LAW ON TRANSPORTATION

I. CONCEPT OF COMMON CARRIER 1. Definition Article 1732 NCC, De Guzman vs. Court of Appeals $lanters $ro%ucts &nc vs. CA

168 SC A 612 !1""3# 226 SC A 76 !1""3#

2. Characteristics 'is(er vs. )an*co Steams(ip Co. 31 $(il 1 !1"1+# ,S vs. -uina(on 31 $(il 18" .oa%star S(ippin* Co., &nc. vs. Court of Appeals 'irst $(il. &n%ustrial vs. Court of Appeals 3. Distinguished fro Pri!ate Carrier 0ome &nsurance Co. vs. American Steams(ip San $a2lo vs. $antranco National Steel Corp. vs. Court of Appeals

31+ SC A 33" !1"""# 3// SC A 661 !1""8# 23 SC A 21 !1"68# 1+3 SC A 1"" !1"87# 283 SC A 1+ !1""7#

". #o!ern ent Regu$ation of Co on Carrier%s &usiness 34, .a2or Center vs. Garcia, 5r. 23" SC A 386 !1""1# 6ata% vs. Garcia, 5r. 211 SC A 331 !1""7# '. #o!erning (a) Samar 4inin* Co., &nc. vs. Nor%eutsc(er .l7o% 8astern S(ippin* .ines vs. &AC National Development Co. vs. Court of Appeals II. CONTRACT*A( EFFECT+ A. ,I#I(ANCE O,ER #OOD+ 1. E-tra.ordinar/ Di$igence Re0uired of Co on Carriers 1Artic$e 12333 NCC4 a. 5Registered O)ner Ru$e6 Gelisan vs. Al%a7 1+1 SC A 388 !1"87# 9ene%icto vs. &AC187 SC A +17 !1""/# $(iltranco Service 8nterprises, &nc. vs. CA 273 SC A +62 !1""7# 7. 8a7it +/ste Santos vs. Si2u* 1/1 SC A +2/ !1"81# .ita 8nterprises, &nc. vs. CA 118 SC A 317 !1"87# 6e:a 4ar;etin* vs. &AC 118 SC A 317 !1"87# c. &oundar/ +/ste 4a*2oo vs. 9ernar%o 7 SC A "+2 !1"63# 132 SC A +2" !1"81# 1+/ SC A 161 !1"81# 161 SC A +"3 !1"88#

2. (ia7i$it/ of Carriers for (oss3 Destruction and Deterioration of #oods9 E-ce:tions9 Presu :tion of Neg$igence Artic$es 123".123'9 Artic$es 123;.12"3 8astern S(ippin* .ines vs. &AC, supra Ganzon vs. CA 161 SC A 616 !1"8+# 8astern S(ippin* .ines vs. Court of Appeals 1"6 SC A +7/ !1""1# Sar;ies 6ours $(ils., &nc. vs. Court of Appeals 28/ SC A +8 !1""7# <alenzuela 0ar%=oo% > &n%ustrial Suppl7 vs. Court of Appeals 271 SC A 612 !1""7# )o2i%o vs. Court of Appeals 281 SC A 1 !1""7# 3. Co ence ent3 Duration and Ter ination of carrier%s res:onsi7i$it/ o!er the goods 1Artic$es 123<.123=3 NCC4 Compania 4aritima vs. &nsurance Co. of Nort( America 12 SC A 213 !1"61# .u Do vs. 9inamira 1/1 $(il. 12/ !1"+7# American $resi%ent .ines .t%. vs. 3lepper 11/ $0&. 213 Servan%o vs. $(il. Steam 117 SC A 832 !1"82# Ganzon vs. Court of Appeals, supra Salu%o, 5r. vs. Court of Appeals 2/7 SC A 1"8 !1""2# 4acam vs. Court of Appeals 313 SC A 77 !1"""# ". +ti:u$ations (i iting Carrier%s (ia7i$it/ a. Artic$es 12"".12"'3 NCC9 Degree of Di$igence Reasona7$e ti e in the de$i!er/ Case: 4aers; .ine vs. Court of Appeals 7. Artic$es 12";.12'>3 NCC9 A ount of (ia7i$it/ )smael vs. 9arretto +1 $0&. "/ !1"27# S(e=aram vs. $(ilippine Airlines 17 SC A 6/6 !1"66# ?n* )iu vs. Court of Appeals "1 SC A 223 !1"66# Sea .an% Services, &nc. vs. &nterme%iate Appellate Court 1+3 SC A ++2 !1"87# Cita%el .ines, &nc. vs. Court of Appeals 181 SC A +11 !1""/# 8verett Seams(ip Corp. vs. Court of Appeals 2"7 SC A 1"6 !1""8# 9ritis( Air=a7s vs. Court of Appeals 28+ SC A 1+/ !1""8# 0.8. 0eacoc; Co. vs. 4acon%ra7 > Co. 12 $0&. 2/+ !1"21# c. ,oid +ti:u$ation 1Art. 12"'3 NCC4 Case: S=eet .ines vs. 6eves 83 SC A 361 !1"78# 18" SC A 6/+ !1""/# 2/" SC A 67 !1""2# 1"2 SC A " !1""/#

222 SC A 1/8 !1""3#

'. Passenger%s &aggages 1Artic$e 12'"3 NCC4 -uisum2in*, Sr. vs. Court of Appeals $an American Airlines vs. apa%as 9ritis( Air=a7s vs. Court of Appeals, supra Alitalia vs. &nterme%iate Appellate Court

&. +AFET? OF PA++EN#ER+ 1. @*t ost Di$igence% Re0uired of Co on Carriers 1Artic$e 12''3 NCC4 83 SC A 386 !1"78# A 83 !1"8"# A 717 !1""7# A 11 !1"""# A 11 !1"""# A 126 !1""1# A 62" !1"82#

Nocum vs. .a*una 6a7a2as 2us. Co. vs. CA 4ecenas vs. CA 18/ SC Ne*ros Navi*ation Co., &nc. vs. CA 281 SC 3orean Airlines Co. .t%. vs. CA 231 SC 'ortune 8@press, &nc. vs. CA 3/+ SC Gatc(alian vs. Delim 2/3 SC Del Castillo vs. 5a7malin 112 SC

A. Doctrine of (ast C$ear Chance $(ilippine a22it 9us .ines vs. &AC 18" SC A 1+8 !1""/# 9ustamante vs. CA 1"3 SC A 6/3 !1""1# &. Acco odation Passenger .ara vs. <alencia 1/1 SC A 6+ !1"+8#

C. Carrier not an insurer against a$$ risAs Necessito vs. $aras 1/1 $(il. 7+ !1"+8# 5apan Airlines vs. CA 2"1 SC A 1" !1""8# D. Res I:sa (o0uitur .a7u*an vs. &AC 2. Co 167 SC A 363 !1"88#

ence ent3 Duration and Ter ination of Carrier%s Res:onsi7i$it/

.a 4allorca vs. De 5esus 17 SC A 73" !1"66# A2oitiz S(ippin* Co. vs. Court of Appeals 17" SC A "+ !1"8"# 4allari Sr. vs. Court of Appeals 321 SC A 117 !2///# 3. Presu :tion of Neg$igenceB (ia7i$it/ of Carriers for death or inCur/ to :assengers9 E-ce:tions 1Artic$es 12'<.12'=3 NCC4 9a7asen vs. Court of Appeals Cervantes vs. Court of Appeals Calalas vs. Court of Appeals $estaAo vs. Suma7an* 1/3 SC 3/1 SC 332 SC 316 SC A 1"7 !1"81# A 27 !1"""# A 3+6 !2///# A 87/ !2///#

". Neg$igence or intentiona$ assau$t 7/ carrier%s e :$o/ee Gillaco vs. 4anila ailroa% Co. 4aranan vs. $erez "7 $(il. 881 !1"++# 2/ SC A 112 !1"67#

'. Passenger%s dut/ to o7ser!e di$igence to a!oid inCur/9 contri7utor/ neg$igence

$N vs. Court of Appeals &saac vs. Al Ammen 6rans

13" SC A 87 !1"8+# 1/1 $(il 1/16 !1"+7#

<. InCur/ to :assenger due to acts of co.:assenger or stranger 9ac(elor 8@press, &nc vs. Court of Appeals 188 SC A 216 !1""/# 'ortune 8@press &nc. vs. CA, supra III. DAMA#E+ 1Artic$e 12<"3 NCC4 A. Actua$DCo :ensator/ Da ages 1Arts. 21;;3 22>13 22>33 NCC4 Caria*a vs. .69 Co., > 4 11/ $0&. 316 !1"6/# <illa e7 6ransit, &nc. vs. Court of Appeals 31 SC A +11 !1"7/# $an American Borl% Air=a7s vs. &AC 1+3 SC A +21 !1"87# Gatc(alian vs. Delim 2/3 SC A 126 !1""1# 1. Reco!er/ for Ph/sica$ InCuries So2erano vs. 4 > 9en*uet Auto .ine 4arc(an vs. 4en%oza 18 SC A 732 !1"66# 21 SC A 888 !1"68#

2. Da ages in case of death De Caliston vs. CA 122 SC A "+8 !1"83# $A. vs. CA 18+ SC A 11/ !1""/# &. Mora$ Da ages 1Arts. 22><3 221<.22123 221;.222>3 NCC4 Cac(ero vs. 4anila )ello= 6a@i Ca2 1/1 $(il. +23 !1"+7# 'ores vs. 4iran%a 1/+ $(il. 266 !1"+"# .opez vs. $an American 16 SC A 131 !1"66# ?rti*as 5r. vs. .uft(ansa 61 SC A 61/ !1"7+# $(il. a22it 9us .ines vs. 8s*uerra 117 SC A 711 !1"82# S=eet .ines vs. Court of Appeals 121 SC A 76" !1"83# $an American Borl% Air=a7s vs. &AC, supra 6ransBorl% Airlines vs. CA 16+ SC A 113 !1"88# Armovit vs. Court of Appeals 181 SC A 176 !1""/# $A. vs. CA 1/6 SC A 3"1 C. E-e :$ar/ Da ages 1Arts. 222;3 2232.22333 NCC4 $ru%encia%o vs. Alliance 6ransport 118 SC A 11/ !1"87# 4arc(an vs. 4en%oza, supra.

SUMMARY OF CASE DOCTRINES

De #uE an !s. Court of A::ea$s Article 1732 ma;es no %istinction 2et=een one =(ose principal 2usiness activit7 is t(e carr7in* of persons or *oo%s or 2ot(, an% one =(o %oes suc( carr7in* onl7 as an ancillar7 activit7 !in local &%iom as Ca si%elineC#. Article 1732 also carefull7 avoi%s ma;in* an7 %istinction 2et=een a person or enterprise offerin* transportation service on a re*ular or sc(e%ule% 2asis an% one offerin* suc( service on an occasional, episo%ic or unsc(e%ule% 2asis. Neit(er %oes Article 1732 %istin*uis( 2et=een a carrier offerin* its services to t(e C*eneral pu2lic,C i.e., t(e *eneral communit7 or population, an% one =(o offers services or solicits 2usiness onl7 from a narro= se*ment of t(e *eneral population. 6(e Court of Appeals referre% to t(e fact t(at private respon%ent (el% no certificate of pu2lic convenience. A certificate of pu2lic convenience is not a reDuisite for t(e incurrin* of lia2ilit7. 6(at lia2ilit7 arises t(e moment a person or firm acts as a common carrier, =it(out re*ar% to =(et(er or not suc( carrier (as also complie% =it( t(e reDuirements of t(e applica2le re*ulator7 statute an% implementin* re*ulations an% (as 2een *rante% a certificate of pu2lic convenience or ot(er franc(ise. 6o e@empt private respon%ent from t(e lia2ilities of a common carrier 2ecause (e (as not secure% t(e necessar7 certificate of pu2lic convenience, =oul% 2e offensive to soun% pu2lic polic7E t(at =oul% 2e to re=ar% private respon%ent precisel7 for failin* to compl7 =it( applica2le statutor7 reDuirements. P$anters Products3 Inc. !s. CA &t is not %ispute% t(at respon%ent carrier, in t(e or%inar7 course of 2usiness, operates as a common carrier, transportin* *oo%s in%iscriminatel7 for all persons. B(en petitioner c(artere% t(e vessel 4F< CSun $lumC, t(e s(ip captain, its officers an% compliment =ere un%er t(e emplo7 of t(e s(ipo=ner an% t(erefore continue% to 2e un%er its %irect supervision an% control. 0ar%l7 t(en can t(e c(arterer 2e c(ar*e%, a stran*er to t(e cre= an% to t(e s(ip, =it( t(e %ut7 of carin* for (is car*o =(en t(e c(arterer %i% not (ave an7 control of t(e means in %oin* so. 6(is is evi%ent in t(e present case consi%erin* t(at t(e steerin* of t(e s(ip, t(e mannin* of t(e %ec;s, t(e %etermination of t(e course of t(e vo7a*e an% ot(er tec(nical inci%ents of maritime navi*ation =ere all consi*ne% to t(e officers an% cre= =(o =ere screene%, c(osen an% (ire% 27 t(e s(ipo=ner. &t is t(erefore imperative t(at a pu2lic carrier s(all remain as suc(, not=it(stan%in* t(e c(arter of t(e =(ole or portion of a vessel 27 one or more persons, provi%e% t(e c(arter is limite% to t(e s(ip onl7, as in t(e case of a timeGc(arter or vo7a*eGc(arter. &t is onl7 =(en t(e c(arter inclu%es 2ot( t(e vessel an% its cre=, t(at a common carrier 2ecomes private, at least insofar as t(e particular vo7a*e coverin* t(e c(arterGpart7 is concerne%. &n%u2ita2l7, a s(ipo=ner in a time or vo7a*e c(arter retains possession an% control of t(e s(ip, alt(ou*( (er (ol%s ma7, for t(e moment, 2e t(e propert7 of t(e c(arterer. Fisher !s. ?angco &n construin* Act "8 for t(e alle*e% violation, t(e test is =(et(er t(e refusal of )SC to carr7 t(e e@plosives =it(out Dualification or con%itions ma7 (ave t(e effect of su2:ectin* an7 person or localit7 or t(e traffic is suc( e@plosives to an un%ul7 unreasona2le or unnecessar7 pre:u%ice or %iscrimination. Common carriers in t(is :uris%iction cannot la=full7 %ecline to accept a particular class of *oo%s unless it appears t(at for some sufficient reason t(e %iscrimination for suc( is reasona2le an% necessar7. )SC (as not met t(ose con%itions.

6(e nature of t(e 2usiness of a common carrier as a pu2lic emplo7ment is suc( t(at it is =it(in t(e po=er of t(e State to impose suc( :ust re*ulations in t(e interest of t(e pu2lic as t(e le*islator ma7 %eem proper. *+ !s. Fuinahon 6(ere is no pretense t(at it actuall7 cost more to (an%le t(e rice for t(e province t(an it %i% for t(e merc(ants =it( =(om t(e special contracts =ere ma%e. 6(ere =as a clear %iscrimination a*ainst t(e province =(ic( is pro(i2ite% 27 t(e la=. &t is (o=ever not 2elieve% t(at t(e la= pro(i2its common carriers from ma;in* special rates for t(e (an%lin* an% transportin* of merc(an%ise, =(en t(e same are ma%e for t(e purpose of increasin* t(eir 2usiness an% to mana*e t(eir important interests upon t(e same principles =(ic( are re*ar%e% as soun% an% a%opte% in ot(er tra%es an% pursuits. A2solute eDualit7 is not reDuire% in all cases. &t is onl7 un:ust, un%ue an% unreasona2le %iscrimination =(ic( t(e la= for2i%s. 6(e la= of eDualit7 is in force onl7 =(ere t(e services performe% in t(e %ifferent cases are su2stantiall7 t(e same an% t(e circumstances an% con%itions are similar. (oadstar +hi::ing Co.3 Inc. !s. CA .oa%star su2mits t(at t(e vessel =as a private carrier 2ecause it =as not issue% a C$CE it %i% not (ave a re*ular trip or sc(e%ule nor a fi@e% routeE an% t(ere =as onl7 Hone s(ipper, one consi*nee for a special car*o.I 6(e SC (el% t(at .oa%star is a common carrier. &t is not necessar7 t(at t(e carrier 2e issue% a C$C, an% t(is c(aracter is not altere% 27 t(e fact t(at t(e carria*e of t(e *oo%s in Duestion =as perio%ic, occasional, episo%ic or unsc(e%ule%. First Phi$i::ine Industria$ Cor:oration !s. CA 9ase% on Article 1732 NCC, t(ere is no %ou2t t(at petitioner is a common carrier. &t is en*a*e% in t(e 2usiness of transportin* or carr7in* *oo%s, i.e. petroleum pro%ucts, for (ire as a pu2lic emplo7ment. &t un%erta;es to carr7 for all persons in%ifferentl7, t(at is, to all persons =(o c(oose to emplo7 its services, an% transports t(e *oo%s 27 lan% an% for compensation. 6(e fact t(at petitioner (as a limite% clientele %oes not e@clu%e it from t(e %efinition of a common carrier. !De Guzman ulin* up(el%# espon%entJs ar*ument t(at t(e term Hcommon carrierI as use% in Section 133!:# of t(e .ocal Government Co%e refers onl7 to common carriers transportin* *oo%s an% passen*ers t(rou*( movin* ve(icles or vessels eit(er 27 lan%, sea or =ater is erroneous. 6(e %efinition of Hcommon carriersI in NCC ma;es no %istinction as to t(e means of transportin* as lon* as it is 27 lan%, =ater or air. &t %oes not provi%e t(at t(e transportin* of t(e passen*ers or *oo%s s(oul% 2e 27 motor ve(icle. Go e Insurance Co :an/ !s. A erican +tea shi: Agencies3 Inc. 6(e NCC provisions on common carriers s(oul% not appl7 =(ere t(e common carrier is not actin* as suc( 2ut as a private carrier. ,n%er American 5urispru%ence, a common carrier un%erta;in* to carr7 a special car*o or c(artere% to a special person onl7 2ecomes a private carrier. As a private carrier, a stipulation e@emptin* t(e o=ner from lia2ilit7 for t(e ne*li*ence of its a*ent is vali%. 6(e stipulation in t(e c(arter part7 a2solvin* t(e o=ner from lia2ilit7 for loss %ue to t(e ne*li*ence of its a*ent =oul% 2e voi% onl7 if strict pu2lic polic7 *overnin* common carrier is applie%. Suc( polic7 (as no

force =(ere t(e pu2lic at lar*e is not involve%, as in t(e case of a s(ip totall7 c(artere% for t(e use of a sin*le part7. 6(e stipulation e@emptin* t(e o=ner from lia2ilit7 for ne*li*ence of its a*ent is not a*ainst pu2lic polic7 an% is %eeme% vali%. ecover7 canJt 2e (a%, for loss or %ama*e to t(e car*o a*ainst s(ipo=ners, unless t(e same is %ue to personal acts or ne*li*ence of sai% o=ner or its mana*ers, as %istin*uis(e% from a*ents or emplo7ees. +an Pa7$o !s. PANTRANCO Consi%erin* t(e environmental circumstances of t(e case, t(e conve7ance of passen*ers, truc;s an% car*o from 4atno* to Allen is certainl7 not a ferr7 2oat service 2ut a coast=ise or interislan% s(ippin* service. ,n%er no circumstance can t(e sea 2et=een 4atno* an% Allen 2e consi%ere% a continuation of t(e (i*(=a7. B(ile a ferr7 2oat service (as 2een consi%ere% as a continuation of t(e (i*(=a7 =(en crossin* rivers or even la;es, =(ic( are small 2o%7 of =aters G separatin* t(e lan%, (o=ever, =(en as in t(is case t(e t=o terminals, 4atno* an% Allen are separate% 27 an open sea it can not 2e consi%ere% as a continuation of t(e (i*(=a7. espon%ent $AN6 ANC? s(oul% secure a separate C$C for t(e operation of an interislan% or coast=ise s(ippin* service in accor%ance =it( t(e provisions of la=. &ts C$C as a 2us transportation cannot 2e merel7 amen%e% to inclu%e t(is =ater service un%er t(e *uise t(at it is a mere private ferr7 service. 6(e contention of private respon%ent $AN6 ANC? t(at its ferr7 service operation is as a private carrier, not as a common carrier for its e@clusive use in t(e ferr7in* of its passen*er 2uses an% car*o truc;s is a2sur%. $AN6 ANC? %oes not %en7 t(at it c(ar*es its passen*ers separatel7 from t(e c(ar*es for t(e 2us trips an% issues separate tic;ets =(enever t(e7 2oar% t(e 4< C9lac; Dou2leC t(at crosses 4atno* to Allen, $AN6 ANC? cannot preten% t(at in issuin* tic;ets to its passen*ers it %i% so as a private carrier an% not as a common carrier. 6(e Court %oes not see an7 reason =(7 inspite of its amen%e% franc(ise to operate a private ferr7 2oat service it cannot accept =al;Gin passen*ers :ust for t(e purpose of crossin* t(e sea 2et=een 4atno* an% Allen. &n%ee% evi%ence to t(is effect (as 2een su2mitte%. Nationa$ +tee$ Cor:oration !s. CA &n t(e instant case, it is un%ispute% t(at <S& %i% not offer its services to t(e *eneral pu2lic. &t carrie% passen*ers or *oo%s onl7 for t(ose it c(ose un%er a special contract of c(arter part7. &t is a private carrier t(at ren%ers trampin* service an% as suc(, %oes not transport car*o or s(ipment for t(e *eneral pu2lic. &ts services are availa2le onl7 to specific persons =(o enter into a special contract of c(arter part7 =it( its o=ner. ConseDuentl7, t(e ri*(ts an% o2li*ations of <S& an% NSC, inclu%in* t(eir respective lia2ilit7 for %ama*e to t(e car*o, are %etermine% primaril7 27 stipulations in t(eir contracts of private carria*e or c(arter part7. ,nli;e in a contract involvin* a common carrier, private carria*e %oes not involve t(e *eneral pu2lic. 0ence, t(e strin*ent provisions of t(e Civil Co%e on common carriers protectin* t(e *eneral pu2lic cannot :ustifia2l7 2e applie% to a s(ip transportin* commercial *oo%s as a private carrier. 8M* !s. #arcia H6(e issuance of a Certificate of $u2lic Convenience is %etermine% 27 pu2lic nee%. 6(e presumption of pu2lic nee% for a service s(all 2e %eeme% in favor of t(e applicant, =(ile t(e 2ur%en of provin* t(at t(ere is no nee% for t(e propose% service s(all 2e t(e oppositorKs.I

