1. Perena vs.
Nicolas Aug 29, 2012; the carrier that he has held out to the general public as his business or occupation.
Facts: Spouses Perena were school bus providers. Route was from the respective
houses of the passengers in Paranaque to Don Bosco in Pasong Tamo, and back.
Van in issue is Kia Ceres with plate no. PYA 896, which could seat 14 students.
Clemente Alfaro was the driver they employed. On August 22, 1996, Aaron Zarate,
a regular rider was picked up from his residence at about 6am. He sat at the left
side, near the rear door. With 7:15 as their due time in Don Bosco, the van took a
shortcut through the narrow path under the Magallanes Interchange. The shortcut
traversed a railroad crossing which had no railroad warning signs, or watchmen or
any person responsible for manning the crossing, in fact, the bamboo barandilla
was left up.
At about the same time, PNR Commuter No. 302, operated by Jhonny
Alano was traveling northbound nearing the Magallanes Interchange. As the school
bus crossed the railroad crossing, it overtook a passenger bus from the left side,
which blocked Alfaro’s view of the incoming train. As the train approached Alano
blew the trains horn and applied its emergency breaks. The passenger bus was
able to cross the railroad without damage but the school bus was hit at the rear by
the train. Impact threw 9 students sitting in the rear part of the bus out of the
vehicle. Aaron landed on the track and was dragged and beheaded by the train.
Alano, onboard the train fled and did not wait for the police to arrive.
Parents of Aaron commenced an action against Alfaro, Perenas and the
PNR. Alfaro could not be served with Summons. Zarates claim against the Perenas
was for a breach of contract of carriage and for quasi- delict agains PNR.
Perenas , in their defense alleged diligence of a good father in their hiring
and supervision of Alfaro who had a license and had not figured in any car accident
before the collision. PNR alleged the proximate cause of the collision was Alfaro
who did not stop look and listen before crossing the tracks, and crossed the said
track which was not meant to be traversed by motorists.
RTC: ruled in favor of Zarates, awarded damages, including loss of earning
capacity
CA: affirmed RTC ruling. Deleted atty fees since RTC stated no factual or legal
basis for such. Damages for loss of earning capacity was upheld
Perenas appealed to the SC
Issue: WON Perenas and PNR are jointly liable for damages?
Held: YES. They were both negligent. Perenas cannot allege as a defense it due
diligence in supervision and hiring of its driver since it only exercised the diligence
of a good father of a family which is less than the required extraordinary diligence
required from common carriers. Perenas are considered common carriers since the
true test of such is whether the undertaking is a part of the activity engaged in by
Thus Perenas were considered common carriers because; (1) they were engaged
in transporting passengers as a business, not a casual occupation; (2) they
undertook to carry passengers through established roads by the method business
was conducted; and (3) they transported for a fee. Despite having a limited
clientele, they held themselves out as ready transportation indiscriminately to
students of a particular school, within or near the area they operated.
Lastly, since Perenas were considered as a common carrier, in the event of an
accident they are presumed negligent with regard to bringing about injury to their
passengers. It is upon the common carrier to overturn such presumption, and
Perenas failed to present any evidence to disprove such
2. AF Sanchez Brokerage vs. CA, Dec. 21, 2004
FACTS:
v July 8, 1992- Wyeth-Pharma GMBH shipped on board an aircraft of KLM
Royal Dutch Airlines at Dusseldorf, Germany oral contraceptives consisting of
86,800 Blisters Femenal tablets, 14,000 Blisters Nordiol tablets and 42,000
Blisters Trinordiol tablets for delivery to Manila in favor of the consignee,
Wyeth-Suaco Laboratories, Inc.
Ø The Femenal tablets were placed in 124 cartons and the Nordiol tablets
were placed in 20 cartons which were packed together in 1 LD3 aluminum
container, while the Trinordial tablets were packed in two pallets, each of
which contained 30 cartons.
v Wyeth-Suaco insured the shipment against all risks with FGU
v July 11 - Upon arrival of the shipment at NAIA, it was discharged without
exception and delivered to the warehouse of the Philippine Skylanders, Inc.
(PSI) located also at the NAIA for safekeeping.
v In order to secure the release of the cargoes from the PSI and the Bureau of
Customs, Wyeth-Suaco engaged the services of Sanchez Brokerage which
had been its licensed broker since 1984.
Ø As its customs broker, Sanchez Brokerage calculates and pays the
customs duties, taxes and storage fees for the cargo and thereafter
delivers it to Wyeth-Suaco
v July 29 - Morales and Mendoza, representatives of Sanchez Brokerage, paid
PSI storage fee of P8,572.35 a receipt for which was issued.
Ø On the receipt, another representative of Sanchez Brokerage, M. Sison,
acknowledged that he received the cargoes consisting of three
pieces in good condition.
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 1
v Wyeth-Suaco being a regular importer, the customs examiner did not inspect
the cargoes which were thereupon stripped from the aluminum containers and
loaded inside two transport vehicles hired by Sanchez Brokerage.
Ø Upon instructions of Wyeth-Suaco, the cargoes were delivered to Hizon
Laboratories Inc. in Antipolo City for quality control check. The delivery
receipt indicated that the delivery consisted of 1 container with 144
cartons of Femenal and Nordiol and 1 pallet containing Trinordiol
v July 31 - Likas, a representative of Wyeth-Suaco, acknowledged the delivery
of the cargoes by affixing his signature on the delivery receipt.
Ø Upon inspection, it was discovered that 44 cartons containing Femenal
and Nordiol tablets were in bad order.
Ø He thus placed a note above his signature on the delivery receipt stating
that 44 cartons of oral contraceptives were in bad order. The remaining
160 cartons of oral contraceptives were accepted as complete and in
good order.
Ø A survey report was prepared that 41 cartons of Femenal tablets and 3
cartons of Nordiol tablets “were wetted” indicating that at the time of
delivery to the warehouse of Hizon Laboratories Inc., slight to heavy rains
fell, which could account for the wetting of the 44 cartons of Femenal and
Nordiol tablets
v Aug 4 - the Hizon Laboratories Inc. issued a Destruction Report confirming
that 38 x 700 blister packs of Femenal tablets, 3 x 700 blister packs of
Femenal tablets and 3 x 700 blister packs of Nordiol tablets were heavily
damaged with water and emitted foul smell.
v Aug 5 - Wyeth-Suaco issued a Notice of Materials Rejection of 38 cartons of
Femenal and 3 cartons of Nordiol on the ground that they were delivered to
Hizon Laboratories with heavy water damaged (sic) causing the cartons to
sagged emitting a foul order and easily attracted flies.
v Wyeth-Suaco later demanded from Sanchez Brokerage the payment
of P191,384.25 representing the value of its loss arising from the damaged
tablets.
Ø Sanchez Brokerage refused to heed the demand
§ So Wyeth-Suaco filed an insurance claim against FGU Insurance
which paid Wyeth-Suaco the amount of P181,431.49 in settlement of
its claim
§ Wyeth-Suaco thus issued Subrogation Receipt in favor of FGU
Insurance.
• FGU Insurance demand from Sanchez Brokerage the payment of
P181,431.49 it paid Wyeth-Suaco
2 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
♦ Sanchez Brokerage disclaimed liability for the damaged
goods, positing that the damage was due to improper and
insufficient export packaging; that when the sealed
containers were opened outside the PSI warehouse, it was
discovered that some of the loose cartons were
wet, prompting its representative Morales to inform Wyeth-
Suaco about the condition of the cargoes but that the latter
advised to still deliver them to Hizon Laboratories where an
adjuster would assess the damages
Ø Hence, FGU Insurance filed a complaint for damages
before RTC of Makati City against Sanchez Brokerage.
v RTC: dismissed the complaint
v CA: Reversed RTC’s decision holding that the Sanchez Brokerage engaged
not only in the business of customs brokerage but also in the transportation
and delivery of the cargo of its clients, hence, a common carrier within the
context of Article 1732
Ø it noted that Wyeth-Suaco adduced evidence that the cargoes were
delivered to petitioner in good order and condition but were in a damaged
state when delivered to Wyeth-Suaco, thus Sanchez Brokerage
is presumed negligent and upon it rested the burden of proving that it
exercised extraordinary negligence not only in instances when negligence
is directly proven but also in those cases when the cause of the damage
is not known or unknown
Ø MR denied; hence this petition for certiorari!
ISSUE: W/N Sanchez Brokerage is a common carrier – YES
HELD: PETITION FAILS.
v Procedurally, Rule 45 is clear that decisions, final orders or resolutions of the
CA in any case, i.e., regardless of the nature of the action or proceedings
involved, may be appealed to this Court by filing a petition for review, which
would be but a continuation of the appellate process over the original case.
Ø The Resolution of the CA dated Dec 8, 2000 denying the MR of its
Decision of August 10, 2000 was received by petitioner on January 5,
2001. Since petitioner failed to appeal within 15 days or on or before
January 20, 2001, CA’s decision had become final and executory.
Ø The filing by petitioner of a petition for certiorari on March 6, 2001 cannot
serve as a substitute for the lost remedy of appeal.
v In another vein, the rule is well settled that in a petition for certiorari, the
petitioner must prove not merely reversible error but also grave abuse of
discretion amounting to lack or excess of jurisdiction.
Ø Petitioner alleges that the appellate court erred in reversing and setting
aside the decision of the trial court based on its finding that petitioner is
liable for the damage to the cargo as a common carrier. What petitioner is
ascribing is an error of judgment, not of jurisdiction, which is properly the
subject of an ordinary appeal.
Ø Where the issue or question involves or affects the wisdom or legal
soundness of the decision not the jurisdiction of the court to render said
decision the same is beyond the province of a petition for certiorari. The
supervisory jurisdiction of this Court to issue a cert writ cannot be
exercised in order to review the judgment of lower courts as to its intrinsic
correctness, either upon the law or the facts of the case.
v Procedural technicalities aside, the petition still fails.
Ø Petitioner, a customs broker is also a common carrier
Ø Anacleto F. Sanchez, Jr., the Manager and Principal Broker of
Sanchez Brokerage, himself testified that the services the firm offers
include the delivery of goods to the warehouse of the consignee or
importer.
§ “As customs broker, we calculate the taxes that has to be paid in
cargos, and those upon approval of the importer, we prepare the
entry together for processing and claims from customs and
finally deliver the goods to the warehouse of the importer.”
Ø Article 1732 does not distinguish between one whose principal
business activity is the carrying of goods and one who does such
carrying only as an ancillary activity. In this case, petitioner undertakes
to deliver the goods for pecuniary consideration. In this light, petitioner
as a common carrier is mandated to observe extraordinary diligence in the
vigilance over the goods it transports according to all the circumstances
of each case. In the event that the goods are lost, destroyed or
deteriorated, it is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence.
§ The concept of extra-ordinary diligence was explained in Compania
Maritima v. Court of Appeals:
• The extraordinary diligence in the vigilance over the goods
tendered for shipment requires the common carrier to know and
to follow the required precaution for avoiding damage to, or
destruction of the goods entrusted to it for sale, carriage and
delivery. It requires common carriers to render service with the
greatest skill and foresight and to use all reasonable means to
ascertain the nature and characteristics of goods tendered for
shipment, and to exercise due care in the handling and stowage,
including such methods as their nature requires.
Ø While Article 1734 (4) exempts a common carrier from liability if the loss or
damage is due to the character of the goods or defects in the packing or
in the containers, the rule is that if the improper packing is known to
the carrier or his employees or is apparent upon ordinary
observation, but he nevertheless accepts the same without protest or
exception notwithstanding such condition, he is not relieved of
liability for the resulting damage.
§ If the claim of petitioner that some of the cartons were already
damaged upon delivery to it were true, then it should have received
the cargo under protest or with reservations duly noted on the
receipt issued by PSI. But it made no such protest or reservation.
