As long as one offers his services to more than 1 person that is

Common Carriers in General already considered a public.

Contract of carriage or transportation Cedena is properly characterized as a common carrier even

 Arises when one obligates oneself to transport persons or though he merely “back-hauled” goods for other merchants
goods from one place to another for consideration. although such backhauling was done on a periodic or
 The one who obligates himself to transport goods or occasional rather than regular or scheduled manner, and even
persons may be a: though Cendaña’s principal occupation was not the carriage of
 Common carrier; or goods for others.
 Private carrier.
There is no dispute that Cendaña charged his customers for a
Transportation includes: fee for hauling their goods; that the fee frequently fell below
 Waiting time; commercial freight rates is not relevant here.
 Loading and unloading;
 Stopping in transit; and Certificate of public convenience is not necessary to be
 All other accessorial services in connection with the liable as a common carrier
loaded movement. A certificate of public convenience is not a requisite for the
incurring of liability under the Civil Code. That liability arises the
Definition of a Common Carrier moment a person or firm acts as a common carrier, without
Art. 1732. Common carriers are persons, corporations, regard to whether or not such carrier has also complied with
firms, or associations engaged in the business of carrying or the requirements of the applicable regulatory statute and
transporting passengers or goods or both, by land, water, or implementing regulations and has been granted a CPC.
air, for compensation, offering their services to the public.
To exempt Cendaña from the liabilities of a common carrier
Vehicles are not common carriers because he has not secured the necessary CPC, would be
Vehicles such as jeepneys, bus or ships are not common offensive to public policy; that would be to reqard Cendaña for
carriers since they are not persons, corporations, firms, or failing to comply with applicable statutory requirements.
associations. You cannot sue a jeepney, bus, ship.
One is still considered a common carrier even if:
Elements of a common carrier (PEPC) Case Held
(1) Person, corporation, firm, or association; FPIC vs. CA The mode of transportation is not a
(2) Engaged in a business of transporting persons or goods or motor vehicle. FPIC is pipelines under
both by land, water, or air; the ground wherein the oil is transported
(3) Offers its services to the Public; and from one province to another. FPIC is a
(4) Accepts Compensation for services. common carrier because all the
elements are there. The oil is moved
from one point to another. The services
True Test of a Common Carrier are offered to the public. FPIC charges
The carriage of goods and passengers provided it has space for that.
for all who opt to avail themselves of its transportation for a fee. Asia It has no fixed and publicly known
(National Steel v. CA) Lighterage vs. route, maintains no terminals, and
CA issues no tickets. This is a small boat
The true test for a common carrier is not the quantity or extent that picks up passengers or goods along
of the business actually transacted, or the number and Pasig River.
character of the conveyances used in the activity, but whether
Calvo vs. It is not in the business of public
the undertaking is a part of the activity engaged in by the
UCPB transportation. Calvo is a customs
carrier that he has held out to the general public as his
broker. Whenever goods arrive from
business or occupation. (Pereña v. Zarate)
abroad, they have to go through the
customs warehouse.
De Guzman vs. CA
Schmitz vs. TVI The vehicle or mode of transport is
not owned by him. Schmitz is a
Article 1732 make no distinction between: customs broker, in charge of the
release of the goods from the vessel but
Principle business activity or ancillary activity did not have any tug-boat or barge so it
 whose principal business activity is the carrying of pax or contracted with TVI. The vehicle
goods or both (main business); and belonged to TVI but it was Schmitz that
 who does such carrying only as an ancillary activity entered into a contract with the
(sideline). consignee.
Bascos vs. CA The contract entered into was not a
Regular or occasional basis
“contract of carriage” but one of
one offering transportation on:
“lease” The shipper leased the truck
 a regular or scheduled basis; and
from Bascos. Bascos here argued that it
 an occasional, episodic or unscheduled basis.
was not a common carrier because we
entered into a lease contract and not a
General public or narrow segment of population
contract of carriage.
one offering its service to:
 the general public, i.e. the general community or
population; and The SC asked, “Did you transport
 only from a narrow segment of the general population. goods from A to B using your truck?”
 The shipper said YES. Thus, the SC
said that it is a common carrier.
Customs broker is a common carrier
A customs broker, whose principal business is the preparation
of the correct customs declaration and the proper shipping
documents, is still considered a common carrier if it also
undertakes to deliver the goods for its customers.
The law does not distinguish between one whose principal
business activity is the carrying of goods and one who
undertakes this task only as an ancillary activity. Delivery of the
goods is an integral, albeit ancillary, part of its brokerage
services.
TMBI admitted that it was contracted to facilitate, process, and
clear the shipments from the customs authorities, withdraw
them from the pier, then transport and deliver them to Sony’s
warehouse in Laguna. That TMBI does not own trucks and has
to subcontract the delivery of its clients’ goods, is immaterial.
As long as an entity holds itself to the public for the transport of
goods as a business, it is considered a common carrier
regardless of whether it owns the vehicle used or has to
actually hire one. (TMVI vs. FEB Mitsui)
School bus operator is a common carrier
A carrier is a person or corporation who undertakes to
transport or convey goods or persons from one place to
another, gratuitously or for hire. SC has considered as
common carriers pipeline operators, custom brokers and
warehousemen, and barge operators even if they had limited
clientele.
There is no question that Pereña as the operator of a school
bus service is:
 Engaged in transporting passengers generally as a
business, not just as a casual occupation;
 Undertaking to carry passengers over established roads
by the method by which the business was conducted; and
 Transporting students for a fee. (Pereña v. Zarate)
Entities which are NOT common carriers:
1. Travel agency
Caravan’s services as a travel agency include procuring tickets
and facilitating travel permits or visas as well as booking
customers for tours. While Crisostomo concededly bought her
plane ticket through the efforts of Caravan, this does not mean
that the latter ipso facto is a common carrier.
At most, Caravan acted merely as an agent of the airline, with
Caravan’s obligation to Crisostomo in this regard was simply to
see to it that Crisostomo was properly booked with the airline
for the appointed date and time.
The object of Crisostomo’s contractual relation with Caravan is
the latter’s service of arranging and facilitating Crisostomo’s
booking, ticketing and accommodation in the package tour. In
contrast, the object of a contract of carriage is the
transportation of passengers or goods.
Caravan is not a common carrier but a travel agency. It is thus
not bound under the law to observe extraordinary diligence in
the performance of its obligation. Since the contract between
the parties is an ordinary one for services, the standard of care
required of Caravan is that of a good father of a family under
Article 1173 of the Civil Code.
This connotes reasonable care consistent with that which an
ordinarily prudent person would have observed when
confronted with a similar situation. (Crisostomo v. CA)
2. Freight Forwarder
The term "freight forwarder" refers to a firm holding itself out to
the general public (other than as a pipeline, rail, motor, or
water carrier) to provide transportation of property for
compensation and, in the ordinary course of its business to:
(1) assemble and consolidate, or to provide for assembling
and consolidating, shipments, and to perform or provide
for break-bulk and distribution operations of the shipments;
(2) assume responsibility for the transportation of goods from
the place of receipt to the place of destination; and
(3) use for any part of the transportation a carrier subject to
the federal law pertaining to common carriers.
A freight forwarder’s liability is limited to damages arising from
its own negligence, including negligence in choosing the
carrier; However, where the forwarder contracts to deliver
goods to their destination instead of merely arranging for
their transportation, it becomes liable as a common carrier
for loss or damage to goods.
A freight forwarder assumes the responsibility of a carrier,
which actually executes the transport, even though the
forwarder does not carry the merchandise itself. It is not a
common carrier because it does not transport but it
becomes liable as a common carrier. When it comes to
liability, when an action is filed, it can be held liable as a
common carrier. (Unsworth v. CA)
3. Arrastre Operator
 Applies only to overseas trade.
 When cargo from abroad arrives on board a vessel, the
consignee cannot unload and deliver the cargo by himself.
This is done by the arrastre operator, who will then deliver
the cargo to the customs warehouse.
 The only route of the arrastre operator is to the customs
warehouse.
 It is not a common carrier because it has only one client
(Republic of the Philippines), and thus it does not offer its
services to the public.
 But it can be held liable as a common carrier even if is not
a common carrier (same with freight forwarder).
Parties in arrastre contract:
(1) Republic of the Philippines; and
(2) Party awarded the privilege of operating the arrastre
