Transportation Law Notes

[TRANSPORTATION LAW NOTES] 2017edramel
TRANSPORTATION LAWS – NOTES

Table of Contents
I. CONCEPT OF COMMON CARRIER
1. Definition
Article 1732 NCC,
De Guzman vs. Court of Appeals 168 SCRA 612 (1993)
Planters Products Inc vs. CA 226 SCRA 76 (1993)
2. Characteristics
Fisher vs. Yangco Steamship Co. 31 Phil 1 (1915)
US vs. Quinahon 31 Phil 189
Loadstar Shipping Co., Inc. vs. Court of Appeals 315 SCRA 339 (1999)
First Phil. Industrial vs. Court of Appeals 300 SCRA 661 (1998)
3. Distinguish from Private Carrier

Home Insurance Co. vs. American Steamship 23 SCRA 24 (1968)
San Pablo vs. Pantranco 153 SCRA 199 (1987)
National Steel Corp. vs. Court of Appeals 283 SCRA 45 (1997)
4. Government Regulation of Common Carrier’s Business

KMU Labor Center vs. Garcia, Jr. 239 SCRA 386 (1994)
Tatad vs. Garcia, Jr. 241 SCRA 334 (1997)
5. Governing Law
Samar Mining Co., Inc. vs. Nordeutscher Llyod 132 SCRA 529 (1984)
Eastern Shipping Lines vs. IAC 150 SCRA 464 (1984)
National Development Co. vs. Court of Appeals 164 SCRA 593 (1988)
II. CONTRACTUAL EFFECTS
A. VIGILANCE OVER GOODS

1. Extra-ordinary Diligence Required of Common Carriers (Article 1733, NCC)
a. “Registered Owner Rule”
Gelisan vs. Alday 154 SCRA 388 (1987)
Benedicto vs. IAC187 SCRA 547 (1990)
Philtranco Service Enterprises, Inc. vs. CA 273 SCRA 562 (1997)
b. Kabit System
Santos vs. Sibug 104 SCRA 520 (1981)
Lita Enterprises, Inc. vs. CA 148 SCRA 347 (1987)
Teja Marketing vs. IAC 148 SCRA 347 (1987)
c. Boundary System
Magboo vs. Bernardo 7 SCRA 952 (1963)
2. Liability of Carriers for Loss, Destruction and Deterioration of Goods; Exceptions; Presumption of Negligence;
Articles 1734-1735; Articles 1739-1743
Eastern Shipping Lines vs. IAC, supra
Ganzon vs. CA 161 SCRA 646 (1985)
Eastern Shipping Lines vs. Court of Appeals 196 SCRA 570 (1991)
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Sarkies Tours Phils., Inc. vs. Court of Appeals 280 SCRA 58 (1997)
Valenzuela Hardwood & Industrial Supply vs. Court of Appeals 274 SCRA 642 (1997)
Yobido vs. Court of Appeals 281 SCRA 1 (1997)
3. Commencement, Duration and Termination of carrier’s responsibility over the goods (Articles 1736-1738, NCC)
Compania Maritima vs. Insurance Co. of North America 12 SCRA 213 (1964)
Lu Do vs. Binamira 101 Phil. 120 (1957)
American President Lines Ltd. vs. Klepper 110 PHIL 243
Servando vs. Phil. Steam 117 SCRA 832 (1982)
Ganzon vs. Court of Appeals, supra
Saludo, Jr. vs. Court of Appeals 207 SCRA 498 (1992)
Macam vs. Court of Appeals 313 SCRA 77 (1999)
4. Stipulations Limiting Carrier’s Liability

a. Articles 1744-1745, NCC; Degree of Diligence
Reasonable time in the delivery
Case: Maersk Line vs. Court of Appeals 222 SCRA 108 (1993)
b. Articles 1749-1750, NCC; Amount of Liability
Ysmael vs. Barretto 51 PHIL 90 (1927)

Shewaram vs. Philippine Airlines 17 SCRA 606 (1966)
Ong Yiu vs. Court of Appeals 91 SCRA 223 (1966)
Sea Land Services, Inc. vs. Intermediate Appellate Court 153 SCRA 552 (1987)
Citadel Lines, Inc. vs. Court of Appeals 184 SCRA 544 (1990)
Everett Seamship Corp. vs. Court of Appeals 297 SCRA 496 (1998)
British Airways vs. Court of Appeals 285 SCRA 450 (1998)
H.E. Heacock Co. vs. Macondray & Co. 42 PHIL 205 (1921)
c. Void Stipulation (Art. 1745, NCC)

Case: Sweet Lines vs. Teves 83 SCRA 361 (1978)
5. Passenger’s Baggages (Article 1754, NCC)

Quisumbing, Sr. vs. Court of Appeals 189 SCRA 605 (1990)
Pan American Airlines vs. Rapadas 209 SCRA 67 (1992)
British Airways vs. Court of Appeals, supra
Alitalia vs. Intermediate Appellate Court 192 SCRA 9 (1990)
B. SAFETY OF PASSENGERS
1. ‘Utmost Diligence’ Required of Common Carriers (Article 1755, NCC)
Nocum vs. Laguna Tayabas bus. Co. vs. CA 83 SCRA 386 (1978)
Mecenas vs. CA 180 SCRA 83 (1989)
Negros Navigation Co., Inc. vs. CA 281 SCRA 717 (1997)
Korean Airlines Co. Ltd. vs. CA 234 SCRA 14 (1999)
Fortune Express, Inc. vs. CA 305 SCRA 14 (1999)
Gatchalian vs. Delim 203 SCRA 126 (1991)
Del Castillo vs. Jaymalin 112 SCRA 629 (1982)
A. Doctrine of Last Clear Chance

Philippine Rabbit Bus Lines vs. IAC 189 SCRA 158 (1990)
Bustamante vs. CA 193 SCRA 603 (1991)
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B. Accomodation Passenger
Lara vs. Valencia 104 SCRA 65 (1958)
C. Carrier not an insurer against all risks

Necessito vs. Paras 104 Phil. 75 (1958)
Japan Airlines vs. CA 294 SCRA 19 (1998)
D. Res Ipsa Loquitur

Layugan vs. IAC 167 SCRA 363 (1988)
2. Commencement, Duration and Termination of Carrier’s Responsibility
La Mallorca vs. De Jesus 17 SCRA 739 (1966)

Aboitiz Shipping Co. vs. Court of Appeals 179 SCRA 95 (1989)
Mallari Sr. vs. Court of Appeals 324 SCRA 147 (2000)
3. Presumption of Negligence: Liability of Carriers for death or injury to passengers; Exceptions (Articles
1756-1758, NCC)
Bayasen vs. Court of Appeals 103 SCRA 197 (1981)

Cervantes vs. Court of Appeals 304 SCRA 27 (1999)
Calalas vs. Court of Appeals 332 SCRA 356 (2000)
Pestaño vs. Sumayang 346 SCRA 870 (2000)
4. Negligence or intentional assault by carrier’s employee
Gillaco vs. Manila Railroad Co. 97 Phil. 884 (1955)

Maranan vs. Perez 20 SCRA 412 (1967)
5. Passenger’s duty to observe diligence to avoid injury; contributory negligence

PNR vs. Court of Appeals 139 SCRA 87 (1985)
Isaac vs. Al Ammen Trans 101 Phil 1046 (1957)
6. Injury to passenger due to acts of co-passenger or stranger
Bachelor Express, Inc vs. Court of Appeals 188 SCRA 216 (1990)
Fortune Express Inc. vs. CA, supra
III. DAMAGES (Article 1764, NCC)
A. Actual/Compensatory Damages (Arts. 2199, 2201, 2203, NCC)

Cariaga vs. LTB Co., & MRR 110 PHIL 346 (1960)
Villa Rey Transit, Inc. vs. Court of Appeals 31 SCRA 511 (1970)
Pan American World Airways vs. IAC 153 SCRA 521 (1987)
1. Recovery for Physical Injuries

Soberano vs. MRR & Benguet Auto Line 18 SCRA 732 (1966)
Marchan vs. Mendoza 24 SCRA 888 (1968)
2. Damages in case of death

De Caliston vs. CA 122 SCRA 958 (1983)
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PAL vs. CA 185 SCRA 110 (1990)
B. Moral Damages (Arts. 2206, 2216-2217, 2219-2220, NCC)

Cachero vs. Manila Yellow Taxi Cab 101 Phil. 523 (1957)
Fores vs. Miranda 105 Phil. 266 (1959)
Lopez vs. Pan American 16 SCRA 431 (1966)
Ortigas Jr. vs. Lufthansa 64 SCRA 610 (1975)
Phil. Rabbit Bus Lines vs. Esguerra 117 SCRA 741 (1982)
Sweet Lines vs. Court of Appeals 121 SCRA 769 (1983)
Pan American World Airways vs. IAC, supra
TransWorld Airlines vs. CA 165 SCRA 143 (1988)
Armovit vs. Court of Appeals 184 SCRA 476 (1990)
PAL vs. CA 106 SCRA 391
C. Exemplary Damages (Arts. 2229, 2232-2233, NCC)

Prudenciado vs. Alliance Transport 148 SCRA 440 (1987)
Marchan vs. Mendoza, supra.
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I. CONCEPT OF COMMON CARRIER

1. DEFINITION
Article 1732 NCC
A common carrier is a person , corporation, firm or association engaged in the business of carrying or transporting of
passengers or goods or both by land, water or air for compensation, offering their services to the public
A common carrier is a person or corporation whose regular business is to carry passenger or property for all persons who
may choose to employ and to remember and to remunerate him.
A common carrier is one who holds himself out to the public as engaged in the business of transporting person or
property or news from place to place, for compensation, offering his services to the public generally.
De Guzman v CA 168 SCRA 612 (1993)

 Article 1732 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.
 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.
 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
backhauling 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.
 A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code
provisions governing common carriers.
Planters Products Inc v CA 226 SCRA 76 (1993)

 ISSUE: Whether a common carrier becomes a private carrier by reason of charter party
 Yes. A charter party is defined as contract where an entire ship, or some principal part thereof, is let by
the owner to another person for a specified time or use.
Two types of a charter party are Contract of Affreightment and Charter by demise
Contract of Affreightment - involves the use of the shipping space in part or in whole while;
Charter by demise – involves the transfer of the entire command including control and crew.
 A common carrier shall become a private carrier only when the charter both includes the boat and the
crew. In the present case, the carrier is still considered a common carrier since the control over
navigation and the crew was still his.
2. CHARACTERISTICS
Fisher v Yangco Steamship Co. 31 Phil 1 (1915)
 ISSUE: Whether the acts complained of had the effect of making or giving an unreasonable or
unnecessary preference or advantage to any person, locality or particular kind of traffic, or of subjecting
any person, locality, or particular kind of traffic to any undue or unreasonable prejudice or discrimination
 HELD: No. There may be some vessels engaged in business as common carriers of merchandise, which
for lack of suitable deck space or storage rooms might be justified in declining to carry kerosene oil,
gasoline, and similar products, even when offered for carriage securely packed in cases; and few vessels
are equipped to transport those products in bulk.
 But in any case of a refusal to carry such products which would subject any person, locality or the traffic
in such products would be necessary to hear evidence before making an affirmative finding that such
prejudice or discrimination was or was not unnecessary, undue or unreasonable. The making of such a
finding would involve a consideration of the suitability of the vessel for the transportation of such
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products; the reasonable possibility of danger or disaster resulting from their transportation in the form
and under the conditions in which they are offered for carriage; the general nature of the business done
by the carrier and, in a word, all the attendant circumstances which might affect the question of the
reasonable necessity for the refusal by the carrier to undertake the transportation of this class of
merchandise.
US v Quinahon 31 Phil 189

 ISSUE: Whether or not the defendants and appellants have violated Act No. 98.
 HELD: YES. The law requires common carriers to carry for all persons, either passengers or property, for
exactly the same charge for a like or contemporaneous service in the transportation of like kind of traffic
under substantially similar circumstances or conditions. The law prohibits common carriers from
subjecting any person, etc., or locality, or any particular kind of traffic, to any undue or unreasonable
prejudice or discrimination whatsoever.
 It is not believed that the law prohibits the charging of a different rate for the carrying of passengers or
property when the actual cost of handling and transporting the same is different. If the services are alike
and contemporaneous, discrimination in the price charged is prohibited. (if services are unlike,
discrimination in the price charged is allowed)
 In the case at bar, there is no proof that the conditions were different. There is no proof that the services
rendered by the defendants for the different parties were unlike. (Services were alike, thus, defendant
must not discriminate on the price charged.)
Loadstar Shipping Co., Inc. v CA (1999)

 We hold that LOADSTAR is a common carrier. It is not necessary that the carrier be issued a certificate of
public convenience, and this public character is not altered by the fact that the carriage of the goods in
question was periodic, occasional, episodic or unscheduled
First Phil. Industrial v CA (1998)

 Issue: Whether a pipeline business is included in the term “common carrier” so as to entitle the
petitioner to the exemption Held: Article 1732 of the Civil Code defines a "common carrier" as "any
person, corporation, firm or association 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 test for determining whether a party is a common carrier of goods is:
 He must be engaged in the business of carrying goods for others as a public employment, and must hold
himself out as ready to engage in the transportation of goods for person generally as a business and not
as a casual occupation; (2) He must undertake to carry goods of the kind to which his business is
confined; (3) He must undertake to carry by the method by which his business is conducted and over his
established roads; and (4) The transportation must be for hire.
 Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier.
It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for hire as a
public employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose
to employ its services, and transports the goods by land and for compensation.
 The fact that petitioner has a limited clientele does not exclude it from the definition of a common
carrier.
3. DISTINGUISH FROM PRIVATE CARRIER

Home Insurance Co. v American Steamship(ASAI) (1968)
 Issue: Whether ASAI is liable as a common carrier
 Held: No. The Civil Code provisions of common carriers should not apply where the common carrier is
not acting as such but as a private carrier.
 Under American Jurisprudence, a common carrier undertaking to carry a special cargo or chartered to a
special person only becomes a private carrier. As a private carrier, a stipulation exempting the owner
from liability for the negligence of its agent is valid.
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San Pablo v Pantranco (1987)

 Issue: Whether the vessel of Pantranco is a private ferry boat service, thus, it need not apply for separate
CPC (certi for Public Convenience).
 Held: No. The vessel is a public ferry service.
 Jurisprudence provides that a public ferry service is one which all the public have its right to resort to and
for which a fare is charged and the ferryman is a common carrier.
 In the case, Pantranco charges its passenger separately from the charges for the bus trips and issues
tickets whenever they board the vessel.
National Steel Corp v CA (1997)

 Generally, private carriage is undertaken by special agreement and the carrier does not hold himself out
of the goods for the general public.
 It is undisputed that VSI did not offer its services to the general public. It carried passengers or goods
only for those it chose under a “special contract of charter party.”
 Consequently, the rights and obligations of VSI and NSC, including their respective liability for damage to
the cargo, are determined primarily by stipulations in their contract of private carriage or charter party.
4. GOVERNMENT REGULATION OF COMMON CARRIER’S BUSINESS

KMU Labor Center v Garcia (1994)
 ISSUE: Whether or not the provincial bus operators have authority to reduce and increase fare rates
based on the order of the LTFRB
 HELD: The Legislature delegated to the defunct Public Service Commission the power of fixing rates of
public services and the LTFRB is likewise vested with the same. Such delegation is permitted in order to
adapt to the increasing complexity of modern life.
 The authority given by the LTFRB to the provincial bus operators to set a fare range is illegal and invalid
as it is tantamount to an undue delegation of legislative authority.
 Potestas delegata non delegari protest.
What has been delegated cannot be delegated. A further delegation of power would constitute a
negation of the duty in violation of the trust reposed in the delegate mandated to discharge it directly.
 The policy of allowing the provincial bus operators to change their fares would lead to a chaotic situation
and would leave the riding public at the mercy of transport operators.
Tatad v Garcia, Jr. (1997)

 The SC ruled that EDSA LRT Consortium, under the agreement, does not and will not become the owner
of a public utility. Hence, the question of its nationality is misplaced.
 It is true that a foreign corporation cannot own a public utility but in this case what EDSA LRT
Consortium will be owning are the facilities that it will be building for the EDSA railway project. There is
no prohibition against a foreign corporation to own facilities used for a public utility.
 Further, it cannot be said that EDSA LRT Consortium will be the one operating the public utility for it will
be DOTC that will operate the railway transit. DOTC will be the one exacting fees from the people for the
use of the railway and from the proceeds, it shall be paying the rent due to EDSA LRT Consortium. All
that EDSA LRT Consortium has to do is to build the facilities and receive rent from the use thereof by the
government for 25 years – it will not operate the railway transit. EDSA LRT Consortium is a corporation
formed for the purpose of building a public utility it does not automatically mean that it is operating a
public utility.
5. GOVERNING LAW
Samar Mining Co., Inc. v Nordeutschr Lloyd (1984)
 Issue: Whether Nordeustscher Lloyd is liable for the loss of the goods as common carrier?
 Held: No. At the time of the loss of the goods, the character of possession of Nordeutscher Lloyd shifted
from common carrier to agent of Samar Mining Co.
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 The Bill of Lading is serves both as a receipt of goods and is likewise the contract to transport and deliver
the same as stipulated. It is a contract and is therefore the law between the parties. The Bill of Lading in
question stipulated that Nordeutscher Lloyd only undertook to transport the goods in its vessel only up
to the port of discharge from ship, which is Manila. The Bill of Lading further stipulated that the goods
were to be transshipped by the carrier from Manila to the port of destination – Davao. By unloading the
shipment in Manila and delivering the goods to the warehouse of AMCYL, the appellant was acting
within the contractual stipulations contained in the Bill of Lading.
 Article 1736 of the Civil Code relives the carrier of responsibility over the shipment as soon as the carrier
makes actual or constructive delivery of the goods to the consignee or to the person who has a right to
receive them.
 Under the Civil Code provisions governing Agency, an agent can only be held liable in cases where his
acts are attended by fraud, negligence, deceit or if there is a conflict of interest between him and the
principal. Under the same law an agent is likewise liable if he appoints a substitute when he was not
given the power to appoint one or otherwise appoints one that is notoriously incompetent or insolvent.
These facts were not proven in the record.
Eastern Shipping Lines v IAC (1984)

 Issue: Whether the Civil Code provisions on Common Carriers or the Carriage of the Goods by Sea Act will
govern the case at bar?
 Held: The law of the country to which the goods are to be transported governs the liability of common
carrier in case of their loss, destruction or deterioration. The liability of petitioner is governed primarily
by the Civil Code however, in all matters not regulated by the Civil Code, the Code of Commerce and
Special Laws will govern with respect to the rights and obligations of the carrier. Therefore COGSA is
suppletory to the provisions of the Civil Code.
National Development Co. v CA (1988)

 Issue: Whether the carriage of the goods by Sea Act should be applied to determine the liability of the
carrier.
 Held: Settled in the Eastern Shipping case that the law of the country to which the goods are to be
transported governs the liability of the common carrier in case of their loss, destruction, or deterioration.
Since it was bound towards the Philippines, our laws shall apply regardless of the fact that the collision
occurred in foreign waters.
 The carrier’s liability is governed by the Civil Code, and in matters not regulated therein, the Code of
Commerce and by laws shall govern.
 The Carriage of Goods by Sea Act is merely suppletory.
II. CONTRACTUAL EFFECTS

A. VIGILANCE OVER GOODS
1. EXTRA- ORDINARY DILIGENCE REQUIRED OF COMMON CARRIERS (ARTICLE 1733, NCC)
Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according
to all the circumstances of each case.
a. “Registered Owner Rule”

Gelisan vs. Alday 154 SCRA 388 (1987)
The court has held in several decisions that the registered owner of a public service is responsible for damages that may arise
from consequences incident to its operation or that may be caused to any of the passengers therein. The claim of the petitioners that
he is not liable in view of the lease contract executed by and between him and Espiritu which exempts him from liability to 3rd persons,
cannot be sustained because it appears that the lease contract had not been approved by the Public Service Commission. It is a
settled rule in our jurisprudence that if the property covered by a Franchise is transferred or lease to another without obtaining the
requisite approval, the transfer is not binding upon the public and 3rd persons. However, Gelisan is not without recourse because he
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has a right to be indemnified by Espiritu for the amount he may be required to pay. This is due to the fact that the lease contract in
question, although not effective against the public is valid and binding between the contracting parties.
Benedicto vs. IAC 187 SCRA 547 (1990)

The prevailing doctrine in common carriers make the owner liable for consequences having from the operations of the carrier
even though the specific vehicle involved may have been transferred to another person. This doctrine rests upon the principle in
dealing with vehicles registered under Public Service Law, the public has the right to assume that the registered owner is the actual or
lawful owner thereof. It would be very difficult and often impossible as a practical matter, for members of the general public to enforce
the rights of action that they may have for injuries inflicted by the vehicles being negligently operated if they should be required to prove
who the actual owner is. The registered owner is not allowed to deny liability by proving the identity of the alleged transferee. Thus,
contrary to petitioner’s claim, private respondents are not required to go beyond the vehicle’s certificate of registration to ascertain the
owner of the carrier.
Philtranco Service Enterprises, Inc. vs. CA 273 SCRA 562 (1997)

We have consistently held that the liability of the registered owner of a public service vehicle, like petitioner Philtranco, for
damages arising from the tortious acts of the driver is primary, direct, and joint and several or solidary with the driver. As to solidarity,
Article 2194 expressly provides:
Art. 2194. The responsibility of two or more persons who are liable for a quasi-delict is solidary.
Since the employer's liability is primary, direct and solidary, its only recourse if the judgment for damages is satisfied by it is to
recover what it has paid from its employee who committed the fault or negligence which gave rise to the action based on quasi-delict.
Article 2181 of the Civil Code provides:
Art. 2181. Whoever pays for the damage caused by his dependents or employees may recover from the latter what he has
paid or delivered in satisfaction of the claim.
b. Kabit System
Santos vs. Sibug 104 SCRA 520 (1981)

