Transporation Law Case Digests

EXTRAORDINARY DILIGENCE (8)
Nocum vs. Laguna Tayabas Bus Co. (GR L-23733, 31 October 1969)
Facts:
Herminio L. Nocum, a passenger in Laguna Tayabas Bus Co.s Bus 120, which was then making
a trip within the barrio of Dita, Municipality of Bay, Laguna, was injured as a consequence of the
explosion of firecrackers, contained in a box, loaded in said bus and declared to its conductor as
containing clothes and miscellaneous items by a co-passenger.
Nocum filed a case against Laguna Tayabas Bus for damages. The CFI of Batangas (Civil Case
834)sentenced Laguna Tayabas to pay Nocum the sum of P1,351.00 for actual damages and
P500.00 as attorneys fees, with legal interest from the filing of the complaint plus costs. Laguna
Tayabas appealed.The Supreme Court reversed the appealed judgment of the trial court, and
dismissed the case, without costs.
Issue: Whether or not Laguna Tayabas Bus Co exerted extraordinary diligence.
Held: Yes. Laguna Tayabas Bus Co. Exerted extraordinary diligence and may not be held liable
for the damages borne by the explosion of firecrackers. Article 1733 of the Civil Code provides
that Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them, according to all the circumstances of each case. A 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.
However Carriers are not mandated to require opening of baggage. Before the box containing the
firecrackers were allowed to be loaded in the bus by the conductor,inquiry was made with the
passenger carrying the same as to what was in it, since its opening was folded and tied with
abaca.
According to the judge of the lower court, if proper and rigid inspection were observed by the
defendant, the contents of the box could have been discovered and the accident avoided. Refusal
by the passenger to have the package opened was no excuse because, as stated by Dispatcher
Cornista, employees should call the police if there were packages containing articles against
company regulations. Even it that may be true, the law does not require as much. Article 1733 is
not as unbending, for it reasonably qualifies the extraordinary diligence required of common
carriers for the safety of the passengers transported by them to beaccording to all the
circumstances of each case. While it is true the passengers of Laguna Tayabas bus should not be
made to suffer for something over which they had no control, fairness demands that in measuring
a common carriers duty towards its passengers, allowance must be given to the reliance that
should be reposed on the sense of responsibility of all the passengers in regard to their common
safety. It is to be presumed that a passenger will not take with him anything dangerous to the lives
and limbs of his co-passengers, not to speak of his own. He cannot be subjected to any unusual
search, when he protests the innocuousness of his baggage and nothing appears to indicate the
contrary, as in the case at bar. In other words, inquiry may be verbally made as to the nature of a
passengers baggage when such is not outwardly perceptible, but beyond this, constitutional
boundaries are already in danger of being transgressed.
ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

(VAUMADADA)
Mecenas v. CA, 180 SCRA 83 (1989)

Facts:
On April 22, 1980, two vessels, Tacloban City and Don Juan collided at the Talbas Strait
within the vicinity of Mindoro. M/V Don Juan sank and hundreds of passengers died. Among
them were petitioners parents, whose bodies were never recovered. Petitioners filed a complaint
seeking damages against Negros Navigation. The trial court awarded P400,000, but the Court of
Appeals reduced the award to P100,000.
Issue:
Whether the reduction of the award was properly ruled upon by the Court of Appeals
Held:
In an action based upon a breach of the contract of carriage, the carrier under our civil law is
liable for the death of passengers arising from the negligence or wilful act of the carrier's
employees although such employees may have acted beyond the scope of their authority or even
in violation of the instructions of the carrier, which liability may include liability for moral
damages. It follows that petitioners would be entitled to moral damages so long as the collision
with the "Tacloban City" and the sinking of the "Don Juan" were caused or attended by
negligence on the part of private respondents.
Whether petitioners are entitled to exemplary damages as claimed must depend upon whether or
not private respondents acted recklessly, that is, with gross negligence. We believe that the
behaviour of the captain of the "Don Juan" in this instance playing mahjong "before and up to
the time of collision" constitutes behaviour that is simply unacceptable on the part of the
master of a vessel to whose hands the lives and welfare of at least seven hundred fifty (750)
passengers had been entrusted. There is also evidence that the "Don Juan" was carrying more
passengers than she had been certified as allowed to carry. We conclude that Capt. Santisteban
and Negros Navigation are properly held liable for gross negligence. We find no necessity for
passing upon the degree of negligence or culpability properly attributable to PNOC and PNOC
Shipping or the master of the "Tacloban City," since they were never impleaded here.
Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is
socially deleterious in its consequence by creating negative incentives or deterrents against such
behaviour. In requiring compliance with the standard of extraordinary diligence, a standard which
is in fact that of the highest possible degree of diligence, from common carriers and in creating a
presumption of negligence against them, the law seeks to compel them to control their employees,
to tame their reckless instincts and to force them to take adequate care of human beings and their
property. Both the demands of substantial justice and the imperious requirements of public policy
compel us to the conclusion that the trial court's implicit award of moral and exemplary damages
was erroneously deleted and must be restored and augmented and brought more nearly to the
level required by public policy and substantial justice.

(VAUMADADA)
Negros Navigation Co., Inc v. CA, 281 SCRA 534 (1997)

Facts:
Sometime in April 1980, Ramon Miranda, one of the private respondents in this case purchased
four special tickets (Numbers 74411, 74412, 74413 and 74414) from the petitioner for his
wife,children and niece who were then bound to leave for Bacolod City to attend a family
reunion.On 22 April 1980, private respondents aforementioned relatives boarded M/V Don Juan
of Negros Navigation Co., Inc., that was leaving Manila at 1:00 PM. As expected, said vessel
sailed on time.
However, on the evening of 22 April, petitioners vessel collided with the M/T Tacloban City- an
oil tanker owned by the Philippine National Oil Corporation (PNOC) and the PNOC Shipping and
Transport Corporation (PNOC/STC). Obviously, several passengers perished in the sea
tragedy.Some bodies were found, and some, including the relatives of private respondents were
never found.Knowing the ill-fate of the M/V Don Juan, private respondents, namely Garcia and
Sps de la Victoria filed a complaint against the Negros Navigation, the PNOC, and the
PNOC/STC. Private respondents sought for damages for the death of their relatives.The RTC
rendered a decision in favor of the private respondents, and asked petitioners, including PNOC
and PNOC/STC to pay the moral damages and upon review by the Court Appeals, the appellate
court affirmed the RTCs decision with modification.
Issue:
Whether or not the ruling in the Mecenas VS CA, finding the crew members of petitioners to be
grossly negligent in the performance of their duty, is binding in this case.
.
Held:
Yes. The courts adherence to Mecenas case is not the entire consideration of the Court. Although
The Mecenas Case is another case arising from the incident that occurred on 22 April 1980 and is
controlling, the court still found other evidence for Negros Navigation to pay for the Damages.
By the principle of Stare Decisis (Follow past precedents and do not disturb what has been
settled). Under the principle of Stare Decisis, it is required that past decisions of the court be
followed in the adjudication of cases. The petitioners assail the lower courts reliance on the
Mecenas Case, arguing that although the same case arose out of the same incident as that involved
in the Mecenas,The parties are different and the trial was conducted separately. Furthermore they
contend that the decision in this case must be based on the allegations, the defenses pleaded and
evidence adduced stated on the records of the case.The Supreme Court ruled otherwise. The
Supreme Court stated that although the merits of the individual claims against the petitioner are
different in both cases, there remains a similarity which is material in the decision of the court
vis--vis the case at hand, i.e. the cause of the sinking of its ship on 22 April 1980 and the
liabilities (of petitioner) for such accident. It has been well entrenched in Philippine jurisprudence
that common carriers are liable if they do not exhibit extraordinary diligence. In the case at bar,
there was even negligence for the crew, specifically the captain, for playing mahjong hence
damages must necessarily be awarded to the family of Ramon Miranda.

(VAUMADADA)
Korean Airlines v. CA, 234 SCRA 717 (1994)

Facts:
Korean Airlines was asked by the RTC to pay for the damages to Juanito Lapuz. This case was
initiated because there was alllegedly a breach of the contract of carriage. The RTC directed KAL
to pay actual/compensatory damages, with legal interest, attorney's fees and costs of suit hence
the appeal to the Court of Appeals which merely modified the the award of damages as to the
commencement of the legal interest. KAL's asseveration that the Court lacks jurisdiction to award
legal interest is devoid of merit. Both the complaint and amended complaint against KAL dated
November 27, 1980, and January 5, 1981, respectively, prayed for reliefs and remedies to which
Lapuz may be entitled in law and equity. The award of legal interest is one such relief, as it is
based on equitable grounds duly sanctioned by Article 2210 of the Civil Code which provides that:
"interest may, in the discretion of the Court, be allowed upon damages awarded for breach of
contract."
Issue:
Whether or not the interest may be added by the court in lieu of the violation by KAL in the
contract of carriage.
Held:
Yes the court may add such needed payments for the damages committed by KAL. Violations of
the contract of carriage gives rise to liabilities and as such must necessarily be compensated.
KALs aversion that their right to due process was violated cannot also be sustained. This was
raised by KAL only in the motion for reconsideration at the Supreme Court level. Such is not the
practice of the law. It can be inferred from the multiple pleadings to delay the payment for 15
years. This court has time and again frowned upon the undesirable practice of a party submitting
his case for decision and then accepting the judgment, only if favorable, and attacking it for lack
of jurisdiction when adverse. The Court shall not countenance KAL's undesirable moves. What
attenuates KAL's unmeritorious importuning is that the assailed decision has long acquired
finality. It is a settled rule that a judgment which has acquired finality becomes immutable and
unalterable, hence may no longer be modified in any respect except only to correct clerical errors
or mistake. Once a judgment becomes final, all the issues between the parties are deemed resolved
and laid to rest. Although this case is more of an administrative matter, the important
transportation doctrine to consider is that when a contract of carriage is breached, there will be
damages and the court may set damages as well as the interest from the decision of the trial court,
not from the filling of the complaint.

(VAUMADADA)
PAL v. Court of Appeals, 275 SCRA 621, G.R. No.120262, 17 July 1997.
Facts:
On October 23, 1988, Leovegildo Pantejo, then City Fiscal of Surigao City, boarded a PAL plane
in Manila and disembarked in Cebu City where he was supposed to take his connecting flight to
Surigao City. However, due to typhoon Osang, the connecting flight to Surigao City was canceled.
PAL initially gave out cash assistance of P100 and, the next day, P200 for their expected stay of
two days in Cebu.Pantejo requested instead that he be accommodated in a hotel at the expense of
PAL as he did not have cash with him at that time but PAL refused. Fortunately, Pantejo was
accommodated by Andoni Dumlao and he shared a room with the latter at Sky View Hotel with
the promise to pay his share of the expenses upon reaching Surigao. When the flight for Surigao
was resumed, Pantejo was informed that the hotel expenses of his co-passengers were reimbursed
by PAL. At this point, Pantejo informed the Manager for Departure Services of PAL at Mactan
Airport that he was going to sue the airline for discriminating against him. The manager offered to
pay Pantejo P300 which the latter declined. Pantejo filed a suit for damages against PAL in the
Regional Trial Court of Surigao City. Said court rendered judgment in favor of Pantejo,ordering
PAL to pay Pantejo P300 for actual damages, P150,000 as moral damages, P100,000 ase
xemplary damages, P15,000 as attorney's fees, and 6% interest from the time of the filing of the
complaint until said amounts shall have been fully paid, plus costs of suit. On appeal, CA
affirmed the decision, but with the exclusion of the award of attorney's fees and litigation
expenses. Hence, this petition.
Issue:
Whether or not PAL was liable for damages.
Held: Yes. A contract to transport passengers is quite different in kind and degree from any other
contractual relation because of the relation which an air carrier sustains with the public. Its
business is mainly with the traveling public. It invites people to avail of the comforts and
advantages it offers. The contract of air carriage, therefore, generates a relation attended with a
public duty. Neglect or malfeasance of the carrier's employees naturally could give ground for an
action for damages.
In this case, there was bad faith on the part of PAL. Contrary to the claim of PAL that cash
assistance was given instead because of non-availability of rooms in hotels, the evidence showed
that Sky View Hotel, where respondent Pantejo was billeted, had plenty of rooms available.
Pantejo only came to know about the reimbursements when other passengers informed him that
they were able to obtain the refund for their own hotel expenses. PAL offered to pay P300.00 to
Pantejo only after the latter had confronted the manager of PAL about the discrimination
committed against Pantejo, which the manager realized was an actionable wrong. The hotel
accommodation was not a mere amenity or privilege. It was a company policy whenever a flight
is canceled as testified by several witnesses. And even if it was a mere privilege, PAL was still
liable for damages for its blatant refusal to accord the so-called amenities equally to all its
stranded passengers.
In fact, Pantejo immediately proceeded to the office of PAL and requested for hotel
accommodations. He was not only refused accommodations, but he was not even informed that he
may later on be reimbursed for his hotel expenses. The refund of hotel expenses was
surreptitiously and discriminatorily made by PAL as only handful of passengers knew about it.
Pantejo was exposed to humiliation and embarrassment especially because of his government
position and social prominence.
(VAUMADADA)
Calalas v. Court of Appeals, 332 SCRA 356, G.R. No. 122039, May 13, 2000
Facts:
Private respondent Eliza Sunga, then freshman at Siliman University, took a passenger jeepney
owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity, Sunga
was given by the conductor an extension seat, a wooden stool at the back of the door at the rear
end of the vehicle. When the jeepney stopped to a let passenger off and Sunga was about to give
way to the outgoing passenger, an Izuzu truck driven by Verena and owned by Salva bumped the
left rear portion of the jeepney. Sunga sustained multiple injuries and remained on a cast for three
months.
Sunga filed a complaint for damages against Calalas, for breach of contract of carriage. Calalas,
on the other hand,filed a third party complaint against Francisco Salva, the owner of the truck.
The lower court rendered judgment against Salva and absolved Calalas of liability. It took
cognizance of other case (Civil Case No. 3490), filed by Calalas against Salva and Verena ,for
quasi-delict, in which branch 37 of the same court held Salva and his driver Verena jointly liable
to Calalas for the damage to his jeepney The CA reversed the lower courts ruling on the ground
the ground that Sungas cause of action was based on a contract of carriage, not quasi-deplict, and
that the common carrier failed to exercise the diligence required under the Civil Code. The
appellate court dismissed the third-party complaint against Salva and adjudged Calalas liable for
damages to Sunga.
Issue: Whether or not the extension seat falls under extraordinary diligence.
Held:
No, on the contrary it does not and is essentially a negligent act. In quasi-delict, the negligence or
fault should be clearly established because it is the basis of the action, whereas in breach of
contract, the action can be prosecuted merely by proving the existence of the contract and the fact
that the obligor, in this case the common carrier, failed to transport his passenger safely to his
destination. In case of death or injuries to passengers, Article 1756 of the Civil Code provides that
common carriers are presumed to have been at fault or have acted negligently unless they proved
that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This
provision necessarily shifts to the common carrier the burden of proof. It is immaterial that the
proximate cause of the collision between the jeepney and the truck was the negligence of the
truck driver.
The doctrine of proximate cause, wherein the effect is the direct, natural and logical effect, is
applicable only in action for quasi delict, not in actions involving breach of contract. The doctrine
is a device for imputing liability to a person where there is no relation between him and another
party. In such a case, the obligation is created by law itself. But, where there is a pre-existing
contractual relation between parties, it is the parties themselves who create the obligation, and the
function of the law is merely to regulate the relation thus created. Hence the liability of Calalas
and the decision by the Court of Appeals must necessarily be sustained.

(VAUMADADA)
Pilapil v. Court of Appeals and Alatco Transportation Co., Inc. G.R. No. 52159. December 22,
1989
Facts:
Jose Pilapil, a paying passenger, boarded Alatco Transportation Co.s bus bearing number 409 at
San Nicolas, Iriga City on 16 September 1971 at about 6:00 P.M. Upon reaching the vicinity of
the cemetery of the Municipality of Baao, Camarines Sur, on the way to Naga City, an
unidentified man, a bystander along said national highway, hurled a stone at the left side of the
bus, which hit Pilapil above his left eye. Alatcos personnel lost no time in bringing Pilapil to the
provincial hospital in Naga City where he was confined and treated. Considering that the sight of
his left eye was impaired, Pilapil was taken to Dr. Malabanan of Iriga, City where he was treated
for another week. Since there was no improvement in his left eyes vision, Pilapilwent to V. Luna
Hospital, Quezon City where he was treated by Dr. Capulong. Despite the treatment accorded to
him by Dr. Capulong, Pilapil lost partially his left eyes vision and sustained a permanent scar
above the left eye. Thereupon, Pilapil instituted an action for recovery of damages sustained as a
result of the stone-throwing incident. After trial, the court a quo rendered judgment ordering the
transportation company to pay Pilapil the sum of P10,000.00, representing actual and material
damages for causing a permanent scar on the face and injuring the eye-sight of Pilapil; ordering
further the transportation company to pay the sum of P5,000.00, to Pilapil as moral and
exemplary damages; and ordering furthermore,the transportation company to reimburse Pilapil
the sum of P300.00 for his medical expenses and attorneys fees in the sum of P1,000.00; and to
pay the costs.From the judgment, Alatco Transportation appealed to the Court of Appeals. Court
of Appeals, in a Special Division of Five, rendered judgment reversing and setting aside the
judgment of the court a quo. Hence, the petition to review on certiorari.
Issue:
Whether or not the decision of the Court of Appeals is correct and whether the presumption that
the bus company did not exhibit extraordinary diligence was rebutted
Held:
The Supreme Court affirmed the judgment appealed from. Under Article 1733 of the Civil Code,
common carriers are required to observe extraordinary diligence for the safety of the passenger
transported by them, according to all the circumstances of each case. 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. 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. Hence the liability of the bus is rebutted by the facts of the case. However herein,
Pilapil contends that it is to the greater interest of the State if a carrier were made liable for such
stone-throwing incidents rather than have the bus riding public lose confidence in the
transportation system. Sad to say, the court is not in a position to so hold. Such a policy would be
better left to the consideration of Congress which is empowered to enact laws to protect the public
from the increasing risks and dangers of lawlessness in society

(VAUMADADA)
Fortune Express, Inc. v. CA, 305 SCRA 14 (1999)

Facts: Fortune Express Inc. is a bus company in northern Mindanao. On 18 November 1989,
Fortune Express bus figured in an accident with a jeepney in Kauswagan, Lanao del Norte,
resulting in the death of several passengers of the jeepney, including two Maranaos. At about 6:45
p.m. on 22 November 1989, 3 armed Maranaos who pretended to be passengers, seized a bus of
Fortune Express at Linamon, Lanao del Norte while on its way to Iligan City. Among the
passengers of the bus was Atty. Talib Caorong. The leader of the Maranaos, identified as one
Bashier Mananggolo, ordered the driver, Godofredo Cabatuan, to stop the bus on the side of the
highway. Mananggolo then shot Cabatuan on the arm, which caused him to slump on the steering
wheel. Then one of the companions of Mananggolo started pouring gasoline inside the bus, as the
other held the passengers at bay with a handgun. The passengers, including Atty. Caorong,
stepped out of the bus and went behind the bushes in a field some distance from the highway.
However, Atty. Caorong returned to the bus to retrieve something from the overhead rack. At that
time, one of the armed men was pouring gasoline on the head of the driver. Cabatuan,who had
meantime regained consciousness, heard Atty. Caorong pleading with the armed men to spare the
driver as he was innocent of any wrong doing and was only trying to make a living. The armed
men were,however, adamant as they repeated their warning that they were going to burn the bus
along with its driver. During this exchange between Atty. Caorong and the assailants, Cabatuan
climbed out of the left window of the bus and crawled to the canal on the opposite side of the
highway. He heard shots from inside the bus. Then the bus was set on fire. Some of the
passengers were able to pull Atty. Caorong out of the burning bus and rush him to the Mercy
Community Hospital in Iligan City, but he died while undergoing operation. In its decision, dated
28 December 1990, the trial court dismissed the complaint, and the corresponding counterclaim;
without costs. On appeal, however, the Court of Appeals reversed the decision of the trial court.
Issue: Whether or not Fortune Express inc. is liable for negligence as it failed to prepare for the
impending retribution of the Maranaos.
Held: Yes Fortune Express is liable. The Supreme Court affirmed the decision of the Court of
Appeals with modification that Fortune Express is ordered to pay Paulie, Yasser King, Rose
Heinni, and Prince Alexander Caorong.Art. 1755 of the Civil Code provides that a common
carrier is bound to carry the passengers as far as human care and foresight can provide, using the
utmost diligence of very cautious person, with due regard for all the circumstances. In the present
case, this factor of unforeseeablility (the second requisite for an event to be considered force
majeure) is lacking. As already stated, despite the report of PC agent Generalao that the Maranaos
were planning to burn some of petitioners buses and the assurance of petitioners operations
manager (Diosdado Bravo) that the necessary precautions would be taken, nothing was really
done by petitioner to protect the safety of passengers. Hence the liability of Fortune Express
remains.

