SECOND DIVISIONL.G. FOODS CORPORATION and VICTORINO GABOR, Vice-President and General Manager,Petitioners,- versus -HON. PHILADELFA B. PAGAPONG-AGRAVIADOR, in her capacity as Presiding Judge of Regional Trial Court, Branch 43, Bacolod City, and SPS. FLORENTINO and THERESA VALLEJERA,Respondents.G.R. No. 158995Present:PUNO,J., Chairperson,SANDOVAL-GUTIERREZ,CORONA,AZCUNA, andGARCIA,JJ.Promulgated:September 26, 2006

x------------------------------------------------------------------------------------xD E C I S I O NGARCIA,J.:Assailed and sought to be set aside in this petition for review oncertiorariis the Decision[1]dated April 25, 2003 of the Court of Appeals (CA), as reiterated in its Resolution of July 10, 2003,[2]inCA-G.R. SP No. 67600, affirmingan earlier Order of the Regional Trial Court (RTC) of Bacolod City, Branch 43, which denied the petitioners motion to dismiss in Civil Case No. 99-10845, an action for damages arising from a vehicular accident thereat instituted by the herein private respondents - the spouses Florentino Vallejera and Theresa Vallejera - against the petitioners.The antecedent facts may be briefly stated as follows:OnFebruary 26, 1996, Charles Vallereja, a 7-year old son of the spouses Florentino Vallejera and Theresa Vallejera, was hit by a Ford Fiera van owned by the petitioners and driven at the time by their employee, Vincent Norman Yeneza y Ferrer. Charles died as a result of the accident.In time, an Information forReckless Imprudence Resulting to Homicidewas filed against the driver before the Municipal Trial Court in Cities (MTCC),BacolodCity, docketed as Criminal Case No. 67787, entitledPeople of thePhilippinesv. Vincent Norman Yeneza.Unfortunately, before the trial could be concluded, the accused driver committed suicide, evidently bothered by conscience and remorse. On account thereof, the MTCC, in its order ofSeptember 30, 1998, dismissed the criminal case.On June 23, 1999, in the RTC of Bacolod City, the spouses Vallejera filed a complaint[3]for damages against the petitioners as employers of the deceased driver, basically alleging that as such employers, they failed to exercise due diligence in the selection and supervision of their employees. Thereat docketed as Civil Case No. 99-10845, the complaint was raffled to Branch 43 of the court.In theirAnswer with Compulsory Counterclaim,[4]the petitioners as defendants denied liability for the death of the Vallejeras 7-year old son, claiming that they had exercised the required due diligence in the selection and supervision of their employees, including the deceased driver. They thus prayed in their Answer for the dismissal of the complaint for lack of cause of action on the part of the Vallejera couple.During pre-trial, the defendant petitioners insisted that their dismissal prayer be resolved. Hence, the trial court required them to file within ten days a memorandum of authorities supportive of their position.Instead, however, of the required memorandum of authorities, the defendant petitioners filed aMotion to Dismiss, principally arguing that the complaint is basically a claim for subsidiary liability against an employer under the provision of Article 103[5]of the Revised Penal Code. Prescinding therefrom, they contend that there must first be a judgment of conviction against their driver as a conditionsine qua nonto hold them liable.Ergo,since the driver died during the pendency of the criminal action, thesine qua noncondition for their subsidiary liability was not fulfilled, hence the of lack of cause of action on the part of the plaintiffs. They further argue that since the plaintiffs did not make a reservation to institute a separate action for damages when the criminal case was filed, the damage suit in question is thereby deemed instituted with the criminal action. which was already dismissed.In an Order datedSeptember 4, 2001,[6]the trial court denied the motion to dismiss for lack of merit and set the case for pre-trial. With their motion for reconsideration having been denied by the same court in its subsequent order[7]ofSeptember 26, 2001, the petitioners then went oncertiorarito the CA inCA-G.R. SP No. 67600,imputing grave abuse of discretion on the partof the trial judge in refusing to dismiss the basic complaint for damages in Civil Case No. 99-10845.In the herein assailed decision[8]datedApril 25, 2003, the CA deniedthe petition and upheld the trial court. Partly says the CA in its challenged issuance:xxxxxxxxxIt is clear that thecomplaintneither represents nor implies that the responsibility charged was the petitioners subsidiary liability under Art. 103,Revised Penal Code.As pointed out [by the trial court] in the Order ofSeptember 4, 2001, thecomplaintdoes not even allege the basic elements for such a liability, like the conviction of the accused employeeand his insolvency. Truly enough, a civil action to enforce subsidiary liability separate and distinct from the criminal action is even unnecessary.xxxxxxxxxSpecifically, Civil Case No. 99-10845 exacts responsibility for fault or negligence under Art. 2176,Civil Code,which is entirelyseparateanddistinctfrom the civil liability arising from negligence under theRevised Penal Code.Verily, therefore, the liability under Art. 2180,Civil Code,isdirect and immediate, and not conditioned upon prior recourse against the negligent employee or prior showing of the latters insolvency. (Underscoring in the original.)In time, the petitioners moved for a reconsideration buttheir motion was denied by the CA in its resolution[9]ofJuly 10, 2003. Hence, the petitioners present recourse on their submission that the appellate court committed reversible error in upholding the trial courts denial of their motion to dismiss.WeDENY.As the Court sees it, the sole issue for resolution is whether the spouses Vallejeras cause of action in Civil Case No. 99-10845 is founded on Article 103 of the Revised Penal Code, as maintained by the petitioners, or derived from Article 2180[10]of theCivil Code,as ruled by the two courts below.It thus behooves us to examine the allegations of the complaint for damages in Civil Case No. 99-10845.That complaint alleged,inter alia,as follows:xxxxxxxxx3.That defendant [LG Food Corporation] is the registered owner of a Ford Fiera Van with Plate No. NMS 881 and employer sometime February of 1996 of one Vincent Norman Yeneza y Ferrer, a salesman of said corporation;4.That sometimeFebruary 26, 1996at around2:00 P.M.atRosario St.,BacolodCity, the minor son of said plaintiffs [now respondents], Charles Vallejera, 7 years old, was hit and bumped by above-described vehicle then driven by said employee, Vincent Norman Yeneza y Ferrer;5.That the mishap was due to the gross fault and negligence of defendants employee, who drove said vehicle, recklessly, negligently and at a high speed without regard to traffic condition and safety of other road users and likewise to the fault and negligence of the owner employer, herein defendants LG Food Corporation who failed to exercise due diligence in the selection and supervision of his employee, Vincent Norman Yeneza y Ferrer;6.That as a result of said incident, plaintiffs son suffered multiple body injuries which led to his untimely demise on that very day;7.That a criminal case was filed against the defendants employee, docketed as Criminal Case No. 67787, (earlier filed as Crim. Case No. 96-17570 before RTC) before MTC-Branch III, entitled People v. Yeneza for Reckless Imprudence resulting to Homicide, but the same was dismissed because pending litigation, then remorse-stricken [accused] committed suicide;xxxxxxxxx8.That the injuries and complications as well as the resultant death suffered by the late minor Charles Vallejera were due to the negligence and imprudence of defendants employee;9.That defendant LG Foods Corporation is civilly liable for the negligence/imprudence of its employee since it failed to exercise the necessary diligence required of a good father of the family in the selection and supervision of his employee, Vincent Norman Yeneza y Ferrer which diligence if exercised, would have prevented said incident.(Bracketed words and emphasis ours.)Nothing in the foregoing allegations suggests, even remotely, that the herein petitioners are being made to account for their subsidiary liability under Article 103 of theRevised Penal Code.As correctly pointed outby the trial court in its order of September 4, 2001denying the petitionersMotion to Dismiss, the complaint did not even aver the basic elements for the subsidiary liability of an employer under Article 103 of the Revised Penal Code, such as the prior conviction of the driver in the criminal case filed against him nor his insolvency.Admittedly, the complaintdid not explicitly state that plaintiff Vallejeraswere suing the defendant petitioners for damages based onquasi-delict. Clear it is, however, from the allegations of the complaint thatquasi-delictwas their choice of remedy against the petitioners. To stress, the plaintiff spouses alleged in their complaint gross fault and negligence on the part of the driver and the failure of the petitioners, as employers, to exercise due diligence in the selection and supervision of their employees. The spouses further alleged that the petitioners are civilly liable for the negligence/imprudence of their driver since they failed to exercise the necessary diligence required of a good father of the family in the selection and supervision of their employees, which diligence, if exercised, could have prevented the vehicular accident that resulted to the death of their 7-year old son.Section 2, Rule 2, of the 1997 Rules of Civil Procedure defines cause of action as the act or omission by which a party violates the right of another.Such act or omission gives rise to an obligation which may come from law, contracts,quasicontracts, delicts orquasi-delicts.