Although SANTOS, as the kabit was the true owner as against VIDAD, the latter, as the registered owner/operator and
grantee of the franchise, is directly and primarily responsible and liable for the damages caused to SIBUG, the injured party, as a
consequence of the negligent or careless operation of the vehicle. This ruling is based on the principle that the operator of record is
considered the operator of the vehicle in contemplation of law as regards the public and third persons even if the vehicle involved in the
accident had been sold to another where such sale had not been approved by the then Public Service Commission.
Lita Enterprises, Inc. vs. CA 148 SCRA 347 (1987)

Unquestionably, the parties herein operated under an arrangement, comonly known as the "kabit system", whereby a person
who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise
for a fee. A certificate of public convenience is a special privilege conferred by the government . Abuse of this privilege by the grantees
thereof cannot be countenanced. Although not outrightly penalized as a criminal offense, the "kabit system" is invariably recognized as
being contrary to public policy and, therefore, void and inexistent under Article 1409 of the Civil Code, It is a fundamental principle that
the court will not aid either party to enforce an illegal contract, but will leave them both where it finds them.
Teja Marketing vs. IAC 148 SCRA 347 (1987)

The ruling in Lita Enterprises Inc. vs. IAC is upheld. The defect of in existence of a contract is permanent and cannot be cured
by ratification or by prescription. The mere lapse of time cannot give efficacy to contracts that are null and void.
c. Boundary System
Magboo vs. Bernardo 7 SCRA 952 (1963)

The features which characterize the boundary system are not sufficient to withdraw the relationship between the parties from that of
employer and employee. The owner continued to be the operator of the vehicle in legal contemplation and as such, he is responsible
for the consequences incident to its operation. To exempt from liability the owner of a public vehicle who operates it under the
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“boundary system” on the ground that he is a mere lessor would be not only to abet flagrant violations of the Public Service Law but
also to place the riding public at the mercy of reckless and irresponsible drivers.
2. LIABILITY OF CARRIERS FOR L OSS, DESTRUCTION AND DETERIORATION OF GOODS; EXCEPTIONS ; PRESUMPTION OF
NEGLIGENCE ; ARTICLES 1734-1735; ARTICLES 1739-1743
DILIGENCE REQUIRED IN THE CARRIAGE OF GOODS
[GR] Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods ,
[XPN]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 of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) (5) Order or act of competent public authority.
PRESUMPTION OF NEGLIGENCE
Art. 1735. In all cases other than those mentioned in Nos. 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 .
Eastern Shipping Lines vs. IAC, supra
Ganzon vs. CA 161 SCRA 646 (1985)

Petitioner Ganzon failed to show that the loss of the scrap iron due to any cause enumerated in Art. 1734. The order of the
acting Mayor did not constitute valid authority for petitioner to carry out. In any case, the intervention of the municipal officials was not
of a character that would render impossible the fulfillment by the carrier of its obligation. The petitioner was not duly bound to obey the
illegal order to dump into the sea the scrap of iron. Moreover, there is absence of sufficient proof that the issuance of the same order
was attended with such force or intimidation as to completely overpower the will of the petitioner’s employees.
By the delivery made during Dec. 1, 1956, the scraps were unconditionally placed in the possession and control of the
common carrier, and upon their receipt by the carrier of transportation, the contract of carriage was deemed perfected. Consequently,
Ganzon’s extraordinary responsibility for the loss, destruction or deterioration of the goods commenced. According to Art 1738, such
extraordinary responsibility would cease only upon the delivery by the carrier to the consignee or persons with right to receive them.
The fact that part of the shipment had not been loaded on board did not impair the contract of transportation as the goods remained in
the custody & control of the carrier.
Eastern Shipping Lines vs. Court of Appeals 196 SCRA 570 (1991)
The heavy seas and rains referred to in the master’s report were not caso fortuito but normal occurrences that an ocean-going
vessel, particularly in the month of September which, in our area, is a month of rains and heavy seas would encounter as a matter of
routine. They are not unforeseen nor unforeseeable. These are conditions that ocean-going vessels would encounter and provide for,
in the ordinary course of a voyage. That rain water (not sea water) found its way into the holds of the Jupri Venture is a clear indication
that care and foresight did not attend the closing of the ship's hatches so that rain water would not find its way into the cargo holds of
the ship.
Since the carrier has failed to establish any caso fortuito, the presumption by law of fault or negligence on the part of the
carrier applies; and the carrier must present evidence that it has observed the extraordinary diligence required by Article 1733 of the
Civil Code in order to escape liability for damage or destruction to the goods that it had admittedly carried in this case. No such
evidence exists of record. Thus, the carrier cannot escape liability.
Sarkies Tours Phils., Inc. vs. Court of Appeals 280 SCRA 58 (1997)
Under the Civil Code, common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods transported by them, and this liability lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the person who has a right to receive them, unless the loss is due to any of the excepted causes under
Article 1734 thereof.
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Where the common carrier accepted its passenger's baggage for transportation and even had it placed in the vehicle by its
own employee, its failure to collect the freight charge is the common carrier's own lookout. It is responsible for the consequent loss of
the baggage. In the instant case, defendant appellant's employee even helped Fatima Minerva Fortades and her brother load the
luggages/baggages in the bus' baggage compartment, without asking that they be weighed, declared, receipted or paid for. Neither
was this required of the other passengers.
Valenzuela Hardwood & Industrial Supply vs. Court of Appeals 274 SCRA 642 (1997)
In a contract of private carriage, the parties may validly stipulate that responsibility for the cargo rests solely on the charterer,
exempting the shipowner from liability for loss of or damage to the cargo caused even by the negligence of the ship captain. Pursuant
to Article 1306 17 of the Civil Code, such stipulation is valid because it is freely entered into by the parties and the same is not contrary
to law, morals, good customs, public order, or public policy. Indeed, their contract of private carriage is not even a contract of adhesion.
We stress that in a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would be
binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the general public. Hence, the
stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship
transporting commercial goods as a private carrier. Consequently, the public policy embodied therein is not contravened by stipulations
in a charter party that lessen or remove the protection given by law in contracts involving common carriers.
Yobido vs. Court of Appeals 281 SCRA 1 (1997)

The explosion of the new tire is not a fortuitous event. There are human factors involved in the situation. The fact that the tire
was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. Neither may
the fact that the tire bought and used is of a brand name noted for quality, resulting in the conclusion that it could not explode within five
day’s use. It is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a caso
fortuito. Moreover, a common carrier may not be absolved from liability in case of force majeure. A common carrier must still prove that
it was not negligent in causing the death or injury resulting from the accident. Thus, having failed to overthrow the presumption of
negligence with clear and convincing evidence, petitioners are hereby held liable for damages.
3. COMMENCEMENT, DURATION AND TERMINATION OF CARRIER’S RESPONSIBILITY OVER THE GOODS (ARTICLES 1736-1738,
NCC)
DURATION OF LIABILITY
A. DELIVERY OF GOODS TO COMMON CARRIER
Art. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed
in the possession of, and received by the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the
provisions of Article 1738.
Compania Maritima vs. Insurance Co. of North America 12 SCRA 213 (1964)
There was a complete contract of carriage the consummation of which has already begun when the shipper delivered the
cargo to the carrier and the latter took possession of the same by placing it on a lighter manned by its authorized employees, under
which Macleod became entitled to the privilege secured to him by law. The responsibility of the carrier commenced on the actual
delivery to, or receipt by, the carrier or its authorized agent, of the goods. The barges or lighters were merely employed as the first step
of the voyage.
Lu Do vs. Binamira 101 Phil. 120 (1957)

While delivery of the cargo to the customs authorities is not delivery to the consignee or to the person who has the right to
receive them as contemplated in Article 1736, NCC because in such case the goods are still in the hands of the government and the
owner cannot exercise dominion over them. However, the parties may agree to limit the liability of the carrier considering that the goods
have still to go through inspection of the customs authorities before they are actually turned over to the consignee.
American President Lines Ltd. vs. Klepper 110 PHIL 243

With regard to the contention of the carrier that COGSA should control in this case, the same is of as moment. Art. 1763 of the New
Civil Code provides that “the laws of the country to which the goods are transported shall govern the liability of the common carrier in
case of loss, destruction and deterioration.” This means that the law of the Philippines on the New Civil Code. Under 1766 of NCC, “in
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all matter not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and
by Special Laws.” Art. 1736-1738, NCC governs said rights and obligations. Therefore, although Sec 4(5) of COGSA states that the
carrier shall not be liable in an amount exceeding $500 per package unless the value of the goods had been declared by the shipper
and asserted in the bill of lading, said section is merely supplementary to the provisions of the New Civil Code.
Servando vs. Phil. Steam 117 SCRA 832 (1982)

The court a quo held that the delivery of the shipment in question to the warehouse of the Bureau of Customs is not the delivery
contemplated by Article 1736; and since the burning of the warehouse occurred before actual or constructive delivery of the goods to
the appellees, the loss is chargeable against the appellant.
It should be pointed out, however, that in the bills of lading issued for the cargoes in question, the parties agreed to limit the
responsibility of the carrier for the loss or damage that may be caused to the shipment therein the following stipulation:
Clause 14. Carrier shall not be responsible for loss or damage to shipments billed 'owner's risk' unless such loss or damage is due to
negligence of carrier. Nor shall carrier be responsible for loss or damage caused by force majeure, dangers or accidents of the sea or
other waters; war; public enemies; . . . fire . ...
We sustain the validity of the above stipulation; there is nothing therein that is contrary to law, morals or public policy.
Appellees would contend that the above stipulation does not bind them because it was printed in fine letters on the back-of the
bills of lading; and that they did not sign the same. This argument overlooks the pronouncement of this Court in Ong Yiu vs. Court of
Appeals, where the same issue was resolved in this wise:
“While it may be true that petitioner had not signed the plane ticket, he is nevertheless bound by the provisions thereof. 'Such
provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's
lack of knowledge or assent to the regulation'. It is what is known as a contract of 'adhesion', in regards which it has been said that
contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the plane ticket in the case at bar, are
contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his
consent."
Ganzon vs. Court of Appeals, supra
Saludo, Jr. vs. Court of Appeals 207 SCRA 498 (1992)
B. ACTUAL OR CONSTRUCTIVE DELIVERY

The goods are deemed delivered to the carrier when the goods are ready for and have been placed in the exclusive
possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has
accepted them. When such delivery has thus been accepted by the carrier, the liability of the carrier commences eo instant
(Saludo v. CA, G.R. No. 95536, March 23, 1992)
Macam vs. Court of Appeals 313 SCRA 77 (1999)
The extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the
consignee or to the person who has a right to receive them. PAKISTAN BANK was indicated in the bills of lading as consignee
whereas GPC was the notify party. However, in the export invoices GPC was clearly named as buyer/importer. Petitioner also referred
to GPC as such in his demand letter to respondent WALLEM and in his complaint before the trial court. This premise draws us to
conclude that the delivery of the cargoes to GPC as buyer/importer which, conformably with Art. 1736 had, other than the consignee,
the right to receive them was proper.
The real issue is whether respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank
guarantee. From the testimony of petitioner, we gather that he has been transacting with GPC as buyer/importer for around two (2) or
three (3) years already. When mangoes and watermelons are in season, his shipment to GPC using the facilities of respondents is
twice or thrice a week. The goods are released to GPC. It has been the practice of petitioner to request the shipping lines to
immediately release perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his "people." In
transactions covered by a letter of credit, bank guarantee is normally required by the shipping lines prior to releasing the goods. But for
buyers using telegraphic transfers, petitioner dispenses with the bank guarantee because the goods are already fully paid. In his
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several years of business relationship with GPC and respondents, there was not a single instance when the bill of lading was first
presented before the release of the cargoes.
C. TEMPORARY UNLOADING OR STORAGE
Art. 1737. The common carrier's duty to observe extraordinary diligence over the goods remains in full force and effect
even when they are temporarily unloaded or stored in transit, unless the shipper or owner has made use of the right of
stoppage in transitu.
Art. 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are
stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the
goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them.
Remembering the law on sales, the right of stoppage in transit is one of the rights of an unpaid seller when he has parted
with the goods and the buyer becomes insolvent. The effect of exercising the right of stoppage in transit is that unpaid
seller is entitled to the possession of the goods as if he had never parted with it. Thus, the responsibility of the common
carrier is reduced to a mere bailee or depository.
4. STIPULATIONS LIMITING CARRIER’S LIABILITY

a. Articles 1744-1745, NCC; Degree of Diligence
Art. 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the
loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence shall be valid, provided it be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
A. VOID STIPULATIONS
Carriage of Goods Carriage of Passengers
1. That the goods are transported at the risk Dispensing with or lessening the extraordinary
of the owner or shipper; responsibility of a common carrier for the
2. That the carrier will not be liable for any safety of passengers imposed by law by
loss, destruction or deterioration of the goods; stipulation, by posting of notices, by
3. That the carrier need not observe any statements on tickets or otherwise. (Art. 1757)
diligence in the custody of the goods;
4. That the carrier shall exercise a degree of
diligence less than that of a good father of a
family over the movable transported;
5. That the carrier shall not be responsible for
the acts or omissions of his or its employees;
6. That the carrier’s liability for acts
committed by thieves or robbers who do not
act with grave or irresistible threat, violence or
force is dispensed with or diminished;
7. That the carrier is not responsible for the
loss, destruction or deterioration of the goods
on account of the defective condition of the
car, vehicle, ship or other equivalent used in
the contract of carriage. (Art. 1745)
The responsibility of a common carrier for the safety of passengers are required in Articles 1733 and 1755 cannot be
dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise.
While it is true that a passenger’s ticket is a complete contract between the common carrier and the passenger, the fact
that it contains provision at the back thereof in fine letters that common carrier will only exercise ordinary diligence is
contrary to Law.
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Reasonable time in the delivery

Case: Maersk Line vs. Court of Appeals 222 SCRA 108 (1993)
While it is true that common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested
with the right to prompt delivery, unless such common carriers previously assume the obligation to deliver at a given date or time,
delivery of shipment or cargo should at least be made within a reasonable time.
While there was no special contract entered into by the parties indicating the date of arrival of the subject shipment, petitioner
nevertheless, was very well aware of the specific date when the goods were expected to arrive as indicated in the bill of lading itself. In
this regard, there arises no need to execute another contract for the purpose as it would be a mere superfluity. In the case before us,
we find that a delay in the delivery of the goods spanning a period of two months and seven days falls was beyond the realm of
reasonableness.
b. Articles 1749-1750, NCC; Amount of Liability

B. LIMITATION OF LIABILITY TO FIXED AMOUNT
Art. 1749. A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading,
unless the shipper or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed
upon.
Q. Does the limitation on the liability of the common carrier remove the disputable presumption of negligence
on its part?
No. Even when there is an agreement limiting the liability of the common carrier in the vigilance over the
goods, the common carrier is disputably presumed to have been negligent in case of their loss, destruction or
deterioration. (Art. 1752, NCC)
Q. What happens when the common carrier refused to carry the goods of the shipper?
The agreement limiting the common carrier’s liability may be annulled by the shipper or owner if the common
carrier refused to carry the goods unless the former agreed to such stipulation. (Art. 1746, NCC)
Citadel Lines, Inc. v. CA, 184 SCRA 544
Basic is the rule, long since enshrined as a statutory provision that a stipulation limiting the liability of the
carrier to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater
value, is binding. Further, a contract fixing the sum that may be recovered by the owner or shipper for the loss,
destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has
been fairly and freely agreed upon.
C. LIMITATION OF LIABILITY IN ABSENCE OF DECLARATION OF GREATER VALUE

Three kinds of stipulations have often been made in a bill of lading.
1. One exempting the carrier from any and all liability for loss or damage occasioned by its own
negligence.(INVALID)
2. One providing for an unqualified limitation of such liability to an agreed valuation.(INVALID)
3. One limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and
pays a higher rate of freight.(VALID AND ENFORCEABLE)
According to an almost uniform weight of authority, the first and second kind of stipulation ARE INVALID as
being contrary to public policy, but the third is VALID and ENFORCEABLE. The first and second stipulations in a
bill of lading are invalid which either exempt the carrier from liability for loss or damage occasioned by its
negligence, or provide for an unqualified limitation of such liability to an agreed valuation. The third stipulation
in a bill of lading limiting the liability of the carrier to a certain amount unless the shipper declares a higher
value or pays a higher rate of freight, is valid and enforceable.
Ysmael vs. Barretto 51 PHIL 90 (1927)

Limiting the common carrier’s liability for loss or damage from any cause or for any reason for less than 1/8 the actual value of
the goods is unconscionable and therefore against public policy. A common carrier cannot lawfully stipulate for exemption from liability,
unless such exemption is just and reasonable and the contract is freely and fairly made.
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Shewaram vs. Philippine Airlines 17 SCRA 606 (1966)

It cannot be said that a contract has been entered into between a passenger and the common carrier, embodying the
conditions as printed at the back of the ticket. The fact that those conditions are printed at the back of the ticket stub in letters so small
that they are hard to read would not warrant the presumption that the passenger was aware of those conditions such that he had "fairly
and freely agreed" to those conditions. The passenger is considered not having agreed to the stipulation on the ticket, as manifested by
the fact that he did not sign the ticket.
Ong Yiu vs. Court of Appeals 91 SCRA 223 (1966)

While it may be true that the passenger had not signed the plane ticket, he is nevertheless bound by the provisions thereof.
"Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the
latter's lack of knowledge or assent to the regulation". It is what is known as a contract of "adhesion", in regards which it has been said
that contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the plane ticket in the case at bar,
are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his
consent. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from
contracting against his own negligence.
Sea Land Services, Inc. vs. Intermediate Appellate Court 153 SCRA 552 (1987)
Since the liability of a common carrier for loss of or damage to goods transported by it under a contract of carriage so
governed by the laws of the country of destination and the goods in question were shipped from the United States to the Philippines,
the liability of common carrier to the consignee is governed primarily by the Civil Code. Applying the Civil Code provisions (Article 1749
and 1750) the stipulation in the bill of lading limiting the liability of the common carrier for loss or damages to the shipment covered by
said rule unless the shipper declares the value of the shipment and pays additional charges is valid and binding on the consignee.
Citadel Lines, Inc. vs. Court of Appeals 184 SCRA 544 (1990)
Basic is the rule that a stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of lading,
unless the shipper or owner declares a greater value, is binding. Furthermore, a contract fixing the sum that may be recovered by the
owner or shipper for the loss, destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and
has been fairly and freely agreed upon.
In this case, the award based on the alleged market value of the goods is erroneous. It is provided in a clause in the BOL that
its liability is limited to US$2.00/kilo. The consignee also admits in the memorandum that the value of the goods does not appear in the
bill of lading. Hence, the stipulation on the carrier’s limited liability applies.
Everett Seamship Corp. vs. Court of Appeals 297 SCRA 496 (1998)
In the bill of lading, the carrier made it clear that all claims for which it may be liable shall be adjusted and settled on the basis
of the shipper's net invoice cost plus freight and insurance premiums, if paid, and in no event shall the carrier be liable for any loss of
possible profits or any consequential loss. Its liability would only be up to One Hundred Thousand (Y100,000.00) Yen. However, the
shipper, had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier.
Considering that the shipper did not declare a higher valuation, it had itself to blame for not complying with the stipulations.
The commercial Invoice does not in itself sufficiently and convincingly show that the common carrier has knowledge of the
value of the cargo as contended by the shipper.
British Airways vs. Court of Appeals 285 SCRA 450 (1998)

The contract of transportation was exclusively between the passenger and common carrier BA. The latter merely endorsing
the Manila to Hong Kong log of the former’s journey to PAL, as its subcontractor or agent. Conditions of contracts were one of
continuous air transportation. Well-settled rule that an agent is also responsible for any negligence in the performance of its function
and is liable for damages which the principal may suffer by reason of its negligent act. When an action is based on breach of contract
of carriage, the passenger can only sue BA and not PAL, since the latter was not a party in the contract.
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The contention of BA with respect to limited liability was overruled although it is recognized in the Philippines, stating that BA
had waived the defense of limited liability when it allowed Mahtani(the passenger) to testify as to the actual damages he incurred due
to the misplacement of his luggage, without any objection.
H.E. Heacock Co. vs. Macondray & Co. 42 PHIL 205 (1921)
Three kinds of stipulations have often been made in a bill of lading. The first is one exempting the carrier from any and all
liability for loss or damage occasioned by its own negligence. The second is one providing for an unqualified limitation of such liability
to an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher
value and pays a higher rate of freight. According to an almost uniform weight of authority, the first and second kinds of stipulations are
invalid as being contrary to public policy, but the third is valid and enforceable.
If a common carrier gives to a shipper the choice of two rates and if the shipper makes such a choice, understandingly and
freely, and names his valuation, he cannot thereafter recover more than the value which he thus places upon his property. A limitation
of liability based upon an agreed value does not conflict with any sound principle of public policy; and it is not conformable to plain
principles of justice that a shipper may understate value in order to reduce the rate and then recover a larger value in case of loss.
c. Void Stipulation (Art. 1745, NCC)

Case: Sweet Lines vs. Teves 83 SCRA 361 (1978)
Considered in the light of circumstances prevailing in the inter-island shipping industry in the country today, We find and hold
that Condition No. 14 printed at the back of the passage tickets should be held as void and unenforceable for the following reasons
first, under circumstances obligation in the inter-island shipping industry, it is not just and fair to bind passengers to the terms of the
conditions printed at the back of the passage tickets, on which Condition No. 14 is Printed in fine letters, and second, Condition No. 14
subverts the public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and interests of
innumerable passengers located in different places of the country who, under Condition No. 14, will have to file suits against petitioner
only in the City of Cebu. Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute a
claim in the City of Cebu, he would most probably decide not to file the action at all. The condition will thus defeat, instead of enhance,
the ends of justice. Upon the other hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to
litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause
inconvenience to, much less prejudice, petitioner.
Under Art. 2220 of the Civil Code, moral damages are justly due in breaches of contract where the defendant acted
fraudulently or in bad faith. Both the Trial Court and the Appellate Court found that there was bad faith on the part of petitioner in that:
(1) Defendants- Appellants did not give notice to plaintiffs-appellates as to the change of scheduled of the vessel;
(2) Knowing fully well that it would take no less than fifteen hours to effect the repairs of the damaged engine, defendants- appellants
instead made announce ment of assurance that the vessel would leave within a short period of time, and when plaintiff-appellees
wanted to leave the port and gave up the trip, defendants- appellants employees would come and say, “we are leaving already”.
(3) Defendants- appellants did not offer to refund plaintiffs-appellees’ tickets nor provide them with transportation form Tacloban to
Catbalogan.
5. PASSENGER’S BAGGAGES (ARTICLE 1754, NCC)
Quisumbing, Sr. vs. Court of Appeals 189 SCRA 605 (1990)

