ASSIGNMENT IN TRANSPORTATION LAW

Read and Digest the following for recitation next meeting.

1. Pedro De Guzman vs. Court of Appeals, G. R. No. L-47822, 22 December 1988

2. Philippine American General Insurance Company vs. Pks
Shipping Company, G.R. No. 149038, 9 April 2003
3. Spouses Perena vs Spouses Nicolas, GR No. 157917, August 29, 2012
4. Unsworth Transport International (Phils.) vs. Court of Appeals ,G.R. No. 166250,
26 July 2010
5. Loadmasters Customs Services, Inc. vs. Glodel Brokerage Corporation, GR No.
179446, January 10, 2011
6. Westwind Shipping Corporation vs. UCPB General Insurance Co., GR no.
2002289, November 25, 2013
7. Unknown Owner Of The Vessel M/V China Joy vs. Asian Terminals Inc. G.R. No.
195661, 11 March 2015
8. R Transport Corporation vs. Pante, GR No. 162104, September 15, 2009
9. Asian Terminals, Inc vs. Simon Enterprises, Inc. GR No. 177116, February 27, 2013
10. Equitable Leasing Corporation vs. Lucita Suyom et al., G.R. No. 143360, 5 September
2002
11. William Tiu, doing business under the name and style of “D’ Rough Riders,” vs. Pedro
A. Arriesgado, G.R. No. 138060, 1 September 2004
12. Spouses Cesar & Suthira Zalamea vs. Court of Appeals, G.R. No. 104235 November
18, 1993
13. Cathay Pacific Airways, Ltd., vs. Spouses Daniel Vazquez And Maria Luisa Madrigal
Vazquez, G.R. No. 150843, March 14, 2003
14. Heirs of Josemaria Ochoa vs. G&S Transport Corporation, March 19, 2011 as
affirmed in the July 16, 2012 decision
15. Victory Liner, Inc. vs. Rosalito Gammad, G.R. No. 159636, November 25, 2004
16. Antonia Maranan vs. Pascual Perez, et al, G.R. No. L-22272, June 26, 1967
17. Jose Pilapil vs. Hon. Court of Appeals, G.R. No. 52159, 22 December 1989
18. Alberta Yobido vs. Court of Appeals, G.R. No. 113003, 17 October 1997
De Guzman v. CA
Facts:
Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that
he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip to Pangasinan,
respondent would load his vehicle with cargo which various merchants wanted delivered,
charging fee lower than the commercial rates. Sometime in November 1970, petitioner Pedro de
Guzman contracted with respondent for the delivery of 750 cartons of Liberty Milk. On
December 1, 1970, respondent loaded the cargo. Only 150 boxes were delivered to petitioner
because the truck carrying the boxes was hijacked along the way. Petitioner commenced an
action claiming the value of the lost merchandise. Petitioner argues that respondent, being a
common carrier, is bound to exercise extraordinary diligence, which it failed to do. Private
respondent denied that he was a common carrier, and so he could not be held liable for force
majeure. The trial court ruled against the respondent, but such was reversed by the Court of
Appeals.
Issues:
(1)Whether or not private respondent is a common carrier
(2) Whether private respondent is liable for the loss of the goods
Held:
(1) Article 1732 makes 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. Article 1732 also 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. Neither does Article 1732 distinguish
between a carrier offering its services to the "general public," i.e., the general community or
population, and one who offers services or solicits business only from a narrow segment of the
general population. It appears to the Court that private respondent is properly characterized as a
common carrier even though he merely "back-hauled" goods for other merchants from Manila to
Pangasinan, although such backhauling was done on a periodic or occasional rather than regular
or scheduled manner, and even though private respondent's principal occupation was not the
carriage of goods for others. There is no dispute that private respondent charged his customers a
fee for hauling their goods; that fee frequently fell below commercial freight rates is not relevant
here. A certificate of public convenience is not a requisite for the incurring of liability under the
Civil Code provisions governing common carriers.
(2) Article 1734 establishes the general rule that common carriers are responsible for the loss,
destruction or deterioration of the goods which they carry, "unless the same is due to any of the
following causes only:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;
b. Act of the public enemy in war, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or in the containers; and
e. Order or act of competent public authority."
The hijacking of the carrier's truck - does not fall within any of the five (5) categories of
exempting causes listed in Article 1734. Private respondent as common carrier is presumed to
have been at fault or to have acted negligently. This presumption, however, may be overthrown
by proof of extraordinary diligence on the part of private respondent. We believe and so hold
that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are
reached where the goods are lost as a result of a robbery which is attended by "grave or
irresistible threat, violence or force." we hold that the occurrence of the loss must reasonably be
regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous
event. It is necessary to recall that even common carriers are not made absolute insurers against
all risks of travel and of transport of goods, and are not held liable for acts or events which
cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous
standard of extraordinary diligence

