Transpo Cases 3
Republic of the Philippines Other cases were filed. Callejas filed a complaint,4 docketed as Civil Case No. NC-397 before the
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 166640 July 31, 2009
HERMINIO MARIANO, JR., Petitioner,
vs.
ILDEFONSO C. CALLEJAS and EDGAR DE BORJA, Respondents.
DECISION
PUNO, C.J.:
On appeal are the Decision1 and Resolution2 of the Court of Appeals in CA-G.R. CV No. 66891,
dated May 21, 2004 and January 7, 2005 respectively, which reversed the Decision 3 of the
Regional Trial Court (RTC) of Quezon City, dated September 13, 1999, which found respondents
jointly and severally liable to pay petitioner damages for the death of his wife.
First, the facts:
Petitioner Herminio Mariano, Jr. is the surviving spouse of Dr. Frelinda Mariano who was a
passenger of a Celyrosa Express bus bound for Tagaytay when she met her death. Respondent
Ildefonso C. Callejas is the registered owner of Celyrosa Express, while respondent Edgar de
Borja was the driver of the bus on which the deceased was a passenger.
At around 6:30 p.m. on November 12, 1991, along Aguinaldo Highway, San Agustin, Dasmariñas,
Cavite, the Celyrosa Express bus, carrying Dr. Mariano as its passenger, collided with an Isuzu
truck with trailer bearing plate numbers PJH 906 and TRH 531. The passenger bus was bound for
Tagaytay while the trailer truck came from the opposite direction, bound for Manila. The trailer
truck bumped the passenger bus on its left middle portion. Due to the impact, the passenger bus
fell on its right side on the right shoulder of the highway and caused the death of Dr. Mariano and
physical injuries to four other passengers. Dr. Mariano was 36 years old at the time of her death.
She left behind three minor children, aged four, three and two years.
Petitioner filed a complaint for breach of contract of carriage and damages against respondents for
their failure to transport his wife and mother of his three minor children safely to her destination.
Respondents denied liability for the death of Dr. Mariano. They claimed that the proximate cause
of the accident was the recklessness of the driver of the trailer truck which bumped their bus while
allegedly at a halt on the shoulder of the road in its rightful lane. Thus, respondent Callejas filed a
third-party complaint against Liong Chio Chang, doing business under the name and style of La
Perla Sugar Supply, the owner of the trailer truck, for indemnity in the event that he would be held
liable for damages to petitioner.lavvph!l
RTC of Naic, Cavite, against La Perla Sugar Supply and Arcadio Arcilla, the truck driver, for
damages he incurred due to the vehicular accident. On September 24, 1992, the said court
dismissed the complaint against La Perla Sugar Supply for lack of evidence. It, however, found
Arcilla liable to pay Callejas the cost of the repairs of his passenger bus, his lost earnings,
exemplary damages and attorney’s fees.5
A criminal case, Criminal Case No. 2223-92, was also filed against truck driver Arcilla in the RTC
of Imus, Cavite. On May 3, 1994, the said court convicted truck driver Arcadio Arcilla of the crime
of reckless imprudence resulting to homicide, multiple slight physical injuries and damage to
property.6
In the case at bar, the trial court, in its Decision dated September 13, 1999, found respondents
Ildefonso Callejas and Edgar de Borja, together with Liong Chio Chang, jointly and severally liable
to pay petitioner damages and costs of suit. The dispositive portion of the Decision reads:
ACCORDINGLY, the defendants are ordered to pay as follows:
1. The sum of ₱50,000.00 as civil indemnity for the loss of life;
2. The sum of ₱40,000.00 as actual and compensatory damages;
3. The sum of ₱1,829,200.00 as foregone income;
4. The sum of ₱30,000.00 as moral damages;
5. The sum of ₱20,000.00 as exemplary damages;
6. The costs of suit.
SO ORDERED.7
Respondents Callejas and De Borja appealed to the Court of Appeals, contending that the trial
court erred in holding them guilty of breach of contract of carriage.
On May 21, 2004, the Court of Appeals reversed the decision of the trial court. It reasoned:
. . . the presumption of fault or negligence against the carrier is only a disputable presumption. It
gives in where contrary facts are established proving either that the carrier had exercised the
degree of diligence required by law or the injury suffered by the passenger was due to a fortuitous
event. Where, as in the instant case, the injury sustained by the petitioner was in no way due to
any defect in the means of transport or in the method of transporting or to the negligent or wilful
acts of private respondent's employees, and therefore involving no issue of negligence in its duty
to provide safe and suitable cars as well as competent employees, with the injury arising wholly
from causes created by strangers over which the carrier had no control or even knowledge or
Transpo Cases 3
could not have prevented, the presumption is rebutted and the carrier is not and ought not to be
held liable. To rule otherwise would make the common carrier the insurer of the absolute safety of
its passengers which is not the intention of the lawmakers.8
The dispositive portion of the Decision reads:
WHEREFORE, the decision appealed from, insofar as it found defendants-appellants Ildefonso
Callejas and Edgar de Borja liable for damages to plaintiff-appellee Herminio E. Mariano, Jr., is
REVERSED and SET ASIDE and another one entered absolving them from any liability for the
death of Dr. Frelinda Cargo Mariano.9
The appellate court also denied the motion for reconsideration filed by petitioner.
Hence, this appeal, relying on the following ground:
THE DECISION OF THE HONORABLE COURT OF APPEALS, SPECIAL FOURTEENTH
DIVISION IS NOT IN ACCORD WITH THE FACTUAL BASIS OF THE CASE.10
The following are the provisions of the Civil Code pertinent to the case at bar:
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.
ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all
the circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755.
In accord with the above provisions, Celyrosa Express, a common carrier, through its driver,
respondent De Borja, and its registered owner, respondent Callejas, has the express obligation "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,"11 and to observe
extraordinary diligence in the discharge of its duty. The death of the wife of the petitioner in the
course of transporting her to her destination gave rise to the presumption of negligence of the
carrier. To overcome the presumption, respondents have to show that they observed extraordinary
diligence in the discharge of their duty, or that the accident was caused by a fortuitous event.
This Court interpreted the above quoted provisions in Pilapil v. Court of Appeals.12 We elucidated:
While the law requires the highest degree of diligence from common carriers in the safe transport
of their passengers and creates a presumption of negligence against them, it does not, however,
make the carrier an insurer of the absolute safety of its passengers.
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in
the carriage of passengers by common carriers to only such as human care and foresight can
provide. What constitutes compliance with said duty is adjudged with due regard to all the
circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the
common carrier when its passenger is injured, merely relieves the latter, for the time being, from
introducing evidence to fasten the negligence on the former, because the presumption stands in
the place of evidence. Being a mere presumption, however, the same is rebuttable by proof that
the common carrier had exercised extraordinary diligence as required by law in the performance of
its contractual obligation, or that the injury suffered by the passenger was solely due to a fortuitous
event.
In fine, we can only infer from the law the intention of the Code Commission and Congress to curb
the recklessness of drivers and operators of common carriers in the conduct of their business.
Thus, it is clear that neither the law nor the nature of the business of a transportation company
makes it an insurer of the passenger's safety, but that its liability for personal injuries sustained by
its passenger rests upon its negligence, its failure to exercise the degree of diligence that the law
requires.
In the case at bar, petitioner cannot succeed in his contention that respondents failed to overcome
the presumption of negligence against them. The totality of evidence shows that the death of
petitioner’s spouse was caused by the reckless negligence of the driver of the Isuzu trailer truck
which lost its brakes and bumped the Celyrosa Express bus, owned and operated by respondents.
First, we advert to the sketch prepared by PO3 Magno S. de Villa, who investigated the accident.
The sketch13 shows the passenger bus facing the direction of Tagaytay City and lying on its right
side on the shoulder of the road, about five meters away from the point of impact. On the other
hand, the trailer truck was on the opposite direction, about 500 meters away from the point of
impact. PO3 De Villa stated that he interviewed De Borja, respondent driver of the passenger bus,
who said that he was about to unload some passengers when his bus was bumped by the driver
of the trailer truck that lost its brakes. PO3 De Villa checked out the trailer truck and found that its
brakes really failed. He testified before the trial court, as follows:
ATTY. ESTELYDIZ:
q You pointed to the Isuzu truck beyond the point of impact. Did you investigate why did
(sic) the Isuzu truck is beyond the point of impact?
a Because the truck has no brakes.
COURT:
q What is the distance between that circle which is marked as Exh. 1-c to the place where
you found the same?
Transpo Cases 3
a More or less 500 meters. In fine, the evidence shows that before the collision, the passenger bus was cruising on its rightful
lane along the Aguinaldo Highway when the trailer truck coming from the opposite direction, on full
q Why did you say that the truck has no brakes? speed, suddenly swerved and encroached on its lane, and bumped the passenger bus on its left
middle portion. Respondent driver De Borja had every right to expect that the trailer truck coming
from the opposite direction would stay on its proper lane. He was not expected to know that the
a I tested it.
trailer truck had lost its brakes. The swerving of the trailer truck was abrupt and it was running on a
fast speed as it was found 500 meters away from the point of collision. Secondly, any doubt as to
q And you found no brakes? the culpability of the driver of the trailer truck ought to vanish when he pleaded guilty to the charge
of reckless imprudence resulting to multiple slight physical injuries and damage to property in
a Yes, sir. Criminal Case No. 2223-92, involving the same incident.1avvph!1

xxx IN VIEW WHEREOF, the petition is DENIED. The Decision dated May 21, 2004 and the
Resolution dated January 7, 2005 of the Court of Appeals in CA-G.R. CV No. 66891 are
q When you went to the scene of accident, what was the position of Celyrosa bus? AFFIRMED.

a It was lying on its side. SO ORDERED.

COURT:

q Right side or left side?

a Right side.

ATTY. ESTELYDIZ:

q On what part of the road was it lying?

a On the shoulder of the road.

COURT:

q How many meters from the point of impact?

a Near, about 5 meters.14

His police report bolsters his testimony and states:

