#1 at Singapore at 8:50 in the morning of January 28, male employee uncaringly retorted: Its your SO ORDERED.

[13]
[G.R. No. 142305. December 10, 2003]
SINGAPORE AIRLINES LIMITED, petitioner,
vs. ANDION FERNANDEZ, respondent.
DECISION
CALLEJO, SR., J.:
This is a petition for review
on certiorari assailing the Decision[1] of the Court
of Appeals which affirmed in toto the decision[2] of
the Regional Trial Court of Pasig City, Branch 164
in Civil Case No. 60985 filed by the respondent for
damages.
The Case for the Respondent
Respondent Andion Fernandez is an
acclaimed soprano here in the Philippines and
abroad. At the time of the incident, she was
availing an educational grant from the Federal
Republic of Germany, pursuing a Masters Degree
in Music majoring in Voice.[3]
She was invited to sing before the King and
Queen of Malaysia on February 3 and 4, 1991. For
this singing engagement, an airline passage ticket
was purchased from petitioner Singapore Airlines
which would transport her
to Manila from Frankfurt, Germany on January 28,
1991. From Manila, she would proceed
to Malaysia on the next day.[4] It was necessary for
the respondent to pass by Manila in order to gather
her wardrobe; and to rehearse and coordinate with
her pianist her repertoire for the aforesaid
performance.
The petitioner issued the respondent a
Singapore Airlines ticket for Flight No. SQ 27,
leaving Frankfurt, Germany on January 27,
1991 bound for Singapore with onward
connections from Singapore to Manila. Flight No.
SQ 27 was scheduled to leave Frankfurt at 1:45 in
the afternoon of January 27, 1991, arriving
Transportation Law
1991.The connecting flight
from Singapore to Manila, Flight No. SQ 72, was
leaving Singapore at 11:00 in the morning
of January 28, 1991, arriving in Manila at 2:20 in
the afternoon of the same day.[5]
On January 27, 1991, Flight No. SQ 27
left Frankfurt but arrived in Singapore two hours
late or at about 11:00 in the morning of January 28,
1991. By then, the aircraft bound for Manilahad left
as scheduled, leaving the respondent and about 25
other passengers stranded in
the Changi Airport in Singapore.[6]
Upon disembarkation at Singapore, the
respondent approached the transit counter who
referred her to the nightstop counter and told the
lady employee thereat that it was important for her
to reach Manila on that day, January 28,
1991. The lady employee told her that there were
no more flights to Manila for that day and that
respondent had no choice but to stay
in Singapore. Upon respondents persistence, she
was told that she can actually fly to Hong
Kong going to Manila but since her ticket was non-
transferable, she would have to pay for the
ticket. The respondent could not accept the offer
because she had no money to pay for it.[7] Her
pleas for the respondent to make arrangements to
transport her to Manila were unheeded.[8]
The respondent then requested the lady
employee to use their phone to make a call
to Manila. Over the employees reluctance, the
respondent telephoned her mother to inform the
latter that she missed the connecting flight. The
respondent was able to contact a family friend who
picked her up from the airport for her overnight stay
in Singapore.[9]
The next day, after being brought back to the
airport, the respondent proceeded to petitioners
counter which says: Immediate Attention To
Passengers with Immediate Booking. There were
four or five passengers in line. The respondent
approached petitioners male employee at the
counter to make arrangements for immediate
booking only to be told: Cant you see I am doing
something. She explained her predicament but the
Full Text Cases 4 (Safety of Passengers)
problem, not ours.[10]
The respondent never made it to Manila and
was forced to take a direct flight
from Singapore to Malaysia on January 29, 1991,
through the efforts of her mother and travel agency
in Manila. Her mother also had to travel
to Malaysia bringing with her respondents
wardrobe and personal things needed for the
performance that caused them to incur an expense
of about P50,000.[11]
As a result of this incident, the respondents
performance before the Royal Family of Malaysia
was below par. Because of the rude and unkind
treatment she received from the petitioners
personnel in Singapore, the respondent was
engulfed with fear, anxiety, humiliation and
embarrassment causing her to suffer mental
fatigue and skin rashes. She was thereby
compelled to seek immediate medical attention
upon her return to Manila for acute urticaria.[12]
On June 15, 1993, the RTC rendered a
decision with the following dispositive portion:
ACCORDINGLY and as prayed for, defendant
Singapore Airlines is ordered to pay herein plaintiff
Andion H. Fernandez the sum of:
1. FIFTY THOUSAND (P50,000.00) PESOS
as compensatory or actual damages;
2. TWO HUNDRED and FIFTY THOUSAND
(P250,000.00) PESOS as moral damages
considering plaintiffs professional standing in
the field of culture at home and abroad;
3. ONE HUNDRED THOUSAND
(P100,000.00) PESOS as exemplary
damages;
4. SEVENTY-FIVE THOUSAND (P75,000.00)
PESOS as attorneys fees; and
5. To pay the costs of suit.
The petitioner appealed the decision to the
Court of Appeals.
On June 10, 1998, the CA promulgated the
assailed decision finding no reversible error in the
appealed decision of the trial court.[14]
Forthwith, the petitioner filed the instant
petition for review, raising the following errors:
I
THE HONORABLE COURT OF APPEALS
ERRED IN AFFIRMING IN TOTO THE DECISION
OF THE TRIAL COURT THAT AWARDED
DAMAGES TO RESPONDENT FOR THE
ALLEGED FAILURE OF THE PETITIONER TO
EXERCISE EXTRAORDINARY DILIGENCE.
II
THE HONORABLE COURT OF APPEALS
ERRED IN HOLDING THAT THE PETITIONER
ACTED IN BAD FAITH.
III
THE HONORABLE COURT OF APPEALS
ERRED IN DISMISSING THE PETITIONERS
COUNTERCLAIMS.[15]
The petitioner assails the award of damages
contending that it exercised the extraordinary
diligence required by law under the given
circumstances. The delay of Flight No. SQ 27
from Frankfurt to Singapore on January 28,
1991 for more than two hours was due to a
fortuitous event and beyond petitioners
control. Inclement weather prevented the
petitioners plane coming
from Copenhagen, Denmark to arrive
in Frankfurt on time on January 27, 1991. The
plane could not take off from the airport as the
place was shrouded with fog. This delay caused a
snowball effect whereby the other flights were
consequently delayed. The plane carrying the
Page 1 of 41
respondent arrived in Singapore two (2) hours
behind schedule.[16] The delay was even
compounded when the plane could not travel the
normal route which was through the Middle
East due to the raging Gulf War at that time. It had
to pass through the restricted Russian airspace
which was more congested.[17]
Under these circumstances, petitioner
therefore alleged that it cannot be faulted for the
delay in arriving in Singapore on January 28,
1991 and causing the respondent to miss her
connecting flight to Manila.
The petitioner further contends that it could
not also be held in bad faith because its personnel
did their best to look after the needs and interests
of the passengers including the
respondent. Because the respondent and the
other 25 passengers missed their connecting flight
to Manila, the petitioner automatically booked
them to the flight the next day and gave them free
hotel accommodations for the night. It was
respondent who did not take petitioners offer and
opted to stay with a family friend in Singapore.
The petitioner also alleges that the action of
the respondent was baseless and it tarnished its
good name and image earned through the years
for which, it was entitled to damages in the amount
of P1,000,000; exemplary damages of P500,000;
and attorneys fees also in the amount
of P500,000.[18]
The petition is barren of merit.
When an airline issues a ticket to a
passenger, confirmed for a particular flight on a
certain date, a contract of carriage arises. The
passenger then has every right to expect that he
be transported on that flight and on that date. If he
does not, then the carrier opens itself to a suit for
a breach of contract of carriage.[19]
The contract of air carriage is a peculiar
one. Imbued with public interest, the law requires
common carriers to carry the passengers safely as
far as human care and foresight can provide, using
the utmost diligence of very cautious persons with
due regard for all the circumstances.[20] In an
action for breach of contract of carriage, the
aggrieved party does not have to prove that the
Transportation Law
common carrier was at fault or was negligent. All
that is necessary to prove is the existence of the
contract and the fact of its non-performance by the
carrier.[21]
In the case at bar, it is undisputed that the
respondent carried a confirmed ticket for the two-
legged trip from Frankfurt to Manila: 1) Frankfurt-
Singapore; and 2) Singapore-Manila. In her
contract of carriage with the petitioner, the
respondent certainly expected that she would fly
to Manila on Flight No. SQ 72 on January 28,
1991. Since the petitioner did not transport the
respondent as covenanted by it on said terms, the
petitioner clearly breached its contract of carriage
with the respondent. The respondent had every
right to sue the petitioner for this breach. The
defense that the delay was due to fortuitous events
and beyond petitioners control is
unavailing. In PAL vs. CA,[22] we held that:
.... Undisputably, PALs diversion of its flight due to
inclement weather was a fortuitous
event. Nonetheless, such occurrence did not
terminate PALs contract with its
passengers. Being in the business of air carriage
and the sole one to operate in the country, PAL is
deemed to be equipped to deal with situations as
in the case at bar. What we said in one case once
again must be stressed, i.e., the relation of carrier
and passenger continues until the latter has been
landed at the port of destination and has left the
carriers premises. Hence, PAL necessarily would
still have to exercise extraordinary diligence in
safeguarding the comfort, convenience and safety
of its stranded passengers until they have reached
their final destination...
...
...If the cause of non-fulfillment of the contract is
due to a fortuitous event, it has to be the sole and
only cause (Art. 1755 C.C., Art. 1733 C.C.). Since
part of the failure to comply with the obligation of
common carrier to deliver its passengers safely to
their destination lay in the defendants failure to
provide comfort and convenience to its stranded
passengers using extraordinary diligence, the
cause of non-fulfillment is not solely and
Full Text Cases 4 (Safety of Passengers)
exclusively due to fortuitous event, but due to
something which defendant airline could have
prevented, defendant becomes liable to plaintiff.
Indeed, in the instant case, petitioner was not
without recourse to enable it to fulfill its obligation
to transport the respondent safely as scheduled as
far as human care and foresight can provide to her
destination. Tagged as a premiere airline as it
claims to be and with the complexities of air travel,
it was certainly well-equipped to be able to foresee
and deal with such situation. The petitioners
indifference and negligence by its absence and
insensitivity was exposed by the trial court, thus:
(a) Under Section 9.1 of its Traffic
Manual (Exhibit 4) flights can be delayed
to await the uplift of connecting cargo
and passengers arriving on a late in-
bound flight As adverted to by the trial
court,Flight SQ-27/28 maybe delayed for
about half an hour to transfer plaintiff to
her connecting flight. As pointed out
above, delay is normal in commercial air
transportation (RTC Decision, p. 22); or
(b) Petitioner airlines could have carried
her on one of its flights bound
for Hongkong and arranged for a
connecting flight from Hongkong
to Manila all on the same date. But then
the airline personnel who informed her of
such possibility told her that she has to
pay for that flight. Regrettably,
respondent did not have sufficient funds
to pay for it. (TSN, 30 March 1992, pp.8-
9; RTC Decision, pp. 22-23) Knowing
the predicament of the respondent,
petitioner did not offer to shoulder the
cost of the ticket for that flight; or
(c) As noted by the trial court from the
account of petitioners witness, Bob
Khkimyong, that a passenger such as
the plaintiff could have been
accommodated in another international
airline such as Lufthansa to bring the
plaintiff to Singapore early enough from
Frankfurt provided that there was prior
communication from that station to
enable her to catch the connecting flight
to Manila because of the urgency of her
business in Manila(RTC Decision, p. 23)
The petitioners diligence in communicating to
its passengers the consequences of the delay in
their flights was wanting. As elucidated by the trial
court:
It maybe that delay in the take off and arrival of
commercial aircraft could not be avoided and may
be caused by diverse factors such as those
testified to by defendants pilot. However, knowing
fully well that even before the plaintiff boarded
defendants Jumbo aircraft in Frankfurt bound
for Singapore, it has already incurred a delay of
two hours. Nevertheless, defendant did not take
the trouble of informing plaintiff, among its other
passengers of such a delay and that in such a
case, the usual practice of defendant airline will be
that they have to stay overnight at their connecting
airport; and much less did it inquire from the
plaintiff and the other 25 passengers bound for
Manila whether they are amenable to stay
overnight in Singapore and to take the connecting
flight to Manila the next day. Such information
should have been given and inquiries made in
Frankfurt because even the defendant airlines
manual provides that in case of urgency to reach
his or her destination on the same date, the head
office of defendant in Singapore must be informed
by telephone or telefax so as the latter may make
certain arrangements with other airlines in
Frankfurt to bring such a passenger with urgent
business to Singapore in such a manner that the
latter can catch up with her connecting flight such
as S-27/28 without spending the night in
Singapore[23]
The respondent was not remiss in conveying
her apprehension about the delay of the flight when
she was still in Frankfurt. Upon the assurance of
petitioners personnel in Frankfurt that she will be
transported to Manila on the same date, she had
every right to expect that obligation fulfilled. She
testified, to wit:
Q: Now, since you were late, when the
plane that arrived
from Frankfurt was late, did you
Page 2 of 41
 not make arrangements so that
your flight
from Singapore to Manila would
be adjusted?
A: I asked the lady at the ticket counter,
the one who gave the boarding
pass in Frankfurt and I asked her,
Since my flight going to Singapore
would be late, what would happen
to my Singapore-Manila flight?
and then she said, Dont worry,
Singapore Airlines would be
responsible to bring you to Manila
on the same date. And then they
have informed the name of the
officer, or whatever, that our flight
is going to be late.[24]
When a passenger contracts for a specific
flight, he has a purpose in making that choice
which must be respected. This choice, once
exercised, must not be impaired by a breach on the
part of the airline without the latter incurring any
liability.[25] For petitioners failure to bring the
respondent to her destination, as scheduled, we
find the petitioner clearly liable for the breach of its
contract of carriage with the respondent.
We are convinced that the petitioner acted in
bad faith. Bad faith means a breach of known duty
through some motive of interest or ill will. Self-
enrichment or fraternal interest, and not personal
ill will, may well have been the motive; but it is
malice nevertheless.[26] Bad faith was imputed by
the trial court when it found that the petitioners
employees at the Singapore airport did not accord
the respondent the attention and treatment
allegedly warranted under the circumstances. The
lady employee at the counter was unkind and of no
help to her. The respondent further alleged that
without her threats of suing the company, she was
not allowed to use the companys phone to make
long distance calls to her mother in Manila. The
male employee at the counter where it says:
Immediate Attention to Passengers with
Immediate Booking was rude to her when he curtly
retorted that he was busy attending to other
passengers in line. The trial court concluded that
this inattentiveness and rudeness of petitioners
personnel to respondents plight was gross enough
Transportation Law
amounting to bad faith. This is a finding that is
generally binding upon the Court which we find no
reason to disturb.
Article 2232 of the Civil Code provides that in
a contractual or quasi-contractual relationship,
exemplary damages may be awarded only if the
defendant had acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner. In this
case, petitioners employees acted in a wanton,
oppressive or malevolent manner. The award of
exemplary damages is, therefore, warranted in this
case.
WHEREFORE, the Petition is DENIED. The
Decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
#2
G.R. No. 155550 January 31, 2008
NORTHWEST AIRLINES, INC., petitioner,
vs.
STEVEN P. CHIONG, respondent.
DECISION
NACHURA, J.:
Before us is a petition for review on certiorari under
Rule 45 of the Rules of Court seeking the reversal
of the Court of Appeals (CA) Decision1 in CA-G.R.
CV No. 503082 which affirmed in toto the Regional
Trial Court (RTC) Decision3 holding petitioner
Northwest Airlines, Inc. (Northwest) liable for
breach of contract of carriage.
On March 14, 1989, Philimare Shipping and
Seagull Maritime Corporation (Philimare), as the
authorized Philippine agent of TransOcean Lines
(TransOcean), hired respondent Steven Chiong as
Third Engineer of TransOcean’s vessel M/V
Elbia at the San Diego, California Port. Under the
Full Text Cases 4 (Safety of Passengers)
service crew agreement, Chiong was guaranteed
compensation at a monthly salary of US$440.00
and a monthly overtime pay of US$220.00, or a
total of US$7,920.00 for one year.
Subsequently, on March 27, 1989, Philimare
dispatched a Letter of Guarantee to CL Hutchins &
Co., Inc., TransOcean’s agent at the San Diego
Port, confirming Chiong’s arrival thereat in time to
board the M/V Elbia which was set to sail on April
1, 1989 (California, United States time). For this
purpose, Philimare purchased for Chiong a
Northwest plane ticket for San Diego, California
with a departure date of April 1, 1989 from Manila.
Ten (10) days before his scheduled departure,
Chiong fetched his entire family from Samar and
brought them to Manila to see him off at the airport.
On April 1, 1989, Chiong arrived at the Manila
International Airport4 (MIA), at about 6:30 a.m.,
three (3) hours before the scheduled time of
departure. Marilyn Calvo, Philimare’s Liaison
Officer, met Chiong at the departure gate, and the
two proceeded to the Philippine Coast Guard
(PCG) Counter to present Chiong’s seaman
service record book for clearance. Thereafter,
Chiong’s passport was duly stamped, after
complying with government requirements for
departing seafarers.
Calvo remained at the PCG Counter while Chiong
proceeded to queue at the Northwest check-in
counter. When it was Chiong’s turn, the Northwest
personnel5 informed him that his name did not
appear in the computer’s list of confirmed
departing passengers. Chiong was then directed to
speak to a "man in barong" standing outside
Northwest’s counters from whom Chiong could
allegedly obtain a boarding pass. Posthaste,
Chiong approached the "man in barong" who
demanded US$100.00 in exchange therefor.
Without the said amount, and anxious to board the
plane, Chiong queued a number of times at
Northwest’s Check-in Counter and presented his
ticket. However, the Northwest personnel at the
counter told him to simply wait and that he was
being a pest.
Frustrated, Chiong went to Calvo at the PCG
counter and inquired if she had money so he could
obtain a boarding pass from the "man in barong."
Calvo, who already saw that something was amiss,
insisted that Chiong’s plane ticket was confirmed
and as such, he could check-in smoothly and
board the plane without shelling out US$100.00 for
a boarding pass. Ultimately, Chiong was not
allowed to board Northwest Flight No. 24 bound for
San Diego that day and, consequently, was unable
to work at the M/V Elbia by April 1, 1989
(California, U.S.A. time).
It appears that Chiong’s name was crossed out
and substituted with "W. Costine" in Northwest’s
Air Passenger Manifest.6
In a letter dated April 3, 1989, Chiong’s counsel
demanded as recompense: (1) the amount
equivalent to Chiong’s salary under the latter’s
Crew Agreement7 with TransOcean;
(2) P15,000.00 for Chiong’s expenses in fetching
and bringing his family from Samar to Manila;
(3) P500,000.00 as moral damages; and
(4) P500,000.00 as legal fees.8
Northwest demurred. Thus, on May 24, 1989,
Chiong filed a Complaint for breach of contract of
carriage before the RTC. Northwest filed a Motion
to Dismiss9 the complaint citing the trial court’s lack
of jurisdiction over the subject matter of the case,
but the trial court denied the same.10
In its Answer,11 Northwest contradicted the claim
that it breached its contract of carriage with
Chiong, reiterating that Chiong had no cause of
action against it because per its records, Chiong
was a "no-show" passenger for Northwest Flight
No. 24 on April 1, 1989.
In the RTC’s Pre-trial Order12 based on the parties’
respective Pre-trial Briefs,13 the triable issues were
limited to the following:
(a) Whether [Chiong] was bumped-off by
[Northwest] from Flight NW 24 or whether
[Chiong] "no-showed" for said flight.
Page 3 of 41
 (b) If defendant is found guilty of having
breached its contract of carriage with
plaintiff, what damages are awardable to
plaintiff and how much.
In the course of proceedings, Northwest, on
September 14, 1990, filed a separate criminal
complaint for False Testimony14 against Chiong
based on the latter’s testimony that he did not
leave the Philippines after April 1, 1989 contrary to
the notations in his seaman service record book
that he had left the country on April 17, 1989, and
returned on October 5 of the same year. Chiong
did not participate in the preliminary investigation;
thus, on December 14, 1990, the City Prosecutor
of Manila filed an Information against Chiong with
the RTC Manila, Branch 54, docketed as Criminal
Case No. 90-89722.
In the meantime, after a flurry of motions filed by
Northwest in the civil case were denied by the
RTC, Northwest filed a Petition
for Certiorari before the CA imputing grave abuse
of discretion to the RTC.15 Correlatively, Northwest
moved for a suspension of the proceedings before
the trial court. However, both the Petition
for Certiorari and Motion for Suspension of the
proceedings were denied by the CA and RTC,
respectively.16
After trial, the RTC rendered a Decision finding
preponderance of evidence in favor of Chiong, and
holding Northwest liable for breach of contract of
carriage. The RTC ruled that the evidence
adduced by the parties supported the conclusion
that Chiong was deliberately prevented from
checking-in and his boarding pass unjustifiably
withheld to accommodate an American passenger
by the name of W. Costine.
The dispositive portion of the RTC decision reads:
WHEREFORE, premises considered, in
consideration of all the foregoing, judgment is
hereby rendered, ordering the defendant
liable to plaintiff in damages by reason of the
latter’s inability to take defendant’s NW Flight
Transportation Law
No. 24 on April 1, 1989, for the following
amounts:
1) U.S.$8,447.0017 or its peso equivalent at
the time of finality of this judgment with legal
interests until fully paid, representing
compensatory damages due to plaintiff’s loss
of income for one (1) year as a direct result of
defendant’s breach of contract of carriage;
2) P15,000.00, Philippine Currency,
representing plaintiff’s actual incurred
damages as a consequence of his failure to
avail of defendant’s Flight No. 24 on April 1,
1989;
3) P200,000.00, Philippine Currency,
representing moral damages suffered and
sustained by the plaintiff as a result of
defendant’s breach of contract of carriage;
4) P200,000.00, Philippine Currency,
representing exemplary or punitive damages
due to plaintiff from defendant, owing to the
latter’s breach of contract of carriage with
malice and fraud; and
5) P200,000.00, Philippine Currency, for and
as attorney’s fees, plus costs of suit.
SO ORDERED.
On appeal, the CA affirmed in toto the ruling of the
RTC. Identical to the RTC’s findings, those of the
CA were as follows: on April 1, 1989, Chiong was
at the MIA three hours before the 10:15 a.m.
departure time for Northwest Flight No. 24.
Contrary to Northwest’s claim that Chiong was a
"no-show" passenger, the CA likewise concluded,
as the RTC did, that Chiong was not allowed to
check-in and was not issued a boarding pass at the
Northwest check-in counter to accommodate a
certain W. Costine. As for Northwest’s defense that
Chiong had left the country after April 1, 1989 and
worked for M/V Elbia, the CA ruled that
Northwest’s failure to raise this defense in its
Answer or Motion to Dismiss is equivalent to a
Full Text Cases 4 (Safety of Passengers)
waiver thereof. The CA declared that, in any event,
Northwest failed to present any evidence to prove
that Chiong had worked under the original crew
agreement.
Hence, this recourse.
Northwest ascribes grievous errors to the CA when
the appellate court ruled that: (1) Northwest
breached the contract of carriage with Chiong who
was present at the MIA on April 1, 1989 to board
Northwest’s Flight No. 24; (2) As a result of the
breach, Northwest is liable to Chiong for
compensatory, actual, moral and exemplary
damages, attorney’s fees, and costs of suit; and (3)
Northwest’s Exhibits "2" and "3," the Flight
Manifest and the Passenger Name Record,
respectively, were hearsay evidence and ought to
be excluded from the records.
The petition must fail.
We are in complete accord with the common ruling
of the lower courts that Northwest breached the
contract of carriage with Chiong, and as such, he
is entitled to compensatory, actual, moral and
exemplary damages, attorney’s fees and costs of
suit.
Northwest contends that Chiong, as a "no-show"
passenger on April 1, 1989, already defaulted in
his obligation to abide by the terms and conditions
of the contract of carriage;18 and thus, Northwest
could not have been in breach of its reciprocal
obligation to transport Chiong. In sum, Northwest
insists that Chiong’s testimony is a complete
fabrication, supposedly demonstrated by the
following: (1) Chiong’s seaman service record
book reflects that he left the Philippines after April
1, 1989, specifically on April 17, 1989, to board
the M/V Elbia, and was discharged therefrom upon
his personal request; (2) the Information filed
against Chiong for False Testimony; and (3) the
Flight Manifest and the Passenger Name Record
both indicate that he was a "no-show" passenger.
We are not convinced.
The records reveal that Chiong, as plaintiff in the
trial court, satisfied the burden of proof required in
civil cases, i.e., preponderance of evidence.
Section 1 of Rule 133 provides:
SECTION 1. Preponderance of evidence,
how determined. – In civil cases, the party
having the burden of proof must establish
his case by a preponderance of evidence.
In determining where the preponderance
or superior weight of evidence on the
issues involved lies, the court may
consider all the facts and circumstance of
the case, the witnesses’ manner of
testifying, their intelligence, their means
and opportunity of knowing the facts to
which they are testifying, the nature of the
facts to which they testify, the probability
or improbability of their testimony, their
interest or want of interest, and also their
personal credibility so far as the same
may legitimately appear upon the trial.
The court may also consider the number
of witnesses, though preponderance is
not necessarily with the greater number.
In this regard, the Court notes that, in addition to
his testimony, Chiong’s evidence consisted of a
Northwest ticket for the April 1, 1989 Flight No. 24,
Chiong’s passport and seaman service record
book duly stamped at the PCG counter, and the
testimonies of Calvo, Florencio Gomez,19 and
Philippine Overseas Employment and
Administration (POEA) personnel who all identified
the signature and stamp of the PCG on Chiong’s
passport.
We have scoured the records, and found no
reason to depart from the well-settled rule that
factual findings of the lower courts deserve the
utmost respect and are not to be disturbed on
appeal.20 Indeed, Chiong’s Northwest ticket for
Flight No. 24 on April 1, 1989, coupled with the
PCG stamps on his passport showing the same
date, is direct evidence that he was present at MIA
on said date as he intended to fly to the United
States on board that flight. As testified to by POEA
personnel and officers, the PCG stamp indicates
that a departing seaman has passed through the
Page 4 of 41
PCG counter at the airport, surrendered the exit
pass, and complied with government requirements
for departing seafarers. Calvo, Philimare’s liaison
officer tasked to assist Chiong at the airport,
corroborated Chiong’s testimony on the latter’s
presence at the MIA and his check-in at the PCG
counter without a hitch. Calvo further testified that
she purposely stayed at the PCG counter to
confirm that Chiong was able to board the plane,
as it was part of her duties as Philimare’s liaison
officer, to confirm with their principal, TransOcean
in this case, that the seafarer had left the country
and commenced travel to the designated port
where the vessel is docked.21 Thus, she had
observed that Chiong was unable to check-in and
board Northwest Flight No. 24, and was actually
being given the run-around by Northwest
personnel.
It is of no moment that Chiong’s witnesses – who
all corroborated his testimony on his presence at
the airport on, and flight details for, April 1, 1989,
and that he was subsequently bumped-off – are,
likewise, employees of Philimare which may have
an interest in the outcome of this case. We intoned
in Philippine Airlines, Inc. v. Court of
Appeals,22 thus:
(T)his Court has repeatedly held that a
witness’ relationship to the victim
does not automatically affect the
veracity of his or her testimony. While
this principle is often applied in criminal
cases, we deem that the same principle
may apply in this case, albeit civil in
nature. If a witness’ relationship with a
party does not ipso facto render him a
biased witness in criminal cases
where the quantum of evidence
required is proof beyond reasonable
doubt, there is no reason why the
same principle should not apply in
civil cases where the quantum of
evidence is only preponderance of
evidence.
The foregoing documentary and testimonial
evidence, taken together, amply establish the fact
that Chiong was present at MIA on April 1, 1989,
Transportation Law
passed through the PCG counter without delay,
proceeded to the Northwest check-in counter, but
when he presented his confirmed ticket thereat, he
was not issued a boarding pass, and ultimately
barred from boarding Northwest Flight No. 24 on
that day.
In stark contrast is Northwest’s bare-faced claim
that Chiong was a "no-show" passenger, and was
scheduled to leave the country only on April 17,
1989. As previously discussed, the records belie
this assertion. It is also noteworthy that Northwest
did not present any evidence to support its belated
defense that Chiong departed from the Philippines
on April 17, 1989 to work as Third Engineer on
board M/V Elbia under the original crew
agreement.
It is true that Chiong’s passport and seaman
service record book indicate that he had left the
country on April 17, 1989 and come back on
October 5 of the same year. However, this
evidence fails to debunk the facts established to
have transpired on April 1, 1989, more particularly,
Chiong’s presence at the airport and his
subsequent bumping-off by Northwest despite a
confirmed ticket. Although initially, the burden of
proof was with Chiong to prove that there was a
breach of contract of carriage, the burden of
evidence shifted to Northwest when Chiong
adduced sufficient evidence to prove the facts he
had alleged. At that point, Northwest had the
burden of going forward23 to controvert
Chiong’s prima facie case. As the party asserting
that Chiong was a "no-show" passenger,
Northwest then had the burden of evidence to
establish its claim. Regrettably, Northwest failed to
do so.
Furthermore, it has not escaped our attention that
Northwest, despite the declaration in its Pre-Trial
Brief, did not present as a witness their check-in
agent on that contentious date.24 This omission
was detrimental to Northwest’s case considering
its claim that Chiong did not check-in at their
counters on said date. It simply insisted that
Chiong was a "no-show" passenger and totally
relied on the Flight Manifest, which, curiously,
showed a horizontal line drawn across Chiong’s
Full Text Cases 4 (Safety of Passengers)
name, and the name W. Costine written above it.
The reason for the insertion, or for Chiong’s
allegedly being a "no-show" passenger, is not even
recorded on the remarks column of the Flight
Manifest beside the Passenger Name column.
Clearly, the categorical declaration of Chiong and
his other witnesses, coupled with the PCG stamp
on his passport and seaman service record book,
prevails over Northwest’s evidence, particularly the
Flight Manifest. Thus, we are perplexed why,
despite the evidence presented by Chiong, and the
RTC’s specific order to Northwest’s counsel to
present the person(s) who prepared the Flight
Manifest and Passenger Name Record for a proper
identification of, and to testify on, those
documents, Northwest still insisted on presenting
Gonofredo Mendoza and Amelia Meris who were,
admittedly, not competent to testify thereon.25
In its desperate attempt to evade liability for the
breach, Northwest claims that Chiong worked
at M/V Elbia when he left the Philippines on April
17, 1989. The argument was not only belatedly
raised, as we have repeatedly stated, but is off-
tangent.
On this point, we uphold the RTC’s and CA’s ruling
that the failure of Northwest to raise the foregoing
defense in its Motion to Dismiss or Answer
constituted a waiver thereof. Section 1, Rule 9 of
the Rules of Court provides:
SECTION 1. Defenses and objections not
pleaded.— Defenses and objections
not pleaded either in a motion to
dismiss or in the answer are deemed
waived. However, when it appears from
the pleadings or the evidence on record
that the court has no jurisdiction over the
subject matter, that there is another
action pending between the same parties
for the same cause, or that the action is
barred by a prior judgment or by statute
of limitations, the court shall dismiss the
claim. (Emphasis supplied)
Similarly, Section 8, Rule 15 of the Rules of Court
reads:
SECTION 8. Omnibus Motion.— Subject
to the provisions of section 1 of Rule 9, a
motion attacking a pleading, order,
judgment, or proceeding shall include all
objections then available, and all
objections not so included shall be
deemed waived.
Moreover, Northwest paints a scenario that
ostensibly transpired on a different date. Even if
Chiong left the Philippines on April 17, 1989, it
would not necessarily prove that Chiong was a "no-
show" on April 1, 1989. Neither does it negate the
already established fact that Chiong had a
confirmed ticket for April 1, 1989, and first passed
through the PCG counter without delay, then
reached and was at the Northwest check-in
counters on time for the scheduled flight.
Essentially, Northwest argues that Chiong was a
"no-show" passenger on two (2) separate
occasions, March 28 and April 1, 1989 because he
was actually scheduled to depart for the US on
April 17, 1989 as ostensibly evidenced by his
passport and seaman record book. Had this new
matter alleged been proven by Northwest, it would
prevent or bar recovery by Chiong. Unfortunately,
Northwest was unsuccessful in proving not only the
"no-show" claim, but that Chiong, likewise, worked
under the original crew agreement.