[11]Corollarily, an act or omission causing damage to another may give rise to two separate civil liabilities on the part of the offender, i.e., 1) civil liabilityex delicto;[12]and 2) independent civil liabilities, such as those (a) not arising from an act or omission complained of as felony (e.g., culpa contractualorobligations arising from law;[13]the intentional torts;[14]andculpa aquiliana[15]); or (b) where the injured party is granted a right to file an action independent and distinct from the criminal action.[16]Either of these two possibleliabilities may be enforced against the offender.[17]Stated otherwise, victims of negligence or their heirs have a choice between an action to enforce the civil liability arising fromculpa criminalunder Article 100 of the Revised Penal Code, and an action forquasi-delict(culpa aquiliana) under Articles 2176 to 2194 of the Civil Code.If, as here, the action chosen is forquasi-delict, the plaintiff may hold the employer liable for the negligent act of its employee, subject to the employers defense of exercise of the diligence of a good father of the family.On the other hand, if the action chosen is forculpa criminal,the plaintiff can hold the employer subsidiarily liable only upon proof ofprior conviction of its employee.[18]Article 1161[19]of the Civil Code provides that civil obligation arising from criminal offenses shall be governed by penal laws subject to the provision of Article 2177[20]and of the pertinent provision of Chapter 2, Preliminary Title on Human Relation, and of Title XVIII of this Book, regulating damages. Plainly, Article 2177 provides for the alternative remedies the plaintiff may choose from in case the obligation has the possibility of arising indirectly from the delict/crime or directly fromquasi-delict/tort.The choice is with the plaintiff who makes known his cause of action in his initiatory pleading or complaint,[21]and not with the defendant who can not ask for the dismissal of the plaintiffs cause of action or lack of it based on the defendants perception that the plaintiff should have opted to file a claim under Article 103 of the Revised Penal Code.Under Article 2180 of the Civil Code, the liability of the employer is direct or immediate. It is not conditioned upon prior recourse against the negligent employee and a prior showing of insolvency of such employee.[22]Here, the complaint sufficiently alleged that the death of the couples minorsonwascausedbythenegligentactof the petitioners driver; and that the petitioners themselves were civilly liable for the negligence of their driver for failing to exercise the necessary diligence required of a good father of the family in the selection and supervision of[their] employee, the driver, which diligence, if exercised, would have prevented said accident.Had the respondent spouses elected to sue the petitioners based on Article103oftheRevisedPenal Code,theywouldhave alleged that theguiltofthedriver had been proven beyond reasonable doubt; that such accused driver is insolvent; that it is the subsidiary liability of the defendant petitioners as employersto pay for the damage done by their employee (driver) based on the principle that every person criminally liable is also civilly liable.[23]Since there was no conviction in the criminal case against the driver, precisely because death intervened prior to the termination of the criminal proceedings, the spouses recourse was, therefore, to sue the petitioners for their direct and primary liability based onquasi-delict.Besides, it is worthy to note that the petitioners, in theirAnswer with Compulsory Counter-Claim,[24]repeatedly made mention of Article 2180 of the Civil Code and anchored their defense on their allegation that they had exercised due diligence in the selection and supervision of [their] employees. The Court views this defense as an admission that indeed the petitioners acknowledged the private respondents cause of action as one forquasi-delict under Article 2180 of the Civil Code.Alltold,CivilCase No. 99-10845 is a negligence suit brought under Article 2176 - Civil Code to recover damages primarily from the petitioners as employers responsible for their negligent driver pursuant to Article 2180 of theCivil Code.The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible. Thus, the employer is liable for damages caused by his employees and household helpers acting within the scope of their assigned tasks, even though the former is not engaged in any business or industry.CitingManiago v. CA,[25]petitioner would argue that Civil Case No. 99-10845 should have been dismissed for failure of the respondent spouses to make a reservation to institute a separate civil action for damages when the criminal case against the driver was filed.The argument is specious.To start with, the petitioners reliance onManiagois obviously misplaced. There, the civil case was filed while the criminal case against the employee was still pending. Here, the criminal case against the employee driver was prematurely terminated due to his death. Precisely, Civil Case No. 99-10845 was filed by the respondent spouses because no remedy can be obtained by them against the petitioners with the dismissal of the criminal case against their driver during the pendency thereof.The circumstance that no reservation to institute a separate civil action for damages was made when the criminal case was filed is of no moment for the simple reason that the criminal case was dismissed without any pronouncement having been made therein. In reality, therefor, it is as if there was no criminal case to speak of in the first place. And for the petitioners to insist for the conviction of their driver as a conditionsine qua nonto hold them liable for damages is to ask for the impossible.IN VIEW WHEREOF,the instant petition isDENIEDfor lack of merit.Costs against the petitioners.SO ORDERED.CANCIO C. GARCIAAssociate JusticeWE CONCUR:REYNATO S. PUNOAssociate JusticeChairpersonANGELINA SANDOVAL-GUTIERREZAssociate JusticeRENATO C. CORONAAssociate Justice

ADOLFO S. AZCUNAAssociate JusticeA T T E S T A T I O NI attest that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Courts Division.REYNATO S. PUNOAssociate JusticeChairperson, Second DivisionC E R T I F I C A T I O NPursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.ARTEMIO V. PANGANIBANChief Justice

[1]Penned by Associate Justice Lucas P. Bersamin with Associate Justices Ruben T. Reyes (now Presiding Justice) and Elvi John Asuncion, concurring. Rollo, pp. 17-22.[2]Id.at 23.[3]Id.at 93-98.[4]Id.at 85-91.[5]Article 103.Subsidiary civil liability of other persons. The subsidiary liability established in the next preceding article shall also apply to employers, teachers, persons and corporations engaged in any kind of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in the discharge of their duties.[6]Rollo, pp. 71-74.[7]Id.at 65.[8]Supra note 1.[9]Rollo, p. 23.[10]Article 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or omissions, but also for those of persons for whom one is responsible.xxxxxxxxxEmployers 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.xxxxxxxxxThe responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage. (1903a)[11]Article 1157, Civil Code of thePhilippines.[12]Article 100, Revised Penal Code.[13]Article 31, Civil Code.[14]Articles 32 and 34, Civil Code.[15]Article 2176, Civil Code.[16]Article 33, Civil Code.[17]Cancio, Jr. v. Isip, G.R. No. 133978,November 12, 2002, 391 SCRA 393.[18]Joaquin, et al. v. Aniceto, et al.,120 Phil. 1100 (1964).[19]ARTICLE 1161.Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of article 2177, and of the pertinent provisions of Chapter 2, Preliminary Title, on Human Relations, and of Title XVIII of this Book, regulating damages.(1092a)[20]ARTICLE 2177.Responsibility for fault or negligence under the preceding article is entirely separate and distinct from the civil liability arising from negligence under the Penal Code.But the plaintiff cannot recover damages twice for the same act or omission of the defendant.(n)[21]Section 3, Rule 6, 1997 Rules on Criminal Procedure.[22]Kapalaran Bus Lines v. Coronado, G.R. No. 85331,August 25, 1989, 176 SCRA 792.[23]Article 100, Revised Penal Code.[24]Supra note 4.[25]G.R. 104392,February 20, 1996, 253 SCRA 674.

Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 141910 August 6, 2002FGU INSURANCE CORPORATION,petitioner,vs.G.P. SARMIENTO TRUCKING CORPORATION and LAMBERT M. EROLES,respondents.VITUG,J.:G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion Industries, Inc., along South Superhighway in Alabang, Metro Manila, to the Central Luzon Appliances in Dagupan City. While the truck was traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban, Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of the covered cargoes in the sum of P204,450.00. FGU, in turn, being the subrogee of the rights and interests of Concepcion Industries, Inc., sought reimbursement of the amount it had paid to the latter from GPS. Since the trucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract of carriage against GPS and its driver Lambert Eroles with the Regional Trial Court, Branch 66, of Makati City. In its answer, respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a common carrier. Respondents further claimed that the cause of damage was purely accidental.1wphi1.ntThe issues having thus been joined, FGU presented its evidence, establishing the extent of damage to the cargoes and the amount it had paid to the assured. GPS, instead of submitting its evidence, filed with leave of court a motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it was a common carrier.The trial court, in its order of 30 April 1996,1granted the motion to dismiss, explaining thusly:"Under Section 1 of Rule 131 of the Rules of Court, it is provided that Each party must prove his own affirmative allegation, xxx."In the instant case, plaintiff did not present any single evidence that would prove that defendant is a common carrier."x x x x x x x x x"Accordingly, the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part of a common carrier in case of loss, damage or deterioration of goods during transport under 1735 of the Civil Code is not availing."Thus, the laws governing the contract between the owner of the cargo to whom the plaintiff was subrogated and the owner of the vehicle which transports the cargo are the laws on obligation and contract of the Civil Code as well as the law on quasi delicts."Under the law on obligation and contract, negligence or fault is not presumed. The law on quasi delict provides for some presumption of negligence but only upon the attendance of some circumstances. Thus, Article 2185 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 violating any traffic regulation."Evidence for the plaintiff shows no proof that defendant was violating any traffic regulation. Hence, the presumption of negligence is not obtaining."Considering that plaintiff failed to adduce evidence that defendant is a common carrier and defendants driver was the one negligent, defendant cannot be made liable for the damages of the subject cargoes."2The subsequent motion for reconsideration having been denied,3plaintiff interposed an appeal to the Court of Appeals, contending that the trial court had erred (a) in holding that the appellee corporation was not a common carrier defined under the law and existing jurisprudence; and (b) in dismissing the complaint on a demurrer to evidence.The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. The appellate court, in its decision of 10 June 1999,4discoursed, among other things, that -"x x x in order for the presumption of negligence provided for under the law governing common carrier (Article 1735, Civil Code) to arise, the appellant must first prove that the appellee is a common carrier. Should the appellant fail to prove that the appellee is a common carrier, the presumption would not arise; consequently, the appellant would have to prove that the carrier was negligent."x x x x x x x x x"Because it is the appellant who insists that the appellees can still be considered as a common carrier, despite its `limited clientele, (assuming it was really a common carrier), it follows that it (appellant) has the burden of proving the same. It (plaintiff-appellant) `must establish his case by a preponderance of evidence, which means that the evidence as a whole adduced by one side is superior to that of the other. (Summa Insurance Corporation vs. Court of Appeals, 243 SCRA 175). This, unfortunately, the appellant failed to do -- hence, the dismissal of the plaintiffs complaint by the trial court is justified."x x x x x x x x x"Based on the foregoing disquisitions and considering the circumstances that the appellee trucking corporation has been `its exclusive contractor, hauler since 1970, defendant has no choice but to comply with the directive of its principal, the inevitable conclusion is that the appellee is a private carrier."x x x x x x x x x"x x x the lower court correctly ruled that 'the application of the law on common carriers is not warranted and the presumption of fault or negligence on the part of a common carrier in case of loss, damage or deterioration of good[s] during transport under [article] 1735 of the Civil Code is not availing.' x x x."Finally, We advert to the long established rule that conclusions and findings of fact of a trial court are entitled to great weight on appeal and should not be disturbed unless for strong and valid reasons."5Petitioner's motion for reconsideration was likewise denied;6hence, the instant petition,7raising the following issues:IWHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON CARRIER AS DEFINED UNDER THE LAW AND EXISTING JURISPRUDENCE.IIWHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER, MAY BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND POSSESSION.IIIWHETHER THE DOCTRINE OFRES IPSA LOQUITURIS APPLICABLE IN THE INSTANT CASE.On the first issue, the Court finds the conclusion of the trial court and the Court of Appeals to be amply justified. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc., rendering or offering its services to no other individual or entity, cannot be considered a common carrier. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for hire or compensation, offering their services to thepublic,8whether to the public in general or to a limited clientele in particular, but never on an exclusive basis.9The true test of a common carrier is the carriage of passengers or goods, providing space for those who opt to avail themselves of its transportation service for a fee.10Given accepted standards, GPS scarcely falls within the term "common carrier."The above conclusion nothwithstanding, GPS cannot escape from liability.Inculpa contractual, upon which the action of petitioner rests as being the subrogee of Concepcion Industries, Inc., the mere proof of the existence of the contract and the failure of its compliance justify,prima facie, a corresponding right of relief.11The law, recognizing the obligatory force of contracts,12will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof.13A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the promisee that may include his "expectation interest," which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, or his "reliance interest," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his "restitution interest," which is his interest in having restored to him any benefit that he has conferred on the other party.14Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action.15The effect of every infraction is to create a new duty, that is, to make recompense to the one who has been injured by the failure of another to observe his contractual obligation16unless he can show extenuating circumstances, like proof of his exercise of due diligence (normally that of the diligence of a good father of a family or, exceptionally by stipulation or by law such as in the case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous event, to excuse him from his ensuing liability.Respondent trucking corporation recognizes the existence of a contract of carriage between it and petitioners assured, and admits that the cargoes it has assumed to deliver have been lost or damaged while in its custody. In such a situation, a default on, or failure of compliance with, the obligation in this case, the delivery of the goods in its custody to the place of destination - gives rise to a presumption of lack of care and corresponding liability on the part of the contractual obligor the burden being on him to establish otherwise. GPS has failed to do so.Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not himself be ordered to pay petitioner. The driver, not being a party to the contract of carriage between petitioners principal and defendant, may not be held liable under the agreement. A contract can only bind the parties who have entered into it or their successors who have assumed their personality or their juridical position.17Consonantly with the axiomres inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third person. Petitioners civil action against the driver can only be based onculpa aquiliana,which, unlikeculpa contractual,would require the claimant for damages to prove negligence or fault on the part of the defendant.18A word in passing.Res ipsa loquitur,a doctrine being invoked by petitioner, holds a defendant liable where the thing which caused the injury complained of is shown to be under the latters management and the accident is such that, in the ordinary course of things, cannot be expected to happen if those who have its management or control use proper care. It affords reasonable evidence, in the absence of explanation by the defendant, that the accident arose from want of care.19It is not a rule of substantive law and, as such, it does not create an independent ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of negligence. The maxim simply places on the defendant the burden of going forward with the proof.20Resort to the doctrine, however, may be allowed only when (a) the event is of a kind which does not ordinarily occur in the absence of negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons, are sufficiently eliminated by the evidence; and (c) the indicated negligence is within the scope of the defendant's duty to the plaintiff.21Thus, it is not applicable when an unexplained accident may be attributable to one of several causes, for some of which the defendant could not be responsible.22Res ipsa loquiturgenerally finds relevance whether or not a contractual relationship exists between the plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the occurrence and not from the nature of the relation of the parties.23Nevertheless, the requirement that responsible causes other than those due to defendants conduct must first be eliminated, for the doctrine to apply, should be understood as being confined only to cases of pure (non-contractual) tort since obviously the presumption of negligence inculpa contractual, as previously so pointed out, immediately attaches by a failure of the covenant or its tenor. In the case of the truck driver, whose liability in a civil action is predicated onculpa acquiliana, while he admittedly can be said to have been in control and management of the vehicle which figured in the accident, it is not equally shown, however, that the accident could have been exclusively due to his negligence, a matter that can allow, forthwith,res ipsa loquiturto work against him.If a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the movant shall be deemed to have waived the right to present evidence.24Thus, respondent corporation may no longer offer proof to establish that it has exercised due care in transporting the cargoes of the assured so as to still warrant a remand of the case to the trial court.1wphi1.ntWHEREFORE, the order, dated 30 April 1996, of the Regional Trial Court, Branch 66, of Makati City, and the decision, dated 10 June 1999, of the Court of Appeals, areAFFIRMEDonly insofar as respondent Lambert M. Eroles is concerned, but said assailed order of the trial court and decision of the appellate court areREVERSEDas regards G.P. Sarmiento Trucking Corporation which, instead, is hereby ordered to pay FGU Insurance Corporation the value of the damaged and lost cargoes in the amount of P204,450.00. No costs.SO ORDERED.Davide, Jr., C.J., Kapunan, Ynares-Santiago, and Austria-Martinez, JJ.,concur.