(VAUMADADA)
LAST CLEAR CHANCE DOCTRINE (2)

Philippine Rabbit Bus Lines, Inc. vs. IAC and Pascua et all
Facts:
Catalina Pascua and 6 others boarded the jeepney owned by spouses Mangune and driven by
Manalo. Upon reaching Tarlac, the right rear wheel of the jeepney was detached, so it was
running in an unbalanced position. Manalo stepped on the brake, as a result of which, the jeepney
which was then running on the eastern lane (its right of way) made a U-turn, invading and
eventually stopping on the western lane of the road in such a manner that the jeepney's front faced
the south (from where it came) and its rear faced the north (towards where it was going). The
jeepney practically occupied and blocked the greater portion of the western lane, which is the
right of way of vehicles coming from the north, among which was of petitioner Philippine Rabbit
Bus driven by delos Reyes. Almost at the time when the jeepney made a sudden U-turn and
encroached on the western lane of the highway, the bus bumped from behind the right rear
portion of the jeepney. As a result of the collision, three passengers of the jeepney died while the
others sustained physical injuries. The IAC found Philippine Rabbit as liable to the private
respondents (who are heirs of the deceased) by applying the doctrine of last clear chance among
others.
Issue:
Did the IAC correctly ruled on the liability of Philippine Rabbit by using the doctrine of last clear
chance?
Ruling: No. The principle of last clear" chance, would call for application in a suit between the
owners and drivers of the two colliding vehicles. It does not arise where a passenger demands
responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to
exempt the negligent driver of the jeepney and its owners on the ground that the other driver was
likewise guilty of negligence.

(VAUMADADA)
Bustamante vs. CA and del Pilar and Montesiano

Facts:
A collision occurred between a gravel and sand truck and a Mazda passenger bus along the
national road in Cavite. Immediately before the collision, the cargo truck and the passenger bus
were approaching each other, coming from the opposite directions of the highway. While the
truck was still about 30 meters away, the bus driver, saw the front wheels of the vehicle wiggling.
He also observed that the truck was heading towards his lane. Not minding this circumstance due
to his belief that the driver of the truck was merely joking, the bus driver shifted from fourth to
third gear in order to give more power and speed to the bus, which was ascending the inclined
part of the road, in order to overtake a hand tractor. While the bus was in the process of
overtaking and the truck was approaching the bus, the two vehicles sideswiped each other at each
other's left side ripping off the said wall from the driver's seat to the last rear seat. Due to the
impact, several passengers of the bus were thrown out and died as a result of the injuries they
sustained. After the impact, the truck skidded towards the other side of the road and landed on a
nearby residential lot, hitting a coconut tree and felling it.
CA absolved the truck driver and owner from liability based on the doctrine of last clear chance
wherein it opined that the bus driver had the last clear chance to avoid the collision.
Issue: Did the CA correctly apply the doctrine of last clear chance?
Ruling:
No. The CA committed an error in applying the doctrine since the case at bar is not a suit between
the owners and drivers of the colliding vehicles but a suit brought by the heirs of the deceased
passengers against both owners and drivers of the colliding vehicles.
The doctrine of last clear chance means a person who has the last clear chance or opportunity of
avoiding an accident, notwithstanding the negligent acts of his opponent or that of a third person
imputed to the opponent is considered in law solely responsible for the consequences of the
accident. It applies in a suit between the owners and drivers of colliding vehicles. It does not arise
where a passenger demands responsibility from the carrier to enforce its contractual obligations.
For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the
ground that the other driver was likewise guilty of negligence.
Furthermore, as between defendants: the doctrine cannot be extended into the field of joint
tortfeasors as a test of whether only one of them should be held liable to the injured person by
reason of his discovery of the latter's peril, and it cannot be invoked as between defendants
concurrently negligent. As against third persons, a negligent actor cannot defend by pleading that
another had negligently failed to take action which could have avoided the injury.

(VAUMADADA)
10
ACCOMMODATION PASSENGER (1)

Lara vs Valencia
Facts:
The deceased was an inspector of the Bureau of Forestry stationed in Davao who went to a
lumber concession in Cotabato due to a call of duty. Lara contracted malaria fever which made
him want go home to Davao in a hurry so he asked defendant Valencia if he could take him in his
pick-up as there was then no other means of transportation. Defendant agreed, and in that same
morning the pick-up left Parang bound for Davao taking along six passengers, including Lara.
Valencia invited Lara to seat with him on the front but the latter declined and instead sat in a bag
in the middle of the back of the pick-up truck. Lara accidentally fell from the pick-up and as a
result he suffered serious injuries resulting to his death.
Issue:
Should Valencia be held liable for the death of Lara?
Ruling:
No. It appears that the deceased, as well his companions who rode in the pick-up of defendant,
were merely accommodation passengers who paid nothing for the service and so they can be
considered as invited guests within the meaning of the law. The rule is that the owner or operator
of an automobile owes the duty to an invited guest to exercise reasonable care in its operation,
and not unreasonably expose him to danger and injury by increasing the hazard of travel. Since
one riding in an automobile is no less a guest because he asked for the privilege of doing so, the
same obligation of care is imposed upon the driver as in the case of one expressly invited to ride.
Defendant, therefore, is only required to observe ordinary care, and is not in duty bound to
exercise extraordinary diligence as required of a common carrier by our law.
There is nothing there to indicate that defendant has acted with negligence or without taking the
precaution that an ordinary prudent man would have taken under similar circumstances the court
was persuaded to conclude that the accident occurred not due to the negligence of defendant but
to circumstances beyond his control and so he should be exempt from liability.

(VAUMADADA)
11
NOT AN INSURER AGAINST ALL RISKS (3)

Necesito vs Paras
Facts:
Garces and her one-year old son, Necesito, carrying vegetables, boarded passenger auto truck of
the Philippine Rabbit Bus Lines. The passenger truck, driven by Bandonell, then proceeded on its
regular run from Agno, Pangasinan to Manila. After passing Mangatarem, Pangasinan the truck
entered a wooden bridge, but the front wheels swerved to the right; the driver lost control, and
after wrecking the bridge's wooden rails, the truck fell on its right side into a creek where water
was breast deep. The mother, Garces, was drowned; the son, Necesito, was injured, suffering
abrasions and fracture of the left femur. The money, wrist watch and cargo of vegetables were
lost. It was found by the trial court that the proximate cause of the accident was the reduced
strength of the steering knuckle of the vehicle caused by defects in casting it.
Issue:
Is the carrier liable for the manufacturing defect of the steering knuckle?
Ruling:
Yes. It is clear that the carrier is not an insurer of the passengers' safety. His liability rests upon
ngligence, his failure to exercise the "utmost" degree of diligence that the law requires. In
American law the preponderance of authority is in favor of the doctrine that a passenger is
entitled to recover damages from a carrier for an injury resulting from a defect in an appliance
purchased from a manufacturer, whenever it appears that the defect would have been discovered
by the carrier if it had exercised the degree of care which under the circumstances was incumbent
upon it, with regard to inspection and application of the necessary tests. For the purposes of this
doctrine, the manufacturer is considered as being in law the agent or servant of the carrier, as far
as regards the work of constructing the appliance. According to this theory, the good repute of the
manufacturer will not relieve the carrier from liability.
The rationale of the carrier's liability is the fact that the passenger has neither choice nor control
over the carrier in the selection and use of the equipment and appliances in use by the carrier.
Having no privity whatever with the manufacturer or vendor of the defective equipment, the
passenger has no remedy against him, while the carrier usually has. It is but logical, therefore, that
the carrier, while not in insurer of the safety of his passengers, should nevertheless be held to
answer for the flaws of his equipment if such flaws were at all discoverable.

(VAUMADADA)
12
Japan Airlines v. Court of Appeals

Facts:
Private respondents were passengers of Japan Airlines from San Francisco California bound for
Manila. The flights were to make an overnight stopover at Nairita, Japan as an incentive for
traveling with said airline, at the airlines' expense, thereafter proceeding to Manila the following
day. Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at Hotel
Nikko Narita for the night. However, their flight to Manila was cancelled indefinitely due to the
eruption of Mt. Pinatubo. Since NAIA was only reopened to airline traffic on June 22, 1991,
private respondents were forced to pay for their accommodations and meal expenses from their
personal funds from June 16 to June 21, 1991. The private respondents commenced an action for
damages claiming that JAL failed to live up to its duty to provide care and comfort to its stranded
passengers when it refused to pay for their hotel and accommodation expenses from June 16 to
21, 1991. In other words, they insisted that JAL was obligated to shoulder their expenses as long
as they were still stranded in Narita. On the other hand, JAL denied this allegation and averred
that airline passengers have no vested right to these amenities in case a flight is cancelled due to
force majeure.
Issue:
Is JAL obligated to shoulder the hotel and meal expenses of its stranded passengers until they
have reached their final destination, even if the delay were caused by "force majeure?
Ruling:
No. Failure on the part of the common carrier to live up to the exacting standards of care and
diligence renders it liable for any damages that may be sustained by its passengers. However, this
is not to say that common carriers are absolutely responsible for all injuries or damages even if
the same were caused by a fortuitous event. To rule otherwise would render the defense of "force
majeure," as an exception from any liability, illusory and ineffective. Their predicament was not
due to the fault or negligence of JAL but the closure of NAIA to international flights. Indeed, to
hold JAL, in the absence of bad faith or negligence, liable for the amenities of its stranded
passengers by reason of a fortuitous event is too much of a burden to assume.
Furthermore, it has been held that airline passengers must take such risks incident to the mode of
travel. In this regard, adverse weather conditions or extreme climatic changes are some of the
perils involved in air travel, the consequences of which the passenger must assume or expect.
After all, common carriers are not the insurer of all risks.

(VAUMADADA)
13
Yobido v. CA, Tumboy

Facts: Spouses Tito and Leny Tumboy and their minor children, boarded at Mangagoy, Surigao
del Sur, a Yobido Liner bus bound for Davao City. Along the way the left front tire of the bus
exploded. The bus fell into a ravine around three feet from the road and struck a tree. The incident
resulted in the death of 28-year-old Tito Tumboy and physical injuries to other passengers. The
plaintiffs asserted that violation of the contract of carriage between them and the defendants was
brought about by the driver's failure to exercise the diligence required of the carrier in
transporting passengers safely to their place of destination. According to Leny Tumboy the
winding road the bus traversed was not cemented, was wet due to the rain and the bus was already
full of passengers but had cargoes on top too. Since it was "running fast," she cautioned the driver
to slow down but he merely stared at her through the mirror. On the other hand, the defendants
argued that the tire was brand new and tried to establish that the accident was due to a fortuitous
event.
Issue: Is the explosion of a new tire a case of force majeure that exempts carrier from liability for
the death of a passenger?
Ruling: No. As a rule, 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.
Under the circumstances of this case, 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. Neither may the fact that the tire bought and used in the vehicle is of a brand name
noted for quality, resulting in the conclusion that it could not explode within five days' use. Be
that as it may, it is settled that an accident caused either by defects in the automobile or through
the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for
damages.
It may be impracticable to require of carriers to test the strength of each and every part of its
vehicles before each trip; but the Court is of the opinion that a due regard for the carrier's
obligations toward the traveling public demands adequate periodical tests to determine the
condition and strength of those vehicle portions the failure of which may endanger the safety of
the passengers.

(VAUMADADA)
14
DURATION OF RESPONSIBILITY (6)

Vda de Nueca vs Manila Railroad
Facts:
At 3 p.m. on Dec. 22, 1958, Fermin Nueca brought 7 sacks of palay to Manila Railroad Co.
(MRC) at its station in Barrio del Rosario, Camarines Sur, to be shipped to the municipality of
Libmanan of the same province. - He paid P 0.70 as freight charge and was issued Way Bill No.
56515. - The cargo was loaded on the freight wagon of Train 537. Passengers boarded the train
and shunting operations started to hook a wagon thereto. - Before the train reached the turnoff
switch, its passenger coach fell on its side some 40 m from the station. The wagon pinned Nueca,
killing him instantly. - Nuecas widow and children bring this claim for damages, alleging that the
Nueca was a passenger and his death was caused by MRCs negligence. - MRC disclaimed
liability stating: (1) it exercised due care in safeguarding the passengers during the shunting
operation, (2) Nueca was not a passenger but a trespasser, (3) even if Nueca were a passenger, he
illegally boarded the train without permission by not paying the fare, (4) the mishap was not
attributable to any defect in MRC equipment, (5) that the accident happened due to force majeur.
-MRC presented evidence showing there was no mechanical defect, but it did not explain why the
accident occurred or show that force majeur caused the mishap. - The lower court absolved MRC
of liability and held that Nueca was a trespasser since he did not buy any ticket, and in any case,
was not in a proper place for passengers.
Issues:
Is Nueca already a passanger for whom the carrier is responsible to?
Held:
No, Nueca was not a passenger thus, MRC did not owe him extraordinary diligence. A passenger
is one who travels in a public conveyance by virtue of a contract, express or implied, with the
carrier as to the payment of the fare, or that which is accepted as an equivalent. The relation of
passenger and carrier commences when one puts himself in the care of the carrier, or directly
under its control, with the bona fide intention of becoming a passenger, and is accepted as such by
the carrier as where he makes a contract for trasportation and presents himself at the proper
place and in a proper manner to be transported. Even disregarding the matter of tickets, and
assuming Nueca intended to be a passenger, he was never accepted as such by MRC as he did not
present himself at the proper place and in a proper manner to be transported.

(VAUMADADA)
15
Dangwa vs CA
Facts:
Pedrito Cudiamat died as a result of a vehicular accident in Mankayan, Benguet. It was alleged
that while Lardizabal was driving a passenger bus belonging to petitioner corporation in a
reckless and imprudent manner, it ran over its passenger, Cudiamat. However, instead of bringing
Cudiamat 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 bringing said victim to the Lepanto Hospital where he expired. From the
testimony of the witness, it is evident that the subject bus was at full stop when the victim
boarded the same as it was precisely on this instance where another passenger alighted from the
bus. Lardizabal prematurely stepped on the accelerator without waiting for the passenger to first
secure his seat especially so that the platform of the bus was at the time slippery and wet because
of a drizzle. The victim also did indicate his intention to board the bus as can be seen from the
testimony of the said witness that Cudiamat was no longer walking and made a sign to board the
bus when the latter was still at a distance. It was at the instance when the victim was closing his
umbrella at the platform of the bus when the latter made a sudden jerk movement as the driver
commenced to accelerate the bus.
Issue:
Are the petitioners liable for the death of the victim?
Ruling:
Yes. 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 their duty 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.
The victim herein, by stepping and standing on the platform of the bus, is already considered a
passenger and is entitled to 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.

(VAUMADADA)
16
La Mallorca v. Court of Appeals

Facts:
Plaintiffs Mariano Beltran and family boarded the Pambusco Bus No. 352, plate TPU No. 757,
owned and operated by the defendant, at San Fernando, Pampanga, bound for Anao, Mexico,
Pampanga. After the bus reached Anao where, it stopped to allow the passengers bound and the
plaintiffs got off. The father, Mariano beltran returned to the bus to get a piece of baggage (a
bayong) which was not unloaded. He was followed by her daughter Raquel. While the father was
still on the running board awaiting for the conductor to give his baggage, the bus started to run,
notwithstanding the fact that the conductor has not given the driver the customary signal to start.
Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the running
board without getting his bayong from the conductor. At that precise time, he saw people beginning
to gather around the body of a dead child, which was his daughter Raquel. When the child (Raquel)
was killed, she was no longer a passenger and therefore the contract of carriage had terminated.
Trial Court found defendant liable of breach of contract of carriage. Court of Appeals sustained the
theory of respondent, but it nevertheless found the defendant-appellant guilty of quasi-delict and
held the latter liable for damages, for the negligence of its driver, in accordance with Article 2180
of the Civil Code. Raised the award from 3,000 to 6,000.
Issue:
Whether the liability of the carrier, as to the child who was already led to a place 5 meters from the
bus, still persists.
- Lesson involved Duration of responsibility of common carriers.
Decision:
Yes. It has been recognized as a rule that the relation of carrier and passenger does not cease at the
moment the passenger alights from the carrier's vehicle at a place selected by the carrier at the point
of destination, but continues until the passenger has had a reasonable time or a reasonable
opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay
within this rule is to be determined from all the circumstances.
In this case, there was no utmost diligence. Firstly, the driver, although stopping the bus,
nevertheless did not put off the engine. Secondly, he started to run the bus even before the bus
conductor gave him the signal to go and while the latter was still unloading part of the baggages of
the passengers Mariano Beltran and family. The presence of said passengers near the bus was not
unreasonable and they are, therefore, to be considered still as passengers of the carrier, entitled to
the protection under their contract of carriage.
Even assuming arguendo that the contract of carriage has already terminated, herein petitioner can
be held liable for the negligence of its driver, as ruled by the Court of Appeals, pursuant to Article
2180 of the Civil Code. Decision Modified. Only questions raised in the briefs can be passed upon,
and as plaintiffs did not appeal the award of 3,000, the increase by the CA of the award of 6,000
cannot be sustained.
(VAUMADADA)
17
Aboitiz Shipping v. Court of Appeals,

Facts:
Anacleto Viana was a passenger of M/V Antonia bound for Manila which was owned by defendant
Aboitiz. The vessel arrived in Manila and the passengers were provided a gangplank on their way
out from the vessel to the port. Instead of using the gangplank, Viana disembarked from the vessel
via the third deck of the ship, which was on the level of the pier. One hour after the passengers had
disembarked, Pioneer Stevedoring started operation by unloading the cargoes using its crane. Viana
who had already disembarked remembered that some of his cargoes were still inside the vessel.
While pointing to the crew of the vessel the place where his cargoes were, the crane hit him, pinning
him between the side of the vessel and the crane which resulted to his death. Vianas wife filed a
complaint for damages against Aboitiz for breach of contract ff carriage.
Aboitiz, however filed a third party complaint against Pioneer since it had control completely over
the vessel during the incident. Furthermore, petitioner contends that one hour has already elapsed
from the time Viana disembarked, thus he has already ceased to be a passenger.
Trial Court's judgment: in favor of Vianas; ordered Aboitiz to pay the Vianas for damages and
Pioneer reimburse Aboitiz for whatever amount they pay the Vianas.
After filing motions for reconsideration, the trial court then absolved Pioneer of its liability as the
Vianas and Aboitiz were unable to establish that there was negligence on the part of the crane
operator.
Court of Appeals judgment: affirmed the decision of the trial court with the exception of award of
damages
Issue: Whether Aboitiz is negligent and liable for the death of Anacleto Diaz
Decision:
Yes. The Supreme Court held that the failure of Aboitiz to exercise extraordinary diligence for the
safety of its passengers makes Aboitiz liable. It has been recognized as a rule that the relation of the
carrier and passenger does not cease the moment the passenger alights from the carriers vehicle,
but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the
carriers premises. A reasonable time or a reasonable delay within this rule is to be determined from
all the circumstances. The primary factor to be considered is the existence of a reasonable cause as
will justify the presence of the victim on or near the petitioners vessel. In the case at bar, such
justifiable cause exists because he had to come back for his cargo. Aboitiz has failed to safeguard its
passenger with extraordinary diligence in requiring or seeing to it that precautionary measures were
strictly and actually enforced to observe their purpose of preventing entry into a forbidden area.
While it may have been established that the deceased was contributorily negligent, the fact that
Aboitiz still failed to exercise extraordinary diligence was the proximate and direct cause of
Viana's death.
(VAUMADADA)
18
Mallari, Sr. v. CA,