97 its terms, pu2lic convenience or necessit7 *enerall7 means somet(in* fittin* or suite% to t(e pu2lic nee%. As one of t(e 2asic reDuirements for t(e *rant of a C$C, pu2lic convenience an% necessit7 e@ists =(en t(e propose% facilit7 or service meets a reasona2le =ant of t(e pu2lic an% suppl7 a nee% =(ic( t(e e@istin* facilities %o not a%eDuatel7 suppl7. 6(e e@istence or nonGe@istence of pu2lic convenience an% necessit7 is t(erefore a Duestion of fact t(at must 2e esta2lis(e% 27 evi%ence, real an%For testimonialE empirical %ataE statistics an% suc( ot(er means necessar7, in a pu2lic (earin* con%ucte% for t(at purpose. 6(e o2:ect an% purpose of suc( proce%ure, amon* ot(er t(in*s, is to loo; out for, an% protect, t(e interests of 2ot( t(e pu2lic an% t(e e@istin* transport operators. Tatad !s. #arcia &n la=, t(ere is a clear %istinction 2et=een t(e CoperationC of a pu2lic utilit7 an% t(e o=ners(ip of t(e facilities an% eDuipment use% to serve t(e pu2lic. 6(e ri*(t to operate a pu2lic utilit7 ma7 e@ist in%epen%entl7 an% separatel7 from t(e o=ners(ip of t(e facilities t(ereof. ?ne can o=n sai% facilities =it(out operatin* t(em as a pu2lic utilit7, or conversel7, one ma7 operate a pu2lic utilit7 =it(out o=nin* t(e facilities use% to serve t(e pu2lic. 6(e %evotion of propert7 to serve t(e pu2lic ma7 2e %one 27 t(e o=ner or 27 t(e person in control t(ereof =(o ma7 not necessaril7 2e t(e o=ner t(ereof. +a ar Mining Co :an/3 Inc. !s. Nordeutscher ($o/d 6(e vali%it7 of stipulations in 2ills of la%in* e@emptin* t(e carrier from lia2ilit7 for loss or %ama*e to t(e *oo%s =(en t(e same are not in its actual custo%7 (as 2een up(el%. 6(ere is no %ou2t t(at Art. 1738 fin%s no applica2ilit7 to t(e instant case. 6(e sai% article contemplates a situation =(ere t(e *oo%s (a% alrea%7 reac(e% t(eir place of %estination an% are store% in t(e =are(ouse of t(e carrier. 6(e su2:ect *oo%s =ere still a=aitin* transs(ipment to t(eir port of %estination, an% =ere store% in t(e =are(ouse of a t(ir% part7 =(en last seen an%For (ear% of. Article 1736 is applica2le to t(e instant suit. ,n%er sai% article, t(e carrier ma7 2e relieve% of t(e responsi2ilit7 for loss or %ama*e to t(e *oo%s upon actual or constructive %eliver7 of t(e same 27 t(e carrier to t(e consi*nee, or to t(e person =(o (as a ri*(t to receive t(em. &n sales, actual %eliver7 (as 2een %efine% as t(e ce%in* of corporeal possession 27 t(e seller, an% t(e actual appre(ension of corporeal possession 27 t(e 2u7er or 27 some person aut(orize% 27 (im to receive t(e *oo%s as (is representative for t(e purpose of custo%7 or %isposal. 97 t(e same to;en, t(ere is actual %eliver7 in contracts for t(e transport of *oo%s =(en possession (as 2een turne% over to t(e consi*nee or to (is %ul7 aut(orize% a*ent an% a reasona2le time is *iven (im to remove t(e *oo%s. 6(e court a Duo foun% t(at t(ere =as actual %eliver7 to t(e consi*nee t(rou*( its %ul7 aut(orize% a*ent, t(e carrier. Eastern +hi::ing (ines !s. Inter ediate A::e$$ate Court 1# 6(e la= of t(e countr7 to =(ic( t(e *oo%s are to 2e transporte% *overns t(e lia2ilit7 of t(e common carrier in case of t(eir loss, %estruction or %eterioration. As t(e car*oes in Duestion =ere transporte% from 5apan to t(e $(ilippines, t(e lia2ilit7 of $etitioner Carrier is *overne% primaril7 27 t(e Civil Co%e. 0o=ever, in all matters not re*ulate% 27 sai% Co%e, t(e ri*(ts an% o2li*ations of common carrier s(all 2e *overne% 27 t(e Co%e of Commerce an% 27 special la=s. 6(us, t(e Carria*e of Goo%s 27 Sea Act, a special la=, is suppletor7 to t(e provisions of t(e Civil Co%e. !2# ,n%er t(e Civil Co%e, common carriers, from t(e nature of t(eir 2usiness an% for reasons of pu2lic polic7, are 2oun% to o2serve e@traor%inar7 %ili*ence in t(e vi*ilance over *oo%s, accor%in* to all t(e

circumstances of eac( case. Common carriers are responsi2le for t(e loss, %estruction, or %eterioration of t(e *oo%s unless t(e same is %ue to an7 of t(e follo=in* causes onl7L !1# 'loo%, storm, eart(Dua;e, li*(tnin* or ot(er natural %isaster or calamit7E $etitioner Carrier claims t(at t(e loss of t(e vessel 27 fire e@empts it from lia2ilit7 un%er t(e p(rase Cnatural %isaster or calamit7.I 0o=ever, t(e Court sai% t(at fire ma7 not 2e consi%ere% a natural %isaster or calamit7. 6(is must 2e so as it arises almost invaria2l7 from some act of man or 27 (uman means. &t %oes not fall =it(in t(e cate*or7 of an act of Go% unless cause% 27 li*(tnin* or 27 ot(er natural %isaster or calamit7. &t ma7 even 2e cause% 27 t(e actual fault or privit7 of t(e carrier. As t(e peril of t(e fire is not compre(en%e% =it(in t(e e@ception in Article 1731, supra, Article 173+ of t(e Civil Co%e provi%es t(at all cases t(an t(ose mention in Article 1731, t(e common carrier s(all 2e presume% to (ave 2een at fault or to (ave acte% ne*li*entl7, unless it proves t(at it (as o2serve% t(e e@traor%inar7 %ili*ence reDuire% 27 la=. An% even if fire =ere to 2e consi%ere% a Cnatural %isasterC =it(in t(e meanin* of Article 1731 of t(e Civil Co%e, it is reDuire% un%er Article 173" of t(e same Co%e t(at t(e Cnatural %isasterC must (ave 2een t(e Cpro@imate an% onl7 cause of t(e loss,C an% t(at t(e carrier (as Ce@ercise% %ue %ili*ence to prevent or minimize t(e loss 2efore, %urin* or after t(e occurrence of t(e %isaster.I 6(is $etitioner Carrier (as also faile% to esta2lis( satisfactoril7. Nationa$ De!e$o: ent Co :an/ !s. CA Si*nificantl7, un%er t(e provisions of t(e Co%e of Commerce, particularl7 Articles 826 to 83", t(e s(ipo=ner or carrier, is not e@empt from lia2ilit7 for %ama*es arisin* from collision %ue to t(e fault or ne*li*ence of t(e captain. $rimar7 lia2ilit7 is impose% on t(e s(ipo=ner or carrier in reco*nition of t(e universall7 accepte% %octrine t(at t(e s(ipmaster or captain is merel7 t(e representative of t(e o=ner =(o (as t(e actual or constructive control over t(e con%uct of t(e vo7a*e. 6(e a*reement 2et=een NDC an% 4C$ s(o=s t(at 4C$ is appointe% as a*ent, a term 2roa% enou*( to inclu%e t(e concept of s(ip a*ent in maritime la=. &n fact 4C$ =as even conferre% all t(e po=ers of t(e o=ner of t(e vessel, inclu%in* t(e po=er to contract in t(e name of t(e NDC. 9ot( o=ner an% a*ent s(oul% 2e %eclare% :ointl7 an% severall7 lia2le since t(e o2li*ation =(ic( is t(e su2:ect of t(e action (a% its ori*in in a fortuitous act an% %i% not arise from contract. #e$isan !s. A$da/ 6(e court (as (el% in several %ecisions t(at t(e re*istere% o=ner of a pu2lic service is responsi2le for %ama*es t(at ma7 arise from conseDuences inci%ent to its operation or t(at ma7 2e cause% to an7 of t(e passen*ers t(erein. 6(e claim of t(e petitioners t(at (e is not lia2le in vie= of t(e lease contract e@ecute% 27 an% 2et=een (im an% 8spiritu =(ic( e@empts (im from lia2ilit7 to 3r% persons, cannot 2e sustaine% 2ecause it appears t(at t(e lease contract (a% not 2een approve% 27 t(e $u2lic Service Commission. &t is a settle% rule in our :urispru%ence t(at if t(e propert7 covere% 27 a 'ranc(ise is transferre% or lease to anot(er =it(out o2tainin* t(e reDuisite approval, t(e transfer is not 2in%in* upon t(e pu2lic an% 3r% persons. 0o=ever, Gelisan is not =it(out recourse 2ecause (e (as a ri*(t to 2e in%emnifie% 27 8spiritu for t(e amount (e ma7 2e reDuire% to pa7. 6(is is %ue to t(e fact t(at t(e lease contract in Duestion, alt(ou*( not effective a*ainst t(e pu2lic is vali% an% 2in%in* 2et=een t(e contractin* parties. &enedicto !s. Inter ediate A::e$$ate Court

6(e prevailin* %octrine in common carriers ma;e t(e o=ner lia2le for conseDuences (avin* from t(e operations of t(e carrier even t(ou*( t(e specific ve(icle involve% ma7 (ave 2een transferre% to anot(er person. 6(is %octrine rests upon t(e principle in %ealin* =it( ve(icles re*istere% un%er $u2lic Service .a=, t(e pu2lic (as t(e ri*(t to assume t(at t(e re*istere% o=ner is t(e actual or la=ful o=ner t(ereof. &t =oul% 2e ver7 %ifficult an% often impossi2le as a practical matter, for mem2ers of t(e *eneral pu2lic to enforce t(e ri*(ts of action t(at t(e7 ma7 (ave for in:uries inflicte% 27 t(e ve(icles 2ein* ne*li*entl7 operate% if t(e7 s(oul% 2e reDuire% to prove =(o t(e actual o=ner is. 6(e re*istere% o=ner is not allo=e% to %en7 lia2ilit7 27 provin* t(e i%entit7 of t(e alle*e% transferee. 6(us, contrar7 to petitionerJs claim, private respon%ents are not reDuire% to *o 2e7on% t(e ve(icleJs certificate of re*istration to ascertain t(e o=ner of t(e carrier. PGI(TRANCO +er!ice Enter:rise3 Inc. !s. Court of A::ea$s Be (ave consistentl7 (el% t(at t(e lia2ilit7 of t(e re*istere% o=ner of a pu2lic service ve(icle, li;e petitioner $(iltranco, for %ama*es arisin* from t(e tortious acts of t(e %river is primar7, %irect, an% :oint an% several or soli%ar7 =it( t(e %river. As to soli%arit7, Article 21"1 e@pressl7 provi%esL Art. 21"1. 6(e responsi2ilit7 of t=o or more persons =(o are lia2le for a DuasiG%elict is soli%ar7. Since t(e emplo7erKs lia2ilit7 is primar7, %irect an% soli%ar7, its onl7 recourse if t(e :u%*ment for %ama*es is satisfie% 27 it is to recover =(at it (as pai% from its emplo7ee =(o committe% t(e fault or ne*li*ence =(ic( *ave rise to t(e action 2ase% on DuasiG%elict. Article 2181 of t(e Civil Co%e provi%esL Art. 2181. B(oever pa7s for t(e %ama*e cause% 27 (is %epen%ents or emplo7ees ma7 recover from t(e latter =(at (e (as pai% or %elivere% in satisfaction of t(e claim. +antos !s. +i7ug Alt(ou*( SAN6?S, as t(e ;a2it =as t(e true o=ner as a*ainst <&DAD, t(e latter, as t(e re*istere% o=nerFoperator an% *rantee of t(e franc(ise, is %irectl7 an% primaril7 responsi2le an% lia2le for t(e %ama*es cause% to S&9,G, t(e in:ure% part7, as a conseDuence of t(e ne*li*ent or careless operation of t(e ve(icle. 6(is rulin* is 2ase% on t(e principle t(at t(e operator of recor% is consi%ere% t(e operator of t(e ve(icle in contemplation of la= as re*ar%s t(e pu2lic an% t(ir% persons even if t(e ve(icle involve% in t(e acci%ent (a% 2een sol% to anot(er =(ere suc( sale (a% not 2een approve% 27 t(e t(en $u2lic Service Commission. (ita Enter:rises Inc. !s. Inter ediate A::e$$ate Court ,nDuestiona2l7, t(e parties (erein operate% un%er an arran*ement, comonl7 ;no=n as t(e C;a2it s7stemC, =(ere27 a person =(o (as 2een *rante% a certificate of convenience allo=s anot(er person =(o o=ns motors ve(icles to operate un%er suc( franc(ise for a fee. A certificate of pu2lic convenience is a special privile*e conferre% 27 t(e *overnment . A2use of t(is privile*e 27 t(e *rantees t(ereof cannot 2e countenance%. Alt(ou*( not outri*(tl7 penalize% as a criminal offense, t(e C;a2it s7stemC is invaria2l7 reco*nize% as 2ein* contrar7 to pu2lic polic7 an%, t(erefore, voi% an% ine@istent un%er Article 11/" of t(e Civil Co%e, &t is a fun%amental principle t(at t(e court =ill not ai% eit(er part7 to enforce an ille*al contract, 2ut =ill leave t(em 2ot( =(ere it fin%s t(em.

TeCa MarAeting !s. Inter ediate A::e$$ate Court 6(e rulin* in .ita 8nterprises &nc. vs. &AC is up(el%. 6(e %efect of in e@istence of a contract is permanent an% cannot 2e cure% 27 ratification or 27 prescription. 6(e mere lapse of time cannot *ive efficac7 to contracts t(at are null an% voi%. Mag7oo !s. &ernardo 6(e features =(ic( c(aracterize t(e 2oun%ar7 s7stem are not sufficient to =it(%ra= t(e relations(ip 2et=een t(e parties from t(at of emplo7er an% emplo7ee. 6(e o=ner continue% to 2e t(e operator of t(e ve(icle in le*al contemplation an% as suc(, (e is responsi2le for t(e conseDuences inci%ent to its operation. 6o e@empt from lia2ilit7 t(e o=ner of a pu2lic ve(icle =(o operates it un%er t(e H2oun%ar7 s7stemI on t(e *roun% t(at (e is a mere lessor =oul% 2e not onl7 to a2et fla*rant violations of t(e $u2lic Service .a= 2ut also to place t(e ri%in* pu2lic at t(e merc7 of rec;less an% irresponsi2le %rivers. #anEon !s. CA $etitioner Ganzon faile% to s(o= t(at t(e loss of t(e scrap iron %ue to an7 cause enumerate% in Art. 1731. 6(e or%er of t(e actin* 4a7or %i% not constitute vali% aut(orit7 for petitioner to carr7 out. &n an7 case, t(e intervention of t(e municipal officials =as not of a c(aracter t(at =oul% ren%er impossi2le t(e fulfillment 27 t(e carrier of its o2li*ation. 6(e petitioner =as not %ul7 2oun% to o2e7 t(e ille*al or%er to %ump into t(e sea t(e scrap of iron. 4oreover, t(ere is a2sence of sufficient proof t(at t(e issuance of t(e same or%er =as atten%e% =it( suc( force or intimi%ation as to completel7 overpo=er t(e =ill of t(e petitionerJs emplo7ees. 97 t(e %eliver7 ma%e %urin* Dec. 1, 1"+6, t(e scraps =ere uncon%itionall7 place% in t(e possession an% control of t(e common carrier, an% upon t(eir receipt 27 t(e carrier of transportation, t(e contract of carria*e =as %eeme% perfecte%. ConseDuentl7, GanzonJs e@traor%inar7 responsi2ilit7 for t(e loss, %estruction or %eterioration of t(e *oo%s commence%. Accor%in* to Art 1738, suc( e@traor%inar7 responsi2ilit7 =oul% cease onl7 upon t(e %eliver7 27 t(e carrier to t(e consi*nee or persons =it( ri*(t to receive t(em. 6(e fact t(at part of t(e s(ipment (a% not 2een loa%e% on 2oar% %i% not impair t(e contract of transportation as t(e *oo%s remaine% in t(e custo%7 > control of t(e carrier. Eastern +hi::ing (ines !s. Court of A::ea$s 6(e (eav7 seas an% rains referre% to in t(e masterJs report =ere not caso fortuito 2ut normal occurrences t(at an oceanG*oin* vessel, particularl7 in t(e mont( of Septem2er =(ic(, in our area, is a mont( of rains an% (eav7 seas =oul% encounter as a matter of routine. 6(e7 are not unforeseen nor unforeseea2le. 6(ese are con%itions t(at oceanG*oin* vessels =oul% encounter an% provi%e for, in t(e or%inar7 course of a vo7a*e. 6(at rain =ater !not sea =ater# foun% its =a7 into t(e (ol%s of t(e 5upri <enture is a clear in%ication t(at care an% foresi*(t %i% not atten% t(e closin* of t(e s(ipKs (atc(es so t(at rain =ater =oul% not fin% its =a7 into t(e car*o (ol%s of t(e s(ip. Since t(e carrier (as faile% to esta2lis( an7 caso fortuito, t(e presumption 27 la= of fault or ne*li*ence on t(e part of t(e carrier appliesE an% t(e carrier must present evi%ence t(at it (as o2serve% t(e e@traor%inar7 %ili*ence reDuire% 27 Article 1733 of t(e Civil Co%e in or%er to escape lia2ilit7 for %ama*e or %estruction to t(e *oo%s t(at it (a% a%mitte%l7 carrie% in t(is case. No suc( evi%ence e@ists of recor%. 6(us, t(e carrier cannot escape lia2ilit7.

+arAies Tours Phi$s !s. Court of A::ea$s ,n%er t(e Civil Co%e, common carriers, from t(e nature of t(eir 2usiness an% for reasons of pu2lic polic7, are 2oun% to o2serve e@traor%inar7 %ili*ence in t(e vi*ilance over t(e *oo%s transporte% 27 t(em, an% t(is lia2ilit7 lasts from t(e time t(e *oo%s are uncon%itionall7 place% in t(e possession of, an% receive% 27 t(e carrier for transportation until t(e same are %elivere%, actuall7 or constructivel7, 27 t(e carrier to t(e person =(o (as a ri*(t to receive t(em, unless t(e loss is %ue to an7 of t(e e@cepte% causes un%er Article 1731 t(ereof. B(ere t(e common carrier accepte% its passen*erKs 2a**a*e for transportation an% even (a% it place% in t(e ve(icle 27 its o=n emplo7ee, its failure to collect t(e frei*(t c(ar*e is t(e common carrierKs o=n loo;out. &t is responsi2le for t(e conseDuent loss of t(e 2a**a*e. &n t(e instant case, %efen%ant appellantKs emplo7ee even (elpe% 'atima 4inerva 'orta%es an% (er 2rot(er loa% t(e lu**a*esF2a**a*es in t(e 2usK 2a**a*e compartment, =it(out as;in* t(at t(e7 2e =ei*(e%, %eclare%, receipte% or pai% for. Neit(er =as t(is reDuire% of t(e ot(er passen*ers. ,a$enEue$a Gard)ood H Industria$ +u::$/ !s. Court of A::ea$s &n a contract of private carria*e, t(e parties ma7 vali%l7 stipulate t(at responsi2ilit7 for t(e car*o rests solel7 on t(e c(arterer, e@emptin* t(e s(ipo=ner from lia2ilit7 for loss of or %ama*e to t(e car*o cause% even 27 t(e ne*li*ence of t(e s(ip captain. $ursuant to Article 13/6 17 of t(e Civil Co%e, suc( stipulation is vali% 2ecause it is freel7 entere% into 27 t(e parties an% t(e same is not contrar7 to la=, morals, *oo% customs, pu2lic or%er, or pu2lic polic7. &n%ee%, t(eir contract of private carria*e is not even a contract of a%(esion. Be stress t(at in a contract of private carria*e, t(e parties ma7 freel7 stipulate t(eir %uties an% o2li*ations =(ic( perforce =oul% 2e 2in%in* on t(em. ,nli;e in a contract involvin* a common carrier, private carria*e %oes not involve t(e *eneral pu2lic. 0ence, t(e strin*ent provisions of t(e Civil Co%e on common carriers protectin* t(e *eneral pu2lic cannot :ustifia2l7 2e applie% to a s(ip transportin* commercial *oo%s as a private carrier. ConseDuentl7, t(e pu2lic polic7 em2o%ie% t(erein is not contravene% 27 stipulations in a c(arter part7 t(at lessen or remove t(e protection *iven 27 la= in contracts involvin* common carriers. ?o7ido !s. Court of A::ea$s 6(e e@plosion of t(e ne= tire is not a fortuitous event. 6(ere are (uman factors involve% in t(e situation. 6(e fact t(at t(e tire =as ne= %i% not impl7 t(at it =as entirel7 free from manufacturin* %efects or t(at it =as properl7 mounte% on t(e ve(icle. Neit(er ma7 t(e fact t(at t(e tire 2ou*(t an% use% is of a 2ran% name note% for Dualit7, resultin* in t(e conclusion t(at it coul% not e@plo%e =it(in five %a7Js use. &t is settle% t(at an acci%ent cause% eit(er 27 %efects in t(e automo2ile or t(rou*( t(e ne*li*ence of its %river is not a caso fortuito. 4oreover, a common carrier ma7 not 2e a2solve% from lia2ilit7 in case of force ma:eure. A common carrier must still prove t(at it =as not ne*li*ent in causin* t(e %eat( or in:ur7 resultin* from t(e acci%ent. 6(us, (avin* faile% to overt(ro= t(e presumption of ne*li*ence =it( clear an% convincin* evi%ence, petitioners are (ere27 (el% lia2le for %ama*es.

Co :ania Mariti a !s. Insurance Co. of North A erica

6(e receipt of *oo%s 27 t(e carrier (as 2een sai% to lie at t(e foun%ation of t(e contract to carr7 an% %eliver, an% if actuall7 no *oo%s are receive% t(ere can 2e no suc( contract. 6(e lia2ilit7 an% responsi2ilit7 of t(e carrier un%er a contract for t(e carria*e of *oo%s commence on t(eir actual %eliver7 to, or receipt 27, t(e carrier or an aut(orize% a*ent an% %eliver7 to a li*(ter in c(ar*e of a vessel for s(ipment on t(e vessel, =(ere it is t(e custom to %eliver in t(at =a7, is a *oo% %eliver7 an% 2in%s t(e vessel receivin* t(e frei*(t, t(e lia2ilit7 commencin* at t(e time of %eliver7 to t(e li*(ter an%, similarl7, =(ere t(ere is a contract to carr7 *oo%s from one port to anot(er, an% t(e7 cannot 2e loa%e% %irectl7 on t(e vessel an% li*(ters are sent 27 t(e vessel to 2rin* t(e *oo%s to it, t(e li*(ters are for t(e time its su2stitutes, so t(at t(e 2ill of lan%in* is applica2le to t(e *oo%s as soon as t(e7 are place% on t(e li*(ters. B(enever t(e control an% possession of *oo%s passes to t(e carrier an% not(in* remains to 2e %one 27 t(e s(ipper, t(en it can 2e sai% =it( certaint7 t(at t(e relation of s(ipper an% carrier (as 2een esta2lis(e%. A 2ill of la%in* is not in%ispensa2le for t(e creation of a contract of carria*e. 6(e 2ill of la%in* is :uri%icall7 a %ocumentar7 proof of t(e stipulations an% con%itions a*ree% upon 27 2ot( parties. 6(e lia2ilit7 of t(e carrier as common carrier 2e*ins =it( t(e actual %eliver7 of t(e *oo%s for transportation, an% not merel7 =it( t(e formal e@ecution of a receipt or 2ill of la%in*E t(e issuance of a 2ill of la%in* is not necessar7 to complete %eliver7 an% acceptance. 8ven =(ere it is provi%e% 27 statute t(at lia2ilit7 commences =it( t(e issuance of t(e 2ill of la%in*, actual %eliver7 an% acceptance are sufficient to 2in% t(e carrier.

(u Do !s. &ina ira B(ile %eliver7 of t(e car*o to t(e consi*nee, or to t(e person =(o (as a ri*(t to receive t(em, contemplate% in Article 1736, 2ecause in suc( case t(e *oo%s are still in t(e (an%s of t(e Government an% t(e o=ner cannot e@ercise %ominion over t(em, =e 2elieve (o=ever t(at t(e parties ma7 a*ree to limit t(e lia2ilit7 of t(e carrier consi%erin* t(at t(e *oo%s (ave still to t(rou*( t(e inspection of t(e customs aut(orities 2efore t(e7 are actuall7 turne% over to t(e consi*nee. 6(is is a situation =(ere =e ma7 sa7 t(at t(e carrier losses control of t(e *oo%s 2ecause of a custom re*ulation an% it is unfair t(at it 2e ma%e responsi2le for =(at ma7 (appen %urin* t(e interre*num.

