G.R. No. 95582 October 7, 1991 3. The sum of Two Hundred Eighty Eight Thousand (P288,000.
3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as actual and
DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y MALECDAN, petitioners,
vs.
COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT BANDOY, FERNANDO
CUDLAMAT, MARRIETA CUDIAMAT, NORMA CUDIAMAT, DANTE CUDIAMAT, SAMUEL CUDIAMAT
and LIGAYA CUDIAMAT, all Heirs of the late Pedrito Cudiamat represented by Inocencia
Cudiamat, respondents.
Francisco S. Reyes Law Office for petitioners.
Antonio C. de Guzman for private respondents.
REGALADO, J.:
On May 13, 1985, private respondents filed a complaint 1 for damages against petitioners for the
death of Pedrito Cudiamat as a result of a vehicular accident which occurred on March 25, 1985 at
Marivic, Sapid, Mankayan, Benguet. Among others, it was alleged that on said date, while petitioner
Theodore M. Lardizabal was driving a passenger bus belonging to petitioner corporation in a
reckless and imprudent manner and without due regard to traffic rules and regulations and safety
to persons and property, it ran over its passenger, Pedrito Cudiamat. However, instead of bringing
Pedrito immediately to the nearest hospital, the said driver, in utter bad faith and without regard to
the welfare of the victim, first brought his other passengers and cargo to their respective
destinations before banging said victim to the Lepanto Hospital where he expired.
On the other hand, petitioners alleged that they had observed and continued to observe the
extraordinary diligence required in the operation of the transportation company and the
supervision of the employees, even as they add that they are not absolute insurers of the safety of
the public at large. Further, it was alleged that it was the victim's own carelessness and negligence
which gave rise to the subject incident, hence they prayed for the dismissal of the complaint plus an
award of damages in their favor by way of a counterclaim.
On July 29, 1988, the trial court rendered a decision, effectively in favor of petitioners, with this
decretal portion:
IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that Pedrito Cudiamat
was negligent, which negligence was the proximate cause of his death. Nonetheless,
defendants in equity, are hereby ordered to pay the heirs of Pedrito Cudiamat the sum of
P10,000.00 which approximates the amount defendants initially offered said heirs for the
amicable settlement of the case. No costs.
SO ORDERED. 2
Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision 3
in CA-G.R. CV No. 19504 promulgated on August 14, 1990, set aside the decision of the lower court,
and ordered petitioners to pay private respondents:
1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for death of the
victim Pedrito Cudiamat;
2. The sum of Twenty Thousand (P20,000.00) by way of moral damages;
compensatory damages;
4. The costs of this suit. 4
Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution dated
October 4, 1990, 5 hence this petition with the central issue herein being whether respondent court
erred in reversing the decision of the trial court and in finding petitioners negligent and liable for
the damages claimed.
It is an established principle that the factual findings of the Court of Appeals as a rule are final and
may not be reviewed by this Court on appeal. However, this is subject to settled exceptions, one of
which is when the findings of the appellate court are contrary to those of the trial court, in which
case a reexamination of the facts and evidence may be undertaken. 6
In the case at bar, the trial court and the Court of Appeal have discordant positions as to who
between the petitioners an the victim is guilty of negligence. Perforce, we have had to conduct an
evaluation of the evidence in this case for the prope calibration of their conflicting factual findings
and legal conclusions.
The lower court, in declaring that the victim was negligent, made the following findings:
This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a moving
vehicle, especially with one of his hands holding an umbrella. And, without having given
the driver or the conductor any indication that he wishes to board the bus. But defendants
can also be found wanting of the necessary diligence. In this connection, it is safe to
assume that when the deceased Cudiamat attempted to board defendants' bus, the
vehicle's door was open instead of being closed. This should be so, for it is hard to believe
that one would even attempt to board a vehicle (i)n motion if the door of said vehicle is
closed. Here lies the defendant's lack of diligence. Under such circumstances, equity
demands that there must be something given to the heirs of the victim to assuage their
feelings. This, also considering that initially, defendant common carrier had made
overtures to amicably settle the case. It did offer a certain monetary consideration to the
victim's heirs. 7
However, respondent court, in arriving at a different opinion, declares that:
From the testimony of appellees'own witness in the person of Vitaliano Safarita, it is
evident that the subject bus was at full stop when the victim Pedrito Cudiamat boarded the
same as it was precisely on this instance where a certain Miss Abenoja alighted from the
bus. Moreover, contrary to the assertion of the appellees, the victim did indicate his
intention to board the bus as can be seen from the testimony of the said witness when he
declared that Pedrito Cudiamat was no longer walking and made a sign to board the bus
when the latter was still at a distance from him. It was at the instance when Pedrito
 Cudiamat was closing his umbrella at the platform of the bus when the latter made a
sudden jerk movement (as) the driver commenced to accelerate the bus.
Evidently, the incident took place due to the gross negligence of the appellee-driver in
prematurely stepping on the accelerator and in not waiting for the passenger to first
secure his seat especially so when we take into account that the platform of the bus was at
the time slippery and wet because of a drizzle. The defendants-appellees utterly failed to
observe their duty and obligation as common carrier to the end that they should observe
extra-ordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them according to the circumstances of each case (Article 1733,
New Civil Code). 8
After a careful review of the evidence on record, we find no reason to disturb the above holding of
the Court of Appeals. Its aforesaid findings are supported by the testimony of petitioners' own
witnesses. One of them, Virginia Abalos, testified on cross-examination as follows:
Q It is not a fact Madam witness, that at bunkhouse 54, that is before the place of the
incident, there is a crossing?
A The way going to the mines but it is not being pass(ed) by the bus.
Q And the incident happened before bunkhouse 56, is that not correct?
A It happened between 54 and 53 bunkhouses. 9
The bus conductor, Martin Anglog, also declared:
Q When you arrived at Lepanto on March 25, 1985, will you please inform this Honorable
Court if there was anv unusual incident that occurred?
A When we delivered a baggage at Marivic because a person alighted there between
Bunkhouse 53 and 54.
Q What happened when you delivered this passenger at this particular place in Lepanto?
A When we reached the place, a passenger alighted and I signalled my driver. When we
stopped we went out because I saw an umbrella about a split second and I signalled again
the driver, so the driver stopped and we went down and we saw Pedrito Cudiamat asking
for help because he was lying down.
Q How far away was this certain person, Pedrito Cudiamat, when you saw him lying down
— from the bus how far was he?
A It is about two to three meters.
Q On what direction of the bus was he found about three meters from the bus, was it at the
front or at the back?
A At the back, sir. 10 (Emphasis supplied.)
The foregoing testimonies show that the place of the accident and the place where one of the
passengers alighted were both between Bunkhouses 53 and 54, hence the finding of the Court of
Appeals that the bus was at full stop when the victim boarded the same is correct. They further
confirm the conclusion that the victim fell from the platform of the bus when it suddenly
accelerated forward and was run over by the rear right tires of the vehicle, as shown by the physical
evidence on where he was thereafter found in relation to the bus when it stopped. Under such
circumstances, it cannot be said that the deceased was guilty of negligence.
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. 11
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. 12
Further, even assuming that the bus was moving, the act of the victim in boarding the same cannot
be considered negligent under the circumstances. As clearly explained in the testimony of the
aforestated witness for petitioners, Virginia Abalos, th bus had "just started" and "was still in slow
motion" at the point where the victim had boarded and was on its platform. 13
It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which
is moving slowly. 14 An ordinarily prudent person would have made the attempt board the moving
conveyance under the same or similar circumstances. The fact that passengers board and alight
from slowly moving vehicle is a matter of common experience both the driver and conductor in this
case could not have been unaware of such an ordinary practice.
The victim herein, by 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.
Hence, it has been held that the duty which the carrier passengers owes to its patrons extends to
persons boarding cars as well as to those alighting therefrom. 15
Common carriers, from the nature of their business and reasons of public policy, are bound to
observe extraordina diligence for the safety of the passengers transported by the according to all
the circumstances of each case. 16 A common carrier is bound to carry the passengers safely as far
as human care and foresight can provide, using the utmost diligence very cautious persons, with a
due regard for all the circumstances. 17
It has also been repeatedly held that in an action based on a contract of carriage, the court need not
make an express finding of fault or negligence on the part of the carrier in order to hold it
responsible to pay the damages sought by the passenger. By 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. This is
an exception to the general rule that negligence must be proved, and it is therefore incumbent
upon the carrier to prove that it has exercised extraordinary diligence as prescribed in Articles 1733
and 1755 of the Civil Code. 18
Moreover, the circumstances under which the driver and the conductor failed to bring the gravely
injured victim immediately to the hospital for medical treatment is a patent and incontrovertible
proof of their negligence. It defies understanding and can even be stigmatized as callous
indifference. The evidence shows that after the accident the bus could have forthwith turned at
Bunk 56 and thence to the hospital, but its driver instead opted to first proceed to Bunk 70 to allow
a passenger to alight and to deliver a refrigerator, despite the serious condition of the victim. The
vacuous reason given by petitioners that it was the wife of the deceased who caused the delay was
tersely and correctly confuted by respondent court:
With respect to the award of damages, an oversight was, however, committed by respondent Court
of Appeals in computing the actual damages based on the gross income of the victim. The rule is
that the amount recoverable by the heirs of a victim of a tort is not the loss of the entire earnings,
but rather the loss of that portion of the earnings which the beneficiary would have received. In
other words, only net earnings, not gross earnings, are to be considered, that is, the total of the
earnings less expenses necessary in the creation of such earnings or income and minus living and
other incidental expenses. 22
We are of the opinion that the deductible living and other expense of the deceased may fairly and
reasonably be fixed at P500.00 a month or P6,000.00 a year. In adjudicating the actual or
compensatory damages, respondent court found that the deceased was 48 years old, in good health
with a remaining productive life expectancy of 12 years, and then earning P24,000.00 a year. Using
the gross annual income as the basis, and multiplying the same by 12 years, it accordingly awarded
P288,000. Applying the aforestated rule on computation based on the net earnings, said award
must be, as it hereby is, rectified and reduced to P216,000.00. However, in accordance with
prevailing jurisprudence, the death indemnity is hereby increased to P50,000.00. 23
WHEREFORE, subject to the above modifications, the challenged judgment and resolution of
respondent Court of Appeals are hereby AFFIRMED in all other respects.

... The pretension of the appellees that the delay was due to the fact that they had to wait
for about twenty minutes for Inocencia Cudiamat to get dressed deserves scant
consideration. It is rather scandalous and deplorable for a wife whose husband is at the
verge of dying to have the luxury of dressing herself up for about twenty minutes before
attending to help her distressed and helpless husband. 19
Further, it cannot be said that the main intention of petitioner Lardizabal in going to Bunk 70 was to
inform the victim's family of the mishap, since it was not said bus driver nor the conductor but the
companion of the victim who informed his family thereof. 20 In fact, it was only after the
refrigerator was unloaded that one of the passengers thought of sending somebody to the house of
the victim, as shown by the testimony of Virginia Abalos again, to wit:
Q Why, what happened to your refrigerator at that particular time?
A I asked them to bring it down because that is the nearest place to our house and when I
went down and asked somebody to bring down the refrigerator, I also asked somebody to
call the family of Mr. Cudiamat.
COURT:
Q Why did you ask somebody to call the family of Mr. Cudiamat?
A Because Mr. Cudiamat met an accident, so I ask somebody to call for the family of Mr.
Cudiamat.
Q But nobody ask(ed) you to call for the family of Mr. Cudiamat?
A No sir. 21
G.R. No. 84458 November 6, 1989
ABOITIZ SHIPPING CORPORATION, petitioner,
vs.
HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO VIANA and
GORGONIA VIANA, and PIONEER STEVEDORING CORPORATION, respondents.
Herenio E. Martinez for petitioner.
M.R. Villaluz Law Office for private respondent.
REGALADO, J.:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of the decision 1
of respondent Court of Appeals, dated July 29, 1988, the decretal portion of which reads:
WHEREFORE, the judgment appealed from as modified by the order of October
27, 1982, is hereby affirmed with the modification that appellant Aboitiz Shipping
is hereby ordered to pay plaintiff-appellees the amount of P30,000.00 for the
death of Anacleto Viana; actual damages of P9,800.00; P150,000.00 for unearned
income; P7,200.00 as support for deceased's parents; P20,000.00 as moral
damages; P10,000.00 as attorney's fees; and to pay the costs.
The undisputed facts of the case, as found by the court a quo and adopted by respondent court, are
as follows: .
The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the vessel
M/V Antonia, owned by defendant, at the port at San Jose, Occidental Mindoro,
bound for Manila, having purchased a ticket (No. 117392) in the sum of P23.10
(Exh. 'B'). On May 12, 1975, said vessel arrived at Pier 4, North Harbor, Manila,
and the passengers therein disembarked, a gangplank having been provided
connecting the side of the vessel to the pier. Instead of using said gangplank
Anacleto Viana disembarked on the third deck which was on the level with the
pier. After said vessel had landed, the Pioneer Stevedoring Corporation took over
the exclusive control of the cargoes loaded on said vessel pursuant to the
Memorandum of Agreement dated July 26, 1975 (Exh. '2') between the third party
defendant Pioneer Stevedoring Corporation and defendant Aboitiz Shipping
Corporation.
The crane owned by the third party defendant and operated by its crane operator
Alejo Figueroa was placed alongside the vessel and one (1) hour after the
passengers of said vessel had disembarked, it started operation by unloading the
cargoes from said vessel. While the crane was being operated, Anacleto Viana
who had already disembarked from said vessel obviously remembering that some
of his cargoes were still loaded in the vessel, went back to the vessel, and it was
while he was pointing to the crew of the said vessel to the place where his cargoes
were loaded that the crane hit him, pinning him between the side of the vessel
and the crane. He was thereafter brought to the hospital where he later expired
three (3) days thereafter, on May 15, 1975, the cause of his death according to
the Death Certificate (Exh. "C") being "hypostatic pneumonia secondary to
traumatic fracture of the pubic bone lacerating the urinary bladder" (See also Exh.
"B"). For his hospitalization, medical, burial and other miscellaneous expenses,
Anacleto's wife, herein plaintiff, spent a total of P9,800.00 (Exhibits "E", "E-1", to
"E-5"). Anacleto Viana who was only forty (40) years old when he met said fateful
accident (Exh. 'E') was in good health. His average annual income as a farmer or a
farm supervisor was 400 cavans of palay annually. His parents, herein plaintiffs
Antonio and Gorgonia Viana, prior to his death had been recipient of twenty (20)
cavans of palay as support or P120.00 monthly. Because of Anacleto's death,
plaintiffs suffered mental anguish and extreme worry or moral damages. For the
filing of the instant case, they had to hire a lawyer for an agreed fee of ten
thousand (P10,000.00) pesos. 2
Private respondents Vianas filed a complaint 3 for damages against petitioner corporation (Aboitiz,
for brevity) for breach of contract of carriage.
In its answer. 4 Aboitiz denied responsibility contending that at the time of the accident, the vessel
was completely under the control of respondent Pioneer Stevedoring Corporation (Pioneer, for
short) as the exclusive stevedoring contractor of Aboitiz, which handled the unloading of cargoes
from the vessel of Aboitiz. It is also averred that since the crane operator was not an employee of
Aboitiz, the latter cannot be held liable under the fellow-servant rule.
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint 5 against Pioneer imputing
liability thereto for Anacleto Viana's death as having been allegedly caused by the negligence of the
crane operator who was an employee of Pioneer under its exclusive control and supervision.
Pioneer, in its answer to the third-party complaint, 6 raised the defenses that Aboitiz had no cause
of action against Pioneer considering that Aboitiz is being sued by the Vianas for breach of contract
of carriage to which Pioneer is not a party; that Pioneer had observed the diligence of a good father
of a family both in the selection and supervision of its employees as well as in the prevention of
damage or injury to anyone including the victim Anacleto Viana; that Anacleto Viana's gross
negligence was the direct and proximate cause of his death; and that the filing of the third-party
complaint was premature by reason of the pendency of the criminal case for homicide through
reckless imprudence filed against the crane operator, Alejo Figueroa.