Facts:
Mallari Jr. was driving a passenger jeepney owned by his father, co-petitioner herein. It collided
with the delivery van of Bulletin along the National Highway in Brgy. San Pablo, Dinalupihan,
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. It was driven by one Felix Angeles. The collision
occurred after Mallari Jr. overtook the Fiera while negotiating a curve in the highway. 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.
Claudia Reyes, the widow of Israel Reyes, filed a complaint for damages against Mallari Sr. and
Mallari Jr., and also against Bulletin, its driver Felix Angeles, and the N.V. Netherlands Insurance
Co. The complaint alleged that the collision which resulted in the death of Israel was caused by
the fault and negligence of both drivers of the passenger jeepney and the Bulletin Isuzu delivery
van. The trial court found that the proximate cause of the collision was the negligence of Angeles
(the driver of the Bulletin delivery van) considering the fact that the left front portion of the delivery
truck hit and bumped the left rear portion of the passenger jeepney. On appeal, the court reversed
the decision of the lower court and held that it was Mallari Jr. who was negligent. The CA ordered
both Mallari Jr. and Mallari Sr. to pay Claudia Reyes and absolved from any liability respondent
Bulletin, Angeles and N.V. Netherlands Insurance Company. Hence, this petition. There is no
evidence to show that petitioner Mallari, Jr. overtook a vehicle at a curve on the road at the time of
the accident and that the testimony of Angeles on the overtaking was not credible and unreliable.
Issue:
Whether petitioners Mallari Jr. and Mallari Sr. are liable for the death of Israel.
Decision
Yes. The CA correctly found, based on its sketch and spot report of the police authorities, which
were not disputed by petitioner, that the collision occurred immediately after petitioner Mallari, Jr.
overtook a vehicle in front of it while traversing a curve on the highway. This act of overtaking was
in clear violation of Sec. 41, pars. (a) and (b), of RA 4136 as amended, otherwise known as The
Land Transportation and Traffic Code. 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. Article 2185 of the NCC, there is a
presumption of negligence on the part of a person driving a motor vehicle if at the time of the
mishap he was violating a traffic regulation. Petitioners herein failed to present satisfactory
evidence to overcome this legal presumption. Therefore they shall be liable for the loss of Reyes
life.

(VAUMADADA)
19
LRTA, et al. v. Marjorie Navidad, et al.,

Facts:
Nicanor Navidad, then drunk, entered the EDSA LRT station after purchasing a token. While
Navidad was standing on the platform near the LRT tracks, Junelito Escartin, a security guard of
petitioner, apprehended the deceased leading to a fist fight between the two resulting to the
deceased falling on the LRT tracks. At the precise moment of the deceaseds fall, a train being
operated by one Rodolfo Roman came in causing the death of the deceased. No evidence,
however, was adduced to indicate how the fight started. Marjorie Navidad, widow of Nicanor and
herein respondent filed a complaint for damages against the petitioners and Prudent Securities.
Issue:
Whether LRTA is liable for damages.
Decision:
YES. Art. 1755 of the Civil Code imposes the obligation to common carriers to exercise
extraordinary diligence in the carriage of passengers and that in cases of death or injuries, Art. 1756
gives rise to the presumption that the common carrier acted negligently. Arts. 1759 & 1763, also
impose the liability to the common carrier due to the negligent or wilful acts of their employees,
strangers and other passengers. In the instant case, the obligation of the LRTA to exercise
extraordinary diligence in the carriage of passengers arose from the moment the deceased entered
into a contract of carriage with the former by purchasing a ticket and presenting himself for
boarding. Even though Escartin and Roman are employees of Prudent and Metro Transit
respectively, petitioners cannot escape liability because of the mandate of Arts. 1759 & 1763 which
obligates common carriers to answer for the negligence of their employees, strangers and other
passengers. It is their duty to carry their passengers safely as far as human care and foresight can
provide, with due regard for all the circumstance as mandated by Art. 1755 of the NCC. Hence,
petitioners are liable for damages as a common carrier. Should Prudent be made likewise liable? If
at all, that liability could only be for tort under the provisions of Article 2176and related provisions,
in conjunction with Article 2180, of the Civil Code. The premise, however, for the employers
liability is negligence or fault on the part of the employee. Once such fault is established, the
employer can then be made liable on the basis of the presumption juris tantum that the employer
failed to exercise diligentissimi patris families in the selection and supervision of its employees.
The liability is primary and can only be negated by showing due diligence in the selection and
supervision of the employee, a factual matter that has not been shown. Absent such a showing, one
might ask further, how then must the liability of the common carrier, on the one hand, and an
independent contractor, on the other hand, be described? It would be solidary.Regrettably for LRT,
as well as perhaps the surviving spouse and heirs of the late Nicanor Navidad, this Court is
concluded by the factual finding of the Court of Appeals that "there is nothing to link (Prudent) to
the death of Nicanor (Navidad), for the reason that the negligence of its employee, Escartin, has not
been duly proven x x x." This finding of the appellate court is not without substantial justification in
our own review of the records of the case.

(VAUMADADA)
20
Pestano v. Sumayang,
Facts:
Around 2pm of August 9, 1986, Sumayang, accompanied by his friend Manuel Romagos, was
riding a motor vehicle on a highway in Cebu. While turning left at a junction, Sumayang was
violently hit by a speeding bus driven by Pestano. Sumayang and his companion died due to the
accident. The heirs of Sumayang filed a civil action against Pestano and Metro Cebu Bus Company,
the owner of the Bus driven by Pestano. A witness named Neis accounts that before Sumayang
turned left, the former had raised his left arm as a signal but was run over by the bus and was thrown
14 meters away. Pestano alleges the victims were negligent because 15-20 meters away, he had
already blown the bus horn and even blew it a second time when he got near but could only step
on the brake after the bus had hid the motor vehicle. Metro Cebu contends that they exercise
extraordinary diligence in the supervision and selection of employees.
RTC and CA held Pestano liable and also held Metro Cebu Bus liable for negligence.The CA
affirmed respondent's liability for the accident and for Sumayang's death. Pestao was negligent
when he tried to overtake the victim's motorcycle at the Tabagon junction. The CA opined that
Metro Cebu had shown laxity in the conduct of its operations and in the supervision of its
employees. By allowing the bus to ply its route despite the defective speedometer, said petitioner
showed its indifference towards the proper maintenance of its vehicles.
Issue:
Whether Pestano and Metro Cebu should be held liable.
Decision
Yes. The SC ruled that they found no cogent reason to reverse or modify their factual findings. The
CA agreed with the trial court that the vehicular collision was caused by Pestao's negligence when
he attempted to overtake the motorcycle. As a professional driver operating a public transport bus,
he should have anticipated that overtaking at a junction was a perilous maneuver and should thus
have exercised extreme caution.
Factual findings of the CA affirming those of the trial court are conclusive and binding on this
Court.
As to Metro Cebu, under Articles 2180 and 2176 of the Civil Code, owners and managers are
responsible for damages caused by their employees. When an injury is caused by the negligence of
a servant or an employee, the master or employer is presumed to be negligent either in the selection
or in the supervision of that employee. This presumption may be overcome only by satisfactorily
showing that the employer exercised the care and the diligence of a good father of a family in the
selection and the supervision of its employee.8
The CA said that allowing Pestao to ply his route with a defective speedometer showed laxity on
the part of Metro Cebu in the operation of its business and in the supervision of its employees. The
negligence alluded to here is in its supervision over its driver, not in that which directly caused the
accident. The fact that Pestao was able to use a bus with a faulty speedometer shows that Metro
Cebu was remiss in the supervision of its employees and in the proper care of its vehicles. It had
thus failed to conduct its business with the diligence required by law.

(VAUMADADA)
21
Ludo v. Court of Appeals,

Facts:
Petitioner Ludo & Luym Corporation is a domestic corporation engaged in the business of copra
processing. On the other hand, private respondent Gabisan Shipping Lines was the registered owner
and operator of the motor vessel MVMiguela. The captain of the said vessel is the other private
respondent named Anselmo Olasiman. Petitioner owns and operates a private wharf used by
vessels for loading and unloading of copra and other processed products. Fender pile clusters for
docking and mooring are among its wharfs facilities. The MV Miguela came to dock at petitioners
wharf on May 21, 1990. MV Miguela did not slow down while the petitioners security guard was
pulling the big rope to be tied to the bolar and after the guide was thrown from the vessel. The
vessels anchor was not released by its crew. Because of that, a fender pile cluster was rammed and
destroyed. The pile cluster was disinclined as well as deformed the cable wires wrapped around it
due to the impact. Thus, damages were demanded by petitioner which was refused by private
respondents. Private respondent denied the incident and damages and their witnesses claimed that
the damage, if any, must have occurred prior to their arrival and caused by another vessel or by
ordinary wear and tear.
Issue:
Whether Gabisan Shipping Lines, the private respondent, was liable for damages
Decision:
Yes. Where the thing which causes injury is shown to be under the management of the defendant,
and the accident is such as in the ordinary course of things does not happen if those who have the
management use proper care, it affords reasonable evidence, in the absence of an explanation by the
defendant, that the accident arose from want of care. The doctrine of res ipsa loquitur is applicable
in this case. Such doctrine enunciates that parties may establish prima facie negligence without
direct proof and allows the principle to substitute for specific proof of negligence. This is invoked
when under the circumstances, direct evidence is absent and not readily available.
The Court ruled that MV Miguela was under the exclusive control of its officers and crew at the
time the incident took place. As the officers and crew maneuvered the vessel to its berthing place,
petitioner did not have direct evidence on what transpired within. In addition, private respondent
did not show persuasively other possible causes of the damage aside from the testimony that MV
Miguela collided with the cluster pile.
The private respondents failed to overcome the existence of presumption of negligence against
them. In fact, a tangible proof was presented by petitioner that proved the negligence of private
respondents. As testified by Capt. Olasiman, from command of slow ahead to stop engine, the
vessel will still travel 100 meters before it finally stops.
However, he ordered stop engine when the vessel was only 50 meters from the pier. Further, he
testified that before the vessel is put to slow astern, the engine has to be restarted. However,
Olasiman can not estimate how long it takes before the engine goes to slow astern after the engine
is restarted. From these declarations, the conclusion is that it was already too late when the
captain ordered reverse. By then, the vessel was only 4 meters from the pier, and therefore
rammed it.
(VAUMADADA)
22
Philippine Rabbit v. Intermediate Appellate Court,

Facts:
About 11:00 am on December 24, 1966, Catalina and Caridad Pascua, Adelaida Estomo, et.al,
boarded the jeepney owned by spouses Isidro Mangune and Guillermo Carreon and driven by
Tranquilino Manalo at Dau, Mabalacat, Pampanga, bound for Carmen, Rosales Pangasinan to
spend Christmas at their respective homes. Upon reaching Barrio Sinayonan in Tarlac, the right
rear wheel of the jeepney was detached, so it was running in an unbalanced position. Manalo
stepped on the brake, as a result of which, the jeepney which was then running on eastern lane made
a U-turn, invading and eventually stopping on the western lane of the highway. The Phil. Rabbit
Bus bumped from behind the right rear portion of the jeepney. As a result, 3 passengers of the
jeepney (Catalina Pascua, Erlinda Meriales, and Adelaida Estomo) died while other jeepney
passengers sustained physical injuries. What could have been a festive Christmas turned out to be
tragic. Civil case for recovery of damages was subsequently filed and rendered decision as
follows that favored the plaintiffs for damages, and decision for cross claim case ordering
ordering Mangune et al. to pay cross-claimant Philippine Rabbit for loss income and
repairs of the bus. On appeal to CA regarding the decision of awarding damages to
Philippine Rabbit, CA reversed the CFI ruling and rendered another decision ordering
Philippine Rabbit and Delos Reyes to pay Pascua et al for the injuries and death suffered by
the victims.
Issue:
Whether the CA is correct in holding Philippine Rabbit Bus Lines and Tomas Delos Reyes civilly
liable to damages due to death and injuries suffered by the victims
Decision
NO. The Supreme Court ruled that the CA erred in its decision.
The Court ruled that CA misapplied the doctrine where it said that the doctrine of last chance is
between the owners of the two colliding vehicle. The case is based on contractual obligations of
the carrier and its passengers. The Court finds that the proximate cause of the accident was the
negligence of Manalo and spouses Mangune and Carreon. They all failed to exercise the
precautions that are needed. In culpa contractual, the moment a passenger dies or is injured, the
carrier is presumed to have been at fault or to have acted negligently, and this disputable
presumption may only be overcome by evidence that he had observed extra-ordinary diligence as
prescribed in Articles 1733, 1755 and 1756 of the New Civil Code 2 or that the death or injury of
the passenger was due to a fortuitous event.
However, its ruling that spouses Mangune and Carreon are jointly and severally liable with Manalo
is erroneous The driver cannot be held jointly and severally liable with the carrier in case of breach
of the contract of carriage. The rationale behind this is readily discernible. Firstly, the contract of
carriage is between the carrier and the passenger, and in the event of contractual liability, the carrier
is exclusively responsible therefore to the passenger, even if such breach be due to the negligence of
his driver. In other words, the carrier can neither shift his liability on the contract to his driver nor
share it with him, for his driver's negligence is his. Secondly, if We make the driver jointly and
severally liable with the carrier, that would make the carrier's liability personal instead of merely
vicarious and consequently, entitled to recover only the share which corresponds to the
driver, 5 contradictory to the explicit provision of Article 2181 of the New Civil Code.
(VAUMADADA)
23
Juntilla v. Fontanar
Facts:
Roberto Juntilla was a passenger of the jeepney driven by Berfol Camoro from Danao City to Cebu
City. The jeepney was registered under the franchise of Clemente Fontanar, but it was actually
owned by Fernando Banzon. When the jeepney reached Mandaue City, the right rear tire exploded
causing the vehicle to turn turtle. Roberto Juntilla, sitting at the front seat was thrown out of the
vehicle. 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 father-in-law to proceed immediately to the place of the accident and look for the
watch. Roberto Juntilla filed for breach of contract with damages
ISSUE:
Whether there is a fortuitous event in the case.
HELD:
NO. The Supreme Court held that a tire-blow out cannot be considered a fortuitous event when it
is coupled with negligence. The specific circumstances must be taken into account before it is
classified as a fortuitous event that will relieve carriers of liability.
The Court ruled that the accident was caused either through the negligence of the driver or
because of mechanical defects in the tire. In the case at bar, there are specific acts of negligence
on the part of the respondents. The records show that the passenger jeepney turned turtle and
jumped into a ditch immediately after its right rear tire exploded. The evidence shows that the
passenger jeepney was running at a very fast speed before the accident. We agree with the
observation of the petitioner that a public utility jeep running at a regular and safe speed will not
jump into a ditch when its right rear tire blows up. There is also evidence to show that the
passenger jeepney was overloaded at the time of the accident. The petitioner stated that there were
three (3) passengers in the front seat and fourteen (14) passengers in the rear.
While it may be true that the tire that blew-up was still good because the grooves of the tire were
still visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence
was presented to show that the accident was due to adverse road conditions or that precautions were
taken by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden
blowing-up, therefore, could have been caused by too much air pressure injected into the tire
coupled by the fact that the jeepney was overloaded and speeding at the time of the accident.

(VAUMADADA)
24
Saturnino BAYASEN v CA
FACTS:
On the morning of August 15, 1963, Dr. Saturnino Bayasen, the Rural Health Physician in
Sagada, Mountain Province, went to barrio Ambasing to visit a patient. Two nurses from the Saint
Theodore's Hospital in Sagada, namely; Elena Awichen (deceased) and Dolores Balcita,
accompanied him to said visit. The trio rode a jeep assigned for the use of the Rural Health Unit.
The said jeep was driven by the accused-appellant Dr. Bayasen. Subsequently, at Ambasing, after
they visited the patient, the two nurses who wanted to gather flowers, asked if Dr. Bayasen could
drive them to a certain place on the way to barrio Suyo, which Bayasen also intended to visit. While
driving to the said place, the jeep went over a cliff. The jeep thus fell 8 feet off the road, and was
blocked by a pine tree. This collision caused the passengers to be thrown out of the jeep. Later on,
Elena Awichens body was found lying in a creek further below. Among other injuries, she suffered
a skull fracture, which caused her death. Bayasen was thereafter charged with Homicide through
reckless imprudence. The CFI of Mountain Province convicted Bayasen, ratiocinating that the
unfortunate accident was due to his negligence in driving at an unreasonable speed on a narrow and
slippery road. The CA affirmed the CFIs decision. Hence this appeal.
In the instant petition, accused-appellant contends that there exist not a scintilla of evidence
that point to his alleged negligence for driving at an unreasonable speed.
ISSUE:
Whether accused-appellant can be considered negligent, for allegedly driving at
unreasonable speed?
HELD:
NO, the accused-appellant cannot be considered negligent for driving at unreasonable
speed. First, a simple perusal of the case records reveals no evidence to support said allegation.
Quite the contrary, the prosecutions star witness Dolores Balcitas testimony, proves the opposite.
When asked by the Court on whether the accused-appellant drove at a high speed, Dolores
answered that Bayasen drove at moderate speed. This fact is further bolstered by the findings of the
investigators that the wrecked jeep was found to be at second-gear. Hence, accused-appellant could
not have been driving at high speed since the jeep was only at a low gear.
Second, Bayasen testified that before reaching the portion of the road where the jeep fell,
he noticed that the rear wheel skidded, while driving from 8 to 10 kilometers per hour; that as a
precautionary measure, he directed the jeep towards the side of the mountain. The deceased
however accidentally stepped on Bayasens right foot, which at the time was locked at the
accelerator. The jeep thereon fell at the cliff. This testimony was not rebutted by the prosecution,
and must therefore be given credence.
This being the case, it must be stressed that cars may skid on greasy or slippery roads, as in
the instant case, without fault on account of the manner of handling the car. Skidding means
partial or complete loss of control of the car under circumstances not necessarily implying
negligence. It may occur without fault.

(VAUMADADA)
25
Nicholas CERVANTES v CA and Philippine Airlines Inc.

