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Picart v. Smith
Facts:

Plaintiff Amado Picart was riding on his pony on the Carlatan Bridge in San Fernando, La Union when the
defendant, riding on his car, approached. Defendant blew his horn to give warning. Plaintiff moved the
horse to the right instead of moving to the left, reasoning that he had no sufficient time to move to the
right direction. Defendant continued to approach, and when he had gotten quite near, he quickly turned to
the left. The horse was frightened that it turned his body across the bridge. His limb was broken and the
rider was thrown off and got injured. The horse died. An action for damages was filed against the
defendant.
Issue:

Whether or not the defendant in maneuvering his car in the manner above described was guilty of
negligence such as gives rise to a civil obligation to repair the damage done
Held:
As the defendant started across the bridge, he had the right to assume that the horse and rider would
pass over to the proper side; but as he moved toward the center of the bridge it was demonstrated to his
eyes that this would not be done; and he must in a moment have perceived that it was too late for the
horse to cross with safety in front of the moving vehicle. In the nature of things this change of situation
occurred while the automobile was yet some distance away; and from this moment it was not longer
within the power of the plaintiff to escape being run down by going to a place of greater safety. The
control of the situation had then passed entirely to the defendant.
The test by which to determine the existence of negligence in a particular case may be stated as follows:
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.
Conduct is said to be negligent when a prudent man in the position of the tortfeasor would have foreseen
that an effect harmful to another was sufficiently probable to warrant his foregoing the conduct or
guarding against its consequences.
It goes without saying that the plaintiff himself was not free from fault, for he was guilty of antecedent
negligence in planting himself on the wrong side of the road. But as we have already stated, the
defendant was also negligent; and in such case the problem always is to discover which agent is
immediately and directly responsible. It will be noted that the negligent acts of the two parties were not
contemporaneous, since the negligence of the defendant succeeded the negligence of the plaintiff by an
appreciable interval. Under these circumstances the law is that the person who has the last fair chance to
avoid the impending harm and fails to do so is chargeable with the consequences, without reference to
the prior negligence of the other party.
Macawili v. Panay
G.R. No. L-8937

November 29, 1957

OLEGARIO
BRITO
vs.
MALATE TAXI CAB & GARAGE, INC., defendant-appelant;
MALATE
TAXICAB
&
GARAGE,
INC., third-party
vs.
JESUS DEQUITO Y DUPY, third-party defendant-appellee.
ENDENCIA, J.:

SY, plaintiff-appellee,

plaintiff-appellant,

On June 26, 1952, at Dewey Boulevard in front of the Selecta Restaurant, Olegario Brito Sy engaged a
taxicab bearing plate No. Taxi-1130, owned and operated by Malate Taxicab and Garage, Inc. and driven
by Catalino Ermino, to take him to his place of business at Dencia's Restaurant on the Escolta where he
was the general manager. Upon reaching the Rizal Monument he told the driver to turn to the right, but
the latter did not heed him and instead countered that they better pass along Katigbak Drive. At the
intersection of Dewey Bolevard and Katigbak Drive, the taxi collided with an army wagon with plate No.
TPI-695 driven by Sgt. Jesus De quito, as a result of which Olegario Brito Sy was jarred, jammed and
jolted. He was taken to the Santa Isabel Hospital suffering from bruises and contusions as well as
fractured right leg. Thereafter he was transferred to the Gonzales Orthopedic Clinic and was accordingly
operated on. He spent some P2,266.45 for medical bills and hospitalization.
On September 30, 1952, Sy filed action against the Malate Taxicab & Garage, Inc., based upon a contract
of carriage, to recover the sums of P7,200 as actual or compensatory damages, P20,000 as moral
damages, P15,000 as nominal and exemplary damages, and P3,000 a attorney's fees. On October 2,
1952, a copy of the complaint was served on and received by the defendant, but the latter filed its answer
only on October 20, 1952, wherein it alleged that the collision subject of the complaint was not due to the
negligence of its driver but to that of Sgt. Jesus Dequito, the driver of the army wagon; and, by way of
counterclaim, sought to recover the sum of P1,000 as damages caused by the alleged malicious and
frivolous action filed against it.
The record reveals that upon plaintiff's motion filed on October 23, 1952, the lower court ordered on
October 25, 1952 that the answer which was filed by defendant out of time be stricken out, and declared
the Malate Taxicab & Garage, Inc. in default. Thereafter, on October 30, 1952, plaintiff presented his
evidence, and on November 20, 1952 judgment was rendered awarding plaintiff the sum of P14.000 as
actual, compensatory, moral, nominal and exemplary damages including attorney's fees and costs, with
interest at the legal rate from the filing of the action. Defendant then filed a motion on December 17,
1952, for relief from the order of default and for new trial, which was granted. Hence, plaintiff filed his
reply to defendant's answer and counterelaim, and by leave of court, the latter filed on February 24, 1953
a third-party complaint against Sgt. Jesus Dequito alleging that the cause of the collision between the
taxicab and the army wagon was the negligence of the army sergeant, and praying that whatever amount
the court may assess against it in the action filed by plaintiff, be paid to said third-party plaintiff, plus an
additional amount of P1,000 representing attorney's fees. It appears, however, that the summons and
copy of the third-party complaint were never served upon third-party defendant Dequito in view of his
continued assignment from place to place in connection with his army duties, and for this reason the main
case was set for trial on May 10, 1953, obviously for the sole purpose of disposing of the issue arising

Page2 Transpo

from plaintiffs complaint. On the day of the trial, defendant failed to appear, whereupon plaintiff presented
his evidence, and judgment was rendered against the defendant in the total sum of P4,200 representing
actual, compensatory and moral damages, as well as attorney's fees, with interest at the legal rate from
the filing of the action, plus costs of suit. Aga nst said judgment defendant appealed to the Court of
Appeals and assigned in its brief two errors of the lower court, namely:
1. The trial court erred in not finding that the third-party complaint involves a prejudicial question,
and therefore, the main complaint cannot be decided until the third-party complaint is decided.
2. The trial court erred in not deciding or making an express finding as to whether the defendant
appellant Malate Taxicab & Garage, Inc. was responsible for the collision, and hence, civilly
responsible to the plaintiff-appellee.
Finding the quoted assignment of errors as involving a purely question of law, the Court of Appeals, by
virtue of the provisions of section 17, paragraph 6 of the judiciary Act of 1948, as amended, certified the
case to this Court for adjudication, in its Resolution of February 7, 1955.

We find no merit in the first assignment of error that the third-party complaint is a pre-judicial question. As
enunciated by this Court in Berbari vs. Concepcion, 40 Phil. 837, "Pre-judicial question in understood in
law to be that which precedes the criminal action, or that which requires a decision before final judgment
is rendered in the principal action with which said question is closely connected. Not all previous
questions are pre-judicial questions are necessarily previous", although all pre-judicial questions are
necessarily previous." In the present case, the third-party complaint is not a pre-judicial question, as the
issue in the main action is not entirely dependent upon those in the third-party complaint; on the contrary,
it is the third-party complaint that is dependent upon the main case at least in the amount of damages
which defendant appellant seeks to be reimbursed in its third-party complaint. Furthermore, the complaint
is based on a contractual obligation of transportation of passenger which defendant-appellant failed to
carry out, and the action is entirely different and independent from that in the third-party complaint which
is based an alleged tortious act committed by the third-party defendant Sgt. Dequito. The main case,
therefore, is entirely severable and may be litigated independently. Moreover, whatever the outcome of
the third-party complaint might be would not in any way affect or alter the contractual liability of the
appellant to plaintiff. If the collision was due to the negligence of the third-party defendant, as alleged,
then defendant appellant may file a separate civil action for damages based on tort ex-delicto or
upon quasi-delict, as the case may be.
Coming to the second assignment of error that the lower court erred in not making an express findings as
to whether defendant appellant was responsible for the collision, we find the same to be unjustified. The
pertinent, provisions of the new Civil Code under the heading Common Carriers, are the following:
ART. 1733. Common carriers, from the nature of their business and for reason of public
policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the
safety of the passengers transported by them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734,
1735, and 1745, Nos. 5, 6, and 7, while the 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 to safety 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. (Emphasis supplied.)
Evidently, under these provisions of law, the court need not make an express finding of fault or negligence
on the part of the defendant appellant in order to hold it responsible to pay the damages sought for by the
plaintiff, for the action initiated therefor is based on a contract of carriage and not on tort. When plaintiff
rode on defendant-appellant's taxicab, the latter assumed the express obligation to transport him 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, supra). This is an exception to the general rule that negligence must be proved,
and it was 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. It is noteworthy, however, that at the hearing
in the lower court defendant-appellant failed to appear and has not presented any evidence at all to
overcome and overwhelm the presumption of negligence imposed upon it by law; hence, there was no
need for the lower court to make an express finding thereon in view of the provisions of the aforequoted
Article 1756 of the new Civil Code.
Wherefore, the decision of the lower court is hereby affirmed with cost against the appellant.

Abeto Vs Philippine Air Lines,Inc.

July 30, 1982
Relova, J. :
ENTITIES INVOLVED:
PAL carrier
JUDGE QURICO ABATO passenger/deceased
CONDRADA VDA. DE ABETO - plaintiff
FACTS:
1. Judge Quirico Abato boarded the Philippine Airline' PI-C133 plane at the Mandurriao Airport,
Iloilo City for Manila
2. The plane did not reach its destination and there was news that the plane went missing.
3. After 3 weeks, it was ascertained that the plane crashed at Mt. Baco, Province of Mindoro.
4. All the passengers have been killed including Judge Quirico Abeto

6.
7.
8.

Condrada Vda. de Abeto , the wife of the deceased, was appointed administratrix of the estate of
Judge Abeto.
Condrada, together with her children filed a complaint for damages against Philippine Airlines for
the death of Judge Abeto.
Philippine Airlines, on the other hand, contends that the plane crash was das due to a fortuitous
event.
The trial court ruled in favor of Abeto and her children.

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5.

DEFENSES:

Plane Crash was beyond the control of the pilot.

The plane was airworthy for the purpose of conveying passengers across the country as shown
by the certificate of airworthiness issued by the Civil Aeronautics Administration.

There was navigational error but no negligence or malfeasance on the part of the pilot.

The plane had undergone pre-flight checks, thorough checks, terminating checks and aftermaintenance checks.

The deviation from its prescribed route was due to bad weather condition.

ISSUE:
Is Philippine Airlines liable for violation of its contract of carriage?
RULING: Yes
The Civic Code, as the law governing the liability of common carriers, is clear and explicit:

Art. 1773 - binds common carriers from the nature of their business and by reason of public
policy to observe extraordinary in vigilance for the safety of the passengers transported by them
according to all the circumstances of each case.

Art. 1755 - a common carrier is required to carry the passengers safely as far as human care
and foresight can provide, using the utmost diligence of every 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 proved that they observed extra ordinary
diligence.

Art. 1757 - the responsibility of a common carrier for the safety of passengers cannot be
dispensed with or lessened by stipulation, by posting of notices, by statements on tickets, or
otherwise,
PAL is liable for the death of Judge Abeto:

The plane did not take the designated route which was Iloilo-Romblon-Manila or "Amber I", if it
had taken this route, then the crash would have not happened.

This was even supported by the statements of Ramon Peroza (Administrative assistant of
Philippine Air Lines Inc.)and Cesar Mijares (Assistant Director of the Civil Aeronautics
Administration)

The weather during that time was clear and the pilot was supposed to cross airway "Amber I"'
instead he made a straight flight to Manila in violation of air traffic rules.
Since theres no satisfactory explanation by PAL with regard to the accident, then the presumption is it is

at fault.

PAL v. NLRC
124 SCRA 583, September 2, 1983
Relova, J.
FACTS:
On November 3, 1980, private respondent, Salvador Gempis, a YS 11 pilot of PAL, with the rank of
captain, filed with the Ministry of labor, NCR, a complaint against PAL for illegal suspension and
dismissal. The next day, PAL filed with the same office an application for clearance to terminate the
employment of Gempis on the grounds: 1) serious misconduct and, 2) violation of the liquor ban and
company policies.
The charge of petitioner against Gempis was "serious misconduct(abuse of authority)" for forcing First
Officers A. Barcebal and J. Ranches to drink on Feb 27, 1980, at 10:30 in the evening at the coffee shop
of the Triton Hotel at Cebu, six (6) bottles of beer each, within 30 minutes. Unable to consume the bottles
of beer within the time set by Gempis, the two pilots were ordered to stand erect and were hit on the
stomach by Gempis. The petition alleged that, "the incident occured with the full knowledge of private
respondent that the two affected co-pilots have flight duties the next day with initial assignment as early
as 0710H and as late as 1200H.
ISSUE: WON, to terminate the private respondent from employement is proper?
HELD:
The business of PAL is such that whenever a passenger dies or is injured, the presumption is that it is at
fault notwithstanding the fact that it has exercised due diligence of a good father of a family in the
selection and supervision of its employees. Thus, extraordinary measures and diligence should be
exercised by it for the safety of its passengers and their belongings. Needless to state, a pilot must be
sober all the time for he may be called upon to fly a plane even before his regular scheduled hours;
otherwise so many lives will be in danger if he is drunk. it would be unjust for an employer like herein
petitioner PAL to be complled to continue with the employment of a person whose continuance in the
service is obviously inimical to its intersts.
PAL's application for clearance to terminate private respondent Salvador Gempis from employment is
hereby approved.
BACHELOR EXPRESS, INCORPORATED, and CRESENCIO RIVERA, petitioners,
vs.
THE HONORABLE COURT OF APPEALS (SIXTH DIVISION), RICARDO BETER, SERGIA BETER,
TEOFILO RAUTRAUT and ZOETERA RAUTRAUT, respondents.