service.
Relationship and responsibility of an arrastre operator to a
consignee of a cargo
Being the custodian of the goods discharged from a vessel, an
arrastre operator’s duty is to take good care of the goods and
to turn them over to the party entitled to their possession.
(Philippines First v. Wallem)
Since it is the duty of the arrastre to take good care of the
goods that are in its custody and to deliver them in good
condition to the consignee, such responsibility also devolves
upon the carrier. Both the arrastre and the carrier are therefore
charged with and obligated to deliver the goods in good
condition to the consignee. (Fireman’s Fund v. Metro Port)
Nature and Basis of Liability
Art. 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the
 goods and for the safety of the passengers transported by goods/products due to any and all causes whatsoever,
them, according to all the circumstances of each case. including theft, robbery and other force majeure while the
goods/products are in transit and until actual delivery.
Such extraordinary diligence in the vigilance over the goods (Malayan v. Reputable)
is further expressed in Articles 1734, 1735, and 1745, Nos.
5, 6, and 7, while the extraordinary diligence for the safety of Liability of registered owner
the passengers is further set forth in Articles 1755 and 1756. The registered owner shall be liable for consequences flowing
from the operations of the carrier, even though the vehicle has
Extraordinary diligence already been transferred to another. (Benedicto v. CA)
Extraordinary diligence is that extreme measure of care and
The registered owner has the right to be indemnified by the
caution which persons of unusual prudence and
circumspection use for securing and preserving their own actual or real owner of the amount that he is required to pay.
(BA Finance v. CA)
property or rights. (RP DOH v. Lorenzo Shipping)
State Regulation of Common Carriers
Distinction between Common Carrier and Private Art. 1765. The Public Service Commission may, on its own
Carrier motion or on petition of any interested party, after due
Common Carrier Private Carrier hearing, cancel the certificate of public convenience granted
to any common carrier that repeatedly fails to comply with
Nature of Engaged in the More of undertaking a
his or its duty to observe extraordinary diligence as
business business of single undertaking.
prescribed in this Section.
transporting pax
or goods as a
Note: Article 1765 talks about the Public Service Commission.
general
occupation. But this is now defunct because we have now governing
Bodies.
Scope of Bound to carry all Can choose the
contract pax who choose persons with whom it
Governing bodies:
to employ it. may contract.
1. Land – Land Transportation Franchising and Regulatory
Diligence Extraordinary Good father of a
Board. (LTFRB)
required diligence. family.
2. Water – Maritime Industry Authority. (MARINA)
Presumptio Arises in case of No presumption. Party 3. Air – Civil Aeronautics Board. (CAB)
n of breach of the who alleges
negligence contract of negligence has the
carriage burden of proof. Common Carriers of Goods
Performs YES. It is subject NO. Not subject to
public to stringent state stringent state Law Applicable
service regulations. regulations. Art. 1753. The law of the country to which the goods are to
be transported shall govern the liability of the common
Private carrier carrier for their loss, destruction or deterioration.
A private carrier is one wherein the carriage is generally
undertaken by special agreement and it does not hold itself out  When it comes to goods, it is the law of the country of
to carry goods for the general public. A common carrier destination.
becomes a private carrier when it undertakes to carry a special
cargo or chartered to a special person only. Ex: Even if the goods come from the Philippines, if they are
being transported to the United States, the applicable law is the
Reputable serves only one customer, Wyeth. For all intents law of California, when it comes to loss, destruction, or
and purposes, therefore, Reputable operated as a deterioration of the goods.
private/special carrier with regard to its contract of carriage with
Wyeth. Parties
1. Shipper/Consignor – one who delivers the goods to the
Liability of private carrier carrier for transportation;
Reputable is bound by the stipulation in its contract with Wyeth, 2. Carrier; and
such that it should be liable for any risk of loss or damage, for 3. Consignee – one to whom the goods are to be delivered.
any cause whatsoever, including that due to theft or robbery
and other force majeure. Note:
 The consignee may be the shipper himself or a third
Reputable is bound by the terms of the contract of carriage. person.
The extent of a private carrier’s obligation is dictated by the  It is the shipper and carrier who is involved in the contract
stipulations of a contract it entered into, provided its of carriage.
stipulations, clauses, terms and conditions are not contrary to  The consignee is not generally part of the contract but
law, morals, good customs, public order, or public policy. The there are instances where the consignee is bound by the
Civil Code provisions on common carriers should not be agreement between the shipper and the carrier.
applied where the carrier is not acting as such but as a private
carrier. When a consignee is bound
The bill of lading is oftentimes drawn up by the shipper and the
Thus, being a private carrier, the extent of Reputable’s liability carrier without the intervention of the consignee. However, the
is fully governed by the stipulations of the contract of carriage, consignee can be bound by such when:
one of which is that it shall be liable to Wyeth for the loss of the
(1) There is a relation of agency between the shipper and the
consignee; or
(2) When the consignee demands fulfillment of the stipulation
of the bill of lading which was drawn up in its favor.
Once the BL is received by the consignee who does not object
to any stipulations contained therein, it constitutes as an
acceptance of the contract and of all of its terms and
conditions, of which the acceptor has actual or constructive
notice.
However, Shin Yang consistently denied that it authorized
Halla to ship the goods on its behalf; or that it got hold of the
BL covering the shipment or that it demanded the release of
the cargo. Thus, MOF has the burden to controvert all these
denials, it being insistent that Shin Yang asserted itself as the
consignee and the one that caused the shipment of the goods
to the Philippines. (MOF v. Shin Yang)
Test to determine if one is a common carrier of
goods
(1) He must be engaged in the business of carrying goods for
others as a public employment;
(2) He must undertake to carry goods of the kind to which his
business is confined and is conducted;
(3) He must undertake to carry the goods by the method by
which his business is conducted and over his established
roads; and
(4) The transportation must be for hire. (FPIC vs. CA)
Vigilance Over Goods
Extraordinary Diligence in the Vigilance over the
goods Extraordinary diligence requires rendering service with
the greatest skill and foresight to avoid damage and
destruction to the goods entrusted for carriage and delivery.
(Lea Mer Industries vs. Malayan Insurance)
General rule on loss, destruction, or deterioration of
goods
Art. 1734. Common Carrier are responsible for the loss,
destruction, or deterioration of the goods, unless the same
is due to any of the following causes only:
1. Flood, storm, earthquake, lightning or other natural
disaster or calamity;
2. Act of the public enemy in war, whether international or
civil;
3. Act of omission of the shipper or owner of the goods;
4. The character of the goods or defects in the packing or
in the container;
5. Order or act of competent public authority.
Automatic Presumption of Negligence
Art. 1735. In all cases other than those mentioned in Nos. 1,
2, 3, 4, and 5 of Art. 1734, 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 observed extraordinary diligence as required in Art.
1733.
Effects when Goods are Lost, Destroyed or
Deteriorated
1. The shipper/consignee has a cause of action for breach
of contract against the carrier; and
2. Automatic presumption of negligence – the common
carrier is presumed to have been at fault or to have acted
negligently. (Art. 1735)
The shipper/consignee have to show the following
in order to have a prima facie case against the
carrier:
1. Proof of actual delivery of goods in good order to carrier;
and
2. Failure of carrier to deliver the goods in the same condition
as when they were received. (Ynchausti vs. Dexter)
Note: The requirements do not apply in case of containerized
shipments.
Containerized Shipment
It means that the goods are stuffed, packed and loaded by the
shipper at the place of his choice, usually his own warehouse,
in the absence of the carrier. The container is sealed by the
shipper and thereafter picked up by the carrier.
A shipment under this arrangement is not inspected or
inventoried by the carrier whose duty is only to transport and
deliver the containers in the same condition as when the carrier
received and accepted the containers for transport.
This means that the only thing that you can look at is the
container. If the container looks like this at the point of origin, it
should also look like that at the point of destination.
If any of the container vans were found in bad condition, or if
any inspection of the goods was to be done in order to
determine the condition thereof, the same should have been
done at:
1. Pierside;
2. Pier warehouse; or
3. Any time and place while the vans were under the care
and custody of the carrier or the arrastre operator.
(Bankers vs. CA)
Rule on automatic presumption of negligence
GR: Common carriers are responsible for the loss,
destruction, or deterioration of goods.
How the common carrier can rebut the automatic
presumption of negligence:
 The common carrier must prove that it exercised
extraordinary diligence in the vigilance over the goods
according to all the circumstances of each case. (Art.
1735, 1733)
 The common carries must prove that it exercised it when