Footnotes1Rollo, p. 14.2Rollo, pp. 14-15.3Rollo, p. 174Rollo, p. 20.5Rollo, pp. 24-28.6Rollo, p. 32.7Rollo, p. 3.8Article 1732, Civil Code.9Sec. 13[b], Public Service Act as amended; see also Guzman vs. Court of Appeals, G.R. L-47822, 22 December 1988.10National Steel Corporation vs. Court of Appeals, 283 SCRA 45.11Calalas vs. Court of Appeals, 332 SCRA 356; Sabena Belgian World Airlines vs. Court of Appeals, 255 SCRA 38.12See Articles 1159, 1308, 1315, 1356, Civil Code.13Anson on Contracts, 1939, p. 424; 17A Am Jur 2d, p. 728 citing Parks vs. Parks, 187 P2d 145.14Restatement, Second, Contracts, 344.15Fuller and Purdue, The Reliance Interest in Contract Damages, 46 Yale L.J.61 (1936).16Richardson on Contracts, 1951, p. 309.17Article 1311, Civil Code.18Calalas vs. Court of Appeals, supra; See Article 2176, Civil Code.19Africa vs. Caltex (Phils.) Inc., 16 SCRA 448; Layugan vs. Intermediate Appellate Court, 167 SCRA 376.20Ramos vs. Court of Appeals, 321 SCRA 600.21Sangco, Torts and Damages V.1, 1993, p. 29, citing 58 Am Jur 2d, pp. 56-58. See Ramos vs. Court of Appeals, supra.22Words and Phrases Vol. 37, p. 483.2357B Am Jur 2d, p. 496.24Section 1, Rule 35, Rules of Court; Section 1, Rule 33, 1997 Rules of Civil Procedure.

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-12163 March 4, 1959PAZ FORES,petitioner,vs.IRENEO MIRANDA,respondent.Alberto O. Villaraza for petitioner.Almazan and Ereneta for respondent.REYES, J.B.L.,J.:Defendant-petitioner Paz Fores brings this petition for review of the decision of the Court of Appeals (C.A. Case No. 1437-R) awarding to the plaintiff-respondent Ireneo Miranda the sums of P5,000 by way of actual damages and counsel fees, and P10,000 as moral damages, with costs.Respondent was one of the passengers on a jeepney driven by Eugenio Luga. While the vehicle was descending the Sta. Mesa bridge at an excessive rate of speed, the driver lost control thereof, causing it to swerve and to his the bridge wall. The accident occurred on the morning of March 22, 1953. Five of the passengers were injured, including the respondent who suffered a fracture of the upper right humerus. He was taken to the National Orthopedic Hospital for treatment, and later was subjected to a series of operations; the first on May 23, 1953, when wire loops were wound around the broken bones and screwed into place; a second, effected to insert a metal splint, and a third one to remove such splint. At the time of the trial, it appears that respondent had not yet recovered the use of his right arm.The driver was charged with serious physical injuries through reckless imprudence, and upon interposing a plea of guilty was sentenced accordingly.The contention that the evidence did not sufficiently establish the identity of the vehicle as the belonging to the petitioner was rejected by the appellate court which found, among other things, that is carried plate No. TPU-1163, SERIES OF 1952, Quezon City, registered in the name of Paz Fores, (appellant herein) and that the vehicle even had the name of "Doa Paz" painted below its wind shield. No evidence to the contrary was introduced by the petitioner, who relied on an attack upon the credibility of the two policemen who went to the scene of the incident.A point to be further remarked is petitioner's contention that on March 21, 1953, or one day before the accident happened, she allegedly sold the passenger jeep that was involved therein to a certain Carmen Sackerman.The initial problem raised by the petitioner in this appeal may be formulated thus "Is the approval of the Public Service Commission necessary for the sale of apublic service vehicleeven without conveying therewith the authority to operate the same?" Assuming thedubioussale to be a fact, the court of Appeals answered the query in the affirmative. The ruling should be upheld.Section 20 of the Public Service Act (Commonwealth Act No. 146) provides:Sec. 20. Subject to established limitations and exceptions and saving provisions to the contrary, it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the previous approval and authority of the Commission previously had x x x x x x x x x(g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights, or any part thereof; or merge or consolidate its property, franchises, privileges or rights, or any part thereof, with those of any other public service. The approval herein required shall be given, after notice to the public and after hearing the persons interested at a public hearing, if it be shown that there are just and reasonable grounds for making the mortgage or encumbrance, for liabilities of more than one year maturity, or the sale, alienation, lease, merger, or consolidation to be approved and that the same are not detrimental to the public interest, and in case of a sale, the date on which the same is to be consummated shall be fixed in the order of approval:Provided,however, That nothing herein contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to prevent the sale, alienation, or lease by any public service of any of its property in the ordinary course of its business.Interpreting the effects of this particular provision of law, we have held in the recent cases ofMontoya vs. Ignacio,*50 Off. Gaz. No. 1, p. 108;Timbol vs. Osias, et al., G. R. No. L-7547, April 30, 1955, andMedina vs. Cresencia, 99 Phil., 506; 52 Off. Gaz. No. 10, p. 4606, that a transfer contemplated by the law, if made without the requisite approval of the Public Service Commission, is not effective and binding in so far as the responsibility of the grantee under the franchise in relation to the public is concerned. Petitioner assails, however, the applicability of these rulings to the instant case, contending that in those cases, the operator did not convey, by lease or by sale, the vehicle independently of his rights under the franchise. This line of reasoning does not find support in the law. The provisions of the statute are clear and prohibit the sale, alienation, lease, or encumbrance of the property, franchise, certificate, privileges or rights, or any part thereof of the owner or operator of the public service Commission. The law was designed primarily for the protection of the public interest; and until the approval of the public Service Commission is obtained the vehicle is, in contemplation of law, still under the service of the owner or operator standing in the records of the Commission which the public has a right to rely upon.Theprovisocontained in the aforequoted law, to the effect that nothing therein shall be construed "to prevent the transaction from being negotiated or complete before its approval", means only that the sale without the required approval is still valid and binding between the parties (Montoya vs. Ignacio,supra). The phrase "in the ordinary course of its business" found in the otherproviso" or to prevent the sale, alienation, or lease by any public service of any of its property". As correctly observed by the lower court, could not have been intended to include the sale of the vehicle itself, but at most may refer only to such property that may be conceivably disposed or by the carrier in the ordinary course of its business, like junked equipment or spare parts.The case ofIndalecio de Torres vs. Vicente Ona(63 Phil., 594, 597) is enlightening; and there, it was held:Under the law, the Public Service Commission has not only general supervision and regulation of, but also full jurisdiction and control over all public utilities including the property, equipment and facilities used, and the property rights and franchise enjoyed by every individual and company engaged i the performance of a public service in the sense this phrase is used in the Public Service Act or Act No. 3108). By virtue of the provisions of said Act,motor vehicles used in the performance of a service, as the transportation of freightfrom one point to another, have to this date been considered and they cannot but be so considered-public service property; and, by reason of its own nature, a TH truck, which means that the operator thereof places it at the disposal of anybody who is willing to pay a rental of its use, when he desires to transfer or carry his effects, merchandise or any other cargo from one place to another, is necessarily a public service property. (Emphasis supplied)Of course, this court has