Page4 Transpo

SUMMARY: Ornominio and Narcisa were on board a Bachelor bus bound for Cagayan de Oro. When
they were passing Butuan, a passenger ran amuck and stabbed a policeman who was on board. A
stampede ensued; Ornominio and Narcisa were pushed off the bus as the passengers scampered for the
solitary door. As the bus was still running, the unlucky couple (kasi dalawa sila eh) fell into the road and
died, as the door was forced open by the panicking passengers. Their parents sued Bachelor, its owner
and the bus driver. RTC absolved them from liability on the ground of caso fortuito and lack of negligence.
CA reversed, holding that RTC overlooked material facts showing negligence of Bachelor (inappropriate
speed, drivers failure to stop bus promptly, not enough doors, conductor panicked). SC upheld CA and
held Bachelor et.al. liable.
DOCTRINE: Common carriers are presumed negligent in case of injury or death of a passenger, even
when the proximate cause of the death is a fortuitous event. In such cases, the common carrier must
show that it exercised extraordinary diligence in preventing harm to its passengers; for it to be absolved
from liability. (NCC 1173, 1732, 1733, 1735 & 1736)
Common carrier must prove that it exercised care and diligence in protecting its customers in the case of
a fortuitous event (e.g., an unexpected stabbing incident).
For the defense of force majeure to prosper the accident must be due to natural causes and exclusively
without human intervention.
Application of the formula for computing damages loss of earning capacity.

NATURE: Petition for review of a CA decision. Original action for sum of money [with quotation marks;
apparently it was a suit for damages].
FACTS

August 1, 1980 BACHELOR Express Bus No. 800 was travelling from Davao City to Cagayan
de Oro via Butuan.
o Owner/Operator: Samson YASAY
o Driver: Cresencio RIVERA
o Conductor: Pedro COLLANGO
o Bus had only one door at the front.

While the bus was in Tabon-tabon, Butuan, the bus stopped to pick up a passenger.

About 15 minutes later, a commotion arose when a passenger at the rear end of the bus (not
identified by name) ran amuck and stabbed a fellow passenger who was a member of the
Philippine Constabulary.

A stampede ensued and the bus had to be stopped. In the aftermath of the incident, passengers
ORNOMINIO Beter and NARCISA Rautraut were found lying on the roadside.
o Ornominio died on the spot from head injuries. He was 32 y/o and a carpenter by trade.
o Narcisa eventually died due to severe injuries she sustained from the accident. She
was 23 y/o and unemployed.
o The passenger who ran amuck was able to jump off the bus but was killed by the police
after he was pursued into the bushes.

Ornominios parents (the SPS. BETER) and Narcisas parents (the SPS. RAUTRAUT [RA-UTRA-UT]) filed a complaint for sum of money against Bachelor, Yasay, and Rivera before Branch
I of the Butuan RTC.

TESTIMONIES
o LEONILA CULLANO (a passenger, testifying for the defense)

When the commotion occurred, she stood up, and noticed a wounded man.

Collango opened the door only when the passengers were shouting at the
driver to stop the bus. Collango was panicking.

The passengers were in a state of panic as well.

She saw Narcisa and Ornominio alight the bus through the door.
o SERGIA BETER (also a passenger; Ornominios mother)

Categorically stated that she saw Ornominio fall of the bus as the door was
pushed open by the force of onrushing passengers.
o PEDRO COLLANGO (the conductor; an employee of Bachelor)

He shut the door after the last passenger had entered the bus.

Some passengers jumped out of the windows while the bus was running
[Bachelor claims that Ornominio and Narcisa were among them].

Asked to provide an estimate of the bus speed at the time the commotion
occurred, he stated that they were running at not less than 30 or 40 miles [per
hour], equivalent to 48-65 kilometers per hour.

The bus was running slowly as they have just picked up a passenger. The bus
was running at second gear when the commotion broke out.
BACHELORS DEFENSES
o It was able to transport the passengers safely to their respective places of destination
except Ornominio and Narcisa, who jumped off the bus without the knowledge and
consent of Rivera and Collango
o It had exercised due diligence in the choice of its employees
o The incident was not a traffic accident or vehicular accident but a fortuitous event very
much beyond the control of Bachelor, Yasay or Rivera
o Bachelor et.al. were not parties to the incident complained of as it was an act of a third
party who is not in any way connected with them and of which they have no control and
supervision.
RTC DECISION
o FACTUAL FINDINGS

The parties presented conflicting evidence as to how Narcisa and Ornominio

died.

From the evidence adduced by Sps. Beter and Sps. Rautraut, the Court could
not see why the two deceased could have fallen off the bus when their own
witnesses testified that when the commotion ensued inside the bus, the
passengers pushed and shoved each other towards the door apparently in
order to get off from the bus through the door.

The passengers could not have passed through the door because
according to the evidence the door was locked.

Court gave credence to the evidence adduced by Bachelor et.al. that when the
commotion ensued inside the bus, the two deceased panicked and, in a state
of shock and fear, they jumped off from the bus through the window.

Rivera and Collango were not negligent in their duties. They had every right to
accept passengers absent any manifestation of violence or drunkenness.
o HOLDING

Complaint was dismissed.

Transportation companies are not insurers of their passengers.

If and when such passengers harm other passengers without the knowledge
of the transportation company's personnel, the latter should not be faulted.
CA DECISION
o FACTUAL FINDINGS

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There was no evidence to support the conclusion that the door was
locked.

Collangos testimony must not be given weight because, apart from being
inconsistent, it is biased. He is an employee of Bachelor; he was also involved
in the incident and would be inclined to testify in his employers favor.

The lone disinterested eyewitness, Cullano, testified that the door was
opened.

Court gave credence to the testimonies of Sergia and Cullano.

The bus was not running slowly. 48-65 km/h cannot be considered slow.

CIRCUMSTANCES SHOWING NEGLIGENCE

Rivera stopping the bus only after mass agitation by the passengers

Reckless opening of the doors of the bus while traveling at an

appreciably fast speed

Violation of the Land Transportation and Traffic Code in operating a

public utility bus with only one door
o HOLDING

Bachelor et.al. held liable:

For Ornominios death - P75,000.00 in loss of earnings and support,

moral damages, straight death indemnity and attorney's fees

For Narcisas death - P45,000.00 for straight death indemnity, moral

damages and attorney's fees.

Costs of suit
Bachelor et.al. appealed to the SC

ISSUE (HELD)
W/N Bachelor et.al. is liable for the deaths of Ornominio and Narcisa (YES)
SUB-ISSUES (HELD)
1) W/N the proximate cause of the incident was beyond the control of Bachelor et.al. (YES)
2) W/N Bachelor exercised extraordinary diligence to safeguard its passengers lives (NO)
RATIO
1) RUNNING AMUCK WAS PROXIMATE CAUSE; EVENT WAS FORTUITOUS; COMMON CARRIERS
NOT IMMEDIATELY ABSOLVED

Bachelor is correct in claiming that the proximate cause of the incident was the stabbing of the
constable.
o The sudden and unexpected stabbing incident drove the passengers and the bus crew
to panic.
o A stampede ensued when the passengers all rushed to the solitary exit, causing the
death of Narcisa and Ornominio (more on this below)

NCC 1173: Except in cases expressly specified by law, or when it is otherwise declared by
stipulations, or when the nature of the obligation requires the assumption of risk, no person shall
be responsible for those events which could not be foreseen, or which though foreseen,
were inevitable. This provision was taken from Art. 1105 of the Spanish Civil Code, which uses
the term caso fortuito.

Lasam v. Smith [Torts]: some extraordinary circumstance independent of the will of the obligor, or
of his employees, is an essential element of a caso fortuito.

COMMON CARRIER MUST STILL PROVE THAT IT WAS NOT NEGLIGENT IN CAUSING THE
INJURIES RESULTING FROM FORTUITOUS EVENTS
o NCC 1756: Common carriers are presumed negligent if a passenger dies or is injured.
o Tan Chiong Sian v. Inchausti & Co.: Common carrier must prove that it exercised care
and diligence in protecting its customers in the case of a fortuitous event
o BLTB Co. v. IAC: For the defense of force majeure to prosper the accident must be due
to natural causes and exclusively without human intervention.
Now the Court had to find out if Bachelor could not really be faulted in any way for the death of
Ornominio and Narcisa, which was brought about by the stabbing incident.

2) BACHELOR DID NOT EXERCISE EXTRAORDINARY DILIGENCE

Bachelors arguments:
o Rivera was driving cautiously giving due regard to traffic rules, laws and regulations
throughout the course of the trip, even during the incident.
o As ruled by the trial court, common carriers are not insurers of their passengers.

SC: Untenable. There is enough evidence to prove Bachelors failure to exercise extraordinary
diligence. It therefore failed to prove that the deaths of Ornominio and Narcisa were attributable
solely to the fortuitous event.

SC noted that the RTCs and CAs factual findings were conflicting. [hence the SC reviewed the
record]

SC upheld the CAS findings of fact [see above], which point to the failure of Bachelor to exercise
extraordinary diligence. The RTC disregarded these material facts.

CIRCUMSTANCES SHOWING NEGLIGENCE

o Rivera did not immediately stop the bus at the height of the commotion
o The bus was speeding from a full stop
o The victims fell from the bus door when it was opened or gave way while the bus was
still running
o Collango panicked and blew his whistle after people had already fallen off the bus
o The bus was not properly equipped with enough doors in accordance with law

It is therefore clear that Bachelor et.al. have failed to overcome the presumption of fault and
negligence found in the law governing common carriers.

BASIS FOR LIABILITY OF COMMON CARRIERS

o Culpa contractual or breach of contract of carriage
o NCC 1732: Common carriers are persons, corporations, firms or associations engaged
in the business of carrying or transporting passengers or goods or both by land, water,
or air, for compensation, offering their services to the public.
o NCC 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.
o NCC 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.
o NCC 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.

Page6 Transpo

3) On Bachelors allegation that the Sps. Beter and the Sps. Rautraut were not the parents of Ornominio
and Narcisa, respectively: Nagpapalusot na lang ang Bachelor. The spouses were identified as the
parents of the deceased during the trial and were recognized by the RTC as such. The complaint was
dismissed solely on the ground that Bachelor et.al. were not negligent. It is a belated attempt to evade
liability.

4) Award of Damages

FACTORS TO CONSIDER (Alcantara v. Surro):

1) life expectancy (considering the state of health of the deceased and the mortality
tables are deemed conclusive) and loss of earning capacity
2) pecuniary loss, loss of support and service
3) moral and mental suffering

Villa Rey Rule, as reiterated in People v. Daniel: BASES FOR COMPUTING LOSS OF
EARNING CAPACITY:
1) number of years on the basis of which the damages shall be computed; and 2)
rate at which the losses sustained by the heirs should be fixed.

Using Davila v. PAL formula: at the age of 30 one's normal life expectancy is 33-1/3 years based
on the American Expectancy Table of Mortality (2/3 x 80-32).

By taking into account the pace and nature of the life of a carpenter, it is reasonable to make
allowances for these circumstances and reduce the life expectancy of Ornominio to 25 years.

To fix the rate of losses it must be noted that Art. 2206 refers to gross earnings less necessary
living expenses of the deceased, in other words, only net earnings are to be considered.

COMPUTATION FOR ORNOMINIO

o Considering his social standing and position
o Deductible, living and incidental expenses=P400 a month, P4,800 annually, and
P120,000 for 25 years.
o Daily Income: Considering that Ornominios work is seasonal (arawan), SC assumed
that he works 20 days a month at P25 a day or P500 a month.
o Annual Income=P6,000 or P150,000 for 25 years.
o Compensation for Loss of support and service=P30,000 (150,000 minus 120,000)
o Straight death indemnity under NCC 2206=P30,000
o Moral Damages=P10,000.00 as an exception to the general rule against moral
damages in case of breach of contract rule Art. 2200 (Necesito v. Paras).
o Attorney's fees=P5,000.
o TOTAL INDEMNITY for Ricardo and Sergia Beter as parents and heirs of
Ornominio=P75,000.