the goods are being transported.
XPN: Instances where Presumption of Negligence does
not arise:
1. Natural disaster;
2. Act of public enemy;
3. Act of shipper;
4. Character of the goods; or
5. Order of competent authority. (Art. 1734)
Effects when any of the 5 exceptions present:
 There is no automatic presumption that the common
carrier acted negligently.
 The common carrier need not prove that it exercised
extraordinary diligence in the vigilance over the goods.
 BUT the common carrier is not automatically exempt from
liability.
 To escape liability, the common carrier has to prove that it
complied with the requirements under Art.1739, 1740,
1741, 1742, and 1743.
Natural disaster
Art. 1739. In order that the common carrier may be
exempted from responsibility that the natural disaster must
have been the proximate and only cause of the loss.
However, the common carrier must exercise due diligence
to prevent or minimize loss before, during and after the
occurrence of flood, storm or other natural disaster in order
that the common carrier may be exempted from liability for
the loss, destruction or deterioration of the goods.
Art. 1740. If the common carrier negligently incurs in delay
in transporting the goods, a natural disaster shall not free
such carrier from responsibility.
Natural disaster
 Flood;
 Storm;
 Earthquake;
 Lightning; or
 Other natural disaster or calamity. (Art. 1734[1])
Note:
GR: Fire is not a natural disaster, because it arises invariably
from some act of man or by human means.
XPN: Unless the fire was caused by lightning or other natural
disaster calamity.
Requisites for the common carrier to escape liability under
Natural Disaster
The common carrier must show that:
(1) The natural disaster must have been the proximate
cause of the loss; (Art. 1739)
 Proximate cause of the loss – there is no participation
on the part of the carrier.
(2) It exercised due diligence to prevent or minimize the loss
before, during or after the occurrence; (Art. 1739)
 Exercising due diligence – it is not necessary to exercise
extraordinary diligence.
(3) It did not incur in delay in transporting the goods. (Art.
1740)
 The delay if ever there is one must be justified.
Act of public enemy
The act of public enemy in war, whether international or civil
(Art. 1734[2])
Requisites for the common carrier to escape liability under
Act of Public Enemy
The common carrier must show that:
(1) The natural disaster must have been the proximate and
only cause of the loss; and
(2) It exercised DUE diligence to prevent or minimize the loss
BEFORE, DURING, or AFTER the occurrence. (Art. 1739)
Act of the Shipper
Act or omission of the shipper or owner of the goods (Art.
1734[3])
Art. 1741. If the shipper or owner merely contributed to the
loss, destruction or deterioration of the goods, the proximate
cause thereof being the negligence of the common carrier,
the common carrier shall be liable in damages, which
however, shall be equitably reduced.
Requisites for the common carrier to escape liability under
Act of the Shipper
The CC has to prove that the act of the shipper is the
proximate and only cause of the loss.
When damages shall be reduced
The CC cannot escape liability but damages shall be equitably
reduced) if:
1. The proximate cause of the loss is the negligence of the
CC;
2. The shipper merely contributed to the loss, destruction, or
deterioration (Art. 1741)
Character of the Goods or Defects in the Packing or
Container
Art. 1742. Even if the loss, destruction, or deterioration, of
the goods should be caused by the character of the goods,
or the faulty nature of the packing or of the containers, the
common carrier must exercise due diligence to forestall or
lessen the loss.
Requisites for the common carrier to escape liability under
Character of the Goods or Defects in the Packing or
Container
The common carrier must prove that it exercised DUE
diligence to FORESTALL or LESSEN the loss (Art. 1742)
Note:
 In a line of cases, the SC said that if the improper packing
or defect in containers are known to the carrier or his
employees or apparent upon ordinary observation but still
accepted it without protest or exception despite such
condition, he is not relieved from damage resulting
therefrom. If only visible.
 If nothing is stated in the bill of lading, that presumption (in
good order) is automatic. Hence, the goods should also
arrive in good order.
Order of Competent Authority
If though the ORDER of PUBLIC AUTHORITY, the goods are
seized or destroyed.
Art. 1743. If through the order of public authority the goods
are seized or destroyed, the common carrier is not
responsible, provided said public authority had power to
issue the order.
Requisites for the common carrier to escape liability under
Order of Competent Authority
(1) The person making the order must have the power or
authority to issue such order; and
(2) The order is lawful or has been issued under legal process
or authority. (Ganzon vs. CA)
Duration of Responsibility
Art. 1736. The extraordinary responsibility of the common
carrier 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, without prejudice to
the provisions of article 1738.
Art. 1737. The common carrier's duty to observe
extraordinary diligence over the goods remains in full force
and effect even when they are temporarily unloaded or
stored in transit, unless the shipper or owner has made use
of the right of stoppage in transitu.
Art. 1738. The extraordinary liability of the common carrier
continues to be operative even during the time the goods
are stored in a warehouse of the carrier at the place of
destination, until the consignee has been advised of the
arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them.
Duration of Liability
 FROM the time the goods are unconditionally placed in the
possession of, and received by the carrier for
transportation (Art. 1736)
 UNTIL they are delivered (actually or constructively) to
the:
a. Consignee; or
b. Person who has the right to receive them.
1. EVEN:
a. When the goods are temporarily unloaded or stored in
transit.
XPN: Unless the shipper or owner has made the use of
the right of stoppage in transit. (Art. 1737)
b. During the time the goods are stored in a warehouse of
the carrier at the place of destination.
XPN: Until the consignee has:
 Been advised of the arrival of the goods; and
 Had reasonable opportunity to remove them. (Art. 1738)
Test on establishment of the relationship of shipper
and carrier
The test of whether the relationship of shipper and carrier have
been established is, had the control and possession of the
goods been completely surrendered by the shipper to the
carrier. Mcleod no longer had control and possession of the
goods. Whether or not the goods were already on the vessel, it
doesn’t matter. The goods were already in the custody of the
carrier.
There is a contract even though there's no written proof of it.
Bill of lading is only a written proof of a contract, but the
contract can already be existing when there is already a
meeting of the minds. (Compania Maritima v. Insurance
Company of North America)
Loss or destruction in the custom’s warehouse
The responsibility of the common carrier to exercise
extraordinary diligence does not extend to the goods already
delivered to the customs of parties. The liability of the carrier
only extends up to the time it has custody over the goods.
Once custody is lost, there is no more responsibility.
It is stated in the Bill of Lading that the carrier does not assume
responsibility for any loss or damage of the goods once they
have been taken into the custom’s authorities. (Lu Do v.
Binamira)
In Servando v. PSNC, the goods were destroyed while in the
custom’s warehouse. The SC applied the defense of fortuitous
event. Here, the burning of the custom’s warehouse was an
extraordinary event which happened independently of the will
of the common carrier as it could not have foreseen that event.
There is nothing in the record to show that appellant carrier
incurred in delay in the performance of its obligation. It appears
that appellant had not only notified appellees of the arrival of
their shipment, out had demanded that the same be withdrawn.
In fact, pursuant to such demand, appellee Uy Bico had taken
delivery of 907 cavans of rice before the burning of the
warehouse.
There is not a shred of proof in the present case that the cause
of the fire that broke out in the Custom’s warehouse was in any
way attributable to the negligence of the appellant or its
employees. Under the circumstances, the appellant is plainly
not responsible.
Thus, where fortuitous event is the immediate and proximate
cause of the loss, the common carrier is exempt from liability
for nonperformance.
In other words, although fortuitous event, it is not the same as
natural disaster because fortuitous event has different legal
basis under Obligations and Contracts. It is still being invoked
as a defense as long as all the requisites are present. Then,
one can escape liability by invoking the defense of a fortuitous
event.
Validity of Stipulations
Limitation As to the Diligence Required
Art. 1744. A stipulation between the common carrier and
the shipper or owner limiting the liability of the former for the
loss, destruction, or deterioration of the goods to a degree
less than extraordinary diligence shall be valid, provided it
be:
(1) In writing, signed by the shipper or owner;
(2) Supported by a valuable consideration other than the
service rendered by the common carrier; and
(3) Reasonable, just and not contrary to public policy.
Where Stipulations are Made
1. Maritime freight – Bill of Lading.
2. Air freight – Airway Bill.
3. Land freight – any relevant document.
Rule as to diligence required
The common carrier and the shipper or owner of the goods
may enter into a stipulation whereby the diligence required
would be less than extraordinary diligence. (Art. 1744)
Requisites for a valid stipulation
It must be:
(1) In Writing;
(2) Signed by the shipper or owner;
(3) Supported by a Valuable consideration other than the
service rendered by the common carrier; and
(4) Reasonable, just and not contrary to public policy.