The highjacking-robbery was force majeure. The hijackers do not board an airplane through a blatant display of firepower and
violent fury. Firearms, hand-grenades, dynamite, and explosives are introduced into the airplane surreptitiously and with the utmost
cunning and stealth, although there is an occasional use of innocent hostages who will be coldly murdered unless a plane is given to
the hijackers' complete disposal.
PAL was not negligent so as to overcome the force majeure nature of the hi-jacking. Hijackers do not board an airplane
through a blatant display of firepower and violent fury. Firearms and grenades are brought to the plane surreptitiously. PAL could not
have been faulted for want of diligence, particularly for failing to take positive measures to implement Civil Aeronautics Administration
regulations prohibiting civilians from carrying firearms on board the plane. The use of the most sophisticated electronic detection
devices may have minimized hijacking but still ineffective against truly determining hijackers.
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Pan American Airlines vs. Rapadas 209 SCRA 67 (1992)

The Warsaw Convention governs the availment of the liability limitations where the baggage check is combined with or
incorporated in the passenger ticket. In the case at bar, the baggage check is combined with the passenger ticket in one document of
carriage. The passenger ticket complies with Article 3, which provides:
(c) a notice to the effect that, if the passenger's journey involves an ultimate destination or stop in a country other than the
country of departure, the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability
of carriers for death or personal injury and in respect of loss of or damage to baggage.
The provisions in the plane ticket are sufficient to govern the limitations of liabilities of the airline for loss of luggage. The
passenger, upon contracting with the airline and receiving the plane ticket, was expected to be vigilant insofar as his luggage is
concerned. If the passenger fails to adduce evidence to overcome the stipulations, he cannot avoid the application of the liability
limitations.
The facts show that the private respondent actually refused to register the attache case and chose to take it with him despite
having been ordered by the PANAM agent to check it in. In attempting to avoid registering the luggage by going back to the line, private
respondent manifested a disregard of airline rules on allowable handcarried baggages. Prudence of a reasonably careful person also
dictates that cash and jewelry should be removed from checked-in-luggage and placed in one's pockets or in a handcarried Manila-
paper or plastic envelope.
The alleged lack of enough time for him to make a declaration of a higher value and to pay the corresponding supplementary
charges cannot justify his failure to comply with the requirement that will exclude the application of limited liability.
British Airways vs. Court of Appeals, supra
Alitalia vs. Intermediate Appellate Court 192 SCRA 9 (1990)

The Warsaw Convention's provisions, do not regulate or exclude liability for other breaches of contract by the carrier' or
misconduct of its officers and employees, or for some particular or exceptional type of damage, Otherwise, an air carrier would be
exempt from any liability for damages in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is
absurd. In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner airline; and Dr.
Pablo's luggage was eventually returned to her, belatedly, it is true, but without appreciable damage.
There can be no doubt that Dr. Pablo underwent profound distress and anxiety, which gradually turned to panic and finally
despair, from the time she learned that her suitcases were missing up to the time when, having gone to Rome, she finally realized that
she would no longer be able to take part in the conference. Certainly, the compensation for the injury suffered by Dr. Pablo cannot
under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to her luggage. As already mentioned, her baggage was
ultimately delivered to her in Manila, tardily, but safely.
B. SAFETY OF PASSENGERS
1. ‘UTMOST DILIGENCE ’ REQUIRED OF C OMMON CARRIERS (ARTICLE 1755, NCC)

A. DILIGENCE REQUIRED OF COMMON CARRIERS TO CARRY PASSENGERS
Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with a due regard for all the circumstances. (NCC)
Nocum vs. Laguna Tayabas bus. Co. vs. CA 83 SCRA 386 (1978)
Facts: A passenger boarded the respondents bus carrying a box which such person attested to the conductor as containing clothes
and miscellaneous items.
Appellee, who was a passenger in appellant's Bus No. 120 then making a trip within the barrio of Dita, Municipality of Bay, Laguna, was
injured as a consequence of the explosion of firecrackers, contained in the box brought by the co-passenger.
Issue: Did LTB Co. exercise the extraordinary diligence required?

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Held: Yes, fairness demands that in measuring a common carrier's duty towards its passengers, allowance must be given to the
reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. It is to be
presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers, not to speak of his
own. Not to be lightly considered must be the right to privacy to which each passenger is entitled. He cannot be subjected to any
unusual search, when he protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the case at
bar. In other words, inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible,
but beyond this, constitutional boundaries are already in danger of being transgressed. Calling a policeman to his aid, as suggested by
the service manual invoked by the trial judge, in compelling the passenger to submit to more rigid inspection, after the passenger had
already declared that the box contained mere clothes and other miscellaneous, could not have justified invasion of a constitutionally
protected domain.
Mecenas vs. CA 180 SCRA 83 (1989)
Facts: M/T "Tacloban City," a barge-type oil tanker owned by the Philippine National Oil Company (PNOC) and operated by the
PNOC Shipping and Transport Corporation (PNOC Shipping), having unloaded its cargo, left for Negros Occidental when it collided
with a carrier ship named Don Juan. When the collision occurred, the sea was calm, the weather fair and visibility good. As a result of
this collision, the M/V "Don Juan" sank and hundreds of its passengers perished. Among the ill-fated passengers were the parents of
petitioners, the spouses Perfecto Mecenas and Sofia Mecenas, whose bodies were never found despite intensive search by
petitioners.
Issue: Whether or not the respondents were negligent?
Held: Yes, the behaviour of the captain of the "Don Juan" in tills instance-playing mahjong "before and up to the time of collision
constitutes behaviour that is simply unacceptable on the part of the master of a vessel to whose hands the lives and welfare of at least
seven hundred fifty (750) passengers had been entrusted. Whether or not Capt. Santisteban was "off-duty" or "on-duty" at or around
the time of actual collision is quite immaterial; there is, both realistically speaking and in contemplation of law, no such thing as "off-
duty" hours for the master of a vessel at sea that is a common carrier upon whom the law imposes the duty of extraordinary diligence.
The record shows that the "Don Juan" sank within ten (10) to fifteen (15) minutes after initial contact with the "Tacloban City. While the
failure of Capt. Santisteban to supervise his officers and crew in the process of abandoning the ship and his failure to avail of measures
to prevent the too rapid sinking of his vessel after collision, did not cause the collision by themselves, such failures doubtless
contributed materially to the consequent loss of life and, moreover, were indicative of the kind and level of diligence exercised by Capt.
Santisteban in respect of his vessel and his officers and men prior to actual contact between the two (2) vessels. The officer-on-watch
in the "Don Juan" admitted that he had failed to inform Capt. Santisteban not only of the "imminent danger of collision" but even of "the
actual collision itself " There is also evidence that the "Don Juan" was carrying more passengers than she had been certified as
allowed to carry.
Under these circumstances, a presumption of gross negligence on the part of the vessel (her officers and crew) and of its ship-owner
arises.
Negros Navigation Co., Inc. vs. CA 281 SCRA 717 (1997)
Facts: Private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc. four special cabin tickets for his wife,
daughter, son and niece who were going to Bacolod City to attend a family reunion boarding the Don Juan. Don Juan collided off the
Tablas Strait in Mindoro, with the M/T Tacloban City, an oil tanker owned by the Philippine National Oil Company (PNOC) and the
PNOC Shipping and Transport Corporation (PNOC/STC). As a result, the M/V Don Juan sank. Several of her passengers perished in
the sea tragedy. The bodies of some of the victims were found and brought to shore, but the four members of private respondents'
families were never found.
Issue: Whether or not the petitioners exercised the extraordinary diligence required?
Held: No. As with the Mecenas case, this Court found petitioner guilty of negligence in (1) allowing or tolerating the ship captain and
crew members in playing mahjong during the voyage, (2) in failing to maintain the vessel seaworthy and (3) in allowing the ship to carry
more passengers than it was allowed to carry.
Also, the duty to exercise due diligence includes the duty to take passengers or cargoes that are within the carrying capacity
of the vessel
Korean Airlines Co. Ltd. vs. CA 234 SCRA 14 (1999)
Facts: Juanito C. Lapuz, an automotive electrician, was contracted for employment in Jeddah, Saudi Arabia. Lapuz was supposed to
leave via Korean Airlines. Initially, he was "wait-listed," which meant that he could only be accommodated if any of the confirmed
passengers failed to show up at the airport before departure. When two of such passengers did not appear, Lapuz and another person
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by the name of Perico were given the two unclaimed seats. As he was about to board the said airline a KAL officer pointed to him and
shouted "Down! Down!" He was thus barred from taking the flight. When he later asked for another booking, his ticket was canceled by
KAL. Consequently, he was unable to report for his work in Saudi Arabia within the stipulated 2-week period and so lost his
employment.
Issue: Whether or not KAL committed a breach of the Contract of Carriage?
Held: Yes. The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in
the passenger manifest of KAL for its Flight No. KE 903. His clearance through immigration and customs clearly shows that he had
indeed been confirmed as a passenger of KAL in that flight. KAL thus committed a breach of the contract of carriage between them
when it failed to bring Lapuz to his destination.
This Court has held that a contract to transport passengers is different in kind and degree from any other contractual relation. The
business of the carrier is mainly with the traveling public. It invites people to avail themselves of the comforts and advantages it offers.
The contract of air carriage generates a relation attended with a public duty. Passengers have the right to be treated by the carrier's
employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct,
injurious language, indignities and abuses from such employees. So it is that any discourteous conduct on the part of these employees
toward a passenger gives the latter an action for damages against the carrier.
Fortune Express, Inc. vs. CA 305 SCRA 14 (1999)

Facts: Petitioner is a bus company in northern Mindanao. 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. The Constabulary officer found
out that certain Maranaos were planning to take revenge on the petitioner by burning some of its buses.
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. They started pouring gasoline inside the bus, as the other held the passenger at bay
with a handgun then ordered the passenger to get off the bus. A passenger Atty. Caorong pleaded with the Maranaos to spare the bus
driver but the Maranaos shot him.
Issue: Whether or not the petitioners were guilty of a breach of the contract of carriage?
Held: Yes, Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account
of wilfull acts of other passengers, if the employees of the common carrier could have prevented the act through 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 petitioner's 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 petitioner's 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 passenger's constitutional rights.
The acts of Maranaos could not be considered as caso fortuito because there was already a warning by the PC.
No contributory negligence could be attributed to the deceased. The assailant's motive was to retaliate for the loss of life of
two Maranaos as a result of the collision between petitioner's bus and the jeepney in which the two Maranaos were riding. The armed
men actually allowed deceased 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.

Facts: Petitioner Reynalda Gatchalian boarded respondent's mini bus. While the bus was running along the highway in Barrio
Payocpoc, Bauang, Union, "a snapping sound" was suddenly heard at one part of the bus and, shortly thereafter, the vehicle bumped a
cement flower pot on the side of the road, went off the road, turned turtle and fell into a ditch as a result petitioner sustained injuries. As
she and several others were confined in a hospital, respondent Delim paid for the hospitalization expenses and had the passengers
sign a waiver stating that they were no longer interested to file a complaint. Notwithstanding this document, petitioner Gathalian filed a
complaint.
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Issue: Whether or not the private respondent were negligent.
Held: The record yields affirmative evidence of fault or negligence on the part of respondent common carrier. The driver did not stop
to check if anything had gone wrong with the bus when the snapping sound was heard and made known to him by the passengers,
instead told them that it was normal. The driver's reply necessarily indicated that the same "snapping sound" had been heard in the bus
on previous occasions. This could only mean that the bus had not been checked physically or mechanically to determine what was
causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it. Such a sound is obviously
alien to a motor vehicle in good operating condition, and even a modicum of concern for life and limb of passengers dictated that the
bus be checked and repaired. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus,
coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of
alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence
on the part of respondent and his driver.
Because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a
common carrier must exercise extraordinary diligence, we must construe any such purported waiver most strictly against the common
carrier. For a waiver to be valid and effective, it must not be contrary to law, morals, public policy or good customs. A cursory
examination of the purported waiver will readily show that appellees did not actually waive their right to claim damages from appellant
for the latter's failure to comply with their contract of carriage. All that said document proves is that they expressed a "desire" to make
the waiver which obviously is not the same as making an actual waiver of their right. A waiver of the kind invoked by appellant must be
clear and unequivocal.
A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which
actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the
condition that she was before mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is
a violation of bodily integrity, giving raise to a legitimate claim for restoration to her condition ante.
Del Castillo vs. Jaymalin 112 SCRA 629 (1982)

Facts: Mario del Castillo, a deaf-mute, son of plaintiff Severo del Castillo boarded a bus of private respondent bus line. Upon
alighting from the bus, he fell and died as a result. Respondents contend that the proximate cause of Mario's death was his
recklessness and gross negligence in jumping out of the bus while in motion.
Issue: Whether or not respondents exercised extraordinary diligence.
Held: No, common carriers are responsible for the death of their passengers (Articles 1764 and 2206 of the Civil Code). This liability
includes the loss of the earning capacity of the deceased. It appears proven that the defendant corporations failed to exercise the
diligence that was their duty to observe according to Articles 1733 and 1755. The conductor was apprised of the fact that Mario del
Castillo was deaf and dumb. With this knowledge the conductor should have taken extra-ordinary care for the safety of the said
passenger. In this he failed.
a. Doctrine of Last Clear Chance

Philippine Rabbit Bus Lines vs. IAC 189 SCRA 158 (1990)
Facts: Catalina Pascua with several others boarded the jeep owned by spouses Isidro Mangune and Guillerma Carreon and driven
by Tranquilino Manalo bound for Carmen, Rosales, Pangasinan.
Upon reaching Tarlac the right rear wheel of the jeepney was detached, so it was running in an unbalanced position. Manalo
stepped on the brake, as a result of which, the jeepney which was then running on the eastern lane (its right of way) made a U-turn,
invading and eventually stopping on the western lane and was hit by the petitioner company’s bus causing the death of Catalina
Pascua and two other passengers.
Issue: Wether or not the Doctrine of Last Clear Chance applies in the case at bar?
Held: No, The principle about "the last clear" chance, would call for application in a suit between the owners and drivers of the two
colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For
it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise
guilty of negligence."
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It is the rule under the substantial factor test that if the actor's conduct is a substantial factor in bringing about harm to another, the fact
that the actor neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him
from being liable. The bus driver's conduct is not a substantial factor in bringing about harm to the passengers of the jeepney. It cannot
be said that the bus was travelling at a fast speed when the accident occurred because the speed of 80 to 90 kilometers per hour,
assuming such calculation to be correct, is yet within the speed limit allowed in highways.
The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of carriage. The rationale behind
this is readily discernible. Firstly, the contract of carriage is between the carrier and the passenger, and in the event of contractual
liability, the carrier is exclusively responsible therefore to the passenger, even if such breach be due to the negligence of his driver. In
other words, the carrier can neither shift his liability on the contract to his driver nor share it with him, for his driver's negligence is his.
Secondly, if We make the driver jointly and severally liable with the carrier, that would make the carrier's liability personal instead of
merely vicarious and consequently, entitled to recover only the share which corresponds to the driver, contradictory to the explicit
provision of Article 2181 of the New Civil Code.
Bustamante vs. CA 193 SCRA 603 (1991)
Facts: A collision occurred between a gravel and sand truck, and a Mazda passenger bus along the national road at Calibuyo, Tanza,
Cavite. The front left side portion (barandilla) of the body of the truck sideswiped the left side wall of the passenger bus, ripping off the
said wall from the driver's seat to the last rear seat. Due to the impact, several passengers of the bus were thrown out and died as a
result of the injuries they sustained, Among those killed were Rogelio Bustamante and his spouse and children, and several others.
During the incident, the cargo truck was driven by defendant Montesiano and owned by defendant Del Pilar; while the
passenger bus was driven by defendant Susulin. The vehicle was registered in the name of defendant Novelo but was owned and/or
operated as a passenger bus jointly by defendants Magtibay and Serrado, under a franchise, with a line from Naic, Cavite, to Baclaran,
Paranaque, Metro Manila, and vice versa, which Novelo sold to Magtibay on November 8, 1981, and which the latter transferred to
Serrado (Cerrado) on January 18, 1983.
After a careful perusal of the circumstances of the case, the trial court reached the conclusion "that the negligent acts of both
drivers contributed to or combined with each other in directly causing the accident which led to the death of the aforementioned
persons. It could not be determined from the evidence that it was only the negligent act of one of them which was the proximate cause
of the collision. In view of this, the liability of the two drivers for their negligence must be solidary.
From said decision, only defendants Federico del Pilar and Edilberto Montesiano, owner and driver, respectively, of the sand
and gravel truck have interposed an appeal before the respondent Court of Appeals, which set aside the trial court’s decision. Hence
the present petition.
Issue: Whether the respondent court has properly and legally applied the doctrine of "last clear chance" in the present case despite its
own finding that appellant cargo truck driver Edilberto Montesiano was admittedly negligent in driving his cargo truck very fast on a
descending road and in the presence of the bus driver coming from the opposite direction.
Held: The respondent court adopted the doctrine of "last clear chance." The doctrine, stated broadly, is that the negligence of the
plaintiff does not preclude a recovery for the negligence of the defendant where it appears that the defendant, by exercising reasonable
care and prudence, might have avoided injurious consequences to the plaintiff notwithstanding the plaintiff's negligence. In other words,
the doctrine of last clear chance means that even though a person's own acts may have placed him in a position of peril, and an injury
results, the injured person is entitled to recovery. As the doctrine is usually stated, a person who has the last clear chance or
opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or that of a third person imputed to the
opponent is considered in law solely responsible for the consequences of the accident. (Sangco, Torts and Damages, 4th Ed., 1986, p.
165).
The practical import of the doctrine is that a negligent defendant is held liable to a negligent plaintiff, or even to a plaintiff who
has been grossly negligent in placing himself in peril, if he, aware of the plaintiffs peril, or according to some authorities, should have
been aware of it in the reasonable exercise of due case, had in fact an opportunity later than that of the plaintiff to avoid an accident (57
Am. Jur., 2d, pp. 798-799).
All premises considered, the Court is convinced that the respondent Court committed an error of law in applying the doctrine of last
clear chance as between the defendants, since the case at bar is not a suit between the owners and drivers of the colliding vehicles but
a suit brought by the heirs of the deceased passengers against both owners and drivers of the colliding vehicles. Therefore, the
respondent court erred in absolving the owner and driver of the cargo truck from liability.
b. Accomodation Passenger
Lara vs. Valencia 104 SCRA 65 (1958)
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Facts: The deceased was an inspector of the Bureau of Forestry stationed in Davao. The defendant is engaged in the business of
exporting logs from his lumber concession in Cotabato. Lara went to said concession upon instructions of his chief to classify the logs
of defendant which were about to be loaded on a ship anchored in the port of Parang. Lara boarded with several others a pick-up
bound for Davao and were seated at the back on an improvised bench. Lara accidentally fell from the pick-up and as a result he
suffered serious injuries which lead to his death.
Issue: Whether or not the respondent failed to exercise the ordinary diligence required?
Held: Yes. The owner and driver of a vehicle owes to accommodation passengers or invited guests merely the duty to exercise
reasonable care so that they may be transported safely to their destination. Thus, "The rule is established by weight of authority that
the owner or operator of an automobile owes the duty to an invited guest to exercise reasonable care in its operation, and not
unreasonably to expose him to danger and injury by increasing the hazard of travel. The owner of the vehicle in the case at bar is only
required to observe ordinary care, and is not in duty bound to exercise extraordinary diligence as required by our law.
A passenger must observe the diligence of a father of a family to avoid injury to himself which means that if the injury to the passenger
has been proximately caused by his own negligence, the carrier cannot be held liable.
c. Carrier not an insurer against all risks

Necessito vs. Paras 104 Phil. 75 (1958)
Facts: Severina Garces and her one-year old son boarded passenger auto truck of the Philippine Rabbit Bus Lines. The truck
entered a wooden bridge, but the front wheels swerved to the right; the driver lost control, and after wrecking the bridge's wooden rails,
the truck fell on its right side into a creek where water was breast deep. The mother, Severina Garces, was drowned; the son,the truck
fell on its right side into a creek where water was breast deep. The mother, Severina Garces, was drowned; the son sustained injuries.
Issue: Whether or not the carrier is liable
Held: While the carrier is not an insurer of the safety of the passengers, it should nevertheless be held to answer for the laws its
equipment if such flaws were at all discoverable. In this connection, the manufacturer of the defective appliance is considered in law
the agent of the carrier, and the good repute of the manufacturer will not relieve the carrier from liability. The rationale of the carrier's
liability is the fact that the passenger has no privity with the manufacturer of the defective equipment; hence, he has no remedy against
him, while the carrier usually has
Japan Airlines vs. CA 294 SCRA 19 (1998)
Facts: Private respondents boarded the JAL flights to Manila with a stop over at Narita Japan at the airlines' expense. Upon arrival
at Narita private respondents were billeted at Hotel Nikko Narita for the night. The next day, private respondents went to the airport to
take their flight to Manila. However, due to the Mt. Pinatubo eruption rendered NAIA inaccessible to airline traffic. Hence, private
respondents' trip to Manila was cancelled indefinitely. JAL then booked another flight fort the passengers and again answered for the
hotel accommodations but still the succeeding flights were cancelled.
Issue: Whether or not JAL was obligated to answer for the accommodation expenses due to the force majeure.
Held: No, there is no question that when a party is unable to fulfill his obligation because of "force majeure," the general rule is that
he cannot be held liable for damages for non-performance. Corollarily, when JAL was prevented from resuming its flight to Manila due
to the effects of Mt. Pinatubo eruption, whatever losses or damages in the form of hotel and meal expenses the stranded passengers
incurred, cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel expenses of respondents for their unexpected
overnight stay on June 15, 1991.
It has been held that airline passengers must take such risks incident to the mode of travel. In this regard, adverse weather conditions
or extreme climatic changes are some of the perils involved in air travel, the consequences of which the passenger must assume or
expect.
While JAL was no longer required to defray private respondents' living expenses during their stay in Narita on account of the fortuitous
event, JAL had the duty to make the necessary arrangements to transport private respondents on the first available connecting flight to
Manila. Petitioner JAL reneged on its obligation to look after the comfort and convenience of its passengers when it declassified private
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respondents from "transit passengers" to "new passengers" as a result of which private respondents were obliged to make the
necessary arrangements themselves for the next flight to Manila.
d. Res Ipsa Loquitur