COMPUTATION FOR NARCISA

o Straight death indemnity=P30,000.00
o Moral damages=P10,000.00
o Attorney's fees =P5,000.00
o TOTAL INDEMNITY= P45,000.00
o No indemnity for loss of earning capacity as there was no evidence that she had visible
means of support.
DISPOSITION: Petition dismissed, CA decision affirmed.

Mallari v. CA

R. No. 128607 January 31, 2000

ALFREDO
MALLARI,
SR.
and
ALFREDO
MALLARI,
JR., petitioners,
vs.
COURT OF APPEALS and BULLETIN PUBLISHING CORPORATION, respondents.
Facts: The passenger jeepney driven by Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari
Sr. collided with the delivery van of Bulletin Publishing Corp. (BULLETIN, for brevity) along the National
Highway in Bataan. Mallari Jr. testified that he went to the left lane of the highway and overtook a Fiera
which had stopped on the right lane. Before he passed by the Fiera, he saw the van of BULLETIN coming
from the opposite direction. The sketch of the accident showed that the collision occurred after Mallari Jr.
overtook the Fiera while negotiating a curve in the highway. The points of collision were the left rear
portion of the passenger jeepney and the left front side of the delivery van of BULLETIN. The two (2) right
wheels of the delivery van were on the right shoulder of the road and pieces of debris from the accident
were found scattered along the shoulder of the road up to a certain portion of the lane travelled by the
passenger jeepney. The impact caused the jeepney to turn around and fall on its left side resulting in
injuries to its passengers one of whom was Israel Reyes who eventually died due to the gravity of his
injuries.
Issue: Whether the common carrier is negligent.
Ruling: Yes. The rule is settled that a driver abandoning his proper lane for the purpose of overtaking
another vehicle in an ordinary situation has the duty to see to it that the road is clear and not to proceed if
he cannot do so in safety.4When a motor vehicle is approaching or rounding a curve, there is special
necessity for keeping to the right side of the road and the driver does not have the right to drive on the left
hand side relying upon having time to turn to the right if a car approaching from the opposite direction
comes into view.5
In the instant case, by his own admission, petitioner Mallari Jr. already saw that the BULLETIN delivery
van was coming from the opposite direction and failing to consider the speed thereof since it was still dark
at 5:00 o'clock in the morning mindlessly occupied the left lane and overtook two (2) vehicles in front of it
at a curve in the highway. Clearly, the proximate cause of the collision resulting in the death of Israel
Reyes, a passenger of the jeepney, was the sole negligence of the driver of the passenger jeepney,
petitioner Alfredo Mallari Jr., who recklessly operated and drove his jeepney in a lane where overtaking
was not allowed by traffic rules. Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it
is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was
violating a traffic regulation. As found by the appellate court, petitioners failed to present satisfactory
evidence to overcome this legal presumption.
The negligence and recklessness of the driver of the passenger jeepney is binding against
petitioner Mallari Sr., who admittedly was the owner of the passenger jeepney engaged as a
common carrier, considering the fact that in an action based on contract of carriage, the court

Page7 Transpo

need not make an express finding of fault or negligence on the part of the carrier in order to hold
it responsible for the payment of damages sought by the passenger. Under Art. 1755 of the Civil
Code, a common carrier is bound to carry the passengers safely as far as human care and
foresight can provide using the utmost diligence of very cautious persons with due regard for all
the circumstances. Moreover, under Art. 1756 of the Civil Code, in case of death or injuries to
passengers, a common carrier is presumed to have been at fault or to have acted negligently,
unless it proves that it observed extraordinary diligence. Further, pursuant to Art. 1759 of the same
Code, it is liable for the death of or injuries to passengers through the negligence or willful acts of the
former's employees. This liability of the common carrier does not cease upon proof that it exercised all the
diligence of a good father of a family in the selection of its employees. Clearly, by the contract of carriage,
the carrier jeepney owned by Mallari Sr. assumed the express obligation to transport the passengers to
their destination safely and to observe extraordinary diligence with due regard for all the circumstances,
and any injury or death that might be suffered by its passengers is right away attributable to the fault or
negligence of the carrier.

SINGSON vs. COURT OF APPEALS and CATHAY PACIFIC AIRWAYS

(G.R. No. 119995. November 18, 1997)

FACTS:
Petitioner CARLOS SINGSON and his cousin Crescentino Tiongson bought from respondent Cathay
Pacific Airways two (2) open-dated, identically routed, round trip plane tickets (Manila to LA and vice
versa). Each ticket consisted of six (6) flight coupons, each would be detached at the start of each leg of
the trip.
Singson failed to obtain a booking in LA for their to Manila; apparently, the coupon corresponding to the
5th leg of the trip was missing and instead the 3rd was still attached. It was not until few days later that
the defendant finally was able to arrange for his return to Manila.
Singson commenced an action for damages based on breach of contract of carriage against CATHAY
before the Regional Trial Court.
CATHAY alleged that there was no contract of carriage yet existing such that CATHAYs refusal to
immediately book him could not be construed as breach of contract of carriage.
The trial court rendered a decision in favor of petitioner herein holding that CATHAY was guilty of gross
negligence amounting to malice and bad faith for which it was adjudged to pay petitioner P20,000.00 for
actual damages with interest at the legal rate of twelve percent (12%) per annum from 26 August 1988
when the complaint was filed until fully paid, P500,000.00 for moral damages, P400,000.00 for exemplary
damages, P100,000.00 for attorneys fees, and, to pay the costs.

On appeal by CATHAY, the Court of Appeals reversed the trial courts finding that there was gross
negligence amounting to bad faith or fraud and, accordingly, modified its judgment by deleting the awards
for moral and exemplary damages, and the attorneys fees as well.
ISSUES:
1.) whether a breach of contract was committed by CATHAY when it failed to confirm the booking of
petitioner.
2.) whether the carrier was liable not only for actual damages but also for moral and exemplary damages,
and attorneys fees.
HELD:
1.) Yes. x x x the round trip ticket issued by the carrier to the passenger was in itself a complete written
contract by and between the carrier and the passenger. It had all the elements of a complete written
contract, to wit: (a) the consent of the contracting parties manifested by the fact that the passenger
agreed to be transported by the carrier to and from Los Angeles via San Francisco and Hong Kong back
to the Philippines, and the carriers acceptance to bring him to his destination and then back home; (b)
cause or consideration, which was the fare paid by the passenger as stated in his ticket; and, (c) object,
which was the transportation of the passenger from the place of departure to the place of destination and
back, which are also stated in his ticket. In fact, the contract of carriage in the instant case was already
partially executed as the carrier complied with its obligation to transport the passenger to his destination,
i.e., Los Angeles. , x x x the loss of the coupon was attributable to the negligence of CATHAYs agents
and was the proximate cause of the non-confirmation of petitioner's return flight.
2.) Yes. x x x Although the rule is that moral damages predicated upon a breach of contract of carriage
may only be recoverable in instances where the mishap results in the death of a passenger, or where the
carrier is guilty of fraud or bad faith, there are situations where the negligence of the carrier is so gross
and reckless as to virtually amount to bad faith, in which case, the passenger likewise becomes entitled to
recover moral damages.
x x x these circumstances reflect the carriers utter lack of care and sensitivity to the needs of its
passengers, clearly constitutive of gross negligence, recklessness and wanton disregard of the rights of
the latter, acts evidently indistinguishable or no different from fraud, malice and bad faith. As the rule now
stands, where in breaching the contract of carriage the defendant airline is shown to have acted
fraudulently, with malice or in bad faith, the award of moral and exemplary damages, in addition to actual
damages, is proper.
However, the P500,000.00 moral damages and P400,000.00 exemplary damages awarded by the trial
court have to be reduced. The well-entrenched principle is that the grant of moral damages depends upon
the discretion of the court based on the circumstances of each case. This discretion is limited by the
principle that the "amount awarded should not be palpably and scandalously excessive" as to indicate
that it was the result of prejudice or corruption on the part of the trial court. Damages are not intended to

Page8 Transpo

enrich the complainant at the expense of the defendant. They are awarded only to alleviate the moral
suffering that the injured party had undergone by reason of the defendant's culpable action. There is no
hard-and-fast rule in the determination of what would be a fair amount of moral damages since each case
must be governed by its own peculiar facts.

(2) NO. There was no evident bad faith or fraud in upgrade of seat neither on overbooking of flight as it is
within 10% tolerance.
(3) YES. Nominal damages (Art. 2221, NCC) were awarded in the amount of P5,000.00. Moral damages
(Art.2220, NCC) and attorneys fees were set aside and deleted from the Court of Appeals ruling.

In the instant case, the injury suffered by petitioner is not so serious or extensive as to warrant an award
amounting to P900,000.00. The assessment of P200,000.00 as moral damages and P50,000.00 as
exemplary damages in his favor is, in our view, reasonable and realistic.
On the issue of actual damages, we agree with the Court of Appeals that the amount of P20,000.00
granted by the trial court to petitioner should not be disturbed.
As regards attorney's fees, they may be awarded when the defendant's act or omission has compelled
the plaintiff to litigate with third persons or to incur expenses to protect his interest. It was therefore
erroneous for the Court of Appeals to delete the award made by the trial court; consequently, petitioner
should be awarded attorney's fees and the amount of P25,000.00, instead of P100,000.00 earlier
awarded, may be considered rational, fair and reasonable.
CATHAY PACIFIC AIRWAYS LTD., petitioner,
vs. SPOUSES DANIEL VASQUEZ and MARIA LUISA MADRIGAL VASQUEZ, respondents.
[G.R. No. 150843. March 14, 2003]
FACTS:
In respondents return flight to Manila from Hongkong, they were deprived of their original seats in
Business Class with their companions because of overbooking. Since respondents were privileged
members, their seats were upgraded to First Class. Respondents refused but eventually persuaded to
accept it. Upon return to Manila, they demanded that they be indemnified in the amount of P1million for
the humiliation and embarrassment caused by its employees. Petitioners Country Manager failed to
respond. Respondents instituted action for damages. The RTC ruled in favor of respondents. The Court of
Appeals affirmed the RTC decision with modification in the award of damages.

Singapore Airlines Ltd. vs. Fernandez, GR 142305, Dec. 10, 2003

FACTS:

Respondent Andion Fernandez is an acclaimed soprano in the Philippines and abroad. At the time of the
incident she was availing of an educational grant from the Federal Republic of Germany pursuing a
Masters Degree in Music major in Voice. She was invited to sing before the King and Queen of Malaysia
on Feb. 3-4, 1991. For this purpose, she took an airline ticket from Singapore Airlines (SAL) FOR THE
Frankfurt-Manila-Malaysia route. Respondent had to pass by Manila in order to gather her wardrobe and
rehearse with the pianist. SAL issued ticket for Flight SQ 27 leaving Frankfurt on Jan. 27, 1991 for
Singapore with connections to Manila in the morning of Jan. 28, 1991. On Jan. 27, 1991 SQ 27 LEFT
Frankfurt but arrived two hours late in Singapore on Jan. 28, 1991. By then, the aircraft bound for Manila
had already left. Upon deplaning in Singapore, Fernandez approached the transit counter at Changi
Airport and was told by a lady employee that there were no more flights to Manila on that day and that
she had to stay in Singapore, if she wanted, she could fly to HK but at her own expense. Respondent
stayed with a relative in Singapore for the night. The next day, she was brought back to the airport and
approached a counter for immediate booking but was told by a male employee: Cant you see I am doing
something. She explained her predicament but was told: Its your problem, not ours.

ISSUE:
Whether or not the petitioners (1) breached the contract of carriage, (2) acted with fraud and (3) were
liable for damages.

The respondent never made it to Manila and was forced to take a direct flight to Malaysia on Jan. 29,
1991 through the efforts of her mother and a travel agency in Manila. Her mother had to travel to
Malaysia with the wardrobe which caused them to incur expenses of 50,000.

RULING:
(1) YES. Although respondents have the priority of upgrading their seats, such priority may be waived, as
what respondents did. It should have not been imposed on them over their vehement objection.

RTC Manila ordered SAL to pay respondent 50k as actual damages, 250k as moral damages, 100k
as exemplary damages, 75k as attorneys fees and costs of suit.

Page9 Transpo

CA affirmed RTC decision.

ISSUE:
Did SAL break the contract of carriage?

RULING:

Yes, when an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a
contract of carriage arises. The passenger has every right to expect that he be transported on that flight
and on that date. If he does not, then the carrier opens itself to a suit for a breach of contract of carriage.
A contract of carriage requires common carriers to transport passengers safely as human care and
foresight can provide (Art. 1755, NCC). In an action for brech of a contract of carriage, the aggrieved
party does not have to prove that the common carrier was at fault or was negligent. All that is necessary
is to prove the existence of the contract and the fact of its non-performance by the carrier.
SAL failed to inform of the delay in the turnaround aircraft in Frankfurt, neither did it ask if the respondent
and 25 other delayed passengers are amenable to a stay in Singapore. Even SALs manual mandates
that in cases of urgent connections the head office of defendant in Singapore has to be informed of
delays so as to make needed arrangements for connecting passengers.