§ Moreover, if indeed petitioners employees only examined the
cargoes outside the PSI warehouse and found some to be wet, they
would certainly have gone back to PSI, showed to the warehouseman
the damage, and demanded then and there for Bad Order documents
or a certification confirming the damage.
v Since petitioner received all the cargoes in good order and condition at
the time they were turned over by the PSI warehouseman, and upon their
delivery to Hizon Laboratories, Inc. a portion thereof was found to be in
bad order, it was incumbent on petitioner to prove that it exercised
extraordinary diligence in the carriage of the goods. It did not, however.
Hence, its presumed negligence under Article 1735 of the Civil Code
remains unrebutted.
3. Cruz vs. Sun Holidays, June 29, 2010;
Petitioners Sps. Cruz lodged a complaint for damages arising from the death of
their son Ruelito who perished with his wife on board M/B Coco Beach III that
capsized en route to Batangas from Puerto Galera where the couple had stayed at
Coco Beach Island Resort (Resort) owned and operated by respondent
FACTS:
• Matute (witness), a scuba diving instructor, stayed at the Resort – was
originally scheduled to leave the Resort in the afternoon of Sept. 10, 2000
but was advised to stay for another night because of the strong winds and
heavy rains
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 3
 • Sept 11: As it was still windy, Matute and 25 other Resort guests including
petitioners’ son and his wife trekked to the other side of Coco Beach
mountain that was sheltered from the wind
o They boarded M/B Coco Beach III, which was to ferry them to
Batangas
o After the boat sailed, it started to rain – the rain and wind got
stronger as it moved farther away from Puerto Galera
o Waves got more unwieldy – M/B Coco Beach was hit by 2 big
waves causing it to be capsized and putting all passengers
underwater
o Passengers who put on their life jackets, struggled to get out of
the boat
o Matute and other passengers asked the captain what they could
do to save the people who were still trapped under the boat to
which the captain replied: “Iligtas niyo na lang sarili niyo”
o After 45 minutes, help came – 2 boats passed by the capsized
M/B Coco Beach
§ 22 persons boarded
§ 8 passengers, including petitioners’ son and his wife
died during the incident
• At the time of Ruelito’s death he was 28 y/p and employed as a
contractual worker for Mitsui Engineering Shipbuilding in Saudi Arabia
with a basic monthly salary of $900
• Petitioners demanded indemnification from respondent for the death of
their son – they alleged that respondent, as common carrier, was guilty of
negligence in allowing M/B Coco Beach to sail notwithstanding the storm
warning issued by PAGASA
• Respondent denied being a common carrier, alleged that its boats are
not available to the general public as they only ferry Resort guests
and crew members – Nonetheless, it claimed that it exercised utmost
diligence in ensuring the safety of its passengers and contrary to
petitioners’ allegation, there was no storm during the date of the incident
o Carlos Bonquin, captain, averred the Resort requires 4
conditions to be met before a boat is allowed to sail
§ Sea is calm
§ Clearance from the coast guard
§ Clearance from the captain
§ Clearance from Resort’s assistant manager
4 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
o He said that all conditions were met but a subasco or squall,
characterized by strong winds and big waves, suddenly
occurred, causing the boat to capsize
• RTC: dismissed complaint – respondent is a private carrier which is only
required to observe ordinary diligence; respondent observed extraordinary
diligence in transporting its guests and the proximate cause of the incident
was a squall, a fortuitous event – MR denied
ISSUE: W/N respondent is a common carrier – YES!
HELD
• Art. 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air for compensation,
offering their services to the public
o There is no distinction between one whose principal business
activity is the carrying of persons or goods or both, and one
who does such carrying only as an ancillary activity
o Art. 1732 carefully avoids making any distinction between a
person or enterprise offering transportation service on a regular
or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis
o Neither does the article distinguish between a carrier offering its
services to the general public and one who services business
only from a narrow segment of the general population
• Respondent is a common carrier – its ferry services are so
intertwined with its main business as to be properly considered
ancillary thereto
o The constancy of respondents ferry services in its resort
operations is underscored by its having its own Coco Beach
boats; Tour packages it offers, including the ferry services, may
be availed by anyone who can afford to pay the same
§ These are services available to the public
• When a passenger dies or is injured in the discharge of its contract of
carriage, it is presumed that the common carrier is at fault or
negligent – there is even no need for the court to make an express
finding of fault or negligence of the common carrier
o The presumption may only be overcome by evidence that the
carrier exercised extraordinary diligence
• Respondents strict compliance on said conditions does not impress
 • Evidence shows that PAGASA issued 24-hour public weather forecasts
and tropical cyclone warnings for shipping on Sept. 10 and 11 advising of
tropical depressions that would affect the province of Mindoro
o A very cautious person exercising utmost diligence would not
brave such stormy weather and put other peoples lives at risk
o The extraordinary diligence required of common carriers demand
that they take care of the goods or lives entrusted to their hands
as if they were their own – respondent failed to do so
• Insistence that the incident was caused by a fortuitous event does not
impress either – fortuitous event must have been the proximate and only
cause of the loss and the common carrier should have exercised due
diligence to prevent or minimize the loss before, during and after the
occurrence of the fortuitous event
o The occurrence of squalls was expected under the weather
condition
o Evidence shows that MB Coco Beach III suffered engine trouble
before it capsized and sank
o Incident not completely free from human intervention
• Art. 1764 vis-à-vis Art 2206 holds the common carrier in breach of its
contract of carriage that results in the death of a passenger liable to pay:
o Indemnity of death – 50K
o Indemnity of loss of earning capacity
§ Net earning Capacity = Life expectancy x ( gross annual
income – reasonable and necessary living expenses)
§ P8.316M
o Moral damages –100K
o Exemplary damages –100K
o 12% interest per annum
4. Villanueva vs Domingo, Sept 20, 2004;
FACTS:
- Priscilla Domingo is the registered owner of a silver Lancer car (1980)
driven by Leandro Domingo
- Nostradamus Villanueva is registered owner of green lancer
- On Oct 22, 1991, 9:45PM, Domingo’s lancer driven by Domingo was
cruising along middle lane of South Superhighway from north to south
following a green traffic light
- Suddenly, a green Mitsubishi Lancer driven by Renato Dela Cruz Ocfemia
darted from Vito Cruz Street towards the South Superhighway directly
into the path of the silver lancer, thereby hitting and bumping its left front
portion. As a result of the impact, the silver lancer hit two (2) parked
vehicles at the roadside, the second hitting another parked car in front of
it.
- Ocfemia was driving with an expired license and was positive for alcoholic
breath, and was recommended to be filed for reckless imprudence
resulting to damage to property and physical injuries
- The original complaint was amended twice: first, impleading Auto Palace
Car Exchange as commercial agent and/or buyer-seller and second,
impleading Albert Jaucian as principal defendant doing business under
the name and style of Auto Palace Car Exchange.
- [Petitioner] Nostradamus Villanueva claimed that he was no longer the
owner of the car at the time of the mishap because it was swapped with a
Pajero owned by Albert Jaucian/Auto Palace Car Exchange.
- Auto Palace Car Exchange represented by Albert Jaucian claimed that he
was not the registered owner of the car. Moreover, it could not be held
subsidiary liable as employer of Ocfemia because the latter was off-duty
as utility employee at the time of the incident. Neither was Ocfemia
performing a duty related to his employment
- After trial, the trial court found petitioner liable and ordered him to pay
respondent actual, moral and exemplary damages plus appearance and
attorneys fees: the amount of P99,580 as actual damages, P25,000.00 as
moral damages, P25,000.00 as exemplary damages and attorneys fees in
the amount of P10,000.00 plus appearance fees of P500.00 per hearing
with legal interest counted from the date of judgment..
- The CA upheld the trial courts decision but deleted the award for
appearance and attorneys fees because the justification for the grant was
not stated in the body of the decision
-
ISSUE: MAY THE REGISTERED OWNER OF A MOTOR VEHICLE BE HELD LIABLE
FOR DAMAGES ARISING FROM A VEHICULAR ACCIDENT INVOLVING HIS
MOTOR VEHICLE WHILE BEING OPERATED BY THE EMPLOYEE OF ITS BUYER
WITHOUT THE LATTERS CONSENT AND KNOWLEDGE?
HELD: Yes. SC has consistently ruled that the registered owner of any vehicle is
directly and primarily responsible to the public and third persons while it is being
operated.
- The principle upon which this doctrine is based is that in dealing with
vehicles registered under the Public Service Law, the public has the right
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 5
 to assume or presume that the registered owner is the actual owner
thereof, for it would be difficult for the public to enforce the actions that
they may have for injuries caused to them by the vehicles being
negligently operated if the public should be required to prove who the
actual owner is. How would the public or third persons know against
whom to enforce their rights in case of subsequent transfers of the
vehicles? We do not imply by his doctrine, however, that the registered
owner may not recover whatever amount he had paid by virtue of his
liability to third persons from the person to whom he had actually sold,
assigned or conveyed the vehicle.
- Under the same principle the registered owner of any vehicle, even if not
used for a public service, should primarily be responsible to the public or
to third persons for injuries caused the latter while the vehicle is being
driven on the highways or streets. There is a presumption that the owner
of the guilty vehicle is the defendant-appellant as he is the registered
owner in the Motor Vehicles Office. The Revised Motor Vehicle Law (Act
No. 3992, as amended) provides that no vehicle may be used or operated
upon any public highway unless the same is property registered. It has
been stated that the system of licensing and the requirement that each
machine must carry a registration number, conspicuously displayed, is
one of the precautions taken to reduce the danger of injury to pedestrians
and other travelers from the careless management of automobiles. Not
only are vehicles to be registered and that no motor vehicles are to be
used or operated without being properly registered for the current year,
but that dealers in motor vehicles shall furnish thee Motor Vehicles Office
a report showing the name and address of each purchaser of motor
vehicle during the previous month and the manufacturers serial number
and motor number. (Section 5(c), Act No. 3992, as amended.)
- Registration is required not to make said registration the operative act by
which ownership in vehicles is transferred, as in land registration cases,
because the administrative proceeding of registration does not bear any
essential relation to the contract of sale between the parties (Chinchilla vs.
Rafael and Verdaguer, 39 Phil. 888), but to permit the use and operation
of the vehicle upon any public highway (section 5 [a], Act No. 3992, as
amended).
- One of the principal purposes of motor vehicles legislation is identification
of the vehicle and of the operator, in case of accident; and another is that
6 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
the knowledge that means of detection are always available may act as a
deterrent from lax observance of the law and of the rules of conservative
and safe operation.
- The main purpose of vehicle registration is the easy identification of the
owner who can be held responsible for any accident, damage or injury
caused by the vehicle. Easy identification prevents inconvenience and
prejudice to a third party injured by one who is unknown or unidentified.
To allow a registered owner to escape liability by claiming that the driver
was not authorized by the new (actual) owner results in the public
detriment the law seeks to avoid.
- Finally, the issue of whether or not the driver of the vehicle during the
accident was authorized is not at all relevant to determining the liability of
the registered owner. This must be so if we are to comply with the
rationale and principle behind the registration requirement under the
motor vehicle law.
5. UCPB Gen Insurance vs. Aboitiz Shipping, GR 168433;
FACTS: On June 18, 1991, three (3) units of waste water treatment plant with
accessories were purchased by San Miguel Corporation (SMC for brevity) from
Super Max Engineering Enterprises, Co., Ltd. of Taipei, Taiwan. The goods came
from Charleston, U.S.A. and arrived at the port of Manila on board MV
SCANDUTCH STAR. The same were then transported to Cebu on board MV
ABOITIZ SUPERCON II. After its arrival at the port of Cebu and clearance from the
Bureau of Customs, the goods were delivered to and received by SMC at its plant
site on August 2, 1991. It was then discovered that one electrical motor of DBS
Drive Unit Model DE-30-7 was damaged.
Pursuant to an insurance agreement, plaintiff-appellee paid SMC the amount of
P1,703,381.40 representing the value of the damaged unit. In turn, SMC executed
a Subrogation Form dated March 31, 1992 in favor of plaintiff-appellee.