A erican President (ines3 (td. !s. 8$e::er Bit( re*ar% to t(e contention of t(e carrier t(at C?GSA s(oul% control in t(is case, t(e same is of as moment. Art. 1763 of t(e Ne= Civil Co%e provi%es t(at Ht(e la=s of t(e countr7 to =(ic( t(e *oo%s are transporte% s(all *overn t(e lia2ilit7 of t(e common carrier in case of loss, %estruction an% %eterioration.I 6(is means t(at t(e la= of t(e $(ilippines on t(e Ne= Civil Co%e. ,n%er 1766 of NCC, Hin all matter not re*ulate% 27 t(is Co%e, t(e ri*(ts an% o2li*ations of common carriers s(all 2e *overne% 27 t(e Co%e of Commerce an% 27 Special .a=s.I Art. 1736G1738, NCC *overns sai% ri*(ts an% o2li*ations. 6(erefore, alt(ou*( Sec 1!+# of C?GSA states t(at t(e carrier s(all not 2e lia2le in an amount e@cee%in* M+// per pac;a*e unless t(e value of t(e *oo%s (a% 2een %eclare% 27 t(e s(ipper an% asserte% in t(e 2ill of la%in*, sai% section is merel7 supplementar7 to t(e provisions of t(e Ne= Civil Co%e. +er!ando !s. Phi$. +tea 6(e court a Duo (el% t(at t(e %eliver7 of t(e s(ipment in Duestion to t(e =are(ouse of t(e 9ureau of

Customs is not t(e %eliver7 contemplate% 27 Article 1736E an% since t(e 2urnin* of t(e =are(ouse occurre% 2efore actual or constructive %eliver7 of t(e *oo%s to t(e appellees, t(e loss is c(ar*ea2le a*ainst t(e appellant. &t s(oul% 2e pointe% out, (o=ever, t(at in t(e 2ills of la%in* issue% for t(e car*oes in Duestion, t(e parties a*ree% to limit t(e responsi2ilit7 of t(e carrier for t(e loss or %ama*e t(at ma7 2e cause% to t(e s(ipment t(erein t(e follo=in* stipulationL Clause 11. Carrier s(all not 2e responsi2le for loss or %ama*e to s(ipments 2ille% Ko=nerKs ris;K unless suc( loss or %ama*e is %ue to ne*li*ence of carrier. Nor s(all carrier 2e responsi2le for loss or %ama*e cause% 27 force ma:eure, %an*ers or acci%ents of t(e sea or ot(er =atersE =arE pu2lic enemiesE . . . fire . ... Be sustain t(e vali%it7 of t(e a2ove stipulationE t(ere is not(in* t(erein t(at is contrar7 to la=, morals or pu2lic polic7. Appellees =oul% conten% t(at t(e a2ove stipulation %oes not 2in% t(em 2ecause it =as printe% in fine letters on t(e 2ac;Gof t(e 2ills of la%in*E an% t(at t(e7 %i% not si*n t(e same. 6(is ar*ument overloo;s t(e pronouncement of t(is Court in ?n* )iu vs. Court of Appeals, =(ere t(e same issue =as resolve% in t(is =iseL While it may be true that petitioner had not signed the plane ticket, he is nevertheless bound by the provisions thereof. 'Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation'. t is what is known as a contract of 'adhesion', in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. !he one who adheres to the contract is in reality free to re"ect it entirely# if he adheres, he gives his consent.$ +a$udo3 Ir. !s. Court of A::ea$s 8@cept as ma7 2e pro(i2ite% 27 la=, t(ere is not(in* to prevent an inverse or%er of events, t(at is, t(e e@ecution of t(e 2ill of la%in* even prior to actual possession an% control 27 t(e carrier of t(e car*o to 2e transporte%. 6(ere is no la= =(ic( reDuires t(at t(e %eliver7 of t(e *oo%s for carria*e an% t(e issuance of t(e coverin* 2ill of la%in* must coinci%e in point of time or, for t(at matter, t(at t(e former s(oul% prece%e t(e latter. B(ile =e a*ree =it( petitionersK statement t(at Can air=a7 2ill estops t(e carrier from %en7in* receipt of *oo%s of t(e Duantit7 an% Dualit7 %escri2e% in t(e 2ill,C a furt(er rea%in* an% a more fait(ful Duotation of t(e aut(orit7 cite% =oul% reveal t(at C!a# 2ill of la%in* ma7 contain constituent elements of estoppel an% t(us 2ecome somet(in* more t(an a contract 2et=een t(e s(ipper an% t(e carrier. . . . !0o=ever#, as 2et=een t(e s(ipper an% t(e carrier, =(en no *oo%s (ave 2een %elivere% for s(ipment no recitals in t(e 2ill can estop t(e carrier from s(o=in* t(e true facts . . . 9et=een t(e consi*nor of *oo%s an% receivin* carrier, recitals in a 2ill of la%in* as to t(e *oo%s s(ippe% raise onl7 a re2utta2le presumption t(at suc( *oo%s =ere %elivere% for s(ipment. As 2et=een t(e consi*nor an% a receivin* carrier, t(e fact must out=ei*( t(e recital.C 6(ere is a (ol%in* in most :uris%ictions t(at t(e acceptance of a 2ill of la%in* =it(out %issent raises a presumption t(at all terms t(erein =ere 2rou*(t to t(e ;no=le%*e of t(e s(ipper an% a*ree% to 27 (im, an% in t(e a2sence of frau% or mista;e, (e is estoppe% from t(ereafter %en7in* t(at (e assente% to suc( terms. 6(is rule applies =it( particular force =(ere a s(ipper accepts a 2ill of la%in* =it( full ;no=le%*e of its contents, an% acceptance un%er suc( circumstances ma;es it a 2in%in* contract. &n or%er t(at an7 presumption of assent to a stipulation in a 2ill of la%in* limitin* t(e lia2ilit7 of a carrier ma7 arise, it must

appear t(at t(e clause containin* t(is e@emption from lia2ilit7 plainl7 forme% a part of t(e contract containe% in t(e 2ill of la%in*. A stipulation printe% on t(e 2ac; of a receipt or 2ill of la%in* or on papers attac(e% to suc( receipt =ill 2e Duite as effective as if printe% on its face, if it is s(o=n t(at t(e consi*nor ;ne= of its terms. 6(us, =(ere a s(ipper accepts a receipt =(ic( states t(at its con%itions are to 2e foun% on t(e 2ac;, suc( receipt comes =it(in t(e *eneral rule, an% t(e s(ipper is (el% to (ave accepte% an% to 2e 2oun% 27 t(e con%itions t(ere to 2e foun%. 8@plicit is t(e rule un%er Article 1736 of t(e Civil Co%e t(at t(e e@traor%inar7 responsi2ilit7 of t(e common carrier 2e*ins from t(e time t(e *oo%s are %elivere% to t(e carrier. 6(is responsi2ilit7 remains in full force an% effect even =(en t(e7 are temporaril7 unloa%e% or store% in transit, unless t(e s(ipper or o=ner e@ercises t(e ri*(t of stoppa*e in transitu, an% terminates onl7 after t(e lapse of a reasona2le time for t(e acceptance, of t(e *oo%s 27 t(e consi*nee or suc( ot(er person entitle% to receive t(em. An%, t(ere is %eliver7 to t(e carrier =(en t(e *oo%s are rea%7 for an% (ave 2een place% in t(e e@clusive possession, custo%7 an% control of t(e carrier for t(e purpose of t(eir imme%iate transportation an% t(e carrier (as accepte% t(em. B(ere suc( a %eliver7 (as t(us 2een accepte% 27 t(e carrier, t(e lia2ilit7 of t(e common carrier commences. ?nl7 =(en suc( fact of %eliver7 (as 2een uneDuivocall7 esta2lis(e% can t(e lia2ilit7 for loss, %estruction or %eterioration of *oo%s in t(e custo%7 of t(e carrier, a2sent t(e e@ceptin* causes un%er Article 1731, attac( an% t(e presumption of fault of t(e carrier un%er Article 173+ 2e invo;e%.

Maca !s. CA 6(e e@traor%inar7 responsi2ilit7 of t(e common carriers lasts until actual or constructive %eliver7 of t(e car*oes to t(e consi*nee or to t(e person =(o (as a ri*(t to receive t(em. $A3&S6AN 9AN3 =as in%icate% in t(e 2ills of la%in* as consi*nee =(ereas G$C =as t(e notif7 part7. 0o=ever, in t(e e@port invoices G$C =as clearl7 name% as 2u7erFimporter. $etitioner also referre% to G$C as suc( in (is %eman% letter to respon%ent BA..84 an% in (is complaint 2efore t(e trial court. 6(is premise %ra=s us to conclu%e t(at t(e %eliver7 of t(e car*oes to G$C as 2u7erFimporter =(ic(, conforma2l7 =it( Art. 1736 (a%, ot(er t(an t(e consi*nee, t(e ri*(t to receive t(em =as proper. 6(e real issue is =(et(er respon%ents are lia2le to petitioner for releasin* t(e *oo%s to G$C =it(out t(e 2ills of la%in* or 2an; *uarantee. 'rom t(e testimon7 of petitioner, =e *at(er t(at (e (as 2een transactin* =it( G$C as 2u7erFimporter for aroun% t=o !2# or t(ree !3# 7ears alrea%7. B(en man*oes an% =atermelons are in season, (is s(ipment to G$C usin* t(e facilities of respon%ents is t=ice or t(rice a =ee;. 6(e *oo%s are release% to G$C. &t (as 2een t(e practice of petitioner to reDuest t(e s(ippin* lines to imme%iatel7 release peris(a2le car*oes suc( as =atermelons an% fres( man*oes t(rou*( telep(one calls 27 (imself or (is Cpeople.C &n transactions covere% 27 a letter of cre%it, 2an; *uarantee is normall7 reDuire% 27 t(e s(ippin* lines prior to releasin* t(e *oo%s. 9ut for 2u7ers usin* tele*rap(ic transfers, petitioner %ispenses =it( t(e 2an; *uarantee 2ecause t(e *oo%s are alrea%7 full7 pai%. &n (is several 7ears of 2usiness relations(ip =it( G$C an% respon%ents, t(ere =as not a sin*le instance =(en t(e 2ill of la%in* =as first presente% 2efore t(e release of t(e car*oes.

MaersA (ine !s. CA B(ile it is true t(at common carriers are not o2li*ate% 27 la= to carr7 an% to %eliver merc(an%ise, an% persons are not veste% =it( t(e ri*(t to prompt %eliver7, unless suc( common carriers previousl7

assume t(e o2li*ation to %eliver at a *iven %ate or time, %eliver7 of s(ipment or car*o s(oul% at least 2e ma%e =it(in a reasona2le time. B(ile t(ere =as no special contract entere% into 27 t(e parties in%icatin* t(e %ate of arrival of t(e su2:ect s(ipment, petitioner nevert(eless, =as ver7 =ell a=are of t(e specific %ate =(en t(e *oo%s =ere e@pecte% to arrive as in%icate% in t(e 2ill of la%in* itself. &n t(is re*ar%, t(ere arises no nee% to e@ecute anot(er contract for t(e purpose as it =oul% 2e a mere superfluit7. &n t(e case 2efore us, =e fin% t(at a %ela7 in t(e %eliver7 of t(e *oo%s spannin* a perio% of t=o mont(s an% seven %a7s falls =as 2e7on% t(e realm of reasona2leness. ?s ae$ !s. &arretto .imitin* t(e common carrierJs lia2ilit7 for loss or %ama*e from an7 cause or for an7 reason for less t(an 1F8 t(e actual value of t(e *oo%s is unconsciona2le an% t(erefore a*ainst pu2lic polic7. A common carrier cannot la=full7 stipulate for e@emption from lia2ilit7, unless suc( e@emption is :ust an% reasona2le an% t(e contract is freel7 an% fairl7 ma%e. +he)ara !s. Phi$i::ine Air$ines &t can not 2e sai% t(at a contract (as 2een entere% into 2et=een a passen*er an% t(e common carrier, em2o%7in* t(e con%itions as printe% at t(e 2ac; of t(e tic;et. 6(e fact t(at t(ose con%itions are printe% at t(e 2ac; of t(e tic;et stu2 in letters so small t(at t(e7 are (ar% to rea% =oul% not =arrant t(e presumption t(at t(e passen*er =as a=are of t(ose con%itions suc( t(at (e (a% Cfairl7 an% freel7 a*ree%C to t(ose con%itions. 6(e passen*er is consi%ere% not (avin* a*ree% to t(e stipulation on t(e tic;et, as manifeste% 27 t(e fact t(at (e %i% not si*n t(e tic;et. Ong ?iu !s. Court of A::ea$s B(ile it ma7 2e true t(at t(e passen*er (a% not si*ne% t(e plane tic;et, (e is nevert(eless 2oun% 27 t(e provisions t(ereof. CSuc( provisions (ave 2een (el% to 2e a part of t(e contract of carria*e, an% vali% an% 2in%in* upon t(e passen*er re*ar%less of t(e latterKs lac; of ;no=le%*e or assent to t(e re*ulationC. &t is =(at is ;no=n as a contract of Ca%(esionC, in re*ar%s =(ic( it (as 2een sai% t(at contracts of a%(esion =(erein one part7 imposes a rea%7 ma%e form of contract on t(e ot(er, as t(e plane tic;et in t(e case at 2ar, are contracts not entirel7 pro(i2ite%. 6(e one =(o a%(eres to t(e contract is in realit7 free to re:ect it entirel7E if (e a%(eres, (e *ives (is consent. A contract limitin* lia2ilit7 upon an a*ree% valuation %oes not offen% a*ainst t(e polic7 of t(e la= for2i%%in* one from contractin* a*ainst (is o=n ne*li*ence. +ea (and +er!ices3 Inc. !s. IAC Since t(e lia2ilit7 of a common carrier for loss of or %ama*e to *oo%s transporte% 27 it un%er a contract of carria*e so *overne% 27 t(e la=s of t(e countr7 of %estination an% t(e *oo%s in Duestion =ere s(ippe% from t(e ,nite% States to t(e $(ilippines, t(e lia2ilit7 of common carrier to t(e consi*nee is *overne% primaril7 27 t(e Civil Co%e. Appl7in* t(e Civil Co%e provisions !Article 171" an% 17+/# t(e stipulation in t(e 2ill of la%in* limitin* t(e lia2ilit7 of t(e common carrier for loss or %ama*es to t(e s(ipment covere% 27 sai% rule unless t(e s(ipper %eclares t(e value of t(e s(ipment an% pa7s a%%itional c(ar*es is vali% an% 2in%in* on t(e consi*nee.

Citade$ (ines3 Inc. !s. CA 9asic is t(e rule t(at a stipulation limitin* t(e lia2ilit7 of t(e carrier to t(e value of t(e *oo%s appearin* in t(e 2ill of la%in*, unless t(e s(ipper or o=ner %eclares a *reater value, is 2in%in*. 'urt(ermore, a contract fi@in* t(e sum t(at ma7 2e recovere% 27 t(e o=ner or s(ipper for t(e loss, %estruction or %eterioration of t(e *oo%s is vali%, if it is reasona2le an% :ust un%er t(e circumstances, an% (as 2een fairl7 an% freel7 a*ree% upon. &n t(is case, t(e a=ar% 2ase% on t(e alle*e% mar;et value of t(e *oo%s is erroneous. &t is provi%e% in a clause in t(e 9?. t(at its lia2ilit7 is limite% to ,SM2.//F;ilo. 6(e consi*nee also a%mits in t(e memoran%um t(at t(e value of t(e *oo%s %oes not appear in t(e 2ill of la%in*. 0ence, t(e stipulation on t(e carrierJs limite% lia2ilit7 applies. E!erett +ea shi: Cor:. !s. CA &n t(e 2ill of la%in*, t(e carrier ma%e it clear t(at all claims for =(ic( it ma7 2e lia2le s(all 2e a%:uste% an% settle% on t(e 2asis of t(e s(ipperKs net invoice cost plus frei*(t an% insurance premiums, if pai%, an% in no event s(all t(e carrier 2e lia2le for an7 loss of possi2le profits or an7 conseDuential loss. &ts lia2ilit7 =oul% onl7 2e up to ?ne 0un%re% 6(ousan% !)1//,///.//# )en. 0o=ever, t(e s(ipper, (a% t(e option to %eclare a (i*(er valuation if t(e value of its car*o =as (i*(er t(an t(e limite% lia2ilit7 of t(e carrier. Consi%erin* t(at t(e s(ipper %i% not %eclare a (i*(er valuation, it (a% itself to 2lame for not compl7in* =it( t(e stipulations. 6(e commercial &nvoice %oes not in itself sufficientl7 an% convincin*l7 s(o= t(at t(e common carrier (as ;no=le%*e of t(e value of t(e car*o as conten%e% 27 t(e s(ipper. &ritish Air)a/s !s. CA 6(e contract of transportation =as e@clusivel7 2et=een t(e passen*er an% common carrier 9A. 6(e latter merel7 en%orsin* t(e 4anila to 0on* 3on* lo* of t(e formerJs :ourne7 to $A., as its su2contractor or a*ent. Con%itions of contracts =ere one of continuous air transportation. BellGsettle% rule t(at an a*ent is also responsi2le for an7 ne*li*ence in t(e performance of its function an% is lia2le for %ama*es =(ic( t(e principal ma7 suffer 27 reason of its ne*li*ent act. B(en an action is 2ase% on 2reac( of contract of carria*e, t(e passen*er can onl7 sue 9A an% not $A., since t(e latter =as not a part7 in t(e contract. 6(e contention of 9A =it( respect to limite% lia2ilit7 =as overrule% alt(ou*( it is reco*nize% in t(e $(ilippines, statin* t(at 9A (a% =aive% t(e %efense of limite% lia2ilit7 =(en it allo=e% 4a(tani!t(e passen*er# to testif7 as to t(e actual %ama*es (e incurre% %ue to t(e misplacement of (is lu**a*e, =it(out an7 o2:ection. G.E. GeacocA Co. !s. Macondra/ 6(ree ;in%s of stipulations (ave often 2een ma%e in a 2ill of la%in*. 6(e first is one e@emptin* t(e carrier from an7 an% all lia2ilit7 for loss or %ama*e occasione% 27 its o=n ne*li*ence. 6(e secon% is one provi%in* for an unDualifie% limitation of suc( lia2ilit7 to an a*ree% valuation. An% t(e t(ir% is one limitin* t(e lia2ilit7 of t(e carrier to an a*ree% valuation unless t(e s(ipper %eclares a (i*(er value an% pa7s a (i*(er

rate of frei*(t. Accor%in* to an almost uniform =ei*(t of aut(orit7, t(e first an% secon% ;in%s of stipulations are invali% as 2ein* contrar7 to pu2lic polic7, 2ut t(e t(ir% is vali% an% enforcea2le. &f a common carrier *ives to a s(ipper t(e c(oice of t=o rates an% if t(e s(ipper ma;es suc( a c(oice, un%erstan%in*l7 an% freel7, an% names (is valuation, (e cannot t(ereafter recover more t(an t(e value =(ic( (e t(us places upon (is propert7. A limitation of lia2ilit7 2ase% upon an a*ree% value %oes not conflict =it( an7 soun% principle of pu2lic polic7E an% it is not conforma2le to plain principles of :ustice t(at a s(ipper ma7 un%erstate value in or%er to re%uce t(e rate an% t(en recover a lar*er value in case of loss. +)eet (ines Inc. !s. TE,E+ Consi%ere% in t(e li*(t of circumstances prevailin* in t(e interGislan% s(ippin* in%ustr7 in t(e countr7 to%a7, Be fin% an% (ol% t(at Con%ition No. 11 printe% at t(e 2ac; of t(e passa*e tic;ets s(oul% 2e (el% as voi% an% unenforcea2le for t(e follo=in* reasons first, un%er circumstances o2li*ation in t(e interG islan% s(ippin* in%ustr7, it is not :ust an% fair to 2in% passen*ers to t(e terms of t(e con%itions printe% at t(e 2ac; of t(e passa*e tic;ets, on =(ic( Con%ition No. 11 is $rinte% in fine letters, an% secon%, Con%ition No. 11 su2verts t(e pu2lic polic7 on transfer of venue of procee%in*s of t(is nature, since t(e same =ill pre:u%ice ri*(ts an% interests of innumera2le passen*ers locate% in %ifferent places of t(e countr7 =(o, un%er Con%ition No. 11, =ill (ave to file suits a*ainst petitioner onl7 in t(e Cit7 of Ce2u. Consi%erin* t(e e@pense an% trou2le a passen*er resi%in* outsi%e of Ce2u Cit7 =oul% incur to prosecute a claim in t(e Cit7 of Ce2u, (e =oul% most pro2a2l7 %eci%e not to file t(e action at all. 6(e con%ition =ill t(us %efeat, instea% of en(ance, t(e en%s of :ustice. ,pon t(e ot(er (an%, petitioner (as 2ranc(es or offices in t(e respective ports of call of its vessels an% can affor% to liti*ate in an7 of t(ese places. 0ence, t(e filin* of t(e suit in t(e C'& of 4isamis ?riental, as =as %one in t(e instant case, =ill not cause inconvenience to, muc( less pre:u%ice, petitioner. ,n%er Art. 222/ of t(e Civil Co%e, moral %ama*es are :ustl7 %ue in 2reac(es of contract =(ere t(e %efen%ant acte% frau%ulentl7 or in 2a% fait(. 9ot( t(e 6rial Court an% t(e Appellate Court foun% t(at t(ere =as 2a% fait( on t(e part of petitioner in t(atL !1# Defen%antsG Appellants %i% not *ive notice to plaintiffsGappellates as to t(e c(an*e of sc(e%ule% of t(e vesselE !2# 3no=in* full7 =ell t(at it =oul% ta;e no less t(an fifteen (ours to effect t(e repairs of t(e %ama*e% en*ine, %efen%antsG appellants instea% ma%e announce ment of assurance t(at t(e vessel =oul% leave =it(in a s(ort perio% of time, an% =(en plaintiffGappellees =ante% to leave t(e port an% *ave up t(e trip, %efen%antsG appellants emplo7ees =oul% come an% sa7, H=e are leavin* alrea%7I. !3# Defen%antsG appellants %i% not offer to refun% plaintiffsGappelleesJ tic;ets nor provi%e t(em =it( transportation form 6aclo2an to Cat2alo*an. Fuisu 7ing +r. !s. Court of A::ea$s 6(e (i*(:ac;in*Gro22er7 =as force ma:eure. 6(e (i:ac;ers %o not 2oar% an airplane t(rou*( a 2latant %ispla7 of firepo=er an% violent fur7. 'irearms, (an%G*rena%es, %7namite, an% e@plosives are intro%uce% into t(e airplane surreptitiousl7 an% =it( t(e utmost cunnin* an% stealt(, alt(ou*( t(ere is an occasional use of innocent (osta*es =(o =ill 2e col%l7 mur%ere% unless a plane is *iven to t(e (i:ac;ersK complete %isposal.

$A. =as not ne*li*ent so as to overcome t(e force ma:eure nature of t(e (iG:ac;in*. 0i:ac;ers %o not 2oar% an airplane t(rou*( a 2latant %ispla7 of firepo=er an% violent fur7. 'irearms an% *rena%es are 2rou*(t to t(e plane surreptitiousl7. $A. coul% not (ave 2een faulte% for =ant of %ili*ence, particularl7 for failin* to ta;e positive measures to implement Civil Aeronautics A%ministration re*ulations pro(i2itin* civilians from carr7in* firearms on 2oar% t(e plane. 6(e use of t(e most sop(isticate% electronic %etection %evices ma7 (ave minimize% (i:ac;in* 2ut still ineffective a*ainst trul7 %eterminin* (i:ac;ers. Pan A erican Jor$d Air)a/s3 Inc. !s. Ra:adas 6(e Barsa= Convention *overns t(e availment of t(e lia2ilit7 limitations =(ere t(e 2a**a*e c(ec; is com2ine% =it( or incorporate% in t(e passen*er tic;et. &n t(e case at 2ar, t(e 2a**a*e c(ec; is com2ine% =it( t(e passen*er tic;et in one %ocument of carria*e. 6(e passen*er tic;et complies =it( Article 3, =(ic( provi%esL !c# a notice to t(e effect t(at, if t(e passen*erKs :ourne7 involves an ultimate %estination or stop in a countr7 ot(er t(an t(e countr7 of %eparture, t(e Barsa= Convention ma7 2e applica2le an% t(at t(e Convention *overns an% in most cases limits t(e lia2ilit7 of carriers for %eat( or personal in:ur7 an% in respect of loss of or %ama*e to 2a**a*e. 6(e provisions in t(e plane tic;et are sufficient to *overn t(e limitations of lia2ilities of t(e airline for loss of lu**a*e. 6(e passen*er, upon contractin* =it( t(e airline an% receivin* t(e plane tic;et, =as e@pecte% to 2e vi*ilant insofar as (is lu**a*e is concerne%. &f t(e passen*er fails to a%%uce evi%ence to overcome t(e stipulations, (e cannot avoi% t(e application of t(e lia2ilit7 limitations. 6(e facts s(o= t(at t(e private respon%ent actuall7 refuse% to re*ister t(e attac(e case an% c(ose to ta;e it =it( (im %espite (avin* 2een or%ere% 27 t(e $ANA4 a*ent to c(ec; it in. &n attemptin* to avoi% re*isterin* t(e lu**a*e 27 *oin* 2ac; to t(e line, private respon%ent manifeste% a %isre*ar% of airline rules on allo=a2le (an%carrie% 2a**a*es. $ru%ence of a reasona2l7 careful person also %ictates t(at cas( an% :e=elr7 s(oul% 2e remove% from c(ec;e%GinGlu**a*e an% place% in oneKs poc;ets or in a (an%carrie% 4anilaGpaper or plastic envelope. 6(e alle*e% lac; of enou*( time for (im to ma;e a %eclaration of a (i*(er value an% to pa7 t(e correspon%in* supplementar7 c(ar*es cannot :ustif7 (is failure to compl7 =it( t(e reDuirement t(at =ill e@clu%e t(e application of limite% lia2ilit7. A$ita$ia !s. Inter ediate A::e$$ate Court 6(e Barsa= ConventionKs provisions, %o not re*ulate or e@clu%e lia2ilit7 for ot(er 2reac(es of contract 27 t(e carrierK or miscon%uct of its officers an% emplo7ees, or for some particular or e@ceptional t7pe of %ama*e, ?t(er=ise, an air carrier =oul% 2e e@empt from an7 lia2ilit7 for %ama*es in t(e event of its a2solute refusal, in 2a% fait(, to compl7 =it( a contract of carria*e, =(ic( is a2sur%. &n t(e case at 2ar, no 2a% fait( or ot(er=ise improper con%uct ma7 2e ascri2e% to t(e emplo7ees of petitioner airlineE an% Dr. $a2loKs lu**a*e =as eventuall7 returne% to (er, 2elate%l7, it is true, 2ut =it(out apprecia2le %ama*e. 6(ere can 2e no %ou2t t(at Dr. $a2lo un%er=ent profoun% %istress an% an@iet7, =(ic( *ra%uall7 turne% to panic an% finall7 %espair, from t(e time s(e learne% t(at (er suitcases =ere missin* up to t(e time =(en, (avin* *one to ome, s(e finall7 realize% t(at s(e =oul% no lon*er 2e a2le to ta;e part in t(e conference. Certainl7, t(e compensation for t(e in:ur7 suffere% 27 Dr. $a2lo cannot un%er t(e circumstances 2e restricte% to t(at prescri2e% 27 t(e Barsa= Convention for %ela7 in t(e transport of 2a**a*e.

S(e is not, of course, entitle% to 2e compensate% for loss or %ama*e to (er lu**a*e. As alrea%7 mentione%, (er 2a**a*e =as ultimatel7 %elivere% to (er in 4anila, tar%il7, 2ut safel7.

