G.R. No.

L-5203 April 18, 1956

STANDARD VACUUM OIL COMPANY, plaintiff-appellant,

vs.
LUZON STEVEDORING CO., INC., defendant-appellee.

Ross, Selph, Carrascoso and Janda and Martin B. Laurena for appellant.
Perkins, Ponce Enrile and Contreras for appellee.

BAUTISTA ANGELO, J.:

Plantiff entered into a contract with defendant to transport between the ports of Manila and Nin Bay, Sangay, Iloilo,
2,916.44 barrels of bulk gasoline belonging to plaintiff. The gasoline was delivered in accordance with the contract
but defendant failed to transport it to its place of destination and so plaintiff brought his action in the Court of First
Instance of Manila to recover the sum of P75,578.50 as damages.

Defendant, in its answer, pleaded that its failure to deliver the gasoline was due to fortuitous event or caused by
circumstances beyond its control and not to its fault or negligence or that of any of its employees. The court, after
receiving the evidence, rendered decision finding that the disaster that had befallen the tugboat was the result of
an avoidable accident and the loss of the gasoline was due to a fortuitous even which was beyond the control of
defendant and, consequently, dismissed the case with costs against the plaintiff.

The facts as found by the trial court are: "that pursuant to an agreement had between the parties, defendant's
barge No. L-522 was laden with gasoline belonging to the plaintiff to be transported from Manila to the Port of
Iloilo; that early in the morning of February 2, 1947, defendant's tugboat "Snapper" picked up the barge outside
the breakwater; that the barge was placed behind the tugboat, it being connected to the latter by a tow rope ten
inches in circumstances; that behind the barge, three other barges were likewise placed, one laden with some
cargo while the other two containing hardly any cargo at all; that the weather was good when on that day the
tugboat with its tow started on its voyage; that the weather remained good on February 3, 1947, when it passed
Santiago Point in Batangas; that at about 3:00 o'clock in the morning of February 4, 1947, the engine of the
tugboat came to a dead stop; that the engineer on board the tugboat found out that the trouble was due to a
broken idler; that a message was then sent to the defendant's radio station in Manila informing its official of the
engine trouble; that upon the receipt of the message the defendant called up several shipping companies in
Manila to find out if they had any vessels in the vicinity where the "Snapper' had stalled but sais companies
replied in the negative; that thereupon the defendant redioed its tugboat Tamban' which was docked at Batangas,
ordering it to proceed to the place where the Snapper' was; that at about 6:00 o'clock in the same morning of
February 4, 1947, the master of the Snapper' attempted to cast anchor but the water areas around Elefante Island
were so deep that the anchor did not touch bottom; that in the afternoon of the same day the weather become
worse as the wind increased in intensity and the waves were likewise increased in size and force; that due to the
rough condition of the sea the anchor chains of the Snapper' and the four barges broke one by one and as a
consequence thereof they were drifted and were finally dashed against the rocks a hole was opened in the hull of
the Snapper', which ultimately caused it to sink, while the barge No. L-522 was so badly damaged that the
gasoline it had on board leaked out; and that the Tamban arrived at the place after the gasoline had already
leaked out.

Defendant is a private stevedoring company engaged in transporting local products, including gasoline in bulk and
has a fleet of about 140 tugboats and about 90 per cent of its business is devoted to transportation. Though it is
engaged in a limited contract of carriage in the sense that it chooses its customers and is not opened to the
public, nevertheless, the continuity of its operation in this kind of business have earned for it the level of a public
utility. The contract between the plaintiff and defendant comes therefore under the provisions of the Code of
Commerce. The pertinent law is article 361 which provides:

ART. 361. The merchandise shall be transported at the risk and venture of the shipper, if the contrary was
not expressly stipulated.

Therefore, all damages and impairment suffered by the goods during the transportation, by reason of
accident, force majeure, or by virtue of the nature or defect of the articles, shall be for the account and risk
of the shipper.

The proof of these accidents is incumbent on the carrier.

It therefore appears that whenever merchandise is transported on the sea by virtue of a contract entered into
between the shipper and the carrier, the merchandise is deemed transported at the risk and venture of the
shipper, if the contrary is not stipulated, and all damages suffered by the merchandise during the transportation by
reason of accident or force majeure shall be for the account and risk of the shipper, but the proof of these
accidents is incumbent on the carrier. Implementing this provision, our Supreme Court has held that all a shipper
has to prove in connection with sea carriage is delivery of the merchandise in good condition and its non-delivery
at the place of destination in order that the burden of proof may shift to the carrier to prove any of the accidents
above adverted to. Thus, it was held that "Shippers who are forced to ship goods on an ocean liner or any other
ship have some legal rights, and when goods are delivered on board a ship in good order and condition, and the
shipowner delivers them to the shipper in bad order and condition, it then devolves upon the shipowner to both
allege and prove that the goods were damaged by reason of some fact which legally exempts him from liability"
(Mirasol vs. Robert Dollar Co., 53 Phil., 129).

The issue to be determined is: Has defendant proven that its failure to deliver the gasoline to its place of
destination is due to accident or force majeure or to a cause beyond its control? This would require an analysis of
the facts and circumstances surrounding the transportation of said gasoline.

It appears that the tugboat "Snapper" was acquired by defendant from the foreign Liquidation Commission. It was
a surplus property. It was a deep-sea tugboat that had been in the service of the United States Armed Forces
prior to its purchase by the Luzon Stevedoring Co. The tugboat was put into operation without first submitting it to
an overhaul in a dry-dock. It also appears that this tugboat had previously made several trips and each time it had
to obtain a special permit from the Bureau of Customs because it had never been dry-dock and did not have
complete equipment to be able to obtain the permanent permit. The special permits that were issued by said
Bureau specifically state that they were issued "pending submission of plans and load line certificate, including
test and final inspection of equipment." It futher appears that, when the tugboat was inspected by the Bureau of
Customs on October 18, 1946, it found it to be inadequately equipped and so the Bureau required defendant to
provide it with the requisite equipment but it was never able to complete it. The fact that the tugboat was a surplus
property, has not been dry-docked, and was not provided with the requisite equipment to make it seaworthy,
shows that defendant did not use reasonable diligence in putting the tugboat in such a condition as would make
its use safe for operation. It is true, as defendant contends, that there were then no dry-dock facilities in the
Philippines, but this does not mean that they could not be obtained elsewhere. It being a surplus property, a dry-
dock inspection was a must to put the tugboat in a sea going condition. It may also be true , as contended, that
the deficiency in the equipment was due to the fact that no such equipment was available at the time, but this did
not justify defendant in putting such tugboat in business even if unequipped merely to make a profit. Nor could the
fact that the tugboat was given a special permit by the Bureau of Customs to make the trip relieve defendant from
liability.

Where owner buys old tug, licensed coastwise, and equips it for ocean going, it is negligence to send tug
out without stability test, where history and performance with respect to crankiness and tenderness are
matters of official record. Sabine Towing Co. vs. Brennan, C.C.A. Tex., 72 F 2d 490, certiorari denied 55 S.
Ct. 141, 293 U.S. 632, 79 L. Ed. 717. (80 C.J. S. 803 Footnote).

There are other circumstances which show the lack of precaution and diligence taken by defendant to make the
travel of the tugboat safe. One is the failure to carry on board the necessary spare parts. When the idler was
broken, the engineer of the tugboat examined it for the first time and it was only then that he found that there were
no spare parts to use except a worn out spare driving chain. And the necessity of carrying such spare parts was
emphasized by the very defendant's winess, Mr. Depree, who said that in vessels motored by diesel engines it is
necessary always to carry spare chains, ball bearings and chain drives. And this was not done.

A tug engaged to tow a barge is liable for damage to the cargo of the barge caused by faulty equipment of
the tug. The Raleigh, D.C. Md. 50 F. Supp. 961. (80 C.J.S. Footnote.).

Another circumstance refers to the deficiency or incomplete in the man power of the tug boat. According to law, a
tugboat of the tonnage and powers of one like the "Snapper" is required to have a complement composed of one
first mate, one second mate, one third mate, one chief engineer, one second engineer, and one third engineer,
(section 1203, Revised Administrative Code), but when the trip in question was undertaken, it was only manned
by one master, who was merely licensed as a bay, river and lake patron, one second mate, who was licensed as a
third mate, oner chief engineer who was licensed as third motor engineer, one assistant engineer, who was
licensed as a bay, river, and lake motor engineer, and one second assistant engineer, who was unlicensed. The
employment of this crew to perform functions beyond its competence and qualifications is not onl;y risky but
against the law and if a mishap is caused, as in this case, one cannot but surmise that such incompetence has
something to do with the mishap. The fact that the tugboat had undertaken several trips before with practically the
same crew without any untoward consequence, cannot furnish any justification for continuing in its employ a
deficient or incompetent personnel contrary to law and the regulations of the Bureau of Customs.

(1) Generally, seaworthiness is that strength, durability and engineering skill made a part of a ship's
construction and continued maintenance, together with a competent and sufficient crew, which would
withstand the vicissitudes and dangers of the elements which might reasonably be expected or
encountered during her voyage without loss or damage to her particular cargo. The Cleveco, D.C. Ohio,
59 F. Supp. 71, 78, affirmed, C.C.A., 154 F. 2d 606. (80 C.J.S. 997, Footnote.).

Let us now come to the eeforts exerted by defendant in extending help to the tugboat when it was notified of the
breakage of the idler. The evidence shows that the idler was broken at about 3:00 o'clock in the morning of
February 4, 1947. Within a few minutes, a massage was sent to defendant by radio informing it of the engine
trouble. The weather was good until 12:00 o'clock noon when the wind started to blow. According to defendant,
since it received the message, it called up different shipping lines in Manila asking them if they had any vessel in
the vicinity where the "Snapper" stalled but, unfortunately, none was available at the time,and as its tug "Tamban"
was then docked in Batangas, Batangas, which was nearest to the place, it radioed said tug to go to the aid of the
"Snapper". Accordingly, the tug "Tamban" set sail from Batangas for the rescue only to return to secure a map of
the vicinity where the "Snapper" had stalled, which entailed a delay of two hours. In the meantime, the captain of
the "Snapper" attempted to cast anchor. The water areas off Elefante Island were deep and the anchor would not
touch bottom. Then the sea became rough and the waves increased in size and force and notwithstanding the
efforts of the crew to prevent the tug from drifting away, the force of the wind and the violence of the waves
dashed the tug and the barges against the rocks. The tug developed a hole in her hull and sank. The barge
carrying the gasoline was so badly damaged that the gasoline leaked out. The tug "Tamban" was finally able to
locate the "Snapper" but it was too late.

The foregoing acts only serve to emphasize that the efforts made by defeandant fall short of that diligence and
precaution that are demanded by the situation to save the tugboat and the barge it was towing from disaster for it
appears that more than twenty-four hours had elapsed befora the tug "Tamban" showed up to extend help. The
delay was caused not so much because of the lack of available ships in the vicinity where the "Snapper" stalled
but because defendant did not have in readiness any tugboat sufficient in tonnage and equipment to attend to the
rescue. The tug "Tamban" that was ordered to extend help was fully inadequate for the purpose. It was a small
vessel that was authorized to operate only within Manila Bay and did not even have any map of the Visayan
Islands. A public utility that is engaged in sea transportation even for a limited service with a fleet of 140 tugboats
should have a competent tug to rush for towing or repairs in the event of untoward happening overseas. If
defendant had only such a tug ready for such an emergency, this disaster would not have happened. Defendant
could have avoided sending a poorly equipped tug whic, as it is to be expected, failed to do job.

While the breaking of the idler may be due to an accident, or to something unexpected, the cause of the disaster
which resulted in the loss of the gasoline can only be attributed to the negligence or lack of precaution to avert it
on the part of defendant. Defendant had enough time to effectuate the rescue if it had only a competent tug for
the purpose because the weather was good from 3:00 o'clock a.m. to 12:00 o'clock noon of February 4, 1947 and
it was only in the afternoon that the wind began to blow with some intensity,1 but failed to do so because of that
shortcoming. The loss of the gasoline certainly cannot be said to be due to force majeure or unforeseen event but
to the failure of defendant to extend adequate and proper help. Considering these circumstances, and those we
have discussed elsewhere, we are persuaded to conclude that defendant has failed to established that it is
exempt from liability under the law.

Wherefore, the decision appealed from is reversed. Defendant is hereby ordered to pay to plaintiff the sum of
P75,578.50, with legal interest from the date of the filing of the complaint, with costs.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 101503 September 15, 1993

PLANTERS PRODUCTS, INC., petitioner,

vs.
COURT OF APPEALS, SORIAMONT STEAMSHIP AGENCIES AND KYOSEI KISEN KABUSHIKI
KAISHA, respondents.

Gonzales, Sinense, Jimenez & Associates for petitioner.

Siguion Reyna, Montecillo & Ongsiako Law Office for private respondents.

BELLOSILLO, J.:

Does a charter-party between a shipowner and a charterer transform a common carrier into a private one as to
1

negate the civil law presumption of negligence in case of loss or damage to its cargo?

Planters Products, Inc. (PPI), purchased from Mitsubishi International Corporation (MITSUBISHI) of New York,
U.S.A., 9,329.7069 metric tons (M/T) of Urea 46% fertilizer which the latter shipped in bulk on 16 June 1974
aboard the cargo vessel M/V "Sun Plum" owned by private respondent Kyosei Kisen Kabushiki Kaisha (KKKK)
from Kenai, Alaska, U.S.A., to Poro Point, San Fernando, La Union, Philippines, as evidenced by Bill of Lading
No. KP-1 signed by the master of the vessel and issued on the date of departure.

On 17 May 1974, or prior to its voyage, a time charter-party on the vessel M/V "Sun Plum" pursuant to the
Uniform General Charter was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner, in
2

Tokyo, Japan. Riders to the aforesaid charter-party starting from par. 16 to 40 were attached to the pre-printed
3

agreement. Addenda Nos. 1, 2, 3 and 4 to the charter-party were also subsequently entered into on the 18th,
20th, 21st and 27th of May 1974, respectively.