Consequently, plaintiff-appellee filed a Complaint on July 21, 1992 as subrogee of
SMC seeking to recover from defendants the amount it had paid SMC. The lower
court issued a ruling holding DAMCO Intermodal Systems, Inc., Eagle Express
Lines, Inc. and defendant Aboitiz Shipping solidarily liable to plaintiff-subrogee for
the damaged shipment
The appellate court reversed the decision of the trial court and ruled that UCPBs
right of action against respondents did not accrue because UCPB failed to file a
formal notice of claim within 24 hours from (SMCs) receipt of the damaged
merchandise as required under Art. 366 of the Code of Commerce.
UCPB however contends that Art. 366 does not apply in this case because the
damage had already been known to the carrier. It reveals that the damage had
been known upon discharge of the goods from the foreign carrier when the
carrier’s representative signed the Request for Bad Order Survey and the Turn
Over of Bad Order Cargoes. On transshipment, the cargo was already damaged
when loaded on board the inter-island carrier. UCPB claims that under the
Carriage of Goods by Sea Act (COGSA), notice of loss need not be given if the
condition of the cargo has been the subject of joint inspection.
Aboitiz, on the other hand, points out that it obviously cannot be held liable for the
damage to the cargo which, by UCPBs admission, was incurred not during
transshipment to Cebu on board one of Aboitiz’s vessels, but was already existent
at the time of unloading in Manila.
ISSUES: W/N the notice of claim of damage or average must be made within 24
hours if, as in this case, damage cannot be ascertained merely from outside of the
cargo
HELD: YES. The requirement to give notice of loss or damage to the goods is not
an empty formalism. The fundamental reason or purpose of such a stipulation is
not to relieve the carrier from just liability, but reasonably to inform it that the
shipment has been damaged and that it is charged with liability therefor, and to
give it an opportunity to examine the nature and extent of the injury. This protects
the carrier by affording it an opportunity to make an investigation of a claim while
the matter is still fresh and easily investigated so as to safeguard itself from false
and fraudulent claims.
We have construed the 24-hour claim requirement as a condition precedent to the
accrual of a right of action against a carrier for loss of, or damage to, the goods.
The shipper or consignee must allege and prove the fulfillment of the condition.
Otherwise, no right of action against the carrier can accrue in favor of the former.
At any rate, the notion that the request for bad order survey and turn over survey of
bad cargoes signed by Eagle Express’ representative is construable as compliant
with the notice requirement under Art. 366 of the Code of Commerce was
foreclosed by the dismissal of the complaint against DAMCOs representative, East
Asiatic.
6. PAL vs. Savillo, GR 149547;
FACTS:
• Private respondent Simplicio Grio and several companions decided to
purchase passenger tickets from PAL with the following points of
passage: MNL-SG-JAKARTA-SG-MNL. They were invited to participate in
a golf tournament in JKT.
o Grio et. al. were made to understand by PAL that its plane would
take them from MNL to SG, while Singapore Airlines (SA) would
take them from SG to JKT.
• Upon their arrival in SG on 3 October 1993, they proceeded to the SA
office to check-in for their flight to JKT but SA rejected the tickets
because they were not endorsed by PAL.
• SA explained that if SA honored the tickets without PAL’s endorsement,
PAL would not pay SA for their passage. Grio et. al. tried to contact PAL’s
office at the airport, only o find out it was closed.
• Stranded and left with no recourse, Grio et. al. were forced to purchase
tickets from Garuda Airlines and board its last flight bound for JKT.
• When they arrived in JKT, the party who was supposed to fetch them
from the airport had already left and they had to arrange for another mode
of transportation to their hotel.
o After a series of nerve-wracking events, Grio became ill and was
unable to participate in the tournament.
• Upon his return to MNL, Grio sent a demand letter to PAL and another to
SA (20 December 1993 and 21 March 1994, respectively). Both airlines
denied liability and blamed each other for the fiasco.
• Grio eventually filed a complaint for damages on 15 August 1997.
PAL’s arguments:
• PAL filed a motion to dismiss on the ground of prescription under Rule 16
of the Rules of Court.
• PAL argued that Article 29 of the Warsaw Convention governed this case,
providing that any claim for damages in connection with the international
transportation of persons is subject to the prescription period of two
years.
o Since the complaint was filed on 15 August 1997 or more than
three years after PAL received the demand letter on 25 January
1994, it was already barred by prescription.
RTC:
• Denied the motion to dismiss, maintaining that the provisions of the Civil
Code and other pertinent laws of the Philippines, not the Warsaw
Convention, were applicable to the present case.
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 7
CA:
• Affirmed the RTC.
o Pronounced that the application of the Warsaw Convention must
not be construed to preclude the application of the Civil Code
and other pertinent laws.
o Applying Art. 1144 of the Civil Code, which allowed for a 10-year
prescription period, the CA declared that the complaint filed by
Grio should not be dismissed.
ISSUES:
1. Are the provisions of the Warsaw Convention applicable in the present
case? NO. Governed by law on torts.
2. Is the complaint barred by prescription? NO. Prescriptive period – 4
years.
RULING:
The Warsaw Convention applies to all international transportation of
persons, baggage or goods performed by any aircraft for hire. It seeks to
accommodate or balance the interests of passengers seeking recovery for
personal injuries and the interests of air carriers seeking to limit potential liability. It
employs a scheme of strict liability favoring passengers and imposing damage
caps to benefit air carriers. The cardinal purpose of the Warsaw Convention is to
provide uniformity of rules governing claims arising from international air travel;
thus, it precludes a passenger from maintaining an action for personal injury
damages under local law when his or her claim does not satisfy the conditions of
liability under the Convention.
Article 19 of the Warsaw Convention provides for liability on the part of a
carrier for damages occasioned by delay in the transportation by air of passengers,
baggage or goods. Article 24 excludes other remedies by further providing that (1)
in the cases covered by articles 18 and 19, any action for damages, however
founded, can only be brought subject to the conditions and limits set out in this
convention. Therefore, a claim covered by the Warsaw Convention can no longer
be recovered under local law, if the statute of limitations of two years has already
lapsed.
Nevertheless, this Court notes that jurisprudence in the Philippines and
the United States also recognizes that the Warsaw Convention does not
exclusively regulate the relationship between passenger and carrier on an
international flight.
• This Court distinguished between the (1) damage to the passengers’
8 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
baggage and (2) humiliation he suffered at the hands of the airlines
employees.
o The first cause of action was covered by the Warsaw Convention
which prescribes in two years, while the second was covered by
the provisions of the Civil Code on torts, which prescribes in four
years.
In the case at hand, Singapore Airlines barred private respondent from boarding
the Singapore Airlines flight because PAL allegedly failed to endorse the tickets of
private respondent and his companions, despite PALs assurances to respondent
that Singapore Airlines had already confirmed their passage. While this fact still
needs to be heard and established by adequate proof before the RTC, an action
based on these allegations will not fall under the Warsaw Convention, since the
purported negligence on the part of PAL did not occur during the performance of
the contract of carriage but days before the scheduled flight. Thus, the present
action cannot be dismissed based on the statute of limitations provided under
Article 29 of the Warsaw Convention.
The present case involves a special species of injury resulting from the failure of
PAL and/or Singapore Airlines to transport private respondent from Singapore to
Jakarta the profound distress, fear, anxiety and humiliation that private respondent
experienced when, despite PAL’s earlier assurance that Singapore Airlines
confirmed his passage, he was prevented from boarding the plane and he faced
the daunting possibility that he would be stranded in Singapore Airport because
the PAL office was already closed.
These claims are covered by the Civil Code provisions on tort, and not within the
purview of the Warsaw Convention. Hence, the applicable prescription period is
that provided under Article 1146 of the Civil Code:
Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict.
8. PCI Leasing and Finance vs UCPB General Insurance, GR 162267;
FACTS:
v Oct 19, 1990 at about 10:30 p.m., a Mitsubishi Lancer car owned by United
Coconut Planters Bank was traversing the Laurel Highway, Barangay
Balintawak, Lipa City.
Ø The car was insured with UCPB General Insurance Inc., then driven
by Flaviano Isaac was hit and bumped by an 18-wheeler Fuso Tanker
Truck owned by PCI Leasing & Finance, Inc. allegedly leased to and
 operated by Superior Gas & Equitable Co., Inc. (SUGECO) and driven by
its employee, Renato Gonzaga.
Ø The impact caused heavy damage to the Mitsubishi Lancer car resulting
in an explosion of the rear part of the car. The driver and passenger
suffered physical injuries. However, Gonzaga continued on its way to its
destination and did not bother to bring his victims to the hospital.
Ø UCPB Gen Insurance paid the assured UCPB the amount
of P244,500.00 representing the insurance coverage of the damaged car.
Ø UCPB Gen Insurance made repeated demands for the payment of the
aforesaid amounts. against PCI Leasing as the 18-wheeler truck is
registered under its name however, no payment was made.
§ Thus, this instant case
v PCI Leasing and Finance, Inc., interposed the defense that it could not be
held liable for the collision, since the driver of the truck, Gonzaga, was
not its employee, but that of its co-defendant SUGECO and that it was
SUGECO that was the actual operator of the truck, pursuant to a Contract of
Lease signed by petitioner and SUGECO. however, it admitted that it was the
[
owner of the truck in question.
v RTC: In favor of UCPB Gen Insurance and ordered PCI and Gonzaga to pay
jointly and severally the former the principal amount of P244,500.00 with 12%
interest; P50,000.00 as atty's fees; and P20,000.00 as costs
v CA affirmed RTC Decision with modifications: deleted atty’s fees and interest
reduced to 6%
Ø MR Denied hence this petition for review
ISSUE: Whether petitioner, as registered owner of a motor vehicle that figured in
a quasi-delict may be held liable, jointly and severally, with the driver thereof, for
the damages caused to third parties – YES
HELD:
v As the registered owner of the vehicle driven by a negligent driver, PCI may
still be held liable under applicable jurisprudence involving laws on compulsory
motor vehicle registration and the liabilities of employers for quasi-
delicts under the Civil Code.
v The principle of holding the registered owner of a vehicle liable for quasi-
delicts resulting from its use is explained in Erezo v. Jepte:
Ø Registration is required not to make said registration the operative act by
which ownership in vehicles is transferred, as in land registration cases,
because the administrative proceeding of registration does not bear any
essential relation to the contract of sale between the parties, but to permit
the use and operation of the vehicle upon any public highway. The main
aim of motor vehicle registration is to identify the owner so that if any
accident happens, or that any damage or injury is caused by
the vehicle on the public highways, responsibility therefor can be
fixed on a definite individual, the registered owner. Instances are
numerous where vehicles running on public highways caused accidents
or injuries to pedestrians or other vehicles without positive identification of
the owner or drivers, or with very scant means of identification. It is to
forestall these circumstances, so inconvenient or prejudicial to the
public, that the motor vehicle registration is primarily ordained, in the
interest of the determination of persons responsible for damages or
injuries caused on public highways.
v A registered owner who has already sold or transferred a vehicle has the
recourse to a third-party complaint, in the same action brought against him to
recover for the damage or injury done, against the vendee or transferee of
the vehicle. The inconvenience of the suit is no justification for relieving him of
liability; said inconvenience is the price he pays for failure to comply with the
registration that the law demands and requires.
v In this case, it is held that the registered owner, the defendant-appellant
herein, is primarily responsible for the damage caused to the vehicle of
the plaintiff-appellee, but he has a right to be indemnified by the real or
actual owner of the amount that he may be required to pay as damage for
the injury caused to the plaintiff-appellant.
v For damage or injuries arising out of negligence in the operation of a motor
vehicle, the registered owner may be held civilly liable with the negligent
driver either
Ø 1) subsidiarily, if the aggrieved party seeks relief based on a delict or
crime; or
Ø 2) solidarily, if the complainant seeks relief based on a quasi-delict.
