G.R. No.
L-56487 October 21, 1991 petitioner Gatchalian signed the Joint Affidavit, she
REYNALDA GATCHALIAN, petitioner,
vs.
ARSENIO DELIM and the HON. COURT OF
APPEALS, respondents.
Facts: At noon time on 11 July 1973, petitioner
Reynalda Gatchalian boarded, as a paying
passenger, respondent's "Thames" mini bus at a
point in San Eugenio, Aringay, La Union, bound for
Bauang, of the same province. On the way, while
the bus was running along the highway in Barrio
Payocpoc, Bauang, Union, "a snapping sound" was
suddenly heard at one part of the bus and, shortly
thereafter, the vehicle bumped a cement flower pot
on the side of the road, went off the road, turned
turtle and fell into a ditch. Several passengers,
including petitioner Gatchalian, were injured. They
were promptly taken to Bethany Hospital at San
Fernando, La Union, for medical treatment. Upon
medical examination, petitioner was found to have
sustained physical injuries on the leg, arm and
forehead, specifically described as follows:
lacerated wound, forehead; abrasion, elbow, left;
abrasion, knee, left; abrasion, lateral surface, leg,
left.
On 14 July 1973, while injured, passengers were
confined in the hospital, Mrs. Adela Delim, wife of
respondent, visited them and later paid for their
hospitalization and medical expenses. She also
gave petitioner P12.00 with which to pay her
transportation expense in going home from the
hospital. However, before Mrs. Delim left, she had
the injured passengers, including petitioner, sign an
already prepared Joint Affidavit which stated,
among other things that the injured passengers are
no longer interested to file a complaint, criminal or
civil against the said driver and owner of the
Thames, because it was an accident and the said
driver and owner of the said Thames have gone to
the extent of helping them to be treated upon our
injuries.
Notwithstanding this document, petitioner Gathalian
filed with the then Court of First Instance of La
Union an action extra contractu to recover
compensatory and moral damages. The trial court
dismissed the complaint upon the ground that when
relinquished any right of action (whether criminal or
civil) that she may have had against respondent
and the driver of the mini-bus. The Court of
Appeals reversed the trial court's conclusion that
there had been a valid waiver, but affirmed the
dismissal of the case by denying petitioner's claim
for damages.
Issue: Whether there is a valid waiver?
Held: A waiver, to be valid and effective, must in
the first place be couched in clear and unequivocal
terms which leave no doubt as to the intention of a
person to give up a right or benefit which legally
pertains to him. A waiver may not casually be
attributed to a person when the terms thereof do
not explicitly and clearly evidence an intent to
abandon a right vested in such person.
Moreover, because what is involved here is the
liability of a common carrier for injuries sustained
by passengers in respect of whose safety a
common carrier must
exercise extraordinary diligence, we must construe
any such purported waiver most strictly against the
common carrier. For a waiver to be valid and
effective, it must not be contrary to law, morals,
public policy or good customs. To uphold a
supposed waiver of any right to claim damages by
an injured passenger, under circumstances like
those exhibited in this case, would be to dilute and
weaken the standard of extraordinary diligence
exacted by the law from common carriers and
hence to render that standard unenforceable. We
believe such a purported waiver is offensive to
public policy.
To overcome the presumption of negligence, the
common carrier must show to the court that it had
exercised extraordinary diligence to prevent the
injuries. A common carrier is bound to carry its
passengers safely" as far as human care and
foresight can provide, using the utmost diligence of
a very cautious person, with due regard to all the
circumstances".
The accident cannot be deemed as caso fortuito
which is an event that takes place by accident and
could not have been foreseen. Since when the
snapping sound was heard, a passenger asked the
driver what was that, the driver casually answered
“that is normal” and did not stop to check what was
that, indicate that such snapping sound had been
heard on the bus on previous occasions which
means that the bus was not mechanically checked
to fix what was wrong.
Since it was concluded that respondent common
carrier and his driver had been grossly negligent in
connection with the bus mishap which had injured
petitioner and other passengers, and recalling the
aggressive manuevers of respondent, through his
wife, to get the victims to waive their right to
recover damages even as they were still
hospitalized for their injuries, petitioner must be
held entitled to such moral damages.
CLEMENTEBRIÑAS,vs.THE PEOPLE OF THE
PHILIPPINES and HONORABLE COURT OF
APPEALS, G.R. No. L-30309 November 25, 1983
FACTS: In the afternoon of January 6, 1957,
Juanito Gesmundo bought a train ticket at the
railroad station in Tagkawayan, Quezon for his 55-
year old mother Martina Bool and his 3-year old
daughter Emelita Gesmundo, who were bound for
Barrio Lusacan, Tiaong, same province. At about
2:00 p.m., Train No. 522 left Tagkawayan with the
old woman and her granddaughter among the
passengers. At Hondagua the train's complement
were relieved, with Victor Millan taking over as
engineman, Clemente Briñas as conductor, and
Hermogenes Buencamino as assistant conductor.
Upon approaching Barrio Lagalag in Tiaong at
about 8:00 p.m. of that same night, the train slowed
down and the conductor shouted 'Lusacan',
'Lusacan'. Thereupon, the old woman walked
towards the left front door facing the direction of
Tiaong, carrying the child with one hand and
holding her baggage with the other. When Martina
and Emelita were near the door, the train suddenly
picked up speed. As a result the old woman and
the child stumbled and they were seen no more. It
took three minutes more before the train stopped at
the next barrio, Lusacan, and the victims were not
among the passengers who disembarked thereat
.têñ.£îhqwâ£
Next morning, the Tiaong police received a report
that two corpses were found along the railroad
tracks at Barrio Lagalag. The two lifeless bodies
pertain to Martina and her granddaughter Emelita.
The bodies of the deceased were autopsied.
The Court of First Instance of Quezon convicted
defendant-appellant Clemente Briñas for double
homicide thru reckless imprudence but acquitted
Hermogenes Buencamino and Victor Millan for
lacked of sufficient evidence.
On appeal, the respondent Court of Appeals
affirmed the judgment of the lower court.
During the pendency of the criminal prosecution in
the Court of First Instance of Quezon, the heirs of
the deceased victims filed with the same court, a
separate civil action for damages against the
Manila Railroad Company.
The appellant filed a petition for review on
certiorari.
ISSUES: 1.Whether or not the Court of Appeals
erred in convicting petitioner-appellant
2. Whether or not the Court of Appeals erred in
including the payment of death indemnity by the
petitioner- appellant, with subsidiary imprisonment
in case of insolvency, after the heirs of the
deceased have already commenced a separate
civil action for damages against the railroad
company arising from the same mishap.
RULING:
No, the Court of Appeals is correct in convicting the
petitioner.
It is a matter of common knowledge and
experience about common carriers like trains and
buses that before reaching a station or flagstop
they slow down and the conductor announces the
name of the place. It is also a matter of common
experience that as the train or bus slackens its
speed, some passengers usually stand and
proceed to the nearest exit, ready to disembark as
the train or bus comes to a full stop. This is
especially true of a train because passengers feel
that if the train resumes its run before they are able
to disembark, there is no way to stop it as a bus
may be stopped.
Therefore, The proximate cause of the death of the
victims was the premature and erroneous
announcement of petitioner' appelant Briñas. This
announcement prompted the victims to stand and
proceed to the nearest exit. Without said
announcement, the victims would have been safely
seated in their respective seats when the train
jerked as it picked up speed. The connection
between the premature and erroneous
announcement of petitioner-appellant and the
deaths of the victims is direct and natural, unbroken
by any intervening efficient causes.
2. No. The source of the obligation sought to
be enforced in Civil Case No. 5978 is culpa
contractual, not an act or omission punishable by
law. We also note from the appellant's arguments
and from the title of the civil case that the party
defendant is the Manila Railroad Company and not
petitioner-appellant Briñas Culpa contractual and
an act or omission punishable by law are two
distinct sources of obligation.
The petitioner-appellant argues that since the
information did not allege the existence of any kind
of damages whatsoever coupled by the fact that no
private prosecutors appeared and the prosecution
witnesses were not interrogated on the issue of
damages, the trial court erred in awarding death
indemnity in its judgment of conviction.
A perusal of the records clearly shows that the
complainants in the criminal action for double
homicide thru reckless imprudence did not only
reserve their right to file an independent civil action
but in fact filed a separate civil action against the
Manila Railroad Company.