Before loading the fertilizer aboard the vessel, four (4) of her holds were all presumably inspected by the
4

charterer's representative and found fit to take a load of urea in bulk pursuant to par. 16 of the charter-party which
reads:

16. . . . At loading port, notice of readiness to be accomplished by certificate from National Cargo
Bureau inspector or substitute appointed by charterers for his account certifying the vessel's
readiness to receive cargo spaces. The vessel's hold to be properly swept, cleaned and dried at
the vessel's expense and the vessel to be presented clean for use in bulk to the satisfaction of the
inspector before daytime commences. (emphasis supplied)

After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the shipper, the
steel hatches were closed with heavy iron lids, covered with three (3) layers of tarpaulin, then tied with steel
bonds. The hatches remained closed and tightly sealed throughout the entire voyage. 5

Upon arrival of the vessel at her port of call on 3 July 1974, the steel pontoon hatches were opened with the use
of the vessel's boom. Petitioner unloaded the cargo from the holds into its steelbodied dump trucks which were
parked alongside the berth, using metal scoops attached to the ship, pursuant to the terms and conditions of the
charter-partly (which provided for an F.I.O.S. clause). The hatches remained open throughout the duration of the
6

discharge.7

Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was transported to the
consignee's warehouse located some fifty (50) meters from the wharf. Midway to the warehouse, the trucks were
made to pass through a weighing scale where they were individually weighed for the purpose of ascertaining the
net weight of the cargo. The port area was windy, certain portions of the route to the warehouse were sandy and
the weather was variable, raining occasionally while the discharge was in progress. The petitioner's warehouse
8

was made of corrugated galvanized iron (GI) sheets, with an opening at the front where the dump trucks entered
and unloaded the fertilizer on the warehouse floor. Tarpaulins and GI sheets were placed in-between and
alongside the trucks to contain spillages of the ferilizer. 9
It took eleven (11) days for PPI to unload the cargo, from 5 July to 18 July 1974 (except July 12th, 14th and
18th). A private marine and cargo surveyor, Cargo Superintendents Company Inc. (CSCI), was hired by PPI to
10

determine the "outturn" of the cargo shipped, by taking draft readings of the vessel prior to and after
discharge. The survey report submitted by CSCI to the consignee (PPI) dated 19 July 1974 revealed a shortage
11

in the cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating 18 M/T was contaminated with
dirt. The same results were contained in a Certificate of Shortage/Damaged Cargo dated 18 July 1974 prepared
by PPI which showed that the cargo delivered was indeed short of 94.839 M/T and about 23 M/T were rendered
unfit for commerce, having been polluted with sand, rust and
dirt.
12

Consequently, PPI sent a claim letter dated 18 December 1974 to Soriamont Steamship Agencies (SSA), the
resident agent of the carrier, KKKK, for P245,969.31 representing the cost of the alleged shortage in the goods
shipped and the diminution in value of that portion said to have been contaminated with dirt. 13

Respondent SSA explained that they were not able to respond to the consignee's claim for payment because,
according to them, what they received was just a request for shortlanded certificate and not a formal claim, and
that this "request" was denied by them because they "had nothing to do with the discharge of the
shipment." Hence, on 18 July 1975, PPI filed an action for damages with the Court of First Instance of Manila.
14

The defendant carrier argued that the strict public policy governing common carriers does not apply to them
because they have become private carriers by reason of the provisions of the charter-party. The court a
quo however sustained the claim of the plaintiff against the defendant carrier for the value of the goods lost or
damaged when it ruled thus: 15

. . . Prescinding from the provision of the law that a common carrier is presumed negligent in case
of loss or damage of the goods it contracts to transport, all that a shipper has to do in a suit to
recover for loss or damage is to show receipt by the carrier of the goods and to delivery by it of
less than what it received. After that, the burden of proving that the loss or damage was due to any
of the causes which exempt him from liability is shipted to the carrier, common or private he may
be. Even if the provisions of the charter-party aforequoted are deemed valid, and the defendants
considered private carriers, it was still incumbent upon them to prove that the shortage or
contamination sustained by the cargo is attributable to the fault or negligence on the part of the
shipper or consignee in the loading, stowing, trimming and discharge of the cargo. This they failed
to do. By this omission, coupled with their failure to destroy the presumption of negligence against
them, the defendants are liable (emphasis supplied).

On appeal, respondent Court of Appeals reversed the lower court and absolved the carrier from liability for the
value of the cargo that was lost or damaged. Relying on the 1968 case of Home Insurance Co. v. American
16

Steamship Agencies, Inc., the appellate court ruled that the cargo vessel M/V "Sun Plum" owned by private
17

respondent KKKK was a private carrier and not a common carrier by reason of the time charterer-party.
Accordingly, the Civil Code provisions on common carriers which set forth a presumption of negligence do not find
application in the case at bar. Thus —

. . . In the absence of such presumption, it was incumbent upon the plaintiff-appellee to adduce
sufficient evidence to prove the negligence of the defendant carrier as alleged in its complaint. It is
an old and well settled rule that if the plaintiff, upon whom rests the burden of proving his cause of
action, fails to show in a satisfactory manner the facts upon which he bases his claim, the
defendant is under no obligation to prove his exception or defense (Moran, Commentaries on the
Rules of Court, Volume 6, p. 2, citing Belen v. Belen, 13 Phil. 202).

But, the record shows that the plaintiff-appellee dismally failed to prove the basis of its cause of
action, i.e. the alleged negligence of defendant carrier. It appears that the plaintiff was under the
impression that it did not have to establish defendant's negligence. Be that as it may, contrary to
the trial court's finding, the record of the instant case discloses ample evidence showing that
defendant carrier was not negligent in performing its obligation . . . (emphasis supplied).
18

Petitioner PPI appeals to us by way of a petition for review assailing the decision of the Court of Appeals.
Petitioner theorizes that the Home Insurance case has no bearing on the present controversy because the issue
raised therein is the validity of a stipulation in the charter-party delimiting the liability of the shipowner for loss or
damage to goods cause by want of due deligence on its part or that of its manager to make the vessel seaworthy
in all respects, and not whether the presumption of negligence provided under the Civil Code applies only to
common carriers and not to private carriers. Petitioner further argues that since the possession and control of
19

the vessel remain with the shipowner, absent any stipulation to the contrary, such shipowner should made liable
for the negligence of the captain and crew. In fine, PPI faults the appellate court in not applying the presumption
of negligence against respondent carrier, and instead shifting the onus probandi on the shipper to show want of
due deligence on the part of the carrier, when he was not even at hand to witness what transpired during the
entire voyage.
As earlier stated, the primordial issue here is whether a common carrier becomes a private carrier by reason of a
charter-party; in the negative, whether the shipowner in the instant case was able to prove that he had exercised
that degree of diligence required of him under the law.

It is said that etymology is the basis of reliable judicial decisions in commercial cases. This being so, we find it
fitting to first define important terms which are relevant to our discussion.

A "charter-party" is defined as a contract by which an entire ship, or some principal part thereof, is let by the
owner to another person for a specified time or use; a contract of affreightment by which the owner of a ship or
20

other vessel lets the whole or a part of her to a merchant or other person for the conveyance of goods, on a
particular voyage, in consideration of the payment of freight; Charter parties are of two types: (a) contract of
21

affreightment which involves the use of shipping space on vessels leased by the owner in part or as a whole, to
carry goods for others; and, (b) charter by demise or bareboat charter, by the terms of which the whole vessel is
let to the charterer with a transfer to him of its entire command and possession and consequent control over its
navigation, including the master and the crew, who are his servants. Contract of affreightment may either be time
charter, wherein the vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship
is leased for a single voyage. In both cases, the charter-party provides for the hire of vessel only, either for a
22

determinate period of time or for a single or consecutive voyage, the shipowner to supply the ship's stores, pay for
the wages of the master and the crew, and defray the expenses for the maintenance of the ship.

Upon the other hand, the term "common or public carrier" is defined in Art. 1732 of the Civil Code. The definition
23

extends to carriers either by land, air or water which hold themselves out as ready to engage in carrying goods or
transporting passengers or both for compensation as a public employment and not as a casual occupation. The
distinction between a "common or public carrier" and a "private or special carrier" lies in the character of the
business, such that if the undertaking is a single transaction, not a part of the general business or occupation,
although involving the carriage of goods for a fee, the person or corporation offering such service is a private
carrier.
24

Article 1733 of the New Civil Code mandates that common carriers, by reason of the nature of their business,
should observe extraordinary diligence in the vigilance over the goods they carry. In the case of private carriers,
25

however, the exercise of ordinary diligence in the carriage of goods will suffice. Moreover, in the case of loss,
destruction or deterioration of the goods, common carriers are presumed to have been at fault or to have acted
negligently, and the burden of proving otherwise rests on them. On the contrary, no such presumption applies to
26

private carriers, for whosoever alleges damage to or deterioration of the goods carried has the onus of proving
that the cause was the negligence of the carrier.

It is not disputed that respondent carrier, in the ordinary course of business, operates as a common carrier,
transporting goods indiscriminately for all persons. When petitioner chartered the vessel M/V "Sun Plum", the ship
captain, its officers and compliment were under the employ of the shipowner and therefore continued to be under
its direct supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to the ship,
with the duty of caring for his cargo when the charterer did not have any control of the means in doing so. This is
evident in the present case considering that the steering of the ship, the manning of the decks, the determination
of the course of the voyage and other technical incidents of maritime navigation were all consigned to the officers
and crew who were screened, chosen and hired by the shipowner. 27

It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or
portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a
time-charter or voyage-charter. It is only when the charter includes both the vessel and its crew, as in a bareboat
or demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-
party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the
ship, although her holds may, for the moment, be the property of the charterer. 28

Respondent carrier's heavy reliance on the case of Home Insurance Co. v. American Steamship Agencies, supra,
is misplaced for the reason that the meat of the controversy therein was the validity of a stipulation in the charter-
party exempting the shipowners from liability for loss due to the negligence of its agent, and not the effects of a
special charter on common carriers. At any rate, the rule in the United States that a ship chartered by a single
shipper to carry special cargo is not a common carrier, does not find application in our jurisdiction, for we have
29

observed that the growing concern for safety in the transportation of passengers and /or carriage of goods by sea
requires a more exacting interpretation of admiralty laws, more particularly, the rules governing common carriers.

We quote with approval the observations of Raoul Colinvaux, the learned barrister-at-law — 30

As a matter of principle, it is difficult to find a valid distinction between cases in which a ship is used
to convey the goods of one and of several persons. Where the ship herself is let to a charterer, so
that he takes over the charge and control of her, the case is different; the shipowner is not then a
carrier. But where her services only are let, the same grounds for imposing a strict responsibility
exist, whether he is employed by one or many. The master and the crew are in each case his
servants, the freighter in each case is usually without any representative on board the ship; the
 same opportunities for fraud or collusion occur; and the same difficulty in discovering the truth as to
what has taken place arises . . .

In an action for recovery of damages against a common carrier on the goods shipped, the shipper or consignee
should first prove the fact of shipment and its consequent loss or damage while the same was in the possession,
actual or constructive, of the carrier. Thereafter, the burden of proof shifts to respondent to prove that he has
exercised extraordinary diligence required by law or that the loss, damage or deterioration of the cargo was due to
fortuitous event, or some other circumstances inconsistent with its liability.
31

To our mind, respondent carrier has sufficiently overcome, by clear and convincing proof, the prima
faciepresumption of negligence.

The master of the carrying vessel, Captain Lee Tae Bo, in his deposition taken on 19 April 1977 before the
Philippine Consul and Legal Attache in the Philippine Embassy in Tokyo, Japan, testified that before the fertilizer
was loaded, the four (4) hatches of the vessel were cleaned, dried and fumigated. After completing the loading of
the cargo in bulk in the ship's holds, the steel pontoon hatches were closed and sealed with iron lids, then
covered with three (3) layers of serviceable tarpaulins which were tied with steel bonds. The hatches remained
close and tightly sealed while the ship was in transit as the weight of the steel covers made it impossible for a
person to open without the use of the ship's boom. 32

It was also shown during the trial that the hull of the vessel was in good condition, foreclosing the possibility of
spillage of the cargo into the sea or seepage of water inside the hull of the vessel. When M/V "Sun Plum"
33

docked at its berthing place, representatives of the consignee boarded, and in the presence of a representative of
the shipowner, the foreman, the stevedores, and a cargo surveyor representing CSCI, opened the hatches and
inspected the condition of the hull of the vessel. The stevedores unloaded the cargo under the watchful eyes of
the shipmates who were overseeing the whole operation on rotation basis. 34

Verily, the presumption of negligence on the part of the respondent carrier has been efficaciously overcome by the
showing of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo. This was confirmed
by respondent appellate court thus —

. . . Be that as it may, contrary to the trial court's finding, the record of the instant case discloses
ample evidence showing that defendant carrier was not negligent in performing its obligations.
Particularly, the following testimonies of plaintiff-appellee's own witnesses clearly show absence of
negligence by the defendant carrier; that the hull of the vessel at the time of the discharge of the
cargo was sealed and nobody could open the same except in the presence of the owner of the
cargo and the representatives of the vessel (TSN, 20 July 1977, p. 14); that the cover of the
hatches was made of steel and it was overlaid with tarpaulins, three layers of tarpaulins and
therefore their contents were protected from the weather (TSN, 5 April 1978, p. 24); and, that to
open these hatches, the seals would have to be broken, all the seals were found to be intact (TSN,
20 July 1977, pp. 15-16) (emphasis supplied).

