the fracture of a car axle, due to a "sand hole" in the
course of moulding the axle, made the following observations.
"The carrier, in consideration of certain well-known and highly valuable
rights granted to it by the public, undertakes certain duties toward the
public, among them being to provide itself with suitable and safe cars and
vehicles in which to carry the traveling public. There is no such duty on the
manufacturer of the cars. There is no reciprocal legal relation between him
and the public in this respect. When the carrier elects to have another build
its cars, it ought not to be absolved by that fact from its duty to the public
to furnish safe care. The carrier cannot lessen its responsibility by shifting
its undertaking to anothers shoulders. Its duty to furnish safe care is side
TRANSPO | Assign No 6 | 38
by side with its duty to furnish safe track, and to operate them in a safe
manner. None of its duties in these respects can be sublet so as to relieve it
from the full measure primarily exacted of it by law. The carrier selecta the
manufacturer of its cars, if it does not itself construct them, precisely as it
does those who grade its road, and lay its tracks, and operate its trains.
That it does not exercise control over the former is because it elects to
place that matter in the hands of the manufacturer, instead of retaining the
supervising control itself. The manufacturer should be deemed the agent of
the carrier as respects its duty to select the material out of which its cars
and locomotive are built, as well as in inspecting each step of their
construction. If there be tests known to the crafts of ear builders, or iron
moulders, by which such defects might be discovered before the part was
incorporated into the car, then the failure of the manufacturer to make the
test will be deemed a failure by the carrier to make it. This is not a
vicarious responsibility. It extends, as the necessity of this business
demands, the rule of respondent superior to a situation which falls clearly
within its scope and spirit. Where an injury is inflicted upon a passenger by
the breaking or wrecking of a part of the train on which he is riding, it is
presumably the result of negligence at some point by the carrier. As stated
by Judge Story, in Story on Bailments, sec. 601a: When the injury or
damage happens to the passenger by the breaking down or overturning of
the coach, or by any other accident occurring on the ground, the
presumption prima facie is that it occurred by the negligence of the
coachmen, and onus probandi is on the proprietors of the coach to establish
that there has been no negligence whatever, and that the damage or injury
has been occasioned by inevitable casualty, or by some cause which human
care and foresight could not prevent; for the law will, in tenderness to
human life and limb, hold the proprietors liable for the slightest negligence,
and will compel them to repel by satisfactory proofs every imputation
thereof. When the passenger has proved his injury as the result of a
breakage in the car or the wrecking of the train on which he was being
carried, whether the defect was in the particular car in which he was riding
or not, the burden is then cast upon the carrier to show that it was due to a
cause or causes which the exercise of the utmost human skill and foresight
could not prevent. And the carrier in this connection must show, if the
accident was due to a latent defect in the material or construction of the
car, that not only could it not have discovered the defect by the exercise of
such care, but that the builders could not by the exercise of the same care
have discovered the defect or foreseen the result. This rule applies the
same whether the defective car belonged to the carrier or not."cralaw

virtua1aw library
In the case now before us, the record is to the effect that the only test
applied to the steering knuckle in question was a purely visual inspection
every thirty days, to see if any cracks developed. It nowhere appears that
either the manufacturer or the carrier at any time tested the steering
knuckle to ascertain whether its strength was up to standard, or that it had
no hidden flaws that would impair that strength. And yet the carrier must
have been aware of the critical importance of the knuckles resistance; that
its failure or breakage would result in loss of balance and steering control of
the bus, with disastrous effects upon the passengers. No argument is
required to establish that a visual inspection could not directly determine
whether the resistance of this critically important part was not impaired.
Nor has it been shown that the weakening of the knuckle was impossible to
detect by any known test; on the contrary, there is testimony that it could
be detected. We are satisfied that the periodical visual inspection of the
steering knuckle as practiced by the carriers agents did not measure up to
the required legal standard of "utmost diligence of very cautious persons"
"as far as human care and foresight can provide", and therefore that the
knuckles failure can not be considered a fortuitous event that exempts the
carrier from responsibility (Lasam v. Smith, 45 Phil, 607; Son v. Cebu
Autobus Co., 94 Phil., 892.