Northwest likewise insists – now that there is a
pending criminal case for False Testimony against
Chiong – that a falsified part of Chiong’s testimony
would indicate the falsity of his entire testimony,
consistent with the "falsus in uno, falsus in
omnibus"26 doctrine. Following Northwest’s flawed
logic, this would invariably lead to the conclusion
that the corroborating testimonies of Chiong’s
witnesses are also false.
The legal maxim falsus in uno, falsus in omnibus,
cited by Northwest, is not a positive rule of law and
is not strictly applied in this jurisdiction. Before this
maxim can be applied, the witness must be shown
to have willfully falsified the truth on one or more
material points. The principle presupposes the
existence of a positive testimony on a material
Page 5 of 41
point contrary to subsequent declarations in the
testimony. However, the records show that
Chiong’s testimony did not contain inconsistencies
on what occurred on April 1, 1989. Yet, Northwest
never even attempted to explain or impugn the
evidence that Chiong passed through the PCG
counter on April 1, 1989, and that his passport was
accordingly stamped, obviously for purposes of his
departure on that day.
As to the criminal case, it is well to note that there
is no final determination, as yet, of Chiong’s guilt
by the courts. But even if Chiong is adjudged guilty,
it will have little effect on the outcome of this case.
As we held in Leyson v. Lawa:27
The testimony of a witness must be
considered in its entirety instead of in
truncated parts. The technique in
deciphering a testimony is not to consider
only its isolated parts and anchor a
conclusion on the basis of said parts. In
ascertaining the facts established by a
witness, everything stated by him on
direct, cross and redirect examinations
must be calibrated and considered.
It must be stressed that facts imperfectly
or erroneously stated in answer to one
question may be supplied or explained as
qualified by his answer to other question.
The principle falsus in uno, falsus in
omnibus is not strictly applied in this
jurisdiction. The doctrine deals only with
the weight of evidence and is not a
positive rule of law, and the same is not
an inflexible one of universal application.
The testimony of a witness can be
believed as to some facts and disbelieved
as to others:
xxxx
Professor Wigmore gives the following
enlightening commentary:
It may be said, once for all, that the maxim is
in itself worthless— first, in point of validity,
Transportation Law
because in one form it merely contains in
loose fashion a kernel of truth which no one
needs to be told, and in the others, it is
absolutely false as a maxim of life;
and secondly, in point of utility, because it
merely tells the jury what they may do in any
event, not what they must do or must not do,
and therefore it is a superfluous form of words.
It is also in practice pernicious, first, because
there is frequently a misunderstanding of its
proper force, and secondly, because it has
become in the hands of many counsel a mere
instrument for obtaining new trials upon points
wholly unimportant in themselves.
From the foregoing disquisition, the ineluctable
conclusion is that Northwest breached its contract
of carriage with Chiong.
Time and again, we have declared that a contract
of carriage, in this case, air transport, is primarily
intended to serve the traveling public and thus,
imbued with public interest. The law governing
common carriers consequently imposes an
exacting standard of conduct. As the aggrieved
party, Chiong only had to prove the existence of
the contract and the fact of its non-performance by
Northwest, as carrier, in order to be awarded
compensatory and actual damages.
We reiterate that Northwest failed to prove its claim
that Chiong worked on M/V Elbia from April 17 to
October 5, 1989 under the original crew
agreement. Accordingly, we affirm the lower
court’s finding on Chiong’s entitlement to actual
and compensatory damages.
We, likewise, uphold the findings of both courts on
Northwest’s liability for moral and exemplary
damages, and attorney’s fees.
Under Article 2220 of the Civil Code of the
Philippines, an award of moral damages, in
breaches of contract, is in order upon a showing
that the defendant acted fraudulently or in bad
faith. Bad faith does not simply connote bad
judgment or negligence.28 It imports a dishonest
purpose or some moral obliquity and conscious
Full Text Cases 4 (Safety of Passengers)
doing of a wrong.29 It means breach of a known
duty through some motive, interest or ill will that
partakes of the nature of fraud.30 Bad faith is in
essence a question of intention.31
In the case at bench, the courts carefully examined
the evidence as to the conduct and outward acts of
Northwest indicative of its inward motive. It is borne
out by the records that Chiong was given the run-
around at the Northwest check-in counter,
instructed to deal with a "man in barong" to obtain
a boarding pass, and eventually barred from
boarding Northwest Flight No. 24 to accommodate
an American, W. Costine, whose name was merely
inserted in the Flight Manifest, and did not even
personally check-in at the counter.32
Under the foregoing circumstances, the award of
exemplary damages is also correct given the
evidence that Northwest acted in an oppressive
manner towards Chiong.33
As for the award of attorney’s fees, while we
recognize that it is sound policy not to set a
premium on the right to litigate,34 we sustain the
lower courts’ award thereof.
Attorney’s fees may be awarded when a party is
compelled to litigate or incur expenses to protect
his interest,35 or where the defendant acted in
gross and evident bad faith in refusing to satisfy the
plaintiff’s plainly valid, just and demandable
claim.36 In the case at bench, Northwest
deliberately breached its contract of carriage with
Chiong and then repeatedly refused to satisfy
Chiong’s valid, just and demandable claim. This
unjustified refusal constrained Chiong to not only
lose income under the crew agreement, but to
further incur expenses and exert effort for almost
two (2) decades in order to protect his interests and
vindicate his right. Therefore, this Court deems it
just and equitable to grant Chiong P200,000.00 as
attorney’s fees. The award is reasonable in view of
the time it has taken for this case to be resolved.37
Finally, the issue of the exclusion of Northwest’s
Exhibits "2" and "3" need not detain us long. Suffice
it to state that the RTC and CA correctly excluded
these documents as hearsay evidence. We quote
with favor the CA’s holding thereon, thus:
As a rule, "entries made at, or near the time of
the transactions to which they refer, by a
person deceased, or unable to testify, who
was in a position to know the facts therein
stated, may be received as prima facie
evidence, if such person made the entries in
his professional capacity or in the
performance of a duty and in the ordinary or
regular course of business or duty". [Rule 130,
Section 43, Revised Rules of Court]
Otherwise stated, in order to be admissible as
entries in the course of business, it is
necessary that: (a) the person who made the
entry must be dead or unable to testify; (b) the
entries were made at or near the time of the
transactions to which they refer; (c) the entrant
was in a position to know the facts stated in
the entries; (d) the entries were made in his
professional capacity or in the performance of
a duty; and (e) the entries were made in the
ordinary or regular course of business or duty.
Tested by these requirements, we find the
manifest and passenger name record to be
mere hearsay evidence. While there is no
necessity to bring into court all the employees
who individually made the entries, it is
sufficient that the person who supervised
them while they were making the entries
testify that the account was prepared under
his supervision and that the entries were
regularly entered in the ordinary course of
business. In the case at bench, while
MENDOZA was the supervisor on-duty on
April 1, 1989, he has no personal
knowledge of the entries in the manifest
since he did not supervise the preparation
thereof. More importantly, no evidence
was presented to prove that the employee
who made the entries was dead nor did the
defendant-appellant set forth the
circumstances that would show the
employee’s inability to testify.38
Page 6 of 41
WHEREFORE, premises considered, the petition
is hereby DENIED. The ruling of the Court of
Appeals in CA-G.R. CV No. 50308 is
hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
#3
G.R. No. L-21438 September 28, 1966
AIR FRANCE, petitioner,
vs.
RAFAEL CARRASCOSO and the HONORABLE
COURT OF APPEALS, respondents.
SANCHEZ, J.:
The Court of First Instance of Manila 1 sentenced
petitioner to pay respondent Rafael Carrascoso
P25,000.00 by way of moral damages; P10,000.00
as exemplary damages; P393.20 representing the
difference in fare between first class and tourist
class for the portion of the trip Bangkok-Rome,
these various amounts with interest at the legal
rate, from the date of the filing of the complaint until
paid; plus P3,000.00 for attorneys' fees; and the
costs of suit.
On appeal,2 the Court of Appeals slightly reduced
the amount of refund on Carrascoso's plane ticket
from P393.20 to P383.10, and voted to affirm the
appealed decision "in all other respects", with costs
against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as "
fully supported by the evidence of record", are:
Plaintiff, a civil engineer, was a member of a
group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France,
through its authorized agent, Philippine Air
Transportation Law
Lines, Inc., issued to plaintiff a "first class"
round trip airplane ticket from Manila to Rome.
From Manila to Bangkok, plaintiff travelled in
"first class", but at Bangkok, the Manager of
the defendant airline forced plaintiff to vacate
the "first class" seat that he was occupying
because, in the words of the witness Ernesto
G. Cuento, there was a "white man", who, the
Manager alleged, had a "better right" to the
seat. When asked to vacate his "first class"
seat, the plaintiff, as was to be expected,
refused, and told defendant's Manager that his
seat would be taken over his dead body; a
commotion ensued, and, according to said
Ernesto G. Cuento, "many of the Filipino
passengers got nervous in the tourist class;
when they found out that Mr. Carrascoso was
having a hot discussion with the white man
[manager], they came all across to Mr.
Carrascoso and pacified Mr. Carrascoso to
give his seat to the white man" (Transcript, p.
12, Hearing of May 26, 1959); and plaintiff
reluctantly gave his "first class" seat in the
plane.3
1. The trust of the relief petitioner now seeks is that
we review "all the findings" 4 of respondent Court
of Appeals. Petitioner charges that respondent
court failed to make complete findings of fact on all
the issues properly laid before it. We are asked to
consider facts favorable to petitioner, and then, to
overturn the appellate court's decision.
Coming into focus is the constitutional mandate
that "No decision shall be rendered by any court of
record without expressing therein clearly and
distinctly the facts and the law on which it is
based". 5 This is echoed in the statutory demand
that a judgment determining the merits of the case
shall state "clearly and distinctly the facts and the
law on which it is based"; 6 and that "Every decision
of the Court of Appeals shall contain complete
findings of fact on all issues properly raised before
it". 7
A decision with absolutely nothing to support it is a
nullity. It is open to direct attack. 8 The law,
however, solely insists that a decision state the
"essential ultimate facts" upon which the court's
Full Text Cases 4 (Safety of Passengers)
conclusion is drawn. 9 A court of justice is not
hidebound to write in its decision every bit and
piece of evidence 10 presented by one party and
the other upon the issues raised. Neither is it to be
burdened with the obligation "to specify in the
sentence the facts" which a party "considered as
proved". 11 This is but a part of the mental process
from which the Court draws the essential ultimate
facts. A decision is not to be so clogged with details
such that prolixity, if not confusion, may result. So
long as the decision of the Court of Appeals
contains the necessary facts to warrant its
conclusions, it is no error for said court to withhold
therefrom "any specific finding of facts with respect
to the evidence for the defense". Because as this
Court well observed, "There is no law that so
requires". 12 Indeed, "the mere failure to specify (in
the decision) the contentions of the appellant and
the reasons for refusing to believe them is not
sufficient to hold the same contrary to the
requirements of the provisions of law and the
Constitution". It is in this setting that in Manigque,
it was held that the mere fact that the findings
"were based entirely on the evidence for the
prosecution without taking into consideration or
even mentioning the appellant's side in the
controversy as shown by his own testimony",
would not vitiate the judgment. 13 If the court did
not recite in the decision the testimony of each
witness for, or each item of evidence presented by,
the defeated party, it does not mean that the court
has overlooked such testimony or such item of
evidence. 14 At any rate, the legal presumptions
are that official duty has been regularly performed,
and that all the matters within an issue in a case
were laid before the court and passed upon by it. 15
Findings of fact, which the Court of Appeals is
required to make, maybe defined as "the written
statement of the ultimate facts as found by the
court ... and essential to support the decision and
judgment rendered thereon". 16They consist of the
court's "conclusions" with respect to the
determinative facts in issue". 17 A question of law,
upon the other hand, has been declared as "one
which does not call for an examination of the
probative value of the evidence presented by the
parties." 18
2. By statute, "only questions of law may be raised"
in an appeal by certiorari from a judgment of the
Court of Appeals. 19 That judgment is conclusive
as to the facts. It is not appropriately the business
of this Court to alter the facts or to review the
questions of fact. 20
With these guideposts, we now face the problem
of whether the findings of fact of the Court of
Appeals support its judgment.
3. Was Carrascoso entitled to the first class seat
he claims?
It is conceded in all quarters that on March 28,
1958 he paid to and received from petitioner a first
class ticket. But petitioner asserts that said ticket
did not represent the true and complete intent and
agreement of the parties; that said respondent
knew that he did not have confirmed reservations
for first class on any specific flight, although he had
tourist class protection; that, accordingly, the
issuance of a first class ticket was no guarantee
that he would have a first class ride, but that such
would depend upon the availability of first class
seats.
These are matters which petitioner has thoroughly
presented and discussed in its brief before the
Court of Appeals under its third assignment of
error, which reads: "The trial court erred in finding
that plaintiff had confirmed reservations for, and a
right to, first class seats on the "definite" segments
of his journey, particularly that from Saigon to
Beirut". 21
And, the Court of Appeals disposed of this
contention thus:
Defendant seems to capitalize on the
argument that the issuance of a first-class
ticket was no guarantee that the
passenger to whom the same had been
issued, would be accommodated in the
first-class compartment, for as in the case
of plaintiff he had yet to make
arrangements upon arrival at every
station for the necessary first-class
Page 7 of 41
 reservation. We are not impressed by
such a reasoning. We cannot understand
how a reputable firm like defendant
airplane company could have the
indiscretion to give out tickets it never
meant to honor at all. It received the
corresponding amount in payment of first-
class tickets and yet it allowed the
passenger to be at the mercy of its
employees. It is more in keeping with the
ordinary course of business that the
company should know whether or riot the
tickets it issues are to be honored or not.22
Not that the Court of Appeals is alone. The trial
court similarly disposed of petitioner's contention,
thus:
On the fact that plaintiff paid for, and was issued a
"First class" ticket, there can be no question. Apart
from his testimony, see plaintiff's Exhibits "A", "A-
1", "B", "B-1," "B-2", "C" and "C-1", and defendant's
own witness, Rafael Altonaga, confirmed plaintiff's
testimony and testified as follows:
Q. In these tickets there are marks "O.K."
From what you know, what does this OK
mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
xxx xxx xxx
Defendant tried to prove by the testimony of its
witnesses Luis Zaldariaga and Rafael Altonaga
that although plaintiff paid for, and was issued a
"first class" airplane ticket, the ticket was subject to
confirmation in Hongkong. The court cannot give
credit to the testimony of said witnesses. Oral
evidence cannot prevail over written evidence, and
plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-
1" belie the testimony of said witnesses, and
clearly show that the plaintiff was issued, and paid
Transportation Law
for, a first class ticket without any reservation
whatever.
Furthermore, as hereinabove shown, defendant's
own witness Rafael Altonaga testified that the
reservation for a "first class" accommodation for
the plaintiff was confirmed. The court cannot
believe that after such confirmation defendant had
a verbal understanding with plaintiff that the "first
class" ticket issued to him by defendant would be
subject to confirmation in Hongkong. 23
We have heretofore adverted to the fact that
except for a slight difference of a few pesos in the
amount refunded on Carrascoso's ticket, the
decision of the Court of First Instance was affirmed
by the Court of Appeals in all other respects. We
hold the view that such a judgment of affirmance
has merged the judgment of the lower
court. 24Implicit in that affirmance is a
determination by the Court of Appeals that the
proceeding in the Court of First Instance was free
from prejudicial error and "all questions raised by
the assignments of error and all questions that
might have been raised are to be regarded as
finally adjudicated against the appellant". So also,
the judgment affirmed "must be regarded as free
from all error". 25 We reached this policy
construction because nothing in the decision of the
Court of Appeals on this point would suggest that
its findings of fact are in any way at war with those
of the trial court. Nor was said affirmance by the
Court of Appeals upon a ground or grounds
different from those which were made the basis of
the conclusions of the trial court. 26
If, as petitioner underscores, a first-class-ticket
holder is not entitled to a first class seat,
notwithstanding the fact that seat availability in
specific flights is therein confirmed, then an air
passenger is placed in the hollow of the hands of
an airline. What security then can a passenger
have? It will always be an easy matter for an airline
aided by its employees, to strike out the very
stipulations in the ticket, and say that there was a
verbal agreement to the contrary. What if the
passenger had a schedule to fulfill? We have long
learned that, as a rule, a written document speaks
a uniform language; that spoken word could be
Full Text Cases 4 (Safety of Passengers)
notoriously unreliable. If only to achieve stability in
the relations between passenger and air carrier,
adherence to the ticket so issued is desirable.
Such is the case here. The lower courts refused to
believe the oral evidence intended to defeat the
covenants in the ticket.
The foregoing are the considerations which point
to the conclusion that there are facts upon which
the Court of Appeals predicated the finding that
respondent Carrascoso had a first class ticket and
was entitled to a first class seat at Bangkok, which
is a stopover in the Saigon to Beirut leg of the
flight. 27 We perceive no "welter of distortions by
the Court of Appeals of petitioner's statement of its
position", as charged by petitioner. 28 Nor do we
subscribe to petitioner's accusation that
respondent Carrascoso "surreptitiously took a first
class seat to provoke an issue". 29And this
because, as petitioner states, Carrascoso went to
see the Manager at his office in Bangkok "to
confirm my seat and because from Saigon I was
told again to see the Manager". 30 Why, then, was
he allowed to take a first class seat in the plane at
Bangkok, if he had no seat? Or, if another had a
better right to the seat?
4. Petitioner assails respondent court's award of
moral damages. Petitioner's trenchant claim is that
Carrascoso's action is planted upon breach of
contract; that to authorize an award for moral
damages there must be an averment of fraud or
bad faith;31 and that the decision of the Court of
Appeals fails to make a finding of bad faith. The
pivotal allegations in the complaint bearing on this
issue are:
3. That ... plaintiff entered into a contract of air
carriage with the Philippine Air Lines for a
valuable consideration, the latter acting as
general agents for and in behalf of the
defendant, under which said contract, plaintiff
was entitled to, as defendant agreed to furnish
plaintiff, First Class passage on defendant's
plane during the entire duration of plaintiff's
tour of Europe with Hongkong as starting point
up to and until plaintiff's return trip to Manila,
... .
4. That, during the first two legs of the trip from
Hongkong to Saigon and from Saigon to
Bangkok, defendant furnished to the plaintiff
First Class accommodation but only after
protestations, arguments and/or insistence
were made by the plaintiff with defendant's
employees.
5. That finally, defendant failed to provide First
Class passage, but instead furnished plaintiff
only Tourist Class accommodations from
Bangkok to Teheran and/or Casablanca, ...
the plaintiff has been compelled by
defendant's employees to leave the First
Class accommodation berths at Bangkok after
he was already seated.
6. That consequently, the plaintiff, desiring no
repetition of the inconvenience and
embarrassments brought by defendant's
breach of contract was forced to take a Pan
American World Airways plane on his return
trip from Madrid to Manila.32
xxx xxx xxx
2. That likewise, as a result of defendant's failure
to furnish First Class accommodations aforesaid,
plaintiff suffered inconveniences,
embarrassments, and humiliations, thereby
causing plaintiff mental anguish, serious anxiety,
wounded feelings, social humiliation, and the like
injury, resulting in moral damages in the amount of
P30,000.00. 33
xxx xxx xxx
The foregoing, in our opinion, substantially
aver: First, That there was a contract to furnish
plaintiff a first class passage covering, amongst
others, the Bangkok-Teheran leg; Second, That
said contract was breached when petitioner failed
to furnish first class transportation at Bangkok;
and Third, that there was bad faith when
petitioner's employee compelled Carrascoso to
leave his first class accommodation berth "after he
was already, seated" and to take a seat in the
tourist class, by reason of which he suffered
Page 8 of 41
inconvenience, embarrassments and humiliations,
thereby causing him mental anguish, serious
anxiety, wounded feelings and social humiliation,
resulting in moral damages. It is true that there is
no specific mention of the term bad faith in the
complaint. But, the inference of bad faith is there,
it may be drawn from the facts and circumstances
set forth therein. 34 The contract was averred to
establish the relation between the parties. But the
stress of the action is put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the
start of the trial, respondent's counsel placed
petitioner on guard on what Carrascoso intended
to prove: That while sitting in the plane in Bangkok,
Carrascoso was ousted by petitioner's manager
who gave his seat to a white man; 35 and (b)
evidence of bad faith in the fulfillment of the
contract was presented without objection on the
part of the petitioner. It is, therefore, unnecessary
to inquire as to whether or not there is sufficient
averment in the complaint to justify an award for
moral damages. Deficiency in the complaint, if any,
was cured by the evidence. An amendment thereof
to conform to the evidence is not even
required. 36 On the question of bad faith, the Court
of Appeals declared:
That the plaintiff was forced out of his seat in
the first class compartment of the plane
belonging to the defendant Air France while at
Bangkok, and was transferred to the tourist
class not only without his consent but against
his will, has been sufficiently established by
plaintiff in his testimony before the court,
corroborated by the corresponding entry
made by the purser of the plane in his
notebook which notation reads as follows:
"First-class passenger was forced to go to the
tourist class against his will, and that the
captain refused to intervene",
and by the testimony of an eye-witness,
Ernesto G. Cuento, who was a co-passenger.
The captain of the plane who was asked by
the manager of defendant company at
Bangkok to intervene even refused to do so. It
Transportation Law
is noteworthy that no one on behalf of
defendant ever contradicted or denied this
evidence for the plaintiff. It could have been
easy for defendant to present its manager at
Bangkok to testify at the trial of the case, or
yet to secure his disposition; but defendant did
neither. 37
The Court of appeals further stated —
Neither is there evidence as to whether or not
a prior reservation was made by the white
man. Hence, if the employees of the
defendant at Bangkok sold a first-class ticket
to him when all the seats had already been
taken, surely the plaintiff should not have been
picked out as the one to suffer the
consequences and to be subjected to the
humiliation and indignity of being ejected from
his seat in the presence of others. Instead of
explaining to the white man the improvidence
committed by defendant's employees, the
manager adopted the more drastic step of
ousting the plaintiff who was then safely
ensconsced in his rightful seat. We are
strengthened in our belief that this probably
was what happened there, by the testimony of
defendant's witness Rafael Altonaga who,
when asked to explain the meaning of the
letters "O.K." appearing on the tickets of
plaintiff, said "that the space is confirmed for
first class. Likewise, Zenaida Faustino,
another witness for defendant, who was the
chief of the Reservation Office of defendant,
testified as follows:
"Q How does the person in the ticket-issuing
office know what reservation the passenger
has arranged with you?
A They call us up by phone and ask for the
confirmation." (t.s.n., p. 247, June 19, 1959)
In this connection, we quote with approval
what the trial Judge has said on this point:
Why did the, using the words of witness
Ernesto G. Cuento, "white man" have a "better
Full Text Cases 4 (Safety of Passengers)
right" to the seat occupied by Mr. Carrascoso?
The record is silent. The defendant airline did
not prove "any better", nay, any right on the
part of the "white man" to the "First class" seat
that the plaintiff was occupying and for which
he paid and was issued a corresponding "first
class" ticket.
If there was a justified reason for the action of
the defendant's Manager in Bangkok, the
defendant could have easily proven it by
having taken the testimony of the said
Manager by deposition, but defendant did not
do so; the presumption is that evidence
willfully suppressed would be adverse if
produced [Sec. 69, par (e), Rules of Court];
and, under the circumstances, the Court is
constrained to find, as it does find, that the
Manager of the defendant airline in Bangkok
not merely asked but threatened the plaintiff to
throw him out of the plane if he did not give up
his "first class" seat because the said Manager
wanted to accommodate, using the words of
the witness Ernesto G. Cuento, the "white
man".38
It is really correct to say that the Court of
Appeals in the quoted portion first
transcribed did not use the term "bad
faith". But can it be doubted that the
recital of facts therein points to bad faith?
The manager not only prevented
Carrascoso from enjoying his right to a
first class seat; worse, he imposed his
arbitrary will; he forcibly ejected him from
his seat, made him suffer the humiliation
of having to go to the tourist class
compartment - just to give way to another
passenger whose right thereto has not
been established. Certainly, this is bad
faith. Unless, of course, bad faith has
assumed a meaning different from what is
understood in law. For, "bad faith"
contemplates a "state of mind
affirmatively operating with furtive design
or with some motive of self-interest or will
or for ulterior purpose." 39
And if the foregoing were not yet
sufficient, there is the express finding
of bad faith in the judgment of the Court
of First Instance, thus:
The evidence shows that the defendant
violated its contract of transportation with
plaintiff in bad faith, with the aggravating
circumstances that defendant's Manager in
Bangkok went to the extent of threatening the
plaintiff in the presence of many passengers
to have him thrown out of the airplane to give
the "first class" seat that he was occupying to,
again using the words of the witness Ernesto
G. Cuento, a "white man" whom he
(defendant's Manager) wished to
accommodate, and the defendant has not
proven that this "white man" had any "better
right" to occupy the "first class" seat that the
plaintiff was occupying, duly paid for, and for
which the corresponding "first class" ticket
was issued by the defendant to him.40
5. The responsibility of an employer for the tortious
act of its employees need not be essayed. It is well
settled in law. 41 For the willful malevolent act of
petitioner's manager, petitioner, his employer,
must answer. Article 21 of the Civil Code says:
ART. 21. Any person who willfully causes
loss or injury to another in a manner that
is contrary to morals, good customs or
public policy shall compensate the latter
for the damage.
In parallel circumstances, we applied the foregoing
legal precept; and, we held that upon the
provisions of Article 2219 (10), Civil Code, moral
damages are recoverable. 42
6. A contract to transport passengers is quite
different in kind and degree from any other
contractual relation. 43 And this, because of the
relation which an air-carrier sustains with the
public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and
advantages it offers. The contract of air carriage,
therefore, generates a relation attended with a
Page 9 of 41
public duty. Neglect or malfeasance of the carrier's
employees, naturally, could give ground for an
action for damages.
Passengers do not contract merely for
transportation. They have a right to be treated by
the carrier's employees with kindness, respect,
courtesy and due consideration. They are entitled
to be protected against personal misconduct,
injurious language, indignities and abuses from
such employees. So it is, that any rule or
discourteous conduct on the part of employees
towards a passenger gives the latter an action for
damages against the carrier. 44
Thus, "Where a steamship company 45 had
accepted a passenger's check, it was a breach of
contract and a tort, giving a right of action for its
agent in the presence of third persons to falsely
notify her that the check was worthless and
demand payment under threat of ejection, though
the language used was not insulting and she was
not ejected." 46 And this, because, although the
relation of passenger and carrier is "contractual
both in origin and nature" nevertheless "the act that
breaks the contract may be also a tort". 47 And in
another case, "Where a passenger on a railroad
train, when the conductor came to collect his fare
tendered him the cash fare to a point where the
train was scheduled not to stop, and told him that
as soon as the train reached such point he would
pay the cash fare from that point to destination,
there was nothing in the conduct of the passenger
which justified the conductor in using insulting
language to him, as by calling him a lunatic," 48 and
the Supreme Court of South Carolina there held
the carrier liable for the mental suffering of said
passenger.1awphîl.nèt
Petitioner's contract with Carrascoso is one
attended with public duty. The stress of
Carrascoso's action as we have said, is placed
upon his wrongful expulsion. This is a violation of
public duty by the petitioner air carrier — a case
of quasi-delict. Damages are proper.
7. Petitioner draws our attention to respondent
Carrascoso's testimony, thus —
Transportation Law
Q You mentioned about an attendant. Who is
that attendant and purser?
A When we left already — that was already in
the trip — I could not help it. So one of the
flight attendants approached me and
requested from me my ticket and I said, What
for? and she said, "We will note that you
transferred to the tourist class". I said,
"Nothing of that kind. That is tantamount to
accepting my transfer." And I also said, "You
are not going to note anything there because
I am protesting to this transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?
A Well, the seats there are so close that you
feel uncomfortable and you don't have enough
leg room, I stood up and I went to the pantry
that was next to me and the purser was there.
He told me, "I have recorded the incident in my
notebook." He read it and translated it to me
— because it was recorded in French — "First
class passenger was forced to go to the tourist
class against his will, and that the captain
refused to intervene."
Mr. VALTE —
I move to strike out the last part of the
testimony of the witness because the best
evidence would be the notes. Your Honor.
COURT —
I will allow that as part of his testimony. 49
Petitioner charges that the finding of the Court of
Appeals that the purser made an entry in his
notebook reading "First class passenger was
forced to go to the tourist class against his will, and
that the captain refused to intervene" is predicated
Full Text Cases 4 (Safety of Passengers)
upon evidence [Carrascoso's testimony above]
which is incompetent. We do not think so. The
subject of inquiry is not the entry, but the ouster
incident. Testimony on the entry does not come
within the proscription of the best evidence rule.
Such testimony is admissible. 49a
Besides, from a reading of the transcript just
quoted, when the dialogue happened, the impact
of the startling occurrence was still fresh and
continued to be felt. The excitement had not as yet
died down. Statements then, in this environment,
are admissible as part of the res gestae. 50 For,
they grow "out of the nervous excitement and
mental and physical condition of the
declarant". 51 The utterance of the purser regarding
his entry in the notebook was spontaneous, and
related to the circumstances of the ouster incident.
Its trustworthiness has been guaranteed. 52 It thus
escapes the operation of the hearsay rule. It forms
part of the res gestae.
At all events, the entry was made outside the
Philippines. And, by an employee of petitioner. It
would have been an easy matter for petitioner to
have contradicted Carrascoso's testimony. If it
were really true that no such entry was made, the
deposition of the purser could have cleared up the
matter.
We, therefore, hold that the transcribed testimony
of Carrascoso is admissible in evidence.
8. Exemplary damages are well awarded. The Civil
Code gives the court ample power to grant
exemplary damages — in contracts and quasi-
contracts. The only condition is that defendant
should have "acted in a wanton, fraudulent,
reckless, oppressive, or malevolent
manner." 53 The manner of ejectment of
respondent Carrascoso from his first class seat fits
into this legal precept. And this, in addition to moral
damages.54
9. The right to attorney's fees is fully established.
The grant of exemplary damages justifies a similar
judgment for attorneys' fees. The least that can be
said is that the courts below felt that it is but just
and equitable that attorneys' fees be given. 55 We
do not intend to break faith with the tradition that
discretion well exercised — as it was here —
should not be disturbed.
10. Questioned as excessive are the amounts
decreed by both the trial court and the Court of
Appeals, thus: P25,000.00 as moral damages;
P10,000.00, by way of exemplary damages, and
P3,000.00 as attorneys' fees. The task of fixing
these amounts is primarily with the trial
court. 56 The Court of Appeals did not interfere with
the same. The dictates of good sense suggest that
we give our imprimatur thereto. Because, the facts
and circumstances point to the reasonableness
thereof.57
On balance, we say that the judgment of the Court
of Appeals does not suffer from reversible error.
We accordingly vote to affirm the same. Costs
against petitioner. So ordered.
#4
G.R. No. L-22415 March 30, 1966
FERNANDO LOPEZ, ET AL., plaintiffs-
appellants,
vs.
PAN AMERICAN WORLD AIRWAYS, defendant-
appellant.
BENGZON, J.P., J.:
Plaintiffs and defendant appeal from a decision of
the Court of First Instance of Rizal. Since the value
in controversy exceeds P200,000 the appeals
were taken directly to this Court upon all questions
involved (Sec. 17, par. 3[5], Judiciary Act).
Stated briefly the facts not in dispute are as follows:
Reservations for first class accommodations in
Flight No. 2 of Pan American World Airways —
hereinafter otherwise called PAN-AM — from
Tokyo to San Francisco on May 24, 1960 were
made with
PAN-AM on March 29, 1960, by "Your Travel
Page 10 of 41
Guide" agency, specifically, by Delfin Faustino, for
then Senator Fernando Lopez, his wife Maria J.
Lopez, his son-in-law Alfredo Montelibano, Jr., and
his daughter, Mrs. Alfredo Montelibano, Jr.,
(Milagros Lopez Montelibano). PAN-AM's San
Francisco head office confirmed the reservations
on March 31, 1960.
First class tickets for the abovementioned flight
were subsequently issued by
PAN-AM on May 21 and 23, 1960, in favor of
Senator Lopez and his party. The total fare of
P9,444 for all of them was fully paid before the
tickets were issued.
As scheduled Senator Lopez and party left Manila
by Northwest Airlines on May 24, 1960, arriving in
Tokyo at 5:30 P.M. of that day. As soon as they
arrived Senator Lopez requested Minister
Busuego of the Philippine Embassy to contact
PAN-AM's Tokyo office regarding their first class
accommodations for that evening's flight. For the
given reason that the first class seats therein were
all booked up, however, PAN-AM's Tokyo office
informed Minister Busuego that PAN-AM could not
accommodate Senator Lopez and party in that trip
as first class passengers. Senator Lopez
thereupon gave their first class tickets to Minister
Busuego for him to show the same to PAN-AM's
Tokyo office, but the latter firmly reiterated that
there was no accommodation for them in the first
class, stating that they could not go in that flight
unless they took the tourist class therein.