FACTS:
On March 1989, private respondent Philippine Airlines Inc. (PAL), issued in favor of petitioner
Nicholas Cervantes, a round-trip plane ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila
trip. Said ticket expressly provides that the same will be valid from date of issuance for a period
of one year or up to March 27 1990. Four days before the aforementioned expiry date, or on
March 23, 1990, Cervantes decided to utilize the ticket and thus travelled to Los Angeles. Upon
his arrival in Los Angeles, Cervantes immediately booked his return flight to Manila, and was
confirmed by the PAL attendants to be scheduled on April 2 1990. Upon knowing however that
the said flight on April 2 would originate from San Francisco, petitioner requested that he be
allowed to board the plane in San Francisco. This request was granted. Subsequently however,
when Cervantes checked-in for his return flight on 2 April, the attending PAL employees at San
Francisco Airport did now allow Cervantes to board the plane, noting that the ticket expired on
March 27. Aggrieved, Cervantes filed with the RTC of Surigao City a complaint for damages. He
contended that the ticket has not expired since the PAL attendants at Los Angeles Airport, who
confirmed his April 2 flight, has effectively extended or waived the expiry date of the ticket from
March 27 to April 2. The RTC however ruled against Cervantes, ratiocinating among others that,
the PAL employees had no authority to extend the life of Cervantes ticket. The CA affirmed said
decision. Hence this petition.
ISSUES:
1. Whether the PAL attendants at Los Angeles Airport effectively extended the period of
validity of petitioners ticket.
2. Whether the appreciation of the defense of Lack of Authority by PALs employees was
properly ruled upon by the Court below.
3. Whether the denial of the award of damages was proper.
HELD:
1. The actions of PAL employees in confirming petitioners April 2 flight did not extend the
period of validity of petitioners ticket. Inasmuch as the ticket constitutes the agreement or
contract of carriage between petitioner and PAL, then the ticket must be considered the Law
between them. Under par. 8 of the conditions laid down in said contract, the ticket is valid
from date of issuance (March 27, 1989) for a period of one year, or until March 27, 1990.
Needless of further analysis, the ticket was unquestionably expired at the time of petitioners
return flight (April 2, 1990). The PAL employees act of confirming petitioners April 2 flight
could not have invalidated the clear and express provisions of the ticket. The PAL attendants
were unauthorized agents. This fact is indisputably known to the petitioner, evidenced by his
repeated inquiries with the PAL legal department days before his flight, who then informed
him that a request for extension can only be properly coursed and approved with the legal
department.
2. Under Art. 1989 of the New Civil Code, the acts of the agent beyond his authority do not bind
the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when the
third person (petitioner herein) knows that the agent was acting beyond his authority, the
principal cannot be held liable for the acts of the agent. If said third person is aware of such
limits of authority, then he is to blame, and is not entitled to recover damages from the principal
(VAUMADADA)
26
nor the agent, unless the latter undertook to secure the principal's ratification. The fact that this
defense was not interposed by PAL in its initial pleadings as required under Rule 9 of the Rules
of Court, does not necessarily imply that this defense cannot be availed. It is sufficient that this
issue was subject to litigation and was thereupon introduced in Court.
3. Lastly, the refusal of the Courts below to award damages to the petitioner is proper. Not only
did petitioner fail to prove bad faith on the part of PAL, but he likewise evidently revealed to
the whole world his cunning machinations. Petitioner knew that the period of validity of his
ticket can only be extended if a request to extend is coursed through and approved by PALs
legal department. Notwithstanding, and with intention to circumvent this procedure, petitioner
secured an invalid extension by a mere PAL attendant who had no knowledge whatsoever of
such legalities. This is unacceptable.

(VAUMADADA)
27
Vicente CALALAS v CA, Eliza Sunga, and Francisco Salva

FACTS:
On August 23, 1989, Eliza Sunga, a freshman in Siliman University rode a jeepney
owned and operated by herein petitioner Vicente Calalas. The jeepney was filled to capacity of 24
passengers. As such, Sunga was given a wooden stool placed at the rear end of the jeepney as an
extension seat. On the way to Poblacion Sibulan, the jeepney stopped by the road to let a
passenger off. While the passenger was alighting, an Isuzu truck owned by herein private
respondent Francisco Salva, rammed the left rear of the jeepney. The incident resulted to multiple
injuries to Eliza Sunga, including a fracture of Sungas right leg. Her injuries caused Sunga to be
confined from August 23 to September 7, and likewise required her to utilize crutches for a period
of three months. Subsequently, Sunga filed a complaint for breach of contract of carriage against
herein petitioner for failing to observe due diligence required of him as a common carrier.
Concurrently, Calalas filed a third-party complaint for quasi-delict against the owner of the Isuzu
truck, Francisco Salva. With two simultaneous complaints arising from a single incident, the RTC
of Dumaguete City resolved to absolve Calalas from any liability and declared Francisco Salva,
the owner of the Isuzu truck, as the offender. Upon appeal, the CA reversed the RTCs decision,
ruling among others that Sungas complaint against Calalas for breach of contract of carriage
must be considered separately from Calalas third-party complaint against Salva based on
quasi-delict. As such, Salva cannot be held liable in the first case where he is not even a party.
Calalas thus appealed to the SC, contending among others that the proximate cause of the
accident is not negligence on his part as a common carrier, but the recklessness of the driver of
the Isuzu truck.
ISSUES:
1. Should the petitions be considered separately?
2. Must Calalas be absolved of any liability on the alleged ground that the proximate cause
of the accident was the recklessness of the driver of the Isuzu truck and not his
negligence?
HELD:
1.
The complaints must be considered separately. The fact that the accident was indeed
ultimately caused by the truck drivers recklessness, as was properly pronounced by the
Courts below, does not necessarily insulate Calalas from liability based on a breach of
contract of carriage. The case between Sunga and Calalas is premised on Calalas
negligence as a common carrier (culpa contractual), while the case between Calalas and
Salva (truck owner) is premised on quasi-delict (culpa aquilana or culpa
extra-contractual). In no way therefore that a pronouncement in the latter against Salva
would constitute res judicata in the former.
2.
NO, Calalas cannot be absolved from liability based on a simplistic argument that the whole
accident was caused by Salva. The nature of Sungas complaint against Calalas is based
on Calalas failure to observe due diligence as a common carrier required under Art. 1733
and 1755 of the Civil code. The fact that the truck driver was in fact negligent, does not
necessarily imply that the jeepney driver was diligent. It must be stressed that upon the
happening of the accident, the presumption of negligence at once arose, and it became
the duty of petitioner to prove that he had to observe extraordinary diligence in the
care of his passengers. As such, the threshold question is whether Calalas jeepney carried

(VAUMADADA)
28
the passengers safely as far as human care and foresight could provide using the utmost
diligence of very cautious persons, with due regard for all the circumstances (Art. 1755).
The answer to this question is a plain NO.
First, as found by the Court of Appeals, the jeepney was not properly parked, its rear portion being
exposed about two meters from the broad shoulders of the highway, and facing the middle of the
highway in a diagonal angle. This is a violation of the R.A. No. 4136, as amended, or the Land
Transportation and Traffic Code, which provides:
Sec. 54. Obstruction of Traffic. No person shall drive his motor vehicle in such
a manner as to obstruct or impede the passage of any vehicle, nor, while
discharging or taking on passengers or loading or unloading freight, obstruct the
free passage of other vehicles on the highway.
Second, it is undisputed that petitioner's driver took in more passengers than the allowed seating
capacity of the jeepney, a violation of sec. 32(a) of the same law. It provides:
Exceeding registered capacity. No person operating any motor vehicle shall
allow more passengers or more freight or cargo in his vehicle than its registered
capacity.
The fact that Sunga was seated in an extension seat placed her in a peril greater than that to which
the other passengers were exposed. Therefore, not only was petitioner unable to overcome the
presumption of negligence imposed on him for the injury sustained by Sunga, but also, the evidence
shows he was actually negligent in transporting passengers.

(VAUMADADA)
29
EXCEPTIONS TO PRESUMPTION OF NEGLIGENCE NEGLIGENCE OR

INTENTIONAL ASSAULT BY CARRIER OR EMPLOYEE (2):
Cornelia Gillaco v Manila Railroad Co.
FACTS:
On the morning of April 1, 1946 the deceased (Tomas Gillaco) boarded a train of herein
Petitioner Company from Calamba, Laguna to Manila. When the train arrived at the Paco Train
Station in Manila, Emilio Devesa, a train guard of Manila Railroad Co., happened to be in the
same place. Devesa was then waiting for the same train, which would take him to Tutuban station,
where he was to report for duty. As it happens, Devesa had a long-standing grudge against Gillaco,
dating back to the Japanese occupation. Because of such grudge, Devesa shot Gillaco point blank,
using the carbine furnished him by the Manila Railroad Co. for his use as a train guard. Gillaco
died as a result of the gunshot. Subsequently, Devesa was charged and convicted of homicide, and
Manila Railroad Co. was, in the same proceedings, held subsidiarily liable for damages for being
Devesas employer. Manila Railroad Co. now assails said decision, arguing among others that no
liability attaches to it as employer of the offender, because the offense was not committed in the
exercise of Devesas function as a train guard. Nor should Manila Railroad Co. be held liable ex
contractu, or based on a breach of the contract of carriage between the company and the deceased,
since no negligence on petitioner-companys part was shown.
ISSUE:
Should the Petitioner Railroad Company be held liable for damages for breach of its
responsibility as a common carrier?
HELD:
There is no doubt that every passenger is entitled to protection by the company from any
harm or violence by the carrier or its agents, since the contract of carriage obligates the carrier to
ferry the passengers safely to their destinations. This, to the Courts mind is indisputable.
However, it must be stressed that this responsibility extends only to those that the carrier could
foresee or avoid, through the exercise of a reasonable care and diligence required of it.
Commonly known as Caso Fortuito (fortuitous event), no one should be held liable for events
which could not be foreseen or which, even if foreseen, is inevitable. Verily, Devesas act of
shooting Gillaco out of hatred and grudge, was entirely unforeseeable by the Petitioner company.
There was no means for the Company to know that one of its hundreds of employees held grudge
against one of a thousand passengers it ferries everyday. Nor was there any chance that the
petitioner company would have the slightest inkling that the two mortal enemies would meet that
very day.
While there should be no doubt that a common carrier is held to a very high degree of care
and diligence in the protection of its passengers, it must be stressed that, considering the vast and
complex activities of modern rail transportation, to require of appellant that it should guard against
all possible misunderstanding between each and every one of its employees and every passenger
that might chance to ride in its conveyances at any time, strikes us as demanding diligence beyond
what human care and foresight can provide. Clearly, the instant case is fortuitous in nature, one
which falls entirely outside the ambit of petitioners responsibility as a common carrier.
PETITION GRANTED. PETITIONER COMPANY ABSOLVED FROM
LIABILITY.

(VAUMADADA)
30
Antonia Maranan v Pascual Perez

FACTS:
On October 18, 1960, Rogelio Corachea rode a taxicab owned and operated by Pascual Perez.
During said trip, Rogelio was stabbed and killed by the cab driver, Simeon Valenzuela. Valenzuela
was thereafter prosecuted for homicide in the CFI of Batangas. Despite his repeated pleadings
that he killed Rogelio only in self-defense, evidenced by the fact that Rogelio first stabbed him
from the back of the driver-seat, the CFI nonetheless found Valenzuela guilty of homicide.
Pending appeal of the above-case with the CA, Rogelios mother Antonia Maranan, filed an
action to recover damages from Valenzuelas employer, Pascual Perez, for the death of her son
and for breach of responsibility as a common carrier. The CFI found the suit meritorious and thus
awarded Maranan with 3,000 pesos in damages. Upon appeal with the CA, the indemnity was
modified and increased to 6,000 pesos. Appellant Pascual Perez now comes to the Court
questioning the basis of the lower Courts awarding of damages. He relies solely on the doctrine
laid down by the Court in Gillaco v Manila Railroad Co., asserting in no certain terms that he
must be absolved from liability because the affray was a caso fortuito, which no amount of
diligence could have prevented. And more importantly, that no negligence on his part as
owner-operator was proven.
ISSUES:
1. Whether the Gillaco ruling applies to this case.
2. Should Perez be held liable for breach of responsibility as a common carrier?
HELD:
1. NO, the Gillaco v Manila Railroad Co. ruling cannot be properly invoked in this case. The
attendant circumstances in the Gillaco case, and those in the instant petition at bar, are
totally distinct. In the Gillaco case, the passenger was killed by an employee outside the
course of duty of the guilty employee. Put it otherwise, both victim and offender-employee
were mere private passengers of repondents train at the time the killing was committed. In
the instant petition however, Rogelio was killed by petitioners employee while engaged
precisely in his function as cab-driver. In other words, the killing was perpetrated by the
driver of the very cab transporting the passenger, in whose hands the carrier has entrusted
the duty of executing the contract of carriage. Furthermore, the Gillaco case was decided
under the Civil Code of 1899, while the instant petition now falls within the provisions of
the New Civil Code.
2.
YES, Perez must be held accountable of Gillacos death for breach of the contract of
carriage. While it is true that the Art. 1105 of the Old Civil Code on fortuitous events is
substantially reproduced in Art. 1174 of the New Civil Code, the same may not be invoked
by the petitioner in the manner Manila Railroad Co. did in the Gillaco case. It must be
stressed that both articles remove from their exempting effect those cases where the law
expressly provides for liability despite the occurrence of force majeure. Unlike the old Civil
Code however, the New Civil Code expressly makes the owner liable for intentional
assaults committed by its employees upon its passengers, as what happened in the instant
case. Art. 1759 provides:
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

(VAUMADADA)
31
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, it is enough that the assault happens within the course of
the employee's duty. It is no defense for the carrier that the act was done in excess of authority or in
disobedience of the carrier's orders. The carrier's liability here is absolute in the sense that it
practically secures the passengers from assaults committed by its own employees. And as can be
gleaned from Art. 1759, the New Civil Code of the Philippines evidently follows the rule based on
the second view.
This being the case, it can be said accordingly that 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.
PETITION DENIED. DAMAGES REWARDED AFFIRMED.

(VAUMADADA)
32
EXCEPTIONS TO PRESUMPTION OF NEGLIGENCE:

PASSENGER DUTY TO OBSERVE DILIGENCE TO AVOID INJURY:
CONTRIBUTORY NEGLIGENCE (2)
PNR v CA and Rosario Tupang
FACTS:
On September 7, 1972, Winifredo Tupang, husband of herein plaintiff Rosario Tupang,
boarded a train of appellant PNR at Libmanan, Camarines Sur bound for Manila. Because the
train was filled to capacity, Tupang had to sit on a makeshift stool on the open platform between
the trains coaches. Unfortunately, upon passing the Iyam Bridge in Lucena, Quezon, Winifredo
Tupang fell off the train resulting to his death. The other passengers raised alarm that somebody
fell off the train, but the train did not stop. The train conductor instead called the Lucena Police to
verify the said incident. Upon investigation, the police found Tupangs lifeless body off the train
tracks at Iyam Bridge. Upon complaint by Tupangs widow, herein plaintiff Rosario Tupang, the
CFI found PNR liable for 12,000 indemnity for the death of Winifredo Tupang, 20,000 for the
loss of his earning capacity, 10,000 as moral damages, and 2,000 attorneys fees. The same
decision was affirmed by the CA, adding additional 5,000 pesos as exemplary damages. The PNR
now comes to the Court assailing both decisions. PNR cites the doctrine of state immunity,
ratiocinating that inasmuch as PNR is an agency of the government without a separate legal
personality, then its funds are governmental in character and may not be subject to garnishment.
Additional remarks were made to the effect that the deceased may have been equally liable for the
unfortunate incident, that he might have failed to exercise necessary precautions while seating on
the makeshift stool (contributory negligence).
ISSUE:
1. Can PNR validly invoke the application of the doctrine state immunity?
2. May PNR claim non-liability on account of negligence on the part of the deceased?
HELD:
1. NO, PNR cannot invoke the doctrine of state immunity. PNR was created under RA
4156 as amended. A simple perusal of said Act would reveal that PNR has all the
powers and characteristics of a corporation under the Corporation Law. There could
be no doubt that PNR can in fact sue and be sued, and be subjected to Court
processes just like any other corporation. As such, PNRs invocation of State
Immunity in the instant case is unavailing. Likewise, PNRs argument that its funds
are governmental in character and may not therefore be subject to garnishment is
equally flawed. In a long line of cases (PNR v Union de Maquinistas; PNB v CIR;
PNB v Judge Pabalan, National Steel Corp. v CIR; etc.) the Court has repeatedly
ruled that, an assertion to the effect that the subject-funds are public funds of the
government, and as such, the same may not be garnished, attached or levied upon, is
untenable for, as a government-owned and controlled corporation, the respondent has a
personality of its own, distinct and separate from that of the Government.
2.
NO, the petitioner has the obligation to transport its passengers to their destinations and to
observe extraordinary diligence in doing so. Death or any injury suffered by any of its
passengers gives rise to the presumption that it was negligent in the performance of its
obligation under the contract of carriage. Its failure therefore to prove that it exercised
extraordinary diligence makes PNR undoubtedly liable. However, while petitioner

(VAUMADADA)
33
failed to exercise extraordinary diligence as required by law, it appears that the

deceased was chargeable with contributory negligence. Since he opted to sit on the
open platform between the coaches of the train, he should have held tightly and
tenaciously on the upright metal bar found at the side of said platform to avoid falling
off from the speeding train. Such contributory negligence, while not exempting the
PNR from liability, nevertheless justified the deletion of the amount adjudicated
as moral damages.
PETITION PARTIALLY GRANTED. DECISION MODIFIED. MORAL DAMAGES AND

EXEMPLARY DAMAGES DELETED AS CONSEQUENCE OF DECEASEDS
CONTRIBUTORY NEGLIGENCE.

