Transportation > 1st batch of Cases
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Everett Streamship Corp. V. CA (1998)
G.R. No. 122494 October 8, 1998
Lessons Applicable: Contracting Parties (Transportation)
SYLLABUS
1. CIVIL LAW; COMMON CARRIERS; BILL OF LADING;
LIMITATION FOR LOSS OR DESTRUCTION OF CARGO,
SANCTIONED BY LAW. — A stipulation in the bill of lading limiting the
common carrier's liability for loss or destruction of a cargo to a certain sum,
unless the shipper or owner declares a greater value, is sanctioned by law,
particularly Articles 1749 and 1750 of the Civil Code. Such limited-liability
clause has also been consistently upheld by this Court in a number of cases.
Art. 1749. A stipulation that the common carrier's liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered. by the owner or
shipper for the loss, destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been fairly and freely
agreed upon.
2. ID.; ID.; ID.; ID.; REQUISITE. — Pursuant to the afore-quoted
provisions of law, it is required that the stipulation limiting the common
carrier's liability for loss must be "reasonable and just under the
circumstances, and has been freely and fairly agreed upon."
3. ID.; ID.; ID.; ID.; ID.; CASE AT BAR. — In the bill of lading, the
carrier made it clear that its liability would only be up to One Hundred
Thousand (¥100,000.00) Yen. However, the shipper, Maruman Trading, had
the option to declare a higher valuation if the value of its cargo was higher
than the limited liability of the carrier. Considering that the shipper did not
declare a higher valuation, it had itself to blame for not complying with the
stipulations. To defeat the carrier's limited liability, the aforecited Clause 18
of the bill of lading requires that the shipper should have declared in writing a
higher valuation of its goods before receipt thereof by the carrier and insert
the said declaration in the bill of lading, with the extra freight paid. These
requirements in the bill of lading were never complied with by the
shipper, hence, the liability of the carrier under the limited liability clause
stands. The Commercial Invoice No. MTM-941 does not in itself sufficiently
and convincingly show that petitioner has knowledge of the value of the cargo
Atty.
as contended by private respondent. No other evidence was proffered by
private respondent to support is contention. Thus, we are convinced that
petitioner should be liable for the full value of the lost cargo. In fine, the
liability of petitioner for the loss of the cargo is limited to One Hundred
Thousand (¥100,000.00) Yen, pursuant to Clause 18 of the bill of lading.
4. ID.; OBLIGATIONS AND CONTRACTS; CONTRACTS OF
ADHESION, NOT PER SE INVALID. — Contracts of adhesion are not
invalid per se and that it has on numerous occasions upheld the binding effect
thereof. (PAL vs. CA, 255 SCRA 48, [1996] and other cases cited)
5. ID.; ID.; GREATER VIGILANCE REQUIRED WHEN DEALING
THEREWITH. — Greater vigilance, however, is required of the courts when
dealing with contracts of adhesion in that the said contracts must be carefully
scrutinized "in order to shield the unwary (or weaker party) from deceptive
schemes contained in ready-made covenants," such as the bill of lading in
question. The stringent requirement which the courts are enjoined to observe
is in recognition of Article 24 of the Civil Code which mandates that "(i)n all
contractual, property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance, indigence,
mental weakness, tender age or other handicap, the courts must be vigilant for
his protection. ASTIED
6. ID.; ID.; CONTRACT OF CARRIAGE; CONSIGNEE; BOUND
THEREBY. — In Sea-Land Service, Inc. vs. Intermediate Appellate Court
(153 SCRA 552 [1987]), we held that even if the consignee was not a
signatory to the contract of carriage between the shipper and the carrier, the
consignee can still be bound by the contract. SDEITC
FACTS:
 Hernandez Trading Co., Inc. (Hernandez) imported 3 crates of bus
spare parts (MARCO C/No. 12, MARCO C/No. 13 and MARCO
C/No. 14), from Maruman Trading Company, Ltd. (Maruman), a
foreign corporation based in Japan.
 The crates (covered by Bill of Lading No.
NGO53MN) were shipped on board
“ADELFAEVERETTE,” a vessel owned by Everett
Orient Lines
 Upon arrival at the port of Manila, it was discovered that the crate
marked MARCO C/No. 14 was missing
 Hernandez made a formal claim for Y1,552,500.00, as shown in
an Invoice No. MTM-941, dated November 14, 1991
  Everett Streamship Corp. offered to pay
only Y100,000.00 the maximum amount stipulated under
Clause 18 of the covering bill of lading
 Hernandez rejected the offer and thereafter instituted a suit for
collection
 Trial Court: in favor of Hernandez
 CA: Affirmed but deleted the award of attorney’s fees
ISSUE:
1. W/N the limited liability clause in the Bill of Lading is valid
2. W/N Hernandez as consignee, who is not a signatory to the bill of
lading is bound by the stipulations thereof
HELD:
1. YES.
 A stipulation in the bill of lading limiting the common carrier’s
liability for loss or destruction of a cargo to a certain sum, unless the
shipper or owner declares a greater value, is sanctioned by law,
particularly Articles 1749 and 1750 of the Civil Code which provide:
Art. 1749. A stipulation that the common carrier's liability is limited to
the value of the goods appearing in the bill of lading, unless the shipper
or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered by the owner
or shipper for the loss, destruction, or deterioration of the goods is valid,
if it is reasonable and just under the circumstances, and has been fairly
and freely agreed upon.
 Maruman Trading, had the option to declare a higher valuation
if the value of its cargo was higher than the limited liability of the
carrier. Considering that the shipper did not declare a higher
valuation, it had itself to blame for not complying with the
stipulations.
 The trial court’s ratiocination that private respondent could not have
“fairly and freely” agreed to the limited liability clause in the bill of
lading because the said conditions were printed in small letters does
not make the bill of lading invalid.
 contracts of adhesion are valid and binding
 Greater vigilance, however, is required of the courts when dealing
with contracts of adhesion in that the said contracts must be carefully
scrutinized “in order to shield the unwary (or weaker party) from
deceptive schemes contained in ready-made covenant
 Article 24 of the Civil Code which mandates that “(i)n all