The trial court acted within its jurisdiction when,
despite the filing with it of the separate civil action
against the Manila Railroad Company, it still
awarded death indemnity in the judgment of
conviction against the petitioner-appellant.
It is well-settled that when death occurs as a result
of the commission of a crime, the following items of
damages may be recovered: (1) an indemnity for
the death of the victim; (2) an indemnity for loss of
earning capacity of the deceased; (3) moral
damages; (4) exemplary damages; (5) attorney's
fees and expenses of litigation, and (6) interest in
proper cases.
The indemnity for loss of earning capacity, moral
damages, exemplary damages, attorney's fees, and
interests are recoverable separately from and in
addition to the fixed slim of P12,000.00
corresponding to the indemnity for the sole fact of
death. This indemnity arising from the fact of death
due to a crime is fixed whereas the others are still
subject to the determination of the court based on
the evidence presented. The fact that the witnesses
were not interrogated on the issue of damages is of
no moment because the death indemnity fixed for
death is separate and distinct from the other forms
of indemnity for damages.
G.R. No. 124293. November 20, 2000
JG SUMMIT HOLDINGS, INC. vs. COURT OF
APPEALS, COMMITTEE ON PRIVATIZATION, its
Chairman and Members; ASSET
PRIVATIZATION TRUST and PHILYARDS
HOLDINGS, INC.,
FACTS: The National Investment and Development
Corporation (NIDC), a government corporation,
entered into a Joint Venture Agreement (JVA) with
Kawasaki Heavy Industries, Ltd. of Kobe, Japan
(Kawasaki) for the construction, operation, and
management of the Subic National Shipyard, Inc.
(SNS), which subsequently became the Philippine
Shipyard and Engineering Corporation
(PHILSECO). Under the JVA, NIDC and Kawasaki
would maintain a shareholding proportion of 60%-
40%, respectively. One of the provisions of the JVA
accorded the parties the right of first refusal should
either party sell, assign or transfer its interest in the
joint venture. Subsequently NIDC transferred all its
rights, title and interest in PHILSECO to the
Philippine National Bank (PNB), who then, by virtue
of Administrative Order No. 14, transferred its rights
to the National Government.
Meanwhile, President Corazon C. Aquino, issued
Proclamation No. 50 establishing the Committee on
Privatization (COP) and the Asset Privatization
Trust (APT) to take title to and possession of,
conserve, manage and dispose of non-performing
assets of the National Government. Exercising their
discretion, the COP and the APT deemed it in the
best interest of the national economy and the
government to privatize PHILSECO by selling
87.67% of its total outstanding capital stock to
private entities. After a series of negotiations
between the APT and Kasawaki, they agreed that
the latters right of first refusal under the JVA be
exchanged for the right to top by five percent (5%)
the highest bid for said shares. Kawasaki informed
APT that Philyards Holdings, Inc. (PHI) would
exercise their right to top by 5%.
At the public bidding, the consortium composed of
petitioner JG Summit Holdings, Inc., Sembawang
Shipyard Ltd. of Singapore (Sembawang), and
Jurong Shipyard Limited of Malaysia (Jurong), was
declared the highest bidder at P2.03 billion. It
notified petitioner of said approval subject to the
right of Kawasaki Heavy Industries, Inc./Philyards
Holdings, Inc. to top petitioners bid by 5% as
specified in the bidding rules. Petitioner informed
the APT that it was protesting the offer of Philyards
to top its bid on the ground that Kawasaki and
Philyards cannot own PHILSECO, as a shipyard, it
is a public utility and, hence, could be operated only
by a corporation at least 60% of whose capital is
owned by Filipino citizens, in accordance with
Article XII, Section 10 of the Constitution.
Consequently, petitioner was notified that Keppel
Consortium (composed of Keppel, SM Group,
Insular Life Assurance, Mitsui and ICTSI) appears
to have joined Philyards in the latters effort to raise
P2.131 billion necessary to fully pay the balance of
the purchase price of the subject bidding with APT
and PHI executing a Stock Purchase Agreement.
the highest bidder may still be topped by
Kawasaki/Philyards by 5%, thus the present case
for certiorari.
ISSUE: Whether PHILSECO being a
shipyard classify as under the public utilities?
Whether there was compliance with the 60-
40% foreign equity?
RULING: After carefully reviewing the applicable
laws and jurisprudence, we hold that PHILSECO is
not a public utility for the following reasons:
First. By nature, a shipyard is not a public utility.
A public utility is a business or service engaged in
regularly supplying the public with some commodity
or service of public consequence such as
electricity, gas, water, transportation, telephone or
telegraph service. However, Public use is not
synonymous with public interest. The
principal determinative characteristic of a public
utility is that of service to, or readiness to serve, an
indefinite public or portion of the public as such
which has a legal right to demand and receive its
services or commodities.
A shipyard is a place or enclosure where ships are
built or repaired. Its nature dictates that it serves
but a limited clientele whom it may choose to serve
at its discretion. While it offers its facilities to
whoever may wish to avail of its services, a
shipyard is not legally obliged to render its services
indiscriminately to the public. It has no legal
obligation to render the services sought by each
and every client.
Second. There is no law declaring a shipyard as a
public utility. Indeed, P.D. No. 666, explicitly stated
that a shipyard was not a public utility. However,
Section 1 of P.D. No. 666 was expressly repealed
by Section 20 of Batas Pambansa Blg. 391, the
Investment Incentive Policy Act of 1983.
Subsequently, Executive Order No. 226, the
Omnibus Investments Code of 1987, was issued
and Section 85 thereof expressly repealed B.P. Blg.
391.
The express repeal of B.P. Blg. 391 by E.O. No.
226 did not revive Section 1 of P.D. No. 666,
declassifying the shipbuilding and ship repair
industry as a public utility, as said executive order
did not provide otherwise. When a law which
expressly repeals a prior law is itself repealed, the
law first repealed shall not be thereby revived
unless expressly so provided.
Article XIV, Section 5 of the 1973 Constitution,
required the same proportion of 60%-40%
capitalization. The JVA between NIDC and
Kawasaki entered into manifests the intention of the
parties to abide by the constitutional mandate on
capitalization of public utilities. Thus, should the
NIDC opt to sell its shares of stock to a third party,
Kawasaki could only exercise its right of first refusal
to the extent that its total shares of stock would not
exceed 40% of the entire shares of stock of SNS or
PHILSECO. The NIDC, on the other hand, may
purchase even beyond 60% of the total shares. As
a government corporation and necessarily a 100%
Filipino-owned corporation, there is nothing to
prevent its purchase of stocks even beyond 60% of
the capitalization as the Constitution clearly limits
only foreign capitalization.
From the facts on record, it appears that at the
outset, the APT and Kawasaki respected the 60%-
40% capitalization proportion in
PHILSECO. However, APT subsequently
encouraged Kawasaki to participate in the public
bidding of the National Governments shareholdings
of 87.67% of the total PHILSECO shares, definitely
over and above the 40% limit of its
shareholdings. In so doing, the APT went beyond
the ambit of its authority.
REPUBLIC OF THE PHILIPPINES vs. LUZON
STEVEDORING CORPORATION
G.R. No. L-21749, September 29, 1967
Facts: The present case comes by direct
appeal from a decision of the Court of First
Instance of Manila adjudging the defendant-
appellant, Luzon Stevedoring Corporation, liable in
damages to the plaintiff-appellee Republic of the
Philippines.
In the early afternoon of August 17, 1960, barge L-
1892, owned by the Luzon Stevedoring Corporation
was being towed down the Pasig river by tugboats
"Bangus" and "Barbero", which are also belonging
to the same corporation, when the barge rammed
against one of the wooden piles of the Nagtahan
bridge, smashing the posts and causing the bridge
to list. The river, at the time, was swollen and the
current swift, on account of the heavy downpour of
Manila and the surrounding province.
Sued by the Republic of the Philippines for actual
and consequential damage caused by its
employees, defendant Luzon Stevedoring
Corporation disclaimed liability therefor, on the
grounds that the damages to the bridge were
caused by force majeur.
The Court of First Instance rules that the defendant
is liable for the damage caused by its employees
and ordering it to pay to plaintiff the actual cost of
the repair of the Nagtahan bridge.
Issue: Whether or not the collision of appellant's
barge with the supports or piers of the Nagtahan
Bridge was in law caused by fortuitous event
or force majeure
Ruling: No, the collision of appellant's barge with
the supports or piers of the Nagtahan bridge was
not caused by fortuitous event or force majeure.