G.R. No. 149038 April 9, 2003

Lessons Applicable: Charter Party (Transportation) FACTS:
 Davao Union Marketing Corporation (DUMC) contracted the services of PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban City of 75,000 bags of cement worth
P3,375,000.
 DUMC insured the goods for its full value with Philippine American General Insurance
Company (Philamgen).
 The goods were loaded aboard the dumb barge Limar I belonging to PKS Shipping.
 December 22, 1988 9 pm: While Limar I was being towed by PKS’ tugboat MT Iron Eagle,
the barge sank a couple of miles off the coast of Dumagasa Point, in Zamboanga del Sur,
bringing down with it the entire cargo of 75,000 bags of cement.
 DUMC filed a formal claim with Philamgen for the full amount of the
insurance. Philamgen promptly made payment; it then sought reimbursement from PKS
Shipping of the sum paid to DUMC but the shipping company refused to pay so Philamgen
to file suit against PKS Shipping
 RTC: dismissed the complaint - fortuitous event
 CA:Affirmed - not a common carrier but a casual occupation
ISSUE: W/N PKS Shipping is NOT liable since it was NOT a common carrier HELD:

NO. Petition is DENIED

Article 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
 Complementary is Section 13, paragraph (b), of the Public Service Act

public service" to be –
"x x x every person that now or hereafter may own, operate, manage, or control in the Philippines,
for hire or compensation, with general or limited clientele, whether permanent, occasional or
accidental, and done for general business purposes, any common carrier, railroad, street
railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route
and whatever may be its classification, freight or carrier service of any class, express service,
steamboat, or steamship, or
steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or
freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice refrigeration plant,
canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum,
sewerage system, wire or wireless communication systems, wire or wireless broadcasting
stations and other similar public services
 So understood, the concept of `common carrier’ under Article 1732 may be seen to
coincide neatly with the notion of `public service,’ under the Public Service Act
 distinction between:
 common or public carrier
 private or special carrier - character of the business, such that if the undertaking is an
isolated transaction , not a part of the business or occupation, and the carrier does not hold
itself out to carry the goods for the general public or to a limited clientele, although
involving the carriage of goods for a fee
 EX: charter party which includes both the vessel and its crew, such as in a bareboat or
demise, where the charterer obtains the use and service of all or some part of a ship for a
period of time or a voyage or voyages and gets the control of the vessel and its crew.
 The regularity of its activities in this area indicates more than just a casual activity on its
part
 The appellate court ruled, gathered from the testimonies and sworn marine protests of the
respective vessel masters ofLimar I and MT Iron Eagle, that there was no way by which the
barge’s or the tugboat’s crew could have prevented the sinking of Limar
I. The vessel was suddenly tossed by waves of extraordinary height of 6 to 8 feet and
buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches.
The official Certificate of Inspection of the barge issued by the Philippine Coastguard and
the Coastwise Load Line Certificate would attest to the seaworthiness of Limar I and should
strengthen the factual findings of the appellate court.
 Findings of fact of the Court of Appeals generally conclude this Court; none of the
recognized exceptions from the rule - (1) when the factual findings of the Court of
Appeals and the trial court are contradictory; (2) when the conclusion is a finding
grounded entirely on speculation, surmises, or conjectures; (3) when the inference
 made by the Court of Appeals from its findings of fact is manifestly mistaken, absurd, or
impossible; (4) when there is a grave abuse of discretion in the appreciation of facts; (5)
when the appellate court, in making its findings, went beyond the issues of the case and such
findings are contrary to the admissions of both appellant and appellee; (6) when the
judgment of the Court of Appeals is premised on a misapprehension of facts; (7) when the
Court of Appeals failed to notice certain relevant facts which, if properly considered, would
justify a different conclusion; (8) when the findings of fact are themselves conflicting; (9)
when the findings of fact are conclusions without citation of the specific evidence on which
they are based; and
(10) when the findings of fact of the Court of Appeals are premised on the absence of
evidence but such findings are contradicted by the evidence on record – would appear to be
clearly extant in this instance.

Spouses Perena vs Spouses Nicolas

In June 1996, Nicolas and Teresita Zarate contracted Teodoro and Nanette Pereña to transport
their (Zarate’s) son, Aaron Zarate, to and from school. The Pereñas were owners of a van being
used for private school transport.
At about 6:45am of August 22, 1996, the driver of the said private van, Clemente Alfaro, while
the children were on board including Aaron, decided to take a short cut in order to avoid traffic.
The usual short cut was a railroad crossing of the Philippine National Railway (PNR).
Alfaro saw that the barandilla (the pole used to block vehicles crossing the railway) was up
which means it was okay to cross. He then tried to overtake a bus. However, there was in fact an
oncoming train but Alfaro no longer saw the train as his view was already blocked by the bus he
was trying to overtake. The bus was able to cross unscathed but the van’s rear end was hit.
During the collision, Aaron, was thrown off the van. His body hit the railroad tracks and his
head was severed. He was only 15 years old.
It turns out that Alfaro was not able to hear the train honking from 50 meters away before the
collision because the van’s stereo was playing loudly.
The Zarates sued PNR and the Pereñas (Alfaro became at-large). Their cause of action
against PNR was based on quasi-delict. Their cause of action against the Pereñas was based
on breach of contract of common carriage.
In their defense, the Pereñas invoked that as private carriers they were not negligent in
selecting Alfaro as their driver as they made sure that he had a driver’s license and that he was
not involved in any accident prior to his being hired. In short, they observed the diligence of a
good father in selecting their employee.
PNR also disclaimed liability as they insist that the railroad crossing they placed there was not
meant for railroad crossing (really, that’s their defense!).
The RTC ruled in favor of the Zarates. The Court of Appeals affirmed the RTC. In the decision
of the RTC and the CA, they awarded damages in favor of the Zarates for the loss of earning
capacity of their dead son.
The Pereñas appealed. They argued that the award was improper as Aaron was merely a high
school student, hence, the award of such damages was merely speculative. They cited the case of
People vs Teehankee where the Supreme Court did not award damages for the loss of earning
capacity despite the fact that the victim there was enrolled in a pilot school.
ISSUES: Whether or not the defense of due diligence of a good father by the Pereñas is
untenable. Whether or not the award of damages for loss of income is proper.