Due to pressing engagements awaiting Senator
Lopez and his wife, in the United States — he had
to attend a business conference in San Francisco
the next day and she had to undergo a medical
check-up in Mayo Clinic, Rochester, Minnesota, on
May 28, 1960 and needed three days rest before
that in San Francisco — Senator Lopez and party
were constrained to take PAN-AM's flight from
Tokyo to San Francisco as tourist passengers.
Senator Lopez however made it clear, as indicated
in his letter to PAN-AM's Tokyo office on that date
(Exh. A), that they did so "under protest" and
without prejudice to further action against the
airline.1äwphï1.ñët
Transportation Law
Suit for damages was thereafter filed by Senator
Lopez and party against PAN-AM on June 2, 1960
in the Court of First Instance of Rizal. Alleging
breach of contracts in bad faith by defendant,
plaintiffs asked for P500,000 actual and moral
damages, P100,000 exemplary damages,
P25,000 attorney's fees plus costs. PAN-AM filed
its answer on June 22, 1960, asserting that its
failure to provide first class accommodations to
plaintiffs was due to honest error of its employees.
It also interposed a counterclaim for attorney's fees
of P25,000.
Subsequently, further pleadings were filed, thus:
plaintiffs' answer to the counterclaim, on July 25,
1960; plaintiffs' reply attached to motion for its
admittance, on December 2, 1961; defendant's
supplemental answer, on March 8, 1962; plaintiffs'
reply to supplemental answer, on March 10, 1962;
and defendant's amended supplemental answer,
on July 10, 1962.
After trial — which took twenty-two (22) days
ranging from November 25, 1960 to January 5,
1963 — the Court of First Instance rendered its
decision on November 13, 1963, the dispositive
portion stating:
In view of the foregoing considerations,
judgment is hereby rendered in favor of
the plaintiffs and against the defendant,
which is accordingly ordered to pay the
plaintiffs the following: (a) P100,000.00
as moral damages; (b) P20,000.00 as
exemplary damages; (c) P25,000.00 as
attorney's fees, and the costs of this
action.
So ordered.
Plaintiffs, however, on November 21, 1963, moved
for reconsideration of said judgment, asking that
moral damages be increased to P400,000 and that
six per cent (6%) interest per annum on the amount
of the award be granted. And defendant opposed
the same. Acting thereon the trial court issued an
order on December 14, 1963, reconsidering the
dispositive part of its decision to read as follows:
Full Text Cases 4 (Safety of Passengers)
In view of the foregoing considerations,
judgment is hereby rendered in favor of
the plaintiffs and against the defendant,
which is accordingly ordered to pay the
plaintiffs the following: (a) P150,000.00
as moral damages; (b) P25,000.00 as
exemplary damages; with legal interest
on both from the date of the filing of the
complaint until paid; and (c) P25,000.00
as attorney's fees; and the costs of this
action.
So ordered.
It is from said judgment, as thus reconsidered, that
both parties have appealed.
Defendant, as stated, has from the start admitted
that it breached its contracts with plaintiffs to
provide them with first class accommodations in its
Tokyo-San Francisco flight of May 24, 1960. In its
appeal, however, it takes issue with the finding of
the court a quo that it acted in bad faith in the
branch of said contracts. Plaintiffs, on the other
hand, raise questions on the amount of damages
awarded in their favor, seeking that the same be
increased to a total of P650,000.
Anent the issue of bad faith the records show the
respective contentions of the parties as follows.
According to plaintiffs, defendant acted in bad faith
because it deliberately refused to comply with its
contract to provide first class accommodations to
plaintiffs, out of racial prejudice against Orientals.
And in support of its contention that what was done
to plaintiffs is an oftrepeated practice of defendant,
evidence was adduced relating to two previous
instances of alleged racial discrimination by
defendant against Filipinos in favor of "white"
passengers. Said previous occasions are what
allegedly happened to (1) Benito Jalbuena and (2)
Cenon S. Cervantes and his wife.
And from plaintiffs' evidence this is what allegedly
happened; Jalbuena bought a first class ticket from
PAN-AM on April 13, 1960; he confirmed it on April
15, 1960 as to the Tokyo-Hongkong flight of April
20, 1960; PAN-AM similarly confirmed it on April
20, 1960. At the airport he and another Oriental —
Mr. Tung — were asked to step aside while other
passengers - including "white" passengers —
boarded PAN-AM's plane. Then PAN-AM officials
told them that one of them had to stay behind.
Since Mr. Tung was going all the way to London,
Jalbuena was chosen to be left behind. PAN-AM's
officials could only explain by saying there was
"some mistake". Jalbuena thereafter wrote PAN-
AM to protest the incident (Exh. B).
As to Cenon S. Cervantes it would appear that in
Flight No. 6 of PAN-AM on September 29, 1958
from Bangkok to Hongkong, he and his wife had to
take tourist class, although they had first class
tickets, which they had previously confirmed,
because their seats in first class were given to
"passengers from London."
Against the foregoing, however, defendant's
evidence would seek to establish its theory of
honest mistake, thus:
The first class reservations of Senator Lopez and
party were made on March 29, 1960 together with
those of four members of the Rufino family, for a
total of eight (8) seats, as shown in their joint
reservation card (Exh. 1). Subsequently on March
30, 1960, two other Rufinos secured reservations
and were given a separate reservation card (Exh.
2). A new reservation card consisting of two pages
(Exhs. 3 and 4) was then made for the original of
eight passengers, namely, Senator Lopez and
party and four members of the Rufino family, the
first page (Exh. 3) referring to 2 Lopezes, 2
Montelibanos and 1 Rufino and the second page
(Exh. 4) referring to 3 Rufinos. On April 18, 1960
"Your Travel Guide" agency cancelled the
reservations of the Rufinos. A telex message was
thereupon sent on that date to PAN-AM's head
office at San Francisco by Mariano Herranz, PAN-
AM's reservations employee at its office in Escolta,
Manila. (Annex A-Acker's to Exh. 6.) In said
message, however, Herranz mistakenly cancelled
all the seats that had been reserved, that is,
including those of Senator Lopez and party.
Page 11 of 41
The next day — April 1960 — Herranz discovered
his mistake, upon seeing the reservation card
newly prepared by his co-employee Pedro Asensi
for Sen. Lopez and party to the exclusion of the
Rufinos (Exh. 5). It was then that Herranz sent
another telex wire to the San Francisco head
office, stating his error and asking for the
reinstatement of the four (4) first class seats
reserved for Senator Lopez and party (Annex A-
Velasco's to Exh. 6). San Francisco head office
replied on April 22, 1960 that Senator Lopez and
party are waitlisted and that said office is unable to
reinstate them (Annex B-Velasco's to Exh. 6).
Since the flight involved was still more than a
month away and confident that reinstatement
would be made, Herranz forgot the matter and told
no one about it except his co-employee, either
Armando Davila or Pedro Asensi or both of them
(Tsn., 123-124, 127, Nov. 17, 1961).
Subsequently, on April 27, 1960, Armando Davila,
PAN-AM's reservations employee working in the
same Escolta office as Herranz, phoned PAN-AM's
ticket sellers at its other office in the Manila Hotel,
and confirmed the reservations of Senator Lopez
and party.
PAN-AM's reservations supervisor Alberto Jose,
discovered Herranz's mistake after "Your Travel
Guide" phone on May 18, 1960 to state that
Senator Lopez and party were going to depart as
scheduled. Accordingly, Jose sent a telex wire on
that date to PAN-AM's head office at San
Francisco to report the error and asked said office
to continue holding the reservations of Senator
Lopez and party (Annex B-Acker's to Exh. 6). Said
message was reiterated by Jose in his telex wire of
May 19, 1960 (Annex C-Acker's to Exh. 6). San
Francisco head office replied on May 19, 1960 that
it regrets being unable to confirm Senator Lopez
and party for the reason that the flight was solidly
booked (Exh. 7). Jose sent a third telex wire on
May 20, 1960 addressed to PAN-AM's offices at
San Francisco, New York (Idlewild Airport), Tokyo
and Hongkong, asking all-out assistance towards
restoring the cancelled spaces and for report of
cancellations at their end (Annex D-Acker's to Exh.
6). San Francisco head office reiterated on May 20,
Transportation Law
1960 that it could not reinstate the spaces and
referred Jose to the Tokyo and Hongkong offices
(Exh. 8). Also on May 20, the Tokyo office of PAN-
AM wired Jose stating it will do everything possible
(Exh. 9).
Expecting that some cancellations of bookings
would be made before the flight time, Jose decided
to withhold from Senator Lopez and party, or their
agent, the information that their reservations had
been cancelled.
Armando Davila having previously confirmed
Senator Lopez and party's first class reservations
to PAN-AM's ticket sellers at its Manila Hotel office,
the latter sold and issued in their favor the
corresponding first class tickets on the 21st and
23rd of May, 1960.
From the foregoing evidence of defendant it is in
effect admitted that defendant — through its
agents — first cancelled plaintiffs, reservations by
mistake and thereafter deliberately and
intentionally withheld from plaintiffs or their travel
agent the fact of said cancellation, letting them go
on believing that their first class reservations stood
valid and confirmed. In so misleading plaintiffs into
purchasing first class tickets in the conviction that
they had confirmed reservations for the same,
when in fact they had none, defendant wilfully and
knowingly placed itself into the position of having
to breach its a foresaid contracts with plaintiffs
should there be no last-minute cancellation by
other passengers before flight time, as it turned out
in this case. Such actuation of defendant may
indeed have been prompted by nothing more than
the promotion of its self-interest in holding on to
Senator Lopez and party as passengers in its flight
and foreclosing on their chances to seek the
services of other airlines that may have been able
to afford them first class accommodations. All the
time, in legal contemplation such conduct already
amounts to action in bad faith. For bad faith means
a breach of a known duty through some motive
of interest or ill-will (Spiegel vs. Beacon
Participations, 8 NE 2d 895, 907). As stated in
Kamm v. Flink, 113 N.J.L. 582, 175 A. 62, 99
A.L.R. 1, 7: "Self-enrichment or fraternal interest,
Full Text Cases 4 (Safety of Passengers)
and not personal ill-will, may well have been the
motive; but it is malice nevertheless."
As of May 18, 1960 defendant's reservations
supervisor, Alberto Jose knew that plaintiffs'
reservations had been cancelled. As of May 20 he
knew that the San Francisco head office stated
with finality that it could not reinstate plaintiffs'
cancelled reservations. And yet said reservations
supervisor made the "decision" — to use his own,
word — to withhold the information from the
plaintiffs. Said Alberto Jose in his testimony:
Q Why did you not notify them?
A Well, you see, sir, in my fifteen (15)
years of service with the air lines business
my experience is that even if the flights
are solidly booked months in advance,
usually the flight departs with plenty of
empty seats both on the first class and
tourist class. This is due to late
cancellation of passengers, or because
passengers do not show up in the airport,
and it was our hope others come in from
another flight and, therefore, are delayed
and, therefore, missed their connections.
This experience of mine, coupled with
that wire from Tokyo that they would do
everything possible prompted me to
withhold the information, but
unfortunately, instead of the first class
seat that I was hoping for and which I
anticipated only the tourists class was
open on which Senator and Mrs. Lopez,
Mr. and Mrs. Montelibano were
accommodated. Well, I fully realize now
the gravity of my decision in not advising
Senator and Mrs. Lopez, Mr. and Mrs.
Montelibano nor their agents about the
erroneous cancellation and for which I
would like them to know that I am very
sorry.
xxx xxx xxx
Q So it was not your duty to notify Sen.
Lopez and parties that their reservations
had been cancelled since May 18, 1960?
A As I said before it was my duty. It was
my duty but as I said again with respect
to that duty I have the power to make a
decision or use my discretion and
judgment whether I should go ahead and
tell the passenger about the cancellation.
(Tsn., pp. 17-19, 28-29, March 15, 1962.)
At the time plaintiffs bought their tickets, defendant,
therefore, in breach of its known duty, made
plaintiffs believe that their reservation
had not been cancelled. An additional indication of
this is the fact that upon the face of the two tickets
of record, namely, the ticket issued to Alfredo
Montelibano, Jr. on May 21, 1960 (Exh. 22) and
that issued to Mrs. Alfredo Montelibano, Jr., on
May 23, 1960 (Exh. 23), the reservation status is
stated as "OK". Such willful-non-disclosure of the
cancellation or pretense that the reservations for
plaintiffs stood — and not simply the erroneous
cancellation itself — is the factor to which is
attributable the breach of the resulting contracts.
And, as above-stated, in this respect defendant
clearly acted in bad faith.
As if to further emphasize its bad faith on the
matter, defendant subsequently promoted the
employee who cancelled plaintiffs' reservations
and told them nothing about it. The record shows
that said employee — Mariano Herranz — was not
subjected to investigation and suspension by
defendant but instead was given a reward in the
form of an increase of salary in June of the
following year (Tsn., 86-88, Nov. 20, 1961).
At any rate, granting all the mistakes advanced by
the defendant, there would at least be negligence
so gross and reckless as to amount to malice or
bad faith (Fores vs. Miranda, L-12163, March 4,
1959; Necesito v. Paras, L-10605-06, June 30,
1958). Firstly, notwithstanding the entries in the
reservation cards (Exhs. 1 & 3) that the
reservations cancelled are those of the Rufinos
only, Herranz made the mistake, after reading said
Page 12 of 41
entries, of sending a wire cancelling all the
reservations, including those of Senator Lopez and
party (Tsn., pp. 108-109, Nov. 17, 1961).
Secondly, after sending a wire to San Francisco
head office on April 19, 1960 stating his error and
asking for reinstatement, Herranz simply forgot
about the matter. Notwithstanding the reply of San
Francisco head Office on April 22, 1960 that it
cannot reinstate Senator Lopez and party (Annex
B-Velasco's to Exh. 6), it was assumed and taken
for granted that reinstatement would be made.
Thirdly, Armando Davila confirmed plaintiff's
reservations in a phone call on April 27, 1960 to
defendant's ticket sellers, when at the time it
appeared in plaintiffs' reservation card (Exh. 5) that
they were only waitlisted passengers. Fourthly,
defendant's ticket sellers issued plaintiffs' tickets
on May 21 and 23, 1960, without first checking
their reservations just before issuing said tickets.
And, finally, no one among defendant's agents
notified Senator Lopez and party that their
reservations had been cancelled, a precaution that
could have averted their entering with defendant
into contracts that the latter had already placed
beyond its power to perform.
Accordingly, there being a clear admission in
defendant's evidence of facts amounting to a bad
faith on its part in regard to the breach of its
contracts with plaintiffs, it becomes unnecessary to
further discuss the evidence adduced by plaintiffs
to establish defendant's bad faith. For what is
admitted in the course of the trial does not need to
be proved (Sec. 2, Rule 129, Rules of Court).
Addressing ourselves now to the question of
damages, it is well to state at the outset those rules
and principles. First, moral damages are
recoverable in breach of contracts where the
defendant acted fraudulently or in bad faith (Art.
2220, New Civil Code). Second, in addition to
moral damages, exemplary or corrective damages
may be imposed by way of example or correction
for the public good, in breach of contract where the
defendant acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner (Articles 2229,
2232, New Civil Code). And, third, a written
contract for an attorney's services shall control the
amount to be paid therefor unless found by the
Transportation Law
court to be unconscionable or unreasonable (Sec.
24, Rule 138, Rules of Court).
First, then, as to moral damages. As a proximate
result of defendant's breach in bad faith of its
contracts with plaintiffs, the latter suffered social
humiliation, wounded feelings, serious anxiety and
mental anguish. For plaintiffs were travelling with
first class tickets issued by defendant and yet they
were given only the tourist class. At stop-overs,
they were expected to be among the first-class
passengers by those awaiting to welcome them,
only to be found among the tourist passengers. It
may not be humiliating to travel as tourist
passengers; it is humiliating to be compelled to
travel as such, contrary to what is rightfully to be
expected from the contractual undertaking.
Senator Lopez was then Senate President Pro
Tempore. International carriers like defendant
know the prestige of such an office. For the Senate
is not only the Upper Chamber of the Philippine
Congress, but the nation's treaty-ratifying body. It
may also be mentioned that in his aforesaid office
Senator Lopez was in a position to preside in
impeachment cases should the Senate sit as
Impeachment Tribunal. And he was former Vice-
President of the Philippines. Senator Lopez was
going to the United States to attend a private
business conference of the Binalbagan-Isabela
Sugar Company; but his aforesaid rank and
position were by no means left behind, and in fact
he had a second engagement awaiting him in the
United States: a banquet tendered by Filipino
friends in his honor as Senate President Pro
Tempore (Tsn., pp. 14-15, Nov. 25, 1960). For the
moral damages sustained by him, therefore, an
award of P100,000.00 is appropriate.
Mrs. Maria J. Lopez, as wife of Senator Lopez,
shared his prestige and therefore his humiliation.
In addition she suffered physical discomfort during
the 13-hour trip,(5 hours from Tokyo to Honolulu
and 8 hours from Honolulu to San Francisco).
Although Senator Lopez stated that "she was quite
well" (Tsn., p. 22, Nov. 25, 1960) — he obviously
meant relatively well, since the rest of his
statement is that two months before, she was
attackedby severe flu and lost 10 pounds of weight
Full Text Cases 4 (Safety of Passengers)
and that she was advised by Dr. Sison to go to the
United States as soon as possible for medical
check-up and relaxation, (Ibid). In fact, Senator
Lopez stated, as shown a few pages after in the
transcript of his testimony, that Mrs. Lopez was
sick when she left the Philippines:
A. Well, my wife really felt very bad during
the entire trip from Tokyo to San
Francisco. In the first place, she was sick
when we left the Philippines, and then
with that discomfort which she
[experienced] or suffered during that
evening, it was her worst experience. I
myself, who was not sick, could not sleep
because of the discomfort. (Tsn., pp. 27-
28, Nov. 25, 1960).
It is not hard to see that in her condition then a
physical discomfort sustained for thirteen hours
may well be considered a physical suffering. And
even without regard to the noise and trepidation
inside the plane — which defendant contends,
upon the strengh of expert testimony, to be
practically the same in first class and tourist class
— the fact that the seating spaces in the tourist
class are quite narrower than in first class, there
beingsix seats to a row in the former as against
four to a row in the latter, and that in tourist class
there is very little space for reclining in view of the
closer distance between rows (Tsn., p. 24, Nov. 25,
1960), will suffice to show that the aforesaid
passenger indeed experienced physical suffering
during the trip. Added to this, of course, was the
painfull thought that she was deprived by
defendant — after having paid for and expected
the same — of the most suitable, place for her, the
first class, where evidently the best of everything
would have been given her, the best seat, service,
food and treatment. Such difference in comfort
between first class and tourist class is too obvious
to be recounted, is in fact the reason for the
former's existence, and is recognized by the airline
in charging a higher fare for it and by the
passengers in paying said higher rate Accordingly,
considering the totality of her suffering and
humiliation, an award to Mrs. Maria J. Lopez of
P50,000.00 for moral damages will be reasonable.
Mr. and Mrs. Alfredo Montelibano, Jr., were
travelling as immediate members of the family of
Senator Lopez. They formed part of the Senator's
party as shown also by the reservation cards of
PAN-AM. As such they likewise shared his prestige
and humiliation. Although defendant contends that
a few weeks before the flight they had asked their
reservations to be charged from first class to tourist
class — which did not materialize due to alleged
full booking in the tourist class — the same does
not mean they suffered no shared in having to take
tourist class during the flight. For by that time they
had already been made to pay for first class seats
and therefore to expect first class
accommodations. As stated, it is one thing to take
the tourist class by free choice; a far different thing
to be compelled to take it notwithstanding having
paid for first class seats. Plaintiffs-appellants now
ask P37,500.00 each for the two but we note that
in their motion for reconsideration filed in the
court a quo, they were satisfied with P25,000.00
each for said persons. (Record on Appeal, p. 102).
For their social humiliation, therefore, the award to
them of P25,000.00 each is reasonable.
The rationale behind exemplary or corrective
damages is, as the name implies, to provide an
example or correction for public good. Defendant
having breached its contracts in bad faith, the
court, as stated earlier, may award exemplary
damages in addition to moral damages (Articles
2229, 2232, New Civil Code).
In view of its nature, it should be imposed in such
an amount as to sufficiently and effectively deter
similar breach of contracts in the future by
defendant or other airlines. In this light, we find it
just to award P75,000.00 as exemplary or
corrective damages.
Now, as to attorney's fees, the record shows a
written contract of services executed on June 1,
1960 (Exh. F) whereunder plaintiffs-appellants
engaged the services of their counsel — Atty.
Vicente J. Francisco — and agreedto pay the sum
of P25,000.00 as attorney's fees upon the
termination of the case in the Court of First
Instance, and an additional sum of P25,000.00 in
the event the case is appealed to the Supreme
Page 13 of 41
Court. As said earlier, a written contract for P75,000.00 as exemplary or corrective damages;
attorney's services shall control the amount to be (3) interest at the legal rate of 6% per annum on
paid therefor unless found by the court to be the moral and exemplary damages aforestated,
unconscionable or unreasonable. A consideration from December 14, 1963, the date of the amended
of the subject matter of the present controversy, of decision of the court a quo, until said damages are
the professional standing of the attorney for fully paid; (4) P50,000.00 as attorney's fees; and
plaintiffs-appellants, and of the extent of the (5) the costs. Counterclaim dismissed.So ordered.
service rendered by him, shows that said amount
provided for in the written agreement is
reasonable. Said lawyer — whose prominence in
the legal profession is well known — studied the
case, prepared and filed the complaint, conferred
with witnesses, analyzed documentary evidence,
personally appeared at the trial of the case in
#5 G.R. No. 123238
twenty-two days, during a period of three years,
prepared four sets of cross-interrogatories for PHILIPPINE
deposition taking, prepared several memoranda AIRLINES, Present:
and the motion for reconsideration, filed a joint INCORPORATE
record on appeal with defendant, filed a brief for D, YNARES-
plaintiffs as appellants consisting of 45 printed Petitioner, SANTIAGO, J.,
pages and a brief for plaintiffs as appellees Chairperson,
consisting of 265 printed pages. And we are further
- versus AUSTRIA-MARTINEZ,
convinced of its reasonableness because
CHICO-NAZARIO,
defendant's counsel likewise valued at P50,000.00 COURT OFNACHURA, and
the proper compensation for his services rendered APPEALS andS REYES, JJ.
to defendant in the trial court and on appeal. POUSES
MANUEL S.
In concluding, let it be stressed that the amount of BUNCIO and Promulgated:
damages awarded in this appeal has been AURORA R.
determined by adequately considering the official, BUNCIO, Minors
political, social, and financial standing of the DEANNA R. September 22, 2008
offended parties on one hand, and the business BUNCIO and
and financial position of the offender on the other NIKOLAI R.
(Domingding v. Ng, 55 O.G. 10). And further BUNCIO,
considering the present rate of exchange and the assisted by their
terms at which the amount of damages awarded Father, MANUEL
would approximately be in U.S. dollars, this Court S. BUNCIO, and
is all the more of the view that said award is proper JOSEFA
and reasonable. REGALADO,
represented by
her Attorney-in-
Wherefore, the judgment appealed from is hereby
modified so as to award in favor of plaintiffs and Fact, MANUEL
against defendant, the following: (1) P200,000.00 S. BUNCIO,
as moral damages, divided among plaintiffs, thus: Respondents.
P100,000.00 for Senate President Pro x-----------------------------------
Tempore Fernando Lopez; P50,000.00 for his wife - - - - - - - - - - - - - - -x
Maria J. Lopez; P25,000.00 for his son-in-law
Alfredo Montelibano, Jr.; and P25,000.00 for his
daughter Mrs. Alfredo Montelibano, Jr.; (2) DECISION
Transportation Law Full Text Cases 4 (Safety of Passengers)
CHICO-NAZARIO, J.:
Before Us is a Petition for
Review[1] on Certiorari under Rule 45 of the Rules
of Court seeking to set aside the Decision,[2] dated
20 December 1995, of the Court of Appeals in CA-
G.R. CV No. 26921 which affirmed in toto the
Decision,[3] dated 2 April 1990, of the Quezon City
Regional Trial Court (RTC), Branch 90, in Civil
Case No. Q-33893.
The undisputed facts are as follows:
Sometime before 2 May 1980, private
respondents spouses Manuel S. Buncio and
Aurora R. Buncio purchased from petitioner
Philippine Airlines, Incorporated, two plane
tickets[4] for their two minor children, Deanna
R. Buncio (Deanna), then 9 years of age, and
Nikolai R. Buncio (Nikolai), then 8 years old. Since
Deanna and Nikolai will travel as unaccompanied
minors, petitioner required private respondents to
accomplish, sign and submit to it an indemnity
bond.[5] Private respondents complied with this
requirement.For the purchase of the said two plane
tickets, petitioner agreed to transport Deanna and
Nikolai on 2 May 1980 from Manila to San
Francisco, California, United States of
America (USA), through one of its planes, Flight
106. Petitioner also agreed that upon the arrival of
Deanna and Nikolai in San Francisco Airport on 3
May 1980, it would again transport the two on that
same day through a connecting flight from San
Francisco, California, USA, to Los
Angeles, California, USA, via another airline,
United Airways 996.Deanna and Nikolai then will
be met by their grandmother,
Mrs. Josefa Regalado (Mrs. Regalado), at the Los
Angeles Airport on their scheduled arrival on 3
May 1980.
On 2 May 1980, Deanna and Nikolai
boarded Flight 106 in Manila.
On 3 May 1980, Deanna and Nikolai
arrived at the San Francisco Airport. However, the
staff of United Airways 996 refused to take aboard
Deanna and Nikolai for their connecting flight
to Los Angeles because petitioners personnel
in San Francisco could not produce the indemnity
bond accomplished and submitted by private
respondents. The said indemnity bond was lost by
petitioners personnel during the previous stop-over
of Flight 106 in Honolulu, Hawaii. Deanna and
Nikolai were then left stranded at the San
Francisco Airport. Subsequently, Mr.
Edwin Strigl (Strigl), then the Lead Traffic Agent of
petitioner in San Francisco, California, USA, took
Deanna and Nikolai to his residence in San
Francisco where they stayed overnight.
Meanwhile, Mrs. Regalado and several
relatives waited for the arrival of Deanna and
Nikolai at the Los Angeles Airport. When United
Airways 996 landed at the Los Angeles Airport and
its passengers disembarked,
Mrs. Regalado sought Deanna and Nikolai but she
failed to find them. Mrs. Regalado asked a
stewardess of the United Airways 996 if Deanna
and Nikolai were on board but the stewardess told
her that they had no minor
passengers. Mrs. Regalado called private
respondents and informed them that Deanna and
Nikolai did not arrive at the Los
Angeles Airport. Private respondents inquired
about the location of Deanna and Nikolai from
petitioners personnel, but the latter replied that
they were still verifying their whereabouts.
On the morning of 4 May 1980, Strigl took
Deanna and Nikolai to San
Francisco Airport where the two boarded a
Western Airlines plane bound for Los
Angeles. Later that day, Deanna and Nikolai
Page 14 of 41
arrived at the Los Angeles Airport where they were
met by Mrs. Regalado. Petitioners personnel had
previously informed Mrs. Regalado of the late
arrival of Deanna and Nikolai on 4 May 1980.
On 17 July 1980, private respondents,
through their lawyer, sent a letter[6] to petitioner
demanding payment of 1 million pesos as
damages for the gross negligence and inefficiency
of its employees in transporting Deanna and
Nikolai. Petitioner did not heed the demand.
On 20 November 1981, private
respondents filed a complaint[7] for damages
against petitioner before the RTC. Private
respondents impleaded Deanna, Nikolai and
Mrs. Regalado as their co-plaintiffs. Private
respondents alleged that Deanna and Nikolai were
not able to take their connecting flight from San
Francisco to Los Angeles as scheduled because
the required indemnity bond was lost on account of
the gross negligence and malevolent conduct of
petitioners personnel. As a consequence thereof,
Deanna and Nikolai were stranded in San
Francisco overnight, thereby exposing them to
grave danger. This dilemma caused Deanna,
Nikolai, Mrs. Regalado and private respondents to
suffer serious anxiety, mental anguish, wounded
feelings, and sleepless nights. Private
respondents prayed the RTC to render judgment
ordering petitioner: (1) to pay Deanna and
Nikolai P100,000.00 each, or a total
of P200,000.00, as moral damages; (2) to pay
private respondents P500,000.00 each, or a total
of P1,000,000,00, as moral damages; (3) to pay
Mrs. Regalado P100,000.00 as moral damages;
(4) to pay Deanna, Nikolai, Mrs. Regalado and
private respondents P50,000.00 each, or a total
of P250,000.00 as exemplary damages; and (5) to
pay attorneys fees equivalent to 25% of the total
amount of damages mentioned plus costs of suit.
Transportation Law
In its answer[8] to the complaint, petitioner S. Buncio was not awarded damages because his
admitted that Deanna and Nikolai were not allowed court testimony was disregarded, as he failed to
to take their connecting flight to Los Angeles and appear during his scheduled cross- Petitioner filed the instant petition before
that they were stranded in San examination. The dispositive portion of the RTC us assigning the following errors[11]:
Francisco. Petitioner, however, denied that the Decision reads:
loss of the indemnity bond was caused by the I.
gross negligence and malevolent conduct of its ACCORDINGLY, judgment is
personnel. Petitioner averred that it always hereby rendered: THE COURT OF APPEALS
exercised the diligence of a good father of the ERRED IN SUSTAINING THE
family in the selection, supervision and control of 1. Ordering defendant RTC AWARD OF MORAL
its employees. In addition, Deanna and Nikolai Philippines Airlines, Inc. to pay DAMAGES.
were personally escorted by Strigl, and the latter Deanna R. Buncio and Nikolai
exerted efforts to make the connecting flight of R. Buncio the amount II.
Deanna and Nikolai to Los of P50,000.00 each as moral
Angeles possible. Further, Deanna and Nikolai damages; and the amount THE COURT OF APPEALS
were not left unattended from the time they were of P25,000.00 each as ERRED IN SUSTAINING THE
stranded in San Francisco until they boarded exemplary damages; RTC AWARD OF EXEMPLARY
Western Airlines for a connecting flight to Los DAMAGES.
Angeles. Petitioner asked the RTC to dismiss the 2. Ordering said defendant to
complaint based on the foregoing averments. pay the amount of P75,000.00 III.
to Aurora R. Buncio, mother of
After trial, the RTC rendered a Decision Deanna and Nikolai, as moral THE COURT OF APPEALS
on 2 April 1990 holding petitioner liable for damages; and the amount ERRED IN SUSTAINING THE
damages for breach of contract of carriage. It ruled of P30,000.00 RTC AWARD OF ATTORNEYS
that petitioner should pay moral damages for its to Josefa Regalado, FEES AND ORDER FOR
inattention and lack of care for the welfare of grandmother of Deanna and PAYMENT OF COSTS.