In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was ordered to pay the Vianas
for damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the
latter paid the Vianas. The dispositive portion of said decision provides:
WHEREFORE, judgment is hereby rendered in favor of the plantiffs:
(1) ordering defendant Aboitiz Shipping Corporation to pay to plaintiffs the sum of
P12,000.00 for the death of Anacleto Viana P9,800.00 as actual damages;
P533,200.00 value of the 10,664 cavans of palay computed at P50.00 per cavan;
P10,000.00 as attorney's fees; F 5,000.00, value of the 100 cavans of palay as
support for five (5) years for deceased (sic) parents, herein plaintiffs Antonio and
Gorgonia Viana computed at P50.00 per cavan; P7,200.00 as support for
 deceased's parents computed at P120.00 a month for five years pursuant to Art.
2206, Par. 2, of the Civil Code; P20,000.00 as moral damages, and costs; and
(2) ordering the third party defendant Pioneer Stevedoring Corporation to
reimburse defendant and third party plaintiff Aboitiz Shipping Corporation the
said amounts that it is ordered to pay to herein plaintiffs.
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein they similarly raised
the trial court's failure to declare that Anacleto Viana acted with gross negligence despite the
overwhelming evidence presented in support thereof. In addition, Aboitiz alleged, in opposition to
Pioneer's motion, that under the memorandum of agreement the liability of Pioneer as contractor is
automatic for any damages or losses whatsoever occasioned by and arising from the operation of
its arrastre and stevedoring service.
In an order dated October 27, 1982, 8 the trial court absolved Pioneer from liability for failure of the
Vianas and Aboitiz to preponderantly establish a case of negligence against the crane operator
which the court a quo ruled is never presumed, aside from the fact that the memorandum of
agreement supposedly refers only to Pioneer's liability in case of loss or damage to goods handled
by it but not in the case of personal injuries, and, finally that Aboitiz cannot properly invoke the
fellow-servant rule simply because its liability stems from a breach of contract of carriage. The
dispositive portion of said order reads:
WHEREFORE, judgment is hereby modified insofar as third party defendant
Pioneer Stevedoring Corporation is concerned rendered in favor of the plaintiffs-,:
(1) Ordering defendant Aboitiz Shipping Corporation to pay the plaintiffs the sum
of P12,000.00 for the death of Anacleto Viana; P9,000.00 (sic) as actual damages;
P533,200.00 value of the 10,664 cavans of palay computed at P50.00 per cavan;
P10,000.00 as attorney's fees; P5,000.00 value of the 100 cavans of palay as
support for five (5) years for deceased's parents, herein plaintiffs Antonio and
Gorgonia Viana,computed at P50.00 per cavan; P7,200.00 as support for
deceased's parents computed at P120.00 a month for five years pursuant to Art.
2206, Par. 2, of the Civil Code; P20,000.00 as moral damages, and costs; and
(2) Absolving third-party defendant Pioneer Stevedoring Corporation for (sic) any
liability for the death of Anacleto Viana the passenger of M/V Antonia owned by
defendant third party plaintiff Aboitiz Shipping Corporation it appearing that the
negligence of its crane operator has not been established therein.
Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to
respondent Court of Appeals which affirmed the findings of of the trial court except as to the
amount of damages awarded to the Vianas.
Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:
(A) In holding that the doctrine laid down by this honorable Court in La Mallorca
vs. Court of Appeals, et al. (17 SCRA 739, July 27, 1966) is applicable to the case in
the face of the undisputable fact that the factual situation under the La Mallorca
case is radically different from the facts obtaining in this case;
(B) In holding petitioner liable for damages in the face of the finding of the court a
quo and confirmed by the Honorable respondent court of Appeals that the
deceased, Anacleto Viana was guilty of contributory negligence, which, We
respectfully submit contributory negligence was the proximate cause of his death;
specifically the honorable respondent Court of Appeals failed to apply Art. 1762 of
the New Civil Code;
(C) In the alternative assuming the holding of the Honorable respondent Court of
Appears that petitioner may be legally condemned to pay damages to the private
respondents we respectfully submit that it committed a reversible error when it
dismissed petitioner's third party complaint against private respondent Pioneer
Stevedoring Corporation instead of compelling the latter to reimburse the
petitioner for whatever damages it may be compelled to pay to the private
respondents Vianas. 9
At threshold, it is to be observed that both the trial court and respondent Court of Appeals found
the victim Anacleto Viana guilty of contributory negligence, but holding that it was the negligence of
Aboitiz in prematurely turning over the vessel to the arrastre operator for the unloading of cargoes
which was the direct, immediate and proximate cause of the victim's death.
I. Petitioner contends that since one (1) hour had already elapsed from the time Anacleto Viana
disembarked from the vessel and that he was given more than ample opportunity to unload his
cargoes prior to the operation of the crane, his presence on the vessel was no longer reasonable e
and he consequently ceased to be a passenger. Corollarily, it insists that the doctrine in La Mallorca
vs. Court of Appeals, et al. 10 is not applicable to the case at bar.
The rule is that the relation of carrier and passenger continues until the passenger has been landed
at the port of destination and has left the vessel owner's dock or premises. 11 Once created, the
relationship will not ordinarily terminate until the passenger has, after reaching his destination,
safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's
premises. All persons who remain on the premises a reasonable time after leaving the conveyance
are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule
is to be determined from all the circumstances, and includes a reasonable time to see after his
baggage and prepare for his departure.12 The carrier-passenger relationship is not terminated
merely by the fact that the person transported has been carried to his destination if, for example,
such person remains in the carrier's premises to claim his baggage.13
It was in accordance with this rationale that the doctrine in the aforesaid case of La Mallorca was
enunciated, to wit:
It has been recognized as a rule that the relation of carrier and passenger does not
cease at the moment the passenger alights from the carrier's vehicle at a place
selected by the carrier at the point of destination, but continues until the
passenger has had a reasonable time or a reasonable opportunity to leave the
carrier's premises. And, what is a reasonable time or a reasonable delay within
this rule is to be determined from all the circumstances. Thus, a person who, after
alighting from a train, walks along the station platform is considered still a
 passenger. So also, where a passenger has alighted at his destination and is
proceeding by the usual way to leave the company's premises, but before actually
doing so is halted by the report that his brother, a fellow passenger, has been
shot, and he in good faith and without intent of engaging in the difficulty, returns
to relieve his brother, he is deemed reasonably and necessarily delayed and thus
continues to be a passenger entitled as such to the protection of the railroad
company and its agents.
In the present case, the father returned to the bus to get one of his baggages
which was not unloaded when they alighted from the bus. Racquel, the child that
she was, must have followed the father. However, although the father was still on
the running board of the bus waiting for the conductor to hand him the bag or
bayong, the bus started to run, so that even he (the father) had to jump down
from the moving vehicle. It was at this instance that the child, who must be near
the bus, was run over and killed. In the circumstances, it cannot be claimed that
the carrier's agent had exercised the 'utmost diligence' of a 'very cautious person'
required by Article 1755 of the Civil Code to be observed by a common carrier in
the discharge of its obligation to transport safely its passengers. ... The presence
of said passengers near the bus was not unreasonable and they are, therefore, to
be considered still as passengers of the carrier, entitled to the protection under
their contract of carriage. 14
It is apparent from the foregoing that what prompted the Court to rule as it did in said case is the
fact of the passenger's reasonable presence within the carrier's premises. That reasonableness of
time should be made to depend on the attending circumstances of the case, such as the kind of
common carrier, the nature of its business, the customs of the place, and so forth, and therefore
precludes a consideration of the time element per se without taking into account such other
factors. It is thus of no moment whether in the cited case of La Mallorca there was no appreciable
interregnum for the passenger therein to leave the carrier's premises whereas in the case at bar, an
interval of one (1) hour had elapsed before the victim met the accident. The primary factor to be
considered is the existence of a reasonable cause as will justify the presence of the victim on or
near the petitioner's vessel. We believe there exists such a justifiable cause.
It is of common knowledge that, by the very nature of petitioner's business as a shipper, the
passengers of vessels are allotted a longer period of time to disembark from the ship than other
common carriers such as a passenger bus. With respect to the bulk of cargoes and the number of
passengers it can load, such vessels are capable of accommodating a bigger volume of both as
compared to the capacity of a regular commuter bus. Consequently, a ship passenger will need at
least an hour as is the usual practice, to disembark from the vessel and claim his baggage whereas a
bus passenger can easily get off the bus and retrieve his luggage in a very short period of time.
Verily, petitioner cannot categorically claim, through the bare expedient of comparing the period of
time entailed in getting the passenger's cargoes, that the ruling in La Mallorca is inapplicable to the
case at bar. On the contrary, if we are to apply the doctrine enunciated therein to the instant
petition, we cannot in reason doubt that the victim Anacleto Viana was still a passenger at the time
of the incident. When the accident occurred, the victim was in the act of unloading his cargoes,
which he had every right to do, from petitioner's vessel. As earlier stated, a carrier is duty bound
not only to bring its passengers safely to their destination but also to afford them a reasonable time
to claim their baggage.
It is not definitely shown that one (1) hour prior to the incident, the victim had already disembarked
from the vessel. Petitioner failed to prove this. What is clear to us is that at the time the victim was
taking his cargoes, the vessel had already docked an hour earlier. In consonance with common
shipping procedure as to the minimum time of one (1) hour allowed for the passengers to
disembark, it may be presumed that the victim had just gotten off the vessel when he went to
retrieve his baggage. Yet, even if he had already disembarked an hour earlier, his presence in
petitioner's premises was not without cause. The victim had to claim his baggage which was
possible only one (1) hour after the vessel arrived since it was admittedly standard procedure in the
case of petitioner's vessels that the unloading operations shall start only after that time.
Consequently, under the foregoing circumstances, the victim Anacleto Viana is still deemed a
passenger of said carrier at the time of his tragic death.
II. Under the law, common carriers are, from the nature of their business and for reasons of public
policy, bound to observe extraordinary diligence in the vigilance over the goods and for the safety
of the passengers transported by them, according to all the circumstances of each case. 15 More
particularly, a common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all
the circumstances. 16 Thus, where a passenger dies or is injured, the common carrier is presumed
to have been at fault or to have acted negligently. 17 This gives rise to an action for breach of
contract of carriage where all that is required of plaintiff is to prove the existence of the contract of
carriage and its non-performance by the carrier, that is, the failure of the carrier to carry the
passenger safely to his destination, 18 which, in the instant case, necessarily includes its failure to
safeguard its passenger with extraordinary diligence while such relation subsists.
The presumption is, therefore, established by law that in case of a passenger's death or injury the
operator of the vessel was at fault or negligent, having failed to exercise extraordinary diligence,
and it is incumbent upon it to rebut the same. This is in consonance with the avowed policy of the
State to afford full protection to the passengers of common carriers which can be carried out only
by imposing a stringent statutory obligation upon the latter. Concomitantly, this Court has likewise
adopted a rigid posture in the application of the law by exacting the highest degree of care and
diligence from common carriers, bearing utmost in mind the welfare of the passengers who often
become hapless victims of indifferent and profit-oriented carriers. We cannot in reason deny that
petitioner failed to rebut the presumption against it. Under the facts obtaining in the present case,
it cannot be gainsaid that petitioner had inadequately complied with the required degree of
diligence to prevent the accident from happening.
As found by the Court of Appeals, the evidence does not show that there was a cordon of drums
around the perimeter of the crane, as claimed by petitioner. It also adverted to the fact that the
alleged presence of visible warning signs in the vicinity was disputable and not indubitably
established. Thus, we are not inclined to accept petitioner's explanation that the victim and other
passengers were sufficiently warned that merely venturing into the area in question was fraught
with serious peril. Definitely, even assuming the existence of the supposed cordon of drums loosely
placed around the unloading area and the guard's admonitions against entry therein, these were at
most insufficient precautions which pale into insignificance if considered vis-a-vis the gravity of the
danger to which the deceased was exposed. There is no showing that petitioner was extraordinarily
diligent in requiring or seeing to it that said precautionary measures were strictly and actually
enforced to subserve their purpose of preventing entry into the forbidden area. By no stretch of
liberal evaluation can such perfunctory acts approximate the "utmost diligence of very cautious
persons" to be exercised "as far as human care and foresight can provide" which is required by law
of common carriers with respect to their passengers.
While the victim was admittedly contributorily negligent, still petitioner's aforesaid failure to
exercise extraordinary diligence was the proximate and direct cause of, because it could definitely
have prevented, the former's death. Moreover, in paragraph 5.6 of its petition, at bar, 19 petitioner
has expressly conceded the factual finding of respondent Court of Appeals that petitioner did not
present sufficient evidence in support of its submission that the deceased Anacleto Viana was guilty
of gross negligence. Petitioner cannot now be heard to claim otherwise.
No excepting circumstance being present, we are likewise bound by respondent court's declaration
that there was no negligence on the part of Pioneer Stevedoring Corporation, a confirmation of the
trial court's finding to that effect, hence our conformity to Pioneer's being absolved of any liability.
As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged gross negligence
of the victim, hence its present contention that the death of the passenger was due to the
negligence of the crane operator cannot be sustained both on grounds, of estoppel and for lack of
evidence on its present theory. Even in its answer filed in the court below it readily alleged that
Pioneer had taken the necessary safeguards insofar as its unloading operations were concerned, a
fact which appears to have been accepted by the plaintiff therein by not impleading Pioneer as a
defendant, and likewise inceptively by Aboitiz by filing its third-party complaint only after ten (10)
months from the institution of the suit against it. Parenthetically, Pioneer is not within the ambit of
the rule on extraordinary diligence required of, and the corresponding presumption of negligence
foisted on, common carriers like Aboitiz. This, of course, does not detract from what we have said
that no negligence can be imputed to Pioneer but, that on the contrary, the failure of Aboitiz to
exercise extraordinary diligence for the safety of its passenger is the rationale for our finding on its
liability.
WHEREFORE, the petition is DENIED and the judgment appealed from is hereby AFFIRMED in toto.
G.R. No. L-20761 July 27, 1966
LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents.
G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.
Ahmed Garcia for 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.
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 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 bayong
which was not unloaded, the relation of passenger and carrier between him and the petitioner
remained subsisting. For, the relation of carrier and passenger does not necessarily cease where the
latter, after alighting from the car, aids the 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, petitioner had failed to overcome. Consequently, petitioner must be adjudged peculiarily liable for
has been shot, and he in good faith and without intent of engaging in the difficulty, returns to the death of the child Raquel Beltran.
relieve his brother, he is deemed reasonably and necessarily delayed and thus continues to be a The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals,
passenger entitled as such to the protection of the railroad and company and its agents. 3 however, cannot be sustained. Generally, the appellate court can only pass upon and consider
In the present case, the father returned to the bus to get one of his baggages which was not questions or issues raised and argued in appellant's brief. Plaintiffs did not appeal from that portion
unloaded when they alighted from the bus. Raquel, the child that she was, must have followed the of the judgment of the trial court awarding them on P3,000.00 damages for the death of their
father. However, although the father was still on the running board of the bus awaiting for the daughter. Neither does it appear that, as appellees in the Court of Appeals, plaintiffs have pointed
conductor to hand him the bag or bayong, the bus started to run, so that even he (the father) had out in their brief the inadequacy of the award, or that the inclusion of the figure P3,000.00 was
to jump down from the moving vehicle. It was at this instance that the child, who must be near the merely a clerical error, in order that the matter may be treated as an exception to the general rule. 5
bus, was run over and killed. In the circumstances, it cannot be claimed that the carrier's agent had Herein petitioner's contention, therefore, that the Court of Appeals committed error in raising the
exercised the "utmost diligence" of a "very cautions person" required by Article 1755 of the Civil amount of the award for damages is, evidently, meritorious.1äwphï1.ñët
Code to be observed by a common carrier in the discharge of its obligation to transport safely its Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the petitioner to
passengers. In the first place, the driver, although stopping the bus, nevertheless did not put off the pay to the respondents Mariano Beltran, et al., the sum of P3,000.00 for the death of the child,
engine. Secondly, he started to run the bus even before the bus conductor gave him the signal to go Raquel Beltran, and the amount of P400.00 as actual damages. No costs in this instance. So ordered.