HELD: Yes, in both issues.

Defense of Due Diligence of a Good Father
This defense is not tenable in this case. The Pereñas are common carriers. They are not merely
private carriers. (Prior to this case, the status of private transport for school services or school
buses is not well settled as to whether or not they are private or common carriers – but they were
generally regarded as private carriers). Private transport for schools are common carriers. The
Pereñas, as the operators of a school bus service were: (a) engaged in transporting passengers
generally as a business, not just as a casual occupation; (b) undertaking to carry passengers over
established roads by the method by which the business was conducted; and (c) transporting
students for a fee.
Despite catering to a limited clientèle, the Pereñas operated as a common carrier
because they held themselves out as a ready transportation indiscriminately to the students of a
particular school living within or near where they operated the service and for a fee.
Being a common carrier, what is required of the Pereñas is not mere diligence of a good father.
What is specifically required from them by law is extraordinary diligence – a fact which they
failed to prove in court. Verily, their obligation as common carriers did not cease upon their
exercise of diligently choosing Alfaro as their employee.
(It is recommended that you read the full text, the Supreme Court made an elaborate and
extensive definition of common and private carriers as well as their distinctions.)
Award of Damages for Aaron’s loss of earning capacity despite he being a high school student at
the time of his death
The award is proper. Aaron was enrolled in a reputable school (Don Bosco). He was of normal
health and was an able-bodied person. Further, the basis of the computation of his earning
capacity was not on what he would have become. It was based on the current minimum wage.
The minimum wage was validly used because with his circumstances at the time of his death, it
is most certain that had he lived, he would at least be a minimum wage earner by the time he
starts working. This is not being speculative at all.
The Teehankee case was different because in that case, the reason why no damages were
awarded for loss of earning capacity was that the defendants there were already assuming that
the victim would indeed become a pilot – hence, that made the assumption speculative. But in
the case of Aaron, there was no speculation as to what he might be – but whatever he’ll become,
it is certain that he will at the least be earning minimum wage.
LOADMASTERS CUSTOMS SERVICES, INC., vs. GLODEL BROKERAGE CORPORATION
and R&B INSURANCE CORPORATION, / G.R. No. 179446 / January 10, 2011

FACTS: The case is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court assailing the August 24, 2007 Decision of the Court of Appeals (CA) in CA-G.R. CV
No. 82822.
 On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor
of Columbia to insure the shipment of 132 bundles of electric copper cathodes against All Risks.
On August 28, 2001, the cargoes were shipped on board the vessel "Richard Rey" from Isabela,
Leyte, to Pier 10, North Harbor, Manila. They arrived on the same date.
Columbia engaged the services of Glodel for the release and withdrawal of the
cargoes from the pier and the subsequent delivery to its warehouses/plants. Glodel, in turn,
engaged the services of Loadmasters for the use of its delivery trucks to transport the cargoes
to Columbia’s warehouses/plants in Bulacan and Valenzuela City.
The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven by
its employed drivers and accompanied by its employed truck helpers. Of the six
(6) trucks route to Balagtas, Bulacan, only five (5) reached the destination. One (1) truck,
loaded with 11 bundles or 232 pieces of copper cathodes, failed to deliver its cargo.
Later on, the said truck, was recovered but without the copper cathodes. Because of this
incident, Columbia filed with R&B Insurance a claim for insurance indemnity in the amount
ofP1,903,335.39. After the investigation, R&B Insurance paid Columbia the amount
ofP1,896,789.62 as insurance indemnity.
R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and
Glodel before the Regional Trial Court, Branch 14, Manila (RTC), It sought reimbursement of
the amount it had paid to Columbia for the loss of the subject cargo. It claimed that it had been
subrogated "to the right of the consignee to recover from the party/parties who may be held
legally liable for the loss."
On November 19, 2003, the RTC rendered a decision holding Glodel liable for damages
for the loss of the subject cargo and dismissing Loadmasters’ counterclaim for damages and
attorney’s fees against R&B Insurance.
Both R&B Insurance and Glodel appealed the RTC decision to the CA.
On August 24, 2007, the CA rendered that the appellee is an agent of appellant Glodel,
whatever liability the latter owes to appellant R&B Insurance Corporation as insurance
indemnity must likewise be the amount it shall be paid by appellee Loadmasters. Hence,
Loadmasters filed the present petition for review on certiorari.
ISSUE:
Whether or not Loadmasters and Glodel are common carriers to determine their liability for the
loss of the subject cargo.