Nocu !s. (aguna Ta/a7as &us Co :an/ 'airness %eman%s t(at in measurin* a common carrierKs %ut7 to=ar%s its passen*ers, allo=ance must 2e *iven to t(e reliance t(at s(oul% 2e repose% on t(e sense of responsi2ilit7 of all t(e passen*ers in re*ar% to t(eir common safet7. &t is to 2e presume% t(at a passen*er =ill not ta;e =it( (im an7t(in* %an*erous to t(e lives an% lim2s of (is coGpassen*ers, not to spea; of (is o=n. Not to 2e li*(tl7 consi%ere% must 2e t(e ri*(t to privac7 to =(ic( eac( passen*er is entitle%. 0e cannot 2e su2:ecte% to an7 unusual searc(, =(en (e protests t(e innocuousness of (is 2a**a*e an% not(in* appears to in%icate t(e contrar7, as in t(e case at 2ar. &n ot(er =or%s, inDuir7 ma7 2e ver2all7 ma%e as to t(e nature of a passen*erKs 2a**a*e =(en suc( is not out=ar%l7 percepti2le, 2ut 2e7on% t(is, constitutional 2oun%aries are alrea%7 in %an*er of 2ein* trans*resse%. Callin* a policeman to (is ai%, as su**este% 27 t(e service manual invo;e% 27 t(e trial :u%*e, in compellin* t(e passen*er to su2mit to more ri*i% inspection, after t(e passen*er (a% alrea%7 %eclare% t(at t(e 2o@ containe% mere clot(es an% ot(er miscellaneous, coul% not (ave :ustifie% invasion of a constitutionall7 protecte% %omain. Mecenas !s. CA 6(e 2e(aviour of t(e captain of t(e CDon 5uanC in tills instanceGpla7in* ma(:on* C2efore an% up to t(e time of collision constitutes 2e(aviour t(at is simpl7 unaccepta2le on t(e part of t(e master of a vessel to =(ose (an%s t(e lives an% =elfare of at least seven (un%re% fift7 !7+/# passen*ers (a% 2een entruste%. B(et(er or not Capt. Santiste2an =as CoffG%ut7C or ConG%ut7C at or aroun% t(e time of actual collision is Duite immaterialE t(ere is, 2ot( realisticall7 spea;in* an% in contemplation of la=, no suc( t(in* as CoffG%ut7C (ours for t(e master of a vessel at sea t(at is a common carrier upon =(om t(e la= imposes t(e %ut7 of e@traor%inar7 %ili*ence. 6(e recor% s(o=s t(at t(e CDon 5uanC san; =it(in ten !1/# to fifteen !1+# minutes after initial contact =it( t(e C6aclo2an Cit7. B(ile t(e failure of Capt. Santiste2an to supervise (is officers an% cre= in t(e process of a2an%onin* t(e s(ip an% (is failure to avail of measures to prevent t(e too rapi% sin;in* of (is vessel after collision, %i% not cause t(e collision 27 t(emselves, suc( failures %ou2tless contri2ute% materiall7 to t(e conseDuent loss of life an%, moreover, =ere in%icative of t(e ;in% an% level of %ili*ence e@ercise% 27 Capt. Santiste2an in respect of (is vessel an% (is officers an% men prior to actual contact 2et=een t(e t=o !2# vessels. 6(e officerGonG=atc( in t(e CDon 5uanC a%mitte% t(at (e (a% faile% to inform Capt. Santiste2an not onl7 of t(e Cimminent %an*er of collisionC 2ut even of Ct(e actual collision itself C 6(ere is also evi%ence t(at t(e CDon 5uanC =as carr7in* more passen*ers t(an s(e (a% 2een certifie% as allo=e% to carr7. ,n%er t(ese circumstances, a presumption of *ross ne*li*ence on t(e part of t(e vessel !(er officers an% cre=# an% of its s(ipGo=ner arises. Negros Na!igation Co.3 Inc. !s. CA

6(e Dut7 to e@ercise %ue %ili*ence inclu%es t(e %ut7 to ta;e passen*ers or car*oes t(at are =it(in t(e carr7in* capacit7 of t(e vessel. !Same ulin* =it( 4ecenas#

8orean Air$ines Co.3 (TD. !s. CA 6(e status of .apuz as stan%27 passen*er =as c(an*e% to t(at of a confirme% passen*er =(en (is name =as entere% in t(e passen*er manifest of 3A. for its 'li*(t No. 38 "/3. 0is clearance t(rou*( immi*ration an% customs clearl7 s(o=s t(at (e (a% in%ee% 2een confirme% as a passen*er of 3A. in t(at fli*(t. 3A. t(us committe% a 2reac( of t(e contract of carria*e 2et=een t(em =(en it faile% to 2rin* .apuz to (is %estination. 6(is Court (as (el% t(at a contract to transport passen*ers is %ifferent in ;in% an% %e*ree from an7 ot(er contractual relation. 6(e 2usiness of t(e carrier is mainl7 =it( t(e travelin* pu2lic. &t invites people to avail t(emselves of t(e comforts an% a%vanta*es it offers. 6(e contract of air carria*e *enerates a relation atten%e% =it( a pu2lic %ut7. $assen*ers (ave t(e ri*(t to 2e treate% 27 t(e carrierKs emplo7ees =it( ;in%ness, respect, courtes7 an% %ue consi%eration. 6(e7 are entitle% to 2e protecte% a*ainst personal miscon%uct, in:urious lan*ua*e, in%i*nities an% a2uses from suc( emplo7ees. So it is t(at an7 %iscourteous con%uct on t(e part of t(ese emplo7ees to=ar% a passen*er *ives t(e latter an action for %ama*es a*ainst t(e carrier. Fortune E-:ress Inc. !s. CA Art. 1763 of t(e Civil Co%e provi%es t(at a common carrier is responsi2le for in:uries suffere% 27 a passen*er on account of =ilfull acts of ot(er passen*ers, if t(e emplo7ees of t(e common carrier coul% (ave prevente% t(e act t(rou*( t(e e@ercise of t(e %ili*ence of a *oo% fat(er of a famil7. &n t(e present case, it is clear t(at 2ecause of t(e ne*li*ence of petitionerKs emplo7ees, t(e seizure of t(e 2us 27 4anan**olo an% (is men =as ma%e possi2le. Despite =arnin* 27 t(e $(ilippine Consta2ular7 at Ca*a7an %e ?ro t(at t(e 4aranaos =ere plannin* to ta;e reven*e on t(e petitioner 27 2urnin* some of its 2uses an% t(e assurance of petitionerKs operation mana*er, Dios%a%o 9ravo, t(at t(e necessar7 precautions =oul% 2e ta;en, petitioner %i% not(in* to protect t(e safet7 of its passen*ers. 0a% petitioner an% its emplo7ees 2een vi*ilant t(e7 =oul% not (ave faile% to see t(at t(e malefactors (a% a lar*e Duantit7 of *asoline =it( t(em. ,n%er t(e circumstances, simple precautionar7 measures to protect t(e safet7 of passen*ers, suc( as fris;in* passen*ers an% inspectin* t(eir 2a**a*es, prefera2l7 =it( nonGintrusive *a%*ets suc( as metal %etectors, 2efore allo=in* t(em on 2oar% coul% (ave 2een emplo7e% =it(out violatin* t(e passen*erKs constitutional ri*(ts. 6(e acts of 4aranaos coul% not 2e consi%ere% as caso fortuito 2ecause t(ere =as alrea%7 a =arnin* 27 t(e $C. No contri2utor7 ne*li*ence coul% 2e attri2ute% to t(e %ecease%. 6(e assailantKs motive =as to retaliate for t(e loss of life of t=o 4aranaos as a result of t(e collision 2et=een petitionerKs 2us an% t(e :eepne7 in =(ic( t(e t=o 4aranaos =ere ri%in*. 6(e arme% men actuall7 allo=e% %ecease% to retrieve somet(in* from t(e 2us. B(at apparentl7 an*ere% t(em =as (is attempt to (elp t(e %river of t(e 2us 27 plea%in* for (is life. #atcha$ian !s. De$i

6(e recor% 7iel%s affirmative evi%ence of fault or ne*li*ence on t(e part of respon%ent common carrier. 6(e %river %i% not stop to c(ec; if an7t(in* (a% *one =ron* =it( t(e 2us =(en t(e snappin* soun% =as (ear% an% ma%e ;no=n to (im 27 t(e passen*ers, instea% tol% t(em t(at it =as normal. 6(e %riverKs repl7 necessaril7 in%icate% t(at t(e same Csnappin* soun%C (a% 2een (ear% in t(e 2us on previous occasions. 6(is coul% onl7 mean t(at t(e 2us (a% not 2een c(ec;e% p(7sicall7 or mec(anicall7 to %etermine =(at =as causin* t(e Csnappin* soun%C =(ic( (a% occurre% so freDuentl7 t(at t(e %river (a% *otten accustome% to it. Suc( a soun% is o2viousl7 alien to a motor ve(icle in *oo% operatin* con%ition, an% even a mo%icum of concern for life an% lim2 of passen*ers %ictate% t(at t(e 2us 2e c(ec;e% an% repaire%. 6(e o2vious continue% failure of respon%ent to loo; after t(e roa%=ort(iness an% safet7 of t(e 2us, couple% =it( t(e %riverKs refusal or ne*lect to stop t(e miniG2us after (e (a% (ear% once a*ain t(e Csnappin* soun%C an% t(e cr7 of alarm from one of t(e passen*ers, constitute% =anton %isre*ar% of t(e p(7sical safet7 of t(e passen*ers, an% (ence *ross ne*li*ence on t(e part of respon%ent an% (is %river. 9ecause =(at is involve% (ere is t(e lia2ilit7 of a common carrier for in:uries sustaine% 27 passen*ers in respect of =(ose safet7 a common carrier must e@ercise e@traor%inar7 %ili*ence, =e must construe an7 suc( purporte% =aiver most strictl7 a*ainst t(e common carrier. 'or a =aiver to 2e vali% an% effective, it must not 2e contrar7 to la=, morals, pu2lic polic7 or *oo% customs. A cursor7 e@amination of t(e purporte% =aiver =ill rea%il7 s(o= t(at appellees %i% not actuall7 =aive t(eir ri*(t to claim %ama*es from appellant for t(e latterKs failure to compl7 =it( t(eir contract of carria*e. All t(at sai% %ocument proves is t(at t(e7 e@presse% a C%esireC to ma;e t(e =aiver =(ic( o2viousl7 is not t(e same as ma;in* an actual =aiver of t(eir ri*(t. A =aiver of t(e ;in% invo;e% 27 appellant must 2e clear an% uneDuivocal. A person is entitle% to t(e p(7sical inte*rit7 of (is or (er 2o%7E if t(at inte*rit7 is violate% or %iminis(e%, actual in:ur7 is suffere% for =(ic( actual or compensator7 %ama*es are %ue an% assessa2le. $etitioner Gatc(alian is entitle% to 2e place% as nearl7 as possi2le in t(e con%ition t(at s(e =as 2efore mis(ap. A scar, especiall7 one on t(e face of t(e =oman, resultin* from t(e infliction of in:ur7 upon (er, is a violation of 2o%il7 inte*rit7, *ivin* raise to a le*itimate claim for restoration to (er con%ition ante. De$ Casti$$o !s. Ia/ a$in Common carriers are responsi2le for t(e %eat( of t(eir passen*ers !Articles 1761 an% 22/6 of t(e Civil Co%e#. 6(is lia2ilit7 inclu%es t(e loss of t(e earnin* capacit7 of t(e %ecease%. &t appears proven t(at t(e %efen%ant corporations faile% to e@ercise t(e %ili*ence t(at =as t(eir %ut7 to o2serve accor%in* to Articles 1733 an% 17++. 6(e con%uctor =as apprise% of t(e fact t(at 4ario %el Castillo =as %eaf an% %um2. Bit( t(is ;no=le%*e t(e con%uctor s(oul% (ave ta;en e@traGor%inar7 care for t(e safet7 of t(e sai% passen*er. &n t(is (e faile%. Phi$. Ra77it &us (ines !s. IAC 6(e principle a2out Ct(e last clearC c(ance, =oul% call for application in a suit 2et=een t(e o=ners an% %rivers of t(e t=o colli%in* ve(icles. &t %oes not arise =(ere a passen*er %eman%s responsi2ilit7 from t(e carrier to enforce its contractual o2li*ations. 'or it =oul% 2e ineDuita2le to e@empt t(e ne*li*ent %river of t(e :eepne7 an% its o=ners on t(e *roun% t(at t(e ot(er %river =as li;e=ise *uilt7 of ne*li*ence.C &t is t(e rule un%er t(e su2stantial factor test t(at if t(e actorKs con%uct is a su2stantial factor in 2rin*in* a2out (arm to anot(er, t(e fact t(at t(e actor neit(er foresa= nor s(oul% (ave foreseen t(e e@tent of t(e (arm or t(e manner in =(ic( it occurre% %oes not prevent (im from 2ein* lia2le. 6(e 2us %riverKs

con%uct is not a su2stantial factor in 2rin*in* a2out (arm to t(e passen*ers of t(e :eepne7. &t cannot 2e sai% t(at t(e 2us =as travellin* at a fast spee% =(en t(e acci%ent occurre% 2ecause t(e spee% of 8/ to "/ ;ilometers per (our, assumin* suc( calculation to 2e correct, is 7et =it(in t(e spee% limit allo=e% in (i*(=a7s.

&usta ante !s. CA 6(e %octrine, state% 2roa%l7, is t(at t(e ne*li*ence of t(e plaintiff %oes not preclu%e a recover7 for t(e ne*li*ence of t(e %efen%ant =(ere it appears t(at t(e %efen%ant, 27 e@ercisin* reasona2le care an% pru%ence, mi*(t (ave avoi%e% in:urious conseDuences to t(e plaintiff not=it(stan%in* t(e plaintiffKs ne*li*ence. &n ot(er =or%s, t(e %octrine of last clear c(ance means t(at even t(ou*( a personKs o=n acts ma7 (ave place% (im in a position of peril, an% an in:ur7 results, t(e in:ure% person is entitle% to recover7. As t(e %octrine is usuall7 state%, a person =(o (as t(e last clear c(ance or opportunit7 of avoi%in* an acci%ent, not=it(stan%in* t(e ne*li*ent acts of (is opponent or t(at of a t(ir% person impute% to t(e opponent is consi%ere% in la= solel7 responsi2le for t(e conseDuences of t(e acci%ent. All premises consi%ere%, t(e Court is convince% t(at t(e respon%ent Court committe% an error of la= in appl7in* t(e %octrine of last clear c(ance as 2et=een t(e %efen%ants, since t(e case at 2ar is not a suit 2et=een t(e o=ners an% %rivers of t(e colli%in* ve(icles 2ut a suit 2rou*(t 27 t(e (eirs of t(e %ecease% passen*ers a*ainst 2ot( o=ners an% %rivers of t(e colli%in* ve(icles. 6(erefore, t(e respon%ent court erre% in a2solvin* t(e o=ner an% %river of t(e car*o truc; from lia2ilit7. (ara !s. ,a$encia 6(e o=ner an% %river of a ve(icle o=es to accommo%ation passen*ers or invite% *uests merel7 t(e %ut7 to e@ercise reasona2le care so t(at t(e7 ma7 2e transporte% safel7 to t(eir %estination. 6(us, C6(e rule is esta2lis(e% 27 =ei*(t of aut(orit7 t(at t(e o=ner or operator of an automo2ile o=es t(e %ut7 to an invite% *uest to e@ercise reasona2le care in its operation, an% not unreasona2l7 to e@pose (im to %an*er an% in:ur7 27 increasin* t(e (azar% of travel. 6(e o=ner of t(e ve(icle in t(e case at 2ar is onl7 reDuire% to o2serve or%inar7 care, an% is not in %ut7 2oun% to e@ercise e@traor%inar7 %ili*ence as reDuire% 27 our la=. A passen*er must o2serve t(e %ili*ence of a fat(er of a famil7 to avoi% in:ur7 to (imself =(ic( means t(at if t(e in:ur7 to t(e passen*er (as 2een pro@imatel7 cause% 27 (is o=n ne*li*ence, t(e carrier cannot 2e (el% lia2le. Necessito !s. Paras B(ile t(e carrier is not an insurer of t(e safet7 of t(e passen*ers, it s(oul% nevert(eless 2e (el% to ans=er for t(e la=s its eDuipment if suc( fla=s =ere at all %iscovera2le. &n t(is connection, t(e manufacturer of t(e %efective appliance is consi%ere% in la= t(e a*ent of t(e carrier, an% t(e *oo% repute of t(e manufacturer =ill not relieve t(e carrier from lia2ilit7. 6(e rationale of t(e carrierKs lia2ilit7 is t(e fact t(at t(e passen*er (as no privit7 =it( t(e manufacturer of t(e %efective eDuipmentE (ence, (e (as no reme%7 a*ainst (im, =(ile t(e carrier usuall7 (as. Ia:an Air$ines !s. CA

Accor%in*l7, t(ere is no Duestion t(at =(en a part7 is una2le to fulfill (is o2li*ation 2ecause of Cforce ma:eure,C t(e *eneral rule is t(at (e cannot 2e (el% lia2le for %ama*es for nonGperformance. Corollaril7, =(en 5A. =as prevente% from resumin* its fli*(t to 4anila %ue to t(e effects of 4t. $inatu2o eruption, =(atever losses or %ama*es in t(e form of (otel an% meal e@penses t(e stran%e% passen*ers incurre%, cannot 2e c(ar*e% to 5A.. )et it is un%enia2le t(at 5A. assume% t(e (otel e@penses of respon%ents for t(eir une@pecte% overni*(t sta7 on 5une 1+, 1""1. &t (as 2een (el% t(at airline passen*ers must ta;e suc( ris;s inci%ent to t(e mo%e of travel. &n t(is re*ar%, a%verse =eat(er con%itions or e@treme climatic c(an*es are some of t(e perils involve% in air travel, t(e conseDuences of =(ic( t(e passen*er must assume or e@pect. B(ile 5A. =as no lon*er reDuire% to %efra7 private respon%entsK livin* e@penses %urin* t(eir sta7 in Narita on account of t(e fortuitous event, 5A. (a% t(e %ut7 to ma;e t(e necessar7 arran*ements to transport private respon%ents on t(e first availa2le connectin* fli*(t to 4anila. $etitioner 5A. rene*e% on its o2li*ation to loo; after t(e comfort an% convenience of its passen*ers =(en it %eclassifie% private respon%ents from Ctransit passen*ersC to Cne= passen*ersC as a result of =(ic( private respon%ents =ere o2li*e% to ma;e t(e necessar7 arran*ements t(emselves for t(e ne@t fli*(t to 4anila. (a/ugan !s. IAC es ipsa loDuitur is a %octrine =(ic( states t(usL CB(ere t(e t(in* =(ic( causes in:ur7 is s(o=n to 2e un%er t(e mana*ement of t(e %efen%ant, an% t(e acci%ent is suc( as in t(e or%inar7 course of t(in*s %oes not (appen if t(ose =(o (ave t(e mana*ement use proper care, it affor%s reasona2le evi%ence, in t(e a2sence of an e@planation 27 t(e %efen%ant, t(at t(e acci%ent arose from =ant of care. 6(e %octrine of es ipsa loDuitur as a rule of evi%ence is peculiar to t(e la= of ne*li*ence =(ic( reco*nizes t(at prima facie ne*li*ence ma7 2e esta2lis(e% =it(out %irect proof an% furnis(es a su2stitute for specific proof of ne*li*ence. 6(e %octrine can 2e invo;e% =(en an% onl7 =(en, un%er t(e circumstances involve%, %irect evi%ence is a2sent an% not rea%il7 availa2le. B(et(er t(e car*o truc; =as par;e% alon* t(e roa% or on (alf t(e s(oul%er of t(e ri*(t si%e of t(e roa% =oul% 2e of no moment ta;in* into account t(e =arnin* %evice consistin* of t(e li*(te% ;erosene lamp place% t(ree or four meters from t(e 2ac; of t(e truc;. 9ut %espite t(is =arnin* =(ic( =e rule as sufficient, t(e &suzu truc; %riven 27 Daniel Serrano, an emplo7ee of t(e private respon%ent, still 2umpe% t(e rear of t(e par;e% car*o truc;. As a %irect conseDuence of suc( acci%ent t(e petitioner sustaine% in:uries on (is left forearm an% left foot. &t is clear t(erefore t(at t(e a2sence or =ant of care of Daniel Serrano (as 2een esta2lis(e% 27 clear an% convincin* evi%ence. &t follo=s t(at t(e %octrine of es ipsa loDuitur is inapplica2le, ma;in* t(e emplo7er of t(e %river lia2le for t(e ne*li*ence of (is emplo7ee. (a Ma$$orca !s. CA 6(e lia2ilit7 of t(e carrier for t(e c(il%, =(o =as alrea%7 le% 27 t(e fat(er to a place a2out + meters a=a7 from t(e 2us for (er safet7 un%er t(e contract of carria*e, persists. 6(e relation of carrier an% passen*er %oes not necessaril7 cease =(ere t(e latter, after ali*(tin* from t(e car, ai%s t(e carrierKs servant or emplo7ee in removin* (is 2a**a*e from t(e car. &t (as 2een reco*nize% as a rule t(at t(e relation of carrier an% passen*er %oes not cease at t(e moment t(e passen*er ali*(ts from t(e carrierKs ve(icle at a place selecte% 27 t(e carrier at t(e point of %estination, 2ut continues until t(e passen*er (as (a% a reasona2le time or a reasona2le opportunit7 to leave t(e carrierKs premises. An%, =(at is a reasona2le time or a reasona2le %ela7 =it(in t(is rule is to 2e %etermine% from all t(e circumstances.

A7oitiE +hi::ing Co. !s. CA 6(e rule is t(at t(e relation of carrier an% passen*er continues until t(e passen*er (as 2een lan%e% at t(e port of %estination an% (as left t(e vessel o=nerKs %oc; or premises. ?nce create%, t(e relations(ip =ill not or%inaril7 terminate until t(e passen*er (as, after reac(in* (is %estination, safel7 ali*(te% from t(e carrierKs conve7ance or (a% a reasona2le opportunit7 to leave t(e carrierKs premises. All persons =(o remain on t(e premises a reasona2le time after leavin* t(e conve7ance are to 2e %eeme% passen*ers, an% =(at is a reasona2le time or a reasona2le %ela7 =it(in t(is rule is to 2e %etermine% from all t(e circumstances, an% inclu%es a reasona2le time to see after (is 2a**a*e an% prepare for (is %eparture. 6(e carrierGpassen*er relations(ip is not terminate% merel7 27 t(e fact t(at t(e person transporte% (as 2een carrie% to (is %estination if, for e@ample, suc( person remains in t(e carrierKs premises to claim (is 2a**a*e. B(en t(e acci%ent occurre%, t(e victim =as in t(e act of unloa%in* (is car*oes, =(ic( (e (a% ever7 ri*(t to %o, from petitionerKs vessel. 8ven if (e (a% alrea%7 %isem2ar;e% an (our earlier, (is presence in petitionerKs premises =as not =it(out cause. 6(e victim (a% to claim (is 2a**a*e =(ic( =as possi2le onl7 one (our after t(e vessel arrive% since it =as a%mitte%l7 stan%ar% proce%ure in t(e case of petitionerKs vessels t(at t(e unloa%in* operations s(all start onl7 after t(at time. Ma$$ari +r. !s. CA Clearl7, t(e pro@imate cause of t(e collision resultin* in t(e %eat( of a passen*er of t(e :eepne7, =as t(e sole ne*li*ence of t(e %river of t(e passen*er :eepne7, petitioner Alfre%o 4allari 5r., =(o rec;lessl7 operate% an% %rove (is :eepne7 in a lane =(ere overta;in* =as not allo=e% 27 traffic rules. ,n%er Art. 218+ of t(e Civil Co%e, unless t(ere is proof to t(e contrar7, it is presume% t(at a person %rivin* a motor ve(icle (as 2een ne*li*ent if at t(e time of t(e mis(ap (e =as violatin* a traffic re*ulation. ,n%er Art. 17++ of t(e Civil Co%e, a common carrier is 2oun% to carr7 t(e passen*ers safel7 as far as (uman care an% foresi*(t can provi%e usin* t(e utmost %ili*ence of ver7 cautious persons =it( %ue re*ar% for all t(e circumstances. 4oreover, un%er Art. 17+6 of t(e Civil Co%e, in case of %eat( or in:uries to passen*ers, a common carrier is presume% to (ave 2een at fault or to (ave acte% ne*li*entl7, unless it proves t(at it o2serve% e@traor%inar7 %ili*ence. 'urt(er, pursuant to Art. 17+" of t(e same Co%e, it is lia2le for t(e %eat( of or in:uries to passen*ers t(rou*( t(e ne*li*ence or =illful acts of t(e formerKs emplo7ees. 6(is lia2ilit7 of t(e common carrier %oes not cease upon proof t(at it e@ercise% all t(e %ili*ence of a *oo% fat(er of a famil7 in t(e selection of its emplo7ees.