Deanna and Nikolai which, in effect, amounted to Nikolai, as moral damages; and
bad faith, and for the agony brought by the incident
to private respondents and Mrs. Regalado. It also 3. Ordering said defendant to Anent the first assigned error, petitioner
held that petitioner should pay exemplary pay P38,250.00 as attorneys maintains that moral damages may be awarded in
damages by way of example or correction for the fees and also the costs of the a breach of contract of air carriage only if the
public good under Article 2229 and 2232 of the suit.[9] mishap results in death of a passenger or if the
Civil Code, plus attorneys fees and costs of suit. In carrier acted fraudulently or in bad faith, that is, by
sum, the RTC ordered petitioner: (1) to pay breach of a known duty through some motive of
Deanna and Nikolai P50,000.00 each as moral Petitioner appealed to the Court of interest or ill will, some dishonest purpose or
damages and P25,000.00 each as exemplary Appeals. On 20 December 1995, the appellate conscious doing of wrong; if there was no finding
damages; (2) to pay private respondent Aurora court promulgated its Decision affirming in toto the of fraud or bad faith on its part; if, although it lost
R. Buncio, as mother of Deanna and RTC Decision, thus: the indemnity bond, there was no finding that such
Nikolai, P75,000.00 as moral damages; (3) to pay loss was attended by ill will, or some motive of
Mrs. Regalado, as grandmother of Deanna and WHEREFORE, the interest, or any dishonest purpose; and if there was
Nikolai, P30,000.00 as moral damages; and (4) to decision appealed is hereby no finding that the loss was deliberate, intentional
pay an amount of P38,250.00 as attorneys fees AFFIRMED in toto and the or consciously done.[12]
and the costs of suit. Private respondent Manuel instant appeal DISMISSED.[10]
Full Text Cases 4 (Safety of Passengers) Page 15 of 41
 Petitioner also claims that it cannot be
entirely blamed for the loss of the indemnity bond;
that during the stop-over of Flight 106 in Honolulu,
Hawaii, USA, it gave the indemnity bond to the
immigration office therein as a matter of procedure;
that the indemnity bond was in the custody of the
said immigration office when Flight 106 left
Honolulu, Hawaii, USA; that the said immigration
office failed to return the indemnity bond to
petitioners personnel before Flight 106 left
Honolulu, Hawaii, USA; and that even though it
was negligent in overlooking the indemnity bond,
there was still no liability on its part because mere
carelessness of the carrier does not per se
constitute or justify an inference of malice or bad
faith.[13]
When an airline issues a ticket to a
passenger, confirmed for a particular flight on a
certain date, a contract of carriage arises. The
passenger has every right to expect that he be
transported on that flight and on that date, and it
becomes the airlines obligation to carry him and his
luggage safely to the agreed destination without
delay. If the passenger is not so transported or if in
the process of transporting, he dies or is injured,
the carrier may be held liable for a breach of
contract of carriage.[14]
Private respondents and petitioner
entered into a contract of air carriage when the
former purchased two plane tickets from the
latter. Under this contract, petitioner obliged itself
(1) to transport Deanna and Nikolai, as
unaccompanied minors, on 2 May 1980 from
Manila to San Francisco through one of its planes,
Flight 106; and (2) upon the arrival of Deanna and
Nikolai in San Francisco Airport on 3 May 1980, to
transport them on that same day from San
Francisco to Los Angeles via a connecting flight on
United Airways 996. As it was, petitioner failed to
transport Deanna and Nikolai from San
Francisco to Los Angeles on the day of their arrival
Transportation Law
at San Francisco. The staff of United Airways 996
refused to take aboard Deanna and Nikolai for their
connecting flight to Los Angeles because
petitioners personnel in San Francisco could not
produce the indemnity bond accomplished and
submitted by private respondents. Thus, Deanna
and Nikolai were stranded in San Francisco and
were forced to stay there overnight. It was only on
the following day that Deanna and Nikolai were
able to leave San Francisco and arrive at Los
Angeles via another airline, Western
Airlines. Clearly then, petitioner breached its
contract of carriage with private respondents.
In breach of contract of air carriage, moral
damages may be recovered where (1) the mishap
results in the death of a passenger; or (2) where
the carrier is guilty of fraud or bad faith; or (3)
where the negligence of the carrier is so gross
and reckless as to virtually amount to bad
faith.[15]
Gross negligence implies a want or
absence of or failure to exercise even slight care
or diligence, or the entire absence of care. It
evinces a thoughtless disregard of consequences
without exerting any effort to avoid them.[16]
In Singson v. Court of Appeals,[17] we
ruled that a carriers utter lack of care for and
sensitivity to the needs of its passengers
constitutes gross negligence and is no different
from fraud, malice or bad faith. Likewise,
in Philippine Airlines, Inc. v. Court of
Appeals,[18] we held that a carriers inattention to,
and lack of care for, the interest of its passengers
who are entitled to its utmost consideration,
particularly as to their convenience, amount to bad
faith and entitles the passenger to an award of
moral damages.
It was established in the instant case that
since Deanna and Nikolai would travel as
Full Text Cases 4 (Safety of Passengers)
unaccompanied minors, petitioner required private
respondents to accomplish, sign and submit to it
an indemnity bond. Private respondents complied
with this requirement. Petitioner gave a copy of the
indemnity bond to one of its personnel on Flight
106, since it was required for the San Francisco-
Los Angeles connecting flight of Deanna and
Nikolai. Petitioners personnel lost the indemnity
bond during the stop-over of Flight 106
in Honolulu, Hawaii. Thus, Deanna and Nikolai
were not allowed to take their connecting flight.
Evidently, petitioner was fully aware that
Deanna and Nikolai would travel as
unaccompanied minors and, therefore, should be
specially taken care of considering their tender age
and delicate situation. Petitioner also knew well
that the indemnity bond was required for Deanna
and Nikolai to make a connecting flight from San
Francisco to Los Angeles, and that it was its duty
to produce the indemnity bond to the staff of United
Airways 996 so that Deanna and Nikolai could
board the connecting flight. Yet, despite
knowledge of the foregoing, it did not exercise
utmost care in handling the indemnity bond
resulting in its loss in Honolulu, Hawaii. This was
the proximate cause why Deanna and Nikolai were
not allowed to take the connecting flight and were
thus stranded overnight in San Francisco. Further,
petitioner discovered that the indemnity bond was
lost only when Flight 106 had already landed
in San Francisco Airport and when the staff of
United Airways 996 demanded the indemnity
bond. This only manifests that petitioner did not
check or verify if the indemnity bond was in its
custody before leaving Honolulu, Hawaii for San
Francisco.
The foregoing circumstances reflect
petitioners utter lack of care for and inattention to
the welfare of Deanna and Nikolai as
unaccompanied minor passengers. They also
indicate petitioners failure to exercise even slight
care and diligence in handling the indemnity
bond. Clearly, the negligence of petitioner was so
gross and reckless that it amounted to bad faith.
It is worth emphasizing that petitioner, as
a common carrier, is bound by law to exercise
extraordinary diligence and utmost care in
ensuring for the safety and welfare of its
passengers with due regard for all the
circumstances.[19] The negligent acts of petitioner
signified more than inadvertence or inattention and
thus constituted a radical departure from the
extraordinary standard of care required of common
carriers.
Petitioners claim that it cannot be entirely
blamed for the loss of the indemnity bond because
it gave the indemnity bond to the immigration office
of Honolulu, Hawaii, as a matter of procedure
during the stop-over, and the said immigration
office failed to return the indemnity bond to
petitioners personnel before Flight 106 left
Honolulu, Hawaii, deserves scant consideration. It
was petitioners obligation to ensure that it had the
indemnity bond in its custody before
leaving Honolulu, Hawaii for San
Francisco. Petitioner should have asked for the
indemnity bond from the immigration office during
the stop-over instead of partly blaming the said
office later on for the loss of the indemnity
bond. Petitioners insensitivity on this matter
indicates that it fell short of the extraordinary care
that the law requires of common carriers.
Petitioner, nonetheless, insists that the
following circumstances negate gross negligence
on its part: (1) Strigl requested the staff of United
Airways 996 to allow Deanna and Nikolai to board
the plane even without the indemnity bond;
(2) Strigl took care of the two and brought them to
his house upon refusal of the staff of the United
Airways 996 to board Deanna and Nikolai; (3)
private respondent Aurora R. Buncio and
Page 16 of 41
Mrs. Regalado were duly informed of Deanna and
Nikolais predicament; and (4) Deanna and Nikolai
were able to make a connecting flight via an
alternative airline, Western Airlines.[20] We do not
agree. It was petitioners duty to provide assistance
to Deanna and Nikolai for the inconveniences of
delay in their transportation. These actions are
deemed part of their obligation as a common
carrier, and are hardly anything to rave about.[21]
Apropos the second and third assigned
error, petitioner argues that it was not liable for
exemplary damages because there was no
wanton, fraudulent, reckless, oppressive, or
malevolent manner on its part. Further, exemplary
damages may be awarded only if it is proven that
the plaintiff is entitled to moral damages. Petitioner
contends that since there was no proof that private
respondents were entitled to moral damages, then
they are also not entitled to exemplary damages.[22]
Petitioner also contends that no premium
should be placed on the right to litigate; that an
award of attorneys fees and order of payment of
costs must be justified in the text of the decision;
that such award cannot be imposed by mere
conclusion without supporting explanation; and
that the RTC decision does not provide any
justification for the award of attorneys fees and
order of payment of costs.[23]
Article 2232 of the Civil Code provides
that exemplary damages may be awarded in a
breach of contract if the defendant acted in a
wanton, fraudulent, reckless, oppressive or
malevolent manner. In addition, Article 2234
thereof states that the plaintiff must show that he is
entitled to moral damages before he can be
awarded exemplary damages.
As we have earlier found, petitioner
breached its contract of carriage with private
respondents, and it acted recklessly and
Transportation Law
malevolently in transporting Deanna and Nikolai as
unaccompanied minors and in handling their
indemnity bond. We have also ascertained that
private respondents are entitled to moral damages
because they have sufficiently established
petitioners gross negligence which amounted to
bad faith. This being the case, the award of
exemplary damages is warranted.
Current jurisprudence[24] instructs that in
awarding attorneys fees, the trial court must state
the factual, legal, or equitable justification for
awarding the same, bearing in mind that the award
of attorneys fees is the exception, not the general
rule, and it is not sound public policy to place a
penalty on the right to litigate; nor should attorneys
fees be awarded every time a party wins a lawsuit.
The matter of attorneys fees cannot be dealt with
only in the dispositive portion of the decision. The
text of the decision must state the reason behind
the award of attorneys fees. Otherwise, its award
is totally unjustified.[25]
In the instant case, the award of attorneys
fees was merely cited in the dispositive portion of
the RTC decision without the RTC stating any legal
or factual basis for said award. Hence, the Court of
Appeals erred in sustaining the RTCs award of
attorneys fees.
Since we have already resolved that the
RTC and Court of Appeals were correct in
awarding moral and exemplary damages, we shall
now determine whether their corresponding
amounts were proper.
The purpose of awarding moral damages
is to enable the injured party to obtain means,
diversion or amusement that will serve to alleviate
the moral suffering he has undergone by reason of
defendants culpable action.[26] On the other hand,
the aim of awarding exemplary damages is to deter
serious wrongdoings.[27]
Full Text Cases 4 (Safety of Passengers)
Article 2216 of the Civil Code provides
that assessment of damages is left to the discretion
of the court according to the circumstances of each
case. This discretion is limited by the principle that
the amount awarded should not be palpably
excessive as to indicate that it was the result of
prejudice or corruption on the part of the trial
court.[28]Simply put, the amount of damages must
be fair, reasonable and proportionate to the injury
suffered.
The RTC and the Court of Appeals
ordered petitioner to pay Deanna and
Nikolai P50,000.00 each as moral damages. This
amount is reasonable considering the harrowing
experience they underwent at their tender age and
the danger they were exposed to when they were
stranded in San Francisco. Both of them testified
that they were afraid and were not able to eat and
sleep during the time they were stranded in San
Francisco.[29] Likewise, the award of P25,000.00
each to Deanna and Nikolai as exemplary
damages is fair so as to deter petitioner and other
common carriers from committing similar or other
serious wrongdoings.
Both courts also directed petitioner to pay
private respondent Aurora R. Buncio P75,000.00
as moral damages. This is equitable and
proportionate considering the serious anxiety and
mental anguish she experienced as a mother when
Deanna and Nikolai were not allowed to take the
connecting flight as scheduled and the fact that
they were stranded in a foreign country and in the
company of strangers. Private respondent Aurora
R. Buncio testified that she was very fearful for the
lives of Deanna and Nikolai when they were
stranded in San Francisco, and that by reason
thereof she suffered emotional stress and
experienced upset stomach.[30] Also, the award
of P30,000.00 as moral damages to
Mrs. Regalado is appropriate because of the
serious anxiety and wounded feelings she felt as a
grandmother when Deanna and Nikolai, whom she
was to meet for the first time, did not arrive at
the Los Angeles Airport. Mrs. Regalado testified
that she was seriously worried when Deanna and
Nikolai did not arrive in Los Angeles on 3 May
1980, and she was hurt when she saw the two
crying upon arriving in Los Angeles on 4 May
1980.[31] The omission of award of damages to
private respondent Manuel S. Buncio was proper
for lack of basis. His court testimony was rightly
disregarded by the RTC because he failed to
appear in his scheduled cross-examination.[32]
On another point, we held in Eastern
Shipping Lines, Inc. v. Court of Appeals,[33] that
when an obligation, not constituting a loan or
forbearance of money is breached, an interest on
the amount of damages awarded may be imposed
at the rate of 6% per annum. We further declared
that when the judgment of the court awarding a
sum of money becomes final and executory, the
rate of legal interest, whether it is a
loan/forbearance of money or not, shall be 12% per
annum from such finality until its satisfaction,
this interim period being deemed to be then
equivalent to a forbearance of credit.
In the instant case, petitioners obligation
arose from a contract of carriage and not from a
loan or forbearance of money. Thus, an interest of
6% per annum should be imposed on the damages
awarded, to be computed from the time of the
extra-judicial demand on 17 July 1980 up to the
finality of this Decision. In addition, the interest
shall become 12% per annum from the finality of
this Decision up to its satisfaction.
Finally, the records[34] show that
Mrs. Regalado died on 1 March 1995 at the age of
74, while Deanna passed away on 8 December
2003 at the age of 32. This being the case, the
Page 17 of 41
foregoing award of damages plus interests in their
favor should be given to their respective heirs.
WHEREFORE, the Petition is PARTLY
GRANTED. The Decision of the Court of
Appeals, dated 20 December 1995, in CA-G.R. CV
No. 26921, is hereby AFFIRMED with the
following MODIFICATIONS: (1) the award of
attorneys fees is deleted; (2) an interest of 6% per
annum is imposed on the damages awarded, to be
computed from 17 July 1980 up to the finality of this
Decision; and (3) an interest of 12% per annum is
also imposed from the finality of this Decision up to
its satisfaction. The damages and interests
granted in favor of deceased Mrs. Regalado and
deceased Deanna are hereby awarded to their
respective heirs. Costs against petitioner.
SO ORDERED.
#6
G.R. No. 150843 March 14, 2003
CATHAY PACIFIC AIRWAYS, LTD., petitioner,
vs.
SPOUSES DANIEL VAZQUEZ and MARIA
LUISA MADRIGAL VAZQUEZ, respondents.
DAVIDE, JR., C.J.:
Is an involuntary upgrading of an airline
passenger’s accommodation from one class to a
more superior class at no extra cost a breach of
contract of carriage that would entitle the
passenger to an award of damages? This is a
novel question that has to be resolved in this case.
The facts in this case, as found by the Court of
Appeals and adopted by petitioner Cathay Pacific
Airways, Ltd., (hereinafter Cathay) are as follows:
Transportation Law
Cathay is a common carrier engaged in the upgraded to First Class. Dr. Vazquez refused the
business of transporting passengers and goods by upgrade, reasoning that it would not look nice for
air. Among the many routes it services is the them as hosts to travel in First Class and their
Manila-Hongkong-Manila course. As part of its guests, in the Business Class; and moreover, they
marketing strategy, Cathay accords its frequent were going to discuss business matters during the
flyers membership in its Marco Polo Club. The flight. He also told Ms. Chiu that she could have
members enjoy several privileges, such as priority other passengers instead transferred to the First
for upgrading of booking without any extra charge Class Section. Taken aback by the refusal for
whenever an opportunity arises. Thus, a frequent upgrading, Ms. Chiu consulted her supervisor, who
flyer booked in the Business Class has priority for told her to handle the situation and convince the
upgrading to First Class if the Business Class Vazquezes to accept the upgrading. Ms. Chiu
Section is fully booked. informed the latter that the Business Class was
fully booked, and that since they were Marco Polo
Club members they had the priority to be upgraded
Respondents-spouses Dr. Daniel Earnshaw
to the First Class. Dr. Vazquez continued to refuse,
Vazquez and Maria Luisa Madrigal Vazquez are
frequent flyers of Cathay and are Gold Card so Ms. Chiu told them that if they would not avail
members of its Marco Polo Club. On 24 September themselves of the privilege, they would not be
1996, the Vazquezes, together with their maid and allowed to take the flight. Eventually, after talking
two friends Pacita Cruz and Josefina Vergel de to his two friends, Dr. Vazquez gave in. He and
Dios, went to Hongkong for pleasure and business. Mrs. Vazquez then proceeded to the First Class
Cabin.
For their return flight to Manila on 28 September
1996, they were booked on Cathay’s Flight CX- Upon their return to Manila, the Vazquezes, in a
letter of 2 October 1996 addressed to Cathay’s
905, with departure time at 9:20 p.m. Two hours
before their time of departure, the Vazquezes and Country Manager, demanded that they be
their companions checked in their luggage at indemnified in the amount of P1million for the
Cathay’s check-in counter at Kai Tak Airport and "humiliation and embarrassment" caused by its
were given their respective boarding passes, to wit, employees. They also demanded "a written
Business Class boarding passes for the apology from the management of Cathay,
Vazquezes and their two friends, and Economy preferably a responsible person with a rank of no
less than the Country Manager, as well as the
Class for their maid. They then proceeded to the
Business Class passenger lounge. apology from Ms. Chiu" within fifteen days from
receipt of the letter.
When boarding time was announced, the
Vazquezes and their two friends went to Departure In his reply of 14 October 1996, Mr. Larry Yuen, the
assistant to Cathay’s Country Manager Argus Guy
Gate No. 28, which was designated for Business
Class passengers. Dr. Vazquez presented his Robson, informed the Vazquezes that Cathay
would investigate the incident and get back to them
boarding pass to the ground stewardess, who in
within a week’s time.
turn inserted it into an electronic machine reader or
computer at the gate. The ground stewardess was
assisted by a ground attendant by the name of On 8 November 1996, after Cathay’s failure to give
Clara Lai Han Chiu. When Ms. Chiu glanced at the them any feedback within its self-imposed
computer monitor, she saw a message that there deadline, the Vazquezes instituted before the
was a "seat change" from Business Class to First Regional Trial Court of Makati City an action for
Class for the Vazquezes. damages against Cathay, praying for the payment
to each of them the amounts of P250,000 as
Ms. Chiu approached Dr. Vazquez and told him temperate damages; P500,000 as moral damages;
that the Vazquezes’ accommodations were P500,000 as exemplary or corrective damages;
and P250,000 as attorney’s fees.
Full Text Cases 4 (Safety of Passengers)
In their complaint, the Vazquezes alleged that
when they informed Ms. Chiu that they preferred to
stay in Business Class, Ms. Chiu "obstinately,
uncompromisingly and in a loud, discourteous and
harsh voice threatened" that they could not board
and leave with the flight unless they go to First
Class, since the Business Class was overbooked.
Ms. Chiu’s loud and stringent shouting annoyed,
embarrassed, and humiliated them because the
incident was witnessed by all the other passengers
waiting for boarding. They also claimed that they
were unjustifiably delayed to board the plane, and
when they were finally permitted to get into the
aircraft, the forward storage compartment was
already full. A flight stewardess instructed Dr.
Vazquez to put his roll-on luggage in the overhead
storage compartment. Because he was not
assisted by any of the crew in putting up his
luggage, his bilateral carpal tunnel syndrome was
aggravated, causing him extreme pain on his arm
and wrist. The Vazquezes also averred that they
"belong to the uppermost and absolutely top elite
of both Philippine Society and the Philippine
financial community, [and that] they were among
the wealthiest persons in the Philippine[s]."
In its answer, Cathay alleged that it is a practice
among commercial airlines to upgrade passengers
to the next better class of accommodation,
whenever an opportunity arises, such as when a
certain section is fully booked. Priority in upgrading
is given to its frequent flyers, who are considered
favored passengers like the Vazquezes. Thus,
when the Business Class Section of Flight CX-905
was fully booked, Cathay’s computer sorted out the
names of favored passengers for involuntary
upgrading to First Class. When Ms. Chiu informed
the Vazquezes that they were upgraded to First
Class, Dr. Vazquez refused. He then stood at the
entrance of the boarding apron, blocking the queue
of passengers from boarding the plane, which
inconvenienced other passengers. He shouted
that it was impossible for him and his wife to be
upgraded without his two friends who were
traveling with them. Because of Dr. Vazquez’s
outburst, Ms. Chiu thought of upgrading the
traveling companions of the Vazquezes. But when
she checked the computer, she learned that the
Vazquezes’ companions did not have priority for
Page 18 of 41
upgrading. She then tried to book the Vazquezes
again to their original seats. However, since the
Business Class Section was already fully booked,
she politely informed Dr. Vazquez of such fact and
explained that the upgrading was in recognition of
their status as Cathay’s valued passengers.
Finally, after talking to their guests, the Vazquezes
eventually decided to take the First Class
accommodation.
Cathay also asserted that its employees at the
Hong Kong airport acted in good faith in dealing
with the Vazquezes; none of them shouted,
humiliated, embarrassed, or committed any act of
disrespect against them (the Vazquezes).
Assuming that there was indeed a breach of
contractual obligation, Cathay acted in good faith,
which negates any basis for their claim for
temperate, moral, and exemplary damages and
attorney’s fees. Hence, it prayed for the dismissal
of the complaint and for payment of P100,000 for
exemplary damages and P300,000 as attorney’s
fees and litigation expenses.
During the trial, Dr. Vazquez testified to support the
allegations in the complaint. His testimony was
corroborated by his two friends who were with him
at the time of the incident, namely, Pacita G. Cruz
and Josefina Vergel de Dios.
For its part, Cathay presented documentary
evidence and the testimonies of Mr. Yuen; Ms.
Chiu; Norma Barrientos, Comptroller of its retained
counsel; and Mr. Robson. Yuen and Robson
testified on Cathay’s policy of upgrading the seat
accommodation of its Marco Polo Club members
when an opportunity arises. The upgrading of the
Vazquezes to First Class was done in good faith;
in fact, the First Class Section is definitely much
better than the Business Class in terms of comfort,
quality of food, and service from the cabin crew.
They also testified that overbooking is a widely
accepted practice in the airline industry and is in
accordance with the International Air Transport
Association (IATA) regulations. Airlines overbook
because a lot of passengers do not show up for
their flight. With respect to Flight CX-905, there
was no overall overbooking to a degree that a
passenger was bumped off or downgraded. Yuen
Transportation Law
and Robson also stated that the demand letter of
the Vazquezes was immediately acted upon.
Reports were gathered from their office in Hong
Kong and immediately forwarded to their counsel
Atty. Remollo for legal advice. However, Atty.
Remollo begged off because his services were
likewise retained by the Vazquezes; nonetheless,
he undertook to solve the problem in behalf of
Cathay. But nothing happened until Cathay
received a copy of the complaint in this case. For
her part, Ms. Chiu denied that she shouted or used
foul or impolite language against the Vazquezes.
Ms. Barrientos testified on the amount of attorney’s
fees and other litigation expenses, such as those
for the taking of the depositions of Yuen and Chiu.
In its decision1 of 19 October 1998, the trial court
found for the Vazquezes and decreed as follows:
WHEREFORE, finding preponderance of
evidence to sustain the instant complaint,
judgment is hereby rendered in favor of
plaintiffs Vazquez spouses and against
defendant Cathay Pacific Airways, Ltd.,
ordering the latter to pay each plaintiff the
following:
a) Nominal damages in the amount of
P100,000.00 for each plaintiff;
b) Moral damages in the amount of
P2,000,000.00 for each plaintiff;
c) Exemplary damages in the amount of
P5,000,000.00 for each plaintiff;
d) Attorney’s fees and expenses of
litigation in the amount of P1,000,000.00
for each plaintiff; and
e) Costs of suit.
SO ORDERED.
According to the trial court, Cathay offers various
classes of seats from which passengers are
allowed to choose regardless of their reasons or
Full Text Cases 4 (Safety of Passengers)
motives, whether it be due to budgetary constraints
or whim. The choice imposes a clear obligation on
Cathay to transport the passengers in the class
chosen by them. The carrier cannot, without
exposing itself to liability, force a passenger to
involuntarily change his choice. The upgrading of
the Vazquezes’ accommodation over and above
their vehement objections was due to the
overbooking of the Business Class. It was a pretext
to pack as many passengers as possible into the
plane to maximize Cathay’s revenues. Cathay’s
actuations in this case displayed deceit, gross
negligence, and bad faith, which entitled the
Vazquezes to awards for damages.
On appeal by the petitioners, the Court of Appeals,
in its decision of 24 July 2001,2 deleted the award
for exemplary damages; and it reduced the awards
for moral and nominal damages for each of the
Vazquezes to P250,000 and P50,000,
respectively, and the attorney’s fees and litigation
expenses to P50,000 for both of them.
The Court of Appeals ratiocinated that by
upgrading the Vazquezes to First Class, Cathay
novated the contract of carriage without the
former’s consent. There was a breach of contract
not because Cathay overbooked the Business
Class Section of Flight CX-905 but because the
latter pushed through with the upgrading despite
the objections of the Vazquezes.
However, the Court of Appeals was not convinced
that Ms. Chiu shouted at, or meant to be
discourteous to, Dr. Vazquez, although it might
seemed that way to the latter, who was a member
of the elite in Philippine society and was not
therefore used to being harangued by anybody.
Ms. Chiu was a Hong Kong Chinese whose
fractured Chinese was difficult to understand and
whose manner of speaking might sound harsh or
shrill to Filipinos because of cultural differences.
But the Court of Appeals did not find her to have
acted with deliberate malice, deceit, gross
negligence, or bad faith. If at all, she was negligent
in not offering the First Class accommodations to
other passengers. Neither can the flight
stewardess in the First Class Cabin be said to have
been in bad faith when she failed to assist Dr.
Vazquez in lifting his baggage into the overhead
storage bin. There is no proof that he asked for
help and was refused even after saying that he was
suffering from "bilateral carpal tunnel syndrome."
Anent the delay of Yuen in responding to the
demand letter of the Vazquezes, the Court of
Appeals found it to have been sufficiently
explained.
The Vazquezes and Cathay separately filed
motions for a reconsideration of the decision, both
of which were denied by the Court of Appeals.
Cathay seasonably filed with us this petition in this
case. Cathay maintains that the award for moral
damages has no basis, since the Court of Appeals
found that there was no "wanton, fraudulent,
reckless and oppressive" display of manners on
the part of its personnel; and that the breach of
contract was not attended by fraud, malice, or bad
faith. If any damage had been suffered by the
Vazquezes, it was damnum absque injuria, which
is damage without injury, damage or injury inflicted
without injustice, loss or damage without violation
of a legal right, or a wrong done to a man for which
the law provides no remedy. Cathay also invokes
our decision in United Airlines, Inc. v. Court of
Appeals3 where we recognized that, in accordance
with the Civil Aeronautics Board’s Economic
Regulation No. 7, as amended, an overbooking
that does not exceed ten percent cannot be
considered deliberate and done in bad faith. We
thus deleted in that case the awards for moral and
exemplary damages, as well as attorney’s fees, for
lack of proof of overbooking exceeding ten percent
or of bad faith on the part of the airline carrier.
On the other hand, the Vazquezes assert that the
Court of Appeals was correct in granting awards
for moral and nominal damages and attorney’s
fees in view of the breach of contract committed by
Cathay for transferring them from the Business
Class to First Class Section without prior notice or
consent and over their vigorous objection. They
likewise argue that the issuance of passenger
tickets more than the seating capacity of each
section of the plane is in itself fraudulent, malicious
and tainted with bad faith.
Page 19 of 41
The key issues for our consideration are whether
(1) by upgrading the seat accommodation of the
Vazquezes from Business Class to First Class
Cathay breached its contract of carriage with the
Vazquezes; (2) the upgrading was tainted with
fraud or bad faith; and (3) the Vazquezes are
entitled to damages.
We resolve the first issue in the affirmative.
A contract is a meeting of minds between two
persons whereby one agrees to give something or
render some service to another for a consideration.
There is no contract unless the following requisites
concur: (1) consent of the contracting parties; (2)
an object certain which is the subject of the
contract; and (3) the cause of the obligation which
is established.4 Undoubtedly, a contract of
carriage existed between Cathay and the
Vazquezes. They voluntarily and freely gave their
consent to an agreement whose object was the
transportation of the Vazquezes from Manila to
Hong Kong and back to Manila, with seats in the
Business Class Section of the aircraft, and whose
cause or consideration was the fare paid by the
Vazquezes to Cathay.
The only problem is the legal effect of the
upgrading of the seat accommodation of the
Vazquezes. Did it constitute a breach of contract?
Breach of contract is defined as the "failure without
legal reason to comply with the terms of a
contract."5 It is also defined as the "[f]ailure,
without legal excuse, to perform any promise which
forms the whole or part of the contract."6
In previous cases, the breach of contract of
carriage consisted in either the bumping off of a
passenger with confirmed reservation or the
downgrading of a passenger’s seat
accommodation from one class to a lower class. In
this case, what happened was the reverse. The
contract between the parties was for Cathay to
transport the Vazquezes to Manila on a Business
Class accommodation in Flight CX-905. After
checking-in their luggage at the Kai Tak Airport in
Hong Kong, the Vazquezes were given boarding
Transportation Law
cards indicating their seat assignments in the
Business Class Section. However, during the
boarding time, when the Vazquezes presented
their boarding passes, they were informed that
they had a seat change from Business Class to
First Class. It turned out that the Business Class
was overbooked in that there were more
passengers than the number of seats. Thus, the
seat assignments of the Vazquezes were given to
waitlisted passengers, and the Vazquezes, being
members of the Marco Polo Club, were upgraded
from Business Class to First Class.
We note that in all their pleadings, the Vazquezes
never denied that they were members of Cathay’s
Marco Polo Club. They knew that as members of
the Club, they had priority for upgrading of their
seat accommodation at no extra cost when an
opportunity arises. But, just like other privileges,
such priority could be waived. The Vazquezes
should have been consulted first whether they
wanted to avail themselves of the privilege or
would consent to a change of seat accommodation
before their seat assignments were given to other
passengers. Normally, one would appreciate and
accept an upgrading, for it would mean a better
accommodation. But, whatever their reason was
and however odd it might be, the Vazquezes had
every right to decline the upgrade and insist on the
Business Class accommodation they had booked
for and which was designated in their boarding
passes. They clearly waived their priority or
preference when they asked that other passengers
be given the upgrade. It should not have been
imposed on them over their vehement objection.
By insisting on the upgrade, Cathay breached its
contract of carriage with the Vazquezes.
We are not, however, convinced that the upgrading
or the breach of contract was attended by fraud or
bad faith. Thus, we resolve the second issue in the
negative.
Bad faith and fraud are allegations of fact that
demand clear and convincing proof. They are
serious accusations that can be so conveniently
and casually invoked, and that is why they are
never presumed. They amount to mere slogans or
Full Text Cases 4 (Safety of Passengers)
mudslinging unless convincingly substantiated by
whoever is alleging them.
Fraud has been defined to include an inducement
through insidious machination. Insidious
machination refers to a deceitful scheme or plot
with an evil or devious purpose. Deceit exists
where the party, with intent to deceive, conceals or
omits to state material facts and, by reason of such
omission or concealment, the other party was
induced to give consent that would not otherwise
have been given.7
Bad faith does not simply connote bad judgment or
negligence; it imports a dishonest purpose or some
moral obliquity and conscious doing of a wrong, a
breach of a known duty through some motive or
interest or ill will that partakes of the nature of
fraud.8
We find no persuasive proof of fraud or bad faith in
this case. The Vazquezes were not induced to
agree to the upgrading through insidious words or
deceitful machination or through willful
concealment of material facts. Upon boarding, Ms.
Chiu told the Vazquezes that their
accommodations were upgraded to First Class in
view of their being Gold Card members of Cathay’s
Marco Polo Club. She was honest in telling them
that their seats were already given to other
passengers and the Business Class Section was
fully booked. Ms. Chiu might have failed to
consider the remedy of offering the First Class
seats to other passengers. But, we find no bad faith
in her failure to do so, even if that amounted to an
exercise of poor judgment.
Neither was the transfer of the Vazquezes effected
for some evil or devious purpose. As testified to by
Mr. Robson, the First Class Section is better than
the Business Class Section in terms of comfort,
quality of food, and service from the cabin crew;
thus, the difference in fare between the First Class
and Business Class at that time was
$250.9Needless to state, an upgrading is for the
better condition and, definitely, for the benefit of the
passenger.
We are not persuaded by the Vazquezes’
argument that the overbooking of the Business
Class Section constituted bad faith on the part of
Cathay. Section 3 of the Economic Regulation No.
7 of the Civil Aeronautics Board, as amended,
provides:
Sec 3. Scope. – This regulation shall
apply to every Philippine and foreign air
carrier with respect to its operation of
flights or portions of flights originating
from or terminating at, or serving a point
within the territory of the Republic of the
Philippines insofar as it denies boarding
to a passenger on a flight, or portion of a
flight inside or outside the Philippines, for
which he holds confirmed reserved
space. Furthermore, this Regulation is
designed to cover only honest mistakes
on the part of the carriers and excludes
deliberate and willful acts of non-
accommodation. Provided, however, that
overbooking not exceeding 10% of the
seating capacity of the aircraft shall not be
considered as a deliberate and willful act
of non-accommodation.