RULING:

The petition is PARTIALLY GRANTED. Judgment is rendered declaring petitioner Loadmasters

Customs Services, Inc. and respondent Glodel Brokerage Corporation jointly and severally liable
to respondent
Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or
associations engaged in the business of carrying or transporting passenger or goods, or both by
land, water or air for compensation, offering their services to the public.
Loadmasters is a common carrier because it is engaged in the business of transporting goods by
land, through its trucking service. It is a common carrier as distinguished from a private carrier
wherein the carriage is generally undertaken by special agreement and it does not hold itself out
to carry goods for the general public. Glodel is also considered a common carrier within the
context of Article 1732. For as stated and well provided in the case of Schmitz Transport &
Brokerage Corporation v. Transport Venture, Inc., a customs broker is also regarded as a
common carrier, the transportation of goods being an integral part of its business.
Loadmasters and Glodel, being both common carriers, are mandated from the nature of their
business and for reasons of public policy, to observe the extraordinary diligence in the vigilance
over the goods transported by them according to all the circumstances of such case, as required
by Article 1733 of the Civil Code. When the Court speaks of extraordinary diligence, it is that
extreme measure of care and caution which persons of unusual prudence and circumspection
observe for securing and preserving their own property or rights. With respect to the time frame
of this extraordinary responsibility, the Civil Code provides that the exercise of extraordinary
diligence lasts from the time the goods are unconditionally placed in the possession of, and
received by, the carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the person who has a right to receive them.
The Court is of the view that both Loadmasters and Glodel are jointly and severally liable to R
& B Insurance for the loss of the subject cargo. Loadmasters’ claim that it was never privy to the
contract entered into by Glodel with the consignee Columbia or R&B Insurance as subrogee, is
not a valid defense.
For under ART. 2180. The obligation imposed by Article 2176 is demandable not only for
one’s own acts or omissions, but also for those of persons for whom one is responsible. x x x x
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry.
It is not disputed that the subject cargo was lost while in the custody of Loadmasters whose
employees (truck driver and helper) were instrumental in the hijacking or robbery of the
shipment. As employer, Loadmasters should be made answerable for the damages caused by its
employees who acted within the scope of their assigned task of delivering the goods safely to the
warehouse.
Glodel is also liable because of its failure to exercise extraordinary diligence. It failed to ensure
that Loadmasters would fully comply with the undertaking to safely transport the subject cargo to
the designated destination. Glodel should, therefore, be held liable with Loadmasters. Its defense
of force majeure is unavailing.
For the consequence, Glodel has no one to blame but itself. The Court cannot come to its aid on
equitable grounds. "Equity, which has been aptly described as ‘a justice outside legality,’ is
applied only in the absence of, and never against, statutory law or judicial rules of procedure."
The Court cannot be a lawyer and take the cudgels for a party who has been at fault or negligent.

Asian Terminals, Inc., Petitioner vs. Simon Enterprises, Inc., Respondent GR. No. 177116 FEB
27, 2013
Facts
Simon Enterprise Inc. (Simon) has entered into contract with Contiquincybunge Export Company
(Contiquincybunge) as its consignee of the shipped Soybean Meal. On
October 25, 1995 and on November 25, 1995 Contiquincybunge has made a shipment through
M/V Sea Dream and M/V Tern respectively at the Port of Darrow, Louisiana,
U.S.A. For the first shipment, Contiquincybunge made a shipment of 6,825.144 metric tons of
U.S. Soybean Meal which when the M/V Sea Dream arrived at the Port of Manila the bulk of
soybean meal was received by the Asian Terminals, Inc. (ATI), for shipment to Simon.
However, when it reached its receiver Simon, it was already short by 18.556 metric tons. For the
second shipment, Contiquincybunge made shipment, through M/V Tern, of 3,300.000 metric
tons of U.S. Soybean Meal in Bulk for delivery to Simon at the Port of Manila. The shipment
was received by ATI again for delivery to Simon. However, the shipped cargos were found
lacking 199.863 metric tons.
Simon has filed an action for damages against the unknown owner of the vessels M/V Sea
Dream and M/V Tern, its local agent Inter-Asia Marine Transport, Inc., and petitioner ATI
alleging that it suffered the losses through the fault or negligence of the said defendants. The
case of the unknown owner of the vessel M/V Sea Dream has been settled in release and
quitclaim and therefore has been stricken out of the case, leaving M/V Tern, its local agent Inter-
Asia Marine Transport, Inc., and petitioner ATI’s case remaining. The RTC has ruled that the
defendants be solidarily liable for the damages incurred by Simon.
Unsatisfied with the RTC ruling, the owner of the M/V Tern, and Inter-Asia Marine Transport,
Inc. appealed to CA on the issue whether RTC has erred in finding that they did not exercise
extraordinary diligence in the handling of the goods. On the other hand, the petitioner ATI has
also appealed to CA on the issue that the RTC, the court-a-quo, committed serious and
reversible error in holding ATI solidarily liable with co-defendant appellant Inter-Asia Marine
Transport, Inc. contrary to the evidence presented.The CA ruled that the RTC ruling be assailed
with some modifications on the basis that M/V Tern and Inter-Asia Marine Transport, Inc. have
failed to establish that they exercised extraordinary diligence in transporting the goods or
exercised due diligence to forestall or lessen the loss as provided in Article 1742 of the Civil
Code. And on ATI’s RTC ruling, it was assailed as well on the basis that the stevedore of the
M/V Tern has witnessed that during the dischargement of the cargo, there has been spillage done
by the stevedores of ATI which is an evidence that ATI has been negligible in handling the
goods.
ATI filed a motion for reconsideration at CA but was denied. It then filed a petition for certiorari
with the sole issue of whether the appellate court erred in affirming the decision of the trial court
holding petitioner ATI solidarily liable with its co-defendants for the shortage incurred in the
shipment of the goods to respondent.
The issue involves questions of facts which cannot be entertained by SC for it is not a trier of
facts under rule 45 of the 1997 rules of civil procedure. However, the said rule 45 is not ironclad
and has certain exceptions. The issue raised by ATI was merited to be entertained by SC under
the rule 4, when the judgment is based on a misapprehension of facts.
Issue
Whether the appellate court erred in affirming the decision of the trial court holding
petitioner ATI solidarily liable with its co-defendants for the shortage incurred in the
shipment of the goods to respondent.
Ruling
The petition for review on certiorari was granted to ATI. The SC agreed to ATI’s claim that the
CA erred in affirming the decision of the trial court holding petitioner ATI solidarily liable with its
co-defendants for the shortage incurred in the shipment of the goods to respondent. The CA
misapprehended the following facts:
First, petitioner ATI is correct in arguing that the respondent failed to prove that the subject
shipment suffered actual shortage, as there was no competent evidence to prove that it actually
weighed 3,300 metric tons at the port of origin.
Second, as correctly asserted by petitioner ATI, the shortage, if any, may have been due to the
inherent nature of the subject shipment or its packaging since the subject cargo was shipped in
bulk and had a moisture content of 12.5%.
Third, SC agreed with the petitioner ATI that respondent has not proven any negligence on the
part of the former.
******
I just remembered the time I do six case digests for labor relations which was just
announced a day before the submission date. I wasn’t able to finish the whole case, I was lacking
digests of 2 cases. I have slept at 4:00am and had to wake up at 6:00. I had to travel to school
with a cup of coffee in my hand and a semi-awake consciousness. When
I entered our room, everyone was like me, with eye bugs and still has the energy to rant about
how we did not manage to finish it all and how we managed to come to class with 3 hours of
sleep or no sleep at all.