Japan Airlines V. Asuncion (G.R No. 161730, January 28,2005) 449 SCRA 544
FACTS:
This petition for review seeks to reverse and set aside the October 9, 2002 decision of the Court of
Appeals and its January 12, 2004 resolution, which affirmed in toto the June 10, 1997 decision of the
Regional Trial Court of Makati City, Branch 61 in Civil Case No. 92-3635.
On March 27, 1992, respondents Michael and Jeanette Asuncion left Manila on board Japan Airlines
(JAL) Flight 742 bound for Los Angeles. Their itinerary included a stop-over in Narita and an overnight
stay at Hotel Nikko Narita. Upon arrival at Narita, Mrs. Noriko Etou-Higuchi of JAL endorsed their
applications for shore pass and directed them to the Japanese immigration official. A shore pass is
required of a foreigner aboard a vessel or aircraft who desires to stay in the neighborhood of the port of
call for not more than 72 hours.
During their interview, the Japanese immigration official noted that Michael appeared shorter than his
height as indicated in his passport. Because of this inconsistency, respondents were denied shore pass
entries and were brought instead to the Narita Airport Rest House where they were billeted overnight.
Mr. Atsushi Takemoto of the International Service Center (ISC), the agency tasked by Japans Immigration
Department to handle passengers who were denied shore pass entries, brought respondents to the
Narita Airport Rest House where they stayed overnight until their departure the following day for Los
Angeles. Respondents were charged US$400.00 each for their accommodation, security service and
meals.
On December 12, 1992, respondents filed a complaint for damages claiming that JAL did not fully apprise
them of their travel requirements and that they were rudely and forcibly detained at Narita Airport.
Issue: Whether or not JAL is liable of breach of contract of carriage.
Side Issues:

When respondent conveyed her apprehension in Frankfurt of the impending delay, she was assured by
petitioners personnel in Frankfurt that she will be transported to Manila on the same date. The lady
employee at the counter in Singapore only allowed respondent to use the phone upon threat of suit, the
male employee at the counter marked Immediate Attention to Passengers with Immediate Booking was
rude to her.

Petition is denied. CA decision affirmed.

Whether or not JAL is liable for moral, exemplary damages,

Whether or not the plaintiff is liable for attorneys fee and cost of suit incurred (JAL counterclaim)
Ruling:
The court finds that JAL did not breach its contract of carriage with respondents. It may be true that JAL
has the duty to inspect whether its passengers have the necessary travel documents, however, such duty
does not extend to checking the veracity of every entry in these documents. JAL could not vouch for the
authenticity of a passport and the correctness of the entries therein. The power to admit or not an alien
into the country is a sovereign act which cannot be interfered with even by JAL. This is not within the

Page10 Transpo

ambit of the contract of carriage entered into by JAL and herein respondents. As such, JAL should not be
faulted for the denial of respondents shore pass applications.

In the Respondents claim that petitioner breached its contract of carriage when it failed to explain to the
immigration authorities that they had overnight vouchers at the Hotel Nikko Narita. They imputed that JAL
did not exhaust all means to prevent the denial of their shore pass entry applications. JAL or any of its
representatives have no authority to interfere with or influence the immigration authorities. The most that
could be expected of JAL is to endorse respondents applications, which Mrs. Higuchi did immediately
upon their arrival in Narita.
Moral damages may be recovered in cases where one willfully causes injury to property, or in cases of
breach of contract where the other party acts fraudulently or in bad faith. Exemplary damages are
imposed by way of example or correction for the public good, when the party to a contract acts in wanton,
fraudulent, oppressive or malevolent manner. Attorneys fees are allowed when exemplary damages are
awarded and when the party to a suit is compelled to incur expenses to protect his interest.[17] There
being no breach of contract nor proof that JAL acted in wanton, fraudulent or malevolent manner, there is
no basis for the award of any form of damages.
Neither should JAL be held liable to reimburse respondents the amount of US$800.00. It has been
sufficiently proven that the amount pertained to ISC, an agency separate and distinct from JAL, in
payment for the accommodations provided to respondents. The payments did not in any manner accrue
to the benefit of JAL.
However, we find that the Court of Appeals correctly dismissed JALs counterclaim for litigation expenses,
exemplary damages and attorneys fees. The action was filed by respondents in utmost good faith and
not manifestly frivolous. Respondents honestly believed that JAL breached its contract. A persons right to
litigate should not be penalized by holding him liable for damages. This is especially true when the filing
of the case is to enforce what he believes to be his rightful claim against another although found to be
erroneous.[
WHEREFORE, in view of the foregoing, the instant petition is PARTLY GRANTED. The October 9, 2002
decision of the Court of Appeals and its January 12, 2004 resolution in CA-G.R. CV No. 57440, are
REVERSED and SET ASIDE insofar as the finding of breach on the part of petitioner and the award of
damages, attorneys fees and costs of the suit in favor of respondents is concerned. Accordingly, there
being no breach of contract on the part of petitioner, the award of actual, moral and exemplary damages,
as well as attorneys fees and costs of the suit in favor of respondents Michael and Jeanette Asuncion, is
DELETED for lack of basis. However, the dismissal for lack of merit of petitioners counterclaim for
litigation expenses, exemplary damages and attorneys fees, is SUSTAINED. No pronouncement as to
costs.

1.

Northwest Airlines v Chiong, January 31, 2008

Facts
Philimare, as the authorized Philippine agent of TransOcean, hired Chiong as third engineer of
TransOceans vessel M/V Elbia. Subsequently, Philmare dispatched a letter of guarantee to CL
Hutchins and Co., TranOceans agent at the San Diego Port, confirming Chiongs arrival in time to
board the vessel. For this purpose, Philimare purchased for Chiong a Northwest plane ticket for San
Diego from Manila. Chiong, on queue at the check-in counter, was informed that his name did not
appear in the list of confirmed departing passengers. He was directed to speak to a man standing
outside the Northwests counters from whom Chiong could allegedly obtain a boarding pass.
Posthaste, Chiong approached the man but having no $100 to pay for the boarding pass he went on
queue at the check-in counter again and presented his ticket where he was made to wait. When
Chiong approached Calvo if she had money for the boarding pass, the latter found something amiss
because his plane ticket was already confirmed. Ultimately, Chiong was not allowed to board the
flight and was unable to work at the M/V Elbia.
It appears that Chiongs name was crossed out and substituted with "W. Costine" in Northwests
Air Passenger Manifest.
Chiong demanded as recompense: (1) the amount equivalent to Chiongs salary under the
latters Crew Agreement with TransOcean; (2) P15,000 for Chiongs expenses in fetching and
bringing his family from Samar to Manila; (3) P500,000 as moral damages; and (4) P500,000 as legal
fees. When Northwest demurred, Chiong filed a complaint for breach of contract of carriage.
Northwest contradicted the claim that it breached its contract of carriage with Chiong, reiterating
that Chiong had no cause of action against it because per its records, Chiong was a "no-show"
passenger.
The RTC rendered a Decision finding preponderance of evidence in favor of Chiong, and holding
Northwest liable for breach of contract of carriage. The RTC ruled that the evidence adduced by the
parties supported the conclusion that Chiong was deliberately prevented from checking-in and his
boarding pass unjustifiably withheld to accommodate an American passenger by the name of W.
Costine. The CA affirmed the RTC ruling.
Issue
Whether Northwest breached its contract of carriage with Chiong and if so, whether it is liable for
compensatory, actual, moral and exemplary damages, attorneys fees, and costs of suit
Ruling
In addition to his testimony, Chiongs evidence consisted of a Northwest ticket, Chiongs
passport and seaman service record book duly stamped at the PCG counter, and the testimonies of
Calvo, Florencio Gomez, and Philippine Overseas Employment and Administration (POEA)
personnel who all identified the signature and stamp of the PCG on Chiongs passport.
Northwest did not present any evidence to support its belated defense that Chiong departed
from the Philippines on April 17, 1989 to work as Third Engineer on board M/V Elbia under the
original crew agreement. Its bare-faced claim that Chiong was a no-show passenger was belied by
the records.
Even if Chiong left the Philippines on April 17, 1989, it would not necessarily prove that Chiong
was a "no-show" on April 1, 1989. Neither does it negate the already established fact that Chiong had
a confirmed ticket for April 1, 1989, and first passed through the PCG counter without delay, then
reached and was at the Northwest check-in counters on time for the scheduled flight.

Page11 Transpo

Northwest breached its contract of carriage with Chiong.

Time and again, we have declared that a contract of carriage, in this case, air transport, is
primarily intended to serve the traveling public and thus, imbued with public interest. The law
governing common carriers consequently imposes an exacting standard of conduct. As the aggrieved
party, Chiong only had to prove the existence of the contract and the fact of its non-performance by
Northwest, as carrier, in order to be awarded compensatory and actual damages.
Article 2220 of the Civil Code of the Philippines, an award of moral damages, in breaches of
contract, is in order upon a showing that the defendant acted fraudulently or in bad faith. Bad faith
does not simply connote bad judgment or negligence. It imports a dishonest purpose or some moral
obliquity and conscious doing of a wrong. It means breach of a known duty through some motive,
interest or ill will that partakes of the nature of fraud.
The award of exemplary damages is also correct given the evidence that Northwest acted in an
oppressive manner towards Chiong.
Attorneys fees may be awarded when a party is compelled to litigate or incur expenses to protect his
interest, or where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiffs
plainly valid, just and demandable claim.
G.R. No. 160219

July 21, 2008

VECTOR
SHIPPING
CORPORATION
and
FRANCISCO
SORIANO, Petitioners,
vs.
ADELFO B. MACASA, EMELIA B. MACASA, TIMOTEO B. MACASA, CORNELIO B. MACASA, JR.,
and ROSARIO C. MACASA, SULPICIO LINES, INC., GO GUIOC SO, ENRIQUE S. GO, EUSEBIO S.
GO, RICARDO S. GO, VICTORIANO S. GO, EDWARD S. GO, ARTURO S. GO, EDGAR S. GO and
EDMUNDO S. GO,Respondents.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Civil Procedure
seeking the reversal of the Court of Appeals (CA) Decision 2 dated September 24, 2003, which affirmed
with modification the Decision3 of the Regional Trial Court (RTC), Branch 17 of Davao City, dated May 5,
1995.
The Facts
On December 19, 1987, spouses Cornelio (Cornelio) and Anacleta Macasa (Anacleta), together with their
eight-year-old grandson, Ritchie Macasa, (Ritchie) boarded the MV Doa Paz, owned and operated by
respondent Sulpicio Lines, Inc. (Sulpicio Lines), at Tacloban, Leyte bound for Manila. On the fateful
evening of December 20, 1987, MV Doa Paz collided with the MT Vector, an oil tanker owned and
operated by petitioners Vector Shipping Corporation (Vector Shipping) and Francisco Soriano (Soriano),
which at the time was loaded with 860,000 gallons of gasoline and other petroleum products, in the

vicinity of Dumali Point, Tablas Strait, between Marinduque and Oriental Mindoro. Only twenty-six persons
survived: 24 passengers of MV Doa Paz and 2 crew members of MT Vector. Both vessels were never
retrieved. Worse, only a few of the victims bodies, who either drowned or were burned alive, were
recovered. Cornelio, Anacleta and Ritchie were among the victims whose bodies have yet to be
recovered up to this day.
Respondents Adelfo, Emilia, Timoteo, and Cornelio, Jr., all surnamed Macasa, are the children of
Cornelio and Anacleta. On the other hand, Timoteo and his wife, respondent Rosario Macasa, are the
parents of Ritchie (the Macasas). Some of the Macasas went to the North Harbor in Manila to await the
arrival of Cornelio, Anacleta and Ritchie. When they heard the news that MV Doa Paz was rammed at
sea by another vessel, bewildered, the Macasas went to the office of Sulpicio Lines to check on the
veracity of the news, but the latter denied that such an incident occurred. According to the Macasas,
Sulpicio Lines was uncooperative and was reluctant to entertain their inquiries. Later, they were forced to
rely on their own efforts to search for the bodies of their loved ones, but to no avail.
The Macasas manifested that before they filed a case in court, Sulpicio Lines, through counsel, intimated
its intention to settle, and offered the amount of P250,000.00 for the death of Cornelio, Anacleta and
Ritchie. The Macasas rejected the said offer. Thus, on October 2, 1991, the Macasas filed a Complaint for
Damages arising out of breach of contract of carriage against Sulpicio Lines before the RTC. The
complaint imputed negligence to Sulpicio Lines because it was remiss in its obligations as a common
carrier. The Macasas prayed for civil indemnity in the amount of P800,000.00 for the death of Cornelio,
Anacleta and Ritchie, as well as for Cornelios and Anacletas alleged unearned income since they were
both working as vocational instructors before their demise. The Macasas also claimed P100,000.00 as
actual and compensatory damages for the lost cash, checks, jewelries and other personal belongings of
the latter, P600,000.00 in moral damages, P100,000.00 by way of exemplary damages, and P100,000.00
as costs and attorneys fees.
Sulpicio Lines traversed the complaint, alleging, among others that (1) MV Doa Paz was seaworthy in all
aspects; (2) it exercised extraordinary diligence in transporting their passengers and goods; (3) it acted in
good faith as it gave immediate assistance to the survivors and kin of the victims; (4) the sinking of MV
Doa Paz was without contributory negligence on its part; and (5) the collision was MT Vectors fault
since it was allowed to sail with an expired coastwise license, expired certificate of inspection and it was
manned by unqualified and incompetent crew members per findings of the Board of Marine Inquiry (BMI)
in BMI Case No. 653-87 which had exonerated Sulpicio Lines from liability. Thus, Sulpicio Lines filed a
Third-Party Complaint against Vector Shipping, Soriano and Caltex Philippines Inc. (Caltex), the charterer
of MT Vector.
Trial on the merits ensued.
The RTCs Ruling
In its Decision4 dated May 5, 1995, the RTC awarded P200,000.00 as civil indemnity for the death of
Cornelio, Anacleta and Ritchie; P100,000.00 as actual damages; P500,000.00 as moral