Layugan vs. IAC 167 SCRA 363 (1988)
Facts: Pedro T. Layugan filed an action for damages against Godofredo Isidro, alleging that while at Baretbet, Bagabag, Nueva
Vizcaya, the Plaintiff and a companion were repairing the tire of their cargo truck which was parked along the right side of the National
Highway; that defendant's truck, driven recklessly by Daniel Serrano bumped the plaintiff, that as a result, plaintiff was injured and
hospitalized.
Defendant countered that the plaintiff was merely a bystander, not a truck helper being a brother-in-law of the driver of said
truck and hence must suffer the damages. The trial court decided in favor of the plaintiff, which was reversed by the CA, hence the
present petition.
Issue: W/N defendant is absolved by virtue of the doctrine of res ipsa loquitur.
Held: No. Res ipsa loquitur is a doctrine which states thus: "Where the thing which causes injury is shown to be under the
management of the defendant, and the accident is such as in the ordinary course of things does not happen if those who have the
management use proper care, it affords reasonable evidence, in the absence of an explanation by the defendant, that the accident
arose from want of care.
It is clear that the driver did not know his responsibilities because he apparently did not check his vehicle before he took it on
the road. If he did he could have discovered earlier that the brake fluid pipe on the right was cut, and could have repaired it and thus
the accident could have been avoided. Moreover, to our mind, the fact that the private respondent used to instruct his driver to be
careful in his driving, that the driver was licensed, and the fact that he had no record of any accident, as found by the respondent court,
are not sufficient to destroy the finding of negligence of the Regional Trial Court given the facts established at the trial The private
respondent or his mechanic, who must be competent, should have conducted a thorough inspection of his vehicle before allowing his
driver to drive it. In the light of the circumstances obtaining in the case, we hold that Isidro failed to prove that the diligence of a good
father of a family in the supervision of his employees which would exculpate him from solidary liability with his driver to the petitioner.
Respondent Isidro posits that any immobile object along the highway, like a parked truck, poses serious danger to a moving
vehicle which has the right to be on the highway. He argues that since the parked cargo truck in this case was a threat to life and limb
and property, it was incumbent upon the driver as well as the petitioner, who claims to be a helper of the truck driver, to exercise
extreme care so that the motorist negotiating the road would be properly forewarned of the peril of a parked vehicle. Isidro submits that
the burden of proving that care and diligence were observed is shifted to the petitioner, for, as previously claimed, his (Isidro's) Isuzu
truck had a right to be on the road, while the immobile cargo truck had no business, so to speak, to be there. Likewise, Isidro proffers
that the petitioner must show to the satisfaction of a reasonable mind that the driver and he (petitioner) himself, provided an early
warning device, like that required by law, or, by some other adequate means that would properly forewarn vehicles of the impending
danger that the parked vehicle posed considering the time, place, and other peculiar circumstances of the occasion. Absent such proof
of care, as in the case at bar, Isidro concludes, would, under the doctrine of Res ipsa loquitur, evoke the presumption of negligence on
the part of the driver of the parked cargo truck as well as his helper, the petitioner herein, who was fixing the flat tire of the said truck.
Respondent Isidro's contention is untenable.
2. COMMENCEMENT, DURATION AND TERMINATION OF CARRIER’S RESPONSIBILITY
La Mallorca vs. De Jesus 17 SCRA 739 (1966)

Facts: Plaintiffs husband and wife, together with their minor children, boarded a La Mallorca bus. Upon arrival at their destination,
plaintiffs and their children alighted from the bus and the father led them to a shaded spot about 5 meters away from the vehicle. The
father returned to the bus to get a piece of baggage which was not unloaded. He was followed by her daughter Raquel. While the
father was still on the running board awaiting for the conductor to give his baggage, the bus started to run so that the father had to
jump. Raquel, who was near the bus, was run over and killed.
The Lower Court rendered judgment for the plaintiff which was affirmed by CA, holding La Mallorca liable for quasi-delict. La
Mallorca contended that when the child was killed, she was no longer a passenger and therefore the contract of carriage had
terminated.
Issue: Whether or not the deceased is considered to be still a passenger of the bus to which the petitioner could be held liable.
Held: Yes. It is a recognized rule that the relation between carrier and passengers does not cease at the moment the passenger alights
from the carrier’s premises, to be determined from the circumstances. In this case, there was no utmost diligence. Firstly, the driver,
although stopping the bus, did not put off the engine. Secondly, he started to run the bus even before the bus conductor gave him the
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signal and while the latter was unloading cargo. Here the presence of said passengers near the bus was not unreasonable and the
duration of responsibility still exists.
Aboitiz Shipping Co. vs. Court of Appeals 179 SCRA 95 (1989)

Facts: Anacleto Viana boarded the vessel owned by defendant ABOITIZ, at the port at San Jose, Occidental Mindoro, bound for
Manila. 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 between the third party defendant Pioneer
Stevedoring Corporation and defendant Aboitiz. The crane owned by the third party defendant and operated by its crane operator Alejo
Figueroa was placed alongside the vessel and one 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 died. Private respondents Vianas filed a
complaint for damages against Aboitiz for breach of contract of carriage. Aboitiz denied responsibility contending that at the time of the
accident, the vessel was completely under the control of Pioneer as the 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. Judgment is rendered in favor of the plantiffs. The trial court absolved Pioneer from liability for failure of the Vianas and
Aboitiz to preponderantly established a case of negligence against the crane operator which the court ruled is never presumed. 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 the instant petition.
Issue: Whether or not the responsibility of Aboitiz to the victim ceased when it disembarked from the vessel.
Held: No. 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. 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. 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.
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. 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 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.
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. Hence, Aboitiz is
negligent. 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 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.
Mallari Sr. vs. Court of Appeals 324 SCRA 147 (2000)

Facts: The passenger jeepney driven by petitioner Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with
the delivery van of respondent Bulletin along the National Highway in Barangay San Pablo, Dinalupihan, Bataan. The impact caused
the jeepney to turn around and fall on its left side resulting in injuries to its passengers one of whom was Israel Reyes who eventually
died due to the gravity of his injuries. The widow of the victim, filed a complaint for damages against petitioners and also against
BULLETIN, its driver Felix Angeles, and the N.V. Netherlands Insurance Company. The trial court found that the proximate cause of
the collision was the negligence of Felix Angeles, driver of the Bulletin delivery van, considering the fact that the left front portion of the
delivery truck driven by Felix Angeles hit and bumped the left rear portion of the passenger jeepney driven by Alfredo Mallari Jr. Hence,
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the trial court held that BULLETIN and Felix Angeles are jointly and severally liable. It also dismissed the complaint against the other
defendants Alfredo Mallari Sr. and Alfredo Mallari Jr. On appeal the Court of Appeals modified the decision of the trial court and found
no negligence on the part of Angeles and consequently of his employer, respondent BULLETIN. Instead, the appellate court ruled that
the collision was caused by the sole negligence of petitioner Alfredo Mallari Jr. who admitted that immediately before the collision and
after he rounded a curve on the highway, he overtook a Fiera which had stopped on his lane and that he had seen the van driven by
Angeles before overtaking the Fiera. Hence this petition.
Issue: Whether or not petitioners are negligent.
Held: Yes. The Court of Appeals correctly found, that the collision occurred immediately after petitioner Mallari Jr. overtook a vehicle in
front of it while traversing a curve on the highway. This act of overtaking was in clear violation of Sec. 41, pars. (a) and (b), of RA 4136
as amended, otherwise known as The Land Transportation and Traffic Code.
Sec. 41. Restrictions on overtaking and passing.
(a) The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or passing another vehicle proceeding in the
same direction, unless such left side is clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or
passing to be made in safety.
(b) The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same direction when approaching the crest of a grade, nor
upon a curve in the highway, where the driver's view along the highway is obstructed within a distance of five hundred feet ahead except on a
highway having two or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle:
Provided That on a highway, within a business or residential district, having two or more lanes for movement of traffic in one direction, the driver of a
vehicle may overtake or pass another vehicle on the right.
The rule is settled that a driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary
situation has the duty to see to it that the road is clear and not to proceed if he cannot do so in safety. When a motor vehicle is
approaching or rounding a curve, there is special necessity for keeping to the right side of the road and the driver does not have the
right to drive on the left hand side relying upon having time to turn to the right if a car approaching from the opposite direction comes
into view.
In the instant case, by his own admission, petitioner Mallari Jr. already saw that the BULLETIN delivery van was coming from
the opposite direction and failing to consider the speed thereof since it was still dark at 5:00 o'clock in the morning mindlessly occupied
the left lane and overtook two vehicles in front of it at a curve in the highway. Clearly, the proximate cause of the collision resulting in
the death of Israel Reyes, a passenger of the jeepney, was the sole negligence of the driver of the passenger jeepney, petitioner
Alfredo Mallari Jr., who recklessly operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules. Under
Art. 2185 of the Civil Code, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent
if at the time of the mishap he was violating a traffic regulation. As found by the appellate court, petitioners failed to present satisfactory
evidence to overcome this legal presumption.
Under Art. 1755 of the Civil Code, 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 due regard for all the circumstances. Moreover, under Art. 1756 of the
Civil Code, in case of death or injuries to passengers, a common carrier is presumed to have been at fault or to have acted negligently,
unless it proves that it observed extraordinary diligence. Further, pursuant to Art. 1759 of the same Code, it is liable for the death of or
injuries to passengers through the negligence or willful acts of the former's employees. This liability of the common carrier does not
cease upon proof that it exercised all the diligence of a good father of a family in the selection of its employees. Clearly, by the contract
of carriage, the carrier jeepney owned by Mallari Sr. assumed the express obligation to transport the passengers to their destination
safely and to observe extraordinary diligence with due regard for all the circumstances, and any injury or death that might be suffered
by its passengers is right away attributable to the fault or negligence of the carrier.
3. PRESUMPTION OF NEGLIGENCE : LIABILITY OF CARRIERS FOR DEATH OR INJURY TO PASSENGERS ; EXCEPTIONS (ARTICLES
1756-1758, NCC)
Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed the extraordinary diligence prescribed in Articles 1733 and 1755.
Art. 1757. The responsibility of a common carrier for the safety of passengers as required in Articles 1733 and 1755 cannot
be dispensed with or lessened by stipulation of parties, by posting of notices, by statements on tickets or otherwise.
Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for negligence is
valid, but not for wilful acts or gross negligence.
The reduction of fare does not justify any limitation of the common carrier's liability.
Bayasen vs. Court of Appeals 103 SCRA 197 (1981)
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Facts: The passenger jeepney driven by petitioner Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with
the delivery van of respondent Bulletin along the National Highway in Barangay San Pablo, Dinalupihan, Bataan. The impact caused
the jeepney to turn around and fall on its left side resulting in injuries to its passengers one of whom was Israel Reyes who eventually
died due to the gravity of his injuries. The widow of the victim, filed a complaint for damages against petitioners and also against
BULLETIN, its driver Felix Angeles, and the N.V. Netherlands Insurance Company. The trial court found that the proximate cause of
the collision was the negligence of Felix Angeles, driver of the Bulletin delivery van, considering the fact that the left front portion of the
delivery truck driven by Felix Angeles hit and bumped the left rear portion of the passenger jeepney driven by Alfredo Mallari Jr. Hence,
the trial court held that BULLETIN and Felix Angeles are jointly and severally liable. It also dismissed the complaint against the other
defendants Alfredo Mallari Sr. and Alfredo Mallari Jr. On appeal the Court of Appeals modified the decision of the trial court and found
no negligence on the part of Angeles and consequently of his employer, respondent BULLETIN. Instead, the appellate court ruled that
the collision was caused by the sole negligence of petitioner Alfredo Mallari Jr. who admitted that immediately before the collision and
after he rounded a curve on the highway, he overtook a Fiera which had stopped on his lane and that he had seen the van driven by
Angeles before overtaking the Fiera. Hence this petition.
Issue: Whether or not petitioners are negligent.
Held: Yes. The Court of Appeals correctly found, that the collision occurred immediately after petitioner Mallari Jr. overtook a vehicle in
front of it while traversing a curve on the highway. This act of overtaking was in clear violation of Sec. 41, pars. (a) and (b), of RA 4136
as amended, otherwise known as The Land Transportation and Traffic Code.
Sec. 41. Restrictions on overtaking and passing.
(a) The driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or passing another vehicle proceeding in the
same direction, unless such left side is clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or
passing to be made in safety.
(b) The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same direction when approaching the crest of a grade, nor
upon a curve in the highway, where the driver's view along the highway is obstructed within a distance of five hundred feet ahead except on a
highway having two or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle:
Provided That on a highway, within a business or residential district, having two or more lanes for movement of traffic in one direction, the driver of a
vehicle may overtake or pass another vehicle on the right.
The rule is settled that a driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary
situation has the duty to see to it that the road is clear and not to proceed if he cannot do so in safety. When a motor vehicle is
approaching or rounding a curve, there is special necessity for keeping to the right side of the road and the driver does not have the
right to drive on the left hand side relying upon having time to turn to the right if a car approaching from the opposite direction comes
into view.
In the instant case, by his own admission, petitioner Mallari Jr. already saw that the BULLETIN delivery van was coming from
the opposite direction and failing to consider the speed thereof since it was still dark at 5:00 o'clock in the morning mindlessly occupied
the left lane and overtook two vehicles in front of it at a curve in the highway. Clearly, the proximate cause of the collision resulting in
the death of Israel Reyes, a passenger of the jeepney, was the sole negligence of the driver of the passenger jeepney, petitioner
Alfredo Mallari Jr., who recklessly operated and drove his jeepney in a lane where overtaking was not allowed by traffic rules. Under
Art. 2185 of the Civil Code, unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent
if at the time of the mishap he was violating a traffic regulation. As found by the appellate court, petitioners failed to present satisfactory
evidence to overcome this legal presumption.
Under Art. 1755 of the Civil Code, 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 due regard for all the circumstances. Moreover, under Art. 1756 of the
Civil Code, in case of death or injuries to passengers, a common carrier is presumed to have been at fault or to have acted negligently,
unless it proves that it observed extraordinary diligence. Further, pursuant to Art. 1759 of the same Code, it is liable for the death of or
injuries to passengers through the negligence or willful acts of the former's employees. This liability of the common carrier does not
cease upon proof that it exercised all the diligence of a good father of a family in the selection of its employees. Clearly, by the contract
of carriage, the carrier jeepney owned by Mallari Sr. assumed the express obligation to transport the passengers to their destination
safely and to observe extraordinary diligence with due regard for all the circumstances, and any injury or death that might be suffered
by its passengers is right away attributable to the fault or negligence of the carrier.
Cervantes vs. Court of Appeals 304 SCRA 27 (1999)

Facts: PAL issued to the petitioner a round trip plane ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila, which ticket expressly
provided an expiry of date of one year from issuance, i.e., until March 27, 1990. On March 23, 1990, four days before the expiry date of
subject ticket, the petitioner used it. Upon his arrival in Los Angeles on the same day, he immediately booked his Los Angeles-Manila
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return ticket with the PAL office, and it was confirmed for the April 2, 1990 flight. Upon learning that the same PAL plane would make a
stop-over in San Francisco, and considering that he would be there on April 2, 1990, petitioner made arrangements with PAL for him to
board the flight In San Francisco instead of boarding in Los Angeles. On April 2, 1990, when the petitioner checked in at the PAL
counter in San Francisco, he was not allowed to board. The PAL personnel concerned marked the following notation on his ticket:
"TICKET NOT ACCEPTED DUE EXPIRATION OF VALIDITY." Petitioner Cervantes filed a Complaint for Damages, for breach of
contract of carriage. But the said complaint was dismissed for lack of merit. On appeal, the lower court’s decision was upheld, hence
the instant petition.
Issue: Whether or not the act of the PAL agents in confirming subject ticket extended the period of validity of petitioner's ticket.
Held: No. Since the PAL agents are not privy to the said Agreement and petitioner knew that a written request to the legal counsel of
PAL was necessary, he cannot use what the PAL agents did to his advantage. The said agents, according to the Court of Appeals,
acted without authority when they confirmed the flights of the petitioner. Under Article 1989 of the New Civil Code, the acts an agent
beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when
the third person (herein petitioner) knows that the agent was acting beyond his power or authority, the principal cannot be held liable for
the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages
from the agent, unless the latter undertook to secure the principal's ratification.
In awarding moral damages for breach of contract of carriage, the breach must be wanton and deliberately injurious or the one
responsible acted fraudulently or with malice or bad faith. Petitioner knew there was a strong possibility that he could not use the
subject ticket, so much so that he bought a back-up ticket to ensure his departure. Should there be a finding of bad faith, we are of the
opinion that it should be on the petitioner. What the employees of PAL did was one of simple negligence. No injury resulted on the part
of petitioner because he had a back-up ticket should PAL refuse to accommodate him with the use of subject ticket. Neither can the
claim for exemplary damages be upheld. Such kind of damages is imposed by way of example or correction for the public good, and
the existence of bad faith is established.
Calalas vs. Court of Appeals 332 SCRA 356 (2000)

Facts: Private respondent Eliza Sunga, then a college freshman majoring in Physical Education at the Siliman University, took a
passenger jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity of about 24 passengers,
Sunga was given by the conductor an "extension seat," a wooden stool at the back of the door at the rear end of the vehicle. On the
way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she was seated at the rear of the vehicle,
Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by
Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured. Sunga filed a complaint for damages
against Calalas, alleging violation of the contract of carriage by the former in failing to exercise the diligence required of him as a
common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of the Isuzu truck.
The lower court rendered judgment against Salva as third-party defendant and absolved Calalas of liability, holding that it was
the driver of the Isuzu truck who was responsible for the accident. It took cognizance of another case (Civil Case No. 3490), filed by
Calalas against Salva and Verena, for quasi-delict, in which the same court held Salva and his driver Verena jointly liable to Calalas for
the damage to his jeepney. On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground that Sunga's
cause of action was based on a contract of carriage, not quasi-delict, and that the common carrier failed to exercise the diligence
required under the Civil Code. The appellate court dismissed the third-party complaint against Salva and adjudged Calalas liable for
damages to Sunga. Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the negligence of Verena was
the proximate cause of the accident negates his liability and that to rule otherwise would be to make the common carrier an insurer of
the safety of its passengers. He contends that the bumping of the jeepney by the truck owned by Salva was a caso fortuito. Petitioner
further assails the award of moral damages to Sunga on the ground that it is not supported by evidence.
Issue: Should be petitioner be absolved if his contentions are considered?
Held: No. There is no basis for the contention that the ruling in Civil Case No. 3490, finding Salva and his driver Verena liable for the
damage to petitioner's jeepney, should be binding on Sunga. It is immaterial that the proximate cause of the collision between the
jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for quasi-
delict, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation
between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual
relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the
relation thus created. Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting
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the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of
death or injury to passengers.
In quasi-delict, the negligence or fault should be clearly established because it is the basis of the action, whereas in breach of
contract, the action can be prosecuted merely by proving the existence of the contract and the fact that the obligor, in this case the
common carrier, failed to transport his passenger safely to his destination. In case of death or injuries to passengers, Art. 1756 of the
Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they
observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier
the burden of proof.
Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances" as required by Art. 1755? We do not think so. First, the
jeepney was not properly parked, its rear portion being exposed about two meters from the broad shoulders of the highway, and facing
the middle of the highway in a diagonal angle. The petitioner's driver took in more passengers than the allowed seating capacity of the
jeepney. These are violations of the Land Transportation and Traffic Code. Petitioner should have foreseen the danger of parking his
jeepney with its body protruding two meters into the highway.
As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract for it is not
one of the items enumerated under Art. 2219 of the Civil Code. As an exception, such damages are recoverable: (1) in cases in which
the mishap results in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the
cases in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220.In this case, there is no legal basis for awarding moral
damages since there was no factual finding by the appellate court that petitioner acted in bad faith in the performance of the contract of
carriage.
Pestaño vs. Sumayang 346 SCRA 870 (2000)

Facts: Ananias Sumayang was riding a motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with him was his friend
Manuel Romagos. As they came upon a junction where the highway connected with the road leading to Tabagon, they were hit by a
passenger bus driven by Pestaño and owned by Metro Cebu which had tried to overtake them, sending the motorcycle and its
passengers hurtling upon the pavement. Apart from the institution of criminal charges against Pestaño, Respondent-heirs, filed this civil
action for damages against petitioners. The cases were consolidated. The lower court found petitioners liable. Said decision was
affirmed by CA, hence this petition.
Issue: Whether or not petitioner Pestaño was negligent
Held: Yes. Petitioners contend that Pestaño was not under any obligation to slow down when he overtook the motorcycle, because the
deceased had given way to him upon hearing the bus horn. Seeing that the left side of the road was clearly visible and free of
oncoming traffic, Pestaño accelerated his speed to pass the motorcycle. Having given way to the bus, the motorcycle driver should
have slowed down until he had been overtaken. They further contend that the motorcycle was not in the middle of the road nearest to
the junction but was on the inner lane. This explains why the damages on the bus were all on the right side - the right end of the
bumper and the right portion of the radiator grill were bent and dented. SC disagreed with this contention and considered the findings of
CA, based on the testimony of the witnesses, wherein, it was found out that as the two vehicles approached the junction, the victim
raised his left arm to signal that he was turning left to Tabagon, but that the latter and his companion were thrown off the motorcycle
after it was bumped by the overspeeding bus. As a professional driver operating a public transport bus, Pestaño should have
anticipated that overtaking at a junction was a perilous maneuver and should thus have exercised extreme caution.
Petitioners also aver that the CA was wrong in attributing the accident to a faulty speedometer and in implying that the
accident could have been avoided had this instrument been properly functioning. This contention has no factual basis. Under Articles
2180 and 2176 of the Civil Code, owners and managers are responsible for damages caused by their employees. When an injury is
caused by the negligence of a servant or an employee, the master or employer is presumed to be negligent either in the selection or in
the supervision of that employee. This presumption may be overcome only by satisfactorily showing that the employer exercised the
care and the diligence of a good father of a family in the selection and the supervision of its employee.
4. NEGLIGENCE OR INTENTIONAL ASSAULT BY CARRIER’S EMPLOYEE
Gillaco vs. Manila Railroad Co. 97 Phil. 884 (1955)