Said vehicle 1 [passenger bus] was running from Manila toward south direction when, in the
course of its travel, it was hit and bumped by vehicle 2 [truck with trailer] then running fast from
opposite direction, causing said vehicle 1 to fall on its side on the road shoulder, causing the death
of one and injuries of some passengers thereof, and its damage, after collission (sic), vehicle 2
continiously (sic) ran and stopped at approximately 500 meters away from the piont (sic) of
impact.15
Transpo Cases 3
SECOND DIVISION
G.R. No. 138060 September 1, 2004
WILLIAM TIU, doing business under the name and style of "D’ Rough Riders," and
VIRGILIO TE LAS PIÑAS petitioners,
vs.
PEDRO A. ARRIESGADO, BENJAMIN CONDOR, SERGIO PEDRANO and PHILIPPINE
PHOENIX SURETY AND INSURANCE, INC., respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court from the Decision 1 of
the Court of Appeals in CA-G.R. CV No. 54354 affirming with modification the Decision2 of the
Regional Trial Court, 7th Judicial Region, Cebu City, Branch 20, in Civil Case No. CEB-5963 for
breach of contract of carriage, damages and attorney’s fees, and the Resolution dated February
26, 1999 denying the motion for reconsideration thereof.
The following facts are undisputed:
At about 10:00 p.m. of March 15, 1987, the cargo truck marked "Condor Hollow Blocks
and General Merchandise" bearing plate number GBP-675 was loaded with firewood in
Bogo, Cebu and left for Cebu City. Upon reaching Sitio Aggies, Poblacion, Compostela,
Cebu, just as the truck passed over a bridge, one of its rear tires exploded. The driver,
Sergio Pedrano, then parked along the right side of the national highway and removed
the damaged tire to have it vulcanized at a nearby shop, about 700 meters
away.3 Pedrano left his helper, Jose Mitante, Jr. to keep watch over the stalled vehicle,
and instructed the latter to place a spare tire six fathoms away4 behind the stalled truck to
serve as a warning for oncoming vehicles. The truck’s tail lights were also left on. It was
about 12:00 a.m., March 16, 1987.
At about 4:45 a.m., D’ Rough Riders passenger bus with plate number PBP-724 driven by Virgilio
Te Laspiñas was cruising along the national highway of Sitio Aggies, Poblacion, Compostela,
Cebu. The passenger bus was also bound for Cebu City, and had come from Maya,
Daanbantayan, Cebu. Among its passengers were the Spouses Pedro A. Arriesgado and Felisa
Pepito Arriesgado, who were seated at the right side of the bus, about three (3) or four (4) places
from the front seat.
As the bus was approaching the bridge, Laspiñas saw the stalled truck, which was then about 25
meters away.5 He applied the breaks and tried to swerve to the left to avoid hitting the truck. But it
was too late; the bus rammed into the truck’s left rear. The impact damaged the right side of the
bus and left several passengers injured. Pedro Arriesgado lost consciousness and suffered a
fracture in his right colles.6 His wife, Felisa, was brought to the Danao City Hospital. She was later
transferred to the Southern Island Medical Center where she died shortly thereafter.7
Respondent Pedro A. Arriesgado then filed a complaint for breach of contract of carriage,
damages and attorney’s fees before the Regional Trial Court of Cebu City, Branch 20, against the
petitioners, D’ Rough Riders bus operator William Tiu and his driver, Virgilio Te Laspiñas on May
27, 1987. The respondent alleged that the passenger bus in question was cruising at a fast and
high speed along the national road, and that petitioner Laspiñas did not take precautionary
measures to avoid the accident.8 Thus:
6. That the accident resulted to the death of the plaintiff’s wife, Felisa Pepito Arriesgado,
as evidenced by a Certificate of Death, a xerox copy of which is hereto attached as
integral part hereof and marked as ANNEX – "A", and physical injuries to several of its
passengers, including plaintiff himself who suffered a "COLLES FRACTURE RIGHT," per
Medical Certificate, a xerox copy of which is hereto attached as integral part hereof and
marked as ANNEX – "B" hereof.
7. That due to the reckless and imprudent driving by defendant Virgilio Te Laspiñas of the
said Rough Riders passenger bus, plaintiff and his wife, Felisa Pepito Arriesgado, failed
to safely reach their destination which was Cebu City, the proximate cause of which was
defendant-driver’s failure to observe utmost diligence required of a very cautious person
under all circumstances.
8. That defendant William Tiu, being the owner and operator of the said Rough Riders
passenger bus which figured in the said accident, wherein plaintiff and his wife were
riding at the time of the accident, is therefore directly liable for the breach of contract of
carriage for his failure to transport plaintiff and his wife safely to their place of destination
which was Cebu City, and which failure in his obligation to transport safely his passengers
was due to and in consequence of his failure to exercise the diligence of a good father of
the family in the selection and supervision of his employees, particularly defendant-driver
Virgilio Te Laspiñas.9
The respondent prayed that judgment be rendered in his favor and that the petitioners be
condemned to pay the following damages:
1). To pay to plaintiff, jointly and severally, the amount of ₱30,000.00 for the death and
untimely demise of plaintiff’s wife, Felisa Pepito Arriesgado;
2). To pay to plaintiff, jointly and severally, the amount of ₱38,441.50, representing actual
expenses incurred by the plaintiff in connection with the death/burial of plaintiff’s wife;
3). To pay to plaintiff, jointly and severally, the amount of ₱1,113.80, representing
medical/hospitalization expenses incurred by plaintiff for the injuries sustained by him;
4). To pay to plaintiff, jointly and severally, the amount of ₱50,000.00 for moral damages;
5). To pay to plaintiff, jointly and severally, the amount of ₱50,000.00 by way of
exemplary damages;
Transpo Cases 3
6). To pay to plaintiff, jointly and severally, the amount of ₱20,000.00 for attorney’s fees;
7). To pay to plaintiff, jointly and severally, the amount of ₱5,000.00 for litigation
expenses.
PLAINTIFF FURTHER PRAYS FOR SUCH OTHER RELIEFS AND REMEDIES IN LAW
AND EQUITY.10
The petitioners, for their part, filed a Third-Party Complaint11 on August 21, 1987 against the
following: respondent Philippine Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tiu’s
insurer; respondent Benjamin Condor, the registered owner of the cargo truck; and respondent
Sergio Pedrano, the driver of the truck. They alleged that petitioner Laspiñas was negotiating the
uphill climb along the national highway of Sitio Aggies, Poblacion, Compostela, in a moderate and
normal speed. It was further alleged that the truck was parked in a slanted manner, its rear portion
almost in the middle of the highway, and that no early warning device was displayed. Petitioner
Laspiñas promptly applied the brakes and swerved to the left to avoid hitting the truck head-on,
but despite his efforts to avoid damage to property and physical injuries on the passengers, the
right side portion of the bus hit the cargo truck’s left rear. The petitioners further alleged, thus:
5. That the cargo truck mentioned in the aforequoted paragraph is owned and registered
in the name of the third-party defendant Benjamin Condor and was left unattended by its
driver Sergio Pedrano, one of the third-party defendants, at the time of the incident;
6. That third-party defendant Sergio Pedrano, as driver of the cargo truck with marked
(sic) "Condor Hollow Blocks & General Merchandise," with Plate No. GBP-675 which was
recklessly and imprudently parked along the national highway of Compostela, Cebu
during the vehicular accident in question, and third-party defendant Benjamin Condor, as
the registered owner of the cargo truck who failed to exercise due diligence in the
selection and supervision of third-party defendant Sergio Pedrano, are jointly and
severally liable to the third-party plaintiffs for whatever liability that may be adjudged
against said third-party plaintiffs or are directly liable of (sic) the alleged death of plaintiff’s
wife;
7. That in addition to all that are stated above and in the answer which are intended to
show reckless imprudence on the part of the third-party defendants, the third-party
plaintiffs hereby declare that during the vehicular accident in question, third-party
defendant was clearly violating Section 34, par. (g) of the Land Transportation and Traffic
Code…
… business as a common carrier, in view of his admission that D’ Rough Rider passenger bus which
10. That the aforesaid passenger bus, owned and operated by third-party plaintiff William
Tiu, is covered by a common carrier liability insurance with Certificate of Cover No.
054940 issued by Philippine Phoenix Surety and Insurance, Inc., Cebu City Branch, in
favor of third-party plaintiff William Tiu which covers the period from July 22, 1986 to July
22, 1987 and that the said insurance coverage was valid, binding and subsisting during
the time of the aforementioned incident (Annex "A" as part hereof);
11. That after the aforesaid alleged incident, third-party plaintiff notified third-party
defendant Philippine Phoenix Surety and Insurance, Inc., of the alleged incident hereto
mentioned, but to no avail;
12. That granting, et arguendo et arguendi, if herein third-party plaintiffs will be adversely
adjudged, they stand to pay damages sought by the plaintiff and therefore could also look
up to the Philippine Phoenix Surety and Insurance, Inc., for contribution, indemnification
and/or reimbursement of any liability or obligation that they might [be] adjudged per
insurance coverage duly entered into by and between third-party plaintiff William Tiu and
third-party defendant Philippine Phoenix Surety and Insurance, Inc.;…12
The respondent PPSII, for its part, admitted that it had an existing contract with petitioner Tiu, but
averred that it had already attended to and settled the claims of those who were injured during the
incident.13 It could not accede to the claim of respondent Arriesgado, as such claim was way
beyond the scheduled indemnity as contained in the contract of insurance.14
After the parties presented their respective evidence, the trial court ruled in favor of respondent
Arriesgado. The dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of plaintiff
as against defendant William Tiu ordering the latter to pay the plaintiff the following
amounts:
1 - The sum of FIFTY THOUSAND PESOS (₱50,000.00) as moral damages;
2 - The sum of FIFTY THOUSAND PESOS (₱50,000.00) as exemplary
damages;
3 - The sum of THIRTY-EIGHT THOUSAND FOUR HUNDRED FORTY-ONE
PESOS (₱38,441.00) as actual damages;
4 - The sum of TWENTY THOUSAND PESOS (₱20,000.00) as attorney’s fees;
5 - The sum of FIVE THOUSAND PESOS (₱5,000.00) as costs of suit;
SO ORDERED.15
According to the trial court, there was no dispute that petitioner William Tiu was engaged in
figured in the accident was owned by him; that he had been engaged in the transportation
business for 25 years with a sole proprietorship; and that he owned 34 buses. The trial court ruled
that if petitioner Laspiñas had not been driving at a fast pace, he could have easily swerved to the
left to avoid hitting the truck, thus, averting the unfortunate incident. It then concluded that
petitioner Laspiñas was negligent.
Transpo Cases 3
The trial court also ruled that the absence of an early warning device near the place where the
truck was parked was not sufficient to impute negligence on the part of respondent Pedrano, since
the tail lights of the truck were fully on, and the vicinity was well lighted by street lamps. 16 It also
found that the testimony of petitioner Tiu, that he based the selection of his driver Laspiñas on
efficiency and in-service training, and that the latter had been so far an efficient and good driver
for the past six years of his employment, was insufficient to prove that he observed the diligence of
a good father of a family in the selection and supervision of his employees.
After the petitioner’s motion for reconsideration of the said decision was denied, the petitioners
elevated the case to the Court of Appeals on the following issues:
I WHETHER THIRD PARTY DEFENDANT SERGIO PEDRANO WAS RECKLESS AND
IMPRUDENT WHEN HE PARKED THE CARGO TRUCK IN AN OBLIQUE MANNER;
II WHETHER THE THIRD PARTY DEFENDANTS ARE JOINTLY AND SEVERALLY
LIABLE DIRECTLY TO PLAINTIFF-APPELLEE OR TO DEFENDANTS-APPELLANTS
FOR WHATEVER LIABILITY THAT MAY BE ADJUDGED TO THE SAID DEFENDANTS-
APPELLANTS;
III WHETHER DEFENDANT-APPELLANT VIRGILIO TE LASPIÑAS WAS GUILTY OF
GROSS NEGLIGENCE;
IV WHETHER DEFENDANT-APPELLANT WILLIAM TIU HAD EXERCISED THE DUE
DILIGENCE OF A GOOD FATHER OF A FAMILY IN THE SELECTION AND
SUPERVISION OF HIS DRIVERS;
V GRANTING FOR THE SAKE OF ARGUMENT THAT DEFENDANT-APPELLANT
WILLIAM TIU IS LIABLE TO PLAINTIFF-APPELLEE, WHETHER THERE IS LEGAL AND
FACTUAL BASIS IN AWARDING EXCESSIVE MORAL DAMAGES, EX[E]MPLARY
DAMAGES, ATTORNEY’S FEES AND LITIGATION EXPENSES TO PLAINTIFF-
APPELLEE;
VI WHETHER THIRD PARTY DEFENDANT PHILIPPINE PHOENIX SURETY AND
INSURANCE, INC. IS LIABLE TO DEFENDANT- APPELLANT WILLIAM TIU.17
The appellate court rendered judgment affirming the trial court’s decision with the modification that
the awards for moral and exemplary damages were reduced to ₱25,000. The dispositive portion
reads:
WHEREFORE, the appealed Decision dated November 6, 1995 is hereby MODIFIED
such that the awards for moral and exemplary damages are each reduced to ₱25,000.00
or a total of ₱50,000.00 for both. The judgment is AFFIRMED in all other respects.
SO ORDERED.18
According to the appellate court, the action of respondent Arriesgado was based not on quasi-
delict but on breach of contract of carriage. As a common carrier, it was incumbent upon petitioner
Tiu to prove that extraordinary diligence was observed in ensuring the safety of passengers during
transportation. Since the latter failed to do so, he should be held liable for respondent Arriesgado’s
claim. The CA also ruled that no evidence was presented against the respondent PPSII, and as
such, it could not be held liable for respondent Arriesgado’s claim, nor for contribution,
indemnification and/or reimbursement in case the petitioners were adjudged liable.
The petitioners now come to this Court and ascribe the following errors committed by the appellate
court:
I. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARING
RESPONDENTS BENJAMIN CONDOR AND SERGIO PEDRANO GUILTY OF
NEGLIGENCE AND HENCE, LIABLE TO RESPONDENT PEDRO A. ARRIESGADO OR
TO PETITIONERS FOR WHATEVER LIABILITY THAT MAY BE ADJUDGED AGAINST
THEM.
II. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONERS
GUILTY OF NEGLIGENCE AND HENCE, LIABLE TO RESPONDENT PEDRO A.
ARRIESGADO.
III. THE HONORABLE COURT OF APPEALS ERRED IN FINDING PETITIONER
WILLIAM TIU LIABLE FOR EXEMPLARY DAMAGES, ATTORNEY’S FEES AND
LITIGATION EXPENSES.
IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDING RESPONDENT
PHILIPPINE PHOENIX SURETY AND INSURANCE, INC. LIABLE TO RESPONDENT
PEDRO A. ARRIESGADO OR TO PETITIONER WILLIAM TIU.19
According to the petitioners, the appellate court erred in failing to appreciate the absence of an
early warning device and/or built-in reflectors at the front and back of the cargo truck, in clear
violation of Section 34, par. (g) of the Land Transportation and Traffic Code. They aver that such
violation is only a proof of respondent Pedrano’s negligence, as provided under Article 2185 of the
New Civil Code. They also question the appellate court’s failure to take into account that the truck
was parked in an oblique manner, its rear portion almost at the center of the road. As such, the
proximate cause of the incident was the gross recklessness and imprudence of respondent
Pedrano, creating the presumption of negligence on the part of respondent Condor in supervising
his employees, which presumption was not rebutted. The petitioners then contend that
respondents Condor and Pedrano should be held jointly and severally liable to respondent
Arriesgado for the payment of the latter’s claim.
The petitioners, likewise, aver that expert evidence should have been presented to prove that
petitioner Laspiñas was driving at a very fast speed, and that the CA could not reach such
conclusion by merely considering the damages on the cargo truck. It was also pointed out that
petitioner Tiu presented evidence that he had exercised the diligence of a good father of a family
in the selection and supervision of his drivers.
Transpo Cases 3
The petitioners further allege that there is no legal and factual basis to require petitioner Tiu to pay
exemplary damages as no evidence was presented to show that the latter acted in a fraudulent,
reckless and oppressive manner, or that he had an active participation in the negligent act of
petitioner Laspiñas.
Finally, the petitioners contend that respondent PPSII admitted in its answer that while it had
attended to and settled the claims of the other injured passengers, respondent Arriesgado’s claim
remained unsettled as it was beyond the scheduled indemnity under the insurance contract. The
petitioners argue that said respondent PPSII should have settled the said claim in accordance with
the scheduled indemnity instead of just denying the same.
On the other hand, respondent Arriesgado argues that two of the issues raised by the petitioners
involved questions of fact, not reviewable by the Supreme Court: the finding of negligence on the
part of the petitioners and their liability to him; and the award of exemplary damages, attorney’s
fees and litigation expenses in his favor. Invoking the principle of equity and justice, respondent
Arriesgado pointed out that if there was an error to be reviewed in the CA decision, it should be
geared towards the restoration of the moral and exemplary damages to ₱50,000 each, or a total of
₱100,000 which was reduced by the Court of Appeals to ₱25,000 each, or a total of only ₱50,000.
Respondent Arriesgado also alleged that respondents Condor and Pedrano, and respondent
Phoenix Surety, are parties with whom he had no contract of carriage, and had no cause of action
against. It was pointed out that only the petitioners needed to be sued, as driver and operator of
the ill-fated bus, on account of their failure to bring the Arriesgado Spouses to their place of
destination as agreed upon in the contract of carriage, using the utmost diligence of very cautious
persons with due regard for all circumstances.
Respondents Condor and Pedrano point out that, as correctly ruled by the Court of Appeals, the
proximate cause of the unfortunate incident was the fast speed at which petitioner Laspiñas was
driving the bus owned by petitioner Tiu. According to the respondents, the allegation that the truck
was not equipped with an early warning device could not in any way have prevented the incident
from happening. It was also pointed out that respondent Condor had always exercised the due
diligence required in the selection and supervision of his employees, and that he was not a party
to the contract of carriage between the petitioners and respondent Arriesgado.
Respondent PPSII, for its part, alleges that contrary to the allegation of petitioner Tiu, it settled all
the claims of those injured in accordance with the insurance contract. It further avers that it did not
deny respondent Arriesgado’s claim, and emphasizes that its liability should be within the
scheduled limits of indemnity under the said contract. The respondent concludes that while it is
true that insurance contracts are contracts of indemnity, the measure of the insurer’s liability is
determined by the insured’s compliance with the terms thereof.
The Court’s Ruling
At the outset, it must be stressed that this Court is not a trier of facts. 20 Factual findings of the
Court of Appeals are final and may not be reviewed on appeal by this Court, except when the
lower court and the CA arrived at diverse factual findings.21 The petitioners in this case assail the
finding of both the trial and the appellate courts that petitioner Laspiñas was driving at a very fast
speed before the bus owned by petitioner Tiu collided with respondent Condor’s stalled truck. This
is clearly one of fact, not reviewable by the Court in a petition for review under Rule 45.22
On this ground alone, the petition is destined to fail.
However, considering that novel questions of law are likewise involved, the Court resolves to
examine and rule on the merits of the case.
Petitioner Laspiñas
Was negligent in driving
The Ill-fated bus
In his testimony before the trial court, petitioner Laspiñas claimed that he was traversing the two-
lane road at Compostela, Cebu at a speed of only forty (40) to fifty (50) kilometers per hour before
the incident occurred.23 He also admitted that he saw the truck which was parked in an "oblique
position" at about 25 meters before impact,24 and tried to avoid hitting it by swerving to the left.
However, even in the absence of expert evidence, the damage sustained by the truck 25 itself
supports the finding of both the trial court and the appellate court, that the D’ Rough Rider bus
driven by petitioner Laspiñas was traveling at a fast pace. Since he saw the stalled truck at a
distance of 25 meters, petitioner Laspiñas had more than enough time to swerve to his left to
avoid hitting it; that is, if the speed of the bus was only 40 to 50 kilometers per hour as he claimed.
As found by the Court of Appeals, it is easier to believe that petitioner Laspiñas was driving at a
very fast speed, since at 4:45 a.m., the hour of the accident, there were no oncoming vehicles at
the opposite direction. Petitioner Laspiñas could have swerved to the left lane with proper
clearance, and, thus, could have avoided the truck.26 Instinct, at the very least, would have
prompted him to apply the breaks to avert the impending disaster which he must have foreseen
when he caught sight of the stalled truck. As we had occasion to reiterate:
A man must use common sense, and exercise due reflection in all his acts; it is his duty to
be cautious, careful and prudent, if not from instinct, then through fear of recurring
punishment. He is responsible for such results as anyone might foresee and for acts
which no one would have performed except through culpable abandon. Otherwise, his
own person, rights and property, and those of his fellow beings, would ever be exposed to
all manner of danger and injury.27
We agree with the following findings of the trial court, which were affirmed by the CA on appeal:
A close study and evaluation of the testimonies and the documentary proofs submitted by
the parties which have direct bearing on the issue of negligence, this Court as shown by
preponderance of evidence that defendant Virgilio Te Laspiñas failed to observe
extraordinary diligence as a driver of the common carrier in this case. It is quite hard to
accept his version of the incident that he did not see at a reasonable distance ahead the
cargo truck that was parked when the Rough Rider [Bus] just came out of the bridge
which is on an (sic) [more] elevated position than the place where the cargo truck was
parked. With its headlights fully on, defendant driver of the Rough Rider was in a vantage
position to see the cargo truck ahead which was parked and he could just easily have
avoided hitting and bumping the same by maneuvering to the left without hitting the said
Transpo Cases 3
cargo truck. Besides, it is (sic) shown that there was still much room or space for the
Rough Rider to pass at the left lane of the said national highway even if the cargo truck
had occupied the entire right lane thereof. It is not true that if the Rough Rider would
proceed to pass through the left lane it would fall into a canal considering that there was
much space for it to pass without hitting and bumping the cargo truck at the left lane of
said national highway. The records, further, showed that there was no incoming vehicle at
the opposite lane of the national highway which would have prevented the Rough Rider
from not swerving to its left in order to avoid hitting and bumping the parked cargo truck.
But the evidence showed that the Rough Rider instead of swerving to the still spacious
left lane of the national highway plowed directly into the parked cargo truck hitting the
latter at its rear portion; and thus, the (sic) causing damages not only to herein plaintiff but
to the cargo truck as well.28
Indeed, petitioner Laspiñas’ negligence in driving the bus is apparent in the records. By his own
admission, he had just passed a bridge and was traversing the highway of Compostela, Cebu at a
speed of 40 to 50 kilometers per hour before the collision occurred. The maximum speed allowed
by law on a bridge is only 30 kilometers per hour.29 And, as correctly pointed out by the trial court,
petitioner Laspiñas also violated Section 35 of the Land Transportation and Traffic Code, Republic
Act No. 4136, as amended:1avvphil.net
Sec. 35. Restriction as to speed. – (a) Any person driving a motor vehicle on a highway
shall drive the same at a careful and prudent speed, not greater nor less than is
reasonable and proper, having due regard for the traffic, the width of the highway, and or
any other condition then and there existing; and no person shall drive any motor vehicle
upon a highway at such speed as to endanger the life, limb and property of any person,
nor at a speed greater than will permit him to bring the vehicle to a stop within the
assured clear distance ahead.30
Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time
of the mishap, he was violating any traffic regulation.31
Petitioner Tiu failed to
Overcome the presumption
Of negligence against him as
One engaged in the business
Of common carriage
The rules which common carriers should observe as to the safety of their passengers are set forth
in the Civil Code, Articles 1733,32 175533 and 1756.34 In this case, respondent Arriesgado and his
deceased wife contracted with petitioner Tiu, as owner and operator of D’ Rough Riders bus
service, for transportation from Maya, Daanbantayan, Cebu, to Cebu City for the price of
₱18.00.35 It is undisputed that the respondent and his wife were not safely transported to the
destination agreed upon. In actions for breach of contract, only the existence of such contract, and
the fact that the obligor, in this case the common carrier, failed to transport his passenger safely to
his destination are the matters that need to be proved.36 This is because under the said contract of
carriage, the petitioners assumed the express obligation to transport the respondent and his wife
to their destination safely and to observe extraordinary diligence with due regard for all
circumstances.37 Any injury suffered by the passengers in the course thereof is immediately
attributable to the negligence of the carrier.38 Upon the happening of the accident, the presumption
of negligence at once arises, and it becomes the duty of a common carrier to prove that he
observed extraordinary diligence in the care of his passengers.39 It must be stressed that in
requiring the highest possible degree of diligence from common carriers and in creating a
presumption of negligence against them, the law compels them to curb the recklessness of their
drivers.40
While evidence may be submitted to overcome such presumption of negligence, it must be shown
that the carrier observed the required extraordinary diligence, which means that the carrier must
show the utmost diligence of very cautious persons as far as human care and foresight can
provide, or that the accident was caused by fortuitous event.41 As correctly found by the trial court,
petitioner Tiu failed to conclusively rebut such presumption. The negligence of petitioner Laspiñas
as driver of the passenger bus is, thus, binding against petitioner Tiu, as the owner of the
passenger bus engaged as a common carrier.42
The Doctrine of
Last Clear Chance
Is Inapplicable in the
Case at Bar
Contrary to the petitioner’s contention, the principle of last clear chance is inapplicable in the
instant case, as it only applies in a suit between the owners and drivers of two colliding vehicles. It
does not arise where a passenger demands responsibility from the carrier to enforce its
contractual obligations, for it would be inequitable to exempt the negligent driver and its owner on
the ground that the other driver was likewise guilty of negligence.43 The common law notion of last
clear chance permitted courts to grant recovery to a plaintiff who has also been negligent provided
that the defendant had the last clear chance to avoid the casualty and failed to do so. Accordingly,
it is difficult to see what role, if any, the common law of last clear chance doctrine has to play in a
jurisdiction where the common law concept of contributory negligence as an absolute bar to
recovery by the plaintiff, has itself been rejected, as it has been in Article 2179 of the Civil Code. 44
Thus, petitioner Tiu cannot escape liability for the death of respondent Arriesgado’s wife due to the
negligence of petitioner Laspiñas, his employee, on this score.
Respondents Pedrano and
Condor were likewise
Negligent
In Phoenix Construction, Inc. v. Intermediate Appellate Court,45 where therein respondent Dionisio
sustained injuries when his vehicle rammed against a dump truck parked askew, the Court ruled
that the improper parking of a dump truck without any warning lights or reflector devices created
an unreasonable risk for anyone driving within the vicinity, and for having created such risk, the
truck driver must be held responsible. In ruling against the petitioner therein, the Court elucidated,
thus:
… In our view, Dionisio’s negligence, although later in point of time than the truck driver’s
negligence, and therefore closer to the accident, was not an efficient intervening or
Transpo Cases 3
independent cause. What the petitioners describe as an "intervening cause" was no more out the fundamental principle of law that a man must respond for the foreseeable consequences of
than a foreseeable consequence of the risk created by the negligent manner in which the his own negligent act or omission. Indeed, our law on quasi-delicts seeks to reduce the risks and
truck driver had parked the dump truck. In other words, the petitioner truck driver owed a burdens of living in society and to allocate them among its members. To accept this proposition
duty to private respondent Dionisio and others similarly situated not to impose upon them would be to weaken the very bonds of society.50
the very risk the truck driver had created. Dionisio’s negligence was not that of an
independent and overpowering nature as to cut, as it were, the chain of causation in fact The Liability of
between the improper parking of the dump truck and the accident, nor to sever the juris Respondent PPSII
vinculum of liability. … as Insurer

