G.R. No. L-22985           January 24, 1968

BATANGAS TRANSPORTATION COMPANY, petitioner, vs.GREGORIO CAGUIMBAL, PANCRACIO CAGUIMBAL, MARIA MARANAN DE CAGUIMBAL, BIÑAN TRANSPORTATION COMPANY and MARCIANO ILAGAN, respondents.

Ozaeta, Gibbs and Ozaeta and Domingo E. de Lara for petitioner. Victoriano H. Endaya for respondents.

CONCEPCION, C.J.:

          Appeal by certiorari from a decision of the Court of Appeals.

          The main facts are set forth in said decision from which we quote:

          There is no dispute at all that the deceased Pedro Caguimbal, Barrio Lieutenant of Barrio Calansayan, San Jose, Batangas, was a paying passenger of BTCO bus, with plate TPU-507, going south on its regular route from Calamba, Laguna, to Batangas, Batangas, driven by Tomas Perez, its regular driver, at about 5:30 o'clock on the early morning of April 25, 1954. The deceased's destination was his residence at Calansayan, San Jose, Batangas. The bus of the Biñan Transportation Company, bearing plate TPU-820, driven by Marciano Ilagan, was coming from the opposite direction (north-bound). Along the national highway at Barrio Daraza, Tanauan, Batangas, on the date and hour above indicated, a horse-driven rig (calesa) managed by Benito Makahiya, which was then ahead of the Biñan bus, was also coming from the opposite direction, meaning proceeding towards the north. As to what transpired thereafter, the lower court chose to give more credence to defendant Batangas Transportation Company's version which, in the words of the Court a quo, is as follows: "As the BTCO bus was nearing a house, a passenger requested the conductor to stop as he was going to alight, and when he heard the signal of the conductor, the driver Tomas Perez slowed down his bus swerving it farther to the right in order to stop; at this juncture, a calesa, then driven by Benito Makahiya was at a distance of several meters facing the BTCO bus coming from the opposite direction; that at the same time the Biñan bus was about 100 meters away likewise going northward and following the direction of the calesa; that upon seeing the Biñan bus the driver of the BTCO bus dimmed his light as established by Magno Ilaw, the very conductor of the Biñan bus at the time of the accident; that as the calesa and the BTCO bus were passing each other from the opposite directions, the Biñan bus following the calesa swerved to its left in an attempt to pass between the BTCO bus and thecalesa; that without diminishing its speed of about seventy (70) kilometers an hour, the Biñan bus passed through the space between the BTCO bus and the calesa hitting first the left side of the BTCO bus with the left front corner of its body and then bumped and struck the calesa which was completely wrecked; that the driver was seriously injured and the horse was killed; that the second and all other posts supporting the top of the left side of the BTCO bus were completely smashed and half of the back wall to the left was ripped open. (Exhibits 1 and 2). The BTCO bus suffered damages for the repair of its damaged portion.

          As a consequence of this occurrence, two (2) passengers of BTCO died, namely, Pedro Caguimbal and Guillermo Tolentino, apart from others who were injured. The widow and children of Caguimbal instituted the present action, which was tried jointly with a similar action of the Tolentinos, to recover damages from the Batangas Transportation Company, hereinafter referred to as BTCO. The latter, in turn, filed a third-party complaint against the Biñan Transportation Company — hereinafter referred to as Biñan — and its driver, Marciano Ilagan. Subsequently, the Caguimbals amended their complaint, to include therein, as defendants, said Biñan and Ilagan.

          After appropriate proceedings, the Court of First Instance of Batangas rendered a decision dismissing the complaint insofar as the BTCO is concerned, without prejudice to plaintiff's right to sue Biñan — which had stopped participating in the proceedings herein, owing apparently, to a case in the Court of First Instance of Laguna for the insolvency of said enterprise — and Ilagan, and without pronouncement as to costs.

          On appeal taken by the Caguimbals, the Court of Appeals reversed said decision and rendered judgment for them, sentencing the BTCO, Biñan and Ilagan to, jointly and severally, pay to the plaintiffs the aggregate sum of P10,500.00 1 and the costs in both instances. Hence, this appeal by BTCO, upon the ground that the Court of Appeals erred: 1) in finding said appellant liable for damages; and 2) in awarding attorney's fees.

          In connection with the first assignment of error, we note that the recklessness of defendant was, manifestly, a major factor in the occurrence of the accident which resulted, inter alia, in the death of Pedro Caguimbal. Indeed, as driver of the Biñan bus, he overtook Benito Makahiya's horse-driven rig or calesa and passed between the same and the BTCO bus despite the fact that the space available was not big enough therefor, in view of which the Biñan bus hit the left side of the BTCO bus and then the calesa. This notwithstanding, the Court of Appeals rendered judgment against the BTCO upon the ground that its driver, Tomas Perez, had failed to exercise the "extraordinary diligence," required in Article 1733 of the new Civil Code, "in the vigilance for the safety" of his passengers. 2

          The record shows that, in order to permit one of them to disembark, Perez drove his BTCO bus partly to the right shoulder of the road and partly on the asphalted portion thereof. Yet, he could have and should have seen to it — had he exercised "extraordinary diligence" — that his bus was completely outside the asphalted portion of the road, and fully within the shoulder thereof, the width of which being more than sufficient to accommodate the bus. He could have and should have done this, because, when the aforementioned passenger expressed his wish to alight from the bus, Ilagan had seen the aforementioned "calesa", driven by Makahiya, a few meters away, coming from the opposite direction, with the Biñan bus about 100 meters behind the rig cruising at a good speed. 3 When Perez slowed down his BTCO bus to permit said passenger to disembark, he must have known, therefore, that the Biñan bus would overtake the calesa at about the time when the latter and BTCO bus would probably be on the same line, on opposite sides of the asphalted portions of the road, and that the space between the BTCO bus and the "calesa" would not be enough to allow the Biñan bus to go through. It is true that the driver of the Biñan bus should have slowed down or stopped, and, hence, was reckless in not doing so; but, he had no especial obligations toward the passengers of the BTCO unlike Perez whose duty was to exercise "utmost" or "extraordinary" diligence for their safety. Perez was thus under obligation to avoid a situation which would be hazardous for his passengers, and, make their safety dependent upon the diligence of the Biñan driver. Such obligation becomes more patent when we considered the fact — of which the Court may take judicial cognizance — that our motor vehicle drivers, particularly those of public service utilities, have not distinguished themselves for their concern over the safety, the comfort or the convenience of others. Besides, as correctly stated in the syllabus to Brito Sy vs. Malate Taxicab & Garage, Inc., 4

          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 (Article 1756, new Civil Code). 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.

          In the case at bar, BTCO has not proven the exercise of extraordinary diligence on its part. For this reason, the case of Isaac vs. A. L. Ammen Trans. Co., Inc. 5 relied upon by BTCO, is not in point, for, in said case, the public utility driver had done everything he could to avoid the accident, and could not have possibly avoided it, for he "swerved the bus to the very extreme right of the road," which the driver, in the present case, had failed to do.

          As regards the second assignment of error, appellant argues that the award of attorney's fees is not authorized by law, because, of the eleven (11) cases specified in Article 1208 of the new Civil Code, only the fifth and the last are relevant to the one under consideration; but the fifth case requires bad faith, which does not exist in the case at bar. As regards the last case, which permits the award, "where the court deems it just and equitable that attorney's fees . . . should be recovered," it is urged that the evidence on record does not show the existence of such just and equitable grounds.

          We, however, believe otherwise, for: (1) the accident in question took place on April 25, 1954, and the Caguimbals have been constrained to litigate for over thirteen (13) years to vindicate their rights; and (2) it is high time to impress effectively upon public utility operators the nature and extent of their responsibility in respect of the safety of their passengers and their duty to exercise greater care in the selection of drivers and conductor and in supervising the performance of their duties, in accordance, not only with Article 1733 of the Civil Code of the Philippines, but, also, with Articles 1755 and 1756 thereof 6 and the spirit of these provisions, as disclosed by the letter thereof, and elucidated by the Commission that drafted the same. 7

          WHEREFORE, the decision appealed from, should be, as it is hereby, affirmed, with the costs of this instance against appellant Batangas Transportation Company.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-29721             March 27, 1929

AMANDO MIRASOL, plaintiff-appellant, vs.THE ROBERT DOLLAR CO., defendant-appellant.

Vicente Hilado for plaintiff-appellant.J.A. Wolfson for defendant-appellant.

STATEMENT

After the promulgation of the decision rendered by the Second Division of February 13, 1929,1 the defendant filed a motion to have the case heard and decided in banc, and inasmuch as the legal questions involved are important to the shipping interests, the court thought it best to do so.

After the formal pleas, plaintiff alleges that he is the owner and consignee of two cases of books, shipped in good order and condition at New York, U.S.A., on board the defendant's steamship President Garfield, for transport and delivery to the plaintiff in the City of Manila, all freight charges paid. That the two cases arrived in Manila on September 1, 1927, in bad order and damaged condition, resulting in the total loss of one case and a partial loss of the other. That the loss in one case is P1,630, and the other P700, for which he filed his claims, and defendant has refused and neglected to pay, giving as its reason that the damage in question "was caused by sea water." That plaintiff never entered into any contract with the defendant limiting defendant's liability as a common carrier, and when he wrote the letter of September 3, 1927, he had not then ascertained the contents of the damaged case, and could not determine their value. That he never intended to ratify or confirm any agreement to limit the liability of the defendant. That on September 9, 1927, when the other case was found, plaintiff filed a claim for the real damage of the books therein named in the sum of $375.

Plaintiff prays for corresponding judgment, with legal interest from the filing of the complaint and costs.

For answer the defendant made a general and specific denial, and as a separate and special defense alleges that the steamship President Garfield at all the times alleged was in all respects seaworthy and properly manned, equipped and supplied, and fit for the voyage. That the damage to plaintiff's merchandise, if any, was not caused through the negligence of the vessel, its master, agent, officers, crew, tackle or appurtenances, nor by reason of the vessel being unseaworthy or improperly manned, "but that such damage, if any, resulted from faults or errors in navigation or in the management of said vessel." As a second separate and special defense, defendant alleges that in the bill of lading issued by the defendant to plaintiff, it was agreed in writing that defendant should not be "held liable for any loss of, or damage to, any of said merchandise resulting from any of the following causes, to wit: Acts of God, perils of the sea or other waters," and that plaintiff's damage, if any, was caused by "Acts of God" or "perils of the sea." As a third special defense, defendant quoted clause 13 of the bill of lading, in which it is stated that in no case shall it be held liable "for or in respect to said merchandise or property beyond the sum of two hundred and fifty dollars for any piece, package or any article not enclosed in a package, unless a higher value is stated herein and ad valorem freight paid or assessed thereon," and that there was no other agreement. That no September 3, 1927 the plaintiff wrote the defendant a letter as follows:

Therefore, I wish to file claim of damage to the meager maximum value that your bills of lading will indemnify me, that is $250 as per condition 13.

As a fourth special defense, defendant alleges that the damage, if any, was caused by "sea water," and that the bill of lading exempts defendant from liability for that cause. That damage by "sea water" is a shipper's risk, and that defendant is not liable.

As a result of the trial upon such issues, the lower court rendered judgment for the plaintiff for P2,080, with legal interest thereon from the date of the final judgment, with costs, from which both parties appealed, and the plaintiff assigns the following errors:

I. The lower court erred in holding that plaintiff's damage on account of the loss of the damaged books in the partially damaged case can be compensated with an indemnity of P450 instead of P750 as claimed by plaintiff.

II. The lower court, consequently, also erred in giving judgment for plaintiff for only P2,080 instead of P2,380.

III. The lower court erred in not sentencing defendant to pay legal interest on the amount of the judgment, at least, from the date of the rendition of said judgment, namely, January 30, 1928.

The defendant assigns the following errors:

I. The lower court erred in failing to recognize the validity of the limited liability clause of the bill of lading, Exhibit 2.

II. The lower court erred in holding defendant liable in any amount and in failing to hold, after its finding as a fact that the damage was caused by sea water, that the defendant is not liable for such damage by sea water.

III. The lower court erred in awarding damages in favor of plaintiff and against defendant for P2,080 or in any other amount, and in admitting, over objection, Exhibits G, H, I and J.

JOHNS, J.:

Plaintiff's contention that he is entitled to P700 for his Encyclopedia Britannica is not tenable. The evidence shows that the P400 that the court allowed, he could buy a new set which could contain all of the material and the subject matter of the one which he lost. Plaintiff's third assignment of error is well taken, as under all of the authorities, he is entitled to legal interest from the date of his judgement rendered in the lower court and not the date when it becomes final. The lower court found that plaintiff's damage was P2,080, and that finding is sustained by that evidence. There was a total loss of one case and a partial loss of the other, and in the very nature of the things, plaintiff could not prove his loss in any other way or manner that he did prove it, and the trial court who heard him testify must have been convinced of the truth of his testimony.

There is no claim or pretense that the plaintiff signed the bill of lading or that he knew of his contents at the time that it was issued. In that situation he was not legally bound by the clause which purports to limit defendant's liability. That question was squarely met and decided by this court in banc in Juan Ysmael and Co., vs. Gabino Baretto and Co., (51 Phil., 90; see numerous authorities there cited).

Among such authorities in the case of The Kengsington decided by the Supreme Court of the U.S. January 6, 1902 (46 Law. Ed., 190), in which the opinion was written by the late Chief Justice White, the syllabus of which is as follows:

1. Restrictions of the liability of a steamship company for its own negligence or failure of duty toward the passenger, being against the public policy enforced by the courts of the United States, will not to be upheld, though the ticket was issued and accepted in a foreign country and contained a condition making it subject to the law thereof, which sustained such stipulation.

2. The stipulation in a steamship passenger's ticket, which compels him to value his baggage, at a certain sum, far less than it is worth, or, in order to have a higher value put upon it, to subject it to the provisions of the Harter Act, by which the carrier would be exempted from all the liability therefore from errors in navigation or management of the vessel of other negligence is unreasonable and in conflict with public policy.

3. An arbitrary limitation of 250 francs for the baggage of any steamship passenger unaccompanied by any right to increase the amount of adequate and reasonable proportional payment, is void as against public policy.

Both the facts upon which it is based and the legal principles involved are square in point in this case.

The defendant having received the two boxes in good condition, its legal duty was to deliver them to the plaintiff in the same condition in which it received them. From the time of their delivery to the defendant in New York until they are delivered to the plaintiff in Manila, the boxes were under the control and supervision of the defendant and beyond the control of the plaintiff. The defendant having admitted that the boxes were damaged while in transit and in its possession, the burden of proof then shifted, and it devolved upon the defendant to both allege and prove that the damage was caused by reason of some fact which exempted it from liability. As to how the boxes were damaged, when or where, was a matter peculiarly and exclusively within the knowledge of the defendant and in the very nature of things could not be in the knowledge of the plaintiff. To require the plaintiff to prove as to when and how the damage was caused would force him to call and rely upon the employees of the defendant's ship, which in legal effect would be to say that he could not recover any damage for any reason. That is not the law.

Shippers who are forced to ship goods on an ocean liner or any other ship have some legal rights, and when goods are delivered on board ship in good order and condition, and the shipowner delivers them to the shipper in bad order and condition, it then devolves upon the shipowner to both allege and prove that the goods were damaged by the reason of some fact which legally exempts him from liability; otherwise, the shipper would be left without any redress, no matter what may have caused the damage.

The lower court in its opinion says:

The defendant has not even attempted to prove that the two cases were wet with sea water by fictitious event, force majeure or nature and defect of the things themselves. Consequently, it must be presumed that it was by causes entirely distinct and in no manner imputable to the plaintiff, and of which the steamerPresident Garfield or any of its crew could not have been entirely unaware.

And the evidence for the defendant shows that the damage was largely caused by "sea water," from which it contends that it is exempt under the provisions of its bill of lading and the provisions of the article 361 of the Code of Commerce, which is as follows:

Merchandise shall be transported at the risk and venture of the shipper, if the contrary was not expressly stipulated.

Therefore, all damages and impairment suffered by the goods during the transportation, by reason of accident, force

majeure, or by virtue of the nature or defect of the articles, shall be for the account and risk of the shipper.

The proof of these accidents is incumbent on the carrier.

In the final analysis, the cases were received by the defendant in New York in good order and condition, and when they arrived in Manila, they were in bad condition, and one was a total loss. The fact that the cases were damaged by "sea water," standing alone and within itself, is not evidence that they were damaged by force majeure or for a cause beyond the defendant's control. The words "perils of the sea," as stated in defendant's brief apply to "all kinds of marine casualties, such as shipwreck, foundering, stranding," and among other things, it is said: "Tempest, rocks, shoals, icebergs and other obstacles are within the expression," and "where the peril is the proximate cause of the loss, the shipowner is excused." "Something fortuitous and out of the ordinary course is involved in both words 'peril' or 'accident'."

Defendant also cites and relies on the case of Government of the Philippine Islands vs. Ynchausti & Company (40 Phil., 219), but it appears from a reading of that case that the facts are very different and, hence, it is not in point. In the instant case, there is no claim or pretense that the two cases were not in good order when received on board the ship, and it is admitted that they were in bad order on their arrival at Manila. Hence, they must have been damaged in transit. In the very nature of things, if they were damaged by reason of a tempest, rocks, icebergs, foundering, stranding or the perils of the sea, that would be a matter exclusively within the knowledge of the officers of defendant's ship, and in the very nature of things would not be within plaintiff's knowledge, and upon all of such questions, there is a failure of proof.

The judgment of the lower court will be modified, so as to give the plaintiff legal interest on the amount of his judgment from the date of its rendition in the lower court, and in all respects affirmed, with costs. So ordered.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 125524           August 25, 1999

BENITO MACAM doing business under the name and style BEN-MAC ENTERPRISES, petitioner, vs.COURT OF APPEALS, CHINA OCEAN SHIPPING CO., and/or WALLEM PHILIPPINES SHIPPING, INC.,respondents.

BELLOSILLO, J.:

On 4 April 1989 petitioner Benito Macam, doing business under the name and style Ben-Mac Enterprises, shipped on board the vessel Nen Jiang, owned and operated by respondent China Ocean Shipping Co., through local agent respondent Wallem Philippines Shipping, Inc. (hereinafter WALLEM), 3,500 boxes of watermelons valued at US$5,950.00 covered by Bill of Lading No. HKG 99012 and exported through Letter of Credit No. HK 1031/30 issued by National Bank of Pakistan, Hongkong (hereinafter PAKISTAN BANK) and 1,611 boxes of fresh mangoes with a value of US$14,273.46 covered by Bill of Lading No. HKG 99013 and exported through Letter of Credit No. HK 1032/30 also issued by PAKISTAN BANK. The Bills of Lading contained the following pertinent provision: "One of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order.1 The shipment was bound for Hongkong with PAKISTAN BANK as consignee and Great Prospect Company of Kowloon, Hongkong (hereinafter GPC) as notify party.

On 6 April 1989, per letter of credit requirement, copies of the bills of lading and commercial invoices were submitted to petitioner's depository bank, Consolidated Banking Corporation (hereinafter SOLIDBANK), which paid petitioner in advance the total value of the shipment of US$20,223.46.1âwphi1.nêt

Upon arrival in Hongkong, the shipment was delivered by respondent WALLEM directly to GPC, not to PAKISTAN BANK, and without the required bill of lading having been surrendered. Subsequently, GPC failed to pay PAKISTAN BANK such that the latter, still in possession of the original bills of lading, refused to pay petitioner through SOLIDBANK. Since SOLIDBANK already pre-paid petitioner the value of the shipment, it demanded payment from respondent WALLEM through five (5) letters but was refused. Petitioner was thus allegedly constrained to return the amount involved to SOLIDBANK, then demanded payment from respondent WALLEM in writing but to no avail.

On 25 September 1991 petitioner sought collection of the value of the shipment of US$20,223.46 or its equivalent of P546,033.42 from respondents before the Regional Trial Court of Manila, based on delivery of the shipment to GPC without presentation of the bills of lading and bank guarantee.

Respondents contended that the shipment was delivered to GPC without presentation of the bills of lading and bank guarantee per request of petitioner himself because the shipment consisted of perishable goods. The telex dated 5 April 1989 conveying such request read —

AS PER SHPR'S REQUEST KINDLY ARRANGE DELIVERY OF A/M SHIPT TO RESPECTIVE CNEES WITHOUT PRESENTATION OF OB/L2 and bank guarantee since for prepaid shipt ofrt charges already fully paid our end . . . .3

Respondents explained that it is a standard maritime practice, when immediate delivery is of the essence, for the shipper to request or

instruct the carrier to deliver the goods to the buyer upon arrival at the port of destination without requiring presentation of the bill of lading as that usually takes time. As proof thereof, respondents apprised the trial court that for the duration of their two-year business relationship with petitioner concerning similar shipments to GPC deliveries were effected without presentation of the bills of lading.4 Respondents advanced next that the refusal of PAKISTAN BANK to pay the letters of credit to SOLIDBANK was due to the latter's failure to submit a Certificate of Quantity and Quality. Respondents counterclaimed for attorney's fees and costs of suit.

On 14 May 1993 the trial court ordered respondents to pay, jointly and severally, the following amounts: (1) P546,033.42 plus legal interest from 6 April 1989 until full payment; (2) P10,000.00 as attorney's fees; and, (3) the costs. The counterclaims were dismissed for lack of merit.5 The trial court opined that respondents breached the provision in the bill of lading requiring that "one of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order," when they released the shipment to GPC without presentation of the bills of lading and the bank guarantee that should have been issued by PAKISTAN BANK in lieu of the bills of lading. The trial court added that the shipment should not have been released to GPC at all since the instruction contained in the telex was to arrange delivery to the respective consignees and not to any party. The trial court observed that the only role of GPC in the transaction as notify party was precisely to be notified of the arrival of the cargoes in Hongkong so it could in turn duly advise the consignee.

Respondent Court of Appeals appreciated the evidence in a different manner. According to it, as established by previous similar transactions between the parties, shipped cargoes were sometimes actually delivered not to the consignee but to notify party GPC without need of the bills of lading or bank guarantee.6 Moreover, the bills of lading were viewed by respondent court to have been properly superseded by the telex instruction and to implement the instruction, the delivery of the shipment must be to GPC, the real importer/buyer of the goods as shown by the export invoices,7 and not to PAKISTAN BANK since the latter could very well present the bills of lading in its possession; likewise, if it were the PAKISTAN BANK to which the cargoes were to be strictly delivered it would no longer be proper to require a bank guarantee. Respondent court noted that besides, GPC was listed as a consignee in the telex. It observed further that the demand letter of petitioner to respondents never complained of misdelivery of goods. Lastly, respondent court found that petitioner's claim of having reimbursed the amount involved to SOLIDBANK was unsubstantiated. Thus, on 13 March 1996 respondent court set aside the decision of the trial court and dismissed the complaint together with the counterclaims.8 On 5 July 1996 reconsideration was denied.9

Petitioner submits that the fact that the shipment was not delivered to the consignee as stated in the bill of lading or to a party designated or named by the consignee constitutes a misdelivery thereof. Moreover, petitioner argues that from the text of the telex, assuming there was such an instruction, the delivery of the shipment without the required bill of lading or bank guarantee should be made only to the designated consignee, referring to PAKISTAN BANK.

We are not persuaded. The submission of petitioner that "the fact that the shipment was not delivered to the consignee as stated in the Bill of Lading or to a party designated or named by the consignee constitutes a misdelivery thereof" is a deviation from his cause of action before the trial court. It is clear from the allegation in his complaint that it does not deal with misdelivery of the cargoes but of delivery to GPC without the required bills of lading and bank guarantee —

6. The goods arrived in Hongkong and were released by the defendant Wallem directly to the buyer/notify party, Great Prospect Company and not to the consignee, the National Bank of Pakistan, Hongkong, without the required bills of lading and bank guarantee for the release of the shipment issued by the consignee of the goods . . . .10

Even going back to an event that transpired prior to the filing of the present case or when petitioner wrote respondent WALLEM demanding payment of the value of the cargoes, misdelivery of the cargoes did not come into the picture —

We are writing you on behalf of our client, Ben-Mac Enterprises who informed us that Bills of Lading No. 99012 and 99013 with a total value of US$20,223.46 were released to Great Prospect, Hongkong without the necessary bank guarantee. We were further informed that the consignee of the goods, National Bank of Pakistan, Hongkong, did not release or endorse the original bills of lading. As a result thereof, neither the consignee, National Bank of Pakistan, Hongkong, nor the importer, Great Prospect Company, Hongkong, paid our client for the goods . . . .11

At any rate, we shall dwell on petitioner's submission only as a prelude to our discussion on the imputed liability of respondents concerning the shipped goods. Article 1736 of the Civil Code provides —

Art. 1736. The extraordinary responsibility of the common carriers 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 1738.12

We emphasize that the extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a right to receive them. PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was the notify party. However, in the export invoices GPC was clearly named as buyer/importer. Petitioner also referred to GPC as such in his demand letter to respondent WALLEM and in his complaint before the trial court. This premise draws us to conclude that the delivery of the cargoes to GPC as buyer/importer which, conformably with Art. 1736 had, other than the consignee, the right to receive them14 was proper.

The real issue is whether respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank guarantee.

Respondents submitted in evidence a telex dated 5 April 1989 as basis for delivering the cargoes to GPC without the bills of lading and bank guarantee. The telex instructed delivery of various shipments to the respective consignees without need of presenting the bill of lading and bank guarantee per the respective shipper's request since "for prepaid shipt ofrt charges already fully paid." Petitioner was named therein as shipper and GPC as consignee with respect to Bill of Lading Nos. HKG 99012 and HKG 99013. Petitioner disputes the existence of such instruction and claims that this evidence is self-serving.

From the testimony of petitioner, we gather that he has been transacting with GPC as buyer/importer for around two (2) or three (3) years already. When mangoes and watermelons are in season, his shipment to GPC using the facilities of respondents is twice or thrice a week. The goods are released to GPC. It has been the practice of petitioner to request the shipping lines to immediately release perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his "people." In transactions covered by a letter of credit, bank guarantee is normally required by the shipping lines prior to releasing the goods. But for buyers using telegraphic transfers, petitioner dispenses with the bank guarantee because the goods are already fully paid. In his several years of business relationship with GPC and respondents, there was not a single instance when the bill of lading was first presented before the release of the cargoes. He admitted the existence of the telex of 3 July 1989 containing his request to deliver the shipment to the consignee without presentation of the bill of lading15 but not the telex of 5 April 1989 because he could not remember having made such request.

Consider pertinent portions of petitioner's testimony —

Q: Are you aware of any document which would indicate or show that your request to the defendant Wallem for the immediate release of your fresh fruits, perishable goods, to Great Prospect without the presentation of the original Bill of Lading?

A: Yes, by telegraphic transfer, which means that it is fully paid. And I requested immediate release of the cargo because there was immediate payment.

Q: And you are referring, therefore, to this copy Telex release that you mentioned where your Company's name appears Ben-Mac?

Atty. Hernandez: Just for the record, Your Honor, the witness is showing a Bill of Lading referring to SKG (sic) 93023 and 93026 with Great Prospect Company.

Atty. Ventura:

Q: Is that the telegraphic transfer?

A: Yes, actually, all the shippers partially request for the immediate release of the goods when they are perishable. I thought Wallem Shipping Lines is not neophyte in the business. As far as LC is concerned, Bank guarantee is needed for the immediate release of the goods . . . .15

Q: Mr. Witness, you testified that if is the practice of the shipper of the perishable goods to ask the shipping lines to release immediately the shipment. Is that correct?

A: Yes, sir.

Q: Now, it is also the practice of the shipper to allow the shipping lines to release the perishable goods to the importer of goods without a Bill of Lading or Bank guarantee?

A: No, it cannot be without the Bank Guarantee.

Atty. Hernandez:

Q: Can you tell us an instance when you will allow the release of the perishable goods by the shipping lines to the importer without the Bank guarantee and without the Bill of Lading?

A: As far as telegraphic transfer is concerned.

Q: Can you explain (to) this Honorable Court what telegraphic transfer is?

A: Telegraphic transfer, it means advance payment that I am already fully paid . . . .

Q: Mr. Macam, with regard to Wallem and to Great Prospect, would you know and can you recall that any of your shipment was released to Great Prospect by Wallem through telegraphic transfer?

A: I could not recall but there were so many instances sir.

Q: Mr. Witness, do you confirm before this Court that in previous shipments of your goods through Wallem, you requested Wallem to release immediately your perishable goods to the buyer?

A: Yes, that is the request of the shippers of the perishable goods . . . .16

Q: Now, Mr. Macam, if you request the Shipping Lines for the release of your goods immediately even without the presentation of OBL, how do you course it?

A: Usually, I call up the Shipping Lines, sir . . . .17

Q: You also testified you made this request through phone calls. Who of you talked whenever you made such phone call?

A: Mostly I let my people to call, sir. (sic)

Q: So everytime you made a shipment on perishable goods you let your people to call? (sic)

A: Not everytime, sir.

Q: You did not make this request in writing?

A: No, sir. I think I have no written request with Wallem . . . .18

Against petitioner's claim of "not remembering" having made a request for delivery of subject cargoes to GPC without presentation of the bills of lading and bank guarantee as reflected in the telex of 5 April 1989 are damaging disclosures in his testimony. He declared that it was his practice to ask the shipping lines to immediately release shipment of perishable goods through telephone calls by himself or his "people." He no longer required presentation of a bill of lading nor of a bank guarantee as a condition to releasing the goods in case he was already fully paid. Thus, taking into account that subject shipment consisted of perishable goods and SOLIDBANK pre-paid the full amount of the value thereof, it is not hard to believe the claim of respondent WALLEM that petitioner indeed requested the release of the goods to GPC without presentation of the bills of lading and bank guarantee.

The instruction in the telex of 5 April 1989 was "to deliver the shipment to respective consignees." And so petitioner argues that, assuming there was such an instruction, the consignee referred to was PAKISTAN BANK. We find the argument too simplistic. Respondent court analyzed the telex in its entirety and correctly arrived at the conclusion that the consignee referred to was not PAKISTAN BANK but GPC —

There is no mistake that the originals of the two (2) subject Bills of Lading are still in the possession of the Pakistani Bank. The appealed decision affirms this fact. Conformably, to implement the said telex instruction, the delivery of the shipment must be to GPC, the notify party or real importer/buyer of the goods and not the Pakistani Bank since the latter can very well present the original Bills of Lading in its possession. Likewise, if it were the Pakistani Bank to whom the cargoes were to be strictly delivered, it will no longer be proper to require a bank guarantee as a substitute for the Bill of Lading. To construe otherwise will render meaningless the telex instruction. After all, the cargoes consist of perishable fresh fruits and immediate delivery thereof to the buyer/importer is essentially a factor to reckon with. Besides, GPC is listed as one among the several consignees in the telex (Exhibit 5-B) and the instruction in the telex was to arrange delivery of A/M shipment (not any party) to respective consignees without presentation of OB/L and bank guarantee . . . .20

Apart from the foregoing obstacles to the success of petitioner's cause, petitioner failed to substantiate his claim that he returned to SOLIDBANK the full amount of the value of the cargoes. It is not far-fetched to entertain the notion, as did respondent court, that he merely

accommodated SOLIDBANK in order to recover the cost of the shipped cargoes from respondents. We note that it was SOLIDBANK which initially demanded payment from respondents through five (5) letters. SOLIDBANK must have realized the absence of privity of contract between itself and respondents. That is why petitioner conveniently took the cudgels for the bank.

In view of petitioner's utter failure to establish the liability of respondents over the cargoes, no reversible error was committed by respondent court in ruling against him.

WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals of 13 March 1996 dismissing the complaint of petitioner Benito Macam and the counterclaims of respondents China Ocean Shipping Co. and/or Wallem Philippines Shipping, Inc., as well as its resolution of 5 July 1996 denying reconsideration, is AFFIRMED.1âwphi1.nêt

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

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

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

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

BARRERA, J.:

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

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

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

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

Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the running board without getting his bayong from the conductor. He landed on the side of the road almost in front of the shaded place where he left his wife and children. At that precise time, he saw people beginning to gather around the body of a child lying prostrate on the ground, her skull crushed, and without life. The child

was none other than his daughter Raquel, who was run over by the bus in which she rode earlier together with her parents.

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

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

On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach of contract in the case, for the reason that when the child met her death, she was no longer a passenger of the bus involved in the incident and, therefore, the contract of carriage had already terminated. Although the Court of Appeals sustained this theory, it nevertheless found the defendant-appellant guilty of quasi-delict and held the latter liable for damages, for the negligence of its driver, in accordance with Article 2180 of the Civil Code. And, the Court of Appeals did not only find the petitioner liable, but increased the damages awarded the plaintiffs-appellees to P6,000.00, instead of P3,000.00 granted by the trial court.

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

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

It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger alights from the carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. Thus, a person who, after alighting from a train, walks along the station platform is considered still a passenger.2 So also, where a passenger has alighted at his destination and is proceeding by the usual way to leave the company's premises, but before actually doing so is halted by the report that his brother, a fellow passenger, has been shot, and he in good faith and without intent of engaging in the difficulty, returns to relieve his brother, he is deemed reasonably and necessarily delayed and thus continues to be a passenger entitled as such to the protection of the railroad and company and its agents.3

In the present case, the father returned to the bus to get one of his baggages which was not unloaded when they alighted from the bus. Raquel, the child that she was, must have followed the father.

However, although the father was still on the running board of the bus awaiting for the conductor to hand him the bag or bayong, the bus started to run, so that even he (the father) had to jump down from the moving vehicle. It was at this instance that the child, who must be near the bus, was run over and killed. In the circumstances, it cannot be claimed that the carrier's agent had exercised the "utmost diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be observed by a common carrier in the discharge of its obligation to transport safely its passengers. In the first place, the driver, although stopping the bus, nevertheless did not put off the engine. Secondly, he started to run the bus even before the bus conductor gave him the signal to go and while the latter was still unloading part of the baggages of the passengers Mariano Beltran and family. The presence of said passengers near the bus was not unreasonable and they are, therefore, to be considered still as passengers of the carrier, entitled to the protection under their contract of carriage.

But even assuming arguendo that the contract of carriage has already terminated, herein petitioner can be held liable for the negligence of its driver, as ruled by the Court of Appeals, pursuant to Article 2180 of the Civil Code. Paragraph 7 of the complaint, which reads —

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

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

The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated when it was alleged in the complaint that "the death of Raquel Beltran, plaintiffs' daughter, was caused by the negligence and want of exercise of the utmost diligence of a very cautious person on the part of the defendants and their agent." This allegation was also proved when it was established during the trial that the driver, even before receiving the proper signal from the conductor, and while there were still persons on the running board of the bus and near it, started to run off the vehicle. The presentation of proof of the negligence of its employee gave rise to the presumption that the defendant employer did not exercise the diligence of a good father of the family in the selection and supervision of its employees. And this presumption, as the Court of Appeals found, petitioner had failed to overcome. Consequently, petitioner must be adjudged peculiarily liable for the death of the child Raquel Beltran.

The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals, however, cannot be sustained. Generally, the appellate court can only pass upon and consider questions or issues raised and argued in appellant's brief. Plaintiffs did not appeal from that portion of the judgment of the trial court awarding them on P3,000.00 damages for the death of their daughter. Neither does it appear that, as appellees in the Court of Appeals, plaintiffs have pointed out in their brief the inadequacy of the award, or that the inclusion of the figure P3,000.00 was merely a clerical error, in order that the matter may be treated as an exception to the general rule.5Herein petitioner's contention, therefore, that the Court of Appeals committed error in raising the amount of the award for damages is, evidently, meritorious.1äwphï1.ñët

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

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 84458 November 6, 1989

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

Herenio E. Martinez for petitioner.

M.R. Villaluz Law Office for private respondent.

 

REGALADO, J.:

In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of the decision 1 of respondent Court of Appeals, dated July 29, 1988, the decretal portion of which reads:

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

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

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

The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was placed alongside the vessel and one (1) hour after the passengers of said vessel had disembarked, it started operation by unloading the cargoes from said vessel. While the crane was being operated, Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him between the side of the vessel and the crane. He was thereafter brought to the hospital where he later expired three (3) days thereafter, on May 15, 1975, the cause of his death according to the Death Certificate (Exh. "C") being

"hypostatic pneumonia secondary to traumatic fracture of the pubic bone lacerating the urinary bladder" (See also Exh. "B"). For his hospitalization, medical, burial and other miscellaneous expenses, Anacleto's wife, herein plaintiff, spent a total of P9,800.00 (Exhibits "E", "E-1", to "E-5"). Anacleto Viana who was only forty (40) years old when he met said fateful accident (Exh. 'E') was in good health. His average annual income as a farmer or a farm supervisor was 400 cavans of palay annually. His parents, herein plaintiffs Antonio and Gorgonia Viana, prior to his death had been recipient of twenty (20) cavans of palay as support or P120.00 monthly. Because of Anacleto's death, plaintiffs suffered mental anguish and extreme worry or moral damages. For the filing of the instant case, they had to hire a lawyer for an agreed fee of ten thousand (P10,000.00) pesos. 2

Private respondents Vianas filed a complaint 3 for damages against petitioner corporation (Aboitiz, for brevity) for breach of contract of carriage.

In its answer. 4 Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely under the control of respondent Pioneer Stevedoring Corporation (Pioneer, for short) as the exclusive stevedoring contractor of Aboitiz, which handled the unloading of cargoes from the vessel of Aboitiz. It is also averred that since the crane operator was not an employee of Aboitiz, the latter cannot be held liable under the fellow-servant rule.

Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint 5 against Pioneer imputing liability thereto for Anacleto Viana's death as having been allegedly caused by the negligence of the crane operator who was an employee of Pioneer under its exclusive control and supervision.

Pioneer, in its answer to the third-party complaint, 6 raised the defenses that Aboitiz had no cause of action against Pioneer considering that Aboitiz is being sued by the Vianas for breach of contract of carriage to which Pioneer is not a party; that Pioneer had observed the diligence of a good father of a family both in the selection and supervision of its employees as well as in the prevention of damage or injury to anyone including the victim Anacleto Viana; that Anacleto Viana's gross negligence was the direct and proximate cause of his death; and that the filing of the third-party complaint was premature by reason of the pendency of the criminal case for homicide through reckless imprudence filed against the crane operator, Alejo Figueroa.

In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was ordered to pay the Vianas for damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter paid the Vianas. The dispositive portion of said decision provides:

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

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

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

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

In an order dated October 27, 1982, 8 the trial court absolved Pioneer from liability for failure of the Vianas and Aboitiz to preponderantly establish a case of negligence against the crane operator which the court a quo ruled is never presumed, aside from the fact that the memorandum of agreement supposedly refers only to Pioneer's liability in case of loss or damage to goods handled by it but not in the case of personal injuries, and, finally that Aboitiz cannot properly invoke the fellow-servant rule simply because its liability stems from a breach of contract of carriage. The dispositive portion of said order reads:

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

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

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

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

Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:

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

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

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

whatever damages it may be compelled to pay to the private respondents Vianas. 9

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

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

The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. 11 Once created, the relationship will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure. 12 The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier's premises to claim his baggage. 13

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

It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger alights from the carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. Thus, a person who, after alighting from a train, walks along the station platform is considered still a passenger. So also, where a passenger has alighted at his destination and is proceeding by the usual way to leave the company's premises, but before actually doing so is halted by the report that his brother, a fellow passenger, has been shot, and he in good faith and without intent of engaging in the difficulty, returns to relieve his brother, he is deemed reasonably and necessarily delayed and thus continues to be a passenger entitled as such to the protection of the railroad company and its agents.

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

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

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

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

II. Under the law, common carriers are, from the nature of their business and for reasons of public policy, bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. 15 More particularly, 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. 16 Thus, where a passenger dies or is injured, the common carrier is presumed to have been at fault or to have acted negligently. 17 This gives rise to an action for breach of contract of carriage where all that is required of plaintiff is to prove the existence of the contract of carriage and its non-performance by the carrier, that is, the failure of the carrier to carry the passenger safely to his destination, 18which, in the instant case, necessarily includes its failure to safeguard its passenger with extraordinary diligence while such relation subsists.

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

case, it cannot be gainsaid that petitioner had inadequately complied with the required degree of diligence to prevent the accident from happening.

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

While the victim was admittedly contributorily negligent, still petitioner's aforesaid failure to exercise extraordinary diligence was the proximate and direct cause of, because it could definitely have prevented, the former's death. Moreover, in paragraph 5.6 of its petition, at bar, 19 petitioner has expressly conceded the factual finding of respondent Court of Appeals that petitioner did not present sufficient evidence in support of its submission that the deceased Anacleto Viana was guilty of gross negligence. Petitioner cannot now be heard to claim otherwise.

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

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

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

SO ORDERED.

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

HONORIO LASAM, ET AL., plaintiffs-appellants, vs.FRANK SMITH, JR., defendant-appellant.

Palma and Leuterio for plaintiffs-appellants.Mariano Alisangco for defendant-appellant.

OSTRAND, J.:

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

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

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

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

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

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

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

This brings us to the principal question in the case:

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

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

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

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

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

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

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

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

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

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

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-6092             March 8, 1912

TAN CHIONG SIAN, plaintiff-appellee, vs.INCHAUSTI AND CO., defendant-appellant.

Haussermann, Cohn and Fisher for appellant. O'Brien and DeWitt for appellee.

TORRES, J.:

This is an appeal through bill of exceptions, by counsel for the firm of Inchausti & Co., from a judgment rendered by the Honorable A.S. Crossfield, judge.

On January 11, 1909, the Chinaman, Tan Chiong Sian or Tan Chinto, filed a written complaint, which was amended on the 28th of the same month and again amended on October 27 of the same year, against the said firm, wherein he alleged, among other things, as a cause of action: That, on or about November 25, 1908, the plaintiff delivered to the defendant 205 bundles or cases of general merchandise belonging to him, which Inchausti & Co., upon receiving, bound themselves to deliver in the pueblo of Catarman, Province of Samar, to the Chinaman, Ong Bieng Sip, and in consideration of the obligations contracted by the defendant party, the plaintiff obligated himself to pay to the latter the sum of P250 Philippine currency, which payment should be made upon the delivery of the said merchandise in the said pueblo Catarman; but that the defendant company neither carried nor delivered the aforementioned merchandise to the said Ong Bieng Sip, in Catarman, but unjustly and negligently failed to do so, with the result that the said merchandise was almost totally lost; that, had the defendant party complied well and faithfully with its obligation, according to the agreement made, the merchandise concerned would have a value of P20,000 in the said pueblo of Catarman on the date when it should have been delivered there, wherefore the defendant party owed the plaintiff the said sum of P20,000, which it had not paid him, or any part thereof, notwithstanding the many demands of the plaintiff; therefore the latter prayed for judgment against the defendant for the said sum, together with legal interest thereon from November 25, 1908, and the costs of the suit.

Counsel for the defendant company, in his answer, set forth, that he admitted the allegations of paragraphs 1 and 2 of the complaint, amended for the second time, and denied those paragraphs 3, 4, 5, 6 and 7 of the same. As his first special defense, he alleged that on or about November 28, 1908, his client, the said firm, received in Manila from Ong Bieng Sip 205 bundles, bales, or cases of merchandise to be placed on board the steamerSorsogon, belonging to the defendant, for shipment to the port of Gubat, Province of Sorsogon, to be in the said port transshipped into another of the defendant's vessels for transportation to the port of Catarman, Samar, and delivered to the aforesaid Chinaman, Ong Bieng Sip; that the defendant company, upon receiving the said merchandise from the latter, Ong Bieng Sip, and on its entering into a contract of maritime transportation with him did not know and was not notified that the plaintiff, Tan Chiong Sian, had any interest whatever in the said merchandise and had made with the plaintiff no contract relative to the transportation of such goods, for, on receiving the latter from the said Ong Bieng Sip, for transportation, there were made out and delivered to him three bills of lading, Nos. 38, 39 and 76, which contained a list of the goods received and, printed on the back thereof were the terms of the maritime transportation contract entered into by and between the plaintiff and the defendant company, copies of which bills of lading and contract, marked as Exhibits A, B, and C, are of record, attached to and made an integral part of the said answer; that Ong Bieng Sip accepted the said bills of lading and the contract extended on the backs thereof; that the merchandise mentioned was put on board the steamerSorsogon and carried to the port of Gubat, Province of Sorsogon, where this vessel arrived on November 28, 1908, on which date the lorcha Pilar, into which the said merchandise was to be transshipped for carriage to Catarman, was not at Gubat, and therefore the goods had to be unloaded and stored in the defendant company's warehouses at Gubat; that, on the 4th of December of the same year, the lorcha Pilar arrived at Gubat and, after the termination of certain

necessary work, the goods received from Chinaman, Ong Bieng Sip, were taken aboard the same, together with other merchandise belonging to the defendant party, for the purpose of transportation to the port of Catarman; that, before the said lorcha could leave for its destination, a strong wind arose which in the course of the day increased in force until, early in the morning of the following day, the lorcha was dragged and driven, by the force of the storm, upon the shore, despite the means employed by the crew to avoid the accident, and notwithstanding the five anchors that held the craft, which was thus wrecked and completely destroyed and the merchandise with which it was laden, including the 205 bundles or packages taken aboard for the said Chinaman, was scattered on the shore; that, on the occasion, the lorcha Pilar was in good condition, provided with all the proper and necessary equipment and accessories and carried a crew of sufficient number in command of a skillful patron or master, wherefore the wreck of the said craft was solely due to the irresistible force of the elements and of the storm which drove it upon the shore; that the defendant company, with the greatest possible diligence, gathered up the said shipwrecked goods that had been shipped by the Chinaman, Ong Bieng Sip, but, owing to the damage they had suffered, it was impossible to preserve them, so, after having offered to deliver them to him, the defendant proceeded, in the presence of a notary, to sell them at public auction and realized from the sale thereof P1,693.67, the reasonable value of the same in the condition in which they were after they had been gathered up and salved from the wreck of the lorcha Pilar; that the expenses occasioned by such salvage and sale of the said goods amounted to P151.35, which were paid by the defendant party; that the latter offered to the Chinese shipper, the plaintiff, the amount realized from the sale of the said merchandise, less P151.35, the amount of the expenses, and the sum of P250, the amount of the freight stipulated, and is still willing to pay such products of the said sale to the aforementioned Ong Bieng Sip or to any other person who should establish his subrogation to the rights of the Chinaman, Ong Bieng Sip, with respect to the said amount; that, as his client's second special defense, the defendant company alleged that one of the conditions of the shipping contract executed between it and the Chinaman, Ong Bieng Sip, relative to the transportation of the said merchandise, was that the said firm should not be held liable for more than P25 for any bundle or package, unless the value of its contents should be stated in the bill of lading, and that the shipper, Chinaman, Ong Bieng Sip, did not state in the bill of lading the value of any of the bundles or packages in which the goods shipped by him were packed. Counsel for the defendant company, therefore, prayed the court to absolve his client from the complaint, with costs against the plaintiff.

After the hearing of the case and the introduction of testimony by the parties, judgment was rendered, on March 18, 1910, in favor of the plaintiff, Tan Chiong Sian or Tan Chinto, against the defendant Inchausti and Co., for the sum of P14,642.63, with interest at the rate of 6 per cent per annum from January 11, 1909, and for the costs of the trial. The defendant party appealed from this judgment.

This suit was brought for the purpose of collecting a certain sum which it is alleged the defendant firm owes the plaintiff for losses and damages suffered by the latter as a result of the former's noncompliance with the terms of an agreement or contract to transport certain merchandise by sea from this city to the pueblo of Catarman, Island of Samar, for the sum of P250.

The principal question to be determined is whether the defendant is liable for the loss of the merchandise and for failure to deliver the same at the place of destination, or whether he is relieved from responsibility on the ground offorce majeure.

Article 1601 of the Civil Code prescribes:

Carriers of goods by land or by water shall be subject with regard to the keeping and preservation of the things entrusted to them, to the same obligations as determined for innkeepers by articles 1783 and 1784.

The provisions of this article shall be understood without prejudice to what is prescribed by the Code of Commerce with regard to transportation by sea and land.

Article 1602 reads:

Carriers are also liable for the loss of and damage to the things which they receive, unless they prove that the loss or damage arose from a fortuitous event or force majeure.

The articles aforecited are as follows:

ART. 1783. The depositum of goods made by travelers in inns or hostelries shall also be considered a necessary one. The keepers of inns and hostelries are liable for them as such bailees, provided that notice thereof may have been given to them or to their employees, and that the travelers on their part take the precautions which said innkeepers or their substitutes may have advised them concerning the care and vigilance of said goods.

ART. 1784. The liability referred to in the preceding article shall include damages to the goods of the travelers caused the servants or employees of the keepers for inns or hostelries as well as by strangers, but not those arising from robbery or which may be caused by any other case of force majeure.

Article 361 of the Code of Commerce provides:

Merchandise shall be transported at the risk and venture of the shipper, unless the contrary was expressly stipulated.