The period during which private respondent was to observe the degree of diligence required of it as a public
carrier began from the time the cargo was unconditionally placed in its charge after the vessel's holds were duly
inspected and passed scrutiny by the shipper, up to and until the vessel reached its destination and its hull was
reexamined by the consignee, but prior to unloading. This is clear from the limitation clause agreed upon by the
parties in the Addendum to the standard "GENCON" time charter-party which provided for an F.I.O.S., meaning,
that the loading, stowing, trimming and discharge of the cargo was to be done by the charterer, free from all risk
and expense to the carrier. Moreover, a shipowner is liable for damage to the cargo resulting from improper
35

stowage only when the stowing is done by stevedores employed by him, and therefore under his control and
supervision, not when the same is done by the consignee or stevedores under the employ of the latter. 36

Article 1734 of the New Civil Code provides that common carriers are not responsible for the loss, destruction or
deterioration of the goods if caused by the charterer of the goods or defects in the packaging or in the containers.
The Code of Commerce also provides that all losses and deterioration which the goods may suffer during the
transportation by reason of fortuitous event, force majeure, or the inherent defect of the goods, shall be for the
account and risk of the shipper, and that proof of these accidents is incumbent upon the carrier. The carrier,
37

nonetheless, shall be liable for the loss and damage resulting from the preceding causes if it is proved, as against
him, that they arose through his negligence or by reason of his having failed to take the precautions which usage
has established among careful persons. 38

Respondent carrier presented a witness who testified on the characteristics of the fertilizer shipped and the
expected risks of bulk shipping. Mr. Estanislao Chupungco, a chemical engineer working with Atlas Fertilizer,
described Urea as a chemical compound consisting mostly of ammonia and carbon monoxide compounds which
are used as fertilizer. Urea also contains 46% nitrogen and is highly soluble in water. However, during storage,
nitrogen and ammonia do not normally evaporate even on a long voyage, provided that the temperature inside the
hull does not exceed eighty (80) degrees centigrade. Mr. Chupungco further added that in unloading fertilizer in
bulk with the use of a clamped shell, losses due to spillage during such operation amounting to one percent (1%)
against the bill of lading is deemed "normal" or "tolerable." The primary cause of these spillages is the clamped
shell which does not seal very tightly. Also, the wind tends to blow away some of the materials during the
unloading process.

The dissipation of quantities of fertilizer, or its daterioration in value, is caused either by an extremely high
temperature in its place of storage, or when it comes in contact with water. When Urea is drenched in water, either
fresh or saline, some of its particles dissolve. But the salvaged portion which is in liquid form still remains potent
and usable although no longer saleable in its original market value.

The probability of the cargo being damaged or getting mixed or contaminated with foreign particles was made
greater by the fact that the fertilizer was transported in "bulk," thereby exposing it to the inimical effects of the
elements and the grimy condition of the various pieces of equipment used in transporting and hauling it.

The evidence of respondent carrier also showed that it was highly improbable for sea water to seep into the
vessel's holds during the voyage since the hull of the vessel was in good condition and her hatches were tightly
closed and firmly sealed, making the M/V "Sun Plum" in all respects seaworthy to carry the cargo she was
chartered for. If there was loss or contamination of the cargo, it was more likely to have occurred while the same
was being transported from the ship to the dump trucks and finally to the consignee's warehouse. This may be
gleaned from the testimony of the marine and cargo surveyor of CSCI who supervised the unloading. He
explained that the 18 M/T of alleged "bar order cargo" as contained in their report to PPI was just an
approximation or estimate made by them after the fertilizer was discharged from the vessel and segregated from
the rest of the cargo.

The Court notes that it was in the month of July when the vessel arrived port and unloaded her cargo. It rained
from time to time at the harbor area while the cargo was being discharged according to the supply officer of PPI,
who also testified that it was windy at the waterfront and along the shoreline where the dump trucks passed
enroute to the consignee's warehouse.

Indeed, we agree with respondent carrier that bulk shipment of highly soluble goods like fertilizer carries with it the
risk of loss or damage. More so, with a variable weather condition prevalent during its unloading, as was the case
at bar. This is a risk the shipper or the owner of the goods has to face. Clearly, respondent carrier has sufficiently
proved the inherent character of the goods which makes it highly vulnerable to deterioration; as well as the
inadequacy of its packaging which further contributed to the loss. On the other hand, no proof was adduced by
the petitioner showing that the carrier was remise in the exercise of due diligence in order to minimize the loss or
damage to the goods it carried.

WHEREFORE, the petition is DISMISSED. The assailed decision of the Court of Appeals, which reversed the trial
court, is AFFIRMED. Consequently, Civil Case No. 98623 of the then Court of the First Instance, now Regional
Trial Court, of Manila should be, as it is hereby DISMISSED.

Costs against petitioner.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-20761 July 27, 1966

LA MALLORCA, petitioner,
vs.
HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents.

G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.

Ahmed Garcia for respondents.

BARRERA, J.:

La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No. 23267-R, holding it liable for
quasi-delict and ordering it to pay to respondents Mariano Beltran, et al., P6,000.00 for the death of his minor
daughter Raquel Beltran, plus P400.00 as actual damages.

The facts of the case as found by the Court of Appeals, briefly are:

On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with their minor
daughters, namely, Milagros, 13 years old, Raquel, about 4½ years old, and Fe, over 2 years old, boarded
the Pambusco Bus No. 352, bearing plate TPU No. 757 (1953 Pampanga), owned and operated by the
defendant, at San Fernando, Pampanga, bound for Anao, Mexico, Pampanga. At the time, they were
carrying with them four pieces of baggages containing their personal belonging. The conductor of the bus,
who happened to be a half-brother of plaintiff Mariano Beltran, issued three tickets (Exhs. A, B, & C)
covering the full fares of the plaintiff and their eldest child, Milagros. No fare was charged on Raquel and
Fe, since both were below the height at which fare is charged in accordance with the appellant's rules and
regulations.

After about an hour's trip, the bus reached Anao whereat it stopped to allow the passengers bound
therefor, among whom were the plaintiffs and their children to get off. With respect to the group of the
plaintiffs, Mariano Beltran, then carrying some of their baggages, was the first to get down the bus,
followed by his wife and his children. Mariano led his companions to a shaded spot on the left pedestrians
side of the road about four or five meters away from the vehicle. Afterwards, he returned to the bus in
controversy to get his other bayong, which he had left behind, but in so doing, his daughter Raquel
followed him, unnoticed by her father. While said Mariano Beltran was on the running board of the bus
waiting for the conductor to hand him his bayong which he left under one of its seats near the door, the
bus, whose motor was not shut off while unloading, suddenly started moving forward, evidently to resume
its trip, notwithstanding the fact that the conductor has not given the driver the customary signal to start,
since said conductor was still attending to the baggage left behind by Mariano Beltran. Incidentally, when
the bus was again placed into a complete stop, it had travelled about ten meters from the point where the
plaintiffs had gotten off.

Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the running board
without getting his bayong from the conductor. He landed on the side of the road almost in front of the
shaded place where he left his wife and children. At that precise time, he saw people beginning to gather
around the body of a child lying prostrate on the ground, her skull crushed, and without life. The child was
none other than his daughter Raquel, who was run over by the bus in which she rode earlier together with
her parents.

For the death of their said child, the plaintiffs commenced the present suit against the defendant seeking
to recover from the latter an aggregate amount of P16,000 to cover moral damages and actual damages
sustained as a result thereof and attorney's fees. After trial on the merits, the court below rendered the
judgment in question.

On the basis of these facts, the trial court found defendant liable for breach of contract of carriage and sentenced
it to pay P3,000.00 for the death of the child and P400.00 as compensatory damages representing burial
expenses and costs.

On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach of contract in the case,
for the reason that when the child met her death, she was no longer a passenger of the bus involved in the
incident and, therefore, the contract of carriage had already terminated. Although the Court of Appeals sustained
this theory, 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. And, the Court of
Appeals did not only find the petitioner liable, but increased the damages awarded the plaintiffs-appellees to
P6,000.00, instead of P3,000.00 granted by the trial court.

In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in holding it liable for quasi-delict,
considering that respondents complaint was one for breach of contract, and (2) in raising the award of damages
from P3,000.00 to P6,000.00 although respondents did not appeal from the decision of the lower court.

Under the facts as found by the Court of Appeals, we have to sustain the judgement holding petitioner liable for
damages for the death of the child, Raquel Beltran. It may be pointed out that although it is true that respondent
Mariano Beltran, his wife, and their children (including the deceased child) had alighted from the bus at a place
designated for disembarking or unloading of passengers, it was also established that the father had to return to
the vehicle (which was still at a stop) to get one of his bags or bayong that was left under one of the seats of the
bus. There can be no controversy that as far as the father is concerned, when he returned to the bus for
his bayongwhich was not unloaded, the relation of passenger and carrier between him and the petitioner
remained subsisting. For, the relation of carrier and passenger does not necessarily cease where the latter, after
alighting from the car, aids the carrier's servant or employee in removing his baggage from the car. 1 The issue to
be determined here is whether as to the child, who was already led by the father to a place about 5 meters away
from the bus, the liability of the carrier for her safety under the contract of carriage also persisted.

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. Thus, a person who, after alighting from a train, walks along the station platform is considered still
a passenger.2 So also, where a passenger has alighted at his destination and is proceeding by the usual way to
leave the company's premises, but before actually doing so is halted by the report that his brother, a fellow
passenger, has been shot, and he in good faith and without intent of engaging in the difficulty, returns to relieve
his brother, he is deemed reasonably and necessarily delayed and thus continues to be a passenger entitled as
such to the protection of the railroad and company and its agents.3

In the present case, the father returned to the bus to get one of his baggages which was not unloaded when they
alighted from the bus. Raquel, the child that she was, must have followed the father. However, although the father
was still on the running board of the bus awaiting for the conductor to hand him the bag or bayong, the bus
started to run, so that even he (the father) had to jump down from the moving vehicle. It was at this instance that
the child, who must be near the bus, was run over and killed. In the circumstances, it cannot be claimed that the
carrier's agent had exercised the "utmost diligence" of a "very cautions person" required by Article 1755 of the
Civil Code to be observed by a common carrier in the discharge of its obligation to transport safely its passengers.
In the first place, 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.

But 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.
Paragraph 7 of the complaint, which reads —

That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs' daughter, was
caused by the negligence and want of exercise of the utmost diligence of a very cautious person on the
part of the defendants and their agent, necessary to transport plaintiffs and their daughter safely as far as
human care and foresight can provide in the operation of their vehicle.

is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict, while incompatible with the
other claim under the contract of carriage, is permissible under Section 2 of Rule 8 of the New Rules of Court,
which allows a plaintiff to allege causes of action in the alternative, be they compatible with each other or not, to
the end that the real matter in controversy may be resolved and determined.4

The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated when it was
alleged in the complaint that "the death of Raquel Beltran, plaintiffs' daughter, was caused by the negligence and
want of exercise of the utmost diligence of a very cautious person on the part of the defendants and their agent."
This allegation was also proved when it was established during the trial that the driver, even before receiving the
proper signal from the conductor, and while there were still persons on the running board of the bus and near it,
started to run off the vehicle. The presentation of proof of the negligence of its employee gave rise to the
presumption that the defendant employer did not exercise the diligence of a good father of the family in the
selection and supervision of its employees. And this presumption, as the Court of Appeals found, petitioner had
failed to overcome. Consequently, petitioner must be adjudged peculiarily liable for the death of the child Raquel
Beltran.
The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals, however, cannot be
sustained. Generally, the appellate court can only pass upon and consider questions or issues raised and argued
in appellant's brief. Plaintiffs did not appeal from that portion of the judgment of the trial court awarding them on
P3,000.00 damages for the death of their daughter. Neither does it appear that, as appellees in the Court of
Appeals, plaintiffs have pointed out in their brief the inadequacy of the award, or that the inclusion of the figure
P3,000.00 was merely a clerical error, in order that the matter may be treated as an exception to the general
rule.5Herein petitioner's contention, therefore, that the Court of Appeals committed error in raising the amount of
the award for damages is, evidently, meritorious. 1äwphï1.ñët

Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the petitioner to pay to the
respondents Mariano Beltran, et al., the sum of P3,000.00 for the death of the child, Raquel Beltran, and the
amount of P400.00 as actual damages. No costs in this instance. So ordered.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 84458 November 6, 1989

ABOITIZ SHIPPING CORPORATION, petitioner,

vs.
HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO VIANA and
GORGONIA VIANA, and PIONEER STEVEDORING CORPORATION, respondents.

Herenio E. Martinez for petitioner.

M.R. Villaluz Law Office for private respondent.

REGALADO, J.:

In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of the decision of respondent
1

Court of Appeals, dated July 29, 1988, the decretal portion of which reads:

WHEREFORE, the judgment appealed from as modified by the order of October 27, 1982, is
hereby affirmed with the modification that appellant Aboitiz Shipping is hereby ordered to pay
plaintiff-appellees the amount of P30,000.00 for the death of Anacleto Viana; actual damages of
P9,800.00; P150,000.00 for unearned income; P7,200.00 as support for deceased's parents;
P20,000.00 as moral damages; P10,000.00 as attorney's fees; and to pay the costs.

The undisputed facts of the case, as found by the court a quo and adopted by respondent court, are as follows: .

The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the vessel M/V Antonia,
owned by defendant, at the port at San Jose, Occidental Mindoro, bound for Manila, having
purchased a ticket (No. 117392) in the sum of P23.10 (Exh. 'B'). On May 12, 1975, said vessel
arrived at Pier 4, North Harbor, Manila, and the passengers therein disembarked, a gangplank
having been provided connecting the side of the vessel to the pier. Instead of using said gangplank
Anacleto Viana disembarked on the third deck which was on the level with the pier. After said
vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive control of the
cargoes loaded on said vessel pursuant to the Memorandum of Agreement dated July 26, 1975
(Exh. '2') between the third party defendant Pioneer Stevedoring Corporation and defendant Aboitiz
Shipping Corporation.