It may be impracticable, as appellee argues, to require of carriers to test
the strength of each and every part of its vehicles before each trip; but we
are of the opinion that a due regard for the carriers obligations toward the
traveling public demands adequate periodical tests to determine the
condition and strength of those vehicle portions the failure of which may
endanger the safety of the passengers.
As to the damages suffered by the plaintiffs, we agree with appellee that no
allowance may be made for moral damages, since under Article 2220 of the
new Civil Code, in case of suits for breach of contract, moral damages are
recoverable only where the defendant acted fraudulently or in bad faith,
and there is none in the case before us. As to exemp]ary damages, the
carrier has not acted in a "wanton, fraudulent, reckless, oppressive or
malevolent manner" to warrant their award. Hence, we believe that for the
minor Precillano Necesito (G. R No. L-10605), an indemnity of P5,000 would
be adequate for the abrasions and fracture of the femur, including medical
and hospitalization expenses, there being no evidence that there would be
TRANSPO | Assign No 6 | 39
any permanent impairment of his faculties or bodily functions, beyond the
lack of anatomical symmetry. As for the death of Severina Garces (G. R.
No. L-10606) who was 33 years old, with seven minor children when she
died, her heirs are obviously entitled to indemnity not only for the incidental
loses of property (cash, wrist watch and merchandise) worth P394 that she
carried at the time of the accident and for the burial expenses of P490, but
also for the loss of her earnings (shown to average P120 a month) and for
the deprivation of her protection, guidance and company. In our judgment,
an award of P15,000 would be adequate (cf Alcantara v. Surro, 49 Off. Gaz.
2769; 93 Phil., 472).
The low income of the plaintiffs-appellants makes an award for attorneys
fees just and equitable (Civil Code, Art. 2208, par. 11). Considering that the
two cases filed were tried jointly, a fee of P3,500 would be reasonable.
In view of the foregoing, the decision appealed from is reversed, and the
defendants-appellees are sentenced to indemnify the plaintiffs-appellants in
the following amounts: P5,000 to Precillano Necesito, and P15,000 to the
heirs of the deceased Severina Garces, plus P3,500 by way of attorneys
fees and litigation expenses. Costs against defendants-appellees. So
ordered.
Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion and
Endencia, JJ., concur.
Felix, J., concurs in the result.
RESOLUTION
September 11, 1958 - REYES, J.B.L., J.:
Defendants-appellees have submitted a motion asking this Court to
reconsider its decision of June 30, 1958, and that the same be modified
with respect to (1) its holding the carrier liable for the breakage of the
steering knuckle that caused the autobus No. 199 to overturn, whereby the
passengers riding in it were injured; (2) the damages awarded, that
appellees argue to be excessive; and (3) the award of attorneys fees.

(1) The rule prevailing in this jurisdiction as established in previous
decisions of this Court, cited in our main opinion, is that a carrier is liable to
its passengers for damages caused by mechanical defects of the
conveyance. As early as 1924, in Lasam v. Smith, 45 Phil. 659 this Court
ruled:jgc:chanrobles.com.ph
"As far as the record shows, the accident was caused either by defects in
the automobile or else through the negligence of its driver. That is not caso
fortuito."cralaw virtua1aw library
And in Son v. Cebu Autobus Company, 94 Phil., 892, this Court held a
common carrier liable in damages to a passenger for injuries caused by an
accident due to the breakage of a faulty drag-link spring.
It can be seen that while the courts of the United States are at variance on
the question of a carriers liability for latent mechanical defects, the rule in
this jurisdiction has been consistent in holding the carrier responsible. This
Court has quoted from American and English decisions, not because it felt
bound to follow the same, but merely in approval of the rationale of the rule
as expressed therein, since the previous Philippine cases did not enlarge on
the ideas underlying the doctrine established thereby.