contractual, property or other relations, when one of the
parties is at a disadvantage on account of his moral
dependence, ignorance, indigence, mental weakness, tender
age or other handicap, the courts must be vigilant for his
protection
 Maruman Trading, we assume, has been extensively engaged in
the trading business. It cannot be said to be ignorant of the
business transactions it entered into involving the shipment of its
goods to its customers. The shipper could not have known, or
should know the stipulations in the bill of lading and there it
should have declared a higher valuation of the goods
shipped. Moreover, Maruman Trading has not been heard to
complain that it has been deceived or rushed into agreeing to ship the
cargo in petitioner’s vessel. In fact, it was not even impleaded in
this case.
2. YES.
 the right of a party in the same situation as Hernandez, to recover for
loss of a shipment consigned to him under a bill of lading drawn up
only by and between the shipper and the carrier, springs from either a
relation of agency that may exist between him and the shipper or
consignor, or his status as stranger in whose favor some stipulation is
made in said contract, and who becomes a party thereto when he
demands fulfillment of that stipulation, in this case the delivery of the
goods or cargo shipped
 When Hernandez formally claimed reimbursement for the missing
goods from Everett and subsequently filed a case against the it based
on the very same bill of lading, it accepted the provisions of the
contract and thereby made itself a party thereto, or at least has come
to court to enforce it.[
 The commercial Invoice No. MTM-941 does not in itself sufficiently
and convincingly show that Everett has knowledge of the value of
the cargo as contended by Hernandez
MOF Company Inc v Shin Yang Brokerage Corp
GR No 172822
December 18, 2009
Topic: Bill of Lading
DECISION
DEL CASTILLO, J p:
The necessity of proving lies with the person who sues.
The refusal of the consignee named in the bill of lading to pay the freightage
on the claim that it is not privy to the contract of affreightment propelled the
shipper to sue for collection of money, stressing that its sole evidence, the bill
of lading, suffices to prove that the consignee is bound to pay. Petitioner now
comes to us by way of Petition for Review on Certiorari 1 under Rule 45
praying for the reversal of the Court of Appeals' (CA) judgment that
dismissed its action for sum of money for insufficiency of evidence.
Facts:
Halla Trading Co., a company based in Korea, shipped to Manila
secondhand cars and other articles on board the vessel Hanjin Busan. The bill
of lading covering the shipment which was prepared by the carrier Hanjin
Shipping Co., Ltd. (Hanjin), named respondent Shin Yang Brokerage Corp.
(Shin Yang) as the consignee and indicated that payment was on a Freight
Collect basis. The shipment arrived in Manila. Thereafter, petitioner MOF
Company, Inc. (MOF), Hanjins exclusive general agent in the Philippines,
repeatedly demanded the payment of ocean freight, documentation fee and
terminal handling charges from Shin Yang. The latter, however, failed and
refused to pay contending that it did not cause the importation of the
goods, that it is only the Consolidator of the said shipment, that the ultimate
consignee did not endorse in its favor the original bill of lading and that the
bill of lading was prepared without its consent. Thus, MOF filed a case for
sum of money. MOF alleged that Shin Yang, a regular client, caused the
importation and shipment of the goods and assured it that ocean freight
and other charges would be paid upon arrival of the goods in Manila.
Yet, after Hanjin's compliance, Shin Yang unjustly breached its
obligation to pay.
MOF argued that Shin Yang, as the named consignee in the bill of lading,
entered itself as a party to the contract and bound itself to the Freight Collect
arrangement. Claiming that it is merely a consolidator/forwarder and that Bill
of Lading was not endorsed to it by the ultimate consignee, Shin Yang denied
any involvement in shipping the goods or in promising to shoulder the
freightage.
Issue:
Whether or not a consignee, who is not a signatory to the bill of lading, is
bound by the stipulations thereof
Ruling:
The bill of lading is oftentimes drawn up by the shipper/consignor and the
carrier without the intervention of the consignee. However, the latter can be
bound by the stipulations of the bill of lading when:
a) there is a relation of agency between the shipper or consignor and the
consignee; or
b) when the consignee demands fulfillment of the stipulation of the bill of
lading which was drawn up in its favor.
In Keng Hua Paper Products Co., Inc. v. CA, we held that once the bill of
lading is received by the consignee who does not object to any terms or
stipulations contained therein, it constitutes as an acceptance of the contract
and of all of its terms and conditions, of which the acceptor has actual or
constructive notice.
In sum, a consignee, although not a signatory to the contract of carriage
between the shipper and the carrier, becomes a party to the contract by
reason of either a) the relationship of agency between the consignee and
the shipper/ consignor; b) the unequivocal acceptance of the bill of lading
delivered to the consignee, with full knowledge of its contents or c)
availment of the stipulation pour autrui, i.e., when the consignee, a third
person, demands before the carrier the fulfillment of the stipulation made by
the consignor/shipper in the consignees favor, specifically the delivery of the
goods/cargoes shipped.
In the instant case, Shin Yang consistently denied in all of its pleadings that it
authorized Halla Trading, Co. to ship the goods on its behalf; or that it got
hold of the bill of lading covering the shipment or that it demanded the release
of the cargo. Basic is the rule in evidence that the burden of proof lies upon
him who asserts it, not upon him who denies, since, by the nature of things, he
who denies a fact cannot produce any proof of it. Thus, MOF has the burden
to controvert all these denials, it being insistent that Shin Yang asserted
itself as the consignee and the one that caused the shipment of the goods to the
Philippines.
Dangwa Transco. Co. Inc. v. CA
G.R. No. 95582 October 7, 1991
Topic: Specific Perfections of Contract of Carriage
Laws Applicable: Art. 1733, Art. 1755
Facts:
May 13, 1985: Theodore M. Lardizabal was driving a passenger
bus belonging to Dangwa Transportation Co. Inc. (Dangwa)
The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro alighted