(VAUMADADA)
34
Cesar ISAAC v A.L. Ammen Transport Corporation

FACTS:
A.L. Ammen Transport Corporation, the defendant herein, is a bus company operating in the
Bicol Area. On May 31, 1951, plaintiff Cesar Isaac boarded one of A.L. Ammens buses at Ligao,
Albay bound for Pili, Camarines Sur. While in transit, the bus collided with a pickup truck
coming from the opposite direction. As a result of the accident, plaintiff Isaac completely severed
his left arm, which he rested on the bus window by protruding it outside the clearance of the
window. Isaac underwent several surgeries and was confined and prevented from coming to work
for a period of three months. As an aftermath, Isaac brought an action for damages against herein
defendant company, alleging that the collision which resulted in the loss of his left arm was due to
the gross incompetence and recklessness of A.L. Ammens bus driver. He contended that A.L.
Ammen committed culpa contractual, namely a breach of the contract of carriage. According to
Isaac, in case of such breach, two requisites need only be proven. First, that a contract exists, and
second, that the said contract was breached. A.L. Ammen countered ratiocinating among others,
that the injury suffered by plaintiff was due entirely to the fault or negligence of the driver of the
pick-up, which collided with the bus driven by its driver and to the contributory negligence of
plaintiff himself by resting his arm in a manner protruding out of the clearance of the window.
Defendant further claims that the accident which resulted in the injury of plaintiff is one which
defendant could not foresee or, though foreseen, was inevitable.
ISSUES:
1. Whether A.L. Ammen was negligent in its mandate as a common carrier.
2. Whether plaintiffss alleged contributory negligence absolves A.L. Ammen from
liability.
HELD:
1. The law concerning the liability of a common carrier has now suffered a substantial modification
in view of the innovations introduced by the new Civil Code. These innovations are the ones
embodied in Articles 1733, 1755 and 1756 in so far as the relation between a common carrier and
its passengers is concerned. From the above legal provisions, the following restatement of the
principles governing the liability of a common carrier may be made: (1) the liability of a carrier is
contractual and arises upon breach of its obligation. There is breach if it fails to exert extraordinary
diligence according to all circumstances of each case; (2) a carrier is obliged to carry its passenger
with the utmost diligence of a very cautious person, having due regard for all the circumstances; (3)
a carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to,
passengers, it being its duty to prove that it exercised extraordinary diligence; and (4) the carrier is
not an insurer against all risks of travel.
The question that now arises is: Has defendant observed extraordinary diligence or the utmost
diligence of every cautious person, having due regard for all circumstances, in avoiding the
collision which resulted in the injury caused to the plaintiff? This is a question of evidence and
fact! One which clearly falls within the mandate of the Trial Court. On this note, the findings of
the Trial Court shall be binding: The pick-up car was at full speed and was running outside of its
proper lane. The driver of the bus, upon seeing the manner in which the pick-up was then running,
swerved the bus to the very extreme right of the road until its front and rear wheels have gone over
the pile of stones or gravel situated on the rampart of the road. Said driver could not move the bus
farther right and run over a greater portion of the pile, the peak of which was about three feet high,

(VAUMADADA)
35
without endangering the safety of his passengers. And notwithstanding all these efforts, the rear left
side of the bus was hit by the pick-up car. Verily, the recklessness of the pick-ups driver is one that
could not have been foreseen by A.L. Ammens driver. And yet, upon the happening of the accident,
A.L. Ammens driver convincingly exercised extraordinary precaution as may be humanly possible
without endangering the rest of the passengers.
2. While contributory negligence ordinarily cannot relieve the defendant-company of its
liability but will only entitle it to a reduction of the amount of damages caused (Art. 1762 of
the New Civil Code), the existence of contributory negligence in this case is peculiar and
unique. Contributory negligence in this case militates against the plaintiffs contention of
negligence on the part of the common carrier. And absent such negligence on the carriers part,
contributory negligence pins the liability on the plaintiff himself. That had he not placed his left arm
on the windowsill with a portion thereof protruding outside, perhaps the injury would have been
avoided as is the case with the other passenger. It is to be noted that appellant was the only victim of
the collision.
PETITION DENIED

(VAUMADADA)
36

INJURY TO PASSENGER DUE TO ACTS OF CO-PASSENGER OR STRANGER (4)
FORTUNE EXPRESS, INC. vs. COURT OF APPEALS
Facts:
Petitioner Fortune Express is a bus company in Mindanao, which on November 18, 1989 had
an unfavorable encounter with a jeep in Kauswagan, Lanao del Norte. This had resulted on the
death of two Maranaos. Chrisanto Generalao conducted an investigation to probe on the incident
and found out that the Maranaos are planning to take vengeance on the bus company by burning 5
of its buses. Generalao upon order of his superior sent a report to the Philippine Constabulary
Headquarters at Cagayan de Oro. He also went and see Diosdado Bravo to report such findings and
the latter assured him that necessary precautions to insure the safety of lives and property were
duly taken.
Respondents are Pauilie Caorong, widow of the deseased and their children. At about 6:45
of November 22, 1989 three armed Maranaos pretended to be passengers boarded and seized a bus
of petitioner while the later was on its way to Iligan City. Among the passengers was Atty. Caorong,
the deceased husband of the petitioner. The Maranaos ordered all the passengers to alight the bus
with the exception of the driver who was shot at the arm while the perpetrators continue to pour
gasoline over him and inside the bus. Atty. Caorong, notwithstanding the gravity of the situation
returned to the bus to retrieve something, he pleaded with the perpetrators to spare the life of the
driver which cost him his own life.
RTC dismissed the case, which divested any negligence on the part of the bus line and
attributed Atty. Caorongs death solely due to the willful acts of the lawless which the bus company
could neither prevent nor stop.
CA reversed the ruling and gave credence to the negligence the bus company exhibited
when it chose not to heed the report of Generalao. The CA ruled that the bus company should have
frisked the passengers and exerted every effort to insure the safety of its passengers
Issue:
WON Fortune Express is liable for the injury of passengers due to acts of co-passengers or
stranger
Held:
YES. Article 1736 of the Civil Code expressly reserves the liability for injuries suffered by a
passenger inflicted by other passengers or strangers to the common carrier. Furthermore the
Supreme Court held that if they had only gave credence to the report of Genelao then the bus
company could have been more cautious and vigilant towards the protection of their passengers.
Under the precautionary measures that would warrant their exercise of diligence was the inspection
of containers which could ultimately raise suspicion because of the large quantities of gasoline that
the perpetrators had with them. Hence, because of these observations the Common carrier is liable
for the death of Atty. Caorong.

(VAUMADADA)
37
MANILA RAILROAD COMPANY vs. MACARIA BALLESTEROS

Facts:
Manila Railroad is an owner of a bus company and the respondent Ballesteros was a passenger
of the former's bus. Jose Anastacio, the driver of the bus owned by the Manila Railroad stopped the
bus and got off to replace a defective spark plug. Upon doing so, Dionisio Abello, an auditor of the
petitioner assigned by the General Auditing Office took over the wheels of the bus and continued to
operate as if he is the legitimate driver of the said bus. Anastacio tried twice to take over the wheel
from Abello but it was futile. During the course of its travel, while Abello was driving the bus at
Isabela it collided with a freight truck driven by Marcial Nokum, which was bound for Manila. The
truck in trying to evade the holes on the right lane swerved his truck in the direction of the
petitioner's bus that resulted to the injuries of 17 passengers.
Petitioner's defense was that the negligence of the truck's driver, Marcial Nokum relieved the
liability from the bus company and that since Abello was not its employee it should not be held
responsible for its acts.
RTC overruled the petitioner's contention and made the petitioner liable for the acts of
Dionisio Abello.
Issue:
WON the common carrier (Manila Railroad Company) could be made liable for the injuries
sustained by its passengers by the act of a stranger (Dionisio Abello)
Held:
YES. Art. 1763. A common carrier is responsible for injuries suffered by a passenger on
account of the willful acts or negligence of other passengers or of strangers, if the common carrier's
employees through the exercise of the diligence of a good father of a family could have prevented
or stopped the act or omission. The RTC also found out that Dionisio Abello is equally negligent
when he was driving 40km to 50km per hour on a bumpy road at the moment of the collision.
SMITH BELL vs. BORJA
Facts:
Petitioner requested from the Bureau of Customs to inspect the M/T King Family which was
due to arrive at the port of Manila on September 24, 1987. Said vessel contained 750 metric tons
of alkyl benzene and methyl methacrylate monomer. Acting from the request of Smith Bell
Bureau of Customs sent respondent Catalino Borja to inspect the vessel. He was then instructed
by his superior to board the vessel to conduct the inspection and perform his duties upon the
vessel's arrival until its departure. At about 11 AM on September 24, 1987 while the chemicals
were being unloaded from the vessel explosions started happening. The same was heard by
respondent Borja, who was at that time preparing his reports inside the cabin of the vessel. He
checked outside and upon seeing the fire and fearing for his life, Borja jumped over board to save
himself. However the water was likewise on fire because of the spilled chemicals. He swam and
stayed on the water for a period of three hours before reaching the shore.
RTC and CA ruled in favor of respondent Borja and held that Smith Bell is liable for the
injuries sustained by the former.
Issue:
WON Smith Bell is liable for the injuries sustained by Borja
Held:
YES. It would be seen from the factual observation that even though the vessel contain
chemicals which where dangerously inflammable, its officers and crew failed to take the
(VAUMADADA)
38
necessary precautions to prevent an accident. There was nothing adduced in the evidence
presented by Smith Bell that the fire could not be attributed to it. As a result of the fire and
explosion during the unloading of the chemicals from the petitioner's vessel the respondent
suffered damages. Accordingly the Supreme Court held through Justice Panganiban that "The
owner or the person in possession and control of a vessel is liable for all natural and proximate
damages caused to persons and property by reason of negligence in its management or
navigation".

(VAUMADADA)
39

LIMITED LIABILITY AND DEFENSES (5)
YOBIDO vs. COURT OF APPEALS
Facts:
Tito and Leny Tumboy together with their children boarded the Yobido Bus Liner which was
bound to Davao City. Along Picap Road in Sta. Maria Agusan del Sur, the left front tire of the bus
exploded which caused the bus to fall to a ravine three feet from the road and struck a tree,
because of this passengers were injuried and Tito Tumboy died.
When the plaintiffs file for breach of contract of carriage they asserted that the bus company
had failed to exercise due diligence because the bus was traversing at a fast speed on rocky and
uneven road; furthermore they alleged that the bus was on full capacity with some people even
standing up. Such reasons were the cause of the tire explosion that led to the death of Tito
Tumboy.
Yobido bus company denied all the allegations and said that the bus was not on full capacity
since the conductor was even allowed to sit down on the vacant seats. However their main
argument was based on the fact that the tire explosion was not due to their negligence because
as evidence by the receipts and witnesses the tire that exploded was a brand new tire which they
only placed on the bus five days from the unfortunate event.
The RTC judge dismissed the case on the ground that the tire explosion could possibly be
attributed to the bus company and that such case falls under fortuitous events which exonerates
the liability of the bus company.
The Court of Appeals reversed the decision of the RTC and ruled in favor of the herein
respondent
Issue:
WON the explosion of a tire is case exonerates the common carrier from its liability
Held:
NO. The Supreme Court held that it comes within the scope of exercising due diligence on
the part of the common carrier to make sure that the vehicle is free from any defects or any
mechanical problems that could harm or injure any of its passengers. The mere fact that the tire
was new could not imply that it was entirely free of manufacturing defects. The Supreme Court
further ruled that the case cannot fall on fortuitous event because human factors are involve and
even if it does, it still has to prove that it was not in any way negligent so as to endanger the lives
of its passengers. In this case no evidence was adduced to rebut the account of Mrs. Tumboy,
when she cautioned the driver to slow down because the road was both slippery and rough and the
court ruled that this contributed to the accident and was ruled to be a negligent act of the driver.

(VAUMADADA)
40
BAYASEN vs. COURT OF APPEALS

Facts:
Saturnino Bayasen, the Rural Heath Physican of Sagada, was going to see a patient in barrio
Ambasing. Elena Awhichen and Dolores Baclita, were nurses from St. Theodores hospital decided
to ride with him on the jeep the petitioner is using since they were also going to the same place.
After going to Ambasing they again requested Baysan if they could gather flowers at Barrio Suyo
which the petitioner intended to visit anyway. On their way to the said place, at barrio Langitiw
the jeep went over a cliff eight feet below the road which caused the three to be thrown out of the
vehicle. Because of this Elena had a fractured skull which resulted to her death.
The RTC and CA both convicted Bayasen guilty of reckless imprudence resulting to
homicide. They ruled that Bayasen negligent in driving his jeep at an unreasonable rate of speed
which caused the death of Elena when the jeep fell over the precipice.
Issue:
WON Saturnino Bayasen is liable for the death of Elena Awichen.
Held:
NO. The Supreme Court ruled that the evidence of the prosecution is legally insufficient and
it could not clearly establish that the petitioner is negligent in driving his the jeep. The star
eyewitness had testified that petitioner was driving at a moderate speed free from any influence of
alcohol or any distraction. Hence, it was impossible to convict the petitioner of unreasonable rate
of speed when such was presented by the prosecution. The Supreme Court stated that the
petitioner is free from being negligent and the unfortunate event was made possible only by
circumstances wherein the petitioner cannot be at fault. The Court attributed it to skidding which
means a partial or complete loss of control of the car under circumstances not necessary implying
negligence. It may occur without fault. The skidding in this case is an unforeseeable event which
the driver could not prevent not stop. The petitioner Saturnino Bayases, is acquitted of the charge.

(VAUMADADA)
41
GATCHALIAN vs. DELIM

Facts:
Reynalda Gatchalian boarded the respondent's mini bus "Thalim" on July 11, 1973, as a
paying passenger. Said bus was bound for Bauang, La Union. On its way, a loud snapping sound
emanated from the vehicle and shortly thereafter the vehicle hit a cement flower pot which then
caused the bus to turn upside down and eventually fall into a ditch. The passengers were sent to
the hospital where the owner of the mini bus Mrs. Adela Delim met them, paid for their hospital
expenses and made them sign a joint affidavit to waive their rights to institute criminal or civil
actions in the future.
The RTC dismissed the complaint stating that the joint affidavit signed by the petitioner bars
her from instituting an action against the respondent.
The Court of Appeals reversed the dismissal of the complaint on the ground that the sign
joint affidavit does not constitute a valid waiver but nevertheless dismissed the case by denying
petitioners claim for damages
Issue:
WON the common carrier is liable for damages
Held:
YES. The Supreme Court held that there exist not valid waiver of her cause of action. The
joint affidavit merely manifest their desire to waive any claims against the bus company. The
waiver, to be valid must be couched in a clear and unequivocal manner. And with respect to a
common carrier, which is required by law to exercise extraordinary diligence such waiver must be
strictly construed against the common carrier and furthermore it must not be contrary to law,
public policy or good customs. The Supreme ruled that to uphold the supposed waiver of any
right to claim damages would weaken the standard of extraordinary diligence required by the law
and to render such requirement to be a subject of waiver. Hence the purported waiver is in valid
because it is deemed offensive to public policy.

(VAUMADADA)
42
FORTUNE EXPRESS, INC. vs. COURT OF APPEALS

Facts:
Petitioner Fortune Express is a bus company in Mindanao, which on November 18, 1989
had an unfavorable encounter with a jeep in Kauswagan, Lanao del Norte. This had resulted on the
death of two Maranaos. Chrisanto Generalao conducted an investigation to probe on the incident
and found out that the Maranaos are planning to take vengeance on the bus company by burning 5
of its buses. Generalao upon order of his superior sent a report to the Philippine Constabulary
Headquarters at Cagayan de Oro. He also went and see Diosdado Bravo to report such findings and
the latter assured him that necessary precautions to insure the safety of lives and property were
duly taken.
Respondents are Pauilie Caorong, widow of the deseased and their children. At about 6:45
of November 22, 1989 three armed Maranaos pretended to be passengers boarded and seized a bus
of petitioner while the later was on its way to Iligan City. Among the passengers was Atty. Caorong,
the deceased husband of the petitioner. The Maranaos ordered all the passengers to alight the bus
with the exception of the driver who was shot at the arm while the perpetrators continue to pour
gasoline over him and inside the bus. Atty. Caorong, notwithstanding the gravity of the situation
returned to the bus to retrieve something, he pleaded with the perpetrators to spare the life of the
driver which cost him his own life.
RTC dismissed the case, which divested any negligence on the part of the bus line and
attributed Atty. Caorongs death solely due to the willful acts of the lawless which the bus company
could neither prevent nor stop.
CA reversed the ruling and gave credence to the negligence the bus company exhibited
when it chose not to heed the report of Generalao. The CA ruled that the bus company should have
frisked the passengers and exerted every effort to insure the safety of its passengers
Issue:
WON Fortune Express is liable for the injury of passengers due to acts of co-passengers or
stranger
Held:
YES. Article 1736 of the Civil Code expressly reserves the liability for injuries suffered by a
passenger inflicted by other passengers or strangers to the common carrier. Furthermore the
Supreme Court held that if they had only gave credence to the report of Genelao then the bus
company could have been more cautious and vigilant towards the protection of their passengers.
Under the precautionary measures that would warrant their exercise of diligence was the inspection
of containers which could ultimately raise suspicion because of the large quantities of gasoline that
the perpetrators had with them. Hence, because of these observations the Common carrier is liable
for the death of Atty. Caorong.

(VAUMADADA)
43
SINGSON vs. COURT OF APPEALS

Facts:
Petitioner, Carlos Singson and his cousin Crescentino Tiongson entered into a contract of
carriage with Cathay Pacific Airways Ltd. They bought open dated, identically routed, round
trip tickets to spend their vacation in the United States. Each ticket consisted of six (6) flight
coupons corresponding to this itinerary:
flight coupon no. 1 - Manila to Hongkong;
flight coupon no. 2 - Hongkong to San Francisco;
flight coupon no. 3 - San Francisco to Los Angeles;
flight coupon no. 4 - Los Angeles back to San Francisco;
flight coupon no. 5 - San Francisco to Hongkong;
flight coupon no. 6 - Hongkong to Manila.
The procedure was that at every leg of the trip the coupon would be collected. When the time
came when they decided to leave the United States and travel back to the Philippines Singson's
flight coupon no. 5 was missing and his flight coupon no. 3 was still in his possession. It caused a
6 days delay in their flight coupled with unfavorable exchanges between the Cathay Pacific
employees and the petitioner himself.
Petitioner filed with the RTC of Ilocos Sur an action for damages for breach of contract for
carriage which made him suffer and miss an important engagement on the day he was supposed to
return to Manila. Cathay denied its liability by stating that there was no breach of contract
because there was not a contract of carriage yet. The open dated ticket, according to Cathay,
signifies an imperfect contract because it presumes that a flight has not yet been booked on a
specific flight on a particular date. The RTC ruled in favor of the petitioner.
The Court of Appeals reversed the rulings of trial court by holding that Cathay could not be
seen as negligent thereby removing the award of moral and exemplary damages previously
awarded by the lower Court.
Issue:
WON Cathay is liable for damages
Held:
YES. The Supreme Court held that CATHAY undoubtedly committed a breach of
contract when it refused to confirm petitioner's flight reservation back to the Philippines on
account of his missing flight coupon. Its contention that there was no contract of carriage that was
breached because petitioners ticket was open-dated is untenable. To begin with, 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 Hongkong 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. It also appears that Cathay was the one
responsible for the loss of the coupon which could have only happened upon the removal of such
coupon by the agents of Cathay themselves. In this case the negligence of the employees of
Cathay could very well be attributed to the delay in the flight of the petitioner. To hold that no
contractual breach was committed by CATHAY and totally absolve it from any liability would in
effect put a premium on the negligence of its agents, contrary to the policy of the law requiring
common carriers to exercise extraordinary diligence.

(VAUMADADA)
44
BILL OF LADING (18)

H.E. Heacock Co vs. Macondray & Co
FACTS:
The plaintiff company caused to be delivered on board the steamship Bolton Castle in the
harbor of New York, four cases of merchandise, one of which contained twelve (12) 8-day
Edmond clocks, for transportation to Manila. The said steamship arrived in the port of Manila and
consigned to the defendant carrier as agent of the said vessel but the twelve 8-day Edmond clocks
were never delivered to the plaintiff. The bill of lading issued and delivered to the plaintiff by the
master of the steamship contained the following clauses: Clause 1: value of the goods receipted
does not exceed $500 per freight ton, or in proportion for any part of a ton, unless the value be
expressly stated; Clause 9: in the event of loss or damage to the cargo, the carrier shall not be
liable for more than the net invoice price. The lower court, in accordance with clause 9 of the bill
of lading, rendered judgment in favor of the plaintiff for the sum of P226.02, this being the
invoice value of the clocks in question. The plaintiff appealed the decision and insisted that it is
entitled to recover the market value of P420 of the said clocks. The defendant, on the other hand,
contended that the plaintiff is entitled to recover only the sum of P76.36 in accordance with
clause 1 of the bill of lading. The claim of plaintiff is based upon the argument that the two
clauses (Clauses 1 and 9) in the bill of lading, limiting the liability of the carrier, are contrary to
public order, and therefore, null and void.
ISSUES:
1) Are the clauses in the bill of lading void?
2) Which of the two clauses shall be applied?
HELD:
1) No. There are three kinds of stipulations that have often been made in a bill of lading.
The first is one exempting the carrier from any and all liability for loss or damage occasioned by
its own negligence. The second is one providing for an unqualified limitation of such liability to
an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation
unless the shipper declares a higher value and pays a higher rate of freight. The first and second
kinds of stipulations are invalid as being contrary to public policy, but the third is valid and
enforceable. A reading of clauses 1 and 9, however, clearly shows that the present case falls
within the third stipulation. Thus, it is valid for not being contrary to public policy.
2) Clause 9 of the Bill of Lading shall be adopted as the measure of defendants liability.
Whereas clause 1 contains only an implied undertaking to settle in case of loss on the basis of not
exceeding $500 per freight ton, clause 9 contains an express undertaking to settle on the basis of
the net invoice price. This being the case, the bill of lading in question should be interpreted
against the defendant carrier, which drew said contract. In construing a bill of lading given by the
carrier, the contract will be construed most strongly against the carrier, and favorably to the
consignor in case of doubt. Therefore, the judgment appealed from should be affirmed.