The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa
was placed alongside the vessel and one (1) hour after the passengers of said vessel had
disembarked, it started operation by unloading the cargoes from said vessel. While the crane was
being operated, Anacleto Viana who had already disembarked from said vessel obviously
remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and
it was while he was pointing to the crew of the said vessel to the place where his cargoes were
loaded that the crane hit him, pinning him between the side of the vessel and the crane. He was
thereafter brought to the hospital where he later expired three (3) days thereafter, on May 15,
1975, the cause of his death according to the Death Certificate (Exh. "C") being "hypostatic
pneumonia secondary to traumatic fracture of the pubic bone lacerating the urinary bladder" (See
also Exh. "B"). For his hospitalization, medical, burial and other miscellaneous expenses,
Anacleto's wife, herein plaintiff, spent a total of P9,800.00 (Exhibits "E", "E-1", to "E-5"). Anacleto
Viana who was only forty (40) years old when he met said fateful accident (Exh. 'E') was in good
health. His average annual income as a farmer or a farm supervisor was 400 cavans of palay
annually. His parents, herein plaintiffs Antonio and Gorgonia Viana, prior to his death had been
recipient of twenty (20) cavans of palay as support or P120.00 monthly. Because of Anacleto's
death, plaintiffs suffered mental anguish and extreme worry or moral damages. For the filing of the
instant case, they had to hire a lawyer for an agreed fee of ten thousand (P10,000.00) pesos. 2

Private respondents Vianas filed a complaint for damages against petitioner corporation (Aboitiz, for brevity) for
3

breach of contract of carriage.

In its answer. Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely
4

under the control of respondent Pioneer Stevedoring Corporation (Pioneer, for short) as the exclusive stevedoring
contractor of Aboitiz, which handled the unloading of cargoes from the vessel of Aboitiz. It is also averred that
since the crane operator was not an employee of Aboitiz, the latter cannot be held liable under the fellow-servant
rule.

Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint against Pioneer imputing liability thereto for
5

Anacleto Viana's death as having been allegedly caused by the negligence of the crane operator who was an
employee of Pioneer under its exclusive control and supervision.

Pioneer, in its answer to the third-party complaint, raised the defenses that Aboitiz had no cause of action against
6

Pioneer considering that Aboitiz is being sued by the Vianas for breach of contract of carriage to which Pioneer is
not a party; that Pioneer had observed the diligence of a good father of a family both in the selection and
supervision of its employees as well as in the prevention of damage or injury to anyone including the victim
Anacleto Viana; that Anacleto Viana's gross negligence was the direct and proximate cause of his death; and that
the filing of the third-party complaint was premature by reason of the pendency of the criminal case for homicide
through reckless imprudence filed against the crane operator, Alejo Figueroa.

In a decision rendered on April 17, 1980 by the trial court, Aboitiz was ordered to pay the Vianas for damages
7

incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter paid the Vianas. The
dispositive portion of said decision provides:

WHEREFORE, judgment is hereby rendered in favor of the plantiffs:

(1) ordering defendant Aboitiz Shipping Corporation to pay to plaintiffs the sum of P12,000.00 for
the death of Anacleto Viana P9,800.00 as actual damages; P533,200.00 value of the 10,664
cavans of palay computed at P50.00 per cavan; P10,000.00 as attorney's fees; F 5,000.00, value
of the 100 cavans of palay as support for five (5) years for deceased (sic) parents, herein plaintiffs
Antonio and Gorgonia Viana computed at P50.00 per cavan; P7,200.00 as support for deceased's
parents computed at P120.00 a month for five years pursuant to Art. 2206, Par. 2, of the Civil
Code; P20,000.00 as moral damages, and costs; and

(2) ordering the third party defendant Pioneer Stevedoring Corporation to reimburse defendant and
third party plaintiff Aboitiz Shipping Corporation the said amounts that it is ordered to pay to herein
plaintiffs.

Both Aboitiz and Pioneer filed separate motions for reconsideration wherein they similarly raised the trial court's
failure to declare that Anacleto Viana acted with gross negligence despite the overwhelming evidence presented
in support thereof. In addition, Aboitiz alleged, in opposition to Pioneer's motion, that under the memorandum of
agreement the liability of Pioneer as contractor is automatic for any damages or losses whatsoever occasioned by
and arising from the operation of its arrastre and stevedoring service.

In an order dated October 27, 1982, the trial court absolved Pioneer from liability for failure of the Vianas and
8

Aboitiz to preponderantly establish a case of negligence against the crane operator which the court a quo ruled is
never presumed, aside from the fact that the memorandum of agreement supposedly refers only to Pioneer's
liability in case of loss or damage to goods handled by it but not in the case of personal injuries, and, finally that
Aboitiz cannot properly invoke the fellow-servant rule simply because its liability stems from a breach of contract
of carriage. The dispositive portion of said order reads:

WHEREFORE, judgment is hereby modified insofar as third party defendant Pioneer Stevedoring
Corporation is concerned rendered in favor of the plaintiffs-,:

(1) Ordering defendant Aboitiz Shipping Corporation to pay the plaintiffs the sum of P12,000.00 for
the death of Anacleto Viana; P9,000.00 (sic) as actual damages; P533,200.00 value of the 10,664
cavans of palay computed at P50.00 per cavan; P10,000.00 as attorney's fees; P5,000.00 value of
the 100 cavans of palay as support for five (5) years for deceased's parents, herein plaintiffs
Antonio and Gorgonia Viana,computed at P50.00 per cavan; P7,200.00 as support for deceased's
parents computed at P120.00 a month for five years pursuant to Art. 2206, Par. 2, of the Civil
Code; P20,000.00 as moral damages, and costs; and

(2) Absolving third-party defendant Pioneer Stevedoring Corporation for (sic) any liability for the
death of Anacleto Viana the passenger of M/V Antonia owned by defendant third party plaintiff
Aboitiz Shipping Corporation it appearing that the negligence of its crane operator has not been
established therein.

Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to respondent Court of
Appeals which affirmed the findings of of the trial court except as to the amount of damages awarded to the
Vianas.

Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:
 (A) In holding that the doctrine laid down by this honorable Court in La Mallorca vs. Court of
Appeals, et al. (17 SCRA 739, July 27, 1966) is applicable to the case in the face of the
undisputable fact that the factual situation under the La Mallorca case is radically different from the
facts obtaining in this case;

(B) In holding petitioner liable for damages in the face of the finding of the court a quo and
confirmed by the Honorable respondent court of Appeals that the deceased, Anacleto Viana was
guilty of contributory negligence, which, We respectfully submit contributory negligence was the
proximate cause of his death; specifically the honorable respondent Court of Appeals failed to
apply Art. 1762 of the New Civil Code;

(C) In the alternative assuming the holding of the Honorable respondent Court of Appears that
petitioner may be legally condemned to pay damages to the private respondents we respectfully
submit that it committed a reversible error when it dismissed petitioner's third party complaint
against private respondent Pioneer Stevedoring Corporation instead of compelling the latter to
reimburse the petitioner for whatever damages it may be compelled to pay to the private
respondents Vianas. 9

At threshold, it is to be observed that both the trial court and respondent Court of Appeals found the victim
Anacleto Viana guilty of contributory negligence, but holding that it was the negligence of Aboitiz in prematurely
turning over the vessel to the arrastre operator for the unloading of cargoes which was the direct, immediate and
proximate cause of the victim's death.

I. Petitioner contends that since one (1) hour had already elapsed from the time Anacleto Viana disembarked from
the vessel and that he was given more than ample opportunity to unload his cargoes prior to the operation of the
crane, his presence on the vessel was no longer reasonable e and he consequently ceased to be a passenger.
Corollarily, it insists that the doctrine in La Mallorca vs. Court of Appeals, et al. is not applicable to the case at
10

bar.

The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of
destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily
11

terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or
had a reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a
reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a
reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time
to see after his baggage and prepare for his departure. The carrier-passenger relationship is not terminated
12

merely by the fact that the person transported has been carried to his destination if, for example, such person
remains in the carrier's premises to claim his baggage. 13

It was in accordance with this rationale that the doctrine in the aforesaid case of La Mallorca was enunciated, to
wit:

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. Thus, a person who, after alighting
from a train, walks along the station platform is considered still a passenger. So also, where a
passenger has alighted at his destination and is proceeding by the usual way to leave the
company's premises, but before actually doing so is halted by the report that his brother, a fellow
passenger, has been shot, and he in good faith and without intent of engaging in the difficulty,
returns to relieve his brother, he is deemed reasonably and necessarily delayed and thus continues
to be a passenger entitled as such to the protection of the railroad company and its agents.

In the present case, the father returned to the bus to get one of his baggages which was not
unloaded when they alighted from the bus. Racquel, the child that she was, must have followed the
father. However, although the father was still on the running board of the bus waiting for the
conductor to hand him the bag or bayong, the bus started to run, so that even he (the father) had
to jump down from the moving vehicle. It was at this instance that the child, who must be near the
bus, was run over and killed. In the circumstances, it cannot be claimed that the carrier's agent had
exercised the 'utmost diligence' of a 'very cautious person' required by Article 1755 of the Civil
Code to be observed by a common carrier in the discharge of its obligation to transport safely its
passengers. ... 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.14

It is apparent from the foregoing that what prompted the Court to rule as it did in said case is the fact of the
passenger's reasonable presence within the carrier's premises. That reasonableness of time should be made to
depend on the attending circumstances of the case, such as the kind of common carrier, the nature of its
business, the customs of the place, and so forth, and therefore precludes a consideration of the time element per
se without taking into account such other factors. It is thus of no moment whether in the cited case of La
Mallorca there was no appreciable interregnum for the passenger therein to leave the carrier's premises whereas
in the case at bar, an interval of one (1) hour had elapsed before the victim met the accident. 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
petitioner's vessel. We believe there exists such a justifiable cause.

It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers of
vessels are allotted a longer period of time to disembark from the ship than other common carriers such as a
passenger bus. With respect to the bulk of cargoes and the number of passengers it can load, such vessels are
capable of accommodating a bigger volume of both as compared to the capacity of a regular commuter bus.
Consequently, a ship passenger will need at least an hour as is the usual practice, to disembark from the vessel
and claim his baggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a very
short period of time. Verily, petitioner cannot categorically claim, through the bare expedient of comparing the
period of time entailed in getting the passenger's cargoes, that the ruling in La Mallorca is inapplicable to the case
at bar. On the contrary, if we are to apply the doctrine enunciated therein to the instant petition, we cannot in
reason doubt that the victim Anacleto Viana was still a passenger at the time of the incident. When the accident
occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from petitioner's
vessel. As earlier stated, a carrier is duty bound not only to bring its passengers safely to their destination but also
to afford them a reasonable time to claim their baggage.

It is not definitely shown that one (1) hour prior to the incident, the victim had already disembarked from the
vessel. Petitioner failed to prove this. What is clear to us is that at the time the victim was taking his cargoes, the
vessel had already docked an hour earlier. In consonance with common shipping procedure as to the minimum
time of one (1) hour allowed for the passengers to disembark, it may be presumed that the victim had just gotten
off the vessel when he went to retrieve his baggage. Yet, even if he had already disembarked an hour earlier, his
presence in petitioner's premises was not without cause. The victim had to claim his baggage which was possible
only one (1) hour after the vessel arrived since it was admittedly standard procedure in the case of petitioner's
vessels that the unloading operations shall start only after that time. Consequently, under the foregoing
circumstances, the victim Anacleto Viana is still deemed a passenger of said carrier at the time of his tragic death.

II. Under the law, common carriers are, from the nature of their business and for reasons of public policy, 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. More particularly, a common carrier is bound to carry
15

the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances. Thus, where a passenger dies or is injured, the common
16

carrier is presumed to have been at fault or to have acted negligently. This gives rise to an action for breach of
17

contract of carriage where all that is required of plaintiff is to prove the existence of the contract of carriage and its
non-performance by the carrier, that is, the failure of the carrier to carry the passenger safely to his
destination, which, in the instant case, necessarily includes its failure to safeguard its passenger with
18

extraordinary diligence while such relation subsists.

The presumption is, therefore, established by law that in case of a passenger's death or injury the operator of the
vessel was at fault or negligent, having failed to exercise extraordinary diligence, and it is incumbent upon it to
rebut the same. This is in consonance with the avowed policy of the State to afford full protection to the
passengers of common carriers which can be carried out only by imposing a stringent statutory obligation upon
the latter. Concomitantly, this Court has likewise adopted a rigid posture in the application of the law by exacting
the highest degree of care and diligence from common carriers, bearing utmost in mind the welfare of the
passengers who often become hapless victims of indifferent and profit-oriented carriers. We cannot in reason
deny that petitioner failed to rebut the presumption against it. Under the facts obtaining in the present case, it
cannot be gainsaid that petitioner had inadequately complied with the required degree of diligence to prevent the
accident from happening.

As found by the Court of Appeals, the evidence does not show that there was a cordon of drums around the
perimeter of the crane, as claimed by petitioner. It also adverted to the fact that the alleged presence of visible
warning signs in the vicinity was disputable and not indubitably established. Thus, we are not inclined to accept
petitioner's explanation that the victim and other passengers were sufficiently warned that merely venturing into
the area in question was fraught with serious peril. Definitely, even assuming the existence of the supposed
cordon of drums loosely placed around the unloading area and the guard's admonitions against entry therein,
these were at most insufficient precautions which pale into insignificance if considered vis-a-vis the gravity of the
danger to which the deceased was exposed. There is no showing that petitioner was extraordinarily diligent in
requiring or seeing to it that said precautionary measures were strictly and actually enforced to subserve their
purpose of preventing entry into the forbidden area. By no stretch of liberal evaluation can such perfunctory acts
approximate the "utmost diligence of very cautious persons" to be exercised "as far as human care and foresight
can provide" which is required by law of common carriers with respect to their passengers.
While the victim was admittedly contributorily negligent, still petitioner's aforesaid failure to exercise extraordinary
diligence was the proximate and direct cause of, because it could definitely have prevented, the former's death.
Moreover, in paragraph 5.6 of its petition, at bar, petitioner has expressly conceded the factual finding of
19

respondent Court of Appeals that petitioner did not present sufficient evidence in support of its submission that the
deceased Anacleto Viana was guilty of gross negligence. Petitioner cannot now be heard to claim otherwise.