&a/asen !s. CA &t is a =ell ;no=n p(7sical tact t(at cars ma7 s;i% on *reas7 or slipper7 roa%s, as in t(e instant case, =it(out fault on account of t(e manner of (an%lin* t(e car. S;i%%in* means partial or complete loss of control of t(e car un%er circumstances not necessaril7 impl7in* ne*li*ence. &t ma7 occur =it(out fault. ,n%er t(e particular circumstances of t(e instant case, t(e petitionerG %river =(o s;i%%e% coul% not 2e re*ar%e% as ne*li*ent, t(e s;i%%in* 2ein* an unforeseen event, so t(at t(e petitioner (a% a vali% e@cuse for (is %eparture from (is re*ular course. Cer!antes !s. CA

Since t(e $A. a*ents are not priv7 to t(e sai% A*reement an% petitioner ;ne= t(at a =ritten reDuest to t(e le*al counsel of $A. =as necessar7, (e cannot use =(at t(e $A. a*ents %i% to (is a%vanta*e. 6(e sai% a*ents, acte% =it(out aut(orit7 =(en t(e7 confirme% t(e fli*(ts of t(e petitioner. ,n%er Article 1"8" of t(e Ne= Civil Co%e, t(e acts of an a*ent 2e7on% t(e scope of (is aut(orit7 %o not 2in% t(e principal, unless t(e latter ratifies t(e same e@pressl7 or implie%l7. 'urt(ermore, =(en t(e t(ir% person !(erein petitioner# ;no=s t(at t(e a*ent =as actin* 2e7on% (is po=er or aut(orit7, t(e principal cannot 2e (el% lia2le for t(e acts of t(e a*ent. &f t(e sai% t(ir% person is a=are of suc( limits of aut(orit7, (e is to 2lame, an% is not entitle% to recover %ama*es from t(e a*ent, unless t(e latter un%ertoo; to secure t(e principalKs ratification. Ca$a$as !s. CA &t is immaterial t(at t(e pro@imate cause of t(e collision 2et=een t(e :eepne7 an% t(e truc; =as t(e ne*li*ence of t(e truc; %river. 6(e %octrine of pro@imate cause is applica2le onl7 in actions for DuasiG%elict, not in actions involvin* 2reac( of contract. 6(e %octrine is a %evice for imputin* lia2ilit7 to a person =(ere t(ere is no relation 2et=een (im an% anot(er part7. &n suc( a case, t(e o2li*ation is create% 27 la= itself. 9ut, =(ere t(ere is a preGe@istin* contractual relation 2et=een t(e parties, it is t(e parties t(emselves =(o create t(e o2li*ation, an% t(e function of t(e la= is merel7 to re*ulate t(e relation t(us create%. &nsofar as contracts of carria*e are concerne%, some aspects re*ulate% 27 t(e Civil Co%e are t(ose respectin* t(e %ili*ence reDuire% of common carriers =it( re*ar% to t(e safet7 of passen*ers as =ell as t(e presumption of ne*li*ence in cases of %eat( or in:ur7 to passen*ers. &n case of %eat( or in:uries to passen*ers, Art. 17+6 of t(e Civil Co%e provi%es t(at common carriers are presume% to (ave 2een at fault or to (ave acte% ne*li*entl7 unless t(e7 prove t(at t(e7 o2serve% e@traor%inar7 %ili*ence as %efine% in Arts. 1733 an% 17++ of t(e Co%e. 6(is provision necessaril7 s(ifts to t(e common carrier t(e 2ur%en of proof. 6(e %river of :eepne7 %i% not carr7 Hsafel7 as far as (uman care an% foresi*(t coul% provi%e, usin* t(e utmost %ili*ence of ver7 cautious persons, =it( %ue re*ar% for all t(e circumstancesC as reDuire% 27 Art. 17++. 'irst, t(e :eepne7 =as not properl7 par;e%, its rear portion 2ein* e@pose% a2out t=o meters from t(e 2roa% s(oul%ers of t(e (i*(=a7, an% facin* t(e mi%%le of t(e (i*(=a7 in a %ia*onal an*le. 6(e petitionerKs %river too; in more passen*ers t(an t(e allo=e% seatin* capacit7 of t(e :eepne7. 6(ese are violations of t(e .an% 6ransportation an% 6raffic Co%e. 6(erefore, t(ere is no assumption of ris; 27 t(e passen*er. PestaKo !s. +u a/ang &n t(e case at 2ar, $estaAo, as a professional %river operatin* a pu2lic transport 2us, s(oul% (ave anticipate% t(at overta;in* at a :unction =as a perilous maneuver an% s(oul% t(us (ave e@ercise% e@treme caution. ,n%er Articles 218/ an% 2176 of t(e Civil Co%e, o=ners an% mana*ers are responsi2le for %ama*es cause% 27 t(eir emplo7ees. B(en an in:ur7 is cause% 27 t(e ne*li*ence of a servant or an emplo7ee, t(e master or emplo7er is presume% to 2e ne*li*ent eit(er in t(e selection or in t(e supervision of t(at emplo7ee. 6(is presumption ma7 2e overcome onl7 27 satisfactoril7 s(o=in* t(at t(e emplo7er e@ercise% t(e care an% t(e %ili*ence of a *oo% fat(er of a famil7 in t(e selection an% t(e supervision of its emplo7ee. #i$$aco !s. Mani$a Rai$road

B(ile a passen*er is entitle% to protection from personal violence 27 t(e carrier or its a*ents or emplo7ees, since t(e contract of transportation o2li*ates t(e carrier to transport a passen*er safel7 to (is %estination, t(e responsi2ilit7 of t(e carrier e@ten%s onl7 to t(ose acts t(at t(e carrier coul% foresee or avoi% t(rou*( t(e e@ercise of t(e %e*ree of care an% %ili*ence reDuire% of it. &n t(e present case, t(e act of t(e train *uar% of t(e 4anila ailroa% Compan7 in s(ootin* t(e passen*er !2ecause of a personal *ru%*e nurture% a*ainst t(e latter since t(e 5apanese occupation# =as entirel7 unforseea2le 27 t(e 4anila ailroa% Co. 6(e latter (a% no means to ascertain or anticipate t(at t(e t=o =oul% meet, nor coul% it reasona2l7 forsee ever7 personal rancor t(at mi*(t e@ist 2et=een eac( one of its man7 emplo7ees an% an7 one of t(e t(ousan%s of eventual passen*ers ri%in* in its trains. 6(e s(ootin* in Duestion =as t(erefore Ccaso fortuitoC =it(in t(e %efinition of Art. 11/+ of t(e ol% Civil Co%e !=(ic( is t(e la= applica2le#, 2ein* 2ot( unforeseea2le an% inevita2le un%er t(e *iven circumstancesE an% pursuant to esta2lis(e% %octrine, t(e resultin* 2reac( of t(e compan7Ks contract of safe carria*e =it( t(e %ecease% =as e@cuse% t(ere27. Maranan !s. PereE 6(e 2asis of t(e common carrierKs lia2ilit7 un%er NCC for assaults on passen*ers committe% 27 its %rivers rests eit(er on !1# t(e %octrine of respon%eat superior or !2# t(e principle t(at it is t(e carrierKs implie% %ut7 to transport t(e passen*er safel7. ,n%er t(e first, =(ic( is t(e minorit7 vie=, t(e carrier is lia2le onl7 =(en t(e act of t(e emplo7ee is =it(in t(e scope of (is aut(orit7 an% %ut7. &t is not sufficient t(at t(e act 2e =it(in t(e course of emplo7ment onl7. ,n%er t(e secon% vie=, up(el% 27 t(e ma:orit7 an% also 27 t(e later cases, it is enou*( t(at t(e assault (appens =it(in t(e course of t(e emplo7eeKs %ut7. &t is no %efense for t(e carrier t(at t(e act =as %one in e@cess of aut(orit7 or in %iso2e%ience of t(e carrierKs or%ers. 6(e carrierKs lia2ilit7 (ere is a2solute in t(e sense t(at it practicall7 secures t(e passen*ers from assaults committe% 27 its o=n emplo7ees. Art. 17+", evi%entl7 follo=s t(e rule 2ase% on t(e secon% vie=. Accor%in*l7, it is t(e carrierKs strict o2li*ation to select its %rivers an% similar emplo7ees =it( %ue re*ar% not onl7 to t(eir tec(nical competence an% p(7sical a2ilit7, 2ut also, no less important, to t(eir total personalit7, inclu%in* t(eir patterns of 2e(avior, moral fi2ers, an% social attitu%e. PNR !s. CA B(en a train 2oar%e% 27 t(e %ecease% passen*er =as so overGcro=%e% t(at (e an% man7 ot(er passen*ers (a% no c(oice 2ut to sit on t(e open platforms 2et=een t(e coac(es of t(e train, t(e common carrier is ne*li*ent. .i;e=ise =(en t(e train %i% not even slo= %o=n =(en it approac(e% t(e &7am 9ri%*e =(ic( =as un%er repair at t(e time, neit(er %i% t(e train stop, %espite t(e alarm raise% 27 ot(er passen*ers t(at a person (a% fallen off t(e train at l7am 9ri%*e, t(ere =as ne*li*ence. 6(e petitioner (as t(e o2li*ation to transport its passen*ers to t(eir %estinations an% to o2serve e@traor%inar7 %ili*ence in %oin* so. Deat( or an7 in:ur7 suffere% 27 an7 of its passen*ers *ives rise to t(e presumption t(at it =as ne*li*ent in t(e performance of its o2li*ation un%er t(e contract of carria*e. 9ut =(ile petitioner faile% to e@ercise e@traor%inar7 %ili*ence as reDuire% 27 la=, it appears t(at t(e %ecease% =as c(ar*ea2le =it( contri2utor7 ne*li*ence. Since (e opte% to sit on t(e open platform 2et=een t(e coac(es of t(e train, (e s(oul% (ave (el% ti*(tl7 an% tenaciousl7 on t(e upri*(t metal 2ar foun% at t(e si%e of sai% platform to avoi% fallin* off from t(e spee%in* train. Isaac !s. A.(. A en Trans. Co.

&f t(e carrierJs emplo7ee is confronte% =it( a su%%en emer*enc7, (e is not (el% to t(e same %e*ree of care (e =oul% ot(er=ise, 2e reDuire% in t(e a2sence of suc( emer*enc7. 97 placin* (is left arm on t(e =in%o=, petitioner is *uilt7 of contri2utor7 ne*li*ence. &t cannot (o=ever relieve t(e carrier 2ut can onl7 re%uce its lia2ilit7 !A 6. 1762#. &t is a prevailin* rule t(at it is ne*li*ence per se for passen*ers on a railroa% to protru%e an7 part of (is 2o%7 an% t(at no recover7 can 2e (a% for an in:ur7. &ache$or E-:ress Inc !s. CA 6(e runnin* amuc; of t(e passen*er =as t(e pro@imate cause of t(e inci%ent as it tri**ere% off a commotion an% panic amon* t(e passen*ers suc( t(at t(e passen*ers starte% runnin* to t(e sole e@it s(ovin* eac( ot(er resultin* in t(e fallin* off t(e 2us 27 passen*ers 9eter an% autraut causin* t(em fatal in:uries. 6(e su%%en act of t(e passen*er =(o sta22e% anot(er passen*er in t(e 2us is =it(in t(e conte@t of force ma:eure. 0o=ever, in or%er t(at a common carrier ma7 2e a2solve% from lia2ilit7 in case of force ma:eure, it is not enou*( t(at t(e acci%ent =as cause% 27 force ma:eure. 6(e common carrier must still prove t(at it =as not ne*li*ent in causin* t(e in:uries resultin* from suc( acci%ent. &n t(is case, 9ac(elor =as ne*li*ent. Consi%erin* t(e factual fin%in*s of t(e Court of AppealsGt(e 2us %river %i% not imme%iatel7 stop t(e 2us at t(e (ei*(t of t(e commotionE t(e 2us =as spee%in* from a full stopE t(e victims fell from t(e 2us %oor =(en it =as opene% or *ave =a7 =(ile t(e 2us =as still runnin*E t(e con%uctor panic;e% an% 2le= (is =(istle after people (a% alrea%7 fallen off t(e 2usE an% t(e 2us =as not properl7 eDuippe% =it( %oors in accor%ance =it( la=. Cariaga !s. (T& Co 6(e income =(ic( %ecease% coul% earn if (e s(oul% finis( t(e me%ical course an% pass t(e correspon%in* 2oar% e@aminations must 2e %eeme% to 2e =it(in t(e same cate*or7 provi%e% for 27 Art. 22/1 of t(e Civil Co%e, =(ic( are t(ose t(at are t(e natural an% pro2a2le conseDuences of t(e 2reac( an% =(ic( t(e parties (a% foreseen or coul% (ave reasona2l7 foreseen at t(e time t(e o2li*ation =as constitute%. .69 coul% not 2e (el% lia2le to pa7 moral %ama*es un%er Article 222/ of t(e Civil Co%e on account of 2reac( of its contract of carria*e 2ecause it %i% not act frau%ulentl7 or in 2a% fait(. .69 (a% e@ercise% %ue %ili*ence in t(e selection an% supervision of its emplo7ees li;e t(e %rivers of its 2uses in connection =it( t(e %isc(ar*e of t(eir %uties an% so it must 2e consi%ere% an o2li*or in *oo% fait(. ,i$$a Re/ Transit3 Inc. !s. CA .ife e@pectanc7 is, not onl7 relevant, 2ut, also, an important element in fi@in* t(e amount recovera2le 27 private respon%ents (erein. Alt(ou*( it is not t(e sole element %eterminative of sai% amount, no co*ent reason (as 2een *iven to =arrant its %isre*ar% an% t(e a%option, in t(e case at 2ar, of a purel7 ar2itrar7 stan%ar%, suc( as a fourG7ear rule. B(en t(e lia2ilit7 of common carrier (a% 2een fi@e% at a minimal rate of onl7 of $2,181.// a 7ear, =(ic( is t(e annual salar7 of %ecease% at t(e time of (is %eat(, as a 7oun* Ctrainin* assistantC an% =(en t(e %ecease%Js potentialit7 an% capacit7 to increase (is future income =as not consi%ere% sai% lia2ilit7 ma7 2e enforce% upon finalit7 of t(e %ecision.

Pan A erican Jor$d Air)a/s !s. IAC 97 refusin* to accommo%ate plaintiff in sai% fli*(t, %efen%ant (a% =illfull7 an% ;no=in*l7 violate% t(e contract of carria*e an% faile% to 2rin* t(e plaintiff to (er place of %estination un%er its contract =it( plaintiff. 9a% fait( =as also present. Self enric(ment or fraternal interest an% not personal ill =ill ma7 (ave 2een t(e motive of %efen%ant, 2ut it is malice nevert(eless. 6(e fact t(at plaintiff =as or%ere% out un%er some prete@t in or%er to accommo%ate a =(ite man in an airline o=ne% 27 an American firm =it( a reputation for 2umpin* off nonG Caucasian to accommo%ate =(ites is ver7 re*retta2le. Defen%ant (avin* 2reac(e% its contract =it( plaintiff in 2a% fait(, it is not error to (ave a=ar%e% e@emplar7 %ama*es. 6(e rationale 2e(in% e@emplar7 or corrective %ama*es is, as t(e name implies, to provi%e an e@ample or correction for pu2lic *oo% . &n vie= of it nature, it s(oul% 2e impose% in suc( amount as to sufficientl7 an% effectivel7 %eter similar 2reac( of contract in t(e future 27 %efen%ant an% ot(er airlines. An a=ar% of attorne7Ks fees is also in or%er, (avin* foun% 2a% fait( on t(e part of %efen%ant. +o7erano !s. MRR &n case of p(7sical in:uries, moral %ama*es are recovera2le onl7 27 t(e part7 in:ure% an% not 27 (is ne@t of ;in, unless t(ere is e@press statutor7 provision to t(e contrar7. &n t(is case it =as 5uana So2erano, not (er (us2an% 5ose, =(o sustaine% t(e 2o%il7 in:uries. Attorne7s fees ma7 onl7 2e a=ar%e% =(en t(e %efen%antKs act or omission (as compelle% t(e plaintiff to liti*ate =it( t(ir% persons or incur e@penses to protect (is interest, or =(en t(e %efen%ant acte% in *ross an% evi%ent 2a% fait( in refusin* to satisf7 t(e plaintiffKs plainl7 vali%, :ust an% %eman%a2le claim. &t =ill 2e o2serve% t(at t(e %efen%ant companies offere% to settle t(e case 27 offerin* to t(e So2eranos t(e a%%itional sum of $+,///. 6(e So2eranos, (o=ever, re:ecte% t(e offer an% procee%e% to court to recover %ama*es in t(e total sum of $76,7+7.76. Marchan !s. MendoEa &t is ar*ue% t(at t(is Court is =it(out :uris%iction to a%:u%icate t(e e@emplar7 %ama*es since t(ere =as no alle*ation nor pra7er, nor proof, nor counterclaim of error for t(e same 27 t(e respon%ents. &t is to 2e o2serve% (o=ever, t(at in t(e complaint, plaintiffs Cpra7e% for suc( ot(er an% furt(er relief as t(is Court ma7 %eem :ust an% eDuita2le.C No=, since t(e 2o%7 of t(e complaint sou*(t to recover %ama*es a*ainst t(e %efen%antGcarrier =(erein plaintiffs pra7e% for in%emnification for t(e %ama*es t(e7 suffere% as a result of t(e ne*li*ence of t(e %river =(o is appellantKs emplo7ee an% since e@emplar7 %ama*es is intimatel7 connecte% =it( *eneral %ama*es, plaintiffs ma7 not 2e e@pecte% to sin*le out 27 e@press term t(e ;in% of %ama*es t(e7 are tr7in* to recover a*ainst t(e %efen%antKs carrier. Suffice it to state t(at =(en plaintiffs pra7e% in t(eir complaint for suc( ot(er relief an% reme%ies t(at ma7 2e availe% of un%er t(e premises, in effect, t(erefore, t(e court is calle% upon t(e e@ercise an% use its %iscretion =(et(er t(e imposition of punitive or e@emplar7 %ama*es even t(ou*( not e@pressl7 pra7e% or plea%e% in t(e plaintiffsK complaint. 8@emplar7 %ama*es ma7 2e impose% 27 =a7 of e@ample or correction onl7 in a%%ition, amon* ot(ers, to compensator7 %ama*es, 2ut t(at t(e7 cannot 2e recovere% as a matter of ri*(t, t(eir %etermination %epen%in* upon t(e %iscretion of t(e court. &f t(e amount of e@emplar7 %ama*es nee% not 2e prove%, it nee% not also 2e alle*e%, an% t(e reason is o2vious 2ecause it is merel7 inci%ental or %epen%ent upon =(at t(e court ma7 a=ar% as compensator7 %ama*es.

De Ca$iston !s. Court of A::ea$s 6(e %eletion of t(e $1/,///.// a=ar%e% for loss of pension is un:ustifie%. ,n%er Article 22/6 of t(e Civil Co%eL 6(e amount of %ama*es for %eat( cause% 27 a crime or DuasiG%elict s(all 2e at least t(ree t(ousan% pesos, even t(ou*( t(ere ma7 (ave 2een miti*atin* circumstances. &n a%%itionL !1# 6(e %efen%ant s(all 2e lia2le for t(e loss of t(e earnin* capacit7 of t(e %ecease%, an% t(e in%emnit7 s(all 2e pai% to t(e (eirs of t(e latter. . 6(e pension of t(e %ece%ent 2ein* a sure income t(at =as cut s(ort 27 (er %eat( for =(ic( Dalmacio =as responsi2le, t(e survivin* (eir of t(e former is entitle% to t(e a=ar% of $ 1/,///.// =(ic( is :ust eDuivalent to t(e pension t(e %ece%ent =oul% (ave receive% for one 7ear if s(e %i% not %ie. ?n t(e ot(er (an%, t(e $+,///.// pai% to t(e (erein petitioner 27 t(e insurer of t(e passen*er 2us =(ic( fi*ure% in t(e acci%ent ma7 2e %eeme% to (ave come from t(e 2us o=ner =(o procure% t(e insurance. Since t(e civil lia2ilit7 !e@G%elicto# of t(e latter for t(e %eat( cause% 27 (is %river is su2si%iar7 an%, at 2ottom, arises from t(e same culpa, t(e insurance procee%s s(oul% 2e cre%ite% in favor of t(e errant %river. Phi$i::ine Air$ines !s. CA 1=' +CRA 11> $etitioner relies on Ct(e principle of la= *enerall7 reco*nize% an% applie% 27 t(e courts in t(e ,nite% StatesC t(at Ct(e controllin* element in %eterminin* loss of earnin*s arisin* from %eat( is, as esta2lis(e% 27 aut(orities, t(e life e@pectanc7 of t(e %ecease% or of t(e 2eneficiar7, =(ic(ever is s(orter. 0o=ever, resort to forei*n :urispru%ence =oul% 2e proper onl7 if no la= or :urispru%ence is availa2le locall7 to settle a controvers7. 8ven in t(e a2sence of local statute an% case la=, forei*n :urispru%ence is onl7 persuasive. 'or t(e settlement of t(e issue at (an%, t(ere are enou*( applica2le local la=s an% :urispru%ence. ,n%er Article 1761 an% Article 22/6!1# of t(e Civil Co%e, t(e a=ar% of %ama*es for %eat( is compute% on t(e 2asis of t(e life e@pectanc7 of t(e %ecease%, not of (is 2eneficiar7. Cachero !s. Mani$a ?e$$o) Ta-i Ca7 B(ile un%er t(e la=, emplo7ers are ma%e responsi2le for t(e %ama*es cause% 27 t(eir emplo7ees actin* =it(in t(e scope of t(eir assi*ne% tas;, plaintiff, in t(e present case, %oes not maintain (is action a*ainst all t(e persons =(o mi*(t 2e lia2le for t(e %ama*es cause% 2ut on an alle*e% 2reac( of contract of carria*e an% a*ainst t(e %efen%ant emplo7er alone. 0o=ever, t(e %efen%ant ta@ica2 compan7 (as not committe% an7 criminal offense resultin* in p(7sical in:uries a*ainst t(e plaintiff. 6(e one t(at committe% t(e offense a*ainst plaintiff is t(e %river of %efen%antKs ta@ica2 2ut (e =as not ma%e part7 %efen%ant to t(e case. 6(erefore, plaintiff is not entitle% to compensation for moral %ama*es as (is case %oes not come =it(in t(e e@ception of para*rap( 1 of Article 221" of t(e Civil Co%e. 6(e present case %oes not come un%er an7 of t(e e@ceptions enumerate% in Article 22/8 of t(e Civil Co%e, speciall7 of para*rap( 2 t(ereof, 2ecause %efen%antKs failure to meet its responsi2ilit7 =as not t(e cause t(at compelle% t(e plaintiff to liti*ate or to incur e@penses to protect (is interests. 6(e present action =as institute% 2ecause plaintiff %eman%e% an e@or2itant amount for moral %ama*es an% naturall7 t(e %efen%ant %i% not an% coul% not 7iel% to suc( %eman%. 6(is is neit(er a case t(at comes un%er para*rap( 11 of sai% Article 2ecause t(e .o=er Court %i% not %eem it :ust an% eDuita2le to a=ar% an7 amount for attorne7Ks fees, on =(ic( point t(is Court a*rees.