held in the case ofBachrach Motor co. vs. Zamboanga Transportation Co., 52 Phil., 244, that there may be anunc pro tuncauthorization which has the effect of having the approval retroact to the date of the transfer; but such outcome cannot prejudice rights intervening in the meantime. It appears that no such approval was given by the Commission before the accident occurred.The P10,000 actual damages awarded by the Court of First Instance of Manila were reduced by the Court of Appeals to only P2,000, on the ground that a review of the records failed to disclose a sufficient basis for the trial court's appraisal, since the only evidence presented on this point consisted of respondent's bare statement that his expenses and loss of income amounted to P20,000. On the other hand, "it cannot be denied," the lower court said, "that appellee (respondent) did incur expenses"' It is well to note further that respondent was a painter by profession and a professor of Fine Arts, so that the amount of P2,000 awarded cannot be said to be excessive (see Arts. 2224 and 2225, Civil Code of the Philippines). The attorney's fees in the sum of P3,000 also awarded to the respondent are assailed on the ground that the Court of First Instance did not provided for the same, and since no appeal was interposed by said respondent, it was allegedly error for the Court of Appeals to award themmotu proprio. Petitioner fails to note that attorney's fees are included in the concept of actual damages under the Civil Code and may be awarded whenever the court deems it is just and equitable (Art. 2208, Civil Code of the Philippines). We see no reason to alter these awards.Anent the moral damages ordered to be paid to the respondent, the same must be discarded. We have repeatedly ruled (Cachero vs. Manila Yellow Taxicab Co. Inc., 101 Phil., 523; 54 Off. Gaz., [26], 6599; Necesito, et al vs. Paras, 104 Phil., 75; 56 Off. Gaz., [23] 4023, that moral damages are not recoverable in damage actions predicted on a breach of the contract of transportation, in view of Articles 2219 and 2220 of the new Civil Code, which provide as follows:Art. 2219. Moral damages may be recovered in the following and analogous cases:(1) A criminal offense resulting in physical injuries;(2) Quasi-delicts causing physical injuries;x x x x x x x x xArt. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under circumstances, such damages are justify due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith.By contrasting the provisions of these two article it immediately becomes apparent that:(a) In case of breach of contract (including one of transportation) proof of bad faith or fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential to justify an award of moral damages; and(b) That a breach of contract can not be considered included in the descriptive term "analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides for the damages that are caused by contractual breach, but because the definition ofquasi-delictin Art. 2176 of the Code expresslyexcludesthe cases where there is a "preexisting contractual relation between the parties."Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage dome. 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.The exception to the basic rule of damages now under consideration is a mishap resulting in the death of a passenger, in which case Article 1764 makes the common carrier expressly subject to the rule of Art. 2206, that entitles the deceased passenger to "demand moral damages for mental anguish by reason of the death of the deceased" (Necesito vs. Paras, 104 Phil., 84, Resolution on motion to reconsider, September 11, 1958). But the exceptional rule of Art. 1764 makes it all the more evident that where the injured passenger does not die, moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. We think it is clear that the mere carelessness of the carrier's driver does notper seconstitute of justify an inference of malice or bad faith on the part of the carrier; and in the case at bar there is no other evidence of such malice to support the award of moral damages by the Court of Appeals. To award moral damages for breach of contract, therefore, without proof of bad faith or malice on the part of the defendant, as required by Art. 220, would be to violate the clear provisions of the law, and constitute unwarranted judicial legislation.The Court of Appeals has invoked our rulings inCastro vs. Acro Taxicab Co., G.R. No. 49155, December 14, 1948 andLayda vs. Court of Appeals, 90 Phil., 724; but these doctrines were predicated upon our former law of damages, before judicial discretion in fixing them became limited by the express provisions of the new Civil Code (previously quoted). Hence, the aforesaid rulings are now inapplicable.Upon the other hand, the advantageous position of a party suing a carrier for breach of the contract of transportations explains, to some extent, the limitations imposed by the new Code on the amount of the recovery. The action for breach of contract imposes on the defendant carrier a presumption of liability upon mere proof of injury to the passenger; that latter is relieved from the duty to established the fault of the carrier, or of his employees, and the burden is placed on the carrier to prove that it was due to an unforseen event or toforce majeure(Cangco vs. Manila Railroad Co., 38 Phil., 768, 777). Moreover, the carrier, unlike in suits for quasi-delict, may not escape liability by proving that it has exercised due diligence in the selection and supervision of its employees (Art. 1759, new civil code; Cangcovs. Manila Railroad Co.,supra;Prado vs. Manila Electric Co., 51 Phil., 900).The difference in conditions, defenses and proof, as well as the codal concept ofquasi-delictas essentiallyextracontractualnegligence, compel us to differentiate between actionex contractu,and actionsquasi ex delicto,and prevent us from viewing the action for breach of contract as simultaneously embodying an action on tort. Neither can this action be taken as one to enforce on employee's liability under Art. 103 of the Revised Penal Code, since the responsibility is not alleged to be subsidiary, nor is there on record any averment or proof that the driver of appellant was insolvent. In fact, he is not even made a party to the suit.It is also suggested that a carrier's violation of its engagement to safety transport the passenger involves a breach of the passenger's confidence, and therefore should be regarded as a breach of contract in bad faith, justifying recovery of moral damages under Art. 2220. This theory is untenable, for under it the carrier would always be deemed in bad faith, in every case its obligation to the passenger is infringed, and it would be never accountable for simple negligence; while under the law (Art. 1756). the presumption is that common carriers actednegligently(and not maliciously), and Art. 1762 speaks ofnegligenceof the common carrier.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 article 1733 and 1755.ART. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be equitably reduced.The distinction between fraud, bad faith or malice in the sense of deliberate or wanton wrong doing and negligence (as mere carelessness) is too fundamental in our law to be ignored (Arts. 1170-1172); their consequences being clearly differentiated by the Code.ART. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted.In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation.It is to be presumed, in the absence of statutory provision to the contrary, that this difference was in the mind of the lawmakers when in Art. 2220 they limited recovery of moral damages to breaches of contract in bad faith. It is true that negligence may be occasionally so gross as to amount to malice; but that fact must be shown in evidence, and a carrier's bad faith is not to be lightly inferred from a mere finding that the contract was breached through negligence of the carrier's employees.In view of the foregoing considerations, the decision of the Court of Appeals is modified by eliminating the award of P5,000.00 by way of moral damages. (Court of Appeals Resolution of May 5, 1957). In all other respects, the judgment is affirmed. No costs in this instance. So ordered.Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion and Endencia, JJ.,concur.