Equitable Leasing Corp. Vs. Lucita Suyom, Marissa Enano, Myrna Tamayo and Felix Oldean
G.R. No. 143360 | September 5, 2002 | Panganiban, J.| ―Registered Owner Rule‖ FACTS:
On July 17, 1994, a Fuso Road Tractor driven by Raul Tutor rammed into the house cumstore of
Myrna Tamayo located at Pier 18, Vitas, Tondo, Manila.A portion of the house was
destroyed.Pinned to death under the engine of the tractor were Respondent Myrna Tamayos son,
Reniel Tamayo, and Respondent Felix Oledans daughter, Felmarie Oledan. Injured were
Respondent Oledan himself, Respondent Marissa Enano, and two sons of Respondent Lucita
Suyom. Tutor was charged with and later convicted of reckless imprudence resulting in multiple
homicide and multiple physical injuries in Criminal Case No. 296094-SA, Metropolitan Trial
Court of Manila, Branch 12. Upon verification with the Land Transportation Office, respondents
were furnished a copy of Official Receipt No.
62204139 and Certificate of Registration No. 08262797, showing that the registered owner of
the tractor was Equitable Leasing Corporation/leased to Edwin Lim.On April 15, 1995,
respondents filed against Raul Tutor, Ecatine Corporation (Ecatine) and Equitable Leasing
Corporation (Equitable) a Complaint for damages docketed as Civil Case No. 95- 73522 in the
RTC of Manila, Branch 14. The trial court, upon motion of plaintiffs counsel, issued an Order
dropping Raul Tutor, Ecatine and Edwin Lim from the Complaint, because they could not be
located and served with summonses. On the other hand, in its Answer with Counterclaim,
petitioner alleged that the vehicle had already been sold to Ecatine and that the former was no
longer in possession and control thereof at the time of the incident.It also claimed that Tutor was
an employee, not of Equitable, but of
Ecatine. After trial on the merits, the RTC rendered its Decision ordering petitioner to pay
actual and moral
damages and attorney’s fees to respondents.
It held that since the Deed of Sale between petitioner and Ecatine had not been registered with
the Land Transportation Office (LTO), the legal owner was still Equitable. Thus, petitioner was
liable to respondents. Upon Appeal to the CA. The court held that petitioner was still to be
legally deemed the owner/operator of the tractor, even if that vehicle had been the subject of a
Deed of Sale in favour of Ecatine. It cited that the Certificate of Registration on file with the
LTO still remained in petitioners name. In order that a transfer of ownership of a motor vehicle
can bind third persons, it must be duly recorded in the LTO. It also upheld the claim for moral
damages considering Tutor to be an agent of the registered owner.
ISSUE:
Whether or not Petitioner is liable for the accident despite a valid deed of sale in favour of
Ecatine.
RULING:
We hold petitioner liable for the deaths and the injuries complained of, because it was the
registered owner of the tractor at the time of the accident on July 17, 1994. The Court has
consistently ruled that,regardless of sales made of a motor vehicle, the registered owner is the
lawful operator insofar as the public and third persons are concerned; consequently, it is directly
and primarily responsible for the consequences of its operation. In contemplation of law, the
owner/operator of record is the employer of the driver, the actual operator and employer being
considered as merely its agent. The same principle applies even if the registered owner of any
vehicle does not use it for public service. Since Equitable remained the registered owner of the
tractor, it could not escape primary liability for the deaths and the injuries arising from the
negligence of the driver. We must stress that the failure of Equitable and/or Ecatine to register
the sale with the
LTO should not prejudice respondents, who have the legal right to rely on the legal principle that
the registered vehicle owner is liable for the damages caused by the negligence of the
driver.Petitioner cannot hide behind its allegation that Tutor was the employee of Ecatine.This will
effectively prevent respondents from recovering their losses on the basis of the inaction or fault of
petitioner in failing to register the sale.The non- registration is the fault of petitioner, which should
thus face the legal consequences thereof.