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

The proof of these accidents in incumbent on the carrier.

ART. 362. The carrier, however, shall be liable for the losses and damages arising from the causes mentioned in the foregoing article if it is proved that they occurred on account of his negligence or because he did not take the precautions usually adopted by careful persons, unless the shipper committed fraud in the bill of lading, stating that the goods were of a class or quality different from what they really were.

If, notwithstanding the precaution referred to in this article, the goods transported run the risk of being lost on account of the nature or by reason of an unavoidable accident, without there being time for the owners of the same to dispose thereof, the carrier shall proceed to their sale, placing them for this purpose at the disposal of the judicial authority or of the officials determined by special provisions.

ART. 363. With the exception of the cases prescribed in the second paragraph of article 361, the carrier shall be obliged to deliver the goods transported in the same condition in which, according to the bill of lading, they were at the time of their receipt, without any detriment or impairment, and should he not do so, he shall be obliged to pay the value of the goods not delivered at the point where they should have been and at the time the delivery should have taken place.

If part of the goods transported should be delivered the consignee may refuse to receive them, when he proves that he can not make use thereof without the others.

On November 25, 1908, Inchausti & Co. received in Manila from the Chinaman, Ong Bieng Sip, 205 bundles, bales or cases of goods to be conveyed by the steamer Sorsogon to the port of Gubat, Province of Sorsogon, where they were to be transshipped to another vessel belonging to the defendant company and by the latter transported to the pueblo of Catarman, Island of Samar, there to be delivered to the Chinese shipper with whom the defendant party made the shipping contract. To this end three bills of lading were executed, Nos. 38, 39, and 76, copies of which, marked as Exhibits A, B, and C, are found on pages 13, 14, and 15 of the record.

The steamer Sorsogon, which carried the goods, arrived at the port of Gubat on the 28th of that month and as thelorcha Pilar, to which the

merchandise was to be transshipped for its transportation to Catarman, was not yet there, the cargo was unloaded and stored in the defendant company's warehouses at that port.

Several days later, the lorcha just mentioned arrived at Gubat and, after the cargo it carried had been unloaded, the merchandise belonging to the Chinaman, Ong Bieng Sip, together with other goods owned by the defendant Inchausti & Co., was taken aboard to be transported to Catarman; but on December 5, 1908, before the Pilarcould leave for its destination, towed by the launch Texas, there arose and, as a result of the strong wind and heavy sea, the lorcha was driven upon the shore and wrecked, and its cargo, including the Chinese shipper's 205 packages of goods, scattered on the beach. Laborers or workmen of the defendant company, by its order, then proceeded to gather up the plaintiff's merchandise and, as it was impossible to preserve it after it was salved from the wreck of the lorcha, it was sold at public auction before a notary for the sum of P1,693.67.

The contract entered into between the Chinese shipper, Ong Bieng Sip, and the firm of Inchausti & Co., provided that transportation should be furnished from Manila to Catarman, although the merchandise taken aboard the steamer Sorsogon was to be transshipped at Gubat to another vessel which was to convey it from that port to Catarman; it was not stipulated in the said contract that the Sorsogon should convey the goods to their final destination, nor that the vessel into which they were to be transshipped, should be a steamer. The shipper, Ong Bieng Sip, therefore assented to these arrangements and made no protest when his 205 packages of merchandise were unloaded from the ship and, on account of the absence of the lorcha Pilar, stored in the warehouses at Gubat nor did he offer any objection to the lading of his merchandise on to this lorcha as soon as it arrived and was prepared to receive cargo; moreover, he knew that to reach the port of Catarman with promptness and dispatch, the lorcha had to be towed by some vessel like the launch Texas, which the defendant company had been steadily using for similar operations in those waters.

Hence the shipper, Ong Bieng Sip, made no protest or objection to the methods adopted by the agents of the defendant for the transportation of his gods to the port of their destination, and the record does not show that in Gubat the defendant possessed any other means for the conveyance and transportation of merchandise, at least for Catarman, than the lorcha Pilar, towed by said launch and exposed during its passage to all sorts of accidents and perils from the nature and seafaring qualities of a lorcha, from the circumstances then present and the winds prevailing on the Pacific Ocean during the months of November and December.

It is to be noted that a lorcha is not easily managed or steered when the traveling, for, out at sea, it can only be moved by wind and sails; and along the coast near the shore and in the estuaries where it customarily travels, it can only move by poling. For this reason, in order to arrive at the pueblo of Catarman with promptness and dispatch, the lorcha was usually towed by the launch Texas.

The record does not show that, from the afternoon of the 4th of December, 1908, until the morning of the following day, the 5th, the patron or master of the lorcha which was anchored in the cove of Gubat, received any notice from the captain of the steamer Ton Yek, also anchored near by, of the near approach of a storm. The said captain, Juan Domingo Alberdi, makes no reference in his sworn testimony of having given any such notice to thepatron of the lorcha, nor did the latter, Mariano Gadvilao, testify that he received such notice from the captain of the Ton Yek or from the person in charge of the Government observatory. Gadvilao, the patron, testified that only between 10 and 11 o'clock of Saturday morning, the 5th of December, was he informed by Inchausti & Co.'s agent in Gubat that a baguio was approaching; that thereupon, on account of the condition of the sea, he dropped the four anchors that the lorcha had on board and immediately went ashore to get another anchor and a new cable in order more securely to hold the boat in view of the predicted storm. This testimony was corroborated by the said representative, Melchor Muñoz. So the lorcha, when the storm broke upon it, was held fast by five anchors and was, as testified by the defendant without contradiction or evidence to the contrary, well found and provided with all proper and necessary equipment and had a sufficient crew for its management and preservation.

The patron of the lorcha testified specifically that at Gubat or in its immediate vicinity there is no port whatever adequate for the shelter and refuge of vessels in cases of danger, and that, even though there were, on being advised between 10 and 11 o'clock of the morning of the 5th, of the approach of a storm from the eastern Pacific, it would have been impossible to spread any sails or weigh anchor on the lorcha without being dragged or

driven against the reefs by the force of the wind. As the craft was not provided with steam or other motive power, it would not have been possible for it to change its anchorage, nor move from the place where it lay, even several hours before the notice was received by its patron. A lorcha can not be compared with a steamer which does not need the help or assistance of any other vessel in its movements.

Due importance must be given to the testimony of the weather observer, Antonio Rocha, that the notice received from the Manila Observatory on the afternoon of December 4, with regard to a storm travelling from the east of the Pelew Islands toward the northwest, was not made known to the people of Gubat and that he merely left a memorandum notice on the desk of the station, intending to give explanations thereof to any person who should request them of him. So the notice of the storm sent by the Manila Observatory was only known to the said observer, and he did not apprise the public of the approach of the storm until he received another notice from Manila at 20 minutes past 8 o'clock on Saturday morning, December 5. Then he made a public announcement and advised the authorities of the storm that was coming.

The patron of the lorcha Pilar is charged with gross negligence for not having endeavored to remove his craft to a safe place in the Sabang River, about half a mile from where it was anchored.

In order to find out whether there was or was not such negligence on the part of the patron, it becomes necessary to determine, first, whether the lorcha, on the morning of December 5, could be moved by its own power and without being towed by any steamboat, since it had no steam engine of its own; second, whether the lorcha, on account of its draft and the shallowness of the mouth of the said river, could have entered the latter before the storm broke.

The patron, Mariano Gadvilao, stated under oath that the weather during the night of December 4 was not threatening and he did not believe there would be a storm; that he knew the Sabang River; and that the lorchaPilar, when loaded, could not enter as there was not sufficient water in its channel; that, according to an official chart of the port of Gubat, the bar of the Sabang River was covered by only a foot and a half of water at ordinary low tide and the lorcha Pilar, when loaded, drew 6 feet and a half; that aside from the fact that the condition of the sea would not have permitted the lorcha to take shelter in the said river, even could it have relied upon the assistance of a towboat, at half past 8 o'clock in the morning the tide was still low; there was but little water in the river and still less over the bar.

It was proven by the said official chart of the port of Gubat, that the depth of water over the bar or entrance of the Sabang River is only one foot and a half at ordinary low tide; that the rise and fall of the tide is about 4_«_ feet, the highest tide being at 2 o'clock in the afternoon of every day; and at that hour, on the 5th of December, the hurricane had already made its appearance and the wind was blowing with all its fury and raising great waves.

The lorcha Pilar, loaded as it had been from the afternoon of December 4, even though it could have been moved by means of poles, without being towed, evidently could not have entered the Sabang River on the morning of the 5th, when the wind began to increase and the sea to become rough, on account of the low tide, the shallowness of the channel, and the boat's draft.

The facts stated in the foregoing paragraph were proved by the said chart which was exhibited in evidence and not rejected or assailed by the plaintiff. They were also supported by the sworn testimony of the patron of thelorcha, unrebutted by any oral evidence on the part of the plaintiff such as might disprove the certainty of the facts related, and, according to section 275 of the Code of Civil Procedure, the natural phenomenon of the tides, mentioned in the official hydrographic map, Exhibit 7, which is prima facie evidence on the subject, of the hours of its occurrence and of the conditions and circumstances of the port of Gubat, shall be judicially recognized without the introduction of proof, unless the facts to the contrary be proven, which was not done by the plaintiff, nor was it proven that between the hours of 10 and 11 o'clock of the morning of December 5, 1908, there did not prevail a state of low tide in the port of Gubat.

The oral evidence adduced by the plaintiff with respect to the depth of the Sabang River, was unable to overcome that introduced by the defendant, especially the said chart. According to section 320 of the Code of Civil Procedure, such a chart is prima facie evidence of particulars of general notoriety and interest, such as the existence of shoals of varying depths in

the bar and mouth of the Sabang River and which obstruct the entrance into the same; the distance, length, and number of the said shoals, with other details apparently well known to thepatron of the lorcha Pilar, to judge from his testimony.

Vessels of considerable draft, larger than the said lorcha, might have entered the Sabang River some seven or nine years before, according to the testimony of the Chinaman, Antonio B. Yap Cunco, though he did not state whether they did so at high tide; but, since 1901, or previous years, until 1908, changes may have taken place in the bed of the river, its mouth and its bar. More shoals may have formed or those in existence may have increased in extent by the constant action of the sea. This is the reason why the patron, Gadvilao, who was acquainted with the conditions of the port and cove of Gubat, positively declared that the lorcha Pilar could not, on account of her draft, enter the Sabang River, on account of low water.

The patron of the lorcha, after stating (p.58) that at Gubat or in its vicinity there is no port that affords shelter, affirmed that it was impossible to hoist the sails or weigh the anchors on the morning of the 5th of December, owing to the force of the wind and because the boat would immediately have been dragged or driven upon the shoals; that furthermore the lorcha was anchored in a channel some 300 brazas wide, but, notwithstanding this width, the Pilar was, for want of motive power, unable to move without being exposed to be dashed against the coast by the strong wind and the heavy sea then prevailing. The testimony of this witness was neither impugned nor offset by any evidence whatever; he was a patron of long years of service and of much practice in seafaring, especially in the port of Gubat and its vicinity, who had commanded or been intrusted with the command of other crafts similar to the lorcha Pilar and his testimony was absolutely uncontradicted.

The patron Gadvilao, being cognizant of the duties imposed upon him by rules 14 and 15 of article 612, and others, of the Code of Commerce, remained with sailors, during the time the hurricane was raging, on board thelorcha from the morning of December 5 until early the following morning, the 6th, without abandoning the boat, notwithstanding the imminent peril to which he was exposed, and kept to his post until after the wreck and thelorcha had been dashed against the rocks. Then he solicited help from the captain of the steamer Ton Yek, and, thanks to the relief afforded by a small boat sent by the latter officer, Gadvilao with his crew succeeded in reaching land and immediately reported the occurrence to the representative of Inchausti & Co. and to the public official from whom he obtained the document of protest, Exhibit 1. By such procedure, he showed that, as a patron skilled in the exercise of his vocation, he performed the duties imposed by law in cases of shipwreck brought about byforce majeure.

Treating of shipwrecks, article 840 of the Code of Commerce prescribes:

The losses and damages suffered by a vessel and her cargo by reason of shipwreck or standing shall be individually for the account of the owners, the part of the wreck which may be saved belonging to them in the same proportion.

And Article 841 of the same code reads:

If the wreck or stranding should arise through the malice, negligence, or lack of skill of the captain, or because the vessel put to sea insufficiently repaired and supplied, the owner or the freighters may demand indemnity of the captain for the damages caused to the vessel or cargo by the accident, in accordance with the provisions contained in articles 610, 612, 614, and 621.

The general rule established in the first of the foregoing articles is that the loss of the vessel and of its cargo, as the result of shipwreck, shall fall upon the respective owners thereof, save for the exceptions specified in the second of the said articles.

These legal provisions are in harmony with those of articles 361 and 362 of the Code of Commerce, and are applicable whenever it is proved that the loss of, or damage to, the goods was the result of a fortuitous event or offorce majeure; but the carrier shall be liable for the loss or the damage arising from the causes aforementioned, if it shall have been proven that they occurred through his own fault or negligence or by his failure to take the same precautions usually adopted by diligent and careful persons.

In the contract made and entered into by and between the owner of the goods and the defendant, no term was fixed within which the said merchandise should be delivered to the former at Catarman, nor was it proved that there was any delay in loading the goods and transporting them to their destination. From the 28th of November, when the steamer Sorsogon arrived at Gubat and landed the said goods belonging to Ong Bieng Sip to await thelorcha Pilar which was to convey them to Catarman, as agreed upon, no vessel carrying merchandise made the voyage from Gubat to the said pueblo of the Island of Samar, and with Ong Bieng Sip's merchandise there were also to be shipped goods belonging to the defendant company, which goods were actually taken on board the saidlorcha and suffered the same damage as those belonging to the Chinaman. So that there was no negligence, abandonment, or delay in the shipment of Ong Bieng Sip's merchandise, and all that was done by the carrier, Inchausti & Co., was what it regularly and usually did in the transportation by sea from Manila to Catarman of all classes of merchandise. No attempt has been made to prove that any course other than the foregoing was pursued by that firm on this occasion; therefore the defendant party is not liable for the damage occasioned as a result of the wreck or stranding of the lorcha Pilar because of the hurricane that overtook this craft while it was anchored in the port of Gubat, on December 5, 1908, ready to be conveyed to that of Catarman.

It is a fact not disputed, and admitted by the plaintiff, that the lorcha Pilar was stranded and wrecked on the coast of Gubat during the night of the 5th or early in the morning of the 6th of December, 1908, as a result of a violent storm that came from the Pacific Ocean, and, consequently, it is a proven fact that the loss or damage of the goods shipped on the said lorcha was due to the force majeure which caused the wreck of the said craft.

According to the aforecited article 361 of the Code of Commerce, merchandise shall be transported at the risk and venture of the shipper, unless the contrary be expressly stipulated. No such stipulation appears of record, therefore, all damages and impairment suffered by the goods in transportation, by reason of accident, force majeure, or by virtue of the nature or defect of the articles, are for the account and risk of the shipper.

A final clause of this same article adds that the burden of proof of these accidents is upon the carrier; the trial record fully discloses that the loss and damage of the goods shipped by the Chinaman, Ong Bieng Sip, was due to the stranding and wreck of the lorcha Pilar in the heavy storm or hurricane aforementioned; this the plaintiff did not deny, and admitted that it took place between the afternoon of the 5th and early in the morning of the 6th of December, 1908, so it is evident that the defendant is exempt from the obligation imposed by the law to prove the occurrence of the said storm, hurricane, or cyclone in the port of Gubat, and, therefore, if said goods were lost or damaged and could not be delivered in Catarman, it was due to a fortuitous event and a superior, irresistible natural force, or force majeure, which completely disabled the lorcha intended for their transportation to the said port of the Island of Samar.

The record bears no proof that the said loss or damage caused by the stranding or wreck of the lorcha Pilar as a result of the storm mentioned, occurred through carelessness or negligence on the part of the defendant company, its agents or the patron of the said lorcha, or because they did not take the precautions usually adopted by careful and diligent persons, as required by article 362 of the Code of Commerce; the defendant company, as well as its agents and the patron of the lorcha, had a natural interest in preserving the craft and its own goods laden therein — an interest equal to that of the Chinese shipper in preserving his own which were on board the ship lorcha — and, in fact, the defendant, his agents and the patron did take the measures which they deemed necessary and proper in order to save the lorcha and its cargo from the impending danger; accordingly, thepatron, as soon as he was informed that a storm was approaching, proceeded to clear the boat of all gear which might offer resistance to the wind, dropped the four anchors he had, and even procured an extra anchor from the land, together with a new cable, and cast it into the water, thereby adding, in so far as possible, to the stability and security of the craft, in anticipation of what might occur, as presaged by the violence of the wind and the heavy sea; and Inchausti & Company's agent furnished the articles requested by the patron of the lorcha for the purpose of preventing the loss of the boat; thus did they all display all the diligence and care such as might have been employed by anyone in similar circumstances, especially the patron who was responsible for the lorcha under his charge; nor is it possible to believe that the latter failed to adopt all the measures that were necessary to save his own life and those of the crew and to free himself from the imminent peril of shipwreck.

In view of the fact that the lorcha Pilar had no means of changing its anchorage, even supposing that there was a better one, and was unable to accept help from any steamer that might have towed it to another point, as wherever it might have anchored, it would continually have been exposed to the lashing of the waves and to the fury of the hurricane, for the port of Gubat is a cove or open roadstead with no shelter whatever from the winds that sweep over it from the Pacific Ocean, and in view of the circumstances that it was impossible for the saidlorcha, loaded as it then was, to have entered the Sabang River, even though there had been a steamer to tow it, not only because of an insufficient depth of water in its channel, but also on account of the very high bar at the entrance of the said river, it is incontrovertible that the stranding and wreck of the lorcha Pilar was due to a fortuitous event or to force majeure and not to the fault and negligence of the defendant company and its agents or of the patron, Mariano Gadvilao, inasmuch as the record discloses it to have been duly proved that the latter, in difficult situation in which unfortunately the boat under his charge was placed, took all the precautions that any diligent man should have taken whose duty it was to save the boat and its cargo, and, by the instinct of self-preservation, his own life and those of the crew of the lorcha; therefore, considering the conduct of the patron of the lorcha and that of the defendant's agent in Gubat, during the time of the occurrence of the disaster, the defendant company has not incurred any liability whatever for the loss of the goods, the value of which is demanded by the plaintiff; it must, besides, be taken into account that the defendant itself also lost goods of its own and the lorcha too.

From the moment that it is held that the loss of the said lorcha was due to force majeure, a fortuitous event, with no conclusive proof or negligence or of the failure to take the precautions such as diligent and careful persons usually adopt to avoid the loss of the boat and its cargo, it is neither just nor proper to attribute the loss or damage of the goods in question to any fault, carelessness, or negligence on the part of the defendant company and its agents and, especially, the patron of the lorcha Pilar.

Moreover, it is to be noted that, subsequent to the wreck, the defendant company's agent took all the requisite measures for the salvage of such of the goods as could be recovered after the accident, which he did with the knowledge of the shipper, Ong Bieng Sip, and, in effecting their sale, he endeavored to secure all possible advantage to the Chinese shipper; in all these proceedings, as shown by the record, he acted in obedience to the law.

From all the foregoing it is concluded that the defendant is not liable for the loss and damage of the goods shipped on the lorcha Pilar by the Chinaman, Ong Bieng Sip, inasmuch as such loss and damage were the result of a fortuitous event or force majeure, and there was no negligence or lack of care and diligence on the part of the defendant company or its agents.

Therefore, we hold it proper to reverse the judgment appealed from, and to absolve, as we hereby do, the defendant, Inchausti & Co., without special findings as to costs.

THIRD DIVISION

[G.R. No. 146018.  June 25, 2003]

EDGAR COKALIONG SHIPPING LINES, INC., petitioner, vs. UCPB GENERAL INSURANCE COMPANY, INC., respondent.

D E C I S I O N

PANGANIBAN, J.:

The liability of a common carrier for the loss of goods may, by stipulation in the bill of lading, be limited to the value declared by the shipper.  On the other hand, the liability of the insurer is determined by the actual value covered by the insurance policy and the insurance premiums paid therefor, and not necessarily by the value declared in the bill of lading.

The Case

Before the Court is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to set aside the August 31, 2000 Decision[2] and the November 17, 2000 Resolution[3] of the Court of Appeals[4] (CA) in CA-GR SP No. 62751.  The dispositive part of the Decision reads:

“IN THE LIGHT OF THE FOREGOING, the appeal is GRANTED.  The Decision appealed from is REVERSED.  [Petitioner] is hereby condemned to pay to [respondent] the total amount ofP148,500.00, with interest thereon, at the rate of 6% per annum, from date of this Decision of the Court.  [Respondent’s] claim for attorney’s fees [is] DISMISSED.  [Petitioner’s] counterclaims areDISMISSED.”[5]

The assailed Resolution denied petitioner’s Motion for Reconsideration.

On the other hand, the disposition of the Regional Trial Court’s[6] Decision,[7] which was later reversed by the CA, states:

“WHEREFORE, premises considered, the case is hereby DISMISSED for lack of merit.

“No cost.”[8]

The Facts

The facts of the case are summarized by the appellate court in this wise:

“Sometime on December 11, 1991, Nestor Angelia delivered to the Edgar Cokaliong Shipping Lines, Inc. (now Cokaliong Shipping Lines), [petitioner] for brevity, cargo consisting of one (1) carton of Christmas décor and two (2) sacks of plastic toys, to be transported on board the M/V Tandag on its Voyage No. T-189 scheduled to depart from Cebu City, on December 12, 1991, for Tandag, Surigao del Sur.  [Petitioner] issued Bill of Lading No. 58, freight prepaid, covering the cargo. Nestor Angelia was both the shipper and consignee of the cargo valued, on the face thereof, in the amount ofP6,500.00.  Zosimo Mercado likewise delivered cargo to [petitioner], consisting of two (2) cartons of plastic toys and Christmas decor, one (1) roll of floor mat and one (1) bundle of various or assorted goods for transportation thereof from Cebu City to Tandag, Surigao del Sur, on board the said vessel,

and said voyage.  [Petitioner] issued Bill of Lading No. 59 covering the cargo which, on the face thereof, was valued in the amount of P14,000.00.  Under the Bill of Lading, Zosimo Mercado was both the shipper and consignee of the cargo.

“On December 12, 1991, Feliciana Legaspi insured the cargo, covered by Bill of Lading No. 59, with the UCPB General Insurance Co., Inc., [respondent] for brevity, for the amount of P100,000.00 ‘against all risks’ under Open Policy No. 002/91/254 for which she was issued, by [respondent], Marine Risk Note No. 18409 on said date.  She also insured the cargo covered by Bill of Lading No. 58, with [respondent], for the amount of P50,000.00, under Open Policy No. 002/91/254   on the basis of which [respondent] issued Marine Risk Note No. 18410 on said date.

“When the vessel left port, it had thirty-four (34) passengers and assorted cargo on board, including the goods of Legaspi.  After the vessel had passed by the Mandaue-Mactan Bridge, fire ensued in the engine room, and, despite earnest efforts of the officers and crew of the vessel, the fire engulfed and destroyed the entire vessel resulting in the loss of the vessel and the cargoes therein.  The Captain filed the required Marine Protest.

“Shortly thereafter, Feliciana Legaspi filed a claim, with [respondent], for the value of the cargo insured under Marine Risk Note No. 18409 and covered by Bill of Lading No. 59.  She submitted, in support of her claim, a Receipt, dated December 11, 1991, purportedly signed by Zosimo Mercado, and Order Slips purportedly signed by him for the goods he received from Feliciana Legaspi valued in the amount of P110,056.00.  [Respondent] approved the claim of Feliciana Legaspi and drew and issued UCPB Check No. 612939, dated March 9, 1992, in the net amount of P99,000.00, in settlement of her claim after which she executed a Subrogation Receipt/Deed, for said amount, in favor of [respondent]. She also filed a claim for the value of the cargo covered by Bill of Lading No. 58.  She submitted to [respondent] a Receipt, dated December 11, 1991 and Order Slips, purportedly signed by Nestor Angelia for the goods he received from Feliciana Legaspi valued at P60,338.00.  [Respondent] approved her claim and remitted to Feliciana Legaspi the net amount of P49,500.00, after which she signed a Subrogation Receipt/Deed, dated March 9, 1992, in favor of [respondent].

“On July 14, 1992, [respondent], as subrogee of Feliciana Legaspi, filed a complaint anchored on torts against [petitioner], with the Regional Trial Court of Makati City, for the collection of the total principal amount of P148,500.00, which it paid to Feliciana Legaspi for the loss of the cargo, praying that judgment be rendered in its favor and against the [petitioner] as follows:

‘WHEREFORE, it is respectfully prayed of this Honorable Court that after due hearing, judgment be rendered ordering [petitioner] to pay [respondent] the following.

1.  Actual damages in the amount of P148,500.00 plus interest thereon at the legal rate from the time of filing of this complaint until fully paid;

2.  Attorney’s fees in the amount of P10,000.00; and

3.  Cost of suit.

‘[Respondent] further prays for such other reliefs and remedies as this Honorable Court may deem just and equitable under the premises.’

“[Respondent] alleged, inter alia, in its complaint, that the cargo subject of its complaint was delivered to, and received by, [petitioner] for transportation to Tandag, Surigao del Sur under ‘Bill of Ladings,’ Annexes ‘A’ and ‘B’ of the complaint; that the loss of the cargo was due to the negligence of the [petitioner]; and that Feliciana Legaspi had executed Subrogation Receipts/Deeds in favor of [respondent] after paying to her the value of the cargo on account of the Marine Risk Notes it issued in her favor covering the cargo.

“In its Answer to the complaint, [petitioner] alleged that: (a) [petitioner] was cleared by the Board of Marine Inquiry of any negligence in the burning of the vessel; (b) the complaint stated no cause of action against [petitioner]; and (c)

the shippers/consignee had already been paid the value of the goods as stated in the Bill of Lading and, hence, [petitioner] cannot be held liable for the loss of the cargo beyond the value thereof declared in the Bill of Lading.

“After [respondent] rested its case, [petitioner] prayed for and was allowed, by the Court a quo, to take the depositions of Chester Cokaliong, the Vice-President and Chief Operating Officer of [petitioner], and a resident of Cebu City, and of Noel Tanyu, an officer of the Equitable Banking Corporation, in Cebu City, and a resident of Cebu City, to be given before the Presiding Judge of Branch 106 of the Regional Trial Court of Cebu City.  Chester Cokaliong and Noel Tanyu did testify, by way of deposition, before the Court and declared inter alia, that: [petitioner] is a family corporation like the Chester Marketing, Inc.; Nestor Angelia had been doing business with [petitioner] and Chester Marketing, Inc., for years, and incurred an account with Chester Marketing, Inc. for his purchases from said corporation; [petitioner] did issue Bills of Lading Nos. 58 and 59 for the cargo described therein with Zosimo Mercado and Nestor Angelia as shippers/consignees, respectively; the engine room of the M/V Tandag caught fire after it passed the Mandaue/Mactan Bridge resulting in the total loss of the vessel and its cargo; an investigation was conducted by the Board of Marine Inquiry of the Philippine Coast Guard which rendered a Report, dated February 13, 1992 absolving [petitioner] of any responsibility on account of the fire, which Report of the Board was approved by the District Commander of the Philippine Coast Guard; a few days after the sinking of the vessel, a representative of the Legaspi Marketing filed claims for the values of the goods under Bills of Lading Nos. 58 and 59 in behalf of the shippers/consignees, Nestor Angelia and Zosimo Mercado; [petitioner] was able to ascertain, from the shippers/consignees and the representative of the Legaspi Marketing that the cargo covered by Bill of Lading No. 59 was owned by Legaspi Marketing and consigned to Zosimo Mercado while that covered by Bill of Lading No. 58 was purchased by Nestor Angelia from the Legaspi Marketing; that [petitioner] approved the claim of Legaspi Marketing for the value of the cargo under Bill of Lading No. 59 and remitted to Legaspi Marketing the said amount under Equitable Banking Corporation Check No. 20230486 dated August 12, 1992, in the amount of P14,000.00 for which the representative of the Legaspi Marketing signed Voucher No. 4379, dated August 12, 1992, for the said amount ofP14,000.00 in full payment of claims under Bill of Lading No. 59; that [petitioner] approved the claim of Nestor Angelia in the amount of P6,500.00 but that since the latter owed Chester Marketing, Inc., for some purchases, [petitioner]  merely set off the amount due to Nestor Angelia under Bill of Lading No. 58 against his account with Chester Marketing, Inc.; [petitioner]  lost/[misplaced] the original of the check after it was received by Legaspi Marketing, hence, the production of the microfilm copy by Noel Tanyu of the Equitable Banking Corporation; [petitioner]  never knew, before settling with Legaspi Marketing and Nestor Angelia that the cargo under both Bills of Lading were insured with [respondent], or that Feliciana Legaspi filed claims for the value of the cargo with [respondent] and that the latter approved the claims of Feliciana Legaspi and paid the total amount of P148,500.00 to her; [petitioner]  came to know, for the first time, of the payments by [respondent] of the claims of Feliciana Legaspi when it was served with the summons and complaint, on October 8, 1992; after settling his claim, Nestor Angelia x x x executed the Release and Quitclaim, dated July 2, 1993, and Affidavit, dated July 2, 1993 in favor of [respondent]; hence, [petitioner] was absolved of any liability for the loss of the cargo covered by Bills of Lading Nos. 58 and 59; and even if it was, its liability should not exceed the value of the cargo as stated in the Bills of Lading.

“[Petitioner] did not anymore present any other witnesses on its evidence-in-chief. x x x”[9] (Citations omitted)

Ruling of the Court of Appeals

The CA held that petitioner had failed “to prove that the fire which consumed the vessel and its cargo was caused by something other than its negligence in the upkeep, maintenance and operation of the vessel.”[10]

Petitioner had paid P14,000 to Legaspi Marketing for the cargo covered by Bill of Lading No. 59.  The CA, however, held that the payment did not extinguish petitioner’s obligation to respondent, because there was no evidence that Feliciana Legaspi (the insured) was the owner/proprietor of Legaspi Marketing.  The CA also pointed

out the impropriety of treating the claim under Bill of Lading No. 58 -- covering cargo valued therein at P6,500 -- as a setoff against Nestor Angelia’s account with Chester Enterprises, Inc.

Finally, it ruled that respondent “is not bound by the valuation of the cargo under the Bills of Lading,  x x x  nor is the value of the cargo under said Bills of Lading conclusive on the [respondent].  This is so because, in the first place, the goods were insured with the [respondent] for the total amount of P150,000.00, which amount may be considered as the face value of the goods.”[11]

Hence this Petition.[12]

Issues

Petitioner raises for our consideration the following alleged errors of the CA:

“I

“The Honorable Court of Appeals erred, granting arguendo that petitioner is liable, in holding that petitioner’s liability should be based on the ‘actual insured value’ of the goods and not from actual valuation declared by the shipper/consignee in the bill of lading.

“II

“The Court of Appeals erred in not affirming the findings of the Philippine Coast Guard, as sustained by the trial court a quo, holding that the cause of loss of the aforesaid cargoes under Bill of Lading Nos. 58 and 59 was due to force majeure and due diligence was [exercised] by petitioner prior to, during and immediately after the fire on [petitioner’s] vessel.

“III

“The Court of Appeals erred in not holding that respondent UCPB General Insurance has no cause of action against the petitioner.”[13]

In sum, the issues are:  (1) Is petitioner liable for the loss of the goods?  (2) If it is liable, what is the extent of its liability?

This Court’s Ruling

The Petition is partly meritorious.

First Issue:Liability for Loss

Petitioner argues that the cause of the loss of the goods, subject of this case, was force majeure.  It adds that its exercise of due diligence was adequately proven by the findings of the Philippine Coast Guard.

We are not convinced.  The uncontroverted findings of the Philippine Coast Guard show that the M/V Tandag sank due to a fire, which resulted from a crack in the auxiliary engine fuel oil service tank.  Fuel spurted out of the crack and dripped to the heating exhaust manifold, causing the ship to burst into flames.  The crack was located on the side of the fuel oil tank, which had a mere two-inch gap from the engine room walling, thus precluding constant inspection and care by the crew. 

Having originated from an unchecked crack in the fuel oil service tank, the fire could not have been caused by force majeure.  Broadly speaking, force majeure generally applies to a natural accident, such

as that caused by a lightning, an earthquake, a tempest or a public enemy.[14] Hence, fire is not considered a natural disaster or calamity.  In Eastern Shipping Lines, Inc. v. Intermediate Appellate Court,[15] we explained:

“x x x.  This must be so as it arises almost invariably from some act of man or by human means.  It does not fall within the category of an act of God unless caused by lighting or by other natural disaster or calamity.  It may even be caused by the actual fault or privity of the carrier.

“Article 1680 of the Civil Code, which considers fire as an extraordinary fortuitous event refers to leases or rural lands where a reduction of the rent is allowed when more than one-half of the fruits have been lost due to such event, considering that the law adopts a protective policy towards agriculture.

“As the peril of fire is not comprehended within the exceptions in Article 1734, supra, Article 1735 of the Civil Code provides that in all cases other than those mentioned in Article 1734, the common carrier shall be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the extraordinary diligence required by law.”

Where loss of cargo results from the failure of the officers of a vessel to inspect their ship frequently so as to discover the existence of cracked parts, that loss cannot be attributed to force majeure, but to the negligence of those officials.[16]

The law provides that a common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported.  Ensuring the seaworthiness of the vessel is the first step in exercising the required vigilance. Petitioner did not present sufficient evidence showing what measures or acts it had undertaken to ensure the seaworthiness of the vessel.   It failed to show when the last inspection and care of the auxiliary engine fuel oil service tank was made, what the normal practice was for its maintenance, or some other evidence to establish that it had exercised extraordinary diligence.  It merely stated that constant inspection and care were not possible, and that the last time the vessel was dry-docked was in November 1990.  Necessarily, in accordance with Article 1735[17] of the Civil Code, we hold petitioner responsible for the loss of the goods covered by Bills of Lading Nos. 58 and 59.

Second Issue:Extent of Liability

Respondent contends that petitioner’s liability should be based on the actual insured value of the goods, subject of this case.  On the other hand, petitioner claims that its liability should be limited to the value declared by the shipper/consignee in the Bill of Lading.

The records[18] show that the Bills of Lading covering the lost goods contain the stipulation that in case of claim for loss or for damage to the shipped merchandise or property, “[t]he liability of the common carrier x x x shall not exceed the value of the goods as appearing in the bill of lading.”[19] The attempt by respondent to make light of this stipulation is unconvincing.  As it had the consignees’ copies of the Bills of Lading,[20] it could have easily produced those copies, instead of relying on mere allegations and suppositions. However, it presented mere photocopies thereof to disprove petitioner’s evidence showing the existence of the above stipulation.

A stipulation that limits liability is valid[21] as long as it is not against public policy.  In Everett Steamship Corporation v. Court of Appeals,[22] the Court stated:

“A stipulation in the bill of lading limiting the common carrier’s liability for loss or destruction of a cargo to a certain sum, unless the shipper or owner declares a greater value, is sanctioned by law, particularly Articles 1749 and 1750 of the Civil Code which provides:

‘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 freely and fairly agreed upon.’

“Such limited-liability clause has also been consistently upheld by this Court in a number of cases.  Thus, in Sea-Land Service, Inc. vs. Intermediate Appellate Court, we ruled:

‘It seems clear that even if said section 4 (5) of the Carriage of Goods by Sea Act did not exist, the validity and binding effect of the liability limitation clause in the bill of lading here are nevertheless fully sustainable on the basis alone of the cited Civil Code Provisions.  That said stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to liability only if a greater value is not declared for the shipment in the bill of lading.  To hold otherwise would amount to questioning the justness and fairness of the law itself, and this the private respondent does not pretend to do.  But over and above that consideration, the just and reasonable character of such stipulation is implicit in it giving the shipper or owner the option of avoiding accrual of liability limitation by the simple and surely far from onerous expedient of declaring the nature and value of the shipment in the bill of lading.’

“Pursuant to the afore-quoted provisions of law, it is required that the stipulation limiting the common carrier’s liability for loss must be ‘reasonable and just under the circumstances, and has been freely and fairly agreed upon.

“The bill of lading subject of the present controversy specifically provides, among others:

’18.         All claims for which the carrier may be liable shall be adjusted and settled on the basis of the shipper’s net invoice cost plus freight and insurance premiums, if paid, and in no event shall the carrier be liable for any loss of possible profits or any consequential loss.

‘The carrier shall not be liable for any loss of or any damage to or in any connection with, goods in an amount exceeding One Hundred Thousand Yen in Japanese Currency (¥100,000.00) or its equivalent in any other currency per package or customary freight unit (whichever is least) unless the value of the goods higher than this amount is declared in writing by the shipper before receipt of the goods by the carrier and inserted in the Bill of Lading and extra freight is paid as required.’ 

“The above stipulations are, to our mind, reasonable and just.  In the bill of lading, the carrier made it clear that its liability would only be up to One Hundred Thousand (Y100,000.00) Yen.  However, the shipper, Maruman Trading, had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier.  Considering that the shipper did not declare a higher valuation, it had itself to blame for not complying with the stipulations.”  (Italics supplied)

In the present case, the stipulation limiting petitioner’s liability is not contrary to public policy.  In fact, its just and reasonable character is evident.  The shippers/consignees may recover the full value of the goods by the simple expedient of declaring the true value of the shipment in the Bill of Lading.  Other than the payment of a higher freight, there was nothing to stop them from placing the actual value of the goods therein.  In fact, they committed fraud against the common carrier by deliberately undervaluing the goods in their Bill of Lading, thus depriving the carrier of its proper and just transport fare.

Concededly, the purpose of the limiting stipulation in the Bill of Lading is to protect the common carrier.  Such stipulation obliges the shipper/consignee to notify the common carrier of the amount that the latter may be liable for in case of loss of the goods.  The common carrier can then take appropriate measures -- getting insurance, if needed, to cover or protect itself.  This precaution on the part of the carrier is reasonable and prudent.  Hence, a shipper/consignee that undervalues the real worth of the goods it seeks to transport does not

only violate a valid contractual stipulation, but commits a fraudulent act when it seeks to make the common carrier liable for more than the amount it declared in the bill of lading.

Indeed, Zosimo Mercado and Nestor Angelia misled petitioner by undervaluing the goods in their respective Bills of Lading.  Hence, petitioner was exposed to a risk that was deliberately hidden from it, and from which it could not protect itself. 

It is well to point out that, for assuming a higher risk (the alleged actual value of the goods) the insurance company was paid the correct higher premium by Feliciana Legaspi; while petitioner was paid a fee lower than what it was entitled to for transporting the goods that had been deliberately undervalued by the shippers in the Bill of Lading.  Between the two of them, the insurer should bear the loss in excess of the value declared in the Bills of Lading.  This is the just and equitable solution.

In Aboitiz Shipping Corporation v. Court of Appeals,[23] the description of the nature and the value of the goods shipped were declared and reflected in the bill of lading, like in the present case.  The Court therein considered this declaration as the basis of the carrier’s liability and ordered payment based on such amount.  Following this ruling, petitioner should not be held liable for more than what was declared by the shippers/consignees as the value of the goods in the bills of lading.

We find no cogent reason to disturb the CA’s finding that Feliciana Legaspi was the owner of the goods covered by Bills of Lading Nos. 58 and 59.  Undoubtedly, the goods were merely consigned to Nestor Angelia and Zosimo Mercado, respectively; thus, Feliciana Legaspi or her subrogee (respondent) was entitled to the goods or, in case of loss, to compensation therefor.  There is no evidence showing that petitioner paid her for the loss of those goods.  It does not even claim to have paid her.

On the other hand, Legaspi Marketing filed with petitioner a claim for the lost goods under Bill of Lading No. 59, for which the latter subsequently paid P14,000. But nothing in the records convincingly shows that the former was the owner of the goods.  Respondent was, however, able to prove that it was Feliciana Legaspi who owned those goods, and who was thus entitled to payment for their loss. Hence, the claim for the goods under Bill of Lading No. 59 cannot be deemed to have been extinguished, because payment was made to a person who was not entitled thereto.

With regard to the claim for the goods that were covered by Bill of Lading No. 58 and valued at P6,500, the parties have not convinced us to disturb the findings of the CA that compensation could not validly take place.  Thus, we uphold the appellate court’s ruling on this point.

WHEREFORE, the Petition is hereby PARTIALLY GRANTED.  The assailed Decision is MODIFIED in the sense that petitioner is ORDERED to pay respondent the sums ofP14,000 and P6,500, which represent the value of the goods stated in Bills of Lading Nos. 59 and 58, respectively.  No costs.

SO ORDERED.

THIRD DIVISION

[G.R. No. 113003.  October 17, 1997]

ALBERTA YOBIDO and CRESENCIO YOBIDO, petitioners, vs. COURT OF APPEALS, LENY TUMBOY, ARDEE TUMBOY and JASMIN TUMBOY, respondents.

D E C I S I O N

ROMERO, J.:

In this petition for review on certiorari of the decision of the Court of Appeals, the issue is whether or not the explosion of a newly installed tire of a passenger vehicle is a fortuitous event that exempts the carrier from liability for the death of a passenger.

On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City. Along Picop Road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus exploded.  The bus fell into a ravine around three (3) feet from the road and struck a tree.  The incident resulted in the death of 28-year-old Tito Tumboy and physical injuries to other passengers.

On November 21, 1988, a complaint for breach of contract of carriage, damages and attorney’s fees was filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido, its driver, before the Regional Trial Court of Davao City.  When the defendants therein filed their answer to the complaint, they raised the affirmative defense of caso fortuito.  They also filed a third-party complaint against Philippine Phoenix Surety and Insurance, Inc. This third-party defendant filed an answer with compulsory counterclaim. At the pre-trial conference, the parties agreed to a stipulation of facts.[1]

Upon a finding that the third party defendant was not liable under the insurance contract, the lower court dismissed the third party complaint.  No amicable settlement having been arrived at by the parties, trial on the merits ensued.

The plaintiffs asserted that violation of the contract of carriage between them and the defendants was brought about by the driver’s failure to exercise the diligence required of the carrier in transporting passengers safely to their place of destination.  According to Leny Tumboy, the bus left Mangagoy at 3:00 o’clock in the afternoon.  The winding road it traversed was not cemented and was wet due to the rain; it was rough with crushed rocks.  The bus which was full of passengers had cargoes on top.  Since it was “running fast,” she cautioned the driver to slow down but he merely stared at her through the mirror. At around 3:30 p.m., in Trento, she heard something explode and immediately, the bus fell into a ravine.

For their part, the defendants tried to establish that the accident was due to a fortuitous event. Abundio Salce, who was the bus conductor when the incident happened, testified that the 42-seater bus was not full as there were only 32 passengers, such that he himself managed to get a seat.  He added that the bus was running at a speed of “60 to 50” and that it was going slow because of the zigzag road.  He affirmed that the left front tire that exploded was a “brand new tire” that he mounted on the bus on April 21, 1988 or only five (5) days before the incident.  The Yobido Liner secretary, Minerva Fernando, bought the new Goodyear tire from Davao Toyo Parts on April 20, 1988 and she was present when it was mounted on the bus by Salce. She stated that all driver applicants in Yobido Liner underwent actual driving tests before they were employed. Defendant Cresencio Yobido underwent such test and submitted his professional driver’s license and clearances from the barangay, the fiscal and the police.

On August 29, 1991, the lower court rendered a decision[2] dismissing the action for lack of merit. On the issue of whether or not the tire blowout was a caso fortuito, it found that “the

falling of the bus to the cliff was a result of no other outside factor than the tire blow-out.” It held that the ruling in the La Mallorca and Pampanga Bus Co. v. De Jesus[3] that a tire blowout is “a mechanical defect of the conveyance or a fault in its equipment which was easily discoverable if the bus had been subjected to a more thorough or rigid check-up before it took to the road that morning” is inapplicable to this case. It reasoned out that in said case, it was found that the blowout was caused by the established fact that the inner tube of the left front tire “was pressed between the inner circle of the left wheel and the rim which had slipped out of the wheel.” In this case, however, “the cause of the explosion remains a mystery until at present.” As such, the court added, the tire blowout was “a caso fortuito which is completely an extraordinary circumstance independent of the will” of the defendants who should be relieved of “whatever liability the plaintiffs may have suffered by reason of the explosion pursuant to Article 1174 [4] of the Civil Code.”

Dissatisfied, the plaintiffs appealed to the Court of Appeals.  They ascribed to the lower court the following errors: (a) finding that the tire blowout was a caso fortuito; (b) failing to hold that the defendants did not exercise utmost and/or extraordinary diligence required of carriers under Article 1755 of the Civil Code, and (c) deciding the case contrary to the ruling in Juntilla v. Fontanar,[5] and Necesito v. Paras.[6]

On August 23, 1993, the Court of Appeals rendered the Decision[7] reversing that of the lower court. It held that:

“To Our mind, the explosion of the tire is not in itself a fortuitous event.  The cause of the blow-out, if due to a factory defect, improper mounting, excessive tire pressure, is not an unavoidable event.  On the other hand, there may have been adverse conditions on the road that were unforeseeable and/or inevitable, which could make the blow-out a caso fortuito.  The fact that the cause of the blow-out was not known does not relieve the carrier of liability.  Owing to the statutory presumption of negligence against the carrier and its obligation to exercise the utmost diligence of very cautious persons to carry the passenger safely as far as human care and foresight can provide, it is the burden of the defendants to prove that the cause of the blow-out was a fortuitous event.  It is not incumbent upon the plaintiff to prove that the cause of the blow-out is not caso-fortuito.

Proving that the tire that exploded is a new Goodyear tire is not sufficient to discharge defendants’ burden. As enunciated in Necesito vs. Paras, the passenger has neither choice nor control over the carrier in the selection and use of its equipment, and the good repute of the manufacturer will not necessarily relieve the carrier from liability.

Moreover, there is evidence that the bus was moving fast, and the road was wet and rough.  The driver could have explained that the blow-out that precipitated the accident that caused the death of Toto Tumboy could not have been prevented even if he had exercised due care to avoid the same, but he was not presented as witness.”

The Court of Appeals thus disposed of the appeal as follows:

“WHEREFORE, the judgment of the court a quo is set aside and another one entered ordering defendants to pay plaintiffs the sum of P50,000.00 for the death of Tito Tumboy, P30,000.00 in moral damages, and P7,000.00 for funeral and burial expenses.

SO ORDERED.”

The defendants filed a motion for reconsideration of said decision which was denied on November 4, 1993 by the Court of Appeals.  Hence, the instant petition asserting the position that the tire blowout that caused the death of Tito Tumboy was a caso fortuito. Petitioners claim further that the Court of Appeals, in ruling contrary to that of the lower court, misapprehended facts and, therefore, its findings of fact cannot be considered final which shall bind this Court.  Hence, they pray that this Court review the facts of the case.

The Court did re-examine the facts and evidence in this case because of the inapplicability of the established principle that the

factual findings of the Court of Appeals are final and may not be reviewed on appeal by this Court.  This general principle is subject to exceptions such as the one present in this case, namely, that the lower court and the Court of Appeals arrived at diverse factual findings.[8] However, upon such re-examination, we found no reason to overturn the findings and conclusions of the Court of Appeals.

As a rule, when a passenger boards a common carrier, he takes the risks incidental to the mode of travel he has taken. After all, a carrier is not an insurer of the safety of its passengers and is not bound absolutely and at all events to carry them safely and without injury.[9] However, when a passenger is injured or dies while travelling, the law presumes that the common carrier is negligent.  Thus, the Civil Code provides:

“Art. 1756. In case of death 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.”