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,
G.R. No. L-47822 December 22, 1988
PEDRO DE GUZMAN, petitioner,
vs.
COURT OF APPEALS and ERNESTO CENDANA, respondents.
Vicente D. Millora for petitioner.
Jacinto Callanta for private respondent.
FELICIANO, J.:
Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal
in Pangasinan. Upon gathering sufficient quantities of such scrap material, respondent would bring
such material to Manila for resale. He utilized two (2) six-wheeler trucks which he owned for
hauling the material to Manila. On the return trip to Pangasinan, respondent would load his vehicles
with cargo which various merchants wanted delivered to differing establishments in Pangasinan.
For that service, respondent charged freight rates which were commonly lower than regular
commercial rates.
Sometime in November 1970, petitioner Pedro de Guzman a merchant and authorized dealer of
General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with respondent for
the hauling of 750 cartons of Liberty filled milk from a warehouse of General Milk in Makati, Rizal,
to petitioner's establishment in Urdaneta on or before 4 December 1970. Accordingly, on 1
December 1970, respondent loaded in Makati the merchandise on to his trucks: 150 cartons were
loaded on a truck driven by respondent himself, while 600 cartons were placed on board the other
truck which was driven by Manuel Estrada, respondent's driver and employee.
Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never
reached petitioner, since the truck which carried these boxes was hijacked somewhere along the
MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver, his
helper and the cargo.
On 6 January 1971, petitioner commenced action against private respondent in the Court of First
Instance of Pangasinan, demanding payment of P 22,150.00, the claimed value of the lost
merchandise, plus damages and attorney's fees. Petitioner argued that private respondent, being a
common carrier, and having failed to exercise the extraordinary diligence required of him by the
law, should be held liable for the value of the undelivered goods.
In his Answer, private respondent denied that he was a common carrier and argued that he could
not be held responsible for the value of the lost goods, such loss having been due to force majeure.
On 10 December 1975, the trial court rendered a Decision 1 finding private respondent to be a
common carrier and holding him liable for the value of the undelivered goods (P 22,150.00) as well
as for P 4,000.00 as damages and P 2,000.00 as attorney's fees.
On appeal before the Court of Appeals, respondent urged that the trial court had erred in
considering him a common carrier; in finding that he had habitually offered trucking services to the
public; in not exempting him from liability on the ground of force majeure; and in ordering him to
pay damages and attorney's fees.
The Court of Appeals reversed the judgment of the trial court and held that respondent had been
engaged in transporting return loads of freight "as a casual
occupation — a sideline to his scrap iron business" and not as a common carrier. Petitioner came to
this Court by way of a Petition for Review assigning as errors the following conclusions of the Court
of Appeals:
1. that private respondent was not a common carrier;
2. that the hijacking of respondent's truck was force majeure; and
3. that respondent was not liable for the value of the undelivered cargo. (Rollo, p.
111)
We consider first the issue of whether or not private respondent Ernesto Cendana may, under the
facts earlier set forth, be properly characterized as a common carrier.
The Civil Code defines "common carriers" in the following terms:
Article 1732. Common carriers are persons, corporations, firms or associations
engaged in the business of carrying or transporting passengers or goods or both,
by land, water, or air for compensation, offering their services to the public.
The above article makes no distinction between one whose principal business activity is the carrying
of persons or goods or both, and one who does such carrying only as an ancillary activity (in local
Idiom as "a sideline"). Article 1732 also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduled basis and one offering such
service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish
between a carrier offering its services to the "general public," i.e., the general community or
population, and one who offers services or solicits business only from a narrow segment of the
general population. We think that Article 1733 deliberaom making such distinctions.
So understood, the concept of "common carrier" under Article 1732 may be seen to coincide neatly
with the notion of "public service," under the Public Service Act (Commonwealth Act No. 1416, as
amended) which at least partially supplements the law on common carriers set forth in the Civil
Code. Under Section 13, paragraph (b) of the Public Service Act, "public service" includes:
... every person that now or hereafter may own, operate, manage, or control in
the Philippines, for hire or compensation, with general or limited clientele,
whether permanent, occasional or accidental, and done for general business
purposes, any common carrier, railroad, street railway, traction railway, subway
motor vehicle, either for freight or passenger, or both, with or without fixed route
and whatever may be its classification, freight or carrier service of any class,
express service, steamboat, or steamship line, pontines, ferries and water craft,
engaged in the transportation of passengers or freight or both, shipyard, marine
repair shop, wharf or dock, ice plant,
ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power,
water supply and power petroleum, sewerage system, wire or wireless
communications systems, wire or wireless broadcasting stations and other similar
public services. ... (Emphasis supplied)
It appears to the Court that private respondent is properly characterized as a common carrier even
though he merely "back-hauled" goods for other merchants from Manila to Pangasinan, although
such back-hauling was done on a periodic or occasional rather than regular or scheduled manner,
and even though private respondent's principal occupation was not the carriage of goods for others.
There is no dispute that private respondent charged his customers a fee for hauling their goods;
that fee frequently fell below commercial freight rates is not relevant here.
The Court of Appeals referred to the fact that private respondent held no certificate of public
convenience, and concluded he was not a common carrier. This is palpable error. A certificate of
public convenience is not a requisite for the incurring of liability under the Civil Code provisions
governing common carriers. That liability arises the moment a person or firm acts as a common
carrier, without regard to whether or not such carrier has also complied with the requirements of
the applicable regulatory statute and implementing regulations and has been granted a certificate
of public convenience or other franchise. To exempt private respondent from the liabilities of a
common carrier because he has not secured the necessary certificate of public convenience, would
be offensive to sound public policy; that would be to reward private respondent precisely for failing
to comply with applicable statutory requirements. The business of a common carrier impinges
directly and intimately upon the safety and well being and property of those members of the
general community who happen to deal with such carrier. The law imposes duties and liabilities
upon common carriers for the safety and protection of those who utilize their services and the law
cannot allow a common carrier to render such duties and liabilities merely facultative by simply
failing to obtain the necessary permits and authorizations.
We turn then to the liability of private respondent as a common carrier.
Common carriers, "by the nature of their business and for reasons of public policy" 2 are held to a
very high degree of care and diligence ("extraordinary diligence") in the carriage of goods as well as
of passengers. The specific import of extraordinary diligence in the care of goods transported by a
common carrier is, according to Article 1733, "further expressed in Articles 1734,1735 and 1745,
numbers 5, 6 and 7" of the Civil Code.
Article 1734 establishes the general rule that common carriers are responsible for the loss,
destruction or deterioration of the goods which they carry, "unless the same is due to any of the
following causes only:
(1) Flood, storm, earthquake, lightning or other natural disaster
or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character-of the goods or defects in the packing or-in the
containers; and
(5) Order or act of competent public authority.
It is important to point out that the above list of causes of loss, destruction or deterioration which
exempt the common carrier for responsibility therefor, is a closed list. Causes falling outside the
foregoing list, even if they appear to constitute a species of force majeure fall within the scope of
Article 1735, which provides as follows:
In all cases other than those mentioned in numbers 1, 2, 3, 4 and 5 of the
preceding article, if the goods are lost, destroyed or deteriorated, common carriers
are presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as required in Article 1733. (Emphasis
supplied)
Applying the above-quoted Articles 1734 and 1735, we note firstly that the specific cause alleged in
the instant case — the hijacking of the carrier's truck — does not fall within any of the five (5)
categories of exempting causes listed in Article 1734. It would follow, therefore, that the hijacking
of the carrier's vehicle must be dealt with under the provisions of Article 1735, in other words, that
the private respondent as common carrier is presumed to have been at fault or to have acted
negligently. This presumption, however, may be overthrown by proof of extraordinary diligence on
the part of private respondent.
Petitioner insists that private respondent had not observed extraordinary diligence in the care of
petitioner's goods. Petitioner argues that in the circumstances of this case, private respondent
should have hired a security guard presumably to ride with the truck carrying the 600 cartons of
Liberty filled milk. We do not believe, however, that in the instant case, the standard of
extraordinary diligence required private respondent to retain a security guard to ride with the truck
and to engage brigands in a firelight at the risk of his own life and the lives of the driver and his
helper.
The precise issue that we address here relates to the specific requirements of the duty of
extraordinary diligence in the vigilance over the goods carried in the specific context of hijacking or
armed robbery.
As noted earlier, the duty of extraordinary diligence in the vigilance over goods is, under Article
1733, given additional specification not only by Articles 1734 and 1735 but also by Article 1745,
numbers 4, 5 and 6, Article 1745 provides in relevant part:
Any of the following or similar stipulations shall be considered unreasonable,
unjust and contrary to public policy:
xxx xxx xxx
(5) that the common carrier shall not be responsible for the acts
or omissions of his or its employees;
(6) that the common carrier's liability for acts committed by
thieves, or of robbers who do not act with grave or irresistible
threat, violence or force, is dispensed with or diminished; and
(7) that the common carrier shall not responsible for the loss,
destruction or deterioration of goods on account of the
defective condition of the car vehicle, ship, airplane or other
equipment used in the contract of carriage. (Emphasis supplied)
Under Article 1745 (6) above, a common carrier is held responsible — and will not be allowed to
divest or to diminish such responsibility — even for acts of strangers like thieves or robbers, except
where such thieves or robbers in fact acted "with grave or irresistible threat, violence or force." We
believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the
goods carried are reached where the goods are lost as a result of a robbery which is attended by
"grave or irresistible threat, violence or force."
In the instant case, armed men held up the second truck owned by private respondent which
carried petitioner's cargo. The record shows that an information for robbery in band was filed in the
Court of First Instance of Tarlac, Branch 2, in Criminal Case No. 198 entitled "People of the
Philippines v. Felipe Boncorno, Napoleon Presno, Armando Mesina, Oscar Oria and one John Doe."
There, the accused were charged with willfully and unlawfully taking and carrying away with them
the second truck, driven by Manuel Estrada and loaded with the 600 cartons of Liberty filled milk
destined for delivery at petitioner's store in Urdaneta, Pangasinan. The decision of the trial court
shows that the accused acted with grave, if not irresistible, threat, violence or force.3 Three (3) of
the five (5) hold-uppers were armed with firearms. The robbers not only took away the truck and its
cargo but also kidnapped the driver and his helper, detaining them for several days and later
releasing them in another province (in Zambales). The hijacked truck was subsequently found by the
police in Quezon City. The Court of First Instance convicted all the accused of robbery, though not of
robbery in band. 4
In these circumstances, we hold that the occurrence of the loss must reasonably be regarded as
quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is
necessary to recall that even common carriers are not made absolute insurers against all risks of
travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen
or are inevitable, provided that they shall have complied with the rigorous standard of
extraordinary diligence.
We, therefore, agree with the result reached by the Court of Appeals that private respondent
Cendana is not liable for the value of the undelivered merchandise which was lost because of an
event entirely beyond private respondent's control.
ACCORDINGLY, the Petition for Review on certiorari is hereby DENIED and the Decision of the Court
of Appeals dated 3 August 1977 is AFFIRMED. No pronouncement as to costs.
[G.R. No. 119756. March 18, 1999]
FORTUNE EXPRESS, INC., petitioner, vs. COURT OF APPEALS, PAULIE U. CAORONG, and minor
children YASSER KING CAORONG, ROSE HEINNI and PRINCE ALEXANDER, all surnamed CAORONG,
and represented by their mother PAULIE U. CAORONG, respondents.
DECISION
MENDOZA, J.:
This is an appeal by petition for review on certiorari of the decision, dated July 29, 1994, of the
Court of Appeals, which reversed the decision of the Regional Trial Court, Branch VI, Iligan City. The
aforesaid decision of the trial court dismissed the complaint of private respondents against
petitioner for damages for breach of contract of carriage filed on the ground that petitioner had not
exercised the required degree of diligence in the operation of one of its buses. Atty. Talib Caorong,
whose heirs are private respondents herein, was a passenger of the bus and was killed in the
ambush involving said bus.
The facts of the instant case are as follows:
Petitioner is a bus company in northern Mindanao. Private respondent Paulie Caorong is the widow
of Atty. Caorong, while private respondents Yasser King, Rose Heinni, and Prince Alexander are their
minor children.
On November 18, 1989, a bus of petitioner figured in an accident with a jeepney in Kauswagan,
Lanao del Norte, resulting in the death of several passengers of the jeepney, including two
Maranaos. Crisanto Generalao, a volunteer field agent of the Constabulary Regional Security Unit
No. X, conducted an investigation of the accident. He found that the owner of the jeepney was a
Maranao residing in Delabayan, Lanao del Norte and that certain Maranaos were planning to take
revenge on the petitioner by burning some of its buses. Generalao rendered a report on his findings
to Sgt. Reynaldo Bastasa of the Philippine Constabulary Regional Hearquarters at Cagayan de Oro.
Upon the instruction of Sgt. Bastasa, he went to see Diosdado Bravo, operations manager of
petitioner, at its main office in Cagayan de Oro City. Bravo assured him that the necessary
precautions to insure the safety of lives and property would be taken.i[1]
At about 6:45 P.M. on November 22, 1989, three armed Maranaos who pretended to be
passengers, seized a bus of petitioner at Linamon, Lanao del Norte while on its way to Iligan City.
Among the passengers of the bus was Atty. Caorong. The leader of the Maranaos, identified as one
Bashier Mananggolo, ordered the driver, Godofredo Cabatuan, to stop the bus on the side of the
highway. Mananggolo then shot Cabatuan on the arm, which caused him to slump on the steering
wheel. Then one of the companions of Mananggolo started pouring gasoline inside the bus, as the
other held the passengers at bay with a handgun. Mananggolo then ordered the passengers to get
off the bus. The passengers, including Atty. Caorong, stepped out of the bus and went behind the
bushes in a field some distance from the highway.ii[2]
However, Atty. Caorong returned to the bus to retrieve something from the overhead rack. At that
time, one of the armed men was pouring gasoline on the head of the driver. Cabatuan, who had
meantime regained consciousness, heard Atty. Caorong pleading with the armed men to spare the
driver as he was innocent of any wrong doing and was only trying to make a living. The armed men
were, however, adamant as they repeated their warning that they were going to burn the bus along
with its driver. During this exchange between Atty. Caorong and the assailants, Cabatuan climbed
out of the left window of the bus and crawled to the canal on the opposite side of the highway. He
heard shots from inside the bus. Larry de la Cruz, one of the passengers, saw that Atty. Caorong was
hit. Then the bus was set on fire. Some of the passengers were able to pull Atty. Caorong out of the
burning bus and rush him to the Mercy Community Hospital in Iligan City, but he died while
undergoing operation.iii[3]
The private respondents brought this suit for breach of contract of carriage in the Regional Trial
Court, Branch VI, Iligan City. In his decision, dated December 28, 1990, the trial court dismissed the
complaint, holding as follows:
The fact that defendant, through Operations Manager Diosdado Bravo, was informed of the rumors
that the Moslems intended to take revenge by burning five buses of defendant is established since
the latter also utilized Crisanto Generalaos as a witness. Yet despite this information, the plaintiffs
charge, defendant did not take proper precautions. . . . Consequently, plaintiffs now fault the
defendant for ignoring the report. Their position is that the defendant should have provided its
buses with security guards. Does the law require common carriers to install security guards in its
buses for the protection and safety of its passengers? Is the failure to post guards an omission of
the duty to exercise the diligence of a good father of the family which could have prevented the
killing of Atty. Caorong? To our mind, the diligence demanded by law does not include the posting
of security guards in buses. It is an obligation that properly belongs to the State. Besides, will the
presence of one or two security guards suffice to deter a determined assault of the lawless and thus
prevent the injury complained of? Maybe so, but again, perhaps not. In other words, the presence
of a security guard is not a guarantee that the killing of Atty. Caorong would have been definitely
avoided.
. enhancement. Gadgets and devices are available in the market for this purpose. It would not have
Accordingly, the failure of defendant to accord faith and credit to the report of Mr. Generalao and
the fact that it did not provide security to its buses cannot, in the light of the circumstances, be
characterized as negligence.