No excepting circumstance being present, we are likewise bound by respondent court's declaration that there was
no negligence on the part of Pioneer Stevedoring Corporation, a confirmation of the trial court's finding to that
effect, hence our conformity to Pioneer's being absolved of any liability.

As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged gross negligence of the victim,
hence its present contention that the death of the passenger was due to the negligence of the crane operator
cannot be sustained both on grounds, of estoppel and for lack of evidence on its present theory. Even in its
answer filed in the court below it readily alleged that Pioneer had taken the necessary safeguards insofar as its
unloading operations were concerned, a fact which appears to have been accepted by the plaintiff therein by not
impleading Pioneer as a defendant, and likewise inceptively by Aboitiz by filing its third-party complaint only after
ten (10) months from the institution of the suit against it. Parenthetically, Pioneer is not within the ambit of the rule
on extraordinary diligence required of, and the corresponding presumption of negligence foisted on, common
carriers like Aboitiz. This, of course, does not detract from what we have said that no negligence can be imputed
to Pioneer but, that on the contrary, the failure of Aboitiz to exercise extraordinary diligence for the safety of its
passenger is the rationale for our finding on its liability.

WHEREFORE, the petition is DENIED and the judgment appealed from is hereby AFFIRMED in toto.

SO ORDERED.
G.R. No. 135645 March 8, 2002

THE PHILIPPINE AMERICAN GENERAL INSURANCE CO., INC., petitioner,

vs.
MGG MARINE SERVICES, INC. and DOROTEO GAERLAN, respondents.

KAPUNAN, J.:

This petition for review seeks the reversal of the Decision, dated September 23, 1998, of the Court of Appeals in
CA-G.R. CV No. 43915,1 which absolved private respondents MCG Marine Services, Inc. and Doroteo Gaerlan of
any liability regarding the loss of the cargo belonging to San Miguel Corporation due to the sinking of the M/V
Peatheray Patrick-G owned by Gaerlan with MCG Marine Services, Inc. as agent.

On March 1, 1987, San Miguel Corporation insured several beer bottle cases with an aggregate value of
P5,836,222.80 with petitioner Philippine American General Insurance Company.2 The cargo were loaded on board
the M/V Peatheray Patrick-G to be transported from Mandaue City to Bislig, Surigao del Sur.

After having been cleared by the Coast Guard Station in Cebu the previous day, the vessel left the port of
Mandaue City for Bislig, Surigao del Sur on March 2, 1987. The weather was calm when the vessel started its
voyage.

The following day, March 3, 1987, M/V Peatheray Patrick-G listed and subsequently sunk off Cawit Point, Cortes,
Surigao del Sur. As a consequence thereof, the cargo belonging to San Miguel Corporation was lost.

Subsequently, San Miguel Corporation claimed the amount of its loss from petitioner.

Upon petitioner's request, on March 18, 1987, Mr. Eduardo Sayo, a surveyor from the Manila Adjusters and
Surveyors Co., went to Taganauan Island, Cortes, Surigao del Sur where the vessel was cast ashore, to
investigate the circumstances surrounding the loss of the cargo. In his report, Mr. Sayo stated that the vessel was
structurally sound and that he did not see any damage or crack thereon. He concluded that the proximate cause
of the listing and subsequent sinking of the vessel was the shifting of ballast water from starboard to portside. The
said shifting of ballast water allegedly affected the stability of the M/V Peatheray Patrick-G.

Thereafter, petitioner paid San Miguel Corporation the full amount of P5,836,222.80 pursuant to the terms of their
insurance contract. 1âwphi1.nêt

On November 3, 1987, petitioner as subrogee of San Miguel Corporation filed with the Regional Trial Court (RTC)
of Makati City a case for collection against private respondents to recover the amount it paid to San Miguel
Corporation for the loss of the latter's cargo.

Meanwhile, the Board of Marine Inquiry conducted its own investigation of the sinking of the M/V Peatheray
Patrick-G to determine whether or not the captain and crew of the vessel should be held responsible for the
incident.3 On May 11, 1989, the Board rendered its decision exonerating the captain and crew of the ill-fated
vessel for any administrative liability. It found that the cause of the sinking of the vessel was the existence of
strong winds and enormous waves in Surigao del Sur, a fortuitous event that could not have been for seen at the
time the M/V Peatheray Patrick-G left the port of Mandaue City. It was further held by the Board that said
fortuitous event was the proximate and only cause of the vessel's sinking.

On April 15, 1993, the RTC of Makati City, Branch 134, promulgated its Decision finding private respondents
solidarily liable for the loss of San Miguel Corporation's cargo and ordering them to pay petitioner the full amount
of the lost cargo plus legal interest, attorney's fees and costs of suit.4

Private respondents appealed the trial court's decision to the Court of Appeals. On September 23, 1998, the
appellate court issued the assailed Decision, which reversed the ruling of the RTC. It held that private
respondents could not be held liable for the loss of San Miguel Corporation's cargo because said loss occurred as
a consequence of a fortuitous event, and that such fortuitous event was the proximate and only cause of the loss.5

Petitioner thus filed the present petition, contending that:

(A)

IN REVERSING AND SETTING ASIDE THE DECISION OF RTC BR. 134 OF MAKATI CITY ON THE
BASIS OF THE FINDINGS OF THE BOARD OF MARINE INQUIRY, APPELLATE COURT DECIDED THE
CASE AT BAR NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE
HONORABLE COURT;

(B)
 IN REVERSING THE TRIAL COURT'S DECISION, THE APPELLATE COURT GRAVELY ERRED IN
CONTRADICTING AND IN DISTURBING THE FINDINGS OF THE FORMER;

(C)

THE APPELLATE COURT GRAVELY ERRED IN REVERSING THE DECISION OF THE TRIAL COURT
AND IN DISMISSING THE COMPLAINT. 6

Common carriers, from the nature of their business and for reasons of public policy, are mandated to observe
extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them.7Owing to this high degree of diligence required of them, common carriers, as a general rule, are presumed
to have been at fault or negligent if the goods transported by them are lost, destroyed or if the same deteriorated.8

However, this presumption of fault or negligence does not arise in the cases enumerated under Article 1734 of the
Civil Code:

Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same
is due to any of the following causes only:

(1) Flood, storm, earthquake, lightning or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.

In order that a common carrier may be absolved from liability where the loss, destruction or deterioration of the
goods is due to a natural disaster or calamity, it must further be shown that the such natural disaster or calamity
was the proximate and only cause of the loss;9 there must be "an entire exclusion of human agency from the
cause of the injury of the loss."10

Moreover, even in cases where a natural disaster is the proximate and only cause of the loss, a common carrier is
still required to exercise due diligence to prevent or minimize loss before, during and after the occurrence of the
natural disaster, for it to be exempt from liability under the law for the loss of the goods. 11 If a common carrier fails
to exercise due diligence--or that ordinary care which the circumstances of the particular case demand12 -- to
preserve and protect the goods carried by it on the occasion of a natural disaster, it will be deemed to have been
negligent, and the loss will not be considered as having been due to a natural disaster under Article 1734 (1).

In the case at bar, the issues may be narrowed down to whether the loss of the cargo was due to the occurrence
of a natural disaster, and if so, whether such natural disaster was the sole and proximate cause of the loss or
whether private respondents were partly to blame for failing to exercise due diligence to prevent the loss of the
cargo.

The parties do not dispute that on the day the M/V Peatheray Patrick-G sunk, said vessel encountered strong
winds and huge waves ranging from six to ten feet in height. The vessel listed at the port side and eventually sunk
at Cawit Point, Cortes, Surigao del Sur.

The Court of Appeals, citing the decision of the Board of Marine Inquiry in the administrative case against the
vessel's crew (BMI--646-87), found that the loss of the cargo was due solely to the existence of a fortuitous event,
particularly the presence of strong winds and huge waves at Cortes, Surigao del Sur on March 3, 1987:

xxx

III. WHAT WAS THE PROXIMATE CAUSE OF SINKING?

Evidence shows that when "LCT Peatheray Patrick-G" left the port of Mandawe, Cebu for Bislig, Surigao
del Sur on March 2, 1987 the Captain had observed the fair atmospheric condition of the area of the pier
and confirmed this good weather condition with the Coast Guard Detachment of Mandawe City. However,
on March 3, 1987 at about 10:00 o'clock in the evening, when the vessel had already passed Surigao
Strait. the vessel started to experience waves as high as 6 to 7 feet and that the Northeasterly wind was
blowing at about five (5) knot velocity. At about 11:00 o'clock P.M. when the vessel was already about 4.5
miles off Cawit Point, Cortes, Surigao del Sur, the vessel was discovered to be listing 15 degrees to port
side and that the strength of the wind had increased to 15 knots and the waves were about ten (10) feet
high [Ramilo TSN 10-27-87 p. 32). Immediately thereafter, emergency measures were taken by the crew.
 The officers had suspected that a leak or crack might had developed at the bottom hull particularly below
one or two of the empty wing tanks at port side serving as buoyancy tanks resulting in ingress of sea water
in the tanks was confirmed when the Captain ordered to use the cargo pump. The suction valves to the
said tanks of port side were opened in order to suck or draw out any amount of water that entered into the
tanks. The suction pressure of the pump had drawn out sea water in large quantity indicating therefore,
that a leak or crack had developed in the hull as the vessel was continuously batted and pounded by the
huge waves. Bailing out of the water through the pump was done continuously in an effort of the crew to
prevent the vessel from sinking. but then efforts were in vain. The vessel still continued to list even more
despite the continuous pumping and discharging of sea water from the wing tanks indicating that the
amount of the ingress of sea water was greater in volume that that was being discharged by the pump.
Considering therefore, the location of the suspected source of the ingress of sea water which was a crack
or hole at the bottom hull below the buoyancy tank's port side which was not accessible (sic) for the crew
to check or control the flow of sea water into the said tank. The accumulation of sea water aggravated by
the continuous pounding, rolling and pitching of the vessel against huge waves and strong northeasterly
wind, the Captain then had no other recourse except to order abandonship to save their lives.13

The presence of a crack in the ill-fated vessel through which water seeped in was confirmed by the Greutzman
Divers who were commissioned by the private respondents to conduct an underwater survey and inspection of
the vessel to determine the cause and circumstances of its sinking. In its report, Greutzman Divers stated that
"along the port side platings, a small hole and two separate cracks were found at about midship."14

The findings of the Board of Marine Inquiry indicate that the attendance of strong winds and huge waves while the
M/V Peatheray Patrick-G was sailing through Cortes, Surigao del Norte on March 3, 1987 was indeed fortuitous. A
fortuitous event has been defined as one which could not be foreseen, or which though foreseen, is
inevitable.15 An event is considered fortuitous if the following elements concur:

xxx (a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with
his obligations, must be independent of human will; (b) it must be impossible to foresee the event which
constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the occurrence
must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d)
the obligor must be free from any participation in the aggravation of the injury resulting to the creditor. xxx16

In the case at bar, it was adequately shown that before the M/V Peatheray Patrick-G left the port of Mandaue City,
the Captain confirmed with the Coast Guard that the weather condition would permit the safe travel of the vessel
to Bislig, Surigao del Sur. Thus, he could not be expected to have foreseen the unfavorable weather condition that
awaited the vessel in Cortes, Surigao del Sur. It was the presence of the strong winds and enormous waves
which caused the vessel to list, keel over, and consequently lose the cargo contained therein. The appellate court
likewise found that there was no negligence on the part of the crew of the M/V Peatheray Patrick-G, citing the
following portion of the decision of the Board of Marine Inquiry:

I. WAS LCT PEATHERAY PATRICK-G SEAWORTHY WHEN SHE LEFT THE PORT OF MANDAWE,
CEBU AND AT THE TIME OF SINKING?

Evidence clearly shows that the vessel was propelled with three (3) diesel engines of 250 BHP each or a
total of 750 BHP. It had three (3) propellers which were operating satisfactorily from the time the vessel left
the port of Mandawe up to the time when the hull on the double bottom tank was heavily floaded (sic) by
uncontrollable entry of sea water resulting in the stoppage of engines. The vessel was also equipped with
operating generator pumps for emergency cases. This equipment was also operating satisfactorily up to
the time when the engine room was heavily floaded (sic) with sea water. Further, the vessel had
undergone emergency drydocking and repair before the accident occurred (sic) on November 9, 1986 at
Trigon Shipyard, San Fernando, Cebu as shown by the billing for the Drydocking and Repair and
certificate of Inspection No. 2588-86 issued by the Philippine coast Guard on December 5, 1986 which
expired on November 8, 1987.

LCT Peatheray Patrick-G was skippered by Mr. Manuel P. Ramilo, competent and experienced licensed
Major Patron who had been in command of the vessel for more than three (3) years from July 1984 up to
the time of sinking March 3, 1987. His Chief Mate Mr. Mariano Alalin also a licensed Major Patron had
been the Chief Mate of " LCT Peatheray Patrick-G" for one year and three months at the time of the
accident. Further Chief Mate Alalin had commanded a tanker vessel named M/T Mercedes of MGM
Corporation for almost two (2) years from 1983-1985 (Alalin TSN-4-13-88 pp. 32-33).