Pedro Cudiamat fell from the platform of the bus when it suddenly accelerated
forward. Worst, Pedro was ran over by the rear right tires of the vehicle.
Theodore first brought his other passengers and cargo to their
respective destinations before bringing Pedro to Lepanto Hospital where he
expired.
Private respondents filed a complaint for damages against Dangwa for the
death of Pedro Cudiamat
Dangwa: observed and continued to observe the extraordinary diligence
required in the operation of the co. and the supervision of the employees even
as they are not absolute insurers of the public at large
RTC: in favour of Dangwa holding Pedrito as negligent and his negligence
was the cause of his death but still ordered to pay in equity P 10,000 to the
heirs of Pedrito
CA: reversed and ordered to pay Pedrito indemnity, moral damages, actual
and compensatory damages and cost of the suit
Issue:
W/N Dangwa should be held liable for the negligence of its driver Theodore
Held:
YES. CA affirmed.
A public utility once it stops, is in effect making a continuous offer to bus
riders (EVEN when moving as long as it is still slow in motion)
Duty of the driver: do NOT make acts that would have the effect of increasing
peril to a passenger while he is attempting to board the same
Premature acceleration of the bus in this case = breach of duty
Stepping and standing on the platform of the bus is already considered a
passenger and is entitled all the rights and protection pertaining to such a
contractual relation
Duty extends to boarding and alighting
GR: By contract of carriage, the carrier assumes the express obligation to
transport the passenger to his destination safely and observe
extraordinary diligence with a due regard for all the circumstances, and
any injury that might be suffered by the passenger is right away
attributable to the fault or negligence of the carrier
EX: carrier to prove that it has exercised extraordinary diligence as prescribed
in Art. 1733 and 1755 of the Civil Code
Failure to immediately bring Pedrito to the hospital despite his serious
condition = patent and incontrovertible proof of their negligence
 Hospital was in Bunk 56
 1st proceeded to Bunk 70 to allow a passenger (who later called the
family of Pedrito on his own will) to alight and deliver a refrigerator
In tort, actual damages is based on net earnings
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF THE
COURT OF APPEALS; RULE AND EXCEPTION. — It is an established
principle that the factual findings of the Court of Appeals as a rule are final
and may not be reviewed by this Court on appeal. However, this is subject to
settled exceptions, one which is when the findings of the appellate court are
contrary to those of the trial court, in which case a reexamination of the facts
and evidence may be undertaken.
2. CIVIL LAW; COMMON CARRIERS; LIABLE FOR INJURIES
SUFFERED BY BOARDING PASSENGERS RESULTING FROM THE
PREMATURE ACCELERATION OF THEIR CONVEYANCES. — The
contention of petitioners that the driver and the conductor had no knowledge
that the victim would ride on the bus, since the latter had supposedly not
manifested his intention to board the same, does not merit consideration.
When the bus is not in motion there is no necessity for a person who wants to
ride the same to signal his intention to board. A public utility bus, once it
stops, is in effect making a continuous offer to bus riders. Hence, it becomes
the duty of the driver and the conductor, every time the bus stops, to do no act
that would have the effect of increasing the peril to a passenger while he was
attempting to board the same. The premature acceleration of the bus in this
case was a breach of such duty. It is the duty of common carriers of
passengers, including common carriers by railroad train, streetcar, or
motorbus, to stop their conveyances a reasonable length of time in order to
afford passengers an opportunity to board and enter, and they are liable for
injuries suffered by boarding passengers resulting from the sudden starting up
or jerking of their conveyances while they are doing so.
3. ID.; ID.; ID.; BOARDING AND ALIGHTING FROM A SLOWLY
MOVING VEHICLE; NOT A NEGLIGENCE PER SE. — It is not
negligence per se, or as a matter of law, for one to attempt to board a train or
streetcar which is moving slowly. An ordinarily prudent person would have
made the attempt to board the moving conveyance under the same or similar
circumstances. The fact that passengers board and alight from a slowly
moving vehicle is a matter of common experience and both the driver and
conductor in this case could not have been unaware of such an ordinary
practice.
4. ID.; ID.; ID.; LIABILITY THEREOF; EXTENDS TO PERSONS
BOARDING THE VEHICLE AS WELL AS THOSE ALIGHTING
THEREFROM. — The victim herein, by stepping and standing on the
platform of the bus, is already considered a passenger and is entitled to all the
rights and protection pertaining to such a contractual relation. Hence, it has
been held that the duty which the carrier of passengers owes to its patrons
extends to persons boarding the cars as well as to those alighting therefrom.
(Del Prado vs. Manila Electric Co., supra.)
express finding of fault or negligence on the part of the carrier in order to hold
it responsible to pay the damages sought by the passenger. By the contract of
carriage, the carrier assumes the express obligation to transport the passenger
to destination safely and to observe extraordinary diligence with a due regard
for all the circumstances, and any injury that might be suffered by the
passenger is right away attributable to the fault or negligence of the carrier.
This is an exception to the general rule that negligence must be proved, and it
is therefore incumbent upon the carrier to prove that it has exercised
extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil
Code.
7. ID.; ID.; ID.; ACTUAL OR COMPENSATORY DAMAGES;
RULE IN DETERMINING THE AMOUNT THEREOF. — With respect to
the award of damages, an oversight was, however, committed by respondent
Court of Appeals in computing the actual damages based on the gross income
of the victim. The rule is that the amount recoverable by the heirs of a victim
of a tort is not the loss of the entire earnings, but rather the loss of that portion
of the earnings which the beneficiary would have received. In other words,
only net earnings, not gross earnings, are to be considered, that is, the total of
the earnings less expenses necessary in the creation of such earnings or
income and minus living and other incidental expenses
.