Finally, the evidence clearly shows that the assailants did not have the least intention of harming
any of the passengers. They ordered all the passengers to alight and set fire on the bus only after all
the passengers were out of danger. The death of Atty. Caorong was an unexpected and unforseen
occurrence over which defendant had no control. Atty. Caorong performed an act of charity and
heroism in coming to the succor of the driver even in the face of danger. He deserves the undying
gratitude of the driver whose life he saved. No one should blame him for an act of extraordinary
charity and altruism which cost his life. But neither should any blame be laid on the doorstep of
defendant. His death was solely due to the willful acts of the lawless which defendant could neither
prevent nor stop.
. WHEREFORE, the decision appealed from is hereby REVERSED and another rendered ordering
WHEREFORE, in view of the foregoing, the complaint is hereby dismissed. For lack of merit, the
counter-claim is likewise dismissed. No cost.iv[4]
On appeal, however, the Court of Appeals reversed. It held:
In the case at bench, how did defendant-appellee react to the tip or information that certain
Maranao hotheads were planning to burn five of its buses out of revenge for the deaths of two
Maranaos in an earlier collision involving appellees bus? Except for the remarks of appellees
operations manager that we will have our action . . . . and Ill be the one to settle it personally,
nothing concrete whatsoever was taken by appellee or its employees to prevent the execution of
the threat. Defendant-appellee never adopted even a single safety measure for the protection of its
paying passengers. Were there available safeguards? Of course, there were: one was frisking
passengers particularly those en route to the area where the threats were likely to be carried out
such as where the earlier accident occurred or the place of influence of the victims or their locality.
If frisking was resorted to, even temporarily, . . . . appellee might be legally excused from liability.
Frisking of passengers picked up along the route could have been implemented by the bus
conductor; for those boarding at the bus terminal, frisking could have been conducted by him and
perhaps by additional personnel of defendant-appellee. On hindsight, the handguns and especially
the gallon of gasoline used by the felons all of which were brought inside the bus would have been
discovered, thus preventing the burning of the bus and the fatal shooting of the victim.
Appellees argument that there is no law requiring it to provide guards on its buses and that the
safety of citizens is the duty of the government, is not well taken. To be sure, appellee is not
expected to assign security guards on all of its buses; if at all, it has the duty to post guards only on
its buses plying predominantly Maranao areas. As discussed in the next preceding paragraph, the
least appellee could have done in response to the report was to adopt a system of verification such
as frisking of passengers boarding its buses. Nothing, and to repeat, nothing at all, was done by
defendant-appellee to protect its innocent passengers from the danger arising from the Maranao
threats. It must be observed that frisking is not a novelty as a safety measure in our society.
Sensitive places in fact, nearly all important places have applied this method of security
weighed much against the budget of the bus company if such items were made available to its
personnel to cope up with situations such as the Maranao threats.
In view of the constitutional right to personal privacy, our pronouncement in this decision should
not be construed as an advocacy of mandatory frisking in all public conveyances. What we are
saying is that given the circumstances obtaining in the case at bench that: (a) two Maranaos died
because of a vehicular collision involving one of appellees vehicles; (b) appellee received a written
report from a member of the Regional Security Unit, Constabulary Security Group, that the
tribal/ethnic group of the two deceased were planning to burn five buses of appellee out of
revenge; and (c) appellee did nothing absolutely nothing for the safety of its passengers travelling in
the area of influence of the victims, appellee has failed to exercise the degree of diligence required
of common carriers. Hence, appellee must be adjudged liable.
.
defendant-appellee to pay plaintiffs-appellants the following:
1) P3,399,649.20 as death indemnity;
2) P50,000.00 and P500.00 per appearance as attorneys fees; and
Costs against defendant-appellee.v[5]
Hence, this appeal. Petitioner contends:
(A) THAT PUBLIC RESPONDENT ERRED IN REVERSING THE DECISION OF THE REGIONAL TRIAL
COURT DATED DECEMBER 28, 1990 DISMISSING THE COMPLAINT AS WELL AS THE
COUNTERCLAIM, AND FINDING FOR PRIVATE RESPONDENTS BY ORDERING PETITIONER
TO PAY THE GARGANTUAN SUM OF P3,449,649.20 PLUS P500.00 PER APPEARANCE AS
ATTORNEYS FEES, AS WELL AS DENYING PETITIONERS MOTION FOR RECONSIDERATION
AND THE SUPPLEMENT TO SAID MOTION, WHILE HOLDING, AMONG OTHERS, THAT
PETITIONER BREACHED THE CONTRACT OF CARIAGE BY ITS FAILURE TO EXERCISE THE
REQUIRED DEGREE OF DILIGENCE;
(B) THAT THE ACTS OF THE MARANAO OUTLAWS WERE SO GRAVE, IRRESISTIBLE, VIOLENT,
AND FORCEFUL, AS TO BE REGARDED AS CASO FORTUITO; AND
(C) THAT PUBLIC RESPONDENT COURT OF APPEALS SERIOUSLY ERRED IN HOLDING THAT
PETITIONER COULD HAVE PROVIDED ADEQUATE SECURITY IN PREDOMINANTLY MUSLIM
 AREAS AS PART OF ITS DUTY TO OBSERVE EXTRA-ORDINARY DILIGENCE AS A COMMON
CARRIER.
The instant petition has no merit.
First. Petitioners Breach of the Contract of Carriage
Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a
passenger on account of the wilful acts of other passengers, if the employees of the common carrier
could have prevented the act the exercise of the diligence of a good father of a family. In the
present case, it is clear that because of the negligence of petitioners employees, the seizure of the
bus by Mananggolo and his men was made possible.
Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were
planning to take revenge on the petitioner by burning some of its buses and the assurance of
petitioners operation manager, Diosdado Bravo, that the necessary precautions would be taken,
petitioner did nothing to protect the safety of its passengers.
Had petitioner and its employees been vigilant they would not have failed to see that the
malefactors had a large quantity of gasoline with them. Under the circumstances, simple
precautionary measures to protect the safety of passengers, such as frisking passengers and
inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors, before
allowing them on board could have been employed without violating the passengers constitutional
rights. As this Court intimated in Gacal v. Philippine Air Lines, Inc.,vi[6] a common carrier can be held
liable for failing to prevent a hijacking by frisking passengers and inspecting their baggages.
From the foregoing, it is evident that petitioners employees failed to prevent the attack on one of
petitioners buses because they did not exercise the diligence of a good father of a family. Hence,
petitioner should be held liable for the death of Atty. Caorong.
Second. Seizure of Petitioners Bus not a Case of Force Majeure
The petitioner contends that the seizure of its bus by the armed assailants was a fortuitous event
for which it could not be held liable.
Art. 1174 of the Civil Code defines a fortuitous even as an occurrence which could not be foreseen
or which though foreseen, is inevitable. In Yobido v. Court of Appeals,vii[7] we held that to be
considered as force majeure, it is necessary that: (1) the cause of the breach of the obligation must
be independent of the human will; (2) the event must be either unforeseeable or unavoidable; (3)
the occurrence must be such as to render it impossible for the debtor to fulfill the obligation in a
normal manner; and (4) the obligor must be free of participation in, or aggravation of, the injury to
the creditor. The absence of any of the requisites mentioned above would prevent the obligor from
being excused from liability.
Thus, in Vasquez v. Court of Appeals,viii[8] it was held that the common carrier was liable for its
failure to take the necessary precautions against an approaching typhoon, of which it was warned,
resulting in the loss of the lives of several passengers. The event was foreseeable, and, thus, the
second requisite mentioned above was not fulfilled. This ruling applies by analogy to the present
case. Despite the report of PC agent Generalao that the Maranaos were going to attack its buses,
petitioner took no steps to safeguard the lives and properties of its passengers. The seizure of the
bus of the petitioner was foreseeable and, therefore, was not a fortuitous event which would
exempt petitioner from liability.
Petitioner invokes the ruling in Pilapil v. Court of Appealsix[9] and De Guzman v. Court of
Appealsx[10] in support of its contention that the seizure of its bus by the assailants constitutes
force majeure. In Pilapil v. Court of Appeals,xi[11] it was held that a common carrier is not liable for
failing to install window grills on its buses to protect passengers from injuries caused by rocks
hurled at the bus by lawless elements. On the other hand, in De Guzman v. Court of Appeals,xii[12]
it was ruled that a common carrier is not responsible for goods lost as a result of a robbery which is
attended by grave or irresistible threat, violence, or force.
It is clear that the cases of Pilapil and De Guzman do not apply to the present case. Art. 1755 of the
Civil Code provides that a common carrier is bound to carry the passengers as far as human care
and foresight can provide, using the utmost diligence of very cautious person, with due regard for
all the circumstances. Thus, we held in Pilapil and De Guzman that the respondents therein were
not negligent in failing to take special precautions against threats to the safety of passengers which
could not be foreseen, such as tortious or criminal acts of third persons. In the present case, this
factor of unforeseeablility (the second requisite for an event to be considered force majeure) is
lacking. As already stated, despite the report of PC agent Generalao that the Maranaos were
planning to burn some of petitioners buses and the assurance of petitioners operations manager
(Diosdado Bravo) that the necessary precautions would be taken, nothing was really done by
petitioner to protect the safety of passengers.
Third. Deceased not Guilty of Contributory Negligence
The petitioner contends that Atty. Caorong was guilty of contributory negligence in returning to the
bus to retrieve something. But Atty. Caorong did not act recklessly. It should be pointed out that the
intended targets of the violence were petitioner and its employees, not its passengers. The
assailants motive was to retaliate for the loss of life of two Maranaos as a result of the collision
between petitioners bus and the jeepney in which the two Maranaos were riding. Mananggolo, the
leader of the group which had hijacked the bus, ordered the passengers to get off the bus as they
intended to burn it and its driver. The armed men actually allowed Atty. Caorong to retrieve
something from the bus. What apparently angered them was his attempt to help the driver of the
bus by pleading for his life. He was playing the role of the good Samaritan. Certainly, this act cannot
be considered an act of negligence, let alone recklessness.
Fourth. Petitioner Liable to Private Respondents for Damages
We now consider the question of damages that the heirs of Atty. Caorong, private respondents
herein, are entitled to recover from the petitioner.
Indemnity for Death. Art. 1764 of the Civil Code, in relation to Art. 2206 thereof, provides for the
payment of indemnity for the death of passengers caused by the breached of contract of carriage
by a common carrier. Initially fixed in Art. 2206 at P3,000.00, the amount of the said indemnity for
death has through the years been gradually increased in view of the declining value of the peso. It is
presently fixed at P50,000.00.xiii[13] Private respondents are entitled to this amount.
Actual damages. Art. 2199 provides that Except as provided by law or by stipulation, one is entitled
to an adequate compensation only for such pecuniary loss suffered by him as he has duly proved.
The trial court found that the private respondents spent P30,000.00 for the wake and burial of Atty. WHEREFORE, the decision, dated July 29, 1994, of the Court of Appeals is hereby AFFIRMED with
Caorong.xiv[14] Since petitioner does not question this finding of the trial court, it is liable to private the MODIFICATION that petitioner Fortune Express, Inc. is ordered to pay the following amounts to
respondents in the said amount as actual damages. private respondents Paulie, Yasser King, Rose Heinni, and Prince Alexander Caorong:
Moral Damages. Under Art. 2206, the spouse, legitimate and illegitimate descendants and 1. death indemnity in the amount of fifty thousand pesos (P50,000.00);
ascendants of the deceased may demand moral damages for mental anguish by reason of the death 2. actual damages in the amount of thirty thousand pesos (P30,000.00);
of the deceased. The trial court found that private respondent Paulie Caorong suffered pain from 3. moral damages in the amount of one hundred thousand pesos(P100,000.00);
the death of her husband and worry on how to provide support for their minor children, private 4. exemplary damages in the amount of one hundred thousand pesos (P100,000.00);
respondents Yasser King, Rose Heinni, and Prince Alexander.xv[15] The petitioner likewise does not 5. attorneys fees in the amount of fifty thousand pesos (P50,000.00);
question this finding of the trial court. Thus, in accordance with recent decisions of this 6. compensation for loss of earning capacity in the amount of two million one hundred
Court,xvi[16] we hold that the petitioner is liable to the private respondents in the amount of twenty-one thousand four hundred four pesos and ninety centavos (P2,121,404.90); and
P100,000.00 as moral damages for the death of Atty. Caorong. 7) costs of suits.
Exemplary Damages. Art. 2232 provides that in contracts and quasi-contracts, the court may award SO ORDERED.
exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or
malevolent manner. In the present case, the petitioner acted in a wanton and reckless manner.
Despite warning that the Maranaos were planning to take revenge against the petitioner by burning
some of its buses, and contrary to the assurance made by its operations manager that the necessary
precautions would be taken, the petitioner and its employees did nothing to protect the safety of
passengers. Under the circumstances, we deem it reasonable to award private respondents
exemplary damages in the amount of P100,000.00.xvii[17]
Attorneys Fees. Pursuant to Art. 2208, attorneys fees may be recovered when, as in the instant
case, exemplary damages are awarded. In the recent case of Sulpicio Lines, Inc. v. Court of
Appeals,xviii[18] we held an award of P50,000.00 as attorneys fees to be reasonable. Hence, the
private respondents are entitled to attorneys fees in that amount.
Compensation for Loss of Earning Capacity. Art. 1764 of the Civil Code, in relation to Art. 2206
thereof, provides that in addition to the indemnity for death arising from the breach of contract of
carriage by a common carrier, the defendant shall be liable for the loss of the earning capacity of
the deceased, and the indemnity shall be paid to the heirs of the latter. The formula established in
decided cases for computing net earning capacity is as follows:xix[19]
Gross Necessary
Net earning = Life x Annual - Living
Capacity Expectancy Income Expenses
Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of eighty (80) and the
age of the deceased.xx[20] Since Atty. Caorong was 37 years old at the time of his death,xxi[21] he
had a life expectancy of 28 2/3 more years.xxii[22] His projected gross annual income, computed
based on his monthly salary of P11,385.00xxiii[23] as a lawyer in the Department of Agrarian
Reform at the time of his death, was P148,005.00.xxiv[24] allowing for necessary living expenses of
fifty percent (50%)xxv[25]of his projected gross annual income, his total earning capacity amounts
to P2,121,404.90.xxvi[26] Hence, the petitioner is liable to the private respondents in the said
amount as compensation for loss of earning capacity.
G.R. No. L-55300 March 15, 1990
FRANKLIN G. GACAL and CORAZON M. GACAL, the latter assisted by her husband, FRANKLIN G.
GACAL, petitioners,
vs.
PHILIPPINE AIR LINES, INC., and THE HONORABLE PEDRO SAMSON C. ANIMAS, in his capacity as
PRESIDING JUDGE of the COURT OF FIRST INSTANCE OF SOUTH COTABATO, BRANCH I,
respondents.
Vicente A. Mirabueno for petitioners.
Siguion Reyna, Montecillo & Ongsiako for private respondent.
PARAS, J.:
This is a, petition for review on certiorari of the decision of the Court of First Instance of South
Cotabato, Branch 1, * promulgated on August 26, 1980 dismissing three (3) consolidated cases for
damages: Civil Case No. 1701, Civil Case No. 1773 and Civil Case No. 1797 (Rollo, p. 35).
The facts, as found by respondent court, are as follows:
Plaintiffs Franklin G. Gacal and his wife, Corazon M. Gacal, Bonifacio S. Anislag and
his wife, Mansueta L. Anislag, and the late Elma de Guzman, were then passengers
boarding defendant's BAC 1-11 at Davao Airport for a flight to Manila, not
knowing that on the same flight, Macalinog, Taurac Pendatum known as
Commander Zapata, Nasser Omar, Liling Pusuan Radia, Dimantong Dimarosing
and Mike Randa, all of Marawi City and members of the Moro National Liberation
Front (MNLF), were their co-passengers, three (3) armed with grenades, two (2)
with .45 caliber pistols, and one with a .22 caliber pistol. Ten (10) minutes after
take off at about 2:30 in the afternoon, the hijackers brandishing their respective
firearms announced the hijacking of the aircraft and directed its pilot to fly to
Libya. With the pilot explaining to them especially to its leader, Commander
Zapata, of the inherent fuel limitations of the plane and that they are not rated for
international flights, the hijackers directed the pilot to fly to Sabah. With the same
explanation, they relented and directed the aircraft to land at Zamboanga Airport,
Zamboanga City for refueling. The aircraft landed at 3:00 o'clock in the afternoon
of May 21, 1976 at Zamboanga Airport. When the plane began to taxi at the
runway, it was met by two armored cars of the military with machine guns
pointed at the plane, and it stopped there. The rebels thru its commander
demanded that a DC-aircraft take them to Libya with the President of the
defendant company as hostage and that they be given $375,000 and six (6)
armalites, otherwise they will blow up the plane if their demands will not be met
by the government and Philippine Air Lines. Meanwhile, the passengers were not
served any food nor water and it was only on May 23, a Sunday, at about 1:00
o'clock in the afternoon that they were served 1/4 slice of a sandwich and 1/10
cup of PAL water. After that, relatives of the hijackers were allowed to board the
plane but immediately after they alighted therefrom, an armored car bumped the
stairs. That commenced the battle between the military and the hijackers which
led ultimately to the liberation of the surviving crew and the passengers, with the
final score of ten (10) passengers and three (3) hijackers dead on the spot and
three (3) hijackers captured.