Unreasonable, unjust and contract to public policy
stipulations
Art. 1745. Any of the following or similar stipulations shall
be considered unreasonable, unjust and contrary to public
policy:
(1) That the goods are transported at the risk of the
owner or shipper;
(2) That the common carrier will not be liable for any
loss, destruction, or deterioration of the goods;
(3) That the common carrier need not observe any
diligence in the custody of the goods;
(4) That the common carrier shall exercise a degree of
diligence less than that of a good father of a family,
or of a man of ordinary prudence in the vigilance over
the movables transported;
(5) That the common carrier shall not be responsible for
the acts or omission of his or its employees;
(6) That the common carrier's liability for acts committed by
thieves, or of robbers who do not act with grave or
irresistible threat, violence or force, is dispensed
with or diminished;
(7) That the common carrier is not responsible for the loss,
destruction, or deterioration of goods on account of the
defective condition of the car, vehicle, ship,
airplane or other equipment used in the contract of
carriage.
Grave or irresistible threat, violence, or force
While Cendaña was a common carrier, it was not held liable.
The common carrier cannot be held liable if acts of strangers or
thieves or robbers were with grave or irresistible threat with
violence or force.
According to the SC, the limits of the duty of extraordinary
diligence in the vigilance of 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.
It was shown here that armed men held up Cendaña’s truck
which carried De Guzman’s cargo. They acted with grave, if
not irresistible threat, violence or force. 3 of the 5 hold-uppers
were armed with firearms. The robbers not only took away the
truck and its cargo but also kidnapped the driver and his
helper.
Therefore, the occurrence of the loss must be reasonably be
regarded as quite beyond the control of the common carrier
and properly regarded as a fortuitous event.
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.
Cendaña was not held liable for the value of the undelivered
merchandise which was lost because of an event entirely
beyond Cendaña’s control. (De Guzman vs. CA)
Hijacking is not a fortuitous event or force majeure
Hijacking is not one of the exceptions provided under Art.
1734. However, a common carrier may absolve itself of liability
from hijacking if it is proven that the hijacking was attended by
grave or irresistible threat, violence or force (Art. 1745), but
Keihin-Everett failed to prove it.
Under Art. 1735, for cases not mentioned in Art. 1734, there is
a presumption that the loss, or destruction is the fault of the
common carrier or that it acted negligently, unless it process
that it observed extraordinary diligence.
Nevertheless, a common carrier may absolve itself of liability
for a resulting loss caused by robbery or hijacked if it is proven
that the robbery or hijacking was attended by grave or
irresistible threat, violence or force. In this case, Keihin-Everett
failed to prove the existence of the aforementioned instances.
(Keihin-Everett Forwarding vs. Tokio Marine)
Limitation As to Amount of liability
Art. 1749. A stipulation that the common carrier's liability is
limited to the value of the goods appearing in the bill of
lading, unless the shipper or owner declares a greater
value, is binding.
Art. 1750. A contract fixing the sum that may be recovered.
by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just
under the circumstances, and has been fairly and freely
agreed upon.
Rule as to the Amount of Liability
The common carrier and the shipper/owner of the goods may
enter into a stipulation LIMITING the LIABILITY of the common
carrier in case of loss, destruction, or deterioration of the
goods. (Art. 1744)
Requisites for Limiting Liability
(1) There is a stipulation limiting the liability of the carrier to
the value of the goods appearing in the bill of lading;
(2) The stipulation is just and reasonable under the
circumstances;
(3) The contract has been fairly and freely agreed upon; and
(4) The shipper or owner does not:
a. Declare a greater value; nor
b. Pay a higher rate of freight. (Art. 1744 & Art. 1745)
Kinds of Stipulations in the Bill of Lading
Stipulation Valid
1. EXEMPTS the carrier from any NO
and all liability for loss or damage
occasioned by its own negligence.
2. Provides for unqualified limitation NO
of such liability to an agreed
valuation.
3. Limits the liability of the carrier to YES
an agreed valuation unless the
shipper declares a higher value
and pays a higher rate of freight.
Art. 1746. An agreement limiting the common carrier’s
liability may be annulled by the shipper or owner if the
common carrier refused to carry the goods unless the
former agreed to such stipulation.
Art. 1747. If the common carrier, without just cause, delays
the transportation of the goods or changes the stipulated or
usual route, the contract limiting the common carrier’s
liability cannot be availed of in case of the loss, destruction,
or deterioration of the goods.
When stipulation limiting liability cannot be availed
by the common carrier
If the common carrier without just cause:
(1) Delays the transportation of the goods; or
(2) Changes the stipulated or usual route. (Art. 1747)
Presumption of negligence still applies
Even when there is an agreement limiting the liability of a
common carrier in the vigilance over the goods, the common
carrier is disputable presumed to have been negligent in case
of their loss, destruction or deterioration. (Art. 1752)
Note: All of the above provisions will apply to unaccompanied
goods (ex: check-in).
Passenger Baggage
Passenger baggage
Baggage that is still in the custody of the passenger like
hand-carried items on board an aircraft, or when you ride a taxi
or bus, it is there beside you.
Art. 1754. The provisions of Art. 1733 to 1753 shall apply to
the passenger’s baggage which is not:
(1) In his personal custody; or
(2) In that of his employee.
As to other baggage, the rules in Art. 1998 and 2000 to
2003 concerning the responsibility of hotel-keepers shall be
applicable.
Art. 1998. The deposit of effects made by travelers in hotels
or inns shall also be regarded as necessary. The keepers of
hotels or inns shall be responsible for them as depositaries,
provided that notice was given to them, or to their EEs, of
the effects brought by the guests and that, on the part of the
latter, they take the precautions which said hotel-keepers or
their substitutes advised relative to the care and vigilance of
their effects.
Art. 2000. The responsibility referred to shall include the
loss of, or injury to the personal property of the guests
caused by the servants or EEs of the keepers of hotels or
inns as well as by strangers; but not that which may proceed
from any force majeure. The fact that travellers are
constrained to rely on the vigilance of the keeper of the hotel
or inn shall be considered in determining the degree of care
required of him.
Art. 2001. The act of a thief or robber, who has entered the
hotel is not deemed force majeure, unless it is done with the
use of arms or through an irresistible force.
Art. 2002. The hotel-keeper is not liable for compensation if
the loss is due to the acts of the guest, his family, servants
or visitors, or if the loss arises from the character of the
things brought into the hotel.
Art. 2003. The hotel-keeper cannot free himself from
responsibility by posting notices to the effect that he is not
liable for the articles brought by the guest. Any stipulation
between the hotelkeeper and the guest whereby the
responsibility of the former as set forth in articles 1998 to
2001 is suppressed or diminished shall be void.
What Laws Shall Apply
1. Check-in Baggage or not in the personal custody of the
passenger or his employee – Civil Code provisions on
common carrier of goods. (Art. 1733-1753)
2. Hand Carried Baggage or in the personal custody of
passenger or his employee – Civil Code provisions
concerning responsibility of hotel keepers. (Art. 1998 and
Art. 2000-2003)
When common carriers shall be responsible for
hand-carried baggage
1. Notice was given to them or their employees’ by the
passenger of the hand-carried items; and
2. The passenger took precautions which the carrier advised
relative to the care and vigilance of their effects.
When notification is not necessary
Art. 1754 does not exempt the common carrier from liability in
case of loss, but only highlights the degree of care required of
it depending on who has the custody of the belongings. Hence,
the law requires the common carrier to observe the same
diligence as hotel keepers in case the baggage remains
with passengers; otherwise, extraordinary diligence must be
exercised.
Furthermore, the liability of the common carrier attaches even if
the loss or damage to the belongings resulted from the acts of
the common carrier's employees, the only exception being
where such loss or damages is due to force majeure.
The actual delivery of the goods to the innkeepers or their
employees is unnecessary before liability could attach to the
hotel-keepers in the event of loss of personal belongings of
their guests considering that the personal effects were inside
the hotel or inn because the hotelkeeper shall remain
accountable.
Hence, actual notification was not necessary to render Sulpicio
as the common carrier liable for the lost personal belongings of
Sesante. By allowing him to board the vessel with his
belongings without any protest, Sulpicio became sufficiently
notified of such belongings.
So long as the belongings were brought inside the premises of
the vessel, Sulpicio was thereby effectively notified and
consequently duty-bound to observe the required diligence in
ensuring the safety of the belongings during the voyage.
Applying Article 2000 of the Civil Code, Sulpicio assumed the
liability for loss of the belongings caused by the negligence of
its officers or crew. Since the negligence of the officers and
crew of Sulpicio was the immediate and proximate cause of the
sinking of the M/V Princess of the Orient, its liability for
Sesante's lost personal belongings was beyond question.
(Sulpicio Lines v. Sesante)
Common Carriers of Passengers
Types of Contracts to Carry Passengers
1. Contract to Carry – An agreement to carry a passenger
at some future date. It is consensual and perfected by
mere consent. Hence, there is a perfected contract to
carry even if no tickets have been issued to the
passenger as long as there is already a meeting of the
minds with respect to the subject matter and the
consideration.
2. Contract of Carriage – Considered a real contract for not
until the carrier is actually used can it be said to have
already assumed the obligation as such. Hence, there is a
perfected contract of carriage between a passenger and
an airline if it was established that the passenger had
checked in and his baggage has been accepted.
(British Airways v. CA)
Nature and Basis of Responsibility
 Common carriers by the nature of their business and for
the reasons of public policy are bound to observe
extraordinary diligence for the safety of the passenger
transported by them according to the circumstances of
each case.
 The extraordinary diligence for the safety of passengers is
further set forth in Art. 1755 and 1756. (Art. 1733)
Art. 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances.
Diligence required
1. Goods – Extraordinary diligence.
2. Passengers – Utmost diligence.
Art. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they
observed extraordinary diligence as prescribed in Articles
1733 and 1755.
When presumption of negligence arises
For the common carrier to be presumed to have been at fault
or to have acted negligently the passenger must die or be
injured under Article 1756. The death or injury of the
passenger will make the presumption of negligence
automatically arise.
How the presumption of negligence is rebutted
If the common carrier proves that it observed the diligence
prescribed in Art. 1733 and 1756. (Art. 1756)
How a common carrier of passengers can escape
liability
1. It must prove that it observed utmost diligence by
carrying the passenger safely as far as human foresight
can provide, using the diligence of a very cautious person,
with due regard for all the circumstances. (Art. 1756); or
2. It must prove that the breach was caused by a fortuitous
event. (Art. 1174)
Requisites for a fortuitous event to exempt a
common carrier from liability
(1) The cause of the incident or the failure of the carrier to
comply with his obligations must be independent of human
will;
(2) The incident must have been impossible to foresee or if it
can be foreseen, it must have been impossible to avoid;
(3) The incident must be such as to render it impossible for
the carrier to fulfill his obligation in a normal manner; and
(4) The carrier must be free from any participation in the
aggravation of the injury resulting to the passenger. (Art.
1174)
In an action based on a contract of carriage, the court need not
make an express finding of fault or negligence on the part of
the carrier in order to hold it responsible to pay the damages
sought for by the passenger.
By the contract of carriage, the carrier assumes the express
obligation to transport the passenger to his destination safely
and to observe extraordinary diligence with a due regard for all
the circumstances, and any injury that might be suffered by the
passenger is right away attributable to the fault or negligence
of the carrier (Art. 1756).
This is an exception to the general rule that negligence must
be proved, and it is therefore incumbent upon the carrier to
prove that it has exercised extraordinary diligence as
prescribed in Articles 1733 and 1755 of the new Civil Code.
Liability of carriers for defects of equipment