Article 1755 provides that “(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.” Accordingly, in culpa contractual, once a passenger dies or is injured, the carrier is presumed to have been at fault or to have acted negligently. This disputable presumption may only be overcome by evidence that the carrier had observed extraordinary diligence as prescribed by Articles 1733,[10] 1755 and 1756 of the Civil Code or that the death or injury of the passenger was due to a fortuitous event.[11] Consequently, the court need not make an express finding of fault or negligence on the part of the carrier to hold it responsible for damages sought by the passenger.[12]

In view of the foregoing, petitioners’ contention that they should be exempt from liability because the tire blowout was no more than a fortuitous event that could not have been foreseen, must fail.  A fortuitous event is possessed of the following characteristics: (a) the cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent of human will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor.[13] As Article 1174 provides, no person shall be responsible for a fortuitous event which could not be foreseen, or which, though foreseen, was inevitable. In other words, there must be an entire exclusion of human agency from the cause of injury or loss.[14]

Under the circumstances of this case, the explosion of the new tire may not be considered a fortuitous event.  There are human factors involved in the situation.  The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle.  Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality, resulting in the conclusion that it could not explode within five days’ use.  Be that as it may, it is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages.[15]

Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous event alone.  The common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident.[16] This Court has had occasion to state:

“While it may be true that the tire that blew-up was still good because the grooves of the tire were still visible, this fact alone does not make the explosion of the tire a fortuitous event. No evidence was presented to show that the accident was due to adverse road conditions or that precautions were taken by the jeepney driver to compensate for any conditions liable to cause accidents. The sudden blowing-up, therefore, could have been caused by too much air pressure injected into the tire coupled by the fact that the jeepney was overloaded and speeding at the time of the accident.”[17]

It is interesting to note that petitioners proved through the bus conductor, Salce, that the bus was running at “60-50” kilometers per hour only or within the prescribed lawful speed limit.  However, they failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she cautioned the driver to slow down.  These contradictory facts must, therefore, be resolved in favor of liability in view of the presumption of negligence of the carrier in the law. Coupled with this is the established condition of the road – rough, winding and wet due to the rain.  It was incumbent upon the defense to establish that it took precautionary measures considering partially dangerous condition of the road.  As stated above, proof that the tire was new and of good quality is not sufficient proof that it was not negligent.  Petitioners should have shown that it undertook extraordinary diligence in the care of its carrier, such as conducting daily routinary check-ups of the vehicle’s parts. As the late Justice J.B.L. Reyes said:

“It may be impracticable, as appellee argues, to require of carriers to test the strength of each and every part of its vehicles before each trip; but we are of the opinion that a due regard for the carrier’s obligations toward the traveling public demands adequate periodical tests to determine the condition and strength of those vehicle portions the failure of which may endanger the safety of the passengers.”[18]

Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing evidence, petitioners are hereby held liable for damages.  Article 1764[19]in relation to Article 2206[20] of the Civil Code prescribes the amount of at least three thousand pesos as damages for the death of a passenger.  Under prevailing jurisprudence, the award of damages under Article 2206 has been increased to fifty thousand pesos (P50,000.00).[21]

Moral damages are generally not recoverable in culpa contractual except when bad faith had been proven.  However, the same damages may be recovered when breach of contract of carriage results in the death of a passenger,[22] as in this case.  Exemplary damages, awarded by way of example or correction for the public good when moral damages are awarded,[23] may likewise be recovered in contractual obligations if the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner.[24] Because petitioners failed to exercise the extraordinary diligence required of a common carrier, which resulted in the death of Tito Tumboy, it is deemed to have acted recklessly.[25] As such, private respondents shall be entitled to exemplary damages.

WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject to the modification that petitioners shall, in addition to the monetary awards therein, be liable for the award of exemplary damages in the amount of P20,000.00. Costs against petitioners.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 139875             December 4, 2000

GREGORIO PESTAÑO and METRO CEBU AUTOBUS CORPORATION, petitioners, vs.Spouses TEOTIMO SUMAYANG and PAZ C. SUMAYANG, respondents.

PANGANIBAN, J.:

Factual findings of the Court of Appeals, affirming those of the trial judge, are binding on this Court. In quasi-delicts, such findings are crucial because negligence is largely a matter of evidence. In computing an award for lost earning capacity, the life expectancy of the deceased, not that of the heir, is used as basis.

The Case

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the April 21, 1999 Decision and the August 6, 1999 Resolution of the Court of Appeals1 (CA) in CA-GR CV No. 30289. The questioned Decision disposed as follows:

"WHEREFORE, premises considered, the instant appeal is hereby DENIED. The assailed Decision of the lower court is hereby AFFIRMED with the aforesaid modification regarding the award of death penalty."

The Resolution of August 6, 1999 denied reconsideration.2

The Facts

The events leading to this Petition were summarized by the Court of Appeals as follows:

"It appears from the records that at around 2:00 o'clock [o]n the afternoon of August 9, 1986, Ananias Sumayang was riding a motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with him was his friend Manuel Romagos. As they came upon a junction where the highway connected with the road leading to Tabagon, they were hit by a passenger bus driven by [Petitioner] Gregorio Pestaño and owned by [Petitioner] Metro Cebu Autobus Corporation (Metro Cebu, for brevity), which had tried to overtake them, sending the motorcycle and its passengers hurtling upon the pavement. Both Ananias Sumayang and Manuel Romagos were rushed to the hospital in Sogod, where Sumayang was pronounced dead on arrival. Romagos was transferred to the Cebu Doctors' Hospital, but he succumbed to his injuries the day after.

"Apart from the institution of criminal charges against Gregorio Pestaño, [Respondents] Teotimo and Paz Sumayang, as heirs of Ananias Sumayang, filed this civil action for damages against Gregorio Pestaño, as driver of the passenger bus that rammed the deceased's motorcycle, Metro Cebu, as owner and operator of the said bus, and Perla Compania de Seguros, as insurer of Metro Cebu. The case was docketed as Civil Case No. CEB-6108.

"On November 9, 1987, upon motion of [Petitioner] Pestaño, Judge Pedro C. Son ordered the consolidation of the said case with Criminal Case No. 10624, pending in Branch 16 of

the same Court, involving the criminal prosecution of Gregorio Pestaño for [d]ouble [h]omicide thru [r]eckless [i]mprudence. Joint trial of the two cases thereafter ensued, where the following assertions were made:

'[Respondents] rely mainly on the testimonies of Ignacio Neis, Pat. Aquilino Dinoy and Teotimo Sumayang, father of the deceased. Neis declared that he saw the incident while he was sitting on a bench beside the highway; that both vehicles c[a]me from the North; that as the motorcycle approached the junction to Tab[a]gon, the driver Ananias Sumayang signalled with his left arm to indicate that he was taking the Tab[a]gon Road; that the motorcycle did turn left but as it did so, it was bumped by an overspeeding bus; that the force of the impact threw Ananias Sumayang and his companion Manuel Romagos about 14 meters away. The motorcycle, Neis continued, was badly damaged as it was dragged by the bus.

'On the other hand, Pat. Dinoy testified that he was in the nearby house of Ruben Tiu [when] he heard the sound or noise caused by the collision; that he immediately went to the scene where he found Ananias Sumayang and Manuel Romagos lying on the road bleeding and badly injured; that he requested the driver of a PU vehicle to take them to a hospital; that he took note of the various distances which he included in his sketch (Exh. J) that the probable point of impact was at the left lane of the highway and right at the junction to Tab[a]gon (Exh J-11); that he based his conclusion on the 'scratches' caused by the motorcycle's footrest on the asphalt pavement; that he described the damage caused to the motorcycle in his sketch (Exh J); that on the part of the bus, the right end of its front bumper was bent and the right portion of the radiator grill was dented. Pat. Dinoy acknowledged that he met at the scene Ignacio Neis who informed him that he saw the incident.

'On the contrary, Pestaño blamed Sumayang for the accident. He testified that when he first blew the horn the motorcycle which was about 15 or 20 meters ahead went to the right side of the highway that he again blew the horn and accelerated in order to overtake the motorcycle; that when he was just one meter behind, the motorcycle suddenly turned left towards the Tab[a]gon [R]oad and was bumped by his bus; that he was able to apply his break only after the impact. Pestaño's testimony was corroborated by Ireneo Casilia who declared that he was one of the passengers of the bus; that the motorcycle suddenly turned left towards Tab[a]gon [R]oad without giving any signal to indicate its maneuver; that the bus was going at 40 kph when the accident occurred.

'To substantiate its defense of bonos pater familias [petitioner] [c]orporation recalled to the witness box Gregorio Pestaño who explained how his driving experience and ability were tested by the company before he was hired. He further declared that the management gave regular lectures to drivers and conductors touching on various topics like speeding, parking, loading and treatment of passengers, and that before he took to the road at 2:30 AM of that day he checked together with the mechanic the tires, brake, signal lights as well as the tools to be brought along. He did the same thing before commencing his return trip from Hagnaya, San Remegio later in the day.

'The corporation also presented its maintenance supervisor, Agustin Pugeda, Jr., and its manager, Alfonso Corominas, Jr. who corroborated Pestaño's testimony that his driving ability was thoroughly tested, and that all drivers underwent periodic lecture on various aspects of safety driving including pertinent traffic regulations. They also confirmed the thorough checkup of every vehicle before it would depart and that the performance of the drivers was being monitored by several inspectors posted at random places along the route.'

"In judgment, the lower court found [petitioners] liable to the [respondents], in the amounts of P30,000.00 for death indemnity, P829,079 for loss of earning capacity of the deceased Ananias Sumayang, and P36,000.00 for necessary interment expenses. The liability of defendant Perla Compania de Seguros, Inc., however, was limited only to the amount stipulated in the insurance policy, which [was] P12,000 for death indemnity and P4,500.00 for burial expenses.

"In so ruling, the lower court found [Petitioner] Pestaño to have been negligent in driving the passenger bus that hit the deceased. It was shown that Pestaño negligently attempted to overtake the motorcycle at a dangerous speed as they were coming upon a junction in the road, and as the motorcycle was about to turn left towards Tabagon. The court likewise found Metro Cebu directly and primarily liable, along with Pestaño, the latter's employer under Article 2180 of the Civil Code, as [Petitioner] Metro Cebu failed to present evidence to prove that it had observed . . . [the] diligence of a good father of a family to prevent damage. Nor has Metro Cebu proven that it had exercised due diligence in the supervision of its employees and in the maintenance of vehicles."3

Ruling of the Court of Appeals

The CA affirmed respondent's liability for the accident and for Sumayang's death. Pestaño was negligent when he tried to overtake the victim's motorcycle at the Tabagon junction. As a professional driver operating a public transport vehicle, he should have taken extra precaution to avoid accidents, knowing that it was perilous to overtake at a junction, where adjoining roads had brought about merging and diverging traffic.

The appellate court opined that Metro Cebu had shown laxity in the conduct of its operations and in the supervision of its employees. By allowing the bus to ply its route despite the defective speedometer, said petitioner showed its indifference towards the proper maintenance of its vehicles. Having failed to observe the extraordinary diligence required of public transportation companies, it was held vicariously liable to the victims of the vehicular accident.

In accordance with prevailing jurisprudence, the CA raised to P50,000 the granted indemnity for the death of the victim. It also affirmed the award of loss of earning capacity based on his life expectancy. Such liability was assessed, not as a pension for the claiming heirs, but as a penalty and an indemnity for the driver's negligent act.

Hence, this Petition.4

Issues

Petitioners submit the following issues5 for our consideration:

1) The Court of Appeals misapplied facts of weight and substance affecting the result of the case.

2) The Court of Appeals misapplied R.A. 4136 as regards the behavior of the deceased at the time of the accident.

3) The Court of Appeals erred in ruling that the award of damages representing income that deceased could have earned be considered a penalty.

4) The Court of Appeals, contrary to Article 2204, Civil Code, raised the award of P30,000.00 damages representing indemnity for death to P50,000.00.

5) The Court of Appeals used as basis for the loss of earning capacity, the life expectancy of the [d]eceased instead of that of the respondents which was shorter."6

In short, they raise these questions: whether the CA erred (1) in applying Section 45 of RA 4136 when it ruled that negligence in driving was the proximate cause of the accident; (2) in increasing the civil indemnity from P30,000 to P50,000; and (3) in using the life expectancy of the deceased instead of the life expectancies of respondents.

The Court's Ruling

The Petition has no merit.

First Issue: Negligence

Petitioners contend that Pestaño was not under any obligation to slow down when he overtook the motorcycle, because the deceased had given way to him upon hearing the bus horn. Seeing that the left side of the road was clearly visible and free of oncoming traffic, Pestaño accelerated his speed to pass the motorcycle. Having given way to the bus, the motorcycle driver should have slowed down until he had been overtaken.

They further contend that the motorcycle was not in the middle of the road nearest to the junction as found by the trial and the appellate courts, but was on the inner lane. This explains why the damage on the bus were all on the right side - the right end of the bumper and the right portion of the radiator grill were bent and dented. Hence, they insist that it was the victim who was negligent.

We disagree. Petitioners are raising a question of fact based on Pestaño's testimony contradicting that of Eyewitness Ignacio Neis and on the location of the dents on the bumper and the grill. Neis testified that as the two vehicles approached the junction, the victim raised his left arm to signal that he was turning left to Tabagon, but that the latter and his companion were thrown off the motorcycle after it was bumped by the overspeeding bus.

These contentions have already been passed upon by the trial and the appellate courts. We find no cogent reason to reverse or modify their factual findings. The CA agreed with the trial court that the vehicular collision was caused by Pestaño's negligence when he attempted to overtake the motorcycle. As a professional driver operating a public transport bus, he should have anticipated that overtaking at a junction was a perilous maneuver and should thus have exercised extreme caution.

Factual findings of the CA affirming those of the trial court are conclusive and binding on this Court. Petitioners failed to demonstrate that this case falls under any of the recognized exceptions to this rule.7 Indeed, the issue of negligence is basically factual and, in quasi-delicts, crucial in the award of damages.

Petitioners aver that the CA was wrong in attributing the accident to a faulty speedometer and in implying that the accident could have been avoided had this instrument been properly functioning.

This contention has no factual basis. Under Articles 2180 and 2176 of the Civil Code, owners and managers are responsible for damages caused by their employees. When an injury is caused by the negligence of a servant or an employee, the master or employer is presumed to be negligent either in the selection or in the supervision of that employee. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee.8

The CA said that allowing Pestaño to ply his route with a defective speedometer showed laxity on the part of Metro Cebu in the operation of its business and in the supervision of its employees. The negligence alluded to here is in its supervision over its driver, not in that which directly caused the accident. The fact that Pestaño was able to use a bus with a faulty speedometer shows that Metro Cebu was remiss in the supervision of its employees and in the proper care of its vehicles. It had thus failed to conduct its business with the diligence required by law.

Second Issue: Life Indemnity

Petitioners aver that the CA erred in increasing the award for life indemnity from P30,000 to P50,000, without specifying any aggravating circumstance to justify the increment as provided in the Civil Code.9

This contention is untenable. The indemnity for death caused by a quasi-delict used to be pegged at P3,000, based on Article 2206 of the Civil Code. However, the amount has been gradually increased through the years because of the declining value of our currency. At present, prevailing jurisprudence fixes the amount at P50,000.10

Third Issue: Loss of Earning Capacity

Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals,11 which held:

"The determination of the indemnity to be awarded to the heirs of a deceased person has therefore no fixed basis. . . . The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important factor . . . "

They contend that the CA used the wrong basis for its computation of earning capacity.

We disagree. The Court has consistently computed the loss of earning capacity based on the life expectancy of the deceased,12 and not on that of the heir.13 Even Villa Rey Transit did likewise.

The award for loss of earning capacity is based on two factors: (1) the number of years on which the computation of damages is based and (2) the rate at which the loss sustained by the heirs is fixed.14 The first factor refers to the life expectancy, which takes into consideration the nature of the victim's work, lifestyle, age and state of health prior to the accident. The second refers to the victim's earning capacity minus the necessary living expenses. Stated otherwise, the amount recoverable is that portion of the earnings of the deceased which the beneficiary would have received — the net earnings of the deceased.15

WHEREFORE, the Petition is DENIED and the assailed Decision and

Resolution AFFIRMED. Cost against petitioners.1âwphi1.nêt

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

 

G.R. No. L-28014-15 May 29, 1970

SPOUSES MARCELO LANDINGIN and RACQUEL BOCASAS, plaintiffs-appellees, vs.PANGASINAN TRANSPORTATION CO. and MARCELO OLIGAN, defendants-appellants.

SPOUSES PEDRO GARCIA and EUFRACIA LANDINGIN, plaintiffs-appellees, vs.PANGASINAN TRANSPORTATION CO. and MARCELO OLIGAN, defendants-appellants.

Gabriel A. Zabala for plaintiffs-appellees.

Vicente M. Erfe Law Office for defendants-appellants.

 

VILLAMOR, J.:

Direct appeal on a question of law from the portion of the judgment of the Court of First Instance of Manila ordering the defendants Pangasinan Transportation Co. (PANTRANCO) and Marcelo Oligan to pay the plaintiffs in Civil Case No. D-1468 (L-28014) the sum of P6,500.00, and the plaintiffs in Civil Case No. 1470 (L-28015) the sum of P3,500.00.

The complaints in said Civil Cases Nos. D-1468 and D-1470 were filed by the spouses Marcelo Landingin and Racquel Bocasas, and the spouses Pedro Garcia and Eufracia Landingin, respectively, for damages allegedly suffered by them in connection with the death of their respective daughter, Leonila Landingin and Estrella Garcia, due to the alleged negligence of the defendants and/or breach of contract of carriage. In their complaints, plaintiffs averred, among others, that in the morning of April 20, 1963, their above-mentioned daughters were among the passengers in the bus driven by defendant Marcelo Oligan and owned and operated by defendant PANTRANCO on an excursion trip from Dagupan City to Baguio City and back, that the bus was open on one side and enclosed on the other, in gross violation of the rules of the Public Service Commission; that defendant PANTRANCO acted with negligence, fraud and bad faith in pretending to have previously secured a special permit for the trip when in truth it had not done so; that upon reaching an uphill point at Camp 8, Kennon Road, Baguio City, on the onward trip, defendant driver, through utter lack of foresight, experience and driving knowledge, caused the bus to stall and stop for a few moments; that through the said defendant's fault and mishandling, the motor ceased to function, causing the bus to slide back unchecked; that when the said defendant suddenly swerved and steered the bus toward the mountainside, Leonila and Estrella, together with several other passengers, were thrown out of the bus through its open side unto the road, suffering serious injuries as a result of which Leonila and Estrella died at the hospital and the same day; and that in connection with the incident, defendant driver had been charged with and convicted of multiple homicide and multiple slight physical injuries on account of the death of Leonila and Estrella and of the injuries suffered by four others, although it may be said, by way of parenthesis, that this case is now pending appeal in a higher court. The plaintiffs prayed for awards of moral, actual and exemplary damages in the total sum of P40,000.00 in Civil Case No. D-1468, and in the total sum of P25,000.00 in Civil Case No. D-1470 as well as

attorney's fees in the amounts of P5,000.00 and P4,000.00, respectively.

Defendants filed a joint answer to each of the two complaints alleging, among others, that at the time of the accident, defendant driver was driving the bus at, the slow speed of about 10 kilometers per hour; that while the said defendant was steering his bus toward the mountainside after hearing a sound coming from under the rear end of the bus, Leonila and Estrella recklessly, and in disobedience to his shouted warnings and advice, jumped out of the bus causing their heads to hit the road or pavement; that the bus was then being driven with extraordinary care, prudence and diligence; that defendant PANTRANCO observed the care and diligence of a good father of a family to prevent the accident as well as in the selection and supervision of its employees, particularly of defendant driver; and that the decision convicting the said defendant was not yet final, the same having been appealed to the Court of Appeals where it was still pending.

By agreement of the parties, the two cases were tried jointly. On October 17, 1966, the court a quo rendered its decision therein in which it made the following findings; that upon reaching the fatal spot at Camp 8, a sudden snapping or breaking of metal below the floor of the bus was heard, and the bus abruptly stopped, rolling back a few moments later; that as a result, some of the passengers jumped out of the bus, while others stepped down; that defendant driver maneuvered the bus safely to and against the side of the mountain where its rear end was made to rest, ensuring the safety of the many passengers still inside the bus; that while defendant driver as steering the bus towards the mountainside, he advised the passengers not to jump, but to remain seated; that Leonila and Estrella were not thrown out of the bus, but that they panicked and jumped out; that the malfunctioning of the motor resulted from the breakage of the cross-joint; that there was no negligence on the part of either of the defendants; that only the day before, the said cross-joint was duly inspected and found to be in order; and that defendant PANTRANCO had exercised the requisite care in the selection and supervision of its employees, including the defendant driver. The court concluded that "the accident was caused by a fortuitous event or an act of God brought about by some extra-ordinary circumstances independent of the will of the Pantranco or its employees."

One would wonder why in the face of such factual findings and conclusion of the trial court, the defendants, instead of the plaintiffs, should come to this Court on appeal. The answer lies in the dispositive portion of the decision, to wit:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the Court hereby renders judgment: (a) Absolving the defendants from any liability on account of negligence on their part and therefore dismissing the complaints in these two cases; (b) However, as stated above, the Court hereby orders the defendant Pantranco to pay to the plaintiffs spouses Marcelo Tandingin and Racquel Bocasas in Civil Case No. D-1468 the amount of P6,500.00; and the amount of P3,500.00 to the spouses Pedro Garcia and Eufracia Landingin in Civil Case No. D-1470, not in payment of liability because of any negligence on the part of the defendants but as an expression of sympathy and goodwill. (Emphasis supplied.)

As to what impelled the court below to include item (b) in the dispositive portion of its decision, can be gathered from the penultimate paragraph of the decision, which reads:

However, there is evidence to the effect that an offer of P8,500.00 in the instant cases without any admission of fault or negligence had been made by the defendant Pantranco and that actually in Civil Case No. D-1469 for the death of Pacita Descalso, the other deceased passenger of the

bus in question, the heirs of the decease received P3,000.00 in addition to hospital and medical bills and the coffin of the deceased for the dismissal of the said case without Pantranco accepting liability. There was as a matter of fact during the pre-trial of these two cases a continuing offer of settlement on the part of the defendant Pantranco without accepting any liability for such damages, and the Court understood that the Pantranco would be willing still to pay said amounts even if these cases were to be tried on the merits. It is well-known that the defendant Pantranco is zealous in the preservation of its public relations. In the spirit therefore of the offer of the defendant Pantranco aforesaid, to assuage the feelings of the herein plaintiffs an award of P6,500.00 for the spouses Marcelo Landingin and Racquel Bocasas in Civil Case No. D-1468 whose daughter Leonila was, when she died, a third-year Commerce student at the Far Eastern University, and P3,500.00 for the spouses Pedro Garcia and Eufracia Landingin in Civil Case No. D-1470 whose daughter Estrella was in the fourth year High at the Dagupan Colleges when she died, is hereby made in their favor. This award is in addition to what Pantranco might have spent to help the parents of both deceased after the accident.

Defendants-appellants complain that having found them to be absolutely free from fault or negligence, and having in fact dismissed the complaints against them, the court should not have ordered them to assume any pecuniary liability. There would be merit in his argument but for the fact that defendant-appellant PANTRANCO was guilty of breach of contract of carriage. It will be noted that in each of the two complaints it is averred that two buses including the one in which the two deceased girls were riding, were hired to transport the excursionist passengers from Dagupan City to Baguio City, and return, and that the said two passengers did not reach destination safely.

As a common carrier, defendant-appellant PANTRANCO was duty bound to carry its 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." (Article 1755, Civil Code.) Did defendant-appellant PANTRANCO measure up to the degree of care and foresight required it under the circumstances? We think not. The court below found that the cross-joint of the bus in which the deceased were riding broke, which caused the malfunctioning of the motor, which in turn resulted in panic among some of the passengers. This is a finding of fact which this Court may not disturb. We are of the opinion, however, that the lower court's conclusion drawn from that fact, i.e., that "the accident was caused by a fortuitous event or an act of God brought about by some extraordinary circumstances independent of the will of the Pantranco or its employees," is in large measure conjectural and speculative, and was arrived at without due regard to all the circumstances, as required by Article 1755. In Lasam vs. Smith (45 Phil. 660), this Court held that an accident caused by defects in the automobile is not a caso fortuito. The rationale of the carrier's liability is the fact that "the passenger has neither the choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier." (Necesito, et al. vs. Paras, et al., 104 Phil. 75.)

When a passenger dies or is injured, the presumption is that the common carrier is at fault or that it acted negligently (Article 1756). This presumption is only rebutted by proof on the carrier's part that it observed the "extraordinary diligence" required in Article 1733 and the "utmost diligence of very cautious persons" required in Article 1755 (Article 1756). In the instant case it appears that the court below considered the presumption rebutted on the strength of defendants-appellants' evidence that only the day before the incident, the crossjoint in question was duly inspected and found to be in order. It does not appear, however, that the carrier gave due regard for all the circumstances in connection with the said inspection. The bus in which the deceased were riding was heavily laden with passengers, and it would be traversing mountainous, circuitous and ascending roads. Thus the entire bus, including its mechanical parts, would naturally be

taxed more heavily than it would be under ordinary circumstances. The mere fact that the bus was inspected only recently and found to be in order would not exempt the carrier from liability unless it is shown that the particular circumstances under which the bus would travel were also considered.

In the premises, it was error for the trial court to dismiss the complaints. The awards made by the court should be considered in the concept of damages for breach of contracts of carriage.

IN VIEW OF THE FOREGOING CONSIDERATIONS, the judgment appealed from is modified as indicated above, and defendant-appellant PANTRANCO is ordered to pay to plaintiffs-appellees the amounts stated in the judgment appealed from, as damages for breach of contracts, with interest thereon at the legal rate from the date of the filing of the complaints. Costs against defendant-appellant PANTRANCO.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

 

G.R. No. 118126 March 4, 1996

TRANS-ASIA SHIPPING LINES, INC., petitioner,

vs.

COURT OF APPEALS and ATTY. RENATO T. ARROYO, respondents.

 

DAVIDE, JR., J.:p

As formulated by the petitioner, the issue in this petition for review on certiorari under Rule 45 of the Rules of Court is as follows:

In case of interruption of a vessel's voyage and the consequent delay in that vessel's arrival at its port of destination, is the right of a passenger affected thereby to be determined and governed by the vague Civil Code provision on common carriers, or shall it be, in the absence of a specific provision thereon governed by Art. 698 of the Code of Commerce? 1

The petitioner considers it a "novel question of law."

Upon a closer evaluation, however, of the challenged decision of the Court of Appeals of 23 November 1994, 2 vis-a-vis, the decision of 29 June 1992 in Civil Case No. 91-491 of the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 24, 3 as well as the allegations and arguments adduced by the parties, we find the petitioner's formulation of the issue imprecise. As this Court sees it, what stands for resolution is a common carrier's liability for damages to a passenger who disembarked from the vessel upon its return to the port of origin, after it suffered engine trouble and had to stop at sea, having commenced the contracted voyage on one engine.

The antecedents are summarized by the Court of Appeals as follows:

Plaintiff [herein private respondent Atty. Renato Arroyo], a public attorney, bought a ticket [from] defendant [herein petitioner], a corporation engaged in . . . inter-island shipping, for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City on November 12, 1991.

At around 5:30 in the evening of November 12, 1991, plaintiff boarded the M/V Asia Thailand vessel. At that instance, plaintiff noticed that some repair works [sic] were being undertaken on the engine of the vessel. The vessel departed at around 11:00 in the evening with only one (1) engine running.

After an hour of slow voyage, the vessel stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some passengers demanded that they should be allowed to return to Cebu City for they were no longer willing to continue their voyage to, Cagayan de Oro City. The captain acceeded [sic] to their request and thus the vessel headed back to Cebu City.

At Cebu City, plaintiff together with the other passengers who requested to be brought back to

Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Plaintiff, the next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of defendant.

On account of this failure of defendant to transport him to the place of destination on November 12, 1991, plaintiff filed before the trial court a complaint for damages against defendant. 4

In his complaint, docketed as Civil Case No. 91-491, plaintiff (hereinafter private respondent) alleged that the engines of the M/V Asia Thailand conked out in the open sea, and for more than an hour it was stalled and at the mercy of the waves, thus causing fear in the passengers. It sailed back to Cebu City after it regained power, but for unexplained reasons, the passengers, including the private respondent, were arrogantly told to disembark without the necessary precautions against possible injury to them. They were thus unceremoniously dumped, which only exacerbated the private respondent's mental distress. He further alleged that by reason of the petitioner's wanton, reckless, and willful acts, he was unnecessarily exposed to danger and, having been stranded in Cebu City for a day, incurred additional expenses and loss of income. He then prayed that he be awarded P1,100.00, P50,000.00, and P25,000.00 as compensatory, moral; and exemplary damages, respectively. 5

In his pre-trial brief, the private respondent asserted that his complaint was "an action for damages arising from bad faith, breach of contract and from tort," with the former arising from the petitioner's "failure to carry [him] to his place of destination as contracted," while the latter from the "conduct of the [petitioner] resulting [in] the infliction of emotional distress" to the private respondent. 6

After due trial, the trial court rendered its decision 7 and ruled that the action was only for breach of contract, with Articles 1170, 1172, and 1173 of the Civil Code as applicable law — not Article 2180 of the same Code. It was of the opinion that Article 1170 made a person liable for damages if, in the performance of his obligation, he was guilty of fraud, negligence, or delay, or in any manner contravened the tenor thereof; moreover, pursuant to Article 2201 of the same Code, to be entitled to damages, the non-performance of the obligation must have been tainted not only by fraud, negligence, or delay, but also bad faith, malice, and wanton attitude. It then disposed of the case as follows:

WHEREFORE, it not appearing from the evidence that plaintiff was left in the Port of Cebu because of the fault, negligence, malice or wanton attitude of defendant's employees, the complaint is DISMISSED. Defendant's counterclaim is likewise dismissed it not appearing also that filing of the case by plaintiff was motivated by malice or bad faith. 8

The trial court made the following findings to support its disposition:

In the light of the evidence adduced by the parties and of the above provisions of the New Civil Code, the issue to be resolved, in the resolution of this case is whether or not, defendant thru its employees in [sic] the night of November 12, 1991, committed fraud, negligence, bad faith or malice when it left plaintiff in the Port of Cebu when it sailed back to Cagayan de Oro City after it has [sic] returned from Kawit Island.

Evaluation of the evidence of the parties tended to show nothing that defendant committed fraud. As early as 3:00 p.m. of November 12, 1991, defendant did not hide the fact that the cylinder head cracked. Plaintiff even saw during its repair. If he had doubts as to the vessel's capacity to sail, he had time yet to take another boat. The ticket could be returned to defendant and corresponding cash [would] be returned to him.

Neither could negligence, bad faith or malice on the part of defendant be inferred from the evidence of the parties. When the boat arrived at [the] Port of Cebu

after it returned from Kawit Island, there was an announcement that passengers who would like to disembark were given ten (10) minutes only to do so. By this announcement, it could be inferred that the boat will [sic] proceed to Cagayan de Oro City. If plaintiff entertained doubts, he should have asked a member of the crew of the boat or better still, the captain of the boat. But as admitted by him, he was of the impression only that the boat will not proceed to Cagayan de Oro that evening so he disembarked. He was instead, the ones [sic] negligent. Had he been prudent, with the announcement that those who will disembark were given ten minutes only, he should have lingered a little by staying in his cot and inquired whether the boat will proceed to Cagayan de Oro City or not. Defendant cannot be expected to be telling [sic] the reasons to each passenger. Announcement by microphone was enough.

The court is inclined to believe that the story of defendant that the boat returned to the Port of Cebu because of the request of the passengers in view of the waves. That it did not return because of the defective engines as shown by the fact that fifteen (15) minutes after the boat docked [at] the Port of Cebu and those who wanted to proceed to Cagayan de Oro disembarked, it left for Cagayan de Oro City.

The defendant got nothing when the boat returned to Cebu to let those who did not want to proceed to Cagayan de Oro City including plaintiff disembarked. On the contrary, this would mean its loss instead because it will have to refund their tickets or they will use it the next trip without paying anymore. It is hard therefore, to imagine how defendant by leaving plaintiff in Cebu could have acted in bad faith, negligently, wantonly and with malice.

If plaintiff, therefore, was not able to [m]ake the trip that night of November 12, 1991, it was not because defendant maliciously did it to exclude him [from] the trip. If he was left, it was because of his fault or negligence. 9

Unsatisfied, the private respondent appealed to the Court of Appeals (CA-G.R. CV No. 39901) and submitted for its determination the following assignment of errors: (1) the trial court erred in not finding that the defendant-appellee was guilty of fraud, delay, negligence, and bad faith; and (2) the trial court. erred in not awarding moral and exemplary damages. 10

In its decision of 23 November 1994, 11 the Court of Appeals reversed the trial court's decision by applying Article 1755 in relation to Articles 2201, 2208, 2217, and 2232 of the Civil Code and, accordingly, awarded compensatory, moral, and exemplary damages as follows:

WHEREFORE, premises considered, the appealed decision is hereby REVERSED and SET ASIDE and another one is rendered ordering defendant-appellee to pay plaintiff-appellant:

1. P20,000.00 as moral damages;

2. P10,000.00 as exemplary damages;

3. P5,000.00 as attorney's fees;

4. Cost of suit.

SO ORDERED. 12

It did not, however, allow the grant of damages for the delay in the performance of the petitioner's obligation as the requirement of demand set forth in Article 1169 of the Civil Code had not been met by the private respondent. Besides, it found that the private respondent offered no

evidence to prove that his contract of carriage with the petitioner provided for liability in case of delay in departure, nor that a designation of the time of departure was the controlling motive for the establishment of the contract. On the latter, the court a quo observed that the private respondent even admitted he was unaware of the vessel's departure time, and it was only when he boarded the vessel that he became aware of such. Finally, the respondent Court found no reasonable basis for the private respondent's belief that demand was useless because the petitioner had rendered it beyond its power to perform its obligation; on the contrary, he even admitted that the petitioner had been assuring the passengers that the vessel would leave on time, and that it could still perform its obligation to transport them as scheduled.

To justify its award of damages, the Court of Appeals ratiocinated as follows:

It is an established and admitted fact that the vessel before the voyage had undergone some repair work on the cylinder head of the engine. It is likewise admitted by defendant-appellee that it left the port of Cebu City with only one engine running. Defendant-appellee averred:

. . . The dropping of the vessel's anchor after running slowly on only one engine when it departed earlier must have alarmed some nervous passengers . . .

The entries in the logbook which defendant-appellee itself offered as evidence categorically stated therein that the vessel stopped at Kawit Island because of engine trouble. It reads:

2330 HRS STBD ENGINE' EMERGENCY STOP

2350 HRS DROP ANCHOR DUE TO ENGINE TROUBLE, 2 ENGINE STOP.

The stoppage was not to start and synchronized [sic] the engines of the vessel as claimed by defendant-appellee. It was because one of the engines of the vessel broke down; it was because of the disability of the vessel which from the very beginning of the voyage was known to defendant-appellee.

Defendant-appellee from the very start of the voyage knew for a fact that the vessel was not yet in its sailing condition because the second engine was still being repaired. Inspite of this knowledge, defendant-appellee still proceeded to sail with only one engine running.

Defendant-appellee at that instant failed to exercise the diligence which all common carriers should exercise in transporting or carrying passengers. The law does not merely require extraordinary diligence in the performance of the obligation. The law mandates that common carrier[s] should exercise utmost diligence the transport of passengers.

Article 1755 of the New Civil Code provides:

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.

Utmost diligence of a VERY CAUTIOUS person dictates that defendant-appellee should have pursued the voyage only when its vessel was already fit to sail.

Defendant-appellee should have made certain that the vessel [could] complete the voyage before starting [to] sail. Anything less than this, the vessel [could not] sail . . . with so many passengers on board it.

However, defendant-appellant [sic] in complete disregard of the safety of the passengers, chose to proceed with its voyage even if only one engine was running as the second engine was still being repaired during the voyage. Defendant-appellee disregarded the not very remote possibility that because of the disability of the vessel, other problems might occur which would endanger the lives of the passengers sailing with a disabled vessel.

As expected, . . . engine trouble occurred. Fortunate[ly] for defendant-appellee, such trouble only necessitated the stoppage of the vessel and did not cause the vessel to capsize. No wonder why some passengers requested to be brought back to Cebu City. Common carriers which are mandated to exercise utmost diligence should not be taking these risks.

On this premise, plaintiff-appellant should not be faulted why he chose to disembark from the vessel with the other passengers when it returned back to Cebu City. Defendant-appellee may call him a very "panicky passenger" or a "nervous person", but this will not relieve defendant-appellee from the liability it incurred for its failure to exercise utmost diligence. 13

xxx xxx xxx

As to the second assigned error, we find that plaintiff-appellant is entitled to the award of moral and exemplary damages for the breach committed by defendant-appellee.

As discussed, defendant-appellee in sailing to Cagayan de Oro City with only one engine and with full knowledge of the true condition of the vessel, acted. in bad faith with malice, in complete disregard for the safety of the passengers and only for its own personal advancement/interest.

The Civil Code provides:

Art. 2201.

xxx xxx xxx

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.

Plaintiff-appellant is entitled to moral damages for the mental anguish, fright and serious anxiety he suffered during the voyage when the vessel's engine broke down and when he disembarked from the vessel during the wee hours of the morning at Cebu City when it returned. 14

Moral damages are recoverable in a damage suit predicated upon a breach of contract of carriage where it is proved that the carrier was guilty of fraud or bad faith even if death does not result. 15

Fraud and bad faith by defendant-appellee having been established, the award of moral damages is in order. 16

To serve as a deterrent to the commission of similar acts in the future, exemplary damages should be imposed upon defendant-appellee. 17 Exemplary damages are designed by our civil law to permit the courts to reshape behavior that is socially deleterious in its consequence by creating . . . negative incentives or deterrents against such behavior. 18

Moral damages having been awarded, exemplary damages maybe properly awarded. When entitlement to moral damages has been established, the award of exemplary damages is proper. 19

The petitioner then instituted this petition and submitted the question of law earlier adverted to.

Undoubtedly, there was, between the petitioner and the private respondent, a contract of common carriage. The laws of primary application then are the provisions on common carriers under Section 4, Chapter 3, Title VIII, Book IV of the Civil Code, while for all other matters not regulated thereby, the Code of Commerce and special laws. 20

Under Article 1733 of the Civil Code, the petitioner was bound to observe extraordinary diligence in ensuring the safety of the private respondent. That meant that the petitioner was, pursuant to Article 1755 of the said Code, bound to carry the private respondent safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances. In this case, we are in full accord with the Court of Appeals that the petitioner failed to discharge this obligation.

Before commencing the contracted voyage, the petitioner undertook some repairs on the cylinder head of one of the vessel's engines. But even before it could finish these repairs, it allowed the vessel to leave the port of origin on only one functioning engine, instead of two. Moreover, even the lone functioning engine was not in perfect condition as sometime after it had run its course, it conked out. This caused the vessel to stop and remain a drift at sea, thus in order to prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel was unseaworthy even before the voyage began. For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew. 21 The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.

As to its liability for damages to the private respondent, Article 1764 of the Civil Code expressly provides:

Art. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by common carrier.

The damages comprised in Title XVIII of the Civil Code are actual or compensatory, moral, nominal, temperate or moderate, liquidated, and exemplary.

In his complaint, the private respondent claims actual or compensatory, moral, and exemplary damages.

Actual or compensatory damages represent the adequate compensation for pecuniary loss suffered and for profits the obligee failed to obtain. 22

In contracts or quasi-contracts, the obligor is liable for all the damages which may be reasonably attributed to the non-performance of the obligation if he is guilty of fraud, bad faith, malice, or wanton attitude. 23

Moral damages include moral suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, or similar injury. They may be recovered in the cases enumerated in Article 2219 of the Civil Code, likewise, if they are the proximate result of, as in this case, the petitioner's breach of the contract of carriage. 24 Anent a breach of a contract of common carriage, moral

damages may be awarded if the common carrier, like the petitioner, acted fraudulently or in bad faith. 25

Exemplary damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated or compensatory damages. 26 In contracts and quasi-contracts, exemplary damages may be awarded if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. 27 It cannot, however, be considered as a matter of right; the court having to decide whether or not they should be adjudicated.28 Before the court may consider an award for exemplary damages, the plaintiff must first show that he is entitled to moral, temperate or compensatory damages; but it is not necessary that he prove the monetary value thereof.29

The Court of Appeals did not grant the private respondent actual or compensatory damages, reasoning that no delay was incurred since there was no demand, as required by Article 1169 of the Civil Code. This article, however, finds no application in this case because, as found by the respondent Court, there was in fact no delay in the commencement of the contracted voyage. If any delay was incurred, it was after the commencement of such voyage, more specifically, when the voyage was subsequently interrupted when the vessel had to stop near Kawit Island after the only functioning engine conked out.

As to the rights and duties of the parties strictly arising out of such delay, the Civil Code is silent. However, as correctly pointed out by the petitioner, Article 698 of the Code of Commerce specifically provides for such a situation. It reads:

In case a voyage already begun should be interrupted, the passengers shall be obliged to pay the fare in proportion to the distance covered, without right to recover for losses and damages if the interruption is due to fortuitous event or force majeure, but with a right to indemnity if the interruption should have been caused by the captain exclusively. If the interruption should be caused by the disability of the vessel and a passenger should agree to await the repairs, he may not be required to pay any increased price of passage, but his living expenses during the stay shall be for his own account.

This article applies suppletorily pursuant to Article 1766 of the Civil Code.

Of course, this does not suffice for a resolution of the case at bench for, as earlier stated, the cause of the delay or interruption was the petitioner's failure to observe extraordinary diligence. Article 698 must then be read together with Articles 2199, 2200, 2201, and 2208 in relation to Article 21 of the Civil Code. So read, it means that the petitioner is liable for any pecuniary loss or loss of profits which the private respondent may have suffered by reason thereof. For the private respondent, such would be the loss of income if unable to report to his office on the day he was supposed to arrive were it not for the delay. This, however, assumes that he stayed on the vessel and was with it when it thereafter resumed its voyage; but he did not. As he and some passengers resolved not to complete the voyage, the vessel had to return to its port of origin and allow them to disembark. The private respondent then took the petitioner's other vessel the following day, using the ticket he had purchased for the previous day's voyage.

Any further delay then in the private respondent's arrival at the port of destination was caused by his decision to disembark. Had he remained on the first vessel, he would have reached his destination at noon of 13 November 1991, thus been able to report to his office in the afternoon. He, therefore, would have lost only the salary for half of a day. But actual or compensatory damages must be proved, 30 which the private respondent failed to do. There is no convincing evidence that he did not receive his salary for 13 November 1991 nor that his absence was not excused.

We likewise fully agree with the Court of Appeals that the petitioner is liable for moral and exemplary damages. In allowing its unseaworthy M/V Asia Thailand to leave the port of origin and undertake the contracted voyage, with full awareness that it was exposed to perils of the sea, it deliberately disregarded its solemn duty to exercise extraordinary diligence and obviously acted with bad faith and in a wanton and reckless manner. On this score, however, the petitioner asserts that the safety or the vessel and passengers was never at stake because the sea was "calm" in the vicinity

where it stopped as faithfully recorded in the vessel's log book (Exhibit "4"). Hence, the petitioner concludes, the private respondent was merely "over-reacting" to the situation obtaining then. 31

We hold that the petitioner's defense cannot exculpate it nor mitigate its liability. On the contrary, such a claim demonstrates beyond cavil the petitioner's lack of genuine concern for the safety of its passengers. It was, perhaps, only providential then the sea happened to be calm. Even so, the petitioner should not expect its passengers to act in the manner it desired. The passengers were not stoics; becoming alarmed, anxious, or frightened at the stoppage of a vessel at sea in an unfamiliar zone as nighttime is not the sole prerogative of the faint-hearted. More so in the light of the many tragedies at sea resulting in the loss of lives of hopeless passengers and damage to property simply because common carriers failed in their duty to exercise extraordinary diligence in the performance of their obligations.

We cannot, however, give our affirmance to the award of attorney's fees. Under Article 2208 of the Civil Code, these are recoverable only in the concept of actual damages, 32 not as moral damages 33 nor judicial costs. 34Hence, to merit such an award, it is settled that the amount thereof must be proven. 35 Moreover, such must be specifically prayed for — as was not done in this case—and may not be deemed incorporated within a general prayer for "such other relief and remedy as this court may deem just and equitable." 36 Finally, it must be noted that aside from the following, the body of the respondent Court's decision was devoid of any statement regarding attorney's fees:

Plaintiff-appellant was forced to litigate in order that he can claim moral and exemplary damages for the suffering he encurred [sic]. He is entitled to attorney's fees pursuant to Article 2208 of the Civil Code. It states:

Art. 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs cannot be recovered except:

1. When exemplary damages are awarded;

2. When the defendant's act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest.

This Court holds that the above does not satisfy the benchmark of "factual, legal and equitable justification" needed as basis for an award of attorney's fees. 37 In sum, for lack of factual and legal basis, the award of attorney's fees must be deleted.

WHEREFORE, the instant petition is DENIED and the challenged decision of the Court of Appeals in CA-G.R. CV No. 39901 is AFFIRMED subject to the modification as to the award for attorney's fees which is hereby SET ASIDE.

Costs against the petitioner.

SO ORDERED.

FIRST DIVISION

[G.R. No. 120027.  April 21, 1999]

EDNA A. RAYNERA, for herself and on behalf of the minors  RIANNA and REIANNE RAYNERA, petitioners, vs. FREDDIE HICETA and JIMMY ORPILLA, respondents.

D E C I S I O N

PARDO, J.:

The case is a petition for review on certiorari of the decision of the Court of Appeals,[1] reversing that of the Regional Trial Court, Branch 45, Manila.[2]

The rule is well-settled that factual findings of the Court of Appeals are generally considered final and may not be reviewed on appeal.  However, this principle admits of certain exceptions, among which is when the findings of the appellate court are contrary to those of the trial court, a re-examination of the facts and evidence may be undertaken.[3] This case falls under the cited exception.

The antecedent facts are as follows:

Petitioner Edna A. Raynera was the widow of Reynaldo Raynera and the mother and legal guardian of the minors Rianna and Reianne, both surnamed Raynera.  Respondents Freddie Hiceta and Jimmy Orpilla were the owner and driver, respectively, of an Isuzu truck-trailer, with plate No. NXC 848, involved in the accident.

On March 23, 1989, at about 2:00 in the morning, Reynaldo Raynera was on his way home.  He was riding a motorcycle traveling on the southbound lane of East Service Road, Cupang, Muntinlupa.  The Isuzu truck was travelling ahead of him at 20 to 30  kilometers  per hour.[4] The truck was loaded with two (2) metal sheets extended on both sides, two (2) feet on the left and three (3) feet on the right.   There were two (2) pairs of red lights, about 35 watts each, on both sides of the metal plates.[5] The asphalt road was not well lighted.

At some point on the road, Reynaldo Raynera crashed his motorcycle into the left rear portion of the truck trailer, which was without tail lights.  Due to the collision, Reynaldo sustained head injuries and truck helper Geraldino D. Lucelo[6] rushed him to the Parañaque Medical Center.  Upon arrival at the hospital, the attending physician, Dr. Marivic Aguirre,[7] pronounced Reynaldo Raynera dead on arrival.

At the time of his death, Reynaldo was manager of the Engineering Department, Kawasaki Motors (Phils.) Corporation.   He was 32 years old, had a life expectancy of sixty five (65) years, and an annual net earnings of not less than seventy three thousand five hundred (P73,500.00) pesos,[8] with a potential increase in annual net earnings of not less than ten percent (10%) of his salary.[9]

On May 12, 1989, the heirs of the deceased demanded [10] from respondents  payment  of  damages  arising  from the death of Reynaldo Raynera as a result of the vehicular accident.  The respondents refused to pay the claims.

On September 13, 1989, petitioners filed with the Regional Trial Court, Manila[11] a complaint[12] for damages against respondents owner and driver of the Isuzu truck.

In their complaint against respondents, petitioners sought recovery of damages for the death of Reynaldo Raynera caused by the negligent operation of the truck-trailer at nighttime on the highway, without tail lights.

In their answer filed on April 4, 1990, respondents alleged that the truck was travelling slowly on the service road, not parked improperly at a dark portion of the road, with no tail lights, license plate and early warning device.

At the trial, petitioners presented Virgilio Santos.  He testified that at about 1:00 and 2:00 in the morning of March 23, 1989, he and his wife went to Alabang market, on board a tricycle.  They passed by the service road going south, and saw a parked truck trailer, with its hood open and without  tail lights.   They would have bumped the truck but the tricycle driver was quick in avoiding a collision.  The place  was dark, and the truck had no early warning device to alert passing motorists.[13]

On the other hand, respondents presented truck helper Geraldino Lucelo.[14] He testified that at the time the incident happened, the truck was slowly traveling at approximately 20 to 30 kilometers per hour.  Another employee of respondents, auto-mechanic Rogoberto Reyes,[15] testified that at about 3:00 in the afternoon of March 22, 1989, with the help of Lucelo, he installed two (2) pairs of red lights, about 30 to 40 watts each, on both sides of the steel plates. [16] On his part, traffic investigation officer Cpl. Virgilio del Monte[17]admitted that these lights were visible at a distance of 100 meters.

On December 19, 1991, the trial court rendered decision in favor of petitioners.  It  found  respondents  Freddie  Hiceta and Jimmy Orpilla negligent in view of these circumstances:  (1) the truck trailer had no license plate and tail lights; (2) there were only two pairs of red lights, 50 watts[18] each, on both sides of the steel plates; and (3) the truck trailer was improperly parked in a dark area.

The trial court held that respondents’ negligence was the immediate and proximate cause of Reynaldo Raynera’s death, for which they are jointly and severally liable to pay damages to petitioners.  The trial court also held that the victim was himself negligent, although this was insufficient to overcome respondents’ negligence. The trial court applied the doctrine of contributory negligence[19] and reduced the responsibility of respondents by 20% on account of the victim’s own negligence.