Fores !s. Miranda 6(e e@ception to t(e 2asic rule of %ama*es no= un%er consi%eration is a mis(ap resultin* in t(e %eat( of a passen*er, in =(ic( case Article 1761 ma;es t(e common carrier e@pressl7 su2:ect to t(e rule of Art. 22/6, t(at entitles t(e spouse, %escen%ants an% ascen%ants of t(e %ecease% passen*er to C%eman% moral %ama*es for mental an*uis( 27 reason of t(e %eat( of t(e %ecease%C. 9ut t(e e@ceptional rule of Art. 1761 ma;es it all t(e more evi%ent t(at =(ere t(e in:ure% passen*er %oes not %ie, moral %ama*es are not recovera2le unless it is prove% t(at t(e carrier =as *uilt7 of malice or 2a% fait(. Be t(in; it is clear t(at t(e mere carelessness of t(e carrierKs %river %oes not per se constitute or :ustif7 an inference of malice or 2a% fait( on t(e part of t(e carrierE an% in t(e case at 2ar t(ere is no ot(er evi%ence of suc( malice to support t(e a=ar% of moral %ama*es 27 t(e Court of Appeals. 6o a=ar% moral %ama*es for 2reac( of contract, t(erefore, =it(out proof of 2a% fait( or malice on t(e part of t(e %efen%ant, as reDuire% 27 Art. 222/, =oul% 2e to violate t(e clear provisions of t(e la=, an% constitute un=arrante% :u%icial le*islation. (o:eE !s. Pan A erican As a pro@imate result of %efen%antKs 2reac( in 2a% fait( of its contracts =it( plaintiffs, t(e latter suffere% social (umiliation, =oun%e% feelin*s, serious an@iet7 an% mental an*uis(. 'or plaintiffs =ere travellin* =it( first class tic;ets issue% 27 %efen%ant an% 7et t(e7 =ere *iven onl7 t(e tourist class. At stopG overs, t(e7 =ere e@pecte% to 2e amon* t(e firstGclass passen*ers 27 t(ose a=aitin* to =elcome t(em, onl7 to 2e foun% amon* t(e tourist passen*ers. &t ma7 not 2e (umiliatin* to travel as tourist passen*ersE it is (umiliatin* to 2e compelle% to travel as suc(, contrar7 to =(at is ri*(tfull7 to 2e e@pecte% from t(e contractual un%erta;in*. Senator .opez =as t(en Senate $resi%ent $ro 6empore. &nternational carriers li;e %efen%ant ;no= t(e presti*e of suc( an office. An% (e =as former <iceG$resi%ent of t(e $(ilippines. Senator .opez =as *oin* to t(e ,nite% States to atten% a private 2usiness conference of t(e 9inal2a*anG&sa2ela Su*ar Compan7E 2ut (is aforesai% ran; an% position =ere 27 no means left 2e(in%, an% in fact (e (a% a secon% en*a*ement a=aitin* (im in t(e ,nite% StatesL a 2anDuet ten%ere% 27 'ilipino frien%s in (is (onor as Senate $resi%ent $ro 6empore. 'or t(e moral %ama*es sustaine% 27 (im, t(erefore, an a=ar% of $1//,///.// is appropriate. A =ritten contract for attorne7Ks services s(all control t(e amount to 2e pai% t(erefor unless foun% 27 t(e court to 2e unconsciona2le or unreasona2le. A consi%eration of t(e attorne7Js prominence as =ell as comparison of t(e %efense counselJs fees coul% =ell esta2lis( t(e reasona2leness of t(e attorne7Js fees, suc( as in t(is case. Ortigas Ir. !s. (ufthansa &t is ?ur consi%ere% vie= t(at =(en it comes to contracts of common carria*e, inattention an% lac; of care on t(e part of t(e carrier resultin* in t(e failure of t(e passen*er to 2e accommo%ate% in t(e class contracte% for amounts to 2a% fait( or frau% =(ic( entitles t(e passen*er to t(e a=ar% of moral %ama*es in accor%ance =it( Article 222/ of t(e Civil Co%e. 9ut in t(e instant case, t(e 2reac( appears to 2e of *raver nature, since t(e preference *iven to t(e 9el*ian passen*er over plaintiff =as %one =illfull7 an% in =anton %isre*ar% of plaintiffKs ri*(ts an% (is %i*nit7 as a (uman 2ein* an% as a 'ilipino, =(o ma7 not 2e %iscriminate% a*ainst =it( impunit7. B(at =orsene% t(e situation of =as t(at .uft(ansa succee%e% in ;eepin* ?rti*as as its passen*er 27 assurin* (im t(at (e =oul% 2e *iven first class accommo%ation at t(e ne@t stations, t(e proper arran*ements t(erefor (avin* 2een ma%e alrea%7, =(en in trut( suc( =as not t(e case.

A passen*er contracts for first class accommo%ations for man7 reasons peculiar to (imself an% pa7s a (i*(er price t(erefor, an% it is certainl7 not for t(e airplane to sa7 later, after it %eprives (im of (is space in or%er to favor anot(er passen*er, t(at econom7 class is an7=a7 :ust as *oo% as first class. Be (ave uniforml7 up(el% t(e ri*(t of a passen*er to %ama*es in all cases =(erein, after (avin* contracte% an% pai% for first class accommo%ations %ul7 confirme% an% vali%ate%, (e is transferre% over (is o2:ection to econom7, class, =(ic( (e (as to ta;e in or%er to 2e a2le to arrive at (is %estination on (is sc(e%ule% time.

Phi$i::ine Ra77it &us (ines !s. Esguerra 4oral %ama*es are not recovera2le in actions for %ama*es pre%icate% on a 2reac( of t(e contract of transportation, as in t(e instant case, in vie= of t(e provisions of Articles 221" an% 222/ of t(e Ne= Civil Co%e. 6(e e@ceptions are !1# =(ere t(e mis(ap results in t(e %eat( of a passen*er, an% !2# =(ere it is prove% t(at t(e carrier =as *uilt7 of frau% or 2a% fait(, even if %eat( %oes not result. 6(e Court of Appeals foun% t(at t(e t=o ve(icles si%es=ipe% eac( ot(er at t(e mi%%le of t(e roa%. &n ot(er =or%s. 2ot( ve(icles =ere in t(eir respective lanes an% t(at t(e7 %i% not inva%e t(e lane of t(e ot(er. &t cannot 2e sai% t(erefore t(at t(ere =as frau% or 2a% fait( on t(e part of t(e carrierKs %river. 6(is 2ein* t(e case, no moral %ama*es are recovera2le.

Trans Jor$d Air$ines !s. CA $etitioner sacrifice% t(e comfort of its first class passen*ers inclu%in* private respon%ent <inluan for t(e sa;e of econom7. Suc( inattention an% lac; of care for t(e interest of its passen*ers =(o are entitle% to its utmost consi%eration, particularl7 as to t(eir convenience, amount to 2a% fait( =(ic( entitles t(e passen*er to t(e a=ar% of moral %ama*es. 4ore so in t(is case =(ere instea% of courteousl7 informin* private respon%ent of (is 2ein* %o=n*ra%e% un%er t(e circumstances, (e =as an*ril7 re2uffe% 27 an emplo7ee of petitioner. At t(e time of t(is unfortunate inci%ent, t(e private respon%ent =as a practicin* la=7er, a senior partner of a 2i* la= firm in 4anila. 0e =as a %irector of several companies an% =as active in civic an% social or*anizations in t(e $(ilippines. Consi%erin* t(e circumstances of t(is case an% t(e social stan%in* of private respon%ent in t(e communit7, (e is entitle% to t(e a=ar% of moral an% e@emplar7 %ama*es. Ar o!it !s. CA 6(e *ross ne*li*ence committe% 27 private respon%ent!Nort(=est Airlines# in t(e issuance of t(e tic;ets 27 t(e erroneous entr7 of t(e %ate of %eparture an% =it(out c(an*in* or correctin* t(e error =(en t(e tic;ets =ere presente% for reGconfirmation an% t(e manner 27 =(ic( petitioners =ere ru%el7 informe% t(at t(e7 =ere 2umpe% off are clear in%icia of suc( malice an% 2a% fait( an% esta2lis( t(at private respon%ent committe% a 2reac( of contract =(ic( entitles petitioners to moral %ama*es. 6(e %eletion of t(e nominal %ama*es 27 t(e appellate court is =ellGta;en since t(ere is an a=ar% of actual %ama*es. Nominal %ama*es cannot coGe@ist =it( actual or compensator7 %ama*es. Phi$i::ine Air$ines !s. CA 1>< +CRA 3;1

6(ere =as *ross ne*li*ence 27 $A. for allo=in* Capt. 9ustamante to fl7 on t(e t(at fateful %a7 of t(e acci%ent, even if (e =as sic;, (avin* tumor on (is nose. No one =ill certif7 t(e fitness to fl7 a plane of one sufferin* from t(e %isease. ?ne mont( prior to t(e cras(Glan%in*, =(en t(e pilot =as preparin* to lan% in Daet, private respon%ent =arne% (im t(at t(e7 =ere not in t(e vicinit7 of Daet 2ut a2ove t(e to=n of .i*ao. 6(e %izziness, (ea%ac(es an% *eneral %e2ilit7 of private respon%ent =ere afterGeffects of t(e cras(G lan%in*. An% t(erefore t(ere is causal connection 2et=een t(e acci%ent an% sai% afterGeffects. 6(e ne*li*ence of $A. is clearl7 a DuasiG%elict an% t(erefore Art. 221"!2# is applica2le, :ustif7in* t(e recover7 of moral %ama*es. 8ven from t(e stan%point of t(e petitioner t(at t(ere is an emplo7eeGemplo7er relations(ip 2et=een it an% private respon%ent arisin* from t(e contract of emplo7ment, private respon%ent is still entitle% to moral %ama*es in vie= of t(e fin%in* of 2a% fait( or malice, appl7in* t(e provisions of Article 222/. Prudenciado !s. A$$iance Trans:ort Dra. $ru%encia%o suffere% a 2rain concussion =(ic( alt(ou*( mil% can a%mitte%l7 pro%uce t(e effects complaine% of 27 (er an% t(at t(ese s7mptoms can %evelop after several 7ears an% can lea% to some, serious (an%icaps or pre%ispose t(e patient to ot(er sic;ness. 9ein* a %octor 27 profession, (er fears can 2e more real an% intense t(an an or%inar7 person. ?t(er=ise state%, s(e is un%enia2l7 a proper recipient of moral %ama*es =(ic( are proportionate to (er sufferin*. As to e@emplar7 %ama*es, Article 2231 of t(e Civil Co%e provi%esL H&n DuasiG%elicts, e@emplar7 %ama*es ma7 2e *rante% if t(e %efen%ant acte% =it( *rave ne*li*ence.I 6(e rationale 2e(in% e@emplar7 or corrective %ama*es is, as t(e name implies, to provi%e an e@ample or correction for t(e pu2lic *oo%. espon%ent %river =as runnin* at (i*( spee% after turnin* to t(e ri*(t alon* 6aft Ave. comin* from A7ala 9oulevar%, consi%erin* t(at t(e traffic =as clear. 'ailin* to notice petitionerKs car, (e faile% to appl7 (is 2ra;es an% %i% not even s=erve to t(e ri*(t to avoi% t(e collision. 4uc( more, it =as rainin* t(at time an% t(e roa%s are slipper7. 6(e freDuent inci%ence of acci%ents of t(is nature cause% 27 ta@i %rivers in%ee% %eman%s corrective measures.

I. CONCEPT OF COMMON CARRIER

DE #*LMAN !s. CO*RT OF APPEA(+ FactsB espon%ent 8rnesto Cen%aAa is a :un; %ealer =(o =as en*a*e% in 2u7in* up use% 2ottles an% scrap metal in $an*asinan. ,pon *at(erin* sufficient Duantities of suc( scrap material, respon%ent =oul% 2rin* suc( material to 4anila for resale. 0e utilize% t=o si@G=(eeler truc;s =(ic( (e o=ne% for (aulin* t(e material to 4anila. ?n t(e return trip to $an*asinan, respon%ent =oul% loa% (is ve(icles =it( car*o =(ic( various merc(ants =ante% %elivere% to %ifferent esta2lis(ments in $an*asinan. 'or t(at service, respon%ent c(ar*e% frei*(t rates =(ic( =ere commonl7 lo=er t(an re*ular commercial rates. $etitioner $e%ro %e Guzman a merc(ant an% aut(orize% %ealer of General 4il; Compan7 !$(ilippines#, &nc. in ,r%aneta, $an*asinan, contracte% =it( respon%ent for t(e (aulin* of 7+/ cartons of .i2ert7 fille% mil; from its =are(ouse in 4a;ati to petitionerKs esta2lis(ment in ,r%aneta. 1+/ cartons =ere loa%e% on a truc; %riven 27 respon%ent, =(ile 6// cartons =ere place% on 2oar% t(e ot(er truc; =(ic( =as %riven 27 4anuel 8stra%a, respon%entKs %river an% emplo7ee. ?nl7 1+/ 2o@es of .i2ert7 fille% mil; =ere %elivere% to petitioner. 6(e ot(er 6// 2o@es never reac(e% petitioner, since t(e truc; =(ic( carrie% t(ese 2o@es =as (i:ac;e% some=(ere alon* t(e 4acArt(ur 0i*(=a7 in $aniDui, 6arlac, 27 arme% men =(o too; =it( t(em t(e truc;, its %river, (is (elper an% t(e car*o. $etitioner commence% action a*ainst private respon%ent %eman%in* pa7ment of $22,1+/.//, t(e claime% value of t(e lost merc(an%ise, plus %ama*es an% attorne7Ks fees. $etitioner ar*ue% t(at private respon%ent, 2ein* a common carrier, an% (avin* faile% to e@ercise t(e e@traor%inar7 %ili*ence reDuire% of (im 27 t(e la=, s(oul% 2e (el% lia2le for t(e value of t(e un%elivere% *oo%s. $rivate respon%ent %enie% t(at (e =as a common carrier an% ar*ue% t(at (e coul% not 2e (el% responsi2le for t(e value of t(e lost *oo%s, suc( loss (avin* 2een %ue to force ma:eure. 6(e 6C rule% t(at private respon%ent =as a common carrier. CA reverse% t(e %ecision an% (el% t(at respon%ent (a% 2een en*a*e% in transportin* return loa%s of frei*(t Cas a casual occupationI, a si%eline to (is scrap iron 2usiness. IssueB 1. B(et(er or not respon%ent is a common carrier. 2. B(et(er or not respon%ent is lia2le. Ge$dB 1. )es. Article 1732 ma;es no %istinction 2et=een one =(ose principal 2usiness activit7 is t(e carr7in* of persons or *oo%s or 2ot(, an% one =(o %oes suc( carr7in* onl7 as an ancillar7 activit7 !in local &%iom as Ca si%elineC#. Article 1732 also carefull7 avoi%s ma;in* an7 %istinction 2et=een a person or enterprise offerin* transportation service on a re*ular or sc(e%ule% 2asis an% one offerin* suc( service on an occasional, episo%ic or unsc(e%ule% 2asis. Neit(er %oes Article 1732 %istin*uis( 2et=een a carrier offerin* its services to t(e C*eneral pu2lic,C i.e., t(e *eneral communit7 or population, an% one =(o offers services or solicits 2usiness onl7 from a narro= se*ment of t(e *eneral population. 6(e Court of Appeals referre% to t(e fact t(at private respon%ent (el% no certificate of pu2lic convenience. A certificate of pu2lic convenience is not a reDuisite for t(e incurrin* of lia2ilit7. 6(at lia2ilit7

arises t(e moment a person or firm acts as a common carrier, =it(out re*ar% to =(et(er or not suc( carrier (as also complie% =it( t(e reDuirements of t(e applica2le re*ulator7 statute an% implementin* re*ulations an% (as 2een *rante% a certificate of pu2lic convenience or ot(er franc(ise. 6o e@empt private respon%ent from t(e lia2ilities of a common carrier 2ecause (e (as not secure% t(e necessar7 certificate of pu2lic convenience, =oul% 2e offensive to soun% pu2lic polic7E t(at =oul% 2e to re=ar% private respon%ent precisel7 for failin* to compl7 =it( applica2le statutor7 reDuirements. 2. No. Article 1731 esta2lis(es t(e *eneral rule t(at common carriers are responsi2le for t(e loss, %estruction or %eterioration of t(e *oo%s =(ic( t(e7 carr7, Cunless t(e same is %ue to an7 of t(e follo=in* causes onl7L !1# 'loo%, storm, eart(Dua;e, li*(tnin* or ot(er natural %isaster or calamit7E !2# Act of t(e pu2lic enem7 in =ar, =(et(er international or civilE !3# Act or omission of t(e s(ipper or o=ner of t(e *oo%sE !1# 6(e c(aracterGof t(e *oo%s or %efects in t(e pac;in* orGin t(e containersE an% !+# ?r%er or act of competent pu2lic aut(orit7. Article 173+ also provi%es as follo=sL &n all cases ot(er t(an t(ose mentione% in num2ers 1, 2, 3, 1 an% + of t(e prece%in* article, if t(e *oo%s are lost, %estro7e% or %eteriorate%, common carriers are presume% to (ave 2een at fault or to (ave acte% ne*li*entl7, unless t(e7 prove t(at t(e7 o2serve% e@traor%inar7 %ili*ence as reDuire% in Article 1733. 6(e (i:ac;in* of t(e carrierKs truc; %oes not fall =it(in an7 of t(e five cate*ories of e@emptin* causes liste% in Article 1731. &t =oul% follo=, t(erefore, t(at t(e (i:ac;in* of t(e carrierKs ve(icle must 2e %ealt =it( un%er t(e provisions of Article 173+, in ot(er =or%s, t(at t(e private respon%ent as common carrier is presume% to (ave 2een at fault or to (ave acte% ne*li*entl7. 6(is presumption, (o=ever, ma7 2e overt(ro=n 27 proof of e@traor%inar7 %ili*ence on t(e part of private respon%ent. $etitioner ar*ues t(at in t(e circumstances of t(is case, private respon%ent s(oul% (ave (ire% a securit7 *uar% presuma2l7 to ri%e =it( t(e truc; carr7in* t(e 6// cartons of .i2ert7 fille% mil;. Be %o not 2elieve, (o=ever, t(at in t(e instant case, t(e stan%ar% of e@traor%inar7 %ili*ence reDuire% private respon%ent to retain a securit7 *uar% to ri%e =it( t(e truc; an% to en*a*e 2ri*an%s in a fireli*(t at t(e ris; of (is o=n life an% t(e lives of t(e %river an% (is (elper. Article 171+ provi%es in relevant partL An7 of t(e follo=in* or similar stipulations s(all 2e consi%ere% unreasona2le, un:ust an% contrar7 to pu2lic polic7L !6# t(at t(e common carrierKs lia2ilit7 for acts committe% 27 t(ieves, or of ro22ers =(o %o not act =it( *rave or irresisti2le t(reat, violence or force, is %ispense% =it( or %iminis(e%. &n t(e instant case, arme% men (el% up t(e secon% truc; o=ne% 27 private respon%ent =(ic( carrie% petitionerKs car*o. Accuse% acte% =it( *rave, if not irresisti2le, t(reat, violence or force. &n t(ese circumstances, =e (ol% t(at t(e occurrence of t(e loss must reasona2l7 2e re*ar%e% as Duite 2e7on% t(e control of t(e common carrier an% properl7 re*ar%e% as a fortuitous event. &t is necessar7 to recall t(at even common carriers are not ma%e a2solute insurers a*ainst all ris;s of travel an% of transport of *oo%s, an% are not (el% lia2le for acts or events =(ic( cannot 2e foreseen or are inevita2le, provi%e% t(at t(e7 s(all (ave complie% =it( t(e ri*orous stan%ar% of e@traor%inar7 %ili*ence.

P(ANTER+ PROD*CT+3 INC. !s. CO*RT OF APPEA(+ FactsB $$& purc(ase% from 4itsu2is(i metric tons of ,rea fertilizer =(ic( t(e latter s(ippe% a2oar% t(e car*o vessel o=ne% 27 3333 from ,S to .a ,nion. $rior to its vo7a*e, a time c(arterGpart7 on t(e vessel

=as entere% into 2et=een 4itsu2is(i as s(ipperFc(arterer an% 3333 as s(ipo=ner, in 6o;7o, 5apan. 9efore loa%in* t(e fertilizer a2oar% t(e vessel, t(e7 =ere all presuma2l7 inspecte% 27 t(e c(artererKs representative an% foun% fit to ta;e a loa% of urea. After t(e ,rea fertilizer =as loa%e% in 2ul; 27 steve%ores (ire% 27 an% un%er t(e supervision of t(e s(ipper, t(e steel (atc(es =ere close% =it( (eav7 iron li%s, covere% =it( t(ree la7ers of tarpaulin, t(en tie% =it( steel 2on%s. 6(e (atc(es remaine% close% an% ti*(tl7 seale% t(rou*(out t(e entire vo7a*e. A private marine an% car*o surve7or, Car*o Superinten%ents Compan7 &nc. !CSC&#, =as (ire% 27 $$& to %etermine t(e CoutturnC of t(e car*o s(ippe%. 6(e surve7 report su2mitte% reveale% a s(orta*e in t(e car*o an% t(at a portion of t(e ,rea fertilizer appro@imatin* =as contaminate% =it( %irt. $$& sent a claim letter to Soriamont Steams(ip A*encies !SSA#, t(e resi%ent a*ent of t(e carrier, 3333, for t(e cost of t(e s(orta*e in t(e an% t(e %iminution in value of t(at portion contaminate% =it( %irt. SSA e@plaine% t(at t(e7 %i% not respon% to t(e consi*neeKs claim 2ecause it =as not a formal claim, an% t(at t(e7 (a% not(in* to %o =it( t(e %isc(ar*e of t(e s(ipment. $$& file% an action for %ama*es. 6(e %efen%ant carrier ar*ue% t(at t(e strict pu2lic polic7 *overnin* common carriers %oes not appl7 to t(em 2ecause t(e7 (ave 2ecome private carriers 27 reason of t(e provisions of t(e c(arterGpart7. 6C rule% in favor of plaintiff, statin* t(at Hcommon carriers are presume% ne*li*ent, all t(at a s(ipper (as to %o in a suit to recover for loss or %ama*e is to s(o= receipt 27 t(e carrier of t(e *oo%s an% to %eliver7 27 it of less t(an =(at it receive%. After t(at, t(e 2ur%en of provin* t(at t(e loss or %ama*e =as %ue to an7 of t(e causes =(ic( e@empt (im from lia2ilit7 is s(ifte% to t(e carrier, common or private (e ma7 2e. 8ven if t(e provisions of t(e c(arterGpart7 are %eeme% vali%, an% t(e %efen%ants consi%ere% private carriers, it =as still incum2ent upon t(em to prove t(at t(e s(orta*e or contamination sustaine% 27 t(e car*o is attri2uta2le to t(e fault or ne*li*ence on t(e part of t(e s(ipper or consi*nee in t(e loa%in*, sto=in*, trimmin* an% %isc(ar*e of t(e car*o. 6(is t(e7 faile% to %o.I CA reverse% t(e %ecision, rel7in* on t(e 1"68 case of 0ome &nsurance Co. v. American Steams(ip A*encies, &nc., it rule% t(at t(e car*o vessel 4F< CSun $lumC o=ne% 27 private respon%ent 3333 =as a private carrier an% not a common carrier 27 reason of t(e time c(artererGpart7. Accor%in*l7, t(e Civil Co%e provisions on common carriers =(ic( set fort( a presumption of ne*li*ence %o not fin% application in t(e case at 2ar. IssueB 1# B(et(er a common carrier 2ecomes a private carrier 27 reason of a c(arterGpart7. 2# B(et(er t(e s(ipo=ner =as a2le to prove t(at (e (a% e@ercise% t(at %e*ree of %ili*ence reDuire% of (im un%er t(e la=. Ge$dB 1.# Not necessaril7. &t is not %ispute% t(at respon%ent carrier, in t(e or%inar7 course of 2usiness, operates as a common carrier, transportin* *oo%s in%iscriminatel7 for all persons. B(en petitioner c(artere% t(e vessel 4F< CSun $lumC, t(e s(ip captain, its officers an% compliment =ere un%er t(e emplo7 of t(e s(ipo=ner an% t(erefore continue% to 2e un%er its %irect supervision an% control. 0ar%l7 t(en can t(e c(arterer 2e c(ar*e%, a stran*er to t(e cre= an% to t(e s(ip, =it( t(e %ut7 of carin* for (is car*o =(en t(e c(arterer %i% not (ave an7 control of t(e means in %oin* so. 6(is is evi%ent in t(e present case consi%erin* t(at t(e steerin* of t(e s(ip, t(e mannin* of t(e %ec;s, t(e %etermination of t(e course of t(e vo7a*e an% ot(er tec(nical inci%ents of maritime navi*ation =ere all consi*ne% to t(e officers an% cre= =(o =ere screene%, c(osen an% (ire% 27 t(e s(ipo=ner. &t is t(erefore imperative t(at a pu2lic carrier s(all remain as suc(, not=it(stan%in* t(e c(arter of t(e =(ole or portion of a vessel 27 one or more persons, provi%e% t(e c(arter is limite% to t(e s(ip onl7, as in t(e case of a timeGc(arter or vo7a*eGc(arter. &t is onl7 =(en t(e c(arter inclu%es 2ot( t(e vessel an% its cre=, t(at a common carrier 2ecomes private, at least insofar as t(e particular vo7a*e coverin* t(e c(arterGpart7 is concerne%. &n%u2ita2l7, a s(ipo=ner in a time or vo7a*e c(arter retains possession an% control of t(e s(ip, alt(ou*( (er (ol%s ma7, for t(e moment, 2e t(e propert7 of t(e c(arterer. espon%ent carrierKs (eav7 reliance on t(e case of 0ome &nsurance Co. v. American Steams(ip A*encies, is misplace% for t(e reason t(at t(e meat of t(e controvers7 t(erein =as t(e vali%it7 of a stipulation in t(e c(arterGpart7 e@emptin* t(e s(ipo=ners from lia2ilit7 for loss %ue to t(e ne*li*ence of its