That the vessel was granted SOLAS clearance by the Philippine Coast Guard on March 1, 1987 to depart
from Mandawe City for Bislig, Surigao del Sur as evidenced by a certification issued to D.C. Gaerlan Oil
Products by Coast Guard Station Cebu dated December 23, 1987. 1âwphi1.nêt

Based on the foregoing circumstances, "LCT Peatheray Patrick-G" should be considered seaworthy
vessel at the time she undertook that fateful voyage on March 2, 1987.
 To be seaworthy, a vessel must not only be staunch and fit in the hull for the voyage to be undertaken but
also must be properly equipped and for that purpose there is a duty upon the owner to provide a
competent master and a crew adequate in number and competent for their duty and equals in disposition
and seamanship to the ordinary in that calling. (Ralph 299 F-52, 1924 AMC 942). American President 2td
v. Ren Fen Fed 629. AMC 1723 LCA 9 CAL 1924).17

Overloading was also eliminated as a possible cause of the sinking of the vessel, as the evidence showed that its
freeboard clearance was substantially greater than the authorized freeboard clearance.18

Although the Board of Marine Inquiry ruled only on the administrative liability of the captain and crew of the M/V
Peatheray Patrick-G, it had to conduct a thorough investigation of the circumstances surrounding the sinking of
the vessel and the loss of its cargo in order to determine their responsibility, if any. The results of its investigation
as embodied in its decision on the administrative case clearly indicate that the loss of the cargo was due solely to
the attendance of strong winds and huge waves which caused the vessel accumulate water, tilt to the port side
and to eventually keel over. There was thus no error on the part of the Court of Appeals in relying on the factual
findings of the Board of Marine Inquiry, for such factual findings, being supported by substantial evidence are
persuasive, considering that said administrative body is an expert in matters concerning marine casualties.19

Since the presence of strong winds and enormous waves at Cortes, Surigao del Sur on March 3, 1987 was
shown to be the proximate and only cause of the sinking of the M/V Peatheray Patrick-G and the loss of the cargo
belonging to San Miguel Corporation, private respondents cannot be held liable for the said loss.

WHEREFORE, the assailed Decision of the Court of Appeals is hereby AFFIRMED and the petition is
hereby DENIED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 52159 December 22, 1989

JOSE PILAPIL, petitioner,

vs.
HON. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, INC., respondents.

Martin Badong, Jr. for petitioner.

Eufronio K. Maristela for private respondent.

PADILLA, J.:

This is a petition to review on certiorari the decision* rendered by the Court of Appeals dated 19 October 1979 in
CA-G.R. No. 57354-R entitled "Jose Pilapil, plaintiff-appellee versus Alatco Transportation Co., Inc., defendant-
appellant," which reversed and set aside the judgment of the Court of First Instance of Camarines Sur in Civil
Case No. 7230 ordering respondent transportation company to pay to petitioner damages in the total sum of
sixteen thousand three hundred pesos (P 16,300.00).

The record discloses the following facts:

Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded respondent-defendant's bus bearing No. 409 at San
Nicolas, Iriga City on 16 September 1971 at about 6:00 P.M. While said bus No. 409 was in due course
negotiating the distance between Iriga City and Naga City, 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 petitioner above his left eye. Private
respondent's personnel lost no time in bringing the petitioner to the provincial hospital in Naga City where he was
confined and treated.

Considering that the sight of his left eye was impaired, petitioner was taken to Dr. Malabanan of Iriga City where
he was treated for another week. Since there was no improvement in his left eye's vision, petitioner went to V.
Luna Hospital, Quezon City where he was treated by Dr. Capulong. Despite the treatment accorded to him by Dr.
Capulong, petitioner lost partially his left eye's vision and sustained a permanent scar above the left eye.

Thereupon, petitioner instituted before the Court of First Instance of Camarines Sur, Branch I an action for
recovery of damages sustained as a result of the stone-throwing incident. After trial, the court a quo rendered
judgment with the following dispositive part:

Wherefore, judgment is hereby entered:

1. Ordering defendant transportation company to pay plaintiff Jose Pilapil the sum of
P 10,000.00, Philippine Currency, representing actual and material damages for
causing a permanent scar on the face and injuring the eye-sight of the plaintiff;

2. Ordering further defendant transportation company to pay the sum of P 5,000.00,

Philippine Currency, to the plaintiff as moral and exemplary damages;

3. Ordering furthermore, defendant transportation company to reimburse plaintiff the

sum of P 300.00 for his medical expenses and attorney's fees in the sum of P
1,000.00, Philippine Currency; and

4. To pay the costs.

SO ORDERED 1

From the judgment, private respondent appealed to the Court of Appeals where the appeal was docketed as CA-
G.R. No. 57354R. On 19 October 1979, the Court of Appeals, in a Special Division of Five, rendered judgment
reversing and setting aside the judgment of the court a quo.

Hence the present petition.

In seeking a reversal of the decision of the Court of Appeals, petitioner contends that said court has decided the
issue not in accord with law. Specifically, petitioner argues that the nature of the business of a transportation
company requires the assumption of certain risks, and the stoning of the bus by a stranger resulting in injury to
petitioner-passenger is one such risk from which the common carrier may not exempt itself from liability.

We do not agree.

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.

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. The requirement of
extraordinary diligence imposed upon common carriers is restated in Article 1755: "A common carrier is bound to
carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very
cautious persons, with due regard for all the circumstances." Further, in case of death of or injuries to passengers,
the law presumes said common carriers to be at fault or to have acted negligently. 2

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. 3

Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance and precaution in the carriage of
passengers by common carriers to only such as human care and foresight can provide. what constitutes
compliance with said duty is adjudged with due regard to all the circumstances.

Article 1756 of the Civil Code, in creating a presumption of fault or negligence on the part of the common carrier
when its passenger is injured, merely relieves the latter, for the time being, from introducing evidence to fasten the
negligence on the former, because the presumption stands in the place of evidence. Being a mere presumption,
however, the same is rebuttable by proof that the common carrier had exercised extraordinary diligence as
required by law in the performance of its contractual obligation, or that the injury suffered by the passenger was
solely due to a fortuitous event.4

In fine, we can only infer from the law the intention of the Code Commission and Congress to curb the
recklessness of drivers and operators of common carriers in the conduct of their business.

Thus, it is clear that neither the law nor the nature of the business of a transportation company makes it an insurer
of the passenger's safety, but that its liability for personal injuries sustained by its passenger rests upon its
negligence, its failure to exercise the degree of diligence that the law requires.5

Petitioner contends that respondent common carrier failed to rebut the presumption of negligence against it by
proof on its part that it exercised extraordinary diligence for the safety of its passengers.

We do not agree.

First, as stated earlier, the presumption of fault or negligence against the carrier is only a disputable presumption.
It gives in where contrary facts are established proving either that the carrier had exercised the degree of
diligence required by law or the injury suffered by the passenger was due to a fortuitous event. Where, as in the
instant case, the injury sustained by the petitioner was in no way due to any defect in the means of transport or in
the method of transporting or to the negligent or willful acts of private respondent's employees, and therefore
involving no issue of negligence in its duty to provide safe and suitable cars as well as competent employees, with
the injury arising wholly from causes created by strangers over which the carrier had no control or even
knowledge or could not have prevented, the presumption is rebutted and the carrier is not and ought not to be
held liable. To rule otherwise would make the common carrier the insurer of the absolute safety of its passengers
which is not the intention of the lawmakers.

Second, while as a general rule, common carriers are bound to exercise extraordinary diligence in the safe
transport of their passengers, it would seem that this is not the standard by which its liability is to be determined
when intervening acts of strangers is to be determined directly cause the injury, while the contract of carriage
Article 1763 governs:

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

Petitioner has charged respondent carrier of negligence on the ground that the injury complained of could have
been prevented by the common carrier if something like mesh-work grills had covered the windows of its bus.

We do not agree.

Although the suggested precaution could have prevented the injury complained of, the rule of ordinary care and
prudence is not so exacting as to require one charged with its exercise to take doubtful or unreasonable
precautions to guard against unlawful acts of strangers. The carrier is not charged with the duty of providing or
maintaining vehicles as to absolutely prevent any and all injuries to passengers. Where the carrier uses cars of
the most approved type, in general use by others engaged in the same occupation, and exercises a high degree
of care in maintaining them in suitable condition, the carrier cannot be charged with negligence in this respect. 6

Finally, petitioner 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, we are 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.

WHEREFORE, the judgment appealed from is hereby AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 119756 March 18, 1999

FORTUNE EXPRESS, INC., petitioner,

vs.
COURT OF APPEALS, PAULIE U.CAORONG, and minor childrenYASSER KING CAORONG, ROSE HEINNI
and PRINCE ALEXANDER, all surnamed CAORONG, and represented by their mother PAULIE U.
CAORONG, respondents.

MENDOZA, J.:

This is an appeal by petition for review on certiorari of the decision, dated July 29, 1994, of the Court of Appeals,
which reversed the decision of the Regional Trial Court, Branch VI, Iligan City. The aforesaid decision of the trial
court dismissed the complaint of public respondents against petitioner for damages for breach of contract of
carriage filed on the ground that petitioner had not exercised the required degree of diligence in the operation of
one of its buses. Atty. Talib Caorong, whose heirs are private respondents herein, was a passenger of the bus and
was killed in the ambush involving said bus.

The facts of the instant case are as follows:

Petitioner is a bus company in northern Mindanao. Private respondent Paulie Caorong is the widow of Atty.
Caorong, while private respondents Yasser King, Rose Heinni, and Prince Alexander are their minor children.

On November 18, 1989, a bus of petitioner figured in an accident with a jeepney in Kauswagan, Lanao del Norte,
resulting in the death of several passengers of the jeepney, including two Maranaos. Crisanto Generalao, a
volunteer field agent of the Constabulary Regional Security Unit No. X, conducted an investigation of the accident.
He found that the owner of the jeepney was a Maranao residing in Delabayan, Lanao del Norte and that certain
Maranaos were planning to take revenge on the petitioner by burning some of its buses. Generalao rendered a
report on his findings to Sgt. Reynaldo Bastasa of the Philippine Constabulary Regional Headquarters at Cagayan
de Oro. Upon the instruction of Sgt. Bastasa, he went to see Diosdado Bravo, operations manager of petitioner,
its main office in Cagayan de Oro City. Bravo assured him that the necessary precautions to insure the safety of
lives and property would be taken. 1

At about 6:45 P.M. on November 22, 1989, three armed Maranaos who pretended to be passengers, seized a bus
of petitioner at Linamon, Lanao del Norte while on its way to Iligan City. Among the passengers of the bus was
Atty. 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. The one of the companions of Mananggolo started pouring gasoline inside
the bus, as the other held the passenger at bay with a handgun. Mananggolo then ordered the passenger to get
off the bus. The passengers, including Atty. Caorong, stepped out of the bus and went behind the bushes in a field
some distance from the highway. 2

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 the
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. Larry de la Cruz, one of the passengers, saw that Atty.
Caorong was hit. 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. 3

The private respondents brought this suit for breach of contract of carriage in the Regional Trial Court, Branch VI,
Iligan City. In its decision, dated December 28, 1990, the trial court dismissed the complaint, holding as follows:

The fact that defendant, through Operations Manager Diosdado Bravo, was informed of the
"rumors" that the Moslems intended to take revenge by burning five buses of defendant is
established since the latter also utilized Crisanto Generalao as a witness. Yet despite this
 information, the plaintiffs charge, defendant did not take proper precautions. . . . Consequently,
plaintiffs now fault the defendant for ignoring the report. Their position is that the defendant should
have provided its buses with security guards. Does the law require common carriers to install
security guards in its buses for the protection and safety of its passengers? Is the failure to post
guards on omission of the duty to "exercise the diligence of a good father of the family" which could
have prevented the killing of Atty. Caorong? To our mind, the diligence demanded by law does not
include the posting of security guard in buses. It is an obligation that properly belongs to the State.
Besides, will the presence of one or two security guards suffice to deter a determined assault of the
lawless and thus prevent the injury complained of? Maybe so, but again, perhaps not. In other
words, the presence of a security guard is not a guarantee that the killing of Atty. Caorong would
have been definitely avoided.

xxx xxx xxx

Accordingly, the failure of defendant to accord faith and credit to the report of Mr. Generalao and
the fact that it did not provide security to its buses cannot, in the light of the circumstances, be
characterized as negligence.

Finally, the evidence clearly shows that the assalants did not have the least intention of the
harming any of the passengers. They ordered all the passengers to alight and set fire on the bus
only after all the passengers were out of danger. The death of Atty. Caorong was an unexpected
and unforseen occurrense over which defendant had no control. Atty. Caorong performed an act of
charity and heroism in coming to the succor of the driver even in the face of danger. He deserves
the undying gratitude of the driver whose life he saved. No one should blame him for an act of
extraordinary charity and altruism which cost his life. But neither should any blame be laid on the
doorstep of defendant. His death was solely due to the willfull acts of the lawless which defendant
could neither prevent nor to stop.

WHEREFORE, in view of the foregoing, the complaint is hereby dismissed. For lack of merit, the
counter-claim is likewise dismissed. No costs. 4

On appeal, however, the Court of Appeals reversed. It held:

In the case at bench, how did defendant-appellee react to the tip or information that certain
Maranao hotheads were planning to burn five of its buses out of revenge for the deaths of two
Maranaos in an earlier collision involving appellee's bus? Except for the remarks of appellee's
operations manager that "we will have our action . . . . and I'll be the one to settle it personally,"
nothing concrete whatsoever was taken by appellee or its employees to prevent the execution of
the threat. Defendant-appellee never adopted even a single safety measure for the protection of its
paying passengers. Were there available safeguards? Of course, there were: one was frisking
passengers particularly those en route to the area where the threats were likely to be carried out
such as where the earlier accident occurred or the place of influence of the victims or their locality.
If frisking was resorted to, even temporarily, . . . . appellee might be legally excused from liabilty.
Frisking of passengers picked up along the route could have been implemented by the bus
conductor; for those boarding at the bus terminal, frisking could have been conducted by him and
perhaps by additional personnel of defendant-appellee. On hindsight, the handguns and especially
the gallon of gasoline used by the felons all of which were brought inside the bus would have been
discovered, thus preventing the burning of the bus and the fatal shooting of the victim.