A passenger is entitled to recover damages from a carrier for
an injury resulting from a defect in an appliance purchased
from a manufacturer, whenever it appears that the defect
would have been discovered by the carrier if it had exercised
the degree of care which under the circumstances was
incumbent upon it with regard to inspection and application of
the necessary tests.
For the purposes of this doctrine, the manufacturer is
considered as being in law the agent or servant of the carrier,
as far as regards the work of constructing the appliance.
According to this theory, the good repute of the manufacturer
will not relieve the carrier from liability.
The rationale of the carrier's liability is the fact that the
passenger has neither choice nor control over the carrier in the
selection and use of the equipment and appliances in use by
the carrier.
Having no privity whatever with the manufacturer or vendor of
the defective equipment, the passenger has no remedy against
him while the carrier usually has. It is but logical, therefore, that
the carrier, while not in insurer of the safety of his passengers,
should nevertheless be held to answer for the flaws of his
equipment if such flaws were at all discoverable.
We are satisfied that the periodical visual inspection of the
steering knuckle as practiced by the carrier's agents did not
measure up to the required legal standard of utmost diligence
of very cautious persons as far as human care and foresight
can provide, and therefore that the knuckle's failure cannot be
considered a fortuitous event that exempts the carrier from
responsibility. (Necesito vs. Paras)
Other causes of breach
Case Held
Singson vs. CA It was not the taking of the wrong
and Cathay Pacific coupon which caused the breach. It
was the refusal of the airline to
allow him to board despite the fact
that he had a confirmed ticket and
this contract was already partially
executed.
He was already there in LA but he
was not able to take the flight from
LA to HK because of the negligence
of one of their agents. But, the
breach here was the refusal of the
airline to give him a seat on the flight
in which he had a confirmed booking.
 Hence, the presumption of
negligence automatically arises
because there was breach.
Whenever there is breach, the
presumption of negligence will arise.
Singapore Airlines Yes. In an action for breach of
vs. Fernandez contract of carriage, the aggrieved
party does not have to prove that the
common carrier was at fault or was
negligent.
All that is necessary to prove is the
existence of the contract and the fact
of its non-performance by the carrier.
Fernandez carried a confirmed
ticket FRA-SIN-MNL. Since SQ did
not transport Fernandez as
covenanted by it on said terms, SQ
clearly breached its contract of
carriage with Fernandez.
Cathay Pacific vs. Here, Fuentebella was entitled to
Fuentebella First Class accommodations under
the contract of carriage, and Cathay
failed to perform its obligation.
A breach upon the contract confers
upon the injured party a valid cause
for recovering that which may have
been lost or suffered.
By its issuance of First-Class tickets
on the same day of the flight in place
of Business Class tickets that
indicated the preferred and
confirmed flight, Cathay led
Feuntebella to believe that his
request for an upgrade had been
approved.
Cathay Pacific vs. Vasquez should have been
Vasquez consulted first whether they wanted
to avail themselves of the
privilege or would consent to a
change of seat accommodation
before their seat assignments were
given to other passengers.
They refused the upgrade to First
class because their friends were in
Business class. It was because of
the computer which automatically
upgraded them.
But, since the business class was
already fully booked and it was given
away since they were upgraded to
first class, they had to take the first-
class upgrade.
Breach of contract of carriage
Breach of contract is defined as the failure without legal reason
to comply with the terms of a contract. It is also defined as the
failure, without legal excuse, to perform any promise which
forms the whole or part of the contract.
In previous cases, the breach of contract of carriage consisted
in either the:
 Bumping off a passenger with confirmed reservation; or
 Downgrading of a passenger’s seat accommodation from
one class to a lower class.
Note: However, in Cathay Pacific vs. Vasquez what happened
was the reverse. There was an upgrading of a passenger’s
seat accommodation without their consent. The SC still held
that it is still considered as a breach of contract of carriage.
Power to admit an alien in a country is not the duty
of the airline
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 date. 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 breach of contract of carriage.
While JAL has the duty to inspect whether its passenger have
the necessary travel documents, such duty does not extend to
checking the veracity and correctness of every entry therein.
The power to admit or not an alien into the country is a
sovereign act which JAL has no authority to interfere with.
This is not within the ambit of the contract of carriage. JAL
should not be faulted for the denial of the shore pass
applications. There is no breach of contract of carriage here,
hence, Asuncions are not entitled to damages. (Japan Airlines
vs. Asuncion)
Duration of Responsibility
Case Held
Bataclan v. Medina The common carrier is still liable
even after the occurrence took
place.
There was a bus and there were
passengers, and it was driving along
the highway. It was in the outskirts
and in a small town without any
electricity, at dusk. The bus fell on its
side and the passengers were able
to get out and the bus was leaking
gasoline. The people from the barrio
came out with their torches and
came too near the bus that it caught
fire. The fire caused the death of
some passengers and some were
injured.
The common carrier is still liable
even after the occurrence took place
and even after the passengers
unloaded the bus.
La Mallorca v. CA Contractual relation continues until
the passenger has had a
reasonable time and opportunity
to leave the premises or reach a
safe distance from the vehicle.
What is a reasonable time or delay is
to be determined from all the
circumstances.
When they reached their destination,
the father said “para” and they got off
the bus. He told his wife and child to
wait on the side of the road, to stand
 by the tree and wait for a minute so
he could get their suitcases. While
he was taking them out, the bus
driver started the bus and sped
off. The suitcases fell off. The father
did not know that his child went to
follow him and was ran over by the
bus, and later on died.
PAL v. Zapatos Until the passenger reaches his
destination, stoppage in between
does not terminate the contract of
carriage.
There was a typhoon and the plane
was diverted, and the passengers
were to stay overnight there. Some
of the passengers were not given
hotel rooms. The common carrier is
still liable because the passenger
has not yet reached its destination.
Doctrine of last clear chance not applicable in
breach of contract of carriage
In an action for damages based on breach of contract, it is
normally a passenger suing the common carrier. This defense
is not available if the cause of action is breach of contract. The
Doctrine of Last Clear Chance would call for application in the
suit between owners of two colliding vehicles.
If carrier A and Carrier B sue each other for negligence, then
the doctrine can be invoked. It does not arise where a
passenger demands responsibility from the carrier to enforce
its contractual obligations. (Philippine Rabbit v. IAC)
Validity of Stipulations
As to Diligence Required
Art. 1757. The responsibility of a common carrier for the
safety of passengers as required in Art. 1733 and 1755
cannot be dispensed with or lessened:
 by stipulation;
 by posting of notices;
 by statement on tickets; or
 otherwise.
 The diligence required for common carriers insofar as the
safety of passengers is concerned is always
extraordinary or utmost diligence. Nothing lower than
that and not even a stipulation signed by the
passenger can change that.
As to Amount of Liability
Art. 1758. When a passenger is carried gratuitously, a
stipulation limiting the common carrier's liability for
negligence is valid, but not for willful acts or gross
negligence.
The reduction of fare does not justify any limitation of the
common carrier's liability.
Amount of Liability of Carrier for Death or Injury
to Passenger
GR: The liability of the common carrier for death or injuries to
the passenger cannot be limited by stipulation or otherwise.
XPN: The common carrier’s liability may be limited by
stipulation only when the:
1. Passenger is carried gratuitously; and
2. Incident was not caused by willful acts or gross negligence
of the common carrier.
Liquidated damages
The kind of damages is involved here in limited liability is
liquidated damages. Liquidated damages are damages that the
obligor has to pay, agreed upon by the parties beforehand and
this is what shall be paid by the party that breaches the
contract. These are the stipulations in the contract. But for
passengers, there's no such thing as liquidated damages when
it comes to injuries or death to passengers.
Responsibility For Acts Of Employees
Art. 1759. Common carriers are liable for the death of or
injuries to passengers through the negligence or willful acts
of the former's employees, although such employees may
have acted beyond the scope of their authority or in violation
of the orders of the common carriers.
This liability of the common carriers does not cease upon
proof that they exercised all the diligence of a good father of
a family in the selection and supervision of their employees.
Tort provision does not apply in breach of contract
of carriage
The liability of the common carrier does not cease upon proof
that they exercised all the diligence of a good father of a family
in the selection and supervision of their employees. (Art. 1759)
Under Art. 2180, which is a tort provision, in relation to 2176,
the employer can escape liability if it proves that it exercised
the diligence of a good father of a family in the selection and
supervision of its employees. That is a defense if the cause of
action is culpa aquiliana or tort. But if the cause of action is
breach of contract and if you are a passenger and you sue the
airline, PAL cannot use this defense to escape liability.
Art. 1760. The common carrier's responsibility prescribed in
the preceding article cannot be eliminated or limited by
stipulation, by the posting of notices, by statements on the
tickets or otherwise.
Responsibility for Acts of Employees
Common carriers are liable for the death or injuries to
passengers through the negligence or willful acts of their
employees, even though such employees may have acted:
 Beyond the scope of their authority; or
 In violation of the order of the common carrier.
This responsibility cannot be eliminated or limited by:
 Stipulation;
 The posting of notices;
 Statements on the tickets; or
 Otherwise.
Note: Even though it’s there in the ticket that you're not
responsible, it’s a void stipulation, that cannot be used by the
carrier to escape liability.
In Actions for Damages Against the Common
Carrier Based on Culpa Contractual
This liability of the common carriers does not cease upon proof
that they exercised all the diligence of a Good father of a family Unfortunately, that
in the selection and supervision of their employees. particular day, there was
a sack of watermelon
Responsibility of Passengers right in front of him. He
did not see the
Art. 1761. The passenger must observe the diligence of a watermelon that’s why
good father of a family to avoid injury to himself. because the station was
very dimly lighted and
There is an obligation on the part of the passenger. The when he jumped off, he
passenger cannot be negligent and blame everything on the tripped and he fell into to
common carrier. the tracks and he was
seriously injured.
Ex: A passenger on plane who is required to wear a seatbelt
especially when a seat belt sign is on. If the passenger is The conduct of Cangco
injured because of his failure to put on his seatbelt, there is in undertaking to
contributory negligence on the part of the passenger. alilght while the train
was yet slightly under
Contributory negligence way was not
 It is the principle that negligence, however slight, on the characterized by
part of the person injured, which is one of the causes imprudence. It is not
proximately contributing to his injury, equitably reduces the negligence per se for a
liability of the common carrier. traveler but a common
 Conduct on the part of the injured party, contributing as a practice to alight from a
legal cause to the harm he has suffered, which falls below slowly moving train. It is
the standard to which he is required to conform for his own also a common practice
protection. (Estacio v. Bernardo) to alight from a bus or a
jeepney that is slowly
When a person can be held to have contributed to moving.
Dangwa v. CA According to the SC, a NO
his injuries public bus, once it stops,
When it is shown that he performed an act that brought about is in effect making a
his injuries in disregard of warning or signs of an impending continuous offer to bus
danger to health and body. (Estacio v. Bernardo) riders. Therefore, it
becomes the duty of the
Effect of contributory negligence driver or the conductor,
Art. 1762. The contributory negligence of the passenger every time the bus
does not bar recovery of damages for his death or injuries, if stops, to do no act which
the proximate cause thereof is the negligence of the could imperil the
common carrier, but the amount of damages shall be passengers while he is
equitably reduced. attempting to board.