Ø It is the option of the plaintiff whether to waive completely the filing of the
civil action, or institute it with the criminal action, or file it separately or
independently of a criminal action; his only limitation is that he cannot
recover damages twice for the same act or omission of the defendant
v In case a separate civil action is filed, the registered owner of a motor vehicle
is primarily and directly responsible for the consequences of its operation,
including the negligence of the driver, with respect to the public and all
third persons.
Ø In contemplation of law, the registered owner of a motor vehicle is the
employer of its driver, with the actual operator and employer, such as a
lessee, being considered as merely the owner's agent.
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 9
 Ø This being the case, even if a sale has been executed before
a tortious incident, the sale, if unregistered, has no effect as to the right of
the public and third persons to recover from the registered owner. The
public has the right to conclusively presume that the registered owner is
the real owner, and may sue accordingly
v Anent the contention of PCI that it should be absolved of liability because of
the enactment of RA 8556 (Sec 12)
Ø Section 12. Liability of lessors. Financing companies shall not be
liable for loss, damage or injury caused by a motor vehicle,
aircraft, vessel, equipment, machinery or other property leased to
a third person or entity except when the motor vehicle, aircraft,
vessel, equipment or other property is operated by the financing
company, its employees or agents at the time of the loss,
damage or injury.
v because it is a financial lease or financing lease, the Court adopted the
statutory definition of a financial lease or financing lease, as::
Ø [A] mode of extending credit through a non-cancelable lease contract
under which the lessor purchases or acquires, at the instance of the
lessee, machinery, equipment, motor vehicles, appliances, business and
office machines, and other movable or immovable property in
consideration of the periodic payment by the lessee of a fixed amount of
money sufficient to amortize at least seventy (70%) of the purchase price
or acquisition cost, including any incidental expenses and a margin of
profit over an obligatory period of not less than two (2) years during which
the lessee has the right to hold and use the leased property, x x x but with
no obligation or option on his part to purchase the leased property from
the owner-lessor at the end of the lease contract.
v The Court held that the new law, R.A. No. 8556 do not supersede or repeal the
law on compulsory motor vehicle registration. No part of the law expressly
repeals Section 5(a) and (e) of R.A. No. 4136, as amended, otherwise known
as the Land Transportation and Traffic Code
v Thus, the rule remains the same: a sale, lease, or financial lease that is not
registered with the Land Transportation Office, still does not bind third
persons who are aggrieved in tortious incidents, for the latter need only to
rely on the public registration of a motor vehicle as conclusive evidence of
ownership
v A lease such as the one involved in the instant case is an encumbrance in
contemplation of law, which needs to be registered in order for it to bind third
parties
10 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
Ø The non-registration of the lease contract between petitioner and its
lessee precludes the former from enjoying the benefits under Section 12
of R.A. No. 8556.
Ø PCI in turn may resort to third-party complaints against their lessees or
whoever are the actual operators of their vehicles.
§ In the case at bar, there is, in fact, a provision in the lease contract
between petitioner and SUGECO to the effect that the latter shall
indemnify and hold the former free and harmless from any liabilities,
damages, suits, claims or judgments arising from the latter's use of
the motor vehicle.
v CA Decision AFFIRMED.
9. Singapore Airlines vs. Andion Fernandez GR 142305;
FACTS:
• Andion Fernandez – acclaimed soprano in the PH and abroad; at the time
of the incident, she was availing an educational grant from Germany –
Masters in Music majoring in Voice
• She was invited to sing before the King and Queen of Malaysia on Feb 3 &
4
o Airline ticket was purchased from petitioner Singapore Airlines
which would transport her from Frankfurt, Germany to Manila;
from Manila she would proceed to Malaysia the next day
o It was necessary to pass by Manila in order to gather her
wardrobe and to rehearse and coordinate with her pianist
• The flight was scheduled to leave Frankfurt at 1:45PM Jan. 27, 1991
arriving at Singapore at 8:50AM of Jan. 28; the connecting flight to Manila
scheduled to leave at 11:00AM, arriving in Manila at 2:20PM same day
• Flight from Frankfurt to Singapore arrived 2 hours late or around
11AM
o By then, the aircraft bound for Manila had already left as
scheduled
• Upon disembarkation at Singapore, Fernandez went to the nightstop
counter and told the lady employee that it was important for her to reach
Manila on that day
• The lady employee told her that there were no more flights to Manila
for that day and that respondent had no choice but to stay in
Singapore
• Fernandez was told that she can go to Hong Kong and then go to Manila
but she would have to pay for the ticket – Fernandez could not accept the
 offer because she had no money for it
• Fernandez stayed with a family member in Singapore and returned to the
airport the next day
• Fernandez proceeded to the counter which says Immediate Attention
to Passengers with Immediate Booking – she approached the male
employee to make arrangements for immediate booking only to be
told: Can’t you see I am doing something
o She explained her predicament but the male employee uncaringly
retorted it’s your problem not ours
• Fernandez never made it to Manila and was forced to take a direct
flight to Malaysia through the efforts of her mother and travel agency
in Manila
o Her mother also had to travel to Malaysia bringing with her
Fernandez’ wardrobe and personal things
• Fernandez’ performance before the royal family of Malaysia was below
par
o Because of the rude and unkind treatment she received from the
petitioner’s personnel in Singapore, respondent was engulfed
with fear, anxiety, humiliation and embarrassment causing her to
suffer mental fatigue and skin rashes – had to seek immediate
medical attention for acute uticaria
• RTC & CA: ruled in favor of Fernandez
ISSUES:
W/N petitioner should be faulted for the delay in arriving in Singapore – YES!
• When an airline issues a ticket to a passenger, confirmed for a particular
flight on a certain date, a contract of carriage arises
o Passenger has every right to expect that he be transported
on that flight and on that date and if he it not transported, the
carrier opens itself to a suit for a breach of contract of
carriage
• Contract of carriage – peculiar contract – imbued with public interest, law
requires common carriers to carry the passengers safely as far as human
car and foresight can provide, using the utmost diligence of very cautious
persons with due regard for all circumstances
o In the case at bar, petitioner did not transport Fernandez as
covenanted by the contract of carriage; petitioner clearly
breached it contract of carriage with respondent
• Defense that the delay was due to fortuitous events and beyond
petitioner’s control is unavailing
o Part of the failure to comply with the obligation of the common
carrier to deliver its passenger safely to their destination was
defendant’s failure to provide comfort and convenience to its
stranded passengers using extraordinary diligence
§ Cause of non-fulfillment is not solely and exclusively
due to fortuitous event, but due to something defendant
airline could have prevented
• Petitioner was not without recourse to enable it to fulfill its obligation to
transport the respondent safely as scheduled – airline was equipped to be
able to foresee and deal with such situation
• Diligence in communicating to its passengers the consequences of the
delay in their flights was wanting – Trial court held:
o Knowing fully well that even before the plaintiff boarded
defendants Jumbo aircraft in Frankfurt bound for Singapore, it
has already incurred a delay of two hours. Nevertheless,
defendant did not take the trouble of informing plaintiff, among its
other passengers of such a delay and that in such a case, the
usual practice of defendant airline will be that they have to stay
overnight at their connecting airport; and much less did it inquire
from the plaintiff and the other 25 passengers bound for Manila
whether they are amenable to stay overnight in Singapore and to
take the connecting flight to Manila the next day. Such
information should have been given and inquiries made in
Frankfurt because even the defendant airlines manual provides
that in case of urgency to reach his or her destination on the
same date, the head office of defendant in Singapore must be
informed by telephone or telefax so as the latter may make
certain arrangements with other airlines in Frankfurt to bring such
a passenger with urgent business to Singapore in such a manner
that the latter can catch up with her connecting flight such as S-
27/28 without spending the night in Singapore
W/N petitioner acted in bad faith – YES!
• Bad faith was imputed when the trial court found that petitioner’s
employees did not accord the respondent the attention and treatment
warranted under the circumstances
• Fernandez alleged that without her threats of suing the company, she was
not allowed to use the company’s phone to make long distance calls to
her mother in Manila
• The inattentiveness and rudeness of the employees were gross
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 11
 enough amounting to bad faith
10. Japan Airlines vs. Asuncion GR 161730;
FACTS:
- On March 27, 1992, respondents Michael and Jeanette Asuncion left
Manila on board Japan Airlines (JAL) Flight bound for Los Angeles. Their
itinerary included a stop-over in Narita and an overnight stay at Hotel
Nikko Narita. Upon arrival at Narita, Mrs. Noriko Etou-Higuchi of JAL
endorsed their applications for shore pass and directed them to the
Japanese immigration official. A shore pass is required of a foreigner
aboard a vessel or aircraft who desires to stay in the neighborhood of the
port of call for not more than 72 hours.
- During their interview, the Japanese immigration official noted that
Michael appeared shorter than his height as indicated in his passport.
Because of this inconsistency, respondents were denied shore pass
entries and were brought instead to the Narita Airport Rest House where
they were billeted overnight.
- Mr. Atsushi Takemoto of the International Service Center (ISC), brought
respondents to the Narita Airport Rest House where they stayed overnight
until their departure the following day for Los Angeles. Respondents were
charged US$400.00 each for their accommodation, security service and
meals.
- On December 12, 1992, respondents filed a complaint for damages
claiming that JAL did not fully apprise them of their travel requirements
and that they were rudely and forcibly detained at Narita Airport.
- JAL denied the allegations of respondents. It maintained that the refusal
of the Japanese immigration authorities to issue shore passes to
respondents is an act of state which JAL cannot interfere with or prevail
upon. Consequently, it cannot impose upon the immigration authorities
that respondents be billeted at Hotel Nikko instead of the airport rest
house.
- RTC: judgment is hereby rendered in favor of plaintiffs ordering defendant
JAL to pay plaintiffs $800 for expenses + Php 400,000 damages and cost.
CA affirmed in toto
12 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
ISSUE: The basic issue for resolution is whether JAL is guilty of breach of
contract.
HELD: NO.
- We find that JAL did not breach its contract of carriage with respondents.
It may be true that JAL has the duty to inspect whether its passengers
have the necessary travel documents, however, such duty does not
extend to checking the veracity of every entry in these documents. JAL
could not vouch for the authenticity of a passport and the correctness of
the entries therein. The power to admit or not an alien into the country is a
sovereign act which cannot be interfered with even by JAL.
- Under Article 1755 of the Civil Code, a common carrier such as JAL is
bound to carry its 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. When an airline issues a ticket to a
passenger, confirmed for a particular flight on a certain date, a contract of
carriage arises. The passenger has every right to expect that he be
transported on that flight and on that date and it becomes the carriers
obligation to carry him and his luggage safely to the agreed destination. If
the passenger is not so transported or if in the process of transporting he
dies or is injured, the carrier may be held liable for a breach of contract of
carriage
- This is not within the ambit of the contract of carriage entered into by JAL
and herein respondents. As such, JAL should not be faulted for the denial
of respondents shore pass applications.
- Prior to their departure, respondents were aware that upon arrival in
Narita, they must secure shore pass entries for their overnight stay.
Respondents mother, Mrs. Imelda Asuncion, insisted though that Ms.
Linda Villavicencio of JAL assured her that her children would be granted
the passes. Next, respondents claimed that petitioner breached its
contract of carriage when it failed to explain to the immigration authorities
that they had overnight vouchers at the Hotel Nikko Narita. They imputed
that JAL did not exhaust all means to prevent the denial of their shore
pass entry applications.
- To reiterate, JAL or any of its representatives have no authority to interfere
 with or influence the immigration authorities. The most that could be
expected of JAL is to endorse respondents applications, which Mrs.
Higuchi did immediately upon their arrival in Narita.
- Mrs. Higuchi did all she could to assist the respondents. Upon being
notified of the denial of respondents applications, Mrs. Higuchi
immediately made reservations for respondents at the Narita Airport Rest
House which is really more a hotel than a detention house as claimed by
respondents. More importantly, nowhere in respondent Michaels
testimony did he state categorically that Mrs. Higuchi or any other
employee of JAL treated them rudely or exhibited improper behavior
throughout their stay. We therefore find JAL not remiss in its obligations
as a common carrier.