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-21438 September 28, 1966AIR FRANCE,petitioner,vs.RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS,respondents.Lichauco, Picazo and Agcaoili for petitioner.Bengzon Villegas and Zarraga for respondent R. Carrascoso.SANCHEZ,J.: The Court of First Instance of Manila1sentenced petitioner to pay respondent Rafael Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary damages; P393.20 representing the difference in fare between first class and tourist class for the portion of the trip Bangkok-Rome, these various amounts with interest at the legal rate, from the date of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees; and the costs of suit. On appeal,2the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the appealed decision "in all other respects", with costs against petitioner. The case is now before us for review oncertiorari. The facts declared by the Court of Appeals as " fully supported by the evidence of record", are: Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on March 30, 1958. On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first class" seat that he was occupying because, in the words of the witness Ernesto G. Cuento, there was a "white man", who, the Manager alleged, had a "better right" to the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be expected, refused, and told defendant's Manager that his seat would be taken over his dead body; a commotion ensued, and, according to said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist class; when they found out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave his "first class" seat in the plane.3 1. The trust of the relief petitioner now seeks is that we review "all the findings"4of respondent Court of Appeals. Petitioner charges that respondent court failed to make complete findings of fact on all the issues properly laid before it. We are asked to consider facts favorable to petitioner, and then, to overturn the appellate court's decision. Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of record without expressing therein clearly and distinctly the facts and the law on which it is based".5This is echoed in the statutory demand that a judgment determining the merits of the case shall state "clearly and distinctly the facts and the law on which it is based";6and that "Every decision of the Court of Appeals shall contain complete findings of fact on all issues properly raised before it".7 A decision with absolutely nothing to support it is a nullity. It is open to direct attack.8The law, however, solely insists that a decision state the "essential ultimate facts" upon which the court's conclusion is drawn.9A court of justice is not hidebound to write in its decision every bit and piece of evidence10presented by one party and the other upon the issues raised. Neither is it to be burdened with the obligation "to specify in the sentence the facts"which a party "considered as proved".11This is but a part of the mental process from which the Court draws the essential ultimate facts. A decision is not to be so clogged with details such that prolixity, if not confusion, may result. So long as the decision of the Court of Appeals contains the necessary facts to warrant its conclusions, it is no error for said court to withhold therefrom "any specific finding of facts with respect to the evidence for the defense". Because as this Court well observed, "There is no law that so requires".12Indeed, "the mere failure to specify (in the decision) the contentions of the appellant and the reasons for refusing to believe them is not sufficient to hold the same contrary to the requirements of the provisions of law and the Constitution". It is in this setting that inManigque, it was held that the mere fact that the findings "were based entirely on the evidence for the prosecution without taking into consideration or even mentioning the appellant's side in the controversy as shown by his own testimony", would not vitiate the judgment.13If the court did not recite in the decision the testimony of each witness for, or each item of evidence presented by, the defeated party, it does not mean that the court has overlooked such testimony or such item of evidence.14At any rate, the legal presumptions are that official duty has been regularly performed, and that all the matters within an issue in a case were laid before the court and passed upon by it.15 Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written statement of the ultimate facts as found by the court ... and essential to support the decision and judgment rendered thereon".16They consist of the court's"conclusions"withrespect to the determinative facts in issue".17A question of law, upon the other hand, has been declared as "one which does not call for an examination of the probative value of the evidence presented by the parties."18 2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the Court of Appeals.19That judgment is conclusive as to the facts. It is not appropriately the business of this Court to alter the facts or to review the questions of fact.20 With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals support its judgment. 3. Was Carrascoso entitled to the first class seat he claims? It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class ticket. But petitioner asserts that said ticket did not represent the true and complete intent and agreement of the parties; that said respondent knew that he did not have confirmed reservations for first class on any specific flight, although he had tourist class protection; that, accordingly, the issuance of a first class ticket was no guarantee that he would have a first class ride, but that such would depend upon the availability of first class seats. These are matters which petitioner has thoroughly presented and discussed in its brief before the Court of Appeals under its third assignment of error, which reads: "The trial court erred in finding that plaintiff had confirmed reservations for, and a right to, first class seats on the "definite" segments of his journey, particularly that from Saigon to Beirut".21 And, the Court of Appeals disposed of this contention thus: Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no guarantee that the passenger to whom the same had been issued, would be accommodated in the first-class compartment, for as in the case of plaintiff he had yet to make arrangements upon arrival at every station for the necessary first-class reservation. We are not impressed by such a reasoning. We cannot understand how a reputable firm like defendant airplane company could have the indiscretion to give out tickets it never meant to honor at all. It received the corresponding amount in payment of first-class tickets and yet it allowed the passenger to be at the mercy of its employees. It is more in keeping with the ordinary course of business that the company should know whether or riot the tickets it issues are to be honored or not.22 Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention, thus: On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1", and defendant's own witness, Rafael Altonaga, confirmed plaintiff's testimony and testified as follows:Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?A. That the space is confirmed.Q. Confirmed for first class?A. Yes, "first class". (Transcript, p. 169)x x x x x x x x x Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that although plaintiff paid for, and was issued a "first class" airplane ticket, the ticket was subject to confirmation in Hongkong. The court cannot give credit to the testimony of said witnesses. Oral evidence cannot prevail over written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the testimony of said witnesses, and clearly show that the plaintiff was issued, and paid for, a first class ticket without any reservation whatever. Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the reservation for a "first class" accommodation for the plaintiff was confirmed. The court cannot believe that after such confirmation defendant had a verbal understanding with plaintiff that the "first class" ticket issued to him by defendant would be subject to confirmation in Hongkong.23 We have heretofore adverted to the fact that except for a slight difference of a few pesos in the amount refunded on Carrascoso's ticket, the decision of the Court of First Instance was affirmed by the Court of Appealsin all other respects. We hold the view that such a judgment of affirmance has merged the judgment of the lower court.24Implicit in that affirmance is a determination by the Court of Appeals that the proceeding in the Court of First Instance was free from prejudicial error and "all questions raised by the assignments of error and all questions that might have been raised are to be regarded as finally adjudicated against the appellant". So also, the judgment affirmed "must be regarded as free from all error".25We reached this policy construction because nothing in the decision of the Court of Appeals on this point would suggest that its findings of fact are in any way at war with those of the trial court. Nor was said affirmance by the Court of Appeals upon a ground or grounds different from those which were made the basis of the conclusions of the trial court.26 If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat, notwithstanding the fact that seat availability in specific flights is therein confirmed, then an air passenger is placed in the hollow of the hands of an airline. What security then can a passenger have? It will always be an easy matter for an airline aided by its employees, to strike out the very stipulations in the ticket, and say that there was a verbal agreement to the contrary. What if the passenger had a schedule to fulfill? We have long learned that, as a rule, a written document speaks a uniform language; that spoken word could be notoriously unreliable. If only to achieve stability in the relations between passenger and air carrier, adherence to the ticket so issued is desirable. Such is the case here. The lower courts refused to believe the oral evidence intended to defeat the covenants in the ticket. The foregoing are the considerations which point to the conclusion that there are facts upon which the Court of Appeals predicated the finding that respondent Carrascoso had a first class ticket and was entitled to a first class seat at Bangkok, which is a stopover in the Saigon to Beirut leg of the flight.27We perceive no "welter of distortions by the Court of Appeals of petitioner's statement of its position", as charged by petitioner.28Nor do we subscribe to petitioner's accusation that respondent Carrascoso "surreptitiously took a first class seat to provoke an issue".29And this because, as petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat and because from Saigon I was told again to see the Manager".30Why, then, was he allowed to take a first class seat in the plane at Bangkok, if he had no seat? Or, if another had a better right to the seat? 4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that Carrascoso's action is planted upon