… The trial court in this case did not rule on the liability of respondent PPSII, while the appellate court
ruled that, as no evidence was presented against it, the insurance company is not liable.
We hold that private respondent Dionisio’s negligence was "only contributory," that the
"immediate and proximate cause" of the injury remained the truck driver’s "lack of due A perusal of the records will show that when the petitioners filed the Third-Party Complaint against
care."…46 respondent PPSII, they failed to attach a copy of the terms of the insurance contract itself. Only
Certificate of Cover No. 05494051 issued in favor of "Mr. William Tiu, Lahug, Cebu City" signed by
In this case, both the trial and the appellate courts failed to consider that respondent Pedrano was Cosme H. Boniel was appended to the third-party complaint. The date of issuance, July 22, 1986,
also negligent in leaving the truck parked askew without any warning lights or reflector devices to the period of insurance, from July 22, 1986 to July 22, 1987, as well as the following items, were
alert oncoming vehicles, and that such failure created the presumption of negligence on the part of also indicated therein:
his employer, respondent Condor, in supervising his employees properly and adequately. As we
ruled in Poblete v. Fabros:47
SCHEDULED VEHICLE
It is such a firmly established principle, as to have virtually formed part of the law itself,
that the negligence of the employee gives rise to the presumption of negligence on the MODEL MAKE TYPE OF COLOR BLT FILE NO.
part of the employer. This is the presumed negligence in the selection and supervision of Isuzu Forward BODY blue mixed
employee. The theory of presumed negligence, in contrast with the American doctrine of Bus
respondeat superior, where the negligence of the employee is conclusively presumed to
PLATE SERIAL/CHASSIS MOTOR NO. AUTHORIZED UNLADEN
be the negligence of the employer, is clearly deducible from the last paragraph of Article
NO. NO. 677836 CAPACITY WEIGHT
2180 of the Civil Code which provides that the responsibility therein mentioned shall
PBP-724 SER450-1584124 50 6 Cyls. Kgs.
cease if the employers prove that they observed all the diligence of a good father of a
family to prevent damages. …48
SECTION 1/11 *LIMITS OF LIABILITY PREMIUMS
₱50,000.00 PAID
The petitioners were correct in invoking respondent Pedrano’s failure to observe Article IV, Section A. THIRD PARTY LIABILITY ₱540.0052
34(g) of the Rep. Act No. 4136, which provides:1avvphil.net
B. PASSENGER LIABILITY Per Person Per Accident
(g) Lights when parked or disabled. – Appropriate parking lights or flares visible one ₱12,000.00 ₱50,000
hundred meters away shall be displayed at a corner of the vehicle whenever such vehicle
is parked on highways or in places that are not well-lighted or is placed in such manner as
to endanger passing traffic. In its Answer53 to the Third-Party Complaint, the respondent PPSII admitted the existence of the
contract of insurance, in view of its failure to specifically deny the same as required under then
Section 8(a), Rule 8 of the Rules of Court,54 which reads:
The manner in which the truck was parked clearly endangered oncoming traffic on both sides,
considering that the tire blowout which stalled the truck in the first place occurred in the wee hours
of the morning. The Court can only now surmise that the unfortunate incident could have been Sec. 8. How to contest genuineness of such documents. When an action or defense is
averted had respondent Condor, the owner of the truck, equipped the said vehicle with lights, founded upon a written instrument copied in or attached to the corresponding pleading as
flares, or, at the very least, an early warning device.49 Hence, we cannot subscribe to respondents provided in the preceding section, the genuineness and due execution of the instrument
Condor and Pedrano’s claim that they should be absolved from liability because, as found by the shall be deemed admitted unless the adverse party, under oath, specifically denies them,
trial and appellate courts, the proximate cause of the collision was the fast speed at which and sets forth what he claims to be the facts; but the requirement of an oath does not
petitioner Laspiñas drove the bus. To accept this proposition would be to come too close to wiping
Transpo Cases 3
apply when the adverse party does not appear to be a party to the instrument or when
compliance with an order for inspection of the original instrument is refused.
In fact, respondent PPSII did not dispute the existence of such contract, and admitted that it was
liable thereon. It claimed, however, that it had attended to and settled the claims of those injured
during the incident, and set up the following as special affirmative defenses:
Third party defendant Philippine Phoenix Surety and Insurance, Inc. hereby reiterates and
incorporates by way of reference the preceding paragraphs and further states THAT:-
8. It has attended to the claims of Vincent Canales, Asuncion Batiancila and
Neptali Palces who sustained injuries during the incident in question. In fact, it
settled financially their claims per vouchers duly signed by them and they duly
executed Affidavit[s] of Desistance to that effect, xerox copies of which are
hereto attached as Annexes 1, 2, 3, 4, 5, and 6 respectively;
9. With respect to the claim of plaintiff, herein answering third party defendant
through its authorized insurance adjuster attended to said claim. In fact, there
were negotiations to that effect. Only that it cannot accede to the demand of said
claimant considering that the claim was way beyond the scheduled indemnity as
per contract entered into with third party plaintiff William Tiu and third party
defendant (Philippine Phoenix Surety and Insurance, Inc.). Third party Plaintiff
William Tiu knew all along the limitation as earlier stated, he being an old hand in
the transportation business;55…
Considering the admissions made by respondent PPSII, the existence of the insurance contract
and the salient terms thereof cannot be dispatched. It must be noted that after filing its answer,
respondent PPSII no longer objected to the presentation of evidence by respondent Arriesgado
and the insured petitioner Tiu. Even in its Memorandum56 before the Court, respondent PPSII
admitted the existence of the contract, but averred as follows:
Petitioner Tiu is insisting that PPSII is liable to him for contribution, indemnification and/or
reimbursement. This has no basis under the contract. Under the contract, PPSII will pay
all sums necessary to discharge liability of the insured subject to the limits of liability but
not to exceed the limits of liability as so stated in the contract. Also, it is stated in the
contract that in the event of accident involving indemnity to more than one person, the
limits of liability shall not exceed the aggregate amount so specified by law to all persons
to be indemnified.57
As can be gleaned from the Certificate of Cover, such insurance contract was issued pursuant to
the Compulsory Motor Vehicle Liability Insurance Law. It was expressly provided therein that the
limit of the insurer’s liability for each person was ₱12,000, while the limit per accident was pegged
at ₱50,000. An insurer in an indemnity contract for third party liability is directly liable to the injured
party up to the extent specified in the agreement but it cannot be held solidarily liable beyond that
amount.58 The respondent PPSII could not then just deny petitioner Tiu’s claim; it should have paid
₱12,000 for the death of Felisa Arriesgado,59 and respondent Arriesgado’s hospitalization
expenses of ₱1,113.80, which the trial court found to have been duly supported by receipts. The
total amount of the claims, even when added to that of the other injured passengers which the
respondent PPSII claimed to have settled,60 would not exceed the ₱50,000 limit under the
insurance agreement.
Indeed, the nature of Compulsory Motor Vehicle Liability Insurance is such that it is primarily
intended to provide compensation for the death or bodily injuries suffered by innocent third parties
or passengers as a result of the negligent operation and use of motor vehicles. The victims and/or
their dependents are assured of immediate financial assistance, regardless of the financial
capacity of motor vehicle owners.61 As the Court, speaking through Associate Justice Leonardo A.
Quisumbing, explained in Government Service Insurance System v. Court of Appeals:62
However, although the victim may proceed directly against the insurer for indemnity, the
third party liability is only up to the extent of the insurance policy and those required by
law. While it is true that where the insurance contract provides for indemnity against
liability to third persons, and such persons can directly sue the insurer, the direct liability
of the insurer under indemnity contracts against third party liability does not mean that the
insurer can be held liable in solidum with the insured and/or the other parties found at
fault. For the liability of the insurer is based on contract; that of the insured carrier or
vehicle owner is based on tort. …
Obviously, the insurer could be held liable only up to the extent of what was provided for
by the contract of insurance, in accordance with the CMVLI law. At the time of the
incident, the schedule of indemnities for death and bodily injuries, professional fees and
other charges payable under a CMVLI coverage was provided for under the Insurance
Memorandum Circular (IMC) No. 5-78 which was approved on November 10, 1978. As
therein provided, the maximum indemnity for death was twelve thousand (₱12,000.00)
pesos per victim. The schedules for medical expenses were also provided by said IMC,
specifically in paragraphs (C) to (G).63
Damages to be
Awarded
The trial court correctly awarded moral damages in the amount of ₱50,000 in favor of respondent
Arriesgado. The award of exemplary damages by way of example or correction of the public
good,64 is likewise in order. As the Court ratiocinated in Kapalaran Bus Line v. Coronado:65
…While the immediate beneficiaries of the standard of extraordinary diligence are, of
course, the passengers and owners of cargo carried by a common carrier, they are not
the only persons that the law seeks to benefit. For if common carriers carefully observed
the statutory standard of extraordinary diligence in respect of their own passengers, they
cannot help but simultaneously benefit pedestrians and the passengers of other vehicles
who are equally entitled to the safe and convenient use of our roads and highways. The
law seeks to stop and prevent the slaughter and maiming of people (whether passengers
or not) on our highways and buses, the very size and power of which seem to inflame the
minds of their drivers. Article 2231 of the Civil Code explicitly authorizes the imposition of
exemplary damages in cases of quasi-delicts "if the defendant acted with gross
negligence."…66
Transpo Cases 3
The respondent Pedro A. Arriesgado, as the surviving spouse and heir of Felisa Arriesgado, is
entitled to indemnity in the amount of ₱50,000.00.67

The petitioners, as well as the respondents Benjamin Condor and Sergio Pedrano are jointly and
severally liable for said amount, conformably with the following pronouncement of the Court in
Fabre, Jr. vs. Court of Appeals:68

The same rule of liability was applied in situations where the negligence of the driver of
the bus on which plaintiff was riding concurred with the negligence of a third party who
was the driver of another vehicle, thus causing an accident. In Anuran v. Buño, Batangas
Laguna Tayabas Bus Co. v. Intermediate Appellate Court, and Metro Manila Transit
Corporation v. Court of Appeals, the bus company, its driver, the operator of the other
vehicle and the driver of the vehicle were jointly and severally held liable to the injured
passenger or the latter’s heirs. The basis of this allocation of liability was explained in
Viluan v. Court of Appeals, thus:

"Nor should it make difference that the liability of petitioner [bus owner] springs
from contract while that of respondents [owner and driver of other vehicle] arises
from quasi-delict. As early as 1913, we already ruled in Gutierrez vs. Gutierrez,
56 Phil. 177, that in case of injury to a passenger due to the negligence of the
driver of the bus on which he was riding and of the driver of another vehicle, the
drivers as well as the owners of the two vehicles are jointly and severally liable
for damages. Some members of the Court, though, are of the view that under the
circumstances they are liable on quasi-delict."69

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The Decision of the
Court of Appeals is AFFIRMED with MODIFICATIONS:

(1) Respondent Philippine Phoenix Surety and Insurance, Inc. and petitioner William Tiu
are ORDERED to pay, jointly and severally, respondent Pedro A. Arriesgado the total
amount of ₱13,113.80;

(2) The petitioners and the respondents Benjamin Condor and Sergio Pedrano are
ORDERED to pay, jointly and severally, respondent Pedro A. Arriesgado ₱50,000.00 as
indemnity; ₱26,441.50 as actual damages; ₱50,000.00 as moral damages; ₱50,000.00
as exemplary damages; and ₱20,000.00 as attorney’s fees.