- Moral damages may be recovered in cases where one willfully causes
injury to property, or in cases of breach of contract where the other party
acts fraudulently or in bad faith. Exemplary damages are imposed by way
of example or correction for the public good, when the party to a contract
acts in wanton, fraudulent, oppressive or malevolent manner. Attorneys
fees are allowed when exemplary damages are awarded and when the
party to a suit is compelled to incur expenses to protect his
interest. There being no breach of contract nor proof that JAL acted in
[17]
wanton, fraudulent or malevolent manner, there is no basis for the award
of any form of damages.
- Neither should JAL be held liable to reimburse respondents the amount of
US$800.00. It has been sufficiently proven that the amount pertained to
ISC, an agency separate and distinct from JAL, in payment for the
accommodations provided to respondents. The payments did not in any
manner accrue to the benefit of JAL.
- However, we find that the Court of Appeals correctly dismissed JALs
counterclaim for litigation expenses, exemplary damages and attorneys
fees. The action was filed by respondents in utmost good faith and not
manifestly frivolous. Respondents honestly believed that JAL breached its
contract. A persons right to litigate should not be penalized by holding
him liable for damages. This is especially true when the filing of the case
is to enforce what he believes to be his rightful claim against another
although found to be erroneous.
11. Alitalia vs. IAC, 192 SCRA 9;
FACTS: Dr. Felipa Pablo was invited to take part at a meeting of the Department of
Research and Isotopes of the Joint FAO-IAEA Division of Atomic Energy in Food
and Agriculture of the United Nations in Ispra, Italy. She accepted the invitation,
and was then scheduled by the organizers, to read a paper during the meeting. Dr.
Pablo booked passage on petitioner airline, ALITALIA.
She arrived in Milan on the day before the meeting in accordance with the itinerary
and time table set for her by ALITALIA. She was however told by the ALITALIA
personnel there at Milan that her luggage was delayed in the flight from Rome to
Milan. Her luggage was suitcases with one contained personal items and the other,
her scientific papers, slides and other research material. However, the other flights
arriving from Rome did not have her baggage on board.
She went to Rome to try to locate her bags herself but failed to do so, completely
distraught, she booked a flight home to Manila and no longer attended the meeting
in Italy.
She demanded that ALITALIA make reparation for the damages she suffered but
ALITALIA only offered her free airline tickets. She rejected the same and instituted
the instant case.
It turns out Prof. Pablo's suitcases forwarded to Ispra, Italy, but on the day after
her scheduled appearance and participation. Furthermore, they were not actually
restored to her until 11 months later and 4 months after institution of the action.
The CFI rendered judgment in favor of Prof. Pablo and awarded nominal damages,
attorney’s fees, the costs of the suit. Upon appeal to the appellate court, it only
doubled the nominal damages.
ALITALIA avers that the Warsaw Convention should have been applied to limit its
liability and that there is no warrant to award nominal damages or attorney’s fees
against it.
ISSUE: w/n the Warsaw Convention should be applied to limit ALITALIA’s liability
HELD: No. Under the Warsaw Convention, an air carrier is made liable for
damages for:
1) the death, wounding or other bodily injury of a passenger if the accident causing
it took place on board the aircraft or in the course of its operations of embarking or
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 13
disembarking;
2) the destruction or loss of, or damage to, any registered luggage or goods, if the
occurrence causing it took place during the carriage by air;" and
3) delay in the transportation by air of passengers, luggage or goods.
However, the liability of the carriers are limited in multiple ways but the limitations
are not applicable if breach of contract is borne by willful misconduct or such
default as amounts to willful misconduct, or if the damage is caused by any agent
of the carrier acting within the scope of his employment.
The Convention does not thus operate as an exclusive enumeration of the
instances of an airline's liability, or as an absolute limit of the extent of that liability
nor does it regulate or exclude liability for other breaches of contract by the carrier.
In the case at bar, no bad faith or otherwise improper conduct may be ascribed to
the employees of petitioner airline; and Dr. Pablo's luggage was eventually
returned to her, belatedly, it is true, but without appreciable damage. Certainly, the
compensation for the injury suffered by Dr. Pablo from the delay resulting in her
failure to represent her country in a prestigious international conference which she
labored over and traveled hundreds of miles for much to her chagrin and
embarrassment, the opportunity to claim this honor or distinction was irretrievably
lost to her because of Alitalia's breach of its contract. It cannot under the
circumstances be restricted to that prescribed by the Warsaw Convention for delay
in the transport of baggage. She is not, of course, entitled to be compensated for
loss or damage to her luggage. As already mentioned, her baggage was ultimately
delivered to her in Manila, tardily but safely. She is however entitled to nominal
damages — which, as the law says, is adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be vindicated
and recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered.
12. Sabena Belgian World Airlines vs CA 255 SCRA 38
FACTS:
• On Aug. 21, 1987, plaintiff was a passenger on board Flight SN 284 of
defendant airline from Casablanca to Brussels, Belgium on her way back
to MNL. She checked in her luggage containing her valuables. She stayed
overnight in Brussels and her luggage was left on board Flight SN 284.
• Plaintiff arrived in MNL on Sept. 2, 1987 but her luggage was missing. She
submitted an Irregularity Report which she accomplished and filed on the
same day.
• After several follow-ups, her luggage was found with broken locks. She
was informed that her luggage will be shipped to Manila on Oct. 27, 1987.
14 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
Unfortunately, she was informed that the luggage was lost for the second
time.
• Plaintiff demanded from defendant the money value of the luggage and its
contents amounting to $4,265 or its exchange value, but defendant
refused to settle the claim.
RTC and CA: ordered Sabena to pay Agustin the value of the luggage, moral and
exemplary damages, attorney’s fees and cost of suit.
DEFENSE:
• Petitioner airline company, in contending that the alleged negligence of
private respondent should be considered the primary cause for the loss of
her luggage, avers that, despite her awareness that the flight ticket had
been confirmed only for Casablanca and Brussels, and that her flight from
Brussels to Manila had yet to be confirmed, she did not retrieve the
luggage upon arrival in Brussels.
• Petitioner insists that private respondent, being a seasoned international
traveler, must have likewise been familiar with the standard provisions
contained in her flight ticket that items of value are required to be hand-
carried by the passenger and that the liability of the airline or loss, delay
or damage to baggage would be limited, in any event, to only US$20.00
per kilo unless a higher value is declared in advance and corresponding
additional charges are paid thereon.
• Petitioner cites Section 5(c), Article IX, of the General Conditions of
Carriage, signed at Warsaw, Poland, on 02 October 1929, as amended by
the Hague Protocol of 1955, generally observed by International carriers,
stating, among other things, that:
o Passengers shall not include in his checked baggage, and the
carrier may refuse to carry as checked baggage, fragile or
perishable articles, money, jewelry, precious metals, negotiable
papers, securities or other valuables.
ISSUE: Is the airline company liable? YES.
RULING:
Fault or negligence consists in the omission of that diligence which is demanded
by the nature of an obligation and corresponds with the circumstances of the
person, of the time, and of the place. When the source of an obligation is derived
from a contract, the mere breach or non-fulfillment of the prestation gives rise to
the presumption of fault on the part of the obligor. This rule is not different in the
case of common carriers in the carriage of goods which, indeed, are bound to
observe not just the due diligence of a good father of a family but that of
extraordinary care in the vigilance over the goods.
Art. 1733 of the [Civil] Code provides that from the very nature of their business
and by reasons of public policy, common carriers are bound to observe
extraordinary diligence in the vigilance over the goods transported by them. This
extraordinary responsibility, according to Art. 1736, lasts from the time the goods
are unconditionally placed in the possession of and received by the carrier until
they are delivered actually or constructively to the consignee or person who has
the right to receive them. Art. 1737 states that the common carriers duty to
observe extraordinary diligence in the vigilance over the goods transported by
them remains in full force and effect even when they are temporarily unloaded or
stored in transit. And Art. 1735 establishes the presumption that if the goods are
lost, destroyed or deteriorated, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they had observed
extraordinary diligence as required in Article 1733.
The only exception to the foregoing extraordinary responsibility of the common
carrier is when the loss, destruction, or deterioration of the goods is due to any of
the following causes:
(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.
Not one of the above excepted causes obtains in this case.
Petitioner is not entirely off track when it raised in its defense the tort doctrine of
proximate cause. Unfortunately for petitioner, however, the doctrine cannot, in this
particular instance, support its case. Proximate cause is that which, in natural and
continuous sequence, unbroken by any efficient intervening cause, produces injury
and without which the result would not have occurred.
Given all the pertinent facts, the appellate court is correct in sustaining the trial
court, finding the petitioner ultimately guilty of gross negligence in the handling of
private respondent’s luggage. The loss of said baggage not only once by twice,
said the appellate court, underscores the wanton negligence and lack of care on
the part of the carrier.
The Warsaw Convention denies to the carrier availment of the provisions which
exclude or limit his liability, if the damage is caused by his willful misconduct or by
such default on his part as is considered to be equivalent to willful misconduct, or
if the damage is (similarly) caused by any agent of the carrier acting within the
scope of his employment. The Hague Protocol amended the Warsaw Convention
by removing the provision that if the airline took all necessary steps to avoid the
damage, it could exculpate itself completely, and declaring the stated limits of
liability not applicable if it is proved that the damage resulted from an act or
omission of the carrier, its servants or agents, done with intent to cause damage or
recklessly and with knowledge that damage would probably result. The same
deletion was effected by the Montreal Agreement of 1966, with the result that a
passenger could recover unlimited damages upon proof of willful misconduct.
The Convention’s provisions, in short, do not regulate or exclude liability for other
breaches of contract by the carrier or misconduct of its officers and employees, or
for some particular or exceptional type of damage. Otherwise, an air carrier would
be exempt from any liability for damages in the event of its absolute refusal, in bad
faith, to comply with a contract of carriage, which is absurd. Nor may it for a
moment be supposed that if a member of the aircraft complement should inflict
some physical injury on a passenger, or maliciously destroy or damage the latter’s
property, the Convention might successfully be pleaded as the sole gauge to
determine the carriers liability to the passenger. Neither may the Convention be
invoked to justify the disregard of some extraordinary sort of damage resulting to a
passenger and preclude recovery therefor beyond the limits set by said
Convention. It is in this sense that the Convention has been applied, or ignored,
depending on the peculiar facts presented by each case.
13. Mapa vs. CA 275 SCRA 286
Facts: Purita Mapa accompanied her daughter to Boston as she was about to
study college there. They purchased tickets from the TWA in Bangkok for a flight
from LA-NYC- Boston- St. Louis- Chicago. On August 10, 1990 Purita and her
daughter boarded a PAL flight to LA. Their flights were fine up until their flight from
JFK Airport in NYC to Logan Airport in Boston, where they checked in 7 pieces of
luggage. They were instructed to board in gate 1 at 3:00pm. At 2:40 no instruction
to board the aircraft was being given. Upon inquiry TWA ground staff informed
them that their gate was in another building and they were waiting in the wrong
gate. They were not able to catch their flight but was informed by the TWA ground
staff that they could use their tickets to board the next flight in 30 minutes, also
heading to Boston. But the said flight was delayed due to a thunderstorm and
departed for Boston at 6pm.
Upon arrival they discovered that they 4 of their 7 pieces of luggage were
missing. They reported the missing baggage to the TWA staff who assured them
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 15
that it would be found at earliest within 24 hours or at the latest within 48 hours.
TWA failed to din the luggage and they were asked to fill out a passenger property
questionnaire to aid TWA in the search. Value of the bags and its contents were at
$11,283. 79. Purita’s husband, Cornelio followed to Boston to aid in the search of
the bags.
The Mapa’s through their counsel wrote the General Sales Manager of
TWA in the Philippines demanding indemnification. TWA assured them that an
intensive search was being conducted. TWA offered to amicably settle a month
after. TWA offered two options; travel credit or a cash settlement. Mapa’s opted for
the travel credit but TWA ignored such and declared payment at $2,560 as full
satisfaction of the claim. Mapa’s accepted the check for such amount as partial
payment. Despite demand, TWA failed and refused to indemnify the plaintiffs.