SPOUSES ZALAMEA and LIANA ZALAMEA vs. CA and TRANSWORLD AIRLINES, INC.
G.R. No. 104235 November 18, 1993
FACTS:
Petitioners-spouses Cesar Zalamea and Suthira Zalamea, and their daughter, Liana purchased 3
airline tickets from the Manila agent of respondent TransWorld Airlines, Inc. for a flight to New
York to Los Angeles. The tickets of petitioners-spouses were purchased at a discount of 75%
while that of their daughter was a full fare ticket. All three tickets represented confirmed
reservations.
On the appointed date, however, petitioners checked in but were placed on the wait-list because
the number of passengers who had checked in before them had already taken all the seats
available on the flight. Out of the 42 names on the wait list, the first 22 names were eventually
allowed to board the flight to Los Angeles, including petitioner Cesar Zalamea. The two others
were not able to fly. Those holding full-fare tickets were given first priority among the wait-
listed passengers. Mr. Zalamea, who was holding the full-fare ticket of his daughter, was
allowed to board the plane; while his wife and daughter, who presented the discounted tickets
were denied boarding.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her daughter, could not be
accommodated because it was also fully booked. Thus, they were constrained to book in another
flight and purchased two tickets from American Airlines. Upon their arrival in the Philippines,
petitioners filed an action for damages based on breach of contract of air carriage before the
RTC- Makati. The lower court ruled in favor of petitioners . CA held that moral damages are
recoverable in a damage suit predicated upon a breach of
contract of carriage only where there is fraud or bad faith. Since it is a matter of record that
overbooking of flights is a common and accepted practice of airlines in the United States and is
specifically allowed under the Code of Federal Regulations by the Civil Aeronautics Board, no
fraud nor bad faith could be imputed on respondent TransWorld Airlines. Thus petitioners raised
the case on petition for review on certiorari.
ISSUE;
WON TWZ acted with bad faith and would entitle Zalameas to Moral and Examplary damages.
RULING:
The U.S. law or regulation allegedly authorizing overbooking has never been proved. Foreign
laws do not prove themselves nor can the courts take judicial notice of them. Like any other
fact, they must be alleged and proved. Written law may be evidenced by an official publication
thereof or by a copy attested by the officer having the legal custody of the record, or by his
deputy, and accompanied with a certificate that such officer has custody. The certificate may be
made by a secretary of an embassy or legation, consul general, consul, vice-consul, or consular
agent or by any officer in the foreign service of the Philippines stationed in the foreign country
in which the record is kept, and authenticated by the seal of his office.
Respondent TWA relied solely on the statement of Ms. Gwendolyn Lather, its customer service
agent, in her deposition that the Code of Federal Regulations of the Civil Aeronautics Board
allows overbooking. No official publication of said code was
presented as evidence. Thus, respondent court’s finding that overbooking is specifically allowed
by the US Code of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the same is not applicable to
the case at bar in accordance with the principle of lex loci contractus which require that the law
of the place where the airline ticket was issued should be applied by the court where the
passengers are residents and nationals of the forum and the ticket is issued in such State by the
defendant airline. Since the tickets were sold and issued in the Philippines, the applicable law in
this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts to bad faith, entitling the
passengers concerned to an award of moral damages. In Alitalia Airways v. Court of
Appeals, where passengers with confirmed bookings were refused carriage on the last minute,
this Court held that when an airline issues a ticket to a passenger confirmed on a particular
flight, on a certain date, a contract of carriage arises, and the passenger has every right to expect
that he would fly on that flight and on that date. If he does not, then the carrier opens itself to a
suit for breach of contract of carriage. Where an airline had deliberately overbooked, it took the
risk of having to deprive some passengers of their seats in case all of them would show up for
the check in. For the indignity and inconvenience of being refused a confirmed seat on the last
minute, said passenger is entitled to an award of moral damages.
For a contract of carriage generates a relation attended with public duty — a duty to provide
public service and convenience to its passengers which must be paramount to self-interest or
enrichment.
Respondent TWA is still guilty of bad faith in not informing its passengers beforehand that it
could breach the contract of carriage even if they have confirmed tickets if there was
overbooking. Respondent TWA should have incorporated stipulations on overbooking on the
tickets issued or to properly inform its passengers about these policies so that the latter would be
prepared for such eventuality or would have the choice to ride with another airline.
Respondent TWA was also guilty of not informing its passengers of its alleged policy of giving
less priority to discounted tickets. Neither did it present any argument of substance to show that
petitioners were duly apprised of the overbooked condition of the flight or that there is a
hierarchy of boarding priorities in booking passengers. It is evident that petitioners had the right
to rely upon the assurance of respondent TWA, thru its agent in Manila, then in New York, that
their tickets represented confirmed seats without any qualification. The failure of respondent
TWA to so inform them when it could easily have done so thereby enabling respondent to hold
on to them as passengers up to the last minute amounts to bad faith. Evidently, respondent TWA
placed its self- interest over the rights of petitioners under their contracts of carriage. Such
conscious disregard of petitioners’ rights makes respondent TWA liable for moral damages. To
deter breach of contracts by respondent TWA in similar fashion in the future, we adjudge
respondent TWA liable for exemplary damages, as well.
In the case of Alitalia Airways v. Court of Appeals, this Court explicitly held that a passenger is
entitled to be reimbursed for the cost of the tickets he had to buy for a flight to another airline.
Thus, instead of simply being refunded for the cost of the unused TWA tickets, petitioners
should be awarded the actual cost of their flight from New York to Los Angeles.
WHEREFORE, the petition is hereby GRANTED and the decision of the respondent Court of
Appeals is hereby MODIFIED