Facts: Lieut. Tomas Gillaco, husband of the plaintiff, was a passenger in the early morning train of the Manila Railroad Company from
Calamba, Laguna to Manila. When the train reached the Paco Railroad station, Emilio Devesa, a train guard of the Manila Railroad
Company happened to be in said station waiting for the same train which would take him to Tutuban Station, where he was going to
report for duty. Emilio Devesa had a long standing personal grudge against Tomas Gillaco, because of this, Devesa shot Gillaco with
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the carbine furnished to him by the Manila Railroad Company for his use as such train guard, upon seeing him inside the train coach.
Tomas died. Devesa was convicted of homicide. A complaint for damages was filed by the victim’s widow. Damages were awarded to
the plaintiff, hence the instant petition. Appellant's contention is that, no liability attaches to it as employer of the Emilio Devesa
because the crime was not committed while the slayer was in the actual performance of his ordinary duties and service and that no
negligence on appellant's part was shown.
Issue: Whether or not appellant could be held liable for the acts of its employee.
Held: No. While a passenger is entitled to protection from personal violence by the carrier or its agents or employees, since the
contract of transportation obligates the carrier to transport a passenger safely to his destination, the responsibility of the carrier extends
only to those acts that the carrier could foresee or avoid through the exercise of the degree of care and diligence required of it. In the
present case, the act of the train guard of the Manila Railroad Company in shooting the passenger (because of a personal grudge
nurtured against the latter since the Japanese occupation) was entirely unforseeable by the Manila Railroad Co. The latter had no
means to ascertain or anticipate that the two would meet, nor could it reasonably forsee every personal rancor that might exist between
each one of its many employees and any one of the thousands of eventual passengers riding in its trains. The shooting in question was
therefore "caso fortuito" within the definition of Art. 1105 of the old Civil Code (which is the law applicable), being both unforeseeable
and inevitable under the given circumstances; and pursuant to established doctrine, the resulting breach of the company's contract of
safe carriage with the deceased was excused thereby.
Maranan vs. Perez 20 SCRA 412 (1967)

Facts: Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and operated by Pascual Perez when he was
stabbed and killed by the driver, Simeon Valenzuela. Valenzuela was prosecuted for homicide in the Court of First Instance of
Batangas and was found guilty. While appeal was pending in the Court of Appeals, Antonia Maranan, Rogelio's mother, filed an action
to recover damages. The court decided in plaintiff’s favor. Hence the instant petition.
Issue: Whether or not defendant- operators could be held liable for damages
Held: Yes. Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila Railroad Co., 97 Phil. 884, that the carrier is
under no absolute liability for assaults of its employees upon the passengers. The attendant facts and controlling law of that case and
the one at bar are very different however. In the Gillaco case, the passenger was killed outside the scope and the course of duty of the
guilty employee. Now here, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose hands the
carrier had entrusted the duty of executing the contract of carriage. In other words, unlike the Gillaco case, the killing of the passenger
here took place in the course of duty of the guilty employee and when the employee was acting within the scope of his duties.
Moreover, the Gillaco case was decided under the provisions of the Civil Code of 1889 which, unlike the present Civil Code,
did not impose upon common carriers absolute liability for the safety of passengers against wilful assaults or negligent acts committed
by their employees. The death of the passenger in the Gillaco case was truly a fortuitous event which exempted the carrier from
liability.
The Civil Code provisions on the subject of Common Carriers are new and were taken from Anglo-American Law. There, the
basis of the carrier's liability for assaults on passengers committed by its drivers rests either on (1) the doctrine of respondeat superior
or (2) the principle that it is the carrier's implied duty to transport the passenger safely.
Under the first, which is the minority view, the carrier is liable only when the act of the employee is within the scope of his
authority and duty. It is not sufficient that the act be within the course of employment only. Under the second view, upheld by the
majority and also by the later cases, it is enough that the assault happens within the course of the employee's duty. It is no defense for
the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. The carrier's liability here is absolute in
the sense that it practically secures the passengers from assaults committed by its own employees. As can be gleaned from Art. 1759,
the Civil Code of the Philippines evidently follows the rule based on the second view. At least three very cogent reasons underlie this
rule. (1) the special undertaking of the carrier requires that it furnish its passenger that full measure of protection afforded by the
exercise of the high degree of care prescribed by the law, inter alia from violence and insults at the hands of strangers and other
passengers, but above all, from the acts of the carrier's own servants charged with the passenger's safety; (2) said liability of the carrier
for the servant's violation of duty to passengers, is the result of the formers confiding in the servant's hands the performance of his
contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with the utmost care prescribed by
law; and (3) as between the carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the carrier's
employees against passengers, since it, and not the passengers, has power to select and remove them.
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Accordingly, it is the carrier's strict obligation to select its drivers and similar employees with due regard not only to their
technical competence and physical ability, but also, no less important, to their total personality, including their patterns of behavior,
moral fibers, and social attitude.
Applying this stringent norm to the facts in this case, therefore, the lower court rightly adjudged the defendant carrier liable pursuant to
Art. 1759 of the Civil Code. The dismissal of the claim against the defendant driver was also correct. Plaintiff's action was predicated on
breach of contract of carriage7 and the cab driver was not a party thereto. His civil liability is covered in the criminal case wherein he
was convicted by final judgment.
5. PASSENGER’S DUTY TO OBSERVE DILIGENCE TO AVOID INJURY ; CONTRIBUTORY NEGLIGENCE
PNR vs. Court of Appeals 139 SCRA 87 (1985)

Facts: Winifredo Tupang, husband of plaintiff, boarded a train of appellant at Libmanan, Camarines Sur, as a paying passenger bound
for Manila. Due to some mechanical defect, the train stopped at Sipocot, Camarines Sur, for repairs. Unfortunately, upon passing Iyam
Bridge at Lucena, Quezon, Winifredo Tupang fell off the train resulting in his death.The train did not stop despite the alarm raised by
the other passengers that somebody fell from the train. Upon complaint filed by Rosario the lower court after trial, held PNR liable for
damages for breach of contract of carriage. The decision was sustained by the appellate court hence the present petition, wherein PNR
raised for the first time, as a defense, the doctrine of state immunity from suit. It alleged that it is a mere agency of the Philippine
government without distinct or separate personality of its own, and that its funds are governmental in character and, therefore, not
subject to garnishment or execution.
Issue: Whether or not PNR can raise the defense of doctrine of state immunity from suit.
Held: No. The PNR was created under Rep. Act 4156, as amended. Section 4 of the said Act provides:
The Philippine national Railways shall have the following powers:
a. To do all such other things and to transact all such business directly or indirectly necessary, incidental or conducive to the attainment
of the purpose of the corporation; and
b. Generally, to exercise all powers of a corporation under the Corporation Law.
Under the foregoing section, the PNR has all the powers, the characteristics and attributes of a corporation under the
Corporation Law. There can be no question then that the PNR may sue and be sued and may be subjected to court processes just like
any other corporation.
Now, is PNR negligent? Yes. The appellate court found, the petitioner does not deny, that the train boarded by the deceased
Winifredo Tupang was so over-crowded that he and many other passengers had no choice but to sit on the open platforms between
the coaches of the train. It is likewise undisputed that the train did not even slow down when it approached the Iyam Bridge which was
under repair at the time, Neither did the train stop, despite the alarm raised by other passengers that a person had fallen off the train at
lyam Bridge. The petitioner has the obligation to transport its passengers to their destinations and to observe extraordinary diligence in
doing so. Death or any injury suffered by any of its passengers gives rise to the presumption that it was negligent in the performance of
its obligation under the contract of carriage. Thus, as correctly ruled by the respondent court, the petitioner failed to overthrow such
presumption of negligence with clear and convincing evidence.
But while petitioner failed to exercise extraordinary diligence as required by law, it appears that the deceased was chargeable with
contributory negligence. Since he opted to sit on the open platform between the coaches of the train, he should have held tightly and
tenaciously on the upright metal bar found at the side of said platform to avoid falling off from the speeding train. Such contributory
negligence, while not exempting the PNR from liability, nevertheless justified the deletion of the amount adjudicated as moral damages
and exemplary damages. Exemplary damages may be allowed only in cases where the defendant acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner.
Isaac vs. Al Ammen Trans 101 Phil 1046 (1957)
Facts: Plaintiff boarded defendant’s bus as paying passenger from Albay. The bus collided with a pick-up truck which was coming
from opposite direction trying to swerve from a pile of gravel. As a result, his left arm was completely severed. Plaintiff chose to hold
defendant liable on its contractual obligation. Plaintiff brought an action for damages which the lower court dismissed holding the driver
of the pick-up car negligent and not that of the bus.
Issue: Whether or not the common carrier is liable.
Held: The bus was running at a moderate speed. The driver of the bus upon the speeding pick-up truck swerved the bus to the very
extreme right of the road. Said driver would not move the bus further without endangering the safety of his passengers.
Notwithstanding all these efforts, the rear left side was hit. This finding of the lower court was sustained.
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Also, of the carrier’s employee is confronted with a sudden emergency, he is not held to the same degree of care he would
otherwise, he required in the absence of such emergency.
By placing his left arm on the window, he is guilty of contributory negligence cannot relieve the carrier but can only reduce its liability
(ART. 1762), this is a circumstance which further militates against plaintiff’s position. It is a prevailing rule that it is negligence per se
for passengers on a railroad to protrude any part of his body and that no recovery can be had for an injury.”
6. INJURY TO PASSENGER DUE TO ACTS OF CO-PASSENGER OR STRANGER
Bachelor Express, Inc vs. Court of Appeals 188 SCRA 216 (1990)
Facts: The bus owned by Petitioners came from Davao City on its way to Cagayan de Oro City passing Butuan City. While at Tabon-
Tabon, Butuan City, the bus picked up a passenger, that about fifteen minutes later, a passenger at the rear portion suddenly stabbed
a PC soldier which caused commotion and panic among the passengers. When the bus stopped, passengers Ornominio Beter and
Narcisa Rautraut were found lying down the road, the former already dead as a result of head injuries and the latter also suffering from
severe injuries which caused her death later. The passenger assailant alighted from the bus and ran toward the bushes but was killed
by the police. Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut, private respondents herein filed a complaint for "sum of
money" against Bachelor Express, Inc., its alleged owner and the driver Rivera. The lower court dismissed the complaint. CA reversed
the decision, hence the instant petition.
Issue: Whether or not petitioner is negligent.
Held: Yes. The liability, if any, of the petitioners is anchored on culpa contractual or breach of contract of carriage. Art. 1732, 1733,
1755 and 1756 are applicable. There is no question that Bachelor is a common carrier. Hence, Bachelor is bound to carry its
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. In the case at bar, Ornominio Beter and Narcisa Rautraut were passengers of a bus belonging to
Bachelor and, while passengers of the bus, suffered injuries which caused their death. Consequently, pursuant to Article 1756 of the
Civil Code, Bachelor is presumed to have acted negligently unless it can prove that it had observed extraordinary diligence in
accordance with Articles 1733 and 1755 of the New Civil Code.
Bachelor denies liability for the death of Beter and Rautraut in that their death was caused by a third person who was beyond
its control and supervision. In effect, the petitioner, in order to overcome the presumption of fault or negligence under the law, states
that the vehicular incident resulting in the death of passengers Beter and Rautraut was caused by force majeure or caso fortuito over
which the common carrier did not have any control. The running amuck of the passenger was the proximate cause of the incident as it
triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each
other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. The sudden act of the passenger
who stabbed another passenger in the bus is within the context of force majeure. However, in order that a common carrier may be
absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure. The common carrier
must still prove that it was not negligent in causing the injuries resulting from such accident. In this case, Bachelor was negligent.
Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the
commotion; the bus was speeding from a full stop; the victims fell from the bus door when it was opened or gave way while the bus
was still running; the conductor panicked and blew his whistle after people had already fallen off the bus; and the bus was not properly
equipped with doors in accordance with law-it is clear that the petitioners have failed to overcome the presumption of fault and
negligence found in the law governing common carriers. The petitioners' argument that the petitioners "are not insurers of their
passengers" deserves no merit in view of the failure of the petitioners to prove that the deaths of the two passengers were exclusively
due to force majeure and not to the failure of the petitioners to observe extraordinary diligence in transporting safely the passengers to
their destinations as warranted by law.
Fortune Express Inc. vs. CA, supra
Facts: A bus of petitioner figured in an accident with a jeepney in Kauswagan, Lanao del Norter, resulting in the death of several
passengers of the jeepney, including two Maranaos. A constabulary agent investigated and found out that the owner of the jeepney
was a Maranao and that certain Maranaos were planning to take revenge on the petitioner by burning some of its buses. The
operations manager of petitioner was advised to take precautionary measures. Four days after the accident, three armed Maranaos
who pretended to be passengers seized a bus petitioner bound for Iligan City and set it on fire. Atty. Talib Caorong, whose heirs are
private respondents herein was a passenger of the bus and was shot and killed during the incident. The private respondents brought
this suit for breach of contract of carriage. Complaint was dismissed in the lower court but its decision was reversed in CA, hence the
instant petition, with petitioners contention that the acts of the Maranaos is caso fortuito.
Issue: Was there breach of contract of carriage?

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Held: Yes. Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of
wilfull acts of other passengers, if the employees of the common carrier could have prevented the act through 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 petitioner's 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 petitioner's 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 passenger's constitutional rights.
Petitioner invokes the ruling in Pilapil v. Court of Appeals, and De Guzman v. Court of Appeals, in support of its contention that
the seizure of its bus by the assailants constitutes force majeure. In Pilapil v. Court of Appeals, it was held that a common carrier is not
liable for failing to install window grills on its buses to protect the passengers from injuries cause by rocks hurled at the bus by lawless
elements. On the other hand, in De Guzman v. Court of Appeals, it was ruled that a common carriers is not responsible for goods lost
as a result of a robbery which is attended by grave or irresistable threat, violence, or force.
It is clear that the cases of Pilapil and De Guzman do not apply to the prensent 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 persons, 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 unforeseeability (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 petitioner's buses and the assurance of petitioner's operation manager (Diosdado Bravo) that the necessary precautions
would be taken, nothing was really done by petitioner to protect the safety of passengers.
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 petitioners and its employees, not
its passengers. The assailant's motive was to retaliate for the loss of life of two Maranaos as a result of the collision between
petitioner's 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.
III. DAMAGES (ARTICLE 1764, NCC)

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 breach 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.
A. ACTUAL/COMPENSATORY DAMAGES (ARTS. 2199, 2201, 2203, NCC)

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 has duly proved”
Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be
those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen
or could have reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation. (1107a)
Art. 2203. The party suffering loss or injury must exercise the diligence of a good father of a family to minimize the damages
resulting from the act or omission in question.
Cariaga vs. LTB Co., & MRR 110 PHIL 346 (1960)
Facts: Edgardo Cariaga, a fourth-year medical student of the University of Santos Tomas was a passenger in one of the buses of LTB,
when it bumped against the engine of a train passing by, when it reached that part of the Poblacion of Bay, Laguna, where the national
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highway crossed a railroad track. The front part of the body of the bus was wrecked, the driver of the bus died, and many passengers
including Edgardo were injured. The LTB paid the sum of P16,964.45 for all the hospital, medical and miscellaneous expenses incurred
from June 18, 1952 to April 1953. From January 15, 1953 up to April of the same year Edgardo stayed in a private house in Quezon
City, the LTB having agreed to give him a subsistence allowance of P10.00 daily during his convalescence.
The present action was filed to recover from the LTB and the MRR Co., the total sum of P312,000.00 as actual,
compensatory, moral and exemplary damages, and for Edgardo’s parents, the sum of P18,000.00 in the same concepts. The LTB
disclaimed liability claiming that the accident was due to the negligence of its co-defendant, the Manila Railroad Company, for not
providing a crossing bar at the point where the national highway crossed the railway track, and for this reason filed the corresponding
cross-claim against the latter company to recover the total sum of P18,194.75 representing the expenses paid to Edgardo. The Manila
Railroad Company, in turn, denied liability upon the complaint and cross-claim, alleging that it was the reckless negligence of the bus
driver that caused the accident. The lower court held that it was the negligence of the bus driver that caused the accident and, as a
result, rendered judgment sentencing the LTB to pay Edgardo the sum of P10,490.00 as compensatory damages, with interest at the
legal rate from the filing of the coinplaint, and dismissing the cross-claim against the Manila Railroad Company. From this decision the
Cariagas and the LTB appealed.The Cariagas claim that the trial court erred: in awarding only P10,490.00 as compensatory damages
to Edgardo; in not awarding them actual and moral damages, and in not sentencing appellant LTB to pay attorney's fees.
Issue: WON petitioners are entitled to an increase in compensatory damages, and for actual and moral damages, as well as attorneys
fees.
Held: The findings of the trial court was sustained. Firstly, the train whistle had been sounded several times before it reached the
crossing; secondly, that another LTB bus which arrived at the crossing ahead of the one where Edgardo was a passenger, paid heed to
the warning and stopped before the "crossing".
Upon the whole evidence on the matter, the lower court found that the removal of the right frontal lobe of the brain of Edgardo
reduced his intelligence by about 50%; that due to the replacement of the right frontal bone of his head with a tantalum plate Edgardo
has to lead a quite and retired life because "if the tantalum plate is pressed in or dented it would cause his death." The impression one
gathers from this evidence is that, as a result of the physical injuries suffered by Edgardo Cariaga, he is now in a helpless condition,
virtually an invalid, both physically and mentally.
Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the obligor, guilty of a breach of contract
but who acted in good faith, is liable shall be those that are the natural and probable consequences of the breach and which the parties
had foreseen or could have reasonably foreseen at the time the obligation was constituted, provided such damages, according to Art.
2199 of the same Code, have been duly proved. Upon this premise it claims that only the actual damages suffered by Edgardo
consisting of medical, hospital and other expenses in the total sum of P17,719.75 are within this category. We are of the opinion
however, that the income which Edgardo could earn if he should finish the medical course and pass the corresponding board
examinations must be deemed to be within the same category because they could have reasonably been foreseen by the parties at the
time he boarded the bus.
Upon consideration of all the facts this Court is of the opinion, and so holds, that the compensatory damages awarded to
petitioner should be increased to P25,000.00.The claim for moral damages and attorney's fees is denied. Article 2219 of the Civil Code
enumerates the instances when moral damages may be covered and the case under consideration does not fall under any one of
them. The present action cannot come under Paragraph 2 of said article because it is not one of quasi-delict and cannot be considered
as such because of the pre-existing contractual relation between the Laguna LTB and Edgardo. Neither could LTB be held liable to pay
moral damages under Article 2220 of the Civil Code on account of breach of its contract of carriage because it did not act fraudulently
or in bad faith. LTB had exercised due diligence in the selection and supervision of its employees like the drivers of its buses in
connection with the discharge of their duties and so it must be considered an obligor in good faith. Petitioner is not entitled to recover
attorney's fees, because this case does not fall under any of the instances enumerated in Article 2208 of the Civil Code.
Villa Rey Transit, Inc. vs. Court of Appeals 31 SCRA 511 (1970)
Facts: An Izuzu First Class passenger bus owned and operated by the petitioner left Lingayen, Pangasinan, for Manila. Among its
paying passengers was the deceased, Policronio Quintos, Jr. When the vehicle was nearing the Sadsaran Bridge on the national
highway in barrio Sto. Domingo, municipality of Minalin, Pampanga, it frontally hit the rear side of a bullcart filled with hay. As a result
the end of a bamboo pole placed on top of the hayload and tied to the cart to hold it in place, hit the right side of the windshield of the
bus. The protruding end of the bamboo pole, about 8 feet long from the rear of the bullcart, penetrated through the glass windshield
and landed on the face of deceased, which caused several wounds. Notwithstanding the medical assistance, the Quintos died. The
private respondents, brought this action against petitioner for breach of the contract of carriage to recover the aggregate sum of
P63,750.00 as damages, including attorney's fees. Said petitioner contended that the mishap was due to a fortuitous event, but this
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pretense was rejected by the trial court and the Court of Appeals, both of which found that the accident and the death of Policronio had
been due to the negligence of the bus driver. Hence the instant petition.
Issue: Did CA erred in its award of the damages to the heirs of Quintos?
Held: No. Petitioner maintains that the lower courts had erred in placing the life expectancy of Quintos at 33-1/3, he being over 29
years of age at the time of his demise and in not acting in accordance with Alcantara v. Surro in which the damages were computed on
a four year basis, despite the fact that the victim therein was 39 years old, at the time of his death, and had a life expectancy of 28.90
years. The case cited is not, however, controlling in the one at bar. In the Alcantara case, none of the parties had questioned the
propriety of the four-year basis adopted by the trial court in making its award of damages. Both parties appealed, but only as regards
the amount thereof. In addition, the case had not thereby laid down any rule on the length of time to be used in the computation of
damages. It even declared “that the determination of the indemnity to be awarded to the heirs of a deceased person has therefore no
fixed basis. Much is left to the discretion of the court considering the moral and material damages involved, and so it has been said that
there can be no exact or uniform rule for measuring the value of a human life and the measure of damages cannot be arrived at by
precise mathematical calculation, but the amount recoverable depends on the particular facts and circumstances of each case. The life
expectancy of the deceased or of the beneficiary, whichever is shorter, is an important factor.”
Thus, life expectancy is, not only relevant, but, also, an important element in fixing the amount recoverable by private
respondents herein. Although it is not the sole element determinative of said amount, no cogent reason has been given to warrant its
disregard and the adoption, in the case at bar, of a purely arbitrary standard, such as a four-year rule. In short, the Court of Appeals
has not erred in basing the computation of petitioner's liability upon the life expectancy of Policronio Quintos, Jr.
With respect to the rate at which the damages shall be computed, petitioner impugns the decision appealed from upon the
ground that the damages awarded therein will have to be paid now, whereas most of those sought to be indemnified will be suffered
years later. This argument is basically true, and this is, perhaps, one of the reasons why the Alcantara case points out the absence of a
"fixed basis" for the ascertainment of the damages recoverable in litigations like the one at bar. Just the same, the force of the said
argument of petitioner herein is offset by the fact that, although payment of the award in the case at bar will have to take place upon the
finality of the decision therein, the liability of petitioner herein had been fixed at the rate only of P2,184.00 a year, which is the annual
salary of Policronio Quintos, Jr. at the time of his death, as a young "training assistant" in the Bacnotan Cement Industries, Inc. In other
words, unlike the Alcantara case, on which petitioner relies, the lower courts did not consider, in the present case, Policronio's
potentiality and capacity to increase his future income. Indeed, upon the conclusion of his training period, he was supposed to have a
better job and be promoted from time to time, and, hence, to earn more, if not considering the growing importance of trade, commerce
and industry and the concomitant rise in the income level of officers and employees therein much more.
Pan American World Airways vs. IAC 153 SCRA 521 (1987)
Facts: Private respondent Teofista P. Tinitigan, filed a complaint against petitioner for damages arising from defendant's alleged
refusal to accommodate her on Pan Am Flight No. 431 from Sto. Domingo, Republica Dominica to San Juan, Puerto Rico
notwithstanding the fact that she possessed a confirmed plane ticket purchased from Pan Am’s Office at Sto. Domingo and thus
causing her to suffer mental anguish, serious anxiety, besmirched reputation, wounded feelings and social humiliation She prayed that
she be awarded moral damages of P500,000.00, exemplary damages of P200,000.00, attorney's fees of P100,000.00 and actual
damages sustained by her in the amount of US$1,546.15. Defendant denied that plaintiff was a confirmed passenger since the ticket
issued to her was on an open space basis which meant that she could only be accommodated if any of the confirmed passengers
failed to show up at the airport before departure. The lower court rendered judgment in favor of plaintiff and awarded the amount of
damages as prayed for. Said decision was affirmed hence the instant petition.
Issue: Whether or not the award of damages was proper.
Held: Yes, but subject to modifications. Findings of fact show that plaintiff, a businesswoman and a multimillionaire in her own right as
evidenced (proprietor of Sampaguita Restaurant, New York City USA; Treasurer of the Molave Development Corp., Phil., proprietor of
Cavite Household Appliances and Rowena's Handicraft, Phil.), was on a business trip with a Pan-Am ticket. While in Sto. Domingo,
after talking thru the telephone with a certain Mrs. Lilibeth Warner, the former said that she (plaintiff) must be in San Juan that same
day, to sign her contract or lose it. Plaintiff expected to make a profit of $1,000 in said contract but since she wasn’t able to board the
flight, said profit was lost.
Other instances which caused moral damage to the plaintiff are the following:
1. While plaintiff was standing in line preparatory to boarding the aircraft, Rene Nolasco, a Pan Am employee ordered her in a loud
voice to step out of line because her ticket was not confirmed to her consternation and embarrassment in the presence of several
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people who heard and order. Despite her Pleas she was not allowed to board the aircraft. And as if to add insult to injury, she saw that
her seat was given to a white man.
2. When the plane took off without her but with her luggage on board. She was forced to return to her hotel without any luggage much
less an extra dress. It was a good thing that the Hotel people remembered her because they do not usually accommodate female
guests, without any luggage to stay in the hotel. While normally, hotel accommodation was paid before departure, plaintiff was made to
pay the room accommodation petition in advance.
It is clear from the evidence that defendant issued a Passenger Ticket and Baggage Check with assigned seat and the corresponding
pass and baggage claim symbol. Plaintiff was made to pay the fare and terminal fee. At the immigration section, plaintiff's passport was
stamped accordingly. Plaintiff's name was included in the passenger manifest. And these show that plaintiff was indeed a confirmed
passenger of defendant's Flight 431 for San Juan. There was, therefore, a contract or carriage perfected between plaintiff and
defendant for the latter to take plaintiff to her place of destination. By refusing to accommodate plaintiff in said flight, defendant had
willfully and knowingly violated the contract of carriage and failed to bring the plaintiff to her place of destination under its contract with
plaintiff. Bad faith was also present. Self enrichment or fraternal interest and not personal ill will may have been the motive of
defendant, but it is malice nevertheless. The fact that plaintiff was ordered out under some pretext in order to accommodate a white
man in an airline owned by an American firm with a reputation for bumping off non- Caucasian to accommodate whites is very
regrettable.
Defendant having breached its contract with plaintiff in bad faith, it is not error to have awarded exemplary damages. The rational
behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good . In view of it
nature, it should be imposed in such amount as to sufficiently and effectively deter similar breach of contract in the future by defendant
and other airlines.
An award of attorney's fees is also in order, having found bad faith on the part of defendant.
We believe, however the amount of some damages awarded to be exorbitant: We therefore reduce the moral and exemplary damages
to the combined total sum of Two Hundred Thousand (P200,000.00) Pesos and the attorney's fees to Twenty Thousand (P20,000.00)
Pesos. The award of actual damages in the amount of One Thousand Five Hundred Forty Six American dollars and fifteen cents
(US$1,546.15) computed at the exchange rate prevailing at the time of payment is hereby retained and granted.