breach of contract; that to authorize an award for moral damages there must be an averment of fraud or bad faith;31and that the decision of the Court of Appeals fails to make a finding of bad faith. The pivotal allegations in the complaint bearing on this issue are:3. That ... plaintiff entered into acontractof air carriage with the Philippine Air Lines for a valuable consideration, the latter acting as general agents for and in behalf of the defendant, under which said contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff, First Class passage on defendant's plane during the entire duration of plaintiff's tour of Europe with Hongkong as starting point up to and until plaintiff's return trip to Manila, ... .4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to Bangkok, defendant furnished to the plaintiff First Class accommodation but only after protestations, arguments and/or insistence were made by the plaintiff with defendant's employees.5. That finally, defendantfailed to provideFirst Class passage, but instead furnished plaintiff onlyTouristClass accommodations from Bangkok to Teheran and/or Casablanca, ... the plaintiff has beencompelledby defendant's employees to leave the First Class accommodation berths at Bangkokafter he was already seated.6. That consequently, the plaintiff, desiring no repetition of the inconvenience and embarrassments brought by defendant's breach of contract was forced to take a Pan American World Airways plane on his return trip from Madrid to Manila.32x x x x x x x x x 2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid, plaintiff suffered inconveniences, embarrassments, and humiliations, thereby causing plaintiff mental anguish, serious anxiety, wounded feelings, social humiliation, and the like injury, resulting in moral damages in the amount of P30,000.00.33x x x x x x x x x The foregoing, in our opinion, substantially aver:First, That there was a contract to furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran leg;Second, That said contract was breached when petitioner failed to furnish first class transportation at Bangkok; andThird,that there was bad faith when petitioner's employee compelled Carrascoso to leave his first class accommodation berth"after he was already, seated"and to take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments and humiliations, thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral damages. It is true that there is no specific mention of the termbad faithin the complaint. But, the inference of bad faith is there, it may be drawn from the facts and circumstances set forth therein.34The contract was averred to establish the relation between the parties. But the stress of the action is put on wrongful expulsion. Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed petitioner on guard on what Carrascoso intended to prove: That while sitting in the plane in Bangkok, Carrascoso wasoustedby petitioner's manager who gave his seat to a white man;35and (b) evidence of bad faith in the fulfillment of the contract was presented without objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to whether or not there is sufficient averment in the complaint to justify an award for moral damages. Deficiency in the complaint, if any, was cured by the evidence. An amendment thereof to conform to the evidence is not even required.36On the question of bad faith, the Court of Appeals declared: That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to the defendant Air France while at Bangkok, and was transferred to the tourist class not only without his consent but against his will, has been sufficiently established by plaintiff in his testimony before the court, corroborated by the corresponding entry made by the purser of the plane in his notebook which notation reads as follows: "First-class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene", and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The captain of the plane who was asked by the manager of defendant company at Bangkok to intervene even refused to do so. It is noteworthy that no one on behalf of defendant ever contradicted or denied this evidence for the plaintiff. It could have been easy for defendant to present its manager at Bangkok to testify at the trial of the case, or yet to secure his disposition; but defendant did neither.37 The Court of appeals further stated Neither is there evidence as to whether or not a prior reservation was made by the white man. Hence, if the employees of the defendant at Bangkok sold a first-class ticket to him when all the seats had already been taken, surely the plaintiff should not have been picked out as the one to suffer the consequences and to be subjected to the humiliation and indignity of being ejected from his seat in the presence of others. Instead of explaining to the white man the improvidence committed by defendant's employees, the manager adopted the more drastic step of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are strengthened in our belief that this probably was what happened there, by the testimony of defendant's witness Rafael Altonaga who, when asked to explain the meaning of the letters "O.K." appearing on the tickets of plaintiff, said "that the space is confirmed for first class. Likewise, Zenaida Faustino, another witness for defendant, who was the chief of the Reservation Office of defendant, testified as follows:"Q How does the person in the ticket-issuing office know what reservation the passenger has arranged with you?A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959) In this connection, we quote with approval what the trial Judge has said on this point: Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right" to the seat occupied by Mr. Carrascoso? The record is silent. The defendant airline did not prove "any better", nay, any right on the part of the "white man" to the "First class" seat that the plaintiff was occupying and for which he paid and was issued a corresponding "first class" ticket. If there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant could have easily proven it by having taken the testimony of the said Manager by deposition, but defendant did not do so; the presumption is that evidence willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances, the Court is constrained to find, as it does find, that the Manager of the defendant airline in Bangkok not merely asked but threatened the plaintiff to throw him out of the plane if he did not give up his "first class" seat because the said Manager wanted to accommodate, using the words of the witness Ernesto G. Cuento, the "white man".38 It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use the term "bad faith". But can it be doubted that the recital of facts therein points to bad faith? The manager not only prevented Carrascoso from enjoying his right to a first class seat; worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliation of having to go to the tourist class compartment - just to give way to another passenger whose right thereto has not been established. Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different from what is understood in law. For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design or with some motive of self-interest or will or for ulterior purpose."39 And if the foregoing were not yet sufficient, there is the express finding ofbad faithin the judgment of the Court of First Instance, thus: The evidence shows that the defendant violated its contract of transportation with plaintiff in bad faith, with the aggravating circumstances that defendant's Manager in Bangkok went to the extent of threatening the plaintiff in the presence of many passengers to have him thrown out of the airplane to give the "first class" seat that he was occupying to, again using the words of the witness Ernesto G. Cuento, a "white man" whom he (defendant's Manager) wished to accommodate, and the defendant has not proven that this "white man" had any "better right" to occupy the "first class" seat that the plaintiff was occupying, duly paid for, and for which the corresponding "first class" ticket was issued by the defendant to him.40 5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well settled in law.41For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer. Article 21 of the Civil Code says: ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage. In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions of Article 2219 (10), Civil Code, moral damages are recoverable.42 6. A contract to transport passengers is quite different in kind and degree from any other contractual relation.43And this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could give ground for an action for damages. Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier.44 Thus, "Where a steamship company45had accepted a passenger's check, it was a breach of contract and a tort, giving a right of action for its agent in the presence of third persons to falsely notify her that the check was worthless and demand payment under threat of ejection, though the language used was not insulting and she was not ejected."46And this, because, although the relation of passenger and carrier is "contractual both in origin and nature" nevertheless "the act that breaks the contract may be also a tort".47And in another case, "Where a passenger on a railroad train, when the conductor came to collect his fare tendered him the cash fare to a point where the train was scheduled not to stop, and told him that as soon as the train reached such point he would pay the cash fare from that point to destination, there was nothing in the conduct of the passenger which justified the conductor in using insulting language to him, as by calling him a lunatic,"48and the Supreme Court of South Carolina there held the carrier liable for the mental suffering of said passenger.1awphl.nt Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a violation of public duty by the petitioner air carrier a case ofquasi-delict. Damages are proper. 