Considering that the Nagtahan bridge was an
immovable and stationary object provided with
adequate openings for the passage of water craft,
including barges like of the defendant, it is
undeniable that the unusual event that the barge
rammed the bridge supports raises a presumption
of negligence on the part of appellant or its
employees manning the barge or the tugs that
towed it. For in the ordinary course of events, such
a thing does not happen if proper care is used. In
Anglo American Jurisprudence, the inference arises
by what is known as the "res ipsa loquitur" rule.
The appellant strongly stresses the precautions
taken by it on the day in question: that it assigned
two of its most powerful tugboats to tow down river
its barge L-1892; that it assigned to the task the
more competent and experienced among
its patrons, had the towlines, engines and
equipment double-checked and inspected; that it
instructed its patrons to take extra precautions; and
concludes that it had done all it was called to do,
and that the accident, therefore, should be held due
to force majeure or fortuitous event.
These very precautions, however, completely
destroy the appellant's defense. For caso
fortuito or force majeure, by definition, are
extraordinary events not foreseeable or avoidable,
events that could not be foreseen, or which, though
foreseen, were inevitable. It is, therefore, not
enough that the event should not have been
foreseen or anticipated, as is commonly believed,
but it must be one impossible to foresee or to avoid.
The mere difficulty to foresee the happening is not
impossibility to foresee the same. The very
measures adopted by appellant prove that the
possibility of danger was not only foreseeable, but
actually foreseen, and was not caso fortuito.
Otherwise stated, the appellant, Luzon Stevedoring
Corporation, knowing and appreciating the perils
posed by the swollen stream and its swift current,
voluntarily entered into a situation involving obvious
danger; it therefore assured the risk, and cannot
shed responsibility merely because the precautions
it adopted turned out to be insufficient. Hence, the
Court of First Instance committed no error in
holding it negligent in not suspending operations
and in holding it liable for the damages caused.
It avails the appellant naught to argue that the
dolphins, like the bridge, were improperly located.
Even if true, these circumstances would merely
emphasize the need of even higher degree of care
on appellant's part in the situation involved in the
present case. The appellant, whose barges and
tugs travel up and down the river every day, could
not safely ignore the danger posed by these
allegedly improper constructions that had been
erected, and in place, for years.
LAMBERT S. RAMOS vs. C.O.L. REALTY
CORPORATION
G.R. No. 184905, August 28, 2009
Facts: On or about 10:40 oclock in the
morning of 8 March 2004, along Katipunan
(Avenue), corner Rajah Matanda (Street), Quezon
City, a vehicular accident took place between a
Toyota Altis Sedan bearing Plate Number XDN
210, owned by petitioner C.O.L. Realty
Corporation, and driven by Aquilino Larin (Aquilino),
and a Ford Expedition, owned by x x x Lambert
Ramos (Ramos) and driven by Rodel Ilustrisimo
(Rodel), with Plate Number LSR 917. A passenger
of the sedan, one Estela Maliwat (Estela) sustained
injuries. She was immediately rushed to the
hospital for treatment. C.O.L. Realty averred that its
driver, Aquilino, was slowly driving the Toyota Altis
car at a speed of five to ten kilometers per hour
along Rajah Matanda Street and has just crossed
the center lane of Katipunan Avenue when Ford
Espedition violently rammed against the cars right
rear door and fender. With the force of the impact,
the sedan turned 180 degrees towards the direction
where it came from.
pon investigation, the Office of the City Prosecutor
of Quezon City found probable cause to indict
Rodel, the driver of the Ford Expedition, for
Reckless Imprudence Resulting in Damage to
Property. In the meantime, petitioner demanded
from respondent reimbursement for the expenses
incurred in the repair of its car and the
hospitalization of Estela in the aggregate amount of
P103,989.60. The demand fell on deaf ears
prompting (C.O.L. Realty) to file a Complaint for
Damages based on quasi-delict before the
Metropolitan Trial Court of Metro Manila
(MeTC), Quezon City, docketed as Civil Case No.
33277, and subsequently raffled to Branch 42.
As could well be expected, Ramos denied liability
for damages insisting that it was the negligence of
Aquilino, (C.O.L. Realtys) driver, which was the
proximate cause of the accident. Ramos
maintained that the sedan car crossed Katipunan
Avenue from Rajah Matanda Street despite the
concrete barriers placed thereon prohibiting
vehicles to pass through the intersection. Ramos
further claimed that he was not in the vehicle when
the mishap occurred. He asserted that he exercised
the diligence of a good father of a family in the
selection and supervision of his driver, Rodel.
Weighing the respective evidence of the parties,
the MeTC rendered the Decision exculpating
Ramos from liability.
The aforesaid judgment did not sit well with C.O.L.
Realty so that he appealed the same before the
RTC of Quezon City, which rendered the assailed
Decision affirming the MeTCs Decision. Then
C.O.L Realty filed a MR,then denied by the RTC.
C.O.L. Realty appealed to the Court of Appeals
which affirmed the view that Aquilino was negligent
in crossing Katipunan Avenue from Rajah Matanda
Street since, as per Certification of the Metropolitan
Manila Development Authority (MMDA) dated
November 30, 2004, such act is specifically
prohibited.
Barricades were precisely placed along the
intersection of Katipunan Avenue and Rajah
Matanda Street in order to prevent motorists from
crossing Katipunan Avenue. Nonetheless, Aquilino
crossed Katipunan Avenue through certain portions
of the barricade which were broken, thus violating
the MMDA rule. However, the Court of Appeals
likewise noted that at the time of the collision,
Ramos vehicle was moving at high speed in a busy
area that was then the subject of an ongoing
construction (the Katipunan Avenue-Boni Serrano
Avenue underpass).
The Court of Appeals rendered decision affirming
the RTC decision with modification, that respondent
Lambert Ramos is held solidarily liable with Rodel
Ilustrisimo to pay petitioner C.O.L. Realty
Corporation the amount of P51,994.80 as actual
damages. Petitioner MR was denied. Hence, this
present petition.
Issue: Whether or not the CA decision is
contrary to law and jurisprudence, and the evidence
to support and justify the same is insufficient.
Ruling: The Supreme Court grant the
petition. There is no doubt in the appellate courts
mind that Aquilino’s violation of the MMDA
prohibition against crossing Katipunan Avenue from
Rajah Matanda Street was the proximate cause of
the accident. Respondent does not dispute this; in
its Comment to the instant petition, it even
conceded that petitioner was guilty of mere
contributory negligence.
Articles 2179 and 2185 of the Civil Code on quasi-
delicts apply in this case, viz:
Article 2179. When the plaintiffs own negligence
was the immediate and proximate cause of his
injury, he cannot recover damages. But if his
negligence was only contributory, the immediate
and proximate cause of the injury being the
defendants lack of due care, the plaintiff may
recover damages, but the courts shall mitigate the
damages to be awarded.
Article 2185. 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 any traffic regulation.
If the master is injured by the negligence of a third
person and by the concurring contributory
negligence of his own servant or agent, the latters
negligence is imputed to his superior and will defeat
the superiors action against the third person,
assuming of course that the contributory negligence
was the proximate cause of the injury of which
complaint is made.
Applying the foregoing principles of law to the
instant case, Aquilinos act of crossing Katipunan
Avenue via Rajah Matanda constitutes negligence
because it was prohibited by law. Moreover, it was
the proximate cause of the accident, and thus
precludes any recovery for any damages suffered
by respondent from the accident.
Proximate cause is defined as that cause, which, in
natural and continuous sequence, unbroken by any
efficient intervening cause, produces the injury, and
without which the result would not have
occurred. And more comprehensively, the
proximate legal cause is that acting first and
producing the injury, either immediately or by
setting other events in motion, all constituting a
natural and continuous chain of events, each
having a close causal connection with its immediate
predecessor, the final event in the chain
immediately effecting the injury as a natural and
probable result of the cause which first acted, under
such circumstances that the person responsible for
the first event should, as an ordinary prudent and
intelligent person, have reasonable ground to
expect at the moment of his act or default that an
injury to some person might probably result
therefrom.
If Aquilino heeded the MMDA prohibition against
crossing Katipunan Avenue from Rajah Matanda,
the accident would not have happened. This
specific untoward event is exactly what the MMDA
prohibition was intended for. Thus, a prudent and
intelligent person who resides within the vicinity
where the accident occurred, Aquilino had
reasonable ground to expect that the accident
would be a natural and probable result if he
crossed Katipunan Avenue since such crossing is
considered dangerous on account of the busy
nature of the thoroughfare and the ongoing
construction of the Katipunan-Boni Avenue
underpass. It was manifest error for the Court of
Appeals to have overlooked the principle embodied
in Article 2179 of the Civil Code, that when the
plaintiffs own negligence was the immediate and
proximate cause of his injury, he cannot recover
damages.