Effect of Contributory Negligence on the Part of Even assuming that the

Passenger bus was already moving,
 The carrier shall still be held liable for the death or injury to the act of Pedro cannot
passenger. be considered a
 But the amount of damages shall be equitably reduced. negligence as it is a
(Art.1762) matter of common
experience and both the
driver and the conductor
should be aware of this
practice.

Pedro, by stepping on
Case Held Contributory the platform of the
negligence bus, is already
Cangco v. One day, as Cangco NO considered a
MRR was returning home, it passenger. Thus, he is
was already around 6:30 entitled to all the rights
PM, he was on his way and protection pertaining
home, traveling on the to such contractual
MRR train and in the old relation.
days, there were no Isaac v. A.L. Passenger who puts his NO.
doors, the trains were Ammen hand outside the window *Purely
open. People could jump Transportation of the bus and the bus or passenger’s
in and out to trains, in somebody cuts his hand fault
the old days. off from the outside
without the bus driver
 knowing about it is not
contributory negligence.
It is the passenger’s
fault. No liability on the
part of the bus company.
Philippine There was contributory YES
National negligence on the part of
Railways v. the passenger because
CA he sat on the platform
between the coaches
of the train.
He should have held
tightly and tenaciously
on the upright metal bar
to avoid falling off from
the speeding train.
Responsibility for Acts of Strangers
Art. 1763. A common carrier is responsible for injuries
suffered by a passenger on account of the willful acts or
negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented
or stopped the act or omission.
Responsibility for Willful Acts of Strangers and
Other Passengers
GR: A common carrier is not responsible for injuries suffered
by a passenger on account of the willful acts or negligence of
other passengers or of strangers.
XPN: The common carrier shall be held responsible for said
injuries to the passenger if the common carrier’s employees;
through the exercise of the diligence of a Good Father of
Family could have prevented or stopped the act or omission.
Case Held
Pilapil v. CA When the bus stopped to pick up some
passengers, some kids were throwing
stones and passengers in the bus were
actually hit on the face and they were
injured. The SC did not hold the bus
company liable because it was held that
a common carrier is not liable for
failure to install window grills on its
buses to protect its passengers from
injuries hurled at the bus by lawless
elements.
De Guzman v. A common carrier is not responsible for
CA goods lost as a result of a robbery
which is attended by grave or
irresistible threat, violence.
Fortune it is clear that because of the negligence
Express v. CA of Fortune’s employees, the seizure of
the bus by AAA was made possible.
Despite warning by the PC that AAA
was planning to take revenge on
Fortune Express by burning some of
its buses and he assurance of Fortune’s
operation manager that the necessary
precautions would be taken, Fortune
did not nothing to protect the safety
of its passengers.
Had Fortune and its employees been
vigilant they would not have failed to see
that the malefactors had a large
quantity of gasoline with them.
Simple precautionary measures to
protect the safety of passenger, such as
frisking passengers and inspecting
their baggage, preferably with non-
intrusive gadgets such as metal
detectors before allowing them on board
could have been employed without
violating the passengers’ constitutional
rights.
It is evident that Fortune’s employees
failed to prevent the attack on one of its
buses because they did not exercise the
diligence of a good father of a family.
XPN: When common carrier is not liable for the
willful acts of strangers and passengers
The law does not make the common carrier an insurer of the
absolute safety of its passengers. Art. 1755 qualifies the duty
of extraordinary care, vigilance, and precaution in the carriage
of passengers by common carriers to only such as human care
and foresight can provide.
Art. 1756 in creating a presumption of negligence is only a
mere presumption and is rebuttable by proof that the common
carrier had exercised extraordinary diligence as required by
law in the performance of its contractual obligation, or the injury
suffered by the passenger was solely due to a fortuitous event.
There is a presumption of negligence when the injury is
sustained by:
1. Defect in the means of transport or in the method of
transporting; and
2. The negligent or willful acts of the common carrier’s
employees.
Romeo Battung boarded the bus of GV Florida bound for
Manila. He slept behind the driver during the ride. The bus
driver, Duplio, stopped the bus and alighted to check the tires.
At this point, a man at the back of the bus shot Battung in the
head and then left with his companions.
Battung’s death was not caused by any defect in the means of
transport or by the negligence or willful acts of the employees
of G.V. Florida. Instead, his death was caused by the
surreptitious acts of a co-passenger, who, after consummating
such crime, hurriedly alighted from the vehicle.
In Fortune Express vs. CA, the common carrier had already
received intelligence reports from law enforcement agents that
certain lawless elements were planning to hijack and burn
some of its buses and they failed to take necessary
precautions resulting to the death of one of the bus
passengers.
In this case, no similar danger was shown to exist as to impel
G.V. Florida or its employees to implement heightened security
measures to ensure the safety of its passengers.
There was also no showing that during the course of the trip,
Battung’s killer made suspicious actions which would have
forwarned G.V. Florida’s employees of the need to conduct
thorough checks on him or any of the passengers.
Common carriers should be given sufficient leeway in
assuming that the passengers they take in will not bring
anything that would prove dangerous to himself, as well as his
co-passengers, unless there is something that will indicate that
a more stringent inspection should be made.
Fairness demands that in measuring a common carrier’s duty
towards its passengers, allowance must be given to the
reliance that should be reposed on the sense of responsibility
of all the passengers in regard to their common safety. It is to
be presumed that a passenger will not take with him anything
dangerous to the lives and limbs of his co-passengers, not to
speak of his own.
Records reveal that the bus stopped at San Jose City to let the
4 men ride the bus which turned to be Battung’s murderers, the
bus driver Duplio saw them get out the bus and took note of
what they were wearing.
Duplio observed nothing which would rouse their suspicion that
the men were armed or were to carry out an unlawful activity.
Therefore, it could not be concluded that they failed to employ
the diligence of a good father of a family in relation to injuries
or death sustained by a passenger. (G.V Florida Transport vs.
Heirs of Battung)
Culpa Aquiliana or Quasi-delict
Quasi-delict
Art. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for
the damage done.
Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter.
Respondeat Superior
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.
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.
This responsibility shall cease when the employer’s prove
that they observed all the diligence of a good father of a
family to prevent damage.
No automatic presumption of negligence in Culpa
Aquiliana
The liability of the Prudent Security Agency could only be for
tort under Art. 2176 and Art. 2180. When it comes to the
security agency, there is no automatic presumption of
negligence because it is culpa aquiliana. Hence, the
negligence of the employee, who is the security guard must be
proven. Once such fault is established or proven, Prudent then
can be made liable based on the presumption juris tantum that
Prudent failed to exercise the diligence of a good father of a
family in the selection and supervision of its employees.
If the security agency does not show that it exercised the due
diligence required in the selection and supervision of its
employees, the liability of the security agency and of the
common carrier is solidary.
A contractual obligation can be breached by tort and when the
same act or omission causes the injury, one resulting in culpa
contractual and the other in culpa aquiliana. The responsibility
under of 2 or more persons who are liable for a quasi-delict is
solidary of the Civil Code can well apply. (Art. 2914)
In fine, a liability for tort may arise even under a contract,
where tort is that which breaches the contract. Stated
differently, when an act which constitutes a breach of contract
would have itself constituted the source of a quasi-delictual
liability had no contract existed between the parties, the
contract can be said to have been breached by tort, thereby
allowing the rules on tort to apply. (LRT Authority vs. Natividad)
Vallacar Transit, Inc. v. Jocelyn Catubig
The collision was caused solely but he negligence of the
motorcycle driver because the bus was in its own lane. The
motorcycle went to the lane of the bus. Hence, they collided.
The proximate cause of the collision of the bus and motorcycle
is attributable solely to the negligence of the driver of the
motorcycle, Catubig.
Hence, the vicarious liability under Article 2180 in relation
to Article 2176, imputing fault or negligence on the part of the
employer for the fault or negligence of its employee does not
apply to Vallacar because the widow failed to prove the fault or
negligence of the bus driver, Cabanilla.
In this case, Catubig’s overtaking of a slow-moving truck ahead
of him, while approaching a curve on the highway, was the
immediate and proximate cause of the collision which led to his
own death.
The presumption that an employer is negligent under Art. 2180
flows from the negligence of its employee. Having adjudged
that the immediate and proximate cause of the collision
resulting in Catubig’s death was his own negligence, and there
was no fault or negligence on Cabanilla’s part, then such
presumption of fault or negligence on the part of Vallacar, as
Cabanilla’s employer, does not arise.
Thus, it is not even necessary to delve into the defense of
Vallacar that it exercised due diligence in the selection and
supervision of Cabanilla as its employee driver.
Caravan v. Abejar
Article 2180 vis-a-vi the registered owner rule
Art. 2180 requires proof of 2 things:
(1) An employment relationship between the driver and the
owner; and
(2) The driver acted within the scope of his or her assigned
tasks.
On the other hand, the registered-owner rule only requires
the plaintiff to prove that the defendant-employer is the
registered owner of the vehicle.
In cases where both the registered-owner rule and Art. 2180
apply, the plaintiff must first establish that the employer is the
registered owner of the vehicle in question.
Once the plaintiff successfully proves ownership, there arises a
disputable presumption that the requirements of Art. 2180 have
been proven. As a consequence, the burden of evidence shifts
to the defendant to show that no liability under Art. 2180 has
arisen.