7. Petitioner draws our attention to respondent Carrascoso's testimony, thus Q You mentioned about an attendant. Who is that attendant and purser?A When we left already that was already in the trip I could not help it. So one of the flight attendants approached me and requested from me my ticket and I said, What for? and she said, "We will note that you transferred to the tourist class". I said, "Nothing of that kind. That is tantamount to accepting my transfer." And I also said, "You are not going to note anything there because I am protesting to this transfer".Q Was she able to note it?A No, because I did not give my ticket.Q About that purser?A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I stood up and I went to the pantry that was next to me and the purser was there. He told me, "I have recorded the incident in my notebook." He read it and translated it to me because it was recorded in French "First class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene."Mr. VALTE I move to strike out the last part of the testimony of the witness because the best evidence would be the notes. Your Honor.COURT I will allow that as part of his testimony.49 Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his notebook reading "First class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene" is predicated upon evidence [Carrascoso's testimony above] which is incompetent. We do not think so. The subject of inquiry is not the entry, but the ouster incident. Testimony on the entry does not come within the proscription of the best evidence rule. Such testimony is admissible.49a Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the startling occurrence was still fresh and continued to be felt. The excitement had not as yet died down. Statements then, in this environment, are admissible as part of theres gestae.50For, they grow "out of the nervous excitement and mental and physical condition of the declarant".51The utterance of the purser regarding his entry in the notebook was spontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has been guaranteed.52It thus escapes the operation of the hearsay rule. It forms part of theres gestae. At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would have been an easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really true that no such entry was made, the deposition of the purser could have cleared up the matter. We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence. 8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant exemplary damages in contracts and quasi- contracts. The only condition is that defendant should have "acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner."53The manner of ejectment of respondent Carrascoso from his first class seat fits into this legal precept. And this, in addition to moral damages.54 9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar judgment for attorneys' fees. The least that can be said is that the courts below felt that it is but just and equitable that attorneys' fees be given.55We do not intend to break faith with the tradition that discretion well exercised as it was here should not be disturbed. 10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing these amounts is primarily with the trial court.56The Court of Appeals did not interfere with the same. The dictates of good sense suggest that we give our imprimatur thereto. Because, the facts and circumstances point to the reasonableness thereof.57 On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We accordingly vote to affirm the same. Costs against petitioner. So ordered.Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro, JJ., concur.Bengzon, J.P., J., took no part.Footnotes1Civil Case No. 38810, "Rafael Carrascoso, plaintiff, vs. Air France, defendant," R.A., pp. 79-80.2C.A.-G.R. No. 26522-R, "Rafael Carrascoso, plaintiff-appellee, vs. Air France, defendant-appellant."3Appendix A, petitioner's brief, pp 146-147. See also R.A., pp. 66-67.4Petitioner's brief, p. 142.5Section 12, Article VIII, Constitution.6Section 1, Rule 36, Rules of Court. See also Section 2, Rule 120, in reference to judgments in criminal cases.7Sec. 4. Rule 51; Sec. 33(2), Judiciary Act of 1948, as amended.8Edwards vs. McCoy, 22 Phil. 598, 601; Yangco vs. Court of First Instance of Manila, et al., 29 Phil. 183, 191.9Braga vs. Millora, 3 Phil. 458, 465.10Id.11Aringo vs. Arena 14 Phil. 263, 266; emphasis supplied.12Reyes vs. People. 71 Phil. 598, 600.13People vs. Manigque 35 O.G., No. 94, pp. 1682, 1683, citing Section 133 of the Code of Civil Procedure and Section 12, Art. VIII, Constitution,supra.14Badger et al. vs. Boyd, 65 S.W. (2d), pp. 601, 610.15Section 5, (m) and (o), Rule 131, Rules of Court.16In re Good's Estate, 266 P. (2d), pp. 719, 729.17Badger et al. vs. Boyd,supra.18Goduco vs. Court of Appeals, et al., L-17647, February 28, 1964.19Section 2, Rule 45, Rules of Court, formerly Section 2, Rule 46 of the Rules of Court.20Medel, et al. vs. Calasanz, et al. L-14835, August 31, 1960; Astraquillo, et al. vs. Javier, et al., L-20034, January 30, 1965.21Petitioner's brief in the Court of Appeals, pp. 82-98.22Decision of the Court of Appeals, Appendix A, petitioner's brief, pp. 148-149.23R.A., pp. 67, 73.245 B C.J.S., p. 295; 3 Am. Jur. p. 678.253 Am. Jur., pp. 677-678.26See Garcia Valdez vs. Seterana Tuason, 40 Phil, 943, 951.27Carrascoso's ticket, according to petitioner (brief, pp. 7-8), shows:Segment or legCarrierFlight No.Date of Departure

1. Manila to HongkongPAL300AMarch 30

2. Hongkong to SaigonVN(Air Vietnam)693March 31

3. Saigon to BeirutAF(Air France)245March 31

28Petitioner's brief, p. 50; see alsoid., pp. 37 and 46.29Id., p. 103.30Ibid., p. 102.31Article 2220, Civil Code reads: "Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith."32R.A., p. 2-4; emphasis supplied.33R.A., P. 5; second cause of action.34Copeland vs. Dunehoo et al., 138 S.E., 267, 270. See also 25 C.J.S., pp. 758-759; 15 Am. Jur., pp. 766-767.35Statement of Attorney Villegas for respondent Carrascoso in open court. Respondent's brief, p. 33.36Section 5, Rule 10, Rules of Court, in part reads: "SEC. 5.Amendment to conform to or authorize presentation of evidence.When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects, as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; but failure so to amend does not affect the result of the trial of these issues ..."; Co Tiamco vs. Diaz, etc., et al., 75 Phil. 672, 679; J.M. Tuason & Co., Inc., etc. vs. Bolanos, 95 Phil. 106, 110.37Decision, Court of Appeals, Appendix A of petitioner's brief, pp. 147-148.38Decision of the Court of Appeals, Appendix A of petitioner's brief, pp. 147-151.39Words & Phrases, Perm. Ed., Vol. 5, p. 13, citing Warfield Natural Gas Co. vs. Allen, 59 S.W. (2d) 534, 538.40R.A., p.74; emphasis supplied.41Article 2180, Civil Code.42Philippine Refining Co. vs. Garcia, et al., L-21871 and L-21962, September 27, 1966.43See Section 4, Chapter 3, Title VIII, Civil Code.444 R.C.L., pp. 1174-1175.45An air carrier is a common carrier; and air transportation is similar or analogous to land and water transportation. Mendoza vs. Philippine Air Lines, Inc., 90 Phil. 836, 841-842.46Austro-American S.S. Co. vs. Thomas, 248 F. 231.47Id., p. 233.48Lipman vs. Atlantic Coast Line R. Co., 93 S.E. 714, 716.49Petitioner's brief, pp, 104-105.49aV Moran, Comments on the Rules of Court, 1963 ed., p. 76.50Section 36, Rule 130, Rules of Court.51IV Martin, Rules of Court in the Philippines, 1963 ed., p. 324.52Ibid.53Article 2232, Civil Code.54Article 2229, Civil Code.55Article 2208, (1) and (11), Civil Code.56Coleongco vs. Claparols, L-18616, March 31, 1964; Corpus vs. Cuaderno, et al., L-23721, March 31, 1965.57Cf.Yutuk vs. Manila Electric Company, L-13016, May 31, 1961; Lopez et al. vs. Pan American World Airways, L-22415, March 30, 1966.

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 108164 February 23, 1995FAR EAST BANK AND TRUST COMPANY,petitioner,vs.THE HONORABLE COURT OF APPEALS, LUIS A. LUNA and CLARITA S. LUNA,respondents.VITUG,J.:Some time in October 1986, private respondent Luis A. Luna applied for, and was accorded, a FAREASTCARD issued by petitioner Far East Bank and Trust Company ("FEBTC") at its Pasig Branch. Upon his request, the bank also issued a supplemental card to private respondent Clarita S. Luna.In August 1988, Clarita lost her credit card. FEBTC was forthwith informed. In order to replace the lost card, Clarita submitted an affidavit of loss. In cases of this nature, the bank's internal security procedures and policy would appear to be to meanwhile so record the lost card, along with the principal card, as a "Hot Card" or "Cancelled Card" in its master file.On 06 October 1988, Luis tendered adespedidalunch for a close friend, a Filipino-American, and another guest at the Bahia Rooftop Restaurant of the Hotel Intercontinental Manila. To pay for the lunch, Luis presented his FAREASTCARD to the attending waiter who promptly had it verified through a telephone call to the bank's Credit Card Department. Since the card was not honored, Luis was forced to pay in cash the bill amounting to P588.13. Naturally, Luis felt embarrassed by this incident.In a letter, dated 11 October 1988, private respondent Luis Luna, through counsel, demanded from FEBTC the payment of damages. Adrian V. Festejo, a vice-president of the bank, expressed the bank's apologies to Luis. In his letter, dated 03 November 1988, Festejo, in part, said:In cases when a card is reported to our office as lost, FAREASTCARD undertakes the necessary action to avert its unauthorized use (such as tagging the card as hotlisted), as it is always our intention to protect our cardholders.An investigation of your case however, revealed that FAREASTCARD failed to inform you about its security policy. Furthermore, an overzealous employee of the Bank's Credit Card Department did not consider the possibility that it may have been you who was presenting the card at that time (for which reason, the unfortunate incident occurred).1Festejo also sent a letter to the Manager of the Bahia Rooftop Restaurant to assure the latter that private respondents were "very valued clients" of FEBTC. William Anthony King, Food and Beverage Manager of the Intercontinental Hotel, wrote back to say that the credibility of private respondent had never been "in question." A copy of this reply was sent to Luis by Festejo.Still evidently feeling aggrieved, private respondents, on 05 December 1988, filed a complaint for damages with the Regional Trial Court ("RTC") of Pasig against FEBTC.On 30 March 1990, the RTC of Pasig, given the foregoing factual settings, rendered a decision ordering FEBTC to pay private respondents (a) P300,000.00 moral damages; (b) P50,000.00 exemplary damages; and (c) P20,000.00 attorney's fees.On appeal to the Court of Appeals, the appellate court affirmed the decision of the trial court.Its motion for reconsideration having been denied by the appellate court, FEBTC has come to this Court with this petition for review.There is merit in this appeal.Inculpa contractual, moral damages may be recovered where the defendant is shown to have acted in bad faith or with malice in the breach of the contract.2The Civil Code provides:Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due.The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. (Emphasis supplied)Bad faith, in this context, includesgross, but not simple, negligence.3Exceptionally, in a contract ofcarriage, moral damages are also allowed in case of death of a passenger attributable to the fault (which is presumed4) of the common carrier.5Concededly, the bank was remiss in indeed neglecting to personally inform Luis of his own card's cancellation. Nothing in the findings of the trial court and the appellate court, however, can sufficiently indicate any deliberate intent on the part of FEBTC to cause harm to private respondents. Neither could FEBTC's negligence in failing to give personal notice to Luis be considered so gross as to amount to malice or bad faith.Malice or bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity; it is different from the negative idea of negligence in that malice or bad faith contemplates a state of mind affirmatively operating with furtive design or ill will.6We are not unaware of the