Hence, we find it unnecessary to delve into the
issue of Rodel’s contributory negligence, since it
cannot overcome or defeat Aquilino’s recklessness
which is the immediate and proximate cause of the
accident. Rodel’s contributory negligence has
relevance only in the event that Ramos seeks to
recover from respondent whatever damages or
injuries he may have suffered as a result; it will
have the effect of mitigating the award of damages
in his favor. In other words, an assertion of
contributory negligence in this case would benefit
only the petitioner; it could not eliminate
respondent’s liability for Aquilino’s negligence
which is the proximate result of the accident.
ANTONIA MARANAN vs. PASCUAL PEREZ, ET
AL.
G.R. NO. L-22272, June 26, 1967
Facts: On October 18, 1960, Rogelio
Corachea was a passenger in a taxicab owned and
operated by Pascual Perez when he was stabbed
and killed by the driver, Simeon Valenzuela.
Valenzuela was prosecuted for homicide in the
Court of First Instance of Batangas. He was found
guilty and was sentenced to suffer imprisonment
and to indemnify the heirs of the deceased in the
sum of P6,000. While appeal was pending in the
Court of Appeals, Antonia Maranan, Rogelio’s
mother, filed an action in the Court of First Instance
of Batangas to recover damages from Perez and
Valenzuela for the death of her son. Defendants
asserted that the deceased was killed in self-
defense, since he first assaulted the driver by
stabbing him from behind. Defendant Perez further
claimed that the death was a caso fortuito for which
the carrier was not liable. The court a quo, after
trial, found for the plaintiff and awarded her P3,000
as damages against defendant Perez. The claim
against defendant Valenzuela was dismissed. From
this ruling, both plaintiff and defendant Perez
appealed to this Court, the former asking for more
damages and the latter insisting on non-liability.
Subsequently, the Court of Appeals affirmed the
judgment of conviction earlier mentioned, during
the pendency of the herein appeal, and on May 19,
1964, final judgment was entered therein.
Defendant-appellant relies solely on the ruling
enunciated in Gillaco v. Manila Railroad, that the
carrier is under no absolute liability for assaults of
its employees upon the passengers. The attendant
facts and controlling law of that case and the one at
bar are very different however. In the Gillaco case,
the passenger was killed outside the scope and the
course of duty of the guilty employee.
ISSUE: Whether or not Perez should be held
liable for the death of the passenger?
RULING: Yes. Unlike the old Civil Code, the
new Civil Code of the Philippines expressly makes
the common carrier liable for intentional assaults
committed by its employees upon its passengers,
by the wording of Art. 1759 which categorically
states that common carriers are liable for the death
of or injuries to passengers through the negligence
or willful acts of the former's employees, although
such employees may have acted beyond the scope
of their authority or in violation of the orders of the
common carriers.”
The Civil Code provisions on the subject of
Common Carriers are new and were taken from
Anglo-American Law. There, the basis of the
carrier's liability for assaults on passengers
committed by its drivers rests either on (1) the
doctrine of respondeat superior or (2) the principle
that it is the carrier's implied duty to transport the
passenger safely.
Under the first, which is the minority view, the
carrier is liable only when the act of the employee is
within the scope of his authority and duty. It is not
sufficient that the act be within the course of
employment only. Under the second view, upheld
by the majority and also by the later cases, it is
enough that the assault happens within the course
of the employee's duty. It is no defense for the
carrier that the act was done in excess authority or
in disobedience of the carrier's orders. The carrier's
liability here is absolute in the sense that it
practically secures the passengers from assaults
committed by its own employees.
As can be gleaned from Art. 1759, the Civil
Code of the Philippines evidently follows the rule
based on the second view. At least three very
cogent reasons underlie this rule. As explained
in Texas Midland R.R. v. Monroe, and Haver v.
Central Railroad Co., (1) the special undertaking of
the carrier requires that it furnish its passenger that
full measure of protection afforded by the exercise
of the high degree of care prescribed by the
law, inter alia from violence and insults at the hands
of strangers and other passengers, but above all,
from the acts of the carrier's own servants charged
with the passenger's safety; (2) said liability of the
carrier for the servant's violation of duty to
passengers, is the result of the formers confiding in
the servant's hands the performance of his contract
to safely transport the passenger, delegating
therewith the duty of protecting the passenger with
the utmost care prescribed by law; and (3) as
between the carrier and the passenger, the former
must bear the risk of wrongful acts or negligence of
the carrier's employees against passengers, since
it, and not the passengers, has power to select and
remove them. Accordingly, it is the carrier's strict
obligation to select its drivers and similar
employees with due regard not only to their
technical competence and physical ability, but also,
no less important, to their total personality,
including their patterns of behavior, moral fibers,
and social attitude. Applying this stringent norm to
the facts in this case, therefore, the lower court
rightly adjudged the defendant carrier liable
pursuant to Art. 1759 of the Civil Code. The
dismissal of the claim against the defendant driver
was also correct. Plaintiff's action was predicated
on breach of contract of carriage7 p the cab driver
was not a party thereto. His civil liability is covered
in the criminal case wherein he was convicted by
final judgment.
Wherefore, with the modification increasing the
award of actual damages in plaintiff's favor to
P6,000, plus P3,000.00 moral damages, with legal
interest on both from the filing of the complaint on
December 6, 1961 until the whole amount is paid,
the judgment appealed from is affirmed in all other
respects.
DANGWA TRANSPORTATION CO., INC. and
THEODORE LARDIZABAL y MALECDAN vs.
COURT OF APPEALS, INOCENCIA CUDIAMAT,
NORMA CUDIAMAT, DANTE CUDIAMAT,
SAMUEL CUDIAMAT AND LIGAYA CUDIAMAT,
all heirs of the late Pedrito Cudiamat represented
by Inocencia Cudiamat, responents
G.R. NO. 95582 , October 7, 1991
Facts: On May 13, 1985, private respondents filed
a complaint for damages against petitioners for the
death of Pedrito Cudiamat as a result of a vehicular
accident which occurred on March 25, 1985 at
Marivic, Sapid, Mankayan, Benguet. Among others,
it was alleged that on said date, while petitioner
Theodore M. Lardizabal was driving a passenger
bus belonging to petitioner corporation in a reckless
and imprudent manner and without due regard to
traffic rules and regulations and safety to persons
and property, it ran over its passenger, Pedrito
Cudiamat. However, instead of bringing Pedrito
immediately to the nearest hospital, the said driver,
in utter bad faith and without regard to the welfare
of the victim, first brought his other passengers and
cargo to their respective destinations before
banging said victim to the Lepanto Hospital where
he expired. Petitioners allege that it exercised
extraordinary diligence in its operation as a
transportation company and its supervision of its
employees. Moreover, they also allege that it was
the victim’s own carelessness that brought about
his untimely demise.
The trial court ruled in favor of the petitioner. It
adjudged that the victim’s negligence on boarding
the bus was the proximate cause of his death. The
said court based its ruling on the fact that the victim
boarded the moving bus while holding an umbrella
and without notifying the driver of his intent to
board.
When the case reached the Court of Appeals, the
said court set aside the ruling of the lower court. In
opposition to the findings of the trial court, the CA
held that the bus was in full stop because a
passenger disembarked from it. It was in that
moment when the victim made a sign of his intent
to board though the bus was still at a distance from
him. When the victim made it to the platform of the
bus and closed his umbrella, the vehicle made a
sudden jerking movement as the driver
accelerated, crushing the victim.
Issue: Whether or not the CA erred in declaring the
negligence of the petitioner as the proximate cause
of the death of victim Cudiamat.
Ruling: The CA was correct in reversing the
decision of the trial court based on the following
grounds:
Based on witness testimony, the incident occurred
in bunkhouse 54 and that the witness/passenger
alighted in between bunkhouses 53 and 55. They
further confirm the conclusion that the victim fell
from the platform of the bus when it suddenly
accelerated forward and was run over by the rear
right tires of the vehicle, as shown by the physical
evidence on where he was thereafter found in
relation to the bus when it stopped. Under such
circumstances, it cannot be said that the deceased
was guilty of negligence.