Page12 Transpo

damages; P100,000.00 as exemplary damages; and P50,000.00 as attorneys fees. The case was
disposed of in this wise:

Accordingly, as a result of this decision, on plaintiffs complaint against third-party (sic) defendant Sulpicio
Lines Inc., third-party defendant Caltex Philippines, Inc. and third-party defendant MT Vector Shipping
Corporation and/or Francisco Soriano, are liable against defendant third-party plaintiff, Sulpicio Lines, for
reimbursement, subrogation and indemnity on all amounts, defendant Sulpicio Lines was ordered liable
against plaintiffs, by way of actual, moral, exemplary damages and attorneys fee, MT Vector Shipping
Lines and/or Francisco Soriano, third-party defendants, are ordered jointly and severally, liable to pay
third-party plaintiff, Sulpicio Lines, by way of reimbursement, subrogation and indemnity, of all the above
amounts, ordered against defendant Sulpicio Lines, Inc., to pay in favor of plaintiff, with interest and cost
of suit.
SO ORDERED.5
Aggrieved, Sulpicio Lines, Caltex, Vector Shipping and Soriano appealed to the CA.
The CAs Ruling
In the assailed Decision6 dated September 24, 2003, the CA held:

WHEREFORE, all premises considered, the assailed decision is hereby modified in that third-party
defendant-appellant Caltex Phils., Inc. is hereby exonerated from liability. The P100,000 actual damages
is deleted while the indemnity for (sic) is reduced to P150,000. All other aspects of the appealed judgment
are perforce affirmed.
SO ORDERED.7
The Issues
Hence, this Petition raising the following issues:
1) May the decision of the Board Marine Inquiry (BMI) which, to date, is still pending with the
Department of National Defense (DND) and, therefore, deemed vacated as it is not yet final and
executory, be binding upon the court?
2) In the absence of clear, convincing, solid, and concrete proof of including, but not limited to,
absence of eyewitnesses on that tragic maritime incident on 20 December 1987, will it be in
consonance with law, logic, principles of physics, and/or allied science, to hold that MT VECTOR
is the vessel solely at fault and responsible for the collision? How about MV DOA PAZ, a bigger
ship of 2,324.08 gross tonnage (5-deck cargo passenger vessel, then cruising at 16.5 knots)? As
compared to MT VECTOR of 629.82 gross tonner tanker, then cruising at 4.5 knots? May it be

considered that, as between the two vessels, MV DOA PAZ could ha[ve] avoid[ed] such
collision had there been an official on the bridge, and that MV DOA PAZ could had been earlier
alarmed by its radar for an approaching vessel?
3) May VECTOR and SORIANO be held liable to indemnify/reimburse SULPICIO the amounts it
is ordered to pay the MACASAs because SULPICIOs liability arises from breach of contract of
carriage, inasmuch as in "culpa contractual" it is sufficient to prove the existence of the contract,
because carrier is presumed to be at fault or to have acted negligently it being its duty to
exercise extraordinary diligence, and cannot make the [safety] of its passengers dependent
upon the diligence of VECTOR and SORIANO?
4) Will it be in accord with existing law and/or jurisprudence that both vessels (MV DOA PAZ
and MT VECTOR) be declared mutually at fault and, therefore, each must [bear] its own loss? In
the absence of CLEAR and CONVINCING proof[,] who is solely at fault?8
Petitioners posit that the factual findings of the BMI are not binding on the Court as such is limited to
administrative liabilities and does not absolve the common carrier from its failure to observe extraordinary
diligence; that this Courts ruling in Caltex (Philippines), Inc. v. Sulpicio Lines, Inc. 9 is not res adjudicata to
this case, since there were several other cases which did not reach this Court but, however, attained
finality, previously holding that petitioners and Sulpicio Lines are jointly and severally liable to the
victims;10 that the collision was solely due to the fault of MV Doa Paz as it was guilty of navigational fault
and negligence; that due to the absence of the ship captain and other competent officers who were not at
the bridge at the time of collision, and running at a speed of 16.5 knots, it was the MV Doa Paz which
rammed MT Vector; and that it was improbable for a slower vessel like MT Vector which, at the time, was
running at a speed of merely 4.5 knots to ram a much faster vessel like the MV Doa Paz.11
On the other hand, Sulpicio Lines claims that this Courts ruling in Caltex (Philippines), Inc. v. Sulpicio
Lines, Inc.12is res adjudicata to this case being of similar factual milieu and that the same is the law of the
case on the matter; that the BMI proceedings are administrative in nature and can proceed independently
of any civil action filed with the regular courts; that the BMI findings, as affirmed by the Philippine Coast
Guard, holding that MT Vector was solely at fault at the time of collision, were based on substantial
evidence and by reason of its special knowledge and technical expertise, the BMIs findings of facts are
generally accorded respect by the courts; and that, as such, said BMI factual findings cannot be the
subject of the instant petition for review asking this Court to look again into the pieces of evidence already
presented. Thus, Sulpicio Lines prays that the instant Petition be denied for lack of merit.13
In their memorandum, the Macasas manifest that they are basically concerned with their claims against
Sulpicio Lines for breach of contract of carriage. The Macasas opine that the arguments raised by
Sulpicio Lines in its attempt to avoid liability to the Macasas are without basis in fact and in law because
the RTCs Decision is supported by applicable provisions of law and settled jurisprudence on contract of
carriage. However, they disagree with the CA on the deletion of the RTCs award of P100,000.00 actual
damages. The CAs simple justification that if indeed the victims had such huge amount of money, they
could have traveled by plane instead of taking the MV Doa Paz, according to the Macasas, is unjust,

Page13 Transpo

misplaced and adds insult to injury. They insist that the claim for actual damages was duly established in
the hearings before the RTC by ample proof that Cornelio and Anacleta were both professionals; that they
were in possession of personal effects and jewelries; and that since it was the Christmas season, the
spouses intended a vacation in Manila and buy things to bring home as gifts. The Macasas also appeal
that the reduction of the civil indemnity for the death of Cornelio, Anacleta and Ritchie from P200,000.00
to P150,000.00 be reconsidered. Thus, the Macasas pray that the RTC Decision be affirmed in toto
and/or the CA Decision be modified with respect to the deleted award of actual damages and the reduced
civil indemnity for the death of the victims.14
This Courts Ruling
The instant Petition lacks merit.
It is a well-established doctrine that in petitions for review on certiorari under Rule 45 of the Rules of Civil
Procedure, only questions of law may be raised by the parties and passed upon by this Court. This Court
defined a question of law, as distinguished from a question of fact, to wit:

Court denied the petition in Francisco Soriano v. Sulpicio Lines, Inc. for its failure to sufficiently show that
the CA committed any reversible error in the challenged decision as to warrant the exercise of this Courts
discretionary appellate jurisdiction. As a result, the CA decision 21 dated November 17, 2003 holding that
Sulpicio Lines has a right to reimbursement and indemnification from the third-party defendants Soriano
and Vector Shipping, who are the same petitioners in this case, was sustained by this Court. Considering
that in the cases which have reached this Court, we have consistently upheld the third-party liability of
petitioners, we see no cogent reason to deviate from this ruling.1avvphi1
Moreover, in Caltex (Philippines), Inc. v. Sulpicio Lines, Inc., 22 we held that MT Vector fits the definition of
a common carrier under Article 173223 of the New Civil Code. Our ruling in that case is instructive:
Thus, the carriers are deemed to warrant impliedly the seaworthiness of the ship. For a vessel to be
seaworthy, it must be adequately equipped for the voyage and manned with a sufficient number of
competent officers and crew. The failure of a common carrier to maintain in seaworthy condition the
vessel involved in its contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil
Code.

A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is
a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be
one of law, the same must not involve an examination of the probative value of the evidence presented by
the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue invites a review of the evidence presented,
the question posed is one of fact. Thus, the test of whether a question is one of law or of fact is
not the appellation given to such question by the party raising the same; rather, it is whether the
appellate court can determine the issue raised without reviewing or evaluating the evidence, in
which case, it is a question of law; otherwise it is a question of fact. 15

The provisions owed their conception to the nature of the business of common carriers. This business is
impressed with a special public duty. The public must of necessity rely on the care and skill of common
carriers in the vigilance over the goods and safety of the passengers, especially because with the modern
development of science and invention, transportation has become more rapid, more complicated and
somehow more hazardous. For these reasons, a passenger or a shipper of goods is under no obligation
to conduct an inspection of the ship and its crew, the carrier being obliged by law to impliedly warrant its
seaworthiness.

Petitioners insistence that MV Doa Paz was at fault at the time of the collision will entail this Courts
review and determination of the weight, credence, and probative value of the evidence presented. This
Court is being asked to evaluate the pieces of evidence which were adequately passed upon by both the
RTC and the CA. Without doubt, this matter is essentially factual in character and, therefore, outside the
ambit of a petition for review oncertiorari under Rule 45 of the Rules of Civil Procedure. Petitioners ought
to remember that this Court is not a trier of facts. It is not for this Court to weigh these pieces of evidence
all over again.16

We are not swayed by the lengthy disquisition of MT Vector and Francisco Soriano urging this Court to
absolve them from liability. All evidence points to the fact that it was MT Vectors negligent officers and
crew which caused it to ram into MV Doa Paz. More so, MT Vector was found to be carrying expired
coastwise license and permits and was not properly manned. As the records would also disclose, there is
a defect in the ignition system of the vessel, and it was not convincingly shown whether the necessitated
repairs were in fact undertaken before the said ship had set to sea. In short, MT Vector was unseaworthy
at the time of the mishap. That the said vessel was allowed to set sail when it was, to everyone in the
groups knowledge, not fit to do so translates into rashness and imprudence.24

Likewise, we take judicial notice 17 of our decision in Caltex (Philippines), Inc. v. Sulpicio Lines, Inc. 18 In
that case, while Caltex was exonerated from any third-party liability, this Court sustained the CA ruling
that Vector Shipping and Soriano are liable to reimburse and indemnify Sulpicio Lines for whatever
damages, attorneys fees and costs the latter is adjudged to pay the victims therein.
Petitioners invocation of the pendency before this Court of Francisco Soriano v. Sulpicio Lines,
Inc.19 along with Vector Shipping Corporation and Francisco Soriano v. American Home Assurance Co.
and Sulpicio Lines, Inc.20is unavailing. It may be noted that in a Resolution dated February 13, 2006, this

Thus, we are disposed to agree with the findings of the CA when it aptly held:

We reiterate, anew, the rule that findings of fact of the CA are generally binding and conclusive on this
Court.25While this Court has recognized several exceptions 26 to this rule, none of these exceptions finds
application in this case. It bears emphasis also that this Court accords respect to the factual findings of
the trial court, especially if affirmed by the CA on appeal. Unless the trial court overlooked substantial
matters that would alter the outcome of the case, this Court will not disturb such findings. In any event, we
have meticulously reviewed the records of the case and found no reason to depart from the rule.27

Page14 Transpo

Lastly, we cannot turn a blind eye to this gruesome maritime tragedy which is now a dark page in our
nations history. We commiserate with all the victims, particularly with the Macasas who were denied
justice for almost two decades in this case. To accept petitioners submission that this Court, along with
the RTC and the CA, should await the review by the Department of National Defense of the BMI findings,
would, in effect, limit the courts jurisdiction to expeditiously try, hear and decide cases filed before them. It
would not only prolong the Macasas agony but would result in yet another tragedy at the expense of
speedy justice. This, we cannot allow.
WHEREFORE, the instant Petition is DENIED. The assailed Court of Appeals Decision dated September
24, 2003 is hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
2.