The dispositive portion of the lower court’s decision reads as follows:

“All things considered, the Court is of the opinion that it is fair and reasonable to fix the living and other expenses of the deceased the sum of P54,000.00 a year or about P4,500.00 a month (P150.00 p/d) and that, consequently, the loss or damage sustained by the plaintiffs may be estimated at P1,674,000.00 for the 31 years of Reynaldo Raynera’s life expectancy.

“Taking into account the cooperative negligence of the deceased Reynaldo Raynera, the Court believes that the demand of substantial justice are satisfied by allocating the damages on 80-20 ratio.  Thus, P1,337,200.00 shall be paid by the defendants with interest thereon, at the legal rate, from date of decision, as damages for the loss of earnings.  To this sum, the following shall be added:

(a) P33,412.00, actually spent for funeral services, interment and memorial lot;

(b) P20,000.00 as attorney’s fees;

(c) cost of suit.

“SO ORDERED.”[20]

On January 10, 1992, respondents Hiceta and Orpilla appealed to the Court of Appeals.[21]

After due proceedings, on April 28, 1995, the Court of Appeals rendered decision setting aside the appealed decision.  The appellate court held that Reynaldo Raynera’s bumping into the left rear portion of the truck was the proximate cause of his death,[22] and consequently, absolved respondents from liability.

Hence, this petition for review on certiorari.

In  this  petition,  the  heirs  of  Reynaldo  Raynera  contend  that the appellate court erred in:  (1) overturning the trial court’s finding that respondents’ negligent operation of the Isuzu truck was the proximate cause of the victim’s death; (2) applying the doctrine  of  last clear chance; (3) setting aside the trial court’s award of actual and compensatory damages.

The issues presented are (a) whether respondents were negligent, and if so, (b) whether such negligence was the proximate cause of the death of  Reynaldo Raynera.

Petitioners maintain that the proximate cause of Reynaldo Raynera’s death was respondents’ negligence in operating the truck trailer on the highway without tail lights and license plate.

The Court finds no reason to disturb the factual findings of the Court of Appeals.

“Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something, which a prudent and reasonable man would not do.”[23]

Proximate cause is “that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred.”[24]

During the trial, it was established that the truck had no tail lights.  The photographs taken of the scene of the accident showed that there were no tail lights or license plates installed on the Isuzu truck.  Instead, what were installed were two (2) pairs of lights on top of the steel plates, and one (1) pair of lights in front of the truck.  With regard to the rear of the truck, the photos taken and the sketch in the spot report proved that there were no tail lights.

Despite the absence of tail lights and license plate, respondents’ truck was visible in the highway.  It was traveling at a moderate speed, approximately 20 to 30 kilometers per hour.  It used the service road, instead of the highway, because the cargo they were hauling posed a danger to passing motorists.  In compliance with the Land Transportation Traffic Code (Republic Act No. 4136)”[25] respondents installed 2 pairs of lights on top of the steel plates, as the vehicle’s cargo load extended beyond the bed or body thereof.

We find that the direct cause of the accident was the negligence of the victim.  Traveling behind the truck, he had the responsibility of avoiding bumping the vehicle in front of him. He was in control of the situation.  His motorcycle was equipped with headlights to enable him to see what was in front of him.  He was traversing the service road where the prescribed speed limit was less than that in the highway.

Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50-watts bulbs were on top of the steel plates, [26] which were visible from a distance of 100 meters.[27] Virgilio Santos admitted that from the tricycle where he was on board,  he saw the truck and its cargo of iron plates from a distance of ten (10) meters. [28] In light of these circumstances, an accident could have been easily avoided, unless the victim had been driving too fast and did not exercise due care and prudence demanded of him under the circumstances.

Virgilio Santos’ testimony strengthened respondents’ defense that it was the victim who was reckless and negligent in driving his motorcycle at high speed.  The tricycle where Santos was on board was not much different from the victim’s motorcycle that figured in the accident.  Although Santos claimed the tricycle almost bumped into the improperly parked truck, the tricycle driver was able to avoid hitting the truck.

It has been said that drivers of vehicles “who bump the rear of another vehicle” are presumed to be “the cause of the accident, unless contradicted by other evidence”.[29]  The rationale behind the presumption is that the driver of the rear vehicle has full control of the situation as he is in a position to observe the vehicle in front of him.

We agree with the Court of Appeals that the responsibility to avoid the collision with the front vehicle lies with the driver of the rear vehicle.

Consequently, no other person was to blame but the victim himself since he was the one who bumped his motorcycle into the rear of the Isuzu truck.  He had the last clear chance of avoiding the accident.

WHEREFORE, we DENY the petition for review on certiorari and AFFIRM the decision of the Court of Appeals in CA-G. R. CV No. 35895, dismissing the amended complaint in Civil Case No. 89-50355, Regional Trial Court, Branch 45, Manila.

No costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-16629             January 31, 1962

SOUTHERN LINES, INC., petitioner, vs.COURT OF APPEALS and CITY OF ILOILO, respondents.

Jose Ma. Lopez Vito, Jr. for petitioner.The City Fiscal for respondents.

DE LEON, J.:

This is a petition to review on certiorari the decision of the Court of Appeals in CA-G.R. No. 15579-R affirming that of the Court of First Instance of Iloilo which sentenced petitioner Southern Lines, Inc. to pay respondent City of Iloilo the amount of P4,931.41.

Sometime in 1948, the City of Iloilo requisitioned for rice from the National Rice and Corn Corporation (hereafter referred to as NARIC) in Manila. On August 24 of the same year, NARIC, pursuant to the order, shipped 1,726 sacks of rice consigned to the City of Iloilo on board the SS "General Wright" belonging to the Southern Lines, Inc. Each sack of rice weighed 75 kilos and the entire shipment as indicated in the bill of lading had a total weight of 129,450 kilos. According to the bill of lading, the cost of the shipment was P63,115.50 itemized and computed as follows: .

Unit Price per bag P36.25 P62,567.50

Handling at P0.13 per bag 224.38

Trucking at P2.50 per bag 323.62

T o t a l . . . . . .. . . . . 63,115.50

On September 3, 1948, the City of Iloilo received the shipment and paid the amount of P63,115.50. However, it was noted that the foot of the bill of lading that the City of Iloilo 'Received the above mentioned merchandise apparently in same condition as when shipped, save as noted below: actually received 1685 sacks with a gross weight of 116,131 kilos upon actual weighing. Total shortage ascertained 13,319 kilos." The shortage was equivalent to 41 sacks of rice with a net weight of 13,319 kilos, the proportionate value of which was P6,486.35.

On February 14, 1951 the City of Iloilo filed a complaint in the Court of First Instance of Iloilo against NARIC and the Southern Lines, Inc. for the recovery of the amount of P6,486.35 representing the value of the shortage of the shipment of rice. After trial, the lower court absolved NARIC from the complaint, but sentenced the Southern Lines, Inc. to pay the amount of P4,931.41 which is the difference between the sum of P6,486.35 and P1,554.94 representing the latter's counterclaim for handling and freight.

The Southern Lines, Inc. appealed to the Court of Appeals which affirmed the judgment of the trial court. Hence, this petition for review.

The only question to be determined in this petition is whether or not the defendant-carrier, the herein petitioner, is liable for the loss or shortage of the rice shipped.

Article 361 of the Code of Commerce provides: .

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

As a consequence, all the losses and deteriorations which the goods may suffer during the transportation by reason of fortuitous event, force majeure, or the inherent nature and defect of the goods, shall be for the account and risk of the shipper.1äwphï1.ñët

Proof of these accidents is incumbent upon the carrier.

Article 362 of the same Code provides: .

ART. 362. — Nevertheless, the carrier shall be liable for the losses and damages resulting from the causes mentioned in the preceding article if it is proved, as against him, that they arose through his negligence or by reason of his having failed to take the precautions which usage his establisbed among careful persons, unless the shipper has committed fraud in the bill of lading, representing the goods to be of a kind or quality different from what they really were.

If, notwithstanding the precautions referred to in this article, the goods transported run the risk of being lost, on account of their nature or by reason of unavoidable accident, there being no time for their owners to dispose of them, the carrier may proceed to sell them, placing them for this purpose at the disposal of the judicial authority or of the officials designated by special provisions.

Under the provisions of Article 361, the defendant-carrier in order to free itself from liability, was only obliged to prove that the damages suffered by the goods were "by virtue of the nature or defect of the articles." Under the provisions of Article 362, the plaintiff, in order to hold the defendant liable, was obliged to prove that the damages to the goods by virtue of their nature, occurred on account of its negligence or because the defendant did not take the precaution adopted by careful persons. (Government v. Ynchausti & Co., 40 Phil. 219, 223).

Petitioner claims exemption from liability by contending that the shortage in the shipment of rice was due to such factors as the shrinkage, leakage or spillage of the rice on account of the bad condition of the sacks at the time it received the same and the negligence of the agents of respondent City of Iloilo in receiving the shipment. The contention is untenable, for, if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting thereform. (9 Am Jur. 869.) Furthermore, according to the Court of Appeals, "appellant (petitioner) itself frankly admitted that the strings that tied the bags of rice were broken; some bags were with holes and plenty of rice were spilled inside the hull of the boat, and that the personnel of the boat collected no less than 26 sacks of rice which they had distributed among themselves." This finding, which is binding upon this Court, shows that the shortage resulted from the negligence of petitioner.

Invoking the provisions of Article 366 of the Code of Commerce and those of the bill of lading, petitioner further contends that respondent is precluded from filing an action for damages on account of its failure to present a claim within 24 hours from receipt of the shipment. It also cites the cases of Government v. Ynchausti & Co., 24 Phil. 315 and Triton Insurance Co. v. Jose, 33 Phil. 194, ruling to the effect that the requirement that the claim for damages must be made within 24 hours from delivery is a condition precedent to the accrual of the right of action to recover damages. These two cases above-cited are not

applicable to the case at bar. In the first cited case, the plaintiff never presented any claim at all before filing the action. In the second case, there was payment of the transportation charges which precludes the presentation of any claim against the carrier. (See Article 366, Code of Commerce.) It is significant to note that in the American case of Hoye v. Pennsylvania Railroad Co., 13 Ann. Case. 414, it has been said: .

... "It has been held that a stipulation in the contract of shipment requiring the owner of the goods to present a notice of his claim to the carrier within a specified time after the goods have arrived at their destination is in the nature of a condition precedent to the owner's right to enforce a recovery, that he must show in the first instance that be has complied with the condition, or that the circumstances were such that to have complied with it would have required him to do an unreasonable thing. The weight of authority, however, sustains the view that such a stipulation is more in the nature of a limitation upon the owner's right to recovery, and that the burden of proof is accordingly on the carrier to show that the limitation was reasonable and in proper form or within the time stated." (Hutchinson on Carrier, 3d ed., par. 44) Emphasis supplied.

In the case at bar, the record shows that petitioner failed to plead this defense in its answer to respondent's complaint and, therefore, the same is deemed waived (Section 10, Rule 9, Rules of Court), and cannot be raised for the first time at the trial or on appeal. (Maxilom v. Tabotabo, 9 Phil. 390.) Moreover, as the Court of Appeals has said: .

... the records reveal that the appellee (respondent) filed the present action, within a reasonable time after the short delivery in the shipment of the rice was made. It should be recalled that the present action is one for the refund of the amount paid in excess, and not for damages or the recovery of the shortage; for admittedly the appellee (respondent) had paid the entire value of the 1726 sacks of rice, subject to subsequent adjustment, as to shortages or losses. The bill of lading does not at all limit the time for filing an action for the refund of money paid in excess.

WHEREFORE, the decision of the Court of Appeals is hereby affirmed in all respects and the petition for certioraridenied.

With costs against the petitioner.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 148496      March 19, 2002

VIRGINES CALVO doing business under the name and style TRANSORIENT CONTAINER TERMINAL SERVICES, INC., petitioner, vs.UCPB GENERAL INSURANCE CO., INC. (formerly Allied Guarantee Ins. Co., Inc.) respondent.

MENDOZA, J.:

This is a petition for review of the decision,1 dated May 31, 2001, of the Court of Appeals, affirming the decision2of the Regional Trial Court, Makati City, Branch 148, which ordered petitioner to pay respondent, as subrogee, the amount of P93,112.00 with legal interest, representing the value of damaged cargo handled by petitioner, 25% thereof as attorney's fees, and the cost of the suit.1âwphi1.nêt

The facts are as follows:

Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. (TCTSI), a sole proprietorship customs broker. At the time material to this case, petitioner entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the Port Area in Manila to SMC's warehouse at the Tabacalera Compound, Romualdez St., Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co., Inc.

On July 14, 1990, the shipment in question, contained in 30 metal vans, arrived in Manila on board "M/V Hayakawa Maru" and, after 24 hours, were unloaded from the vessel to the custody of the arrastre operator, Manila Port Services, Inc. From July 23 to July 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the cargo from the arrastre operator and delivered it to SMC's warehouse in Ermita, Manila. On July 25, 1990, the goods were inspected by Marine Cargo Surveyors, who found that 15 reels of the semi-chemical fluting paper were "wet/stained/torn" and 3 reels of kraft liner board were likewise torn. The damage was placed at P93,112.00.

SMC collected payment from respondent UCPB under its insurance contract for the aforementioned amount. In turn, respondent, as subrogee of SMC, brought suit against petitioner in the Regional Trial Court, Branch 148, Makati City, which, on December 20, 1995, rendered judgment finding petitioner liable to respondent for the damage to the shipment.

The trial court held:

It cannot be denied . . . that the subject cargoes sustained damage while in the custody of defendants. Evidence such as the Warehouse Entry Slip (Exh. "E"); the Damage Report (Exh. "F") with entries appearing therein, classified as "TED" and "TSN", which the claims processor, Ms. Agrifina De Luna, claimed to be tearrage at the end and tearrage at the middle of the subject damaged cargoes respectively, coupled with the Marine Cargo Survey Report (Exh. "H" - "H-4-A") confirms the fact of the damaged condition of the subject cargoes. The surveyor[s'] report (Exh. "H-4-A") in particular, which provides among others that:

" . . . we opine that damages sustained by shipment is attributable to improper handling in

transit presumably whilst in the custody of the broker . . . ."

is a finding which cannot be traversed and overturned.

The evidence adduced by the defendants is not enough to sustain [her] defense that [she is] are not liable. Defendant by reason of the nature of [her] business should have devised ways and means in order to prevent the damage to the cargoes which it is under obligation to take custody of and to forthwith deliver to the consignee. Defendant did not present any evidence on what precaution [she] performed to prevent [the] said incident, hence the presumption is that the moment the defendant accepts the cargo [she] shall perform such extraordinary diligence because of the nature of the cargo.

. . . .

Generally speaking under Article 1735 of the Civil Code, if the goods are proved to have been lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they have observed the extraordinary diligence required by law. The burden of the plaintiff, therefore, is to prove merely that the goods he transported have been lost, destroyed or deteriorated. Thereafter, the burden is shifted to the carrier to prove that he has exercised the extraordinary diligence required by law. Thus, it has been held that the mere proof of delivery of goods in good order to a carrier, and of their arrival at the place of destination in bad order, makes out a prima facie case against the carrier, so that if no explanation is given as to how the injury occurred, the carrier must be held responsible. It is incumbent upon the carrier to prove that the loss was due to accident or some other circumstances inconsistent with its liability." (cited in Commercial Laws of the Philippines by Agbayani, p. 31, Vol. IV, 1989 Ed.)

Defendant, being a customs brother, warehouseman and at the same time a common carrier is supposed [to] exercise [the] extraordinary diligence required by law, hence the extraordinary responsibility 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 the right to receive the same.3

Accordingly, the trial court ordered petitioner to pay the following amounts --

1. The sum of P93,112.00 plus interest;

2. 25% thereof as lawyer's fee;

3. Costs of suit.4

The decision was affirmed by the Court of Appeals on appeal. Hence this petition for review on certiorari.

Petitioner contends that:

I. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR [IN] DECIDING THE CASE NOT ON THE EVIDENCE PRESENTED BUT ON PURE SURMISES, SPECULATIONS AND MANIFESTLY MISTAKEN INFERENCE.

II. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR IN CLASSIFYING THE PETITIONER AS A COMMON CARRIER AND NOT AS PRIVATE OR SPECIAL CARRIER WHO DID NOT HOLD ITS SERVICES TO THE PUBLIC.5

It will be convenient to deal with these contentions in the inverse order, for if petitioner is not a common carrier, although both the trial court and the Court of Appeals held otherwise, then she is indeed not liable beyond what ordinary diligence in the vigilance over the goods transported by her, would require.6 Consequently, any damage to the cargo she agrees to transport cannot be presumed to have been due to her fault or negligence.

Petitioner contends that contrary to the findings of the trial court and the Court of Appeals, she is not a common carrier but a private carrier because, as a customs broker and warehouseman, she does not indiscriminately hold her services out to the public but only offers the same to select parties with whom she may contract in the conduct of her business.

The contention has no merit. In De Guzman v. Court of Appeals,7 the Court dismissed a similar contention and held the party to be a common carrier, thus -

The Civil Code defines "common carriers" in the following terms:

"Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public."

The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity . . . Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on aregular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis.Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrowsegment of the general population. We think that Article 1732 deliberately refrained from making such distinctions.

So understood, the concept of "common carrier" under Article 1732 may be seen to coincide neatly with the notion of "public service," under the Public Service Act (Commonwealth Act No. 1416, as amended) which at least partially supplements the law on common carriers set forth in the Civil Code. Under Section 13, paragraph (b) of the Public Service Act, "public service" includes:

" x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless communications systems, wire or

wireless broadcasting stations and other similar public services. x x x" 8

There is greater reason for holding petitioner to be a common carrier because the transportation of goods is an integral part of her business. To uphold petitioner's contention would be to deprive those with whom she contracts the protection which the law affords them notwithstanding the fact that the obligation to carry goods for her customers, as already noted, is part and parcel of petitioner's business.

Now, as to petitioner's liability, Art. 1733 of the Civil Code provides:

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 them, according to all the circumstances of each case. . . .

In Compania Maritima v. Court of Appeals,9 the meaning of "extraordinary diligence in the vigilance over goods" was explained thus:

The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires."

In the case at bar, petitioner denies liability for the damage to the cargo. She claims that the "spoilage or wettage" took place while the goods were in the custody of either the carrying vessel "M/V Hayakawa Maru," which transported the cargo to Manila, or the arrastre operator, to whom the goods were unloaded and who allegedly kept them in open air for nine days from July 14 to July 23, 1998 notwithstanding the fact that some of the containers were deformed, cracked, or otherwise damaged, as noted in the Marine Survey Report (Exh. H), to wit:

MAXU-2062880      -       rain gutter deformed/cracked

ICSU-363461-3      -       left side rubber gasket on door distorted/partly loose

PERU-204209-4    -       with pinholes on roof panel right portion

TOLU-213674-3     -       wood flooring we[t] and/or with signs of water soaked

MAXU-201406-0     -       with dent/crack on roof panel

ICSU-412105-0      -       rubber gasket on left side/door panel partly detached loosened.10

In addition, petitioner claims that Marine Cargo Surveyor Ernesto Tolentino testified that he has no personal knowledge on whether the container vans were first stored in petitioner's warehouse prior to their delivery to the consignee. She likewise claims that after withdrawing the container vans from the arrastre operator, her driver, Ricardo Nazarro, immediately delivered the cargo to SMC's warehouse in Ermita, Manila, which is a mere thirty-minute drive from the Port Area where the cargo came from. Thus, the damage to the cargo could not have taken place while these were in her custody.11

Contrary to petitioner's assertion, the Survey Report (Exh. H) of the Marine Cargo Surveyors indicates that when the shipper transferred the cargo in question to the arrastre operator, these were covered by clean Equipment Interchange Report (EIR) and, when petitioner's employees withdrew the cargo from the arrastre operator, they did so without exception or protest either with regard to the condition of container vans or their contents. The Survey Report pertinently reads --

Details of Discharge:

Shipment, provided with our protective supervision was noted discharged ex vessel to dock of Pier #13 South Harbor, Manila on 14 July 1990, containerized onto 30' x 20' secure metal vans, covered by clean EIRs. Except for slight dents and paint scratches on side and roof panels, these containers were deemed to have [been] received in good condition.

. . . .

Transfer/Delivery:

On July 23, 1990, shipment housed onto 30' x 20' cargo containers was [withdrawn] by Transorient Container Services, Inc. . . .   without exception .

[The cargo] was finally delivered to the consignee's storage warehouse located at Tabacalera Compound, Romualdez Street, Ermita, Manila from July 23/25, 1990.12

As found by the Court of Appeals:

From the [Survey Report], it [is] clear that the shipment was discharged from the vessel to the arrastre, Marina Port Services Inc., in good order and condition as evidenced by clean Equipment Interchange Reports (EIRs). Had there been any damage to the shipment, there would have been a report to that effect made by the arrastre operator. The cargoes were withdrawn by the defendant-appellant from the arrastre still in good order and condition as the same were received by the former without exception, that is, without any report of damage or loss. Surely, if the container vans were deformed, cracked, distorted or dented, the defendant-appellant would report it immediately to the consignee or make an exception on the delivery receipt or note the same in the Warehouse Entry Slip (WES). None of these took place. To put it simply, the defendant-appellant received the shipment in good order and condition and delivered the same to the consignee damaged. We can only conclude that the damages to the cargo occurred while it was in the possession of the defendant-appellant. Whenever the thing is lost (or damaged) in the possession of the debtor (or obligor), it shall be presumed that the loss (or damage) was due to his fault, unless there is proof to the contrary. No proof was proffered to rebut this legal presumption and the presumption of negligence attached to a common carrier in case of loss or damage to the goods.13

Anent petitioner's insistence that the cargo could not have been damaged while in her custody as she immediately delivered the containers to SMC's compound, suffice it to say that to prove the exercise of extraordinary diligence, petitioner must do more than merely show the possibility that some other party could be responsible for the damage. It must prove that it used "all reasonable means to ascertain the nature and characteristic of goods tendered for [transport] and that [it] exercise[d] due care in the handling [thereof]." Petitioner failed to do this.

Nor is there basis to exempt petitioner from liability under Art. 1734(4), which provides --

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

. . . .

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

. . . .

For this provision to apply, the rule is that if the improper packing or, in this case, the defect/s in the container, is/are known to the carrier or his employees or apparent upon ordinary observation, but he nevertheless accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for damage resulting therefrom.14 In this case, petitioner accepted the cargo without exception despite the apparent defects in some of the container vans. Hence, for failure of petitioner to prove that she exercised extraordinary diligence in the carriage of goods in this case or that she is exempt from liability, the presumption of negligence as provided under Art. 173515 holds.

WHEREFORE, the decision of the Court of Appeals, dated May 31, 2001, is AFFIRMED.1âwphi1.nêt

SO ORDERED.

Bellosillo, Quisumbing, Buena, and De Leon, Jr., JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 143133           June 5, 2002

BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and JARDINE DAVIES TRANSPORT SERVICES, INC.,petitioners, vs.PHILIPPINE FIRST INSURANCE CO., INC., respondents.

PANGANIBAN, J.:

Proof of the delivery of goods in good order to a common carrier and of their arrival in bad order at their destination constitutes prima facie fault or negligence on the part of the carrier. If no adequate explanation is given as to how the loss, the destruction or the deterioration of the goods happened, the carrier shall be held liable therefor.

Statement of the Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the July 15, 1998 Decision1 and the May 2, 2000 Resolution2 of the Court of Appeals3 (CA) in CA-GR CV No. 53571. The decretal portion of the Decision reads as follows:

"WHEREFORE, in the light of the foregoing disquisition, the decision appealed from is hereby REVERSED and SET ASIDE. Defendants-appellees are ORDERED to jointly and severally pay plaintiffs-appellants the following:

'1) FOUR Hundred Fifty One Thousand Twenty-Seven Pesos and 32/100 (P451,027.32) as actual damages, representing the value of the damaged cargo, plus interest at the legal rate from the time of filing of the complaint on July 25, 1991, until fully paid;

'2) Attorney's fees amounting to 20% of the claim; and

'3) Costs of suit.'"4

The assailed Resolution denied petitioner's Motion for Reconsideration.

The CA reversed the Decision of the Regional Trial Court (RTC) of Makati City (Branch 134), which had disposed as follows:

"WHEREFORE, in view of the foregoing, judgment is hereby rendered, dismissing the complaint, as well as defendant's counterclaim."5

The Facts

The factual antecedents of the case are summarized by the Court of Appeals in this wise:

"On June 13, 1990, CMC Trading A.G. shipped on board the M/V 'Anangel Sky' at Hamburg, Germany 242 coils of various Prime Cold Rolled Steel sheets for transportation to Manila consigned to the Philippine Steel Trading Corporation. On July 28, 1990, M/V Anangel Sky arrived at the port of Manila and, within the subsequent days, discharged the subject cargo. Four (4) coils were found to be

in bad order B.O. Tally sheet No. 154974. Finding the four (4) coils in their damaged state to be unfit for the intended purpose, the consignee Philippine Steel Trading Corporation declared the same as total loss.1âwphi1.nêt

"Despite receipt of a formal demand, defendants-appellees refused to submit to the consignee's claim. Consequently, plaintiff-appellant paid the consignee five hundred six thousand eighty six & 50/100 pesos (P506,086.50), and was subrogated to the latter's rights and causes of action against defendants-appellees. Subsequently, plaintiff-appellant instituted this complaint for recovery of the amount paid by them, to the consignee as insured.

"Impugning the propriety of the suit against them, defendants-appellees imputed that the damage and/or loss was due to pre-shipment damage, to the inherent nature, vice or defect of the goods, or to perils, danger and accidents of the sea, or to insufficiency of packing thereof, or to the act or omission of the shipper of the goods or their representatives. In addition thereto, defendants-appellees argued that their liability, if there be any, should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws. Finally, defendants-appellees averred that, in any event, they exercised due diligence and foresight required by law to prevent any damage/loss to said shipment."6

Ruling of the Trial Court

The RTC dismissed the Complaint because respondent had failed to prove its claims with the quantum of proof required by law.7

It likewise debunked petitioners' counterclaim, because respondent's suit was not manifestly frivolous or primarily intended to harass them.8

Ruling of the Court of Appeals

In reversing the trial court, the CA ruled that petitioners were liable for the loss or the damage of the goods shipped, because they had failed to overcome the presumption of negligence imposed on common carriers.

The CA further held as inadequately proven petitioners' claim that the loss or the deterioration of the goods was due to pre-shipment damage.9 It likewise opined that the notation "metal envelopes rust stained and slightly dented" placed on the Bill of Lading had not been the proximate cause of the damage to the four (4) coils.10

As to the extent of petitioners' liability, the CA held that the package limitation under COGSA was not applicable, because the words "L/C No. 90/02447" indicated that a higher valuation of the cargo had been declared by the shipper. The CA, however, affirmed the award of attorney's fees.

Hence, this Petition.11

Issues

In their Memorandum, petitioners raise the following issues for the Court's consideration:

I

"Whether or not plaintiff by presenting only one witness who has never seen the subject shipment and whose testimony is purely hearsay is sufficient to pave the way for the applicability of Article 1735 of the Civil Code;

II

"Whether or not the consignee/plaintiff filed the required notice of loss within the time required by law;

III

"Whether or not a notation in the bill of lading at the time of loading is sufficient to show pre-shipment damage and to exempt herein defendants from liability;

IV

"Whether or not the "PACKAGE LIMITATION" of liability under Section 4 (5) of COGSA is applicable to the case at bar."12

In sum, the issues boil down to three:

1. Whether petitioners have overcome the presumption of negligence of a common carrier

2. Whether the notice of loss was timely filed

3. Whether the package limitation of liability is applicable

This Court's Ruling

The Petition is partly meritorious.

First Issue:

Proof of Negligence

Petitioners contend that the presumption of fault imposed on common carriers should not be applied on the basis of the lone testimony offered by private respondent. The contention is untenable.

Well-settled is the rule that common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence and vigilance with respect to the safety of the goods and the passengers they transport.13 Thus, common carriers are required to render service with the greatest skill and foresight and "to use all reason[a]ble means to ascertain the nature and characteristics of the goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires."14 The extraordinary responsibility lasts from the time the goods are unconditionally placed in the possession of and received for transportation by the carrier until they are delivered, actually or constructively, to the consignee or to the person who has a right to receive them.15

This strict requirement is justified by the fact that, without a hand or a voice in the preparation of such contract, the riding public enters into a contract of transportation with common carriers.16 Even if it wants to, it cannot submit its own stipulations for their approval.17 Hence, it merely adheres to the agreement prepared by them.

Owing to this high degree of diligence required of them, common carriers, as a general rule, are presumed to have been at fault or negligent if the goods they transported deteriorated or got lost or destroyed.18 That is, unless they prove that they exercised extraordinary diligence in transporting the goods.19 In order to avoid responsibility for any loss or damage, therefore, they have the burden of proving that they observed such diligence.20

However, the presumption of fault or negligence will not arise21 if the loss is due to any of the following causes: (1) flood, storm, earthquake,

lightning, or other natural disaster or calamity; (2) an act of the public enemy in war, whether international or civil; (3) an act or omission of the shipper or owner of the goods; (4) the character of the goods or defects in the packing or the container; or (5) an order or act of competent public authority.22 This is a closed list. If the cause of destruction, loss or deterioration is other than the enumerated circumstances, then the carrier is liable therefor.23

Corollary to the foregoing, mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no adequate explanation is given as to how the deterioration, the loss or the destruction of the goods happened, the transporter shall be held responsible.24

That petitioners failed to rebut the prima facie presumption of negligence is revealed in the case at bar by a review of the records and more so by the evidence adduced by respondent.25

First, as stated in the Bill of Lading, petitioners received the subject shipment in good order and condition in Hamburg, Germany.26

Second, prior to the unloading of the cargo, an Inspection Report27 prepared and signed by representatives of both parties showed the steel bands broken, the metal envelopes rust-stained and heavily buckled, and the contents thereof exposed and rusty.

Third, Bad Order Tally Sheet No. 15497928 issued by Jardine Davies Transport Services, Inc., stated that the four coils were in bad order and condition. Normally, a request for a bad order survey is made in case there is an apparent or a presumed loss or damage.29

Fourth, the Certificate of Analysis30 stated that, based on the sample submitted and tested, the steel sheets found in bad order were wet with fresh water.

Fifth, petitioners -- in a letter31 addressed to the Philippine Steel Coating Corporation and dated October 12, 1990 -- admitted that they were aware of the condition of the four coils found in bad order and condition.

These facts were confirmed by Ruperto Esmerio, head checker of BM Santos Checkers Agency. Pertinent portions of his testimony are reproduce hereunder:

"Q.       Mr. Esmerio, you mentioned that you are a Head Checker. Will you inform the Honorable Court with what company you are connected?

A.       BM Santos Checkers Agency, sir.

Q.       How is BM Santos checkers Agency related or connected with defendant Jardine Davies Transport Services?

A.       It is the company who contracts the checkers, sir.

Q.       You mentioned that you are a Head Checker, will you inform this Honorable Court your duties and responsibilities?

A.       I am the representative of BM Santos on board the vessel, sir, to supervise the discharge of cargoes.

x x x           x x x           x x x

Q.       On or about August 1, 1990, were you still connected or employed with BM Santos as a Head Checker?

A.       Yes, sir.

Q.       And, on or about that date, do you recall having attended the discharging and inspection of cold steel sheets in coil on board the MV/AN ANGEL SKY?

A.       Yes, sir, I was there.

x x x           x x x           x x x

Q.       Based on your inspection since you were also present at that time, will you inform this Honorable Court the condition or the appearance of the bad order cargoes that were unloaded from the MV/ANANGEL SKY?

ATTY. MACAMAY:

Objection, Your Honor, I think the document itself reflects the condition of the cold steel sheets and the best evidence is the document itself, Your Honor that shows the condition of the steel sheets.

COURT:

Let the witness answer.

A.       The scrap of the cargoes is broken already and the rope is loosen and the cargoes are dent on the sides."32

All these conclusively prove the fact of shipment in good order and condition and the consequent damage to the four coils while in the possession of petitioner,33 who notably failed to explain why.34

Further, petitioners failed to prove that they observed the extraordinary diligence and precaution which the law requires a common carrier to know and to follow to avoid damage to or destruction of the goods entrusted to it for safe carriage and delivery.35

True, the words "metal envelopes rust stained and slightly dented" were noted on the Bill of Lading; however, there is no showing that petitioners exercised due diligence to forestall or lessen the loss.36 Having been in the service for several years, the master of the vessel should have known at the outset that metal envelopes in the said state would eventually deteriorate when not properly stored while in transit.37 Equipped with the proper knowledge of the nature of steel sheets in coils and of the proper way of transporting them, the master of the vessel and his crew should have undertaken precautionary measures to avoid possible deterioration of the cargo. But none of these measures was taken.38 Having failed to discharge the burden of proving that they have exercised the extraordinary diligence required by law, petitioners cannot escape liability for the damage to the four coils.39

In their attempt to escape liability, petitioners further contend that they are exempted from liability under Article 1734(4) of the Civil Code. They cite the notation "metal envelopes rust stained and slightly dented" printed on the Bill of Lading as evidence that the character of the goods or defect in the packing or the containers was the proximate cause of the damage. We are not convinced.

From the evidence on record, it cannot be reasonably concluded that the damage to the four coils was due to the condition noted on the Bill of Lading.40 The aforecited exception refers to cases when goods are lost or damaged while in transit as a result of the natural decay of perishable goods or the fermentation or evaporation of substances liable therefor, the necessary and natural wear of goods in transport, defects in packages in which they are shipped, or the natural propensities of animals.41 None of these is present in the instant case.

Further, even if the fact of improper packing was known to the carrier or its crew or was apparent upon ordinary observation, it is not relieved of liability for loss or injury resulting therefrom, once it accepts the

goods notwithstanding such condition.42 Thus, petitioners have not successfully proven the application of any of the aforecited exceptions in the present case.43

Second Issue:

Notice of Loss

Petitioners claim that pursuant to Section 3, paragraph 6 of the Carriage of Goods by Sea Act44 (COGSA), respondent should have filed its Notice of Loss within three days from delivery. They assert that the cargo was discharged on July 31, 1990, but that respondent filed its Notice of Claim only on September 18, 1990.45

We are not persuaded. First, the above-cited provision of COGSA provides that the notice of claim need not be given if the state of the goods, at the time of their receipt, has been the subject of a joint inspection or survey. As stated earlier, prior to unloading the cargo, an Inspection Report46 as to the condition of the goods was prepared and signed by representatives of both parties.47

Second, as stated in the same provision, a failure to file a notice of claim within three days will not bar recovery if it is nonetheless filed within one year.48 This one-year prescriptive period also applies to the shipper, the consignee, the insurer of the goods or any legal holder of the bill of lading.49

In Loadstar Shipping Co., Inc, v. Court of Appeals,50 we ruled that a claim is not barred by prescription as long as the one-year period has not lapsed. Thus, in the words of the ponente, Chief Justice Hilario G. Davide Jr.:

"Inasmuch as the neither the Civil Code nor the Code of Commerce states a specific prescriptive period on the matter, the Carriage of Goods by Sea Act (COGSA)--which provides for a one-year period of limitation on claims for loss of, or damage to, cargoes sustained during transit--may be applied suppletorily to the case at bar."

In the present case, the cargo was discharged on July 31, 1990, while the Complaint51 was filed by respondent on July 25, 1991, within the one-year prescriptive period.

Third Issue:

Package Limitation

Assuming arguendo they are liable for respondent's claims, petitioners contend that their liability should be limited to US$500 per package as provided in the Bill of Lading and by Section 4(5)52 of COGSA.53

On the other hand, respondent argues that Section 4(5) of COGSA is inapplicable, because the value of the subject shipment was declared by petitioners beforehand, as evidenced by the reference to and the insertion of the Letter of Credit or "L/C No. 90/02447" in the said Bill of Lading.54

A bill of lading serves two functions. First, it is a receipt for the goods shipped.53 Second, it is a contract by which three parties -- namely, the shipper, the carrier, and the consignee -- undertake specific responsibilities and assume stipulated obligations.56 In a nutshell, the acceptance of the bill of lading by the shipper and the consignee, with full knowledge of its contents, gives rise to the presumption that it constituted a perfected and binding contract.57

Further, a stipulation in the bill of lading limiting to a certain sum the common carrier's liability for loss or destruction of a cargo -- unless the shipper or owner declares a greater value58 -- is sanctioned by law.59 There are, however, two conditions to be satisfied: (1) the contract is reasonable and just under the circumstances, and (2) it has

been fairly and freely agreed upon by the parties.60 The rationale for this rule is to bind the shippers by their agreement to the value (maximum valuation) of their goods.61

It is to be noted, however, that the Civil Code does not limit the liability of the common carrier to a fixed amount per package.62 In all matters not regulated by the Civil Code, the right and the obligations of common carriers shall be governed by the Code of Commerce and special laws.63 Thus, the COGSA, which is suppletory to the provisions of the Civil Code, supplements the latter by establishing a statutory provision limiting the carrier's liability in the absence of a shipper's declaration of a higher value in the bill of lading.64 The provisions on limited liability are as much a part of the bill of lading as though physically in it and as though placed there by agreement of the parties.65

In the case before us, there was no stipulation in the Bill of Lading66 limiting the carrier's liability. Neither did the shipper declare a higher valuation of the goods to be shipped. This fact notwithstanding, the insertion of the words "L/C No. 90/02447 cannot be the basis for petitioners' liability.

First, a notation in the Bill of Lading which indicated the amount of the Letter of Credit obtained by the shipper for the importation of steel sheets did not effect a declaration of the value of the goods as required by the bill.67 That notation was made only for the convenience of the shipper and the bank processing the Letter of Credit.68

Second, in Keng Hua Paper Products v. Court of Appeals,69 we held that a bill of lading was separate from the Other Letter of Credit arrangements. We ruled thus:

"(T)he contract of carriage, as stipulated in the bill of lading in the present case, must be treated independently of the contract of sale between the seller and the buyer, and the contract of issuance of a letter of credit between the amount of goods described in the commercial invoice in the contract of sale and the amount allowed in the letter of credit will not affect the validity and enforceability of the contract of carriage as embodied in the bill of lading. As the bank cannot be expected to look beyond the documents presented to it by the seller pursuant to the letter of credit, neither can the carrier be expected to go beyond the representations of the shipper in the bill of lading and to verify their accuracy vis-à-vis the commercial invoice and the letter of credit. Thus, the discrepancy between the amount of goods indicated in the invoice and the amount in the bill of lading cannot negate petitioner's obligation to private respondent arising from the contract of transportation."70

In the light of the foregoing, petitioners' liability should be computed based on US$500 per package and not on the per metric ton price declared in the Letter of Credit.71 In Eastern Shipping Lines, Inc. v. Intermediate Appellate Court,72 we explained the meaning of packages:

"When what would ordinarily be considered packages are shipped in a container supplied by the carrier and the number of such units is disclosed in the shipping documents, each of those units and not the container constitutes the 'package' referred to in the liability limitation provision of Carriage of Goods by Sea Act."

Considering, therefore, the ruling in Eastern Shipping Lines and the fact that the Bill of Lading clearly disclosed the contents of the containers, the number of units, as well as the nature of the steel sheets, the four damaged coils should be considered as the shipping unit subject to the US$500 limitation.1âwphi1.nêt

WHEREFORE, the Petition is partly granted and the assailed Decision MODIFIED. Petitioners' liability is reduced to US$2,000 plus interest at the legal rate of six percent from the time of the filing of the

Complaint on July 25, 1991 until the finality of this Decision, and 12 percent thereafter until fully paid. No pronouncement as to costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-48757 May 30, 1988

MAURO GANZON, petitioner, vs.COURT OF APPEALS and GELACIO E. TUMAMBING, respondents.

Antonio B. Abinoja for petitioner.

Quijano, Arroyo & Padilla Law Office for respondents.

 

SARMIENTO, J.:

The private respondent instituted in the Court of First Instance of Manila 1 an action against the petitioner for damages based on culpa contractual. The antecedent facts, as found by the respondent Court, 2 are undisputed:

On November 28, 1956, Gelacio Tumambing contracted the services of Mauro B. Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the lighter LCT "Batman" (Exhibit 1, Stipulation of Facts, Amended Record on Appeal, p. 38). Pursuant to that agreement, Mauro B. Ganzon sent his lighter "Batman" to Mariveles where it docked in three feet of water (t.s.n., September 28, 1972, p. 31). On December 1, 1956, Gelacio Tumambing delivered the scrap iron to defendant Filomeno Niza, captain of the lighter, for loading which was actually begun on the same date by the crew of the lighter under the captain's supervision. When about half of the scrap iron was already loaded (t.s.n., December 14, 1972, p. 20), Mayor Jose Advincula of Mariveles, Bataan, arrived and demanded P5,000.00 from Gelacio Tumambing. The latter resisted the shakedown and after a heated argument between them, Mayor Jose Advincula drew his gun and fired at Gelacio Tumambing (t.s.n., March 19, 1971, p. 9; September 28, 1972, pp. 6-7). <äre||anº•1àw> The gunshot was not fatal but Tumambing had to be taken to a hospital in Balanga, Bataan, for treatment (t.s.n., March 19, 1971, p. 13; September 28, 1972, p. 15).

After sometime, the loading of the scrap iron was resumed. But on December 4, 1956, Acting Mayor Basilio Rub, accompanied by three policemen, ordered captain Filomeno Niza and his crew to dump

the scrap iron (t.s.n., June 16, 1972, pp. 8-9) where the lighter was docked (t.s.n., September 28, 1972, p. 31). The rest was brought to the compound of NASSCO (Record on Appeal, pp. 20-22). Later on Acting Mayor Rub issued a receipt stating that the Municipality of Mariveles had taken custody of the scrap iron (Stipulation of Facts, Record on Appeal, p. 40; t.s.n., September 28, 1972, p. 10.)

On the basis of the above findings, the respondent Court rendered a decision, the dispositive portion of which states:

WHEREFORE, the decision appealed from is hereby reversed and set aside and a new one entered ordering defendant-appellee Mauro Ganzon to pay plaintiff-appellant Gelacio E. Tumambimg the sum of P5,895.00 as actual damages, the sum of P5,000.00 as exemplary damages, and the amount of P2,000.00 as attorney's fees. Costs against defendant-appellee Ganzon. 3

In this petition for review on certiorari, the alleged errors in the decision of the Court of Appeals are:

I

THE COURT OF APPEALS FINDING THE HEREIN PETITIONER GUILTY OF BREACH OF THE CONTRACT OF TRANSPORTATION AND IN IMPOSING A LIABILITY AGAINST HIM COMMENCING FROM THE TIME THE SCRAP WAS PLACED IN HIS CUSTODY AND CONTROL HAVE NO BASIS IN FACT AND IN LAW.

II

THE APPELLATE COURT ERRED IN CONDEMNING THE PETITIONER FOR THE ACTS OF HIS EMPLOYEES IN DUMPING THE SCRAP INTO THE SEA DESPITE THAT IT WAS ORDERED BY THE LOCAL GOVERNMENT OFFICIAL WITHOUT HIS PARTICIPATION.

III

THE APPELLATE COURT FAILED TO CONSIDER THAT THE LOSS OF THE SCRAP WAS DUE TO A FORTUITOUS EVENT AND THE PETITIONER IS THEREFORE NOT LIABLE FOR LOSSES AS A CONSEQUENCE THEREOF. 4

The petitioner, in his first assignment of error, insists that the scrap iron had not been unconditionally placed under his custody and control to make him

liable. However, he completely agrees with the respondent Court's finding that on December 1, 1956, the private respondent delivered the scraps to Captain Filomeno Niza for loading in the lighter "Batman," That the petitioner, thru his employees, actually received the scraps is freely admitted. Significantly, there is not the slightest allegation or showing of any condition, qualification, or restriction accompanying the delivery by the private respondent-shipper of the scraps, or the receipt of the same by the petitioner. On the contrary, soon after the scraps were delivered to, and received by the petitioner-common carrier, loading was commenced.

By the said act of delivery, the scraps were unconditionally placed in the possession and control of the common carrier, and upon their receipt by the carrier for transportation, the contract of carriage was deemed perfected. Consequently, the petitioner-carrier's extraordinary responsibility for the loss, destruction or deterioration of the goods commenced. Pursuant to Art. 1736, such extraordinary responsibility would cease only upon the delivery, actual or constructive, by the carrier to the consignee, or to the person who has a right to receive them. 5 The fact that part of the shipment had not been loaded on board the lighter did not impair the said contract of transportation as the goods remained in the custody and control of the carrier, albeit still unloaded.

The petitioner has failed to show that the loss of the scraps was due to any of the following causes enumerated in Article 1734 of the Civil Code, namely:

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

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

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

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

(5) Order or act of competent public authority.

Hence, the petitioner is presumed to have been at fault or to have acted negligently. 6 By reason of this presumption, the court is not even required to make an express finding of fault or negligence before it could hold the petitioner answerable for the breach of the contract of carriage. Still, the petitioner could have been exempted from any liability had he been able to prove that he observed extraordinary diligence in the vigilance over the goods in his custody, according to

all the circumstances of the case, or that the loss was due to an unforeseen event or to force majeure. As it was, there was hardly any attempt on the part of the petitioner to prove that he exercised such extraordinary diligence.

It is in the second and third assignments of error where the petitioner maintains that he is exempt from any liability because the loss of the scraps was due mainly to the intervention of the municipal officials of Mariveles which constitutes a caso fortuito as defined in Article 1174 of the Civil Code. 7

We cannot sustain the theory of caso fortuito. In the courts below, the petitioner's defense was that the loss of the scraps was due to an "order or act of competent public authority," and this contention was correctly passed upon by the Court of Appeals which ruled that:

... In the second place, before the appellee Ganzon could be absolved from responsibility on the ground that he was ordered by competent public authority to unload the scrap iron, it must be shown that Acting Mayor Basilio Rub had the power to issue the disputed order, or that it was lawful, or that it was issued under legal process of authority. The appellee failed to establish this. Indeed, no authority or power of the acting mayor to issue such an order was given in evidence. Neither has it been shown that the cargo of scrap iron belonged to the Municipality of Mariveles. What we have in the record is the stipulation of the parties that the cargo of scrap iron was accilmillated by the appellant through separate purchases here and there from private individuals (Record on Appeal, pp. 38-39). The fact remains that the order given by the acting mayor to dump the scrap iron into the sea was part of the pressure applied by Mayor Jose Advincula to shakedown the appellant for P5,000.00. The order of the acting mayor did not constitute valid authority for appellee Mauro Ganzon and his representatives to carry out.

Now the petitioner is changing his theory to caso fortuito. Such a change of theory on appeal we cannot, however, allow. In any case, the intervention of the municipal officials was not In any case, of a character that would render impossible the fulfillment by the carrier of its obligation. The petitioner was not

duty bound to obey the illegal order to dump into the sea the scrap iron. Moreover, there is absence of sufficient proof that the issuance of the same order was attended with such force or intimidation as to completely overpower the will of the petitioner's employees. The mere difficulty in the fullfilment of the obligation is not considered force majeure. We agree with the private respondent that the scraps could have been properly unloaded at the shore or at the NASSCO compound, so that after the dispute with the local officials concerned was settled, the scraps could then be delivered in accordance with the contract of carriage.

There is no incompatibility between the Civil Code provisions on common carriers and Articles 361 8 and 362 9 of the Code of Commerce which were the basis for this Court's ruling in Government of the Philippine Islands vs. Ynchausti & Co.10 and which the petitioner invokes in tills petition. For Art. 1735 of the Civil Code, conversely stated, means that the shipper will suffer the losses and deterioration arising from the causes enumerated in Art. 1734; and in these instances, the burden of proving that damages were caused by the fault or negligence of the carrier rests upon him. However, the carrier must first establish that the loss or deterioration was occasioned by one of the excepted causes or was due to an unforeseen event or to force majeure. Be that as it may, insofar as Art. 362 appears to require of the carrier only ordinary diligence, the same is .deemed to have been modified by Art. 1733 of the Civil Code.

Finding the award of actual and exemplary damages to be proper, the same will not be disturbed by us. Besides, these were not sufficiently controverted by the petitioner.

WHEREFORE, the petition is DENIED; the assailed decision of the Court of Appeals is hereby AFFIRMED. Costs against the petitioner.

This decision is IMMEDIATELY EXECUTORY.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-10195 December 29, 1916

YU CON, plaintiff-appellee, vs.GLICERIO IPIL, NARCISO LAURON, and JUSTO SOLAMO, defendants-appellants.

Felix Sevilla y Macam for appellants.Juan Singson and Dionisio Jakosalem for appellee.