The contention of petitioners that the driver and the
conductor had no knowledge that the victim would
ride the bus, since the latter had supposedly not
manifested his intention to board the same, does
not merit consideration. When the bus is not in
motion there is no necessity for a person who
wants to ride the same to signal his intention to
board. A public utility bus, once it stops, is in effect
making a continuous offer to bus riders. Hence, it
becomes the duty of the driver and the conductor,
every time the bus stops, to do no act that would
have the effect of increasing the peril to a
passenger while he was attempting to board the
same. The premature acceleration of the bus in this
case was a breach of such duty.
It is the duty of common carriers of passengers,
including common carriers by railroad train,
streetcar, or motorbus, to stop their conveyances a
reasonable length of time in order to afford
passengers an opportunity to board and enter, and
they are liable for injuries suffered by boarding
passengers resulting from the sudden starting up or
jerking of their conveyances while they are doing
so.
Further, even assuming that the bus was moving,
the act of the victim in boarding the same cannot be
considered negligent under the circumstances. As
clearly explained in the testimony of the aforestated
witness for petitioners, Virginia Abalos, the bus had
"just started" and "was still in slow motion" at the
point where the victim had boarded and was on its
platform.
It is not negligence per se, or as a matter of law, for
one attempt to board a train or streetcar which is
moving slowly. An ordinarily prudent person would
have made the attempt to board the moving
conveyance under the same or similar
circumstances. The fact that passengers board and
alight from a slowly moving vehicle is a matter of
common experience both the driver and conductor
in this case could not have been unaware of such
an ordinary practice.
The victim herein, by stepping and standing on the
platform of the bus, is already considered a
passenger and is entitled all the rights and
protection pertaining to such a contractual relation.
Hence, it has been held that the duty which the
carrier passengers owes to its patrons extends to
persons boarding cars as well as to those alighting
therefrom.
Common carriers, from the nature of their business
and reasons of public policy, are bound to observe
extraordinary diligence for the safety of the
passengers transported by according to all the
circumstances of each case. A common carrier is
bound to carry the passengers safely as far as
human care and foresight can provide, using the
utmost diligence of very cautious persons, with a
due regard for all the circumstances.
It has also been repeatedly held that in an action
based on a contract of carriage, the court need not
make an express finding of fault or negligence on
the part of the carrier in order to hold it responsible
to pay the damages sought by the passenger. By
contract of carriage, the carrier assumes the
express obligation to transport the passenger to his
destination safely and observe extraordinary
diligence with a due regard for all the
circumstances, and any injury that might be
suffered by the passenger is right away attributable
to the fault or negligence of the carrier. This is an
exception to the general rule that negligence must
be proved, and it is therefore incumbent upon the
carrier to prove that it has exercised extraordinary
diligence as prescribed in Articles 1733 and 1755 of
the Civil Code.
Moreover, as patent proof of incontrovertible
negligence and despite the serious condition of the
victim, the driver opted to first proceed to
bunkhouse 70 to allow a passenger to deliver a
refrigerator instead of making a turn at bunkhouse
56 to get to a nearby hospital and save the victim’s
life.
JG SUMMIT HOLDINGS, INC. vs. COURT OF
APPEALS
G.R. No. 124293, September 24, 2003
Facts: On 27 January 1977, the National
Investment and Development Corporation (NIDC),
a government corporation, entered into a Joint
Venture Agreement (JVA) with Kawasaki Heavy
Industries, Ltd. of Kobe, Japan (Kawasaki) for the
construction, operation, and management of the
Subic National Shipyard, Inc. (SNS), which
subsequently became the Philippine Shipyard and
Engineering Corporation (PHILSECO). Under the
JVA, NIDC and Kawasaki would maintain a
shareholding proportion of 60% - 40%, respectively.
One of the provisions of the JVA accorded the
parties the right of first refusal should either party
sell, assign or transfer its interest in the joint
venture. On 25 November 1986, NIDC transferred
all its rights, title and interest in PHILSECO to the
Philippine National Bank.
More than two months later or on 3 February 1987,
by virtue of Administrative Order 14, PNB's interest
in PHILSECO was transferred to the National
Government.
Meanwhile, on 8 December 1986, President
Corazon C. Aquino issued Proclamation 50
establishing the Committee on Privatization (COP)
and the Asset Privatization Trust (APT) to take title
to and possession of, conserve, manage and
dispose of non-performing assets of the National
Government. On 27 February 1987, a trust
agreement was entered into between the National
Government and the APT by virtue of which the
latter was named the trustee of the National
Government's share in PHILSECO.
In 1989, as a result of a quasi-reorganization of
PHILSECO to settle its huge obligations to PNB,
the National Government's shareholdings in
PHILSECO increased to 97.41% thereby reducing
Kawasaki's shareholdings to 2.59%. Exercising
their discretion, the COP and the APT deemed it in
the best interest of the national economy and the
government to privatize PHILSECO by selling
87.67% of its total outstanding capital stock to
private entities.
After a series of negotiations between the APT and
Kasawaki, they agreed that the latter's right of first
refusal under the JVA be "exchanged" for the right
to top by 5% the highest bid for said shares. They
further agreed that Kawasaki would be entitled to
name a company in which it was a stockholder,
which could exercise the right to top.
On 7 September 1990, Kawasaki informed APT
that Philyards Holdings, Inc. (PHI) would exercise
its right to top by 5%.
At the pre-bidding conference held on 28
September 1993, interested bidders were given
copies of the JVA between NIDC and Kawasaki,
and of the Asset Specific Bidding Rules (ASBR)
drafted for the 87.67% equity in PHILSECO of the
National Government. The provisions of the ASBR
were explained to the interested bidders who were
notified that bidding would be held on 2 December
1993.
At the public bidding on said date, the consortium
composed of JG Summit Holdings, Inc. (JGSMI),
Sembawang Shipyard Ltd. of Singapore
(Sembawang), and Jurong Shipyard Limited of
Malaysia (Jurong), was declared the highest bidder
at P2.03 billion. The following day, the COP
approved the sale of 87.67% National Government
shares of stock in PHILSECO to said consortium. It
notified JGSMI of said approval subject to the right
of Kawasaki Heavy Industries, Inc./Philyards
Holdings, Inc. to top JGSMI's bid by 5% as
specified in the bidding rules.
On 29 December 1993, JGSMI informed the APT
that it was protesting the offer of PHI to top its bid
on the grounds that: (a) the Kawasaki/PHI
consortium composed of Kawasaki, Philyards,
Mitsui, Keppel, SM Group, ICTSI and Insular Life
violated the ASBR because the last four (4)
companies were the losing bidders (for P1.528
billion) thereby circumventing the law and
prejudicing the weak winning bidder; (b) only
Kawasaki could exercise the right to top; (c) giving
the same option to top to PHI constituted
unwarranted benefit to a third party; (d) no right of
first refusal can be exercised in a public bidding or
auction sale, and (e) the JG Summit Consortium
was not estopped from questioning the
proceedings.
On 2 February 1994, JGSMI was notified that PHI
had fully paid the balance of the purchase price of
the subject bidding. On 7 February 1994, the APT
notified JGSMI that PHI had exercised its option to
top the highest bid and that the COP had approved
the same on 6 January 1994. On 24 February
1994, the APT and PHI executed a Stock Purchase
Agreement.
Consequently, JGSMI filed with the Supreme Court
a petition for mandamus under GR 114057. On 11
May 1994, said petition was referred to the Court of
Appeals. On 18 July 1995, the Court of Appeals
"denied" for lack of merit the petition for
mandamus. JGSMI filed a motion for the
reconsideration of said Decision which was denied
on 15 March 1996. JGSMI filed the petition for
review on certiorari.
On November 20, 2000, this Court rendered the
now assailed Decision ruling among others that the
Court of Appeals erred when it dismissed the
petition on the sole ground of the impropriety of the
special civil action of mandamus because the
petition was also one of certiorari.
It further ruled that a shipyard like PHILSECO is a
public utility whose capitalization must be sixty
percent (60%) Filipino-owned.
Issue: Whether or not PHILSECO is a public utility.
Ruling: After carefully reviewing the
applicable laws and jurisprudence, we hold that
PHILSECO is not a public utility.
First. By nature, a shipyard is not a public utility.