CATHAY PACIFIC AIRWAYS LTD., petitioner,

vs. SPOUSES DANIEL VASQUEZ and MARIA LUISA MADRIGAL VASQUEZ,
respondents. [G.R. No. 150843. March 14, 2003]
FACTS: In respondents’ return flight to Manila from Hongkong, they were deprived of their
original seats in Business Class with their companions because of overbooking. Since
respondents were privileged members, their seats were upgraded to First Class. Respondents
refused but eventually persuaded to accept it. Upon return to Manila, they demanded that they
be indemnified in the amount of P1million for the “humiliation and embarrassment” caused by
its employees. Petitioner’s Country Manager failed to respond. Respondents instituted action for
damages. The RTC ruled in favor of respondents. The Court of Appeals affirmed the RTC
decision with modification in the award of damages.

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

RULING: (1) YES. Although respondents have the priority of upgrading their seats, such
priority may be waived, as what respondents did. It should have not been imposed on them
over their vehement objection.
(2) NO. There was no evident bad faith or fraud in upgrade of seat neither on
overbooking of flight as it is within 10% tolerance.
(3) YES. Nominal damages (Art. 2221, NCC) were awarded in the amount of P5,000.00. Moral
damages (Art.2220, NCC) and attorney’s fees were set aside and deleted from the Court of
Appeals’ ruling.
G.R. No. L-22272 Maranan v. Perez Case

Facts of the Case:

The carrier was charged for damages due to the case where his former employee executed
homicide.

According the Civil code of the Philippines, made a point that the common carrier is "liable
for the damages done by his employees to their
passengers" by the wording of Art. 1759 which states that:

"Common carriers are liable for the death or of injuries to passengers through negligence
or willful acts of the former's employers, although
such employees may have acted beyond the scope of their authority or in violation of the
Common carriers."

Antonia Maranan, the mother of the victim filed an action in the court of First Instance of
Batangas to recover damages from Perez who is the carrier and Valenzuela, who is the suspect
found guilty of homicide for the death of Rogelio Corachea, her son. In defense of Perez claimed
that deceased was killed in self-defense because he was the first who assaulted the driver. In
addition to that, the defendant claimed that the death was caso foruito which means Perez, the
carrier is not liable for the damages done. In the end, the lower court adjudged the defendant
carrier liable pursuant to Article 1759 of the Civil Code

Issues:
  Whether the carrier did not partake on the crime scene, is responsible for the
protection of the passengers?
 Whether the carrier is not involve in that event, is responsible for the action of his
employees?
 Whether it is not the fault of the carrier committing the crime, is liable due to the
fact that he hired the employee who
failed transporting the passenger to safety?
 Whether it's the employee's fault, the carrier will bear the risk of wrongful acts or
negligence of the carrier's employees against
passengers?

Decisions:

The court's decision is yes, the carrier is liable for the damages due to Art. 1759 of the Civil
Code proves his guilt.
The three very least reasons to which the remaining issues are also 'yesy', explained in
Texas Midland R.R. v. Monroe, 110 Tex. 97, 216 S.W. 388, 389-390, and Haver v. Central
Railroad Co., 43 LRA 84, 85: (1) the special undertaking of the carrier requires that it furnish
its passenger that full measure of protection afforded by the exercise of the high degree of care
prescribed by the law, inter alia from violence and insults at the hands of strangers and other
passengers, but above all, from the acts of the carrier's own servants charged with the
passenger's safety; (2) said liability of the carrier for the servant's violation of duty to
passengers, is the result of the formers confiding in the servant's hands the performance of his
contract to safely transport the passenger, delegating therewith the duty of protecting the
passenger with the utmost care prescribed by law; and (3) as between the carrier and the
passenger, the former must bear the risk of wrongful acts or negligence of the carrier's
employees against passengers, since it, and not the passengers, has power to select and remove
them.
 JOSE PILAPIL vs. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY,
INC. (G.R. No. 52159, December 22, 1989)

FACTS: Petitioner Pilapil, on board respondent’s bus was hit above his eye by a stone
hurled by an unidentified bystander. Respondent’s personnel lost no time in bringing him to a
hospital, but eventually petitioner partially lost his left eye’s vision and sustained a permanent
scar.