It is clear from this section that an overbooking that
does not exceed ten percent is not considered
deliberate and therefore does not amount to bad
faith.10 Here, while there was admittedly an
overbooking of the Business Class, there was no
evidence of overbooking of the plane beyond ten
percent, and no passenger was ever bumped off
or was refused to board the aircraft.
Now we come to the third issue on damages.
The Court of Appeals awarded each of the
Vazquezes moral damages in the amount of
P250,000. Article 2220 of the Civil Code provides:
Article 2220. Willful injury to property may
be a legal ground for awarding moral
damages if the court should find that,
under the circumstances, such damages
are justly due. The same rule applies to
Page 20 of 41
 breaches of contract where the defendant
acted fraudulently or in bad faith.
Moral damages include physical suffering, mental
anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Although incapable
of pecuniary computation, moral damages may be
recovered if they are the proximate result of the
defendant’s wrongful act or omission.11 Thus, case
law establishes the following requisites for the
award of moral damages: (1) there must be an
injury clearly sustained by the claimant, whether
physical, mental or psychological; (2) there must
be a culpable act or omission factually established;
(3) the wrongful act or omission of the defendant is
the proximate cause of the injury sustained by the
claimant; and (4) the award for damages is
predicated on any of the cases stated in Article
2219 of the Civil Code.12
Moral damages predicated upon a breach of
contract of carriage may only be recoverable in
instances where the carrier is guilty of fraud or bad
faith or where the mishap resulted in the death of
a passenger.13 Where in breaching the contract of
carriage the airline is not shown to have acted
fraudulently or in bad faith, liability for damages is
limited to the natural and probable consequences
of the breach of the obligation which the parties
had foreseen or could have reasonably foreseen.
In such a case the liability does not include moral
and exemplary damages.14
In this case, we have ruled that the breach of
contract of carriage, which consisted in the
involuntary upgrading of the Vazquezes’ seat
accommodation, was not attended by fraud or bad
faith. The Court of Appeals’ award of moral
damages has, therefore, no leg to stand on.
The deletion of the award for exemplary damages
by the Court of Appeals is correct. It is a requisite
in the grant of exemplary damages that the act of
the offender must be accompanied by bad faith or
done in wanton, fraudulent or malevolent
manner.15 Such requisite is absent in this case.
Moreover, to be entitled thereto the claimant must
Transportation Law
first establish his right to moral, temperate, or
compensatory damages.16 Since the Vazquezes
are not entitled to any of these damages, the award
for exemplary damages has no legal basis. And
where the awards for moral and exemplary
damages are eliminated, so must the award for
attorney’s fees.17
The most that can be adjudged in favor of the
Vazquezes for Cathay’s breach of contract is an
award for nominal damages under Article 2221 of
the Civil Code, which reads as follows:
Article 2221 of the Civil Code provides:
Article 2221. Nominal damages are
adjudicated in order that a right of the
plaintiff, which has been violated or
invaded by the defendant, may be
vindicated or recognized, and not for the
purpose of indemnifying the plaintiff for
any loss suffered by him.
Worth noting is the fact that in Cathay’s
Memorandum filed with this Court, it prayed only
for the deletion of the award for moral damages. It
deferred to the Court of Appeals’ discretion in
awarding nominal damages; thus:
As far as the award of nominal damages
is concerned, petitioner respectfully
defers to the Honorable Court of Appeals’
discretion. Aware as it is that somehow,
due to the resistance of respondents-
spouses to the normally-appreciated
gesture of petitioner to upgrade their
accommodations, petitioner may have
disturbed the respondents-spouses’ wish
to be with their companions (who traveled
to Hong Kong with them) at the Business
Class on their flight to Manila. Petitioner
regrets that in its desire to provide the
respondents-spouses with additional
amenities for the one and one-half (1 1/2)
hour flight to Manila, unintended tension
ensued.18
Full Text Cases 4 (Safety of Passengers)
Nonetheless, considering that the breach was
intended to give more benefit and advantage to the
Vazquezes by upgrading their Business Class
accommodation to First Class because of their
valued status as Marco Polo members, we reduce
the award for nominal damages to P5,000.
Before writing finis to this decision, we find it well-
worth to quote the apt observation of the Court of
Appeals regarding the awards adjudged by the trial
court:
We are not amused but alarmed at the lower
court’s unbelievable alacrity, bordering on the
scandalous, to award excessive amounts as
damages. In their complaint, appellees asked for
P1 million as moral damages but the lower court
awarded P4 million; they asked for P500,000.00 as
exemplary damages but the lower court cavalierly
awarded a whooping P10 million; they asked for
P250,000.00 as attorney’s fees but were awarded
P2 million; they did not ask for nominal damages
but were awarded P200,000.00. It is as if the lower
court went on a rampage, and why it acted that way
is beyond all tests of reason. In fact the
excessiveness of the total award invites the
suspicion that it was the result of "prejudice or
corruption on the part of the trial court."
The presiding judge of the lower court is
enjoined to hearken to the Supreme
Court’s admonition in Singson vs.
CA (282 SCRA 149 [1997]), where it said:
The well-entrenched principle is that the grant
of moral damages depends upon the discretion
of the court based on the circumstances of
each case. This discretion is limited by the
principle that the amount awarded should not
be palpably and scandalously excessive as to
indicate that it was the result of prejudice or
corruption on the part of the trial court….
and in Alitalia Airways vs. CA (187 SCRA 763
[1990], where it was held:
Nonetheless, we agree with the injunction
expressed by the Court of Appeals that
passengers must not prey on international
airlines for damage awards, like "trophies in a
safari." After all neither the social standing nor
prestige of the passenger should determine the
extent to which he would suffer because of a
wrong done, since the dignity affronted in the
individual is a quality inherent in him and not
conferred by these social indicators. 19
We adopt as our own this observation of the Court
of Appeals.
WHEREFORE, the instant petition is hereby partly
GRANTED. The Decision of the Court of Appeals
of 24 July 2001 in CA-G.R. CV No. 63339 is hereby
MODIFIED, and as modified, the awards for moral
damages and attorney’s fees are set aside and
deleted, and the award for nominal damages is
reduced to P5,000.
No pronouncement on costs.
SO ORDERED.
#7
G.R. No. L-10126 October 22, 1957
SALUD VILLANUEVA VDA. DE BATACLAN and
the minors NORMA, LUZVIMINDA, ELENITA,
OSCAR and ALFREDO BATACLAN,
represented by their Natural guardian, SALUD
VILLANUEVA VDA. DE BATACLAN, plaintiffs-
appellants,
vs.
MARIANO MEDINA, defendant-appellant.
MONTEMAYOR, J.:
Shortly after midnight, on September 13, 1952 bus
no. 30 of the Medina Transportation, operated by
its owner defendant Mariano Medina under a
certificate of public convenience, left the town of
Amadeo, Cavite, on its way to Pasay City, driven
by its regular chauffeur, Conrado Saylon. There
were about eighteen passengers, including the
Page 21 of 41
driver and conductor. Among the passengers were
Juan Bataclan, seated beside and to the right of
the driver, Felipe Lara, sated to the right of
Bataclan, another passenger apparently from the
Visayan Islands whom the witnesses just called
Visaya, apparently not knowing his name, seated
in the left side of the driver, and a woman named
Natalia Villanueva, seated just behind the four last
mentioned. At about 2:00 o'clock that same
morning, while the bus was running within the
jurisdiction of Imus, Cavite, one of the front tires
burst and the vehicle began to zig-zag until it fell
into a canal or ditch on the right side of the road
and turned turtle. Some of the passengers
managed to leave the bus the best way they could,
others had to be helped or pulled out, while the
three passengers seated beside the driver, named
Bataclan, Lara and the Visayan and the woman
behind them named Natalia Villanueva, could not
get out of the overturned bus. Some of the
passengers, after they had clambered up to the
road, heard groans and moans from inside the bus,
particularly, shouts for help from Bataclan and
Lara, who said they could not get out of the bus.
There is nothing in the evidence to show whether
or not the passengers already free from the wreck,
including the driver and the conductor, made any
attempt to pull out or extricate and rescue the four
passengers trapped inside the vehicle, but calls or
shouts for help were made to the houses in the
neighborhood. After half an hour, came about ten
men, one of them carrying a lighted torch made of
bamboo with a wick on one end, evidently fueled
with petroleum. These men presumably approach
the overturned bus, and almost immediately, a
fierce fire started, burning and all but consuming
the bus, including the four passengers trapped
inside it. It would appear that as the bus
overturned, gasoline began to leak and escape
from the gasoline tank on the side of the chassis,
spreading over and permeating the body of the bus
and the ground under and around it, and that the
lighted torch brought by one of the men who
answered the call for help set it on fire.
That same day, the charred bodies of the four
deemed passengers inside the bus were removed
and duly identified that of Juan Bataclan. By
reason of his death, his widow, Salud Villanueva,
Transportation Law
in her name and in behalf of her five minor children,
brought the present suit to recover from Mariano
Medina compensatory, moral, and exemplary
damages and attorney's fees in the total amount of
P87,150. After trial, the Court of First Instance of
Cavite awarded P1,000 to the plaintiffs plus P600
as attorney's fee, plus P100, the value of the
merchandise being carried by Bataclan to Pasay
City for sale and which was lost in the fire. The
plaintiffs and the defendants appealed the decision
to the Court of Appeals, but the latter endorsed the
appeal to us because of the value involved in the
claim in the complaint.
Our new Civil Code amply provides for the
responsibility of common carrier to its passengers
and their goods. For purposes of reference, we are
reproducing the pertinent codal provisions:
ART. 1733. Common carriers, from the nature
of their business and for reasons of public
policy, are bound to observe extraordinary
diligence in the vigilance over the goods and
for the safety of the passengers transported by
them, according to all the circumstances of
each case.
Such extraordinary diligence in the vigilance
over the goods is further expressed in articles
1734, 1735, and 1745, Nos. 5, 6, and 7, while
the extra ordinary diligence for the safety of
the passengers is further set forth in articles
1755 and 1756.
ART. 1755. A common carrier is bound to
carry the passengers safely as far as human
care and foresight can provide, using the
utmost diligence of very cautious persons,
with a due regard for all the circumstances.
ART. 1756. In case of death of or injuries to
passengers, common carriers are presumed
to have been at fault or to have acted
negligently, unless they prove that they
observed extraordinary diligence as
prescribed in articles 1733 and 1755
Full Text Cases 4 (Safety of Passengers)
ART. 1759. Common carriers are liable for the
death of or injuries to passengers through the
negligence or willful acts of the former's
employees, although such employees may
have acted beyond the scope of their authority
or in violation of the order of the common
carriers.
This liability of the common carriers does not
cease upon proof that they exercised all the
diligence of a good father of a family in the
selection and supervision of their employees.
ART. 1763. A common carrier responsible for
injuries suffered by a passenger on account of
the willful acts or negligence of other
passengers or of strangers, if the common
carrier's employees through the exercise of
the diligence of a good father of a family could
have prevented or stopped the act or
omission.
We agree with the trial court that the case involves
a breach of contract of transportation for hire, the
Medina Transportation having undertaken to carry
Bataclan safely to his destination, Pasay City. We
also agree with the trial court that there was
negligence on the part of the defendant, through
his agent, the driver Saylon. There is evidence to
show that at the time of the blow out, the bus was
speeding, as testified to by one of the passengers,
and as shown by the fact that according to the
testimony of the witnesses, including that of the
defense, from the point where one of the front tires
burst up to the canal where the bus overturned
after zig-zaging, there was a distance of about 150
meters. The chauffeur, after the blow-out, must
have applied the brakes in order to stop the bus,
but because of the velocity at which the bus must
have been running, its momentum carried it over a
distance of 150 meters before it fell into the canal
and turned turtle.
There is no question that under the circumstances,
the defendant carrier is liable. The only question is
to what degree. The trial court was of the opinion
that the proximate cause of the death of Bataclan
was not the overturning of the bus, but rather, the
fire that burned the bus, including himself and his
co-passengers who were unable to leave it; that at
the time the fire started, Bataclan, though he must
have suffered physical injuries, perhaps serious,
was still alive, and so damages were awarded, not
for his death, but for the physical injuries suffered
by him. We disagree. A satisfactory definition of
proximate cause is found in Volume 38, pages
695-696 of American jurisprudence, cited by
plaintiffs-appellants in their brief. It is as follows:
. . . 'that cause, which, in natural and
continuous sequence, unbroken by any
efficient intervening cause, produces the
injury, and without which the result would
not have occurred.' And more
comprehensively, 'the proximate legal
cause is that acting first and producing
the injury, either immediately or by setting
other events in motion, all constituting a
natural and continuous chain of events,
each having a close causal connection
with its immediate predecessor, the final
event in the chain immediately effecting
the injury as a natural and probable result
of the cause which first acted, under such
circumstances that the person
responsible for the first event should, as
an ordinary prudent and intelligent
person, have reasonable ground to
expect at the moment of his act or default
that an injury to some person might
probably result therefrom.
It may be that ordinarily, when a passenger bus
overturns, and pins down a passenger, merely
causing him physical injuries, if through some
event, unexpected and extraordinary, the
overturned bus is set on fire, say, by lightning, or if
some highwaymen after looting the vehicle sets it
on fire, and the passenger is burned to death, one
might still contend that the proximate cause of his
death was the fire and not the overturning of the
vehicle. But in the present case under the
circumstances obtaining in the same, we do not
hesitate to hold that the proximate cause was the
overturning of the bus, this for the reason that
when the vehicle turned not only on its side but
completely on its back, the leaking of the gasoline
Page 22 of 41
from the tank was not unnatural or unexpected;
that the coming of the men with a lighted torch was
in response to the call for help, made not only by
the passengers, but most probably, by the driver
and the conductor themselves, and that because it
was dark (about 2:30 in the morning), the rescuers
had to carry a light with them, and coming as they
did from a rural area where lanterns and flashlights
were not available; and what was more natural
than that said rescuers should innocently approach
the vehicle to extend the aid and effect the rescue
requested from them. In other words, the coming
of the men with a torch was to be expected and
was a natural sequence of the overturning of the
bus, the trapping of some of its passengers and the
call for outside help. What is more, the burning of
the bus can also in part be attributed to the
negligence of the carrier, through is driver and its
conductor. According to the witness, the driver and
the conductor were on the road walking back and
forth. They, or at least, the driver should and must
have known that in the position in which the
overturned bus was, gasoline could and must have
leaked from the gasoline tank and soaked the area
in and around the bus, this aside from the fact that
gasoline when spilled, specially over a large area,
can be smelt and directed even from a distance,
and yet neither the driver nor the conductor would
appear to have cautioned or taken steps to warn
the rescuers not to bring the lighted torch too near
the bus. Said negligence on the part of the agents
of the carrier come under the codal provisions
above-reproduced, particularly, Articles 1733,
1759 and 1763.
As regard the damages to which plaintiffs are
entitled, considering the earning capacity of the
deceased, as well as the other elements entering
into a damage award, we are satisfied that the
amount of SIX THOUSAND (P6,000) PESOS
would constitute satisfactory compensation, this to
include compensatory, moral, and other damages.
We also believe that plaintiffs are entitled to
attorney's fees, and assessing the legal services
rendered by plaintiffs' attorneys not only in the trial
court, but also in the course of the appeal, and not
losing sight of the able briefs prepared by them, the
attorney's fees may well be fixed at EIGHT
HUNDRED (P800) PESOS for the loss of
Transportation Law
merchandise carried by the deceased in the bus,
is adequate and will not be disturbed.
There is one phase of this case which disturbs if it
does not shock us. According to the evidence, one
of the passengers who, because of the injuries
suffered by her, was hospitalized, and while in the
hospital, she was visited by the defendant Mariano
Medina, and in the course of his visit, she
overheard him speaking to one of his bus
inspectors, telling said inspector to have the tires
of the bus changed immediately because they
were already old, and that as a matter of fact, he
had been telling the driver to change the said tires,
but that the driver did not follow his instructions. If
this be true, it goes to prove that the driver had not
been diligent and had not taken the necessary
precautions to insure the safety of his passengers.
Had he changed the tires, specially those in front,
with new ones, as he had been instructed to do,
probably, despite his speeding, as we have already
stated, the blow out would not have occurred. All in
all, there is reason to believe that the driver
operated and drove his vehicle negligently,
resulting in the death of four of his passengers,
physical injuries to others, and the complete loss
and destruction of their goods, and yet the criminal
case against him, on motion of the fiscal and with
his consent, was provisionally dismissed, because
according to the fiscal, the witnesses on whose
testimony he was banking to support the
complaint, either failed or appear or were reluctant
to testify. But the record of the case before us
shows the several witnesses, passengers, in that
bus, willingly and unhesitatingly testified in court to
the effect of the said driver was negligent. In the
public interest the prosecution of said erring driver
should be pursued, this, not only as a matter of
justice, but for the promotion of the safety of
passengers on public utility buses. Let a copy of
this decision be furnished the Department of
Justice and the Provincial Fiscal of Cavite.
In view of the foregoing, with the modification that
the damages awarded by the trial court are
increased from ONE THOUSAND (P1,000)
PESOS TO SIX THOUSAND (P6,000) PESOS,
and from SIX HUNDRED PESOS TO EIGHT
HUNDRED (P800) PESOS, for the death of
Full Text Cases 4 (Safety of Passengers)
Bataclan and for the attorney's fees, respectively,
the decision appealed is from hereby affirmed, with
costs.
#8
G.R. No. L-20761 July 27, 1966
LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO
BELTRAN, ET AL., respondents.
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.
The facts of the case as found by the Court of
Appeals, briefly are:
On December 20, 1953, at about noontime,
plaintiffs, husband and wife, together with their
minor daughters, namely, Milagros, 13 years
old, Raquel, about 4½ 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
belonging. 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 appellant's rules and
regulations.
Duration of liability
After about an hour's 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 a 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 P16,000 to cover
moral damages and actual damages
sustained as a result thereof and attorney's
Page 23 of 41
 fees. After trial on the merits, the court below
rendered the judgment in question.
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.
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 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 judgement 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 bayongwhich
was not unloaded, the relation of passenger and
Transportation Law
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 carrier's
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.
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.2 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 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 carrier's agent had exercised the
"utmost diligence" of a "very cautions person"
required by Article 1755 of the Civil Code to be
Full Text Cases 4 (Safety of Passengers)
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 are, therefore, to be
considered still as passengers of the carrier,
entitled to the protection under their contract of
carriage.
But even assuming arguendo that the contract of
carriage has already terminated, herein petitioner
can be held liable for the negligence of its driver,
as ruled by the Court of Appeals, pursuant to
Article 2180 of the Civil Code. Paragraph 7 of the
complaint, which reads —
That aside from the aforesaid breach of
contract, 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, necessary to transport
plaintiffs and their daughter safely as far
as human care and foresight can provide
in the operation of their vehicle.
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 peculiarily 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 argued in
appellant's brief. Plaintiffs did not appeal from that
portion of the judgment of the trial court awarding
them on P3,000.00 damages for the death of their
daughter. Neither does it appear that, as appellees
in the Court of Appeals, plaintiffs have pointed out
in their brief the inadequacy of the award, or that
the inclusion of the figure P3,000.00 was merely a
clerical error, in order that the matter may be
treated as an exception to the general rule.5Herein
petitioner's contention, therefore, that the Court of
Appeals committed error in raising the amount of
the award for damages is, evidently,
meritorious.1äwphï1.ñët
Wherefore, the decision of the Court of Appeals is
hereby modified by sentencing, the petitioner to
pay to the respondents Mariano Beltran, et al., the
sum of P3,000.00 for the death of the child, Raquel
Beltran, and the amount of P400.00 as actual
damages. No costs in this instance. So ordered.
#9
G.R. No. L-82619 September 15, 1993
PHILIPPINE AIRLINES, INC., petitioner,
vs.
Page 24 of 41
COURT OF APPEALS and PEDRO
ZAPATOS, respondents.
BELLOSILLO, J.:
This petition for review in certiorari seeks to annul
and set aside the decision of the then Intermediate
Appellant Court,1 now Court of Appeals, dated 28
February 1985, in AC-G.R. CV No. 69327 ("Pedro
Zapatos v. Philippine Airlines, Inc.") affirming the
decision of the then Court of first Instance, now
Regional Trial Court, declaring Philippine Airlines,
Inc., liable in damages for breach of contract.
On 25 November 1976, private respondent filed a
complaint for damages for breach of contract of
carriage2 against Philippine Airlines, Inc. (PAL),
before the then Court of First Instance, now
Regional Trial Court, of Misamis Occidental, at
Ozamiz City. According to him, on 2 August 1976,
he was among the twenty-one (21) passengers of
PAL Flight 477 that took off from Cebu bound for
Ozamiz City. The routing of this flight was Cebu-
Ozamiz-Cotabato. While on flight and just about
fifteen (15) minutes before landing at Ozamiz City,
the pilot received a radio message that the airport
was closed due to heavy rains and inclement
weather and that he should proceed to Cotabato
City instead.
Upon arrival at Cotabato City, the PAL Station
Agent informed the passengers of their options to
return to Cebu on flight 560 of the same day and
thence to Ozamiz City on 4 August 1975, or take
the next flight to Cebu the following day, or remain
at Cotabato and take the next available flight to
Ozamiz City on 5 August 1975.3 The Station Agent
likewise informed them that Flight 560 bound for
Manila would make a stop-over at Cebu to bring
some of the diverted passengers; that there were
only six (6) seats available as there were already
confirmed passengers for Manila; and, that the
basis for priority would be the check-in sequence
at Cebu.
Private respondent chose to return to Cebu but
was not accommodated because he checked-in as
passenger No. 9 on Flight 477. He insisted on
Transportation Law
being given priority over the confirmed passengers
in the accommodation, but the Station Agent
refused private respondent's demand explaining
that the latter's predicament was not due to PAL's
own doing but to be a force majeure.4
Private respondent tried to stop the departure of
Flight 560 as his personal belongings, including a
package containing a camera which a certain Miwa
from Japan asked him to deliver to Mrs. Fe Obid of
Gingoog City, were still on board. His plea fell on
deaf ears. PAL then issued to private respondent
a free ticket to Iligan city, which the latter received
under protest.5 Private respondent was left at the
airport and could not even hitch a ride in the Ford
Fiera loaded with PAL personnel.6 PAL neither
provided private respondent with transportation
from the airport to the city proper nor food and
accommodation for his stay in Cotabato City.
The following day, private respondent purchased a
PAL ticket to Iligan City. He informed PAL
personnel that he would not use the free ticket
because he was filing a case against PAL. 7 In
Iligan City, private respondent hired a car from the
airport to Kolambugan, Lanao del Norte, reaching
Ozamiz City by crossing the bay in a launch. 8 His
personal effects including the camera, which were
valued at P2,000.00 were no longer recovered.
On 13 January 1977, PAL filed its answer denying
that it unjustifiably refused to accommodate private
9
respondent. It alleged that there was simply no
more seat for private respondent on Flight 560
since there were only six (6) seats available and
the priority of accommodation on Flight 560 was
based on the check-in sequence in Cebu; that the
first six (6) priority passengers on Flight 477 chose
to take Flight 560; that its Station Agent explained
in a courteous and polite manner to all passengers
the reason for PAL's inability to transport all of
them back to Cebu; that the stranded passengers
agreed to avail of the options and had their
respective tickets exchanged for their onward trips;
that it was
only the private respondent who insisted on being
given priority in the accommodation; that pieces of
checked-in baggage and had carried items of the
Ozamiz City passengers were removed from the
Full Text Cases 4 (Safety of Passengers)
aircraft; that the reason for their pilot's inability to
land at Ozamis City airport was because the
runway was wet due to rains thus posing a threat
to the safety of both passengers and aircraft; and,
that such reason of force majeure was a valid
justification for the pilot to bypass Ozamiz City and
proceed directly to Cotabato City.
On 4 June 1981, the trial court rendered its
decision 10 the dispositive portion of which states:
WHEREFORE, judgment is hereby rendered
in favor of the plaintiff and against the
defendant Philippine AirLines, Inc. ordering
the latter to pay:
(1) As actual damages, the sum of Two
Hundred Pesos (P200.00) representing
plaintiff's expenses for transportation, food
and accommodation during his stranded stay
at Cotabato City; the sum of Forty-Eight Pesos
(P48.00) representing his flight fare from
Cotabato City to Iligan city; the sum of Five
Hundred Pesos (P500.00) representing
plaintiff's transportation expenses from Iligan
City to Ozamiz City; and the sum of Five
Thousand Pesos (P5,000.00) as loss of
business opportunities during his stranded
stay in Cotabato City;
(2) As moral damages, the sum of Fifty
Thousand Pesos (P50,000.00) for plaintiff's
hurt feelings, serious anxiety, mental anguish
and unkind and discourteous treatment
perpetrated by defendant's employees during
his stay as stranded passenger in Cotabato
City;
(3) As exemplary damages, the sum of Ten
Thousand Pesos (P10,000.00) to set a
precedent to the defendant airline that it shall
provide means to give comfort and
convenience to stranded passengers;
(4) The sum of Three Thousand Pesos
(P3,000.00) as attorney's fees;
(5) To pay the costs of this suit.
PAL appealed to the Court of Appeals which on 28
February 1985, finding no reversible error, affirmed
the judgment of the court a quo. 11
PAL then sought recourse to this Court by way of
a petition for review on certiorari 12 upon the
following issues: (1) Can the Court of Appeals
render a decision finding petitioner (then
defendant-appellant in the court below) negligent
and, consequently, liable for damages on a
question of substance which was neither raised on
a question nor proved at the trial? (2) Can the
Court of Appeals award actual and moral damages
contrary to the evidence and established
jurisprudence? 13
An assiduous examination of the records yields no
valid reason for reversal of the judgment on
appeal; only a modification of its disposition.
In its petition, PAL vigorously maintains that private
respondent's principal cause of action was its
alleged denial of private respondent's demand for
priority over the confirmed passengers on Flight
560. Likewise, PAL points out that the complaint
did not impute to PAL neglect in failing to attend to
the needs of the diverted passengers; and, that the
question of negligence was not and never put in
issue by the pleadings or proved at the trial.
Contrary to the above arguments, private
respondent's amended complaint touched on
PAL's indifference and inattention to his
predicament. The pertinent portion of the amended
complaint 14 reads:
10. That by virtue of the refusal of the
defendant through its agent in Cotabato to
accommodate (sic) and allow the plaintiff to
take and board the plane back to Cebu, and
by accomodating (sic) and allowing
passengers from Cotabato for Cebu in his
stead and place, thus forcing the plaintiff
against his will, to be left and stranded in
Cotabato, exposed to the peril and danger of
muslim rebels plundering at the time, the
Page 25 of 41
 plaintiff, as a consequence, (have) suffered
mental anguish, mental torture, social
humiliation, bismirched reputation and
wounded feeling, all amounting to a
conservative amount of thirty thousand
(P30,000.00) Pesos.
To substantiate this aspect of apathy, private
respondent testified 15
A I did not even notice that I was I think the
last passenger or the last person out of the
PAL employees and army personnel that were
left there. I did not notice that when I was
already outside of the building after our
conversation.
Q What did you do next?
A I banished (sic) because it seems that there
was a war not far from the airport. The sound
of guns and the soldiers were plenty.
Q After that what did you do?
A I tried to look for a transportation that could
bring me down to the City of Cotabato.
Q Were you able to go there?
A I was at about 7:00 o'clock in the evening
more or less and it was a private jeep that I
boarded. I was even questioned why I and
who am (sic) I then. Then I explained my side
that I am (sic) stranded passenger. Then they
brought me downtown at Cotabato.
Q During your conversation with the Manager
were you not offered any vehicle or
transportation to Cotabato airport downtown?
A In fact I told him (Manager) now I am by-
passed passenger here which is not my
destination what can you offer me. Then they
answered, "it is not my fault. Let us forget
that."
Transportation Law
Q In other words when the Manager told you
that offer was there a vehicle ready?
A Not yet. Not long after that the Ford Fiera
loaded with PAL personnel was passing by
going to the City of Cotabato and I stopped it
to take me a ride because there was no more
available transportation but I was not
accommodated.
Significantly, PAL did not seem to mind the
introduction of evidence which focused on its
alleged negligence in caring for its stranded
passengers. Well-settled is the rule in evidence
that the protest or objection against the admission
of evidence should be presented at the time the
evidence is offered, and that the proper time to
make protest or objection to the admissibility of
evidence is when the question is presented to the
witness or at the time the answer thereto is
given. 16 There being no objection, such evidence
becomes property of the case and all the parties
are amenable to any favorable or unfavorable
effects resulting from the evidence. 17
PAL instead attempted to rebut the aforequoted
testimony. In the process, it failed to substantiate
its counter allegation for want of concrete
proof 18 —
Atty. Rubin O. Rivera — PAL's counsel:
Q You said PAL refused to help you when you
were in Cotabato, is that right?
Private respondent:
A Yes.
Q Did you ask them to help you regarding any
offer of transportation or of any other matter
asked of them?
A Yes, he (PAL PERSONNEL) said what is?
It is not our fault.
Full Text Cases 4 (Safety of Passengers)
Q Are you not aware that one fellow
passenger even claimed that he was given
Hotel accommodation because they have no
money?
xxx xxx xxx
A No, sir, that was never offered to me. I said,
I tried to stop them but they were already
riding that PAL pick-up jeep, and I was not
accommodated.
Having joined in the issue over the alleged lack of
care it exhibited towards its passengers, PAL
cannot now turn around and feign surprise at the
outcome of the case. When issues not raised by
the pleadings are tried by express or implied
consent of the parties, they shall be treated in all
respects as if they had been raised in the
pleadings. 19
With regard to the award of damages affirmed by
the appellate court, PAL argues that the same is
unfounded. It asserts that it should not be charged
with the task of looking after the passengers'
comfort and convenience because the diversion of
the flight was due to a fortuitous event, and that if
made liable, an added burden is given to PAL
which is over and beyond its duties under the
contract of carriage. It submits that
granting arguendo that negligence exists, PAL
cannot be liable in damages in the absence of
fraud or bad faith; that private respondent failed to
apprise PAL of the nature of his trip and possible
business losses; and, that private respondent
himself is to be blamed for unreasonably refusing
to use the free ticket which PAL issued.
The contract of air carriage is a peculiar one. Being
imbued with public interest, the law requires
common carriers to carry the passengers safely as
far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with
due regard for all the circumstances. 20 In Air
France v. Carrascoso, 21 we held that —
A contract to transport passengers is quite
different in kind and degree from any other
contractual relation. And this, because of the
relation which an air carrier sustains with the
public. Its business is mainly with the travelling
public. It invites people to avail of the comforts
and advantages it offers. The contract of air
carriage, therefore, generates a relation
attended with a public duty . . . . ( emphasis
supplied).
The position taken by PAL in this case clearly
illustrates its failure to grasp the exacting
standard required by law. Undisputably, PAL's
diversion of its flight due to inclement weather
was a fortuitous event. Nonetheless, such
occurrence did not terminate PAL's contract
with its passengers. Being in the business of
air carriage and the sole one to operate in the
country, PAL is deemed equipped to deal with
situations as in the case at bar. What we said
in one case once again must be stressed, i.e.,
the relation of carrier and passenger
continues until the latter has been landed at
the port of destination and has left the carrier's
premises. 22 Hence, PAL necessarily would
still have to exercise extraordinary diligence in
safeguarding the comfort, convenience and
safety of its stranded passengers until they
have reached their final destination. On this
score, PAL grossly failed considering the then
ongoing battle between government forces
and Muslim rebels in Cotabato City and the
fact that the private respondent was a stranger
to the place. As the appellate court correctly
ruled —
While the failure of plaintiff in the first instance
to reach his destination at Ozamis City in
accordance with the contract of carriage was
due to the closure of the airport on account of
rain and inclement weather which was radioed
to defendant 15 minutes before landing, it has
not been disputed by defendant airline that
Ozamis City has no all-weather airport and
has to cancel its flight to Ozamis City or by-
pass it in the event of inclement weather.
Knowing this fact, it becomes the duty of
defendant to provide all means of comfort and
convenience to its passengers when they
would have to be left in a strange place in case
Page 26 of 41
 of such by-passing. The steps taken by
defendant airline company towards this end
has not been put in evidence, especially for
those 7 others who were not accommodated
in the return trip to Cebu, only 6 of the 21
having been so accommodated. It appears
that plaintiff had to leave on the next flight 2
days later. If the cause of non-fulfillment of the
contract is due to a fortuitous event, it has to
be the sole and only cause (Art. 1755 CC., Art.