SO ORDERED.
Transpo Cases 3
FIRST DIVISION
G.R. No. 145804 February 6, 2003
LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners,
vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT SECURITY
AGENCY, respondents.
DECISION
VITUG, J.:
The case before the Court is an appeal from the decision and resolution of the Court of Appeals,
promulgated on 27 April 2000 and 10 October 2000, respectively, in CA-G.R. CV No. 60720,
entitled "Marjorie Navidad and Heirs of the Late Nicanor Navidad vs. Rodolfo Roman, et. al.,"
which has modified the decision of 11 August 1998 of the Regional Trial Court, Branch 266, Pasig
City, exonerating Prudent Security Agency (Prudent) from liability and finding Light Rail Transit
Authority (LRTA) and Rodolfo Roman liable for damages on account of the death of Nicanor
Navidad.
On 14 October 1993, about half an hour past seven o’clock in the evening, Nicanor Navidad, then
drunk, entered the EDSA LRT station after purchasing a "token" (representing payment of the
fare). While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the
security guard assigned to the area approached Navidad. A misunderstanding or an altercation
between the two apparently ensued that led to a fist fight. No evidence, however, was adduced to
indicate how the fight started or who, between the two, delivered the first blow or how Navidad
later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by
petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was
killed instantaneously.
On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with her
children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the
Metro Transit Organization, Inc. (Metro Transit), and Prudent for the death of her husband. LRTA
and Roman filed a counterclaim against Navidad and a cross-claim against Escartin and Prudent.
Prudent, in its answer, denied liability and averred that it had exercised due diligence in the
selection and supervision of its security guards.
The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting
evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was negligent
in his assigned task. On 11 August 1998, the trial court rendered its decision; it adjudged:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendants
Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally the plaintiffs
the following:
"a) 1) Actual damages of P44,830.00;
2) Compensatory damages of P443,520.00;
3) Indemnity for the death of Nicanor Navidad in the sum of P50,000.00;
"b) Moral damages of P50,000.00;
"c) Attorney’s fees of P20,000;
"d) Costs of suit.
"The complaint against defendants LRTA and Rodolfo Roman are dismissed for lack of merit.
"The compulsory counterclaim of LRTA and Roman are likewise dismissed."1
Prudent appealed to the Court of Appeals. On 27 August 2000, the appellate court promulgated its
now assailed decision exonerating Prudent from any liability for the death of Nicanor Navidad and,
instead, holding the LRTA and Roman jointly and severally liable thusly:
"WHEREFORE, the assailed judgment is hereby MODIFIED, by exonerating the appellants from
any liability for the death of Nicanor Navidad, Jr. Instead, appellees Rodolfo Roman and the Light
Rail Transit Authority (LRTA) are held liable for his death and are hereby directed to pay jointly
and severally to the plaintiffs-appellees, the following amounts:
a) P44,830.00 as actual damages;
b) P50,000.00 as nominal damages;
c) P50,000.00 as moral damages;
d) P50,000.00 as indemnity for the death of the deceased; and
e) P20,000.00 as and for attorney’s fees."2
The appellate court ratiocinated that while the deceased might not have then as yet boarded the
train, a contract of carriage theretofore had already existed when the victim entered the place
where passengers were supposed to be after paying the fare and getting the corresponding token
therefor. In exempting Prudent from liability, the court stressed that there was nothing to link the
security agency to the death of Navidad. It said that Navidad failed to show that Escartin inflicted
fist blows upon the victim and the evidence merely established the fact of death of Navidad by
reason of his having been hit by the train owned and managed by the LRTA and operated at the
time by Roman. The appellate court faulted petitioners for their failure to present expert evidence
to establish the fact that the application of emergency brakes could not have stopped the train.
Transpo Cases 3
The appellate court denied petitioners’ motion for reconsideration in its resolution of 10 October
2000.
In their present recourse, petitioners recite alleged errors on the part of the appellate court; viz:
"I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED BY DISREGARDING THE
FINDINGS OF FACTS BY THE TRIAL COURT
"II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT PETITIONERS
ARE LIABLE FOR THE DEATH OF NICANOR NAVIDAD, JR.
"III.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT RODOLFO
ROMAN IS AN EMPLOYEE OF LRTA."3
Petitioners would contend that the appellate court ignored the evidence and the factual findings of
the trial court by holding them liable on the basis of a sweeping conclusion that the presumption of
negligence on the part of a common carrier was not overcome. Petitioners would insist that
Escartin’s assault upon Navidad, which caused the latter to fall on the tracks, was an act of a
stranger that could not have been foreseen or prevented. The LRTA would add that the appellate
court’s conclusion on the existence of an employer-employee relationship between Roman and
LRTA lacked basis because Roman himself had testified being an employee of Metro Transit and
not of the LRTA.
Respondents, supporting the decision of the appellate court, contended that a contract of carriage
was deemed created from the moment Navidad paid the fare at the LRT station and entered the
premises of the latter, entitling Navidad to all the rights and protection under a contractual relation,
and that the appellate court had correctly held LRTA and Roman liable for the death of Navidad in
failing to exercise extraordinary diligence imposed upon a common carrier.
Law and jurisprudence dictate that a common carrier, both from the nature of its business and for
reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the
safety of passengers.4 The Civil Code, governing the liability of a common carrier for death of or
injury to its passengers, provides:
"Article 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.
"Article 1756. In case of death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755."
"Article 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the former’s employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers.
"This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees."
"Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of
the willful acts or negligence of other passengers or of strangers, if the common carrier’s
employees through the exercise of the diligence of a good father of a family could have prevented
or stopped the act or omission."
The law requires common carriers to carry passengers safely using the utmost diligence of very
cautious persons with due regard for all circumstances.5 Such duty of a common carrier to provide
safety to its passengers so obligates it not only during the course of the trip but for so long as the
passengers are within its premises and where they ought to be in pursuance to the contract of
carriage.6 The statutory provisions render a common carrier liable for death of or injury to
passengers (a) through the negligence or wilful acts of its employees or b) on account of wilful
acts or negligence of other passengers or of strangers if the common carrier’s employees through
the exercise of due diligence could have prevented or stopped the act or omission. 7 In case of
such death or injury, a carrier is presumed to have been at fault or been negligent, and 8 by simple
proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the
carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to
an unforeseen event or to force majeure.9 In the absence of satisfactory explanation by the carrier
on how the accident occurred, which petitioners, according to the appellate court, have failed to
show, the presumption would be that it has been at fault,10 an exception from the general rule that
negligence must be proved.11
The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the
victim arises from the breach of that contract by reason of its failure to exercise the high diligence
required of the common carrier. In the discharge of its commitment to ensure the safety of
passengers, a carrier may choose to hire its own employees or avail itself of the services of an
outsider or an independent firm to undertake the task. In either case, the common carrier is not
relieved of its responsibilities under the contract of carriage.
Should Prudent be made likewise liable? If at all, that liability could only be for tort under the
provisions of Article 217612 and related provisions, in conjunction with Article 2180,13 of the Civil
Code. The premise, however, for the employer’s liability is negligence or fault on the part of the
employee. Once such fault is established, the employer can then be made liable on the basis of
the presumption juris tantum that the employer failed to exercise diligentissimi patris families in the
selection and supervision of its employees. The liability is primary and can only be negated by
showing due diligence in the selection and supervision of the employee, a factual matter that has
not been shown. Absent such a showing, one might ask further, how then must the liability of the
Transpo Cases 3
common carrier, on the one hand, and an independent contractor, on the other hand, be
described? It would be solidary. A contractual obligation can be breached by tort and when the
same act or omission causes the injury, one resulting in culpa contractual and the other in culpa
aquiliana, Article 219414 of the Civil Code can well apply.15 In fine, a liability for tort may arise even
under a contract, where tort is that which breaches the contract. 16 Stated differently, when an act
which constitutes a breach of contract would have itself constituted the source of a quasi-delictual
liability had no contract existed between the parties, the contract can be said to have been
breached by tort, thereby allowing the rules on tort to apply.17

Regrettably for LRT, as well as perhaps the surviving spouse and heirs of the late Nicanor
Navidad, this Court is concluded by the factual finding of the Court of Appeals that "there is
nothing to link (Prudent) to the death of Nicanor (Navidad), for the reason that the negligence of its
employee, Escartin, has not been duly proven x x x." This finding of the appellate court is not
without substantial justification in our own review of the records of the case.

There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable
act or omission, he must also be absolved from liability. Needless to say, the contractual tie
between the LRT and Navidad is not itself a juridical relation between the latter and Roman; thus,
Roman can be made liable only for his own fault or negligence.

The award of nominal damages in addition to actual damages is untenable. Nominal damages are
adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff
for any loss suffered by him.18 It is an established rule that nominal damages cannot co-exist with
compensatory damages.19

WHEREFORE, the assailed decision of the appellate court is AFFIRMED with MODIFICATION
but only in that (a) the award of nominal damages is DELETED and (b) petitioner Rodolfo Roman
is absolved from liability. No costs.

SO ORDERED.
Transpo Cases 3
SECOND DIVISION
G.R. No. 122039 May 31, 2000
VICENTE CALALAS, petitioner,
vs.
COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.
MENDOZA, J.:
This is a petition for review on certiorari of the decision1 of the Court of Appeals, dated March 31,
1991, reversing the contrary decision of the Regional Trial Court, Branch 36, Dumaguete City, and
awarding damages instead to private respondent Eliza Jujeurche Sunga as plaintiff in an action for
breach of contract of carriage.
The facts, as found by the Court of Appeals, are as follows:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G. 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. She sustained a
fracture of the "distal third of the left tibia-fibula with severe necrosis of the underlying skin."
Closed reduction of the fracture, long leg circular casting, and case wedging were done under
sedation. Her confinement in the hospital lasted from August 23 to September 7, 1989. Her
attending physician, Dr. Danilo V. Oligario, an orthopedic surgeon, certified she would remain on a
cast for a period of three months and would have to ambulate in crutches during said period.
On October 9, 1989, 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 Branch 37 of 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. The dispositive portion of its decision reads:
WHEREFORE, the decision appealed from is hereby REVERSED and SET
ASIDE, and another one is entered ordering defendant-appellee Vicente Calalas
to pay plaintiff-appellant:
(1) P50,000.00 as actual and compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorney's fees; and
(4) P1,000.00 as expenses of litigation; and
(5) to pay the costs.
SO ORDERED.
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.
The petition has no merit.
The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and the
owner of the truck liable for quasi-delict ignores the fact that she was never a party to that case
and, therefore, the principle of res judicata does not apply.
Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil
Case No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for the
damage caused to petitioner's jeepney. On the other hand, the issue in this case is whether
petitioner is liable on his contract of carriage. The first, quasi-delict, also known as culpa aquiliana
or culpa extra contractual, has as its source the negligence of the tortfeasor. The second, breach
of contract or culpa contractual, is premised upon the negligence in the performance of a
contractual obligation.
Transpo Cases 3
Consequently, 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. 2 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.
There is, thus, 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 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. It provides:
Art. 1733. Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance over
the goods and for the safety of the passengers transported by them, according to
all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed
in articles 1734, 1735, and 1746, Nos. 5, 6, and 7, while the extraordinary
diligence for the safety of the passengers is further set forth in articles 1755 and
1756.
Art. 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances.
Art. 1756. In case of death of or injuries to passengers, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence as prescribed by articles 1733 and
1755.
In the case at bar, upon the happening of the accident, the presumption of negligence at once
arose, and it became the duty of petitioner to prove that he had to observe extraordinary diligence
in the care of his passengers.
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. Several factors militate against
petitioner's contention.
First, as found by the Court of Appeals, 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. This is a violation of the R.A. No. 4136, as amended, or the Land
Transportation and Traffic Code, which provides:
Sec. 54. Obstruction of Traffic. — No person shall drive his motor vehicle in such
a manner as to obstruct or impede the passage of any vehicle, nor, while
discharging or taking on passengers or loading or unloading freight, obstruct the
free passage of other vehicles on the highway.
Second, it is undisputed that petitioner's driver took in more passengers than the allowed seating
capacity of the jeepney, a violation of §32(a) of the same law. It provides:
Exceeding registered capacity. — No person operating any motor vehicle shall
allow more passengers or more freight or cargo in his vehicle than its registered
capacity.
The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to
which the other passengers were exposed. Therefore, not only was petitioner unable to overcome
the presumption of negligence imposed on him for the injury sustained by Sunga, but also, the
evidence shows he was actually negligent in transporting passengers.
We find it hard to give serious thought to petitioner's contention that Sunga's taking an "extension
seat" amounted to an implied assumption of risk. It is akin to arguing that the injuries to the many
victims of the tragedies in our seas should not be compensated merely because those passengers
assumed a greater risk of drowning by boarding an overloaded ferry. This is also true of
petitioner's contention that the jeepney being bumped while it was improperly parked
constitutes caso fortuito. A caso fortuito is an event which could not be foreseen, or which, though
foreseen, was inevitable.3 This requires that the following requirements be present: (a) the cause
of the breach is independent of the debtor's will; (b) the event is unforeseeable or unavoidable; (c)
the event is such as to render it impossible for the debtor to fulfill his obligation in a normal
manner, and (d) the debtor did not take part in causing the injury to the
creditor.4 Petitioner should have foreseen the danger of parking his jeepney with its body
protruding two meters into the highway.
Finally, petitioner challenges the award of moral damages alleging that it is excessive and without
basis in law. We find this contention well taken.
In awarding moral damages, the Court of Appeals stated:
Plaintiff-appellant at the time of the accident was a first-year college student in
that school year 1989-1990 at the Silliman University, majoring in Physical
Education. Because of the injury, she was not able to enroll in the second
Transpo Cases 3
semester of that school year. She testified that she had no more intention of
continuing with her schooling, because she could not walk and decided not to
pursue her degree, major in Physical Education "because of my leg which has a
defect already."

Plaintiff-appellant likewise testified that even while she was under confinement,
she cried in pain because of her injured left foot. As a result of her injury, the
Orthopedic Surgeon also certified that she has "residual bowing of the fracture
side." She likewise decided not to further pursue Physical Education as her major
subject, because "my left leg . . . has a defect already."

Those are her physical pains and moral sufferings, the inevitable bedfellows of
the injuries that she suffered. Under Article 2219 of the Civil Code, she is entitled
to recover moral damages in the sum of P50,000.00, which is fair, just and
reasonable.

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. 5 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. 2220.6

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. Sunga's contention that petitioner's admission in open court that the driver of the jeepney
failed to assist her in going to a nearby hospital cannot be construed as an admission of bad faith.
The fact that it was the driver of the Isuzu truck who took her to the hospital does not imply that
petitioner was utterly indifferent to the plight of his injured passenger. If at all, it is merely implied
recognition by Verena that he was the one at fault for the accident.

WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its resolution,
dated September 11, 1995, are AFFIRMED, with the MODIFICATION that the award of moral
damages is DELETED.