 

ARAULLO, J.:

The purpose of the action brought in these proceedings is to enable the plaintiff to recover from the defendants jointly and severally the sum of P450, which had been delivered by the plaintiff to the first and third of the above-named defendants, master and supercargo, respectively, of a banca named Maria belonging to the second defendant, to be carried, together with various merchandise belonging to the plaintiff, from the port of Cebu to the town of Catmon of the Province of Cebu. By virtue of the contract executed between the said second defendant and the plaintiff, the money and merchandise were to be transported by the said craft between the points above-named in consideration of the payment of a certain sum for each voyage. The money disappeared from said craft during the night of October 18, 1911, while it was anchored in the port of Cebu and ready to sail for its destination, Catmon, and was not afterwards found. The plaintiff based his action on the charge that the disappearance of said sum was due to the abandonment, negligence, or voluntary breach, on the part of the defendants, of the duty they had in respect to the safe-keeping of the aforementioned sum.

The defendants, besides denying the allegations of the complaint, pleaded in special defense that the plaintiff, at his own expense and under his exclusive responsibility, chartered the said banca, the property of the defendant Lauron, for the fixed period of three days, at the price of P10 per diem, and that, through the misfortune, negligence, or abandonment of the plaintiff himself, the loss complained of occurred, while said banca was at anchor in the port of Cebu, and was caused by theft committed by unknown thieves. They further alleged that said defendant Lauron, the owner of the banca merely placed this craft at the disposal of the plaintiff for the price and period agreed upon, and did not go with the banca on its voyage from Catmon to Cebu. As a counterclaim, the defendants also asked that the plaintiff be ordered to pay the freight agreed upon, which had not yet been paid, amounting to P80, plus the sum of P70, as an indemnity for the losses and damages caused them by the attachment of the banca, issued at the instance of the plaintiff upon filing his complaint. They also prayed for the additional sum of P100, for the deterioration of the said banca, and also that of P200 for other deterioration suffered by the same since November, 1911, and which had not bee paid for. Finally, the defendants asked to be absolved from the complaint.

Before commencing the hearing of this case, the defendants made a verbal motion asking that the plaintiff be declared in default, with respect to the counterclaim filed by them in their answer. On the same date, the plaintiff presented his answer to said counter claim, denying each and all of the allegations thereof and of the defendants' special defense. The aforementioned motion was overruled by the court, and the defendants excepted.

At the termination of the trial, the court, in view of the evidence adduced, held that there was no room to doubt that the sole cause of

the disappearance of the money from the said banca was the negligence of the master and the supercargo, the defendants Ipil and Solamo, respectively, and that the defendant Narciso Lauron was responsible for that negligence, as owner of the banca, pursuant to articles 589, 587, and 618 of the Code of Commerce, the plaintiff therefore being entitled to recover the amount lost. Judgment was rendered on April 20, 1914, in favor of the plaintiff and against the defendants jointly and severally for the sum of P450, with interest thereon at the rage of 6 per cent per annum from the date of filing of the complaint, October 24, 1911, with costs. The plaintiff was absolved from the defendant's counterclaim. From this judgment the defendants excepted and at the same time moved for a new trial. Their motion was denied, to which ruling they also excepted, and, through the proper bill of exceptions, entered and appeal to this Supreme Court. In their brief they allege that the trial court erred:

1. In applying articles 586, 587, and 618 of the Code of Commerce in favor of the plaintiff;

2. In overruling the motion for default presented by the defendants and in sentencing the defendants jointly and severally to pay the plaintiff the amount mentioned in the judgment; and

3. In absolving the plaintiff from the defendant's counterclaim.

The evidence shows that the plaintiff Yu Con, a merchant and a resident of the town of San Nicolas, of the city of Cebu, engaged in the sale of cloth and domestic articles and having a share in a shop, or small store, situated in the town of Catmon, of said province, had several times chartered from the defendant Narciso Lauron, a bancanamed Maria belonging to the latter, of which Glicerio Ipil was master and Justo Solamo, supercargo, for the transportation of certain merchandise and some money to and from the said town and the port of Cebu, that, on or about the 17th of October, 1911, the plaintiff chartered the said banca from the defendant Lauron for the transportation of various merchandise from the port of Cebu to Catmon, at the price of P45 for the round trip, which merchandise was loaded on board the said craft which was then at anchor in front of one of the graded fills of the wharf of said port; that in the afternoon of the following day, he delivered to the other two defendants, Ipil, and Solamo, master and supercargo, respectively, of the afore-named banca, the sum of P450, which was in a trunk belonging to the plaintiff and was taken charge of by said two defendants, who received this money from the plaintiff, for the purpose of its delivery to the latter's shop in Catmon for the purchase of corn in this town; that while the money was still in said truck abroad the vessel, on the night of the said 18th of October, the time scheduled for the departure of the Maria from the port of Cebu, said master and said supercargo transferred the P450 from the plaintiff's trunk, where it was, to theirs, which was in a stateroom of the banca, from which stateroom both the trunk and the money disappeared during that same night, and that the investigations, made to ascertain their whereabouts, produced no result.

The facts are also admitted by the aforementioned master and supercargo, two of the defendants, that they received from the plaintiff said P450, which sum was in the latter's own trunk which was placed outside the stateroom of the banca, for the reason, as they said, that there was no room for it inside the stateroom; that these defendants therefore transferred said money to their trunk, which was inside the stateroom, and that this trunk and the P450 therein contained disappeared from the boat during the night of that same day; that said sum had not been found or returned to the plaintiff; that the plaintiff, being on the banca in the afternoon of that day, when his trunk containing the P450 was carried aboard, and seeing that said two defendants, who had the key of the trunk, has removed said sum to their trunk inside the stateroom, charged them to take special care of the money; that the master Ipil assured the plaintiff that there was no danger of the money being lost; and that, final, during the night in question, both the master and the supercargo and four cabin-boys were aboard the banca.

It was likewise proven by the affidavits made by the master Ipil, the supercargo Solamo, and the cabin-boys of said vessel, Juan Quiamco and Gabriel Basang, before the provincial fiscal of Cebu on the day following the commission of the theft, which affidavits were presented at the trial as Exhibits A, 3, 4, and 5, and by the testimony given at the trial by the defendants Ipil and Solamo, that both said cabin-boys and the other two, Simeon Solamo, and said cabin-boys ad the other two, Simeon Solamo, and Eulalio Quiamco, knew of the existence of the money in the trunk inside the stateroom and witnessed its removal to said trunk from the plaintiff's; that the last two cabin- boys above-named, in company with the master and the supercargo, conveyed the plaintiff's trunk, in which the money was previously contained, from the plaintiff's shop to the banca; and that no person not belonging to the vessel knew that the money was in the trunk inside said stateroom.

According to the testimony of the master Ipil himself he slept outside the stateroom that night, but a cabin-boy named Gabriel slept inside. The latter, however, was not presented by the defendants to be examined in regard to this point, nor does it appear that he testified in respect thereto in his affidavit, Exhibit 5, before referred to, presented by the defendant's own counsel. The master Ipil and the supercargo Solamo also testified that they left the cabin-boy Simeon Solamo on guard that night; but this affirmation was not corroborated by Solamo at the trial, for he was not introduced as a witness, and only his affidavit, Exhibit 2, taken before the fiscal of Cebu on the day following the commission of the crime, was presented by the defendants. This affidavit, which should have been admitted and not rejected, as was done by the court and excepted to by the defendants, shows that Simeon Solamo stated that he was not designated to do guard duty that night, but that on the morning of the said 19th of October, that is, the next day, all agreed that affiant should say that he was on guard, though it was not true that he was.

Finally, said two defendants, the master and the supercargo, gave no satisfactory explanation in regard to the disappearance of the trunk and the money therein contained, from the stateroom in which the trunk was, nor as to who stole or might have stolen it. The master of the banca merely testified that they, he and the supercargo, did to know who the robbers were, for, when the robbery was committed, they were sound asleep, as they were tired, and that he believed that the guard Simeon also fell asleep because he, too, was tired. The second defendant gave the same testimony. Both of them testified that the small window of the stateroom had been broken, and the first of them, i.e., the master, stated that all the window-blinds had been removed from the windows, as well as part of the partition in which they were, and that the trunk in which the money was contained could have been passed through said small window, because, as this witness himself had verified, the Chinaman's trunk, which differed but a little from the one stolen, could be passed through the same opening. The chief pilot of the harbor of Cebu, Placido Sepeda, who officially visited the said banca, also stated that the small wooden window of the stateroom was broken, and that he believed that in breaking it much noise must have been produced. However, no evidence whatever was offered by counsel for the defendants to prove that it might have been possible to remove the trunk from the stateroom through the opening made by the breaking of the small window, neither was the size of the trunk proven, in relation to the Chinaman's to which the defendant master referred in his testimony, so that it might be verified whether the statement made by the latter was true, viz., that it might have been possible to remove from the stateroom through said opening the trunk in which the P450 were contained, which sum, the same as the trunk, its container, had not been found, in spite of the investigation made for the purpose. Furthermore, it was not proven, nor is there any circumstantial evidence to show, that the robbery in question was committed by persons not belonging to the craft.

It is therefore beyond all doubt that the loss or disappearance, on the night aforementioned, of the P450, the property of the plaintiff, which, were in the possession of the defendants, the master and the supercargo of thebanca Maria, occurred through the manifest fault and negligence of said defendants, for, not only did they fail to take the necessary precautions in order that the stateroom containing the trunk in which they kept the money should be properly guarded by members of the crew and put in such condition that it would be impossible to steal the trunk from it or that persons not belonging to the vessel might force an entrance into the stateroom from the outside, but also they did

not expressly station some person inside the stateroom for the guarding and safe-keeping of the trunk, for it was not proven that the cabin-boy Gabriel slept there, as the master of the vessel, Ipil, stated, nor that the other Cabin-boy, Simeon Solamo, was on guard that night, for the latter contradicted the statements made by the two defendants on this point. On the contrary, it was proven by the master's own statement that all the people of the vessel, including himself and the supercargo Solamo, slept soundly that night; which fact cannot, in any manner, serve them as an excuse, nor can it be accepted as an explanation of the statement that they were not aware of what was then occuring on board, if the trunk was actually stolen by outsiders and removed through the small window of the stateroom, a detail which also was not proven, but, on the contrary, increases their liability, because it is very strange that none of them, who were six and were around or near the stateroom, should have heard the noise which the robbers must have made in breaking its window. All of these circumstances, together with that of its having been impossible to know who took the trunk and the money and the failure to recover the one or the other make the conduct of the two defendants and of the other members of the crew of banca, eminently supicious and prevent our holding that the disappearance or loss of the money was due to a fortuitous event, to force majeure, or that it was an occurrence which could not have been foreseen, or which, if foreseen, was inevitable.

It is unquestionable that the defendants Glicerio Ipil and Justo Solamo were the carriers of the said P450 belonging to the plaintiff, and that they received this sum from the latter for the purpose of delivering it to the store of the town of Catmon, to which it had been consigned. Under such circumstances, said defendants were the depositaries of the money.lawphi1.net

Manresa, in his Commentaries on the Civil Code (Vol. 10, p. 773), in treating of the provisions of the said code concerning transportation by sea and by land of both persons and things, says:

Liability of carriers. — In order that a thing may be transported, it must be delivered to the carrier, as the Code says. From the time it is delivered to the carrier or shipper until it is received by the consignee, the carrier has it in his possession, as a necessary condition for its transportation, and is obliged to preserve and guard it; wherefore it is but natural and logical that he should be responsible for it.

The Code discovers in the relation of all these elements the factors which go to make up the conception of a trust, and, taking into account that the delivery of the thing on the part of the shipper is unavoidable, if the transportation is to take place, esteem that, at least in certain respects, such trusts are necessary.

The said two defendants being the depositaries of the sum in question, and they having failed to exercise for its safe-keeping the diligence required by the nature of the obligation assumed by them and by the circumstances of the time and the place, it is evident that, in pursuance of the provisions of articles 1601 and 1602, in their relation to articles 1783 and 1784, and as prescribed in articles 1770, of the Civil Code, they are liable for its loss or misplacement and must restore it to the plaintiff, together with the corresponding interest thereon as an indemnity for the losses and damages caused him through the loss of the said sum.

With respect to the other defendant, Narciso Lauron, as he was the owner of the vessel in which the loss or misplacement of the P450 occurred, of which vessel, as aforestated, Glicerio Ipil was master and Justo Solamo, supercargo, both of whom were appointed to, or chosen for, the positions they held, by the defendant himself, and, as the aforementioned sum was delivered to the said master, Ipil, and the merchandise to be transported by means of said vessel from the port of Cebu to the town of Catmon was laden by virtue of a contract executed by and between the plaintiff and the owner of the vessel, Narciso Lauron, it behooves us to examine whether the latter, also, should be held to be liable, as requested by the plaintiff in his complaint.

Said vessel was engaged in the transportation of merchandise by sea and made voyages to and from the port of Cebu to Catmon, and had been equipped and victualed for this purpose by its owner, Narciso Lauron, with whom, as aforesaid, the plaintiff contracted for the transportation of the merchandise which was to be carried, on the date hereinabove mentioned, from the port of Cebu to the town of Catmon.

For legal purposes, that is, for the determination of the nature and effect of the relations created between the plaintiff, as owner of the merchandise laden on said craft and of the money that was delivered to the master, Ipil, and the defendant Lauron, as owner of the craft, the latter was a vessel, according to the meaning and construction given to the word vessel in the Mercantile Code, in treating of maritime commerce, under Title 1, Book 3.

The word vessel serves to designate every kind of craft by whatever particular or technical name it may now be known or which nautical advancements may give it in the future. (Commentaries on the Code of Commerce, in the General Review of Legislation and Jurisprudence, founded by D. Jose Reus y Garcia, Vol., 2 p. 136.)

According to the Dictionary of Legislation and Jurisprudence by Escriche, a vessel is any kind of craft, considering solely the hull.

Blanco, the commentator on mercantile law, in referring to the grammatical meaning of the word "ship" and "vessels," says, in his work aforecited, that these terms designate every kind of craft, large or small, whether belonging to the merchant marine or to the navy. And referring to their juridical meaning, he adds: "This does not differ essentially from the grammatical meaning; the words "ship" and "vessel" also designate every craft, large or small, so long as it be not an accessory of another, such as the small boat of a vessel, of greater or less tonnage. This definition comprises both the craft intended for ocean or for coastwise navigation, as well as the floating docks, mud lighters, dredges, dumpscows or any other floating apparatus used in the service of an industry or in that of maritime commerce. . . ." (Vol. 1, p. 389.)

According to the foregoing definitions, then, we should that the banca called Maria, chartered by the plaintiff Yu Con from the defendant Narciso Lauron, was a "vessel", pursuant to the meaning this word has in mercantile law, that is, in accordance with the provisions of the Code of Commerce in force.

Glicerio Ipil, the master of the said banca Maria, must also be considered as its captain, in the legal acceptation of this word.

The same Code of Commerce in force in these Islands compares, in its article 609, masters with captains. It is to be noted that in the Code of Commerce of Spain the denomination of arraeces is not included in said article as equivalent to that of masters, as it is in the Code of these Islands.

Commenting on said article, the aforementioned General Review of Legislation and Jurisprudence says:

The name of captain or master is given, according to the kind of vessel, to the person in charge of it.

The first denomination is applied to those who govern vessels that navigate the high seas or ships of large dimensions and importance, although they be engaged in the coastwise trade.

Masters are those who command smaller ships engaged exclusively in the coastwise trade.

For the purposes of maritime commerce, the words "captain" and "master" have the same meaning; both being the chiefs or commanders of ships. (Vol. 2, p. 168.)

Article 587 of the Code of Commerce in force provides:

The agent shall be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipments and the freight he may have earned during the trip.

Article 618 of the same Code also prescribes:

The captain shall be civilly liable to the agent and the latter to the third persons who may have made contracts with the former —

1. For all the damages suffered by the vessel and its cargo by reason of want of skill or negligence on his part, If a misdemeanor or crime has been committed he shall be liable in accordance with the Penal Code.

2. For all the thefts committed by the crew, reserving his right of action against the guilty parties.

The Code of Commerce previous to the one now in force, to wit, that of 1829, in its article 624, provided that the agent or shipowner should not be liable for any excesses which, during the navigation, might be committed by the captain and crew, and that, for the reason of such excesses, it was only proper to bring action against the persons and property of those found guilty.

Estasen, in his work on the Institutes of Mercantile Law (Vol. 4, p. 280), makes the following remarks, in referring to the exposition of reasons presented by the Code Commission which prepared and presented for approval the Code of Commerce now in force, in which exposition of reasons were set forth the fundamental differences between the provisions contained in both codes, with respect to the subject-matter now under discussion. He says:

Another very important innovation introduced by the Code is that relative to the liability for misdemeanors and crimes committed by the captain or by members of the crew. This is a matter of the greatest importance on which a variety of opinions has been expressed by different juris-consults.

The old code declares the captain civilly liable for all damage sustained by the vessel or its cargo through lack of skill or care on his part, through violations of the law, or through unlawful acts committed by the crew. As regards the agent or shipowners, it declares in unmistakeable terms that he shall in no wise be liable for any excesses which, during the navigation, may be committed by the captain and the crew.

Upon an examination, in the light of the principles of modern law, of the standing legal doctrine on the non-liability of the shipowner for the unlawful acts, that is, the crimes or quasi crimes, committed by the captain and the crew, it is observed that it cannot be maintained in the absolute and categorical terms in which it is formulated.

It is well and good that the shipowner be not held criminally liable for such crimes or quasi crimes; but the cannot be excused from liability for the damage and harm which, in consequence of those acts, may be suffered by the third parties who contracted with the captain, in his double capacity of agent and subordinate of the shipowner himself. In maritime commerce, the shippers and passengers in making contracts with the captain do so through the confidence they have in the shipowner who appointed him; they presume that the owner made a most careful investigation before appointing him, and, above all, they themselves are unable to make such an investigation, and even though they should do so, they could not obtain complete security, inasmuch as the shipowner can, whenever he sees fir, appoint another captain instead.

The shipowner is in the same case with respect to the members of the crew, for, though he does not appoint directly, yet, expressly or tacitly, he contributes to their appointment.

On the other hand, if the shipowner derives profits from the results of the choice of the captain and the crew, when the choice turns out successful, it is also just that he should suffer the consequences of an unsuccessful appointment, by application of the rule of natural law contained in the Partidas, viz., that he who enjoys the benefits derived from a thing must likewise suffer the losses that ensue therefrom.

Moreover, the Penal Code contains a general principle that resolves the question under consideration, for it declares that such persons as undertake and carry on any iondustry shall be civilly liable, in default of those who may be criminally liable, for the misdemeanors and crimes committed by their subordinates in the discharge of their duties.

The Code of Commerce in force omits the declaration of non-liability contained in the old code, and clearly makes the shipowner liable civilly for the loss suffered by those who contracted with the captain, in consequence of the misdemeanors and crimes committed by the latter or by the members of the crew.

It is therefore evident that, in accordance with the provisions of the Code of Commerce in force, which are applicable to the instance case, the defendant Narciso Lauron, as the proprietor and owner of the craft of which Glicerio Ipil was the master and in which, through the fault and negligence of the latter and of the supercago Justo Solamo, there occurred the loss, theft, or robbery of the P450 that belonged to the plaintiff and were delivered to said master and supercargo, a theft which, on the other hand, as shown by the evidence, does not appear to have been committed by a person not belonging to the craft, should, for said loss or theft, be held civilly liable to the plaintiff, who executed with said defendant Lauron the contract for the transportation of the merchandise and money aforementioned between the port of Cebu and the town of Catmon, by means of the said craft.

Therefore, the trial court did not err in so holding in the judgement appealed from.

The plaintiff having filed his answer to the cross-complaint as soon as the defendant presented their motion for] a declaration of the plaintiff's default in connection with said cross-complaint, and it being optional with the court to make in such cases the declaration of default, as provided in section 129 of the Code of Civil Procedure, the said court did not incur the second error assigned by the appellants in their brief.

Lastly, as the banca Maria did not make the trip she should have made from the port of Cebu to the town of Catmon, on the occasion in question, through cases chargeable, as has been seen, to the captain and the supercargo of said banca, to wit, because of the loss, theft of robbery of the P450 belonging to the plaintiff, and as a contract was made for the transportation of the said sum and the merchandise from

one of said points to the other, for the round trip, and not through payment by the plaintiff of the wages due the crew for each day, as alleged by the defendants, for the proofs presented by the latter in regard to this point were insufficient, as the trial court so held, neither did the latter incur error in overruling the cross-complaint formulated by the defendants in their answer against the plaintiff.

Therefore, and for all the reasons above set forth, we affirm the judgment appealed from, with the costs of this instance against the appellants. So ordered.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

 

G.R. No. 85691 July 31, 1990

BACHELOR EXPRESS, INCORPORATED, and CRESENCIO RIVERA, petitioners, vs.THE HONORABLE COURT OF APPEALS (Sixth Division), RICARDO BETER, SERGIA BETER, TEOFILO RAUTRAUT and ZOETERA RAUTRAUT, respondents.

Aquino W. Gambe for petitioners.

Tranquilino O. Calo, Jr. for private respondents.

 

GUTIERREZ, JR., J.:

This is a petition for review of the decision of the Court of Appeals which reversed and set aside the order of the Regional Trial Court, Branch I, Butuan City dismissing the private respondents' complaint for collection of "a sum of money" and finding the petitioners solidarily liable for damages in the total amount of One Hundred Twenty Thousand Pesos (P120,000.00). The petitioners also question the appellate court's resolution denying a motion for reconsideration.

On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. and driven by Cresencio Rivera was the situs of a stampede which resulted in the death of passengers Ornominio Beter and Narcisa Rautraut.

The evidence shows that the bus came from Davao City on its way to Cagayan de Oro City passing Butuan City; that while at Tabon-Tabon, Butuan City, the bus picked up a passenger; that about fifteen (15) minutes later, a passenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic among the passengers; that when the bus stopped, passengers Ornominio Beter and Narcisa Rautraut were found lying down the road, the former already dead as a result of head injuries and the latter also suffering from severe injuries which caused her death later. The passenger assailant alighted from the bus and ran toward the bushes but was killed by the police. Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut, private respondents herein (Ricardo Beter and Sergia Beter are the parents of Ornominio while Teofilo Rautraut and Zoetera [should be Zotera] Rautraut are the parents of Narcisa) filed a complaint for "sum of money" against Bachelor Express, Inc. its alleged owner Samson Yasay and the driver Rivera.

In their answer, the petitioners denied liability for the death of Ornominio Beter and Narcisa Rautraut. They alleged that ... the driver was able to transport his passengers safely to their respective places of destination except Ornominio Beter and Narcisa Rautraut who jumped off the bus without the knowledge and consent, much less, the fault of the driver and conductor and the defendants in this case; the defendant corporation had exercised due diligence in the choice of its employees to avoid as much as possible accidents; the incident on August 1, 1980 was not a traffic accident or vehicular accident; it was an incident or event very much beyond the control of the defendants; defendants were not parties to the incident complained of as it was an act of a third party who is not in any way connected with the defendants and of which the latter have no control and supervision; ..." (Rollo, pp. 112-113).i•t•c-aüsl

After due trial, the trial court issued an order dated August 8, 1985 dismissing the complaint.

Upon appeal however, the trial court's decision was reversed and set aside. The dispositive portion of the decision of the Court of Appeals states:

WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE and a new one entered finding the appellees jointly and solidarily liable to pay the plaintiffs-appellants the following amounts:

1) To the heirs of Ornominio Beter, the amount of Seventy Five Thousand Pesos (P75,000.00) in loss of earnings and support, moral damages, straight death indemnity and attorney's fees; and,

2) To the heirs of Narcisa Rautraut, the amount of Forty Five Thousand Pesos (P45,000.00) for straight death indemnity, moral damages and attorney's fees. Costs against appellees. (Rollo, pp. 71-72)

The petitioners now pose the following questions

What was the proximate cause of the whole incident? Why were the passengers on board the bus panicked (sic) and why were they shoving one another? Why did Narcisa Rautraut and Ornominio Beter jump off from the running bus?

The petitioners opine that answers to these questions are material to arrive at "a fair, just and equitable judgment." (Rollo, p. 5) They claim that the assailed decision is based on a misapprehension of facts and its conclusion is grounded on speculation, surmises or conjectures.

As regards the proximate cause of the death of Ornominio Beter and Narcisa Rautraut, the petitioners maintain that it was the act of the passenger who ran amuck and stabbed another passenger of the bus. They contend that the stabbing incident triggered off the commotion and panic among the passengers who pushed one another and that presumably out of fear and moved by that human instinct of self-preservation Beter and Rautraut jumped off the bus while the bus was still running resulting in their untimely death." (Rollo, p. 6) Under these circumstances, the petitioners asseverate that they were not negligent in the performance of their duties and that the incident was completely and absolutely attributable to a third person, the passenger who ran amuck, for without his criminal act, Beter and Rautraut could not have been subjected to fear and shock which compelled them to jump off the running bus. They argue that they should not be made liable for damages arising from acts of third persons over whom they have no control or supervision.

Furthermore, the petitioners maintain that the driver of the bus, before, during and after the incident was driving cautiously giving due regard to traffic rules, laws and regulations. The petitioners also argue that they are not insurers of their passengers as ruled by the trial court.

The liability, if any, of the petitioners is anchored on culpa contractual or breach of contract of carriage. The applicable provisions of law under the New Civil Code are as follows:

ART. 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both by land, water, or air, for compensation, offering their services to the public.

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 them, according to all the circumstances of each case.

xxx xxx xxx

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.

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.

There is no question that Bachelor Express, Inc. is a common carrier. Hence, from the nature of its business and for reasons of public policy Bachelor Express, Inc. is bound to carry its passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

In the case at bar, Ornominio Beter and Narcisa Rautraut were passengers of a bus belonging to petitioner Bachelor Express, Inc. and, while passengers of the bus, suffered injuries which caused their death. Consequently, pursuant to Article 1756 of the Civil Code, petitioner Bachelor Express, Inc. is presumed to have acted negligently unless it can prove that it had observed extraordinary diligence in accordance with Articles 1733 and 1755 of the New Civil Code.

Bachelor Express, Inc. denies liability for the death of Beter and Rautraut on its posture that the death of the said passengers was caused by a third person who was beyond its control and supervision. In effect, the petitioner, in order to overcome the presumption of fault or negligence under the law, states that the vehicular incident resulting in the death of passengers Beter and Rautraut was caused by force majeure or caso fortuito over which the common carrier did not have any control.

Article 1174 of the present Civil Code states:

Except in cases expressly specified by law, or when it is otherwise declared by stipulations, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which though foreseen, were inevitable.

The above-mentioned provision was substantially copied from Article 1105 of the old Civil Code which states"

No one shall be liable for events which could not be foreseen or which, even if foreseen, were inevitable, with the exception of the cases in which the law expressly provides otherwise and those in which the obligation itself imposes liability.

In the case of Lasam v. Smith (45 Phil. 657 [1924]), we defined "events" which cannot be foreseen and which, having been foreseen, are inevitable in the following manner:

... The Spanish authorities regard the language employed as an effort to define the term 'caso fortuito' and hold that the two expressions are synonymous. (Manresa Comentarios al Codigo Civil Español, vol. 8, pp. 88 et seq.; Scaevola, Codigo Civil, vol. 19, pp. 526 et seq.)

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

Escriche defines caso fortuito as an unexpected event or act of God which could neither be foreseen nor resisted, such as floods, torrents, shipwrecks, conflagrations, lightning, compulsion, insurrections, destruction of buildings by unforeseen accidents and other occurrences of a similar nature.

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

As will be seen, these authorities agree that some extraordinary circumstance independent of the will of the obligor or of his employees, is an essential element of a caso fortuito. ...

The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. The sudden act of the passenger who stabbed another passenger in the bus is within the context of force majeure.

However, in order that a common carrier may be absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. Thus, as early as 1912, we ruled:

From all the foregoing, it is concluded that the defendant is not liable for the loss and damage of the goods shipped on the lorcha Pilar by the Chinaman, Ong Bien Sip, inasmuch as such loss and damage were the result of a fortuitous event or force majeure, and there was no negligence or lack of care and diligence on the part of the defendant company or its agents. (Tan Chiong Sian v. Inchausti & Co., 22 Phil. 152 [1912]; Emphasis supplied).

This principle was reiterated in a more recent case, Batangas Laguna Tayabas Co. v. Intermediate Appellate Court (167 SCRA 379 [1988]), wherein we ruled:

... [F]or their defense of force majeure or act of God to prosper the accident must be due to

natural causes and exclusively without human intervention. (Emphasis supplied)

Therefore, the next question to be determined is whether or not the petitioner's common carrier observed extraordinary diligence to safeguard the lives of its passengers.

In this regard the trial court and the appellate court arrived at conflicting factual findings.

The trial court found the following facts:

The parties presented conflicting evidence as to how the two deceased Narcisa Rautruat and Ornominio Beter met their deaths.

However, from the evidence adduced by the plaintiffs, the Court could not see why the two deceased could have fallen off the bus when their own witnesses testified that when the commotion ensued inside the bus, the passengers pushed and shoved each other towards the door apparently in order to get off from the bus through the door. But the passengers also could not pass through the door because according to the evidence the door was locked.

On the other hand, the Court is inclined to give credence to the evidence adduced by the defendants that when the commotion ensued inside the bus, the two deceased panicked and, in state of shock and fear, they jumped off from the bus by passing through the window.

It is the prevailing rule and settled jurisprudence that transportation companies are not insurers of their passengers. The evidence on record does not show that defendants' personnel were negligent in their duties. The defendants' personnel have every right to accept passengers absent any manifestation of violence or drunkenness. If and when such passengers harm other passengers without the knowledge of the transportation company's personnel, the latter should not be faulted. (Rollo, pp. 46-47)

A thorough examination of the records, however, show that there are material facts ignored by the trial court which were discussed by the appellate court to arrive at a different conclusion. These circumstances show that the petitioner common carrier was negligent in the provision of safety precautions so that its passengers may be transported safely to their destinations. The appellate court states:

A critical eye must be accorded the lower court's conclusions of fact in its tersely written ratio decidendi. The lower court concluded that the door of the bus was closed; secondly, the passengers, specifically the two deceased, jumped out of the window. The lower court therefore concluded that the defendant common carrier is not liable for the death of the said passengers which it implicitly attributed to the unforeseen acts of the unidentified passenger who went amuck.

There is nothing in the record to support the conclusion that the solitary door of the bus was locked as to prevent the passengers from passing through. Leonila Cullano, testifying for the defense, clearly stated that the conductor opened the door when the passengers were shouting that the bus stop while they were in a state of panic. Sergia Beter categorically stated that she actually saw her son fall from the bus as the door was

forced open by the force of the onrushing passengers.

Pedro Collango, on the other hand, testified that he shut the door after the last passenger had boarded the bus. But he had quite conveniently neglected to say that when the passengers had panicked, he himself panicked and had gone to open the door. Portions of the testimony of Leonila Cullano, quoted below, are illuminating:

xxx xxx xxx

Q When you said the conductor opened the door, the door at the front or rear portion of the bus?

A Front door.

Q And these two persons whom you said alighted, where did they pass, the fron(t) door or rear door?

A Front door.

xxx xxx xxx

(Tsn., p. 4, Aug. 8, 1984)

xxx xxx xxx

Q What happened after there was a commotion at the rear portion of the bus?

A When the commotion occurred, I stood up and I noticed that there was a passenger who was sounded (sic). The conductor panicked because the passengers were shouting 'stop, stop'. The conductor opened the bus.'

(Tsn. p. 3, August 8, 1984).

Accordingly, there is no reason to believe that the deceased passengers jumped from the window when it was entirely possible for them to have alighted through the door. The lower court's reliance on the testimony of Pedro Collango, as the conductor and employee of the common carrier, is unjustified, in the light of the clear testimony of Leonila Cullano as the sole uninterested eyewitness of the entire episode. Instead we find Pedro Collango's testimony to be infused by bias and fraught with inconsistencies, if not notably unreliable for lack of veracity. On direct examination, he testified:

xxx xxx xxx

Q So what happened to the passengers inside your bus?

A Some of the passengers jumped out of the window.

COURT:

Q While the bus was in motion?

A Yes, your Honor, but the speed was slow because we have just picked up a passenger.

Atty. Gambe:

Q You said that at the time of the incident the bus was running slow because you have just picked up a passenger. Can you estimate what was your speed at that time?

Atty. Calo:

No basis, your Honor, he is neither a driver nor a conductor.

COURT:

Let the witness answer. Estimate only, the conductor experienced.

Witness:

Not less than 30 to 40 miles.

COURT:

Kilometers or miles?

A Miles.

Atty. Gambe:

Q That is only your estimate by your experience?

A Yes, sir, estimate.

(Tsn., pp. 4-5, Oct. 17, 1983).

At such speed of not less than 30 to 40 miles ..., or about 48 to 65 kilometers per hour, the speed of the bus could scarcely be considered slow considering that according to Collango himself, the bus had just come from a full stop after picking a passenger (Tsn, p. 4, Id.) and that the bus was still on its second or third gear (Tsn., p. 12, Id.).

In the light of the foregoing, the negligence of the common carrier, through its employees, consisted of the lack of extraordinary diligence required of common carriers, in exercising vigilance and utmost care of the safety of its passengers, exemplified by the driver's belated stop and the reckless opening of the doors of the bus while the same was travelling at an appreciably fast speed. At the same time, the common carrier itself acknowledged, through its administrative officer, Benjamin Granada, that the bus was commissioned to travel and take on passengers and the public at large, while equipped with only a solitary door for a bus its size and loading capacity, in contravention of rules and regulations provided for under the Land Transportation and Traffic Code (RA 4136 as amended.) (Rollo, pp. 23-26)

Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the commotion; the bus was speeding from a full stop; the victims fell from the bus door when it was opened or gave way while the bus was still running; the conductor panicked and blew his whistle after people had already fallen off the bus; and the bus was not properly equipped with doors in accordance with law-it is clear that the petitioners have failed to

overcome the presumption of fault and negligence found in the law governing common carriers.

The petitioners' argument that the petitioners "are not insurers of their passengers" deserves no merit in view of the failure of the petitioners to prove that the deaths of the two passengers were exclusively due to force majeureand not to the failure of the petitioners to observe extraordinary diligence in transporting safely the passengers to their destinations as warranted by law. (See Batangas Laguna Tayabas Co. v. Intermediate Appellate Court,supra).

The petitioners also contend that the private respondents failed to show to the court that they are the parents of Ornominio Beter and Narcisa Rautraut respectively and therefore have no legal personality to sue the petitioners. This argument deserves scant consideration. We find this argument a belated attempt on the part of the petitioners to avoid liability for the deaths of Beter and Rautraut. The private respondents were Identified as the parents of the victims by witnesses during the trial and the trial court recognized them as such. The trial court dismissed the complaint solely on the ground that the petitioners were not negligent.

Finally, the amount of damages awarded to the heirs of Beter and Rautraut by the appellate court is supported by the evidence. The appellate court stated:

Ornominio Beter was 32 years of age at the time of his death, single, in good health and rendering support and service to his mother. As far as Narcisa Rautraut is concerned, the only evidence adduced is to the effect that at her death, she was 23 years of age, in good health and without visible means of support.

In accordance with Art. 1764 in conjunction with Art. 2206 of the Civil Code, and established jurisprudence, several factors may be considered in determining the award of damages, namely: 1) life expectancy (considering the state of health of the deceased and the mortality tables are deemed conclusive) and loss of earning capacity; (2) pecuniary loss, loss of support and service; and (3) moral and mental suffering (Alcantara, et al. v. Surro, et al., 93 Phil. 470).

In the case of People v. Daniel (No. L-66551, April 25, 1985, 136 SCRA 92, at page 104), the High Tribunal, reiterating the rule in Villa Rey Transit, Inc. v. Court of Appeals (31 SCRA 511), stated that the amount of loss of earring capacity is based mainly on two factors, namely, (1) the number of years on the basis of which the damages shall be computed; and (2) the rate at which the losses sustained by the heirs should be fixed.

As the formula adopted in the case of Davila v. Philippine Air Lines, 49 SCRA 497, at the age of 30 one's normal life expectancy is 33-1/3 years based on the American Expectancy Table of Mortality (2/3 x 80-32).i•t•c-aüsl By taking into account the pace and nature of the life of a carpenter, it is reasonable to make allowances for these circumstances and reduce the life expectancy of the deceased Ornominio Beter to 25 years (People v. Daniel, supra). To fix the rate of losses it must be noted that Art. 2206 refers to gross earnings less necessary living expenses of the deceased, in other words, only net earnings are to be considered (People v. Daniel, supra; Villa Rey Transit, Inc. v. Court of Appeals,supra).

Applying the foregoing rules with respect to Ornominio Beter, it is both just and reasonable,

considering his social standing and position, to fix the deductible, living and incidental expenses at the sum of Four Hundred Pesos (P400.00) a month, or Four Thousand Eight Hundred Pesos (P4,800.00) annually. As to his income, considering the irregular nature of the work of a daily wage carpenter which is seasonal, it is safe to assume that he shall have work for twenty (20) days a month at Twenty Five Pesos (P150,000.00) for twenty five years. Deducting therefrom his necessary expenses, his heirs would be entitled to Thirty Thousand Pesos (P30,000.00) representing loss of support and service (P150,000.00 less P120,000.00). In addition, his heirs are entitled to Thirty Thousand Pesos (P30,000.00) as straight death indemnity pursuant to Article 2206 (People v. Daniel, supra). For damages for their moral and mental anguish, his heirs are entitled to the reasonable sum of P10,000.00 as an exception to the general rule against moral damages in case of breach of contract rule Art. 2200 (Necesito v. Paras, 104 Phil. 75). As attorney's fees, Beter's heirs are entitled to P5,000.00. All in all, the plaintiff-appellants Ricardo and Sergia Beter as heirs of their son Ornominio are entitled to an indemnity of Seventy Five Thousand Pesos (P75,000.00).

In the case of Narcisa Rautraut, her heirs are entitled to a straight death indemnity of Thirty Thousand Pesos (P30,000.00), to moral damages in the amount of Ten Thousand Pesos (P10,000.00) and Five Thousand Pesos (P5,000.00) as attorney's fees, or a total of Forty Five Thousand Pesos (P45,000.00) as total indemnity for her death in the absence of any evidence that she had visible means of support. (Rollo, pp. 30-31)

WHEREFORE, the instant petition is DISMISSED. The questioned decision dated May 19, 1988 and the resolution dated August 1, 1988 of the Court of Appeals are AFFIRMED.

SO ORDERED.

THIRD DIVISION

[G.R. No. 136048.  January 23, 2001]

JOSE BARITUA and JB LINE, petitioners, vs. NIMFA DIVINA MERCADER in her capacity and as guardian of DARWIN, GIOVANNI, RODEL and DENNIS, all surnamed MERCADER; LEONIDA Vda. de MERCADER on her behalf and on behalf of her minor child MARY JOY MERCADER; SHIRLEY MERCADER DELA CRUZ; MARIA THERESA MERCADER-GARCIA; DANILO MERCADER; JOSE DANTE MERCADER; and JOSEFINA MERCADER, respondents.

D E C I S I O N

PANGANIBAN, J.:

The Manchester ruling requiring the payment of docket and other fees as a condition for the acquisition of jurisdiction has no retroactive effect and applies only to cases filed after its finality.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the April 17, 1998 Decision[1] and the October 28, 1998 Resolution[2] of the Court of Appeals (CA) in CA-GR CV No. 40772.  The decretal portion of said Decision reads as follows:

“WHEREFORE, upon all the foregoing premises considered, the DECISION appealed from is AFFIRMED with the MODIFICATION that the loss of earnings of the late Dominador Mercader is reduced to P798,000.00.”[3]

The assailed Resolution denied petitioners’ Motion for Reconsideration.

The Court of Appeals sustained the Decision of the Regional Trial Court (RTC) of Laoang, Northern Samar (Branch 21).  Except for the modification of the loss of earnings, it affirmed all the monetary damages granted by the trial court to respondents.  The decretal portion of the assailed RTC Decision reads as follows:[4]

“WHEREFORE, on preponderance of evidence, judgment is for [herein respondents] and against [herein petitioners], ordering the latter to pay the former:

(a) As compensatory damages for the death of Dominador Mercader -- P50,000.00;

(b) For the loss of earnings of the late Dominador Mercader -- P1,660,000.00, more or less, based on the average life span of 75 years from the time of his death who earned a net income of P5,000.00 monthly out of his business;

(c) Actual damages of P30,000.00 receipted purchases of goods in Manila; P5,750.00 for the first class coffin and a 15-day wake services evidenced by a receipt marked Exh. ‘D’; [P]850.00 for the 50 x 60 headstone, receipt marked Exh. ‘E’ and P1,590.00  -- Deed of Absolute Sale of a burial lot, marked Exh. ‘F’;

(d) 25% of whatever amount is collected by [respondents] from [petitioners] but no less than P50,000.00 plus P1,000.00 per hearing by way of attorney’s fees;

(e) As moral damages -- P50,000.00;

(f) As exemplary damages -- P30,000.00; and

(g) To pay the costs.”

The Facts

The antecedents of the case are succinctly summarized by the Court of Appeals in this wise:

“The original complaint was filed against JB Lines, Inc. [Petitioner JB Lines, Inc.] filed a motion to dismiss complaint, to strike out false-impertinent matters therefrom, and/or for bill of particulars on the primary grounds that [respondents] failed to implead Jose Baritua as an indispensable party and that the cause of action is a suit against a wrong and non-existent party. [Respondents] filed an opposition to the said motion and an amended complaint.

“In an Order dated December 11, 1984 the trial court denied the aforesaid motion and admitted the amended complaint of [respondents] impleading Jose Baritua and alleged the following:

‘(10) The late Dominador Mercader is a [b]usinessman mainly engaged in the buy and sell of dry goods in Laoang, N. Samar.  He buys his goods from Manila and bring[s] them to Laoang, Northern Samar for sale at his store located in the said locality;

(11) Sometime on March 16, 1983, the late Dominador Mercader boarded [petitioners’] bus No. 142 with Plate No. 484 EU at [petitioners’] Manila Station/terminal, bound for Brgy. Rawis, Laoang Northern Samar as a paying passenger;

(12) At that time, Dominador Mercader had with him as his baggage, assorted goods (i.e. long pants, short pants, dusters, etc.) which he likewise loaded in [petitioners’] bus;

(13) The late Dominador Mercader was not able to reach his destination considering that on March 17, 1983 at Beily (Bugco) Bridge, Barangay Roxas, Mondragon, Northern Samar, while he was on board [petitioners’] bus no. 142 with Plate No. 484 EU, the said bus fell into the river as a result of which the late Dominador Mercader died. x x x.

(14) The accident happened because [petitioners’] driver negligently and recklessly operated the bus at a fast speed in wanton disregard of traffic rules and regulations and the prevailing conditions then existing that caused [the] bus to fall into the river.’

“[Respondents] then filed a motion to declare [petitioners] in default which motion was opposed by [petitioners]. [Respondents] withdrew the said motion prompting the trial court to cancel the scheduled hearing of the said motion to declare [petitioners] in default in an Order dated January 23, 1985.

“In its answer, [petitioners] denied specifically all the material allegations in the complaint and alleged the following:

‘2. The alleged person of Dominador Mercader did not board bus 142 at [petitioners’] Manila station/terminal x x x as a (supposed paying passenger). There is even no statement in the complaint that Dominador Mercader (if it were true that he was a passenger of bus 142 ‘at the [petitioners’] Manila station/terminal’) was issued any passenger-freight ticket conformably with law and practice. It is a fact of public knowledge that, in compliance with existing rules and laws, [Petitioner] Baritua, as a public utility operator, issues, thru his conductors, in appropriate situations, to a true passenger, the familiar and known passenger and freight ticket which reads in part:

‘NOTICE

Baggage carried at owner’s risk x x x liability on prepaid freight otherwise declared.

x x x                                             x x x                                     x x x

Whole Fare Paid P ______________

Declared value ____________  x x x.

Description of Freight _____________________________

                                                                          Signature of Owner.’

3. It is also a fact of public knowledge that [Petitioner] Baritua does not have any ‘Manila station/terminal,’ because what he has is a Pasay city station.

4. [Petitioner] Baritua had no prior knowledge that, on or about March 17, 1983, and/or previous thereto, the Bugko Bailey Bridge (across Catarman-Laoang road) in Barangay Roxas, Mondragon, Northern Samar, was in virtual dilapida[ted] and dangerous condition, in a state of decay and disrepair, thus calling for the concerned government and public officials’ performance of their coordinative and joint duties and responsibilities, to repair, improve and maintain that bridge, in good and reasonably safe condition, but, far from performing or complying with said subject duties and responsibilities, the adverted officials concerned, without just cause, not only failed and neglected to cause such needed repair, improvement and maintenance of the Bugko Bailey Bridge, on or prior to March 17, 1983, but also failed, and neglected to either close the Bugko Bridge to public use and travel, and/or to put appropriate warning and cautionary signs, for repair, improvement, maintenance, and safety purposes.  So that, as a proximate and direct consequence of the aggregate officials’ nonfeasance, bad faith, negligence, serious inefficiency, and callous indifference to public safety, that Bugko Bridge collapsed inward and caved in ruin, on that March 17, 1983, while Baritua’s bus 142 was cautiously and prudently passing and travelling across the said bridge, as a result of which the bus fell into the river and sea waters, despite the exercise and compliance by Baritua and his driver of their duties in the matter of their requisite degree of diligence, caution and prudence, Baritua also exercised and complied with the requisite duty of diligence, care, and prudence in the selection and supervision over his driver, contrary to the baseless imputation in paragraphs 14 and 20 of the original and amended complaints. Moreover, Baritua and his driver did not violate any traffic rule and regulation, contrary to plaintiffs’ insinuation.

5.  Furthermore, [Petitioner] Baritua and his driver have no causative connection with the alleged death of Dominador Mercader who, according to a reliable source, was already seriously suffering from a lingering illness even prior to his alleged demise. Baritua also learned lately, and so it is herein alleged that Dominador Mercader contributed considerably, to, and/or provided the proximate and direct cause of his own death, hence, he himself is to be blamed for whatever may have happened to him or for whatever may have been sustained by his supposed heirs, vis-à-vis the suit against the wrong party.

6. Baritua and his driver, as earlier stated, did not commit any actionable breach of contract with the alleged Dominador Mercader or the latter’s supposed heirs.

7. There is no factual nor any legal basis for plaintiffs’ proffered claims for damages.

II. AFFIRMATIVE DEFENSES

8. Based on the preceding averments, plaintiffs have neither a cause nor a right of action against [Petitioner] Baritua and his driver.

8.1. The allegation that supposedly the ‘x x x [p]laintiffs are the compulsory heirs of the late DOMINADOR MERCADER x x x‘ (par. 8, complaint) is too vague and too broad, as the subject allegation is a bare and pure conclusionary averment unaccompanied by the requisite statement of ultimate facts constitutive of a cause or right of action.

8.2. Even assuming arguendo, without however conceding, plaintiff’s statement of a cause of action, the complaint is nonetheless replete with false and impertinent matters which fit the rule on striking out pleadings or parts thereof.  To mention only a glaring few:

8.2.a. The allegation on exemplary damages x x x is impertinent and immaterial in the complaint against a supposed employer. For, even theoretically assuming, without however admitting a negligent act-omission on the part of a driver, nevertheless, in such a hypothetical situation, the causative negligence, if any there was, is personal to the wrongdoer, i.e., the employee-driver, to the exclusion of the employer.

8.2.b. The allegation on supposed ‘minimum life of 75 years’ and on ‘he expects to earn no less than P1,680,000.00 x x x is false, a pure hyperbole, and bereft of factual and legal basis.  Besides, what jurisprudential rule refers to is only net earning.  The law abhors a claim, akin to plaintiffs’ allegation, which is manifestly speculative, as it may not exist at all.  Furthermore, the questioned allegation in the plaintiff’s original and amended complaints is not preceded by the requisite statement of definitive facts, nor of any specific fact, which could possibly afford a rational basis for a reasonable expectation of supposed earning that could be lost, or impaired.

8.2.c. Likewise, the allegations that allegedly ‘x x x the late Dominador Mercader boarded x x x Bus No. 142 x x x and that supposedly the latter had a baggage x x x containing drygoods x x x in which case [petitioners have] to pay the value thereof in such amount as may be proven by [respondents] in court during the trial x x x, apart from being false, are offensive to the rule on concise statement of ultimate facts. The assailed allegations also contravene Interim Rule 11, ‘(i)f any demand is for damages in a civil action the amount thereof must be specifically alleged.’ In consequence of this averment, [respondents] have not yet paid the correct docket fee, for which reason, [respondents’] case may be dismissed on that ground alone.

8.3. In violation also of the same Interim Rule 11, regarding the requisite definitive amount of claim, the allegation on the supposed funeral expense x x x does not also indicate any specific amount.  So with the averment on supposed moral damage which may not be warranted because of absence of allegation of fraud or bad faith, if any, there was, apart from want of causative connection with the defendant.

8.4. The allegation in paragraph 15 of the original and amended complaint is also a pure conclusionary averment, without a factual premise.