Here, Abejar presented a copy of the Certificate of Registration
of the van that hit Reyes. Caravan did not dispute its ownership
of the van. Hence, a presumption that the requirements of Art.
2180 have been satisfied arises.
It is now up to Caravan to establish that it incurred no liability
under Art. 2180. This it can do by disputing the presumption by
presenting proof of any of the following that:
1. it had no employment relationship with Bautista;
2. Bautista acted outside the scope of his assigned tasks; or
3. it exercised the diligence of a good father of a family in the
selection and supervision of Bautista.
Test of negligence
Did the defendant in doing the alleged negligent act use that
reasonable care and caution which an ordinary prudent person
would have used in the same situation? If not, then he is guilty
of negligence. (Picart vs. Smith)
The question as to what would constitute the conduct of a
prudent man in a given situation must of course be always
determined in the light of human experience and in view of the
facts involved in the particular case.
Stated in these terms, the proper criterion for determining the
existence of negligence in a given case is this: “Conduct is said
to be negligent when a prudent man in the position of the
tortfeasor would have foreseen that an effect harmful to
another was sufficiently probable to warrant his foregoing
conduct or guarding against its consequences.”
Cacho v. Manahan
The SC said that it doesn’t matter if there is a pile of rocks
there. The driver was still negligent because he was driving
fast on a narrow highway. Using the test of negligence,
Manahan was clearly negligent when he was relatively driving
fast on a narrow highway and approaching a similarly narrow
bridge. On top of this, the time of the accident was on or about
sunrise when visibility on the road was compromised. Manahan
should have been more prudent and careful in his driving the
bus especially considering that Dagupan Bus is a common
carrier.
Presumption of negligence under Art. 2185
Moreover, we can also say that Manahan was legally
presumed negligent under Article 2185 of the Civil Code, which
provides:
Art. 2185. Unless there is proof to the contrary, it is presumed
that a person driving a motor vehicle has been negligent if at
the time of the mishap, he was in violation of any traffic
regulation.
Based on the place and time of the accident, Manahan was
actually violating Section 35(a) of R.A. No. 4136.
When employee’s negligence has been established
Having established Manahan's negligence, he is liable with
Dagupan Bus to indemnify Cacho's heirs. Article 2180, in
relation to Article 2176, of the Civil Code provides that the
employer of a negligent employee is liable for the damages
caused by the latter.
When an injury is caused by the negligence of an employee
there instantly arises a presumption of the law that there was
negligence on the part of the employer either in the selection of
his employee or in the supervision over him after such
selection.
The presumption, however, may be rebutted by a clear
showing on the part of the employer that it had exercised the
care and diligence of a good father of a family in the selection
and supervision of his employee.
Hence, to escape solidary liability, for a quasi-delict committed
by its employees, an employer must overcome the
presumption by presenting convincing proof that it exercised
the care and diligence of a good father of a family in the
selection and supervision of its employees.
Evidence would show that although Manahan passed his
driving examination, the examiner noted his slow reaction in
stopping. Manahan's written examination also points out that
he cannot recognize traffic signs indicating a narrow road.
Dagupan bus was negligent in allowing Manahan to drive one
of its buses because it was not able to show that it exercised
the required diligence in the selection of the driver. They
should not have made him a driver if he had such kind of
results in his driving test. Hence, Dagupan bus is civilly liable
for damages under a tort or quasi-delict.
Bayanban vs. Imperial
Article 2176 defines quasi-delict as the fault or negligence that
causes damage to another, there being no pre-existing
contractual relations between the parties. On the other hand,
Article 2180 enumerates persons who are vicariously liable for
the fault or negligence of persons over whom they exercise
control, whether absolute or limited.
The reason for holding the employer liable, even if it was not
him who directly caused the injury, is as follows: This moral
responsibility may consist in having failed to exercise due care
in one's own acts, or in having failed to exercise due care in
the selection and control of one's agents or servants, or in the
control of persons who, by reason of their status, occupy a
position of dependency with respect to the person made liable
for their conduct.
In this case, it is clear that Laraga was working under
Imperial’s orders, since ultimately it was Imperial’s garden
which was being tended to. Laraga was driving the van in
furtherance of the interests of Imperial at the time of the
accident. Since the Bayanban spouses now proved that Laraga
was Imperial’s employee, the burden of proof now shifted to
Imperial to show that he observed due diligence in the
selection and supervision of Laraga.
Imperial failed to do this, having presented only receipts for
the driving lessons which is hardly the due diligence
contemplated in Article 2180 of the Civil Code. Thus, being
Laraga’s employer, Imperial is liable for the damages incurred
by the Bayanban.
Culpa Criminal
Liability of employer
Culpa Aquiliana Culpa Criminal
The liability of the employer The liability of the employer
is direct, primary and is merely subsidiary if the
solidary with the driver. driver or the employee is
insolvent.
Basis of liability
 Every person criminally liable for a felony is also civilly Distinctions between culpa contractual, culpa
liable. (Art. 100, RPC)
 The subsidiary liability established in the next preceding aquiliana and culpa criminal
article shall also apply to employers, teachers, persons, Culpa Culpa Culpa
and corporations engaged in any kind of industry for Contractual Aquiliana Criminal
felonies committed by their servants, pupils, workmen, Basis Contract of a Duty to be Natural
apprentices, or employees in the discharge of their duties. pre-existing careful in all duty to
(Art. 101, RPC) obligation. human never
actuations. harm
others
Requisites for employer to be subsidiarily liable Proof Preponderance Preponderance proof of
(1) The driver is found guilty;
required of evidence. of evidence. guilt
(2) There is an Employer-Employee relationship between the
beyond
carrier and the driver;
reasonabl
(3) The driver is insolvent;
e doubt
(4) The Employer is engaged in any kind of industry
Liability of Direct and Direct and Subsidiary.
(5) The crime is committed by the driver in the discharge of
carrier primary. primary.
his duties.
Defense Exercise of Exercise of Art. 103
Note: extraordinary diligence of a RPC
 For culpa criminal, if the driver is merely a family driver, diligence. Good father of
the employer cannot be held subsidiarily liable because a family in the
there is this requirement that “The Employer is engaged in selection &
any kind of industry.” supervision of
 But in culpa aquiliana, there is no requirement so even if employees.
the driver is a family driver, the employer has direct Presumptio Automatic He who alleges Accused is
liability. n of presumption of negligence presumed
 All of these must be proven by the prosecution in order to negligence negligence if must prove the innocent
hold the employer subsidiarily liable. passenger fails same. until found
to reach his guilty.
Valencia v. People destination.

The prosecution failed to establish that the proximate cause of Damages

death was Valencia’s imprudence in driving the jeepney. To
establish a motorist’s liability for negligence, the prosecution Art. 1764. Damages in cases comprised in this Section shall
must show the “direct causal connection between such be awarded in accordance with Title XVIII of this Book,
negligence and the injuries or damages complained of. concerning Damages. Article 2206 shall also apply to the
death of a passenger caused by the breach of contract by a
Negligence in driving alone is not enough to constitute reckless common carrier.
driving. It is the inexcusable lack of precaution or conscious
indifference to the consequences reckless driving which Note: All provisions on damages under the Civil Code is
supplies the criminal intent and brings an act of mere applicable to transportation.
negligence and imprudence under the operation of the penal
law.
Kinds of Damages
The testimonies presented only established that they heard a 1. Moral;
loud thud, and that they saw a man lying down on the ground. 2. Exemplary;
However, no one testified as to the manner Valencia was 3. Nominal;
driving. Moreover, there was an eyewitness testimony which is 4. Temperate or moderate;
to the effect that Valencia did not run over Jaquilmo. Thus, 5. Actual or compensatory;
Valencia was acquitted. 6. Liquidated. (Art. 2197)

Principles to remember Actual or Compensatory Damages

 There are different causes of action culpa criminal and
culpa aquiliana.
 Extraordinary diligence is only required in culpa
contractual, in actions for damages based on breach of the
contract of carriage.
 In criminal cases, the burden of proof belongs to the
prosecution. There is no presumption of negligence and
no extraordinary diligence.
Art. 2199. Except as provided by law or by stipulation, one
is entitled to an adequate compensation only for such
pecuniary loss suffered by him as he has duly proved.
Such compensation is referred to as actual or compensatory
damages.
Art. 2200. Indemnification for damages shall comprehend
not only the value of the loss suffered, but also that of the
profits which the obligee failed to obtain.

Actual Damages is recoverable only when:

(1) Pleaded – It is prayed for and may actually be included in
the phrase “further relief”.
(2) Proven – Evidence must be adduced and the amount of (6) Wounded feelings;
damages must possess at least some degree of certainty. (7) Moral shock;
Features of actual damages (8) Social humiliation; and
 They pertain to such injuries or losses that are actually (9) Similar injury.
sustained and susceptible of measurement.
 In transportation cases, the actual damages that the Though incapable of pecuniary computation, moral damages
passenger can ask the court to award are: may be recovered if they are the proximate result of the
defendant's wrongful act or omission. (Art. 2217)
Passenger on taxi
a. Hospitalization; When moral damages may be recovered
b. Medicine; (1) A criminal offense resulting in physical injuries; and
c. Doctor’s fees; and (2) Quasi-delicts causing physical injuries. (Art. 2219)
d. Loss of capacity or income.
Note:
Passenger on airplane  Willful injury to property may be a legal ground for
a. Hotel; awarding moral damages if the court should find that,
b. Food; and under the circumstances, such damages are justly due.
c. Transportation. The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith. (Art. 2220)
 Damages cannot be presumed. To be recoverable, they
must be pleaded and proven in court. In no instance may a  The spouse, legitimate and illegitimate descendants and
judge award more than those so pleaded and proven. ascendants of the deceased may demand moral damages
for mental anguish by reason of the death of the
 Speculative damages cannot be awarded. The award deceased. (Art. 2206)
thereof must be based on the evidence presented, not on
the personal knowledge of the court; and certainly not on Rule in breach of contract of carriage
flimsy, remote, speculative and non-substantial proof. GR: Moral Damages are not recoverable in damage actions
predicated on a breach of contract of carriage or culpa
Art. 2201. In contracts and quasi-contracts, the damages for contractual.
which the obligor who acted in good faith is liable shall be
those that are the natural and probable consequences of the XPN:
breach of the obligation, and which the parties have (1) The mishap results in the death of the passenger. (Art.
foreseen or could have reasonably foreseen at the time the 2206)
obligation was constituted. (2) It is proven that the carrier is guilty of fraud or bad faith,
even if death does not result. (Art. 2220)
In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be Bad Faith is a breach of a known duty through some motive of
reasonably attributed to the non-performance of the interest or ill will.
obligation.
Nominal Damages
Liability for actual damages if the carrier acted in:
Good Faith Bad Faith Art. 2221. Nominal damages are adjudicated in order that
1. The natural and All damages which shall be a right of the plaintiff, which has been violated or
probable responsible for all damages invaded by the defendant, may be vindicated or
consequences of the which may be reasonably recognized, and not for the purpose of indemnifying the
breach of obligations; attributed to the non- plaintiff for any loss suffered by him.
and performance of the
2. Damages which the obligation. (Relation of Art. 2222. The court may award nominal damages in
parties foresaw or cause and effect is enough) every obligation arising from any source enumerated in
could have reasonably Article 1157, or in every case where any property right has
foreseen. been invaded.