Facts: Reynalda Gatchalian boarded respondent’s minibus at a point in Aringay, La Union bound for Bauang. While the bus was
running along the highway, a “snapping sound” was suddenly heard at one part of the bus and shortly thereafter, the vehicle bumped a
cement flower pot on the side of the road, turned turtle and fell into the ditch. Upon medical examination, petitioner was found to have
sustained physical injuries on the leg, arm and forehead.
Issue: Is petitioner entitled to actual and compensatory damages?
Held: Yes. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is
suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as
possible in the condition that she was before mishap. A scar, especially one on the face of the woman, resulting from the infliction of
injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her condition ante.
In Araneta v. Areglado, 104 Phil. 529, this Court awarded actual or compensatory damages, for among other things, the surgical
removal of the scar on the face of a young boy who had been injured in a vehicular collision. We consider that the amount of
P15,000.00 to recover the cost of such plastic surgery is not unreasonable.
1. RECOVERY FOR PHYSICAL INJURIES

Soberano vs. MRR & Benguet Auto Line 18 SCRA 732 (1966)
Facts: Juana Soberano boarded a bus of the Benguet Auto Line (BAL), a subsidiary of the Manila Railroad Co. (MRR), driven by
Santiago Caccam, bound for Baguio City. In that trip, Juana brought with her 3,024 chicken eggs to be sold in Baguio City, and some
personal belongings which she needed in that trip. About three kilometers away from Baguio City, along the Naguilian road, the bus hit
a stone embankment, causing it to fall into a 65-foot deep precipice, resulting in death to two of its passengers and serious physical
injuries to Juana and loss and destruction of all her belongings.
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Juana Soberano did not intervene in the criminal case because she filed a formal reservation to institute a separate civil action
for damages and indemnity against the MRR and the BAL. Because of the loss of the eggs and the destruction of the personal effects
that Juana brought with her in that trip, Jose Soberano, her husband, demanded from the defendant companies the value thereof
amounting to P370.66, of which sum the MRR paid P300. The MRR also paid the daily expenses, allowances, subsistence,
hospitalization, medical fees and medicines of Juana Soberano, as well as the service fees of her caretaker. The MRR has paid a total
sum of P4,219. Later the MRR offered to settle the case extrajudicially, tendering to the Soberanos the additional sum of P5,000. The
offer was rejected, and the Soberanos filed the present action against the defendant companies and Caccam, to recover from them
damages in the total sum of P76,757.76. After due trial, the lower court rendered the decision appealed from, dismissing at the same
time the complaint against Caccam. The Soberanos moved to have the decision reconsidered. The motion for reconsideration was
denied; hence the present recourse.
Issue: Whether or not the amount of damages awarded is adequate.
Held: The Soberanos initially contend that the lower court erred in disallowing their claim of P200, representing the expenses of Juana
Soberano in attending as a witness in the criminal case and attorney's fees incurred in connection therewith. This claim was correctly
denied by the lower court, because these expenses were properly taxable in the criminal case. It may be argued that the Soberanos
could not have recovered this sum in the criminal case because Juana Soberano expressly filed a formal reservation to institute a
separate civil action for damages, but such reservation did not preserve whatever rights they had against Caccam on the basis of the
latter's imprudence. The reservation is ineffective as to Caccam as it did not include him among those against whom their rights had
been reserved. And the Soberanos not having intervened in the criminal case, this claim must be considered as having been impliedly
adjudicated in the criminal case, and cannot therefore be ventilated in the present action.
The Soberanos next contend that the lower court erred in denying their claim for moral damages in the sum of P15,000, for
the physical suffering, mental anguish, serious anxiety and fright they suffered as a consequence of the mishap. The lower court
denied this claim on the strength of the oft-reiterated ruling of this Court that moral damages cannot be recovered against the employer
in actions based on a breach of contract of carriage in the absence of malice, fraud, or bad faith. The lower court rightly denied the
claim for moral damages as far as Jose Soberano is concerned. In case of physical injuries, moral damages are recoverable only by
the party injured and not by his next of kin, unless there is express statutory provision to the contrary. In this case it was Juana
Soberano, not her husband Jose, who sustained the bodily injuries.
The claim for attorney's fees was also properly denied by the lower court. The Soberanos aver that they were obliged to file a
separate civil action for damages against the defendant companies. This claim is predicated upon paragraphs (2) and (5) of article
2208 of the New Civil Code, which provide that attorney's fees and expenses of litigation may be recovered when the defendant's act
or omission has compelled the plaintiff to litigate with third persons or incur expenses to protect his interest, or when the defendant
acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim. It will be observed that
the defendant companies offered to settle the case by offering to the Soberanos the additional sum of P5,000. The Soberanos,
however, rejected the offer and proceeded to court to recover damages in the total sum of P76,757.76. It was not, therefore, the
defendant companies that compelled the Soberanos to litigate, or to incur expenses in connection with the litigation instituted by them.
Lastly, the nature and extent of the physical injuries suffered by Juana Soberano has the effect of making her live an abnormal
life. Considering all the facts this Court is of the opinion that the sum of P5,000 in compensatory damages awarded to her for loss of
earning capacity is inadequate; the amount should be increased to P15,000. She should also be awarded the sum of P45.35,
representing unrealized profits from the 3,024 chicken eggs which she brought with her in the trip and which were destroyed.
Marchan vs. Mendoza 24 SCRA 888 (1968)

Facts: A passenger bus of the Philippine Rabbit Bus Lines which was then driven by Silverio Marchan fell into a ditch somewhere in
Barrio Malanday, Polo, Bulacan, while travelling on its way to Manila. As a result of which Arsenio Mendoza, his wife and child, who
were then inside the bus as passengers were thrown out to the ground resulting in their multiple injuries. Arsenio Mendoza suffered the
most serious injuries which damaged his vertebrae causing the paralysis of his lower extremities. An action was brought to recover
damages against petitioners predicated not only on a breach of contract of carriage for failure to safely convey the plaintiffs to their
destination, but also on account of a criminal negligence on the part of defendant driver. The lower court ruled in favor of plaintiffs. The
award of P40,000.00 as compensatory damages was affirmed by CA. It however added the amount of P30,000.00 as exemplary
damages and sustained the award of attorney's fees in the amount of P5,000.00.
Issue: Whether or not the award of moral damages was proper.
Held: Yes. The amount of P40,000.00 awarded by the court as compensatory damages is quite reasonable and fair, considering that
plaintiff Arsenio Mendoza had suffered paralysis on the lower extremities, which will incapacitate him to engage in his customary
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occupation throughout the remaining years of his life, especially so if we take into account that plaintiff was only 26 years old when he
met an accident and taking the average span of life of a Filipino, he may be expected to live for 30 years more and bearing in mind the
earning capacity of Arsenio Mendoza who before the happening of this accident derived an income of almost P100.00 a month from
the business of his father-in-law as Assistant Supervisor of the small fairs and his income of P100.00 a month which he derived as a
professional boxer.
2. DAMAGES IN CASE OF DEATH

De Caliston vs. CA 122 SCRA 958 (1983)
Facts: While driving a passenger bus in Bacolod City, private respondent Geronimo Dalmacio ran over Juana Sonza Vda. de Darrocha
(a USVA pensioner) who died instantly, survived by her only child, Gloria Darrocha de Caliston, the herein petitioner.
Prosecuted for homicide thru reckless imprudence, Dalmacio was convicted by the Court of First Instance of Negros Occidental,
sentenced to imprisonment and ordered to pay the herein petitioner P15,000.00 for the death of the victim, P5,000.00 as moral
damages, P5,000.00 for burial expenses and P10,000.00 for loss of pension which the deceased had failed to receive.
On appeal, the former Court of Appeals modified the CFI decision by absolving Dalmacio from the payment of the P10,000.00 for loss
of pension and credited him for the amount of P5,000.00 previously paid to the herein petitioner under a vehicular insurance policy
obtained by the bus owner.
Issue: Whether or not the deletion of the P10,000.00 awarded for loss of pension is justified?
Held: The deletion of the P10,000.00 awarded for loss of pension is unjustified. Under Article 2206 of the Civil Code: The amount of
damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been
mitigating circumstances. In addition:
(1) 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 pension of the decedent being a sure income that was cut short by her death for which Dalmacio was responsible, the surviving
heir of the former is entitled to the award of P 10,000.00 which is just equivalent to the pension the decedent would have received for
one year if she did not die.
On the other hand, the P5,000.00 paid to the herein petitioner by the insurer of the passenger bus which figured in the accident may be
deemed to have come from the bus owner who procured the insurance. Since the civil liability (ex-delicto) of the latter for the death
caused by his driver is subsidiary and, at bottom, arises from the same culpa, the insurance proceeds should be credited in favor of the
errant driver.
PAL vs. CA 185 SCRA 110 (1990)
Facts: On November 23, 1960, Starlight Flight No. 26 of the Philippine Air Lines took off from Iloilo, on its way to Manila, with 33
persons on board, including the plane's complement. The plane did not reach its destination but crashed on Mt. Baco, Mindoro, one
hour and fifteen minutes after takeoff .The plane was Identified as PI-C133, a DC-3 type aircraft manufactured in 1942 and acquired by
PAL in 1948. It had flown almost 18,000 hours at the time of its illfated flight. It had been certified as airworthy by the Civil Aeronautics
Administration.
Among the fatalities was Nicanor Padilla. He was 29 years old, single. His mother, Natividad A. Vda. de Padilla, was his only
legal heir.
As a result of her son's death, Mrs. Padilla filed a complaint (which was amended twice) against PAL, demanding payment of P600,000
as actual and compensatory damages, plus exemplary damages and P60,000 as attorney's fees.
In its answer, PAL denied that the accident was caused by its negligence or that of any of the plane's flight crew, and that,
moreover, the damages sought were excessive and speculative.
On August 31, 1973, the trial court promulgated a decision, ordering the defendant Philippine Air Lines, Inc. to pay the plaintiff
Natividad A. Vda. de Padilla the sum of P477,000.00 as award for the expected income of the deceased Nicanor; P10,000.00 as moral
damages; P10,000.00 as attorney's fees; and to pay the costs.
On Appeal to the Court of Appeals the decision of the trial court was affirmed in toto.
Issue: Whether or not the respondent court erred in computing the awarded indemnity on the basis of the life expectancy of the late
Nicanor A. Padilla rather than on the life expectancy of private respondent, and thus erred in awarding what appears to the petitioner
as the excessive sum of P477,000 as indemnity for loss of earnings.
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Held: Petitioner relies on "the principle of law generally recognized and applied by the courts in the United States" that "the controlling
element in determining loss of earnings arising from death is, as established by authorities, the life expectancy of the deceased or of
the beneficiary, whichever is shorter.
However, resort to foreign jurisprudence would be proper only if no law or jurisprudence is available locally to settle a
controversy. Even in the absence of local statute and case law, foreign jurisprudence is only persuasive.
For the settlement of the issue at hand, there are enough applicable local laws and jurisprudence. Under Article 1764 and
Article 2206(1) of the Civil Code, the award of damages for death is computed on the basis of the life expectancy of the deceased, not
of his beneficiary. The articles provide:
Art. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning
Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier.
Art. 2206. The amount of damages for death caused by a crime or quasi- delict shall be at least three thousand pesos, even though
there may have been mitigating circumstances. In addition:
(1) 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; such indemnity shall in every case be assessed and awarded by the court, unless the deceased on account of permanent
physical disability not caused by the defendant, had no earning capacity at the time of his death.
In the case of Davila vs. PAL, 49 SCRA 497 which involved the same tragic plane crash, this Court determined not only PALs liability
for negligence or breach of contract, but also the manner of computing the damages due the plaintiff therein which it based on the life
expectancy of the deceased, Pedro Davila, Jr.
WHEREFORE, the petition is dismissed. The decision of the trial court is affirmed with modification. The petitioner is ordered to pay the
private respondent or her heirs death indemnity in the sum of P417,000 (not P477,000), with legal rate of interest of 6% per annum
from the date of the judgment on August 31, 1973, until it is fully paid. Costs against the petitioner.
B. MORAL DAMAGES (ARTS. 2206, 2216-2217, 2219-2220, NCC)

Under Art. 2206, the “spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the deceased.” The trial court found that private respondent
suffered pain from the death of her husband and worry on how to provide support for their minor children.
CHAPTER 3
OTHER KINDS OF DAMAGES
Art. 2216. No proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated or exemplary
damages, may be adjudicated. The assessment of such damages, except liquidated ones, is left to the discretion of the
court, according to the circumstances of each case.
SECTION 1. - Moral Damages

Art. 2217. Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary computation, moral
damages may be recovered if they are the proximate result of the defendant's wrongful act for omission.
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
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The parents of the female seduced, abducted, raped, or abused, referred to in No. 3 of this article, may also recover moral
damages.
The spouse, descendants, ascendants, and brothers and sisters may bring the action mentioned in No. 9 of this article, in
the order named.
Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under
the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted
fraudulently or in bad faith.
Cachero vs. Manila Yellow Taxi Cab 101 Phil. 523 (1957)
Facts: Atty. Cachero boarded a Yellow Taxicab driven by Gregorio Mira Abinion and owned by the Manila Yellow Taxicab Co., Inc. On
passing Oroquieta between Doroteo José and Lope de Vega streets, Gregorio Mira Abinion bumped said taxicab against a Meralco
post, with the result that the cab was badly smashed and the plaintiff fell out of the vehicle to the ground, suffering thereby physical
injuries, slight in nature.
The chauffeur was subsequently prosecuted by the City Fiscal and on February 26, 1953, upon his plea of guilty the Municipal Court of
Manila sentenced him to suffer 1 month and 1 day of arresto mayor, and to pay the costs.
On December 17, 1952, Tranquilino F. Cachero addressed a letter to the Manila Yellow Taxicab Co., Inc., which was followed
by another of January 6, 1953, which he asks for damages.
The Taxicab Co. to avoid expenses and time of litigation offered to settle the case amicably with plaintiff but the latter only
agreed to reduce his demand to the sum of P72,050.20 as his only basis for settlement which, of course, was not accepted by said
company. So plaintiff instituted an action in the Court of First Instance of Manila.
Issue: Whether or not the defendant demanded an exorbitant moral damages?
Held: In all cases, the attorney's fees and expenses of litigation must be reasonable.The present action was instituted because
plaintiff demanded an exorbitant amount for moral damages (P60,000) and naturally the defendant did not and could not yield to such
demand. This is neither a case that comes under paragraph 11 of Article 2208 because the Lower Court did not deem it just and
equitable to award any amount for attorney's fees. As We agree with the trial Judge on this point, We cannot declare that he erred for
not awarding to plaintiff any such fees in this case.
"Realizing its obligation under its contract of carriage with the plaintiff, and because the facts of the case, as have been
shown, mark it as more proper for the Municipal Court only, the defendant, to avoid the expense and time of litigation, offered to settle
the case amicably with plaintiff, but the latter refused and insisted on his demand for P72,050.20 as the only basis for settlement, thus
adding a clearly petty case to the already overflowing desk of the Honorable Members of this Court.
We admire and respect at all times a man for standing up and fighting for his rights, and when said right consists in injuries
sustained due to a breach of a contract of carriage with us, sympathy and understanding are added thereto. But when a person starts
demanding P2,050.20 for a solitary bruise and sprain, injuries for which the trial court, even at its generous although erroneous best,
could only grant P5,900, then respect and sympathy give way to something else. It is time to fight, for, in our humble opinion, there is
nothing more loathsome nor truly worthy of condemnation than one who uses his injuries for other purposes than just rectification. If
plaintiff's claim is granted, it would be a blessing, not a misfortune, to be injured."
This case was instituted by a lawyer who, as an officer of the courts, should be the first in helping Us in the administration of
justice, and after going over the record of this case, we do not hesitate to say that the demand of this case, we do not hesitate to say
that the demand of P72,050.20 for a subluxation of the right humerus bone and an insignificant contusion in 'he chest, has not even the
semblance of reasonableness. The plaintiff himself must have felt embarrassed by his own attitude when after receiving defendant's
brief as appellant, he makes in his brief as appellee the categorical statement that he "DOES NOT NOW INSIST NOR PRETEND IN
THE LEAST to collect from the defendant all the damages he had claimed in his complaint, but instead he is submitting his case to the
sound discretion of the Honorable Court for the award of a reasonable and equitable damages allowable by law, to compensate the
plaintiff of the suffering and losses he had undergone and incurred because of the accident oftentimes mentioned in this brief in which
plaintiff was injured". This acknowledgment comes too late, for plaintiff has already deprived the Court of Appeals of the occasion to
exercise its appellate jurisdiction over this case which he recklessly dumped to this Court. We certainly cannot look with favor at this
attitude of plaintiff.
Wherefore, the decision appealed from is hereby modified by reducing the amount awarded as unearned professioral fees
from P3,000 to P2,000 and by eliminating, the moral damages of P2,000 awarded by the Lower Court to the plaintiff. Said decision is in
all other respects affirmed, without pronouncement as to costs. It is so ordered.
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Fores vs. Miranda 105 Phil. 266 (1959)