The new evidence sought to be introduced do not warrant the grant of a
new trial, since the proposed proof was available when the original trial was
held. Said evidence is not newly discovered.
(2) With regard to the indemnity awarded to the child Precilliano Necesito,
the injuries suffered by him are incapable of accurate pecuniary estimation,
particularly because the full effect of the injury is not ascertainable
immediately. This uncertainty, however, does not preclude the right to an
indemnity, since the injury is patent and not denied (Civil Code, Art. 2224).
The reasons behind this award are expounded by the Code Commission in
its report:jgc:chanrobles.com.ph
"There are cases where from the nature of the case, definite proof of
pecuniary loss cannot be offered, although the court is convinced that there
has been such loss. For instance, injury to ones commercial credit or to the
goodwill of a business firm is often hard to show with certainty in terms of
money. Should damages be denied for that reason? The judge should be
TRANSPO | Assign No 6 | 40
empowered to calculate moderate damages in such cases, rather than that
the plaintiff should suffer, without redress, from the defendants wrongful
act." (Report of the Code Commission, p. 75)
In awarding to the heirs of the deceased Severina Garces an indemnity for
the loss of her "guidance, protection and company," although it is but moral
damage, the Court took into account that the case of a passenger who dies
in the course of an accident, due to the carriers negligence constitutes an
exception to the general rule. While, as pointed out in the main decision,
under Article 2220 of the new Civil Code there can be no recovery of moral
damages for a breach of contract in the absence of fraud malice) or bad
faith, the case of a violation of the contract of carriage leading to a
passengers death escapes this general rule, in view of Article 1764 in
connection with Article 2206, No. 3 of the new Civil Code.
"ART. 1764. Damages in cases comprised in this Section shall be awarded in
accordance with Title XVIII of this Book, concerning Damages. Article 2206
shall also apply to the death of a passenger caused by the breach of
contract by a common carrier."cralaw virtua1aw library
"ART. 2206. . . .
(3) The spouse, legitimate and illegitimate descendants and ascendants of
the deceased may demand moral damages for mental anguish by reason of
the death of the deceased."cralaw virtua1aw library
Being a special rule limited to cases of fatal injuries, these articles prevail
over the general rule of Art. 2220. Special provisions control general ones
(Lichauco & Co. v. Apstol, 44 Phil. 138; Sancio v. Lizarraga, 55 Phil. 601).
It thus appears that under the new Civil Code, in case of accident due to a
carriers negligence, the heirs of a deceased passenger may recover moral
damages, even though a passenger who is injured, but manages to survive,
is not entitled to them. There is, therefore, no conflict between our main
decision in the instant case and that of Cachero v. Manila Yellow Taxi Cab
Co., 101 Phil., 523, where the passenger suffered injuries, but did not lose
his life.
(3) In the Cachero case this Court disallowed attorneys fees to the injured
plaintiff because the litigation arose out of his exaggerated and
 TRANSPO | Assign No 6 | 41

unreasonable demands for an indemnity that was out of proportion with the reason earn the right to a larger indemnity; but, by parity of reasoning, he
compensatory damages to which he was solely entitled. Put in the present should not be deprived of counsel fees if by law he is entitled to recover
case, plaintiffs original claims can not be deemed a priori wholly them.
unreasonable, since they had a right to indemnity for moral damages
besides compensatory ones, and moral damages are not determined by set We find no reason to alter the main decision heretofore rendered.
and invariable bounds. Ultimately, the position taken by this Court is that a common carriers
contract is not to be regarded as a game of chance wherein the passenger
Neither does the fact that the contract between the passengers and their stakes his limb and life against the carriers property and profits.
counsel was on a contingent basis affect the formers right to counsel fees.
As pointed out for appellants, the Courts award is an indemnity to the
party and not to counsel. A litigant who improvidently stipulates higher
counsel fees than those to which he is lawfully entitled, does not for that