1733 C.C.) Since part of the failure to comply
with the obligation of common carrier to deliver
its passengers safely to their destination lay in
the defendant's failure to provide comfort and
convenience to its stranded passengers using
extra-ordinary diligence, the cause of non-
fulfillment is not solely and exclusively due to
fortuitous event, but due to something which
defendant airline could have prevented,
defendant becomes liable to plaintiff. 23
While we find PAL remiss in its duty of extending
utmost care to private respondent while being
stranded in Cotabato City, there is no sufficient
basis to conclude that PAL failed to inform him
about his non-accommodation on Flight 560, or
that it was inattentive to his queries relative thereto.
On 3 August 1975, the Station Agent reported to
his Branch Manager in Cotabato City that —
3. Of the fifteen stranded passengers two pax
elected to take F478 on August 05, three pax
opted to take F442 August 03. The remaining
ten (10) including subject requested that they
be instead accommodated (sic) on F446
CBO-IGN the following day where they
intended to take the surface transportation to
OZC. Mr. Pedro Zapatos had by then been
very vocal and boiceterous (sic) at the counter
and we tactfully managed to steer him inside
the Station Agent's office. Mr. Pedro Zapatos
then adamantly insisted that all the diverted
passengers should have been given priority
over the originating passengers of F560
whether confirmed or otherwise. We
explained our policies and after awhile he
seemed pacified and thereafter took his ticket
(in-lieued (sic) to CBO-IGN, COCON basis), at
Transportation Law
the counter in the presence of five other
passengers who were waiting for their tickets
too. The rest of the diverted pax had left earlier
after being assured their tickets will be ready
the following day. 24
Aforesaid Report being an entry in the course of
business is prima facie evidence of the facts
therein stated. Private respondent, apart from his
testimony, did not offer any controverting
evidence. If indeed PAL omitted to give information
about the options available to its diverted
passengers, it would have been deluged with
complaints. But, only private respondent
complained —
Atty. Rivera (for PAL)
Q I understand from you Mr. Zapatos that at
the time you were waiting at Cotabato Airport
for the decision of PAL, you were not informed
of the decision until after the airplane left is
that correct?
A Yes.
COURT:
Q What do you mean by "yes"? You meant
you were not informed?
A Yes, I was not informed of their decision,
that they will only accommodate few
passengers.
Q Aside from you there were many other
stranded passengers?
A I believed, yes.
Q And you want us to believe that PAL did not
explain (to) any of these passengers about the
decision regarding those who will board the
aircraft back to Cebu?
A No, Sir.
Full Text Cases 4 (Safety of Passengers)
Q Despite these facts Mr. Zapatos did any of
the other passengers complained (sic)
regarding that incident?
xxx xxx xxx
A There were plenty of argument and I was
one of those talking about my case.
Q Did you hear anybody complained (sic) that
he has not been informed of the decision
before the plane left for Cebu?
A No. 25
Admittedly, private respondent's insistence on
being given priority in accommodation was
unreasonable considering the fortuitous event and
that there was a sequence to be observed in the
booking, i.e., in the order the passengers checked-
in at their port of origin. His intransigence in fact
was the main cause for his having to stay at the
airport longer than was necessary.
Atty. Rivera:
Q And, you were saying that despite the fact
that according to your testimony there were at
least 16 passengers who were stranded there
in Cotabato airport according to your
testimony, and later you said that there were
no other people left there at that time, is that
correct?
A Yes, I did not see anyone there around. I
think I was the only civilian who was left there.
Q Why is it that it took you long time to leave
that place?
A Because I was arguing with the PAL
personnel. 26
Anent the plaint that PAL employees were
disrespectful and inattentive toward private
respondent, the records are bereft of evidence to
support the same. Thus, the ruling of respondent
Court of Appeals in this regard is without
basis. 27 On the contrary, private respondent was
attended to not only by the personnel of PAL but
also by its Manager." 28
In the light of these findings, we find the award of
moral damages of Fifty Thousand Pesos
(P50,000.00) unreasonably excessive; hence, we
reduce the same to Ten Thousand Pesos
(P10,000.00). Conformably herewith, the award of
exemplary damages is also reduced to five
Thousand Pesos (5,000.00). Moral damages are
not intended to enrich the private respondent. They
are awarded only to enable the injured party to
obtain means, diversion or amusements that will
serve to alleviate the moral suffering he has
undergone by reason of the defendant's culpable
action. 29
With regard to the award of actual damages in the
amount of P5,000.00 representing private
respondent's alleged business losses occasioned
by his stay at Cotabato City, we find the same
unwarranted. Private respondent's testimony that
he had a scheduled business "transaction of shark
liver oil supposedly to have been consummated on
August 3, 1975 in the morning" and that "since
(private respondent) was out for nearly two weeks
I missed to buy about 10 barrels of shark liver
oil,"30 are purely speculative. Actual or
compensatory damages cannot be presumed but
must be duly proved with reasonable degree of
certainty. A court cannot rely on speculation,
conjecture or guesswork as to the fact and amount
of damages, but must depend upon competent
proof that they have suffered and on evidence of
the actual amount thereof. 31
WHEREFORE the decision appealed from is
AFFIRMED with modification however that the
award of moral damages of Fifty Thousand Pesos
(P50,000.00) is reduced to Ten Thousand Pesos
(P10,000.00) while the exemplary damages of Ten
Thousand Pesos (P10,000.00) is also reduced to
Five Thousand Pesos (P5,000.00). The award of
actual damages in the amount Five Thousand
Pesos (P5,000.00) representing business losses
Page 27 of 41
occasioned by private respondent's being stranded vulcanized at a nearby shop, about 700
in Cotabato City is deleted. meters away.3 Pedrano left his helper, Jose
Mitante, Jr. to keep watch over the stalled
SO ORDERED. vehicle, and instructed the latter to place a
spare tire six fathoms away4 behind the stalled
truck to serve as a warning for oncoming
#10 vehicles. The truck’s tail lights were also left
on. It was about 12:00 a.m., March 16, 1987.
G.R. No. 138060 September 1, 2004
At about 4:45 a.m., D’ Rough Riders passenger
WILLIAM TIU, doing business under the name bus with plate number PBP-724 driven by Virgilio
and style of "D’ Rough Riders," and VIRGILIO Te Laspiñas was cruising along the national
highway of Sitio Aggies, Poblacion, Compostela,
TE LAS PIÑASpetitioners,
Cebu. The passenger bus was also bound for
vs.
Cebu City, and had come from Maya,
PEDRO A. ARRIESGADO, BENJAMIN
CONDOR, SERGIO PEDRANO and PHILIPPINE Daanbantayan, Cebu. Among its passengers were
PHOENIX SURETY AND INSURANCE, the Spouses Pedro A. Arriesgado and Felisa
INC., respondents. Pepito Arriesgado, who were seated at the right
side of the bus, about three (3) or four (4) places
from the front seat.
DECISION
As the bus was approaching the bridge, Laspiñas
CALLEJO, SR., J.:
saw the stalled truck, which was then about 25
meters away.5 He applied the breaks and tried to
This is a petition for review on certiorari under Rule swerve to the left to avoid hitting the truck. But it
45 of the Rules of Court from the Decision1 of the was too late; the bus rammed into the truck’s left
Court of Appeals in CA-G.R. CV No. 54354 rear. The impact damaged the right side of the bus
affirming with modification the Decision2 of the and left several passengers injured. Pedro
Regional Trial Court, 7th Judicial Region, Cebu Arriesgado lost consciousness and suffered a
City, Branch 20, in Civil Case No. CEB-5963 for fracture in his right colles.6 His wife, Felisa, was
breach of contract of carriage, damages and brought to the Danao City Hospital. She was later
attorney’s fees, and the Resolution dated February transferred to the Southern Island Medical Center
26, 1999 denying the motion for reconsideration where she died shortly thereafter.7
thereof.
Respondent Pedro A. Arriesgado then filed a
The following facts are undisputed: complaint for breach of contract of carriage,
damages and attorney’s fees before the Regional
At about 10:00 p.m. of March 15, 1987, the Trial Court of Cebu City, Branch 20, against the
cargo truck marked "Condor Hollow Blocks petitioners, D’ Rough Riders bus operator William
and General Merchandise" bearing plate Tiu and his driver, Virgilio Te Laspiñas on May 27,
number GBP-675 was loaded with firewood in 1987. The respondent alleged that the passenger
Bogo, Cebu and left for Cebu City. Upon bus in question was cruising at a fast and high
reaching Sitio Aggies, Poblacion, speed along the national road, and that petitioner
Compostela, Cebu, just as the truck passed Laspiñas did not take precautionary measures to
over a bridge, one of its rear tires exploded. avoid the accident.8 Thus:
The driver, Sergio Pedrano, then parked along
the right side of the national highway and 6. That the accident resulted to the death of
removed the damaged tire to have it the plaintiff’s wife, Felisa Pepito Arriesgado,
Transportation Law Full Text Cases 4 (Safety of Passengers)
as evidenced by a Certificate of Death, a xerox
copy of which is hereto attached as integral
part hereof and marked as ANNEX – "A", and
physical injuries to several of its passengers,
including plaintiff himself who suffered a
"COLLES FRACTURE RIGHT," per Medical
Certificate, a xerox copy of which is hereto
attached as integral part hereof and marked
as ANNEX – "B" hereof.
7. That due to the reckless and imprudent
driving by defendant Virgilio Te Laspiñas of
the said Rough Riders passenger bus, plaintiff
and his wife, Felisa Pepito Arriesgado, failed
to safely reach their destination which was
Cebu City, the proximate cause of which was
defendant-driver’s failure to observe utmost
diligence required of a very cautious person
under all circumstances.
8. That defendant William Tiu, being the owner
and operator of the said Rough Riders
passenger bus which figured in the said
accident, wherein plaintiff and his wife were
riding at the time of the accident, is therefore
directly liable for the breach of contract of
carriage for his failure to transport plaintiff and
his wife safely to their place of destination
which was Cebu City, and which failure in his
obligation to transport safely his passengers
was due to and in consequence of his failure
to exercise the diligence of a good father of the
family in the selection and supervision of his
employees, particularly defendant-driver
Virgilio Te Laspiñas.9
The respondent prayed that judgment be rendered
in his favor and that the petitioners be condemned
to pay the following damages:
1). To pay to plaintiff, jointly and severally, the
amount of ₱30,000.00 for the death and
untimely demise of plaintiff’s wife, Felisa
Pepito Arriesgado;
2). To pay to plaintiff, jointly and severally, the
amount of ₱38,441.50, representing actual
expenses incurred by the plaintiff in
connection with the death/burial of plaintiff’s
wife;
3). To pay to plaintiff, jointly and severally, the
amount of ₱1,113.80, representing
medical/hospitalization expenses incurred by
plaintiff for the injuries sustained by him;
4). To pay to plaintiff, jointly and severally, the
amount of ₱50,000.00 for moral damages;
5). To pay to plaintiff, jointly and severally, the
amount of ₱50,000.00 by way of exemplary
damages;
6). To pay to plaintiff, jointly and severally, the
amount of ₱20,000.00 for attorney’s fees;
7). To pay to plaintiff, jointly and severally, the
amount of ₱5,000.00 for litigation expenses.
PLAINTIFF FURTHER PRAYS FOR SUCH
OTHER RELIEFS AND REMEDIES IN LAW
AND EQUITY.10
The petitioners, for their part, filed a Third-Party
Complaint11 on August 21, 1987 against the
following: respondent Philippine Phoenix Surety
and Insurance, Inc. (PPSII), petitioner Tiu’s
insurer; respondent Benjamin Condor, the
registered owner of the cargo truck; and
respondent Sergio Pedrano, the driver of the truck.
They alleged that petitioner Laspiñas was
negotiating the uphill climb along the national
highway of Sitio Aggies, Poblacion, Compostela, in
a moderate and normal speed. It was further
alleged that the truck was parked in a slanted
manner, its rear portion almost in the middle of the
highway, and that no early warning device was
displayed. Petitioner Laspiñas promptly applied
the brakes and swerved to the left to avoid hitting
the truck head-on, but despite his efforts to avoid
damage to property and physical injuries on the
passengers, the right side portion of the bus hit the
cargo truck’s left rear. The petitioners further
alleged, thus:
Page 28 of 41
 5. That the cargo truck mentioned in the
aforequoted paragraph is owned and
registered in the name of the third-party
defendant Benjamin Condor and was left
unattended by its driver Sergio Pedrano, one
of the third-party defendants, at the time of the
incident;
6. That third-party defendant Sergio Pedrano,
as driver of the cargo truck with marked (sic)
"Condor Hollow Blocks & General
Merchandise," with Plate No. GBP-675 which
was recklessly and imprudently parked along
the national highway of Compostela, Cebu
during the vehicular accident in question, and
third-party defendant Benjamin Condor, as the
registered owner of the cargo truck who failed
to exercise due diligence in the selection and
supervision of third-party defendant Sergio
Pedrano, are jointly and severally liable to the
third-party plaintiffs for whatever liability that
may be adjudged against said third-party
plaintiffs or are directly liable of (sic) the
alleged death of plaintiff’s wife;
7. That in addition to all that are stated above
and in the answer which are intended to show
reckless imprudence on the part of the third-
party defendants, the third-party plaintiffs
hereby declare that during the vehicular
accident in question, third-party defendant
was clearly violating Section 34, par. (g) of the
Land Transportation and Traffic Code…
… he based the selection of his driver Laspiñas on
10. That the aforesaid passenger bus, owned
and operated by third-party plaintiff William
Tiu, is covered by a common carrier liability
insurance with Certificate of Cover No.
054940 issued by Philippine Phoenix Surety
and Insurance, Inc., Cebu City Branch, in
favor of third-party plaintiff William Tiu which
covers the period from July 22, 1986 to July
22, 1987 and that the said insurance coverage
was valid, binding and subsisting during the
time of the aforementioned incident (Annex
"A" as part hereof);
Transportation Law
11. That after the aforesaid alleged incident,
third-party plaintiff notified third-party
defendant Philippine Phoenix Surety and
Insurance, Inc., of the alleged incident hereto
mentioned, but to no avail;
12. That granting, et arguendo et arguendi, if
herein third-party plaintiffs will be adversely
adjudged, they stand to pay damages sought
by the plaintiff and therefore could also look up
to the Philippine Phoenix Surety and
Insurance, Inc., for contribution,
indemnification and/or reimbursement of any
liability or obligation that they might [be]
adjudged per insurance coverage duly
entered into by and between third-party
plaintiff William Tiu and third-party defendant
Philippine Phoenix Surety and Insurance,
Inc.;…12
The respondent PPSII, for its part, admitted
that it had an existing contract with petitioner
Tiu, but averred that it had already attended to
and settled the claims of those who were
injured during the incident.13 It could not
accede to the claim of respondent Arriesgado,
as such claim was way beyond the scheduled
indemnity as contained in the contract of
insurance.14
After the parties presented their respective
evidence, the trial court ruled in favor of
respondent Arriesgado. The dispositive
portion of the decision reads:
WHEREFORE, in view of the foregoing,
judgment is hereby rendered in favor of
plaintiff as against defendant William Tiu
ordering the latter to pay the plaintiff the
following amounts:
1 - The sum of FIFTY THOUSAND PESOS
(₱50,000.00) as moral damages;
2 - The sum of FIFTY THOUSAND PESOS
(₱50,000.00) as exemplary damages;
Full Text Cases 4 (Safety of Passengers)
3 - The sum of THIRTY-EIGHT THOUSAND I WHETHER THIRD PARTY DEFENDANT
FOUR HUNDRED FORTY-ONE PESOS SERGIO PEDRANO WAS RECKLESS AND
(₱38,441.00) as actual damages; IMPRUDENT WHEN HE PARKED THE
CARGO TRUCK IN AN OBLIQUE MANNER;
4 - The sum of TWENTY THOUSAND PESOS
(₱20,000.00) as attorney’s fees; II WHETHER THE THIRD PARTY
DEFENDANTS ARE JOINTLY AND
5 - The sum of FIVE THOUSAND PESOS SEVERALLY LIABLE DIRECTLY TO
(₱5,000.00) as costs of suit; PLAINTIFF-APPELLEE OR TO
DEFENDANTS-APPELLANTS FOR
WHATEVER LIABILITY THAT MAY BE
SO ORDERED.15 ADJUDGED TO THE SAID DEFENDANTS-
APPELLANTS;
According to the trial court, there was no dispute
that petitioner William Tiu was engaged in III WHETHER DEFENDANT-APPELLANT
business as a common carrier, in view of his VIRGILIO TE LASPIÑAS WAS GUILTY OF
admission that D’ Rough Rider passenger bus GROSS NEGLIGENCE;
which figured in the accident was owned by him;
that he had been engaged in the transportation
business for 25 years with a sole proprietorship; IV WHETHER DEFENDANT-APPELLANT
and that he owned 34 buses. The trial court ruled WILLIAM TIU HAD EXERCISED THE DUE
DILIGENCE OF A GOOD FATHER OF A
that if petitioner Laspiñas had not been driving at a
fast pace, he could have easily swerved to the left FAMILY IN THE SELECTION AND
SUPERVISION OF HIS DRIVERS;
to avoid hitting the truck, thus, averting the
unfortunate incident. It then concluded that
petitioner Laspiñas was negligent. V GRANTING FOR THE SAKE OF
ARGUMENT THAT DEFENDANT-
The trial court also ruled that the absence of an APPELLANT WILLIAM TIU IS LIABLE TO
early warning device near the place where the PLAINTIFF-APPELLEE, WHETHER THERE
truck was parked was not sufficient to impute IS LEGAL AND FACTUAL BASIS IN
negligence on the part of respondent Pedrano, AWARDING EXCESSIVE MORAL
DAMAGES, EX[E]MPLARY DAMAGES,
since the tail lights of the truck were fully on, and
the vicinity was well lighted by street lamps. 16 It ATTORNEY’S FEES AND LITIGATION
EXPENSES TO PLAINTIFF-APPELLEE;
also found that the testimony of petitioner Tiu, that
efficiency and in-service training, and that the latter VI WHETHER THIRD PARTY DEFENDANT
had been so far an efficient and good driver for the PHILIPPINE PHOENIX SURETY AND
past six years of his employment, was insufficient INSURANCE, INC. IS LIABLE TO
to prove that he observed the diligence of a good DEFENDANT- APPELLANT WILLIAM TIU.17
father of a family in the selection and supervision
of his employees.
The appellate court rendered judgment affirming
the trial court’s decision with the modification that
After the petitioner’s motion for reconsideration of the awards for moral and exemplary damages
the said decision was denied, the petitioners were reduced to ₱25,000. The dispositive portion
elevated the case to the Court of Appeals on the reads:
following issues:
WHEREFORE, the appealed Decision
dated November 6, 1995 is hereby
Page 29 of 41
 MODIFIED such that the awards for
moral and exemplary damages are each
reduced to ₱25,000.00 or a total of
₱50,000.00 for both. The judgment is
AFFIRMED in all other respects.
SO ORDERED.18
According to the appellate court, the action of
respondent Arriesgado was based not on quasi-
delict but on breach of contract of carriage. As a
common carrier, it was incumbent upon petitioner
Tiu to prove that extraordinary diligence was
observed in ensuring the safety of passengers
during transportation. Since the latter failed to do
so, he should be held liable for respondent
Arriesgado’s claim. The CA also ruled that no
evidence was presented against the respondent
PPSII, and as such, it could not be held liable for
respondent Arriesgado’s claim, nor for
contribution, indemnification and/or
reimbursement in case the petitioners were
adjudged liable.
The petitioners now come to this Court and ascribe
the following errors committed by the appellate
court:
I. THE HONORABLE COURT OF
APPEALS ERRED IN NOT DECLARING
RESPONDENTS BENJAMIN CONDOR
AND SERGIO PEDRANO GUILTY OF
NEGLIGENCE AND HENCE, LIABLE TO
RESPONDENT PEDRO A.
ARRIESGADO OR TO PETITIONERS
FOR WHATEVER LIABILITY THAT MAY
BE ADJUDGED AGAINST THEM.
II. THE HONORABLE COURT OF
APPEALS ERRED IN FINDING
PETITIONERS GUILTY OF
NEGLIGENCE AND HENCE, LIABLE TO
RESPONDENT PEDRO A.
ARRIESGADO.
III. THE HONORABLE COURT OF
APPEALS ERRED IN FINDING
PETITIONER WILLIAM TIU LIABLE FOR
Transportation Law
EXEMPLARY DAMAGES, ATTORNEY’S
FEES AND LITIGATION EXPENSES.
IV. THE HONORABLE COURT OF
APPEALS ERRED IN NOT FINDING
RESPONDENT PHILIPPINE PHOENIX
SURETY AND INSURANCE, INC.
LIABLE TO RESPONDENT PEDRO A.
ARRIESGADO OR TO PETITIONER
WILLIAM TIU.19
According to the petitioners, the appellate court
erred in failing to appreciate the absence of an
early warning device and/or built-in reflectors at the
front and back of the cargo truck, in clear violation
of Section 34, par. (g) of the Land Transportation
and Traffic Code. They aver that such violation is
only a proof of respondent Pedrano’s negligence,
as provided under Article 2185 of the New Civil
Code. They also question the appellate court’s
failure to take into account that the truck was
parked in an oblique manner, its rear portion
almost at the center of the road. As such, the
proximate cause of the incident was the gross
recklessness and imprudence of respondent
Pedrano, creating the presumption of negligence
on the part of respondent Condor in supervising his
employees, which presumption was not rebutted.
The petitioners then contend that respondents
Condor and Pedrano should be held jointly and
severally liable to respondent Arriesgado for the
payment of the latter’s claim.
The petitioners, likewise, aver that expert evidence
should have been presented to prove that
petitioner Laspiñas was driving at a very fast
speed, and that the CA could not reach such
conclusion by merely considering the damages on
the cargo truck. It was also pointed out that
petitioner Tiu presented evidence that he had
exercised the diligence of a good father of a family
in the selection and supervision of his drivers.
The petitioners further allege that there is no legal
and factual basis to require petitioner Tiu to pay
exemplary damages as no evidence was
presented to show that the latter acted in a
fraudulent, reckless and oppressive manner, or
Full Text Cases 4 (Safety of Passengers)
that he had an active participation in the negligent
act of petitioner Laspiñas.
Finally, the petitioners contend that respondent
PPSII admitted in its answer that while it had
attended to and settled the claims of the other
injured passengers, respondent Arriesgado’s claim
remained unsettled as it was beyond the
scheduled indemnity under the insurance contract.
The petitioners argue that said respondent PPSII
should have settled the said claim in accordance
with the scheduled indemnity instead of just
denying the same.
On the other hand, respondent Arriesgado argues
that two of the issues raised by the petitioners
involved questions of fact, not reviewable by the
Supreme Court: the finding of negligence on the
part of the petitioners and their liability to him; and
the award of exemplary damages, attorney’s fees
and litigation expenses in his favor. Invoking the
principle of equity and justice, respondent
Arriesgado pointed out that if there was an error to
be reviewed in the CA decision, it should be geared
towards the restoration of the moral and exemplary
damages to ₱50,000 each, or a total of ₱100,000
which was reduced by the Court of Appeals to
₱25,000 each, or a total of only ₱50,000.
Respondent Arriesgado also alleged that
respondents Condor and Pedrano, and
respondent Phoenix Surety, are parties with whom
he had no contract of carriage, and had no cause
of action against. It was pointed out that only the
petitioners needed to be sued, as driver and
operator of the ill-fated bus, on account of their
failure to bring the Arriesgado Spouses to their
place of destination as agreed upon in the contract
of carriage, using the utmost diligence of very
cautious persons with due regard for all
circumstances.
Respondents Condor and Pedrano point out that,
as correctly ruled by the Court of Appeals, the
proximate cause of the unfortunate incident was
the fast speed at which petitioner Laspiñas was
driving the bus owned by petitioner Tiu. According
to the respondents, the allegation that the truck
was not equipped with an early warning device
could not in any way have prevented the incident
from happening. It was also pointed out that
respondent Condor had always exercised the due
diligence required in the selection and supervision
of his employees, and that he was not a party to
the contract of carriage between the petitioners
and respondent Arriesgado.
Respondent PPSII, for its part, alleges that
contrary to the allegation of petitioner Tiu, it settled
all the claims of those injured in accordance with
the insurance contract. It further avers that it did
not deny respondent Arriesgado’s claim, and
emphasizes that its liability should be within the
scheduled limits of indemnity under the said
contract. The respondent concludes that while it is
true that insurance contracts are contracts of
indemnity, the measure of the insurer’s liability is
determined by the insured’s compliance with the
terms thereof.
The Court’s Ruling
At the outset, it must be stressed that this Court is
not a trier of facts.20 Factual findings of the Court
of Appeals are final and may not be reviewed on
appeal by this Court, except when the lower court
and the CA arrived at diverse factual
findings.21 The petitioners in this case assail the
finding of both the trial and the appellate courts that
petitioner Laspiñas was driving at a very fast speed
before the bus owned by petitioner Tiu collided with
respondent Condor’s stalled truck. This is clearly
one of fact, not reviewable by the Court in a petition
for review under Rule 45.22
On this ground alone, the petition is destined to fail.
However, considering that novel questions of law
are likewise involved, the Court resolves to
examine and rule on the merits of the case.
Petitioner Laspiñas
Was negligent in driving
The Ill-fated bus
Page 30 of 41
In his testimony before the trial court, petitioner
Laspiñas claimed that he was traversing the two-
lane road at Compostela, Cebu at a speed of only
forty (40) to fifty (50) kilometers per hour before the
incident occurred.23 He also admitted that he saw
the truck which was parked in an "oblique position"
at about 25 meters before impact,24and tried to
avoid hitting it by swerving to the left. However,
even in the absence of expert evidence, the
damage sustained by the truck25 itself supports the
finding of both the trial court and the appellate
court, that the D’ Rough Rider bus driven by
petitioner Laspiñas was traveling at a fast pace.
Since he saw the stalled truck at a distance of 25
meters, petitioner Laspiñas had more than enough
time to swerve to his left to avoid hitting it; that is,
if the speed of the bus was only 40 to 50 kilometers
per hour as he claimed. As found by the Court of
Appeals, it is easier to believe that petitioner
Laspiñas was driving at a very fast speed, since at
4:45 a.m., the hour of the accident, there were no
oncoming vehicles at the opposite direction.
Petitioner Laspiñas could have swerved to the left
lane with proper clearance, and, thus, could have
avoided the truck.26 Instinct, at the very least,
would have prompted him to apply the breaks to
avert the impending disaster which he must have
foreseen when he caught sight of the stalled truck.
As we had occasion to reiterate:
A man must use common sense, and exercise
due reflection in all his acts; it is his duty to be
cautious, careful and prudent, if not from
instinct, then through fear of recurring
punishment. He is responsible for such results
as anyone might foresee and for acts which no
one would have performed except through
culpable abandon. Otherwise, his own person,
rights and property, and those of his fellow
beings, would ever be exposed to all manner
of danger and injury.27
We agree with the following findings of the trial
court, which were affirmed by the CA on appeal:
A close study and evaluation of the
testimonies and the documentary proofs
submitted by the parties which have direct
bearing on the issue of negligence, this Court
Transportation Law
as shown by preponderance of evidence that
defendant Virgilio Te Laspiñas failed to
observe extraordinary diligence as a driver of
the common carrier in this case. It is quite hard
to accept his version of the incident that he did
not see at a reasonable distance ahead the
cargo truck that was parked when the Rough
Rider [Bus] just came out of the bridge which
is on an (sic) [more] elevated position than the
place where the cargo truck was parked. With
its headlights fully on, defendant driver of the
Rough Rider was in a vantage position to see
the cargo truck ahead which was parked and
he could just easily have avoided hitting and
bumping the same by maneuvering to the left
without hitting the said cargo truck. Besides, it
is (sic) shown that there was still much room
or space for the Rough Rider to pass at the left
lane of the said national highway even if the
cargo truck had occupied the entire right lane
thereof. It is not true that if the Rough Rider
would proceed to pass through the left lane it
would fall into a canal considering that there
was much space for it to pass without hitting
and bumping the cargo truck at the left lane of
said national highway. The records, further,
showed that there was no incoming vehicle at
the opposite lane of the national highway
which would have prevented the Rough Rider
from not swerving to its left in order to avoid
hitting and bumping the parked cargo truck.
But the evidence showed that the Rough Rider
instead of swerving to the still spacious left
lane of the national highway plowed directly
into the parked cargo truck hitting the latter at
its rear portion; and thus, the (sic) causing
damages not only to herein plaintiff but to the
cargo truck as well.28
Indeed, petitioner Laspiñas’ negligence in driving
the bus is apparent in the records. By his own
admission, he had just passed a bridge and was
traversing the highway of Compostela, Cebu at a
speed of 40 to 50 kilometers per hour before the
collision occurred. The maximum speed allowed
by law on a bridge is only 30 kilometers per
hour.29And, as correctly pointed out by the trial
court, petitioner Laspiñas also violated Section 35
Full Text Cases 4 (Safety of Passengers)
of the Land Transportation and Traffic Code,
Republic Act No. 4136, as amended:1avvphil.net
Sec. 35. Restriction as to speed. – (a)
Any person driving a motor vehicle on a
highway shall drive the same at a careful
and prudent speed, not greater nor less
than is reasonable and proper, having
due regard for the traffic, the width of the
highway, and or any other condition then
and there existing; and no person shall
drive any motor vehicle upon a highway
at such speed as to endanger the life,
limb and property of any person, nor at a
speed greater than will permit him to bring
the vehicle to a stop within the assured
clear distance ahead.30
Under Article 2185 of the Civil Code, a person
driving a vehicle is presumed negligent if at the
time of the mishap, he was violating any traffic
regulation.31
Petitioner Tiu failed to
Overcome the presumption
Of negligence against him as
One engaged in the business
Of common carriage
The rules which common carriers should observe
as to the safety of their passengers are set forth in
the Civil Code, Articles 1733,32 175533 and
1756.34 In this case, respondent Arriesgado and
his deceased wife contracted with petitioner Tiu, as
owner and operator of D’ Rough Riders bus
service, for transportation from Maya,
Daanbantayan, Cebu, to Cebu City for the price of
₱18.00.35 It is undisputed that the respondent and
his wife were not safely transported to the
destination agreed upon. In actions for breach of
contract, only the existence of such contract, and
the fact that the obligor, in this case the common
carrier, failed to transport his passenger safely to
his destination are the matters that need to be
proved.36 This is because under the said contract
of carriage, the petitioners assumed the express
obligation to transport the respondent and his wife
to their destination safely and to observe
extraordinary diligence with due regard for all
circumstances.37 Any injury suffered by the
passengers in the course thereof is immediately
attributable to the negligence of the carrier.38 Upon
the happening of the accident, the presumption of
negligence at once arises, and it becomes the duty
of a common carrier to prove that he observed
extraordinary diligence in the care of his
passengers.39 It must be stressed that in requiring
the highest possible degree of diligence from
common carriers and in creating a presumption of
negligence against them, the law compels them to
curb the recklessness of their drivers.40
While evidence may be submitted to overcome
such presumption of negligence, it must be shown
that the carrier observed the required extraordinary
diligence, which means that the carrier must show
the utmost diligence of very cautious persons as
far as human care and foresight can provide, or
that the accident was caused by fortuitous
event.41 As correctly found by the trial court,
petitioner Tiu failed to conclusively rebut such
presumption. The negligence of petitioner
Laspiñas as driver of the passenger bus is, thus,
binding against petitioner Tiu, as the owner of the
passenger bus engaged as a common carrier.42
The Doctrine of
Last Clear Chance
Is Inapplicable in the
Case at Bar
Contrary to the petitioner’s contention, the principle
of last clear chance is inapplicable in the instant
case, as it only applies in a suit between the
owners and drivers of two colliding vehicles. It does
not arise where a passenger demands
responsibility from the carrier to enforce its
contractual obligations, for it would be inequitable
to exempt the negligent driver and its owner on the
ground that the other driver was likewise guilty of
negligence.43 The common law notion of last clear
chance permitted courts to grant recovery to a
plaintiff who has also been negligent provided that
the defendant had the last clear chance to avoid
the casualty and failed to do so. Accordingly, it is
difficult to see what role, if any, the common law of
last clear chance doctrine has to play in a
Page 31 of 41
jurisdiction where the common law concept of
contributory negligence as an absolute bar to
recovery by the plaintiff, has itself been rejected,
as it has been in Article 2179 of the Civil Code.44
Thus, petitioner Tiu cannot escape liability for the
death of respondent Arriesgado’s wife due to the
negligence of petitioner Laspiñas, his employee,
on this score.