(VAUMADADA)
45
Macondray and Co. vs. Acting Commissioner of Customs

FACTS:
Petitioner carrier was the local agent of the vessel that arrived at the port of Manila from San
Francisco, California, USA, conveying various shipments of merchandise, among which was a
shipment of one (1) coil carbon steel, one (1) bundle carbon steel flat, and one (1) carton
containing carbon tool holders carbide cutters, all of which appeared in the Bill of Lading. The
shipment, except the one (1) coil carbon steel was not reflected in the Inward Cargo Manifest as
required by the Tariff and Customs Code. Petitioner applied for amendment of the customs form
to reflect the true and correct description of the shipment and to effect its release from the
customs house. Nevertheless, the Collector of Customs imposed a fine of P1,000 for violation of
the said code on unmanifested cargoes. Petitioner paid the fine under protest. Petitioner contended
that the Bill of Lading whereon the shipment was correctly manifested was a substantial
compliance with the provision of the said code. Additionally, petitioner insisted that the form had
already been amended in its correct description.
ISSUES:
1) Is the Bill of Lading sufficient to comply with the provision on manifested cargoes?
2) Did the amendment made by the petitioner cure the infirmity?
HELD:
1) No. Nowhere in the said sections on the Tariff and Customs Code is the presentation of
a Bill of Lading required, but only the presentation of a Manifest containing a true and accurate
description of the cargoes. This is for the simple reason that while a manifest is a declaration of
the entire cargo, a bill of lading is but a declaration of a specific part of the cargo and is a matter
of business convenience based exclusively on a contract. More so, the purpose served by the
manifest is far different from that of a bill of lading. While a bill of lading is ordinarily merely a
convenient commercial instrument designed to protect the importer or consignee, a manifest of
the cargo is absolutely essential to the exportation or importation of property in all vessels, the
object of which is to impose upon the owners of such vessel an imperative obligation to submit
lists of the entire loading of the ship to defeat any attempt to make use of such vessels to secure
the unlawful entry of persons or things into the country. Thus, the Court held that the bill of
lading did not supply the deficiency of the manifest and cure it of its infirmity.
2) No. First, the amendment was made without prior approval from the Collector of
Customs in contravention of the usual and accepted office procedure. Second, no amended
manifest was presented during the hearing in spite of ample time granted to petitioner to enable
them to produce this document. Third, the supposed amendment was never attached to the
manifest as required by the provision on manifested cargoes but only annotated. Granting
arguendo that the amendment was approved and valid, it does not in any way relieve the vessel
from the liability which the vessel had already incurred prior to its amendment. Therefore, no
valid amendment to the ships manifest was made conformably with the provisions of the Tariff
and Customs Code.

(VAUMADADA)
46
Magellan Manufacturing Marketing Corp vs. CA

FACTS:
Petitioner entered into a contract with Choju Co of Yokohama, Japan to export anahaw fans
for and in consideration of $23,220. As payment thereof, a letter of credit was issued to petitioner
by the buyer. Petitioner contracted private respondents to ship the anahaw fans specifying that he
needed 1) an on-board bill of lading and that 2) transshipment is not allowed, under the letter of
credit. Petitioner paid private respondents and secured a copy of the bill of lading which was
presented to the bank. However, the payment was refused by the buyer because there was no
on-board bill of lading, and there was a transshipment of goods. When informed of what
happened, private respondents then issued a certificate stating that its bill of lading it issued is an
on board bill of lading and that there was no actual transshipment of the fans because although the
goods are transferred from one vessel to another, both vessels belong to the same owner.
Nevertheless, the buyer still refused to accept the goods and thereafter, the anahaw fans were
shipped back to Manila by defendant carrier. Private respondents gave petitioner the option to pay
the sum of shipment or to abandon the anahaw fans to enable them to sell the said fans at public
auction to cover the cost of shipment. Petitioner opted to abandon the goods. Later, petitioner
filed a complaint for damages alleging that private respondents are to blame for the refusal of the
buyer to accept the anahaw fans.
ISSUES:
1) Is the bill of lading an on-board bill of lading or a received for shipment bill of
lading?
2) Was there transshipment of goods in violation of the conditions set forth in the letter of
credit?
3) Who, between the petitioner and private respondents, shall be liable for such violations?
HELD:
1) The bill of lading is a received for shipment bill of lading. An on board bill of lading
is one in which it is stated that the goods have been received on board the vessel which is to carry
the goods, whereas a received for shipment bill of lading is one in which it is stated that the goods
have been received for shipment with or without specifying the vessel by which the goods are to
be shipped. Received for shipment bills of lading are issued whenever conditions are not normal
and there is insufficiency of shipping space. An on board bill of lading is issued when the goods
have been actually placed aboard the ship with every reasonable expectation that the shipment is
as good as on its way. The purpose of requiring an on board bill of lading, especially in maritime
contracts, is its apparent guaranty of certainty of shipping as well as the seaworthiness of the
vessel which is to carry the goods. In the instant case, the bill of lading issued by the private
respondents bore the notation received for shipment without specifying the name of the vessel
which is to carry the said anahaw fans.
2) Yes. Transshipment is defined as the act of taking cargo out of one ship and loading it
in another. There is transshipment, as in this case, whether or not the same person, firm or entity
owns the vessels. The fact of transshipment is not dependent upon the ownership of the
transporting ships but rather on the fact of actual physical transfer of cargo from one vessel to
another. There also appears on the face of the bill of lading the entry Hong Kong in the blank
space labeled Transshipment which can only mean that transshipment actually took place.

(VAUMADADA)
47
3) Petitioner shall be liable for such violations. A bill of lading operates both as a receipt
and as a contract. It is a receipt for the goods shipped and a contract to transport and deliver the
same as therein stipulated. Thus, a shipper who receives a bill of lading without objection is
presumed to have accepted it as correctly stating the contract and to have assented to its terms
whether he reads the bill or not, in the absence of fraud, concealment, or improper conduct. He
is estopped from thereafter denying that he assented to such terms. The president of the petitioner
company personally received and signed the bill of lading and paid the freight charges despite the
stipulation appearing on the face of the bill under column port of shipment an entry Hong
Kong. Petitioner had full knowledge that the bill issued to it contained terms and conditions
clearly violative of the requirements of the letter of credit. Any violation was entirely of the
petitioners making for which it must bear the consequences. It should not affect private
respondents since they were not privies to the said terms and conditions. Nonetheless, the Court
held that petitioner is absolved of any liability for the reason that it had already abandoned its
goods for the public sale and such proceeds are sufficient to pay the costs incurred by private
respondents.

(VAUMADADA)
48
Saludo, Jr. vs. CA

FACTS:
The mother of the petitioners died in Chicago, Illinois. Pomierski Funeral Home of
Chicago made the necessary preparations and arrangements for the shipment of the remains from
Chicago to the Philippines. Pomierski brought the remains to Continental Mortuary Air Services
(CMAS) at the Chicago Airport which made the necessary arrangements such as flights, transfers,
etc. CMAS booked the shipment with PAL. PAL Airway Bill was issued wherein the requested
routing was from Chicago to San Francisco on board Trans World Airline (TWA) and from San
Francisco to Manila on board PAL. Salvacion (one of the petitioners), upon arrival at San
Francisco, went to the TWA to inquire about her mothers remains. But she was told they did not
know anything about it. She then called Pomierski that her mothers remains were not at the West
Coast terminal. Pomierski immediately called CMAS which informed that the remains were on a
plane to Mexico City, that there were two bodies at the terminal, and somehow they were
switched. Petitioners filed a complaint against TWA and PAL for the erroneous shipment and
delay of the cargo. Petitioners alleged that private respondents received the casketed remains of
the deceased on October 26, 1976, as evidenced by the issuance of PAL Airway Bill and from
said date, private respondents were charged with the responsibility to exercise extraordinary
diligence so much so that the alleged switching of the caskets on October 27, 1976, the latter must
be liable. PAL contended that it was not until October 28, 1976 that they received the physical
delivery of the body, thus, they are not liable for the switching of caskets which happened the day
before.
ISSUE:
1) Is the Airway Bill a bill of lading?
2) Was there delivery of the cargo upon mere issuance of the Airway Bill?
HELD:
1) Yes. A bill of lading is a written acknowledgement of the receipt of the goods and an
agreement to transport and deliver them at a specified place to a person named or on his order.
Such instrument may be called a shipping receipt, forwarders receipt and receipt for
transportation. The designation, however, is immaterial. It has been held that freight tickets for
bus companies as well as receipts for cargo transported by all forms of transportation, whether by
sea or land, fall within the definition. Under the Tariff and Customs Code, a bill of lading
includes airway bills of lading. As such, the Airway Bill issued by PAL is a bill of lading.
2) No. While it is true that delivery of the goods to the carrier normally precedes the
issuance of the bill or delivery of the goods and issuance of the bill are regarded in commercial
practice as simultaneous acts, there is nothing to prevent an inverse order of events, that is, the
execution of the bill of lading even prior to actual possession and control by the carrier of the
cargo to be transported. It is a general rule as to the parties to a contract of carriage of goods in
connection with which a bill of lading is issued that the recital being in essence a receipt alone, is
not conclusive, but may be explained, varied, or contradicted by parol or other evidence. For
instance, when no goods have been delivered for shipment, no recitals in the bill can estop the
carrier from showing the true facts. It only raises a rebuttable presumption that such goods were
delivered for shipment but the fact must always outweigh the recital contained therein. In the
instant case, the explanation of private respondents that the Airway Bill was issued, not as
evidence of receipt of delivery of the cargo but merely as a confirmation of the book thus made

(VAUMADADA)
49
sufficiently overcomes the presumption relied on by petitioners in insisting that the remains of
their mother were delivered to and received by private respondents on October 26. Rather, the
Court is convinced that private respondent received the physical delivery of the body only on
October 28 as duly evidenced by the Interline Freight Transfer Manifest of the American Airline
Freight System. It was from that date that private respondents became responsible for the agreed
cargo under their undertakings in PAL Airway Bill. Consequently, for the switching of caskets
prior thereto which was not caused by them, private respondents cannot be held liable.

(VAUMADADA)
50
Juan Ysmael & Co, Inc. vs. Limgengco

FACTS:
Petitioner corporation sought to recover from the respondents P9,940.95, the alleged value of
four cases of merchandise of silk which it delivered to the steamship Andres at Manila to be
shipped to Surigao, but which were never delivered to the consignee or returned to the petitioner.
Respondent denied liability by relying to paragraphs 7 and 12 of the bill of lading executed by it
and the petitioner which contained the following: Paragraph 7: Suits based upon claims arising
from shortage, damage, or non-delivery of shipment shall be instituted within 60 days from date
of accrual of the right of action. Failure to make claims or to institute judicial proceedings as
herein provided shall constitute a waiver of the claim or right of action; Paragraph 12: It is
expressly understood that carrier shall not be liable for loss or damage from any cause or for any
reason to an amount exceeding P300 for any single package of silk or other valuable cargo, nor
for an amount exceeding P100 for any single package of other cargo, unless the value or contents
of such packages are correctly declared in this bill of lading at the time the shipment and freight
paid in accord with the actual measurement or weight of the cargo shipped.
ISSUES:
1) Was the action filed by petitioner brought within reasonable time?
2) Should paragraph 12 of the subject bill of lading be upheld?
HELD:
1)
Yes. Although according to the bill of lading, claim should be filed only within 60 days,
the Court ruled after considering all circumstances on the issue that the action was brought within
a reasonable time. The goods in question were shipped from Manila on October 25, 1992, to be
delivered to consignee in Surigao. Petitioners original complaint was filed on April 17, 1923, or a
little less than 6 months after the shipment was made. It is true that both the petitioner and the
respondent are residents of Manila, but it is also true that Surigao where the goods in question
were to be delivered is one of the most distant places from Manila. In the very nature of things,
petitioner would not want to commence its action until such time as it had made a full and careful
investigation of all of the material facts and even the law of the case, as to determine whether or
not respondents were liable for its loss.
2) No. The Court held that the limitation of value of the goods stipulated in the bill of
lading is unconscionable and void as against public policy. It is a matter of common knowledge
that large quantities of silk are imported in the Philippines, and that after being imported, they are
sold by merchants in Manila and then shipped to different points and places in the Islands. Hence,
there is nothing unusual about the shipment of silk. In truth and in fact, it is a matter of usual and
ordinary business. Paragraph 12 limits P300 for every single package of silk. The evidence
shows that 164 cases were shipped, and that the value of each case was very near P2,500. In this
situation, the limit of the respondents liability for each case of silk for loss or damage from any
cause or for any reason would put it in the power of the respondents to have taken the whole
cargo of 164 cases of silk at a valuation of P300 for each case, or less than one-eight (1/8) of its
actual value. If that rule of law should be sustained, no silk would ever be shipped from one
island to another in the Philippines.

(VAUMADADA)
51
Shewaram vs. Philippine Air Lines

FACTS:
Shewaram boarded Philippine Air Lines (PAL) for a flight from Zamboanga City to
Manila. He checked in three (3) pieces of baggage a suitcase and two (2) other pieces. The
suitcase was mistagged by PALs personnel in Zamboanga City, as I.G.N. (for Iligan) instead of
MNL (for Manila). When Shewaram arrived in Manila, his suitcase did not arrive with his flight.
So, he made a claim with PAL's personnel in Manila and another suitcase similar to his own was
given to him but he refused to take the same on the ground that it was not his. After inquiries were
made by PAL, Shewarams suitcase was found to have reached Iligan and it arrived in Manila the
next day. When Shewarams suitcase arrived in Manila, he noticed tampering of the same and the
Transistor Radio 7 and the Rollflex Camera were no longer inside it. Shewaram demanded that
the items be returned to him or that PAL pay for their value but PAL did not comply with his
demands and thus, he instituted this complaint. PAL contended that its liability should be limited
to the amount stated in the conditions of carriage printed at the back of the plane ticket stub.
These conditions are embodied in Domestic Tariff Regulations No. 2 which provides: The
liability for loss or damage to checked baggage or for delay in the delivery thereof is limited to its
value and, unless the passenger declares in advance a higher valuation and pay an additional
charge therefor, the value shall be conclusively deemed not to exceed P100.00 for each ticket.
ISSUE:
Should PALs liability be limited to what is indicated in the bill of lading (i.e. plane ticket
stub)?
HELD:
No. PALs liability cannot be limited. PAL maintained that since Shewaram failed to
declare a higher value for his luggage when he checked such luggage at the airport, he cannot
demand payment from PAL of an amount in excess of P100.00. As Article 1750 of the New Civil
Code provides, the pecuniary liability of a common carrier may, by contract, be limited to a fixed
amount. It is required, however, that the contract must be "reasonable and just under the
circumstances and has been fairly and freely agreed upon." The requirements provided in Article
1750 of the New Civil Code must be complied with before a common carrier can claim a
limitation of its pecuniary liability in case of loss, destruction or deterioration of the goods.
However, the requirements of said article have not been met. It cannot be said that Shewaram had
actually entered into a contract with PAL, embodying the conditions as printed at the back of the
ticket stub that it issued. The fact that those conditions are printed at the back of the ticket in
letters so small that they are hard to read would not warrant the presumption that petitioner was
aware of those conditions such that he had "fairly and freely agreed" to those conditions. PAL also
admitted that passengers do not sign the ticket, and as such passengers cannot be bound by the
conditions of carriage found at the back of the ticket stub. PALs liability must be governed by
Article 1735 of the New Civil Code which provides the presumption of common carriers to have
been at fault or to have acted negligently, unless they prove that they observed extraordinary
diligence as required in Article 1733.

(VAUMADADA)
52
Ong Yiu vs. CA

GR No. L-40597, June 29, 1979
FACTS:
Petitioner, a lawyer and businessman, was a passenger of respondent Philippine Air Lines
(PAL), on board a flight from Cebu bound for Butuan City. He was scheduled to attend a civil
case trial set for hearing. As a passenger, he checked in one piece of luggage, a blue "maleta" for
which he was issued a claim check. Upon arrival, petitioner claimed his luggage but it could not
be found. It contained vital documents for the trial. PAL Manila wired PAL Cebu advising that the
luggage had been over carried to Manila. The next day, a colorum car driver Dagorro, who used
to drive for petitioner, was asked to deliver the "maleta" to petitioner, with the information that
the lock was open. Upon inspection, petitioner found that a folder containing certain exhibits,
transcripts and private documents were missing, aside from two gift items for his parents-in-law.
Petitioner refused to accept the luggage. Dagorro returned it to PAL who wrote back to petitioner
apologizing that his missing papers as well as the person responsible for it have not been found
and identified respectively. It also stated the fact that no inventory was taken of the cargo upon
loading them on any plane thus there was no way of knowing the real contents of the baggage that
was loaded. Petitioner filed a complaint against PAL for damages for breach of contract of
transportation. Respondent court, however, limited PALs carriage liability to the amount of
P100.00 as stipulated at the back of the ticket.
ISSUE:
Is petitioner bound by the stipulation indicated at the back of the ticket limiting PALs
liability?
HELD:
Yes. While it may be true that petitioner had not signed the plane ticket, he is nevertheless
bound by the provisions thereof. "Such provisions have been held to be a part of the contract of
carriage and valid and binding upon the passenger regardless of the latter's lack of knowledge or
assent to the regulation". It is what is known as a contract of "adhesion", in regards which it has
been said that contracts of adhesion wherein one party imposes a ready made form of contract on
the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. The one who
adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. A
contract limiting liability upon an agreed valuation does not offend against the policy of the law
forbidding one from contracting against his own negligence. Considering, therefore, that
petitioner had failed to declare a higher value for his baggage, he cannot be permitted a recovery
in excess of P100.00. Besides, passengers are advised not to place valuable items inside their
baggage but to avail of their V-cargo service. Moreover, petitioner had been a frequent passenger
of PAL from Cebu to Butuan City and back, and he, being a lawyer and businessman, must be
fully aware of these conditions.

(VAUMADADA)
53
Aboitiz Shipping Corp vs. CA

FACTS:
The vessel M/V Aboitiz took on board in Hongkong for shipment to Manila some cargo
consisting of one (1) twenty (20) footer container holding 271 rolls of goods for apparel covered
by Bill of Lading No. 515-M and one (1) forty (40)-footer container holding 447 rolls, 10 bulk
and 95 cartons of goods for apparel covered by Bill of Lading No. 505-M. The total value of the
goods amounts to P1,072,611.20 which were consigned to the Philippine Apparel. On its way to
Manila, the vessel sunk and it was declared lost with all its cargoes. Private respondent filed an
action for damages against petitioner alleging that the loss was due to the fault and negligence of
petitioner and the master and crew of its vessel in that they did not observe the extraordinary
diligence required by law as regards common carriers which fact of negligence affirmed by
respondent court. Petitioner contended that its liability should be fixed at $500.00 per
package/container as stipulated in the bill of lading and not at the actual value of the cargo.
ISSUE:
Is the stipulation limiting petitioners liability valid and enforceable?
HELD:
No. While it is true that in the bill of lading there is such stipulation that the liability of the
carrier is $500.00 per package/container/customary freight, there is an exception, that is, when the
nature and value of such goods have been declared by the shipper before shipment and inserted in
the bill of lading. This is provided for in Section 4(5) of the Carriage of Goods by Sea Act which
stipulates that this declaration of the actual value, if embodied in the bill of lading, shall be prima
facie evidence, but shall not be conclusive on the carrier. In the instant case, the description of the
nature and the value of the goods shipped are declared and reflected in the bills of lading. Thus, it
is the basis of the liability of the carrier as the actual value of the loss. To limit the liability of
petitioner to $500.00 would nullify the policy of the law imposing on common carriers the duty to
observe extraordinary diligence in the carriage of goods. Moreover, the Court also held that it is
absurd to interpret container, as provided in the bill of lading to be valued at $500.00 each, to
refer to the container which is the modern substitute for the hold of the vessel. The
package/container contemplated by the law to limit the liability of the carrier should be sensibly
related to the unit in which the shipper packaged the goods and described them, not a large mental
object in which the carrier caused them to be contained. Such container must be given the same
meaning and classification as a package and customary freight unit.