5. ID.; ID.; ID.; BOUND TO OBSERVE EXTRAORDINARY

DILIGENCE FOR THE SAFETY OF THE PASSENGERS TRANSPORTED
BY THEM. — Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence for the
safety of the passengers transported by them, according to all the
circumstances of each case. 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. 1755, Civil Code.)

6. ID.; DAMAGES; ACTION BASED ON A CONTRACT OF

CARRIAGE; FINDING OF FAULT OR NEGLIGENCE ON THE PART OF
CARRIER NEED NOT BE EXPRESS. — It has also been repeatedly held
that in an action based on a contract of carriage, the court need not make an
G.R. No. 145804 February 6, 2003
Light Rail Transit Authority v. Navidad
Lessons Applicable: Actionable Document (transportation)
Laws Cited: Art. 1755,Art. 1756,Art. 1759,Art. 1763
SYNOPSIS
On 14 October 1993, Nicanor Navidad, then drunk, entered the EDSA LRT
station after purchasing a "token" (representing payment of the fare). Junelito
Escartin, the security guard assigned to the area, approached Navidad. A
misunderstanding or an altercation between the two apparently ensued that led
to a fist fight. At the exact moment that Navidad fell, an LRT train, operated
by petitioner Rodolfo Roman (driver), was coming in. Navidad was struck
by the moving train, and he was killed instantaneously.
Private respondent Marjorie Navidad, the widow of Nicanor, along with her
children, filed a complaint for damages against Junelito Escartin, Rodolfo
Roman, the LRTA, the Metro Transit Organization, Inc. and Prudent Security
Agency for the death of her husband.
The trial court ruled in favor of private respondent by awarding actual, moral
and compensatory damages. Prudent Security Agency appealed to the Court
of Appeals.
The appellate court exonerated Prudent from any liability for the death of
Nicanor and instead held LRTA and Roman jointly and severally liable. In
exempting Prudent from liability, the appellate court stressed that there was
nothing to link the security agency to the death of Navidad. It ruled that
Navidad (widow) failed to show that Escartin (guard) inflicted fist blows upon
the victim and the evidence merely established the fact of death of Navidad by
reason of his having been hit by the train owned and managed by the LRTA
and operated at the time by Roman.
The appellate court faulted petitioners for their failure to present expert
evidence to establish the fact that the application of emergency brakes could
not have stopped the train. Hence, the present petition for review.
The Supreme Court affirmed the decision of the Court of Appeals.
If there is any liability that could be attributed to Prudent, it could only be for
tort under the provisions of Article 2176 and related provisions, in conjunction
with Article 2180, of the Civil Code. In the absence of satisfactory
explanation by the carrier on how the accident occurred, which petitioners,
according to the appellate court, have failed to show, the presumption would
be that it has been at fault, an exception from the general rule that negligence
must be proved. Regrettably for LRT, as well as the surviving spouse and
heirs of the late Nicanor Navidad, the Court is concluded by the factual
finding of the Court of Appeals that there was nothing to link Prudent to
the death of Nicanor Navidad, for the reason that the negligence of its
employee, Escartin, has not been duly proven. The Court also absolved
petitioner Rodolfo Roman, there being no showing that he is guilty of any
culpable act or omission and also for the reason that the contractual tie
between the LRT and Navidad is not itself a juridical relation between
the latter and Roman; thus, Roman can be made liable only for his own fault
or negligence.
The Court also ruled that the award of nominal damages, in addition to actual
damages, is untenable stressing that 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. It is also an
established rule that nominal damages cannot co-exist with compensatory
damages.
SYLLABUS
1. CIVIL LAW; COMMON CARRIERS; LIABILITY FOR DEATH
OR INJURY TO PASSENGERS. — The law requires common carriers to
carry passengers safely using the utmost diligence of very cautious persons
with due regard for all circumstances. Such duty of a common carrier to
provide safety to its passengers so obligates it not only during the course of
the trip but for so long as the passengers are within its premises and where
they ought to be in pursuance to the contract of carriage. The statutory
provisions render a common carrier liable for death of or injury to passengers
(a) through the negligence or willful acts of its employees or b) on account of
willful acts or negligence of other passengers or of strangers if the common
carrier's employees through the exercise of due diligence could have
prevented or stopped the act or omission. In case of such death or injury, a
carrier is presumed to have been at fault or been negligent, and by simple
proof of injury, the passenger is relieved of the duty to still establish the fault
or negligence of the carrier or of its employees and the burden shifts upon the
carrier to prove that the injury is due to an unforeseen event or to force
majeure. In the absence of satisfactory explanation by the carrier on how the
accident occurred, which petitioners, according to the appellate court, have
failed to show, the presumption would be that it has been at fault, an exception
from the general rule that negligence must be proved.
2. ID.; EXTRA CONTRACTUAL OBLIGATIONS; QUASI-
DELICTS; AN EMPLOYER CANNOT BE HELD LIABLE FOR