Respondents Pedrano and
Condor were likewise
Negligent
In Phoenix Construction, Inc. v. Intermediate
Appellate Court,45 where therein respondent
Dionisio sustained injuries when his vehicle
rammed against a dump truck parked askew, the
Court ruled that the improper parking of a dump
truck without any warning lights or reflector devices
created an unreasonable risk for anyone driving
within the vicinity, and for having created such risk,
the truck driver must be held responsible. In ruling
against the petitioner therein, the Court elucidated,
thus:
… In our view, Dionisio’s negligence,
although later in point of time than the
truck driver’s negligence, and therefore
closer to the accident, was not an efficient
intervening or independent cause. What
the petitioners describe as an
"intervening cause" was no more than a
foreseeable consequence of the risk
created by the negligent manner in which
the truck driver had parked the dump
truck. In other words, the petitioner truck
driver owed a duty to private respondent
Dionisio and others similarly situated not
to impose upon them the very risk the
truck driver had created. Dionisio’s
negligence was not that of an
independent and overpowering nature as
to cut, as it were, the chain of causation
in fact between the improper parking of
the dump truck and the accident, nor to
sever the juris vinculum of liability. …
Transportation Law
… whenever such vehicle is parked on 1987, as well as the following items, were also
highways or in places that are not well- indicated therein:
We hold that private respondent lighted or is placed in such manner as to
Dionisio’s negligence was "only endanger passing traffic.
contributory," that the "immediate and SCHEDULED VEHICLE
proximate cause" of the injury remained The manner in which the truck was parked clearly
the truck driver’s "lack of due care."…46 endangered oncoming traffic on both sides, MO MAKE TYPE COLOR BLT
considering that the tire blowout which stalled the DEL Isuzu OF blue FILE
truck in the first place occurred in the wee hours of Forward BODY mixed NO.
In this case, both the trial and the appellate courts Bus
failed to consider that respondent Pedrano was the morning. The Court can only now surmise that
also negligent in leaving the truck parked askew the unfortunate incident could have been averted
had respondent Condor, the owner of the truck, PLA SERIAL/C MOT AUTHO UNLA
without any warning lights or reflector devices to TE HASSIS OR RIZED DEN
alert oncoming vehicles, and that such failure equipped the said vehicle with lights, flares, or, at
the very least, an early warning device.49 Hence, NO. NO. NO. CAPAC WEIG
created the presumption of negligence on the part PB SER450- 67783 ITY HT
of his employer, respondent Condor, in supervising we cannot subscribe to respondents Condor and
Pedrano’s claim that they should be absolved from P- 1584124 6 50 6 Cyls.
his employees properly and adequately. As we 724 Kgs.
ruled in Poblete v. Fabros:47 liability because, as found by the trial and appellate
courts, the proximate cause of the collision was the
fast speed at which petitioner Laspiñas drove the SECTION 1/11 *LIMITS OF PREM
It is such a firmly established principle, as bus. To accept this proposition would be to come LIABILITY IUMS
to have virtually formed part of the law too close to wiping out the fundamental principle of A. THIRD PARTY ₱50,000.00 PAID
itself, that the negligence of the employee law that a man must respond for the foreseeable LIABILITY ₱540.
gives rise to the presumption of consequences of his own negligent act or 0052
negligence on the part of the employer. omission. Indeed, our law on quasi-delicts seeks to B. PASSENGER Per Per
This is the presumed negligence in the reduce the risks and burdens of living in society LIABILITY Perso Acciden
selection and supervision of employee. and to allocate them among its members. To n t
The theory of presumed negligence, in accept this proposition would be to weaken the ₱12,0 ₱50,00
contrast with the American doctrine of very bonds of society.50 00.00 0
respondeat superior, where the
negligence of the employee is
conclusively presumed to be the The Liability of In its Answer53 to the Third-Party Complaint, the
Respondent PPSII
negligence of the employer, is clearly respondent PPSII admitted the existence of the
deducible from the last paragraph of as Insurer contract of insurance, in view of its failure to
Article 2180 of the Civil Code which specifically deny the same as required under then
provides that the responsibility therein The trial court in this case did not rule on the liability Section 8(a), Rule 8 of the Rules of Court,54 which
mentioned shall cease if the employers of respondent PPSII, while the appellate court reads:
prove that they observed all the diligence ruled that, as no evidence was presented against
of a good father of a family to prevent it, the insurance company is not liable. Sec. 8. How to contest genuineness of
damages. …48 such documents. When an action or
A perusal of the records will show that when the defense is founded upon a written
The petitioners were correct in invoking petitioners filed the Third-Party Complaint against instrument copied in or attached to the
respondent Pedrano’s failure to observe Article IV, respondent PPSII, they failed to attach a copy of corresponding pleading as provided in
Section 34(g) of the Rep. Act No. 4136, which the terms of the insurance contract itself. Only the preceding section, the genuineness
provides:1avvphil.net Certificate of Cover No. 05494051 issued in favor of and due execution of the instrument shall
"Mr. William Tiu, Lahug, Cebu City" signed by be deemed admitted unless the adverse
(g) Lights when parked or disabled. – Cosme H. Boniel was appended to the third-party party, under oath, specifically denies
Appropriate parking lights or flares visible complaint. The date of issuance, July 22, 1986, the them, and sets forth what he claims to be
one hundred meters away shall be period of insurance, from July 22, 1986 to July 22, the facts; but the requirement of an oath
displayed at a corner of the vehicle does not apply when the adverse party
Full Text Cases 4 (Safety of Passengers) Page 32 of 41
 does not appear to be a party to the
instrument or when compliance with an
order for inspection of the original
instrument is refused.
In fact, respondent PPSII did not dispute the
existence of such contract, and admitted that it was
liable thereon. It claimed, however, that it had
attended to and settled the claims of those injured
during the incident, and set up the following as
special affirmative defenses:
Third party defendant Philippine Phoenix
Surety and Insurance, Inc. hereby reiterates
and incorporates by way of reference the
preceding paragraphs and further states
THAT:-
8. It has attended to the claims of Vincent
Canales, Asuncion Batiancila and Neptali
Palces who sustained injuries during the
incident in question. In fact, it settled
financially their claims per vouchers duly
signed by them and they duly executed
Affidavit[s] of Desistance to that effect, xerox
copies of which are hereto attached as
Annexes 1, 2, 3, 4, 5, and 6 respectively;
9. With respect to the claim of plaintiff, herein
answering third party defendant through its
authorized insurance adjuster attended to said
claim. In fact, there were negotiations to that
effect. Only that it cannot accede to the
demand of said claimant considering that the
claim was way beyond the scheduled
indemnity as per contract entered into with
third party plaintiff William Tiu and third party
defendant (Philippine Phoenix Surety and
Insurance, Inc.). Third party Plaintiff William
Tiu knew all along the limitation as earlier
stated, he being an old hand in the
transportation business;55…
Considering the admissions made by respondent
PPSII, the existence of the insurance contract and
the salient terms thereof cannot be dispatched. It
must be noted that after filing its answer,
respondent PPSII no longer objected to the
Transportation Law
presentation of evidence by respondent
Arriesgado and the insured petitioner Tiu. Even in
its Memorandum56 before the Court, respondent
PPSII admitted the existence of the contract, but
averred as follows:
Petitioner Tiu is insisting that PPSII is liable to
him for contribution, indemnification and/or
reimbursement. This has no basis under the
contract. Under the contract, PPSII will pay all
sums necessary to discharge liability of the
insured subject to the limits of liability but not
to exceed the limits of liability as so stated in
the contract. Also, it is stated in the contract
that in the event of accident involving
indemnity to more than one person, the limits
of liability shall not exceed the aggregate
amount so specified by law to all persons to
be indemnified.57
As can be gleaned from the Certificate of Cover,
such insurance contract was issued pursuant to
the Compulsory Motor Vehicle Liability Insurance
Law. It was expressly provided therein that the limit
of the insurer’s liability for each person was
₱12,000, while the limit per accident was pegged
at ₱50,000. An insurer in an indemnity contract for
third party liability is directly liable to the injured
party up to the extent specified in the agreement
but it cannot be held solidarily liable beyond that
amount.58 The respondent PPSII could not then
just deny petitioner Tiu’s claim; it should have paid
₱12,000 for the death of Felisa Arriesgado,59 and
respondent Arriesgado’s hospitalization expenses
of ₱1,113.80, which the trial court found to have
been duly supported by receipts. The total amount
of the claims, even when added to that of the other
injured passengers which the respondent PPSII
claimed to have settled,60 would not exceed the
₱50,000 limit under the insurance agreement.
Indeed, the nature of Compulsory Motor Vehicle
Liability Insurance is such that it is primarily
intended to provide compensation for the death or
bodily injuries suffered by innocent third parties or
passengers as a result of the negligent operation
and use of motor vehicles. The victims and/or their
dependents are assured of immediate financial
assistance, regardless of the financial capacity of
Full Text Cases 4 (Safety of Passengers)
motor vehicle owners.61 As the Court, speaking
through Associate Justice Leonardo A.
Quisumbing, explained in Government Service
Insurance System v. Court of Appeals:62
However, although the victim may proceed
directly against the insurer for indemnity, the
third party liability is only up to the extent of the
insurance policy and those required by law.
While it is true that where the insurance
contract provides for indemnity against liability
to third persons, and such persons can directly
sue the insurer, the direct liability of the insurer
under indemnity contracts against third party
liability does not mean that the insurer can be
held liable in solidum with the insured and/or
the other parties found at fault. For the liability
of the insurer is based on contract; that of the
insured carrier or vehicle owner is based on
tort. …
Obviously, the insurer could be held liable only
up to the extent of what was provided for by
the contract of insurance, in accordance with
the CMVLI law. At the time of the incident, the
schedule of indemnities for death and bodily
injuries, professional fees and other charges
payable under a CMVLI coverage was
provided for under the Insurance
Memorandum Circular (IMC) No. 5-78 which
was approved on November 10, 1978. As
therein provided, the maximum indemnity for
death was twelve thousand (₱12,000.00)
pesos per victim. The schedules for medical
expenses were also provided by said IMC,
specifically in paragraphs (C) to (G).63
Damages to be
Awarded
The trial court correctly awarded moral damages in
the amount of ₱50,000 in favor of respondent
Arriesgado. The award of exemplary damages by
way of example or correction of the public
good,64 is likewise in order. As the Court
ratiocinated in Kapalaran Bus Line v. Coronado:65
…While the immediate beneficiaries of the
standard of extraordinary diligence are, of
course, the passengers and owners of cargo
carried by a common carrier, they are not the
only persons that the law seeks to benefit. For
if common carriers carefully observed the
statutory standard of extraordinary diligence in
respect of their own passengers, they cannot
help but simultaneously benefit pedestrians
and the passengers of other vehicles who are
equally entitled to the safe and convenient use
of our roads and highways. The law seeks to
stop and prevent the slaughter and maiming
of people (whether passengers or not) on our
highways and buses, the very size and power
of which seem to inflame the minds of their
drivers. Article 2231 of the Civil Code explicitly
authorizes the imposition of exemplary
damages in cases of quasi-delicts "if the
defendant acted with gross negligence."…66
The respondent Pedro A. Arriesgado, as the
surviving spouse and heir of Felisa Arriesgado, is
entitled to indemnity in the amount of
₱50,000.00.67
The petitioners, as well as the respondents
Benjamin Condor and Sergio Pedrano are jointly
and severally liable for said amount, conformably
with the following pronouncement of the Court in
Fabre, Jr. vs. Court of Appeals:68
The same rule of liability was applied in
situations where the negligence of the
driver of the bus on which plaintiff was
riding concurred with the negligence of a
third party who was the driver of another
vehicle, thus causing an accident. In
Anuran v. Buño, Batangas Laguna
Tayabas Bus Co. v. Intermediate
Appellate Court, and Metro Manila Transit
Corporation v. Court of Appeals, the bus
company, its driver, the operator of the
other vehicle and the driver of the vehicle
were jointly and severally held liable to
the injured passenger or the latter’s heirs.
The basis of this allocation of liability was
explained in Viluan v. Court of Appeals,
thus:
Page 33 of 41
 "Nor should it make difference
that the liability of petitioner [bus
owner] springs from contract
while that of respondents [owner
and driver of other vehicle]
arises from quasi-delict. As early
as 1913, we already ruled in
Gutierrez vs. Gutierrez, 56 Phil.
177, that in case of injury to a
passenger due to
negligence of the driver of the
bus on which he was riding and
of the driver of another vehicle,
the drivers as well as the owners
of the two vehicles are jointly
and severally liable
damages. Some members of
the Court, though, are of the
view that under
circumstances they are liable on
quasi-delict."69
IN LIGHT OF ALL THE FOREGOING, the petition
is PARTIALLY GRANTED. The Decision of the
Court of Appeals
is AFFIRMED with MODIFICATIONS:
(1) Respondent Philippine Phoenix
Surety and Insurance, Inc. and petitioner
William Tiu are ORDERED to pay, jointly
and severally, respondent Pedro A.
Arriesgado the total amount of
₱13,113.80;
(2) The petitioners and the respondents
Benjamin Condor and Sergio Pedrano
are ORDERED to pay, jointly and
severally, respondent Pedro A.
Arriesgado ₱50,000.00 as indemnity;
₱26,441.50 as actual damages;
₱50,000.00 as moral damages;
₱50,000.00 as exemplary damages; and
₱20,000.00 as attorney’s fees.
SO ORDERED.
#11
Transportation Law
G.R. No. 144723 February 27, 2006
LARRY ESTACION, Petitioner,
vs.
NOE BERNARDO, thru and his guardian ad
litem ARLIE BERNARDO, CECILIA
BANDOQUILLO and GEMINIANO
QUINQUILLERA, Respondents.
the
DECISION
AUSTRIA-MARTINEZ, J.:
Before us is a petition for review on certiorari filed
for
by Larry Estacion (petitioner) seeking to annul the
Decision dated April 17, 20001 of the Court of
Appeals (CA) in CA-GR CV No. 41447 which
the
affirmed in toto the decision of the Regional Trial
Court (RTC) of Dumaguete City, Branch 41,
Negros Oriental, holding petitioner and his driver
Bienvenido Gerosano (Gerosano) liable for
damages for the injury sustained by Noe Bernardo
(respondent Noe). Also assailed is the appellate
court’s Resolution dated August 16, 20002 denying
petitioner’s motion for reconsideration.
In the afternoon of October 16, 1982, respondent
Noe was going home to Dumaguete from
Cebu, via Bato and Tampi. At Tampi, he boarded
a Ford Fiera passenger jeepney with plate no. NLD
720 driven by respondent Geminiano Quinquillera
(Quinquillera), owned by respondent Cecilia
Bandoquillo (Bandoquillo), and was seated on the
extension seat placed at the center of the Fiera.
From San Jose, an old woman wanted to ride, so
respondent Noe offered his seat. Since the Fiera
was already full, respondent Noe hung or stood on
the left rear carrier of the vehicle. Somewhere
along Barangay Sto. Niño, San Jose, Negros
Oriental, between kilometers 13 and 14, the Fiera
began to slow down and then stopped by the right
shoulder of the road to pick up passengers.
Suddenly, an Isuzu cargo truck, owned by
petitioner and driven by Gerosano, which was
traveling in the same direction, hit the rear end
portion of the Fiera where respondent Noe was
standing. Due to the tremendous force, the cargo
truck smashed respondent Noe against the Fiera
Full Text Cases 4 (Safety of Passengers)
crushing his legs and feet which made him fall to
the ground. A passing vehicle brought him to the
Silliman University Medical Center where his lower
left leg was amputated.
Police investigation reports showed that
respondent Noe was one of the 11 passengers of
the Fiera who suffered injuries; that when the Fiera
stopped to pick up a passenger, the cargo truck
bumped the rear left portion of the Fiera; that only
one tire mark from the front right wheel of the cargo
truck was seen on the road. A sketch of the
accident was drawn by investigator Mateo Rubia
showing the relative positions of the two vehicles,
their distances from the shoulder of the road and
the skid marks of the right front wheel of the truck
measuring about 48 feet.
On February 18, 1993, respondent Noe, through
his guardian ad litem Arlie Bernardo, filed with the
RTC of Dumaguete City a complaint3 for damages
arising from quasi delict against petitioner as the
registered owner of the cargo truck and his driver
Gerosano. He alleged that the proximate cause of
his injuries and suffering was the reckless
imprudence of Gerosano and petitioner’s
negligence in the selection of a reckless driver and
for operating a vehicle that was not roadworthy. He
prayed for actual damages, loss of income, moral
and exemplary damages, attorney’s fees, litigation
expenses and costs of suit.
Petitioner and his driver Gerosano filed their
Answer4 denying the material allegations in the
complaint. They, in turn, filed a third party
complaint5 against respondents Bandoquillo and
Quinquillera, as owner and driver respectively of
the Fiera. They alleged that it was the reckless
imprudence of respondent driver Quinquillera and
his clear violation of the traffic rules and regulations
which was the proximate cause of the accident and
asked for indemnification for whatever damages
they would be sentenced to pay. Respondents
Bandoquillo and Quinquillera filed their Answer to
the third party complaint asking for the dismissal of
the third party complaint and for payment of
attorney’s fees.
Driver Gerosano was charged criminally for
reckless imprudence resulting to multiple physical
injuries with damage to property before the
Municipal Circuit Trial Court (MCTC) of Pamplona-
Amlan and San Jose, Negros Oriental. On
November 16, 1987, the MCTC rendered its
decision6 finding him guilty of the crime charged
and was sentenced to four months and one day to
two years and four months and to pay the costs.
On February 18, 1993, the RTC rendered its
judgment in the civil case,7 the dispositive portion
of which reads:
WHEREFORE, in view of the foregoing, judgment
is hereby rendered, ordering defendants Gerosano
and Estacion, to pay plaintiff, jointly or solidarily,
the following:
1. ₱129,584.20 for actual damages in the
form of medical and hospitalization
expenses;
2. ₱50,000.00 for moral damages,
consisting of mental anguish, moral
shock, serious anxiety and wounded
feelings;
3. ₱10,000.00 for attorney’s fees; and
4. ₱5,000.00 for litigation expenses.
SO ORDERED.8
The trial court ruled that the negligence of
Gerosano, petitioner’s driver, is the direct and
proximate cause of the incident and of the injuries
suffered by respondent Noe; that Gerosano’s
gross negligence and reckless imprudence had
been confirmed by the Judgment in Criminal Case
No. 463; that based on the findings of the police
investigator, the faulty brakes caused the cargo
truck to bump the Fiera; that the Traffic Accident
Report showed that the tire mark of the cargo truck
measuring 48 feet is visibly imprinted on the road
where the incident took place indicating that the
said vehicle was speeding fast; that the existence
Page 34 of 41
of one tire mark of the cargo truck proved that the
said vehicle had a faulty brake, otherwise, it would
have produced two tire marks on the road; and that
the photographs taken right after the incident also
showed who the guilty party was.
The trial court did not give credence to the
argument of petitioner and his driver that the truck
was properly checked by a mechanic before it was
dispatched for a trip. It found that petitioner is
negligent in maintaining his vehicle in good
condition to prevent any accident to happen; that
petitioner is liable under Article 2180 of the Civil
Code as employer of driver Gerosano for being
negligent in the selection and supervision of his
driver as well as for maintaining and operating a
vehicle that was not roadworthy; and that petitioner
and his driver are solidarily liable for all the natural
and probable consequences of their negligent acts
or omissions. The trial court dismissed the third
party complaint filed by petitioner and his driver
against respondents Bandoquillo and Quinquillera.
Dissatisfied, only petitioner appealed to the CA. On
April 17, 2000, the CA rendered the assailed
decision which affirmed in toto the decision of the
trial court. Petitioner’s motion for reconsideration
was denied in a Resolution dated August 16, 2000.
Hence, the herein petition for review.
Petitioner submits the following issues for
resolution:9
WHETHER THE COURT OF APPEALS ERRED
IN NOT FINDING THAT PETITIONER LARRY
ESTACION EXERCISED THE DUE DILIGENCE
OF A GOOD FATHER OF A FAMILY TO
PREVENT DAMAGE DESPITE ABUNDANCE OF
EVIDENCE TO THAT EFFECT;
WHETHER THE COURT OF APPEALS ERRED
IN NOT HOLDING THAT PETITIONER LARRY
ESTACION EXERCISED DUE DILIGENCE IN
THE SELECTION AND SUPERVISION OF HIS
EMPLOYEE AND IN MAINTAINING HIS CARGO
TRUCK ROADWORTHY AND IN GOOD
OPERATING CONDITION;
Transportation Law
WHETHER THE COURT OF APPEALS ERRED
IN EXONERATING RESPONDENTS CECILIA
BANDOQUILLO AND GEMINIANO
QUINQUILLERA.
In his Memorandum, petitioner contends that he
was able to establish that he observed the
diligence of a good father of a family not only in the
selection of his employees but also in maintaining
his truck roadworthy and in good operating
condition; that the CA erred in exonerating
respondents Bandoquillo and Quinquillera, owner
and driver, respectively of the Fiera from liability
when their negligence was the proximate cause of
respondent Noe’s injuries; that respondent Noe’s
act of standing in the rear carrier of the Fiera is in
itself negligence on his part which was aggravated
by the fact that respondent Quinquillera overtook
the cargo truck driven by Gerosano on the curve
and suddenly cut into the latter’s lane; that due to
the overloading of passengers, Gerosano was not
able to see the brake lights of the Fiera when it
suddenly stopped to pick up passengers; that
overloading is in violation of the applicable traffic
rules and regulations and Article 2185 is explicit
when it provides that "unless there is proof to the
contrary, it is presumed that a person driving a
motor vehicle has been negligent if at the time of
the mishap, he was violating any traffic regulation";
that since the Fiera driver was negligent, there
arises a presumption that respondent Bandoquillo,
as owner of the Fiera, is negligent in the selection
and supervision of her employee; that assuming
petitioner Estacion and his driver are not entirely
blameless, the negligence of Quinquillera is
sufficient basis why the respective liabilities should
be delineated vis-à-vis their degree of negligence
consistent with Article 217910 of the Civil Code.
Respondent Noe filed his Memorandum alleging
that the first and second issues raised are factual
in nature which are beyond the ambit of a petition
for review; that petitioner failed to overcome the
presumption of negligence thus he is liable for the
negligence of his driver Gerosano; and that the
third issue is best addressed to respondents
Bandoquillo and Quinquillera.
Full Text Cases 4 (Safety of Passengers)
Respondents Bandoquillo and Quinquillera failed
to file their memorandum despite receipt of our
Resolution requiring them to submit the same.
We find it apropos to resolve first the third issue
considering that the extent of the liability of
petitioner and his driver is dependent on whether
respondents Bandoquillo and Quinquillera are the
ones negligent in the vehicular mishap that
happened in the afternoon of October 16, 1982
where respondent Noe was injured, resulting in the
amputation of his left leg.
At the outset, the issue raised is factual in nature.
Whether a person is negligent or not is a question
of fact which we cannot pass upon in a petition for
review on certiorari, as our jurisdiction is limited to
reviewing errors of law.11As a rule, factual findings
of the trial court, affirmed by the CA, are final and
conclusive and may not be reviewed on appeal.
The established exceptions are: (1) when the
inference made is manifestly mistaken, absurd or
impossible; (2) when there is grave abuse of
discretion; (3) when the findings are grounded
entirely on speculations, surmises or conjectures;
(4) when the judgment of the CA is based on
misapprehension of facts; (5) when the findings of
fact are conflicting; (6) when the CA, in making its
findings, went beyond the issues of the case and
the same is contrary to the admissions of both
appellant and appellee; (7) when the findings of
fact are conclusions without citation of specific
evidence on which they are based; (8) when the
CA manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly
considered, would justify a different conclusion;
and (9) when the findings of fact of the CA are
premised on the absence of evidence and are
contradicted by the evidence on record.12
On the basis of the records of this case, we find
that there is cogent reason for us to review the
factual findings of the lower courts to conform to
the evidence on record and consider this case as
an exception to the general rule.
The trial court and the appellate court had made a
finding of fact that the proximate cause of the injury
sustained by respondent Noe was the negligent
and careless driving of petitioner’s driver,
Gerosano, who was driving at a fast speed with a
faulty brake when the accident happened. We see
no cogent reason to disturb the trial court’s finding
in giving more credence to the testimony of
respondent Noe than the testimony of Gerosano,
petitioner’s truck driver.
The correctness of such finding is borne by the
records. In his testimony, Gerosano said that he
was driving the truck at a speed of about 40
kilometers per hour;13 that the Fiera was behind
him but upon reaching the curve, i.e.,after passing
San Jose going to Dumaguete, the Fiera overtook
him and blocked his way;14 that he was 10 meters
from the Fiera prior to the impact15 when he
applied the brakes16 and tried to evade the Fiera
but he still hit it.17
We agree with the trial court and the appellate
court when they found that the truck was running
at a fast speed because if Gerosano was really
driving at a speed of 40 kilometers per hour and
considering that the distance between the truck
and the Fiera in front was about 10 meters, he had
more than enough time to slacken his speed and
apply his break to avoid hitting the Fiera. However,
from the way the truck reacted to the application of
the brakes, it showed that Gerosano was driving at
a fast speed because the brakes skidded a lengthy
48 feet as shown in the sketch of police
investigator Rubia of the tire marks visibly printed
on the road.
Moreover, the photographs taken after the incident
and the testimony of Gerosano as to the extent of
damage to the truck, i.e. the truck’s windshield was
broken and its hood was damaged after the
impact,18 further support the finding of both courts
that Gerosano was driving at a fast pace.
The accident was further caused by the faulty
brakes of the truck. Based on the sketch report,
there was only one tire mark of the right tire of the
cargo truck during the incident which, as testified
to by police investigator Rubia, meant that the
brakes of the truck were not aligned otherwise
Page 35 of 41
there would be two tire marks impressions on the
road.19 Although petitioner contends that there are
other factors to explain why only one skid mark
was found at the place of the incident, such as the
angle and edges of the road as well as the balance
of the weight of the cargo laden in the truck, he
failed to show that indeed those factors were
present to prove his defense. Such claim cannot
be given credence considering that investigator
Rubia testified that the body of the truck was very
much on the road, i.e., not over the shoulder of the
road,20 and the road was straight.21 Indeed, it is the
negligent act of petitioner’s driver of driving the
cargo truck at a fast speed coupled with faulty
brakes which was the proximate cause of
respondent Noe’s injury.
Petitioner’s claim that right after overtaking the
cargo truck, the Fiera driver suddenly stopped to
pick up three passengers from the side of the road;
that the overloading of passengers prevented his
truck driver from determining that the Fiera had
pulled over to pick up passengers as the latter’s
brakelights were obstructed by the passengers
standing on the rear portion of the Fiera were not
substantiated at all. Respondent Quinquillera, the
driver of the Fiera, testified that the distance from
the curve of the road when he stopped and picked
up passengers was estimated to be about 80 to 90
feet.22 In fact, from the sketch drawn by
investigator Rubia, it showed a distance of 145 feet
from the curve of the road to the speed tire mark
(which measured about 48 feet) visibly printed on
the road to the Fiera. This means that the Fiera
driver did not stop immediately after the curve as
what petitioner claims. Moreover, Gerosano
admitted that his truck was at a distance of 10
meters prior to the impact. The distance between
the two vehicles was such that it would be
impossible for Gerosano not to have seen that the
Fiera had pulled over to pick up passengers.
However, we agree with petitioner that respondent
Noe’s act of standing on the rear carrier of the
Fiera exposing himself to bodily injury is in itself
negligence on his part. We find that the trial court
and the CA erred when they failed to consider that
respondent Noe was also guilty of contributory
negligence. Contributory negligence is conduct on
Transportation Law
the part of the injured party, contributing as a legal
cause to the harm he has suffered, which falls
below the standard to which he is required to
conform for his own protection. 23
It has been established by the testimony of
respondent Noe that he was with four or five other
persons standing on the rear carrier of the Fiera
since it was already full. Respondent Noe’s act of
standing on the left rear carrier portion of the Fiera
showed his lack of ordinary care and foresight that
such act could cause him harm or put his life in
danger. It has been held that "to hold a person as
having contributed to his injuries, it must be shown
that he performed an act that brought about his
injuries in disregard of warning or signs of an
impending danger to health and
body.24 Respondent Noe’s act of hanging on the
Fiera is definitely dangerous to his life and limb.
We likewise find merit in petitioner’s contention that
respondent Quinquillera, the Fiera driver, was also
negligent. There is merit to petitioner’s claim that
there was overloading which is in violation of traffic
rules and regulations. Respondent Noe himself
had testified that he was standing at the rear
portion of the Fiera because the Fiera was already
full. Respondent Quinquillera should not have
taken more passengers than what the Fiera can
accommodate. If the Fiera was not overloaded,
respondent Noe would not have been standing on
the rear carrier and sustained such extent of injury.
Furthermore, we find that respondent Quinquillera
was negligent in allowing respondent Noe to stand
on the Fiera’s rear portion. Section 32(c) of Article
III of Republic Act No. 4136, otherwise known as
"The Land Transportation and Traffic Code"
provides:
(c) Riding on running boards – No driver shall allow
any person to ride on running board, step board or
mudguard of his motor vehicle for any purpose
while the vehicle is in motion.
Respondent Quinquillera’s act of permitting
respondent Noe to hang on the rear portion of the
Fiera in such a dangerous position creates undue
Full Text Cases 4 (Safety of Passengers)
risk of harm to respondent Noe. Quinquillera failed
to observe that degree of care, precaution and
vigilance that the circumstances justly demand.
Thus, respondent Noe suffered injury.25 Since
respondent Quinquillera is negligent, there arises
a presumption of negligence on the part of his
employer, respondent Bandoquillo, in supervising
her employees properly. Such presumption was
not rebutted at all by Bandoquillo. Thus, the CA
erred in affirming the dismissal of the third party
complaint filed by petitioner against respondents
Quinquillera and Bandoquillo.
Petitioner contends that he was able to establish
that he exercised the due diligence of a good father
of a family in the selection of his employees as well
as in the maintenance of his cargo truck in good
operating condition. He claims that in addition to
looking at Gerosano’s driver’s license, he
accompanied the latter in his first two trips, during
which he ascertained Gerosano’s competence as
a driver, petitioner being a driver himself; that the
truck driven by Gerosano has never figured in any
accident prior to the incident involved; that upon his
acquisition of the cargo truck on March 16, 1982,
only 7 months prior to the incident, the same was
thoroughly checked up and reconditioned; and that
he had in his employ a mechanic who conducted
periodic check-ups of the engine and brake system
of the cargo truck.
We are not persuaded.
Article 2180 of the Civil Code provides:
Art. 2180. The obligation imposed by Article 2176
is demandable not only for one’s own acts or
omissions, but also for those of persons for whom
one is responsible.
xxx
Employers shall be liable for the damages caused
by their employees and household helpers acting
within the scope of their assigned tasks, even
though the former are not engaged in any business
or industry.
xxx
The responsibility treated of in this article shall
cease when the persons herein mentioned prove
that they observed all the diligence of a good father
of a family to prevent damage.
As the employer of Gerosano, petitioner is
primarily and solidarily liable for the quasi-
delict committed by the former. Petitioner is
presumed to be negligent in the selection and
supervision of his employee by operation of law
and may be relieved of responsibility for the
negligent acts of his driver, who at the time was
acting within the scope of his assigned task, only if
he can show that he observed all the diligence of a
good father of a family to prevent damage.26
In Yambao v. Zuniga,27 we have clarified the
meaning of the diligence of a good father of a
family, thus:
The "diligence of a good father" referred to in the
last paragraph of the aforecited statute means
diligence in the selection and supervision of
employees. Thus, when an employee, while
performing his duties, causes damage to persons
or property due to his own negligence, there arises
the juris tantum presumption that the employer is
negligent, either in the selection of the employee
or in the supervision over him after the
selection. For the employer to avoid the
solidary liability for a tort committed by his
employee, an employer must rebut the
presumption by presenting adequate and
convincing proof that in the selection and
supervision of his employee, he or she
exercises the care and diligence of a good
father of a family. x x x
Petitioner’s claim that she exercised due diligence
in the selection and supervision of her driver,
Venturina, deserves but scant consideration. Her
allegation that before she hired Venturina she
required him to submit his driver’s license and
clearances is worthless, in view of her failure
to offer in evidence certified true copies of said
license and clearances. Bare allegations,
Page 36 of 41
unsubstantiated by evidence, are not equivalent to
proof under the rules of evidence. x x x
In any case, assuming arguendo that Venturina did
submit his license and clearances when he applied
with petitioner in January 1992, the latter still fails
the test of due diligence in the selection of her bus
driver. Case law teaches that for an employer to
have exercised the diligence of a good father of
a family, he should not be satisfied with the
applicant’s mere possession of a professional
driver’s license; he must also carefully
examine the applicant for employment as to his
qualifications, his experience and record of
service. Petitioner failed to present convincing
proof that she went to this extent of verifying
Venturina’s qualifications, safety record, and
driving history. The presumption juris tantum that
there was negligence in the selection of her bus
driver, thus, remains unrebutted.