A "public utility" is "a business or service engaged
in regularly supplying the public with some
commodity or service of public consequence such
as electricity, gas, water, transportation, telephone
or telegraph service." To constitute a public utility,
the facility must be necessary for the maintenance
of life and occupation of the residents. However,
the fact that a business offers services or goods
that promote public good and serve the interest of
the public does not automatically make it a public
utility. Public use is not synonymous with public
interest. As its name indicates, the term "public
utility" implies public use and service to the public.
The principal determinative characteristic of a
public utility is that of service to, or readiness to
serve, an indefinite public or portion of the public as
such which has a legal right to demand and receive
its services or commodities. Stated otherwise, the
owner or person in control of a public utility must
have devoted it to such use that the public
generally or that part of the public which has been
served and has accepted the service, has the right
to demand that use or service so long as it is
continued, with reasonable efficiency and under
proper charges.
"Public use" means the same as "use by the
public." The essential feature of the public use is
that it is not confined to privileged individuals, but is
open to the indefinite public. It is this indefinite or
unrestricted quality that gives it its public character.
In determining whether a use is public, we must
look not only to the character of the business to be
done, but also to the proposed mode of doing it. If
the use is merely optional with the owners, or the
public benefit is merely incidental, it is not a public
use, authorizing the exercise of jurisdiction of the
public utility commission. There must be, in
general, a right which the law compels the owner to
give to the general public. It is not enough that the
general prosperity of the public is promoted. Public
use is not synonymous with public interest. The
true criterion by which to judge the character of the
use is whether the public may enjoy it by right or
only by permission.
A "shipyard" is "a place or enclosure where ships
are built or repaired." Its nature dictates that it
serves but a limited clientele whom it may choose
to serve at its discretion. While it offers its facilities
to whoever may wish to avail of its services, a
shipyard is not legally obliged to render its services
indiscriminately to the public. It has no legal
obligation to render the services sought by each
and every client. The fact that it publicly offers its
services does not give the public a legal right to
demand that such services be rendered.
There can be no disagreement that the shipbuilding
and ship repair industry is imbued with public
interest as it involves the maintenance of the
seaworthiness of vessels dedicated to the
transportation of either persons or goods.
Nevertheless, the fact that a business is affected
with public interest does not imply that it is under a
duty to serve the public. While the business may be
regulated for public good, the regulation cannot
justify the classification of a purely private
enterprise as a public utility.
The legislature cannot, by its mere declaration,
make something a public utility which is not in fact
such; and a private business operated under
private contracts with selected customers and not
devoted to public use cannot, by legislative fiat or
by order of a public service commission, be
declared a public utility, since that would be taking
private property for public use without just
compensation, which cannot be done consistently
with the due process clause.
It is worthy to note that automobile and aircraft
manufacturers, which are of similar nature to
shipyards, are not considered public utilities despite
the fact that their operations greatly impact on land
and air transportation. The reason is simple. Unlike
commodities or services traditionally regarded as
public utilities such as electricity, gas, water,
transportation, telephone or telegraph service,
automobile and aircraft manufacturing---and for that
matter ship building and ship repair--- serve the
public only incidentally.
Second. There is no law declaring a shipyard as a
public utility.
History provides us hindsight and hindsight ought to
give us a better view of the intent of any law. The
succession of laws affecting the status of shipyards
ought not to obliterate, but rather, give us full
picture of the intent of the legislature. The totality of
the circumstances, including the contemporaneous
interpretation accorded by the administrative bodies
tasked with the enforcement of the law all lead to a
singular conclusion: that shipyards are not public
utilities.
Since the enactment of Act No. 2307 which created
the Public Utility Commission (PUC) until its repeal
by Commonwealth Act No. 146, establishing the
Public Service Commission (PSC), a shipyard, by
legislative declaration, has been considered a
public utility.
To accelerate the development of shipbuilding and
ship repair industry, former President Ferdinand E.
Marcos issued P.D. No. 666 granting the following
incentives:
SECTION 1. Shipbuilding and ship repair yards
duly registered with the Maritime Industry Authority
shall be entitled to the following incentive benefits:
XXX
Any law, decree, executive order, or rules and
regulations inconsistent with P.D. No. 666 were
repealed or modified accordingly. Consequently,
sections 13 (b) and 15 of C.A. No. 146 were
repealed in so far as the former law included
shipyards in the list of public utilities and required
the certificate of public convenience for their
operation. Simply stated, the repeal was due to
irreconcilable inconsistency, and by definition, this
kind of repeal falls under the category of an implied
repeal.
On April 28, 1983, Batas Pambansa Blg. 391, also
known as the "Investment Incentive Policy Act of
1983," was enacted. It laid down the general policy
of the government to encourage private domestic
and foreign investments in the various sectors of
the economy, to wit:
XXX
With the new investment incentive regime, Batas
Pambansa Blg. 391 repealed the following laws,
viz:
Sec. 20. The following provisions are hereby
repealed:
2.) Section 1, P.D. 666 (Shipbuilding and Ship
Repair Industry);
XXX
From the language of the afore-quoted provision,
the whole of P.D. No. 666, section 1 was expressly
and categorically repealed. As a consequence, the
provisions of C.A. No. 146, which were impliedly
repealed by P.D. No. 666, section 1 were revived.
In other words, with the enactment of Batas
Pambansa Blg. 391, a shipyard reverted back to its
status as a public utility and as such, requires a
CPC for its operation.
We rule that the express repeal of Batas Pambansa
Blg. 391 by E.O. No. 226 (THE OMNIBUS
INVESTMENTS CODE OF 1987) did not revive
Section 1 of P.D. No. 666. But more importantly, it
also put a period to the existence of sections 13 (b)
and 15 of C.A. No. 146.
It bears emphasis that sections 13 (b) and 15 of
C.A. No. 146, as originally written, owed their
continued existence to Batas Pambansa Blg. 391.
Had the latter not repealed P.D. No. 666, the
former should have been modified accordingly and
shipyards effectively removed from the list of public
utilities. Ergo, with the express repeal of Batas
Pambansa Blg. 391 by E.O. No. 226, the revival of
sections 13 (b) and 15 of C.A. No. 146 had no more
leg to stand on.
A law that has been expressly repealed ceases to
exist and becomes inoperative from the moment
the repealing law becomes effective. Hence, there
is simply no basis in the conclusion that shipyards
remain to be a public utility. A repealed statute
cannot be the basis for classifying shipyards as
public utilities.
In view of the foregoing, there can be no other
conclusion than to hold that a shipyard is not a
pubic utility. A shipyard has been considered a
public utility merely by legislative declaration.
Absent this declaration, there is no more reason
why it should continuously be regarded as such.
FRANCISCA VILUAN vs. THE COURT OF
APPEALS, PATRICIO HUFANA and GREGORIO
HUFANA
G.R. Nos. L-21477-81. April 29, 1966
Facts: The bus owned by Francisca Viluan,
driven by Hermenegildo Aquino, met an accident,
when it caught fire after hitting a post and crashing
against a tree. Consequently, seven persons were
killed and thirteen others were injured. Said
accident happened when the bus driven by Aquino
and the bus owned by Patricio Hufana and driven
by Gregorio Hufana tried to overtake Aquino, but
instead of giving way, Aquino increased the speed
of his bus and raced with the overtaking bus.
The injured passengers and the heirs of the
deceased passengers sued Viluan and Aquino for
damages for breach of contract of carriage and was
filed in the CFI of La Union. In their answer,
petitioner and her driver blamed respondent
Gregorio Hufana for the accident. With leave of
court, they filed third party complaints against
Hufana and the latter's employer, Patricio Hufana.
CFI found that the accident was due to the
concurrent negligence of the drivers of the two
buses and held both, together with their respective
employers, jointly and severally liable for damages.
On appeal, the CA affirmed the finding that the
accident was due to the concurrent negligence of
the drivers of both the Viluan and the Hufana
buses, the Court of Appeals differed with the trial
court in the assessment of liabilities of the parties.
In its view only petitioner Francisca Viluan, as
operator of the bus, is liable for breach of contract
of carriage. The driver, Aquino, cannot be made
jointly and severally liable with petitioner because
he is merely the latter's employee and is in no way
a party to the contract of carriage, without prejudice
on the part of Viluan to recover from Aquino any
damages that she might have suffered by reason of
the latter's negligence.
Neither may respondents Patricio Hufana and
Gregorio Hufana be held liable in the opinion of the
appellate court because the plaintiffs did not amend
complaints in the main action so as to assert a
claim against the respondents as third party
defendants. Hence, the case at bar.