DAMAGES ABSENT PROOF OF FAULT OR NEGLIGENCE ON THE
PART OF ITS EMPLOYEE; CASE AT BAR. — The foundation of
LRTA's liability is the contract of carriage and its obligation to indemnify the
victim arises from the breach of that contract by reason of its failure to
exercise the high diligence required of the common carrier. In the discharge of
its commitment to ensure the safety of passengers, a carrier may choose to
hire its own employees or avail itself of the services of an outsider or an
independent firm to undertake the task. In either case, the common carrier is
not relieved of its responsibilities under the contract of carriage. Should
Prudent be made likewise liable? If at all, that liability could only be for tort
under the provisions of Article 2176 and related provisions, in conjunction
with Article 2180, of the Civil Code. The premise, however, for the
employer's liability is negligence or fault on the part of the employee. Once
such fault is established, the employer can then be made liable on the basis of
the presumption juris tantum that the employer failed to exercise
diligentissimi patris familias in the selection and supervision of its employees.
The liability is primary and can only be negated by showing due diligence in
the selection and supervision of the employee, a factual matter that has not
been shown. Absent such a showing, one might ask further, how then must the
liability of the common carrier, on the one hand, and an independent
contractor, on the other hand, be described? It would be solidary. A
contractual obligation can be breached by tort and when the same act or
omission causes the injury, one resulting in culpa contractual and the other in
culpa aquiliana, Article 2194 of the Civil Code can well apply. In fine, a
liability for tort may arise even under a contract, where tort is that which
breaches the contract. Stated differently, when an act which constitutes a
breach of contract would have itself constituted the source of a quasi-delictual
liability had no contract existed between the parties, the contract can be said to
have been breached by tort, thereby allowing the rules on tort to apply.
Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the
late Nicanor Navidad, this Court is concluded by the factual finding of the
Court of Appeals that "there is nothing to link (Prudent) to the death of
Nicanor (Navidad), for the reason that the negligence of its employee,
Escartin, has not been duly proven . . . ." This finding of the appellate court is
not without substantial justification in our own review of the records of the
case. There being, similarly, no showing that petitioner Rodolfo Roman
himself is guilty of any culpable act or omission, he must also be absolved
from liability. Needless to say, the contractual tie between the LRT and
Navidad is not itself a juridical relation between the latter and Roman; thus,
Roman can be made liable only for his own fault or negligence.
3. ID.; DAMAGES; AWARD OF NOMINAL DAMAGES IN
ADDITION TO ACTUAL DAMAGES IS UNTENABLE; NOMINAL
DAMAGES CANNOT CO-EXIST WITH COMPENSATORY DAMAGES.
— The award of nominal damages in addition to actual damages is untenable.
Nominal damages are adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered by him. It is an established rule that nominal damages cannot co-exist
with compensatory damages.
Facts:
October 14, 1993, 7:30 p.m. : Drunk Nicanor Navidad (Nicanor) entered the
EDSA LRT station after purchasing a “token”. While Nicanor was standing at
the platform near the LRT tracks, the guard Junelito Escartin approached
him. Due to misunderstanding, they had a fist fight. Nicanor fell on the tracks
and killed instantaneously upon being hit by a moving train operated by
Rodolfo Roman.
December 8, 1994: The widow of Nicanor, along with her children, filed a
complaint for damages against Escartin, Roman, LRTA, Metro Transit Org.
Inc. and Prudent (agency of security guards) for the death of her husband.
LRTA and Roman filed a counter-claim against Nicanor and a cross-claim
against Escartin and Prudent
Prudent: denied liability – averred that it had exercised due diligence in the
selection and surpervision of its security guards
LRTA and Roman: presented evidence
Prudent and Escartin: demurrer contending that Navidad had failed to prove
that Escartin was negligent in his assigned task
RTC: In favour of widow and against Prudent and Escartin, complaint against
LRT and Roman were dismissed for lack of merit
CA: reversed by exonerating Prudent and held LRTA and Roman (driver)
liable
Issue:
W/N LRTA and Roman should be liable according to the contract of carriage.
Held:
NO. Affirmed with Modification: (a) nominal damages is DELETED
(CANNOT co-exist w/ compensatory damages) (b) Roman is absolved.
Law and jurisprudence dictate that a common carrier, both from the nature of
its business and for reasons of public policy, is burdened with the duty off
exercising utmost diligence in ensuring the safety of passengers
GR: Prudent can be liable only for tort under Art. 2176 and related provisions
in conjunction with Art. 2180 of the Civil Code. (Tort may arise even under a
contract, where tort [quasi-delict liability] is that which breaches the contract)
EX: if employer’s liability is negligence or fault on the part of the employee,
employer can be made liable on the basis of the presumption juris tantum that
the employer failed to exercise diligentissimi patris families in the selection
and supervision of its employees.