9. [Petitioner] JB LINE, impleaded in the amended complaint, is merely a business name and sole proprietorship of defendant Baritua.  As such, JB Line is not a juridical person, nor an entity authorized by law to sue and be sued, hence, it cannot legally be a party to any action.  With this averment, correlated with that in paragraphs 4-5 hereof, [respondents’] amended complaint is essentially a suit against a wrong party.”[5]

The RTC, after due trial, rendered the aforesaid assailed Decision.

Ruling of the Court of Appeals

As earlier stated, the Court of Appeals affirmed the trial court’s award of monetary damages in favor of respondents, except the amount of Dominador Mercader’s lost earnings, which it reduced toP798,000.  It held that petitioners failed to rebut the presumption that in the event a passenger died or was injured, the carrier had acted negligently.  Petitioners, it added, presented no sufficient proof that they had exercised extraordinary diligence.

Hence, this Petition.[6]

The Issues

In their Memorandum, petitioners submit the following issues for our consideration:

“I

Did the honorable Court of Appeals (CA) gravely abuse its discretion when it allowed to pass  sub silencio the trial court’s failure to rule frontally on petitioners’ plea for a bill of particulars, and ignored the nature of respondents’ prayer in the complaint pleading for an award of --

‘a) P12,000.00 -- representing the death compensation;

b)   An amount to be proven in court, representing actual damages;

c)  P1,660,000.00 or more as may be proven during the trial, by way of loss of earnings;

d)  An amount to be proven in court as and by way of funeral expenses;

e)  An amount to be proven during the trial, representing moral damages;

f)  An amount to be determined by this Honorable Court, representing exemplary damages;

g)  An amount equivalent to 25% of whatever amount the plaintiffs would be able to collect from the defendant but in no case less than P50,000.00 plus an additional amount of P1,000.00 per hearing as and by way of Attorney’s fees;’

“II

Did the CA also ignore the fact that the trial court was not paid the correct amount of the docket and other lawful fees; hence, without jurisdiction over the original and amended complaints or over the subject matter of the case;

“III

Did the CA likewise arbitrarily disregard petitioners’ constitutional right to procedural due process and fairness when it ignored and thrust aside their right to present evidence and to expect that their evidence will be duly considered and appreciated; and

“IV

In awarding excessive and extravagant damages, did the CA and the trial court adhere to the rule that their assailed decision must state clearly and distinctly the facts and the laws on which  they are based?”[7]

Distilling the alleged errors cited above, petitioners raise two main issues for our consideration: (1) whether the CA erred in holding that the RTC had jurisdiction over the subject matter of the case, and (2) whether the CA disregarded petitioners’ procedural rights.

The Court’s Ruling

The Petition is devoid of merit.

First Issue: Jurisdiction

Petitioners contend that since the correct amounts of docket and other lawful fees were not paid by respondents, then the trial court did not acquire jurisdiction over the subject matter of the case.

The Court, in Manchester Development Corporation v. CA,[8] held that “[t]he court acquires jurisdiction over any case only upon the payment of the prescribed docket fee.  An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the court, much less the payment of the docket fee based on the amounts sought in the amended pleading. x x x.”

Generally, the jurisdiction of a court is determined by the statute in force at the commencement of the action,[9] unless such statute provides for its retroactive application.[10] Once the jurisdiction of a court attaches, it continues until the case is finally terminated. [11] The trial court cannot be ousted therefrom by subsequent happenings or events, although of a character that would have prevented jurisdiction from attaching in the first instance.[12]

The Manchester ruling, which became final in 1987, has no retroactive application and cannot be invoked in the subject Complaint filed in 1984.  The Court explicitly declared:

“To put a stop to this irregularity, henceforth all complaints, petitions, answers and other similar pleadings should specify the amount of damages being prayed for not only in the body of the pleading but also in the prayer, and said damages shall be considered in the assessment of the filing fees in any case.  Any pleading that fails to comply with this requirement shall not be accepted nor admitted, or shall otherwise be expunged from the record.”[13] (emphasis supplied)

Second Issue: Petitioners’ Procedural Rights

Motion for a Bill of Particulars

Petitioners argue that the Court of Appeals erred when it passed sub silencio on the trial court’s failure to rule frontally on their plea for a bill of particulars.

We are not impressed.  It must be noted that petitioners’ counsel manifested in open court his desire to file a motion for a bill of particulars.  The RTC gave him ten days from March 12, 1985 within which to do so.[14] He, however, filed the aforesaid motion only on April 2, 1985 or eleven days past the deadline set by the trial court.[15] Moreover, such motion was already moot and academic because, prior to its filing, petitioners had already filed their answer and several other pleadings to the amended Complaint.  Section 1, Rule 12 of the Rules of Court, provides:

“Section 1. When applied for; purpose. -- Before responding to a pleading, a party may move for a more definite statement or for a bill of particulars of any matter which is not averred with sufficient definiteness or particularity to enable him properly to prepare his responsive pleading.  If the pleading is a reply, the motion must be filed within ten (10) days from service thereof.  Such motion shall point out the defects complained of, the paragraphs wherein they are contained, and the details desired.”[16] (emphasis supplied)

Petitioners’ Right to Adduce Evidence

Petitioners also argue that their right to present evidence was violated by the CA, because it did not consider their contention that the trial judges who heard the case were biased and impartial.  Petitioners contend, as they did before the CA, that Judge Tomas B. Noynay based his Decision “on certain chosen partial testimonies of [respondents’] witnesses x x x.” They further maintain that Judge Fortunato Operario, who initially handled the case, questioned some witnesses in an overzealous manner and “assum[ed] the dual role of magistrate and advocate.”[17]

These arguments are not meritorious.  First, judges cannot be expected to rely on the testimonies of every witness.  In ascertaining the facts, they determine who are credible and who are not.  In doing so, they consider all the evidence before them.  In other words, the mere fact that Judge Noynay based his decision on the testimonies of respondents’ witnesses does not necessarily mean that he did not consider those of petitioners.  Second, we find no sufficient showing that Judge Operario was overzealous in questioning the

witnesses.  His questions merely sought to clarify their testimonies.  In all, we reject petitioners’ contention that their right to adduce evidence was violated.

Alleged Failure to State Clearly the Facts and the Law

We are not convinced by petitioners’ contention, either, that both the trial and the appellate courts failed to state clearly and distinctly the facts and the law involved in the case.  As can be gleaned from their Decisions, both courts clearly laid down their bases for awarding monetary damages to respondents.

Both the RTC and the CA found that a contract of carriage existed between petitioners and Dominador Mercader when he boarded Bus No. 142 in Pasay City on March 16, 1983.  Petitioners failed to transport him to his destination, because the bus fell into a river while traversing the Bugko Bailey Bridge.  Although he survived the fall, he later died of asphyxia secondary to drowning.

We agree with the findings of both courts that petitioners failed to observe extraordinary diligence[18] that fateful morning.  It must be noted that a common carrier, by the nature of its business and for reasons of public policy, is bound to carry passengers safely as far as human care and foresight can provide.  It is supposed to do so by using the utmost diligence of very cautious persons, with due regard for all the circumstances.[19] In case of death or injuries to passengers, it is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence as prescribed in Articles 1733 and 1755[20] of the Civil Code.

We sustain the ruling of the CA that petitioners failed to prove that they had observed extraordinary diligence.

First, petitioners did not present evidence on the skill or expertise of the driver of Bus No. 142 or the condition of that vehicle at the time of the incident.

Second, the bus was overloaded at the time.  In fact, several individuals were standing when the incident occurred.[21]

Third, the bus was overspeeding.  Its conductor testified that it had overtaken several buses before it reached the Bugko Bailey Bridge.[22] Moreover, prior to crossing the bridge, it had accelerated and maintained its speed towards the bridge.[23]

We therefore believe that there is no reason to overturn the assailed CA Decision, which affirmed that of the RTC.  It is a well-settled rule that the trial court’s factual findings, when affirmed by the appellate court, are conclusive and binding, if they are not tainted with arbitrariness or oversight of some fact or circumstance of significance and influence.[24] As clearly discussed above, petitioners have not presented sufficient ground to warrant a deviation from this rule.

Finally, we cannot fault the appellate court in its computation of the damages and lost earnings, since it effectively computed only net earnings in accordance with existing jurisprudence.[25]

WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED.  Costs against petitioners.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-23733            October 31, 1969

HERMINIO L. NOCUM, plaintiff-appellee, vs.LAGUNA TAYABAS BUS COMPANY, defendant-appellant.

Fernando M. Mangubat and Felimon H. Mendoza for plaintiff-appellee. Domingo E. de Lara and Associates for defendant-appellant.

BARREDO, J.:

Appeal of the Laguna Tayabas Bus Co., defendant in the Court below, from a judgment of the said court (Court of First Instance of Batangas) in its Civil Case No. 834, wherein appellee Herminio L. Nocum was plaintiff, sentencing appellant to pay appellee the sum of P1,351.00 for actual damages and P500.00 as attorney's fees with legal interest from the filing of the complaint plus costs. Appellee, who was a passenger in appellant's Bus No. 120 then making a trip within the barrio of Dita, Municipality of Bay, Laguna, was injured as a consequence of the explosion of firecrackers, contained in a box, loaded in said bus and declared to its conductor as containing clothes and miscellaneous items by a co-passenger. The findings of fact of the trial court are not assailed. The appeal is purely on legal questions.

Appellee has not filed any brief. All that We have before Us is appellant's brief with the following assignment of errors:

I

BASED ON THE FACTS THE LOWER COURT FOUND AS ESTABLISHED, IT ERRED AS A MATTER OF LAW IN NOT ABSOLVING APPELLANT FROM LIABILITY RESULTING FROM THE EXPLOSION OF FIRECRACKERS CONTAINED IN A PACKAGE, THE CONTENTS OF WHICH WERE MISREPRESENTED BY A PASSENGER.

II

THE LOWER COURT ERRED, AS A MATTER OF LAW, IN AWARDING DAMAGES WITH LEGAL INTEREST IN FAVOR OF THE APPELLEE.

III

THE LOWER COURT ERRED IN NOT DISMISSING THE COMPLAINT, WITH COSTS AGAINST THE APPELLEE.

Upon consideration of the points raised and discussed by appellant, We find the appeal to be well taken.

The main basis of the trial court's decision is that appellant did not observe the extraordinary or utmost diligence of a very cautious person required by the following articles of the Civil Code:

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 them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.

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.

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.

Analyzing the evidence presented by the parties, His Honor found:

According to Severino Andaya, a witness for the plaintiff, a man with a box went up the baggage compartment of the bus where he already was and said box was placed under the seat. They left Azcarraga at about 11:30 in the morning and when the explosion occurred, he was thrown out. PC investigation report states that thirty seven (37) passengers were injured (Exhibits "O" and "2").

The bus conductor, Sancho Mendoza, testified that the box belonged to a passenger whose name he does not know and who told him that it contained miscellaneous items and clothes. He helped the owner in loading the baggage which weighed about twelve (12) kilos and because of company regulation, he charged him for it twenty-five centavos (P0.25). From its appearance there was no indication at all that the contents were explosives or firecrackers. Neither did he open the box because he just relied on the word of the owner.

Dispatcher Nicolas Cornista of defendant company corroborrated the testimony of Mendoza and he said, among other things, that he was present when the box was loaded in the truck and the owner agreed to pay its fare. He added that they were not authorized to open the baggages of passengers because instruction from the management was to call the police if there were packages containing articles which were against regulations.

xxx           xxx           xxx

There is no question that Bus No. 120 was road worthy when it left its Manila Terminal for Lucena that morning of December 5, 1960. The injuries suffered by the plaintiff were not due to mechanical defects but to the explosion of firecrackers inside the bus which was loaded by a co-passenger.

... Turning to the present case, it is quite clear that extraordinary or utmost diligence of a very cautious person was not observed by the defendant company. The service manual, exhibits "3" and "3-A," prohibits the employees to allow explosives, such as dynamite and firecrackers to be transported on its buses. To implement this particular rule for 'the safety of passengers, it was therefore incumbent upon the employees of the company to make the proper inspection of all the baggages which are carried by the passengers.

But then, can it not be said that the breach of the contract was due to fortuitous event? The Supreme Court in the case of Lasam vs. Smith, 45 Phil. 657, quoted Escriche's definition of caso fortuito as "an unexpected event or act of God which could neither be foreseen nor resisted, such as floods, torrents, shipwrecks, conflagrations, lightning, compulsions, insurrections, destructions of buildings by unforeseen accidents and other occurrences of a similar nature." In other words, the cause of the unexpected event must be independent of the will of man or something which cannot be avoided. This cannot be said of the instant case. If proper and rigid inspection were observed by the defendant, the contents of the box could have been discovered and the accident avoided. Refusal by the passenger to have the package opened was no excuse because, as stated by Dispatcher Cornista, employees should call the police if there were packages containing articles against company regulations. Neither was failure by employees of defendant company to detect the contents of the packages of passengers because like the rationale in the Necesito vs. Paras case (supra), a passenger

has neither choice nor control in the exercise of their discretion in determining what are inside the package of co-passengers which may eventually prove fatal.

We cannot agree. No doubt, the views of His Honor do seem to be in line with the reasons that the Code Commission had for incorporating the above-quoted provisions in its draft of the Civil Code. Indeed, in approving the said draft, Congress must have concurred with the Commission that by requiring the highest degree of diligence from common carriers in the safe transport of their passengers and by creating a presumption of negligence against them, the recklessness of their drivers which is a common sight even in crowded areas and, particularly, on the highways throughout the country may, somehow, if not in a large measure, be curbed. We are not convinced, however, that the exacting criterion of said provisions has not been met by appellant in the circumstances of this particular case.

It is undisputed that before the box containing the firecrackers were allowed to be loaded in the bus by the conductor, inquiry was made with the passenger carrying the same as to what was in it, since its "opening ... was folded and tied with abaca." (Decision p. 16, Record on Appeal.) According to His Honor, "if proper and rigid inspection were observed by the defendant, the contents of the box could have been discovered and the accident avoided. Refusal by the passenger to have the package opened was no excuse because, as stated by Dispatcher Cornista, employees should call the police if there were packages containing articles against company regulations." That may be true, but it is Our considered opinion that the law does not require as much. Article 1733 is not as unbending as His Honor has held, for it reasonably qualifies the extraordinary diligence required of common carriers for the safety of the passengers transported by them to be "according to all the circumstances of each case." In fact, Article 1755 repeats this same qualification: "A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances."

In this particular case before Us, it must be considered that while it is true the passengers of appellant's bus should not be made to suffer for something over which they had no control, as enunciated in the decision of this Court cited by His Honor,1 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. Not to be lightly considered must be the right to privacy to which each passenger is entitled. He cannot be subjected to any unusual search, when he protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the case at bar. In other words, inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible, but beyond this, constitutional boundaries are already in danger of being transgressed. Calling a policeman to his aid, as suggested by the service manual invoked by the trial judge, in compelling the passenger to submit to more rigid inspection, after the passenger had already declared that the box contained mere clothes and other miscellaneous, could not have justified invasion of a constitutionally protected domain. Police officers acting without judicial authority secured in the manner provided by law are not beyond the pale of constitutional inhibitions designed to protect individual human rights and liberties. Withal, what must be importantly considered here is not so much the infringement of the fundamental sacred rights of the particular passenger herein involved, but the constant threat any contrary ruling would pose on the right of privacy of all passengers of all common carriers, considering how easily the duty to inspect can be made an excuse for mischief and abuse. Of course, when there are sufficient indications that the representations of the passenger regarding the nature of his baggage may not be true, in the interest of the common safety of all, the assistance of the police authorities may be solicited, not necessarily to force the passenger to open his baggage, but to conduct the needed investigation consistent with the rules of propriety and, above all, the constitutional rights of the passenger. It is in this sense that the mentioned service manual issued by appellant to its conductors must be understood.

Decisions in other jurisdictions cited by appellant in its brief, evidently because of the paucity of local precedents squarely in point, emphasize that there is need, as We hold here, for evidence of circumstances indicating cause or causes for apprehension that the passenger's baggage is dangerous and that it is failure of the common carrier's employee to act in the face of such evidence that constitutes the cornerstone of the common carrier's liability in cases similar to the present one.

The principle that must control the servants of the carrier in a case like the one before us is correctly stated in the opinion in the case of Clarke v. Louisville & N.R. Co. 20 Ky L. Rep. 839, 49 S.W. 1120. In that case Clarke was a passenger on the defendant's train. Another passenger took a quantity of gasoline into the same coach in which Clarke was riding. It ignited and exploded, by reason of which he was severely injured. The trial court peremptorily instructed the jury to find for the defendant. In the opinion, affirming the judgment, it is said: "It may be stated briefly, in assuming the liability of a railroad to its passengers for injury done by another passenger, only where the conduct of this passenger had been such before the injury as to induce a reasonably prudent and vigilant conductor to believe that there was reasonable ground to apprehend violence and danger to the other passengers, and in that case asserting it to be the duty of the conductor of the railroad train to use all reasonable means to prevent such injury, and if he neglects this reasonable duty, and injury is done, that then the company is responsible; that otherwise the railroad is not responsible."

The opinion quotes with approval from the case of Gulf, C. & S. F. R. Co. vs. Shields, 9 Tex. Civ. App. 652, 29 S. W. 652, in which case the plaintiff was injured by alcohol which had been carried upon the train by another passenger. In the opinion in that case it is said: "It was but a short period of time after the alcohol was spilt when it was set on fire and the accident occurred, and it was not shown that appellant's employees knew that the jug contained alcohol. In fact, it is not shown that the conductor or any other employee knew that Harris had a jug with him until it fell out of the sack, though the conductor had collected ... (his) fare, and doubtless knew that he had the sack on the seat with him. ... It cannot be successfully denied that Harris had the right as a passenger to carry baggage on the train, and that he had a right to carry it in a sack if he chose to do so. We think it is equally clear that, in the absence of some intimation or circumstance indicating that the sack contained something dangerous to other passengers, it was not the duty of appellant's conductor or any other employee to open the sack and examine its contents." Quinn v. Louisville & N. R. Co. 98 Ky. 231, 32 S. W. 742; Wood v. Louisville & N. R. Co. 101 Ky. 703, 42 S. W. 349; Louisville & N. R. Co. v. Vincent, 29 Ky. L. Rep. 1049, 96 S. W. 898; Louisville & N. R. Co. v. Renfro, 142 Ky. 590, 33 L. R. A. (N. S.) 133, 135 S. W. 266.2 (Emphasis supplied)

Explosive or Dangerous Contents. — A carrier is ordinarily not liable for injuries to passengers from fires or explosions caused by articles brought into its conveyances by other passengers, in the absence of any evidence that the carrier, through its employees, was aware of the nature of the article or had any reason to anticipate danger therefrom. (Bogard v. Illinois C. R Co. 144 Ky. 649, 139 S. W. 855, 36 L. R. A.[N. S.] 337; Clarke v. Louisville & N. R. Co. 101 Ky. 34, 39 S. W. 840, 36 L. R. A. 123 [explosion of can of gasoline]; East Indian R. Co. v. Mukerjee [1901] A. C. [Eng.] 396, 3 B. R. C. 420 — P. C. [explosion of fireworks]; Annotation: 37 L. R. A. [N. S.] 725.)3

Appellant further invokes Article 1174 of the Civil Code which relieves all obligors, including, of course, common carriers like appellant, from the consequence of fortuitous events. The court a quo held that "the breach of contract (in this case) was not due to fortuitous event and that, therefore, the defendant is liable in damages." Since We hold that appellant has succeeded in rebutting the presumption of negligence by showing that it has exercised extraordinary diligence for the safety of its passengers, "according to the circumstances of the (each) case", We deem it unnecessary to rule whether or not there was any fortuitous event in this case.

ACCORDINGLY, the appealed judgment of the trial court is reversed and the case is dismissed, without costs.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

 

G.R. No. 111127 July 26, 1996

MR. & MRS. ENGRACIO FABRE, JR. and PORFIRIO CABIL, petitioners, vs.COURT OF APPEALS, THE WORD FOR THE WORLD CHRISTIAN FELLOWSHIP, INC., AMYLINE ANTONIO, JOHN RICHARDS, GONZALO GONZALES, VICENTE V. QUE, JR., ICLI CORDOVA, ARLENE GOJOCCO, ALBERTO ROXAS CORDERO, RICHARD BAUTISTA, JOCELYN GARCIA, YOLANDA CORDOVA, NOEL ROQUE, EDWARD TAN, ERNESTO NARCISO, ENRIQUETA LOCSIN, FRANCIS NORMAN O. LOPES, JULIUS CAESAR, GARCIA, ROSARIO MA. V. ORTIZ, MARIETTA C. CLAVO, ELVIE SENIEL, ROSARIO MARA-MARA, TERESITA REGALA, MELINDA TORRES, MARELLA MIJARES, JOSEFA CABATINGAN, MARA NADOC, DIANE MAYO, TESS PLATA, MAYETTE JOCSON, ARLENE Y. MORTIZ, LIZA MAYO, CARLOS RANARIO, ROSAMARIA T. RADOC and BERNADETTE FERRER, respondents.

 

MENDOZA, J.:p

This is a petition for review on certiorari of the decision of the Court of Appeals 1 in CA-GR No. 28245, dated September 30, 1992, which affirmed with modification the decision of the Regional Trial Court of Makati, Branch 58, ordering petitioners jointly and severally to pay damages to private respondent Amyline Antonio, and its resolution which denied petitioners' motion for reconsideration for lack of merit.

Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used the bus principally in connection with a bus service for school children which they operated in Manila. The couple had a driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out for two weeks, His job was to take school children to and from the St. Scholastica's College in Malate, Manila.

On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with petitioners for the transportation of 33 members of its Young Adults Ministry from Manila to La Union and back in consideration of which private respondent paid petitioners the amount of P3,000.00.

The group was scheduled to leave on November 2, 1984, at 5:00 o'clock in the afternoon. However, as several members of the party were late, the bus did not leave the Tropical Hut at the corner of Ortigas Avenue and EDSA until 8:00 o'clock in the evening. Petitioner Porfirio Cabil drove the minibus.

The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was under repair, sot hat petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was forced to take a detour through the town of Baay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came upon a sharp curve on the highway, running on a south to east direction, which he described as "siete." The road was slippery because it was raining, causing the bus, which was running at the speed of 50 kilometers per hour, to skid to the left road shoulder. The bus hit the left traffic steel brace and sign along the road and rammed the fence of one Jesus Escano, then turned over and landed on its left side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A coconut tree which it had hit fell on it and smashed its front portion.

Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the bus and pinned down by a wooden seat which came down by a wooden seat which came off after being unscrewed. It took three persons to safely remove her from this portion. She was in great pain and could not move.

The driver, petitioner Cabil, claimed he did not see the curve until it was too late. He said he was not familiar with the area and he could not have seen the curve despite the care he took in driving the bus, because it was dark and there was no sign on the road. He said that he saw the curve when he was already within 15 to 30 meters of it. He allegedly slowed down to 30 kilometers per hour, but it was too late.

The Lingayen police investigated the incident the next day, November 3, 1984. On the basis of their finding they filed a criminal complaint against the driver, Porfirio Cabil. The case was later filed with the Lingayen Regional Trial Court. Petitioners Fabre paid Jesus Escano P1,500.00 for the damage to the latter's fence. On the basis of Escano's affidavit of desistance the case against petitioners Fabre was dismissed.

Amyline Antonio, who was seriously injured, brought this case in the RTC of Makati, Metro Manila. As a result of the accident, she is now suffering from paraplegia and is permanently paralyzed from the waist down. During the trial she described the operations she underwent and adduced evidence regarding the cost of her treatment and therapy. Immediately after the accident, she was taken to the Nazareth Hospital in Baay, Lingayen. As this hospital was not adequately equipped, she was transferred to the Sto. Niño Hospital, also in the town of Ba-ay, where she was given sedatives. An x-ray was taken and the damage to her spine was determined to be too severe to be treated there. She was therefore brought to Manila, first to the Philippine General Hospital and later to the Makati Medical Center where she underwent an operation to correct the dislocation of her spine.

In its decision dated April 17, 1989, the trial court found that:

No convincing evidence was shown that the minibus was properly checked for travel to a long distance trip and that the driver was properly screened and tested before being admitted for employment. Indeed, all the evidence presented have shown the negligent act of the defendants which ultimately resulted to the accident subject of this case.

Accordingly, it gave judgment for private respondents holding:

Considering that plaintiffs Word for the World Christian Fellowship, Inc. and Ms. Amyline Antonio were the only ones who adduced evidence in support of their claim for damages, the Court is therefore not in a position to award damages to the other plaintiffs.

WHEREFORE, premises considered, the Court hereby renders judgment against defendants Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y Jamil pursuant to articles 2176 and 2180 of the Civil Code of the Philippines and said defendants are ordered to pay jointly and severally to the plaintiffs the following amount:

1) P93,657.11 as compensatory and actual damages;

2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio;

3) P20,000.00 as moral damages;

4) P20,000.00 as exemplary damages; and

5) 25% of the recoverable amount as attorney's fees;

6) Costs of suit.

SO ORDERED.

The Court of Appeals affirmed the decision of the trial court with respect to Amyline Antonio but dismissed it with respect to the other plaintiffs on the ground that they failed to prove their respective claims. The Court of Appeals modified the award of damages as follows:

1) P93,657.11 as actual damages;

2) P600,000.00 as compensatory damages;

3) P50,000.00 as moral damages;

4) P20,000.00 as exemplary damages;

5) P10,000.00 as attorney's fees; and

6) Costs of suit.

The Court of Appeals sustained the trial court's finding that petitioner Cabil failed to exercise due care and precaution in the operation of his vehicle considering the time and the place of the accident. The Court of Appeals held that the Fabres were themselves presumptively negligent. Hence, this petition. Petitioners raise the following issues:

I. WHETHER OR NOT PETITIONERS WERE NEGLIGENT.

II. WHETHER OF NOT PETITIONERS WERE LIABLE FOR THE INJURIES SUFFERED BY PRIVATE RESPONDENTS.

III WHETHER OR NOT DAMAGES CAN BE AWARDED AND IN THE POSITIVE, UP TO WHAT EXTENT.

Petitioners challenge the propriety of the award of compensatory damages in the amount of P600,000.00. It is insisted that, on the assumption that petitioners are liable an award of P600,000.00 is unconscionable and highly speculative. Amyline Antonio testified that she was a casual employee of a company called "Suaco," earning P1,650.00 a month, and a dealer of Avon products, earning an average of P1,000.00 monthly. Petitioners contend that as casual employees do not have security of tenure, the award of P600,000.00, considering Amyline Antonio's earnings, is without factual basis as there is no assurance that she would be regularly earning these amounts.

With the exception of the award of damages, the petition is devoid of merit.

First, it is unnecessary for our purpose to determine whether to decide this case on the theory that petitioners are liable for breach of contract of carriage or culpa contractual or on the theory of quasi delict or culpa aquiliana as both the Regional Trial Court and the Court of Appeals held, for 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." 2 In either case, the question is whether the bus driver, petitioner Porfirio Cabil, was negligent.

The finding that Cabil drove his bus negligently, while his employer, the Fabres, who owned the bus, failed to exercise the diligence of a good father of the family in the selection and supervision of their employee is fully supported by the evidence on record. These factual findings of the two courts we regard as final and conclusive, supported as they are by the evidence. Indeed, it was admitted by Cabil that on the night in question, it was raining, and as a consequence, the road was slippery, and it was dark. He averred these facts to justify his failure to see that there lay a sharp curve ahead. However, it is undisputed that Cabil drove his bus at the speed of 50 kilometers per hour and only slowed down when he noticed the curve some 15 to 30 meters ahead. 3 By then it was too late for him to avoid falling off the road. Given the conditions of the road and considering that the trip was Cabil's first one outside of Manila, Cabil should have driven his vehicle at a moderate speed. There is testimony 4that the vehicles passing on that portion of the road should only be running 20 kilometers per hour, so that at 50 kilometers per hour, Cabil was running at a very high speed.

Considering the foregoing — the fact that it was raining and the road was slippery, that it was dark, that he drove his bus at 50 kilometers an hour when even on a good day the normal speed was only 20 kilometers an hour, and that he was unfamiliar with the terrain, Cabil was grossly negligent and should be held liable for the injuries suffered by private respondent Amyline Antonio.

Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his employers, the Fabres, were themselves negligent in the selection and supervisions of their employee.

Due diligence in selection of employees is not satisfied by finding that the applicant possessed a professional driver's license. The employer should also examine the applicant for his qualifications, experience and record of service. 5 Due diligence in supervision, on the other hand, requires the formulation of rules and regulations for the guidance of employees and issuance of proper instructions as well as actual implementation and monitoring of consistent compliance with the rules. 6

In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union, apparently did not consider the fact that Cabil had been driving for school children only, from their homes to the St. Scholastica's College in Metro Manila. 7 They had hired him only after a two-week apprenticeship. They had hired him only after a two-week apprenticeship. They had tested him for certain matters, such as whether he could remember the names of the children he would be taking to school, which were irrelevant to his qualification to drive on a long distance travel, especially considering that the trip to La Union was his first. The existence of hiring procedures and supervisory policies cannot be casually invoked to overturn the presumption of negligence on the part of an employer. 8

Petitioners argue that they are not liable because (1) an earlier departure (made impossible by the congregation's delayed meeting) could have a averted the mishap and (2) under the contract, the WWCF was directly responsible for the conduct of the trip. Neither of these contentions hold water. The hour of departure had not been fixed. Even if it had been, the delay did not bear directly on the cause of the accident. With respect to the second contention, it was held in an early case that:

[A] person who hires a public automobile and gives the driver directions as to the place to which he wishes to be conveyed, but exercises no other control over the conduct of the driver, is not responsible for acts of negligence of the latter or prevented from recovering for injuries suffered from a collision between the automobile and a train, caused by the negligence or the automobile driver. 9

As already stated, this case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation for the provisions of the Civil Code on common carriers to apply to them. As this Court has held: 10

Art. 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air for compensation, offering their services to the public.

The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such carrying only as an ancillary activity (in local idiom, as "a sideline"). Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a narrow segment of the general population. We think that Article 1732 deliberately refrained from making such distinctions.

As common carriers, the Fabres were found to exercise "extraordinary diligence" for the safe transportation of the passengers to their destination. This duty of care is not excused by proof that they exercise the diligence of a good father of the family in the selection and supervision of their employee. As Art. 1759 of the Code provides:

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.

The same circumstances detailed above, supporting the finding of the trial court and of the appellate court that petitioners are liable under Arts. 2176 and 2180 for quasi delict, fully justify findings them guilty of breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.

Secondly, we sustain the award of damages in favor of Amyline Antonio. However, we think the Court of Appeals erred in increasing the amount of compensatory damages because private respondents did not question this award as inadequate. 11 To the contrary, the award of P500,000.00 for compensatory damages which the Regional Trial Court made is reasonable considering the contingent nature of her income as a casual employee of a company and as distributor of beauty products and the fact that the possibility that she might be able to work again has not been foreclosed. In fact she testified that one of her previous employers had expressed willingness to employ her again.

With respect to the other awards, while the decisions of the trial court and the Court of Appeals do not sufficiently indicate the factual and legal basis for them, we find that they are nevertheless supported by evidence in the records of this case. Viewed as an action for quasi delict, this case falls squarely within the purview of Art. 2219(2) providing for the payment of moral damages in cases of quasi delict. On the theory that petitioners are liable for breach of contract of carriage, the award of moral damages is authorized by Art. 1764, in relation to Art. 2220, since Cabil's gross negligence amounted to bad faith. 12 Amyline Antonio's testimony, as well as the testimonies of her father and copassengers, fully establish the physical suffering and mental anguish she endured as a result of the injuries caused by petitioners' negligence.

The award of exemplary damages and attorney's fees was also properly made. However, for the same reason that it was error for the appellate court to increase the award of compensatory damages, we hold that it was also error for it to increase the award of moral damages and reduce the award of attorney's fees, inasmuch as private respondents, in whose favor the awards were made, have not appealed. 13

As above stated, the decision of the Court of Appeals can be sustained either on the theory of quasi delict or on that of breach of contract. The question is whether, as the two courts below held, petitioners, who are the owners and driver of the bus, may be made to respond jointly and severally to private respondent. We hold that they may be. In Dangwa Trans. Co. Inc. v. Court of Appeals, 14 on facts similar to those in this case, this Court held the bus company and the driver jointly and severally liable for damages for injuries suffered by a passenger. Again, inBachelor Express, Inc. v. Court ofAppeals 15 a driver found negligent in failing to stop the bus in order to let off passengers when a fellow passenger ran amuck, as a result of which the passengers jumped out of the speeding bus and suffered injuries, was held also jointly and severally liable with the bus company to the injured passengers.

The same rule of liability was applied in situations where the negligence of the driver of the bus on which plaintiff was riding concurred with the negligence of a third party who was the driver of another vehicle, thus causing an accident. In Anuran v. Buño, 16 Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate Court, 17 and Metro Manila Transit Corporation v. Court of Appeals, 18 the bus company, its driver, the operator of the other vehicle and the driver of the vehicle were jointly and severally held liable to the injured passenger or the latters' heirs. The basis of this allocation of liability was explained in Viluan v. Court of Appeals, 19 thus:

Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that of respondents [owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we already ruled inGutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the

owners of the two vehicles are jointly and severally liable for damages. Some members of the Court, though, are of the view that under the circumstances they are liable on quasi-delict. 20

It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals 21 this Court exonerated the jeepney driver from liability to the injured passengers and their families while holding the owners of the jeepney jointly and severally liable, but that is because that case was expressly tried and decided exclusively on the theory of culpa contractual. As this Court there explained:

The trial court was therefore right in finding that Manalo (the driver) and spouses Mangune and Carreon (the jeepney owners) were negligent. However, its ruling that spouses Mangune and Carreon are jointly and severally liable with Manalo is erroneous. The driver cannot be held jointly and severally liable with carrier in case of breach of the contract of carriage. The rationale behind this is readily discernible. Firstly, the contract of carriage is between the carrier is exclusively responsible therefore to the passenger, even if such breach be due to the negligence of his driver (see Viluan v. The Court of Appeals, et al., G.R. Nos. L-21477-81, April 29, 1966, 16 SCRA 742). 22

As in the case of BLTB, private respondents in this case and her coplaintiffs did not stake out their claim against the carrier and the driver exclusively on one theory, much less on that of breach of contract alone. After all, it was permitted for them to allege alternative causes of action and join as many parties as may be liable on such causes of action 23 so long as private respondent and her coplaintiffs do not recover twice for the same injury. What is clear from the cases is the intent of the plaintiff there to recover from both the carrier and the driver, thus, justifying the holding that the carrier and the driver were jointly and severally liable because their separate and distinct acts concurred to produce the same injury.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED with MODIFICATION as to award of damages. Petitioners are ORDERED to PAY jointly and severally the private respondent Amyline Antonio the following amounts:

1) P93,657.11 as actual damages;

2) P500,000.00 as the reasonable amount of loss of earning capacity of plaintiff Amyline Antonio;

3) P20,000.00 as moral damages;

4) P20,000.00 as exemplary damages;

5) 25% of the recoverable amount as attorney's fees; and

6) costs of suit.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-22272             June 26, 1967

ANTONIA MARANAN, plaintiff-appellant, vs.PASCUAL PEREZ, ET AL., defendants. PASCUAL PEREZ, defendant appellant.

Pedro Panganiban for plaintiff-appellant.Magno T. Bueser for defendant-appellant.

BENGZON, J.P., J.:

Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and operated by Pascual Perez when he was stabbed and killed by the driver, Simeon Valenzuela.

Valenzuela was prosecuted for homicide in the Court of First Instance of Batangas. Found guilty, he was sentenced to suffer imprisonment and to indemnify the heirs of the deceased in the sum of P6,000. Appeal from said conviction was taken to the Court of Appeals.1äwphï1.ñët

On December 6 1961, while appeal was pending in the Court of Appeals, Antonia Maranan, Rogelio's mother, filed an action in the Court of First Instance of Batangas to recover damages from Perez and Valenzuela for the death of her son. Defendants asserted that the deceased was killed in self-defense, since he first assaulted the driver by stabbing him from behind. Defendant Perez further claimed that the death was a caso fortuito for which the carrier was not liable.

The court a quo, after trial, found for the plaintiff and awarded her P3,000 as damages against defendant Perez. The claim against defendant Valenzuela was dismissed. From this ruling, both plaintiff and defendant Perez appealed to this Court, the former asking for more damages and the latter insisting on non-liability. Subsequently, the Court of Appeals affirmed the judgment of conviction earlier mentioned, during the pendency of the herein appeal, and on May 19, 1964, final judgment was entered therein. (Rollo, p. 33).

Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila Railroad Co., 97 Phil. 884, that the carrier is under no absolute liability for assaults of its employees upon the passengers. The attendant facts and controlling law of that case and the one at bar are very different however. In the Gillaco case, the passenger was killed outside the scope and the course of duty of the guilty employee. As this Court there found:

x x x when the crime took place, the guard Devesa had no duties to discharge in connection with the transportation of the deceased from Calamba to Manila. The stipulation of facts is clear that when Devesa shot and killed Gillaco, Devesa was assigned to guard the Manila-San Fernando (La Union) trains, and he was at Paco Station awaiting transportation to Tutuban, the starting point of the train that he was engaged to guard. In fact, his tour of duty was to start at 9:00 two hours after the commission of the crime. Devesa was therefore under no obligation to safeguard the passengers of the Calamba-Manila train, where the deceased was riding; and the killing of Gillaco was not done in line of duty. The position of Devesa at the time was that of another would be passenger, a stranger also awaiting transportation, and not that of an employee assigned to discharge any of the duties that the Railroad had assumed by its contract with the deceased. As a result, Devesa's assault can not be deemed in law a breach of

Gillaco's contract of transportation by a servant or employee of the carrier. . . . (Emphasis supplied)

Now here, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose hands the carrier had entrusted the duty of executing the contract of carriage. In other words, unlike the Gillaco case, the killing of the passenger here took place in the course of duty of the guilty employee and when the employee was acting within the scope of his duties.

Moreover, the Gillaco case was decided under the provisions of the Civil Code of 1889 which, unlike the present Civil Code, did not impose upon common carriers absolute liability for the safety of passengers against wilful assaults or negligent acts committed by their employees. The death of the passenger in the Gillaco case was truly a fortuitous event which exempted the carrier from liability. It is true that Art. 1105 of the old Civil Code on fortuitous events has been substantially reproduced in Art. 1174 of the Civil Code of the Philippines but both articles clearly remove from their exempting effect the case where the law expressly provides for liability in spite of the occurrence of force majeure. And herein significantly lies the statutory difference between the old and present Civil Codes, in the backdrop of the factual situation before Us, which further accounts for a different result in theGillaco case. Unlike the old Civil Code, the new Civil Code of the Philippines expressly makes the common carrier liable for intentional assaults committed by its employees upon its passengers, by the wording of Art. 1759 which categorically states that

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.

The Civil Code provisions on the subject of Common Carriers1 are new and were taken from Anglo-American Law.2 There, the basis of the carrier's liability for assaults on passengers committed by its drivers rests either on (1) the doctrine of respondeat superior or (2) the principle that it is the carrier's implied duty to transport the passenger safely.3

Under the first, which is the minority view, the carrier is liable only when the act of the employee is within the scope of his authority and duty. It is not sufficient that the act be within the course of employment only.4

Under the second view, upheld by the majority and also by the later cases, it is enough that the assault happens within the course of the employee's duty. It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders.5 The carrier's liability here is absolute in the sense that it practically secures the passengers from assaults committed by its own employees.6

As can be gleaned from Art. 1759, the Civil Code of the Philippines evidently follows the rule based on the second view. At least three very cogent reasons underlie this rule. As explained in Texas Midland R.R. v. Monroe, 110 Tex. 97, 216 S.W. 388, 389-390, and Haver v. Central Railroad Co., 43 LRA 84, 85: (1) the special undertaking of the carrier requires that it furnish its passenger that full measure of protection afforded by the exercise of the high degree of care prescribed by the law, inter alia from violence and insults at the hands of strangers and other passengers, but above all, from the acts of the carrier's own servants charged with the passenger's safety; (2) said liability of the carrier for the servant's violation of duty to passengers, is the result of the formers confiding in the servant's hands the performance of his contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with the utmost care prescribed by law; and (3) as between the carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the carrier's employees against passengers, since it, and not the passengers, has power to select and remove them.

Accordingly, it is the carrier's strict obligation to select its drivers and similar employees with due regard not only to their technical competence and physical ability, but also, no less important, to their total personality, including their patterns of behavior, moral fibers, and social attitude.

Applying this stringent norm to the facts in this case, therefore, the lower court rightly adjudged the defendant carrier liable pursuant to Art. 1759 of the Civil Code. The dismissal of the claim against the defendant driver was also correct. Plaintiff's action was predicated on breach of contract of carriage7 and the cab driver was not a party thereto. His civil liability is covered in the criminal case wherein he was convicted by final judgment.

In connection with the award of damages, the court a quo granted only P3,000 to plaintiff-appellant. This is the minimum compensatory damages amount recoverable under Art. 1764 in connection with Art. 2206 of the Civil Code when a breach of contract results in the passenger's death. As has been the policy followed by this Court, this minimal award should be increased to P6,000. As to other alleged actual damages, the lower court's finding that plaintiff's evidence thereon was not convincing,8 should not be disturbed. Still, Arts. 2206 and 1764 awardmoral damages in addition to compensatory damages, to the parents of the passenger killed to compensate for the mental anguish they suffered. A claim therefor, having been properly made, it becomes the court's duty to award moral damages.9 Plaintiff demands P5,000 as moral damages; however, in the circumstances, We consider P3,000 moral damages, in addition to the P6,000 damages afore-stated, as sufficient. Interest upon such damages are also due to plaintiff-appellant. 10

Wherefore, with the modification increasing the award of actual damages in plaintiff's favor to P6,000, plus P3,000.00 moral damages, with legal interest on both from the filing of the complaint on December 6, 1961 until the whole amount is paid, the judgment appealed from is affirmed in all other respects. No costs. So ordered.

EN BANC

G.R. No. L-19161     April 29, 1966

MANILA RAILROAD COMPANY, Petitioner, vs. MACARIA BALLESTEROS, TIMOTEO CAMAYO, JOSE REYES and JULIAN

MAIMBAN, JR., Respondents.

MAKALINTAL, J.: chanrobles virtual law library

In civil case No. 45968 of the Court of First Instance of Manila (Macaria Ballesteros, Timoteo Camayo, Jose Reyes and Julian Maimban, Jr. vs. Manila Railroad Company) the defendant was adjudged to pay damages in the following amounts: P2,400 to Macaria Ballesteros; P4,000 to Timoteo Camayo; P3,000 to Jose Reyes: and P2,000, plus P1,000 as attorney's fees, to Julian Maimban, Jr.chanroblesvirtualawlibrary chanrobles virtual law library

The defendant appealed from the judgment, but upon motion by the plaintiffs, the trial court, by order dated October 14, 1961, dismissed the appeal on the ground that it was "manifestly and palpably frivolous and interposed ostensibly to delay the settlement of the just and reasonable claims of the herein plaintiffs, which have been pending since 1958." The defendant moved to reconsider, and upon denial of its motion instituted in this Court the instant petition for mandamus to set aside the order of dismissal and to order respondent court to give due course to the appeal.chanroblesvirtualawlibrary chanrobles virtual law library

In filing the petition directly with this Court, petitioner evidently intended to raise only questions of law in the appeal contemplated, since under Rule 41, section 15, "when erroneously a motion to dismiss an appeal is granted or a record on appeal is disallowed by the trial court, a proper petition for mandamus may be filed in the appellate court;" and under section 17(6) of the Judiciary Act this Court may review on appeal only questions of law in civil cases decided by inferior courts unless the value in controversy exceeds P200,000.chanroblesvirtualawlibrary chanrobles virtual law library

The fact that an appeal is frivolous and interposed only for purposes of delay has been recognized as a valid ground to deny issuance of the writ of mandamus to compel the trial court to approve and certify the appeal. In De la Cruz vs. Blanco and Quevedo, 73 Phil. 596, We held:

And where as in the instant case, the dismissal has been ordered by the trial court, it would not be disturbed in the Appellate Court if the latter finds the appeal to have been interposed ostensibly for delay. It has been held that a frivolous appeal is one presenting no justiciable question or one so readily cognizable as devoid of merit on the face of the record that there is little, if any, prospect that it can over succeed. The instant case is one such instance in which the appeal is evidently without merit, taken manifestly for delay.

And in Paner vs. Yatco, 87 Phil. 271, We denied the writ prayed for and held that "while strictly and legally speaking the petition may be granted, we may, before acting thereon, inquire into the facts involved in order to determine whether once the writ is granted and the case is brought up here on appeal the appellant has any chance, even possibility, of having the basic decision of the trial court set aside or modified; for if the appellant has not that prospect or likelihood then the granting of the writ and the consequent appeal would be futile and would mean only a waste of time to the parties and to this Court." chanrobles virtual law library

The material facts, as found by respondent court in its decision, are as follows: Private respondents here, plaintiffs below, were passengers on petitioner's bus, the driver of which was Jose Anastacio. In Bayombong, Nueva Vizcaya, Anastacio stopped the bus and got off to replace a defective spark plug. While he was thus engaged, one Dionisio Abello, an auditor assigned to defendant company by the General Auditing Office, took the wheel and told the driver to sit somewhere else. With Abello driving, the bus proceeded on its way, from time to time stopping to pick up passengers. Anastacio tried twice to take the wheel back but Abello would not relinquish it. Then, in the language of the trial court, "while the bus was negotiating between Km. posts 328 and 329 (in Isabela) a freight truck ... driven by Marcial Nocum ... bound for Manila, was also negotiating the

same place; when these two vehicles were about to meet at the bend of the road Marcial Nocum, in trying to evade several holes on the right lane, where his truck was running, swerved his truck towards the middle part of the road and in so doing, the left front fender and left side of the freight truck smashed the left side of the bus resulting in extensive damages to the body of the bus and injuries to seventeen of its passengers, ... including the plaintiffs herein." chanrobles virtual law library

In rejecting petitioner's contention that the negligence of Marcial Nocum could not be imputed to it and relieved it from liability, the trial court found that Dionisio Abello "was likewise reckless when he was driving the bus at the rate of from 40 to 50 kilometers per hour on a bumpy road at the moment of the collision." chanrobles virtual law library

Another defense put up by petitioner is that since Abello was not its employee it should not be held responsible for his acts. This defense was correctly overruled by the trial court, considering the provisions of Article 1763 of the Civil Code and section 48 (b) of the Motor Vehicle Law, which respectively provide as follows:

Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilfull 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.chanroblesvirtualawlibrary chanrobles virtual law library

Sec. 48(b). No professional chauffeur shall permit any unlicensed person to drive the motor vehicle under his control, or permit a person, sitting beside him or in any other part of the car, to interfere with him in the operation of the motor vehicle, by allowing said person to take hold of the steering wheel, or in any other manner take part in the manipulation or control of the car.

It appears further, and so the trial court found, that there were negotiations between the parties to compromise the case, as a result of which respondents herein, plaintiffs below, considerably reduced their claims to the amounts subsequently awarded in the judgment; that petitioner had in fact settled the claims of the other passengers who were also injured in the same accident and even the claim for damages filed in another action by the owner of the freight truck; and that the Government Corporate Counsel himself, who represents herein petitioner, rendered two separate opinions (Op. No. 86, May 19, 1960; and Op. No. 99, series of 1961) wherein, after analyzing the facts and the law applicable, he reached the conclusion that the acts of the bus personnel, particularly "in allowing Mr. Abello to drive despite two occasions when the bus stopped and the regular driver could have taken over, constitute reckless imprudence and wanton injurious conduct on the part of the MRR employees." On the basis of those opinions the Government Corporate Counsel advised petitioner that the offer of the claimants was reasonable and should be accepted. His advice, however, was not favorably acted upon, petitioner obviously preferring to litigate.chanroblesvirtualawlibrary chanrobles virtual law library

The issues proposed to be taken up on appeal, as set forth in the petition, are whether or not Dionisio Abello acted with reckless negligence while driving petitioner's bus at the time of the accident, and whether or not petitioner may be held liable on account of such negligence, considering that he was not its employee. These are no longer justiciable questions which would justify our issuing the peremptory writ prayed for. The first is a question of fact on which the affirmative finding of respondent court is not reviewable by Us; and the second is one as to which there can be no possible doubt in view of the provisions of the Civil Code and of the Motor Vehicle Law hereinbefore cited. There would be no point in giving the appeal due course.chanroblesvirtualawlibrary chanrobles virtual law library

The writ prayed for is denied, with costs against petitioner.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

 

G.R. No. 108897 October 2, 1997

SARKIES TOURS PHILIPPINES, INC., petitioner, vs.HONORABLE COURT OF APPEALS (TENTH DIVISION), DR. ELINO G. FORTADES, MARISOL A. FORTADES and FATIMA MINERVA A. FORTADES, respondents.