City Fiscal Franklin G. Gacal was unhurt. Mrs. Corazon M. Gacal suffered injuries in
the course of her jumping out of the plane when it was peppered with bullets by
the army and after two (2) hand grenades exploded inside the plane. She was
hospitalized at General Santos Doctors Hospital, General Santos City, for two (2)
days, spending P245.60 for hospital and medical expenses, Assistant City Fiscal
Bonifacio S. Anislag also escaped unhurt but Mrs. Anislag suffered a fracture at
the radial bone of her left elbow for which she was hospitalized and operated on
at the San Pedro Hospital, Davao City, and therefore, at Davao Regional Hospital,
Davao City, spending P4,500.00. Elma de Guzman died because of that battle.
Hence, the action of damages instituted by the plaintiffs demanding the following
damages, to wit:
Civil Case No. 1701 —
City Fiscal Franklin G. Gacal and Mrs. Corazon M. Gacal — actual
damages: P245.60 for hospital and medical expenses of Mrs
Gacal; P8,995.00 for their personal belongings which were lost
and not recovered; P50,000.00 each for moral damages; and
P5,000.00 for attorney's fees, apart from the prayer for an
award of exemplary damages (Record, pp. 4-6, Civil Case No.
1701).
Civil Case No. 1773 —
xxx xxx xxx
Civil Case No. 1797 —
xxx xxx xxx
The trial court, on August 26, 1980, dismissed the complaints finding that all the damages sustained
in the premises were attributed to force majeure.
On September 12, 1980 the spouses Franklin G. Gacal and Corazon M. Gacal, plaintiffs in Civil Case
No. 1701, filed a notice of appeal with the lower court on pure questions of law (Rollo, p. 55) and
the petition for review on certiorari was filed with this Court on October 20, 1980 (Rollo, p. 30).
The Court gave due course to the petition (Rollo, p. 147) and both parties filed their respective
briefs but petitioner failed to file reply brief which was noted by the Court in the resolution dated
May 3, 1982 (Rollo, p. 183).
Petitioners alleged that the main cause of the unfortunate incident is the gross, wanton and
inexcusable negligence of respondent Airline personnel in their failure to frisk the passengers
adequately in order to discover hidden weapons in the bodies of the six (6) hijackers. They claimed
that despite the prevalence of skyjacking, PAL did not use a metal detector which is the most
effective means of discovering potential skyjackers among the passengers (Rollo, pp. 6-7).
Respondent Airline averred that in the performance of its obligation to safely transport passengers
as far as human care and foresight can provide, it has exercised the utmost diligence of a very
cautious person with due regard to all circumstances, but the security checks and measures and
surveillance precautions in all flights, including the inspection of baggages and cargo and frisking of
passengers at the Davao Airport were performed and rendered solely by military personnel who
under appropriate authority had assumed exclusive jurisdiction over the same in all airports in the
Philippines.
Similarly, the negotiations with the hijackers were a purely government matter and a military
operation, handled by and subject to the absolute and exclusive jurisdiction of the military
authorities. Hence, it concluded that the accident that befell RP-C1161 was caused by fortuitous
event, force majeure and other causes beyond the control of the respondent Airline.
The determinative issue in this case is whether or not hijacking or air piracy during martial law and
under the circumstances obtaining herein, is a caso fortuito or force majeure which would exempt
an aircraft from payment of damages to its passengers whose lives were put in jeopardy and whose
personal belongings were lost during the incident.
Under the Civil Code, common carriers are required to exercise extraordinary diligence in their
vigilance over the goods and for the safety of passengers transported by them, according to all the
circumstances of each case (Article 1733). They are presumed at fault or to have acted negligently
whenever a passenger dies or is injured (Philippine Airlines, Inc. v. National Labor Relations
Commission, 124 SCRA 583 [1983]) or for the loss, destruction or deterioration of goods in cases
other than those enumerated in Article 1734 of the Civil Code (Eastern Shipping Lines, Inc. v.
Intermediate Appellate Court, 150 SCRA 463 [1987]).
The source of a common carrier's legal liability is the contract of carriage, and by entering into said
contract, it binds itself to carry the passengers safely as far as human care and foresight can
provide. There is breach of this obligation if it fails to exert extraordinary diligence according to all
the circumstances of the case in exercise of the utmost diligence of a very cautious person (Isaac v.
Ammen Transportation Co., 101 Phil. 1046 [1957]; Juntilla v. Fontanar, 136 SCRA 624 [1985]).
It is the duty of a common carrier to overcome the presumption of negligence (Philippine National
Railways v. Court of Appeals, 139 SCRA 87 [1985]) and it must be shown that the carrier had
observed the required extraordinary diligence of a very cautious person as far as human care and
foresight can provide or that the accident was caused by a fortuitous event (Estrada v. Consolacion,
71 SCRA 523 [1976]). Thus, as ruled by this Court, no person shall be responsible for those "events
which could not be foreseen or which though foreseen were inevitable. (Article 1174, Civil Code).
The term is synonymous with caso fortuito (Lasam v. Smith, 45 Phil. 657 [1924]) which is of the
same sense as "force majeure" (Words and Phrases Permanent Edition, Vol. 17, p. 362).
In order to constitute a caso fortuito or force majeure that would exempt a person from liability
under Article 1174 of the Civil Code, it is necessary that the following elements must concur: (a) the
cause of the breach of the obligation must be independent of the human will (the will of the debtor
or the obligor); (b) the event must be either unforeseeable or unavoidable; (c) the event must be
such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the
debtor must be free from any participation in, or aggravation of the injury to the creditor (Lasam v.
Smith, 45 Phil. 657 [1924]; Austria v. Court of Appeals, 39 SCRA 527 [1971]; Estrada v. Consolacion,
supra; Vasquez v. Court of Appeals, 138 SCRA 553 [1985]; Juan F. Nakpil & Sons v. Court of Appeals,
144 SCRA 596 [1986]). Caso fortuito or force majeure, by definition, are extraordinary events not
foreseeable or avoidable, events that could not be foreseen, or which, though foreseen, are
inevitable. It is, therefore, not enough that the event should not have been foreseen or anticipated,
as is commonly believed, but it must be one impossible to foresee or to avoid. The mere difficulty to
foresee the happening is not impossibility to foresee the same (Republic v. Luzon Stevedoring
Corporation, 21 SCRA 279 [1967]).
Applying the above guidelines to the case at bar, the failure to transport petitioners safely from
Davao to Manila was due to the skyjacking incident staged by six (6) passengers of the same plane,
all members of the Moro National Liberation Front (MNLF), without any connection with private
respondent, hence, independent of the will of either the PAL or of its passengers.
Under normal circumstances, PAL might have foreseen the skyjacking incident which could have
been avoided had there been a more thorough frisking of passengers and inspection of baggages as
authorized by R.A. No. 6235. But the incident in question occurred during Martial Law where there
was a military take-over of airport security including the frisking of passengers and the inspection of
their luggage preparatory to boarding domestic and international flights. In fact military take-over
was specifically announced on October 20, 1973 by General Jose L. Rancudo, Commanding General
of the Philippine Air Force in a letter to Brig. Gen. Jesus Singson, then Director of the Civil
Aeronautics Administration (Rollo, pp. 71-72) later confirmed shortly before the hijacking incident
of May 21, 1976 by Letter of Instruction No. 399 issued on April 28, 1976 (Rollo, p. 72).
Otherwise stated, these events rendered it impossible for PAL to perform its obligations in a
nominal manner and obviously it cannot be faulted with negligence in the performance of duty
taken over by the Armed Forces of the Philippines to the exclusion of the former.
Finally, there is no dispute that the fourth element has also been satisfied. Consequently the
existence of force majeure has been established exempting respondent PAL from the payment of
damages to its passengers who suffered death or injuries in their persons and for loss of their
baggages.
PREMISES CONSIDERED, the petition is hereby DISMISSED for lack of merit and the decision of the
Court of First Instance of South Cotabato, Branch I is hereby AFFIRMED.
SO ORDERED.
Melencio-Herrera, Padilla, Sarmiento and Regalado, JJ., concur.
G.R. No. 34840 September 23, 1931
NARCISO GUTIERREZ, plaintiff-appellee,
vs.
BONIFACIO GUTIERREZ, MARIA V. DE GUTIERREZ, MANUEL GUTIERREZ, ABELARDO VELASCO, and
SATURNINO CORTEZ, defendants-appellants.
L.D. Lockwood for appellants Velasco and Cortez.
San Agustin and Roxas for other appellants.
Ramon Diokno for appellee.
MALCOLM, J.:
This is an action brought by the plaintiff in the Court of First Instance of Manila against the five
defendants, to recover damages in the amount of P10,000, for physical injuries suffered as a result
of an automobile accident. On judgment being rendered as prayed for by the plaintiff, both sets of
defendants appealed.
On February 2, 1930, a passenger truck and an automobile of private ownership collided while
attempting to pass each other on the Talon bridge on the Manila South Road in the municipality of
Las Piñas, Province of Rizal. The truck was driven by the chauffeur Abelardo Velasco, and was
owned by Saturnino Cortez. The automobile was being operated by Bonifacio Gutierrez, a lad 18
years of age, and was owned by Bonifacio's father and mother, Mr. and Mrs. Manuel Gutierrez. At
the time of the collision, the father was not in the car, but the mother, together will several other
members of the Gutierrez family, seven in all, were accommodated therein. A passenger in the
autobus, by the name of Narciso Gutierrez, was en route from San Pablo, Laguna, to Manila. The
collision between the bus and the automobile resulted in Narciso Gutierrez suffering a fracture right
leg which required medical attendance for a considerable period of time, and which even at the
date of the trial appears not to have healed properly.
It is conceded that the collision was caused by negligence pure and simple. The difference between
the parties is that, while the plaintiff blames both sets of defendants, the owner of the passenger
truck blames the automobile, and the owner of the automobile, in turn, blames the truck. We have
given close attention to these highly debatable points, and having done so, a majority of the court
are of the opinion that the findings of the trial judge on all controversial questions of fact find
sufficient support in the record, and so should be maintained. With this general statement set
down, we turn to consider the respective legal obligations of the defendants.
In amplification of so much of the above pronouncement as concerns the Gutierrez family, it may
be explained that the youth Bonifacio was in incompetent chauffeur, that he was driving at an
excessive rate of speed, and that, on approaching the bridge and the truck, he lost his head and so
contributed by his negligence to the accident. The guaranty given by the father at the time the son
was granted a license to operate motor vehicles made the father responsible for the acts of his son.
Based on these facts, pursuant to the provisions of article 1903 of the Civil Code, the father alone
and not the minor or the mother, would be liable for the damages caused by the minor.
We are dealing with the civil law liability of parties for obligations which arise from fault or
negligence. At the same time, we believe that, as has been done in other cases, we can take
cognizance of the common law rule on the same subject. In the United States, it is uniformly held
that the head of a house, the owner of an automobile, who maintains it for the general use of his
family is liable for its negligent operation by one of his children, whom he designates or permits to
run it, where the car is occupied and being used at the time of the injury for the pleasure of other
members of the owner's family than the child driving it. The theory of the law is that the running of
the machine by a child to carry other members of the family is within the scope of the owner's
business, so that he is liable for the negligence of the child because of the relationship of master
and servant. (Huddy On Automobiles, 6th ed., sec. 660; Missell vs. Hayes [1914], 91 Atl., 322.) The
liability of Saturnino Cortez, the owner of the truck, and of his chauffeur Abelardo Velasco rests on a
different basis, namely, that of contract which, we think, has been sufficiently demonstrated by the
allegations of the complaint, not controverted, and the evidence. The reason for this conclusion
reaches to the findings of the trial court concerning the position of the truck on the bridge, the
speed in operating the machine, and the lack of care employed by the chauffeur. While these facts
are not as clearly evidenced as are those which convict the other defendant, we nevertheless
hesitate to disregard the points emphasized by the trial judge. In its broader aspects, the case is one
of two drivers approaching a narrow bridge from opposite directions, with neither being willing to
slow up and give the right of way to the other, with the inevitable result of a collision and an
accident.
The defendants Velasco and Cortez further contend that there existed contributory negligence on
the part of the plaintiff, consisting principally of his keeping his foot outside the truck, which
occasioned his injury. In this connection, it is sufficient to state that, aside from the fact that the
defense of contributory negligence was not pleaded, the evidence bearing out this theory of the
case is contradictory in the extreme and leads us far afield into speculative matters.
The last subject for consideration relates to the amount of the award. The appellee suggests that
the amount could justly be raised to P16,517, but naturally is not serious in asking for this sum,
since no appeal was taken by him from the judgment. The other parties unite in challenging the
award of P10,000, as excessive. All facts considered, including actual expenditures and damages for
the injury to the leg of the plaintiff, which may cause him permanent lameness, in connection with
other adjudications of this court, lead us to conclude that a total sum for the plaintiff of P5,000
would be fair and reasonable. The difficulty in approximating the damages by monetary
compensation is well elucidated by the divergence of opinion among the members of the court,
three of whom have inclined to the view that P3,000 would be amply sufficient, while a fourth
member has argued that P7,500 would be none too much.
In consonance with the foregoing rulings, the judgment appealed from will be modified, and the
plaintiff will have judgment in his favor against the defendants Manuel Gutierrez, Abelardo Velasco,
and Saturnino Cortez, jointly and severally, for the sum of P5,000, and the costs of both instances.
G.R. Nos. L-21477-81 April 29, 1966
FRANCISCA VILUAN, petitioner,
vs.
THE COURT OF APPEALS, PATRICIO HUFANA and GREGORIO HUFANA, respondents.
Jose A. Solomon, for petitioner.
Lourdes M. Garcia, for respondents.
REGALA, J.:
Seven persons were killed and thirteen others were injured in Bangar, La Union, on February 16,
1958, when a passenger bus on which they were riding caught fire after hitting a post and crashing
against a tree. The bus, owned by petitioner and driven by Hermenegildo Aquino, came from San
Fernando, La Union and was on its way to Candon, Ilocos Sur.
It appears that, as the bus neared the gate of the Gabaldon school building in the municipality of
Bangar, another passenger bus owned by Patricio Hufana and driven by Gregorio Hufana tried to
overtake it but that instead of giving way, Aquino increased the speed of his bus and raced with the
overtaking bus. Aquino lost control of his bus as a result of which it hit a post, crashed against a tree
and then burst into flames.
Among those who perished were Timoteo Mapanao, Francisca Lacsamana, Narcisa Mendoza and
Gregorio Sibayan, whose heirs sued petitioner and the latter's driver, Hermenegildo Aquino, for
damages for breach of contract of carriage. Carolina Sabado, one of those injured, also sued
petitioner and the driver for damages. The complaints were filed in the Court of First Instance of La
Union.
In their answer, petitioner and her driver blamed respondent Gregorio Hufana for the accident.
With leave of court, they filed third party complaints against Hufana and the latter's employer,
Patricio Hufana.
After trial, the court found that the accident was due to the concurrent negligence of the drivers of
the two buses and held both, together with their respective employers, jointly and severally liable
for damages.