Civil Code:
Art. 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances
Art. 1756. In case of death 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
Art. 1759. Common carriers are liable for the death of or injuries to
passengers through the negligence or wilful acts of the former’s employees,
although such employees may have acted beyond the scope of their authority
or in violation of the orders of the common carriers
EX to the EX: Upon showing due diligence in the selection and supervision of
the employee
Factual finding of the CA: NO link bet. Prudent and the death of Nicanor for
the reason that the negligence of Escartin was NOT proven
NO showing that Roman himself is guilty of any culpable act or omission, he
must also be absolved from liability
Contractual tie bet. LRT and Nicanor is NOT itself a juridical relation bet.
Nicanor and Roman
Roman can be liable only for his own fault or negligence

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 is responsible for injuries suffered by a

passenger on account of the wilful 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.

Carriers presumed to be at fault or been negligent and by simple proof of

injury, the passenger is relieaved of the duty to still establish the fault or
negligence of the carrier or of its employees and the burden shifts upon the
carrier to prove that the injury is due to an unforeseen event or to force
majeure

Where it hires its own employees or avail itself of the services of an outsider
or an independent firm to undertake the task, the common carrier is NOT
relieved of its responsibilities under the contract of carriage
Korean Airlines v. CA
234 SCRA 717
Principle:
Specific Perfections of the Contract of Carriage > AIRCRAFT
A. If contract to carry passengers, there is perfection even if no tickets have
been issued to said passengers so long as there was already a meeting of
minds with respect to the subject matter and the consideration. (British
Airways, Inc. vs. CA, G. R. No. 92288, 9 February 1993
B. If contract of carriage, there is perfection if it can be established that the
passenger had checked in at the departure counter, passed through customs
and immigration, boarded the shuttle bus and proceeded to the ramp of the
aircraft and that his baggage had already been loaded in the aircraft to be
flown with the passenger to his destination. (KAL Co. Ltd. Vs. CA, G.R.
No.114061, 3 August 1994, 234 SCRA 717, 723)
Facts:
Juanito Lapuz was contracted for employment in Saudi Arabia through Pan
Pacific Recruiting Services, Inc. He was supposed to leave via Korean
Airlines, but was initially listed as a “chance passenger”. According to Lapuz,
he was allowed to check in and was cleared for departure. When he was on the
stairs going to the airplane, a KAL officer pointed at him and shouted,
“Down! Down!” and he was barred from taking the flight. When he asked for
another booking, his ticket was cancelled. He was unable to report for work
and so he lost his employment. KAL alleged that the agent of Pan Pacific was
informed that there are 2 seats possibly available. He gave priority to Perico,
while the other seat was won by Lapuz through lottery. But because only 1
seat became available, it was given to Perico. The trial court adjudged KAL
liable for damages. The decision was affirmed by the Court of Appeals, with
modification on the damages awarded.
Issues:
(1) Whether there is already a contract of carriage between KAL and Lapuz to
hold KAL liable for breach of contract
(2) Whether moral and exemplary damages should be awarded, and to what
extent
Held:
(1) The status of Lapuz as standby passenger was changed to that of a
confirmed passenger when his name was entered in the passenger manifest of
KAL for its Flight No. KE 903. His clearance through immigration and
customs clearly shows that he had indeed been confirmed as a passenger of
KAL in that flight. KAL thus committed a breach of the contract of carriage
between them when it failed to bring Lapuz to his destination. A contract to
transport passengers is different in kind and degree from any other contractual
relation. The business of the carrier is mainly with the traveling public. It
invites people to avail themselves of the comforts and advantages it offers.
The contract of air carriage generates a relation attended with a public duty.
Passengers have the 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 discourteous conduct on the part
of these employees toward a passenger gives the latter an action for damages
against the carrier. The breach of contract was aggravated in this case when,
instead of courteously informing Lapuz of his being a "wait-listed" passenger,
a KAL officer rudely shouted "Down! Down!" while pointing at him, thus
causing him embarrassment and public humiliation. The evidence presented
by Lapuz shows that he had indeed checked in at the departure counter, passed
through customs and immigration, boarded the shuttle bus and proceeded to
the ramp of KAL's aircraft. In fact, his baggage had already been loaded in
KAL's aircraft, to be flown with him to Jeddah. The contract of carriage
between him and KAL had already been perfected when he was summarily
and insolently prevented from boarding the aircraft.
(2) The Court of Appeals granted moral and exemplary damages because:
a. The findings of the court a quo that the defendant-appellant has committed
breach of contract of carriage in bad faith and in wanton, disregard of
plaintiff-appellant's rights as passenger laid the basis and justification of an
award for moral damages.
b. In the instant case, we find that defendant-appellant Korean Air Lines acted
in a wanton, fraudulent, reckless, oppressive or malevolent manner when it
"bumped off" plaintiff-appellant on November 8, 1980, and in addition treated
him rudely and arrogantly as a "patay gutom na contract worker fighting
Korean Air Lines," which clearly shows malice and bad faith, thus entitling
plaintiff-appellant to moral damages.
c. Considering that the plaintiff-appellant's entitlement to moral damages has
been fully established by oral and documentary evidence, exemplary damages
may be awarded. In fact, exemplary damages may be awarded, even though
not so expressly pleaded in the complaint. By the same token, to provide an
example for the public good, an award of exemplary damages is also proper.
 as this, should not be permitted to be filed to merely clutter the already
A review of the record of this case shows that the injury suffered by Lapuz is congested judicial dockets. They do not advance the cause of law or their
not so serious or extensive as to warrant an award of P1.5 million. The clients by commencing litigations that for sheer lack of merit do not deserve
assessment of P100,000 as moral and exemplary damages in his favor is, in the attention of the courts." A lawyer owes fidelity to the cause of his client,
our view, reasonable and realistic. but not at the expense of truth and the administration of justice. Counsel for
KAL is reminded that it is his duty not to unduly delay a case, impede the
SYLLABUS execution of a judgment or misuse Court processes.
1. REMEDIAL LAW; JURISDICTION; QUESTION THEREOF;
RULE; EXCEPTION; APPLICATION IN CASE AT BAR. — While it is a
rule that jurisdictional question may be raised at any time, this, however,
admits of an exception where, as in this case, estoppel has supervened. This
Court has time and again frowned upon the undesirable practice of a party
submitting his case for decision and then accepting the judgment, only if
favorable, and attacking it for lack of jurisdiction when adverse. The Court
shall not countenance KAL's undesirable move. What attenuates KAL's
unmeritorious importuning is that the assailed decision has long acquired
finality.