 

ROMERO, J.:

This petition for review is seeking the reversal of the decision of the Court of Appeals in CA-G.R. CV No. 18979 promulgated on January 13, 1993, as well as its resolution of February 19, 1993, denying petitioner's motion for reconsideration for being a mere rehash of the arguments raised in the appellant's brief.

The case arose from a damage suit filed by private respondents Elino, Marisol, and Fatima Minerva, all surnamed Fortades, against petitioner for breach of contract of carriage allegedly attended by bad faith.

On August 31, 1984, Fatima boarded petitioner's De Luxe Bus No. 5 in Manila on her way to Legazpi City. Her brother Raul helped her load three pieces of luggage containing all of her optometry review books, materials and equipment, trial lenses, trial contact lenses, passport and visa, as well as her mother Marisol's U.S. immigration (green) card, among other important documents and personal belongings. Her belongings were kept in the baggage compartment of the bus, but during a stopover at Daet, it was discovered that only one bag remained in the open compartment. The others, including Fatima's things, were missing and might have dropped along the way. Some of the passengers suggested retracing the route of the bus to try to recover the lost items, but the driver ignored them and proceeded to Legazpi City.

Fatima immediately reported the loss to her mother who, in turn, went to petitioner's office in Legazpi City and later at its head office in Manila. Petitioner, however, merely offered her P1,000.00 for each piece of luggage lost, which she turned down. After

returning to Bicol, disappointed but not defeated, mother and daughter asked assistance from the radio stations and even from Philtranco bus drivers who plied the same route on August 31st. The effort paid off when one of Fatima's bags was recovered. Marisol further reported the incident to the National Bureau of Investigation's field office in Legazpi City and to the local police.

On September 20, 1984, respondents, through counsel, formally demanded satisfaction of their complaint from petitioner. In a letter dated October 1, 1984, the latter apologized for the delay and said that "(a) team has been sent out to Bicol for the purpose of recovering or at least getting the full detail" 1 of the incident.

After more than nine months of fruitless waiting, respondents decided to file the case below to recover the value of the remaining lost items, as well as moral and exemplary damages, attorney's fees and expenses of litigation. They claimed that the loss was due to petitioner's failure to observe extraordinary diligence in the care of Fatima's luggage and that petitioner dealt with them in bad faith from the start. Petitioner, on the other hand, disowned any liability for the loss on the ground that Fatima allegedly did not declare any excess baggage upon boarding its bus.

On June 15, 1988, after trial on the merits, the court a quo adjudged the case in favor of respondents, viz.:

PREMISES CONSIDERED, judgment is hereby rendered in favor of the plaintiffs (herein respondents) and against the herein defendant Sarkies Tours Philippines, Inc., ordering the latter to pay to the former the following sums of money, to wit:

1. The sum of P30,000.00 equivalent to the value of the personal belongings of plaintiff Fatima Minerva Fortades, etc. less the value of one luggage recovered;

2. The sum of P90,000.00 for the transportation expenses, as well as moral damages;

3. The sum of P10,000.00 by way of exemplary damages;

4. The sum of P5,000.00 as attorney's fees; and

5. The sum of P5,000.00 as litigation expenses or a total of One Hundred Forty Thousand (P140,000.00) Pesos.

to be paid by herein defendant Sarkies Tours Philippines, Inc. to the herein plaintiffs within 30 days from receipt of this Decision.

SO ORDERED.

On appeal, the appellate court affirmed the trial court's judgment, but deleted the award of moral and exemplary damages. Thus,

WHEREFORE, premises considered, except as above modified, fixing the award for transportation expenses at P30,000.00 and the deletion of the award for moral and exemplary damages, the decision appealed from is AFFIRMED, with costs against defendant-appellant.

SO ORDERED.

Its motion for reconsideration was likewise rejected by the Court of Appeals, so petitioner elevated its case to this Court for a review.

After a careful scrutiny of the records of this case, we are convinced that the trial and appellate courts resolved the issues judiciously based on the evidence at hand.

Petitioner claims that Fatima did not bring any piece of luggage with her, and even if she did, none was declared at the start of the trip. The documentary and testimonial evidence presented at the trial, however, established that Fatima indeed boarded petitioner's De Luxe Bus No. 5 in the evening of August 31, 1984, and she brought three pieces of luggage with her, as testified by her brother Raul, 2 who helped her pack her things and load them on said bus. One of the bags was even recovered by a Philtranco bus driver. In its letter dated October 1, 1984, petitioner tacitly admitted its liability by apologizing to respondents and assuring them that efforts were being made to recover the lost items.

The records also reveal that respondents went to great lengths just to salvage their loss. The incident was reported to the police, the NBI, and the regional and head offices of petitioner. Marisol even sought the assistance of Philtranco bus drivers and the radio stations. To expedite the replacement of her mother's lost U.S. immigration documents, Fatima also had to execute an affidavit of loss. 3 Clearly, they would not have gone through all that trouble in pursuit of a fancied loss.

Fatima was not the only one who lost her luggage. Apparently, other passengers had suffered a similar fate: Dr. Lita Samarista testified that petitioner offered her P1,000.00 for her lost baggage and she accepted it; 4 Carleen Carullo-Magno lost her chemical engineering review materials, while her brother lost abaca products he was transporting to Bicol. 5

Petitioner's receipt of Fatima's personal luggage having been thus established, it must now be determined if, as a common carrier, it is responsible for their loss. Under the Civil Code, "(c)ommon 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 . . . transported by them," 6 and this liability "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 person who has a right to receive them," 7 unless the loss is due to any of the excepted causes under Article 1734 thereof. 8

The cause of the loss in the case at bar was petitioner's negligence in not ensuring that the doors of the baggage compartment of its bus were securely fastened. As a result of this lack of care, almost all of the luggage was lost, to the prejudice of the paying passengers. As the Court of Appeals correctly observed:

. . . . Where the common carrier accepted its passenger's baggage for transportation and even had it placed in the vehicle by its own employee, its failure to collect the freight charge is the common carrier's own lookout. It is responsible for the consequent loss of the baggage. In the instant case, defendant appellant's employee even helped Fatima Minerva Fortades and her brother load the luggages/baggages in the bus' baggage compartment, without asking that they be weighed, declared, receipted or paid for (TSN, August 4, 1986, pp. 29, 34, 54, 57, 70; December 23, 1987, p. 35). Neither was this required of the other passengers (TSN, August 4, 1986, p. 104; February 5, 1988; p. 13).

Finally, petitioner questions the award of actual damages to respondents. On this point, we likewise agree with the trial and appellate courts' conclusions. There is no dispute that of the three pieces of luggage of Fatima, only one was recovered. The other two contained optometry books, materials, equipment, as well as vital documents and personal belongings. Respondents had to shuttle between Bicol and Manila

in their efforts to be compensated for the loss. During the trial, Fatima and Marisol had to travel from the United States just to be able to testify. Expenses were also incurred in reconstituting their lost documents. Under these circumstances, the Court agrees with the Court of Appeals in awarding P30,000.00 for the lost items and P30,000.00 for the transportation expenses, but disagrees with the deletion of the award of moral and exemplary damages which, in view of the foregoing proven facts, with negligence and bad faith on the fault of petitioner having been duly established, should be granted to respondents in the amount of P20,000.00 and P5,000.00, respectively.

WHEREFORE, the assailed decision of the Court of Appeals dated January 13, 1993, and its resolution dated February 19, 1993, are hereby AFFIRMED with the MODIFICATION that petitioner is ordered to pay respondents an additional P20,000.00 as moral damages and P5,000.00 as exemplary damages. Costs against petitioner.

SO ORDERED.

FIRST DIVISION

[G.R. No. 104685.  March 14, 1996]

SABENA BELGIAN WORLD AIRLINES, petitioner, vs. HON. COURT OF APPEALS and MA. PAULA SAN AGUSTIN, respondents.

D E C I S I O N

VITUG, J.:

The appeal before the Court involves the issue of an airline’s liability for lost luggage.  The petition for review assails the decision of the Court Appeals,[1] dated 27 February 1992, affirming an award of damages made by the trial court in a complaint filed by private respondent against petitioner.

The factual background of the case, narrated by the trial court and reproduced at length by the appellate court, is hereunder quoted:

“On August 21, 1987, plaintiff was a passenger on board Flight SN 284 of defendant airline originating from Casablanca to Brussels, Belgium on her way back to Manila. Plaintiff checked in her luggage which contained her valuables, namely: jewelries valued at $2,350.00; clothes $1,500.00; shoes/bag $150; accessories $75; luggage itself $10.00; or a total of $4,265.00, for which she was issued Tag No. 71423. She stayed overnight in Brussels and her luggage was left on board Flight SN 284.

“Plaintiff arrived at Manila International Airport on September 2, 1987 and immediately submitted her Tag No. 71423 to facilitate the release of her luggage hut the luggage was missing.  She was advised to accomplish and submit a property Irregularity Report which she submitted and filed on the same day.

“She followed up her claim on September 14, 1987 but the luggage remained to be missing.

“On September 15, 1987, she filed her formal complaint with the office of Ferge Massed, defendant’s Local Manager, demanding immediate attention (Exh. ‘A’).

“On September 30, 1987, on the occasion of plaintiff’s following up of her luggage claim, she was furnished copies of defendant’s telexes with an information that the Brussel’s Office of defendant found the luggage and that they have broken the locks for identification (Exhibit ‘B’).  Plaintiff was assured by the defendant that it has notified its Manila Office that the luggage will be shipped to Manila on October 27, 1987.  But unfortunately plaintiff was informed that the luggage was lost for the second time (Exhibits ‘C’ and ‘C-1’).

“At the time of the filling of the complaint, the luggage with its content has not been found.

“Plaintiff demanded from the defendant the money value of the luggage and its contents amounting to $4,265.00 or its exchange value, but defendant refused to settle the claim.

“Defendant asserts in its Answer and its evidence tend to show that while it admits that the plaintiff was a passenger on board Flight No. SN 284 with a piece of checked in luggage bearing Tag No. 71423, the loss of the luggage was due to plaintiff’s sole if not contributory negligence; that she did not declare the valuable items in her checked-in luggage at the flight counter when she checked in for her flight from Casablanca to Brussels so that either the representative of the defendant at the counter would have advised her to secure an insurance on the alleged valuable items and required her to pay

additional charges, or would have refused acceptance of her baggage as required by the generally accepted practices of international carriers; that Section 9(a), Article IX of General Conditions of carriage requiring passengers to collect their checked baggage at the place of stopover, plaintiff neglected to claim her baggage at the Brussels Airport; that plaintiff should have retrieved her undeclared valuables from her baggage at the Brussels Airport since her flight from Brussels to Manila will still have to visit for confirmation inasmuch as only her flight from Casablanca to Brussels was confirmed; that defendant incorporated in all Sabena Plane Tickets, including Sabena Ticket No. 082422-72502241 issued to plaintiff in Manila on August 21, 1987, a warning that ‘Items of value should be carried on your person’ and that some carriers assume no liability for fragile, valuable or perishable articles and that further information may he obtained from the carrier for guidance’; that granting without conceding that defendant is liable, its liability is limited only to US $20.00 per kilo due to plaintiff’s failure to declare a higher value on the contents of her checked in luggage and pay additional charges thereon.”[2]

The trial court rendered judgment ordering petitioner Sabena Belgian World Airlines to pay private respondent Ma. Paula San Agustin –

”(a) x x x US$4,265.00 or its legal exchange in Philippine pesos;

“(b) x x x P30,000.00 as moral damages;

“(c) x x x P10,000.00 as exemplary damages;

“(d) x x x P10,000.00 attorney’s fees; and

“(e) (t)he costs of the suit.”[3]

Sabena appealed the decision of the Regional Trial Court to the Court of Appeals. The appellate court, in its decision of 27 February 1992, affirmed in toto the trial court’s judgment.

Petitioner airline company, in contending that the alleged negligence of private respondent should be considered the primary cause for the loss of her luggage, avers that, despite her awareness that the flight ticket had been confirmed only for Casablanca and Brussels, and that her flight from Brussels to Manila had yet to be confirmed, she did not retrieve the luggage upon arrival in Brussels.  Petitioner insists that private respondent, being a seasoned international traveler, must have likewise been familiar with the standard provisions contained in her flight ticket that items of value are required to be hand-carried by the passenger and that the liability of the airline or loss, delay or damage to baggage would be limited, in any event, to only US$20.00 per kilo unless a higher value is declared in advance and corresponding additional charges are paid thereon.  At the Casablanca International Airport, private respondent, in checking in her luggage, evidently did not declare its contents or value.  Petitioner cites Section 5(c), Article IX, of the General Conditions of Carriage, signed at Warsaw, Poland, on 02 October 1929, as amended by the Hague Protocol of 1955, generally observed by International carriers, stating, among other things, that:

“Passengers shall not include in his checked baggage, and the carrier may refuse to carry as checked baggage, fragile or perishable articles, money, jewelry, precious metals, negotiable papers, securities or other valuables.”[4]

Fault or negligence consists in the omission of that diligence which is demanded by the nature of an obligation and corresponds with the circumstances of the person, of the time, and of the place.  When the source of an obligation is derived from a contract, the mere breach or non-fulfillment of the prestation gives rise to the presumption of fault on the part of the obligor.  This rule is not different in the case of common carriers in the carriage of goods which, indeed, are bound to observe not just the due diligence of a good father of a family but that of “extraordinary” care in the vigilance over the goods.  The appellate court has aptly observed:

“x x x Art. 1733 of the [Civil] Code provides that from the very nature of their business and by reasons of public policy, common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them.  This extraordinary responsibility, according to Art. 1736, lasts from the time the goods are unconditionally placed in the possession of and received by the carrier until they are delivered actually or constructively to the consignee or person who has the right to receive them.  Art. 1737 states that the common carrier’s duty to observe extraordinary diligence in the vigilance over the goods transported by them ‘remains in full force and effect even when they are temporarily unloaded or stored in transit.’ And Art. 1735 establishes the presumption that if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they had observed extraordinary diligence as required in Article 1733.

“The only exceptions to the foregoing extraordinary responsibility of the common carrier is when the loss, destruction, or deterioration of the goods is due to any of the following causes:

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

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

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

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

“’(5) Order or act of competent public authority.’

“Not one of the above excepted causes obtains in this case.”[5]

The above rules remain basically unchanged even when the contract is breached by tort[6] although noncontradictory principles on quasi-delict may then be assimilated as also forming part of the governing law.  Petitioner is not thus entirely off track when it has likewise raised in its defense the tort doctrine of proximate cause.  Unfortunately for petitioner, however, the doctrine cannot, in this particular instance, support its case.  Proximate cause is that which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces injury and without which the result would not have occurred.  The exemplification by the Court in one case[7] is simple and explicit; viz:

“(T)he proximate legal cause is that acting first and producing the injury, either immediately or by setting other events in motion, all constituting a natural and Continuous chain of events, each having a close causal Connection with its immediate predecessor, the final event in the chain immediately affecting the injury as a natural and probable result of the cause which first acted, under such circumstances that the person responsible for the first event should, as an ordinarily prudent, and intelligent person, have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom.”

It remained undisputed that private respondent’s luggage was lost while it was in the custody of petitioner.  It was supposed to arrive on the same flight that private respondent took in returning to Manila on 02 September 1987.  When she discovered that the luggage was missing, she promptly accomplished and filed a Property Irregularity Report.  She followed up her claim on 14 September 1987, and filed, on the following day, a formal letter-complaint with petitioner.  She felt relieved when, on 23 October 1987, she was advised that her luggage had finally been found, with its contents intact when examined, and that she could expect it to arrive on 27 October 1987.  She then waited anxiously only to be told later that her luggage had been lost for the second time.  Thus, the appellate court, given all the facts before it, sustained the trial court in finding petitioner ultimately guilty of “gross negligence” in the handling of private respondent’s luggage.  The “loss of said baggage not only once by twice,” said the appellate court, “underscores the wanton negligence and lack of care” on the part of the carrier.

The above findings, which certainly cannot be said to be without basis, foreclose whatever rights petitioner might have had to the possible limitation of liabilities enjoyed by international air carriers under the Warsaw Convention (Convention for the Unification of Certain Rules Relating to International Carriage by Air, as amended by the Hague Protocol of 1955, the Montreal Agreement of 1966, the Guatemala Protocol of 1971 and the Montreal Protocols of 1975).  In Alitalia vs. Intermediate Appellate Court,[8] now Chief Justice Andres R. Narvasa, speaking for the Court, has explained it well; he said:

“The Warsaw Convention however denies to the carrier availment ‘of the provisions which exclude or limit his liability, if the damage is caused by his wilful misconduct or by such default on his part as, in accordance with the law of the court seized of the case, is considered to be equivalent to wilful misconduct,’ or ‘if the damage is (similarly) caused x x x by any agent of the carrier acting within the scope of his employment.’ The Hague Protocol amended the Warsaw Convention by removing the provision that if the airline took all necessary steps to avoid the damage, it could exculpate itself completely, and declaring the stated limits of liability not applicable ‘if it is proved that the damage resulted from an act or omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result.’ The same deletion was effected by the Montreal Agreement of 1966, with the result that a passenger could recover unlimited damages upon proof of wilful misconduct.

“The Convention does not thus operate as an exclusive enumeration of the instances of an airline’s liability, or as an absolute limit of the extent of that liability.  Such a proposition is not borne out by the language of the Convention, as this Court has now, and at an earlier time, pointed out.  Moreover, slight reflection readily leads to the conclusion that it should be deemed a limit of liability only in those cases where the cause of the death or injury to person, or destruction, loss or damage to property or delay in its transport is not attributable to or attended by any wilful misconduct, bad faith, recklessness or otherwise improper conduct on the part of any official or employee for which the carrier is responsible, and there is otherwise no special or extraordinary form of resulting injury.  The Contention’s provisions, in short, do not ‘regulate or exclude liability for other breaches of contract by the carrier’ or misconduct of its officers and employees, or for some particular or exceptional type of damage.  Otherwise, ‘an air carrier would be exempt from any liability for damages in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd.’ Nor may it for a moment be supposed that if a member of the aircraft complement should inflict some physical injury on a passenger, or maliciously destroy or damage the latter’s property, the Convention might successfully be pleaded as the sole gauge to determine the carrier’s liability to the passenger.  Neither may the Convention be invoked to justify the disregard of some extraordinary sort of damage resulting to a passenger and preclude recovery therefor beyond the limits set by said Convention.  It is in this sense that the Convention has been applied, or ignored, depending on the peculiar facts presented by each case.”

The Court thus sees no error in the preponderant application to the instant case by the appellate court, as well as by the trial court, of the usual rules on the extent of recoverable damages beyond the Warsaw limitations.  Under domestic law and jurisprudence (the Philippines being the country of destination), the attendance of gross negligence (given the equivalent of fraud or bad faith) holds the common carrier liable for all damages which can be reasonably attributed, although unforeseen, to the non-performance of the obligation,[9]including moral and exemplary damages.[10]

WHEREFORE, the decision appealed from is AFFIRMED.  Costs against petitioner.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-9671             August 23, 1957

CESAR L. ISAAC, plaintiff-appellant, vs.A. L. AMMEN TRANSPORTATION CO., INC., defendant-appellee.

Angel S. Gamboa for appellant.Manuel O. Chan for appellee.

BAUTISTA ANGELO, J.:

A. L. Ammen Transportation Co., Inc., hereinafter referred to as defendant, is a corporation engaged in the business of transporting passengers by land for compensation in the Bicol provinces and one of the lines it operates is the one connecting Legaspi City, Albay with Naga City, Camarines Sur. One of the buses which defendant was operating is Bus No. 31. On May 31, 1951, plaintiff boarded said bus as a passenger paying the required fare from Ligao, Albay bound for Pili, Camarines Sur, but before reaching his destination, the bus collided with a motor vehicle of the pick-up type coming from the opposite direction, as a result of which plaintiff's left arm was completely severed and the severed portion fell inside the bus. Plaintiff was rushed to a hospital in Iriga, Camarines Sur where he was given blood transfusion to save his life. After four days, he was transferred to another hospital in Tabaco, Albay, where he under went treatment for three months. He was moved later to the Orthopedic Hospital where he was operated on and stayed there for another two months. For these services, he incurred expenses amounting to P623.40, excluding medical fees which were paid by defendant.

As an aftermath, plaintiff brought this action against defendants for damages alleging that the collision which resulted in the loss of his left arm was mainly due to the gross incompetence and recklessness of the driver of the bus operated by defendant and that defendant incurred in culpa contractual arising from its non-compliance with its obligation to transport plaintiff safely to his, destination. Plaintiff prays for judgment against defendant as follows: (1) P5,000 as expenses for his medical treatment, and P3,000 as the cost of an artificial arm, or a total of P8,000; (2) P6,000 representing loss of earning; (3) P75,000 for diminution of his earning capacity; (4) P50,000 as moral damages; and (5) P10,000 as attorneys' fees and costs of suit.

Defendant set up as special defense that the injury suffered by plaintiff was due entirely to the fault or negligence of the driver of the pick-up car which collided with the bus driven by its driver and to the contributory negligence of plaintiff himself. Defendant further claims that the accident which resulted in the injury of plaintiff is one which defendant could not foresee or, though foreseen, was inevitable.

The after trial found that the collision occurred due to the negligence of the driver of the pick-up car and not to that of the driver of the bus it appearing that the latter did everything he could to avoid the same but that notwithstanding his efforts, he was not able to avoid it. As a consequence, the court dismissed complaint, with costs against plaintiff. This is an appeal from said decision.

It appears that plaintiff boarded a bus of defendant as paying passenger from Ligao, Albay, bound for Pili, Camarines Sur, but before reaching his destination, the bus collided with a pick-up car which was coming from the opposite direction and, as a, result, his left arm was completely severed and fell inside the back part of the bus. Having this background in view, and considering that plaintiff chose to hold defendant liable on its contractual obligation to carry him safely to his place of destination, it becomes important to determine the nature and

extent of the liability of a common carrier to a passenger in the light of the law applicable in this jurisdiction.

In this connection, appellant invokes the rule that, "when an action is based on a contract of carriage, as in this case, all that is necessary to sustain recovery is proof of the existence of the contract of the breach thereof by act or omission", and in support thereof, he cites several Philippine cases.1 With the ruling in mind, appellant seems to imply that once the contract of carriage is established and there is proof that the same was broken by failure of the carrier to transport the passenger safely to his destination, the liability of the former attaches. On the other hand, appellee claims that is a wrong presentation of the rule. It claims that the decisions of this Court in the cases cited do not warrant the construction sought to be placed upon, them by appellant for a mere perusal thereof would show that the liability of the carrier was predicated not upon mere breach of its contract of carriage but upon the finding that its negligence was found to be the direct or proximate cause of the injury complained of. Thus, appellee contends that "if there is no negligence on the part of the common carrier but that the accident resulting in injuries is due to causes which are inevitable and which could not have been avoided or anticipated notwithstanding the exercise of that high degree of care and skill which the carrier is bound to exercise for the safety of his passengers", neither the common carrier nor the driver is liable therefor.

We believe that the law concerning the liability of a common carrier has now suffered a substantial modification in view of the innovations introduced by the new Civil Code. These innovations are the ones embodied in Articles 1733, 1755 and 1756 in so far as the relation between a common carrier and its passengers is concerned, which, for ready reference, we quote hereunder:

ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extra ordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.

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.

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.

The Code Commission, in justifying this extraordinary diligence required of a common carrier, says the following:

A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost deligence of very cautions persons, with due regard for all circumstances. This extraordinary diligence required of common carriers is calculated to protect the passengers from the tragic mishaps that frequently occur in connection with rapid modern transportation. This high standard of care is imperatively demanded by the precariousness of human life and by the consideration that every person must in every way be safeguarded against all injury. (Report of the Code Commission, pp. 35-36)" (Padilla, Civil Code of the Philippines, Vol. IV, 1956 ed., p. 197).

From the above legal provisions, we can make the following restatement of the principles governing the liability of a common

carrier: (1) the liability of a carrier is contractual and arises upon breach of its obligation. There is breach if it fails to exert extraordinary diligence according to all circumstances of each case; (2) a carrier is obliged to carry its passenger with the utmost diligence of a very cautious person, having due regard for all the circumstances; (3) a carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to, passengers, it being its duty to prove that it exercised extraordinary diligence; and (4) the carrier is not an insurer against all risks of travel.

The question that now arises is: Has defendant observed extraordinary diligence or the utmost diligence of every cautious person, having due regard for all circumstances, in avoiding the collision which resulted in the injury caused to the plaintiff?

After examining the evidence in connection with how the collision occurred, the lower court made the following finding:

Hemos examinado muy detenidamente las pruebas presentadas en la vista, principalmente, las declaraciones que hemos acotado arriba, y hernos Ilegado a la conclusion de que el demandado ha hecho, todo cuanto estuviere de su parte para evitar el accidente, pero sin embargo, no ha podido evitarlo.

EI hecho de que el demandado, antes del choque, tuvo que hacer pasar su truck encima de los montones de grava que estaban depositados en la orilla del camino, sin que haya ido mas alla, por el grave riesgo que corrian las vidas de sus pasajeros, es prueba concluyente de lo que tenemos dicho, a saber: — que el cuanto esuba de su parte, para evitar el accidente, sin que haya podidoevitardo, por estar fuera de su control.

The evidence would appear to support the above finding. Thus, it appears that Bus No. 31, immediately prior to the collision, was running at a moderate speed because it had just stopped at the school zone of Matacong, Polangui, Albay. The pick-up car was at full speed and was running outside of its proper lane. The driver of the bus, upon seeing the manner in which the pick-up was then running, swerved the bus to the very extreme right of the road until its front and rear wheels have gone over the pile of stones or gravel situated on the rampart of the road. Said driver could not move the bus farther right and run over a greater portion of the pile, the peak of which was about 3 feet high, without endangering the safety of his passengers. And notwithstanding all these efforts, the rear left side of the bus was hit by the pick-up car.

Of course, this finding is disputed by appellant who cannot see eye to eye with the evidence for the appellee and insists that the collision took place because the driver of the bus was going at a fast speed. He contends that, having seen that a car was coming from the opposite direction at a distance which allows the use of moderate care and prudence to avoid an accident, and knowing that on the side of the road along which he was going there was a pile of gravel, the driver of the bus should have stopped and waited for the vehicle from the opposite direction to pass, and should have proceeded only after the other vehicle had passed. In other words, according to appellant, the act of the driver of the bus in squeezing his way through of the bus in squeezing his way through between the oncoming pick-up and the pile of gravel under the circumstances was considered negligent.

But this matter is one of credibility and evaluation of the evidence. This is evidence. This is the function of the trial court. The trial court has already spoken on this matter as we have pointed out above. This is also a matter of appreciation of the situation on the part of the driver. While the position taken by appellant appeals more to the sense of caution that one should observe in a given situation to avoid an accident or mishap, such however can not always be expected from one who is placed suddenly in a predicament where he is not given enough time to take the course of action as he should under ordinary circumstances. One who is placed in such a predicament cannot exercise such coolness or accuracy of judgment as is required of him under ordinary circumstances and he cannot therefore be expected to observe the same judgment, care and precaution as in the latter. For

this reason, authorities abound where failure to observe the same degree of care that as ordinary prudent man would exercise under ordinary circumstances when confronted with a sadden emergency was held to be warranted and a justification to exempt the carrier from liability. Thus, it was held that "where a carrier's employee is confronted with a sudden emergency, the fact that he is obliged to act quickly and without a chance for deliberation must be taken into account, and he is held to the some degree of care that he would otherwise be required to exercise in the absence of such emergency but must exercise only such care as any ordinary prudent person would exercise under like circumstances and conditions, and the failure on his part to exercise the best judgement the case renders possible does not establish lack of care and skill on his part which renders the company, liable. . . . (13 C. J. S., 1412; 10 C. J.,970). Considering all the circumstances, we are persuaded to conclude that the driver of the bus has done what a prudent man could have done to avoid the collision and in our opinion this relieves appellee from legibility under our law.

A circumstances which miliates against the stand of appellant is the fact borne out by the evidence that when he boarded the bus in question, he seated himself on the left side thereof resting his left arm on the window sill but with his left elbow outside the window, this being his position in the bus when the collision took place. It is for this reason that the collision resulted in the severance of said left arm from the body of appellant thus doing him a great damage. It is therefore apparent that appellant is guilty of contributory negligence. Had he not placed his left arm on the window sill with a portion thereof protruding outside, perhaps the injury would have been avoided as is the case with the other passenger. It is to be noted that appellant was the only victim of the collision.

It is true that such contributory negligence cannot relieve appellee of its liability but will only entitle it to a reduction of the amount of damage caused (Article 1762, new Civil Code), but this is a circumstance which further militates against the position taken by appellant in this case.

It is the prevailing rule that it is negligence per se for a passenger on a railroad voluntarily or inadvertently to protrude his arm, hand, elbow, or any other part of his body through the window of a moving car beyond the outer edge of the window or outer surface of the car, so as to come in contact with objects or obstacles near the track, and that no recovery can be had for an injury which but for such negligence would not have been sustained. (10 C. J. 1139)

Plaintiff, (passenger) while riding on an interurban car, to flick the ashes, from his cigar, thrust his hand over the guard rail a sufficient distance beyond the side line of the car to bring it in contact with the trunk of a tree standing beside the track; the force of the blow breaking his wrist. Held, that he was guilty of contributory negligence as a matter of law. (Malakia vs. Rhode Island Co., 89 A., 337.)

Wherefore, the decision appealed from is affirmed, with cost against appellant.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

 

G.R. No. 125138 March 2, 1999

NICHOLAS Y. CERVANTES, petitioner, vs.COURT OF APPEALS AND THE PHILIPPINE AIR LINES, INC., respondent.

 

PURISMA, J.:

This Petition for Review on certiorari assails the 25 July 1995 decision of the Court of Appeals 1 in CA GR CV No. 41407, entitled "Nicholas Y. Cervantes vs. Philippine Air Lines Inc.", affirming in toto the judgment of the trial court dismissing petitioner's complaint for damages.

On March 27, 1989, the private respondent, Philippines Air Lines, Inc. (PAL), issued to the herein petitioner, Nicholas Cervantes (Cervantes), a round trip plane ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila, which ticket expressly provided an expiry of date of one year from issuance, i.e., until March 27, 1990. The issuance of the said plane ticket was in compliance with a Compromise Agreement entered into between the contending parties in two previous suits, docketed as Civil Case Nos. 3392 and 3451 before the Regional Trial Court in Surigao City. 2

On March 23, 1990, four days before the expiry date of subject ticket, the petitioner used it. Upon his arrival in Los Angeles on the same day, he immediately booked his Los Angeles-Manila return ticket with the PAL office, and it was confirmed for the April 2, 1990 flight.

Upon learning that the same PAL plane would make a stop-over in San Francisco, and considering that he would be there on April 2, 1990, petitioner made arrangements with PAL for him to board the flight In San Francisco instead of boarding in Las Angeles.

On April 2, 1990, when the petitioner checked in at the PAL counter in San Francisco, he was not allowed to board. The PAL personnel concerned marked the following notation on his ticket: "TICKET NOT ACCEPTED DUE EXPIRATION OF VALIDITY."

Aggrieved, petitioner Cervantes filed a Complaint for Damages, for breach of contract of carriage docketed as Civil Case No. 3807 before Branch 32 of the Regional Trial Court of Surigao del Norte in Surigao City. But the said complaint was dismissed for lack of merit. 3

On September 20, 1993, petitioner interposed an appeal to the Court of Appeals, which came out with a Decision, on July 25, 1995, upholding the dismissal of the case.

On May 22, 1996, petitioner came to this Court via the Petition for Review under consideration.

The issues raised for resolution are: (1) Whether or not the act of the PAL agents in confirming subject ticket extended the period of validity of petitioner's ticket; (2) Whether or not the defense of lack of authority was correctly ruled upon; and (3) Whether or not the denial of the award for damages was proper.

To rule on the first issue, there is a need to quote the findings below. As a rule, conclusions and findings of fact arrived at by the trial court are entitled to great weight on appeal and should not be disturbed unless for strong and cogent reasons. 4

The facts of the case as found by the lower court 5 are, as follows:

The plane ticket itself (Exhibit A for plaintiff; Exhibit 1 for defendant) provides that it is not valid after March 27, 1990. (Exhibit 1-F). It is also stipulated in paragraph 8 of the Conditions of Contract (Exhibit 1, page 2) as follows:

8. This ticket is good for carriage for one year from date of issue, except as otherwise provided in this ticket, in carrier's tariffs, conditions of carriage, or related regulations. The fare for carriage hereunder is subject to change prior to commencement of carriage. Carrier may refuse transportation if the applicable fare has not been paid. 6

The question on the validity of subject ticket can be resolved in light of the ruling in the case of Lufthansa vs. Court of Appeals. 7 In the said case, the Tolentinos were issued first class tickets on April 3, 1982, which will be valid until April 10, 1983. On June 10, 1982, they changed their accommodations to economy class but the replacement tickets still contained the same restriction. On May 7, 1983, Tolentino requested that subject tickets be extended, which request was refused by the petitioner on the ground that the said tickets had already expired. The non-extension of their tickets prompted the Tolentinos to bring a complaint for breach of contract of carriage against the petitioner. In ruling against the award of damages, the Court held that the "ticket constitute the contract between the parties. It is axiomatic that when the terms are clear and leave no doubt as to the intention of the contracting parties, contracts are to be interpreted according to their literal meaning."

In his effort to evade this inevitable conclusion, petitioner theorized that the confirmation by the PAL's agents in Los Angeles and San Francisco changed the compromise agreement between the parties.

As aptly by the appellate court:

. . . on March 23, 1990, he was aware of the risk that his ticket could expire, as it did, before he returned to the Philippines.' (pp. 320-321, Original Records) 8

The question is: "Did these two (2) employees, in effect, extend the validity or lifetime of the ticket in question? The answer is in the negative. Both had no authority to do so. Appellant knew this from the very start when he called up the Legal Department of appellee in the Philippines before he left for the United States of America. He had first hand knowledge that the ticket in question would expire on March 27, 1990 and that to secure an extension, he

would have to file a written request for extension at the PAL's office in the Philippines (TSN, Testimony of Nicholas Cervantes, August 2, 1991, pp. 20-23). Despite this knowledge, appellant persisted to use the ticket in question." 9

From the aforestated facts, it can be gleaned that the petitioner was fully aware that there was a need to send a letter to the legal counsel of PAL for the extension of the period of validity of his ticket.

Since the PAL agents are not privy to the said Agreement and petitioner knew that a written request to the legal counsel of PAL was necessary, he cannot use what the PAL agents did to his advantage. The said agents, according to the Court of Appeals, 10 acted without authority when they confirmed the flights of the petitioner.

Under Article 1989 11 of the New Civil Code, the acts an agent beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when the third person (herein petitioner) knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages from the agent, unless the latter undertook to secure the principal's ratification. 12

Anent the second issue, petitioner's stance that the defense of lack of authority on the part of the PAL employees was deemed waived under Rule 9, Section 2 of the Revised Rules of Court, is unsustainable. Thereunder, failure of a party to put up defenses in their answer or in a motion to dismiss is a waiver thereof.

Petitioner stresses that the alleged lack of authority of the PAL employees was neither raised in the answer nor in the motion to dismiss. But records show that the question of whether there was authority on the part of the PAL employees was acted upon by the trial court when Nicholas Cervantes was presented as a witness and the depositions of the PAL employees, Georgina M. Reyes and Ruth Villanueva, were presented.

The admission by Cervantes that he was told by PAL's legal counsel that he had to submit a letter requesting for an extension of the validity of subject tickets was tantamount to knowledge on his part that the PAL employees had no authority to extend the validity of subject tickets and only PAL's legal counsel was authorized to do so.

However, notwithstanding PAL's failure to raise the defense of lack of authority of the said PAL agents in its answer or in a motion to dismiss, the omission was cured since the said issue was litigated upon, as shown by the testimony of the petitioner in the course of trial. Rule 10, Section 5 of the 1997 Rules of Civil Procedure provides:

Sec. 5. Amendment to conform, or authorize presentation of evidence. — When issues not raised by the pleadings are tried with express or implied consent of the parties, 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 to amend does not affect the result of the trial of these issues. . . .

Thus, "when evidence is presented by one party, with the express or implied consent of the adverse party, as to issues not alleged in the pleadings, judgment may be rendered validly as regards the said issue, which shall be treated as if they have been raised in the pleadings. There is implied consent to the evidence thus presented when the adverse party fails to object thereto." 13

Re: the third issue, an award of damages is improper because petitioner failed to show that PAL acted in bad faith in refusing to allow him to board its plane in San Francisco.

In awarding moral damages for breach of contract of carriage, the breach must be wanton and deliberately injurious or the one responsible acted fraudulently or with malice or bad faith. 14 Petitioner knew there was a strong possibility that he could not use the subject ticket, so much so that he bought a back-up ticket to ensure his departure. Should there be a finding of bad faith, we are of the opinion that it should be on the petitioner. What the employees of PAL did was one of simple negligence. No injury resulted on the part of petitioner because he had a back-up ticket should PAL refuse to accommodate him with the use of subject ticket.

Neither can the claim for exemplary damages be upheld. Such kind of damages is imposed by way of example or correction for the public good, and the existence of bad faith is established. The wrongful act must be accompanied by bad faith, and an award of damages would be allowed only if the guilty party acted in a wanton, fraudulent, reckless or malevolent manner. 15 Here, there is no showing that PAL acted in such a manner. An award for attorney's fees is also improper.

WHEREFORE, the Petition is DENIED and the decision of the Court of Appeals dated July 25, 1995 AFFIRMED in toto. No pronouncement as to costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

 

G.R. No. 118664 August 7, 1998

JAPAN AIRLINES, petitioner, vs.THE COURT OF APPEALS, ENRIQUE AGANA., MARIA ANGELA NINA AGANA, ADALIA B. FRANCISCO and JOSE MIRANDA, respondents.

 

ROMERO, J.:

Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL) seeking the reversal of the decision of the Court of Appeals, 1 which affirmed with modification the award of damages made by the trial court in favor of herein private respondents Enrique Agana, Maria Angela Nina Agana, Adelia Francisco and Jose Miranda.

On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in San Francisco, California bound for Manila. Likewise, on the same day private respondents Enrique Agana, Maria Angela Nina Agana and Adelia Francisco left Los Angeles, California for Manila via JAL flight No. JL 061. As an incentive for travelling on the said airline, both flights were to make an overnight stopover at Narita, Japan, at the airlines' expense, thereafter proceeding to Manila the following day.

Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at Hotel Nikko Narita for the night. The next day, private respondents, on the final leg of their journey, went to the airport to take their flight to Manila. However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino International Airport (NAIA), rendering it inaccessible to airline traffic. Hence, private respondents' trip to Manila was cancelled indefinitely.

To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-bound passengers on flight No. 741 due to depart on June 16, 1991 and also paid for the hotel expenses for their unexpected overnight stay. On June 16, 1991, much to the dismay of the private respondents, their long anticipated flight to Manila was again cancelled due to NAIA's indefinite closure. At this point, JAL informed the private respondents that it would no longer defray their hotel and accommodation expense during their stay in Narita.

Since NAIA was only reopened to airline traffic on June 22, 1991, private respondents were forced to pay for their accommodations and meal expenses from their personal funds from June 16 to June 21, 1991. Their unexpected stay in Narita ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741.

Obviously, still reeling from the experience, private respondents, on July 25, 1991, commenced an action for damages against JAL before the Regional Trial Court of Quezon City, Branch 104. 2 To support their claim, private respondents asserted that JAL failed to live up to its duty to provide care and comfort to its stranded passengers when it refused to pay for their hotel and accommodation expenses from June 16 to 21, 1991 at Narita, Japan. In other words, they insisted that JAL was obligated to shoulder their expenses as long as they were still stranded in Narita. On the other hand, JAL denied this allegation and averred that airline passengers have no vested right to these amenities in case a flight is cancelled due to "force majeure."

On June 18, 1992, the trial court rendered its judgment in favor of private respondents holding JAL liable for damages, viz.:

WHEREFORE, judgment is rendered in favor of plaintiffs ordering the defendant Japan Airlines to pay the plaintiffs Enrique Agana, Adalia B. Francisco and Maria Angela Nina Agana the sum of One million Two Hundred forty-six Thousand Nine Hundred Thirty-Six Pesos (P1,246,936.00) and Jose Miranda the sum of Three Hundred Twenty Thousand Six Hundred sixteen and 31/100 (P320,616.31) as actual, moral and exemplary damages and pay attorney's fees in the amount of Two Hundred Thousand Pesos (P200,000.00), and to pay the costs of suit.

Undaunted, JAL appealed the decision before the Court of Appeals, which, however, with the exception of lowering the damages awarded affirmed the trial court's finding, 3 thus:

Thus, the award of moral damages should be as it is hereby reduced to P200,000.00 for each of the plaintiffs, the exemplary damages to P300,000.00 and the attorney's fees to P100,000.00 plus the costs.

WHEREFORE, with the foregoing Modification, the judgment appealed from is hereby AFFIRMED in all other respects.

JAL filed a motion for reconsideration which proved futile andunavailing. 4

Failing in its bid to reconsider the decision, JAL has now filed this instant petition.

The issue to be resolved is whether JAL, as a common carrier has the obligation to shoulder the hotel and meal expenses of its stranded passengers until they have reached their final destination, even if the delay were caused by "force majeure."

To begin with, there is no dispute that the Mt. Pinatubo eruption prevented JAL from proceeding to Manila on schedule. Likewise, private respondents concede that such event can be considered as "force majeure" since their delayed arrival in Manila was not imputable to JAL. 5

However, private respondents contend that while JAL cannot be held responsible for the delayed arrival in Manila, it was nevertheless liable for their living expenses during their unexpected stay in Narita since airlines have the obligation to ensure the comfort and convenience of its passengers. While we sympathize with the private respondents' plight, we are unable to accept this contention.

We are not unmindful of the fact that in a plethora of cases we have consistently ruled that a contract to transport passengers is quite different in kind, and degree from any other contractual relation. It is safe to conclude that it is a relationship imbued with public interest. Failure on the part of the common carrier to live up to the exacting standards of care and diligence renders it liable for any damages that may be sustained by its passengers. However, this is not to say that common carriers are absolutely responsible for all injuries or damages even if the same were caused by a fortuitous event. To rule otherwise would render the defense of "force majeure," as an exception from any liability, illusory and ineffective.

Accordingly, there is no question that when a party is unable to fulfill his obligation because of "force majeure," the general rule is that he cannot be held liable for damages for non-performance. 6 Corollarily, when JAL was prevented from resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever losses or damages in the

form of hotel and meal expenses the stranded passengers incurred, cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel expenses of respondents for their unexpected overnight stay on June 15, 1991.

Admittedly, to be stranded for almost a week in a foreign land was an exasperating experience for the private respondents. To be sure, they underwent distress and anxiety during their unanticipated stay in Narita, but their predicament was not due to the fault or negligence of JAL but the closure of NAIA to international flights. Indeed, to hold JAL, in the absence of bad faith or negligence, liable for the amenities of its stranded passengers by reason of a fortuitous event is too much of a burden to assume.

Furthermore, it has been held that airline passengers must take such risks incident to the mode of travel. 7 In this regard, adverse weather conditions or extreme climatic changes are some of the perils involved in air travel, the consequences of which the passenger must assume or expect. After all, common carriers are not the insurer of all risks. 8

Paradoxically, the Court of Appeals, despite the presence of "force majeure," still ruled against JAL relying in our decision inPAL v. Court of Appeals, 9 thus:

The position taken by PAL in this case clearly illustrates its failure to grasp the exacting standard required by law. Undisputably, PAL's diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such occurrence did not terminate PAL's contract with its passengers. Being in the business of air carriage and the sole one to operate in the country, PAL is deemed equipped to deal with situations as in the case at bar. What we said in one case once again must be stressed, i.e., the relation of carrier and passenger continues until the latter has been landed at the port of destination and has left the carrier's premises. Hence, PAL necessarily would still have to exercise extraordinary diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they have reached their final destination. On this score, PAL grossly failed considering the then ongoing battle between government forces and Muslim rebels in Cotabato City and the fact that the private respondent was a stranger to the place.

The reliance is misplaced. The factual background of the PAL case is different from the instant petition. In that case there was indeed a fortuitous event resulting in the diversion of the PAL flight. However, the unforeseen diversion was worsened when "private respondents (passenger) was left at the airport and could not even hitch a ride in a Ford Fiera loaded with PAL personnel," 10 not to mention the apparent apathy of the PAL station manager as to the predicament of the stranded passengers. 11 In light of these circumstances, we held that if the fortuitous event was accompanied by neglect and malfeasance by the carrier's employees, an action for damages against the carrier is permissible. Unfortunately, for private respondents, none of these conditions are present in the instant petition.

We are not prepared, however, to completely absolve petitioner JAL from any liability. It must be noted that private respondents bought tickets from the United States with Manila as their final destination. While JAL was no longer required to defray private respondents' living expenses during their stay in Narita on account of the fortuitous event, JAL had the duty to make the necessary arrangements to transport private respondents on the first available connecting flight to Manila. Petitioner JAL reneged on its obligation to look after the comfort and convenience of its passengers when it declassified private respondents from "transit passengers" to "new passengers" as a result of which private respondents were obliged to make the necessary arrangements themselves for the next flight to Manila. Private respondents were placed on the waiting list from June 20 to June 24. To assure themselves of a seat on an available flight, they were compelled to stay in the airport the whole day of June 22, 1991 and it

was only at 8:00 p.m. of the aforesaid date that they were advised that they could be accommodated in said flight which flew at about 9:00 a.m. the next day.

We are not oblivious to the fact that the cancellation of JAL flights to Manila from June 15 to June 21, 1991 caused considerable disruption in passenger booking and reservation. In fact, it would be unreasonable to expect, considering NAIA's closure, that JAL flight operations would be normal on the days affected. Nevertheless, this does not excuse JAL from its obligation to make the necessary arrangements to transport private respondents on its first available flight to Manila. After all, it had a contract to transport private respondents from the United States to Manila as their final destination.

Consequently, the award of nominal damages is in order. Nominal damages are adjudicated in order that a right of a plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized and not for the purpose of indemnifying any loss suffered by him. 12 The court may award nominal damages in every obligation arising from any source enumerated in article 1157, or in every case where any property right has been invaded. 13

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dated December 22, 1993 is hereby MODIFIED. The award of actual, moral and exemplary damages is hereby DELETED. Petitioner JAL is ordered to pay each of the private respondents nominal damages in the sum of P100,000.00 each including attorney' s fees of P50,000.00 plus costs.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 122039 May 31, 2000

VICENTE CALALAS, petitioner,vs.COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and FRANCISCO SALVA, respondents.

MENDOZA, J.:

This is a petition for review on certiorari of the decision1 of the Court of Appeals, dated March 31, 1991, reversing the contrary decision of the Regional Trial Court, Branch 36, Dumaguete City, and awarding damages instead to private respondent Eliza Jujeurche Sunga as plaintiff in an action for breach of contract of carriage.

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

At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche G. Sunga, then a college freshman majoring in Physical Education at the Siliman University, took a passenger jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity of about 24 passengers, Sunga was given by the conductor an "extension seat," a wooden stool at the back of the door at the rear end of the vehicle.

On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as she was doing so, an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of the jeepney. As a result, Sunga was injured. She sustained a fracture of the "distal third of the left tibia-fibula with severe necrosis of the underlying skin." Closed reduction of the fracture, long leg circular casting, and case wedging were done under sedation. Her confinement in the hospital lasted from August 23 to September 7, 1989. Her attending physician, Dr. Danilo V. Oligario, an orthopedic surgeon, certified she would remain on a cast for a period of three months and would have to ambulate in crutches during said period.

On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging violation of the contract of carriage by the former in failing to exercise the diligence required of him as a common carrier. Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the owner of the Isuzu truck.

The lower court rendered judgment against Salva as third-party defendant and absolved Calalas of liability, holding that it was the driver of the Isuzu truck who was responsible for the accident. It took cognizance of another case (Civil Case No. 3490), filed by Calalas against Salva and Verena, for quasi-delict, in which Branch 37 of the same court held Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney.

On appeal to the Court of Appeals, the ruling of the lower court was reversed on the ground that Sunga's cause of action was based on a contract of carriage, not quasi-delict, and that the common carrier failed to exercise the diligence required under the Civil Code. The appellate court dismissed the third-party complaint against Salva and adjudged Calalas liable for damages to Sunga. The dispositive portion of its decision reads:

WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE, and another one is entered ordering defendant-appellee Vicente Calalas to pay plaintiff-appellant:

(1) P50,000.00 as actual and compensatory damages;

(2) P50,000.00 as moral damages;

(3) P10,000.00 as attorney's fees; and

(4) P1,000.00 as expenses of litigation; and

(5) to pay the costs.

SO ORDERED.

Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that the negligence of Verena was the proximate cause of the accident negates his liability and that to rule otherwise would be to make the common carrier an insurer of the safety of its passengers. He contends that the bumping of the jeepney by the truck owned by Salva was a caso fortuito. Petitioner further assails the award of moral damages to Sunga on the ground that it is not supported by evidence.