The dispositive portion of its decision reads:
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered, declaring the plaintiff's
entitled to damages to be paid jointly and severally by the defendants and third-party
defendants as follows:
(1) For plaintiff Juliana C. Vda. de Mapanao for the death of her son Timoteo Mapanao, the
sum of P5,000.00 for actual damages, P1,000.00 as moral damages and P250.00 as
attorney's fees;
(2) For plaintiff Leon Lacsamana for the death of his daughter Francisca Lacsamana, the
sum of P4,000.00 as actual damages, P1,000.00 as moral damages and P250.00 as
attorney's fees;
(3) For plaintiffs Juan Mendoza and Magdalena Mendoza for the death of their mother
Narcisa Mendoza, the sum of P4,000.00 for actual damages, P1,000.00 for moral damages
and P250.00 as attorney's fees;
(4) For plaintiffs Agustina Sabado, Quintin Sibayan, Julita Sibayan, Primitivo Sibayan and
Avelina Sibayan, the sum of P4,000.00 for actual damages, P1,500.00 for moral damages
and P250.00 as attorney's fees;
(5) For the injured passenger Carolina Sabado, P649.00 for actual damages, P1,000.00 for
moral damages and P250.00 for attorney's fees.
All such amounts awarded as damages shall bear interest at the legal rate of six per cent
(6%) per annum from the date of this decision until the same shall have been duly paid in
full.
Defendants and third-party defendants are further ordered to pay proportionate costs."
Both petitioner and her driver and the respondents herein appealed to the Court of Appeals. While
affirming the finding that the accident was due to the concurrent negligence of the drivers of both
the Viluan and the Hufana buses, the Court of Appeals differed with the trial court in the
assessment of liabilities of the parties. In its view only petitioner Francisca Viluan, as operator of the
bus, is liable for breach of contract of carriage. The driver, Hermenegildo Aquino, cannot be made
jointly and severally liable with petitioner because he is merely the latter's employee and is in no
way a party to the contract of carriage. The court added, however —
Hermenegildo Aquino is not entirely free from liability. He may be held liable, criminally
and civilly, under the Revised Penal Code (Articles 100 and 103), but not in a civil suit for
damages predicated upon a breach of contract, such as this one (Aguas, et al. vs. Vargas, et
al., CA-G.R. No. 27161-R, Jan. 22, 1963). Furthermore, the common carrier, Francisca
Viluan could recover from Aquino any damages that she might have suffered by reason of
the latter's negligence.
Neither may respondents Patricio Hufana and Gregorio Hufana be held liable in the opinion of the
appellate court because the plaintiffs did not amend complaints in the main action so as to assert a
claim against the respondents as third party defendants.
The appellate court likewise disallowed the award of moral damages for P1,000.00 to Carolina
Sabado, there being no showing that the common carrier was guilty of fraud or bad faith in the
performance of her obligation. Accordingly, it rendered judgment as follows:
IN VIEW OF ALL THE FOREGOING, we hereby find defendant-appellant Francisca Viluan
solely liable to the plaintiffs-appellees for the damages and attorney's fees awarded to
them by the court below and further declare null and void the lower court's award of
moral damages in the amount of P1,000.00 in favor of plaintiff Carolina Sabado. Thus
modified, the judgment appealed from is affirmed in all other respects, with costs in this
instance against defendant-appellant Francisca Viluan.
From this judgment petitioner brought this appeal. In brief, her position is that since the proximate
cause of the accident was found to be the concurrent negligence of the drivers of the two buses,
then she and respondent Patricio and Gregorio Hufana should have been held equally liable to the
plaintiffs in the damage suits. The fact that the respondents were not sued as principal defendants
but were brought into the cases as third party defendants should not preclude a finding of their
liability.
We agree with petitioner's contention. To begin with, the Court of Appeals' ruling is based on motion for leave to file a third party complaint, it was stated that "Patricio Hufana and Gregorio
section 5 of Rule 12 of the former Rules of Court, 1 which was adopted from Rule 14-a of the Federal Hufana were not made parties to this action, although the defendants are entitled to indemnity
Rules of Civil Procedure. While the latter provision has indeed been held to preclude a judgment in and/or subrogation against them in respect of plaintiff's claim."
favor of a plaintiff and against a third party defendant where the plaintiff has not amended his It should make no difference therefore whether the respondents were brought in as principal
complaint to assert a claim against a third party defendant, 2 yet, as held in subsequent decisions, defendants or as third-party defendants. As Chief Justice Moran points out, since the liability of the
this rule applies only to cases where the third party defendant is brought in on an allegation of third-party defendant is already asserted in the third-party complaint, the amendment of the
liability to the defendants. The rule does not apply where a third-party defendant is impleaded on complaint to assert such liability is merely a matter of form, to insist on which would not be in
the ground of direct liability to the plaintiffs, in which case no amendment of the plaintiffs keeping with the liberal spirit of the Rules of Court. 4
complaint is necessary. 3 As explained in the Atlantic Coast Line R. Co. vs. U. S. Fidelity & Guaranty Nor should it make any difference that the liability of petitioner springs from contract while that of
Co., 52 F. Supp. 177 (1943): respondents arises from quasi-delict. As early as 1913, we already ruled in Gutierrez vs. Gutierrez,
From the sources of Rule 14 and the decisions herein cited, it is clear that this rule, like the 56 Phil. 177,5 that in case of injury to a passenger due to the negligence of the driver of the bus on
admiralty rule, "covers two distinct subjects, the addition of parties defendant to the main which he was riding and of the driver of another vehicle, the drivers as well as the owners of the
cause of action, and the bringing in of a third party for a defendant's remedy over." x x x two vehicles are jointly and severally liable for damages. Some members of the Court, though, are
If the third party complaint alleges facts showing a third party's direct liability to plaintiff of the view that under the circumstances they are liable on quasi-delict.
on the claim set out in plaintiff's petition, then third party "shall" make his defenses as Wherefore, the decision appealed from is hereby modified in the sense that petitioner as well as
provided in Rule 12 and his counterclaims against plaintiff as provided in Rule 13. In the respondents Patricio Hufana and Gregorio Hufana are jointly and severally liable for the damages
case of alleged direct liability, no amendment is necessary or required. The subject-matter awarded by the trial court. The disallowance of moral damages in the amount of P1,000.00 is
of the claim is contained in plaintiff's complaint, the ground of third party's liability on that correct and should be affirmed. No costs.
claim is alleged in third party complaint, and third party's defense to set up in his an to
plaintiff's complaint. At that point and without amendment, the plaintiff and third party
are at issue as to their rights respecting the claim.
The provision in the rule that, "The third-party defendant may assert any defenses which
the third-party plaintiff may assert to the plaintiff's claim," applies to the other subject,
namely, the alleged liability of third party defendant. The next sentence in the rule, "The
third-party defendant is bound by the adjudication of the third party plaintiff's liability to
the plaintiff, as well as of his own to the plaintiff or to the third-party plaintiff," applies to
both subjects. If third party is brought in as liable only to defendant and judgment is
rendered adjudicating plaintiff's right to recover against defendant and defendant's rights
to recover against third party, he is bound by both adjudications. That part of the sentence
refers to the second subject. If third party is brought in as liable to plaintiff, then third
party is bound by the adjudication as between him and plaintiff. That refers to the first
subject. If third party is brought in as liable to plaintiff and also over to defendant, then
third party is bound by both adjudications. The next sentence in the rule, "The plaintiff may
amend his pleadings to assert against the third-party defendant any claim which the
plaintiff might have asserted against the third-party defendant had he been joined
originally as a defendant," refers to the second subject, that is, to bringing in third party as
liable to defendant only, and does not apply to the alleged liability of third party directly to
plaintiff."
In this case the third-party complaints filed by petitioner and her driver charged respondents with
direct liability to the plaintiffs. It was contended that the accident was due "to the fault, negligence,
carelessness and imprudence of the third party defendant Gregorio Hufana" and, in petitioner's
G.R. No. L-30115 September 28, 1973
FE PEREZ, plaintiff-appellant,
vs.
JOSEFINA GUTIERREZ, defendant third-party plaintiff-appellee, PANFILO ALAJAR, third-party
defendant-appellee.
Julian C. Gonzales, Jr. for plaintiff-appellant.
Gerardo E. Angeles for defendant-third-party plaintiff-appellee.
Apostadera, Palabrica and Muyco for third-party defendant-appellee.
CASTRO, J.:
This appeal from the decision dated June 9, 1967 of the Court of First Instance of Davao in its civil
case 3163 poses objections to the manner the trial court adjudicated the claim for damages filed by
the plaintiff-appellant Fe Perez against the defendant-third-party plaintiff-appellee Josefina
Gutierrez.
The complaint (later amended) filed on October 29, 1959 by Fe Perez with the Court of First
Instance of Davao against Josefina Gutierrez, for breach of contract of carriage, alleges that on
September 6, 1959 while she, together with nine co-teachers, was a passenger of an AC jeepney
registered under the name of the defendant Gutierrez, the said vehicle, due to the reckless
negligence of its driver Leopoldo Cordero, met with an accident, resulting in injuries to herself
which required her hospitalization. In her answer, Josefina Gutierrez averred that if the claim of Fe
Perez is at all justified, responsibility therefor should devolve on one Panfilo Alajar, the actual
owner, by purchase, of the said passenger jeepney when the accident occurred and against whom
she has filed a third-party complaint.
The deed of sale attached to the third-party complaint recites, inter alia,
That it is mutually agreed by the herein vendor and vendee that the TITLE to the
aforementioned vehicle shall remain with the VENDOR, pending approval of the
herein SALE by the Public Service Commission, said motor vehicle being registered
as a public utility auto-calesa under "AC" denomination; ...
That the vendee herein, by these presents, do [sic] hereby binds himself and do
[sic] hereby assume, [sic] responsibility for all actions, claims, demands, and rights
of action, and whatever kind and nature, that may hereafter develop as a
consequence of or in the course of operation of the aforementioned vehicle; ...
In his answer to the third-party complaint, Panfilo Alajar disclaimed responsibility for the accident,
alleging that (a) the mentioned deed of sale is null and void because it has not been registered with
the Public Service Commission despite repeated demands on the 3rd-party complainant to do so;
(b) the said passenger jeepney remained in the control of the 3rd-party complainant who, together
with her lawyer-husband, had been collecting rentals from him for the use of the said vehicle; and
(c) by express agreement, title to the said vehicle remained with the 3rd-party complainant pending
approval of the sale by the Public Service Commission.
The defendant Leopoldo Cordero was declared in default and did not appeal.
On June 9, 1967, after trial on the merits, the court a quo rendered its decision, in the main finding
Leopoldo Cordero guilty of reckless imprudence, and finding that Panfilo Alajar owned and operated
the auto calesa in question and, in fact, after the accident, even assumed responsibility for the
payment of the hospital bills due to the Brokenshire Memorial Hospital for treatment of the injuries
suffered by Fe Perez. Based on these findings as well as the proof of the damages suffered by Fe
Perez, the court adjudged as follows:
WHEREFORE, premises considered, judgment is hereby rendered ordering third-
party defendant Panfilo Alajar to pay plaintiff the amount of P1,552.20 hospital
expenses; P2,000.00, actual damages; P5,000.00 moral damages; P500.00
incidental expenses; and P2,000.00 attorney's fees.
Ordering likewise Panfilo Alajar to pay defendant third-party plaintiff Josefina
Gutierrez P500.00 moral damages; and P1,000.00 attorney's fees, and to pay the
costs of the proceedings on both cases.
The present appeal questions the correctness of the dispositive portion of the decision a quo which
adjudged Panfilo Alajar, instead of Josefina Gutierrez, as the party liable to her for the payment of
the damages adjudicated in her favor. Specifically, Fe Perez argues that the registered owner of a
motor vehicle should be the one held liable for damages resulting from breach of contract of
carriage by a common carrier.
We find the appeal meritorious and in accord with settled law on the matter.
In Peralta vs. Mangusang1 this Court, in approbation of a similar argument, said:
The law (Sec. 20 [g], Public Service Act) really requires the approval of the Public
Service Commission in order that a franchise, or any privileges pertaining thereto,
may be sold or leased without infringing the certificate issued to the grantee. The
reason is obvious. Since a franchise is personal in nature any transfer or lease
thereof should be submitted for approval of the Public Service Commission, so
that the latter may take proper safeguards to protect the interest of the public. It
follows that if the property covered by the franchise is transferred or leased to
another without obtaining the requisite approval, the transfer is not binding on
the Public Service Commission and, in contemplation of law, the grantee
continues to be responsible under the franchise in relation to the Commission and
to the public for the consequences incident to the operation of the vehicle, one of
them being the collision under consideration. (Montoya v. Ignacio, 50 O.G. No. 1.
108; Vda. de Medina, et al. v. Cresencia, et al., 52 O.G. No. 10, 4604; Erezo v.
Jepte, et al., G.R. No. L-9605, Sept. 30, 1957; Tamayo v. Aquino, 56 O.G. No.
36,5617).
In the earlier case of Erezo vs. Jepte,2 which is cited in the foregoing opinion, this Court held that
the doctrine making the registered owner of a common carrier answerable to the public for
negligence injuries to its passengers or third persons, even though the vehicle had already been
transferred to another, is based upon the principle —
... that in dealing with vehicles registered under the Public Service Law, the public
has the right to assume or presume that the registered owner is the actual owner
 thereof, for it would be difficult for the public to enforce the actions that they
may have for injuries caused to them by the vehicles being negligently operated if
the public should be required to prove who the actual owner is. How would the
public or third persons know against whom to enforce their rights in case of
subsequent transfers of the vehicles? We do not imply by this doctrine, however,
that the registered owner may not recover whatever amount he had paid by
virtue of his liability to third persons from the person to whom he had actually
sold, assigned or conveyed the vehicle.
In Tamayo vs. Aquino,3 also cited in Mangusang, supra, this Court, reiterating what was stated en
passant in Jepte, supra, described the nature of the liability of the actual transferee of a vehicle the
negligent operation of which gives rise to injuries to its passengers:
The question that is posed, therefore, is how should the holder of the certificate
of public convenience Tamayo participate with his transferee operator Rayos, in
the damages recoverable by the heirs of the deceased passenger, if their liability
is not that of joint tortfeasors in accordance with Article 2194 of the Civil Code.
The following considerations must be borne in mind in determining this question.
As Tamayo is the registered owner of the truck, his responsibility to the public or
to any passenger riding in the vehicle or truck must be direct, for the reasons
given in our decision in the case of Erezo vs. Jepte, supra, as quoted above. But as
the transferee, who operated the vehicle when the passenger died, is the one
directly responsible for the accident and death, he should in turn be made
responsible to the registered owner for what the latter may have been adjudged
to pay. In operating the truck without transfer thereof having been approved by
the Public Service Commission, the transferee acted merely as agent of the
registered owner and should be responsible to him (the registered owner), for any
damages that he may cause the latter by his negligence."
Upon the foregoing, it is quite clear that the court below erred in holding Panfilo Alajar, rather than
Josefina Gutierrez, as the one directly liable to Fe Perez for the latter's injuries and the
corresponding damages incurred. This Court notes moreover, that the court below inexplicably
failed to hold the driver (Leopoldo Cordero), whom it found guilty of reckless imprudence, jointly
and solidarily liable with Josefina Gutierrez to Fe Perez in accordance with the provisions of article
2184 in relation to article 2180 of the new Civil Code.4
ACCORDINGLY, the judgment below is hereby modified in the sense that Josefina Gutierrez and
Leopoldo Cordero are hereby adjudged directly and jointly and solidarily liable to Fe Perez for the
sums adjudicated in the judgment below in her (Fe Perez') favor, while Panfilo Alajar is, in turn,
hereby held answerable to Josefina Gutierrez for such amount as the latter may pay to Fe Perez in
satisfaction of the judgment appealed from. Costs against both the defendant-third party plaintiff-
appellee Josefina Gutierrez and the third party defendant-appellee Panfilo Alajar.
G.R. No. L-57298 September 7, 1984
MYC-AGRO-INDUSTRIAL CORPORATION, petitioner,
vs.