Mapa’s filed a case for damages. TWA answered by alleging lack of
Jurisdiction since it alleged that the Philippine courts were without jurisdiction as
stated in the Warsaw convention. To which the Philippines was a signatory. Also
under the Warsaw, and the Notice of Baggage Limitation on the back of the
tickets, Respondent was limited to $ 9.07 per pound or $20.00 per kilo.
RTC: dismissed case in view of Warsaw convention, considering the
information in Passenger Property Questionaire which placed Philippines as
origin.
CA: affirmed trial courts ruling. Since the two tickets were in conjunction with
each other, forming a contract of transportation from Manila to Chicago.
Issue: WON the Warsaw Convention is applicable?
Held: No. The defense alleged by defendants, RTC, and CA were based on the two
tickets purchased by the Mapas for their trip around the U.S. By such facts alone
the Warsaw convention cannot be applied. Since there was no other High
contracting party designated as a destination. Not as an ultimate place of
destination or a stop over. The ticket was for flights that would traverse only the
territory of one high contracting party, thus not a contract of international contract
of carriage, thus not subject to the Warsaw Convention. CA’s reliance on the
questionnaire is without merit since such was only accomplished in relation to the
claim for their baggage and does not mean that such flight from Manila was to be
included in their contract of carriage
14. Litonjua vs. National Seamen Board GR 51910;
FACTS:
v Petitioner Litonjua is the duly appointed local crewing Managing Office of the
Fairwind Shipping Corporation ('Fairwind).
16 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
v The M/V Dufton Bay is an ocean-going vessel of foreign registry owned by the
R.D. Mullion Ship Broking Agency Ltd. ("Mullion").
v Sept 11, 1976 - while the Dufton Bay was in the port of Cebu and while under
charter by Fairwind, the vessel's master contracted the services ofvprivate
respondent Gregorio Candongo to serve as Third Engineer for a period of 12
months with a monthly wage of US$500.00.
Ø This agreement was executed before the Cebu Area Manning Unit of the
NSB.
Ø Thereafter, private respondent boarded the vessel.
v On Dec 28 1976 - before expiration of his contract, private respondent was
required to disembark at Port Kelang, Malaysia, and was returned to the Phils
on Jan 51977
Ø The cause of the discharge was described in his Seaman's Book as 'by
owner's arrange".
§ After returning to the Phils, private respondent filed a complaint
before public respondent NSB for violation of contract, against
Mullion as the shipping company and petitioner Litonjua as agent of
the shipowner and of the charterer of the vessel.
• Petitioner Litonja was declared in default –
• Private respondent testified that when he was recruited by the
Captain of the Dufton Bay, the latter was accompanied to the
NSB Cebu Area Manning Unit by 2 supercargos sent by
petitioner Litonjua to Cebu, and that the 2 supercargos Cruz and
Litonjua assisted private respondent in the procurement of his
National Investigation and Security Agency (NISA) clearance.
Messrs. Cruz and Litonjua were also present during private
respondent's interview by Captain Ho King Yiu of the Dufton Bay.
♦ NSB rendered a judgment by default ordering the
respondents R.D. Mullion Shipbrokers Co., Ltd., and
Litonjua Shipping Co., Inc., jointly and solidarily to pay the
complainant 4,657.63 or its equivalent in the Phil. currency
within 10 days from receipt this Decision
Ø It clearly appears that there was no sufficient or valid
cause for the respondents to terminate the services of
complainant prior to 17 September 1977, which is the
expiry date of the contract thus the respondents have
violated the conditions of the contract of employment
§ Petitioner Litonjua filed MR of the hearing officer's
decision – DENIED
 • Petitioner next filed an "Appeal and/or Motion
for Reconsideration of the Default Judgment
dated 9 August 1977" with the central office of
the NSB – granted; allowed to present
evidence
♦ Findings: Affirmed the hearing officer’s
decision -> It is clear that respondent
Litonjua Shipping Co., Inc. is the
authorized Philippine agent of Fairwind
Shipping Corporation, charterer of the
vessel 'Dufton Bay, wherein complainant,
served as 3rd Engineer from 17
September until disembarkation on
December 28, 1976. It is also clear from
the complainant's wages account bearing
the heading 'Fairwind Shipping
Corporation', signed by the Master of the
vessel that the Philippine agency referred
to herein directed to pay the said
withdrawn wages of $13.19 is no other
than Litonjua Shipping Company, Inc.
♦ From this observation, it can be
reasonably inferred that the master of the
vessel acted for and in behalf of Fairwind
Shipping Corporation who had the
obligation to pay the salary of the
complainant. It necessarily follows that
Fairwind Shipping Corporation is the
employer of said complainant. Moreover, it
had been established by complainant
that Litonjua Shipping Company, Inc., had
knowledge of and participated, through its
employee, in the recruitment of herein
complainant.
♦ Hence the present petition for certiorari
ISSUE: W/N the charterer Fairwind is the employer of private respondent
HELD:
v There are 2 grounds upon which petitioner Litonjua may be held liable to the
private respondent on the contract of employment.
Ø First basis: the charter party which existed between Mullion, the
shipowner, and Fairwind, the charterer.
§ In modern maritime law and usage, there are 3 distinguishable types
of charter parties: (a) the "bareboat" or "demise" charter; (b) the
"time" charter; and (c) the "voyage" or "trip" charter.
§ It is well settled that in a demise or bare boat charter, the charterer
is treated as owner pro hac vice of the vessel, the charterer assuming
in large measure the customary rights and liabilities of the shipowner
in relation to third persons who have dealt with him or with the
vessel. In such case, the Master of the vessel is the agent of the
charterer and not of the shipowner. The charterer or owner pro
hac vice, and not the general owner of the vessel, is held liable
for the expenses of the voyage including the wages of the seame
• Treating Fairwind as owner pro hac vice, petitioner Litonjua
having failed to show that it was not such, we believe and so
hold that petitioner Litonjua, as Philippine agent of the
charterer, may be held liable on the contract of employment
between the ship captain and the private respondent.
Ø Second and ethically more compelling basis: the charterer of the vessel,
Fairwind, clearly benefitted from the employment of private
respondent as Third Engineer of the Dufton Bay, along with the ten 10
other Filipino crewmembers recruited by Captain Ho in Cebu at the same
occasion. If private respondent had not agreed to serve as such Third
Engineer, the ship would not have been able to proceed with its voyage
Ø Last, but certainly not least, there is the circumstance that extreme
hardship would result for the private respondent if petitioner Litonjua,
as Philippine agent of the charterer, is not held liable to private
respondent upon the contract of employment.
§ Clearly, the private respondent, and the other Filipino crew members
of the vessel, would be defenseless against a breach of their
respective contracts.
§ While wages of crew members constitute a maritime lien upon the
vessel, private respondent is in no position to enforce that lien. If only
because the vessel, being one of foreign registry and not ordinarily
doing business in the Philippines or making regular calls on Philippine
ports cannot be effectively held to answer for such claims in a
Philippine forum.
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 17
v Clearly, petitioner Litonjua, should it be held liable to private respondent for
the latter's claims, would be better placed to secure reimbursement from its
principal Fairwind. In turn, Fairwind would be in an indefinitely better position
(than private respondent) to seek and obtain recourse from Mullion, the foreign
shipowner, should Fairwind feel entitled to reimbursement of the amounts paid
to private respondent through petitioner Litonjua.
v Conclusion: private respondent was an employee of the Fairwind and that
petitioner Litonjua may be held to answer to private respondent for the latter's
claims as the agent in the Philippines of Fairwind.
15. Maranan vs. Perez GR 22272;
FACTS:
• Rogelio Corachea – passenger in a taxicab owned and operated by
Pascual Perez when he was stabbed and killed by the driver, Simeon
Valenzuela
• Valenzuela was prosecuted for homicide in the CFI of Batangas
• Antonia Maranan, Rogelio’s mother filed an action to recover damages
from Perez and Valenzuela for the death of her son
o Defendants asserted that the deceased was killed in self-
defense, since he first assaulted the driver by stabbing him from
behind
o Death was a casa fortuito for which the carrier was not liable
• Court decided in favor of the plaintiff and awarded P3K as damages
o Appeal denied
ISSUE: W/N the common carrier is liable for assaults of its employees upon its
passengers –YES!
HELD:
• Defendant relies on the ruling in Gilaco v. Manila Railroad Co – carrier is
under no absolute liability for assaults of its employees upon passengers
o In the Gilaco case, when the crime took place the guard Devesa
had no duties to discharge in connection with the transportation
of the deceased from Calamba to Manila
o When Devesa shot and killed Gilaco, Devesa was assigned to
guard the Manila-San Fernando trains
o He was under no obligation to safeguard the passengers of the
Calmaba-Manila train – killing of Gilaco was not done in line of
duty
18 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
• Here, the killing was perpetrated by the driver of the very cab transporting
the passenger, in whose hands the carrier had entrusted the duty of
executing the contract of carriage
• Unlike the old Civil Code, the NCC expressly makes the common carrier
liable for intentional assaults committed by its employees upon its
passengers:
o Common carriers are liable for the death of or injury to
passengers through negligence or willful acts of the former’s
employees, although such employees may have acted beyond
the scope of their authority or in violation of the orders of the
common carrier
• The basis of the carrier’s liability for assaults on passengers committed by
its drivers rests either on
o Doctrine of respondeat superior – carrier is liable only when
the act of the employee is within the scope of his authority and
duty; not sufficient that the act be within the course of
employment only
o The principle that it is the carrier’s implied duty to transport
the passender safely – enough that the assault happens within
the course of the employee’s duty; no defense for the carrier that
the act done was in excess of authority or in disobedience of the
carrier’s orders – liability of carrier here is absolute
• As can be gleaned from Art. 1759, the Civil Code of the Philippines
follows the rule based on the second view. 3 reasons underlie this rule. As
explained in Texas Midland R.R. v. Monroe:
o Special undertaking of the carrier requires that it furnish its
passenger that full measure of protection afforded by the
exercise of the high degree of care prescribed by the law, inter
alia from violence and insults at the hands of strangers and other
passengers, but above all, from the acts of the carrier's own
servants charged with the passenger's safety;
o Said liability of the carrier for the servant's violation of duty to
passengers, is the result of the formers confiding in the servant's
hands the performance of his contract to safely transport the
passenger, delegating therewith the duty of protecting the
passenger with the utmost care prescribed by law; and
o As between the carrier and the passenger, the former must bear
the risk of wrongful acts or negligence of the carrier's employees
against passengers, since it, and not the passengers, has power
to select and remove them.
 • It is the carrier's strict obligation to select its drivers and similar
employees with due regard not only to their technical competence and
physical ability, but also to their total personality, including their patterns
of behavior, moral fibers, and social attitude
• Applying this stringent norm to the facts in this case, therefore, the lower
court rightly adjudged the defendant carrier liable pursuant to Art. 1759 of
the Civil Code
16. Compania Maritima vs. CA GR 31379;
- Private respondent Vicente E. Concepcion, a civil engineer doing business
under the name and style of Consolidated Construction with office
address at Taft Avenue, Manila, had a contract with the Civil Aeronautics
Administration (CAA) sometime in 1964 for the construction of the airport
in Cagayan de Oro City Misamis Oriental.
- Being a Manila — based contractor, Vicente E. Concepcion had to ship
his construction equipment to Cagayan de Oro City. Having shipped
some of his equipment through petitioner, Concepcion negotiated anew
with petitioner, thru its collector, Pacifico Fernandez, for the shipment to
Cagayan de Oro City of one (1) unit payloader, four (4) units 6x6 Reo
trucks and two (2) pieces of water tanks.