a*ent, an% not t(e effects of a special c(arter on common carriers. At an7 rate, t(e rule in t(e ,nite% States t(at a s(ip c(artere% 27 a sin*le s(ipper to carr7 special car*o is not a common carrier, %oes not fin% application in our :uris%iction, for =e (ave o2serve% t(at t(e *ro=in* concern for safet7 in t(e transportation of passen*ers an% For carria*e of *oo%s 27 sea reDuires a more e@actin* interpretation of a%miralt7 la=s, more particularl7, t(e rules *overnin* common carriers. 2.# )es. &n an action for recover7 of %ama*es a*ainst a common carrier on t(e *oo%s s(ippe%, t(e 6CJs statement on t(e reDuirements of t(e la= =as reiterate%. SC (el% t(at respon%ent carrier (as sufficientl7 overcome, 27 clear an% convincin* proof, t(e prima facie presumption of ne*li*ence. &t =as s(o=n %urin* t(e trial t(at after t(e loa%in* of t(e car*o in 2ul; in t(e s(ipJs (ol%s, t(e steel pontoon (atc(es =ere close% an% seale% =it( iron li%s, t(en covere% =it( 3 la7ers of servicea2le tarpaulins =(ic( =ere tie% =it( steel 2on%s. 6(e (atc(es remaine% close an% ti*(tl7 seale% =(ile t(e s(ip =as in transit as t(e =ei*(t of t(e steel covers ma%e it impossi2le for a person to open =it(out t(e use of t(e s(ipJs 2oom. Also s(o=n, =as t(at t(e (ull of t(e vessel =as in *oo% con%ition, foreclosin* t(e possi2ilit7 of spilla*e of t(e car*o into t(e sea or seepa*e of =ater insi%e t(e (ull of t(e vessel. SC a*ree% t(at t(e 2ul; s(ipment of (i*(l7 solu2le *oo%s li;e fertilizer carries =it( it t(e ris; of loss or %ama*e. 4oreso, =it( a varia2le =eat(er con%ition prevalent %urin* its unloa%in*, as =as t(e case at 2ar. 6(is is a ris; t(e s(ipper or t(e o=ner of t(e *oo%s (as to face. Clearl7, respon%ent carrier (as sufficientl7 prove% t(e in(erent c(aracter of t(e *oo%s =(ic( ma;es it (i*(l7 vulnera2le to %eteriorationE as =ell as t(e ina%eDuac7 of its pac;a*in* =(ic( furt(er contri2ute% to t(e loss. F.C. FI+GER !s.?AN#CO +TEAM+GIP COMPAN? FactsB 6(e 2oar% of )an*co Steams(ip Co. a%opte% a resolution =(ic( =as ratifie% 27 t(e stoc;(ol%ers %eclarin* classes of merc(an%ise =(ic( are not to 2e carrie% 27 t(e vessels of t(e compan7 an% pro(i2itin* t(e emplo7ees to carr7 %7namite, po=%er or ot(er e@plosives. 6(e Collector of Customs suspen%e% t(e issuance of clearances for t(e vessels unless t(e7 carr7 t(e e@plosives. 'is(er, a stoc;(ol%er of )SC, file% a petition for pro(i2ition. IssueB B(et(er or not t(e refusal of t(e 2oar% of )'C to accept for carria*e C%7namite, po=%er or ot(er e@plosivesC from an7 an% all s(ippers =(o ma7 offer suc( e@plosives for carria*e can 2e (el% to 2e a la=ful act. Ge$dB No. &n construin* Act "8 for t(e alle*e% violation, t(e test is =(et(er t(e refusal of )SC to carr7 t(e e@plosives =it(out Dualification or con%itions ma7 (ave t(e effect of su2:ectin* an7 person or localit7 or t(e traffic is suc( e@plosives to an un%ul7 unreasona2le or unnecessar7 pre:u%ice or %iscrimination. Common carriers in t(is :uris%iction cannot la=full7 %ecline to accept a particular class of *oo%s unless it appears t(at for some sufficient reason t(e %iscrimination for suc( is reasona2le an% necessar7. )SC (as not met t(ose con%itions. 6(e nature of t(e 2usiness of a common carrier as a pu2lic emplo7ment is suc( t(at it is =it(in t(e po=er of t(e State to impose suc( :ust re*ulations in t(e interest of t(e pu2lic as t(e le*islator ma7 %eem proper. *+ !s. F*INAGON FactsB Defen%ants =ere c(ar*e% for violation of Act "8, =(en t(e7 unloa%e% in t(e port of Currimao +,"86 sac;s of rice 2elon*in* to &locos Norte $rovincial Government from 4anila, an% c(ar*e% t(e provincial treasurer 1/ centavos for eac( sac; instea% of 6 centavos =(ic( t(e7 (ave 2een re*ularl7 c(ar*in* for t(e

unloa%in* of t(e same ;in% of merc(an%ise an% un%er virtuall7 t(e same circumstances an% con%itions. 6(e7 =ere convicte%, (ence t(e7 appeale% to t(e (i*(er court. IssueB B(et(er or not t(e %efen%ants as common carriers cause% pre:u%ice to t(e &locos Norte Government. Ge$dB )es. 6(ere is no pretense t(at it actuall7 cost more to (an%le t(e rice for t(e province t(an it %i% for t(e merc(ants =it( =(om t(e special contracts =ere ma%e. 6(ere =as a clear %iscrimination a*ainst t(e province =(ic( is pro(i2ite% 27 t(e la=. &t is (o=ever not 2elieve% t(at t(e la= pro(i2its common carriers from ma;in* special rates for t(e (an%lin* an% transportin* of merc(an%ise, =(en t(e same are ma%e for t(e purpose of increasin* t(eir 2usiness an% to mana*e t(eir important interests upon t(e same principles =(ic( are re*ar%e% as soun% an% a%opte% in ot(er tra%es an% pursuits. A2solute eDualit7 is not reDuire% in all cases. &t is onl7 un:ust, un%ue an% unreasona2le %iscrimination =(ic( t(e la= for2i%s. 6(e la= of eDualit7 is in force onl7 =(ere t(e services performe% in t(e %ifferent cases are su2stantiall7 t(e same an% t(e circumstances an% con%itions are similar. (OAD+TAR +GIPPIN# CO.3 INC. !s.CO*RT OF APPEA(+ FactsB ?n Novem2er 1", 1"81, .?ADS6A receive% on 2oar% its 4F< C(ero;ee *oo%s!certain t7pes of =oo%# for s(ipment. 6(e *oo%s =ere insure% =it( 4anila &nsurance Co.!4&C# a*ainst various ris;s inclu%in* H6?6A. .?SS 9) 6?6A. .?SS ?' 608 <8SS8.I. 6(e vessel, in turn, =as insure% 27 $ru%ential Guarantee > Assurance, &nc.!$GA&# for $1 4illion. ?n Novem2er 2/, 1"81, on its =a7 to 4anila from Nasipit, A*usan %el Norte, t(e vessel san; off .imasa=a &slan%. As a result of t(e total loss of its s(ipment, t(e consi*nee ma%e a claim =it( .?ADS6A =(ic(, (o=ever i*nore% t(e same. As t(e insurer, 4&C pai% t(e insure% in full settlement of its claim. ?n 'e2ruar7 1, 1"8+, 4&C file% a complaint a*ainst .oa%star an% $GA&, alle*in* t(at t(e sin;in* of t(e vessel =as %ue to t(e fault an% ne*li*ence of .oa%star an% its emplo7ees. .oa%star claime% force ma:eur. $GA& averre% t(at 4&C (as no cause of action a*ainst it, .oa%star 2ein* t(e part7 insure%. $GA& =as later %roppe% as a part7 %efen%ant after it pai% t(e insurance procee%s to .oa%star. 6(e trial court ren%ere% :u%*ment for 4&C, promptin* .oa%star to *o to t(e CA =(ic( affirme% t(e %ecision. IssueB B(et(er or not .oa%star is a private carrier. Ge$dB No. .oa%star su2mits t(at t(e vessel =as a private carrier 2ecause it =as not issue% a C$CE it %i% not (ave a re*ular trip or sc(e%ule nor a fi@e% routeE an% t(ere =as onl7 Hone s(ipper, one consi*nee for a special car*o.I 6(e SC (el% t(at .oa%star is a common carrier. &t is not necessar7 t(at t(e carrier 2e issue% a C$C, an% t(is c(aracter is not altere% 27 t(e fact t(at t(e carria*e of t(e *oo%s in Duestion =as perio%ic, occasional, episo%ic or unsc(e%ule%. &n support of its position .oa%star relie% on t(e 1"68 case of 0ome &nsurance Co. v. American Steams(ip A*encies, =(ere t(e Court (el% t(at a common carrier transportin* special car*o or c(arterin* t(e vessel to a special person 2ecomes a private carrier t(at is not su2:ect to t(e provisions of t(e Civil Co%e. 6(is case (o=ever is not applica2le in t(e case at 2ar for t(e simple reason t(at t(e actual settin*s are %ifferent. 6(e recor%s %o not %isclose t(at t(e 4F< C(ero;ee, on t(e %ate in Duestion, un%ertoo; to carr7 a special car*o or =as c(artere% to a special person onl7. 6(ere =as no c(arter part7. 6(e 2ills of la%in* faile% to s(o= an7 special arran*ement, 2ut onl7 a *eneral provision to t(e effect t(at t(e 4F< C(ero;ee =as a *eneral car*o carrier. 'urt(er, t(e 2are fact t(at t(e vessel =as carr7in* a particular t7pe of car*o for

one s(ipper, =(ic( appears to 2e purel7 coinci%ental, is not reason enou*( to convert t(e vessel from a common carrier to a private carrier, especiall7 =(ere, as in t(is case, it =as s(o=n t(at t(e vessel =as also carr7in* passen*ers. ,n%er t(e facts an% circumstances o2tainin* in t(is case, .oa%star fits t(e %efinition of a common carrier un%er Article 1732 of t(e NCC. 6(e %octrine enunciate% in t(e case of De Guzman v. CA =as also mentione%. CA %ecision is (ere27 affirme%. FIR+T PGI(IPPINE IND*+TRIA( CORPORATION !s. CO*RT OF APPEA(+ FactsB $etitioner is a *rantee of a pipeline concession un%er A 387 to contract, install an% operate oil pipelines. 6(e first pipeline concession =as *rante% in 1"67 an% =as rene=e% 27 t(e 8 9 in 1""2. &n 1""+, petitioner applie% for a 4a7orJs permit in 9atan*as Cit7. espon%ent treasurer reDuire% petitioner to pa7 a local ta@ 2ase% on its *ross receipts for t(e fiscal 7ear in 1""3 pursuant to t(e .ocal Government Co%e. 6o avoi% (amperin* its operations, petitioner pai% t(e amount of ta@ for t(e first Duarter un%er protest. $etitioner ar*ue% t(at as a pipeline operator =it( a *overnment concession en*a*e% in transportin* petroleum pro%ucts via pipeline it is e@empte% from pa7ment of ta@ 2ase% on *ross receipts. espon%ent refuse% to ma;e reim2ursement on t(e *roun% t(at petitioner is not a common carrier en*a*e% in transportation 2usiness 27 lan%, =ater or air. IssueB B(et(er or not petitioner is lia2le to pa7 a local ta@ 2ase% on *ross receipts since it is not a common carrier. Ge$dB No. 9ase% on Article 1732 NCC, t(ere is no %ou2t t(at petitioner is a common carrier. &t is en*a*e% in t(e 2usiness of transportin* or carr7in* *oo%s, i.e. petroleum pro%ucts, for (ire as a pu2lic emplo7ment. &t un%erta;es to carr7 for all persons in%ifferentl7, t(at is, to all persons =(o c(oose to emplo7 its services, an% transports t(e *oo%s 27 lan% an% for compensation. 6(e fact t(at petitioner (as a limite% clientele %oes not e@clu%e it from t(e %efinition of a common carrier. !De Guzman ulin* up(el%# espon%entJs ar*ument t(at t(e term Hcommon carrierI as use% in Section 133!:# of t(e .ocal Government Co%e refers onl7 to common carriers transportin* *oo%s an% passen*ers t(rou*( movin* ve(icles or vessels eit(er 27 lan%, sea or =ater is erroneous. 6(e %efinition of Hcommon carriersI in NCC ma;es no %istinction as to t(e means of transportin* as lon* as it is 27 lan%, =ater or air. &t %oes not provi%e t(at t(e transportin* of t(e passen*ers or *oo%s s(oul% 2e 27 motor ve(icle. &t is clear t(at t(e le*islative intent in e@clu%in* from t(e ta@in* po=er of t(e local *overnment unit t(e imposition of 2usiness ta@ a*ainst common carriers is to prevent a %uplication of t(e soGcalle% Ccommon carrierKs [email protected] $etitioner is alrea%7 pa7in* 3N common carrierKs ta@ on its *ross salesFearnin*s un%er t(e National &nternal evenue Co%e. 6o ta@ petitioner a*ain on its *ross receipts in its transportation of petroleum 2usiness =oul% %efeat t(e purpose of t(e .ocal Government Co%e. GOME IN+*RANCE COMPAN? !s. AMERICAN +TEAM+GIP A#ENCIE+3 INC. FactsB A $eruvian firm s(ippe% fis(meal t(rou*( t(e SS C(o=2orou*( consi*ne% to t(e San 4i*uel 9re=er7 an% insure% 27 t(e 0ome &nsurance Co. 6(e car*o arrive% in 4anila an% =as %isc(ar*e% into t(e li*(ters of .uzon Steve%orin* Co. B(en t(e car*o =as %elivere% to S49 t(ere =ere s(orta*es. 0ome &nsurance Co. pai% S49 $11,/// after its %eman%. 0ome &nsurance file% for reim2ursement from .uzon Steve%orin* an% American Steams(ip A*encies, o=ner an% operator of t(e vessel. 6(e lo=er court a2solve% .uzon after fin%in* t(at it o2serve% t(e reDuire% %ili*ence 2ut or%ere% ASA to reim2urse 0ome &nsurance, %eclarin* t(at Art. +87 of t(e Co%e of Commerce ma;es t(e s(ip a*ent civill7 lia2le for %ama*es in favor of t(ir% persons %ue to t(e con%uct of carrierJs captain an% t(at t(e stipulation in t(e c(arter part7 e@emptin* o=ner from lia2ilit7 is a*ainst pu2lic polic7 un%er Art. 1711, NCC. ASA appeale%,

alle*in* t(at un%er t(e provisions of t(e C(arter $art7 referre% to in t(e 2ills of la%in*, t(e c(arterer, not t(e s(ipo=ner is responsi2le for an7 loss or %ama*e of t(e car*o. IssueB Are t(e provisions of t(e NCC applica2leO Ge$dB No. 6(e NCC provisions on common carriers s(oul% not appl7 =(ere t(e common carrier is not actin* as suc( 2ut as a private carrier. ,n%er American 5urispru%ence, a common carrier un%erta;in* to carr7 a special car*o or c(artere% to a special person onl7 2ecomes a private carrier. As a private carrier, a stipulation e@emptin* t(e o=ner from lia2ilit7 for t(e ne*li*ence of its a*ent is vali%. 6(e stipulation in t(e c(arter part7 a2solvin* t(e o=ner from lia2ilit7 for loss %ue to t(e ne*li*ence of its a*ent =oul% 2e voi% onl7 if strict pu2lic polic7 *overnin* common carrier is applie%. Suc( polic7 (as no force =(ere t(e pu2lic at lar*e is not involve%, as in t(e case of a s(ip totall7 c(artere% for t(e use of a sin*le part7. 6(e stipulation e@emptin* t(e o=ner from lia2ilit7 for ne*li*ence of its a*ent is not a*ainst pu2lic polic7 an% is %eeme% vali%. ecover7 canJt 2e (a%, for loss or %ama*e to t(e car*o a*ainst s(ipo=ners, unless t(e same is %ue to personal acts or ne*li*ence of sai% o=ner or its mana*ers, as %istin*uis(e% from a*ents or emplo7ees. +AN PA&(O !s. PANTRANCO FactsB $AN6 ANC? offers $,9 service for passen*ers an% frei*(t. &t operates passen*er 2uses from 4etro 4anila to 9icol e*ion an% 8astern Samar. ?n 4arc( 27,1"8/ it reDueste% 4A &NA for aut(orit7 to leaseFpurc(ase a vessel for its pro:ect to operate a ferr72oat service from 4atno*,Sorso*on an% Allen,Samar t(at =ill provi%e service to compan7 2uses an% frei*(t truc;s t(at (ave to cross San 9ernar%o Strait.6(is =as not *iven %ue course 2ecause t(e 4atno*GAllen run is a%eDuatel7 service% 27 Car%inal S(ippin* Corp. an% 8pitacio San $a2lo an% mar;et con%itions in t(e propose% route cannot support t(e entr7 of a%%itional tonna*e. $AN6 ANC? nevert(eless acDuire% t(e vessel. &t =rote t(e C(airman of t(e 9oar% of 6ransportation !9?6#, t(at it proposes to operate a ferr7 service to carr7 its passen*er 2uses an% frei*(t truc;s 2et=een Allen an% 4atno* in connection =it( its trips to 6aclo2an Cit7. $AN6 ANC? claims t(at it can operate a ferr7 service in connection =it( its franc(ise for 2us operation in t(e (i*(=a7 from $asa7 Cit7 to 6aclo2an Cit7 for t(e purpose of continuin* t(e (i*(=a7, =(ic( is interrupte% 27 a small 2o%7 of =ater, t(e sai% propose% ferr7 operation is merel7 a necessar7 an% inci%ental service to its main service an% o2li*ation of transportin* its passen*ers from $asa7 Cit7 to 6aclo2an Cit7. Suc( 2ein* t(e case t(ere is no nee% to o2tain a separate certificate for pu2lic convenience to operate a ferr7 service. 6(e 9?6 *rante% aut(orit7 to $AN6 ANC? to operate a private ferr7 2oat service, to =(ic( t(e petitioners oppose%. IssueB BFN a lan% transportation compan7 can 2e aut(orize% to operate a ferr7 service or coast=ise or interislan% s(ippin* service alon* its aut(orize% route as an inci%ent to its franc(ise =it(out t(e nee% of filin* a separate application for t(e same. Ge$dB No. Consi%erin* t(e environmental circumstances of t(e case, t(e conve7ance of passen*ers, truc;s an% car*o from 4atno* to Allen is certainl7 not a ferr7 2oat service 2ut a coast=ise or interislan% s(ippin* service. ,n%er no circumstance can t(e sea 2et=een 4atno* an% Allen 2e consi%ere% a continuation of t(e (i*(=a7. B(ile a ferr7 2oat service (as 2een consi%ere% as a continuation of t(e (i*(=a7 =(en crossin* rivers or even la;es, =(ic( are small 2o%7 of =aters G separatin* t(e lan%, (o=ever, =(en as in t(is case t(e t=o terminals, 4atno* an% Allen are separate% 27 an open sea it can not 2e consi%ere% as a continuation of t(e (i*(=a7. espon%ent $AN6 ANC? s(oul% secure a separate C$C for t(e operation of an interislan% or coast=ise s(ippin* service in accor%ance =it( t(e provisions of la=. &ts C$C as a 2us transportation cannot 2e merel7 amen%e% to inclu%e t(is =ater service un%er t(e *uise t(at it is a mere private ferr7 service.

6(e contention of private respon%ent $AN6 ANC? t(at its ferr7 service operation is as a private carrier, not as a common carrier for its e@clusive use in t(e ferr7in* of its passen*er 2uses an% car*o truc;s is a2sur%. $AN6 ANC? %oes not %en7 t(at it c(ar*es its passen*ers separatel7 from t(e c(ar*es for t(e 2us trips an% issues separate tic;ets =(enever t(e7 2oar% t(e 4< C9lac; Dou2leC t(at crosses 4atno* to Allen, $AN6 ANC? cannot preten% t(at in issuin* tic;ets to its passen*ers it %i% so as a private carrier an% not as a common carrier. 6(e Court %oes not see an7 reason =(7 inspite of its amen%e% franc(ise to operate a private ferr7 2oat service it cannot accept =al;Gin passen*ers :ust for t(e purpose of crossin* t(e sea 2et=een 4atno* an% Allen. &n%ee% evi%ence to t(is effect (as 2een su2mitte%. NATIONA( +TEE( CORPORATION !s. CO*RT OF APPEA(+ FactsB ?n 5ul7 17, 1"71, plaintiff NSC as c(arterer an% %efen%ant <S& as o=ner, entere% into a Contract of <o7a*e C(arter 0ire =(ere27 NSC (ire% <S&Js vessel, t(e 4< P<.AS?NS &J to ma;e one vo7a*e to loa% steel pro%ucts at &li*an Cit7 an% %isc(ar*e t(em at Nort( 0ar2or 4anila. B(en t(e vesselJs 3 (atc(es containin* t(e s(ipment =ere opene% 27 plaintiffJs a*ents, nearl7 all t(e s;i%s of tinplates an% (ot rolle% s(eets =ere alle*e%l7 foun% to 2e =et an% rust7. 6(e car*o =as %isc(ar*e% an% unloa%e% 27 steve%ores (ire% 27 t(e plaintiff. $laintiff file% =it( t(e %efen%ant its claim for %ama*es suffere% %ue to t(e %o=n*ra%in* of t(e %ama*e% tinplates in t(e amount of $"11,11+.18 2ut %efen%ant refuse% an% faile% to pa7. 6C rule% a*ainst t(e plaintiff, statin* t(at t(e vessel =as sea=ort(7 an% t(at t(ere is no proof of =illful ne*li*ence of t(e vesselKs officers. 6(is =as affirme% 27 CA 2ut mo%ifie% t(e a=ar% of %ama*es, (ence t(e appeal. IssueB BFN <S& contracte% =it( NSC as a common carrier or as a private carrier. Ge$dB &t is a private carrier. &n t(e instant case, it is un%ispute% t(at <S& %i% not offer its services to t(e *eneral pu2lic. &t carrie% passen*ers or *oo%s onl7 for t(ose it c(ose un%er a special contract of c(arter part7. &t is a private carrier t(at ren%ers trampin* service an% as suc(, %oes not transport car*o or s(ipment for t(e *eneral pu2lic. &ts services are availa2le onl7 to specific persons =(o enter into a special contract of c(arter part7 =it( its o=ner. ConseDuentl7, t(e ri*(ts an% o2li*ations of <S& an% NSC, inclu%in* t(eir respective lia2ilit7 for %ama*e to t(e car*o, are %etermine% primaril7 27 stipulations in t(eir contracts of private carria*e or c(arter part7. ,nli;e in a contract involvin* a common carrier, private carria*e %oes not involve t(e *eneral pu2lic. 0ence, t(e strin*ent provisions of t(e Civil Co%e on common carriers protectin* t(e *eneral pu2lic cannot :ustifia2l7 2e applie% to a s(ip transportin* commercial *oo%s as a private carrier. &t is clear from t(e partiesJ Contract of <o7a*e C(arter 0ire, t(at <S& Hs(all not 2e responsi2le for losses e@cept on proven =ilful ne*li*ence of t(e officers of t(e vessel.I 6(e NAN)?QA& C(arter $art7!an internationall7 reco*nize% C(arter $art7 A*reement#, =(ic( =as incorporate% in t(e partiesJ contract of transportation, furt(er provi%e% t(at t(e s(ipo=ner s(all not 2e lia2le for loss of or %ama*e to t(e car*o arisin* or resultin* from unsea=ort(iness, unless t(e same =as cause% 27 its lac; of %ue %ili*ence to ma;e t(e vessel sea=ort(7 or to ensure t(at t(e same =as Hproperl7 manne%, eDuippe% an% supplie%.I &n vie= of t(e a2ove, NSC must prove t(at t(e %ama*e to its s(ipment =as cause% 27 <S&Js =ilful ne*li*ence or failure to e@ercise %ue %ili*ence in ma;in* 4< <lasons & sea=ort(7 an% fit for (ol%in*, carr7in* an% safe;eepin* t(e car*o. &nelucta2l7, t(e 2ur%en of proof =as place% on NSC 27 t(e partiesJ a*reement. 6(e CA %ecision, affirmin* t(e 6C %ecision in favor of %efen%ant an% %ismissin* t(e complaint is Affirme%. 8M* !s. #ARCIA

FactsB 6(e follo=in* memoran%a, circulars an%For or%ers are sou*(t to 2e nullifie% 27 t(e instant petition, vizL !a# D?6C 4emoran%um ?r%er "/G3"+, %ate% 5une 26, 1""/ relative to t(e implementation of a fare ran*e sc(eme for provincial 2us services in t(e countr7, allo=in* provincial 2us operators to c(ar*e passen*ers rates =it(in a ran*e of 1+N a2ove an% 1+N 2elo= t(e .6' 9 official rate for a perio% of one 7ear. .6' 9 C(airman, 'ernan%o, fin%in* t(e 4? not le*all7 feasi2le su2mitte% a memoran%um to D?6C Secretar7 ?r2os as it contravenes t(e $u2lic Service Act for t(e follo=in* reasonsL i. t(e rates to 2e approve% s(oul% 2e propose% 27 pu2lic service operators ii. t(ere s(oul% 2e a pu2lication an% notice to concerne% or affecte% parties in t(e territor7 affecte% iii. a pu2lic (earin* s(oul% 2e (el% for t(e fi@in* of t(e rates 6(e c(airman a%%e% t(at to allo= 2us operators to c(ar*e fares 1+N a2ove t(e present .6' 9 fares in t(e =a;e of t(e %evastation, %eat( an% sufferin* cause% 27 t(e 5ul7 16 eart(Dua;e =ill not 2e sociall7 =arrante% an% =ill 2e politicall7 unsoun%. $rovincial 9us ?perators Association of t(e $(ilippines, &nc. !$9?A$# file% an application for an acrossGt(eG 2oar% fare increase of $/./8+ per ;ilometer. &t =as oppose% 27 $(ilippine Consumers 'oun%ation, &nc. an% $erla C. 9autista alle*in* t(at t(e propose% rates =ere e@or2itant an% unreasona2le. 6(e sai% increase =as *rante% 27 .6' 9. !2# D?6C Department ?r%er No."2G+87, %ate% 4arc( 3/, 1""2, %efinin* t(e polic7 frame=or; on t(e re*ulation of transport servicesE Amon* t(e salient provisions of =(ic( inclu%eL H&n %eterminin* pu2lic nee%, t(e presumption of nee% for a service s(all 2e %eeme% in favor of t(e applicant. 6(e 2ur%en of provin* t(at t(ere is no nee% for a propose% service s(all 2e =it( t(e oppositor!s#.I !c# D?6C 4emoran%um %ate% ?cto2er 8, 1""2, la7in* %o=n rules an% proce%ures to implement Department ?r%er No. "2G+87E !%# .6' 9 4emoran%um Circular No. "2G//", provi%in* implementin* *ui%elines on t(e D?6C Department ?r%er No. "2G+87E an% !e# .6' 9 ?r%er %ate% 4arc( 21, 1""1 in Case No. "1G3112. Sometime in 4arc(, 1""1, private respon%ent $9?A$, availin* itself of t(e %ere*ulation polic7 of t(e D?6C allo=in* provincial 2us operators to collect plus 2/N an% minus 2+N of t(e prescri2e% fare =it(out first (avin* file% a petition for t(e purpose an% =it(out t(e 2enefit of a pu2lic (earin*, announce% a fare increase of 2/N percent of t(e e@istin* fares. $etitioner 34, file% a petition 2efore t(e .6' 9 opposin* t(e up=ar% a%:ustment of 2us fares. .6' 9 %ismisse% t(e petition (ence t(e present one. IssueB B(et(er or not t(e assaile% or%ersFcirculars are vali%. Ge$dB B(ile t(e aut(orit7 of t(e D?6C an% t(e .6' 9 to issue a%ministrative or%ers to re*ulate t(e transport sector is reco*nize%, t(e Court foun% t(at t(e7 committe% *rave a2use of %iscretion in issuin* D?6C Department ?r%er No. "2G+87 an% .6' 9 4emoran%um Circular No. "2G//" promul*atin* t(e implementin* *ui%elines on D?6C Department ?r%er No. "2G+87, t(e sai% a%ministrative issuances 2ein* amen%ator7 an% violative of t(e $u2lic Service Act an% t(e ules of Court.