ISSUE: Whether the Hufanas may be held
solidarily liable with Viluan
RULING: Yes. The Supreme Court ruled that it
makes no difference that the liability of petitioner
springs from contract while that of respondents
arises from quasi-delict. As early as 1913, the
Court already ruled in Gutierrez vs. Gutierrez, 56
Phil. 177, that in case of injury to a passenger due
to the negligence of the driver of the bus on which
he was riding and of the driver of another vehicle,
the drivers as well as the owners of the two
vehicles are jointly and severally liable for
damages. Some members of the Court, though, are
of the view that under the circumstances they are
liable on quasi-delict.
Wherefore, the decision appealed from is hereby
modified in the sense that petitioner as well as
respondents Patricio Hufana and Gregorio Hufana
are jointly and severally liable for the damages
awarded by the trial court.
Manila Steamship Co., Inc. vs. Insa Abdulhaman
and Lim Hong To,
G.R. No. L-9534 September 29, 1956
Facts: Insa Abdulhaman together with his
wife and five children boarded M/L Consuelo V in
Zamboanga City. The said ship was bound for
Siokon under the command of Faustino Macrohon.
On that same night, M/S Bowline Knot was
navigating from Marijoboc towards Zamboanga.
Around 9:30 to 10:00 in the evening of May 4,
1948, while some of the passengers of the M/L
Consuelo V were then sleeping and some lying
down awake, a shocking collision suddenly
occurred. The ship that collided was later on
identified as the M/V Bowline Knot. M/L Consuelo V
capsized that resulted to the death of 9 passengers
and the loss of the cargos on board.
The Court held the owners of both vessels solidarily
liable to plaintiff for damages caused to the latter
under Article 827 of the Code of Commerce but
exempted defendant Lim Hong To from liability due
to the sinking and total loss of his vessel. While
Manila steamship, owner of the Bowline Knot was
ordered to pay all of plaintiff’s damages.
Petitioner Manila Steamship Co. pleaded that it is
exempt from any liability under Article 1903 of the
Civil Code because it had exercised the diligence of
a good father of a family in the selection of its
employees, particularly the officer in command of
the M/S Bowline Knot.
Issue: Whether or not petitioner Manila
Steamship Co. is exempt from any liability under
Art. 1903 of the Civil Code?
Ruling: No. Petitioner is not exempted from
liabilities. While it is true that plaintiff’s action
against petitioner is based on a tort or quasi delict,
the tort in question is not a civil tort under the Civil
Code but a maritime tort resulting in a collision at
sea, governed by Articles 826-939 of the Code of
Commerce. Under Art. 827 of the Code of
Commerce, in case of collision between two
vessels imputable to both of them, each vessel
shall suffer her own damage and both shall be
solidarily liable for the damages occasioned to their
cargoes. The shipowner is directly and primarily
responsible in tort resulting in a collision at sea, and
it may not escape liability on the ground that
exercised due diligence in the selection and
supervision of the vessel’s officers and crew.
COMMON CARRIERS; MARITIME TORTS;
COLLISION IMPUTABLE TO BOTH VESSELS;
LIABILITY OF SHIPOWNERS, SOLIDARY.—In
case of collision between two vessels imputable to
both of them, each vessel shall suffer her own
damage and both shall be solidarily liable for the
damages occasioned to their cargoes. (Article 827,
Code of Commerce.)
LIABILITY OF SHIPOWNERS.—The shipowner is
directly and primarily responsible in tort resulting in
a collision at sea, and it may not escape liability on
the ground that it exercised due diligence in the
selection and supervision of the vessel’s officers
and crew.
LIABILITY OF SHIPOWNER WHERE OFFICERS
OF THE SHIP ARE UNLICENSED.—The owner of
a vessel who had caused the same to sail without
licensed officers is liable for the injuries caused by
the collision over and beyond the value of his
vessel; hence, he cannot escape liability because
of the sinking of the vessel.
The court agree, however, with petitioner-appellant,
that the Court of Appeals was in error in declaring
the respondent Lim Hong To, owner of the M/L
“Consuelo V", exempt from liability to the original
plaintiff, Abdulhaman, in view of the total loss of his
own vessel, that sank as a result of the collision. It
is to be noted that both the master and the
engineer of the motor launch “Consuelo V“ were
not duly licensed as such.
Wherefore, the court held that:
(1) That the Manila Steamship Co., owner of the
M/S “Bowline Knot”, is directly and primarily
responsible in tort for the injuries caused to the
plaintiff by the collision of said vessel with the
launch “Consuelo V", through the negligence of the
crews of both vessels, and it may not escape
liability on the ground that it exercised due diligence
in the selection and supervision of the officers and
crew of the “Bowline Knot”;
(2) That Lim Hong To, as owner of the motor
launch “Consuelo V", having caused the same to
sail without licensed officers, is liable for the injuries
caused by the collision over and beyond the value
of said launch;
(3) That both vessels being at fault, the liability of
Lim Hong To and Manila Steamship Co. to the
plaintiff herein is in solidum, as prescribed by
Article 827 of the Code of Commerce.
In view of the foregoing, the decision of the Court of
Appeals is modified, and that of the Court of First
Instance affirmed, in the sense of declaring both
original defendants solidarily liable to plaintiff Insa
Abdulhaman in the sum of P20,784.00 and the cost
of the litigation, without prejudice to the right of the
one who should pay the judgment in full to demand
contribution from his co-defendant.
Southern lines v. CA
Facts: Sometime in 1948, the City of Iloilo
requisitioned for rice from the National Rice and
Corn Corporation ( NARIC) in Manila. NARIC,
pursuant to the order, shipped 1,726 sacks of rice
consigned to the City of Iloilo on board the SS
"General Wright" belonging to the Southern Lines,
Inc. Each sack of rice weighed 75 kilos and the
entire shipment as indicated in the bill of lading had
a total weight of 129,450 kilos. According to the bill
of lading, the cost of the shipment was P63,115.50.
The City of Iloilo received the shipment and paid
the amount of P63,115.50. However, it was noted
that the foot of the bill of lading that the City of Iloilo
'Received the above mentioned merchandise
apparently in same condition as when shipped,
save as noted below: actually received 1685 sacks
with a gross weight of 116,131 kilos upon actual
weighing. Total shortage ascertained 13,319 kilos."
The shortage was equivalent to 41 sacks of rice
with a net weight of 13,319 kilos, the proportionate
value of which was P6,486.35. The City of Iloilo
filed a complaint in the Court of First Instance of
Iloilo against NARIC and the Southern Lines, Inc.
for the recovery of the amount of P6,486.35
representing the value of the shortage of the
shipment of rice. The lower court absolved NARIC
from the complaint, but sentenced the Southern
Lines, Inc. to pay the amount of P4,931.41 which is
the difference between the sum of P6,486.35 and
P1,554.94 representing the latter's counterclaim for
handling and freight. On appeal, the CA affirmed
RTC' decision
Issue: whether or not the defendant-carrier is liable
for the loss or shortage of the rice shipped Ruling:
Ruling: yes. Under the provisions of Article 361,
the defendant-carrier in order to free itself from
liability, was only obliged to prove that the damages
suffered by the goods were "by virtue of the nature
or defect of the articles." Under the provisions of
Article 362, the plaintiff, in order to hold the
defendant liable, was obliged to prove that the
damages to the goods by virtue of their nature,
occurred on account of its negligence or because
the defendant did not take the precaution adopted
by careful persons. (Government v. Ynchausti &
Co., 40 Phil. 219, 223). Petitioner claims exemption
from liability by contending that the shortage in the
shipment of rice was due to such factors as the
shrinkage, leakage or spillage of the rice on
account of the bad condition of the sacks at the
time it received the same and the negligence of the
agents of respondent City of Iloilo in receiving the
shipment. The contention is untenable, for, if the
fact of improper packing is known to the carrier or
his servants, or apparent upon ordinary
observation, but it accepts the goods
notwithstanding such condition, it is not relieved of
liability for loss or injury resulting thereform. (9 Am
Jur. 869.) Furthermore, according to the Court of
Appeals, "appellant (petitioner) itself frankly
admitted that the strings that tied the bags of rice
were broken; some bags were with holes and
plenty of rice were spilled inside the hull of the boat,
and that the personnel of the boat collected no less
than 26 sacks of rice which they had distributed
among themselves." This finding, which is binding
upon this Court, shows that the shortage resulted
from the negligence of petitioner.