Nor did petitioner show that she exercised due
supervision over Venturina after his selection. For
as pointed out by the Court of Appeals, petitioner
did not present any proof that she drafted and
implemented training programs and guidelines
on road safety for her employees. In fact, the
record is bare of any showing that petitioner
required Venturina to attend periodic seminars
on road safety and traffic efficiency. Hence,
petitioner cannot claim exemption from any liability
arising from the recklessness or negligence of
Venturina.
In sum, petitioner’s liability to private respondents
for the negligent and imprudent acts of her driver,
Venturina, under Article 2180 of the Civil Code is
both manifest and clear. Petitioner, having failed to
rebut the legal presumption of negligence in the
selection and supervision of her driver, is
responsible for damages, the basis of the liability
being the relationship of pater familias or on the
employer’s own negligence. x x x28 (Emphasis
supplied)
Petitioner failed to show that he examined driver
Gerosano as to his qualifications, experience and
service records. In fact, the testimony of driver
Transportation Law
Gerosano in his cross-examination showed the
non-observance of these requirements. Gerosano
testified that petitioner was his first employer in
Dumaguete and that he was accepted by petitioner
on the very day he applied for the job; 29 that his
driver’s license was issued in Mindanao where he
came from30 and that while petitioner asked him
about his driving record in Mindanao, he did not
present any document of his driving record.31 Such
admission clearly established that petitioner did
not exercise due diligence in the selection of his
driver Gerosano.
Moreover, the fact that petitioner’s driver Gerosano
was driving in an efficient manner when petitioner
was with him in his first two trips would not
conclusively establish that Gerosano was not at all
reckless. It could not be considered as due
diligence in the supervision of his driver to exempt
petitioner from liability. In the supervision of his
driver, petitioner must show that he had formulated
training programs and guidelines on road safety for
his driver which the records failed to show. We find
that petitioner failed to rebut the presumption of
negligence in the selection and supervision of his
employees.
Moreover, there was also no proof that he
exercised diligence in maintaining his cargo truck
roadworthy and in good operating condition. While
petitioner’s mechanic driver testified that he made
a routine check up on October 15, 1982, one day
before the mishap happened, and found the truck
operational, there was no record of such
inspection.
Turning now to the award of damages, since there
was contributory negligence on the part of
respondent Noe, petitioner’s liability should be
mitigated in accordance with Article 2179 of the
Civil Code which provides:
When the plaintiff’s own negligence was the
immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was
only contributory, the immediate and proximate
cause of the injury being the defendant’s lack of
due care, the plaintiff may recover damages, but
Full Text Cases 4 (Safety of Passengers)
the courts shall mitigate the damages to be
awarded.
The underlying precept of the above article on
contributory negligence is that a plaintiff who is
partly responsible for his own injury should not be
entitled to recover damages in full but must bear
the consequences of his own negligence. The
defendant must thus be held liable only for the
damages actually caused by his negligence.32
In Phoenix Construction, Inc., v. Intermediate
Appellate Court,33 where we held that the legal and
proximate cause of the accident and of Dionisio’s
injuries was the wrongful and negligent manner in
which the dump truck was parked but found
Dionisio guilty of contributory negligence on the
night of the accident, we allocated most of the
damages on a 20-80 ratio. In said case, we
required Dionisio to bear 20% of the damages
awarded by the appellate court, except as to the
award of exemplary damages, attorney’s fees and
costs.
In the present case, taking into account the
contributing negligence of respondent Noe, we
likewise rule that the demands of substantial
justice are satisfied by distributing the damages
also on a 20-80 ratio excluding attorney’s fees and
litigation expenses.34 Consequently, 20% should
be deducted from the actual and moral damages
awarded by the trial court in favor of respondent
Noe, that is: 20% of ₱129,584.20 for actual
damages is ₱25,916.84 and 20% of ₱50,000.00 for
moral damages is ₱10,000.00. Thus, after
deducting the same, the award for actual damages
should be ₱103,667.36 and ₱40,000.00 for moral
damages or 80% of the damages so awarded.
Petitioner and respondents Bandoquillo and
Quinquillera are jointly and severally liable for the
80% of the damages as well as attorney’s fees and
litigation expenses conformably with our
pronouncement in Tiu v. Arriesgado35 where we
held:
The petitioners, as well as the respondents
Benjamin Condor and Sergio Pedrano are jointly
and severally liable for said amount, conformably
with the following pronouncement of the Court
in Fabre, Jr. v. Court of Appeals:
The same rule of liability was applied in situations
where the negligence of the driver of the bus on
which plaintiff was riding concurred with the
negligence of a third party who was the driver of
another vehicle, thus causing an accident. In
Anuran v. Buño, Batangas Laguna Tayabas Bus
Co. v. Intermediate Appellate Court, and Metro
Manila Transit Corporation v. Court of Appeals, the
bus company, its driver, the operator of the other
vehicle and the driver of the vehicle were jointly
and severally held liable to the injured passenger
or the latter’s heirs. The basis of this allocation of
liability was explained in Viluan v. Court of
Appeals, thus:
"Nor should it make difference that the liability of
petitioner [bus owner] springs from contract while
that of respondents [owner and driver of other
vehicle] arises from quasi delict. As early as 1913,
we already ruled in Gutierrez v. Gutierrez, 56 Phil.
177, that in case of injury to a passenger due to the
negligence of the driver of the bus on which he was
riding and of the driver of another vehicle, the
drivers as well as the owners of the two vehicles
are jointly and severally liable for damages. Some
members of the Court, though, are of the view that
under the circumstances they are liable on quasi
delict."36
WHEREFORE, the instant petition is PARTIALLY
GRANTED. The assailed Decision of the Court of
Appeals dated April 17, 2000 as well as its
Resolution dated August 16, 2000
are AFFIRMED with MODIFICATION to the effect
that the dispositive portion of the Decision dated
February 18, 1993 of the Regional Trial Court of
Dumaguete City in Civil Case No. 8122, should
read as follows:
"WHEREFORE, in view of the foregoing, judgment
is hereby rendered, ordering defendants Gerosano
and Estacion, as well as third party defendants
Bandoquillo and Quinquillera, to pay plaintiff,
jointly and solidarily, the following:
Page 37 of 41
 1. ₱103,667.36 for actual damages in the
form of medical and hospitalization
expenses;
2. ₱40,000.00 for moral damages,
consisting of mental anguish, moral
shock, serious anxiety and wounded
feelings;
3. ₱10,000.00 for attorney’s fees; and
4. ₱5,000.00 for litigation
expenses.1avvphil.net
SO ORDERED."
No pronouncement as to costs.
SO ORDERED.
#12
G.R. No. L-12191 October 14, 1918
JOSE CANGCO, plaintiff-appellant,
vs.
MANILA RAILROAD CO., defendant-appellee.
FISHER, J.:
At the time of the occurrence which gave rise to
this litigation the plaintiff, Jose Cangco, was in the
employment of Manila Railroad Company in the
capacity of clerk, with a monthly wage of P25. He
lived in the pueblo of San Mateo, in the province of
Rizal, which is located upon the line of the
defendant railroad company; and in coming daily
by train to the company's office in the city of Manila
where he worked, he used a pass, supplied by the
company, which entitled him to ride upon the
company's trains free of charge. Upon the
occasion in question, January 20, 1915, the
plaintiff arose from his seat in the second class-car
where he was riding and, making, his exit through
the door, took his position upon the steps of the
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coach, seizing the upright guardrail with his right
hand for support.
On the side of the train where passengers alight at
the San Mateo station there is a cement platform
which begins to rise with a moderate gradient
some distance away from the company's office and
extends along in front of said office for a distance
sufficient to cover the length of several coaches.
As the train slowed down another passenger,
named Emilio Zuñiga, also an employee of the
railroad company, got off the same car, alighting
safely at the point where the platform begins to rise
from the level of the ground. When the train had
proceeded a little farther the plaintiff Jose Cangco
stepped off also, but one or both of his feet came
in contact with a sack of watermelons with the
result that his feet slipped from under him and he
fell violently on the platform. His body at once
rolled from the platform and was drawn under the
moving car, where his right arm was badly crushed
and lacerated. It appears that after the plaintiff
alighted from the train the car moved forward
possibly six meters before it came to a full stop.
The accident occurred between 7 and 8 o'clock on
a dark night, and as the railroad station was lighted
dimly by a single light located some distance away,
objects on the platform where the accident
occurred were difficult to discern especially to a
person emerging from a lighted car.
The explanation of the presence of a sack of
melons on the platform where the plaintiff alighted
is found in the fact that it was the customary
season for harvesting these melons and a large lot
had been brought to the station for the shipment to
the market. They were contained in numerous
sacks which has been piled on the platform in a
row one upon another. The testimony shows that
this row of sacks was so placed of melons and the
edge of platform; and it is clear that the fall of the
plaintiff was due to the fact that his foot alighted
upon one of these melons at the moment he
stepped upon the platform. His statement that he
failed to see these objects in the darkness is
readily to be credited.
Full Text Cases 4 (Safety of Passengers)
The plaintiff was drawn from under the car in an
unconscious condition, and it appeared that the
injuries which he had received were very serious.
He was therefore brought at once to a certain
hospital in the city of Manila where an examination
was made and his arm was amputated. The result
of this operation was unsatisfactory, and the
plaintiff was then carried to another hospital where
a second operation was performed and the
member was again amputated higher up near the
shoulder. It appears in evidence that the plaintiff
expended the sum of P790.25 in the form of
medical and surgical fees and for other expenses
in connection with the process of his curation.
Upon August 31, 1915, he instituted this
proceeding in the Court of First Instance of the city
of Manila to recover damages of the defendant
company, founding his action upon the negligence
of the servants and employees of the defendant in
placing the sacks of melons upon the platform and
leaving them so placed as to be a menace to the
security of passenger alighting from the company's
trains. At the hearing in the Court of First Instance,
his Honor, the trial judge, found the facts
substantially as above stated, and drew therefrom
his conclusion to the effect that, although
negligence was attributable to the defendant by
reason of the fact that the sacks of melons were so
placed as to obstruct passengers passing to and
from the cars, nevertheless, the plaintiff himself
had failed to use due caution in alighting from the
coach and was therefore precluded form
recovering. Judgment was accordingly entered in
favor of the defendant company, and the plaintiff
appealed.
It can not be doubted that the employees of the
railroad company were guilty of negligence in piling
these sacks on the platform in the manner above
stated; that their presence caused the plaintiff to
fall as he alighted from the train; and that they
therefore constituted an effective legal cause of the
injuries sustained by the plaintiff. It necessarily
follows that the defendant company is liable for the
damage thereby occasioned unless recovery is
barred by the plaintiff's own contributory
negligence. In resolving this problem it is
necessary that each of these conceptions of
liability, to-wit, the primary responsibility of the
defendant company and the contributory
negligence of the plaintiff should be separately
examined.
It is important to note that the foundation of the
legal liability of the defendant is the contract of
carriage, and that the obligation to respond for the
damage which plaintiff has suffered arises, if at all,
from the breach of that contract by reason of the
failure of defendant to exercise due care in its
performance. That is to say, its liability is direct and
immediate, differing essentially, in legal viewpoint
from that presumptive responsibility for the
negligence of its servants, imposed by article 1903
of the Civil Code, which can be rebutted by proof
of the exercise of due care in their selection and
supervision. Article 1903 of the Civil Code is not
applicable to obligations arising ex contractu, but
only to extra-contractual obligations — or to use
the technical form of expression, that article relates
only to culpa aquiliana and not to culpa
contractual.
Manresa (vol. 8, p. 67) in his commentaries upon
articles 1103 and 1104 of the Civil Code, clearly
points out this distinction, which was also
recognized by this Court in its decision in the case
of Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil.
rep., 359). In commenting upon article 1093
Manresa clearly points out the difference between
"culpa, substantive and independent, which of
itself constitutes the source of an obligation
between persons not formerly connected by any
legal tie" and culpa considered as an accident in
the performance of an obligation already existing .
. . ."
In the Rakes case (supra) the decision of this court
was made to rest squarely upon the proposition
that article 1903 of the Civil Code is not applicable
to acts of negligence which constitute the breach
of a contract.
Upon this point the Court said:
The acts to which these articles [1902 and
1903 of the Civil Code] are applicable are
Page 38 of 41
 understood to be those not growing out of
pre-existing duties of the parties to one
another. But where relations already
formed give rise to duties, whether
springing from contract or quasi-contract,
then breaches of those duties are subject
to article 1101, 1103, and 1104 of the
same code. (Rakes vs. Atlantic, Gulf and
Pacific Co., 7 Phil. Rep., 359 at 365.)
This distinction is of the utmost importance. The
liability, which, under the Spanish law, is, in certain
cases imposed upon employers with respect to
damages occasioned by the negligence of their
employees to persons to whom they are not bound
by contract, is not based, as in the English
Common Law, upon the principle of respondeat
superior — if it were, the master would be liable in
every case and unconditionally — but upon the
principle announced in article 1902 of the Civil
Code, which imposes upon all persons who by
their fault or negligence, do injury to another, the
obligation of making good the damage caused.
One who places a powerful automobile in the
hands of a servant whom he knows to be ignorant
of the method of managing such a vehicle, is
himself guilty of an act of negligence which makes
him liable for all the consequences of his
imprudence. The obligation to make good the
damage arises at the very instant that the unskillful
servant, while acting within the scope of his
employment causes the injury. The liability of the
master is personal and direct. But, if the master
has not been guilty of any negligence whatever in
the selection and direction of the servant, he is not
liable for the acts of the latter, whatever done within
the scope of his employment or not, if the damage
done by the servant does not amount to a breach
of the contract between the master and the person
injured.
It is not accurate to say that proof of diligence and
care in the selection and control of the servant
relieves the master from liability for the latter's acts
— on the contrary, that proof shows that the
responsibility has never existed. As Manresa says
(vol. 8, p. 68) the liability arising from extra-
contractual culpa is always based upon a
voluntary act or omission which, without willful
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intent, but by mere negligence or inattention, has
caused damage to another. A master who
exercises all possible care in the selection of his
servant, taking into consideration the qualifications
they should possess for the discharge of the duties
which it is his purpose to confide to them, and
directs them with equal diligence, thereby performs
his duty to third persons to whom he is bound by
no contractual ties, and he incurs no liability
whatever if, by reason of the negligence of his
servants, even within the scope of their
employment, such third person suffer damage.
True it is that under article 1903 of the Civil Code
the law creates a presumption that he has been
negligent in the selection or direction of his servant,
but the presumption is rebuttable and yield to proof
of due care and diligence in this respect.
The supreme court of Porto Rico, in interpreting
identical provisions, as found in the Porto Rico
Code, has held that these articles are applicable to
cases of extra-contractual culpa exclusively.
(Carmona vs. Cuesta, 20 Porto Rico Reports,
215.)
This distinction was again made patent by this
Court in its decision in the case of
Bahia vs. Litonjua and Leynes, (30 Phil. rep., 624),
which was an action brought upon the theory of the
extra-contractual liability of the defendant to
respond for the damage caused by the
carelessness of his employee while acting within
the scope of his employment. The Court, after
citing the last paragraph of article 1903 of the Civil
Code, said:
From this article two things are apparent:
(1) That when an injury is caused by the
negligence of a servant or employee
there instantly arises a presumption of
law that there was negligence on the part
of the master or employer either in
selection of the servant or employee, or in
supervision over him after the selection,
or both; and (2) that that presumption
is juris tantum and not juris et de jure, and
consequently, may be rebutted. It follows
necessarily that if the employer shows to
the satisfaction of the court that in
Full Text Cases 4 (Safety of Passengers)
selection and supervision he has
exercised the care and diligence of a
good father of a family, the presumption
is overcome and he is relieved from
liability.
This theory bases the responsibility of the
master ultimately on his own negligence
and not on that of his servant. This is the
notable peculiarity of the Spanish law of
negligence. It is, of course, in striking
contrast to the American doctrine that, in
relations with strangers, the negligence of
the servant in conclusively the negligence
of the master.
The opinion there expressed by this Court, to the
effect that in case of extra-contractual culpa based
upon negligence, it is necessary that there shall
have been some fault attributable to the defendant
personally, and that the last paragraph of article
1903 merely establishes a rebuttable presumption,
is in complete accord with the authoritative opinion
of Manresa, who says (vol. 12, p. 611) that the
liability created by article 1903 is imposed by
reason of the breach of the duties inherent in the
special relations of authority or superiority existing
between the person called upon to repair the
damage and the one who, by his act or omission,
was the cause of it.
On the other hand, the liability of masters and
employers for the negligent acts or omissions of
their servants or agents, when such acts or
omissions cause damages which amount to the
breach of a contact, is not based upon a mere
presumption of the master's negligence in their
selection or control, and proof of exercise of the
utmost diligence and care in this regard does not
relieve the master of his liability for the breach of
his contract.
Every legal obligation must of necessity be extra-
contractual or contractual. Extra-contractual
obligation has its source in the breach or omission
of those mutual duties which civilized society
imposes upon it members, or which arise from
these relations, other than contractual, of certain
members of society to others, generally embraced
in the concept of status. The legal rights of each
member of society constitute the measure of the
corresponding legal duties, mainly negative in
character, which the existence of those rights
imposes upon all other members of society. The
breach of these general duties whether due to
willful intent or to mere inattention, if productive of
injury, give rise to an obligation to indemnify the
injured party. The fundamental distinction between
obligations of this character and those which arise
from contract, rests upon the fact that in cases of
non-contractual obligation it is the wrongful or
negligent act or omission itself which creates
the vinculum juris, whereas in contractual relations
the vinculum exists independently of the breach of
the voluntary duty assumed by the parties when
entering into the contractual relation.
With respect to extra-contractual obligation arising
from negligence, whether of act or omission, it is
competent for the legislature to elect — and our
Legislature has so elected — whom such an
obligation is imposed is morally culpable, or, on the
contrary, for reasons of public policy, to extend that
liability, without regard to the lack of moral
culpability, so as to include responsibility for the
negligence of those person who acts or mission
are imputable, by a legal fiction, to others who are
in a position to exercise an absolute or limited
control over them. The legislature which adopted
our Civil Code has elected to limit extra-contractual
liability — with certain well-defined exceptions —
to cases in which moral culpability can be directly
imputed to the persons to be charged. This moral
responsibility may consist in having failed to
exercise due care in the selection and control of
one's agents or servants, or in the control of
persons who, by reason of their status, occupy a
position of dependency with respect to the person
made liable for their conduct.
The position of a natural or juridical person who
has undertaken by contract to render service to
another, is wholly different from that to which article
1903 relates. When the sources of the obligation
upon which plaintiff's cause of action depends is a
negligent act or omission, the burden of proof rests
upon plaintiff to prove the negligence — if he does
Page 39 of 41
not his action fails. But when the facts averred
show a contractual undertaking by defendant for
the benefit of plaintiff, and it is alleged that plaintiff
has failed or refused to perform the contract, it is
not necessary for plaintiff to specify in his
pleadings whether the breach of the contract is due
to willful fault or to negligence on the part of the
defendant, or of his servants or agents. Proof of the
contract and of its nonperformance is
sufficient prima facie to warrant a recovery.
As a general rule . . . it is logical that in
case of extra-contractual culpa, a suing
creditor should assume the burden of
proof of its existence, as the only fact
upon which his action is based; while on
the contrary, in a case of negligence
which presupposes the existence of a
contractual obligation, if the creditor
shows that it exists and that it has been
broken, it is not necessary for him to
prove negligence. (Manresa, vol. 8, p. 71
[1907 ed., p. 76]).
As it is not necessary for the plaintiff in an action
for the breach of a contract to show that the breach
was due to the negligent conduct of defendant or
of his servants, even though such be in fact the
actual cause of the breach, it is obvious that proof
on the part of defendant that the negligence or
omission of his servants or agents caused the
breach of the contract would not constitute a
defense to the action. If the negligence of servants
or agents could be invoked as a means of
discharging the liability arising from contract, the
anomalous result would be that person acting
through the medium of agents or servants in the
performance of their contracts, would be in a better
position than those acting in person. If one delivers
a valuable watch to watchmaker who contract to
repair it, and the bailee, by a personal negligent act
causes its destruction, he is unquestionably liable.
Would it be logical to free him from his liability for
the breach of his contract, which involves the duty
to exercise due care in the preservation of the
watch, if he shows that it was his servant whose
negligence caused the injury? If such a theory
could be accepted, juridical persons would enjoy
practically complete immunity from damages
Transportation Law
arising from the breach of their contracts if caused
by negligent acts as such juridical persons can of
necessity only act through agents or servants, and
it would no doubt be true in most instances that
reasonable care had been taken in selection and
direction of such servants. If one delivers securities
to a banking corporation as collateral, and they are
lost by reason of the negligence of some clerk
employed by the bank, would it be just and
reasonable to permit the bank to relieve itself of
liability for the breach of its contract to return the
collateral upon the payment of the debt by proving
that due care had been exercised in the selection
and direction of the clerk?
This distinction between culpa aquiliana, as
the source of an obligation, and culpa
contractual as a mere incident to the performance
of a contract has frequently been recognized by the
supreme court of Spain. (Sentencias of June 27,
1894; November 20, 1896; and December 13,
1896.) In the decisions of November 20, 1896, it
appeared that plaintiff's action arose ex contractu,
but that defendant sought to avail himself of the
provisions of article 1902 of the Civil Code as a
defense. The Spanish Supreme Court rejected
defendant's contention, saying:
These are not cases of injury
caused, without any pre-existing
obligation, by fault or negligence, such as
those to which article 1902 of the Civil
Code relates, but of damages caused by
the defendant's failure to carry out the
undertakings imposed by the contracts . .
..
A brief review of the earlier decision of this court
involving the liability of employers for damage done
by the negligent acts of their servants will show that
in no case has the court ever decided that the
negligence of the defendant's servants has been
held to constitute a defense to an action for
damages for breach of contract.
In the case of Johnson vs. David (5 Phil. Rep.,
663), the court held that the owner of a carriage
was not liable for the damages caused by the
Full Text Cases 4 (Safety of Passengers)
negligence of his driver. In that case the court
commented on the fact that no evidence had been
adduced in the trial court that the defendant had
been negligent in the employment of the driver, or
that he had any knowledge of his lack of skill or
carefulness.
In the case of Baer Senior & Co's
Successors vs. Compania Maritima (6 Phil. Rep.,
215), the plaintiff sued the defendant for damages
caused by the loss of a barge belonging to plaintiff
which was allowed to get adrift by the negligence
of defendant's servants in the course of the
performance of a contract of towage. The court
held, citing Manresa (vol. 8, pp. 29, 69) that if the
"obligation of the defendant grew out of a contract
made between it and the plaintiff . . . we do not
think that the provisions of articles 1902 and 1903
are applicable to the case."
In the case of Chapman vs. Underwood (27 Phil.
Rep., 374), plaintiff sued the defendant to recover
damages for the personal injuries caused by the
negligence of defendant's chauffeur while driving
defendant's automobile in which defendant was
riding at the time. The court found that the
damages were caused by the negligence of the
driver of the automobile, but held that the master
was not liable, although he was present at the time,
saying:
. . . unless the negligent acts of the driver
are continued for a length of time as to
give the owner a reasonable opportunity
to observe them and to direct the driver to
desist therefrom. . . . The act complained
of must be continued in the presence of
the owner for such length of time that the
owner by his acquiescence, makes the
driver's acts his own.
In the case of Yamada vs. Manila Railroad Co. and
Bachrach Garage & Taxicab Co. (33 Phil. Rep., 8),
it is true that the court rested its conclusion as to
the liability of the defendant upon article 1903,
although the facts disclosed that the injury
complaint of by plaintiff constituted a breach of the
duty to him arising out of the contract of
transportation. The express ground of the decision
in this case was that article 1903, in dealing with
the liability of a master for the negligent acts of his
servants "makes the distinction between private
individuals and public enterprise;" that as to the
latter the law creates a rebuttable presumption of
negligence in the selection or direction of servants;
and that in the particular case the presumption of
negligence had not been overcome.
It is evident, therefore that in its decision Yamada
case, the court treated plaintiff's action as though
founded in tort rather than as based upon the
breach of the contract of carriage, and an
examination of the pleadings and of the briefs
shows that the questions of law were in fact
discussed upon this theory. Viewed from the
standpoint of the defendant the practical result
must have been the same in any event. The proof
disclosed beyond doubt that the defendant's
servant was grossly negligent and that his
negligence was the proximate cause of plaintiff's
injury. It also affirmatively appeared that defendant
had been guilty of negligence in its failure to
exercise proper discretion in the direction of the
servant. Defendant was, therefore, liable for the
injury suffered by plaintiff, whether the breach of
the duty were to be regarded as constituting culpa
aquiliana or culpa contractual. As Manresa points
out (vol. 8, pp. 29 and 69) whether negligence
occurs an incident in the course of the performance
of a contractual undertaking or its itself the source
of an extra-contractual undertaking obligation, its
essential characteristics are identical. There is
always an act or omission productive of damage
due to carelessness or inattention on the part of the
defendant. Consequently, when the court holds
that a defendant is liable in damages for having
failed to exercise due care, either directly, or in
failing to exercise proper care in the selection and
direction of his servants, the practical result is
identical in either case. Therefore, it follows that it
is not to be inferred, because the court held in the
Yamada case that defendant was liable for the
damages negligently caused by its servants to a
person to whom it was bound by contract, and
made reference to the fact that the defendant was
negligent in the selection and control of its
servants, that in such a case the court would have
Page 40 of 41
held that it would have been a good defense to the
action, if presented squarely upon the theory of the
breach of the contract, for defendant to have
proved that it did in fact exercise care in the
selection and control of the servant.
The true explanation of such cases is to be found
by directing the attention to the relative spheres of
contractual and extra-contractual obligations. The
field of non- contractual obligation is much more
broader than that of contractual obligations,
comprising, as it does, the whole extent of juridical
human relations. These two fields, figuratively
speaking, concentric; that is to say, the mere fact
that a person is bound to another by contract does
not relieve him from extra-contractual liability to
such person. When such a contractual relation
exists the obligor may break the contract under
such conditions that the same act which
constitutes the source of an extra-contractual
obligation had no contract existed between the
parties.
The contract of defendant to transport plaintiff
carried with it, by implication, the duty to carry him
in safety and to provide safe means of entering and
leaving its trains (civil code, article 1258). That
duty, being contractual, was direct and immediate,
and its non-performance could not be excused by
proof that the fault was morally imputable to
defendant's servants.
The railroad company's defense involves the
assumption that even granting that the negligent
conduct of its servants in placing an obstruction
upon the platform was a breach of its contractual
obligation to maintain safe means of approaching
and leaving its trains, the direct and proximate
cause of the injury suffered by plaintiff was his own
contributory negligence in failing to wait until the
train had come to a complete stop before alighting.
Under the doctrine of comparative negligence
announced in the Rakes case (supra), if the
accident was caused by plaintiff's own negligence,
no liability is imposed upon defendant's negligence
and plaintiff's negligence merely contributed to his
injury, the damages should be apportioned. It is,
therefore, important to ascertain if defendant was
in fact guilty of negligence.
Transportation Law
It may be admitted that had plaintiff waited until the
train had come to a full stop before alighting, the
particular injury suffered by him could not have
occurred. Defendant contends, and cites many
authorities in support of the contention, that it is
negligence per se for a passenger to alight from a
moving train. We are not disposed to subscribe to
this doctrine in its absolute form. We are of the
opinion that this proposition is too badly stated and
is at variance with the experience of every-day life.
In this particular instance, that the train was barely
moving when plaintiff alighted is shown
conclusively by the fact that it came to stop within
six meters from the place where he stepped from
it. Thousands of person alight from trains under
these conditions every day of the year, and sustain
no injury where the company has kept its platform
free from dangerous obstructions. There is no
reason to believe that plaintiff would have suffered
any injury whatever in alighting as he did had it not
been for defendant's negligent failure to perform its
duty to provide a safe alighting place.
We are of the opinion that the correct doctrine
relating to this subject is that expressed in
Thompson's work on Negligence (vol. 3, sec.
3010) as follows:
The test by which to determine whether
the passenger has been guilty of
negligence in attempting to alight from a
moving railway train, is that of ordinary or
reasonable care. It is to be considered
whether an ordinarily prudent person, of
the age, sex and condition of the
passenger, would have acted as the
passenger acted under the
circumstances disclosed by the evidence.
This care has been defined to be, not the
care which may or should be used by the
prudent man generally, but the care
which a man of ordinary prudence would
use under similar circumstances, to avoid
injury." (Thompson, Commentaries on
Negligence, vol. 3, sec. 3010.)
Or, it we prefer to adopt the mode of exposition
used by this court in Picart vs. Smith (37 Phil. rep.,
809), we may say that the test is this; Was there
Full Text Cases 4 (Safety of Passengers)
anything in the circumstances surrounding the
plaintiff at the time he alighted from the train which
would have admonished a person of average
prudence that to get off the train under the
conditions then existing was dangerous? If so, the
plaintiff should have desisted from alighting; and
his failure so to desist was contributory
negligence.1awph!l.net
As the case now before us presents itself, the only
fact from which a conclusion can be drawn to the
effect that plaintiff was guilty of contributory
negligence is that he stepped off the car without
being able to discern clearly the condition of the
platform and while the train was yet slowly moving.
In considering the situation thus presented, it
should not be overlooked that the plaintiff was, as
we find, ignorant of the fact that the obstruction
which was caused by the sacks of melons piled on
the platform existed; and as the defendant was
bound by reason of its duty as a public carrier to
afford to its passengers facilities for safe egress
from its trains, the plaintiff had a right to assume,
in the absence of some circumstance to warn him
to the contrary, that the platform was clear. The
place, as we have already stated, was dark, or
dimly lighted, and this also is proof of a failure upon
the part of the defendant in the performance of a
duty owing by it to the plaintiff; for if it were by any
possibility concede that it had right to pile these
sacks in the path of alighting passengers, the
placing of them adequately so that their presence
would be revealed.
As pertinent to the question of contributory
negligence on the part of the plaintiff in this case
the following circumstances are to be noted: The
company's platform was constructed upon a level
higher than that of the roadbed and the
surrounding ground. The distance from the steps
of the car to the spot where the alighting passenger
would place his feet on the platform was thus
reduced, thereby decreasing the risk incident to
stepping off. The nature of the platform,
constructed as it was of cement material, also
assured to the passenger a stable and even
surface on which to alight. Furthermore, the
plaintiff was possessed of the vigor and agility of
young manhood, and it was by no means so risky
for him to get off while the train was yet moving as
the same act would have been in an aged or feeble
person. In determining the question of contributory
negligence in performing such act — that is to say,
whether the passenger acted prudently or
recklessly — the age, sex, and physical condition
of the passenger are circumstances necessarily
affecting the safety of the passenger, and should
be considered. Women, it has been observed, as
a general rule are less capable than men of
alighting with safety under such conditions, as the
nature of their wearing apparel obstructs the free
movement of the limbs. Again, it may be noted that
the place was perfectly familiar to the plaintiff as it
was his daily custom to get on and of the train at
this station. There could, therefore, be no
uncertainty in his mind with regard either to the
length of the step which he was required to take or
the character of the platform where he was
alighting. Our conclusion is that the conduct of the
plaintiff in undertaking to alight while the train was
yet slightly under way was not characterized by
imprudence and that therefore he was not guilty of
contributory negligence.
The evidence shows that the plaintiff, at the time of
the accident, was earning P25 a month as a
copyist clerk, and that the injuries he has suffered
have permanently disabled him from continuing
that employment. Defendant has not shown that
any other gainful occupation is open to plaintiff. His
expectancy of life, according to the standard
mortality tables, is approximately thirty-three
years. We are of the opinion that a fair
compensation for the damage suffered by him for
his permanent disability is the sum of P2,500, and
that he is also entitled to recover of defendant the
additional sum of P790.25 for medical attention,
hospital services, and other incidental
expenditures connected with the treatment of his
injuries.
The decision of lower court is reversed, and
judgment is hereby rendered plaintiff for the sum of
P3,290.25, and for the costs of both instances. So
ordered.
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