SO ORDERED.
Transpo Cases 3
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-22985 January 24, 1968
BATANGAS TRANSPORTATION COMPANY, petitioner,
vs.
GREGORIO CAGUIMBAL, PANCRACIO CAGUIMBAL, MARIA MARANAN DE CAGUIMBAL,
BIÑAN TRANSPORTATION COMPANY and MARCIANO ILAGAN, respondents.
Ozaeta, Gibbs and Ozaeta and Domingo E. de Lara for petitioner.
Victoriano H. Endaya for respondents.
CONCEPCION, C.J.:
Appeal by certiorari from a decision of the Court of Appeals.
The main facts are set forth in said decision from which we quote:
There is no dispute at all that the deceased Pedro Caguimbal, Barrio Lieutenant of Barrio
Calansayan, San Jose, Batangas, was a paying passenger of BTCO bus, with plate TPU-
507, going south on its regular route from Calamba, Laguna, to Batangas, Batangas,
driven by Tomas Perez, its regular driver, at about 5:30 o'clock on the early morning of
April 25, 1954. The deceased's destination was his residence at Calansayan, San Jose,
Batangas. The bus of the Biñan Transportation Company, bearing plate TPU-820, driven
by Marciano Ilagan, was coming from the opposite direction (north-bound). Along the
national highway at Barrio Daraza, Tanauan, Batangas, on the date and hour above
indicated, a horse-driven rig (calesa) managed by Benito Makahiya, which was then
ahead of the Biñan bus, was also coming from the opposite direction, meaning
proceeding towards the north. As to what transpired thereafter, the lower court chose to
give more credence to defendant Batangas Transportation Company's version which, in
the words of the Court a quo, is as follows: "As the BTCO bus was nearing a house, a
passenger requested the conductor to stop as he was going to alight, and when he heard
the signal of the conductor, the driver Tomas Perez slowed down his bus swerving it
farther to the right in order to stop; at this juncture, a calesa, then driven by Benito
Makahiya was at a distance of several meters facing the BTCO bus coming from the
opposite direction; that at the same time the Biñan bus was about 100 meters away
likewise going northward and following the direction of the calesa; that upon seeing the
Biñan bus the driver of the BTCO bus dimmed his light as established by Magno Ilaw, the
very conductor of the Biñan bus at the time of the accident; that as the calesa and the
BTCO bus were passing each other from the opposite directions, the Biñan bus following
the calesa swerved to its left in an attempt to pass between the BTCO bus and
the calesa; that without diminishing its speed of about seventy (70) kilometers an hour,
the Biñan bus passed through the space between the BTCO bus and the calesa hitting
first the left side of the BTCO bus with the left front corner of its body and then bumped
and struck the calesa which was completely wrecked; that the driver was seriously injured
and the horse was killed; that the second and all other posts supporting the top of the left
side of the BTCO bus were completely smashed and half of the back wall to the left was
ripped open. (Exhibits 1 and 2). The BTCO bus suffered damages for the repair of its
damaged portion.
As a consequence of this occurrence, two (2) passengers of BTCO died, namely, Pedro
Caguimbal and Guillermo Tolentino, apart from others who were injured. The widow and children
of Caguimbal instituted the present action, which was tried jointly with a similar action of the
Tolentinos, to recover damages from the Batangas Transportation Company, hereinafter referred
to as BTCO. The latter, in turn, filed a third-party complaint against the Biñan Transportation
Company — hereinafter referred to as Biñan — and its driver, Marciano Ilagan. Subsequently, the
Caguimbals amended their complaint, to include therein, as defendants, said Biñan and Ilagan.
After appropriate proceedings, the Court of First Instance of Batangas rendered a decision
dismissing the complaint insofar as the BTCO is concerned, without prejudice to plaintiff's right to
sue Biñan — which had stopped participating in the proceedings herein, owing apparently, to a
case in the Court of First Instance of Laguna for the insolvency of said enterprise — and Ilagan,
and without pronouncement as to costs.
On appeal taken by the Caguimbals, the Court of Appeals reversed said decision and rendered
judgment for them, sentencing the BTCO, Biñan and Ilagan to, jointly and severally, pay to the
plaintiffs the aggregate sum of P10,500.00 1 and the costs in both instances. Hence, this appeal by
BTCO, upon the ground that the Court of Appeals erred: 1) in finding said appellant liable for
damages; and 2) in awarding attorney's fees.
In connection with the first assignment of error, we note that the recklessness of defendant was,
manifestly, a major factor in the occurrence of the accident which resulted, inter alia, in the death
of Pedro Caguimbal. Indeed, as driver of the Biñan bus, he overtook Benito Makahiya's horse-
driven rig or calesa and passed between the same and the BTCO bus despite the fact that the
space available was not big enough therefor, in view of which the Biñan bus hit the left side of the
BTCO bus and then the calesa. This notwithstanding, the Court of Appeals rendered judgment
against the BTCO upon the ground that its driver, Tomas Perez, had failed to exercise the
"extraordinary diligence," required in Article 1733 of the new Civil Code, "in the vigilance for the
safety" of his passengers. 2
The record shows that, in order to permit one of them to disembark, Perez drove his BTCO bus
partly to the right shoulder of the road and partly on the asphalted portion thereof. Yet, he could
have and should have seen to it — had he exercised "extraordinary diligence" — that his bus was
completely outside the asphalted portion of the road, and fully within the shoulder thereof, the
width of which being more than sufficient to accommodate the bus. He could have and should
have done this, because, when the aforementioned passenger expressed his wish to alight from
the bus, Ilagan had seen the aforementioned "calesa", driven by Makahiya, a few meters away,
coming from the opposite direction, with the Biñan bus about 100 meters behind the rig cruising at
a good speed. 3 When Perez slowed down his BTCO bus to permit said passenger to disembark,
he must have known, therefore, that the Biñan bus would overtake the calesa at about the time
when the latter and BTCO bus would probably be on the same line, on opposite sides of the
Transpo Cases 3
asphalted portions of the road, and that the space between the BTCO bus and the "calesa" would
not be enough to allow the Biñan bus to go through. It is true that the driver of the Biñan bus
should have slowed down or stopped, and, hence, was reckless in not doing so; but, he had no
especial obligations toward the passengers of the BTCO unlike Perez whose duty was to exercise
"utmost" or "extraordinary" diligence for their safety. Perez was thus under obligation to avoid a
situation which would be hazardous for his passengers, and, make their safety dependent upon
the diligence of the Biñan driver. Such obligation becomes more patent when we considered the
fact — of which the Court may take judicial cognizance — that our motor vehicle drivers,
particularly those of public service utilities, have not distinguished themselves for their concern
over the safety, the comfort or the convenience of others. Besides, as correctly stated in the
syllabus to Brito Sy vs. Malate Taxicab & Garage, Inc., 4

In an action based on a contract of carriage, the court need not make an express finding
of fault or negligence on the part of the carrier in order to hold it responsible to pay the
damages sought for by the passenger. By the contract of carriage, the carrier assumes
the express obligation to transport the passenger to his destination safely and to observe
extraordinary diligence with a due regard for all the circumstances, and any injury that
might be suffered by the passenger is right away attributable to the fault or negligence of
the carrier (Article 1756, new Civil Code). This is an exception to the general rule that
negligence must be proved, and it is therefore incumbent upon the carrier to prove that it
has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the new
Civil Code.

In the case at bar, BTCO has not proven the exercise of extraordinary diligence on its part. For
this reason, the case of Isaac vs. A. L. Ammen Trans. Co., Inc. 5 relied upon by BTCO, is not in
point, for, in said case, the public utility driver had done everything he could to avoid the accident,
and could not have possibly avoided it, for he "swerved the bus to the very extreme right of the
road," which the driver, in the present case, had failed to do.

As regards the second assignment of error, appellant argues that the award of attorney's fees is
not authorized by law, because, of the eleven (11) cases specified in Article 1208 of the new Civil
Code, only the fifth and the last are relevant to the one under consideration; but the fifth case
requires bad faith, which does not exist in the case at bar. As regards the last case, which permits
the award, "where the court deems it just and equitable that attorney's fees . . . should be
recovered," it is urged that the evidence on record does not show the existence of such just and
equitable grounds.

We, however, believe otherwise, for: (1) the accident in question took place on April 25, 1954, and
the Caguimbals have been constrained to litigate for over thirteen (13) years to vindicate their
rights; and (2) it is high time to impress effectively upon public utility operators the nature and
extent of their responsibility in respect of the safety of their passengers and their duty to exercise
greater care in the selection of drivers and conductor and in supervising the performance of their
duties, in accordance, not only with Article 1733 of the Civil Code of the Philippines, but, also, with
Articles 1755 and 1756 thereof 6 and the spirit of these provisions, as disclosed by the letter
thereof, and elucidated by the Commission that drafted the same. 7