2. ID.; FINALITY OF JUDGMENT; RULE; APPLICATION IN

CASE AT BAR. — It is a settled rule that a judgment which has acquired
finality becomes immutable and unalterable, hence may no longer be modified
in any respect except only to correct clerical errors or mistake. Once a
judgment becomes final, all the issues between the parties are deemed
resolved and laid to rest. KAL's filing of numerous pleadings delayed the
disposition of the case which for fifteen years remained pending. This practice
may constitute abuse of the Court's processes for it tends to impede, obstruct
and degrade the administration of justice. In Li Kim Tho v. Go Siu Ko, et al.,
the Court gave this reminder to litigants and lawyers' alike: "Litigation must
end and terminate sometime and somewhere, and it is essential to an effective
and efficient administration of justice that, once a judgment has become final,
the winning party be not, through a mere subterfuge, deprived of the fruits of
the verdict. Courts must therefore guard against any scheme calculated to
bring about that result. Constituted as they are to put an end to controversies,
courts should frown upon any attempt to prolong them."

3. ADMINISTRATIVE LAW; LAWYERS; RESPONSIBILITY AS

OFFICERS OF THE COURT; CONSTRUED IN CASE AT BAR. — In
Banogan v. Zerna the Court reminded lawyers of their responsibility as
officers of the court in this manner: "As officers of the court, lawyers have a
responsibility to assist in the proper administration of justice. They do not
discharge this duty by filing pointless petitions that only add to the workload
of the judiciary, especially this Court, which is burdened enough as it is. A
judicious study of the facts and the law should advise them when a case, such
G.R. No. 114061 August 23, 1995 resolution dated September 21, 1994, the Court resolved to deny both motions
for reconsideration with finality. Notwithstanding, KAL filed subsequent
KOREAN AIRLINES CO., LTD., petitioner, pleadings asking for reconsideration of the Court's consolidated decision and
vs. again impugning the award of legal interest. Lapuz, meanwhile, filed a motion
COURT OF APPEALS and JUANITO C. LAPUZ, respondents. for early resolution of the case followed by a motion for execution dated
March 14, 1995, praying for the issuance of a writ of execution. KAL, in
response, filed its Opposition and Supplemental Argument in Support of the
G.R. No. 113842 August 23, 1995
Opposition dated March 28, 1995, and March 30, 1995, respectively.
Additionally, on May 3, 1995, Lapuz filed another Urgent Motion for Early
JUANITO C. LAPUZ, petitioner, Resolution stating that the case has been pending for fifteen years which KAL
vs. admitted in its Comment filed two days later, albeit stressing that its pleadings
COURT OF APPEALS and KOREAN AIRLINES CO., were not intended for delay.3
LTD., respondents.
KAL's asseveration that the Court lacks jurisdiction to award legal interest is
RESOLUTION devoid of merit. Both the complaint and amended complaint against KAL
dated November 27, 1980, and January 5, 1981, respectively, prayed for
reliefs and remedies to which Lapuz may be entitled in law and equity. The
award of legal interest is one such relief, as it is based on equitable grounds
FRANCISCO, J.: duly sanctioned by Article 2210 of the Civil Code which provides that:
"[i]nterest may, in the discretion of the Court, be allowed upon damages
The case is of 1980 vintage. It originated from the Regional Trial Court, awarded for breach of contract".4
appealed to the Court of Appeals, then finally elevated to this Court. From the
Court's disposition of the case stemmed incidents which are now the subjects Furthermore, in its petition for review before the Court of Appeals, KAL did
for resolution. To elaborate: not question the trial court's imposition of legal interest. Likewise, in its
appeal before the Court, KAL never bewailed the award of legal interest. In
In an action for breach of contract of carriage, Korean Airlines, Co., Ltd., fact, KAL took exception only with respect to the date when legal interest
(KAL) was ordered by the trial court to pay actual/compensatory damages, should commence to run.5 Indeed, it was only in its motion for reconsideration
with legal interest, attorney's fees and costs of suit in favor of plaintiff Juanito when suddenly its imposition was assailed for having been rendered without
C. Lapuz.1 Both parties appealed to the Court of Appeals, but the trial court's jurisdiction. To strengthen its languid position, KAL's subsequent pleadings