- These equipment were loaded aboard the MV Cebu, which left Manila on
August 30, 1964 and arrived at Cagayan de Oro City in the afternoon of
September 1, 1964. The Reo trucks and water tanks were safely unloaded
within a few hours after arrival, but while the payloader was about two (2)
meters above the pier in the course of unloading, the swivel pin of the
heel block of the port block of Hatch No. 2 gave way, causing the
payloader to fall. The payloader was damaged and was thereafter taken
to petitioner's compound in Cagayan de Oro City.
- On September 7, 1964, Consolidated Construction, thru Vicente E.
Concepcion, wrote Compañia Maritima to demand a replacement of the
payloader which it was considering as a complete loss because of the
extent of damage. Consolidated Construction likewise notified petitioner
4
of its claim for damages. Unable to elicit response, the demand was
repeated in a letter dated October 2, 1964. 5
- Meanwhile, petitioner shipped the payloader to Manila where it was
weighed at the San Miguel Corporation. Finding that the payloader
weighed 7.5 tons and not 2.5 tons as declared in the B-111 of Lading,
petitioner denied the claim for damages of Consolidated Construction in
its letter dated October 7, 1964, contending that had Vicente E.
Concepcion declared the actual weight of the payloader, damage to their
ship as well as to his payloader could have been prevented. 6
- Vicente E. Concepcion filed an action for damages against petitioner with
the then Court of First Instance of Manila, seeking to recover damages in
the amount of P41,225.00 allegedly suffered for the period of 97 days that
he was not able to employ a payloader in the construction job
- Court of First Instance of Manila, dismissed on April 24, 1968 the
complaint with costs against Vicente E. Concepcion, stating that the
proximate cause of the fall of the payloader was Vicente E. Concepcion's
act or omission in having misrepresented the weight of the payloader as
2.5 tons instead of its true weight of 7.5 tons, which underdeclaration was
intended to defraud Compañia Maritima of the payment of the freight
charges and which likewise led the Chief Officer of the vessel to use the
heel block of hatch No. 2 in unloading the payloader.
- CA reversed; defendant is condemned to pay unto plaintiff the sum in
damages of P24,652.07 with legal interest from the date the present
decision shall have become final; the payloader is declared abandoned to
defendant; costs against the latter.9
ISSUE: whether or not the act of private respondent Vicente E. Concepcion in
furnishing petitioner Compañia Maritima with an inaccurate weight of 2.5 tons
instead of the payloader's actual weight of 7.5 tons was the proximate and only
cause of the damage on the Oliver Payloader OC-12 when it fell while being
unloaded by petitioner's crew
HELD: Compania Maritama is not exempt from liability.
- Petitioner, upon the testimonies of its own crew, failed to take the
necessary and adequate precautions for avoiding damage to, or
destruction of, the payloader entrusted to it for safe carriage and delivery
to Cagayan de Oro City, it cannot be reasonably concluded that the
damage caused to the payloader was due to the alleged
misrepresentation of private respondent Concepcion as to the correct and
accurate weight of the payloader. As found by the respondent Court of
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 19
 Appeals, the fact is that petitioner used a 5-ton capacity lifting apparatus
to lift and unload a visibly heavy cargo like a payloader. Private
respondent has, likewise, sufficiently established the laxity and
carelessness of petitioner's crew in their methods of ascertaining the
weight of heavy cargoes offered for shipment before loading and
unloading them, as is customary among careful persons.
- While petitioner has proven that private respondent Concepcion did
furnish it with an inaccurate weight of the payloader, petitioner is
nonetheless liable, for the damage caused to the machinery could have
been avoided by the exercise of reasonable skill and attention on its part
in overseeing the unloading of such a heavy equipment. And
circumstances clearly show that the fall of the payloader could have been
avoided by petitioner's crew. Evidence on record sufficiently show that
the crew of petitioner had been negligent in the performance of its
obligation by reason of their having failed to take the necessary
precaution under the circumstances which usage has established among
careful persons, more particularly its Chief Officer, Mr. Felix Pisang, who
is tasked with the over-all supervision of loading and unloading heavy
cargoes and upon whom rests the burden of deciding as to what
particular winch the unloading of the payloader should be
undertaken. While it was his duty to determine the weight of heavy
18
cargoes before accepting them. Mr. Felix Pisang took the bill of lading on
its face value and presumed the same to be correct by merely "seeing"
it. Acknowledging that there was a "jumbo" in the MV Cebu which has
19
the capacity of lifting 20 to 25 ton cargoes, Mr. Felix Pisang chose not to
use it, because according to him, since the ordinary boom has a capacity
of 5 tons while the payloader was only 2.5 tons, he did not bother to use
the "jumbo" anymore. 20
- In that sense, therefore, private respondent's act of furnishing petitioner
with an inaccurate weight of the payloader upon being asked by
petitioner's collector, cannot be used by said petitioner as an excuse to
avoid liability for the damage caused, as the same could have been
avoided had petitioner utilized the "jumbo" lifting apparatus which has a
capacity of lifting 20 to 25 tons of heavy cargoes. It is a fact known to the
Chief Officer of MV Cebu that the payloader was loaded aboard the MV
Cebu at the Manila North Harbor on August 28, 1964 by means of a
terminal crane. Even if petitioner chose not to take the necessary
21
precaution to avoid damage by checking the correct weight of the
20 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
payloader, extraordinary care and diligence compel the use of the
"jumbo" lifting apparatus as the most prudent course for petitioner.
- While the act of private respondent in furnishing petitioner with an
inaccurate weight of the payloader cannot successfully be used as an
excuse by petitioner to avoid liability to the damage thus caused, said act
constitutes a contributory circumstance to the damage caused on the
payloader, which mitigates the liability for damages of petitioner in
accordance with Article 1741 of the Civil Code
17. Eastern Shipping Lines vs. IAC, 150 SCRA 469
FACTS:
In G.R. No. 69044, the M/S ASIATICA, a vessel operated by petitioner Eastern
Shipping Lines, Inc., (referred to hereinafter as Petitioner Carrier) loaded at Kobe,
Japan for transportation to Manila, 5,000 pieces of calorized lance pipes in 28
packages valued at P256,039.00 consigned to Philippine Blooming Mills Co., Inc.,
and 7 cases of spare parts valued at P92,361.75, consigned to Central Textile
Mills, Inc. Both sets of goods were insured against marine risk for their stated value
with respondent Development Insurance and Surety Corporation.
In G.R. No. 71478, during the same period, the same vessel took on board 128
cartons of garment fabrics and accessories, in two (2) containers, consigned to
Mariveles Apparel Corporation, and two cases of surveying instruments consigned
to Aman Enterprises and General Merchandise. The 128 cartons were insured for
their stated value by respondent Nisshin Fire & Marine Insurance Co., for US
$46,583.00, and the 2 cases by respondent Dowa Fire & Marine Insurance Co.,
Ltd., for US $11,385.00.
En route for Kobe, Japan, to Manila, the vessel caught fire and sank, resulting in
the total loss of ship and cargo. The respective respondent Insurers paid the
corresponding marine insurance values to the consignees concerned and were
thus subrogated unto the rights of the latter as the insured.
Respondent Development Insurance & Surety Corporation (Development
Insurance, for short), having been subrogated unto the rights of the two insured
companies, filed suit against petitioner Carrier for the recovery of the amounts it
had paid to the insured. Petitioner-Carrier denied liability on the ground that the
loss was due to an extraordinary fortuitous event; hence, it is not liable under the
law. The Trial Court rendered judgment in favor of Development Insurance
Respondents Nisshin Fire & Marine Insurance Co. (NISSHIN for short), and Dowa
Fire & Marine Insurance Co., Ltd. (DOWA, for brevity), as subrogees of the insured,
filed suit against Petitioner Carrier for the recovery of the insured value of the cargo
lost imputing unseaworthiness of the ship and non-observance of extraordinary
diligence by petitioner Carrier.
Petitioner Carrier denied liability on the principal grounds that the fire which caused
the sinking of the ship is an exempting circumstance under Section 4(2) (b) of the
Carriage of Goods by Sea Act (COGSA); and that when the loss of fire is
established, the burden of proving negligence of the vessel is shifted to the cargo
shipper. The Trial Court rendered judgment in favor of NISSHIN and DOWA.
ISSUES:
1.) which law between the Civil Code or COGSA shall govern
2.) who has burden of proof to show negligence of the carrier
3.) w/n the US $500 per package limitation applies
HELD:
1.) The law of the country to which the goods are to be transported governs
the liability of the common carrier in case of their loss, destruction or
deterioration. As the cargoes in question were transported from Japan to
the Philippines, the liability of Petitioner Carrier is governed primarily by
the Civil Code. However, in all matters not regulated by said Code, the
rights and obligations of common carrier shall be governed by the Code
of Commerce and by special laws. Thus, the Carriage of Goods by Sea
Act, a special law, is suppletory to the provisions of the Civil Code.
2.) Under the Civil Code, common carriers, from the nature of their business
and for reasons of public policy, are bound to observe extraordinary
diligence in the vigilance over goods, according to all the circumstances
of each case. 8 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;
xxx xxx xxx
Petitioner Carrier claims that the loss of the vessel by fire exempts it from liability
under the phrase "natural disaster or calamity. " However, we are of the opinion
that fire may not be considered a natural disaster or calamity. This must be so as it
arises almost invariably from some act of man or by human means. The burden
then is upon Petitioner Carrier to prove that it has exercised the extraordinary
diligence required by law.
3.) Yes. It is to be noted that the Civil Code does not of itself limit the liability
of the common carrier to a fixed amount per package although the Code
expressly permits a stipulation limiting such liability. Thus, the COGSA
which is suppletory to the provisions of the Civil Code, steps in and
supplements the Code by establishing a statutory provision limiting the
carrier's liability in the absence of a declaration of a higher value of the
goods by the shipper in the bill of lading. The provisions of the Carriage of
Goods by Sea Act on limited liability are as much a part of a bill of lading
as though physically in it and as much a part thereof as though placed
therein by agreement of the parties. If the number of cartons was
disclosed to the carrier in the bill of lading, treat the cartons, not the
container, as the COGSA packages. However, the Eurygenes case
indicated that a carrier could limit its liability to $500 per container if the
bill of lading failed to disclose the number of cartons or units within the
container, or if the parties indicated, in clear and unambiguous language,
an agreement to treat the container as the package.
18. Sulpicio Lines vs. Curso 615 SCRA 575
FACTS:
• Dr. Curso boarded at the port of Manila the MV Dona Marilyn owned and
operated by petitioner Sulpicio Lines bound for Tacloban.
• The vessel sank due to inclement sea and whether conditions brought
about by Typhoon Unsang.
• The body of Dr. Curso was not recovered, along with hundreds of other
passengers.
• Respondents, allegedly the surviving brothers and sisters of Dr. Curso,
sued petitioner for damages based on breach of contract of carriage by
sea, alleging that petitioner acted negligently.
o They stated among others their parents predeceased Dr. Curso,
who died single and without issue and that as such, they were
Dr. Curso’s surviving heirs and successors-in-interest.
• Petitioner denied liability, insisting that the sinking of the vessel was due
to force majeure, which exempted a common carrier from liability.
o It averred that the vessel was seaworthy and was cleared by the
coast guard for the voyage and that it conducted intensive
search and rescue operations and extended assistance and aid
to the victims and their families after the accident.
RTC’s ruling:
• Dismissed the complaint upon finding that the sinking of the vessel was
due to force majeure.
o Officers of the vessel acted with diligence required of a common
carrier
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 21
 o Death of passengers could not have been avoided
o No basis to consider the vessel not seaworthy at the time of
voyage
o Respondents failed to prove their claim for damages
CA’s ruling:
• Set aside the RTC’s ruling
o Inadequate explanation why the officers of the vessel had not
apprised themselves of the weather reports bearing on the
direction of the vessel’s path.
o No account of the acts and decision of the crew of the ill-fated
ship
o The fact that the stud bolts in the ship’s hydraulic system gave
way while the ship was at sea discredits he theory that Sulpicio
exercised due diligence in maintaining the seaworthy condition of
the vessel.