WHEREFORE, the decision appealed from, should be, as it is hereby, affirmed, with the costs of
this instance against appellant Batangas Transportation Company.
Transpo Cases 3
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-30309 November 25, 1983
CLEMENTE BRIÑAS, petitioner,
vs.
THE PEOPLE OF THE PHILIPPINES and HONORABLE COURT OF APPEALS, respondents.
Mariano R. Abad for petitioner.
The Solicitor General for respondents.
GUTIERREZ, JR., J.:
This is a petition to review the decision of respondent Court of Appeals, now Intermediate
Appellate Court, affirming the decision of the Court of First Instance of Quezon, Ninth Judicial
District, Branch 1, which found the accused Clemente Briñas guilty of the crime of DOUBLE
HOMICIDE THRU RECKLESS IMPRUDENCE prior the deaths of Martina Bool and Emelita
Gesmundo.
The information charged the accused-appellant. and others as follows:
That on or about the 6th day of January, 1957, in the Municipality of Tiaong, Province of Quezon,
Philippines, and within the jurisdiction of this Hon. Court, the said accused Victor Milan, Clemente
Briñas and Hermogenes Buencamino, being then persons in charge of passenger Train No. 522-6
of the Manila Railroad Company, then running from Tagkawayan to San Pablo City, as engine
driver, conductor and assistant conductor, respectively, wilfully and unlawfully drove and operated
the same in a negligent, careless and imprudent manner, without due regard to existing laws,
regulations and ordinances, that although there were passengers on board the passenger coach,
they failed to provide lamps or lights therein, and failed to take the necessary precautions for the
safety of passengers and to prevent accident to persons and damage to property, causing by such
negligence, carelessness and imprudence, that when said passenger Train No. 522-6 was
passing the railroad tracks in the Municipality of Tiaong, Quezon, two of its passengers, Martina
Bool, an old woman, and Emelita Gesmundo, a child about three years of age, fell from the
passenger coach of the said train, as a result of which, they were over run, causing their
instantaneous death. "
The facts established by the prosecution and accepted by the respondent court as basis for the
decision are summarized as follows:
The evidence of the prosecution tends to show that in the afternoon of January 6, 1957, Juanito
Gesmundo bought a train ticket at the railroad station in Tagkawayan, Quezon for his 55-year old
mother Martina Bool and his 3-year old daughter Emelita Gesmundo, who were bound for Barrio
Lusacan, Tiaong, same province. At about 2:00 p.m., Train No. 522 left Tagkawayan with the old
woman and her granddaughter among the passengers. At Hondagua the train's complement were
relieved, with Victor Millan taking over as engineman, Clemente Briñas as conductor, and
Hermogenes Buencamino as assistant conductor. Upon approaching Barrio Lagalag in Tiaong at
about 8:00 p.m. of that same night, the train slowed down and the conductor shouted 'Lusacan',
'Lusacan'. Thereupon, the old woman walked towards the left front door facing the direction of
Tiaong, carrying the child with one hand and holding her baggage with the other. When Martina
and Emelita were near the door, the train suddenly picked up speed. As a result the old woman
and the child stumbled and they were seen no more. It took three minutes more before the train
stopped at the next barrio, Lusacan, and the victims were not among the passengers who
disembarked thereat .têñ.£îhqwâ£
Next morning, the Tiaong police received a report that two corpses were found
along the railroad tracks at Barrio Lagalag. Repairing to the scene to investigate,
they found the lifeless body of a female child, about 2 feet from the railroad
tracks, sprawled to the ground with her belly down, the hand resting on the
forehead, and with the back portion of the head crushed. The investigators also
found the corpse of an old woman about 2 feet away from the railroad tracks with
the head and both legs severed and the left hand missing. The head was located
farther west between the rails. An arm was found midway from the body of the
child to the body of the old woman. Blood, pieces of scattered brain and pieces of
clothes were at the scene. Later, the bodies were Identified as those of Martina
Bool and Emelita Gesmundo. Among the personal effects found on Martina was
a train ticket (Exhibits "B").
On January 7, 1957, the bodies of the deceased were autopsied by Dr. Pastor Huertas, the
Municipal Health Officer of Tiaong. Dr. Huertas testified on the cause of death of the victims as
follows: têñ.£îhqwâ£
FISCAL YNGENTE:
Q What could have caused the death of those women?
A Shock.
Q What could have caused that shock?
A Traumatic injury.
Q What could have caused traumatic injury?
A The running over by the wheel of the train.
Transpo Cases 3
Q With those injuries, has a person a chance to survive?
A No chance to survive.
Q What would you say death would come?
A Instantaneous.
Q How about the girl, the young girl about four years old, what
could have caused the death?
A Shock too.
Q What could have caused the shock?
A Compound fracture of the skull and going out of the brain.
Q What could have caused the fracture of the skull and the
going out of the brain?
A That is the impact against a steel object. (TSN., pp. 81-82,
July 1, 1959)
The Court of First Instance of Quezon convicted defendant-appellant Clemente Briñas for double
homicide thru reckless imprudence but acquitted Hermogenes Buencamino and Victor Millan The
dispositive portion of the decision reads: têñ.£îhqwâ£
WHEREFORE, the court finds the defendant Clemente Briñas guilty beyond
doubt of the crime of double homicide thru reckless imprudence, defined and
punished under Article 305 in connection with Article 249 of the Revised Penal
Code, and sentences him to suffer six (6) months and one (1) day of prision
correccional to indemnify the heirs of the deceased Martina Bool and Emelita
Gesmundo in the amounts of P6,000 and P3,000, respectively, with subsidiary
imprisonment in case of insolvency not to exceed one-third of the principal
penalty, and to pay the costs.
For lack of sufficient evidence against the defendant Hermogenes Buencamino
and on the ground of reasonable doubt in the case of defendant Victor Millan the
court hereby acquits them of the crime charged in the information and their bail
bonds declared cancelled.
As to the responsibility of the Manila Railroad Company in this case, this will be
the subject of court determination in another proceeding.
On appeal, the respondent Court of Appeals affirmed the judgment of the lower court.
During the pendency of the criminal prosecution in the Court of First Instance of Quezon, the heirs
of the deceased victims filed with the same court, a separate civil action for damages against the
Manila Railroad Company entitled "Civil Case No. 5978, Manaleyo Gesmundo, et al., v. Manila
Railroad Company". The separate civil action was filed for the recovery of P30,350.00 from the
Manila Railroad Company as damages resulting from the accident.
The accused-appellant alleges that the Court of Appeals made the following errors in its decision:
I têñ.£îhqwâ£
THE HONORABLE COURT OF APPEALS ERRED IN CONVICTING
PETITIONER-APPELLANT UNDER THE FACTS AS FOUND BY SAID COURT;
and
II têñ.£îhqwâ£
THE HONORABLE COURT OF APPEALS ERRED IN INCLUDING THE
PAYMENT OF DEATH INDEMNITY BY THE PETITIONER- APPELLANT, WITH
SUBSIDIARY IMPRISONMENT IN CASE OF INSOLVENCY, AFTER THE
HEIRS OF THE DECEASED HAVE ALREADY COMMENCED A SEPARATE
CIVIL ACTION FOR DAMAGES AGAINST THE RAILROAD COMPANY
ARISING FROM THE SAME MISHAP.
We see no error in the factual findings of the respondent court and in the conclusion drawn from
those findings.
It is undisputed that the victims were on board the second coach where the petitioner-appellant
was assigned as conductor and that when the train slackened its speed and the conductor
shouted "Lusacan, Lusacan", they stood up and proceeded to the nearest exit. It is also
undisputed that the train unexpectedly resumed its regular speed and as a result "the old woman
and the child stumbled and they were seen no more.
In finding petitioner-appellant negligent, respondent Court têñ.£îhqwâ£
xxx xxx xxx
The appellant's announcement was premature and erroneous, for it took a full
three minutes more before the next barrio of Lusacan was reached. In making
the erroneous and premature announcement, appellant was negligent. He ought
to have known that train passengers invariably prepare to alight upon notice from
the conductor that the destination was reached and that the train was about to
stop. Upon the facts, it was the appellant's negligent act which led the victims to
the door. Said acts virtually exposed the victims to peril, for had not the appellant
mistakenly made the announcement, the victims would be safely ensconced in
their seats when the train jerked while picking up speed, Although it might be
argued that the negligent act of the appellant was not the immediate cause of, or
Transpo Cases 3
the cause nearest in time to, the injury, for the train jerked before the victims
stumbled, yet in legal contemplation appellant's negligent act was the proximate
cause of the injury. As this Court held in Tucker v. Milan, CA G.R. No. 7059-R,
June 3, 1953: 'The proximate cause of the injury is not necessarily the immediate
cause of, or the cause nearest in time to, the injury. It is only when the causes
are independent of each other that the nearest is to be charged with the disaster.
So long as there is a natural, direct and continuous sequence between the
negligent act the injury (sic) that it can reasonably be said that but for the act the
injury could not have occurred, such negligent act is the proximate cause of the
injury, and whoever is responsible therefore is liable for damages resulting
therefrom. One who negligently creates a dangerous condition cannot escape
liability for the natural and probable consequences thereof, although the act of a
third person, or an act of God for which he is not responsible intervenes to
precipitate the loss.
xxx xxx xxx
It is a matter of common knowledge and experience about common carriers like trains and buses
that before reaching a station or flagstop they slow down and the conductor announces the name
of the place. It is also a matter of common experience that as the train or bus slackens its speed,
some passengers usually stand and proceed to the nearest exit, ready to disembark as the train or
bus comes to a full stop. This is especially true of a train because passengers feel that if the train
resumes its run before they are able to disembark, there is no way to stop it as a bus may be
stopped.
It was negligence on the conductor's part to announce the next flag stop when said stop was still a
full three minutes ahead. As the respondent Court of Appeals correctly observed, "the appellant's
announcement was premature and erroneous.
That the announcement was premature and erroneous is shown by the fact that immediately after
the train slowed down, it unexpectedly accelerated to full speed. Petitioner-appellant failed to
show any reason why the train suddenly resumed its regular speed. The announcement was
made while the train was still in Barrio Lagalag.
The proximate cause of the death of the victims was the premature and erroneous announcement
of petitioner' appelant Briñas. This announcement prompted the victims to stand and proceed to
the nearest exit. Without said announcement, the victims would have been safely seated in their
respective seats when the train jerked as it picked up speed. The connection between the
premature and erroneous announcement of petitioner-appellant and the deaths of the victims is
direct and natural, unbroken by any intervening efficient causes.
Petitioner-appellant also argues that it was negligence per se for Martina Bool to go to the door of
the coach while the train was still in motion and that it was this negligence that was the proximate
cause of their deaths.
We have carefully examined the records and we agree with the respondent court that the
negligence of petitioner-appellant in prematurely and erroneously announcing the next flag stop
was the proximate cause of the deaths of Martina Bool and Emelita Gesmundo. Any negligence of
the victims was at most contributory and does not exculpate the accused from criminal liability.
With respect to the second assignment of error, the petitioner argues that after the heirs of Martina
Bool and Emelita Gesmundo had actually commenced the separate civil action for damages in the
same trial court during the pendency of the criminal action, the said court had no more power to
include any civil liability in its judgment of conviction.
The source of the obligation sought to be enforced in Civil Case No. 5978 is culpa contractual, not
an act or omission punishable by law. We also note from the appellant's arguments and from the
title of the civil case that the party defendant is the Manila Railroad Company and not petitioner-
appellant Briñas Culpa contractual and an act or omission punishable by law are two distinct
sources of obligation.
The petitioner-appellant argues that since the information did not allege the existence of any kind
of damages whatsoever coupled by the fact that no private prosecutors appeared and the
prosecution witnesses were not interrogated on the issue of damages, the trial court erred in
awarding death indemnity in its judgment of conviction.
A perusal of the records clearly shows that the complainants in the criminal action for double
homicide thru reckless imprudence did not only reserve their right to file an independent civil
action but in fact filed a separate civil action against the Manila Railroad Company.
The trial court acted within its jurisdiction when, despite the filing with it of the separate civil action
against the Manila Railroad Company, it still awarded death indemnity in the judgment of
conviction against the petitioner-appellant.
It is well-settled that when death occurs as a result of the commission of a crime, the following
items of damages may be recovered: (1) an indemnity for the death of the victim; (2) an indemnity
for loss of earning capacity of the deceased; (3) moral damages; (4) exemplary damages; (5)
attorney's fees and expenses of litigation, and (6) interest in proper cases.
The indemnity for loss of earning capacity, moral damages, exemplary damages, attorney's fees,
and interests are recoverable separately from and in addition to the fixed slim of P12,000.00
corresponding to the indemnity for the sole fact of death. This indemnity arising from the fact of
death due to a crime is fixed whereas the others are still subject to the determination of the court
based on the evidence presented. The fact that the witnesses were not interrogated on the issue
of damages is of no moment because the death indemnity fixed for death is separate and distinct
from the other forms of indemnity for damages.
WHEREFORE, the judgment appealed from is modified in that the award for death indemnity is
increased to P12,000.00 for the death of Martina Bool instead of P6,000.00 and P12,000.00 for
the death of Emelita Gesmundo instead of P3,000.00, but deleting the subsidiary imprisonment in
case of insolvency imposed by the lower court. The judgment is AFFIRMED in all other respects.
SO ORDERED
Transpo Cases 3
FIRST DIVISION
July 27, 2016
G.R. No. 172682
SULPICIO LINES, INC., Petitioner
vs.
NAPOLEON SESANTE, NOW SUBSTITUTED BY MARIBEL ATILANO, KRISTEN MARIE,
CHRISTIAN IONE, KENNETH KERRN AND KARISNA KATE, ALL SURNAMED SESANTE,
Respondents
DECISION
BERSAMIN, J.:
Moral damages are meant to enable the injured party to obtain the means, diversions or
amusements in order to alleviate the moral suffering. Exemplary damages are designed to permit
the courts to reshape behavior that is socially deleterious in its consequence by creating negative
incentives or deterrents against such behavior.
The Case
This appeal seeks to undo and reverse the adverse decision promulgated on June 27,
2005,1 whereby the Court of Appeals (CA) affirmed with modification the judgment of the Regional
Trial Court (RTC), Branch 91, in Quezon City holding the petitioner liable to pay temperate and
moral damages due to breach of contract of carriage.2
Antecedents
On September 18, 1998, at around 12:55 p.m., the M/V Princess of the Orient, a passenger vessel
owned and operated by the petitioner, sank near Fortune Island in Batangas. Of the 388 recorded
passengers, 150 were lost.3 Napoleon Sesante, then a member of the Philippine National Police
(PNP) and a lawyer, was one of the passengers who survived the sinking. He sued the petitioner
for breach of contract and damages.4
Sesante alleged in his complaint that the M/V Princess of the Orient left the Port of Manila while
Metro Manila was experiencing stormy weather; that at around 11:00 p.m., he had noticed the
vessel listing starboard, so he had gone to the uppermost deck where he witnessed the strong
winds and big waves pounding the vessel; that at the same time, he had seen how the
passengers had been panicking, crying for help and frantically scrambling for life jackets in the
absence of the vessel's officers and crew; that sensing danger, he had called a certain Veney
Ceballos through his cellphone to request him to inform the proper authorities of the situation; that
thereafter, big waves had rocked the vessel, tossing him to the floor where he was pinned by a
long steel bar; that he had freed himself only after another wave had hit the vessel; 5 that he had
managed to stay afloat after the vessel had sunk, and had been carried by the waves to the
coastline of Cavite and Batangas until he had been rescued; that he had suffered tremendous
hunger, thirst, pain, fear, shock, serious anxiety and mental anguish; that he had sustained
injuries,6 and had lost money, jewelry, important documents, police uniforms and the .45 caliber
pistol issued to him by the PNP; and that because it had committed bad faith in allowing the vessel
to sail despite the storm signal, the petitioner should pay him actual and moral damages of
₱500,000.00 and ₱l,000,000.00, respectively.7
In its defense, the petitioner insisted on the seaworthiness of the M/V Princess of the Orient due to
its having been cleared to sail from the Port of Manila by the proper authorities; that the sinking
had been due to force majeure; that it had not been negligent; and that its officers and crew had
also not been negligent because they had made preparations to abandon the "'vessel because
they had launched life rafts and had provided the passengers assistance in that regard.8
Decision of the RTC
On October 12, 2001, the RTC rendered its judgment in favor of the respondent,9 holding as
follows:
WHEREFORE, judgment is hereby rendered in favor of plaintiff Napoleon Sesante and against
defendant Sulpicio Lines, Inc., ordering said defendant to pay plaintiff:
1. Temperate damages in the amount of ₱400,000.00;
2. Moral damages in the amount of One Million Pesos (₱l ,000,000.00);
3. Costs of suit.
SO ORDERED.10
The RTC observed that the petitioner, being negligent, was liable to Sesante pursuant to Articles
1739 and 1759 of the Civil Code; that the petitioner had not established its due diligence in the
selection and supervision of the vessel crew; that the ship officers had failed to inspect the
stowage of cargoes despite being aware of the storm signal; that the officers and crew of the
vessel had not immediately sent a distress signal to the Philippine Coast Guard; that the ship
captain had not called for then "abandon ship" protocol; and that based on the report of the Board
of Marine Inquiry (BMI), the erroneous maneuvering of the vessel by the captain during the
extreme weather condition had been the immediate and proximate cause of the sinking.
The petitioner sought reconsideration, but the RTC only partly granted its motion by reducing the
temperate damages from ₱500,000.00 to ₱300,000.00.11
Dissatisfied, the petitioner appealed.12 It was pending the appeal in the CA when Sesante passed
away. He was substituted by his heirs.13
Judgment of the CA
Transpo Cases 3
On June 27, 2005, the CA promulgated its assailed decision. It lowered the temperate damages to
₱120,000.00, which approximated the cost of Sesante's lost personal belongings; and held that
despite the seaworthiness of the vessel, the petitioner remained civilly liable because its officers
and crew had been negligent in performing their duties.14
Sttill aggrieved, Sulpicio Lines moved for reconsideration, but the CA denied the motion. 15
Hence, this appeal.
Issues
The petitioner attributes the following errors to the CA, to wit:
I I
THE ASSAILED DECISION ERRED IN SUSTAINING THE AWARD OF MORAL DAMAGES, AS
THE INSTANT CASE IS FOR ALLEGED PERSONAL INJURIES PREDICATED ON BREACH OF
CONTRACT OF CARRIAGE, AND THERE BEING NO PROOF OF BAD FAITH ON THE PART
OF SULPICIO
II
THE ASSAILED DECISION ERRED IN SUSTAINING THE AMOUNT OF MORAL DAMAGES
AWARDED, THE SAME BEING UNREASONABLE, EXCESSIVE AND UNCONSCIONABLE,
AND TRANSLATES TO UNJUST ENRICHMENT AGAINST SULPICIO
III
THE ASSAILED DECISION ERRED IN SUSTAINING THE AWARD OF TEMPERATE DAMAGES
AS THE SAME CANNOT SUBSTITUTE FOR A FAILED CLAIM FOR ACTUAL DAMAGES,
THERE BEING NO COMPETENT PROOF TO WARRANT SAID AWARD
IV
THE AWARD OF TEMPERATE DAMAGES IS UNTENABLE AS THE REQUISITE NOTICE
UNDER THE LAW WAS NOT GIVEN TO SULPICIO IN ORDER TO HOLD IT LIABLE FOR THE
ALLEGED LOSS OF SESANTE'S PERSONAL BELONGINGS
V xxxx
THE ASSAILED DECISION ERRED IN SUBSTITUTING THE HEIRS OF RESPONDENT
SESANTE IN THE INST ANT CASE, THE SAME BEING A PERSONAL ACTION WHICH DOES
NOT SURVIVE
VI
THE ASSAILED DECISION ERRED IN APPLYING ARTICLE 1759 OF THE NEW CIVIL CODE
AGAINST SULPICIO SANS A CLEAR-CUT FINDING OF SULPICIO'S BAD FAITH IN THE
INCIDENT16
In other words, to be resolved are the following, namely: (1) Is the complaint for breach of contract
and damages a personal action that does not survive the death of the plaintiff?; (2) Is the
petitioner liable for damages under Article 1759 of the Civil Code?; and (3) Is there sufficient basis
for awarding moral and temperate damages?
Ruling of the Court
The appeal lacks merit.
An action for breach of contract of carriage
survives the death of the plaintiff
The petitioner urges that Sesante's complaint for damages was purely personal and cannot be
transferred to his heirs upon his death. Hence, the complaint should be dismissed because the
death of the plaintiff abates a personal action.
The petitioner's urging is unwarranted.
Section 16, Rule 3 of the Rules of Court lays down the proper procedure in the event of the death
of a litigant, viz.:
Section 16. Death of party; duty of counsel. - Whenever a party to a pending action dies, and
the claim is not thereby extinguished, it shall be the duty of his counsel to inform the court
within thirty (30) days after such death of the fact thereof, and to give the name and address of his
legal representative or representatives. Failure of counsel to comply with his duty shall be a
ground for disciplinary action.
The heirs of the deceased may be allowed to be substituted for the deceased, without
requiring the appointment of an executor or administrator and the court may appoint a guardian ad
litem for the minor heirs.
Substitution by the heirs is not a matter of jurisdiction, but a requirement of due process. 17 It
protects the right of due process belonging to any party, that in the event of death the deceased
litigant continues to be protected and properly represented in the suit through the duly appointed
legal representative of his estate.18
Transpo Cases 3
The application of the rule on substitution depends on whether or not the action survives the death
of the litigant. Section 1, Rule 87 of the Rules of Court enumerates the following actions that
survive the death of a party, namely: (1) recovery of real or personal property, or an interest from
the estate; (2) enforcement of liens on the estate; and (3) recovery of damages for an injury to
person or property. On the one hand, Section 5, Rule 86 of the Rules of Court lists the actions
abated by death as including: (1) claims for funeral expenses and those for the last sickness of the
decedent; (2) judgments for money; and (3) all claims for money against the deceased, arising
from contract, express or implied.
A contract of carriage generates a relation attended with public duty, neglect or malfeasance of
the carrier's employees and gives ground for an action for damages.19 Sesante's claim against the
petitioner involved his personal injury caused by the breach of the contract of carriage. Pursuant to
the aforecited rules, the complaint survived his death, and could be continued by his heirs
following the rule on substitution.
II
The petitioner is liable for
breach of contract of carriage
The petitioner submits that an action for damages based on breach of contract of carriage under
Article 1759 of the Civil Code should be read in conjunction with Article 2201 of the same code;
that although Article 1759 only provides for a presumption of negligence, it does not envision
automatic liability; and that it was not guilty of bad faith considering that the sinking of M/V
Princess of the Orient had been due to a fortuitous event, an exempting circumstance under
Article 1174 of the Civil Code.
The submission has no substance.
Article 1759 of the Civil Code does not establish a presumption of negligence because it explicitly
makes the common carrier liable in the event of death or injury to passengers due to the
negligence or fault of the common carrier's employees. It reads:
Article 1759. Common carriers are liable for the death or injuries to passengers through the
negligence or willful acts of the former's employees, although such employees may have
acted beyond the scope of their authority or in violation of the orders of the common earners.
This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees.
The liability of common carriers under Article 1759 is demanded by the duty of extraordinary
diligence required of common carriers in safely carrying their passengers.20
On the other hand, Article 1756 of the Civil Code lays down the presumption of negligence against
the common carrier in the event of death or injury of its passenger, viz.:
Article 1756. In case of death of or injuries to passengers, common carriers are presumed to have
been at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as prescribed in Articles 1733 and 1755.
Clearly, the trial court is not required to make an express finding of the common carrier's fault or
negligence.21 Even the mere proof of injury relieves the passengers from establishing the fault or
negligence of the carrier or its employees.22 The presumption of negligence applies so long as