Other Kinds of Damages Art. 2223. The adjudication of nominal damages shall
Art. 2216. No proof of pecuniary loss is necessary in order preclude further contest upon the right involved and all
that moral, nominal, temperate, liquidated, or exemplary accessory questions, as between the parties to the suit, or
damages, may be adjudicated. The assessment of such their respective heirs and assigns.
damages, except liquidated ones, is left to the discretion of
the court, according to the circumstances of each case. Nominal Damages are Adjudicated
 In order that a right of the passenger, shipper or
Moral Damages consignee, which has been violated or invaded by the
common carrier, may be vindicated or recognized; and
 Not for the purposes of indemnifying the passenger,
Moral damages include: shipper or consignee for any loss suffered by him. (Art.
(1) Physical suffering; 2221)
(2) Mental anguish;
(3) Fright;
(4) Serious anxiety;
Nominal Damages Stand Alone
(5) Besmirched reputation;
 There can no longer be an award for nominal damages if
there already has been an award for actual, moral,
temperate, liquidated and exemplary damages.
 An award of nominal damages precludes the award of
actual, moral, temperate, liquidated and exemplary
damages.
Temperate or Moderate Damages
Art. 2224. Temperate or moderate damages, which are
more than nominal but less than compensatory damages,
may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot,
from the nature of the case, be provided with certainty.
Temperate or Moderate Damages
 More than nominal but less than compensatory damages.
 May be recovered when the court finds that some
pecuniary loss has been suffered.
 Its amount cannot from the nature of the case be provided
with certainty. (Art. 2224)
Liquidated Damages
Art. 2226. Liquidated damages are those agreed upon by
the parties to a contract, to be paid in case of breach
thereof.
Liquidated Damages
 Those agreed upon by, the parties to a contract; and
 To be paid in case of breach thereof.
Note:
 There must be a contract.
 Liquidated damages are only awarded when there is culpa
contractual because there must be a previous agreement.
 It is not applicable in culpa aquiliana and in culpa criminal.
Exemplary or Corrective Damages
Art. 2229. Exemplary or corrective damages are imposed,
by way of example or correction for the public good, in
addition to the moral, temperate, liquidated or
compensatory damages.
Art. 2233. Exemplary damages cannot be recovered as a
matter of right; the court will decide whether or not they
should be adjudicated.
Art. 2234. While the amount of the exemplary damages
need not be proved, the plaintiff must show that he is
entitled to moral, temperate or compensatory damages
before the court may consider the question of whether or not
exemplary damages should be awarded. In case liquidated
damages have been agreed upon, although no proof of
loss is necessary in order that such liquidated damages
may be recovered, nevertheless, before the court may
consider the question of granting exemplary in addition to
the liquidated damages, the plaintiff must show that he
would be entitled to moral, temperate or compensatory
damages were it not for the stipulation for liquidated
damages.
Art. 2235. A stipulation whereby exemplary damages are
renounced in advance shall be null and void.
Award of exemplary damages
Exemplary damages can only be granted in addition to:
 Moral damages;
 Temperate damages;
 Liquidated damages; or
 Actual or compensatory damages.
If exemplary damages are granted, nominal damages cannot
be granted.
Art. 2230. In criminal offenses, exemplary damages as a
part of the civil liability may be imposed when the crime was
committed with one or more aggravating circumstances.
Such damages are separate and distinct from fines and
shall be paid to the offended party.
Art. 2231. In quasi-delicts, exemplary damages may be
granted if the defendant acted with gross negligence.
Art. 2232. In contracts and quasi-contracts, the court
may award exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or malevolent
manner.
When exemplary damages may be awarded
Criminal Offenses If the crime was committed with one
or more aggravating circumstances.
(Art. 2230)
Quasi-delicts If the common carrier acted with
gross negligence. (Art. 2231)
Contracts & If the common carrier acted in a
Quasi-contracts wanton, fraudulent, reckless,
oppressive, or malevolent manner.
(Art. 2232)
Cases involving damages
Victory Liner v. Rosalito Gammad
Art. 1764 in relation to Art. 2206, holds the common carrier in
breach of its contract of carriage that results in the death of
a passenger liable to pay the following:
 Indemnify for the death;
 Indemnify for loss of earning capacity;
 Moral Damages.
Indemnity for Death
Rosalito is entitled to indemnity for the death of Marie which
under current jurisprudence is fixed at P50,000.
Compensatory Damages
As a rule, documentary evidence should be presented to
substantiate the claim for damages for loss of earning capacity.
By way of exception, damages for loss of earning capacity may
be awarded despite the absence of documentary evidence
when deceased is:
 Self-employed earnings less than minimum wage under
current labor laws and judicial notice may be taken of the
fact that in the deceased line of work no documentary
evidence was available; or
 Employed as a daily wage worker earning less than the
minimum wage under current labor laws.
The claim for compensatory damages for loss of earning
capacity was based only on the testimony of Rosalito that
Marie was 39 years, a Section Chief of the BIR with a salary of
83,088 per annum when she died. No other evidence was
presented. Marie’s earnings does not fall within the
exceptions.
Temperate Damages
However, the facts of loss having been established,
temperate damages in the amount of P500,000 should be
awarded to Rosalito pursuant to Art. 2224.
Moral Damages
Moral damages awarded in case of death of a passenger
results from a breach of carriage. Moral damages cannot be
lumped with exemplary damages because they are based on
different jural foundations. These damages are different in
nature and require separate determination.
Exemplary Damages
Awarded by way of example or correction for the public good
may be recovered in contractual obligations if the carrier acted
in wanton, fraudulent, reckless, oppressive, or malevolent
manner.
Actual Damages
Only substantial and proven expenses or those that appear
to have been genuinely incurred in connection with the death,
wake or burial of the victim will be recognized.
A list of expenses and the receipt for the construction of the
tomb in this case, cannot be considered competent proof
and cannot replace the official receipts necessary to justify the
award. Actual damages should be reduced to P78,160 which
was the amount supported by official receipts.
Attorney’s Fees
Pursuant to Art. 2208. Attorney’s fees may also be recovered
in case at bar where exemplary damages are awarded.
Tan v. Northwest
Willful misconduct
For willful misconduct to exist there must be showing that the
acts complained of were impelled by an intention to violate the
law or were in persistent disregard of one’s right. It must be
evidenced by flagrantly or shamefully wrong or improper
conduct. There was nothing in the conduct of NW which
showed that they were motivated by malice or bad faith in
loading her luggage on another plane.
NW failed to deliver Tan’s luggage on time. However, there
was no showing of malice in such failure. Bad Faith does not
simply connote bad judgment or negligence. It imports a
dishonest purpose or some moral obliquity and conscious
doing of a wrong, a breach of known duty through some motive
or interest or ill-will that partakes the nature of fraud.
United Airlines v. CA and Fontanilla
There was no breach in the contract of carriage when
Fontanilla was refused boarding on UA 1108. Explicitly printed
on the boarding pass are the words “Check-in Required”.
Fontanilla failed to realize that their failure to check in, as
expressly required in their boarding passes, is the very reason
why they were not given their respective seat numbers, which
resulted in their being denied boarding. UA relied on the
“denied boarding rules” under Code of Federal Regulation Part
on Oversales, which states:
250.6 Exceptions to eligibility for denied boarding
compensation. A pax denied board involuntarily from an
oversold flight shall not be eligible for denied board
compensation if:
(a) Passenger does not comply with the carrier’s
contract of carriage or tariff provisions regarding
ticketing, reconfirmation, check-in, and acceptability
for transformation.
Even assuming there was a breach, Fontanilla is not
entitled to damages
For the plaintiff to be entitled to an award of moral damages
arising from a breach of contract of carriage, the carrier must
have acted with fraud or bad faith.
In Zalamea v. CA, the SC held that existing jurisprudence
explicitly states that overbooking amounts to bad faith
entitling the passenger concerned to an award of moral
damages.
In Alitalia v. CA, where the passenger with confirmed
booking were refused carriage on the last minute, when an
airline issued 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
passenger of their seats in case all of them would show up for
check in. For the indignity and inconvenience of being refused
a confirmed seat on the last minute, said passenger is entitled
to moral damages.
However, the Alitalia ruling should be read in consonance with
existing laws, particularly, Economic Regulations , as
amended, of the CAB. Sec. 3 clearly states that when the
overbooking does not exceed 10%, it is not considered as
deliberate and therefore does not amount to bad faith. While
there may have been overbooking in this case, Fontanilla were
not able to prove that the overbooking on UA 1108 exceeded
10%.
Cathay Pacific v. Vasquez
Moral Damages
Requisites for the award of moral damages:
(1) There must be an injury clearly sustained by the claimant,
whether physical, mental or psychological;
(2) There must be a culpable act or omission factually
established;
(3) The wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant;
and
(4) The award for damages is predicated on any of the cases
stated in Art. 2219.
Moral damages predicated upon breach of contract of
carriage may only be recoverable in instances where:
1. The carrier is guilty of fraud or bad faith; or
2. The mishap resulted in the death of a passenger.
Bad faith does not simply connote bad judgment or negligence;
it imports a dishonest purpose or some moral obliquity and
conscious doing of a wrong, a breach of a known duty through
some motive or interest or ill will that partakes of the nature of
fraud.
Vazquez were not induced to agree to the upgrading through
insidious words or deceitful machination or through willful
concealment of material facts. Moreover, the overbooking of
in awarding moral damages only if she was subjected to
contemptuous conduct despite the offender’s knowledge of her
standing.
-----------------------END OF FIRST EXAM COVERAGE----------------------

Humility and
B/C does not constitute bad faith on the part of Cathay.

It is clear from Sec. 3 of CAB Economic Regulation 7 that an

overbooking that does not exceed 10% is not considered

Perseverance ⚖️
deliberate and therefore does not amount to bad faith. Here,
while there was admittedly an overbooking of B/C, there was
no evidence of the plane beyond 10%, and no pax was
bumped off or was refused to board the aircraft.

Exemplary Damages and Attorney’s Fees

It is a requisite in the grant of exemplary damages that the act
of the offender must be accompanied by bad faith or done in
wanton, fraudulent or malevolent manner. Such requisite is
absent in this case.

Moreover, to be entitled thereto the claimant must first

establish his right to moral, temperate, or compensatory
damages.Since Vasquez are not entitled to any of these
damages, the award for exemplary damages has no legal
basis. And where the awards for moral and exemplary
damages are eliminated, so must the award for attorney’s fees.

Nominal Damages
The most that can be adjudged in favor of Vazquez for
Cathay’s breach of contract is an award for nominal damages
under Art. 2221. Nonetheless, considering, that the breach was
intended to give more benefit and advantage to Vazquez by
upgrading their Business Class accommodation to First Class
because of their valued status as Marco Polo members, we
reduce the award for nominal damages to P5,000.

Sulpicio v. Curso

Even though there is bad faith or death, if it is not the spouse,

the legitimate or illegitimate ascendants or descendants,
then moral damages cannot be awarded.

Art. 2206(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 Art. 2206(3) of the brothers and sisters

of the deceased passengers reveals the legislative intent to
exclude them from the recovery of moral damages for mental
anguish by reason of the death of deceased.

Damages Arising from Quasi-Delict

Kierulf v. Pantranco

Victor’s claim for deprivation of his right to consortium is not

supported by the evidence on record. His wife might have been
badly disfigured, but he had not testified that, in consequence
thereof, his right to marital consortium was affected.

The social and financial standing of Lucilla cannot be

considered in awarding moral damages. The factual
circumstances prior to the accident show that no “rude and
rough” reception, no “menacing attitude,” no “supercilious
manner,” no “abusive language and highly scornful reference”
was given her. The standing of a claimant may be considered