Facts: Respondent was one of the passengers on a jeepney driven by Eugenio Luga. While the vehicle was descending the Sta. Mesa
bridge at an excessive rate of speed, the driver lost control thereof, causing it to swerve and to hit the bridge wall. The accident
occurred on the morning of March 22, 1953. Five of the passengers were injured, including the respondent who suffered a fracture of
the upper right humerus. He was taken to the National Orthopedic Hospital for treatment, and later was subjected to a series of
operations; the first on May 23, 1953, when wire loops were wound around the broken bones and screwed into place; a second,
effected to insert a metal splint, and a third one to remove such splint. At the time of the trial, it appears that respondent had not yet
recovered the use of his right arm.
The driver was charged with serious physical injuries through reckless imprudence, and upon interposing a plea of guilty was
sentenced accordingly.
The contention that the evidence did not sufficiently establish the identity of the vehicle as that belonging to the petitioner was rejected
by the appellate court which found, among other things, that it carried plate No. TPU-1163, series of 1952, Quezon City, registered in
the name of Paz Fores, (appellant herein) and that the vehicle even had the name of "Doña Paz" painted below its windshield. No
evidence to the contrary was introduced by the petitioner, who relied on an attack upon the credibility of the two policemen who went to
the scene of the incident.
A point to be further remarked is petitioner's contention that on March 21, 1953, or one day before the accident happened, she
allegedly sold the passenger jeep that was involved therein to a certain Carmen Sackerman.
The CA awarded moral damages to respondent hence this petition.
Issue: Whether or not the award of moral damages given by the CA was valid?
Held: No. Petitioner’s contention of loss of income and payment of attorneys fees cannot be the basis for the award of the damages on
the ground that a review of the records failed to disclose a sufficient basis for the trial court's appraisal, since the only evidence
presented on this point consisted of respondent's bare statement of his expenses and the said loss of income. Petitioner fails to note
that attorney's fees are included in the concept of actual damages under the Civil Code and may be awarded whenever the court
deems it just and equitable. Moral damages are not recoverable in damage actions predicated on a breach of the contract of
transportation, in view of Articles 2219 and 2220 of the new Civil Code, which provide as follows:
"ART. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
ART. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the
circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or
in bad faith."
By contrasting the provisions of these two articles it immediately becomes apparent that: (a) In case of breach of contract
(including one of transportation) proof of bad faith or fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential to Justify
an award of moral damages; and (b) That a breach of contract can not be considered included in the descriptive term "analogous
cases" used in Art. 2219; not only because Art. 2220 specifically provides for the damages that are caused by contractual breach, but
because the definition of quasi-delict in Art. 2176 of the Code expressly excludes the cases where there is a "preexisting contractual
relation between the parties."
"ART. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict and
is governed by the provisions of this Chapter."
The exception to the basic rule of damages now under consideration is a mishap resulting in the death of a passenger, in
which case Article 1764 makes the common carrier expressly subject to the rule of Art. 2206, that entitles the spouse, descendants and
ascendants of the deceased passenger to "demand moral damages for mental anguish by reason of the death of the deceased". But
the exceptional rule of Art. 1764 makes it all the more evident that where the injured passenger does not die, moral damages are not
recoverable unless it is proved that the carrier was guilty of malice or bad faith. We think it is clear that the mere carelessness of the
carrier's driver does not per se constitute or justify an inference of malice or bad faith on the part of the carrier; and in the case at bar
there is no other evidence of such malice to support the award of moral damages by the Court of Appeals. To award moral damages
for breach of contract, therefore, without proof of bad faith or malice on the part of the defendant, as required by Art. 2220, would be to
violate the clear provisions of the law, and constitute unwarranted judicial legislation.
The suggestion that a carrier's violation of its engagement to safely transport the passenger involves a breach of the
passenger's confidence, and therefore should be regarded as a breach of contract in bad faith, justifying recovery of moral damages
under Art. 2220 is untenable, for under it the carrier would always be deemed in bad faith, in every case its obligation to the passenger
is infringed, and it would be never accountable for simple negligence; while under the law (Art. 1756) "ART. 1756. In case of death of or
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injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in articles 1733 and 1755."
"ART. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries, if the
proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably reduced."
The distinction between fraud, bad faith or malice in the sense of deliberate or wanton wrong doing and negligence (as mere
carelessness) is too fundamental in our law to be ignored; their consequences being clearly differentiated by the Code.
"ART. 2201. In contracts and quasi-contracts, the damages forwhich the obligor who acted in good faith is liable shall be those
that arc the, natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have
reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably
attributed to the non-performance of the obligation."
It is to be presumed, in the absence of statutory provision to the contrary, that this difference was in the mind of the lawmakers
when in Art. 2220 they limited recovery of moral damages to breaches of contract in bad faith. It is true that negligence may be
occasionally so gross as to amount to malice; but that fact must be shown in evidence, and a carrier's bad faith is not to be lightly
inferred from a mere finding that the contract was breached through negligence of the carrier's employees.
In view of the foregoing considerations, the decision of the Court of Appeals is modified by eliminating the award of P5.000.00
by way of moral damages the presumption is that common carriers acted negligently (and not maliciously), and Art. 1762 speaks of
negligence of the common carrier.
Lopez vs. Pan American 16 SCRA 431 (1966)
Facts: Reservations for first class accommodations in Flight No. 2 of Pan American World Airways from Tokyo to San Francisco were
made, by "Your Travel Guide" agency, for then Senator Fernando Lopez, his wife Maria J. Lopez, his son-in-law Alfredo Montelibano,
Jr., and his daughter, Mrs. Alfredo Montelibano, Jr. PAN-AM's San Francisco head office confirmed the reservations. First class tickets
for the abovementioned flight were subsequently issued. As scheduled Senator Lopez and party left Manila by Northwest Airlines. As
soon as they arrived Senator Lopez requested Minister Busuego of the Philippine Embassy to contact PAN-AM's Tokyo office
regarding their first class accommodations for that evening's flight. For the given reason that the first class seats therein were all
booked up, however, PAN-AM's Tokyo office informed Minister Busuego that PAN-AM could not accommodate Senator Lopez and
party in that trip as first class passengers. Senator Lopez thereupon gave their first class tickets to Minister Busuego for him to show
the same to PAN-AM's Tokyo office, but the latter firmly reiterated that there was no accommodation for them in the first class, stating
that they could not go in that flight unless they took the tourist class therein. They were constrained to take PAN-AM's flight from Tokyo
to San Francisco as tourist passengers. Suit for damages was thereafter filed by Senator Lopez and party against PAN-AM. Alleging
breach of contracts in bad faith by defendant, plaintiffs asked for P500,000 actual and moral damages, P100,000 exemplary damages,
P25,000 attorney's fees plus costs. PAN-AM filed its answer, asserting that its failure to provide first class accommodations to plaintiffs
was due to honest error of its employees. Court of First Instance rendered its decision in favor of plaintiffs. Both however appealed the
decision. Plaintiff prayed for an increase in the award.
Issue: Whether or not plaintiff is entitled to damages.
Held: Yes. According to plaintiffs, defendant acted in bad faith because it deliberately refused to comply with its contract to provide first
class accommodations to plaintiffs, out of racial prejudice against Orientals. Against the foregoing, however, defendant's evidence
would seek to establish its theory of honest mistake. It said that the first class reservations of Senator Lopez and party were made
together with those of four members of the Rufino family. The reservations employee mistakenly cancelled all the seats that had been
reserved, that is, including those of Senator Lopez and party. Since the flight involved was still more than a month away and confident
that reinstatement would be made, Herranz forgot the matter and told no one about it except his co-employee. From the foregoing
evidence of defendant, it is in effect admitted that defendant through its agents first cancelled plaintiffs, reservations by mistake and
thereafter deliberately and intentionally withheld from plaintiffs or their travel agent the fact of said cancellation, letting them go on
believing that their first class reservations stood valid and confirmed. In so misleading plaintiffs into purchasing first class tickets in the
conviction that they had confirmed reservations for the same, when in fact they had none, defendant willfully and knowingly placed
itself into the position of having to breach its contracts with plaintiffs. All the time, in legal contemplation such conduct already amounts
to action in bad faith. For bad faith means a breach of a known duty through some motive of interest or ill-will.
Now on the issue of amount of damages. First, then, as to moral damages. As a proximate result of defendant's breach in
bad faith of its contracts with plaintiffs, the latter suffered social humiliation, wounded feelings, serious anxiety and mental anguish. For
plaintiffs were travelling with first class tickets issued by defendant and yet they were given only the tourist class. At stop-overs, they
were expected to be among the first-class passengers by those awaiting to welcome them, only to be found among the tourist
passengers. It may not be humiliating to travel as tourist passengers; it is humiliating to be compelled to travel as such, contrary to
what is rightfully to be expected from the contractual undertaking. Senator Lopez was then Senate President Pro Tempore.
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International carriers like defendant know the prestige of such an office. And he was former Vice-President of the Philippines. Senator
Lopez was going to the United States to attend a private business conference of the Binalbagan-Isabela Sugar Company; but his
aforesaid rank and position were by no means left behind, and in fact he had a second engagement awaiting him in the United States:
a banquet tendered by Filipino friends in his honor as Senate President Pro Tempore. For the moral damages sustained by him,
therefore, an award of P100,000.00 is appropriate.
Considering also the physical discomfort of the wife of Senator Lopez as well as the members of his family, it should be
imposed in such an amount as to sufficiently and effectively deter similar breach of contracts in the future by defendant or other
airlines. In this light, we find it just to award P75,000.00 as exemplary or corrective damages.
A written contract for attorney's services shall control the amount to be paid therefor unless found by the court to be
unconscionable or unreasonable. The amount of P25, 000 is reasonable, considering the attorney’s prominence in the legal profession,
and that the defense counsel’s fees is more than half the said amount.
In concluding, let it be stressed that the amount of damages awarded in this appeal has been determined by adequately
considering the official, political, social, and financial standing of the offended parties on one hand, and the business and financial
position of the offender on the other.
Ortigas Jr. vs. Lufthansa 64 SCRA 610 (1975)

Facts: The Sharp Travel Service, the travel department of C. F. Sharp, Inc., the majority interest-in-which is held by Rocha y Cia., Inc.,
General Agents of the defendant, Lufthansa German Airlines issued to the plaintiff First Class Pan American Ticket which would take
him from Manila, the place of departure, to Hongkong, various cities in the United States, Europe, Asia, the Far East, and then back to
Manila, the place of destination. Ortigas' ticket for all these different legs of his journey was first class. He left Manila as scheduled. In
New York, he decided to leave out some cities, included in his original itinerary, to be in Hongkong, for several appointments he had
there. Ortigas arrived in due course in Rome. To be sure he could fly first class to Hongkong, for his appointments there the next day,
Ortigas went to the office of the Alitalia to book passage. The man at the counter of the Alitalia office told him it had no flight on Monday
but the Lufthansa had. The man thereupon called up the office of the Lufthansa and, after talking to an employee thereof, told Ortigas
that the Lufthansa had no first class, but only economy seats available. Ortigas was not willing to take an economy seat and requested
the employee to call up other airlines. The employee afterwards informed Ortigas that the Lufthansa had a first class seat available.
Ortigas immediately asked him to get the seat and to see to it that his ticket be confirmed and validated for the flight and a first class
seat. The man thereafter asked for Ortigas' passport and other travel papers and attached a validating sticker on flight coupon No. 4
which corresponded to the Rome-Hongkong leg of his TWA Ticket.
The following Monday, Ortigas checked out of his hotel and took a taxi to the terminal. He unloaded his baggage and
proceeded to the counter in charge of the Lufthansa passengers. The lady at the counter told him that Lufthansa had no space for him
that day. Ortigas requested her to check with her main office, which she did by calling it up. After calling, she apologized and said the
plaintiff's ticket was in order and would be confirmed and validated. On her request, Ortigas had his luggage weighed and was given
the free luggage allowance of a first class passenger. He was furthermore asked to pay 800 liras for bus fare and 700 liras as
embarkation tax. An employee in the airport asked for his passport and other papers and, after examining his passport, where his
Filipino nationality appears, said he could not board the plane that day because his seat would be given to a Belgian.
After an argument with the employee, Ortigas made another request, that the employee call other airlines to inquire if they had
flights to Hongkong that day but he once more turned down the plea and insisted that Ortigas travel economy, with the promise that he
will be transferred to first class in Cairo and onward to Hongkong. He was constrained to agree with the arrangement. Upon arrival in
Cairo, the plaintiff requested the Lufthansa agent to transfer him to first class but the agent said he could not and that he did not
receive any communication from Rome to that effect. At Dharham, the plaintiff once more requested a transfer to first class but was
also told by the Lufthansa agent that he had not received any communication about the change and the request could not be granted.
In Calcutta, Ortigas once again requested a transfer or that he be assisted in booking passage on other planes but was also refused. It
was only in Bangkok when the chief steward asked him if he wanted to move over to first class but having been already embarrassed
and humiliated and the trip to Hongkong being only three hours, he said he would not as a sign of protest. The foregoing facts resulted
in the filing of the case by the plaintiff against defendant, in which an award of moral and exemplary damages was ordered and now
subject of an appeal.
Issue: Whether or not plaintiff is entitled to damages.
Held: Yes. Manuel Otayza, general manager of Filital, Inc., which is the general agent of the Alitalia in the Philippines, testified that
space reservation through telephone calls between airlines is permitted by IATA's, "Manual of Traffic Conference Resolutions" and that
telephone calls for reservation by one airline to another is in fact accepted procedure in accordance with the official airline guide of the
Air Traffic Conference and International Air Transport Association. There was, therefore, a valid and binding contract between
Lufthansa and the plaintiff to transport him as a first class passenger from Rome to Hongkong, and this agreement the defendant
42 | P a g e
violated by compelling the plaintiff to travel as an economy passenger. It cannot be said the breach was the result of an honest mistake
or excusable negligence. There is evidence that the defendant acted with bad faith and in willful disregard of the plaintiffs rights.
It is Our considered view that when it comes to contracts of common carriage, inattention and lack of care on the part of the
carrier resulting in the failure of the passenger to be accommodated in the class contracted for amounts to bad faith or fraud which
entitles the passenger to the award of moral damages in accordance with Article 2220 of the Civil Code. But in the instant case, the
breach appears to be of graver nature, since the preference given to the Belgian passenger over plaintiff was done willfully and in
wanton disregard of plaintiff's rights and his dignity as a human being and as a Filipino, who may not be discriminated against with
impunity.
Lufthansa contends, however, that there could not have been any possible discrimination by reason of race against Ortigas
because from his appearance, said plaintiff can easily be taken for a European or white more than his own witness Amado Castro and
besides, there were other Orientals in the same flight on that occasion. It is argued that any such policy would be self-defeating, since it
would certainly be damaging to its own business. Again, this ratiocination is untenable, for what appears from the evidence is not really
a case of a general policy of discriminating against Orientals or non-whites, but a specific act of Lufthansa employee at the airport of
giving preference to a Belgian after examining Ortigas passport wherein his Filipino nationality is noted.
As found by the lower court what worsened the situation of Ortigas was that Lufthansa succeeded in keeping him as its
passenger by assuring him that he would be given first class accommodation at Cairo, the next station, the proper arrangements
therefor having been made already, when in truth such was not the case. Thus, instead of complying with the request of Ortigas that
other airlines be contacted to find out it they had first class space for him, the Lufthansa employee who had indifferently told him about
his downgrading paid very little attention if ever to said request. Although molested and embarrassed to the point that he had to take
nitroglycerine pills to ward off a possible heart attack, Ortigas hardly had any choice, since his luggage was already in the plane. To his
disappointment, when the plane reached Cairo, he was told by the Lufthansa office there that no word at all had been received from
Rome and they had no space for him in first class. Worse, similar false representations were made to him at Dharham and Calcutta. It
was only at Bangkok where for the first time, Ortigas was at last informed that he could have a first class seat in that leg of the flight,
from Bangkok to Hongkong. This Ortigas rejected, if only to make patent his displeasure and indignation at being so inconsiderately
treated in the earlier part of his journey.
Moreover, it is argued, the economy class accommodations are not much different from first class and Ortigas was not
delayed in his trip. We cannot see the point. A passenger contracts for first class accommodations for many reasons peculiar to himself
and pays a higher price therefor, and it is certainly not for the airplane to say later, after it deprives him of his space in order to favor
another passenger, that economy class is anyway just as good as first class.
In the light of all the foregoing, there can be no doubt as to the right of Ortigas to damages, both moral and exemplary.
We have uniformly upheld the right of a passenger to damages in all cases wherein, after having contracted and paid for first class
accommodations duly confirmed and validated, he is transferred over his objection to economy, class, which he has to take in order to
be able to arrive at his destination on his scheduled time.
DISPOSITIVE: WHEREFORE, the judgment appealed from is modified by raising the award of moral and exemplary damages to
plaintiff Ortigas to P150,000.00 and P100,000.00, respectively. In all other respects, including as to the payment of interests on the said
amounts, the same is affirmed.
Phil. Rabbit Bus Lines vs. Esguerra 117 SCRA 741 (1982)
Facts: Patrocinio Esguerra was a paying passenger of Bus No. 223 of Philippine Rabbit Bus Lines, Inc. He boarded the said bus at the
Manila terminal about four o'clock in the afternoon of November 6, 1961, bound for San Fernando, Pampanga. He sat at the left-end of
the fourth row behind the driver, close to the window. As the bus approached barrio San Marcos, Calumpit, Bulacan, a freight truck
owned and operated by the Transport Contractors, Inc. was coming from the opposite direction. The vehicles sideswiped each other.
The window glass near the driver's seat of the Rabbit Bus was detached and the left side of its body was damaged. The left forearm of
Patrocinio Esguerra was hit by a hard blunt object, breaking the bones into small fragments while the soft tissues of the muscles and
the skin were mascerated. He was immediately brought to the Bulacan Provincial Hospital in Malolos, Bulacan for treatment. The left
arm was amputated.
Plaintiff filed a case against the Philippine Rabbit Bus Lines, Inc. and the Transport Contractors, Inc., together with their
respective drivers, praying that judgment be rendered in favor of the plaintiff and against the defendants requiring them to pay, jointly
and severally damages, actual and compensatory, moral and exemplary, litigation expenses and costs. The Court of Appeals affirmed
CFI’s decision.
Issue: Whether or not the award of moral damages is proper
43 | P a g e
Held: No. The contention of petitioners with respect to the award of moral damages is meritorious. This Court has repeatedly held that
moral damages are not recoverable in actions for damages predicated on a breach of the contract of transportation, as in the instant
case, in view of the provisions of Articles 2219 and 2220 of the New Civil Code. The exceptions are (1) where the mishap results in the
death of a passenger, and (2) where it is proved that the carrier was guilty of fraud or bad faith, even if death does not result. The Court
of Appeals found that the two vehicles sideswiped each other at the middle of the road. In other words both vehicles were in their
respective lanes and that they did not invade the lane of the other. It cannot be said therefore that there was fraud or bad faith on the
part of the carrier's driver. This being the case, no moral damages are recoverable.
Sweet Lines vs. Court of Appeals 121 SCRA 769 (1983)

Facts: Private respondents purchased first-class tickets from petitioner at the latter’s office in Cebu City. They were to board
petitioner’s vessel. M/V Sweet Grace, bound for Catbalogan, Western Samar. Instead of departing at the scheduled hour of about
midnight on July 8, 1972, the vessel set sail at 3:00am of July 9, 1972, only to be towed back to cebu due to engine trouble, arrving at
about 4:00pm n the same day. Repairs having been accomplished, the vessel lifted anchor again on July 10, 1972 at around 8:00am.
Instead of docking to Catbalogan, which was the first port of call, the vessel proceeded direct to Tacloban at around 9:00pm of July 10,
1972. Private respondents had no recourse but to disembark and board a ferryboat to Catbalogan.
Hence, this suit for damages for breach of contract of carriage which the Trial court, affirmed by the CA, decided in favor of plaintiffs.
Issue: Whether or not moral damages may be rightfully demanded.
Held: Yes. Under Art. 2220 of the Civil Code, moral damages are justly due in breaches of contract where the defendant acted
fraudulently or in bad faith. Both the Trial Court and the Appellate Court found that there was bad faith on the part of petitioner in that:
(1) Defendants- Appellants did not give notice to plaintiffs-appellates as to the change of scheduled of the vessel;
(2) Knowing fully well that it would take no less than fifteen hours to effect the repairs of the damaged engine, defendants-
appellants instead made announce ment of assurance that the vessel would leave within a short period of time, and when
plaintiff-appellees wanted to leave the port and gave up the trip, defendants- appellants employees would come and say,
“we are leaving already”.
(3) Defendants- appellants did not offer to refund plaintiffs-appellees’ tickets nor provide them with transportation form
Tacloban to Catbalogan.
That the finding of bad faith is binding on us, since it is not the function of the court to analyze and review evidence on this
point all over again, aside from the fact that we find it faithful to the meaning of bad faith enunciated thus:
“Bad faith means a breach of a known duty through some motive or interest or ill will. Self enrichment or fraternal interest, and
not personal ill will, may have been the motive, but it is malice nevertheless.”
Under the circumstances, however, we find the award of moral damages excessive and accordingly reduce them from P75,000.00 to
P3,000.00 respectively for each of the private respondents. Judgment MODIFIED
Pan American World Airways vs. IAC, supra
TransWorld Airlines vs. CA 165 SCRA 143 (1988)