there is evidence showing that: (a) a contract exists between the passenger and the common
carrier; and (b) the injury or death took place during the existence of such contract. 23 In such
event, the burden shifts to the common carrier to prove its observance of extraordinary diligence,
and that an unforeseen event or force majeure had caused the injury.24
Sesante sustained injuries due to the buffeting by the waves and consequent sinking of M/V
Princess of the Orient where he was a passenger. To exculpate itself from liability, the common
carrier vouched for the seaworthiness of M/V Princess of the Orient, and referred to the BMI report
to the effect that the severe weather condition - a force majeure – had brought about the sinking of
the vessel.
The petitioner was directly liable to Sesante and his heirs.
A common carrier may be relieved of any liability arising from a fortuitous event pursuant to Article
117425 of the Civil Code. But while it may free a common carrier from liability, the provision still
requires exclusion of human agency from the cause of injury or loss.26 Else stated, for a common
carrier to be absolved from liability in case of force majeure, it is not enough that the accident was
caused by a fortuitous event. The common carrier must still prove that it did not contribute to the
occurrence of the incident due to its own or its employees' negligence. 27 We explained in Schmitz
Transport & Brokerage Corporation v. Transport Venture, Inc.,28 as follows:
In order to be considered a fortuitous event, however, (1) the cause of the unforeseen and
unexpected occurrence, or the failure of the debtor to comply with his obligation, must be
independent of human will; (2) it must be impossible to foresee the event which constitute
the caso fortuito, or if it can be foreseen it must be impossible to avoid; (3) the occurrence must be
such as to render it impossible for the debtor to fulfill his obligation in any manner; and (4) the
obligor must be free from any participation in the aggravation of the injury resulting to the creditor.
[T]he principle embodied in the act of God doctrine strictly requires that the act must be
occasioned solely by the violence of nature. Human intervention is to be excluded from
creating or entering into the cause of the mischief. When the effect is found to be in part
the result of the participation of man, whether due to his active intervention or neglect or
failure to act, the whole occurrence is then humanized and removed from the rules
applicable to the acts of God.29 (bold underscoring supplied for emphasis)
The petitioner has attributed the sinking of the vessel to the storm notwithstanding its position on
the seaworthiness of M/V Princess of the Orient.1âwphi1 Yet, the findings of the BMI directly
contradicted the petitioner's attribution, as follows:
7. The Immediate and the Proximate Cause of the Sinking
Transpo Cases 3
The Captain's erroneous maneuvers of the MIV Princess of the Orient minutes before she sunk
[sic] had caused the accident. It should be noted that during the first two hours when the ship left
North Harbor, she was navigating smoothly towards Limbones Point. During the same period, the
ship was only subjected to the normal weather stress prevailing at the time. She was then inside
Manila Bar. The waves were observed to be relatively small to endanger the safety of the ship. It
was only when the MV Princess of the Orient had cleared Limbones Pt. while navigating towards
the direction of the Fortune Island when this agonizing misfortune struck the ship.
Initially, a list of three degrees was observed. The listing of the ship to her portside had
continuously increased. It was at this point that the captain had misjudged the situation. While the
ship continuously listed to her portside and was battered by big waves, strong southwesterly
winds, prudent judgement [sic] would dictate that the Captain should have considerably reduced
the ship's speed. He could have immediately ordered the Chief Engineer to slacken down the
speed. Meanwhile, the winds and waves continuously hit the ship on her starboard side. The
waves were at least seven to eight meters in height and the wind velocity was a[t] 25 knots.
The MV Princess of the Orient being a close-type ship (seven decks, wide and high
superstructure) was vulnerable and exposed to the howling winds and ravaging seas. Because of
the excessive movement, the solid and liquid cargo below the decks must have shifted its weight
to port, which could have contributed to the tilted position of the ship.
Minutes later, the Captain finally ordered to reduce the speed of the ship to 14 knots. At the same
time, he ordered to put ballast water to the starboard-heeling tank to arrest the continuous listing
of the ship. This was an exercise in futility because the ship was already listing between 15 to 20
degrees to her portside. The ship had almost reached the maximum angle of her loll. At this stage,
she was about to lose her stability.
Despite this critical situation, the Captain executed several starboard maneuvers. Steering the
course of the Princess to starboard had greatly added to her tilting. In the open seas, with a fast
speed of 14 knots, advance maneuvers such as this would tend to bring the body of the ship in the
opposite side. In navigational terms, this movement is described as the centripetal force. This
force is produced by the water acting on the side of the ship away from the center of the turn. The
force is considered to act at the center of lateral resistance which, in this case, is the centroid of
the underwater area of the ship's side away from the center of the turn. In the case of
the Princess, when the Captain maneuvered her to starboard, her body shifted its weight to port.
Being already inclined to an angle of 15 degrees, coupled with the instantaneous movement of the
ship, the cargoes below deck could have completely shifted its position and weight towards
portside. By this time, the ship being ravaged simultaneously by ravaging waves and howling
winds on her starboard side, finally lost her grip.30
Even assuming the seaworthiness of the M/VPrincess of the Orient, the petitioner could not
escape liability considering that, as borne out by the aforequoted findings of the BMI, the
immediate and proximate cause of the sinking of the vessel had been the gross negligence of its
captain in maneuvering the vessel.
The Court also notes that Metro Manila was experiencing Storm Signal No. 1 during the time of
the sinking.31 The BMI observed that a vessel like the M/V Princess of the Orient, which had a
volume of 13.734 gross tons, should have been capable of withstanding a Storm Signal No. I
considering that the responding fishing boats of less than 500 gross tons had been able to
weather through the same waves and winds to go to the succor of the sinking vessel and had
actually rescued several of the latter's distressed passengers.32
III
The award of moral damages and
temperate damages is proper
The petitioner argues that moral damages could be meted against a common carrier only in the
following instances, to wit: (1) in the situations enumerated by Article 2201 of the Civil Code; (2) in
cases of the death of a passenger; or (3)where there was bad faith on the part of the common
carrier. It contends that none of these instances obtained herein; hence, the award should be
deleted.
We agree with the petitioner that moral damages may be recovered in an action upon breach of
contract of carriage only when: (a) death of a passenger results, or (b) it is proved that the carrier
was guilty of fraud and bad faith, even if death does not result.33 However, moral damages may be
awarded if the contractual breach is found to be wanton and deliberately injurious, or if the one
responsible acted fraudulently or with malice or bad faith.34
The CA enumerated the negligent acts committed by the officers and crew of M/V Princess of the
Orient, viz.:
x x x. [W]hile this Court yields to the findings of the said investigation report, yet it should be
observed that what was complied with by Sulpicio Lines were only the basic and minimal safety
standards which would qualify the vessel as seaworthy. In the same report however it also
revealed that the immediate and proximate cause of the sinking of the M/V Princess of the Orient
was brought by the following: erroneous maneuvering command of Captain Esrum Mahilum and
due to the weather condition prevailing at the time of the tragedy. There is no doubt that under the
circumstances the crew of the vessel were negligent in manning it. In fact this was clearly
established by the investigation of the Board of Marine Inquiry where it was found that:
The Chief Mate, when interviewed under oath, had attested that he was not able to make stability
calculation of the ship vis-à-vis her cargo. He did not even know the metacentric height (GM) of
the ship whether it be positive or negative.
As cargo officer of the ship, he failed to prepare a detailed report of the ship's cargo stowage plan.
He likewise failed to conduct the soundings (measurement) of the ballast tanks before the ship
departed from port. He readily presumed that the ship was full of ballast since the ship was fully
ballasted when she left Cebu for Manila on 16 September 1998 and had never discharge[d] its
contents since that time.
Being the officer-in-charge for emergency situation (sic) like this, he failed to execute and
supervise the actual abandonship (sic) procedure. There was no announcement at the public
Transpo Cases 3
address system of abandonship (sic), no orderly distribution of life jackets and no orderly
launching of life rafts. The witnesses have confirmed this finding on their sworn statements.
There was miscalculation in judgment on the part of the Captain when he erroneously navigated
the ship at her last crucial moment.x x x
To aggravate his case, the Captain, having full command and responsibility of the MV Princess of
the Orient, had failed to ensure the proper execution of the actual abandoning of the ship.
The deck and engine officers (Second Mate, Third Mate, Chief Engineers, Second Engineer, Third
Engineer and Fourth Engineer), being in charge of their respective abandonship (sic) post, failed
to supervise the crew and passengers in the proper execution of abandonship (sic) procedure.
The Radio Officer (spark) failed to send the SOS message in the internationally accepted
communication network (VHF Channel 16). Instead, he used the Single Side Band (SSB) radio in
informing the company about the emergency situation. x x x x35
The aforestated negligent acts of the officers and crew of M/V Princess of the Orient could not be
ignored in view of the extraordinary duty of the common carrier to ensure the safety of the
passengers. The totality of the negligence by the officers and crew of M/V Princess of the Orient,
coupled with the seeming indifference of the petitioner to render assistance to
Sesante,36 warranted the award of moral damages.
While there is no hard-and-fast rule in determining what is a fair and reasonable amount of moral
damages, the discretion to make the determination is lodged in the trial court with the limitation
that the amount should not be palpably and scandalously excessive. The trial court then bears in
mind that moral damages are not intended to impose a penalty on the wrongdoer, or to enrich the
plaintiff at the expense of the defendant.37 The amount of the moral damages must always
reasonably approximate the extent of injury and be proportional to the wrong committed. 38
The Court recognizes the mental anguish, agony and pain suffered by Sesante who fought to
survive in the midst of the raging waves of the sea while facing the immediate prospect of losing
his life. His claim for moral and economic vindication is a bitter remnant of that most infamous
tragedy that left hundreds of families broken in its wake. The anguish and moral sufferings he
sustained after surviving the tragedy would always include the memory of facing the prospect of
his death from drowning, or dehydration, or being preyed upon by sharks. Based on the
established circumstances, his survival could only have been a miracle wrought by God's grace,
by which he was guided in his desperate swim for the safety of the shore. But even with the glory
of survival, he still had to grapple with not just the memory of having come face to face with almost
certain death, but also with having to answer to the instinctive guilt for the rest of his days of being
chosen to live among the many who perished in the tragedy.39
While the anguish, anxiety, pain and stress experienced by Sesante during and after the sinking
cannot be quantified, the moral damages to be awarded should at least approximate the
reparation of all the consequences of the petitioner's negligence. With moral damages being
meant to enable the injured party to obtain the means, diversions or amusements in order to
alleviate his moral and physical sufferings,40 the Court is called upon to ensure that proper
recompense be allowed to him, through his heirs. For this purpose, the amount of ₱l,000,000.00,
as granted by the RTC and affirmed by the CA, is maintained.
The petitioner contends that its liability for the loss of Sesante' s personal belongings should
conform with A1iicle 1754, in relation to Articles 1998, 2000 to 2003 of the Civil Code, which
provide:
Article 1754. The provisions of Articles 1733 to 1753 shall apply to the passenger's baggage which
is not in his personal custody or in that of his employees. As to other baggage, the rules in Articles
1998 and 2000 to 2003 concerning the responsibility of hotel-keepers shall be applicable.
xxxx
Article 1998. The deposit of effects made by travellers in hotels or inns shall also be regarded as
necessary. The keepers of hotels or inns shall be responsible for them as depositaries, provided
that notice was given to them, or to their employees, of the effects brought by the guests and that,
on the part of the latter, they take the precautions which said hotel-keepers or their substitutes
advised relative to the care and vigilance of their effects.
xxxx
Article 2000. The responsibility referred to in the two preceding articles shall include the loss of, or
injury to the personal property of the guests caused by the servants or employees of the keepers
of hotels or inns as well as by strangers; but not that which may proceed from any force
majeure. The fact that travellers are constrained to rely on the vigilance of the keeper of the hotel
or inn shall be considered in determining the degree of care required of him.
Article 2001. The act of a thief or robber, who has entered the hotel is not deemed force
majeure, unless it is done with the use of arms or through an irresistible force.
Article 2002. The hotel-keeper is not liable for compensation if the loss is due to the acts of the
guest, his family, servants or visitors, or if the loss arises from the character of the things brought
into the hotel.
Article 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the
effect that he is not liable for the articles brought by the guest. Any stipulation to the contrary
between the hotel-keeper and the guest whereby the responsibility of the former as set forth in
Articles 1998 to 2001 is suppressed or diminished shall be void.
The petitioner denies liability because Sesante' s belongings had remained in his custody all
throughout the voyage until the sinking, and he had not notified the petitioner or its employees
about such belongings. Hence, absent such notice, liability did not attach to the petitioner.
Is notification required before the common carrier becomes liable for lost belongings that remained
in the custody of the passenger?
Transpo Cases 3
We answer in the negative.
The rule that the common carrier is always responsible for the passenger's baggage during the
voyage needs to be emphasized. Article 1754 of the Civil Code does not exempt the common
carrier from liability in case of loss, but only highlights the degree of care required of it depending
on who has the custody of the belongings. Hence, the law requires the common carrier to observe
the same diligence as the hotel keepers in case the baggage remains with the passenger;
otherwise, extraordinary diligence must be exercised.41 Furthermore, the liability of the common
carrier attaches even if the loss or damage to the belongings resulted from the acts of the common
carrier's employees, the only exception being where such loss or damages is due to force
majeure.42
In YHT Realty Corporation v. Court of Appeals,43we declared the actual delivery of the goods to
the innkeepers or their employees as unnecessary before liability could attach to the hotelkeepers
in the event of loss of personal belongings of their guests considering that the personal effects
were inside the hotel or inn because the hotelkeeper shall remain accountable.44 Accordingly,
actual notification was not necessary to render the petitioner as the common carrier liable for the
lost personal belongings of Sesante. By allowing him to board the vessel with his belongings
without any protest, the petitioner became sufficiently notified of such belongings. So long as the
belongings were brought inside the premises of the vessel, the petitioner was thereby effectively
notified and consequently duty-bound to observe the required diligence in ensuring the safety of
the belongings during the voyage. Applying Article 2000 of the Civil Code, the petitioner assumed
the liability for loss of the belongings caused by the negligence of its officers or crew. In view of
our finding that the negligence of the officers and crew of the petitioner was the immediate and
proximate cause of the sinking of the M/V Princess of the Orient, its liability for Sesante' s lost
personal belongings was beyond question.
The petitioner claims that temperate damages were erroneously awarded because Sesante had
not proved pecuniary loss; and that the CA merely relied on his self-serving testimony.
The award of temperate damages was proper.
Temperate damages may be recovered when some pecuniary loss has been suffered but the
amount cannot, from the nature of the case, be proven with certainty. 45 Article 222446 of the Civil
Code expressly authorizes the courts to award temperate damages despite the lack of certain
proof of actual damages.47
Indubitably, Sesante suffered some pecuniary loss from the sinking of the vessel, but the value of
the loss could not be established with certainty. The CA, which can try facts and appreciate
evidence, pegged the value of the lost belongings as itemized in the police report at P120,000.00.
The valuation approximated the costs of the lost belongings. In that context, the valuation of
₱120,000.00 is correct, but to be regarded as temperate damages.
In fine, the petitioner, as a common carrier, was required to observe extraordinary diligence in
ensuring the safety of its passengers and their personal belongings. It being found herein short of
the required diligence rendered it liable for the resulting injuries and damages sustained by
Sesante as one of its passengers.
Should the petitioner be further held liable for exemplary damages?
In contracts and quasi-contracts, the Court has the discretion to award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner.48 Indeed,
exemplary damages cannot be recovered as a matter of right, and it is left to the court to decide
whether or not to award them.49 In consideration of these legal premises for the exercise of the
judicial discretion to grant or deny exemplary damages in contracts and quasi-contracts against a
defendant who acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner, the
Court hereby awards exemplary damages to Sesante.
First of all, exemplary damages did not have to be specifically pleaded or proved, because the
courts had the discretion to award them for as long as the evidence so warranted. In Marchan v.
Mendoza,50 the Court has relevantly discoursed:
x x x. It is argued that this Court is without jurisdiction to adjudicate this exemplary
damages since there was no allegation nor prayer, nor proof, nor counterclaim of error for
the same by the appellees. 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 said Silverio Marchan 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 arc 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 to exercise and use its discretion whether the imposition of punitive or
exemplary damages even though not expressly prayed or pleaded in the plaintiffs'
complaint."
x x x It further appears that the amount of exemplary damages need not be proved, because
its determination depends upon the amount of compensatory damages that may be
awarded to the claimant. 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. Unless and until this premise
is determined and established, what may be claimed as exemplary damages would amount
to a mere surmise or speculation. It follows as a necessary consequence that the amount
of exemplary damages need not be pleaded in the complaint because the same cannot be
predetermined. One can merely ask that it be determined by the court if in the use of its
discretion the same is warranted by the evidence, and this is just what appellee has
done. (Bold underscoring supplied for emphasis)
And, secondly, exemplary damages are designed by our civil law to "permit the courts to reshape
behavior that is socially deleterious in its consequence by creating negative incentives or
deterrents against such behavior. "51 The nature and purpose for this kind of damages have been
well-stated in People v. Dalisay,52to wit:
Transpo Cases 3
Also known as 'punitive' or 'vindictive' damages, exemplary or corrective damages are intended
to serve as a deterrent to serious wrong doings, and as a vindication of undue sufferings
and wanton invasion of the rights of an injured or a punishment for those guilty of
outrageous conduct. These terms are generally, but not always, used interchangeably. In
common law, there is preference in the use of exemplary damages when the award is to account
for injury to feelings and for the sense of indignity and humiliation suffered by a person as a result
of an injury that has been maliciously and wantonly inflicted, the theory being that there should be
compensation for the hurt caused by the highly reprehensible conduct of the defendant -
associated with such circumstances as willfulness, wantonness, malice, gross negligence or
recklessness, oppression, insult or fraud or gross fraud - that intensifies the injury. The terms
punitive or vindictive damages are often used to refer to those species of damages that may be
awarded against a person to punish him for his outrageous conduct. In either case, these
damages arc intended in good measure to deter the wrongdoer and others like him from
similar conduct in the future. (Bold underscoring supplied for emphasis)
The BMI found that the "erroneous maneuvers" during the ill-fated voyage by the captain of the
petitioner's vessel had caused the sinking. After the vessel had cleared Limbones Point while
navigating towards the direction of Fortune Island, the captain already noticed the listing of the
vessel by three degrees to the portside of the vessel, but, according to the BMI, he did not
exercise prudence as required by the situation in which his vessel was suffering the battering on
the starboard side by big waves of seven to eight meters high and strong southwesterly winds of
25 knots. The BMI pointed out that he should have considerably reduced the speed of the vessel
based on his experience about the vessel - a close-type ship of seven decks, and of a wide and
high superstructure - being vulnerable if exposed to strong winds and high waves. He ought to
have also known that maintaining a high speed under such circumstances would have shifted the
solid and liquid cargo of the vessel to port, worsening the tilted position of the vessel. It was only
after a few minutes thereafter that he finally ordered the speed to go down to 14 knots, and to put
ballast water to the starboard-heeling tank to arrest the continuous listing at portside. By then, his
moves became an exercise in futility because, according to the BMI, the vessel was already listing
to her portside between 15 to 20 degrees, which was almost the maximum angle of the vessel's
loll. It then became inevitable for the vessel to lose her stability.
Clearly, the petitioner and its agents on the scene acted wantonly and
recklessly. Wanton and reckless are virtually synonymous in meaning as respects liability for
conduct towards others.54 Wanton means characterized by extreme recklessness and utter
disregard for the rights of others; or marked by or manifesting arrogant recklessness of justice or
of rights or feelings of others.55 Conduct is reckless when it is an extreme departure from ordinary
care, in a situation in which a high degree of danger is apparent. It must be more than any mere
mistake resulting from inexperience, excitement, or confusion, and more than mere
thoughtlessness or inadvertence, or simple inattention.56
The actuations of the petitioner and its agents during the incident attending the unfortunate sinking
of the M/V Princess of the Orient were far below the standard of care and circumspection that the
law on common carriers demanded. Accordingly, we hereby fix the sum of ₱l ,000,000.00 in order
to serve fully the objective of exemplarity among those engaged in the business of transporting
passengers and cargo by sea. The amount would not be excessive, but proper. As the Court put it
in Pereria v. Zarate:57
Anent the ₱1,000,000.00 allowed as exemplary damages, we should not reduce the amount if
only to render effective the desired example for the public good. As a common carrier, the
Pereñas needed to be vigorously reminded to observe their duty to exercise extraordinary
diligence to prevent a similarly senseless accident from happening again. Only by an award of
exemplary damages in that amount would suffice to instill in them and others similarly situated like
them the ever-present need for greater and constant vigilance in the conduct of a business
imbued with public interest.58 (Bold underscoring supplied for emphasis)
WHEREFORE, the Court AFFIRMS the decision promulgated on June 27, 2005 with
the MODIFICATIONS that: (a) the amount of moral damages is fixed at ₱l,000,000.00; (b) the
amount of ₱l,000,000.00 is granted as exemplary damages; and (c) the sum of ₱l20,000.00 is
allowed as temperate damages, all to be paid to the heirs of the late Napoleon Sesante. In
addition, all the amounts hereby awarded shall earn interest of 6% per annum from the finality of
this decision until fully paid. Costs of suit to be paid by the petitioner.