Japan Airlines, Inc. v Simangan, September 22, 2008

Facts
Simangan decided to donate a kidney to his ailing cousin Loreto, in California. Simangan
needed to go to the US to complete his preliminary work-up and donation surgery. Upon UCLAs
request, Simangan was issued an emergency US visa by the American Embassy in Manila.
Respondent purchased a round trip plane ticket from petitioner JAL and was issued the
corresponding boarding pass.
On the date of the flight, he went to the airport and was allowed to check-in at JALs counter. His
plane ticket, boarding pass, travel authority and personal articles were subjected to rigid immigration
and security routines. Respondent was then allowed to board the airplane.
While inside the airplane, JALs crew suspected Simangan of carrying a falsified travel document
and imputed that he would only use the trip to the US as a pretext to stay and work in Japan. Later,
he was ordered to leave the plane. Respondent protested, explaining that he was issued a US visa.
His pleas were ignored and was bumped off.
Respondent went to JAL's ground office and waited there for three hours. Meanwhile, the plane
took off and he was left behind. Afterwards, he was informed that his travel documents were, indeed,
in order. Respondent was refunded the cost of his plane ticket less the sum of US$500.00 which was
deducted by JAL. Subsequently, respondent's U.S. visa was cancelled.
Respondent filed an action for damages against JAL. The latter denied the material allegations
of the complaint. The RTC ordered JAL to pay Simangan moral, exemplary damages and attorneys
fees, plus the cost of suit. The CA affirmed the RTCs decision but lowered the amount of moral and
exemplary damages and deleted the award of attorneys fees. Hence, the present petition.
Issue
Whether JAL is guilty of breach of contract of carriage, and if so liable for moral and exemplary
damages
Ruling
Since JAL definitely declared that the flight could not wait for respondent, it gave respondent no
choice but to be left behind. The latter was unceremoniously bumped off despite his protestations
and valid travel documents and notwithstanding his contract of carriage with JAL. Damage had
already been done when respondent was offered to fly the next day on July 30, 1992. Said offer did
not cure JAL's default.

3.

Moreover, the reason behind the bumping off incident, as found by the RTC and CA, was that
JAL personnel imputed that respondent would only use the trip to the United States as a pretext to
stay and work in Japan.
Apart from the fact that respondent's plane ticket, boarding pass, travel authority and personal
articles already passed the rigid immigration and security routines, JAL, as a common carrier, ought
to know the kind of valid travel documents respondent carried. As provided in Article 1755 of the New
Civil Code: "A common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all
the circumstances." Thus, We find untenable JAL's defense of "verification of respondent's
documents" in its breach of contract of carriage.
The power to admit or not an alien into the country is a sovereign act which cannot be interfered
with even by JAL.
In an action for breach of contract of carriage, all that is required of plaintiff is to prove the
existence of such contract and its non-performance by the carrier through the latter's failure to carry
the passenger safely to his destination. Respondent has complied with these twin requisites.
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 Article 2219 of the Civil Code. As
an exception, such damages are recoverable: (1) in cases in which the mishap results in the death of
a passenger, as provided in Article 1764, in relation to Article 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 Article 2220. JAL breached its
contract of carriage with respondent in bad faith. JAL personnel summarily and insolently ordered
respondent to disembark while the latter was already settled in his assigned seat. He was certainly
embarrassed and humiliated when, in the presence of other passengers, the appellant's airline staff
shouted at him to stand up and arrogantly asked him to produce his travel papers, without the least
courtesy every human being is entitled to. Inattention to and lack of care for the interests of its
passengers who are entitled to its utmost consideration, particularly as to their convenience, amount
to bad faith which entitles the passenger to an award of moral damages.
JAL is also liable for exemplary damages as its above-mentioned acts constitute wanton,
oppressive and malevolent acts against respondent. Exemplary damages, which are awarded by
way of example or correction for the public good, may be recovered in contractual obligations, as in
this case, if defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner.
It was therefore erroneous for the CA to delete the award of attorney's fees on the ground that
the record is devoid of evidence to show the cost of the services of respondent's counsel. The
amount is actually discretionary upon the Court so long as it passes the test of reasonableness. They
may be recovered as actual or compensatory damages when exemplary damages are awarded and
whenever the court deems it just and equitable, as in this case.
PAL v CA and Spouses Buncio, September 22, 2008
Facts
The spouses Buncio purchased from PAL two plane tickets for their 2 minor children. Since they
will travel as unaccompanied minors, PAL required the Buncios accomplished an indemnity bond as
required. PAL agreed to transport the minors from Manila to San Francisco, and upon arrival in SF, to
transport through a connecting flight to Los Angeles, via United Airways where they will be met by
their grandmother at the LAX.

Page15 Transpo

When the children arrived at SF airport, United Airways refused to take them aboard because
PALs personnel in SF could not produce the indemnity bond submitted by the Buncios, which was
lost by PALs personnel during the previous stop-over in Honolulu. Subsequently, Mr. Strigl, Lead
Traffic Agent of PAL in SF, took the children to his residence where they stayed overnight.
When UAs airplane landed in LAX, Mrs. Regalado, the grandmother, found no children and
could not get any answer as to their whereabouts. Next day, the minors boarded a Western Airlines
plane bound for LA where they were met by Mrs. Regalado. PALs personnel had previously informed
her of the late arrival.
The Buncios sent a demand for damages for the gross negligence and inefficiency of its
employees, which went unheeded. Hence, a complaint was filed. Petitioner denied that the loss of
the indemnity bond was caused by the gross negligence and malevolent conduct of its personnel.
Petitioner averred that it always exercised the diligence of a good father of the family in the selection,
supervision and control of its employees. In addition, the children were personally escorted by Strigl,
and the latter exerted efforts to make the connecting flight of Deanna and Nikolai to Los Angeles
possible. Further, they were not left unattended from the time they were stranded in San Francisco
until they boarded Western Airlines for a connecting flight to Los Angeles.
The RTC held PAL liable for damages for breach of contract of carriage and awarded moral and
exemplary damages plus attorneys fees and costs of suit. The CA affirmed the RTC in toto. Hence,
the present petition.
Issue
Whether PAL is liable for damages
Ruling
When an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date,
a contract of carriage arises. The passenger has every right to expect that he be transported on that
flight and on that date, and it becomes the airlines obligation to carry him and his luggage safely to
the agreed destination without delay. If the passenger is not so transported or if in the process of
transporting, he dies or is injured, the carrier may be held liable for a breach of contract of carriage.
In breach of contract of air carriage, moral damages may be recovered where (1) the mishap
results in the death of a passenger; or (2) where the carrier is guilty of fraud or bad faith; or (3) where
the negligence of the carrier is so gross and reckless as to virtually amount to bad faith.
Gross negligence implies a want or absence of or failure to exercise even slight care or
diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without
exerting any effort to avoid them.
Petitioner was fully aware that the children were travelling as unaccompanied minors and require
special care. They also knew that the indemnity bond was required for the children to make the
connecting flight. Yet, it did not exercise utmost care in handling the indemnity bond resulting in its
loss. This was the proximate loss of the failure of the minors to make their connecting flight. This
manifests that PAL did not check or verify if the indemnity bond was in its custody before leaving
Honolulu.
The foregoing circumstances reflect petitioners utter lack of care for and inattention to the
welfare of Deanna and Nikolai as unaccompanied minor passengers. They also indicate petitioners

failure to exercise even slight care and diligence in handling the indemnity bond. Clearly, the
negligence of petitioner was so gross and reckless that it amounted to bad faith.
Petitioner should have asked for the indemnity bond from the immigration office during the stopover instead of partly blaming the said office later on for the loss of the indemnity bond. Petitioners
insensitivity on this matter indicates that it fell short of the extraordinary care that the law requires of
common carriers.
Petitioner breached its contract of carriage with private respondents, and it acted recklessly and
malevolently in transporting Deanna and Nikolai as unaccompanied minors and in handling their
indemnity bond. We have also ascertained that private respondents are entitled to moral damages
because they have sufficiently established petitioners gross negligence which amounted to bad faith.
This being the case, the award of exemplary damages is warranted.
The award of attorneys fees is the exception, not the general rule, and it is not sound public
policy to place a penalty on the right to litigate; nor should attorneys fees be awarded every time a
party wins a lawsuit. The text of the decision must state the reason behind the award of attorneys
fees. Otherwise, its award is totally unjustified. In the instant case, the award of attorneys fees was
merely cited in the dispositive portion of the RTC decision without the RTC stating any legal or factual
basis for said award. Hence, the Court of Appeals erred in sustaining the RTCs award of attorneys
fees.
The RTC and the Court of Appeals ordered petitioner to pay Deanna and Nikolai P50,000 each
as moral damages. Both of them testified that they were afraid and were not able to eat and sleep
during the time they were stranded in San Francisco. Likewise, the award of P25,000.00 each to
Deanna and Nikolai as exemplary damages is fair so as to deter petitioner and other common
carriers from committing similar or other serious wrongdoings. Both courts also directed petitioner to
pay private respondent Aurora R. Buncio P75,000. as moral damages. This is equitable and
proportionate considering the serious anxiety and mental anguish she experienced as a mother when
Deanna and Nikolai were not allowed to take the connecting flight as scheduled and the fact that they
were stranded in a foreign country and in the company of strangers. Also, the award of P30,000.00
as moral damages to Mrs. Regalado is appropriate because of the serious anxiety and wounded
feelings she felt as a grandmother when Deanna and Nikolai, whom she was to meet for the first
time, did not arrive at the Los Angeles Airport. The omission of award of damages to private
respondent Manuel S. Buncio was proper for lack of basis. His court testimony was rightly
disregarded by the RTC because he failed to appear in his scheduled cross-examination.
When an obligation, not constituting a loan or forbearance of money is breached, an interest on the
amount of damages awarded may be imposed at the rate of 6% per annum. We further declared that
when the judgment of the court awarding a sum of money becomes final and executory, the rate of legal
interest, whether it is a loan/forbearance of money or not, shall be 12% per annum from such finality until
its satisfaction, this interim period being deemed to be then equivalent to a forbearance of credit.
G.R. No. 179117

February 3, 2010

NORTHWEST
AIRLINES,
INC., Petitioner,
vs.
SPOUSES EDWARD J. HESHAN AND NELIA L. HESHAN AND DARA GANESSA L. HESHAN,
REPRESENTED BY HER PARENTS EDWARD AND NELIA HESHAN, Respondents.

CARPIO MORALES, J.:

Page16 Transpo

DECISION

In July 1998, Edward Heshan (Edward) purchased three (3) roundtrip tickets from Northwest Airlines, Inc.
(petitioner) for him, his wife Nelia Heshan (Nelia) and daughter Dara Ganessa Heshan (Dara) for their trip
from Manila to St. Louis, Missouri, USA and back to attend an ice skating competition where then seven
yearold Dara was to participate.1

When Daras participation in the ice skating event ended on August 7, 1998, the Heshans proceeded to
the airport to take the connecting flight from St. Louis to Memphis on their way to Los Angeles. At the
airport, the Heshans first checked-in their luggage at the airports "curbside check-in" near the
entrance.2 Since they arrived three hours early for their 6:05 p.m. flight (Flight No. 972M), the Heshans
whiled away the time at a nearby coffee shop. At 5:15 p.m. when the check-in counter opened, Edward
took to the line where he was second in the queue. When his turn came and presented the tickets to
petitioners customer service agent Ken Carns (Carns) to get the boarding passes, he was asked to step
aside and wait to be called again.3
After all the other departing passengers were given their boarding passes, the Heshans were told to
board the plane without any boarding pass given to them and to just occupy open seats therein. Inside
the plane, the Heshans noticed that only one vacant passenger seat was available, which was offered to
Dara, while Edward and Nelia were directed to occupy two "folding seats" located at the rear portion of
the plane. To respondents, the two folding seats were crew seats intended for the stewardesses.4
Upset that there were not enough passenger seats for them, the Heshans complained to the cabin crew
about the matter but were told that if they did not like to occupy the seats, they were free to disembark
from the plane. And disembark they did, complaining thereafter to Carns about their situation. Petitioners
plane then departed for Memphis without respondents onboard.5
The Heshans were later endorsed to and carried by Trans World Airways to Los Angeles. Respondents
arrived in Los Angeles at 10:30 p.m. of the same day but had to wait for three hours at the airport to
retrieve their luggage from petitioners Flight No. 972M. 6 Respondents stayed for five days more in the
U.S. before going back home to Manila.7
On September 24, 1998, respondents sent a letter to petitioner to demand indemnification for the breach
of contract of carriage.8 Via letter of December 4, 1998, petitioner replied that respondents were
prohibited to board Flight No. 972M for "verbally abus[ing] [the] flight crew."9
As their demand remained unheeded, respondents filed a complaint for breach of contract with damages
at the Regional Trial Court (RTC) of Quezon City.10