• Sulpicio was hereby ordered to pay the plaintiffs heirs of Dr. Curso
damages (death indemnity, loss of earning capacity, moral damages and
cost).
ISSUE: Are the brothers and sisters of a deceased passenger in a case of breach
of contract of carriage entitled to moral damages against the carrier? NO.
RULING:
GR: moral damages are not recoverable in actions for damages predicated on a
breach of contract, unless there is fraud or bad faith.
XPN: moral damages may be awarded in case of breach of contract of carriage
that results in the death of a passenger, in accordance with Article 1764, in relation
to Article 2206 (3), of the Civil Code, which provide:
Article 1764. Damages in cases comprised in this Section shall be awarded in
accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall
also apply to the death of a passenger caused by the breach of contract by a
common carrier.
Article 2206. The amount of damages for death caused by a crime or quasi-
delict shall be at least three thousand pesos, even though there may have been
mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of the
22 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
deceased, and the indemnity shall be paid to the heirs of the latter; such indemnity
shall in every case be assessed and awarded by the court, unless the deceased on
account of permanent physical disability not caused by the defendant, had no
earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the provisions of
article 291, the recipient who is not an heir called to the decedent's inheritance by
the law of testate or intestate succession, may demand support from the person
causing the death, for a period not exceeding five years, the exact duration to be
fixed by the court;
(3) 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 omission from Article 2206 (3) of the brothers and sisters of the deceased
passenger reveals the legislative intent to exclude them from the recovery of moral
damages for mental anguish by reason of the death of the
deceased. Inclusio unius est exclusio alterius.
To be entitled to moral damages, the respondents must have a right based upon
law. It is true that under Article 1003 of the Civil Code they succeeded to the entire
estate of the late Dr. Curso in the absence of the latter’s descendants, ascendants,
illegitimate children, and surviving spouse. However, they were not included
among the persons entitled to recover moral damages, as enumerated in Article
2219 of the Civil Code.
Article 2219 circumscribes the instances in which moral damages may be
awarded. The provision does not include succession in the collateral line as a
source of the right to recover moral damages. In fine, moral damages may be
recovered in an action upon breach of contract of carriage only when: (a) where
death of a passenger results, or (b) it is proved that the carrier was guilty of fraud
and bad faith, even if death does not result. Article 2206 of the Civil Code entitles
only the descendants, ascendants, illegitimate children, and surviving spouse of
the deceased passenger to demand moral damages for mental anguish by reason
of the death of the deceased.
19. Westwind Shipping vs. UCPB General Insurance 710 SCRA 544
Facts: These are consolidated cases for claims made on insurance taken on 197
metal containers to be shipped to San Miguel Corporation (SMC) from Kinshho-
Mataichi Corp in Kobe, Japan. Such metal containers were loaded into M/V Golden
Harvest which is owned by Westwind Shipping Corporation (Westwind). SMC
insured the said cargo with all risk insurance from UCPB fo $184,798.97. The
cargo arrived in Manila was turned over to Asian Terminals Inc(ATI). During the
unloading 6 containers were dented by the forklift used by Ocean Terminal
Services (OTSI) to carry the said containers. Baliwag Shipping Agency issued 2
Bad Order Cargo Receipt because of such. Orient Freight International Inc(OFII),
the customs broker, withdrew the containers from ATI, including the dented
containers. It was transported to SMC in Calamba through J.B. Limcaoco Trucking
(JBL) and upon discharge it was discovered an additional 9 containers were
damaged by the forklifts. After a year SMC filed a claim against UCPB, Westwind,
ATI and OFII to recover the damage. UCPB paid the total and upon payment of the
subrogation receipt, UCPB filed a complaint against Westwind, ATI and OFII.
RTC: case dismissed. 15 day Prescriptive period with regard to ATI. Under
COGSA, with regard to Westwind, ATI had control of the forklifts and
Westwind had no hand in such. Lastly with OFII, it only undertook for the
release of such cargo and had no hand in the forklifts
CA: Reversed the said decision. Imposing penalty on Westwind and OFII to
pay to UCPB.
Issue: WON Westwind and OFII are liable for the damage?
Held: YES. As the carrier of the goods, Westwind must observe extraordinary
diligence in the goods it undertakes to carry. In the case at bar, delivery of the said
cargo was not complete and its extraordinary diligence in the care of the cargo
was still to be observed. Since the forklift was still unloading the containers from
the ship of Westwind, custody of the goods was still not completely turned over,
Westwinds liability as common carrier was still controlling, thus Westwind is liable
for the damage.
OFII is also liable since as a customs broker, he undertook to transport
the cargo of SMC to SMC’s premises in Calamba. Transporting the said cargo
from the port to Calamba was the service offered and taken up by OFII, thus it is to
be considered a common carrier and to exercise extraordinary diligence. OFII’s
own witness testified to the conduct of OFII as a cargo forwarder as one of its
services offered. Thus in transporting the containers, and in the event of damage,
as a common carrier, OFII is also presumed to be negligent.
20. Air France vs. Gallego 638 SCRA 472
FACTS:
v Plaintiff Carrascoso, a civil engineer, was a member of a group of 48 Filipino
pilgrims that left Manila for Lourdes on March 30, 1958.
v On March 28, 1958, the defendant, Air France, through its authorized agent,
Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane
ticket from Manila to Rome.
Ø From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok,
the Manager of the defendant airline forced plaintiff to vacate the "first
class" seat that he was occupying because, in the words of the
witness Ernesto G. Cuento, there was a "white man", who, the
Manager alleged, had a "better right" to the seat.
Ø Carrascoso refused and told defendant's Manager that his seat would be
taken over his dead body; a commotion ensued, and, according to the
witness, "many of the Filipino passengers got nervous in the tourist class;
when they found out that Mr. Carrascoso was having a hot discussion
with the white man [manager], they came to him and pacified him to give
his seat to the white man" so plaintiff reluctantly gave his "first class" seat
in the plane.
v CFI of Manila: sentenced petitioner to pay respondent Carrascoso P25K by
way of moral damages; P10K as exemplary damages; P393.20 representing
the difference in fare between first class and tourist class for the portion of the
trip Bangkok-Rome,; plus P3K for attorneys' fees; and the costs of suit.
v On appeal, CA affirmed but with slight modifications as to the amount of
refund on Carrascoso's plane ticket from P393.20 to P383.10
v Hence this present review on certiorari.
ISSUE: W/N Air France is liable for damages for breach of contract – YES
HELD:
v A contract to transport passengers is different in kind and degree from any
other contractual relation. This is because of the relation which an air-carrier
sustains with the public. Its business is mainly with the travelling public. It
invites people to avail of the comforts and advantages it offers. The contract of
air carriage, therefore, generates a relation attended with a public duty.
Neglect or malfeasance of the carrier's employees, naturally, could give
ground for an action for damages. Passengers do not contract merely for
transportation. They have a right to be treated by the carrier's employees with
kindness, respect, courtesy and due consideration. They are entitled to be
protected against personal misconduct, injurious language, indignities and
abuses from such employees. So it is, that any rule or discourteous conduct
on the part of employees towards a passenger gives the latter an action for
damages against the carrier.
CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 23
v Petitioner's contract with Carrascoso is one attended with public duty. The
stress of Carrascoso's action is placed upon his wrongful expulsion. This is a
violation of public duty by the petitioner air carrier — a case of quasi-delict.
Ø All the requisites for an action for damages are present:
§ First, That there was a contract to furnish plaintiff a first class
passage covering, amongst others, the Bangkok-Teheran leg;
§ Second, That said contract was breached when petitioner failed to
furnish first class transportation at Bangkok; and
§ Third, that there was bad faith when petitioner's employee compelled
Carrascoso to leave his first class accommodation berth "after he
was already, seated" and to take a seat in the tourist class, by reason
of which he suffered inconvenience, embarrassments and
humiliations, thereby causing him mental anguish, serious anxiety,
wounded feelings and social humiliation, resulting in moral damages.
• although there is no no specific mention of the term bad faith in
the complaint, the same can be inferred from the facts and
circumstances set forth therein
♦ The evidence shows that the defendant violated its contract
of transportation with plaintiff in bad faith, with the
aggravating circumstances that defendant's Manager in
Bangkok went to the extent of threatening the plaintiff in the
presence of many passengers to have him thrown out of the
airplane to give the "first class" seat that he was occupying
to, again using the words of the witness Ernesto G. Cuento,
a "white man" whom he (defendant's Manager) wished to
accommodate, and the defendant has not proven that this
"white man" had any "better right" to occupy the "first class"
seat that the plaintiff was occupying, duly paid for, and for
which the corresponding "first class" ticket was issued by
the defendant to him.
v It is well settled in law the responsibility of an employer for the tortious act of
its employees
Ø For the willful malevolent act of petitioner's manager, petitioner, his
employer, must answer. Article 21 of the Civil Code says: Any person who
willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the
damage.
Ø Corollary thereto, based on Article 2219 (10), Civil Code, moral damages
are recoverable.
24 CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO
v Exemplary damages are well awarded too. The Civil Code gives the only
condition is that defendant should have "acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner."
Ø The manner of ejectment of respondent Carrascoso from his first class
seat fits into this legal precept. And this, in addition to moral damages.
]
v The right to attorney's fees is fully established. The grant of exemplary
damages justifies a similar judgment for attorneys' fees. It is just and equitable
that attorneys' fees be given.
v CA JUDGMENT AFFIRMED
21. Crisostomo vs. CA, GR 138334;
Facts: Crisostomo contracted the services of Caravan Travel and Tours
International, Inc. to arrange her travel in the Jewels of Europe tour. The tour
included England, Holland, Germany, Austria, Liechtenstein, Switzerland and
France. She got a 5% discount since Menor, company ticketing manager was her
niece. On June 12, 1991, Menor proceeded to her aunts house to deliver the plane
tickets and travel documents, and also to receive the payment for the agency. She
instructed her aunt to go to NAIA on the 15 and, 2 hours before her flight on board
th
British Airways. Without checking her documents, she proceeded to NAIA and was
informed that the flight she was booked for left the day before. She subsequently
called Menor.
Menor was able to convince Crisostomo to take another tour with the
agency, called British Pageant. Which included England, Scotland and Wales. She
was asked to pay an additional amount, to which she paid a partial payment and
commenced her trip.
Upon her return, Crisostomo demanded from the agency reimbursement
for the difference in amount of the trip she actually took and the trip she missed.
Despite several demands, agency refused to pay and said the amount was non
refundable, which constrained Crisostomo to file an action for breach of contract of
carriage in the RTC of Makati. Crisostomo alleged that she was informed of the
wrong flight schedule by Menor and that her plane ticket did not clearly indicate
her departure date. Respondent through its Operations Manager denied liability
alleging that the documents were given to the passengers 2 days before their flight
and it was Crisostomo’s own negligence which caused her to miss her flight since
she did not check her ticket. Respondent also explained refunding was not
possible since they already remitted the money to their principal in Singapore who
determines the amount for the tour by the number of people to join it. Lastly
Respondent explained that the British pageant tour was not a substitute for the
tour she missed and was only charged less for such since her niece was an
employee of the Respondent.

RTC: Ruled in favor of plaintiff, ordering return of amount with interest.

CA: Reversed and set aside judgment. Ordering plaintiff to pay defendant the
balance for the British pageant tour.

Issue: WON Respondent is a common carrier.

Held, NO. Respondent was only in charge of procuring tickets, arranging tours,
and booking accommodations for its clients. It did not undertake to carry or
transport its clients or its clients property from one place to another. In this case
what existed between the parties was an ordinary contract of service. In such
contract the negligence on the part of the plaintiff is contributory and is not the
kind of diligence one should have in dealing with her own affairs. Though Menor
was negligent as an employee of the Respondent and such was ruled on by lower
courts, such was not supported with evidence on record.

CAUILAN DANSAL FRIAS GARCIA SACLAYAN SANTIAGO 25