Appellee's argument that there is no law requiring it to provide guards on its buses and that the
safety of citizens is the duty of the government, is not well taken. To be sure, appellee is not
expected to assign security guards on all its buses; if at all, it has the duty to post guards only on
its buses plying predominantly Maranaos areas. As discussed in the next preceding paragraph,
least appellee could have done in response to the report was to adopt a system of verification such
as the frisking of passengers boarding at its buses. Nothing, and no repeat, nothing at all, was
done by defendant-appellee to protect its innocent passengers from the danger arising from the
"Maranao threats." It must be observed that frisking is not a novelty as a safety measure in our
society. Sensitive places — in fact, nearly all important places — have applied this method of
security enhancement. Gadgets and devices are avilable in the market for this purpose. It would
not have weighed much against the budget of the bus company if such items were made available
to its personnel to cope up with situations such as the "Maranaos threats."

In view of the constitutional right to personal privacy, our pronouncement in this decision should not
be construed as an advocacy of mandatory frisking in all public conveyances. What we are saying
is that given the circumstances obtaining in the case at bench that: (a) two Maranaos died because
of a vehicular collision involving one of appellee's vehicles; (b) appellee received a written report
from a member of the Regional Security Unit, Constabulary Security Group, that the tribal/ethnic
group of the two deceased were planning to burn five buses of appellee out of revenge; and (c)
 appelle did nothing — absolutely nothing — for the safety of its passengers travelling in the area of
influence of the victims, appellee has failed to exercise the degree of dilegence required of
common carriers. Hence, appellee must be adjudge liable.

xxx xxx xxx

WHEREFORE the decision appealed from is hereby REVERSED and another rendered ordering
defendant-appellee to pay plaintiffs-appellants the following:

1) P3,399,649.20 as death indemnity;

2) P50,000.00 and P500.00 per appearance as attorney's fee and

Costs against defendant-appellee. 5

Hence, this appeal. Petitioner contends:

(A) THAT PUBLIC RESPONDENT ERRED IN REVERSING THE

DECISION OF THE REGIONAL TRIAL COURT DATED DECEMBER
28, 1990 DISMISSING THE COMPLAINT AS WELL AS THE
COUNTERCLAIM, AND FINDING FOR PRIVATE RESPONDENTS
BY ORDERING PETITIONER TO PAY THE GARGANTUAN SUM OF
P3,449,649.20 PLUS P500.00 PER APPEARANCE AS
ATTORNEY'S FEES, AS WELL AS DENYING PETITIONERS
MOTION FRO RECONSIDERATION AND THE SUPPLEMENT TO
SAID MOTION, WHILE HOLDING, AMONG OTHERS, THAT THE
PETITIONER BREACHED THE CONTRACT OF THE CARRIAGE
BY ITS FAILURE TO EXCERCISE THE REQUIRED DEGREE OF
DILIGENCE;

(B) THAT THE ACTS OF THE MARANAO OUTLAWS WERE SO

GRAVE, IRRESISTABLE, VIOLENT, AND FORCEFULL, AS TO BE
REGARDED AS CASO FORTUITO; AND

(C) THAT PUBLIC RESPONDENT COURT OF APPEALS

SERIOUSLY ERRED IN HOLDING THAT PETITIONER COULD
HAVE PROVIDED ADEQUATE SECURITY IN PREDOMINANTLY
MUSLIM AREAS AS PART OF ITS DUTY TO OBSERVE EXTRA-
ORDINARY DILIGENCE AS A COMMON CARRIER.

The instant has no merit.

First. Petitioner's Breach of the Contract of Carriage.

Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on
account of wilfull acts of other passengers, if the employees of the common carrier could have prevented the act
through the exercise of the diligence of a good father of a family. In the present case, it is clear that because of
the negligence of petitioner's employees, the seizure of the bus by Mananggolo and his men was made possible.

Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take
revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager,
Diosdado Bravo, that the necessary precautions would be taken, petitioner did nothing to protect the safety of its
passengers.

Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large
quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of
passengers, such as frisking passengers and inspecting their baggages, preferably with non-intrusive gadgets
such as metal detectors, before allowing them on board could have been employed without violating the
passenger's constitutional rights. As this Court amended in Gacal v. Philippine Air Lines, Inc., a common carrier
6

can be held liable for failing to prevent a hijacking by frisking passengers and inspecting their baggages.

From the foregoing, it is evident that petitioner's employees failed to prevent the attack on one of petitioner's
buses because they did not exercise the diligence of a good father of a family. Hence, petitioner should be held
liable for the death of Atty. Caorong.

Second. Seizure of Petitioner's Bus not a Case of Force Majeure

The petitioner contends that the seizure of its bus by the armed assailants was a fortuitous event for which it
could not be held liable.

Art. 1174 of the Civil Code defines a fortuitous event as an occurence which could not be foreseen, is inevitable.
In Yobido v. Court of Appeals, we held that to considered as force majeure, it is necessary that (1) the cause of
7

the breach of the obligation must be independent of the human will; (2) the event must be either unforeseeable or
unavoidable; (3) the occurence must be render it impossible for the debtor to fulfill the obligation in a normal
manner; and (4) the obligor must be free of participation in, or aggravation of, the injury to the creditor. The
absence of any of the requisites mentioned above would prevent the obligor from being excused from liability.

Thus, in Vasquez v. Court of Appeals, it was held that the common carrier was liable for its failure to take the
8

necessary precautions against an approaching typhoon, of which it was warned, resulting in the loss of the lives
of several passengers. The event was forseeable, and, thus, the second requisite mentioned above was not
fulfilled. This ruling applies by analogy to the present case. Despite the report of PC agent Generalao that the
Maranaos were going to attack its buses, petitioner took no steps to safeguard the lives and properties of its
passengers. The seizure of the bus of the petitioner was foreseeable and, therefore, was not a fortuitous event
which would exempt petitioner from liabilty.

Petitioner invokes the ruling in Pilapil v. Court of Appeals, and De Guzman v. Court of Appeals, in support of its
9 10

contention that the seizure of its bus by the assailants constitutes force majeure. In Pilapil v. Court of Appeals, it
11

was held that a common carrier is not liable for failing to install window grills on its buses to protect the
passengers from injuries cause by rocks hurled at the bus by lawless elements. On the other hand, in De
Guzman v. Court of Appeals, it was ruled that a common carriers is not responsible for goods lost as a result of
12

a robbery which is attended by grave or irresistable threat, violence, or force.

It is clear that the cases of Pilapil and De Guzman do not apply to the prensent case. Art. 1755 of the Civil Code
provides that "a common carrier is bound to carry the passengers as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due regard for all the circumstances." Thus, we held in
Pilapil and De Guzman that the respondents therein were not negligent in failing to take special precautions
against threats to the safety of passengers which could not be foreseen, such as tortious or criminal acts of third
persons. In the present case, this factor of unforeseeability (the second requisite for an event to be considered
force majeure) is lacking. As already stated, despite the report of PC agent Generalao that the Maranaos were
planning to burn some of petitioner's buses and the assurance of petitioner's operation manager (Diosdado
Bravo) that the necessary precautions would be taken, nothing was really done by petitioner to protect the safety
of passengers.

Third. Deceased not Guilty of Contributory Negligence

The petitioner contends that Atty. Caorong was guilty of contributory negligence in returning to the bus to retrieve
something. But Atty. Caorong did not act recklessly. It should be pointed out that the intended targets of the
violence were petitioners and its employees, not its passengers. The assailant's motive was to retaliate for the
loss of life of two Maranaos as a result of the collision between petitioner's bus and the jeepney in which the two
Maranaos were riding. Mananggolo, the leader of the group which had hijacked the bus, ordered the passengers
to get off the bus as they intended to burn it and its driver. The armed men actually allowed Atty. Caorong to
retrieve something from the bus. What apparently angered them was his attempt to help the driver of the bus by
pleading for his life. He was playing the role of the good Samaritan. Certainly, this act cannot considered an act of
negligence, let alone recklessness.

Fourth. Petitioner Liable to Private Respaondents for Damages

We now consider the question of damages that the heirs of Atty. Caorong, private respondents herein, are entitled
to recover from the petitioner.

Indemnity for Death. Art. 1764 of the Civil Code, in relation to Art. 2206 thereof, provides for the payment of
indemnity for the death of passengers caused by the breach of contract of carriage by a common carrier. Initially
fixed in Art. 2206 at P3,000.00, the amount of the said indemnity for death has through the years been gradually
increased in view of the declining value of the peso. It is presently fixed at P50,000.00. Private respondents are
13

entitled to this amount.

Actual Damages. Art. 2199 provides that "except as provided by law or by stipulation, one is entitled to an
adequate compensation only for such pecuniary loss suffered by him as has duly proved." The trial court found
that the private respondents spent P30,000.00 for the wake and burial of Atty. Caorong. Since petitioner does
14

not question this finding of the trial court, it is liable to private respondent in the said amount as actual damages.

Moral Damages. Under Art. 2206, the "spouse, legitimate and illegitimate descendants and ascendants of the
deceased may demand moral damages for mental anguish by reason of the death of the deceased." The trial
court found that private respondent Paulie Caorong suffered pain from the death of her husband and worry on
how to provide support for their minor children, private respondents Yasser King, Rose Heinni, and Prince
Alexander. The petitioner likewise does not question this finding of the trial court. Thus, in accordance with
15

recent decisions of this Court, we hold that the petitioner is liable to the private respondents in the amount of
16

P100,000.00 as moral damages for the death of Atty. Caorong.

Exemplary Damages. Art. 2232 provides that "in contracts and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent reckless manner." In
the present case, the petitioner acted in a wanton and reckless manner. Despite warning that the Maranaos were
planning to take revenge against the petitioner by burning some of its buses, and contary to the assurance made
by its operations manager that the necessary precautions would be take, the petitioner and its employees did
nothing to protect the safety of passengers. Under the circumtances, we deem it reasonable to award private
respondents exemplary damages in the amount of P100,000.00. 17

Attorney's Fees. Pursuant to Art. 2208, attorney's fees may be recovered when, as in the instant case, exemplary
damages are awarded. In the recent case of Sulpicio Lines, Inc. v. Court of Appeals, we held an award of
18

P50,000.00 as attorney's fees to be reasonable. Hence, the private respondents are entitled to attorney's fees in
that amount.

Compensation for Loss of Earning Capacity. Art. 1764 of the Civil Code, in relation to Art. 2206 thereof, provides
that in addition to the indemnity for death arising from the breach of contrtact of carriage by a common carrier, the
"defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to
the heirs of the latter." The formula established in decided cases for computing net earning capacity is as follows:19

Gross Necessary

Net Earning = Life x Annual — Living

Capacity Expectancy Income Expenses

Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of eighty (80) and the age of the
deceased. Since Atty. Caorong was 37 years old at that time of his death, he had a life expectancy of 28 2/3
20 21

more years. His projected gross annual income, computed based on his monthly salary of P11,385.00. as a
22 23

lawyer in the Department of Agrarian Reform at the time of his death, was P148,005.00. Allowing for necessary
24

living expenses of fifty percent (50%) of his projected gross annual income, his total earning capacity amounts to
25

P2,121,404.90. Hence, the petitioner is liable to the private respondents in the said amount as a compensation
26

for loss of earning capacity.

WHEREFORE, the decision, dated July 29, 1994, of the Court of Appeals is hereby AFFIRMED with the
MODIFICATION that petitioner Fortune Express, Inc. is ordered to pay the following amounts to private
respondents Paulie, Yasser King, Rose Heinni, and Prince Alexander Caorong:

1. death indemnity in the amount of fifty thousand pesos (P50,000.00);

2. actual damages in the amount of thirty thousand pesos (P30,000.00);

3. moral damages in the amount of one hundred thousand pesos (P100,000.00);

4. exemplary damages in the amount of one hundred thousand pesos (P100,000.00);

5. attorney's fees in the amount of fifty thousand pesos (P50,000.00);

6. compensation for loss of earning capacity in the amount of two million one hundred twenty-one thousand four
hundred four pesos and ninety centavos (P2,121,404.90); and

7. cost of suits.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-45637 May 31, 1985

ROBERTO JUNTILLA, petitioner,

vs.
CLEMENTE FONTANAR, FERNANDO BANZON and BERFOL CAMORO, respondents.

Valentin A. Zozobrado for petitioner.

Ruperto N. Alfarara for respondents.

GUTIERREZ, JR., J.:

This is a petition for review, on questions of law, of the decision of the Court of First Instance of Cebu which
reversed the decision of the City Court of Cebu and exonerated the respondents from any liability arising from a
vehicular accident.

The background facts which led to the filing of a complaint for breach of contract and damages against the
respondents are summarized by the Court of First Instance of Cebu as follows:

The facts established after trial show that the plaintiff was a passenger of the public utility jeepney
bearing plate No. PUJ-71-7 on the course of the trip from Danao City to Cebu City. The jeepney
was driven by defendant Berfol Camoro. It was registered under the franchise of defendant
Clemente Fontanar but was actually owned by defendant Fernando Banzon. When the jeepney
reached Mandaue City, the right rear tire exploded causing the vehicle to turn turtle. In the process,
the plaintiff who was sitting at the front seat was thrown out of the vehicle. Upon landing on the
ground, the plaintiff momentarily lost consciousness. When he came to his senses, he found that
he had a lacerated wound on his right palm. Aside from this, he suffered injuries on his left arm,
right thigh and on his back. (Exh. "D"). Because of his shock and injuries, he went back to Danao
City but on the way, he discovered that his "Omega" wrist watch 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. In spite of the efforts of his father-in-law, the wrist watch, which he bought for P 852.70
(Exh. "B") could no longer be found.

xxx xxx xxx

Petitioner Roberto Juntilla filed Civil Case No. R-17378 for breach of contract with damages before the City Court
of Cebu City, Branch I against Clemente Fontanar, Fernando Banzon and Berfol Camoro.

The respondents filed their answer, alleging inter alia that the accident that caused losses to the petitioner was
beyond the control of the respondents taking into account that the tire that exploded was newly bought and was
only slightly used at the time it blew up.