From the depositions of petitioners employees Carns, Mylan Brown (Brown) and Melissa Seipel (Seipel),
the following version is gathered:
The Heshans did not have reservations for particular seats on the flight. When they requested that they
be seated together, Carns denied the request and explained that other passengers had pre-selected
seats and that the computerized seating system did not reflect that the request could be accommodated
at the time. Carns nonetheless assured the Heshans that they would be able to board the plane and be
seated accordingly, as he in fact instructed them ten minutes before the planes departure, to board the
plane even without boarding passes and to occupy "open seats" therein.11
By Seipels claim, as the Heshans were upset upon learning that they were not seated together on the
plane, she told them that she would request other passengers to switch places to accommodate their
demand; that she never had a chance to try to carry out their demand, however, as she first had to find
space for their bags in the overhead compartment; and that the Heshans cursed her which compelled her
to seek assistance from Brown in dealing with them.12
Brown averred that she went to the back portion of the plane to help out but she was brushed aside by
Nelia who was cursing them as she stormed out of the plane followed by Edward and Dara.13
Petitioner denied that the Heshans (hereafter respondents) were told to occupy "folding seats" or crew
seats since "[Federal Aviation Authority] regulations say no passengers are to sit there." 14 As for
respondents not having been given boarding passes, petitioner asserted that that does not in itself mean
that the flight was overbooked, for
[t]his is done on last minute boarding when flights are full and in order to get passengers on their way and
to get the plane out on time. This is acceptable procedure.15
Branch 96 of the RTC, by Decision 16 of August 20, 2002, rendered judgment in favor of respondents,
disposing as follows:
WHEREFORE, judgment is rendered ordering [petitioner] Northwest Airlines, Inc. to pay [respondents]
Edward J. Heshan, Nelia L. Heshan and Dara Ganessa L. Heshan the following:
1. P3,000,000.00, as moral damages;
2. P500,000.00, as exemplary damages;
3. A sum equivalent of 20% of the foregoing amounts, as attorneys fees; and,
4. Costs of suit.
SO ORDERED.17

Page17 Transpo

In finding for respondents, the trial court noted:

[T]hat the [respondents] held confirmed reservations for the St Louis-Memphis leg of their return trip to
the Philippines is not disputed. As such, they were entitled as of right under their contract to be
accommodated in the flight, regardless of whether they had selected their seats in advance or not. They
had arrived at the airport early to make sure of their seating together, and, in fact, Edward was second in
the queue for boarding passes. Yet, Edward was unceremoniously sidelined and curtly told to wait without
any explanations why. His concerned seeking for explanations was repeatedly rebuffed by the airline
employees. When, at last, they were told to board the aircraft although they had not yet been
issued boarding passes, which they thought to be highly unusual, they soon discovered, to their
dismay, that the plane was fully booked, with only one seat left for the 3 of them. Edward and Nelia
rejected the offer [to take] the crew seats. [Respondents] were thus forced to disembark. (italics in
the original; emphasis and underscoring supplied)

On appeal, the Court of Appeals, by Decision18 of June 22, 2007, sustained the trial courts findings but
reduced the award of moral and exemplary damages to P2 million and P300,000, respectively.19 In
affirming the findings of the trial court, the appellate court held:
[I]t is clear that the only instances [sic] when the [petitioner] and its agents allow its passengers to
board the plane without any boarding pass is when the flights are full and the plane is running late. Taking
into account the fact that the [respondents] arrived at the airport early, checked-in their baggage before
hand and were in fact at the gates of the boarding area on time, thus, it could not be said that they can fall
under the exceptional circumstance [sic]. It bears stressing at this juncture that it becomes a highly
irregular situation that despite the fact that the [respondents] showed up on time at the boarding
area[,] they were made to go in last and sans any boarding passes. Thus, We hold that it can
be logically inferred that the reason why no boarding passes were immediately issued to the
[respondents] is because Flight 972 from St. Louis to Memphis is full and the [respondents] were
"bumped off" from their flight. (emphasis, italics and underscoring supplied)
Reconsideration having been denied by the appellate court, 20 petitioner filed the present petition for
review upon the issues of whether the appellate court

. . . ERRED IN RULING THAT RESPONDENTS WERE ENTITLED TO ATTORNEYS FEES

IV
. . .ASSUMING ARGUENDO THAT RESPONDENTS WERE ENTITLED TO AN AWARD OF DAMAGES,
[ERRED IN AWARDING EXCESSIVE DAMAGES TO RESPONDENTS] .
V
. . . ERRED IN NOT FINDING FOR [IT] ON ITS COUNTERCLAIM. 21
To petitioner, the present petition offers compelling reasons to again review the congruent factual findings
of the lower courts which, to it, are contrary to the evidence on record; that the lower courts disregarded
vital testimonies of its witnesses; that the appellate court premised its decision on a misapprehension of
facts and failed to consider certain relevant facts which, if properly taken into account, will justify a
different conclusion; that the appellate court made several inferences which were manifestly mistaken
and absurd; and that the appellate court exercised grave abuse of discretion in the appreciation of facts.22
Petitioner maintains that it did not violate the contract of carriage since respondents were eventually
transported from Memphis to Los Angeles, albeit via another airline, and that respondents made no claim
of having sustained injury during the carriage.23
Petitioner goes on to posit that if indeed crew seats were offered to respondents, its crew would have had
nowhere to sit and the plane would not have been able to depart, 24 and that in reality, respondents
voluntarily disembarked from the aircraft because they were not willing to wait to be seated together.25
At all events, petitioner finds the amount of damages imposed by the appellate court "excessive and
unprecedented" and needing substantial reduction.26
In their Comment, respondents counter that since the petition is predicated on questions of facts and the
appellate court affirmed the trial courts factual findings, these are entitled to great weight and respect.27

I
. . . ERRED IN RULING THAT RESPONDENTS WERE ENTITLED TO MORAL DAMAGES
II
. . . ERRED IN RULING THAT RESPONDENTS WERE ENTITLED TO EXEMPLARY DAMAGES
III

Respondents thus maintain that petitioner was guilty of breach of contract. They cite Singapore Airlines v.
Fernandez,28 which ruled:
[W]hen an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a
contract of carriage arises. The passenger then has every right to expect that he be transported on that
flight and on that date. If he does not, then the carrier opens itself to a suit for a breach of contract of
carriage.
The petition fails.

Nonetheless, the petition is in part meritorious. There is a need to substantially reduce the moral
damages awarded by the appellate court. While courts are given discretion to determine the amount of
damages to be awarded, it is limited by the principle that the amount awarded should not be palpably and
scandalously excessive.34

The issues raised by petitioner are predicated on the appreciation of factual issues. In weighing the
evidence of the parties, the trial court found respondents more credible.

Moral damages are neither intended to impose a penalty to the wrongdoer, nor to enrich the claimant.
Taking into consideration the facts and circumstances attendant to the case, an award to respondents
of P500,000, instead of P2,000,000, as moral damages is to the Court reasonable.35

Page18 Transpo

As has repeatedly been underscored, in petitions for review on certiorari, the general rule is that only
questions of law may be raised by the parties and passed upon by the Court. 29 Factual findings of the
appellate court are generally binding on the Court, especially when in complete accord with the findings of
the trial court, as in the present case, save for some recognized exceptions.30

An examination of the evidence presented by petitioner shows that it consisted only of depositions of its
witnesses. It had in its possession and disposition pertinent documents such as the flight manifest and
the planes actual seating capacity and layout which could have clearly refuted respondents claims that
there were not enough passenger seats available for them. It inexplicably failed to offer even a single
piece of documentary evidence. The Court thus believes that if at least the cited documentary evidence
had been produced, it would have been adverse to petitioners case.31
More. Petitioner failed to satisfactorily explain why it did not issue boarding passes to respondents who
were confirmed passengers, even after they had checked-in their luggage three hours earlier. That
respondents did not reserve seats prior to checking-in did not excuse the non-issuance of boarding
passes.
From Carns following testimony, viz:
Q. Now you mentioned open seats, Mr. Carns, can you tell us what the phrase or term open
seats mean?
A. Well, about 10 minutes before boarding time when we cancel those who do not take reserve
seats, we know how many passengers are on the plane and we just tell the other passengers to
take whatever seat is available at that time, 32 it is gathered that respondents were made to wait
for last-minute cancellations before they were accommodated onto the plane. This, coupled with
petitioners failure to issue respondents their boarding passes and the eleventh-hour directive for
them to embark, reinforces the impression that the flight was overbooked.
Petitioners assertion that respondents disembarked from the plane when their request to be seated
together was ignored does not impress. The observation of the appellate court, viz:
x x x x [T]he fact that the Appellees still boarded the plane ten (10) minutes prior to the departure time,
despite knowing that they would be seated apart, is a clear manifestation of the Appellees willingness to
abandon their request and just board the plane in order to catch their flight. But as it turns out, there were
not enough seats for the three of them as aptly found by the Court a quo, to which We subscribed [sic]. x
x x x,33 merits the Courts concurrence.1avvphi1

WHEREFORE, the assailed Decision and Resolution of the Court of Appeals are AFFIRMED with
MODIFICATION. The award of moral damages is reduced to P500,000. In all other respects, the Decision
is AFFIRMED.
Costs against petitioner.
SO ORDERED.

LASAM VS. SMITH

45 PHIL 657
FACTS:
The defendant was the owner of a public garage in the town of San Fernando, La Union, and engaged in
the business of carrying passengers for hire from one point to another in the Province of La Union and the
surrounding provinces. Defendant undertook to convey the plaintiffs from San Fernando to Currimao,
Ilocos Norte, in a Ford automobile. On leaving San Fernando, the automobile was operated by a licensed
chauffeur, but after having reached the town of San Juan, the chauffeur allowed his assistant, Bueno, to
drive the car. Bueno held no drivers license, but had some experience in driving. The car functioned well
until after the crossing of the Abra River in Tagudin, when, according to the testimony of the witnesses for
the plaintiffs, defects developed in the steering gear so as to make accurate steering impossible, and
after zigzagging for a distance of about half kilometer, the car left the road and went down a steep
embankment. The automobile was overturned and the plaintiffs pinned down under it. Mr. Lasam escaped
with a few contusions and a dislocated rib, but his wife, Joaquina, received serious injuries, among which
was a compound fracture of one of the bones in her left wrist. She also suffered nervous breakdown from
which she has not fully recovered at the time of trial. The complaint was filed about a year and a half after
and alleges that the accident was due to defects in the automobile as well as to the incompetence and
negligence of the chauffeur. The trial court held, however, that the cause of action rests on the
defendants breach of the contract of carriage and that, consequently, articles 1101-1107 of the Civil
Code, and not article 1903, are applicable. The court further found that the breach of contact was not due
to fortuitous events and that, therefore the defendant was liable in damages.
ISSUE:
Is the trial court correct in its findings that the breach of contract was not due to a fortuitous event?
RULING:
Yes. It is sufficient to reiterate that the source of the defendants legal liability is the contract of carriage;
that by entering into that contract he bound himself to carry the plaintiffs safely and securely to their

Page19 Transpo

destination; and that having failed to do so he is liable in damages unless he shows that the failure to
fulfill his obligation was due to causes mentioned in article 1105 of the Civil Code, which reads:
No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable,
with the exception of the cases in which the law expressly provides otherwise and those in which the
obligation itself imposes such liability.

As will be seen, some extraordinary circumstances independent of the will of the obligor, or of his
employees, is an essential element of a caso fortuito. In the present case, this element is lacking. It is not
suggested that the accident in question was due to an act of God or to adverse road conditions which
could have been foreseen. As far as the record shows, the accident was caused either by defects in the
automobile or else through the negligence of its driver. That is not a caso fortuito.
PRECILLANO NECESITO, ETC. vs. NATIVIDAD PARAS, ET AL.
G.R. No. L-10605, June 30, 1958)
FACTS:

Upon landing on the ground, he momentarily lost consciousness. When he came to his
senses, he found that he had a lacerated wound on his right palm. He also injured his left arm, right
thigh and on his back.

Because of his shock and injuries, he went back to Danao City but on the way, he discovered
that his "Omega" wrist watch worth P 852.70 was lost. Upon his arrival in Danao City, he
immediately entered the Danao City Hospital to attend to his injuries, and also requested his fatherin-law to proceed immediately to the place of the accident and look for the watch.

Roberto Juntilla filed for breach of contract with damages

Respondents: beyond the control since tire that exploded was newly bought and was
only slightly used

RTC: favored Roberto Juntilla

CA: Reversed since accident was due to fortuitous event

ISSUE: W/N there is a fortuitous event

Juntilla v. Fontanar

HELD: NO. CA reversed, RTC reinstated.

passenger jeepney was running at a very fast speed before the accident

at a regular and safe speed will not jump into a ditch when its right rear tire blows up

passenger jeepney was overloaded

3 passengers in the front seat

14 passengers in the rear

caso fortuito presents the following essential characteristics:

(1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to
comply with his obligation, must be independent of the human will.