SO ORDERED.
The BMI concluded that the captain had executed several starboard maneuvers despite the critical
situation of the vessel, and that the maneuvers had greatly added to the tilting of the vessel. It
observed:

x x x In the open seas, with a fast speed of 14 knots, advance maneuvers such as this
would tend to bring the body of the ship in the opposite side. In navigational terms, this
movement is described as the centripetal force. This force is produced by the water acting
on the side of the ship away from the center of the turn. The force is considered to act at
the center of lateral resistance which, in this case, is the centroid of the underwater area of
the ship's side away from the center of the turn. In the case of the Princess, when the
Captain maneuvered her to starboard, her body shifted its weight to port. Being already
inclined to an angle of 15 degrees, coupled with the instantaneous movement of the ship,
the cargoes below deck could have completely shifted its position and weight towards
portside. By this time, the ship being ravaged simultaneously by ravaging waves and
howling winds on her starboard side, finally lost her grip.53
Transpo Cases 3
FIRST DIVISION
October 14, 2015
G.R. No. 208802
G.V. FLORIDA TRANSPORT, INC., Petitioner
vs.
HEIRS OF ROMEO L. BATTUNG, SR., represented by ROMEO BATTUNG, SR., Respondent
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated May 31, 2013 and the
Resolution3 dated August 23, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 97757, which
affirmed in toto the Decision4 dated August 29, 2011 of the Regional Trial Court of Cabagan,
Isabela, Branch 22 (RTC) in Civil Case No. 22-1103 finding petitioner G.V. Florida Transport, Inc.
(petitioner), Federico M. Duplio, Jr. (Duplio ), and Christopher Daraoay (Daraoay) jointly and
severally liable to respondents heirs of Romeo L. Battung, Jr. (respondents) for damages arising
from culpa contractual.
The Facts
Respondents alleged that in the evening of March 22, 2003, Romeo L. Battung, Jr. (Battung)
boarded petitioner’s bus with body number 037 and plate number BVJ-525 in Delfin Albano,
Isabela, bound for Manila.5 Battung was seated at the first row behind the driver and slept during
the ride. When the bus reached the Philippine Carabao Center in Muñoz, Nueva Ecija, the bus
driver, Duplio, stopped the bus and alighted to check the tires. At this point, a man who was
seated at the fourth row of the bus stood up, shot Battung at his head, and then left with a
companion. The bus conductor, Daraoay, notified Duplio of the incident and thereafter, brought
Romeo to the hospital, but the latter was pronounced dead on arrival.6 Hence, respondents filed a
complaint7 on July 15, 2008 for damages in the aggregate amount of ₱1,826,000.00 8 based on a
breach of contract of carriage against petitioner, Duplio, and Baraoay (petitioner, et al.) before the
RTC, docketed as Civil Case No. 22-1103. Respondents contended that as a common carrier,
petitioner and its employees are bound to observe extraordinary diligence in ensuring the safety of
passengers; and in case of injuries and/or death on the part of a passenger, they are presumed to
be at fault and, thus, responsible therefor. As such, petitioner, et al. should be held civilly liable for
Battung’s death.9
In their defense, petitioner, et al. maintained that they had exercised the extraordinary diligence
required by law from common carriers.1âwphi1 In this relation, they claimed that a common carrier
is not an absolute insurer of its passengers and that Battung’s death should be properly deemed a
fortuitous event. Thus, they prayed for the dismissal of the complaint, as well as the payment of
their counterclaims for damages and attorney’s fees.10
The RTC Ruling
In a Decision11 dated August 29, 2011, the RTC ruled in respondents’ favor and, accordingly,
ordered petitioner, et al. to pay respondent the amounts of: (a) ₱1,586,000.00 as compensatory
damages for unearned income; (b) ₱50,000.00 as actual damages; and (c) ₱50,000.00 as moral
damages.12
The RTC found that petitioner, et al. were unable to rebut the presumed liability of common
carriers in case of injuries/death to its passengers due to their failure to show that they
implemented the proper security measures to prevent passengers from carrying deadly weapons
inside the bus which, in this case, resulted in the killing of Battung. As such, petitioner, et al. were
held civilly liable for the latter’s death based on culpa contractual.13
Dissatisfied, petitioner, et al. appealed to the CA.14
The CA Ruling
In a Decision15 dated May 31, 2013, the CA affirmed the ruling of the RTC in toto.16 It held that the
killing of Battung cannot be deemed as a fortuitous event, considering that such killing happened
right inside petitioner’s bus and that petitioner, et al. did not take any safety measures in ensuring
that no deadly weapon would be smuggled inside the bus.17
Aggrieved, only petitioner moved for reconsideration18 which was, however, denied in a
Resolution19 dated August 23, 2013; hence, the instant petition.
The Issue Before the Court
The core issue for the Court’s resolution is whether or not the CA correctly affirmed the ruling of
the RTC finding petitioner liable for damages to respondent arising from culpa contractual.
The Court’s Ruling
The petition is meritorious.
I.
The law exacts from common carriers (i.e., those persons, corporations, firms, or associations
engaged in the business of carrying or transporting passengers or goods or both, by land, water,
or air, for compensation, offering their services to the public 20) the highest degree of diligence (i.e.,
extraordinary diligence) in ensuring the safety of its passengers. Articles 1733 and 1755 of the
Civil Code state:
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.
Transpo Cases 3
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.
In this relation, Article 1756 of the Civil Code provides that "[i]n case of death of or injuries to
passengers, common carriers are presumed to have been at fault or to have acted negligently,
unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and
1755." This disputable presumption may also be overcome by a showing that the accident was
caused by a fortuitous event.21 The foregoing provisions notwithstanding, it should be pointed out
that the law does not make the common carrier an insurer of the absolute safety of its passengers.
In Mariano, Jr. v. Callejas,22 the Court explained that:
While the law requires the highest degree of diligence from common carriers in the safe transport
of their passengers and creates a presumption of negligence against them, it does not, however,
make the
carrier an insurer of the absolute safety of its passengers.
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance[,] and
precaution in the carriage of passengers by common carriers to only such as human care
and foresight can provide. What constitutes compliance with said duty is adjudged with
due regard to all the circumstances.
Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the
common carrier when its passenger is injured, merely relieves the latter, for the time being, from
introducing evidence to fasten the negligence on the former, because the presumption stands in
the place of evidence. Being a mere presumption, however, the same is rebuttable by proof
that the common carrier had exercised extraordinary diligence as required by law in the
performance of its contractual obligation, or that the injury suffered by the passenger was
solely due to a fortuitous event.
In fine, we can only infer from the law the intention of the Code Commission and Congress to curb
the recklessness of drivers and operators of common carriers in the conduct of their business.
Thus, it is clear that neither the law nor the nature of the business of a transportation company
makes it an insurer of the passenger’s safety, but that its liability for personal injuries sustained by
its passenger rests upon its negligence, its failure to exercise the degree of diligence that the law
requires.23 (Emphases and underscoring supplied)
Therefore, it is imperative for a party claiming against a common carrier under the above-said
provisions to show that the injury or death to the passenger/s arose from the negligence of the
common carrier and/or its employees in providing safe transport to its passengers.
In Pilapil v. CA,24 the Court clarified that where the injury sustained by the passenger was in no
way due (1) to any defect in the means of transport or in the method of transporting, or (2) to the
negligent or willful acts of the common carrier’s employees with respect to the foregoing – such as
when the injury arises wholly from causes created by strangers which the carrier had no control of
or prior knowledge to prevent – there would be no issue regarding the common carrier’s
negligence in its duty to provide safe and suitable care, as well as competent employees in
relation to its transport business; as such, the presumption of fault/negligence foisted under Article
1756 of the Civil Code should not apply:
First, as stated earlier, the presumption of fault or negligence against the carrier is only a
disputable presumption. [The presumption] gives in where contrary facts are established
proving either that the carrier had exercised the degree of diligence required by law or the
injury suffered by the passenger was due to a fortuitous event. Where, as in the instant
case, the injury sustained by the petitioner was in no way due to any defect in the means of
transport or in the method of transporting or to the negligent or wilful acts of [the common
carrier’s] employees, and therefore involving no issue of negligence in its duty to provide
safe and suitable [care] as well as competent employees, with the injury arising wholly
from causes created by strangers over which the carrier had no control or even knowledge
or could not have prevented, the presumption is rebutted and the carrier is not and ought
not to be held liable. To rule otherwise would make the common carrier the insurer of the
absolute safety of its passengers which is not the intention of the lawmakers. (Emphasis and
underscoring supplied)
In this case, Battung’s death was neither caused by any defect in the means of transport or in the
method of transporting, or to the negligent or willful acts of petitioner’s employees, namely, that of
Duplio and Daraoay, in their capacities as driver and conductor, respectively. Instead, the case
involves the death of Battung wholly caused by the surreptitious act of a copassenger who, after
consummating such crime, hurriedly alighted from the vehicle.25 Thus, there is no proper issue on
petitioner’s duty to observe extraordinary diligence in ensuring the safety of the passengers
transported by it, and the presumption of fault/negligence against petitioner under Article 1756 in
relation to Articles 1733 and 1755 of the Civil Code should not apply.
II.
On the other hand, since Battung’s death was caused by a copassenger, the applicable provision
is Article 1763 of the Civil Code, which states that "a common carrier is responsible for injuries
suffered by a passenger on account of the willful acts or negligence of other passengers or of
strangers, if the common carrier’s employees through the exercise of the diligence of a good
father of a family could have prevented or stopped the act or omission." Notably, for this
obligation, the law provides a lesser degree of diligence, i.e., diligence of a good father of a family,
in assessing the existence of any culpability on the common carrier’s part.
Case law states that the concept of diligence of a good father of a family "connotes reasonable
care consistent with that which an ordinarily prudent person would have observed when
confronted with a similar situation. The test to determine whether negligence attended the
performance of an obligation is: did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinarily prudent person would have used in the same
situation? If not, then he is guilty of negligence."26
Transpo Cases 3
In ruling on this case, the CA cited Fortune Express, Inc. v. Court of Appeals 27 (Fortune) in inspect can be made an excuse for mischief and abuse. Of course, when there are sufficient
ascribing negligence on the part of petitioner, ratiocinating that it failed to implement measures to indications that the representations of the passenger regarding the nature of his baggage
detect if its passengers were carrying firearms or deadly weapons which would pose a danger to may not be true, in the interest of the common safety of all, the assistance of the police
the other passengers.28 However, the CA’s reliance was plainly misplaced in view of Fortune’s authorities may be solicited, not necessarily to force the passenger to open his baggage,
factual variance with the case at bar. but to conduct the needed investigation consistent with the rules of propriety and, above
all, the constitutional rights of the passenger. It is in the sense that the mentioned srvices
In Fortune, the common carrier had already received intelligence reports from law enforcement manual issued by appellant to its conductors must be understood. 30 (Emphases and underscoring
agents that certain lawless elements were planning to hijack and burn some of its buses; and yet, supplied)
it failed to implement the necessary precautions to ensure the safety of its buses and its
passengers. A few days later, one of the company’s buses was indeed hijacked and burned by the In this case, records reveal that when the bus stopped at San Jose City to let four (4) men ride
lawless elements pretending as mere passengers, resulting in the death of one of the bus petitioner's bus (two [2] of which turned out to be Battung's murderers), the bus driver, Duplio, saw
passengers. Accordingly, the Court held that the common carrier’s failure to take precautionary them get on the bus and even took note of what they were wearing. Moreover, Duplio made the
measures to protect the safety of its passengers despite warnings from law enforcement agents bus conductor, Daraoay, approach these men and have them pay the corresponding fare, which
showed that it failed to exercise the diligence of a good father of a family in preventing the attack Daraoay did. 31 During the foregoing, both Duplio and Daraoay observed nothing which would
against one of its buses; thus, the common carrier was rightfully held liable for the death of the rouse their suspicion that the men were armed or were to carry out an unlawful activity. With no
aforementioned passenger. such indication, there was no need for them to conduct a more stringent search (i.e., bodily
search) on the aforesaid men. By all accounts, therefore, it cannot be concluded that petitioner or
In contrast, no similar danger was shown to exist in this case so as to impel petitioner or its any of its employees failed to employ the diligence of a good father of a family in relation to its
employees to implement heightened security measures to ensure the safety of its passengers. responsibility under Article 1763 of the Civil Code. As such, petitioner cannot altogether be held
There was also no showing that during the course of the trip, Battung’s killer made suspicious civilly liable.
actions which would have forewarned petitioner’s employees of the need to conduct thorough
checks on him or any of the passengers. Relevantly, the Court, in Nocum v. Laguna Tayabas Bus WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated May 31, 2013 and the
Company,29 has held that common carriers should be given sufficient leeway in assuming that the Resolution dated August 23, 2013 of the Court of Appeals in CA-G.R. CV No. 97757 are
passengers they take in will not bring anything that would prove dangerous to himself, as well as hereby REVERSED and SET ASIDE. Accordingly, the complaint for damages filed by
his copassengers, unless there is something that will indicate that a more stringent inspection respondents heirs of Romeo L. Battung, Jr. is DISMISSED for lack of merit.
should be made, viz.:
SO ORDERED.
In this particular case before Us, it must be considered that while it is true the passengers of
appellant’s bus should not be made to suffer for something over which they had no control, as
enunciated in the decision of this Court cited by His Honor, 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. Police officers acting without judicial
authority secured in the manner provided by law are not beyond the pale of constitutional
inhibitions designed to protect individual human rights and liberties. Withal, what must be
importantly considered here is not so much the infringement of the fundamental sacred rights of
the particular passenger herein involved, but the constant threat any contrary ruling would pose on
the right of privacy of all passengers of all common carriers, considering how easily the duty to