(VAUMADADA)
54
SEA LAND SERVICE V. IAC

Facts:
Sea-Land Service, Inc. shipped wholesale and retail goods consigned to Paulino Cue, from the
U.S. to Cebu, covered by a bill of lading. Cue did not declare the value of the goods in the bill of
lading. The shipment arrived in Manila to be transshipped to Cebu, where Cue resides. However,
the shipment was stolen by pilferers and was never recovered. Thus, Cue made a formal claim for
the value of the lost shipment amounting to P179,643.48. Sea-Land offered to settle for $4,000.00
(P30,600.00) arguing that the offer is the amount representing its maximum liability for the loss
of the shipment under the package limitation clause in the bill of lading covering the shipment.
Unfortunately, a judgement was rendered against Cue sentencing him to pay P186,048.00 for the
value of the cargo plus unrealized profit.
Issue:
Should the judgment be based on the maximum liability as stipulated in the bill of lading?
Held:
Yes. According to the Court, the liability of a common carrier for loss or damage of goods to be
transported is governed by the laws of the country of the destination. Subsequently, Art. 1749 and
Art. 1750 is applicable where it provides:
Art. 1749. A stipulation that the common carriers liability is limited to the value of the goods
appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.
Furthermore, The Carriage of Goods by Sea Act U.S. is also suppletory in that it Sec. 4(5) of the
said Act states:
Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to
or in connection with the transportation of goods in an amount exceeding $500 pert
packageunless the nature and value of such goods have been declared by the shipper before
shipment and inserted in the bill of lading
Clause 22 of the bill of lading between the consignee and the carrier adopts the $ 500 valuation as
provided in the COGSA. Additionally, the Court held that there is nothing in the said COGSA
stipulation that is unreasonable and not fairly agreed upon. Thus, the maximum liability of
$4,000.00 should have been upheld.

(VAUMADADA)
55
CITADEL LINES V. CA
Facts:
The petitioner-carrier undertook to transport goods by the consignee, Manila Wine Merchants,
composing of Dunhill cigarettes from England. Upon arrival at the Port of Manila, the container
van was stripped of its contents, resulting to the loss of 90 cases of the Dunhill cigarettes. Thus, a
formal claim was made by the consignee and judgement was rendered in his favor for the amount
of P312, 480.00 representing the market value of the lost shipment. The petitioner contends that
the Clause 6 of the bill of lading limiting its liability to $2.00 per kilo should have been
controlling.
Issue:
Was the stipulation in the bill of lading controlling?
Held:
Yes. The Court held that Article 17491 and 17502 is applicable seeing as the consignee did not
declare a higher valuation than that limited liability as stipulated in the bill of lading between
them. Furthermore, the said stipulation is found to be just and reasonable under the circumstances
and have been fairly and freely agreed upon. Thus, the liability of Citadel Lines should have been
$4,467.60 (2,223.90 kilos) as per the $2.00 per kilo stipulation.
Art. 1749. A stipulation that the common carriers liability is limited to the value of the goods appearing
in the bill of lading, unless the shipper or owner declares a greater value, is binding.
2 Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and
has been fairly and freely agreed upon.
1

(VAUMADADA)
56
EVERETT STEAMSHIP CORPORATION V. CA

Facts:
The petitioner undertook to transport three crates of bus spare parts from Nagoya Japan to Manila,
covered by a bill of lading. However, upon arrival to Manila, one of the three crates were missing.
Thus, the respondent consignee filed a formal claim of 1,552,500.00 yen. Subsequently, the
petitioner offered to pay only 100,000.00 yen, as reflected in the maximum amount stipulated in
Clause 18 of the bill of lading. However, judgment was rendered against the petitioner since the
stipulation was not fairly and freely agreed upon since the conditions were printed in small letters.
Issue:
Should Clause 18 be binding upon the respondent consignee?
Held:
Yes. The Court held that Articles 17493 and 17504 is applicable. Furthermore, Clause 18 is found
to be reasonable and just, despite being printed in small letters. Subsequently, contracts of
adhesion, as presented by the situation in the bill of lading, is not necessarily invalid only that the
courts should provide greater vigilance as provided in Article 24 of the Civil Code. Thus, seeing
as the consignee did not declare a higher valuation, the amount stipulated in Clause 18 should be
upheld.
Art. 1749. A stipulation that the common carriers liability is limited to the value of the goods appearing
in the bill of lading, unless the shipper or owner declares a greater value, is binding.
4 Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and
has been fairly and freely agreed upon.

(VAUMADADA)
57
BRITISH AIRWAYS V. CA
Facts:
Private respondent Mahtani, wanting to visit his relatives in India, purchased tickets from British
Airways with a connecting flight: Manila (via PAL) Hongkong (via BA) Bombay India.
Mahtani checked in his luggages in PAL with the assurance that the same will be transferred to
the BA connecting flight. However, upon arrival at Bombay, his luggages were missing. Thus,
Mahtani filed a formal claim of which judgment was rendered amounting to P7,000.00 as
compensatory damages.
Subsequently, BA denied that Mahtani had a cause of action against them since it was PAL who
lost the luggage. Furthermore, they contested that the liability should be limited to the
condition as provided for in the ticket:
Liability for loss, delay, or damage to baggage is limited unless a higher value is declared in
advance and additional charges are paid:
1. For most international travelthe liability limit is approximately U.S. $9.07 per
pound (U.S. $20.00) per kilo for checked baggage and U.S.$400 per passenger for
unchecked baggage.
Issue:
Should the condition provided for in the ticket be controlling?
Held:
No. According to the Court, the benefits of limited liability is subject to waiver such as when the
air carrier failed to raise timely objections during the trial when questions and answers regarding
the actual claims and damages sustained by the passenger were asked. In this case, BA failed to
object and was silent during the asking of damages. Thus, BA is deemed to have been waived his
opportunity to make timely objections. Thus, the condition cannot be binding.
Furthermore, PAL acted merely as an agent of BA and thus, as principal, should be held liable.

(VAUMADADA)
58
SWEET LINES V. TEVES

Facts:
Private respondents Atty. Tandog and Tiro bought tickets at the branch office of the petitioner at
Cagayan De Oro City. They were supposed to board M/S Sweet Hope for transportation to
Tagbilaran City via port of Cebu but, upon learning that many passengers were bound for Surigao,
went back to the branch office for proper relocation to M/S Sweet Town. However, they were
informed that the vessel was already filled to capacity and they were forced to agree to hide at
the cargo section to avoid inspection of the officers of the Philippine Coastguard. Eventually, the
tickets that they bought at Cagayan for Tagbilaran were not honored and they were constrained to
pay for other ticets. Furthermore, the respondents complained that they were subject to the
scorching heat of the sun and the dust coming from the ships cargo of corn grits.
Thus, they made a formal claim for damages amounting to P110,000.00 before the Court of First
Instance of Misamis Oriental. However, the petitioner moved to dismiss the complaint on the
ground of improper venue, since at the back of the tickets purchased by the respondents,
Condition No.14 read that any and all actions shall be filed in the competent courts in the City of
Cebu and that respondents acceded to such conditions upon purchase. Furthermore, they argued
that venue may be validly waived. Nevertheless, the private respondents claimed that Condition
No. 14 is invalid since the provision exacts too much from the public and is burdensome to bear.
Issue:
Is Condition No. 14 valid?
Held:
No. The Court held that while stipulations limiting liability is generally valid, the said condition
should be void and unenforceable since 1) The condition is not just and fair; and 2) The condition
subverts the public policy on transfer of venue of proceedings of this nature, prejudicing the rights
and interests of passengers from different parts of the country. It is not just and fair to bind the
passengers to the stipulation at the bck of the ticket because the passengers could hardly be
expected to examine their tickets received in the congested counters, rush hour conditions
depriving them of the opportunity to take the tickets into account and inspect the same.
Furthermore, while transfer of venue is valid, the case at bar is against public policy since the
expense and trouble the passenger would be subjected of having to travel to Cebu just to file the
claim, which might result the frustration of a valid claim since the passenger might not pursue the
claim at all on account of the burden.

(VAUMADADA)
59
ALITALIA V. IAC
Facts:
Private respondent Dr. Pablo, an associate professor of U.P. and research grantee of the Philippine
Atomic Energy Agency was invited to take part at a meeting of the Department of Research and
Isotopes of the Joint FAO-IAEA Division of Atomic Energy in Food and Agriculture of the U.N.
in Ispra, Italy (wow). She was to be the second speaker of the first day of the meeting.
Thus, Dr. Pablo booked passage on petitioner airline Alitalia. Upon arrival to Milan, she was told
that her luggage, which contained her research material for the meeting, was delayed in one of the
succeeding flights from Rome to Milan. She went to Rome to locate the bags but to no avail.
Completely distraught and discouraged, she returned to Manila without attending the meeting in
Ispra. Subsequently, the luggages were found to in Ispra one day (wow) after her scheduled
appearance in the meeting.
Thus, she made a formal claim for damages. Alitalia offered her free airline tickets to compensate,
but she rejected the offer. Subsequently, judgment was rendered against Alitalia amounting to
P40,000.00 as nominal damages.
Alitalia counter-argued that the Warsaw Convention should have been applied to limit their
liability to damages arising out of:
1) The death, wounding or other bodily injury of a passenger if the accident causing it took
place on board the aircraft or in the course of its operations of embarking or disembarking
2) The destruction of loss of, or damage to, any registered luggage or goods, if the
occurrence causing took place during the carriage by air
3) Delay in the transportation by air of passengers, luggage or goods.
Since the luggage was not found to be in any of the instances listed in the Warsaw Convention,
there is no basis for the nominal damages.
Issue:
Is the Warsaw Convention an exclusive enumeration of the instances of an airlines liability?
Held:
No. The Court held that the Convention is not an exclusive enumeration of the instances of an
airlines liability. It does not exclude liability for other breaches of contract by the carrier or
misconduct by its officers and employees, or for some particular or exceptional type of damage.
Thus, seeing as a special injury was caused to Dr. Pablo via being unable to attend the meeting
causing distress, anxiety, and humiliation to not only herself but also of the country and U.P. since
the luggage was not delivered to her in time she is also entitled to nominal damages which, as
the law says, is adjudicated in order that a right of the plaintiff which has been violated or invaded
by the defendant, may be vindicated and recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered.

(VAUMADADA)
60
PAN AMERICAN WORLD AIRWAYS V. IAC

Facts:
Pangan had an agreement with several film companies wherein he bound himself to supply films
and to exhibit his films in their theatres. Consequently, he purchased plane tickets from the
petitioner bound from Manila to Guam. He checked in his luggages which contained several films
and valuables in PAL, the connecting flight of the petitioner. When he arrived in Guam, the
luggages did not come with the flight, and thus, the film exhibitions were cancelled. Thus, he
filed a formal claim for the missing luggages. Judgment was rendered in favor of Pangan.
Subsequently, the petitioner contested that the awarding of damages should have been within the
liability set forth in the Warsaw Convention, which is embodied in the contract of carriage as
manifested by the airline ticket:
Liability for loss, delay, or damage to baggage is limited unless a higher value is declared in
advance and additional charges are paid:
1. For most international travelthe liability limit is approximately U.S. $9.07 per
pound (U.S. $20.00) per kilo for checked baggage and U.S.$400 per passenger for
unchecked baggage.
The respondent averred that he did not sign the ticket, and thus, it is not a binding contract.
Issue:
Is the Warsaw Convention as embodied in the contract of carriage controlling?
Held:
Yes. The Court held that since the petitioner did not declare any higher value for his luggage, the
stipulation in the contract as derived from the Warsaw Convention is binding. Furthermore, the
fact that the respondent did not sign the ticket is immaterial. Lastly, the Court disagrees the award
of damages in favor of the private respondent damages for lost profits when their contract to show
the films in Guam and San Francisco. For such award to be valid, there must be a showing that
petitioners attention was called to the special circumstance requiring prompt delivery of private
respondents luggages.

(VAUMADADA)
61
CHINA AIRLINES V. CHIOK

Facts:
The private respondent purchased tickets from the petitioner China Airlines Ltd: Manila Taipei
Hongkong Manila. When he arrived at Taipei, he went to the CAL office to confirm his
Hongkong Manila trip, and was confirmed by the same. He did the same confirmation in the
PAL office upon arrival to Hong Kong, and was also confirmed by the same. However, due to
stormy weather, all the ticket holders of PR 311 where booked for the next flight PR 307.
Nevertheless, Chiok insisted to reach Manila on November 25, 1981 due to a business deal. On
the said date, Chiok went to the airport, but was informed that his name was not in the PAL
computer list. Chiok proceeded to the Hongkong office again, but was told that the computer in
their branch had his name on the list. Ultimately, he was not able to board PR 307 on the said date,
missing his business deal. Thus, he filed a formal complaint for damages.
Issue:
Is CAL liable despite PAL being the one who is negligent?
Are they liable for damages?
Held:
Yes. According to the Court, Art. 30 of the Warsaw Convention provides that a ticket-issuing
carrier is liable for the acts of the endorsee-airline as agent. Thus, in a contract of carriage, the
principal is liable for damages despite the breach not occurring on its own flight and on that of
another airline.
Furthermore, the Court held that a claim for moral damages may be awarded by virtue of Article
2220:
Willful injury to the property may be legal ground for awarding moral damages if the court
should find that, under the circumstances, such damages are justly due. The same rule applies to
the breaches of contract where the defendant acted fraudulently or in bad faith.
In this case, there was gross negligence amounting bad faith as shown by: 1) Insensitive acts of
the PAL employees 2) The breach of duty to transport despite several confirmations. Thus, moral
and exemplary damages are applicable.

(VAUMADADA)
62
Augusto Benedicto Santos III, represented by his father and legal guardian, Augusto
FACTS:
Santos, a minor and resident of the Philippines, purchased a round-trip ticket from Northwest
Orient Airlines (NOA) in San Francisco, USA for his flight from San Francisco to Manila and back
but the return flight was left open. Despite a previous confirmation and reconfirmation, he was
informed that he had no reservation for his flight when he checked in at the NOA counter in the San
Francisco airport. Santos sued NOA for damages in the RTC of Makati. The trial court granted the
motion to dismiss of NOA on the ground that the RTC has no jurisdiction over the case in line with
Article 28 (1) of the Warsaw Convention.5 The appellate court affirmed the trial courts decision,
hence this appeal.
ISSUES:
(1) Whether or not the said provision is constitutional
(2) Whether or not the Philippine court has jurisdiction over the case
HELD:
(1) YES. The Convention is a treaty commitment voluntarily assumed by the Philippine
government and, as such, has the force and effect of law in this country. The treaty cannot
be rejected by the court on the ground of rebus sic stantibus6 because it is not the courts
function but of the other branches of the government.
(2) NO. Manila is not considered the ultimate destination but merely an agreed stopping place.
Hence, Philippines is not one of the courts where a plaintiff can file a case according to
Article 28(1). Moreover, a citizen does not necessarily have the right to sue in his own
courts simply because the defendant airline has a place of business in his country.
NOTE: USA has already proposed an amendment that would enable a passenger to sue in his own
domicile if the carrier does business in that jurisdiction. It was incorporated in the
Guatemala Protocol amending the Warsaw Convention but is still ineffective because it has
not yet been ratified by the required minimum number of contracting parties.
Art. 28 (1). An action for damage must be brought at the option of the plaintiff, in the territory of one of the
High Contracting parties, either before the court of the domicile of the carrier or his principal place of
business, or where he has a place of business through which the contract has been made, or before the court at
the place of destination.
6
A doctrine which justifies the non-performance of a treaty obligation whenever there is a vital change in the
condition of the contracting parties that they could not have foreseen at the time the treaty was concluded.
(VAUMADADA)
63
United Airlines vs. Willie J. Uy

FACTS:
On October 13, 1989, Willie Uy, a revenue passenger on United Airlines Flight No. 819 bound to
Manila from San Francisco, checked in together with his luggage one piece of which was found to
be overweight at the airline counter. The United Airlines employees at the counter rebuked Uy for
not packing his luggage in accordance with the weight limit and told Uy in a loud voice in front of
the crowd to repack his things. Uy agreed to pay for the overweight charges instead through his
airline pre-paid credit which the employee refused to honor so he was forced to pay the charges
with his American Express credit card. Upon arrival in Manila, one of Uys bags was slashed and
its contents stolen. Uy sent three demand letters on several occasions for the payment of his losses
to which the United Airlines denied. On June 9, 1992 or more than two years later, Uy filed an
action for damages based on two causes of action: (1) from the misconduct of the airline
employees and the violation of respondents rights as passenger, and (2) from the theft or damage to
property or goods. The trial court dismissed the case on the ground of prescription but the
appellate court gave due course to the case.
ISSUE:
Whether or not the action has prescribed based on Article 29 of the Warsaw Convention7
HELD:
Insofar as the first cause of action is concerned, the action has not yet prescribed since the airline
may still be held liable for breach of other provisions of the Civil Code which prescribe a different
period or procedure for instituting the action. Article 1146 of the Civil Code prescribes four years
for filing an action based on torts.
As for the second cause of action, the travaux preparatories8 of the Warsaw Convention reveal that
the two-year limitation is an absolute bar to suit and not to be made subject to the various tolling
provisions of the laws of the forum. This therefore forecloses the application of our own rules on
interruption of prescriptive periods. Article 29 (2) was intended only to let local laws determine
whether an action had been commenced within the two-year period, and within our jurisdiction, an
action shall be deemed commenced upon the filing of a complaint. Since it is indisputable that
respondent filed the present action beyond the time frame, his second cause of action must be
barred.
7
Article 29. (1) The right to damages shall be extinguished if an action is not brought within two years,
reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have
arrived, or from the date on which the transportation stopped.
(2) The method of calculating the period of limitation shall be determined by the law of the court to which the
case is submitted.
8
Official record of negotiation
(VAUMADADA)
64
ACTIONS FOR DAMAGES IN CASE OF BREACH (12):

Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil vs. CA, The Word for the World
Christian Fellowship, Inc., Amyline, Antonio, et. al. (Mazda minibus, solidary liability)
FACTS:
Spouses Fabre were owners of a 1982 Mazda minibus which they used as a bus service for school
children operated in Manila. They had a driver, Cabil, whom they hired after trying him of for two
weeks to take school children to and from the St. Scholasticas College in Malate, Manila. Word for
World Christian Fellowship (WWCF) arranged with the spouses for the transportation of 33
members of its Young Adults Ministry from Manila to La Union and back. A bridge in Carmen,
which was the usual route to La Union, was under repair so Cabil was forced to take a detour
through the town of Baay in Lingayen, Pangasinan. At 11:30 that night, while traversing a sharp
curve, the bus hit the left traffic steel brace and sign along the road and rammed a fence, then turned
over and landed on its left side, coming to a full stop only after a series of impacts. A coconut tree
which it had hit fell on it and smashed its front portion. Several passengers were injured. Amyline
Antonio, who suffered paraplegia and is permanently paralyzed from the waist down, brought this
case in the RTC of Makati which ruled in her favor. The CA affirmed the trial courts decision,
hence this appeal.
ISSUE:
Whether or not Spouses Fabre may be made to respond jointly and severally to Antonio
HELD:
YES. Although the relation of the passenger and carrier is contractual both in origin and nature,
nevertheless the act that breaks the contract may also be a tort. Considering that it was raining,
the road was slippery, and it was dark, it was grossly negligent of Cabil to have driven the bus at 50
kilometers an hour. And pursuant to Articles 2176 and 2180 of the Civil Code, his negligence gave
rise to the presumption that his employers, the Fabres, were themselves negligent in the selection
and supervision of their employees. It is permissible for the plaintiff to allege in the Complaint
alternative causes of action and join as many parties as may be liable on such causes of action so
long as the plaintiff does not recover twice for the same injury. Thus, the carrier may also be sued
on the alternative causes of action of breach of contract and quasi-delict.