After trial, Judge Romulo R. Senining of the Civil Court of Cebu rendered judgment in favor of the petitioner and
against the respondents. The dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendants and
the latter are hereby ordered, jointly and severally, to pay the plaintiff the sum of P750.00 as
reimbursement for the lost Omega wrist watch, the sum of P246.64 as unrealized salary of the
plaintiff from his employer, the further sum of P100.00 for the doctor's fees and medicine, an
additional sum of P300.00 for attorney's fees and the costs.

The respondents appealed to the Court of First Instance of Cebu, Branch XIV.

Judge Leonardo B. Canares reversed the judgment of the City Court of Cebu upon a finding that the accident in
question was due to a fortuitous event. The dispositive portion of the decision reads:
 WHEREFORE, judgment is hereby rendered exonerating the defendants from any liability to the
plaintiff without pronouncement as to costs.

A motion for reconsideration was denied by the Court of First Instance.

The petitioner raises the following alleged errors committed by the Court of First Instance of Cebu on appeal—

a. The Honorable Court below committed grave abuse of discretion in failing to take cognizance of
the fact that defendants and/or their employee failed to exercise "utmost and/or extraordinary
diligence" required of common carriers contemplated under Art. 1755 of the Civil Code of the
Philippines.

b. The Honorable Court below committed grave abuse of discretion by deciding the case contrary
to the doctrine laid down by the Honorable Supreme Court in the case of Necesito et al. v. Paras,
et al.

We find the petition impressed with merit.

The City Court and the Court of First Instance of Cebu found that the right rear tire of the passenger jeepney in
which the petitioner was riding blew up causing the vehicle to fall on its side. The petitioner questions the
conclusion of the respondent court drawn from this finding of fact.

The Court of First Instance of Cebu erred when it absolved the carrier from any liability upon a finding that the tire
blow out is a fortuitous event. The Court of First Instance of Cebu ruled that:

After reviewing the records of the case, this Court finds that the accident in question was due to a
fortuitous event. A tire blow-out, such as what happened in the case at bar, is an inevitable
accident that exempts the carrier from liability, there being absence of a showing that there was
misconduct or negligence on the part of the operator in the operation and maintenance of the
vehicle involved. The fact that the right rear tire exploded, despite being brand new, constitutes a
clear case of caso fortuito which can be a proper basis for exonerating the defendants from liability.
...

The Court of First Instance relied on the ruling of the Court of Appeals in Rodriguez v. Red Line Transportation
Co., CA G.R. No. 8136, December 29, 1954, where the Court of Appeals ruled that:

A tire blow-out does not constitute negligence unless the tire was already old and should not have
been used at all. Indeed, this would be a clear case of fortuitous event.

The foregoing conclusions of the Court of First Instance of Cebu are based on a misapprehension of overall facts
from which a conclusion should be drawn. The reliance of the Court of First Instance on the Rodriguez case is not
in order. In La Mallorca and Pampanga Bus Co. v. De Jesus, et al. (17 SCRA 23), we held that:

Petitioner maintains that a tire blow-out is a fortuitous event and gives rise to no liability for
negligence, citing the rulings of the Court of Appeals in Rodriguez v. Red Line Transportation Co.,
CA G.R. No. 8136, December 29, 1954, and People v. Palapad, CA-G.R. No. 18480, June 27,
1958. These rulings, however, not only are not binding on this Court but were based on
considerations quite different from those that obtain in the case at bar. The appellate court there
made no findings of any specific acts of negligence on the part of the defendants and confined
itself to the question of whether or not a tire blow-out, by itself alone and without a showing as to
the causative factors, would generate liability. ...

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.
In Lasam v. Smith (45 Phil. 657), we laid down the following essential characteristics of caso fortuito:

xxx xxx xxx

... In a legal sense and, consequently, also in relation to contracts, a caso fortuito presents the
following essential characteristics: (1) The cause of the unforeseen and unexpected occurrence, or
of the failure of the debtor to comply with his obligation, must be independent of the human will. (2)
It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor)
must be free from any participation in the aggravation of the injury resulting to the creditor.
(5 Encyclopedia Juridica Espanola, 309.)

In the case at bar, the cause of the unforeseen and unexpected occurrence was not independent of the human
will. The accident was caused either through the negligence of the driver or because of mechanical defects in the
tire. Common carriers should teach their drivers not to overload their vehicles, not to exceed safe and legal speed
limits, and to know the correct measures to take when a tire blows up thus insuring the safety of passengers at all
times. Relative to the contingency of mechanical defects, we held in Necesito, et al. v. Paras, et al. (104 Phil. 75),
that:

... 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' (10 Am. Jur. 205, s, 1324; see also Pennsylvania R. Co. v.
Roy, 102 U.S. 451; 20 L. Ed. 141; Southern R. Co. v. Hussey, 74 ALR 1172; 42 Fed. 2d 70; and Ed
Note, 29 ALR 788.: Ann. Cas. 1916E 929).

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 an 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. ...

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

The respondents likewise argue that the petitioner cannot recover any amount for failure to prove such damages
during the trial. The respondents submit that if the petitioner was really injured, why was he treated in Danao City
and not in Mandaue City where the accident took place. The respondents argue that the doctor who issued the
medical certificate was not presented during the trial, and hence not cross-examined. The respondents also claim
that the petitioner was not wearing any wrist watch during the accident.

It should be noted that the City Court of Cebu found that the petitioner had a lacerated wound on his right palm
aside from injuries on his left arm, right thigh and on his back, and that on his way back to Danao City, he
discovered that his "Omega" wrist watch was lost. These are findings of facts of the City Court of Cebu which we
find no reason to disturb. More so when we consider the fact that the Court of First Instance of Cebu impliedly
concurred in these matters when it confined itself to the question of whether or not the tire blow out was a
fortuitous event.

WHEREFORE, the decision of the Court of First Instance of Cebu, Branch IV appealed from is hereby
REVERSED and SET ASIDE, and the decision of the City Court of Cebu, Branch I is REINSTATED, with the
modification that the damages shall earn interest at 12% per annum and the attorney's fees are increased to SIX
HUNDRED PESOS (P600.00). Damages shall earn interests from January 27, 1975.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-19495 February 2, 1924

HONORIO LASAM, ET AL., plaintiffs-appellants,

vs.
FRANK SMITH, JR., defendant-appellant.

Palma and Leuterio for plaintiffs-appellants.

Mariano Alisangco for defendant-appellant.

OSTRAND, J.:

The plaintiff are husband and wife and this action is brought to recover damages in the sum of P20,000 for
physical injuries sustained by them in an automobile accident. The trial court rendered a judgment in their favor
for the sum of P1,254.10, with legal interest from the date of the judgment. Both the plaintiffs and the defendant
appeal, the former maintaining that the damages awarded are insufficient while the latter denies all liability for any
damages whatever.

It appears from the evidence that on February 27, 1918, the defendant was the owner of a public garage in the
town of San Fernando, La Union, and engaged in the business of carrying passengers for hire from the one point
to another in the Province of La Union and the surrounding provinces. On the date mentioned, he undertook to
convey the plaintiffs from San Fernando to Currimao, Ilocos Norte, in a Ford automobile. On leaving San
Fernando, the automobile was operated by a licensed chauffeur, but after having reached the town of San Juan,
the chauffeur allowed his assistant, Remigio Bueno, to drive the car. Bueno held no driver's license, but had some
experience in driving, and with the exception of some slight engine trouble while passing through the town of
Luna, the car functioned well until after the crossing of the Abra River in Tagudin, when, according to the
testimony of the witnesses for the plaintiffs, defects developed in the steering gear so as to make accurate
steering impossible, and after zigzagging for a distance of about half a kilometer, the car left the road and went
down a steep embankment.

The defendant, in his testimony, maintains that there was no defect in the steering gear, neither before nor after
the accident, and expresses the opinion that the swaying or zigzagging of the car must have been due to its
having been driven at an excessive rate of speed. This may possibly be true, but it is, from our point of view,
immaterial whether the accident was caused by negligence on the part of the defendant's employees, or whether
it was due to defects in the automobile; the result would be practically the same in either event.

In going over the bank of the road, the automobile was overturned and the plaintiffs pinned down under it. Mr.
Lasam escaped with a few contusions and a "dislocated" rib , but his wife, Joaquina Sanchez, received serious
injuries, among which was a compound fracture of one of the bones in her left wrist. She also appears to have
suffered a nervous breakdown from which she had not fully recovered at the time of the trial.

The complaint in the case was filed about a year and a half after the occurrence above related. It alleges, among
other things, that the accident was due to defects in the automobile as well as to the incompetence and
negligence of the chauffeur, and the case appears to have been tried largely upon the theory that it sounds in tort
and that the liability of the defendant is governed by article 1903 of the Civil Code. The trial court held, however,
that the cause of action rests on the defendant's breach of the contract of carriage and that, consequently, articles
1101-1107 of the Civil Code, and not article 1903, are applicable. The court further found that the breach of the
contract was not due to fortuitous events and that, therefore, the defendant was liable in damages.

In our opinion, the conclusions of the court below are entirely correct. That upon the facts stated the defendant's
liability, if any, is contractual, is well settled by previous decisions of the court, beginning with the case of Rakes
vs. Atlantic, Gulf & Pacific Co. (7 Phil., 359), and the distinction between extra-contractual liability and contractual
liability has been so ably and exhaustively discussed in various other cases, that nothing further need here be
said upon that subject. (See Cangco vs. Manila Railroad Co., 38 Phil., 768; Manila Railroad Co. vs. Compania
Trasatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875; De Guia vs. Manila Electric Railroad & Light Co., 40
Phil., 706.) It is sufficient to reiterate that the source of the defendant's legal liability is the contract of carriage; that
by entering into that contract he bound himself to carry the plaintiffs safely and securely to their destination; and
that having failed to do so he is liable in damages unless he shows that the failure to fulfill his obligation was due
to causes mentioned in article 1105 of the Civil Code, which reads as follows:

No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable,
with the exception of the cases in which the law expressly provides otherwise and those in which the
obligation itself imposes such liability.
This brings us to the principal question in the case:

What is meant by "events which cannot be foreseen and which, having been foreseen, are inevitable?" The
Spanish authorities regard the language employed as an effort to define the term caso fortuito and hold that the
two expressions are synonymous. (Manresa, Comentarios al Codigo Civil Español, vol. 8, pp. 88 et seq.;
Scævola, Codigo Civil, vol. 19, pp. 526 et seq.)

The antecedent to article 1105 is found in Law 11, Title 33, Partida 7, which defines caso fortuito as "occasion que
a case por aventura de que non se puede ante ver. E son estos, derrivamientos de casas e fuego que se
enciende a so ora, e quebrantamiento de navio, fuerca de ladrones. . . . (An event that takes place by accident
and could not have been foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck,
violence of robbers. . . .)"

Escriche defines caso fortuito as "an unexpected event or act of God which could either be foreseen nor resisted,
such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destructions, destruction
of buildings by unforseen accidents and other occurrences of a similar nature."

In discussing and analyzing the term caso fortuito the Enciclopedia Juridica Española says: "In a legal sense and,
consequently, also in relation to contracts, a caso fortuito presents the following essential characteristics: (1) The
cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation,
must be independent of the human will. (2) It must be impossible to foresee the event which constitutes the caso
fortuito, or if it can be foreseen, it must be impossible to avoid. (3) The occurrence must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner. And (4) the obligor (debtor) must be free from
any participation in the aggravation of the injury resulting to the creditor." (5 Enciclopedia Juridica Española, 309.)

As will be seen, these authorities agree that some extraordinary circumstance independent of the will of the
obligor, or of his employees, is an essential element of a caso fortuito. Turning to the present case, it is at once
apparent that this element is lacking. It is not suggested that the accident in question was due to an act of God or
to adverse road conditions which could not have been foreseen. As far as the records shows, the accident was
caused either by defects in the automobile or else through the negligence of its driver. That is not a caso fortuito.

We agree with counsel that neither under the American nor Spanish law is a carrier of passengers an absolute
insurer against the risks of travel from which the passenger may protect himself by exercising ordinary care and
diligence. The case of Alba vs. Sociedad Anonima de Tranvias, Jurisprudencia Civil, vol. 102, p. 928, cited by the
defendant in support of his contentions, affords a good illustration of the application of this principle. In that case
Alba, a passenger on a street car, was standing on the platform of the car while it was in motion. The car rounded
a curve causing Alba to lose his balance and fall off the platform, sustaining severe injuries. In an action brought
by him to recover damages, the supreme court of Spain held that inasmuch as the car at the time of the accident
was travelling at a moderate rate of speed and there was no infraction of the regulations, and the plaintiff was
exposed to no greater danger than that inherent in that particular mode of travel, the plaintiff could not recover,
especially so since he should have been on his guard against a contingency as natural as that of losing his
balance to a greater or less extent when the car rounded the curve.

But such is not the present case; here the passengers had no means of avoiding the danger or escaping the
injury.

The plaintiffs maintain that the evidence clearly establishes that they are entitled to damages in the sum of
P7,832.80 instead of P1,254.10 as found by the trial court, and their assignments of error relate to this point only.

There can be no doubt that the expenses incurred by the plaintiffs as a result of the accident greatly exceeded the
amount of the damages awarded. But bearing in mind that in determining the extent of the liability for losses or
damages resulting from negligence in the fulfillment of a contractual obligation, the courts have "a discretionary
power to moderate the liability according to the circumstances" (De Guia vs. Manila Electric Railroad & Light Co.,
40 Phil., 706; art. 1103, Civil Code), we do not think that the evidence is such as to justify us in interfering with the
discretion of the court below in this respect. As pointed out by that court in its well-reasoned and well-considered
decision, by far the greater part of the damages claimed by the plaintiffs resulted from the fracture of a bone in the
left wrist of Joaquina Sanchez and from her objections to having a decaying splinter of the bone removed by a
surgical operation. As a consequence of her refusal to submit such an operation, a series of infections ensued
and which required constant and expensive medical treatment for several years. We agree with the court below
that the defendant should not be charged with these expenses.

For the reasons stated, the judgment appealed from is affirmed, without costs in this instance. So ordered.