judgment was merely modified: the award of compensatory damages reduced, clothed its attack with constitutional import for alleged violation of its right to
an award for moral and exemplary damages added, with 6% interest per due process. There is no cogent reason and none appears on record that could
annum from the date of filing of the complaint, and the attorney's fees and sustain KAL's scheme as KAL was amply given, in the courts below and in
costs deleted. this Court, occasion to ventilate its case. What is repugnant to due process is
the denial of opportunity to be heard6 which opportunity KAL was extensively
afforded. While it is a rule that jurisdictional question may be raised at any
The parties subsequently elevated the case to this Court, docketed as G.R. No.
time, this, however, admits of an exception where, as in this case, estoppel has
114061 and G.R. No. 113842. On August 3, 1994, the Court in a consolidated
supervened.7 This court has time and again frowned upon the undesirable
decision affirmed the decision of the Court of Appeals, modified only as to the
practice of a party submitting his case for decision and then accepting the
commencement date of the award of legal interest, i.e., from the date of the
judgment, only if favorable, and attacking it for lack of jurisdiction when
decision of the trial court and not from the date of filing of the
adverse.8 The Court shall not countenance KAL's undesirable moves. What
complaint.2 The parties filed their respective motions for reconsideration with
attenuates KAL's unmeritorious importuning is that the assailed decision has
KAL, for the first time, assailing the Court's lack of jurisdiction to impose
long acquired finality. It is a settled rule that a judgment which has acquired
legal interest as the complaint allegedly failed to pray for its award. In a
finality becomes immutable and unalterable, hence may no longer be modified
in any respect except only to correct clerical errors or mistake. 9 Once a that is left of the trial court is the ministerial act of ordering the execution
judgment becomes final, all the issues between the parties are deemed thereof.
resolved and laid to rest.
ACCORDINGLY, KAL's motion for reconsideration is DENlED. Counsel for
KAL's filing of numerous pleadings delayed the disposition of the case which KAL is hereby warned that repetition of his undesirable practice shall be dealt
for fifteen years remained pending. This practice may constitute abuse of the with severely.
Court's processes for it tends to impede, obstruct and degrade the
administration of justice. In Li Kim Tho v. Go Siu Ko, et al., 10 the Court gave Regalado, Puno and Mendoza, JJ., concur.
this reminder to litigants and lawyers' alike:
Narvasa, C.J., is on leave.
Litigation must end and terminate sometime and
somewhere, and it is essential to an effective and efficient Footnotes
administration of justice that, once a judgment has become 1 Decision dated November 14, 1990, Civil Case No. 82-2790, Br. 30, RTC
final, the winning party be not, through a mere subterfuge,
Manila.
deprived of the fruits of the verdict. Courts must therefore
2 Penned by Cruz, J., with Davide, Bellosillo, Quiason and Kapunan, JJ.,
guard against any scheme calculated to bring about the
Concurring; 234 SCRA 717 (1994).
result. Constituted as they are to put an end to controversies,
courts should frown upon any attempt to prolong them. 11

Likewise, in Banogan v. Zerna 12 the Court reminded lawyers of their

responsibility as officers of the court in this manner:

As officers of the court, lawyers have a responsibility to

assist in the proper administration of justice. They do not
discharge this duty by filing pointless petitions that only add
to the workload of the judiciary, especially this Court, which
is burdened enough as it is. A judicious study of the facts
and the law should advise them when a case, such as this,
should not de permitted to be filed to merely clutter the
already congested judicial dockets. They do not advance the
cause of law or their clients by commencing litigations that
for sheer lack of merit do not deserve the attention of the
courts.13

A lawyer owes fidelity to the cause of his client, but not at the expense of
truth and the administration of justice. 14Counsel for KAL is reminded that it
is his duty not to unduly delay a case, impede the execution of a judgment or
misuse Court processes. 15

With respect to Lapuz' motion for execution, suffice to state that the
application for a writ of execution should be addressed to the court of origin
and not to this Court. As the judgment has become final and executory then all