Thus, Petitioner lodged an action for recovery of damages before the Court of First Instance of
Camarines Sur which the latter granted. On appeal, the Court of Appeals reversed said decision.

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

HELD: In consideration of the right granted to it by the public to engage in the business of
transporting passengers and goods, a common carrier does not give its consent to become an
insurer of any and all risks to passengers and goods. It merely undertakes to perform certain
duties to the public as the law imposes, and holds itself liable for any breach thereof.
While the law requires the highest degree of diligence from common carriers in the safe
transport of their passengers and creates a presumption of negligence against them, it does not,
however, make the carrier an insurer of the absolute safety of its passengers. Article 1763. A
common carrier is responsible for injuries suffered by a passenger on account of the wilful acts
or negligence of other passengers or of strangers, if the common carrier's employees through the
exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission.
Clearly under the above provision, a tort committed by a stranger which causes injury to a
passenger does not accord the latter a cause of action against the carrier. The negligence for
which a common carrier is held responsible is the negligent omission by the carrier's employees
to prevent the tort from being committed when the same could have been foreseen and prevented
by them. Further, under the same provision, it is to be noted that when the violation of the
contract is due to the willful acts of strangers, as in the instant case, the degree of care essential
to be exercised by the common carrier for the protection of its passenger is only that of a good
father of a family.
YOBIDO v CA [G.R. No. 113003. October 17, 1997.] ALBERTA YOBIDO and CRESENCIO
YOBIDO, petitioners, vs. COURT OF APPEALS, LENY TUMBOY, ARDEE TUMBOY and
JASMIN TUMBOY, respondents.

FACTS:
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children, Ardee and Jasmin,
boarded at Mangagoy, Surigao del Sur, a Yobido bus bound for Davao City.
Along Picop road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus suddenly
exploded. The bus fell into a ravine around three (3) feet from the road and struck a tree which
resulted in the death of Tito Tumboy and physical injuries to other passengers. Thereafter, a
complaint for breach of contract of carriage, damages and attorney's fees was filed by Leny and
her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido, its driver in
the Regional Trial Court of Davao City.

Defenses:
Abundio Salce, who was the bus conductor when the incident happened, testified that 1. the 42-
seater bus was not full as there were only 32 passengers, such that he himself managed to get a
seat;
2. the bus was running at a speed of "60 to 50" and that it was going slow because of the zigzag
road.
3. the left front tire that exploded was a "brand new tire" that he mounted on the bus on April
21, 1988 or only five (5) days before the incident.

DECISION:
(1)Trial Court: dismissing the action for lack of merit
(2) Court of Appeals: rendered a decision reversing that of the lower court

ISSUE: Whether the tire blow-out is a fortuitous event

RULING: No.
A fortuitous event is possessed of the following characteristics:
(a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to
comply with his obligations must be independent of human will;
(b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be
foreseen, it must be impossible to avoid;
(c) the occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner; and
(d) the obligor must be free from any participation in the aggravation of the injury
resulting to the creditor.

As Article 1174 provides, no person shall be responsible for a fortuitous event which could not
be foreseen, or which, though foreseen was inevitable. In other words, there must be an entire
exclusion of human agency from the cause of injury or loss.

There is no reason to overturn the findings and conclusions of the Court of Appeals. Petitioners'
contention that they are exempted from liability because the tire blowout was a fortuitous event
that could not have been foreseen, must fail. It is settled that an accident caused either by defects
in the automobile or through the negligence of its driver is not a caso fortuito that would exempt
the carrier from liability for damages.
Accordingly, the challenged decision is affirmed subject to modification that petitioners shall
additionally pay herein, respondents P20,000.00 as exemplary damages.
The explosion of the new tire may not be considered a fortuitous event. There are human factors
involved in the situation. The fact that the tire was new did not imply that it was entirely free
from manufacturing defects or that it was properly mounted on the vehicle. Neither may the fact
that the tire bought and used in the vehicle is of a brand name noted for quality, resulting in the
conclusion that it could not explode within five days' use. Be that as it may, it is settled that an
accident caused either by defects in the automobile or through the negligence of its driver is not a
caso fortuito that would exempt the carrier from liability for damages.

It was incumbent upon the defense to establish that it took precautionary measures
considering partially dangerous condition of the road. As stated above, proof that the tire was
new and of good quality is not sufficient proof that it was not negligent.
Petitioners should have shown that it undertook extraordinary diligence in the care of its carrier
such as conducting daily routinary check-ups of the vehicle's parts. As the late Justice J.B.L.
Reyes said: "It may be impracticable, as appellee argues, to require of carriers to test the strength
of each and every part of its vehicles before each trip, but we are of the opinion that a due regard
for the carrier's obligations toward the traveling public demands adequate periodical tests to
determine the condition and strength of those vehicle portions the failure of which may endanger
the safety of the passengers."
It is interesting to note that petitioners proved through the bus conductor, Salce, that the bus was
running at "60-50" kilometers per hour only within the prescribed lawful speed limit. However,
they failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she
cautioned the driver to slow down. These contradictory facts must, therefore, be resolved in
favor of liability in view of the presumption of negligence of the carrier in the law.