(2) It must be impossible to foresee the event which constitutes 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 a normal manner.

(4) the obligor (debtor) must be free from any participation in the aggravation of the injury
resulting to the creditor.

In the case at bar, the cause of the unforeseen and unexpected occurrence was not independent
of the human will. The accident was caused either through the negligence of the driver or because of
mechanical defects in the tire. Common carriers should teach their drivers not to overload their
vehicles, not to exceed safe and legal speed limits, and to know the correct measures to take when a
tire blows up thus insuring the safety of passengers at all times

the source of a common carrier's legal liability is the contract of carriage, and by entering into the
said contract, it binds itself to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of a very cautious person, with a due regard for all the
circumstances. The records show that this obligation was not met by the respondents

respondents likewise argue that the petitioner cannot recover any amount for failure to prove
such damages during the trial

findings of facts of the City Court of Cebu

FACTS:

Jeepney was driven by Berfol Camoro from Danao City to Cebu City. It was Clemente Fontanar
but was actually owned by defendant Fernando Banzon.

When the jeepney reached Mandaue City, the right rear tire exploded causing the vehicle to turn
turtle. Roberto Juntilla was sitting at the front seat was thrown out of the vehicle.

Alberta Yobido and Cresencio Yobido v. CA, Leny Tumboy, Ardee Tumboy and Jasmin Tumboy
G.R. No. 113003 October 17, 1997
Romero, J.

A mother and her son boarded a passenger auto-truck of the Philippine Rabbit Bus Lines. While entering
a wooden bridge, its front wheels swerved to the right, the driver lost control and the truck fell into a
breast-deep creek. The mother drowned and the son sustained injuries. These cases involve actions ex
contractu against the owners of PRBL filed by the son and the heirs of the mother. Lower Court dismissed
the actions, holding that the accident was a fortuitous event.
ISSUE:
Whether or not the carrier is liable for the manufacturing defect of the steering knuckle, and whether the
evidence discloses that in regard thereto the carrier exercised the diligence required by law (Art. 1755,
new Civil Code)
HELD:
Yes.
While the carrier is not an insurer of the safety of the passengers, the manufacturer of the defective
appliance is considered in law the agent of the carrier, and the good repute of the manufacturer will not
relieve the carrier from liability. The rationale of the carriers liability is the fact that the passengers has no
privity with the manufacturer of the defective equipment; hence, he has no remedy against him, while the
carrier has. We find that the defect could be detected. The periodical, usual inspection of the steering
knuckle did not measure up to the utmost diligence of a very cautious person as far as human care and
foresight can provide and therefore the knuckles failure cannot be considered a fortuitous event that
exempts the carrier from responsibility.

Page20 Transpo

FACTS:
Spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin, boarded a Yobido
Liner bus bound for Davao City. Along the trip, the left front tire of the bus exploded. The bus fell into a
ravine around 3 ft. from the road and struck a tree. The incident resulted in the death of Tito and
physical injuries to other passengers.
Factual backdrop based on testimony of Leny: the winding road the bus traversed was not cemented and
was wet due to the rain; it was rough with crushed rocks. The bus which was full of passengers had
cargoes on top. Since it was running fast, (at a speed of 50-60kph based on another witness
testimony) she cautioned the driver to slow down but he merely stared at her through the mirror.
A complaint for breach of contract of carriage was filed by Leny and her children against Alberta Yobido,
the owner of the bus, and Cresencio Yobido, its driver; Yobidos raised the affirmative defense of caso
fortuito; they also filed a third-party complaint against Philippine Phoenix Surety and Insurance, Inc.
Upon a finding that the third party defendant was not liable under the insurance contract, the lower court
dismissed the third party complaint.
ISSUE: WON the tire blowout was a caso fortuito as to exempt Yobidos from liability

HELD: No.
tire blowout - mechanical defect of the conveyance or a fault in its equipment which was easily
discoverable if the bus had been subjected to a more thorough or rigid check-up before it took to the
road
when a passenger boards a common carrier, he takes the risks incidental to the mode of travel he has
taken. After all, a carrier is not an insurer of the safety of its passengers and is not bound absolutely
and at all events to carry them safely and without injury. However, when a passenger is injured or dies
while travelling, the law presumes that the common carrier is negligent. (see Art. 1756)
Art. 1755 provides that 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 culpa contractual, once a passenger dies or is injured, the carrier is presumed to
have been at fault or to have acted negligently. This disputable presumption may only be overcome by
evidence that the carrier had observed extraordinary diligence as prescribed by Arts. 1733, 1755 and
1756 or that the death or injury of the passenger was due to a fortuitous event.
characteristics of fortuitous event: a) the cause of the unforeseen and unexpected occurrence, or the
failure of the debtor to comply with his obligations, must be independent of human will; b) it must be
impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be
impossible to avoid; c) the occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner; and d) the obligor must be free from any participation in the aggravation
of the injury resulting to the creditor
Art 1174: no person shall be responsible for a fortuitous event which could not be foreseen, or which,
though foreseen, was inevitable
the explosion of the new tire may not be considered a fortuitous event; there are human factors involved
in the situation; the fact that the tire was new did not imply that it was entirely free from manufacturing
defects or that it was properly mounted on the vehicle

FACTS
Franklin G. Gacal and his wife, Corazon, Bonifacio S. Anislag and his wife, Mansueta, and the late
Elma de Guzman, boarded a PAL flight to Manila from the Davao Airport. Commander Zapata, and five
other armed members of the Moro National Liberation Front (MNLF), all passengers of the same flight,
hijacked the aircraft ten minutes after take off. The hijackers directed the pilot to fly to Libya but upon the
pilots explanation of the fuel limitations, they relented and directed the aircraft to land at Zamboanga
Airport.
At the runway of the Zamboanga Airport, the aircraft was met by two armored cars of the military
with machine guns pointed at the plane. The rebels demanded that a DC-aircraft take them to Libya with
the President of PAL as hostage and that they be given $375,000 and 6 armalites, otherwise they will
blow up the plane. The negotiations lasted for three days and it was only on the third day that the
passengers were served 1/4 slice of a sandwich and 1/10 cup of PAL water. On the same day, relatives of
the hijackers were allowed to board the plane but immediately after they alighted therefrom, a battle
between the military and the hijackers ensued, culminating in the liberation of the surviving crew and
passengers, the death of 10 passengers and 3 hijackers, and the capture of the 3 others.
Franklin G. Gacal was unhurt but his wife suffered injuries and was hospitalized for 2 days.
Bonifacio S. Anislag also escaped unhurt but Mrs. Anislag suffered a fracture at the radial bone of her left
elbow for which she was hospitalized and operated on. Elma de Guzman died because of that battle.
The plaintiffs filed an action for damages demanding from PAL actual damages for hospital and
medical expenses and the value of lost personal belongings, moral damages, attorneys fees and
exemplary damages. The trial court dismissed the complaints finding that all the damages sustained in
the premises were attributed to force majeure. Hence, this petition.
ISSUE: Whether or not PAL is liable for damages
HELD
NO. Under Art 1733 of the Civil Code, common carriers are required to exercise extraordinary
diligence in their vigilance over the goods and for the safety of passengers transported by them,

GACAL v. PAL
G.R. No. 55300
PARAS; March 15, 1990

according so all the circumstances of each case. They are presumed at fault or to have acted negligently
whenever a passenger dies or is injured or for the loss, destruction or deterioration of goods in cases
other than those enumerated in Article 1734 of the Civil Code.

Page21 Transpo

The source of a common carrier's legal liability is the contract of carriage, and by entering into said
contract, it binds itself to carry the passengers safely as far as human care and foresight can provide.
There is breach of this obligation if it fails to exert extraordinary diligence according to all the
circumstances of the case in exercise of the utmost diligence of a very cautious person.

In consideration of the right granted to it by the public to engage in the business of transporting
passengers and goods, a common carrier does not give its consent to become an insurer of any and all
risks to passengers and goods. It merely undertakes to perform certain duties to the public as the law
imposes, and holds itself liable for any breach thereof.
xxx

It is the duty of a common carrier to overcome the presumption of negligence and it must be shown
that the carrier had observed the required extraordinary diligence of a very cautious person as far as
human care and foresight can provide or that the accident was caused by a fortuitous event. Thus, as
ruled by this Court, no person shall be responsible for those "events which could not be foreseen or which
though foreseen were inevitable." (Article 1174, Civil Code). The term is synonymous with caso fortuito
which is of the same sense as "force majeure".
In order to constitute a caso fortuito or force majeure that would exempt a person from liability
under Article 1174 of the Civil Code, it is necessary that the following elements must concur: (a) the cause
of the breach of the obligation must be independent of the human will (the will of the debtor or the
obligor); (b) the event must be either unforeseeable or unavoidable; (c) the event must be such as to
render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the debtor must be
free from any participation in, or aggravation of the injury to the creditor. Caso fortuito or force majeure, by

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.
xxx
Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful
acts or negligence of other passengers or of strangers, if the common carrier's employees through the
exercise of the diligence of a good father of a family could have prevented or stopped the act or omission.
Clearly under the above provision, a tort committed by a stranger which causes injury to a passenger
does not accord the latter a cause of action against the carrier. The negligence for which a common
carrier is held responsible is the negligent omission by the carrier's employees to prevent the tort from
being committed when the same could have been foreseen and prevented by them. Further, under the
same provision, it is to be noted that when the violation of the contract is due to the willful acts of
strangers, as in the instant case, the degree of care essential to be exercised by the common carrier for
the protection of its passenger is only that of a good father of a family.

definition, are extraordinary events not foreseeable or avoidable, events that could not be foreseen, or
which, though foreseen, are inevitable.

FORTUNE EXPRESS, INC. VS. COURT OF APPEALS 305 SCRA 14

JOSE PILAPIL vs. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC.
(G.R. No. 52159, December 22, 1989)

FACTS:
Petitioner Pilapil, on board respondents bus was hit above his eye by a stone hurled by an unidentified
bystander. Respondents personnel lost no time in bringing him to a hospital, but eventually petitioner
partially lost his left eyes vision and sustained a permanent scar.
Thus, Petitioner lodged an action for recovery of damages before the Court of First Instance of
Camarines Sur which the latter granted. On appeal, the Court of Appeals reversed said decision.

Facts: A bus of Fortune Express, Inc. (FEI) figured in an accident with a jeepney which resulted in the
death of several passengers including two Maranaos. It was found out that a Maranao owns said jeepney
and certain Maranaos were planning to take revenge by burning some of FEIs buses. The operations
manager of FEI was advised to take precautionary measures but just the same, three armed Maranaos
were able to seize a bus of FEI and set it on fire.
Issue: Whether the seizure of the bus was a fortuitous event which Fortune Express, Inc could not be
held liable.
Held: A fortuitous event is an occurrence which could not be foreseen or which though foreseen, is
inevitable. This factor of unforeseen-ability is lacking in this case for despite the report that the Maranaos
were planning to burn FEIs buses, nothing was really done by FEI to protect the safety of the
passengers.

ISSUE:
Whether or not common carriers assume risks to passengers such as the stoning in this case?
HELD:

JAL vs CA

Page22 Transpo

Japan Airlines vs Court of Appeals (G.R. No. 118664)

Facts: Private respondents boarded a JAL flight in San Francisco, California bound for Manila. It included
an overnight stopover at Narita, Japan at JALs expense. Due to the Mt. Pinatubo eruption, private
respondents trip to Manila was cancelled. JAL rebooked all the Manila-bound passengers and paid for
the hotel expenses of their unexpected overnight stay. The flight of private respondents was again
cancelled due to NAIAs indefinite closure. JAL informed the respondents that it would no longer defray
their hotel and accommodation expense during their stay in Narita. The respondents were forced to pay
for their accommodations and meal expenses for 5 days.
Issues:nWhether or not JAL has the obligation to shoulder the hotel and meal expenses even if the delay
was caused by force majeure
Whether or not the award of damages was proper
Held:

When a party is unable to fulfill his obligation because of force majeure, the general rule is that he cannot
be held liable for damages for non-performance. When JAL was prevented from resuming its flight to
Manila due to the effects of the eruption, whatever losses or damages in the form of hotel and meal
expenses the stranded passengers incurred cannot be charged to JAL. The predicament of the private
respondents was not due to the fault or negligence of JAL. JAL had the duty to arrange the respondents
flight back to Manila. However, it failed to look after the comfort and convenience of its passengers when
it made the passengers arrange their flight back to Manila on their own and after waiting in the airport for
a whole day.
Yes, the award of nominal damages is proper. Nominal damages are adjudicated in order that a right of a
plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized and not
for the purpose of indemnifying any loss suffered by him.