TABACALERA INSURANCE CO., PRUDENTIAL
GUARANTEE & ASSURANCE, INC., and NEW
ZEALAND INSURANCE CO., LTD., petitioners,
vs. NORTH FRONT SHIPPING SERVICES, INC.,
and COURT OF APPEALS, respondents.
Facts: Petitioners are insurers of a shipment of
sacks of corn grains consigned to Republic Flour
Mills Corporation in Manila. The vessel was
inspected by representatives of the shipper prior to
the transport and was found fitting to carry the
cargo; it was also issued a Permit to Sail. The
cargo was shipped by North Front Shipping
Services, Inc. from Cagayan de Oro to Manila. The
goods were successfully delivered but it was not
immediately unloaded by the Republic Flour Mills
Corporation. After 20 days, the unloading
operations were completed. There were a shortage
of 23.666 metric tons and some of the merchandise
was already moldy and deteriorating. The moisture
content and the wetting found on the corn was due
to contact with salt water but the mold growth was
only incipient and not sufficient to make the corn
grains toxic and unfit for consumption. In fact the
mold growth could still be arrested by drying.
However, Republic Flour rejected the entire cargo
and demanded North Front to pay but was ignored,
which therefore forced the petitioners to pay the
former. Now, as subrogees, they lodged a
complaint for damages against respondents
claiming that the loss was exclusively attributable to
the fault and negligence of the carrier. The Marine
Cargo Adjusters hired by the insurance companies
conducted a survey and found cracks in the bodega
of the barge and heavy concentration of molds on
the tarpaulins and wooden boards. They did not
notice any seals in the hatches. The tarpaulins
were not brand new as there were patches on
them, contrary to the claim of North Front Shipping
Services, Inc., thus making it possible for water to
seep in. They also discovered that the bulkhead of
the barge was rusty. The trial court dismissed the
complaint and ruled that the contract entered into
between North Front Shipping Services, Inc., and
Republic Flour Mills Corporation was a charter-
party agreement. As such, only ordinary diligence
in the care of goods was required. On the other
hand, the Court of Appeals ruled that as a common
carrier required to observe a higher degree of
diligence North Front 777 satisfactorily complied
with all the requirements hence was issued a
Permit to Sail after proper inspection.
Issues: Whether North Front Shipping is a
common carrier. If indeed, did it fail to exercise the
required diligence and thus should be held liable?
Ruling: Yes, North Front is a common carrier. The
charter-party agreement between North Front
Shipping Services, Inc., and Republic Flour Mills
Corporation did not in any way convert the common
carrier into a private carrier. A “charter-party” is
defined as a contract by which an entire ship, or
some principal part thereof, is let by the owner to
another person for a specified time or use. North
Front Shipping Services, Inc., is a corporation
engaged in the business of transporting cargo and
offers its services indiscriminately to the public. It is
without doubt a common carrier. As such it is
required to observe extraordinary diligence in its
vigilance over the goods it transports. When goods
placed in its care are lost or damaged, the carrier is
presumed to have been at fault or to have acted
negligently. North Front Shipping Services, Inc.,
therefore has the burden of proving that it observed
extraordinary diligence in order to avoid
responsibility for the lost cargo. North Front
Shipping Services, Inc., proved that the vessel was
inspected prior to actual loading by representatives
of the shipper and was found fit to take a load of
corn grains. They were also issued Permit to Sail
by the Coast Guard. The master of the vessel
testified that the corn grains were farm wet when
loaded. However, this testimony was disproved by
the clean bill of lading issued by North Front
Shipping Services, Inc., which did not contain a
notation that the corn grains were wet and
improperly dried. Having been in the service since
1968, the master of the vessel would have known
at the outset that corn grains that were farm wet
and not properly dried would eventually deteriorate
when stored in sealed and hot compartments as in
hatches of a ship. Equipped with this knowledge,
the master of the vessel and his crew should have
undertaken precautionary measures to avoid or
lessen the cargo's possible deterioration as they
were presumed knowledgeable about the nature of
such cargo. But none of such measures was taken.
In fine, we find that the carrier failed to observe the
required extraordinary diligence in the vigilance
over the goods placed in its care. The proofs
presented by North Front Shipping Services, Inc.,
were insufficient to rebut the prima facie
presumption of private respondent's negligence,
more so if we consider the evidence adduced by
petitioners. However, we cannot attrib ute the
destruction, loss or deterioration of the cargo solely
to the carrier. We find the consignee Republic Flour
Mills Corporation guilty of contributory negligence.
It was seasonably notified of the arrival of the barge
but did not immediately start the unloading
operations. No explanation was proffered by the
consignee as to why there was a delay of six (6)
days. Had the unloading been commenced
immediately the loss could have been completely
avoided or at least minimized. As testified to by the
chemist who analyzed the corn samples, the mold
growth was only at its incipient stage and could still
be arrested by drying. The corn grains were not yet
toxic or unfit for consumption.
CHINA AIRLINES vs. IAC and CLAUDIA OSORIO
Facts: On April 14, 1980, after a four-day delay
caused by an engine malfunction, private
respondent Claudia B. Osorio boarded in Manila
Flight No. CI-812 of petitioner China Airlines, Ltd.,
for Taipei. Said flight, as originally scheduled, was
to bring private respondent and nine (9) other
passengers to Taipei in time for petitioner airline's
Flight No. CI-002 for Los Angeles (LAX). As this
schedule had been rendered impossible by the
delay, it was agreed, prior to their departure from
Manila that private respondent and the nine (9)
other passengers similarly situated would spend
the night in Taipei at petitioner's expense and
would be brought the following day to San
Francisco (SF), U.S.A., where they would be
furnished an immediate flight connection to LAX.
However, upon arrival in San Francisco, U.S.A. on
April 15, 1980 at around 1:31 p.m., SF local time.
No instructions having been received regarding
them by petitioner's SF Office due to the delay in
the transmission of the telex messages from
Manila, private respondent and her co-passengers
were asked to deplane and wait while contact with
Manila was being made. This, however, could not
be done immediately because of the time difference
between the two (2) places. Private respondent
with the other passengers requested for food and
accommodations as transit passangers. They were
refused by the service agent and their unloaded
luggage, which caused them to angrily leave the
place, without leaving any contact numbers or
information. On the same day, in the evening word
from Manila arrived authorizing the issuance of LAX
tickets for LAX to private respondent and her
companions, the latter could not be informed
thereof. It was only on the following day, April 16,
1980, after spending the night at the YMCA, paying
a fee of $5.00 therefor, that private respondent
learned thru her companions Atty. Laud and Mrs.
Sim that her ticket for LAX and luggage were ready
for pick-up any time. Notwithstanding, private
respondent preferred to pick up her luggage on
April 17, 1980 and fly to LAX on said date with a
Western Airlines ticket which she purchased for
$56.00. Private respondent spent the night of April
16, 1980 in the house of Mrs. Sims friend who did
not charge anything. On June 30, 1980, private
respondent filed before the then Court of First
Instance of Manila a complaint for damages arising
from breach of contract against petitioner airline.
Issue: WON the failure of petitioner airline to
arrange for private respondent's immediate flight to
Los Angeles constitute a palpable breach of
contract of carriage?
Ruling: 1.) Yes. Verily, petitioner airlines
committed a breach of contract in failing to secure
an immediate flight connection for private
respondent. Under Article 1755 of the Civil Code of
the Philippines, petitioner, as a common carrier, is
duty bound to "carry 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." The reliance of
petitioner on the subject telex communications falls
short of the utmost diligence of a very cautious
person expected of it, thereby rendering it liable for
its failure to abide by the promised immediate
connection. Be that as it may, we, however, find
that the breach of contract committed by petitioner
was not attended by gross negligence,
recklessness or wanton disregard of the rights of
private respondent as a passenger. Telex was the
established mode of communication between
petitioner's Manila and San Francisco offices.
Contact by telephone was not a practice due to the
time difference between the two places. Thus, while
petitioner's Manila office was aware of the
possibility of transmission delay, it bad to avail itself
of this mode of communication. For this course of
action, we do not find petitioner to have acted
wantonly or recklessly. Considering the gap of
more than 24 hours between the time the telex
messages were sent out and private respondent's
expected arrival at San Francisco, it was not
unreasonable for petitioner to expect that this time
gap would cover whatever delay might be
encountered at the Hongkong Link. Thus, while
petitioner may have been remiss in its total reliance
upon the telex communications and therefore
considered negligent in view of the degree of
diligence required of it as a common carrier, such
negligence cannot under the obtaining
circumstances be said to be so gross as to amount
to bad faith.