PURIFICACION CAMERINO VDA. DE CALDO, LEONILA, NEMENCIO, YOLANDA, EDNA, LORNA and
GENY all surnamed CALDO and represented herein by PURIFICACION CAMERINO VDA. DE CALDO;
PETRA SARDIDO DE ARO, TEODORA S. TABING, LUCILA RAMOS VDA. DE PAKINGAN, GERALDO,
ROWENA, and ISIDRO, all surnamed PAKINGAN and represented herein by LUCILA RAMOS VDA.
DE PAKINGAN; EMILIANO NAVARRETE, NEMENCIO NAVARRETE, RODOLFO NAVARRETE,
EDUARDO NAVARRETE, MELANIO NAVARRETE, AIDA, LUALHATI and DOMINADOR, all surnamed
NAVARRETE and represented herein by EMILIANO NAVARRETE; CONSTANCIA MANALAYSAY VDA.
DE LACSON, ALMARIO, SOLEDAD, SUSAN, ELVIRA, CAROLINA, CECILIA and ARIEL, all surnamed
LACSON and represented herein by CONSTANCIA MANALAYSAY VDA. DE LACSON; BELLA
BALAJADIA, ERLINDA CANDADO, SOTERA RAMIREZ, ROGELIO and FELICITACION GONZAGA, RUBY
GONZAGA, represented herein by ROGELIO GONZAGA; ALFREDO RODOLFO, ROSARIO GONZALES-
ORDOÑEZ, HERMOGENA BAUTISTA, RODOLFO ALCARAZ, FELICIDAD ALCARAZ, LENIZA ALCARAZ,
represented herein by RODOLFO ALCARAZ; ANIANO BAUTISTA, MAXIMINA BAUTISTA, EPIFANIA
and CORNELIO BAUTISTA, represented herein by ANIANO BAUTISTA; AVELINO IGNACIO,
NICANOR SILLA and ROSILA REYES; and BENEDICTO KALAW KATIGBAK in his capacity as the
General Manager of the MYC Agro-Industrial Corporation; and CEFERINO AREVALO; and JAGUAR
TRANSPORTATION CO., INC., FEDERAL INSURANCE CO., INC., F. E. ZUELLIG, and CASTO MADAMBA
INSURANCE AGENCY; and HONORABLE COURT OF APPEALS, respondents.
V.E. del Rosario & Associates for petitioner.
Remulla, Estrella, Bihasa, Lata & Associates for respondents.
Austria & Vargas for respondents Federal Ins., Castro Ins. Agency and F.E. Zuellig Inc.
Rodolfo Ma. Acob for respondent Jaguar Transit Co., Inc.
Pedro Magpayo, Jr. for respondent Federal Zuellig.
RELOVA, J.:
This is a petition for review of the decision of the then Court of Appeals in CA. G. R. No. 56343-R,
finding petitioner liable for damages.
About 4:30 in the afternoon of March 21, 1971, a Toyota truck with Plate No. 12-90-4 CT '70 owned
by petitioner and operated by Ceferino Arevalo hit the right center side of a jeepney with Plate No.
24-97-40-3 1970 owned by Nicanor Silla and operated by Alfredo Rodolfo. There were fifteen (15)
passengers of the jeepney, namely: (1) Laureano Lacson, (2) Salome Bautista, (3) Chona Alcaraz, (4)
Ruby Gonzaga, (5) Felicitacion Gonzaga, (6) Epifania Bautista, (7) Avelino Ignacio, (8) Erlinda
Candado, (9) Leniza Alcaraz, (10) Sotera Ramirez, (11) Rosario Ordoñez, (12) Maximina Bautista, (13)
Cornelio Bautista, (14) Hermogena Bautista and (15) Felicidad Alcaraz. The jeepney, at the time of
the impact, was parked at Regiment Street, Anabu Imus, Cavite. As a consequence, said jeepney
turned turtle and was pushed to a cemented fence owned by Lucila Reyes, pinning down to death
Carlito Pakingan, Hipolito Caldo, Azucena Camaclang-Navarrete and Fortunato Bonifacio. Likewise,
the passengers: Laureano Lacson, Salome Bautista and Chona Alcaraz died because of the injuries
sustained in this incident; the other passengers suffered various injuries on the different parts of
their bodies.
The aforementioned jeepney and the wall fence were also damaged.
Complaint for damages was filed by the owner of the wall fence, the aforementioned victims and
the heirs of the deceased victims against petitioner MYC-AGRO-INDUSTRIAL CORPORATION, the
registered owner of the Toyota truck; Ceferino Arevalo, the driver of said truck; and, Benedicto
Kalaw-Katigbak, the general manager of petitioner corporation.
In its responsive pleading, petitioner admitted ownership of the Toyota truck but alleged that the
same, together with nine (9) other units were leased to the Jaguar Transportation, Inc. and that
Ceferino Arevalo, as well as Benedicto Kalaw-Katigbak are not its (petitioner) employees.
Thereafter, petitioner, defendant in the damage suit, filed a third-party complaint against Jaguar
Transportation Company.
Third-party Jaguar pleads that its liability is only secondary and that it had already complied with its
obligation under its contract of lease with petitioner when it secured a third-party liability insurance
from Federal Insurance Company, Inc. It then filed a fourth-party complaint against Federal
Insurance Company, Inc., F. E. Zuellig, Inc. and Casto Madamba, claiming that Jaguar had obtained
an insurance policy from Federal Insurance Company, Inc. of which F. E. Zuellig is its general
manager, and fourth-party defendant Casto Madamba is the general agent of defendant Federal
Insurance Company, Inc.
In its answer to the fourth-party complaint, the fourth-party defendants alleged that Jaguar has no
cause of action against them because F. E. Zuellig is only the general manager of Federal Insurance
Company, Inc.; that Casto Madamba is only the general agent of Federal Insurance Company, Inc.,
and that the proper party in interest is herein petitioner, the registered owner of the Toyota truck.
Ceferino Arevalo, driver of the truck in question was named defendant in Criminal Case No. 53-71 of
the then Court of First Instance of Cavite, Branch V. Upon arraignment, he pleaded guilty to the
crimes of multiple homicide, multiple serious physical injuries, multiple less serious physical injuries,
slight physical injuries and damage to property thru reckless imprudence.
Evidence is clear that the death of seven (7) persons and the injuries suffered by private
respondents were due to the negligence and reckless operation of the Toyota truck, owned by
herein petitioner and driven by Ceferino Arevalo. On March 21, 1971, when the accident happened,
subject vehicle was registered in the name of petitioner which, however, would want to exculpate
itself from liability because of the contract of lease with sale (Exhibit "1") allegedly executed on
December 1, 1970 between it and Jaguar Transportation Company. Petitioner claims that because
of the lease contract with sale to Jaguar it had no more control over the vehicle; that Ceferino
Arevalo is not its employee but that of Jaguar. On this score, the trial court as well as the then Court
of Appeals made the finding that —
... A reading of said contract cannot but produce the conviction that the same was
drawn up for no other purpose but to set up a buffer between MYC and the
public. It is really nothing but a simulated contract, a subterfuge, intended to shift
liability from MYC to Jaguar Transportation Company which appears to be nothing
more than a conduit of MYC. The obvious purpose is to create an apparent
relationship of employer-employee between Jaguar and the persons operating
MYC's trucks. Thus, while the contract is denominated as one of lease with sale
and the ten Toyota trucks were supposed to be leased to Jaguar; the right of
Jaguar to use these trucks was subject to a hauling contract with defendant MYC.
The supposed lessee Jaguar may use these trucks only if the lessor shall have no
more need for the trucks herein leased. (Par. 3 of Exhibit 1) Even if Jaguar should
be able to lease these trucks to other parties because the lessor MYC has no more
need for the same as the milling season is over, said contract executed by Jaguar
with a third party shag be terminated as soon as the milling season is over, said
contract executed by Jaguar with a third party shall be terminable as soon as the
lessor shall have a need for the leased motor vehicle. Par. 2 of the lease contract
exposes the true nature of this alleged contract of lease with sale as nothing more
than a disguise effected by defendant MYC to relieve itself of the burdens and
responsibilities of an employer with respect to these trucks. That the defendant
MYC remained the true and real owner and possessor of these trucks is further
indicated by the fact that those trucks, although purportedly sold to Jaguar on
installment, were never mortgaged to MYC by way of security; the same trucks
leased and sold to Jaguar were exclusively used for the business of MYC in the
hauling of its agricultural products; said trucks may not be sold, leased, alienated
or encumbered by Jaguar without MYC's written consent. During the 3 year period
of the contract Exhibit I before full payment of the supposed installment price of
P362,129.10 by Jaguar all these trucks continue to be under the effective
dominion of MYC — all the rights of ownership — to use, enjoy and dispose of
these — remained with MYC. As a matter of fact, the ownership was not to be
transferred until after three years. After the incident of March 21, 1971, the
trucks were all "repossessed" by defendant MYC, a mere ceremony since MYC
never lost possession. (pp. 175-177, Record on Appeal)
After trial, the lower court rendered judgment ordering "defendants MYC Agro-Industrial
Corporation and Ceferino Arevalo jointly and severally to pay to plaintiffs the following: P3,348.75
to Felicidad Alcaraz; P3,399.15 to Rodolfo, Felicidad and Leniza, all surnamed Alcaraz; P18,000.00 to
Rodolfo and Felicidad Alcaraz; P4,689.80 for Sotera Ramirez; P20,300.00 for Teodora Sardido-Tabing
and Petra de Aro; P45,485.00 for Constancia Manalaysay Vda. de Lacson, Almario, Solidad, Susan,
Elvira, Carolina, Cecilia, and Ariel, all surnamed Lacson; P22,760.00 for Purificacion Camerino Vda.
de Caldo, Leonila, Nemencia, Yolanda, Edna, Lorna and Genie all surnamed Caldo; P21,000.00 for
Lucila Ramos Vda. de Pakingan, Geraldo, Rowena, and Isidro all surnamed Pakingan; P20,500.00 for
plaintiff Bella Balajadia-Bonifacio; P1,989.49 for Erlinda Candado; P230.50 for Avelino Ignacio;
P8,484.00 for Nicanor Silla P2,150.00 for Aniano Maximina, Epifania and Cornelio, all surnamed
Bautista; P4,724.50 to plaintiffs Rogelio, Felicitacion and Ruby, all surnamed Gonzaga; P1,724.55 for
the injuries sustained by Ruby Gonzaga; P850.00 for plaintiff Hermogena Bautista; P23,000.00 for
plaintiffs Emiliano, Nemencio, Rodolfo, Eduardo, Melanio, Aida, Lualhati, and Dominador, all
surnamed Navarrete; P221.10 for plaintiff Alfredo Rodolfo and P300.00 for plaintiff Rosila Reyes; by
way of actual and compensatory damages; by way of exemplary damages, the amount of
P50,000.00 likewise awarded to plaintiffs as exemplary damages to be divided among them in
proportion of their share of actual and compensatory damages. Defendant is further ordered to pay
to plaintiffs the amount of P20,000.00 as Attorney's fees and the costs of this suit. The Complaint
against Benedicto Katigbak, the counterclaim, the third-party and fourth party complaint are
dismissed." (pp. 181-182, Record on Appeal)
From the foregoing judgment which was affirmed in toto by respondent Court of Appeals, petitioner
went to this Court alleging in substance that the appellate court erred in holding that Jaguar
Transportation Company was a mere dummy or conduit of petitioner which should be considered
as the true owner of the vehicle.
We cannot uphold the contention of petitioner. In the first place, Jaguar's answer to third party
complaint tendered no genuine or real issue. Secondly, Jaguar's representative did not even appear
in court after impleading fourth party defendants and its President, Benedicto Katigbak, did not
adduce evidence in his behalf. Thirdly, the sign MYC which stands for petitioner still appears on
subject vehicle and, as aptly observed by the appellate court the agreement which allegedly
transferred the truck from MYC to Jaguar failed to provide for a chattel mortgage to secure said
transfer. The well-known practice is that motor vehicles acquired through installment payments are
secured by a chattel mortgage over the vehicle sold. None exists in the instant case (p. 51, Rollo)."
Finally, it is undisputed that the registered owner of the Toyota truck is petitioner. As held in Vargas
vs. Langcay, 6 SCRA 174, "[t]he registered owner/operator of a passenger vehicle is jointly and
severally hable with the driver for damages incurred by passengers or third persons as a
consequence of injuries (or death) sustained in the operation of said vehicles. ... Regardless of who
the actual owner of a vehicle is, the operator of record continues to be the operator of the vehicles
as regards the public and third persons, and as such is directly and primarily responsible for the
consequences incident to its operation, so that, in contemplation of law, such owner/operator of
record is the employer of the driver, the actual operator and employer being considered merely as
his agent."
ACCORDINGLY, the petition is hereby DENIED for lack of merit
G.R. No. L-50127-28 March 30, 1979 erroneous theory that Eugenio Jose and Rosalia Arroyo, having lived together as
VICTOR JUANIZA, Heirs of Josefa P. Leus etc., et al., plaintiffs and appellees, husband and wife, without the benefit of marriage, are co- owners of said
vs. jeepney. (p. 2, Appellant's Brief).
EUGENIO JOSE, THE ECONOMIC INSURANCE COMPANY, INC., and ROSALIA ARROYO, defendants The issues thus to be resolved are as follows: (1) whether or not Article 144 of the Civil Code is
and appellants. applicable in a case where one of the parties in a common-law relationship is incapacitated to
Victoriano O. Javier and Ricardo A. Fabros, Jr. for appellees. marry, and (2) whether or not Rosalia who is not a registered owner of the jeepney can be held
Luis Viscocho and Francisco E. Rodrigo, Jr. for appellants. jointly and severally liable for damages with the registered owner of the same.
It has been consistently ruled by this Court that the co-ownership contemplated in Article 144 of
DE CASTRO, J.: the Civil Code requires that the man and the woman living together must not in any way be
This case was certified by the Court of Appeals to this Court on the ground that the questions raised incapacitated to contract marriage. (Camporedondo vs. Aznar, L-11483, February 4, 1958, 102 Phil.
in the appeal of the decision of the Court of First Instance of Laguna are purely questions of law. 1055, 1068; Osmeña vs. Rodriguez, 54 OG 5526; Malajacan vs. Rubi, 42 OG 5576). Since Eugenio
Eugenio Jose was the registered owner and operator of the passenger jeepney involved in an Jose is legally married to Socorro Ramos, there is an impediment for him to contract marriage with
accident of collision with a freight train of the Philippine National Railways that took place on Rosalia Arroyo. Under the aforecited provision of the Civil Code, Arroyo cannot be a co-owner of the
November 23, 1969 which resulted in the death to seven (7) and physical injuries to five (5) of its jeepney. The jeepney belongs to the conjugal partnership of Jose and his legal wife. There is
passengers. At the time of the accident, Eugenio Jose was legally married to Socorro Ramos but had therefore no basis for the liability of Arroyo for damages arising from the death of, and physical
been cohabiting with defendant-appellant, Rosalia Arroyo, for sixteen (16) years in a relationship injuries suffered by, the passengers of the jeepney which figured in the collision.
akin to that of husband and wife. Rosalia Arroyo, who is not the registered owner of the jeepney can neither be liable for damages
In the resulting cages for damages filed in the Court of First Instance of Laguna, decision was caused by its operation. It is settled in our jurisprudence that only the registered owner of a public
rendered, the dispositive part of which reads as follows: service vehicle is responsible for damages that may arise from consequences incident to its
(4) In Civil Case No. SP-867 ordering defendants Eugenio Jose and Rosalia Arroyo operation, or maybe caused to any of the passengers therein. (De Peralta vs. Mangusang, L-18110,
jointly and severally to pay plaintiff Victor Juaniza the sum of P1,600.00 plus legal July 31, 1964, 11 SCRA 598; Tamayo vs. Aquino, L-12634 and L-12720, May 29, 1959; Roque vs.
interest from date of complaint until fully paid and costs of suit; Malibay Transit, L-8561, November 18,1955; Montoya vs. Ignacio, L-5868, December 29, 1953).
(5) In Civil Case No. SP-872, ordering defendants Eugenio Jose and Rosalia Arroyo WHEREFORE, in view of the foregoing, Rosalia Arroyo is hereby declared free from any liability for
jointly and severally to pay the respective heirs of the deceased Josefa P. Leus, damages and the appealed decision is hereby modified accordingly. No costs.