Facts: Rogelio A. Vinluan is a practicing lawyer who entered into a contract for air carriage for valuable consideration with Japan
Airlines first class from Manila to Tokyo, Moscow, Paris, Hamburg, Zurich, New York, Los Angeles, Honolulu and back to Manila thru
the same airline and other airlines it represents for which he was issued the corresponding first class tickets for the entire trip.
On April 18, 1979, while in Paris, he went to the office of Trans World Airlines (TWA) and secured therefrom confirmed
reservation for first class accommodation on board its Flight No. 41 from New York to San Francisco. A validated stub was attached to
the New York-Los Angeles portion of his ticket evidencing his confirmed reservation for said flight with the mark "OK " On April 20,
1979, at about 8:00 o'clock A.M., Vinluan reconfirmed his reservation for first class accommodation on board TWA Flight No. 41 with its
New York office. He was advised that his reservation was confirmed. Vinluan presented his ticket for check-in at the counter of TWA at
JFK International Airport at about 9:45 o'clock A.M., the scheduled time of the departure being 11:00 o'clock A.M. He was informed that
there was no first class seat available for him on the flight. He asked for an explanation but TWA employees on duty declined to give
any reason. When he began to protest, one of the TWA employees, a certain Mr. Braam, rudely threatened him with the words "Don't
argue with me, I have a very bad temper."
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To be able to keep his schedule, Vinluan was compelled to take the economy seat offered to him and he was issued a refund
application" as he was downgraded from first class to economy class.
While waiting for the departure of Flight No. 41. Vinluan noticed that other passengers who were white Caucasians and who
had checked-in later than him were given preference in some first class seats which became available due to "no show" passengers.
On February 15, 1980, Vinluan filed an action for damages against the TWA in the Court of First Instance of Rizal alleging
breach of contract and bad faith. The CFI ruled in favor of Vinluan which was affirmed by the Court of appeals with some modifications.
Issue: Whether or not Trans World should be liable for damages.
Held: Respondent had a first class ticket for Flight No. 41 of petitioner from New York to San Francisco on April 20, 1979. It was twice
confirmed and yet respondent unceremoniously told him that there was no first class seat available for him and that he had to be
downgraded to the economy class. As he protested, he was arrogantly threatened by one Mr. Braam. Worst still, while he was waiting
for the flight, he saw that several Caucasians who arrived much later were accommodated in first class seats when the other
passengers did not show up.
The discrimination is obvious and the humiliation to which private respondent was subjected is undeniable. Consequently, the
award of moral and exemplary damages by the respondent court is in order.
Indeed, private respondent had shown that the alleged switch of planes from a Lockheed 1011 to a smaller Boeing 707 was because
there were only 138 confirmed economy class passengers who could very well be accommodated in the smaller plane and not
because of maintenance problems.
Petitioner sacrificed the comfort of its first class passengers including private respondent Vinluan for the sake of economy.
Such inattention and lack of care for the interest of its passengers who are entitled to its utmost consideration, particularly as to their
convenience, amount to bad faith which entitles the passenger to the award of moral damages. 5 More so in this case where instead of
courteously informing private respondent of his being downgraded under the circumstances, he was angrily rebuffed by an employee of
petitioner.
At the time of this unfortunate incident, the private respondent was a practicing lawyer, a senior partner of a big law firm in Manila. He
was a director of several companies and was active in civic and social organizations in the Philippines. Considering the circumstances
of this case and the social standing of private respondent in the community, he is entitled to the award of moral and exemplary
damages. However, the moral damages should be reduced to P300,000.00, and the exemplary damages should be reduced to
P200,000.00. This award should be reasonably sufficient to indemnify private respondent for the humiliation and embarrassment that
he suffered and to serve as an example to discourage the repetition of similar oppressive and discriminatory acts.
Armovit vs. Court of Appeals 184 SCRA 476 (1990)
Facts: In October 1981, the petitioners decided to spend their Christmas holidays with relatives and friends in the Philippines, so they
purchased from private respondent, (Northwest Airlines, Inc.) three (3) round trip airline tickets from the U.S. to Manila and back, plus
three (3) tickets for the rest of the children, though not involved in the suit. Each ticket of the petitioners which was in the handwriting of
private respondent's tickets sales agent contains the following entry on the Manila to Tokyo portion of the return flight: from Manila to
Tokyo, NW flight 002, date 17 January, time 10:30 A.M. Status, OK.
On their return trip from Manila to the U.S. scheduled on January 17, 1982, petitioner arrived at the check-in counter of
private respondent at the Manila International Airport at 9:15 in the morning, which is a good one (1) hour and fifteen (15) minutes
ahead of the 10:30 A.M. scheduled flight time recited in their tickets. Petitioners were rudely informed that they cannot be
accommodated inasmuch as Flight 002 scheduled at 9:15 a.m. was already taking off and the 10:30 A.M. flight time entered in their
plane tickets was erroneous.
Previous to the said date of departure petitioners re-confirmed their reservations through their representative Ernesto
Madriaga who personally presented the three (3) tickets at the private respondent's Roxas Boulevard office. The departure time in the
three (3) tickets of petitioners was not changed when re-confirmed. The names of petitioners appeared in the passenger manifest and
confirmed as Passenger Nos. 306, 307, and 308, Flight 002.
Herein petitioner Dr. Armovit protested in extreme agitation that because of the bump-off he will not be able to keep his
appointments with his patients in the U.S. Petitioners suffered anguish, wounded feelings, and serious anxiety day and night of January
17th until the morning of January 18th when they were finally informed that seats will be available for them on the flight that day.
45 | P a g e
Because of the refusal of the private respondent to heed the repeated demands of the petitioners for compensatory damages
arising from the aforesaid breach of their air-transport contracts, petitioners were compelled to file an action for damages in the
Regional Trial Court of Manila.
The RTC awarded actual damages, moral damages, exemplary damages and nominal damages to the plaintiffs but the CA
eliminated the award for moral and nominal damages.
Issue: Whether or not the elimination of the CA of the award for moral damages.
Held: Yes. The contention of the CA that the appellees did not take the witness stand to testify on their "social humiliation, wounded
feelings and anxiety" and the breach of contract was not malicious or fraudulent was without merit. The CA overlooked the fact that a
year after the incident there was a turmoil in the country because of the assassination of Benigno Aquino and that violent
demonstrations in the country were sensationalized in the U.S. media so petitioners were advised to refrain from returning to the
Philippines at the time when they were scheduled to testify. Nevertheless, Atty. Armovit, brother of Dr. Armovit, took the witness stand
for he was there from the time they checked in until the time they were rudely informed that their flight had already taken off.
Angered and frustrated Dr. Armovit told the said check-in-officer that he had to be accommodated that morning so that he
could attend to all his appointments in the U.S.; that petitioner Jacqueline Armovit also complained about not being able to report for
work at the expiration of her leave of absence; that while petitioner had to accept private respondent's offer for hotel accommodations
at the Philippine Village Hotel so that they could follow up and wait for their flight out of Manila the following day, petitioners did not use
their meal coupons supplied because of the limitations thereon so they had to spend for lunch, dinner, and breakfast in the sum of
P1,300.00 while waiting to be flown out of Manila; that Dr. Armovit had to forego the professional fees for the medical appointments he
missed due to his inability to take the January 17 flight; that the petitioners were finally able to fly out of Manila on January 18, 1982,
but were assured of this flight only on the very morning of that day, so that they experienced anxiety until they were assured seats for
that flight.
No doubt Atty. Raymund Armovit's testimony adequately and sufficiently established the serious anxiety, wounded feelings
and social humiliation that petitioners suffered upon having been bumped off. However, considering the circumstances of this case
whereby the private respondent attended to the plight of the petitioners, taking care of their accommodations while waiting and
boarding them in the flight back to the U.S. the following day, the Court finds that the petitioners are entitled to moral damages in the
amount of P100,000.00 each.
Also, the gross negligence committed by private respondent in the issuance of the tickets with entries as to the time of the
flight, the failure to correct such erroneous entries and the manner by which petitioners were rudely informed that they were bumped off
are clear indicia of such malice and bad faith and establish that private respondent committed a breach of contract which entitles
petitioners to moral damages.
The deletion of the nominal damages by the appellate court is well-taken since there is an award of actual damages. Nominal
damages cannot co-exist with actual or compensatory damages.
Wherefore the decision of the CA is modified providing the award for moral damages.
PAL vs. CA 106 SCRA 391

Facts: Private respondent Jesus Samson flew as co-pilot on a regular flight from Manila to Legaspi with Captain Delfin Bustamante in
a plane belonging to petitioner PAL. The airplane crash-landed beyond the runway due to the slow reaction and poor judgment of said
captain, when it did not maintain the required pressure on the brakes and notwithstanding the diligent efforts of Samson. The jolt
caused injuries to Samson. And instead of PAL giving Samson expert and proper medical treatment it referred him to a general medical
practitioner. Now, on grounds of physical disability Samson was discharged from PAL’s employ, which caused him to file a complaint
for damages. PAL denied liability on the ground of fortuitous event, and that the physical headaches and dizziness experience by
Samson were due to emotional disturbance over his inability to pass the required upgrading course given by PAL. Judgement was
rendered in favor of Samson in the lower court which was affirmed by CA with some modification, by imposing legal rate of interest on
the unearned income of Samson. Hence the instant petition.
46 | P a g e
Issue: Is there a causal connection between the injuries suffered by private respondent during the accident and the subsequent
periodic dizziness, headache and general debility allegedly caused by the accident and private respondent’s discharge from
employment, which further warrants the award of damages?
Held: Yes. The dizziness, headaches and general debility of private respondent were after-effects of the crash-landing. Doctors
presented by PAL even admit the vital facts about Samson’s brain injury.
There was also gross negligence by PAL for allowing Capt. Bustamante to fly on the that fateful day of the accident, even if he
was sick, having tumor on his nose. No one will certify the fitness to fly a plane of one suffering from the disease. One month prior to
the crash-landing, when the pilot was preparing to land in Daet, private respondent warned him that they were not in the vicinity of Daet
but above the town of Ligao. The plane hit outside the airstrip. In another instance, the pilot would hit the Mayon Volcano had not the
plaintiff warned him. These more than prove what private respondent had complained of. Disregard thereof by PAL is condemnable.
Having affirmed the gross negligence and casual connection of the after-effects of the accident, the award of damages was
likewise affirmed. The grant of compensatory damages[P204,000] by computing the basic salary per annum at P750.00 a month and
P300.00 a month for extra pay for extra flying time including bonus every year is justified. The grant of moral damages[P50,000] was
also justified, having considered the bad faith of PAL. The negligence of PAL is clearly a quasi-delict and therefore Art. 2219(2) is
applicable, justifying the recovery of moral damages. Even from the standpoint of the petitioner that there is an employee-employer
relationship between it and private respondent arising from the contract of employment, private respondent is still entitled to moral
damages in view of the finding of bad faith or malice, applying the provisions of Article 2220.
C. EXEMPLARY DAMAGES (ARTS. 2229, 2232-2233, NCC)

SECTION 5. - Exemplary or Corrective Damages
Art. 2229. Exemplary or corrective damages are imposed, by way of example or correction for the public good, in addition
to the moral, temperate, liquidated or compensatory damages.
Art. 2230. In criminal offenses, exemplary damages as a part of the civil liability may be imposed when the crime was
committed with one or more aggravating circumstances. Such damages are separate and distinct from fines and shall be
paid to the offended party.
Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence.
Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner.
Art. 2233. Exemplary damages cannot be recovered as a matter of right; the court will decide whether or not they should be
adjudicated.
Prudenciado vs. Alliance Transport 148 SCRA 440 (1987)
Facts: Petitioner was driving her own Chevrolet Bel Air car along Arroceros Street with the intention of crossing Taft Avenue in order to
turn left, to go to the Philippine Normal College Compound where she would hold classes. She claimed that she was driving her car at
the rate of 10 kmph, that before crossing Taft Ave. she stopped her car and looked to the right and to the left and not noticing any on-
coming vehicle on either side she slowly proceeded on first gear to cross the same, but when she was almost at the center, near the
island thereof, Jose Leyson who was driving People's Taxicab owned and operated by Alliance Transport System, Inc., suddenly
bumped and struck petitioner’s car, thereby causing physical injuries in different parts of her body, suffering more particularly brain
concussion while her car was damaged to the extent of P2,451.27. The damage to the taxicab amounted to P190.00. Petitioner filed a
complaint for damages against respondents. The lower court found Jose Leyson guilty of negligence. Alliance Transport System, Inc.
failed to prove to the satisfaction of the court that it had exercised the required diligence of a good father of the family in the selection,
supervision and control of its employees. Both defendants were held jointly and severally liable for the physical injuries suffered by the
plaintiff as well as for the damage to her car, in addition to the other consequential damages prayed for. The award was P2,451.27 for
actual damages representing the cost for the repair of the car of plaintiff; P25,000.00 as moral damages; P5,000.00 as exemplary
damages; and the further sum of P3,000.00 as attorney's fees, with costs against the defendants. CA modified the award, reducing the
amount of moral damages from P25,000 to P2,000 and eliminating the award of exemplary damages and attorney's fees. Hence the
instant petition.
Issue: Whether or not the Court of Appeals is justified in modifying or changing the grant of damages by the trial court.
Held: No. A careful review of the records makes it readily apparent that the injuries sustained by petitioner are not as serious or
extensive as they were claimed to be, to warrant the damages awarded by the trial court. In fact, a closer scrutiny of the exhibits
47 | P a g e
showing a moderate damage to the car can by no stretch of the imagination produce a logical conclusion that such disastrous effects of
the accident sought to be established, actually took place, not to mention the fact that such were not supported by the medical findings
presented. Unquestionably, therefore, the damages imposed by the lower court should be reduced to more reasonable levels. On the
other hand, it will be observed that the reduction of the damages made by the Court of Appeals is both too drastic and unrealistic, to
pass the test of reasonableness, which appears to be the underlying basis to justify such reduction. While the damages sought to be
recovered were not satisfactorily established to the extent desired by the petitioner, it was nonetheless not disputed that an accident
occurred due to the fault and negligence of the respondents that Dra. Prudenciado suffered a brain concussion which although mild
can admittedly produce the effects complained of by her and that these symptoms can develop after several years and can lead to
some, serious handicaps or predispose the patient to other sickness. Being a doctor by profession, her fears can be more real and
intense than an ordinary person. Otherwise stated, she is undeniably a proper recipient of moral damages which are proportionate to
her suffering.
As to exemplary damages, Article 2231 of the Civil Code provides: “In quasi-delicts, exemplary damages may be granted if the
defendant acted with grave negligence.” The rationale behind exemplary or corrective damages is, as the name implies, to provide an
example or correction for the public good. The findings of the trial court is apparent, which became the basis of the award of exemplary
damages that respondent driver was running at high speed after turning to the right along Taft Ave. coming from Ayala Boulevard,
considering that the traffic was clear. Failing to notice petitioner's car, he failed to apply his brakes and did not even swerve to the right
to avoid the collision. Much more, it was raining that time and the roads are slippery. The frequent incidence of accidents of this nature
caused by taxi drivers indeed demands corrective measures. This however was overruled by CA and did not subscribed to the fact that
the driver was grossly negligent, in which this Court finds that it has erred.
DISPOSITIVE: PREMISES CONSIDERED, the assailed decision of the Court of Appeals is hereby MODIFIED insofar as the award of
damages is concerned; and respondents are ordered to jointly and severally pay the petitioner; (1) the sum of P2,451.27 for actual
damages representing the cost of the repair of her car; (2) the sum of P15,000.00 as moral damages; (3) the sum of P5,000.00 as
exemplary damages; and (4) the sum of P3,000.00 as attorney's fees. No pronouncement as to costs.
Marchan vs. Mendoza, supra.

Facts: A passenger bus of the Philippine Rabbit Bus Lines which was then driven by Silverio Marchan fell into a ditch somewhere in
Barrio Malanday, Polo, Bulacan, while travelling on its way to Manila. As a result of which Arsenio Mendoza, his wife and child, who
were then inside the bus as passengers were thrown out to the ground resulting in their multiple injuries. Arsenio Mendoza suffered the
most serious injuries which damaged his vertebrae causing the paralysis of his lower extremities. An action was brought to recover
damages against petitioners predicated not only on a breach of contract of carriage for failure to safely convey the plaintiffs to their
destination, but also on account of a criminal negligence on the part of defendant driver. The lower court ruled in favor of plaintiffs. The
award of P40,000.00 as compensatory damages was affirmed by CA. It however added the amount of P30,000.00 as exemplary
damages and sustained the award of attorney's fees in the amount of P5,000.00.
Issue: Whether or not there should be an award of exemplary damages.
Held: Yes. It is argued that this Court is without jurisdiction to adjudicate the exemplary damages since there was no allegation nor
prayer, nor proof, nor counterclaim of error for the same by the respondents. It is to be observed however, that in the complaint,
plaintiffs "prayed for such other and further relief as this Court may deem just and equitable." Now, since the body of the complaint
sought to recover damages against the defendant-carrier wherein plaintiffs prayed for indemnification for the damages they suffered as
a result of the negligence of the driver who is appellant's employee and since exemplary damages is intimately connected with general
damages, plaintiffs may not be expected to single out by express term the kind of damages they are trying to recover against the
defendant's carrier. Suffice it to state that when plaintiffs prayed in their complaint for such other relief and remedies that may be
availed of under the premises, in effect, therefore, the court is called upon the exercise and use its discretion whether the imposition of
punitive or exemplary damages even though not expressly prayed or pleaded in the plaintiffs' complaint. Exemplary damages may be
imposed by way of example or correction only in addition, among others, to compensatory damages, but that they cannot be recovered
as a matter of right, their determination depending upon the discretion of the court. If the amount of exemplary damages need not be
proved, it need not also be alleged, and the reason is obvious because it is merely incidental or dependent upon what the court may
award as compensatory damages.
There is no reason to consider that the lower court erred in awarding the P5,000 attorneys fees. A modification of the decision
however is proper. Respondents are entitled to interest for the amount of compensatory damages from the date of the decision of the
lower court and legal interest on the exemplary damages from the date of the decision of the Court of Appeals.
[Reference] Case Digests uploaded by Louie Ray Cagurong

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[TRANSPORTATION LAW NOTES] 2017edramel

TRANSPORTATION LAWS – NOTES

3. Distinguish from Private Carrier

4. Government Regulation of Common Carrier’s Business

II. CONTRACTUAL EFFECTS

A. VIGILANCE OVER GOODS

4. Stipulations Limiting Carrier’s Liability

b. Articles 1749-1750, NCC; Amount of Liability

Ysmael vs. Barretto 51 PHIL 90 (1927)

c. Void Stipulation (Art. 1745, NCC)

5. Passenger’s Baggages (Article 1754, NCC)

1. ‘Utmost Diligence’ Required of Common Carriers (Article 1755, NCC)

A. Doctrine of Last Clear Chance

C. Carrier not an insurer against all risks

D. Res Ipsa Loquitur

2. Commencement, Duration and Termination of Carrier’s Responsibility

La Mallorca vs. De Jesus 17 SCRA 739 (1966)

Bayasen vs. Court of Appeals 103 SCRA 197 (1981)

4. Negligence or intentional assault by carrier’s employee

Gillaco vs. Manila Railroad Co. 97 Phil. 884 (1955)

5. Passenger’s duty to observe diligence to avoid injury; contributory negligence

6. Injury to passenger due to acts of co-passenger or stranger

III. DAMAGES (Article 1764, NCC)

A. Actual/Compensatory Damages (Arts. 2199, 2201, 2203, NCC)

1. Recovery for Physical Injuries

2. Damages in case of death

PAL vs. CA 185 SCRA 110 (1990)

B. Moral Damages (Arts. 2206, 2216-2217, 2219-2220, NCC)

C. Exemplary Damages (Arts. 2229, 2232-2233, NCC)

I. CONCEPT OF COMMON CARRIER

De Guzman v CA 168 SCRA 612 (1993)

Planters Products Inc v CA 226 SCRA 76 (1993)

US v Quinahon 31 Phil 189

Loadstar Shipping Co., Inc. v CA (1999)

First Phil. Industrial v CA (1998)

3. DISTINGUISH FROM PRIVATE CARRIER

San Pablo v Pantranco (1987)

National Steel Corp v CA (1997)

4. GOVERNMENT REGULATION OF COMMON CARRIER’S BUSINESS

Tatad v Garcia, Jr. (1997)

Eastern Shipping Lines v IAC (1984)

National Development Co. v CA (1988)

II. CONTRACTUAL EFFECTS

a. “Registered Owner Rule”

Benedicto vs. IAC 187 SCRA 547 (1990)

Philtranco Service Enterprises, Inc. vs. CA 273 SCRA 562 (1997)

Santos vs. Sibug 104 SCRA 520 (1981)

Lita Enterprises, Inc. vs. CA 148 SCRA 347 (1987)

Teja Marketing vs. IAC 148 SCRA 347 (1987)

Magboo vs. Bernardo 7 SCRA 952 (1963)

[XPN]unless the same is due to any of the following causes only :

Eastern Shipping Lines vs. IAC, supra

Ganzon vs. CA 161 SCRA 646 (1985)

Yobido vs. Court of Appeals 281 SCRA 1 (1997)

Lu Do vs. Binamira 101 Phil. 120 (1957)

American President Lines Ltd. vs. Klepper 110 PHIL 243

Servando vs. Phil. Steam 117 SCRA 832 (1982)

Ganzon vs. Court of Appeals, supra

Saludo, Jr. vs. Court of Appeals 207 SCRA 498 (1992)

B. ACTUAL OR CONSTRUCTIVE DELIVERY

Macam vs. Court of Appeals 313 SCRA 77 (1999)

C. TEMPORARY UNLOADING OR STORAGE

4. STIPULATIONS LIMITING CARRIER’S LIABILITY