Cruz v.

Sun Holidays

Facts: Spouses Dante and Leonora Cruz lodged a Complaint against Sun Holidays, Inc. for
damages arising from the death of their son Ruelito C. Cruz who perished with his wife on
board the boat M/B Coco Beach III that capsized en route to Batangas from Puerto Galera,
Oriental Mindoro where the couple had stayed at Coco Beach Island Resort owned and
operated by respondent. Eight passengers, including petitioners son and his wife, died during
the incident. Petitioners demanded indemnification from respondent for the death of their son
but denied any liability on the ground of fortuitous event. Petitioners then filed a complaint
alleging that respondent, as a common carrier, was guilty of negligence in allowing M/B Coco
Beach III to sail notwithstanding storm warning bulletins issued by PAGASA. They added that
respondent is a common carrier since by its tour package; the transporting of its guests is an
integral part of its resort business. On the other hand, respondent contends that petitioners
failed to present evidence to prove that it is a common carrier alleging that its boats are not
available to the general public as they only ferry Resort guests and crew members, that the
Resorts ferry services for guests cannot be considered as ancillary to its business as no income
is derived therefrom; that it exercised extraordinary diligence; that the incident was caused by
a fortuitous event without any contributory negligence on its part.

Issue: Whether or not respondent is a common carrier

Ruling: Yes. Petitioners correctly rely on De Guzman v. Court of Appeals in characterizing

respondent as a common carrier. Its ferry services are so intertwined with its main business as
to be properly considered ancillary thereto. The constancy of respondents ferry services in its
resort operations is underscored by its having its own Coco Beach boats. And the tour packages
it offers, which include the ferry services, may be availed of by anyone who can afford to pay
the same. These services are thus available to the public. That respondent does not charge a
separate fee or fare for its ferry services is of no moment. It would be imprudent to suppose
that it provides said services at a loss. The Court is aware of the practice of beach resort
operators offering tour packages to factor the transportation fee in arriving at the tour package
price. That guests who opt not to avail of respondents ferry services pay the same amount is
likewise inconsequential. These guests may only be deemed to have overpaid.
Smith Bell v. Borja

Facts: At about 11 o'clock in the morning on September 24, 1987, while M/T King Family was
unloading chemicals unto two barges owned by [Respondent] ITTC, a sudden explosion
occurred setting the vessels afire. [Borja] hurriedly jumped over board to save himself.
However, the [water] [was] likewise on fire due mainly to the spilled chemicals. Despite the
tremendous heat, [Borja] swam his way for one (1) hour until he was rescued by the people
living in the squatters' area and sent to San Juan De Dios Hospital. After weeks of intensive care
at the hospital, his attending physician diagnosed [Borja] to be permanently disabled due to the
incident. [Borja] made demands against Smith Bell and ITTC for the damages caused by the
explosion. However, both denied liabilities and attributed to each other negligence. Smith bell
contended that the fire was not coming from their vessel but from the ITTC. Therefore, they
should not be liable to Borja. The RTC ruled in favor of Borja and awarded damages to Smith
bell which was affirmed by the CA.

Issue: Whether petitioner should be held liable for the injuries of Respondent Catalino Borja

Ruling: The SC affirmed the decision of the CA but with modification in so far as to the amount
of liability in favor of Borja. Accordingly, the attempts of [Petitioner] Smith Bell to shift the
blame on ITTC were all for naught.

First, the testimony of its alleged eyewitness was stricken off the record for his failure to appear
for cross-examination.

Second, the documents offered to prove that the fire originated from the barge of ITTC were
all denied admission by the court for being, in effect, hearsay. Thus, there is nothing in the
record to support [petitioner's] contention that the fire and explosion originated from the
barge of ITTC. Negligence is conduct that creates undue risk of harm to another. It is the failure
to observe that degree of care, precaution and vigilance that the circumstances justly demand,
whereby that other person suffers injury. Petitioner's vessel was carrying chemical cargo -- alkyl
benzene and methyl methacrylate monomer. While knowing that their vessel was carrying
dangerous inflammable chemicals, its officers and crew failed to take all the necessary
precautions to prevent an accident. Petitioner was, therefore, negligent. The three elements of
quasi delict are: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant,
and (c) the connection of cause and effect between the fault or negligence of the defendant
and the damages inflicted on the plaintiff. All these elements were established in this case.
Knowing fully well that it was carrying dangerous chemicals, petitioner was negligent in not
taking all the necessary precautions in transporting the cargo. The owner or the person in
possession and control of a vessel and the vessel are liable for all natural and proximate
damage caused to persons and property by reason of negligent management or navigation.
China Airlines v. Chiok

Facts: Daniel Chiok purchased a ticket from China Airlines Ltd. Covering Manila-Taipei-Hong
Kong-Manila. The ticket was exclusively endorsable to Philippine Airlines. The trips covered by
the ticket were pre-scheduled and confirmed. In Taipei, Chiok went to CAL office to confirm his
Hong Kong-Manila flight. CAL attached a yellow sticker, indicating that flight was OK. In Hong
Kong, Chiok went to PAL office to confirm his Manila flight. PAL confirmed and attached its own
sticker. During the scheduled flight bound to Manila, it was cancelled due to a typhoon. All
confirmed ticket holders were booked automatically for its next flight (next day) However on
the following day, a PAL employee informed Chiok that his name did not appear in PALs
computer list of passengers and therefore could not be permitted to board PAL flight no. PR
307. Chiok filed a complaint for damages.The Regional Trial Court held that CAL and PAL jointly
and severely liable to correspondent, affirmed by Court of Appeals.

Issue: Whether or not China Airline is liable as a principal carrier?

Ruling: As the principal in the contract of carriage, the petitioner in British Airways v. Court of
Appeals was held liable, even when the breach of contract had occurred, not on its own flight,
but on that of another airline. The Decision followed our ruling in Lufthansa German Airlines v.
Court of Appeals, in which we had held that the obligation of the ticket-issuing airline remained
and did not cease, regardless of the fact that another airline had undertaken to carry the
passengers to one of their destinations. In the instant case, following the jurisprudence cited
above, PAL acted as the carrying agent of CAL. In the same way that we ruled against British
Airways and Lufthansa in the aforementioned cases, we also rule that CAL cannot evade liability
to respondent, even though it may have been only a ticket issuer for the Hong Kong-Manila
sector.