(VAUMADADA)
65
Air France vs. Rafael Carrascoso and CA (white man, first class)
FACTS:
Carrascoso, a civil engineer and member of a group of 48 Filipino pilgrims that left Manila for
Lourdes, was issued a first class round trip airplane ticket from Manila to Rome by Air France
through its authorized agent, Philippine Air Lines. From Manila to Bangkok, he travelled in first
class, but at Bangkok, the Manager of Air France forced him to vacate the first class seat that he was
occupying because there was a white man, who, the Manager alleged, had a better right to the
seat. When asked to vacate his seat, Carrascoso refused at first but he reluctantly gave his seat after
a hot discussion with the Manager.
ISSUE:
Whether or not Carrascoso has an action against Air France
HELD:
YES. A contract to transport passengers is quite different in kind and degree from any other
contractual relation. And this, because of the relation which an air-carrier sustains with the public.
Its business is mainly with the travelling public. It invites people to avail of the comforts and
advantages it offers. The contract of air carriage, therefore, generates a relation attended with a
public duty. Neglect of malfeasance of the carriers employees, naturally, could give ground for an
action for damages.
Passengers do no contract merely for transportation. They have a right to be treated by the carriers
employees with kindness, respect, courtesy, and due consideration. They are entitled to be
protected against personal misconduct, injurious language, indignities, and abuses from such
employees. So it is, that any rule or discourteous conduct on the part of the employees towards a
passenger gives the latter an action for damages against the carrier.
Moral damages are also awarded because bad faith was demonstrated when the manager imposed
his arbitrary will and forcibly ejected the plaintiff from his seat, made him suffer the humiliation of
having to go to the tourist class compartment just to give way to another passenger whose right
thereto has not been established.

(VAUMADADA)
66
William Tiu, doing business under the name and style of D Rough Riders. and Virgilio Te
Laspias vs. Pedro Arriesgado, Benjamin Condor, Sergio Pedrano, and Philippine Phoenix
Surety and Insurance, Inc. (tire explosion, collision)
FACTS:
One of the rear tires of a cargo truck marked Condor Hollow Blocks and General Merchandise
exploded so that the driver, Pedrano, was forced to park along the right side of the national highway
and remove the damaged tire to have it vulcanized at a nearby shop. Pedrano left his helper, Jose
Mitante, Jr., to keep watch over the stalled vehicle, and instructed the latter to place a spare tire six
fathoms away behind the stalled truck to serve as a warning to oncoming vehicles. The trucks tail
lights were also left on. It was about 12:00 am of March 16. 1987. At about 4:45 am, D Rough
Riders passenger bus driven by Laspias was cruising along the same national highway. As the bus
was approaching the bridge, Laspias saw the stalled truck, which was then about 25 meters away.
He applied the brakes and tried to swerve to the left to avoid hitting the truck but it was too late. The
bus rammed into the trucks left rear. The impact damaged the right side of the bus and left several
passengers injured. Arriesgado lost consciousness and suffered a fracture on his right colles. His
wife, Felisa, was brought to the Danao City Hospital and was later transferred to the Southern
Island Medical center where she died shortly thereafter. Arriesgado then filed a complaint for
breach of contract of carriage.
ISSUE:
(1) Whether or not Tiu should be held liable
(2) Whether or not Pedrano and Condor should also be held liable
HELD:
(1) YES. Any injury suffered by the passengers in the course of the contract of carriage is
immediately attributable to the negligence of the carrier. Upon happening of the accident,
the presumption of negligence at once arises, and it becomes the duty of a common carrier
to prove that he observed extraordinary diligence in the care of his passengers. Tiu failed to
conclusively rebut such presumption. The negligence of Laspias as driver of the
passenger bus is, thus, binding against Tiu, as the owner of the passenger bus engaged as a
common carrier.
(2) YES. Respondent Pedrano was also negligent in leaving the truck parked askew without
any warning lights or reflector devices to alert oncoming vehicles. Such failure created the
presumption of negligence on the part of his employer, Condor, in supervising his
employees properly and adequately. The unfortunate incident could have been averted had
Condor equipped the vehicle with lights, flares, or, at the very least, and early warning
device.

(VAUMADADA)
67
Philippine American General Insurance Co., Inc. and Tagum Plastics, Inc. vs. Sweet Lines,
Inc., Davao Veterans Arrastre and Port Services, Inc. and CA (polyethylene, essential
elements)
FACTS:
In or about March 1977, SS Vishva Yash belonging to or operated by The Shipping Corporation
of India Ltd., took on board 2 consignments of cargoes for shipment to Manila and later for
transshipment to Davao City, consisting of 7000 bags of Polyethylene consigned to the order of Far
East Bank and Trust Company Manila, with arrival notice to Tagum Plastics, Inc. In the course of
time, the said vessel arrived at Manila and discharged its cargoes in the Port of Manila for
transshipment to DAvao City. For this purpose, the foreign carrier awaited and made use of the
services of the vessel called M/V Sweet Love owned and operated by Sweet Lines. On May 15,
1977, the shipments were discharged from the interisland carrier into the custody of the consignee.
Of said shipment totaling 7000 bags, only a total of 5820 bags were delivered in good order
condition, leaving a balance of 1080 bags. Petitioner filed a complaint on May 12, 1978 and the trial
court ruled in favor of the petitioners while the appellate court reversed the lower courts decision.
ISSUE:
Whether or not the action has prescribed
HELD:
YES. Before an action can be properly commenced all the essential elements of the cause of action
must be in existence, that is, the cause of action must be complete. All valid conditions precedent to
the institution of the particular action, whether prescribed by statute, fixed by agreement of the
parties or implied by law must be performed or complied with before commencing the action,
unless the conduct of the adverse party has been such as to prevent or waive performance or excuse
non-performance of the condition.
In the case at bar, there is neither any showing of compliance by petitioners with the requirement
for the filing of a notice of claim within the prescribed period nor any allegation to that effect. It
may then be said that while petitioners may possibly have a cause of action, for failure to comply
with the above condition precedent they lost whatever right of action they may have in their favor,
or token in another sense, that remedial right or right to relief had prescribed.
The shipment in question was discharged into the custody of the consignee on May 15, 1977 and it
was from this date that petitioners cause of action accrued, with 30 days9 therefrom within which
to file a claim with the carrier for any loss or damage which may have been suffered by the cargo
and thereby perfect their right of action.
In this case, there was a provision in the bill of lading, which was held as valid, prescribing a time frame
of 30 days for filing a claim with the carrier in case of loss or damage to the cargo and 60 days from accrual of
the right of action for instituting an action in court
(VAUMADADA)
68
Dole Philippines vs. Maritime Company of the Philippines (machine parts, prescription)
FACTS:
Maritime was contracted to ship machine parts to consignee Dole and the cargo was discharged to
the latters custody on December 18, 1971. Dole filed a claim for damages against Maritime on
May 4, 1972. On December 11, 1974, Judge Serafin Cuevas dismissed the claim along with the two
other causes of action, the first one being without prejudice as it was not covered by the settlement.
Because of the dismissal of the case with respect to the third cause of action without prejudice,
plaintiff instituted this present complaint on January 6, 1975.
ISSUE:
Whether or not Article 115510 of the Civil Code is applicable to actions brought under the Carriage
of Goods by Sea Act11
HELD:
NO. The general provisions of the new Civil Code (Art. 1155) cannot be made to apply, as such
application would have the effect of extending the one-year period of prescription fixed in the law.
It is desirable that matters affecting transportation of goods by sea be decided in as short a time as
possible; the application of the provisions of Article 1155 of the new Civil Code would
unnecessarily extend the period and permit delays in the settlement of questions affecting
transportation, contrary to the clear intent and purpose of the law.
Doles contention that the prescriptive period remained tolled as of May 4, 1972 and that in legal
contemplation the case filed on January 6, 1975 was well within the one-year prescriptive period in
SEction 3(6) of the Carriage of Goods by Sea Act equates to tolling with indefinite suspension. It is
clearly fallacious and merits no consideration.
10
Article 1155. The prescription of actions is interrupted when they are filed before the court, when there is
a written extrajudicial demand by the creditors, and when there is any written acknowledgment of the debt by
the debtor.
11
Section 3, paragraph 6. x x x the carrier and the ship shall be discharged from all liability in respect of loss
or damage unless suit is brought within one year after delivery of the goods or the date when the goods should
have been delivered; Provided, That if a notice of loss or damage, either apparent or conceded, is not given as
provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring suit within
one year after the delivery of the goods or the date when the goods should have been delivered.
(VAUMADADA)
69
Maritime Agencies & Services, Inc. vs. CA, and Union Insurance Society of Canton, Ltd.
G.R. No. 77638 July 12, 1990
Union Insurance Society of Canton, Ltd. vs. CA, Hongkong Island Co., Ltd., Maritime
Agencies & Services, Inc., and/or Viva Customs Brokerage (urea, prescription)
FACTS:
Transcontinental Fertilizer Company of London chartered from Hongkong Island Shipping
Company of Hongkong the motor vessel named Hongkong Island for the shipment of 8073.35
MT (gross) bagged urea from Novorossisk, Odessa, USSR to the Philippines, the parties signing for
this purpose a Uniform General Charter dated August 9, 1979. Of the total shipment, 5400.04 MT
was for the account of Atlas Fertilizer Company as consignee, 3400.04 to be discharged in Manila
and the remaining 2000 MT in Cebu. The goods were insured by the consignee with the Union
Insurance Society of Canton, Ltd. against all risks. Maritime Agencies & Services, Inc. was
appointed as the charterers agent and Macondray Company, Inc. as the owners agent. On October
31, 1979, consignee filed a formal claim against Maritime, representing the value of the 1383
shortlanded bags. Consignee went to Union pursuant to the insurance contract when Maritime
refused to pay. As subrogee, Union filed a complaint for reimbursement against Hongkong
Insurance on September 19, 1980 and impleaded Macondray as a new defendant on April 20, 1981.
ISSUE:
Whether or not the action has prescribed
HELD:
NO. The one-year period should commence on October 20, 1979, when the last item was delivered
to the consignee. Unions complaint was filed against Hongkong on September 19, 1980, but
tardily against Macondray on April 20, 1981. The consequence is that the action is considered
prescribed as far as Macondray is concerned but not against its principal, which is what matters
anyway.
AS regards the goods damaged or lost during the unloading, the charterer is liable therefor, having
assumed this activity under the charter party free of expense to the vessel. The difficulty is that
Transcontinental has not been impleaded in these cases and so is beyond the jurisdiction of the
court. The liability imposable upon it cannot be borne by Maritime which, as a mere agent, is not
answerable for injury cased by its principal. It is a well-settled principle that the agent shall be liable
for the act or omission of the principal only if the latter is undisclosed.

(VAUMADADA)
70
Zulueta v. Pan American World Airways, Inc.

FACTS:
Spouses Rafael Zulueta and Telly Albert Zulueta, with their daughter boarded a PANAM plane
from Honolulu to Manila, the first leg of which was Wake Island. While on stopover, Mr. Zulueta
found the need to relieve himself and after finding the terminals comfort rooms full, he walked
down the beach to do his business. Meanwhile, the flight was called and Mr. Zuluetas absence
was noticed. Heading towards the ram, plaintiff remarked, You people almost made me miss
your flight. You have a defective announcing system and I was not paged.
Instead of allowing plaintiff to board the plane, however, the airport manager stopped plaintiff
and asked him to surrender his baggages for inspection. Refusing to comply with the order,
plaintiff was not allowed to board the plane. His wife and daughter were able to proceed but were
instructed to leave their baggages behind.
Plaintiff instituted present petition for recovery of damages against respondents for breach of
contract. The defendants, however, maintain that plaintiffs reason for going to the beach was not
to relieve himself but because he had a quarrel with his wife.
ISSUE:
Whether or not plaintiff is entitled to damages for breach of contract.
HELD:
YES, plaintiff is entitled to damages. Firstly, plaintiffs testimony about what he did upon
reaching the beach is uncontradicted. Furthermore, there is absolutely no direct evidence about
said alleged quarrel. If such was true, surely, plaintiff would not have walked back from the beach
to the terminal before the plane had resumed its flight to Manila, thereby exposing his presence to
the full view of those who were looking for him.
Anent the request of the common carrier to inspect the bags of plaintiff, it appears that Captain
Zentner received information that one of the passengers expressed a fear of a bomb on board the
plane. As a result, he asked for the plaintiffs bags to verify the bomb. Nevertheless, this claim is
unfounded. The Captain failed to explain why he seemingly assumed that the alleged
apprehension of his information was justified. Plaintiff himself intimated to them that he was well
known to the US State Department and that the Captain was not even aware of the informants
name or any circumstances which may substantiate the latters fear of a certain bomb.
Defendants further argue that plaintiff was also guilty of contributory negligence for failure to
reboard the plane within the 30 minutes announced before the passengers debarked therefrom.
This may have justified a reduction of the damages had plaintiff been unwittingly left by the plane,
owing to the negligence of PANAM personnel, or even, wittingly, if he could not be found before
the planes departure. It does not, and cannot have such justification in the case at bar, plaintiff
having shown up before the plane had taken off and he having been off-loaded intentionally and
with malice.
With all the foregoing, it is clear that plaintiff is entitled to damages from respondent company.

(VAUMADADA)
71
Merhcan v. Mendoza
FACTS:
Respondents Arsenio Mendoza, Leonarda Ilaya and Zenaida Mendoza boarded a bus owned and
operated by Philippine Rabbit Bus Lines driven by Silverio Marchan. While travelling on its way
to Manila, it fell into a ditch causing the passengers inside the bus to be thrown out to the ground
resulting in their multiple injuries. Thereafter, Marchan was convicted for serious, less serious and
slight physical injuries through reckless imprudence.
As such, respondents filed to recover damages from herein petitioners. Petitioners, on the other
hand, contends there is can be no implied contract of carriage between them and the passengers,
hence, there can be no basis for the recovery of damages from breach of contract.
ISSUE:
Whether or not there is a contract of carriage between the bus company and the passengers and
consequently, whether or not Article 1759 is applicable in the present case.
HELD:
YES, there is a contract of carriage between the parties and Article 1759 is applicable in the case
at bar. Respondents were waiting for a passenger bus and the moment they boarded the bus being
driven by Marchan, they were treated as passengers thereto, for they paid their corresponding fees.
The riding public is not expected to inquire from time to time before hey board the passenger bus
whether or not the driver who is at the steering wheel of said bus was authorized to drive said
vehicle or that said driver is acting within the scope of his authority and observing the existing
rules and regulations required of him by the management.
Common carriers cannot escape liability for the death of or injuries to passengers through the
negligence and willful acts of the formers employees, although such employees may have acted
beyond the scope of their authority or in violation of orders. Clearly, the applicability of Article
1759 is indisputable.

(VAUMADADA)
72
De Caliston v. Court of Appeals

FACTS:
Private respondent Geronimo Dalmacio ran over Juana Sonza Vda. de Darrocha, a USVA
pensioner, survived by her only child, Gloria Garrocha de Caliston, herein petitioner. Private
respondent Dalamcio was prosecuted for and convicted of homicide through reckless imprudence.
On appeal, the Court of Appeals absolved Dalmacio from the payment of P10,000 for the loss of
pension.
ISSUE:
Whether or not the deletion of the P10,000 award for the loss of pension is proper.
HELD:
NO, the deletion of the P10,000 award for loss of pension is unjustified. The pension of the
decedent being a sure income was cut short by her death. The surviving heir of the decedent is
entitled to the award of P10,000 which is a just equivalent to the pension the decedent would have
received for one year if she did not die.

(VAUMADADA)
73
Prudenciado v. Alliance Transport System

FACTS:
While crossing Taft Avenue, Dra. Sofia Prudenciado was suddenly bumped by Jose Leyson who
was driving a taxicab owned and operated by Alliance Transport System, Inc. As a result, Dra.
Prudenciado suffered physical injuries in different parts of her body, including a brain concussion
which subjected her to several physical examinations.
After due hearing, Jose Leyson was found guilty of negligence in the performance of his duties as
a taxicab driver which is the proximate cause of the accident and that Alliance Transport System
failed to prove that it had exercised the required diligence of a good father of a family in the
selection, supervision, and control of its employees.
Petitioner questions the award of the damages of the Court of Appeals.
ISSUE:
Whether or not the Court of Appeals is justified in modifying the grant of damages by the trial
court.
HELD:
YES and NO. A careful review of the record makes it readily apparent that the injuries sustained
by Dra. Prudenciado are not as serious or extensive as they were claimed to be, which proof
merely consisted in her own uncorroborated testimony, and which are not enough to warrant the
damages awarded by the trial court.
On the other hand, the reduction of the damages made by the Court of Appeals is both too drastic
and unrealistic to pass the test of reasonableness. Being a doctor by profession, petitioners fears
can be more real and intense than an ordinary person, thus, she is undeniably a proper recipient of
moral damages which are proportionate to her suffering.
With regard to exemplary damages, Article 2231 of the Civil Code provides that exemplary
damages may be had if the defendant acted with grave negligence. A driver running at full speed
on a rainy day, on a slippery road in complete disregard of the hazards to life and limbs of other
people cannot be said to be acting in anything less than gross negligence. The frequent incidence
of accidents of this nature caused by taxi drivers indeed demands corrective measures.

(VAUMADADA)
74

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EXTRAORDINARY DILIGENCE (8)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Mecenas v. CA, 180 SCRA 83 (1989)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Negros Navigation Co., Inc v. CA, 281 SCRA 534 (1997)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Korean Airlines v. CA, 234 SCRA 717 (1994)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Fortune Express, Inc. v. CA, 305 SCRA 14 (1999)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

LAST CLEAR CHANCE DOCTRINE (2)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Bustamante vs. CA and del Pilar and Montesiano

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACCOMMODATION PASSENGER (1)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

NOT AN INSURER AGAINST ALL RISKS (3)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Japan Airlines v. Court of Appeals

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Yobido v. CA, Tumboy

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

DURATION OF RESPONSIBILITY (6)

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

La Mallorca v. Court of Appeals

Aboitiz Shipping v. Court of Appeals,

Mallari, Sr. v. CA,

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

LRTA, et al. v. Marjorie Navidad, et al.,

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Ludo v. Court of Appeals,

Philippine Rabbit v. Intermediate Appellate Court,

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Nicholas CERVANTES v CA and Philippine Airlines Inc.

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Vicente CALALAS v CA, Eliza Sunga, and Francisco Salva

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

EXCEPTIONS TO PRESUMPTION OF NEGLIGENCE NEGLIGENCE OR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Antonia Maranan v Pascual Perez

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

EXCEPTIONS TO PRESUMPTION OF NEGLIGENCE:

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

failed to exercise extraordinary diligence as required by law, it appears that the

PETITION PARTIALLY GRANTED. DECISION MODIFIED. MORAL DAMAGES AND

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

Cesar ISAAC v A.L. Ammen Transport Corporation

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

EXCEPTIONS TO PRESUMPTION OF NEGLIGENCE:

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

MANILA RAILROAD COMPANY vs. MACARIA BALLESTEROS

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

EXCEPTIONS TO PRESUMPTION OF NEGLIGENCE:

ACERO, ANDRES, ANDE, ARUGAY, DALUDADO, DENILA, MAROHOMBSAR, URUBIO, VILLAMAYOR

BAYASEN vs. COURT OF APPEALS