Fausto Retrita, Nestor del Rosario Añonuevo and Arceli de la Cueva in the sum of
P12,000.00 for the life of each of said deceased, with legal interest from date of
complaint, and costs of suit. (pp. 47-48, Rello).
Motion for reconsideration was filed by Rosalia Arroyo praying that the decision be reconsidered
insofar as it condemns her to pay damages jointly and severally with her co-defendant, but was
denied. The lower court based her liability on the provision of Article 144 of the Civil Code which
reads:
When a man and woman driving together as husband and wife, but they are not
married, or their marriage is void from the beginning, the property acquired by
either or both of them through their work or industry or their wages and salaries
shall be governed by the rules on co-ownership.
Rosalia Arroyo then filed her appeal with the Court of Appeals which, as previously stated, certified
the same to Us, the question raised being purely legal as may be seen from the lone assigned error
as follows:
The lower court erred in holding defendant-appellant Rosalia Arroyo liable 'for
damages resulting from the death and physical injuries suffered by the
passengers' of the jeepney registered in the name of Eugenio Jose, on the
G.R. No. L-18965 October 30, 1964
COMPAÑIA MARITIMA, petitioner,
vs.
INSURANCE COMPANY OF NORTH AMERICA, respondent.
Rafael Dinglasan for petitioner.
Ozaeta Gibbs & Ozaeta for respondent.
BAUTISTA ANGELO, J.:
Sometime in October, 1952, Macleod and Company of the Philippines contracted by telephone the
services of the Compañia Maritima, a shipping corporation, for the shipment of 2,645 bales of hemp
from the former's Sasa private pier at Davao City to Manila and for their subsequent transhipment
to Boston, Massachusetts, U.S.A. on board the S.S. Steel Navigator. This oral contract was later on
confirmed by a formal and written booking issued by Macleod's branch office in Sasa and
handcarried to Compañia Maritima's branch office in Davao in compliance with which the latter
sent to Macleod's private wharf LCT Nos. 1023 and 1025 on which the loading of the hemp was
completed on October 29, 1952. These two lighters were manned each by a patron and an assistant
patron. The patrons of both barges issued the corresponding carrier's receipts and that issued by
the patron of Barge No. 1025 reads in part:
Received in behalf of S.S. Bowline Knot in good order and condition from MACLEOD AND
COMPANY OF PHILIPPINES, Sasa Davao, for transhipment at Manila onto S.S. Steel
Navigator.
FINAL DESTINATION: Boston.
Thereafter, the two loaded barges left Macleod's wharf and proceeded to and moored at the
government's marginal wharf in the same place to await the arrival of the S.S. Bowline Knot
belonging to Compañia Maritima on which the hemp was to be loaded. During the night of October
29, 1952, or at the early hours of October 30, LCT No. 1025 sank, resulting in the damage or loss of
1,162 bales of hemp loaded therein. On October 30, 1952, Macleod promptly notified the carrier's
main office in Manila and its branch in Davao advising it of its liability. The damaged hemp was
brought to Odell Plantation in Madaum, Davao, for cleaning, washing, reconditioning, and redrying.
During the period from November 1-15, 1952, the carrier's trucks and lighters hauled from Odell to
Macleod at Sasa a total of 2,197.75 piculs of the reconditioned hemp out of the original cargo of
1,162 bales weighing 2,324 piculs which had a total value of 116,835.00. After reclassification, the
value of the reconditioned hemp was reduced to P84,887.28, or a loss in value of P31,947.72.
Adding to this last amount the sum of P8,863.30 representing Macleod's expenses in checking,
grading, rebating, and other fees for washing, cleaning and redrying in the amount of P19.610.00,
the total loss adds up to P60,421.02.
All abaca shipments of Macleod, including the 1,162 bales loaded on the carrier's LCT No. 1025,
were insured with the Insurance Company of North America against all losses and damages. In due
time, Macleod filed a claim for the loss it suffered as above stated with said insurance company,
and after the same had been processed, the sum of P64,018.55 was paid, which was noted down in
a document which aside from being a receipt of the amount paid, was a subrogation agreement
between Macleod and the insurance company wherein the former assigned to the latter its rights
over the insured and damaged cargo. Having failed to recover from the carrier the sum of
P60,421.02, which is the only amount supported by receipts, the insurance company instituted the
present action on October 28, 1953. After trial, the court a quo rendered judgment ordering the
carrier to pay the insurance company the sum of P60,421.02, with legal interest thereon from the
date of the filing of the complaint until fully paid, and the costs. This judgment was affirmed by the
Court of Appeals on December 14, 1960. Hence, this petition for review.
The issues posed before us are: (1) Was there a contract of carriage between the carrier and the
shipper even if the loss occurred when the hemp was loaded on a barge owned by the carrier which
was loaded free of charge and was not actually loaded on the S.S. Bowline Knot which would carry
the hemp to Manila and no bill of lading was issued therefore?; (2) Was the damage caused to the
cargo or the sinking of the barge where it was loaded due to a fortuitous event, storm or natural
disaster that would exempt the carrier from liability?; (3) Can respondent insurance company sue
the carrier under its insurance contract as assignee of Macleod in spite of the fact that the liability
of the carrier as insurer is not recognized in this jurisdiction?; (4) Has the Court of Appeals erred in
regarding Exhibit NNN-1 as an implied admission by the carrier of the correctness and sufficiency of
the shipper's statement of accounts contrary to the burden of proof rule?; and (5) Can the
insurance company maintain this suit without proof of its personality to do so?
1. This issue should be answered in the affirmative. As found by the Court of Appeals, Macleod and
Company contracted by telephone the services of petitioner to ship the hemp in question from the
former's private pier at Sasa, Davao City, to Manila, to be subsequently transhipped to Boston,
Massachusetts, U.S.A., which oral contract was later confirmed by a formal and written booking
issued by the shipper's branch office, Davao City, in virtue of which the carrier sent two of its
lighters to undertake the service. It also appears that the patrons of said lighters were employees of
the carrier with due authority to undertake the transportation and to sign the documents that may
be necessary therefor so much so that the patron of LCT No. 1025 signed the receipt covering the
cargo of hemp loaded therein as follows: .
Received in behalf of S.S. Bowline Knot in good order and condition from MACLEOD AND
COMPANY OF PHILIPPINES, Sasa Davao, for transhipment at Manila onto S.S. Steel
Navigator.
FINAL DESTINATION: Boston.
The fact that the carrier sent its lighters free of charge to take the hemp from Macleod's wharf at
Sasa preparatory to its loading onto the ship Bowline Knot does not in any way impair the contract
of carriage already entered into between the carrier and the shipper, for that preparatory step is
but part and parcel of said contract of carriage. The lighters were merely employed as the first step
of the voyage, but once that step was taken and the hemp delivered to the carrier's employees, the
rights and obligations of the parties attached thereby subjecting them to the principles and usages
of the maritime law. In other words, here we have a complete contract of carriage the
consummation of which has already begun: the shipper delivering the cargo to the carrier, and the
latter taking possession thereof by placing it on a lighter manned by its authorized employees,
under which Macleod became entitled to the privilege secured to him by law for its safe
transportation and delivery, and the carrier to the full payment of its freight upon completion of the
voyage.
The receipt of goods by the carrier has been said to lie at the foundation of the contract to
carry and deliver, and if actually no goods are received there can be no such contract. The
liability and responsibility of the carrier under a contract for the carriage of goods
commence on their actual delivery to, or receipt by, the carrier or an authorized agent. ...
and delivery to a lighter in charge of a vessel for shipment on the vessel, where it is the
custom to deliver in that way, is a good delivery and binds the vessel receiving the freight,
the liability commencing at the time of delivery to the lighter. ... and, similarly, where there
is a contract to carry goods from one port to another, and they cannot be loaded directly on
the vessel and lighters are sent by the vessel to bring the goods to it, the lighters are for the
time its substitutes, so that the bill of landing is applicable to the goods as soon as they are
placed on the lighters. (80 C.J.S., p. 901, emphasis supplied)
... The test as to whether the relation of shipper and carrier had been established is, Had
the control and possession of the cotton been completely surrendered by the shipper to
the railroad company? Whenever the control and possession of goods passes to the carrier
and nothing remains to be done by the shipper, then it can be said with certainty that the
relation of shipper and carrier has been established. Railroad Co. v. Murphy, 60 Ark. 333,
30 S.W. 419, 46 A. St. Rep. 202; Pine Bluff & Arkansas River Ry. v. MaKenzie, 74 Ark. 100,
86 S.W. 834; Matthews & Hood v. St. L., I.M. & S.R. Co., 123 Ark. 365, 185 S.W. 461, L.R.A.
1916E, 1194. (W.F. Bogart & Co., et al. v. Wade, et al., 200 S.W. 148).
The claim that there can be no contract of affreightment because the hemp was not actually loaded
on the ship that was to take it from Davao City to Manila is of no moment, for, as already stated,
the delivery of the hemp to the carrier's lighter is in line with the contract. In fact, the receipt signed
by the patron of the lighter that carried the hemp stated that he was receiving the cargo "in behalf
of S.S. Bowline Knot in good order and condition." On the other hand, the authorities are to the
effect that a bill of lading is not indispensable for the creation of a contract of carriage.
Bill of lading not indispensable to contract of carriage. — As to the issuance of a bill of
lading, although article 350 of the Code of Commerce provides that "the shipper as well as
the carrier of merchandise or goods may mutua-lly demand that a bill of lading is not
indispensable. As regards the form of the contract of carriage it can be said that provided
that there is a meeting of the minds and from such meeting arise rights and obligations,
there should be no limitations as to form." The bill of lading is not essential to the contract,
although it may become obligatory by reason of the regulations of railroad companies, or
as a condition imposed in the contract by the agreement of the parties themselves. The bill
of lading is juridically a documentary proof of the stipulations and conditions agreed upon
by both parties. (Del Viso, pp. 314-315; Robles vs. Santos, 44 O.G. 2268). In other words,
the Code does not demand, as necessary requisite in the contract of transportation, the
delivery of the bill of lading to the shipper, but gives right to both the carrier and the
shipper to mutually demand of each other the delivery of said bill. (Sp. Sup. Ct. Decision,
May 6, 1895). (Martin, Philippine Commercial Laws, Vol. II, Revised Edition, pp. 12-13)
The liability of the carrier as common carrier begins with the actual delivery of the goods
for transportation, and not merely with the formal execution of a receipt or bill of lading;
the issuance of a bill of lading is not necessary to complete delivery and acceptance. Even
where it is provided by statute that liability commences with the issuance of the bill of
lading, actual delivery and acceptance are sufficient to bind the carrier. (13 C.J.S., p. 288)
2. Petitioner disclaims responsibility for the damage of the cargo in question shielding itself behind
the claim of force majeure or storm which occurred on the night of October 29, 1952. But the
evidence fails to bear this out.
Rather, it shows that the mishap that caused the damage or loss was due, not to force majeure, but
to lack of adequate precautions or measures taken by the carrier to prevent the loss as may be
inferred from the following findings of the Court of Appeals:
Aside from the fact that, as admitted by appellant's own witness, the ill-fated barge had
cracks on its bottom (pp. 18-19, t.s.n., Sept. 13, 1959) which admitted sea water in the
same manner as rain entered "thru tank man-holes", according to the patron of LCT No.
1023 (exh. JJJ-4) — conclusively showing that the barge was not seaworthy — it should be
noted that on the night of the nautical accident there was no storm, flood, or other natural
disaster or calamity. Certainly, winds of 11 miles per hour, although stronger than the
average 4.6 miles per hour then prevailing in Davao on October 29, 1952 (exh. 5), cannot
be classified as storm. For according to Beaufort's wind scale, a storm has wind velocities
of from 64 to 75 miles per hour; and by Philippine Weather Bureau standards winds should
have a velocity of from 55 to 74 miles per hour in order to be classified as storm (Northern
Assurance Co., Ltd. vs. Visayan Stevedore Transportation Co., CA-G.R. No. 23167-R, March
12, 1959).
The Court of Appeals further added: "the report of R. J. del Pan & Co., Inc., marine surveyors,
attributes the sinking of LCT No. 1025 to the 'non-water-tight conditions of various buoyancy
compartments' (exh. JJJ); and this report finds confirmation on the above-mentioned admission of
two witnesses for appellant concerning the cracks of the lighter's bottom and the entrance of the
rain water 'thru manholes'." We are not prepared to dispute this finding of the Court of Appeals.
3. There can also be no doubt that the insurance company can recover from the carrier as assignee
of the owner of the cargo for the insurance amount it paid to the latter under the insurance
contract. And this is so because since the cargo that was damaged was insured with respondent
company and the latter paid the amount represented by the loss, it is but fair that it be given the
right to recover from the party responsible for the loss. The instant case, therefore, is not one
between the insured and the insurer, but one between the shipper and the carrier, because the
insurance company merely stepped into the shoes of the shipper. And since the shipper has a direct
cause of action against the carrier on account of the damage of the cargo, no valid reason is seen
why such action cannot be asserted or availed of by the insurance company as a subrogee of the
shipper. Nor can the carrier set up as a defense any defect in the insurance policy not only because
it is not a privy to it but also because it cannot avoid its liability to the shipper under the contract of
carriage which binds it to pay any loss that may be caused to the cargo involved therein. Thus, we
find fitting the following comments of the Court of Appeals:
 It was not imperative and necessary for the trial court to pass upon the question of
whether or not the disputed abaca cargo was covered by Marine Open Cargo Policy No.
MK-134 isued by appellee. Appellant was neither a party nor privy to this insurance
contract, and therefore cannot avail itself of any defect in the policy which may constitute
a valid reason for appellee, as the insurer, to reject the claim of Macleod, as the insured.
Anyway, whatever defect the policy contained, if any, is deemed to have been waived by
the subsequent payment of Macleod's claim by appellee. Besides, appellant is herein sued
in its capacity as a common carrier, and appellee is suing as the assignee of the shipper
pursuant to exhibit MM. Since, as above demonstrated, appellant is liable to Macleod and
Company of the Philippines for the los or damage to the 1,162 bales of hemp after these
were received in good order and condition by the patron of appellant's LCT No. 1025, it
necessarily follows that appellant is likewise liable to appellee who, as assignee of
Macleod, merely stepped into the shoes of and substi-tuted the latter in demanding from
appellant the payment for the loss and damage aforecited.
4. It should be recalled in connection with this issue that during the trial of this case the carrier
asked the lower court to order the production of the books of accounts of the Odell Plantation
containing the charges it made for the loss of the damaged hemp for verification of its accountants,
but later it desisted therefrom on the claim that it finds their production no longer necessary. This
desistance notwithstanding, the shipper however pre-sented other documents to prove the damage
it suffered in connection with the cargo and on the strength thereof the court a quo ordered the
carrier to pay the sum of P60,421.02. And after the Court of Appeals affirmed this award upon the
theory that the desistance of the carrier from producing the books of accounts of Odell Plantation
implies an admission of the correctness of the statements of accounts contained therein, petitioner
now contends that the Court of Appeals erred in basing the affirmance of the award on such
erroneous interpretation.
There is reason to believe that the act of petitioner in waiving its right to have the books of
accounts of Odell Plantation presented in court is tantamount to an admission that the statements
contained therein are correct and their verification not necessary because its main defense here, as
well as below, was that it is not liable for the loss because there was no contract of carriage
between it and the shipper and the loss caused, if any, was due to a fortuitous event. Hence, under
the carrier's theory, the correctness of the account representing the loss was not so material as
would necessitate the presentation of the books in question. At any rate, even if the books of
accounts were not produced, the correctness of the accounts cannot now be disputed for the same
is supported by the original documents on which the entries in said books were based which were
presented by the shipper as part of its evidence. And according to the Court of Appeals, these
documents alone sufficiently establish the award of P60,412.02 made in favor of respondent.
5. Finally, with regard to the question concerning the personality of the insurance company to
maintain this action, we find the same of no importance, for the attorney himself of the carrier
admitted in open court that it is a foreign corporation doing business in the Philippines with a
personality to file the present action.
WHEREFORE, the decision appealed from is affirmed, with costs against petitioner.