The petition has no merit.

The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and the owner of the truck liable for quasi-delict ignores the fact that she was never a party to that case and, therefore, the principle ofres judicata does not apply.

Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue in Civil Case No. 3490 was whether Salva and his driver Verena were liable for quasi-delict for the damage caused to petitioner's jeepney. On the other hand, the issue in this case is whether petitioner is liable on his contract of carriage. The first, quasi-delict, also known as culpa aquiliana or culpa extra contractual, has as its source the negligence of the tortfeasor. The second, breach of contract or culpa contractual, is premised upon the negligence in the performance of a contractual obligation.

Consequently, in quasi-delict, the negligence or fault should be clearly established because it is the basis of the action, whereas in breach of contract, the action can be prosecuted merely by proving the existence of the contract and the fact that the obligor, in this case the common carrier, failed to transport his passenger safely to his destination.2 In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof.

There is, thus, no basis for the contention that the ruling in Civil Case No. 3490, finding Salva and his driver Verena liable for the damage to petitioner's jeepney, should be binding on Sunga. It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus created. Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers. It provides:

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 them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1746, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.

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 due regard for all the circumstances.

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 by articles 1733 and 1755.

In the case at bar, upon the happening of the accident, the presumption of negligence at once arose, and it became the duty of petitioner to prove that he had to observe extraordinary diligence in the care of his passengers.

Now, did the driver of jeepney carry Sunga "safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances" as required by Art. 1755? We do not think so. Several factors militate against petitioner's contention.

First, as found by the Court of Appeals, the jeepney was not properly parked, its rear portion being exposed about two meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. This is a violation of the R.A. No. 4136, as amended, or the Land Transportation and Traffic Code, which provides:

Sec. 54. Obstruction of Traffic. — No person shall drive his motor vehicle in such a manner as to obstruct or impede the passage of any vehicle, nor, while discharging or taking on passengers or loading or unloading freight, obstruct the free passage of other vehicles on the highway.

Second, it is undisputed that petitioner's driver took in more passengers than the allowed seating capacity of the jeepney, a violation of §32(a) of the same law. It provides:

Exceeding registered capacity. — No person operating any motor vehicle shall allow more passengers or more freight or cargo in his vehicle than its registered capacity.

The fact that Sunga was seated in an "extension seat" placed her in a peril greater than that to which the other passengers were exposed. Therefore, not only was petitioner unable to overcome the presumption of negligence imposed on him for the injury sustained by Sunga, but also, the evidence shows he was actually negligent in transporting passengers.

We find it hard to give serious thought to petitioner's contention that Sunga's taking an "extension seat" amounted to an implied assumption of risk. It is akin to arguing that the injuries to the many victims of the tragedies in our seas should not be compensated merely because those passengers assumed a greater risk of drowning by boarding an overloaded ferry. This is also true of petitioner's contention that the jeepney being bumped while it was improperly parked constitutes caso fortuito. A caso fortuito is an event which could not be foreseen, or which, though foreseen, was inevitable.3 This requires that the following requirements be present: (a) the cause of the breach is independent of the debtor's will; (b) the event is unforeseeable or unavoidable; (c) the event is such as to render it impossible for the debtor to fulfill his obligation in a normal manner, and (d) the debtor did not take part in causing the injury to the

creditor.4 Petitioner should have foreseen the danger of parking his jeepney with its body protruding two meters into the highway.

Finally, petitioner challenges the award of moral damages alleging that it is excessive and without basis in law. We find this contention well taken.

In awarding moral damages, the Court of Appeals stated:

Plaintiff-appellant at the time of the accident was a first-year college student in that school year 1989-1990 at the Silliman University, majoring in Physical Education. Because of the injury, she was not able to enroll in the second semester of that school year. She testified that she had no more intention of continuing with her schooling, because she could not walk and decided not to pursue her degree, major in Physical Education "because of my leg which has a defect already."

Plaintiff-appellant likewise testified that even while she was under confinement, she cried in pain because of her injured left foot. As a result of her injury, the Orthopedic Surgeon also certified that she has "residual bowing of the fracture side." She likewise decided not to further pursue Physical Education as her major subject, because "my left leg . . . has a defect already."

Those are her physical pains and moral sufferings, the inevitable bedfellows of the injuries that she suffered. Under Article 2219 of the Civil Code, she is entitled to recover moral damages in the sum of P50,000.00, which is fair, just and reasonable.

As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract for it is not one of the items enumerated under Art. 2219 of the Civil Code.5 As an exception, such damages are recoverable: (1) in cases in which the mishap results in the death of a passenger, as provided in Art. 1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the cases in which the carrier is guilty of fraud or bad faith, as provided in Art. 2220.6

In this case, there is no legal basis for awarding moral damages since there was no factual finding by the appellate court that petitioner acted in bad faith in the performance of the contract of carriage. Sunga's contention that petitioner's admission in open court that the driver of the jeepney failed to assist her in going to a nearby hospital cannot be construed as an admission of bad faith. The fact that it was the driver of the Isuzu truck who took her to the hospital does not imply that petitioner was utterly indifferent to the plight of his injured passenger. If at all, it is merely implied recognition by Verena that he was the one at fault for the accident.

WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its resolution, dated September 11, 1995, are AFFIRMED, with the MODIFICATION that the award of moral damages is DELETED.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. L-31379 August 29, 1988

COMPAÑIA MARITIMA, petitioner, vs.COURT OF APPEALS and VICENTE CONCEPCION, respondents.

Rafael Dinglasan for petitioner.

Benjamin J. Molina for private respondent.

 

FERNAN, C.J.:

Petitioner Compañia Maritima seeks to set aside through this petition for review on certiorari the decision 1 of the Court of Appeals dated December 5, 1965, adjudging petitioner liable to private respondent Vicente E. Concepcion for damages in the amount of P24,652.97 with legal interest from the date said decision shall have become final, for petitioner's failure to deliver safely private respondent's payloader, and for costs of suit. The payloader was declared abandoned in favor of petitioner.

The facts of the case are as follows:

Private respondent Vicente E. Concepcion, a civil engineer doing business under the name and style of Consolidated Construction with office address at Room 412, Don Santiago Bldg., Taft Avenue, Manila, had a contract with the Civil Aeronautics Administration (CAA) sometime in 1964 for the construction of the airport in Cagayan de Oro City Misamis Oriental.

Being a Manila — based contractor, Vicente E. Concepcion had to ship his construction equipment to Cagayan de Oro City. Having shipped some of his equipment through petitioner and having settled the balance of P2,628.77 with respect to said shipment, Concepcion negotiated anew with petitioner, thru its collector, Pacifico Fernandez, on August 28, 1964 for the shipment to Cagayan de Oro City of one (1) unit payloader, four (4) units 6x6 Reo trucks and two (2) pieces of water tanks. He was issued Bill of Lading 113 on the same date upon delivery of the equipment at the Manila North Harbor. 2

These equipment were loaded aboard the MV Cebu in its Voyage No. 316, which left Manila on August 30, 1964 and arrived at Cagayan de Oro City in the afternoon of September 1, 1964. The Reo trucks and water tanks were safely unloaded within a few hours after arrival, but while the payloader was about two (2) meters above the pier in the course of unloading, the swivel pin of the heel block of the port block of Hatch No. 2 gave way, causing the payloader to fall. 3 The payloader was damaged and was thereafter taken to petitioner's compound in Cagayan de Oro City.

On September 7, 1964, Consolidated Construction, thru Vicente E. Concepcion, wrote Compañia Maritima to demand a replacement of the payloader which it was considering as a complete loss because of the extent of damage. 4 Consolidated Construction likewise notified petitioner of its claim for damages. Unable to elicit response, the demand was repeated in a letter dated October 2, 1964. 5

Meanwhile, petitioner shipped the payloader to Manila where it was weighed at the San Miguel Corporation. Finding that the payloader weighed 7.5 tons and not 2.5 tons as declared in the B-111 of Lading, petitioner denied the claim for damages of Consolidated Construction in its letter dated October 7, 1964, contending that had Vicente E. Concepcion declared the actual weight of the payloader, damage to their ship as well as to his payloader could have been prevented. 6

To replace the damaged payloader, Consolidated Construction in the meantime bought a new one at P45,000.00 from Bormaheco Inc. on

December 3, 1964, and on July 6, 1965., Vicente E. Concepcion filed an action for damages against petitioner with the then Court of First Instance of Manila, Branch VII, docketed as Civil Case No. 61551, seeking to recover damages in the amount of P41,225.00 allegedly suffered for the period of 97 days that he was not able to employ a payloader in the construction job at the rate of P450.00 a day; P34,000.00 representing the cost of the damaged payloader; Pl 1, 000. 00 representing the difference between the cost of the damaged payloader and that of the new payloader; P20,000.00 representing the losses suffered by him due to the diversion of funds to enable him to buy a new payloader; P10,000.00 as attorney's fees; P5,000.00 as exemplary damages; and cost of the suit. 7

After trial, the then Court of First Instance of Manila, Branch VII, dismissed on April 24, 1968 the complaint with costs against therein plaintiff, herein private respondent Vicente E. Concepcion, stating that the proximate cause of the fall of the payloader was Vicente E. Concepcion's act or omission in having misrepresented the weight of the payloader as 2.5 tons instead of its true weight of 7.5 tons, which underdeclaration was intended to defraud Compañia Maritima of the payment of the freight charges and which likewise led the Chief Officer of the vessel to use the heel block of hatch No. 2 in unloading the payloader. 8

From the adverse decision against him, Vicente E. Concepcion appealed to the Court of Appeals which, on December 5, 1965 rendered a decision, the dispositive portion of which reads:

IN VIEW WHEREOF, judgment must have to be as it is hereby reversed; defendant is condemned to pay unto plaintiff the sum in damages of P24,652.07 with legal interest from the date the present decision shall have become final; the payloader is declared abandoned to defendant; costs against the latter. 9

Hence, the instant petition.

The principal issue in the instant case is whether or not the act of private respondent Vicente E. Concepcion in furnishing petitioner Compañia Maritima with an inaccurate weight of 2.5 tons instead of the payloader's actual weight of 7.5 tons was the proximate and only cause of the damage on the Oliver Payloader OC-12 when it fell while being unloaded by petitioner's crew, as would absolutely exempt petitioner from liability for damages under paragraph 3 of Article 1734 of the Civil Code, which provides:

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only:

xxx xxx xxx

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

Petitioner claims absolute exemption under this provision upon the reasoning that private respondent's act of furnishing it with an inaccurate weight of the payloader constitutes misrepresentation within the meaning of "act or omission of the shipper or owner of the goods" under the above- quoted article. It likewise faults the respondent Court of Appeals for reversing the decision of the trial court notwithstanding that said appellate court also found that by representing the weight of the payloader to be only 2.5 tons, private respondent had led petitioner's officer to believe that the same was within the 5 tons capacity of the heel block of Hatch No. 2. Petitioner would thus insist that the proximate and only cause of the damage to the payloader was private respondent's alleged misrepresentation of the weight of the machinery in question; hence, any resultant damage to it must be borne by private respondent Vicente E. Concepcion.

The general rule under Articles 1735 and 1752 of the Civil Code is that common carriers are presumed to have been at fault or to have acted negligently in case the goods transported by them are lost, destroyed or had deteriorated. To overcome the presumption of liability for the loss, destruction or deterioration of the goods under Article 1735, the common carriers must prove that they observed extraordinary diligence as required in Article 1733 of the Civil Code. The responsibility of observing

extraordinary diligence in the vigilance over the goods is further expressed in Article 1734 of the same Code, the article invoked by petitioner to avoid liability for damages.

Corollary is the rule that mere proof of delivery of the goods in good order to a common carrier, and of their arrival at the place of destination in bad order, makes out prima facie case against the common carrier, so that if no explanation is given as to how the loss, deterioration or destruction of the goods occurred, the common carrier must be held responsible. 10 Otherwise stated, it is incumbent upon the common carrier to prove that the loss, deterioration or destruction was due to accident or some other circumstances inconsistent with its liability.

In the instant case, We are not persuaded by the proferred explanation of petitioner alleged to be the proximate cause of the fall of the payloader while it was being unloaded at the Cagayan de Oro City pier. Petitioner seems to have overlooked the extraordinary diligence required of common carriers in the vigilance over the goods transported by them by virtue of the nature of their business, which is impressed with a special public duty.

Thus, Article 1733 of the Civil Code provides:

Art. 1733. Common carriers, from the nature of their business and for reason of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, 1735 and 1745, Nos. 5, 6 and 7, ...

The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for safe carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage including such methods as their nature requires." 11 Under Article 1736 of the Civil Code, the responsibility to observe extraordinary diligence commences and 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 the right to receive them without prejudice to the provisions of Article 1738.

Where, as in the instant case, petitioner, upon the testimonies of its own crew, failed to take the necessary and adequate precautions for avoiding damage to, or destruction of, the payloader entrusted to it for safe carriage and delivery to Cagayan de Oro City, it cannot be reasonably concluded that the damage caused to the payloader was due to the alleged misrepresentation of private respondent Concepcion as to the correct and accurate weight of the payloader. As found by the respondent Court of Appeals, the fact is that petitioner used a 5-ton capacity lifting apparatus to lift and unload a visibly heavy cargo like a payloader. Private respondent has, likewise, sufficiently established the laxity and carelessness of petitioner's crew in their methods of ascertaining the weight of heavy cargoes offered for shipment before loading and unloading them, as is customary among careful persons.

It must be noted that the weight submitted by private respondent Concepcion appearing at the left-hand portion of Exhibit 8 12 as an addendum to the original enumeration of equipment to be shipped was entered into the bill of lading by petitioner, thru Pacifico Fernandez, a company collector, without seeing the equipment to be shipped. 13Mr. Mariano Gupana, assistant traffic manager of petitioner, confirmed in his testimony that the company never checked the information entered in the bill of lading. 14 Worse, the weight of the payloader as entered in the bill of lading was assumed to be correct by Mr. Felix Pisang, Chief Officer of MV Cebu. 15

The weights stated in a bill of lading are prima facie evidence of the amount received and the fact that the weighing was done by another will not relieve the common carrier where it accepted such weight and entered it on the bill of lading. 16 Besides, common carriers can protect themselves against

mistakes in the bill of lading as to weight by exercising diligence before issuing the same. 17

While petitioner has proven that private respondent Concepcion did furnish it with an inaccurate weight of the payloader, petitioner is nonetheless liable, for the damage caused to the machinery could have been avoided by the exercise of reasonable skill and attention on its part in overseeing the unloading of such a heavy equipment. And circumstances clearly show that the fall of the payloader could have been avoided by petitioner's crew. Evidence on record sufficiently show that the crew of petitioner had been negligent in the performance of its obligation by reason of their having failed to take the necessary precaution under the circumstances which usage has established among careful persons, more particularly its Chief Officer, Mr. Felix Pisang, who is tasked with the over-all supervision of loading and unloading heavy cargoes and upon whom rests the burden of deciding as to what particular winch the unloading of the payloader should be undertaken. 18 While it was his duty to determine the weight of heavy cargoes before accepting them. Mr. Felix Pisang took the bill of lading on its face value and presumed the same to be correct by merely "seeing" it. 19 Acknowledging that there was a "jumbo" in the MV Cebu which has the capacity of lifting 20 to 25 ton cargoes, Mr. Felix Pisang chose not to use it, because according to him, since the ordinary boom has a capacity of 5 tons while the payloader was only 2.5 tons, he did not bother to use the "jumbo" anymore. 20

In that sense, therefore, private respondent's act of furnishing petitioner with an inaccurate weight of the payloader upon being asked by petitioner's collector, cannot be used by said petitioner as an excuse to avoid liability for the damage caused, as the same could have been avoided had petitioner utilized the "jumbo" lifting apparatus which has a capacity of lifting 20 to 25 tons of heavy cargoes. It is a fact known to the Chief Officer of MV Cebu that the payloader was loaded aboard the MV Cebu at the Manila North Harbor on August 28, 1964 by means of a terminal crane. 21 Even if petitioner chose not to take the necessary precaution to avoid damage by checking the correct weight of the payloader, extraordinary care and diligence compel the use of the "jumbo" lifting apparatus as the most prudent course for petitioner.

While the act of private respondent in furnishing petitioner with an inaccurate weight of the payloader cannot successfully be used as an excuse by petitioner to avoid liability to the damage thus caused, said act constitutes a contributory circumstance to the damage caused on the payloader, which mitigates the liability for damages of petitioner in accordance with Article 1741 of the Civil Code, to wit:

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 latter shall be liable in damages, which however, shall be equitably reduced.

We find equitable the conclusion of the Court of Appeals reducing the recoverable amount of damages by 20% or 1/5 of the value of the payloader, which at the time the instant case arose, was valued at P34,000. 00, thereby reducing the recoverable amount at 80% or 4/5 of P34,000.00 or the sum of P27,200.00. Considering that the freight charges for the entire cargoes shipped by private respondent amounting to P2,318.40 remained unpaid.. the same would be deducted from the P27,000.00 plus an additional deduction of P228.63 representing the freight charges for the undeclared weight of 5 tons (difference between 7.5 and 2.5 tons) leaving, therefore, a final recoverable amount of damages of P24,652.97 due to private respondent Concepcion.

Notwithstanding the favorable judgment in his favor, private respondent assailed the Court of Appeals' decision insofar as it limited the damages due him to only P24,652.97 and the cost of the suit. Invoking the provisions on damages under the Civil Code, more particularly Articles 2200 and 2208, private respondent further seeks additional damages allegedly because the construction project was delayed and that in spite of his demands, petitioner failed to take any steps to settle his valid, just and demandable claim for damages.

We find private respondent's submission erroneous. It is well- settled that an appellee, who is not an appellant, may assign errors in his brief where his purpose is to maintain the judgment on other grounds, but he may not do so if his purpose is to have the judgment modified or reversed, for, in such case, he must appeal. 22 Since private respondent did not appeal from the judgment insofar as it limited the award of damages due him, the reduction of 20% or 1/5 of the value of the payloader stands.

WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals is hereby AFFIRMED in all respects with costs against

petitioner. In view of the length of time this case has been pending, this decision is immediately executory.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-12191             October 14, 1918

JOSE CANGCO, plaintiff-appellant, vs.MANILA RAILROAD CO., defendant-appellee.

Ramon Sotelo for appellant.Kincaid & Hartigan for appellee.

 

FISHER, J.:

          At the time of the occurrence which gave rise to this litigation the plaintiff, Jose Cangco, was in the employment of Manila Railroad Company in the capacity of clerk, with a monthly wage of P25. He lived in the pueblo of San Mateo, in the province of Rizal, which is located upon the line of the defendant railroad company; and in coming daily by train to the company's office in the city of Manila where he worked, he used a pass, supplied by the company, which entitled him to ride upon the company's trains free of charge. Upon the occasion in question, January 20, 1915, the plaintiff arose from his seat in the second class-car where he was riding and, making, his exit through the door, took his position upon the steps of the coach, seizing the upright guardrail with his right hand for support.

          On the side of the train where passengers alight at the San Mateo station there is a cement platform which begins to rise with a moderate gradient some distance away from the company's office and extends along in front of said office for a distance sufficient to cover the length of several coaches. As the train slowed down another passenger, named Emilio Zuñiga, also an employee of the railroad company, got off the same car, alighting safely at the point where the platform begins to rise from the level of the ground. When the train had proceeded a little farther the plaintiff Jose Cangco stepped off also, but one or both of his feet came in contact with a sack of watermelons with the result that his feet slipped from under him and he fell violently on the platform. His body at once rolled from the platform and was drawn under the moving car, where his right arm was badly crushed and lacerated. It appears that after the plaintiff alighted from the train the car moved forward possibly six meters before it came to a full stop.

          The accident occurred between 7 and 8 o'clock on a dark night, and as the railroad station was lighted dimly by a single light located some distance away, objects on the platform where the accident occurred were difficult to discern especially to a person emerging from a lighted car.

          The explanation of the presence of a sack of melons on the platform where the plaintiff alighted is found in the fact that it was the customary season for harvesting these melons and a large lot had been brought to the station for the shipment to the market. They were contained in numerous sacks which has been piled on the platform in a row one upon another. The testimony shows that this row of sacks was so placed of melons and the edge of platform; and it is clear that the fall of the plaintiff was due to the fact that his foot alighted upon one of these melons at the moment he stepped upon the platform. His

statement that he failed to see these objects in the darkness is readily to be credited.

          The plaintiff was drawn from under the car in an unconscious condition, and it appeared that the injuries which he had received were very serious. He was therefore brought at once to a certain hospital in the city of Manila where an examination was made and his arm was amputated. The result of this operation was unsatisfactory, and the plaintiff was then carried to another hospital where a second operation was performed and the member was again amputated higher up near the shoulder. It appears in evidence that the plaintiff expended the sum of P790.25 in the form of medical and surgical fees and for other expenses in connection with the process of his curation.

          Upon August 31, 1915, he instituted this proceeding in the Court of First Instance of the city of Manila to recover damages of the defendant company, founding his action upon the negligence of the servants and employees of the defendant in placing the sacks of melons upon the platform and leaving them so placed as to be a menace to the security of passenger alighting from the company's trains. At the hearing in the Court of First Instance, his Honor, the trial judge, found the facts substantially as above stated, and drew therefrom his conclusion to the effect that, although negligence was attributable to the defendant by reason of the fact that the sacks of melons were so placed as to obstruct passengers passing to and from the cars, nevertheless, the plaintiff himself had failed to use due caution in alighting from the coach and was therefore precluded form recovering. Judgment was accordingly entered in favor of the defendant company, and the plaintiff appealed.

          It can not be doubted that the employees of the railroad company were guilty of negligence in piling these sacks on the platform in the manner above stated; that their presence caused the plaintiff to fall as he alighted from the train; and that they therefore constituted an effective legal cause of the injuries sustained by the plaintiff. It necessarily follows that the defendant company is liable for the damage thereby occasioned unless recovery is barred by the plaintiff's own contributory negligence. In resolving this problem it is necessary that each of these conceptions of liability, to-wit, the primary responsibility of the defendant company and the contributory negligence of the plaintiff should be separately examined.

          It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed by article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection and supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only to extra-contractual obligations — or to use the technical form of expression, that article relates only to culpa aquiliana and not to culpa contractual.

          Manresa (vol. 8, p. 67) in his commentaries upon articles 1103 and 1104 of the Civil Code, clearly points out this distinction, which was also recognized by this Court in its decision in the case of Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil. rep., 359). In commenting upon article 1093 Manresa clearly points out the difference between "culpa, substantive and independent, which of itself constitutes the source of an obligation between persons not formerly connected by any legal tie" and culpa considered as an accident in the performance of an obligation already existing . . . ."

          In the Rakes case (supra) the decision of this court was made to rest squarely upon the proposition that article 1903 of the Civil Code is not applicable to acts of negligence which constitute the breach of a contract.

          Upon this point the Court said:

          The acts to which these articles [1902 and 1903 of the Civil Code] are applicable are understood to be those not growing out of pre-existing duties of the parties to one another. But where relations already formed give rise to duties, whether springing from contract or quasi-contract, then breaches of those duties are subject to article 1101, 1103, and 1104 of the same code. (Rakes vs. Atlantic, Gulf and Pacific Co., 7 Phil. Rep., 359 at 365.)

          This distinction is of the utmost importance. The liability, which, under the Spanish law, is, in certain cases imposed upon employers with respect to damages occasioned by the negligence of their employees to persons to whom they are not bound by contract, is not based, as in the English Common Law, upon the principle ofrespondeat superior — if it were, the master would be liable in every case and unconditionally — but upon the principle announced in article 1902 of the Civil Code, which imposes upon all persons who by their fault or negligence, do injury to another, the obligation of making good the damage caused. One who places a powerful automobile in the hands of a servant whom he knows to be ignorant of the method of managing such a vehicle, is himself guilty of an act of negligence which makes him liable for all the consequences of his imprudence. The obligation to make good the damage arises at the very instant that the unskillful servant, while acting within the scope of his employment causes the injury. The liability of the master is personal and direct. But, if the master has not been guilty of any negligence whatever in the selection and direction of the servant, he is not liable for the acts of the latter, whatever done within the scope of his employment or not, if the damage done by the servant does not amount to a breach of the contract between the master and the person injured.

          It is not accurate to say that proof of diligence and care in the selection and control of the servant relieves the master from liability for the latter's acts — on the contrary, that proof shows that the responsibility has never existed. As Manresa says (vol. 8, p. 68) the liability arising from extra-contractual culpa is always based upon a voluntary act or omission which, without willful intent, but by mere negligence or inattention, has caused damage to another. A master who exercises all possible care in the selection of his servant, taking into consideration the qualifications they should possess for the discharge of the duties which it is his purpose to confide to them, and directs them with equal diligence, thereby performs his duty to third persons to whom he is bound by no contractual ties, and he incurs no liability whatever if, by reason of the negligence of his servants, even within the scope of their employment, such third person suffer damage. True it is that under article 1903 of the Civil Code the law creates a presumption that he has been negligent in the selection or direction of his servant, but the presumption is rebuttable and yield to proof of due care and diligence in this respect.

          The supreme court of Porto Rico, in interpreting identical provisions, as found in the Porto Rico Code, has held that these articles are applicable to cases of extra-contractual culpa exclusively. (Carmona vs. Cuesta, 20 Porto Rico Reports, 215.)

          This distinction was again made patent by this Court in its decision in the case of Bahia vs. Litonjua and Leynes, (30 Phil. rep., 624), which was an action brought upon the theory of the extra-contractual liability of the defendant to respond for the damage caused by the carelessness of his employee while acting within the scope of his employment. The Court, after citing the last paragraph of article 1903 of the Civil Code, said:

          From this article two things are apparent: (1) That when an injury is caused by the negligence of a servant or employee there instantly arises a presumption of law that there was negligence on the part of the master or employer either in selection of the servant or employee, or in supervision over him after the selection, or both; and (2) that that presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It follows necessarily that if the employer shows to the satisfaction of the court that in selection and supervision he has exercised the care and diligence of a good father of a family, the presumption is overcome and he is relieved from liability.

          This theory bases the responsibility of the master ultimately on his own negligence and not on that of his servant. This is the notable peculiarity of the Spanish law of negligence. It is, of course, in striking contrast to the American doctrine that, in relations with strangers, the negligence of the servant in conclusively the negligence of the master.

          The opinion there expressed by this Court, to the effect that in case of extra-contractual culpa based upon negligence, it is necessary that there shall have been some fault attributable to the defendant personally, and that the last paragraph of article 1903 merely establishes a rebuttable presumption, is in complete accord with the authoritative opinion of Manresa, who says (vol. 12, p. 611) that the liability created by article 1903 is imposed by reason of the breach of the duties inherent in the special relations of authority or superiority existing between the person called upon to repair the damage and the one who, by his act or omission, was the cause of it.

          On the other hand, the liability of masters and employers for the negligent acts or omissions of their servants or agents, when such acts or omissions cause damages which amount to the breach of a contact, is not based upon a mere presumption of the master's negligence in their selection or control, and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract.

          Every legal obligation must of necessity be extra-contractual or contractual. Extra-contractual obligation has its source in the breach or omission of those mutual duties which civilized society imposes upon it members, or which arise from these relations, other than contractual, of certain members of society to others, generally embraced in the concept of status. The legal rights of each member of society constitute the measure of the corresponding legal duties, mainly negative in character, which the existence of those rights imposes upon all other members of society. The breach of these general duties whether due to willful intent or to mere inattention, if productive of injury, give rise to an obligation to indemnify the injured party. The fundamental distinction between obligations of this character and those which arise from contract, rests upon the fact that in cases of non-contractual obligation it is the wrongful or negligent act or omission itself which creates the vinculum juris, whereas in contractual relations the vinculum exists independently of the breach of the voluntary duty assumed by the parties when entering into the contractual relation.

          With respect to extra-contractual obligation arising from negligence, whether of act or omission, it is competent for the legislature to elect — and our Legislature has so elected — whom such an obligation is imposed is morally culpable, or, on the contrary, for reasons of public policy, to extend that liability, without regard to the lack of moral culpability, so as to include responsibility for the negligence of those person who acts or mission are imputable, by a legal fiction, to others who are in a position to exercise an absolute or limited control over them. The legislature which adopted our Civil Code has elected to limit extra-contractual liability — with certain well-defined exceptions — to cases in which moral culpability can be directly imputed to the persons to be charged. This moral responsibility may consist 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.

          The position of a natural or juridical person who has undertaken by contract to render service to another, is wholly different from that to which article 1903 relates. When the sources of the obligation upon which plaintiff's cause of action depends is a negligent act or omission, the burden of proof rests upon plaintiff to prove the negligence — if he does not his action fails. But when the facts averred show a contractual undertaking by defendant for the benefit of plaintiff, and it is alleged that plaintiff has failed or refused to perform the contract, it is not necessary for plaintiff to specify in his pleadings whether the breach of the contract is due to willful fault or to negligence on the part of the defendant, or of his servants or agents. Proof of the contract and of its nonperformance is sufficient prima facie to warrant a recovery.

          As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor should assume the burden of proof of its existence, as the only fact upon which his action is based; while on the contrary, in a case of negligence which presupposes the existence of a contractual obligation, if the creditor shows that it exists and that it has been broken, it is not necessary for him to prove negligence. (Manresa, vol. 8, p. 71 [1907 ed., p. 76]).

          As it is not necessary for the plaintiff in an action for the breach of a contract to show that the breach was due to the negligent conduct of defendant or of his servants, even though such be in fact the actual cause of the breach, it is obvious that proof on the part of defendant that the negligence or omission of his servants or agents caused the breach of the contract would not constitute a defense to the action. If the negligence of servants or agents could be invoked as a means of discharging the liability arising from contract, the anomalous result would be that person acting through the medium of agents or servants in the performance of their contracts, would be in a better position than those acting in person. If one delivers a valuable watch to watchmaker who contract to repair it, and the bailee, by a personal negligent act causes its destruction, he is unquestionably liable. Would it be logical to free him from his liability for the breach of his contract, which involves the duty to exercise due care in the preservation of the watch, if he shows that it was his servant whose negligence caused the injury? If such a theory could be accepted, juridical persons would enjoy practically complete immunity from damages arising from the breach of their contracts if caused by negligent acts as such juridical persons can of necessity only act through agents or servants, and it would no doubt be true in most instances that reasonable care had been taken in selection and direction of such servants. If one delivers securities to a banking corporation as collateral, and they are lost by reason of the negligence of some clerk employed by the bank, would it be just and reasonable to permit the bank to relieve itself of liability for the breach of its contract to return the collateral upon the payment of the debt by proving that due care had been exercised in the selection and direction of the clerk?

          This distinction between culpa aquiliana, as the source of an obligation, and culpa contractual as a mere incident to the performance of a contract has frequently been recognized by the supreme court of Spain. (Sentencias of June 27, 1894; November 20, 1896; and December 13, 1896.) In the decisions of November 20, 1896, it appeared that plaintiff's action arose ex contractu, but that defendant sought to avail himself of the provisions of article 1902 of the Civil Code as a defense. The Spanish Supreme Court rejected defendant's contention, saying:

          These are not cases of injury caused, without any pre-existing obligation, by fault or negligence, such as those to which article 1902 of the Civil Code relates, but of damages caused by the defendant's failure to carry out the undertakings imposed by the contracts . . . .

          A brief review of the earlier decision of this court involving the liability of employers for damage done by the negligent acts of their servants will show that in no case has the court ever decided that the negligence of the defendant's servants has been held to constitute a defense to an action for damages for breach of contract.

          In the case of Johnson vs. David (5 Phil. Rep., 663), the court held that the owner of a carriage was not liable for the damages caused by the negligence of his driver. In that case the court commented on the fact that no evidence had been adduced in the trial court that the defendant had been negligent in the employment of the driver, or that he had any knowledge of his lack of skill or carefulness.

          In the case of Baer Senior & Co's Successors vs. Compania Maritima (6 Phil. Rep., 215), the plaintiff sued the defendant for damages caused by the loss of a barge belonging to plaintiff which was allowed to get adrift by the negligence of defendant's servants in the course of the performance of a contract of towage. The court held, citing Manresa (vol. 8, pp. 29, 69) that if the "obligation of the defendant grew out of a contract made between it and the plaintiff . . .

we do not think that the provisions of articles 1902 and 1903 are applicable to the case."

          In the case of Chapman vs. Underwood (27 Phil. Rep., 374), plaintiff sued the defendant to recover damages for the personal injuries caused by the negligence of defendant's chauffeur while driving defendant's automobile in which defendant was riding at the time. The court found that the damages were caused by the negligence of the driver of the automobile, but held that the master was not liable, although he was present at the time, saying:

          . . . unless the negligent acts of the driver are continued for a length of time as to give the owner a reasonable opportunity to observe them and to direct the driver to desist therefrom. . . . The act complained of must be continued in the presence of the owner for such length of time that the owner by his acquiescence, makes the driver's acts his own.

          In the case of Yamada vs. Manila Railroad Co. and Bachrach Garage & Taxicab Co. (33 Phil. Rep., 8), it is true that the court rested its conclusion as to the liability of the defendant upon article 1903, although the facts disclosed that the injury complaint of by plaintiff constituted a breach of the duty to him arising out of the contract of transportation. The express ground of the decision in this case was that article 1903, in dealing with the liability of a master for the negligent acts of his servants "makes the distinction between private individuals and public enterprise;" that as to the latter the law creates a rebuttable presumption of negligence in the selection or direction of servants; and that in the particular case the presumption of negligence had not been overcome.

          It is evident, therefore that in its decision Yamada case, the court treated plaintiff's action as though founded in tort rather than as based upon the breach of the contract of carriage, and an examination of the pleadings and of the briefs shows that the questions of law were in fact discussed upon this theory. Viewed from the standpoint of the defendant the practical result must have been the same in any event. The proof disclosed beyond doubt that the defendant's servant was grossly negligent and that his negligence was the proximate cause of plaintiff's injury. It also affirmatively appeared that defendant had been guilty of negligence in its failure to exercise proper discretion in the direction of the servant. Defendant was, therefore, liable for the injury suffered by plaintiff, whether the breach of the duty were to be regarded as constituting culpa aquiliana or culpa contractual. As Manresa points out (vol. 8, pp. 29 and 69) whether negligence occurs an incident in the course of the performance of a contractual undertaking or its itself the source of an extra-contractual undertaking obligation, its essential characteristics are identical. There is always an act or omission productive of damage due to carelessness or inattention on the part of the defendant. Consequently, when the court holds that a defendant is liable in damages for having failed to exercise due care, either directly, or in failing to exercise proper care in the selection and direction of his servants, the practical result is identical in either case. Therefore, it follows that it is not to be inferred, because the court held in the Yamada case that defendant was liable for the damages negligently caused by its servants to a person to whom it was bound by contract, and made reference to the fact that the defendant was negligent in the selection and control of its servants, that in such a case the court would have held that it would have been a good defense to the action, if presented squarely upon the theory of the breach of the contract, for defendant to have proved that it did in fact exercise care in the selection and control of the servant.

          The true explanation of such cases is to be found by directing the attention to the relative spheres of contractual and extra-contractual obligations. The field of non- contractual obligation is much more broader than that of contractual obligations, comprising, as it does, the whole extent of juridical human relations. These two fields, figuratively speaking, concentric; that is to say, the mere fact that a person is bound to another by contract does not relieve him from extra-contractual liability to such person. When such a contractual relation exists the obligor may break the contract under such conditions that the same act which constitutes the source of an extra-contractual obligation had no contract existed between the parties.

          The contract of defendant to transport plaintiff carried with it, by implication, the duty to carry him in safety and to provide safe means of entering and leaving its trains (civil code, article 1258). That duty, being contractual, was direct and immediate, and its non-performance could not be excused by proof that the fault was morally imputable to defendant's servants.

          The railroad company's defense involves the assumption that even granting that the negligent conduct of its servants in placing an obstruction upon the platform was a breach of its contractual obligation to maintain safe means of approaching and leaving its trains, the direct and proximate cause of the injury suffered by plaintiff was his own contributory negligence in failing to wait until the train had come to a complete stop before alighting. Under the doctrine of comparative negligence announced in the Rakes case (supra), if the accident was caused by plaintiff's own negligence, no liability is imposed upon defendant's negligence and plaintiff's negligence merely contributed to his injury, the damages should be apportioned. It is, therefore, important to ascertain if defendant was in fact guilty of negligence.

          It may be admitted that had plaintiff waited until the train had come to a full stop before alighting, the particular injury suffered by him could not have occurred. Defendant contends, and cites many authorities in support of the contention, that it is negligence per se for a passenger to alight from a moving train. We are not disposed to subscribe to this doctrine in its absolute form. We are of the opinion that this proposition is too badly stated and is at variance with the experience of every-day life. In this particular instance, that the train was barely moving when plaintiff alighted is shown conclusively by the fact that it came to stop within six meters from the place where he stepped from it. Thousands of person alight from trains under these conditions every day of the year, and sustain no injury where the company has kept its platform free from dangerous obstructions. There is no reason to believe that plaintiff would have suffered any injury whatever in alighting as he did had it not been for defendant's negligent failure to perform its duty to provide a safe alighting place.

          We are of the opinion that the correct doctrine relating to this subject is that expressed in Thompson's work on Negligence (vol. 3, sec. 3010) as follows:

          The test by which to determine whether the passenger has been guilty of negligence in attempting to alight from a moving railway train, is that of ordinary or reasonable care. It is to be considered whether an ordinarily prudent person, of the age, sex and condition of the passenger, would have acted as the passenger acted under the circumstances disclosed by the evidence. This care has been defined to be, not the care which may or should be used by the prudent man generally, but the care which a man of ordinary prudence would use under similar circumstances, to avoid injury." (Thompson, Commentaries on Negligence, vol. 3, sec. 3010.)

          Or, it we prefer to adopt the mode of exposition used by this court in Picart vs. Smith (37 Phil. rep., 809), we may say that the test is this; Was there anything in the circumstances surrounding the plaintiff at the time he alighted from the train which would have admonished a person of average prudence that to get off the train under the conditions then existing was dangerous? If so, the plaintiff should have desisted from alighting; and his failure so to desist was contributory negligence.1awph!l.net

          As the case now before us presents itself, the only fact from which a conclusion can be drawn to the effect that plaintiff was guilty of contributory negligence is that he stepped off the car without being able to discern clearly the condition of the platform and while the train was yet slowly moving. In considering the situation thus presented, it should not be overlooked that the plaintiff was, as we find, ignorant of the fact that the obstruction which was caused by the sacks of melons piled on the platform existed; and as the defendant was bound by reason of its duty as a public carrier to afford to its passengers facilities for safe egress from its trains, the plaintiff had a right to assume, in the absence of some circumstance to warn him to the contrary, that the platform was clear. The place, as we have already stated, was dark, or

dimly lighted, and this also is proof of a failure upon the part of the defendant in the performance of a duty owing by it to the plaintiff; for if it were by any possibility concede that it had right to pile these sacks in the path of alighting passengers, the placing of them adequately so that their presence would be revealed.

          As pertinent to the question of contributory negligence on the part of the plaintiff in this case the following circumstances are to be noted: The company's platform was constructed upon a level higher than that of the roadbed and the surrounding ground. The distance from the steps of the car to the spot where the alighting passenger would place his feet on the platform was thus reduced, thereby decreasing the risk incident to stepping off. The nature of the platform, constructed as it was of cement material, also assured to the passenger a stable and even surface on which to alight. Furthermore, the plaintiff was possessed of the vigor and agility of young manhood, and it was by no means so risky for him to get off while the train was yet moving as the same act would have been in an aged or feeble person. In determining the question of contributory negligence in performing such act — that is to say, whether the passenger acted prudently or recklessly — the age, sex, and physical condition of the passenger are circumstances necessarily affecting the safety of the passenger, and should be considered. Women, it has been observed, as a general rule are less capable than men of alighting with safety under such conditions, as the nature of their wearing apparel obstructs the free movement of the limbs. Again, it may be noted that the place was perfectly familiar to the plaintiff as it was his daily custom to get on and of the train at this station. There could, therefore, be no uncertainty in his mind with regard either to the length of the step which he was required to take or the character of the platform where he was alighting. Our conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly under way was not characterized by imprudence and that therefore he was not guilty of contributory negligence.

          The evidence shows that the plaintiff, at the time of the accident, was earning P25 a month as a copyist clerk, and that the injuries he has suffered have permanently disabled him from continuing that employment. Defendant has not shown that any other gainful occupation is open to plaintiff. His expectancy of life, according to the standard mortality tables, is approximately thirty-three years. We are of the opinion that a fair compensation for the damage suffered by him for his permanent disability is the sum of P2,500, and that he is also entitled to recover of defendant the additional sum of P790.25 for medical attention, hospital services, and other incidental expenditures connected with the treatment of his injuries.

          The decision of lower court is reversed, and judgment is hereby rendered plaintiff for the sum of P3,290.25, and for the costs of both instances. So ordered.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-29462             March 7, 1929

IGNACIO DEL PRADO, plaintiff-appellee, vs.MANILA ELECTRIC CO., defendant-appellant.

Ross, Lawrence and Selph and Antonio T. Carrascoso, jr., for appellant.Vicente Sotto for appellee.

STREET, J.:

This action was instituted in the Court of First Instance of Manila by Ignacio del Prado to recover damages in the amount of P50,000 for personal injuries alleged to have been caused by the negligence of te defendant, the Manila Electric Company, in the operation of one of its street cars in the City of Manila. Upon hearing the cause the trial court awarded to the plaintiff the sum of P10,000, as damages, with costs of suit, and the defendant appealed.

The appellant, the Manila Electric Company, is engaged in operating street cars in the City for the conveyance of passengers; and on the morning of November 18, 1925, one Teodorico Florenciano, as appellant's motorman, was in charge of car No. 74 running from east to west on R. Hidalgo Street, the scene of the accident being at a point near the intersection of said street and Mendoza Street. After the car had stopped at its appointed place for taking on and letting off passengers, just east of the intersection, it resumed its course at a moderate speed under the guidance of the motorman. The car had proceeded only a short distance, however, when the plaintiff, Ignacio del Prado, ran across the street to catch the car, his approach being made from the left. The car was of the kind having entrance and exist at either end, and the movement of the plaintiff was so timed that he arrived at the front entrance of the car at the moment when the car was passing.

The testimony of the plaintiff and of Ciriaco Guevara, one of his witnesses, tends to shows that the plaintiff, upon approaching the car, raised his hand as an indication to the motorman of his desire to board the car, in response to which the motorman eased up a little, without stopping. Upon this the plaintiff seized, with his hand, the front perpendicular handspot, at the same time placing his left foot upon the platform. However, before the plaintiff's position had become secure, and even before his raised right foot had reached the flatform, the motorman applied the power, with the result that the car gave a slight lurch forward. This sudden impulse to the car caused the plaintiff's foot to slip, and his hand was jerked loose from the handpost, He therefore fell to the ground, and his right foot was caught and crushed by the moving car. The next day the member had to be amputated in the hospital. The witness, Ciriaco Guevara, also stated that, as the plaintiff started to board the car, he grasped the handpost on either side with both right and left hand. The latter statement may possibly be incorrect as regards the use of his right hand by the plaintiff, but we are of the opinion that the finding of the trial court to the effect that the motorman slowed up slightly as the plaintiff was boarding the car that the plaintiff's fall was due in part at lease to a sudden forward movement at the moment when the plaintiff put his foot on the platform is supported by the evidence and ought not to be disturbed by us.

The motorman stated at the trial that he did not see the plaintiff attempting to board the car; that he did not accelerate the speed of the car as claimed by the plaintiff's witnesses; and that he in fact knew nothing of the incident until after the plaintiff had been hurt and some one called to him to stop. We are not convinced of the complete candor of this statement, for we are unable to see how a motorman operating this car could have failed to see a person boarding the car under the circumstances revealed in this case. It must be remembered that the front handpost which, as all witness agree, was grasped by the plaintiff in attempting to board the car, was immediately on the left side of the motorman.

With respect to the legal aspects of the case we may observe at the outset that there is no obligation on the part of a street railway company to stop its cars to let on intending passengers at other points than those appointed for stoppage. In fact it would be impossible to operate a system of street cars if a company engage in this business were required to stop any and everywhere to take on people who were too indolent, or who imagine themselves to be in too great a hurry, to go to the proper places for boarding the cars. Nevertheless, although the motorman of this car was not bound to stop to let the plaintiff on, it was his duty to do act that would have the effect of increasing the plaintiff's peril while he was attempting to board the car. The premature acceleration of the car was, in our opinion, a breach of this duty.

The relation between a carrier of passengers for hire and its patrons is of a contractual nature; and in failure on the part of the carrier to use due care in carrying its passengers safely is a breach of duty (culpa contructual) under articles 1101, 1103 and 1104 of the Civil Code. Furthermore, the duty that the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom. The case of Cangco vs. Manila Railroad Co. (38 Phil., 768), supplies an instance of the violation of this duty with respect to a passenger who was getting off of a train. In that case the plaintiff stepped off of a moving train, while it was slowing down in a station, and at the time when it was too dark for him to see clearly where he was putting his feet. The employees of the company had carelessly left watermelons on the platform at the place where the plaintiff alighted, with the result that his feet slipped and he fell under the car, where his right arm badly injured. This court held that the railroad company was liable for breach positive duty (culpa contractual), and the plaintiff was awarded damages in the amount of P2,500 for the loss of his arm. In the opinion in that case the distinction is clearly drawn between a liability for negligence arising from breach of contructual duty and that arising articles 1902 and 1903 of the Civil Code (culpa aquiliana).

The distiction between these two sorts of negligence is important in this jurisdiction, for the reason that where liability arises from a mere tort (culpa aquiliana), not involving a breach of positive obligation, an employer, or master, may exculpate himself, under the last paragraph of article 1903 of the Civil Code, by providing that he had exercised due degligence to prevent the damage; whereas this defense is not available if the liability of the master arises from a breach of contrauctual duty (culpa contractual). In the case bfore us the company pleaded as a special defense that it had used all the deligence of a good father of a family to prevent the damage suffered by the plaintiff; and to establish this contention the company introduced testimony showing that due care had been used in training and instructing the motorman in charge of this car in his art. But this proof is irrelevant in view of the fact that the liability involved was derived from a breach of obligation under article 1101 of the Civil Code and related provisions. (Manila Railroad Co. vs. Compana Transatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875, 887; De Guia vs. Manila Electric Railroad & Light Co., 40 Phil., 706, 710.)

Another practical difference between liability for negligence arising under 1902 of the Civil Code and liability arising from negligence in the performance of a positive duty, under article 1101 and related provisions of the Civil Code, is that, in dealing with the latter form of negligence, the court is given a discretion to mitigate liability according to the circumstances of the case (art 1103). No such general discretion is given by the Code in dealing with liability arising under article 1902; although possibly the same end is reached by courts in dealing with the latter form of liability because of the latitude of the considerations pertinent to cases arising under this article.

As to the contributory negligence of the plaintiff, we are of the opinion that it should be treated, as in Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359), as a mitigating circumstance under article 1103 of the Civil Code. It is obvious that the plaintiff's negligence in attempting to board the moving car was not the proximate cause of the injury. The direct and proximate cause of the injury was the act of appellant's motorman in putting on the power prematurely. A person boarding a moving car must be taken to assume the risk of injury from boarding the car under the conditions open to his view, but he cannot fairly be held to assume the risk that the motorman, having the situation in view, will increase his peril by accelerating the speed of the car before he is planted safely on the platform. Again, the situation before us is one where the negligent act of the company's servant succeeded the negligent act of the plaintiff, and the negligence of the company must be considered the proximate cause of the injury. The rule here applicable seems to be analogous to, if not identical with that which is sometimes referred to as the doctrine of "the last clear chance." In accordance with this doctrine, the contributory negligence of the party injured will not defeat the action if it be shown that the defendant might, by the exercise of reasonable care and prudence, have avoided the consequences of the negligence of the injured party (20 R. C. L., p. 139; Carr vs. Interurban Ry. Co., 185 Iowa, 872; 171 N. W., 167). The negligence of the plaintiff was, however, contributory to the accident and must be considered as a mitigating circumstance.

With respect to the effect of this injury upon the plaintiff's earning power, we note that, although he lost his foot, he is able to use an artificial member without great inconvenience and his earning capacity has probably not been reduced by more than 30 per centum. In view of the precedents found in our decisions with respect to the damages that ought to be awarded for the loss of limb, and more particularly Rakes vs. Atlantic, Gulf and Pacific Co. (7 Phil., 359); Cangco vs. Manila Railroad Co. (38 Phil., 768); and Borromeo vs. Manila Electric Railroad and Light Co. (44 Phil., 165), and in view of all the circumstances connected with the case, we are of the opinion that the plaintiff will be adequately compensated by an award of P2,500.

It being understood, therefore, that the appealed judgment is modified by reducing the recovery to the sum of P2,500, the judgment, as thus modified, is affirmed. So ordered, with costs against the appellant.