'are an*e Sc(emeL 6(e 2/N fare increase impose% 27 $9?A$ =it(out t(e 2enefit of a petition an% a pu2lic (earin* is null an% voi% an% of no force an% effect. $resume% $u2lic Nee%L A C$C is an aut(orization *rante% 27 t(e .6' 9 for t(e operation of lan% transportation services for pu2lic use as reDuire% 27 la=. $ursuant to Section 16!a# of t(e $u2lic Service Act, as amen%e%, t(e follo=in* reDuirements must 2e met 2efore a C$C ma7 2e *rante%, to =itL !i# t(e applicant must 2e a citizen of t(e $(ilippines, or a corporation or coGpartners(ip, association or :ointGstoc; compan7 constitute% an% or*anize% un%er t(e la=s of t(e $(ilippines, at least 6/ N of its stoc; or pai%Gup capital must 2elon* entirel7 to citizens of t(e $(ilippinesE !ii# t(e applicant must 2e financiall7 capa2le of un%erta;in* t(e propose% service an% meetin* t(e responsi2ilities inci%ent to its operationE an% !iii# t(e applicant must prove t(at t(e operation of t(e pu2lic service propose% an% t(e aut(orization to %o 2usiness =ill promote t(e pu2lic interest in a proper an% suita2le manner. &t is un%erstoo% t(at t(ere must 2e proper notice an% (earin* 2efore t(e $SC can e@ercise its po=er to issue a C$C. B(ile a%optin* t(e fore*oin* reDuisites for t(e issuance of a C$C, .6' 9 4emoran%um Circular No. "2G//", $art &<, provi%es for 7et incon*ruous an% contra%ictor7 polic7 *ui%eline on t(e issuance of a C$C. 6(e *ui%elines statesL H6(e issuance of a Certificate of $u2lic Convenience is %etermine% 27 pu2lic nee%. 6(e presumption of pu2lic nee% for a service s(all 2e %eeme% in favor of t(e applicant, =(ile t(e 2ur%en of provin* t(at t(ere is no nee% for t(e propose% service s(all 2e t(e oppositorKs.I 97 its terms, pu2lic convenience or necessit7 *enerall7 means somet(in* fittin* or suite% to t(e pu2lic nee%. As one of t(e 2asic reDuirements for t(e *rant of a C$C, pu2lic convenience an% necessit7 e@ists =(en t(e propose% facilit7 or service meets a reasona2le =ant of t(e pu2lic an% suppl7 a nee% =(ic( t(e e@istin* facilities %o not a%eDuatel7 suppl7. 6(e e@istence or nonGe@istence of pu2lic convenience an% necessit7 is t(erefore a Duestion of fact t(at must 2e esta2lis(e% 27 evi%ence, real an%For testimonialE empirical %ataE statistics an% suc( ot(er means necessar7, in a pu2lic (earin* con%ucte% for t(at purpose. 6(e o2:ect an% purpose of suc( proce%ure, amon* ot(er t(in*s, is to loo; out for, an% protect, t(e interests of 2ot( t(e pu2lic an% t(e e@istin* transport operators. No *rave a2use of %iscretion (o=ever =as committe% in t(e issuance of D?6C 4emoran%um ?r%er No. "/G3"+ an% D?6C 4emoran%um %ate% ?cto2er 8, 1""2, t(e same 2ein* merel7 internal communications 2et=een a%ministrative officers. TATAD !s. #ARCIA FactsB D?6C planne% to construct a li*(t rail=a7 transit line alon* 8DSA referre% to as 8DSA .i*(t ail 6ransit &&& !8DSA . 6 &&&#. 6(en $resi%ent ADuino, si*ne% into la= t(e 9uil%G?perateG6ransfer !9?6# .a=. After preDualif7in* t(e 2i%%ers for t(e construction of t(e sai% transit, it =as foun% t(at out of all t(e applicants, onl7 t(e 8DSA . 6 Consortium met t(e reDuirements. D?6C an% respon%ent 8DSA . 6 Corporation, .t%. !a private corporation or*anize% un%er t(e la=s of 0on*3on*# in su2stitution of t(e 8DSA . 6 Consortium, entere% into an CA*reement to 9uil%, .ease an% 6ransfer a .i*(t ail 6ransit S7stem for 8DSAC un%er t(e terms of t(e 9?6 .a=. D?6C sou*(t t(e approval of t(e $resi%ent 2ut t(e same =as %enie%. 6(us, D?6C, represente% 27 Secretar7 Garcia, an% private respon%ent entere% into a supplemental a*reementRH evise% an% estate% A*reement to 9uil%, .ease an% 6ransfer a .i*(t ail 6ransit S7stem for 8DSAC so as to clarif7 t(eir respective ri*(ts an% responsi2ilities an% to su2mit Supplemental A*reement to t(e $resi%ent. $etitioners, in t(eir capacit7 as Senators an% ta@pa7ers, Duestion t(e constitutionalit7 of t(e t=o a*reements 2et=een D?6C an% private respon%ent. 6(e7 conten% t(at it *rants 8DSA . 6 Corp., .t%., a forei*n corporation, t(e o=ners(ip of 8DSA . 6 &&& =(ic( is a pu2lic utilit7. Secretar7 Garcia an% private

respon%ent on t(e ot(er (an%, conten% t(at t(e nationalit7 reDuirement for pu2lic utilities man%ate% 27 t(e Constitution %oes not appl7 to private respon%ent. IssueB Does t(e fact t(at 8DSA . 6 Corporation, .t%., a forei*n corporation, o=n t(e facilities an% eDuipment of t(e . 6 &&& mean it also o=n t(e . 6 &&& as a pu2lic utilit7O Ge$dB No. B(at private respon%ent o=ns are t(e rail trac;s, rollin* stoc;s li;e t(e coac(es, rail stations, terminals an% t(e po=er plant, not a pu2lic utilit7. B(ile a franc(ise is nee%e% to operate t(ese facilities to serve t(e pu2lic, t(e7 %o not 27 t(emselves constitute a pu2lic utilit7. As rule% in &loilo &ce > Col% Stora*e Co. v. $u2lic Service 9oar%, =(at constitutes a pu2lic utilit7 is not t(eir o=ners(ip 2ut t(eir use to serve t(e pu2lic. &n la=, t(ere is a clear %istinction 2et=een t(e CoperationC of a pu2lic utilit7 an% t(e o=ners(ip of t(e facilities an% eDuipment use% to serve t(e pu2lic. 6(e ri*(t to operate a pu2lic utilit7 ma7 e@ist in%epen%entl7 an% separatel7 from t(e o=ners(ip of t(e facilities t(ereof. ?ne can o=n sai% facilities =it(out operatin* t(em as a pu2lic utilit7, or conversel7, one ma7 operate a pu2lic utilit7 =it(out o=nin* t(e facilities use% to serve t(e pu2lic. 6(e %evotion of propert7 to serve t(e pu2lic ma7 2e %one 27 t(e o=ner or 27 t(e person in control t(ereof =(o ma7 not necessaril7 2e t(e o=ner t(ereof. &n t(e case at 2ar, private respon%ent an% D?6C a*ree% t(at on completion %ate, private respon%ent =ill imme%iatel7 %eliver possession of t(e . 6 s7stem 27 =a7 of lease for 2+ 7ears, %urin* =(ic( perio% D?6C s(all operate t(e same as a common carrier an% private respon%ent s(all provi%e tec(nical maintenance an% repair services to D?6C. Clearl7, private respon%ent =ill not run t(e li*(t rail ve(icles an% collect fees from t(e ri%in* pu2lic. &t =ill (ave no %ealin*s =it( t(e pu2lic an% t(e pu2lic =ill (ave no ri*(t to %eman% an7 services from it. &t is D?6C =(ic( s(all operate t(e 8DSA . 6 &&&. 6(erefore, private respon%ent, 8DSA . 6 Corp., .t%. %oes not o=n 8DSA . 6 &&& as a pu2lic utilit7. +AMAR MININ# COMPAN?3 INC. !s. NORDE*T+CGER ((O?D FactsB 6(e case arose from an importation ma%e 27 plaintiff, SA4A of one crate ?ptima =el%e% =e%*e =ire sieves t(rou*( t(e 4FS SC0BA98NS68&N a vessel o=ne% 27 %efen%ant N? D8,6SC08 ..?)D, !represente% in t(e $(ilippines 27 its a*ent, C.'. S0A $ > C?., &NC.#, =(ic( s(ipment is covere% 27 9ill of .a%in* No. 18 %ul7 issue% to consi*nee SA4A 4&N&NG C?4$AN), &NC. ,pon arrival of t(e aforesai% vessel at t(e port of 4anila, t(e importation =as unloa%e% an% %elivere% in *oo% or%er an% con%ition to t(e 2on%e% =are(ouse of A4C).. 6(e *oo%s =ere (o=ever never %elivere% to, nor receive% 27, t(e consi*nee at t(e port of %estinationRDavao. 9ill of la%in*, No. 18 sets fort( in t(e pa*e 2 t(ereof t(at t(e *oo%s =ere receive% 27 N? D8,6SC08 ..?)D at t(e Hport of loa%in* at 9remen, German7, =(ile t(e frei*(t (a% 2een prepai% up to t(e port of %estination or t(e Hport of %isc(ar*e of *oo%sIRDavao. 6(e carrier un%ertoo; to transport t(e *oo%s in its vessel, 4FS S0BA98NS68&N, onl7 up to t(e Hport of %isc(ar*e from s(ipIR4anila. 6(ereafter, t(e *oo%s =ere to 2e trans(ippe% 27 t(e carrier to t(e port of %estination or Hport of %isc(ar*e of *oo%sI. Section 1, para*rap( 3 of 9ill of .a%in* No. 18, statesL H6(e carrier s(all not 2e lia2le in an7 capacit7 =(atsoever for an7 %ela7, loss or %ama*e occurrin* 2efore t(e *oo%s enter s(ipJs tac;le to 2e loa%e% or after t(e *oo%s leave s(ipJs tac;le to 2e %isc(ar*e%, trans(ippe% or for=ar%e%. @@@I 6(e trial court ren%ere% :u%*ment in favor of plaintiff, (ence t(e appeal. IssueB B(et(er or not t(e various clauses an% stipulations in t(e 9ill of la%in* is vali%.

Ge$dB )es. 6(e vali%it7 of stipulations in 2ills of la%in* e@emptin* t(e carrier from lia2ilit7 for loss or %ama*e to t(e *oo%s =(en t(e same are not in its actual custo%7 (as 2een up(el% in $0?8N&S ASS, ANC8 C?., .6D. vs. ,N&68D S6A68S .&N8S, 22 SC A 671 !1"68#. 6(e stipulations in t(e 2ill of la%in* in t(e $0?8N&S case =(ic( are su2stantiall7 t(e same as t(e su2:ect stipulations provi%esL H6(e carrier s(all not 2e lia2le in an7 capacit7 =(atsoever for an7 loss or %ama*e to t(e *oo%s =(ile t(e *oo%s are not in its actual custo%7.I !$ar. 2, last su2par.# H6(e carrier or master, in ma;in* arran*ements =it( an7 person for or in connection =it( all transs(ippin* or for=ar%in* of t(e *oo%s or t(e use of an7 means of transportation or for=ar%in* of *oo%s not use% or operate% 27 t(e carrier, s(all 2e consi%ere% solel7 t(e a*ent of t(e s(ipper an% consi*nee an% =it(out an7 ot(er responsi2ilit7 =(atsoever or for t(e cost t(ereof.I !$ar. 16# 'in%in* t(e a2ove stipulations not contrar7 to la=, morals, *oo% customs, pu2lic or%er or pu2lic polic7 t(eir vali%it7 =as sustaine%. A careful perusal of t(e provisions of t(e Ne= Civil Co%e on common carriers =as loo;e% into 27 t(e Court particularl7, Article 1736 an% 1738. 6(ere is no %ou2t t(at Art. 1738 fin%s no applica2ilit7 to t(e instant case. 6(e sai% article contemplates a situation =(ere t(e *oo%s (a% alrea%7 reac(e% t(eir place of %estination an% are store% in t(e =are(ouse of t(e carrier. 6(e su2:ect *oo%s =ere still a=aitin* transs(ipment to t(eir port of %estination, an% =ere store% in t(e =are(ouse of a t(ir% part7 =(en last seen an%For (ear% of. Article 1736 is applica2le to t(e instant suit. ,n%er sai% article, t(e carrier ma7 2e relieve% of t(e responsi2ilit7 for loss or %ama*e to t(e *oo%s upon actual or constructive %eliver7 of t(e same 27 t(e carrier to t(e consi*nee, or to t(e person =(o (as a ri*(t to receive t(em. &n sales, actual %eliver7 (as 2een %efine% as t(e ce%in* of corporeal possession 27 t(e seller, an% t(e actual appre(ension of corporeal possession 27 t(e 2u7er or 27 some person aut(orize% 27 (im to receive t(e *oo%s as (is representative for t(e purpose of custo%7 or %isposal. 97 t(e same to;en, t(ere is actual %eliver7 in contracts for t(e transport of *oo%s =(en possession (as 2een turne% over to t(e consi*nee or to (is %ul7 aut(orize% a*ent an% a reasona2le time is *iven (im to remove t(e *oo%s. 6(e court a Duo foun% t(at t(ere =as actual %eliver7 to t(e consi*nee t(rou*( its %ul7 aut(orize% a*ent, t(e carrier. 6=o un%erta;in*s appeare% em2o%ie% an%For provi%e% for in t(e 9ill of .a%in* in Duestion. 6(e first is '? 608 6 ANS$? 6 ?' G??DS from 9remen, German7 to 4anila. 6(e secon%, 608 6 ANSS0&$48N6 ?' 608 SA48 G??DS from 4anila to Davao, =it( appellant actin* as a*ent of t(e consi*nee. At t(e (iatus 2et=een t(ese t=o un%erta;in*s of appellant =(ic( is t(e moment =(en t(e su2:ect *oo%s are %isc(ar*e% in 4anila, its personalit7 c(an*es from t(at of carrier to t(at of a*ent of t(e consi*nee. 6(us, t(e c(aracter of appellantKs possession also c(an*es, from possession in its o=n name as carrier, into possession in t(e name of consi*nee as t(e latterKs a*ent. Suc( 2ein* t(e case, t(ere =as, in effect, actual %eliver7 of t(e *oo%s from appellant as carrier to t(e same appellant as a*ent of t(e consi*nee. ,pon suc( %eliver7, t(e appellant, as erst=(ile carrier, ceases to 2e responsi2le for an7 loss or %ama*e t(at ma7 2efall t(e *oo%s from t(at point on=ar%s. 6(is is t(e full import of Article 1736, as applie% to t(e case. 6(e actions of appellant carrier an% of its representative in t(e $(ilippines 2ein* in full fait( =it( t(e la=ful stipulations of 9ill of .a%in* No. 18 an% in conformit7 =it( t(e provisions of t(e Ne= Civil Co%e on common carriers, a*enc7 an% contracts, t(e7 incur no lia2ilit7 for t(e loss of t(e *oo%s in Duestion. Appeale% %ecision is 8<8 S8D. $laintiffGappelleeKs complaint is D&S4&SS8D. EA+TERN +GIPPIN# (INE+3 INC. !s. INTERMEDIATE APPE((ATE CO*RT

FactsB &n G. . No. 6"/11, sometime in or prior to 5une, 1"77, t(e 4FS AS&A6&CA, a vessel operate% 27 petitioner loa%e% at 3o2e, 5apan for transportation to 4anila, +,/// pieces of calorize% lance pipes consi*ne% to $(ilippine 9loomin* 4ills Co., &nc., an% 7 cases of spare parts value% consi*ne% to Central 6e@tile 4ills, &nc. 9ot( sets of *oo%s =ere insure% a*ainst marine ris; for =it( respon%ent. &n G. . No. 71178, %urin* t(e same perio%, t(e same vessel too; on 2oar% 128 cartons of *arment fa2rics an% accessories consi*ne% to 4ariveles Apparel Corporation, an% t=o cases of surve7in* instruments consi*ne% to Aman 8nterprises an% General 4erc(an%ise. 6(e 128 cartons =ere insure% for t(eir state% value 27 respon%ent Niss(in an% t(e 2 cases 27 respon%ent Do=a. 8nroute for 3o2e, 5apan, to 4anila, t(e vessel cau*(t fire an% san;, resultin* in t(e total loss of s(ip an% car*o. 6(e respective respon%ent &nsurers pai% t(e correspon%in* marine insurance values to t(e consi*nees concerne% an% =ere t(us su2ro*ate% unto t(e ri*(ts of t(e latter as t(e insure%. espon%ents file% a claim for reim2ursement from petitioner. 6(e 6C rule% in t(eir favor to =(ic( t(e petitioner appeale%. IssueB !1# B(ic( la= s(oul% *overn t(e Civil Co%e provisions on Common carriers or t(e Carria*e of Goo%s 27 Sea ActO an% !2# =(o (as t(e 2ur%en of proof to s(o= ne*li*ence of t(e carrierO Ge$dB !1# 6(e la= of t(e countr7 to =(ic( t(e *oo%s are to 2e transporte% *overns t(e lia2ilit7 of t(e common carrier in case of t(eir loss, %estruction or %eterioration. As t(e car*oes in Duestion =ere transporte% from 5apan to t(e $(ilippines, t(e lia2ilit7 of $etitioner Carrier is *overne% primaril7 27 t(e Civil Co%e. 0o=ever, in all matters not re*ulate% 27 sai% Co%e, t(e ri*(ts an% o2li*ations of common carrier s(all 2e *overne% 27 t(e Co%e of Commerce an% 27 special la=s. 6(us, t(e Carria*e of Goo%s 27 Sea Act, a special la=, is suppletor7 to t(e provisions of t(e Civil Co%e. !2# ,n%er t(e Civil Co%e, common carriers, from t(e nature of t(eir 2usiness an% for reasons of pu2lic polic7, are 2oun% to o2serve e@traor%inar7 %ili*ence in t(e vi*ilance over *oo%s, accor%in* to all t(e circumstances of eac( case. Common carriers are responsi2le for t(e loss, %estruction, or %eterioration of t(e *oo%s unless t(e same is %ue to an7 of t(e follo=in* causes onl7L !1# 'loo%, storm, eart(Dua;e, li*(tnin* or ot(er natural %isaster or calamit7E $etitioner Carrier claims t(at t(e loss of t(e vessel 27 fire e@empts it from lia2ilit7 un%er t(e p(rase Cnatural %isaster or calamit7.I 0o=ever, t(e Court sai% t(at fire ma7 not 2e consi%ere% a natural %isaster or calamit7. 6(is must 2e so as it arises almost invaria2l7 from some act of man or 27 (uman means. &t %oes not fall =it(in t(e cate*or7 of an act of Go% unless cause% 27 li*(tnin* or 27 ot(er natural %isaster or calamit7. &t ma7 even 2e cause% 27 t(e actual fault or privit7 of t(e carrier. As t(e peril of t(e fire is not compre(en%e% =it(in t(e e@ception in Article 1731, supra, Article 173+ of t(e Civil Co%e provi%es t(at all cases t(an t(ose mention in Article 1731, t(e common carrier s(all 2e presume% to (ave 2een at fault or to (ave acte% ne*li*entl7, unless it proves t(at it (as o2serve% t(e e@traor%inar7 %ili*ence reDuire% 27 la=. &n t(is case, t(e respective &nsurers. as su2ro*ees of t(e car*o s(ippers, (ave proven t(at t(e transporte% *oo%s (ave 2een lost. $etitioner Carrier (as also prove% t(at t(e loss =as cause% 27 fire. 6(e 2ur%en t(en is upon $etitioner Carrier to prove% t(at it (as e@ercise% t(e e@traor%inar7 %ili*ence reDuire% 27 la=, =(ic( it faile% to %o. An% even if fire =ere to 2e consi%ere% a Cnatural %isasterC =it(in t(e meanin* of Article 1731 of t(e Civil Co%e, it is reDuire% un%er Article 173" of t(e same Co%e t(at t(e Cnatural %isasterC must (ave 2een t(e Cpro@imate an% onl7 cause of t(e loss,C an% t(at t(e carrier (as Ce@ercise% %ue %ili*ence to prevent or minimize t(e loss 2efore, %urin* or after t(e occurrence of t(e %isaster.I 6(is $etitioner Carrier (as also faile% to esta2lis( satisfactoril7.

Nor ma7 $etitioner Carrier see; refu*e from lia2ilit7 un%er t(e Carria*e of Goo%s 27 Sea Act, &t is provi%e% t(erein t(atL Sec. 1!2#. Neit(er t(e carrier nor t(e s(ip s(all 2e responsi2le for loss or %ama*e arisin* or resultin* from !2# 'ire, unless cause% 27 t(e actual fault or privit7 of t(e carrier. 9ot( t(e 6rial Court an% t(e Appellate Court, in effect, foun%, as a fact, t(at t(ere =as Cactual faultC of t(e carrier s(o=n 27 Clac; of %ili*enceC in t(at =(en t(e smo;e =as notice%, t(e fire =as alrea%7 2i*E t(at t(e fire must (ave starte% 21 (ours 2efore t(e same =as notice%E an% t(at after t(e car*oes =ere store% in t(e (atc(es, no re*ular inspection =as ma%e as to t(eir con%ition %urin* t(e vo7a*e. 6(e fore*oin* suffices to s(o= t(at t(e circumstances un%er =(ic( t(e fire ori*inate% an% sprea% are suc( as to s(o= t(at $etitioner Carrier or its servants =ere ne*li*ent in connection t(ere=it(. ConseDuentl7, t(e complete %efense affor%e% 27 t(e C?GSA =(en loss results from fire is unavailin* to $etitioner Carrier. NATIONA( DE,E(OPMENT COMPAN? !s. CO*RT OF APPEA(+ FactsB An a*reement =as entere% onto 2et=een %efen%ants National Development Compan7 !NDC# an% 4aritime Compan7 of t(e $(ilippines !4C$# in accor%ance of =(ic(, NDC as t(e first preferre% mort*a*ee of t(ree oceanG*ivin* vessels inclu%in* one =it( t(e name HDona NatiI appointe% 4C$ as its a*ents to mana*e an% operate sai% vessel in its 2e(alf. 6(e 8. $(ilipp Corporation of t(e Ne= )or; loa%e% on 2oar% t(e vessel HDona NatiI at San 'rancisco, California, a total of 1,2// 2ales of American ra= cotton consi*ne% to 4anila 9an;in* Corporation, 4anila an% t(e $eopleJs 9an; an% 6rust Compan7, actin* for an% in 2e(alf of $an Asiatic Commercial Compan7, &nc. =(o represents iversi%e 4ills Corporation. 6(e vessel fi*ure% in a collision at &se 9a7, 5apan =it( a 5apanese vessel as a result of =(ic( +/ 2ales of aforesai% car*o =ere lost an%For %estro7e%. $laintiff !D&SC# as insurer, pai% t(e respective claims of (ol%ers of t(e ne*otia2le 2ills of la%in* %ul7 en%orse% to t(em. $laintiff file% complaint for reim2ursement from t(e %efen%antsGNDC an% 4C$ as o=ner an% s(ip a*ent respectivel7. 6(e 6C ren%ere% a %ecision or%erin* t(e %efen%ants 4C$ an% NDC to pa7 :ointl7 an% soli%arit7 to D&SC. 4C$ an% NDC interpose% t(eir appeals. CA affirme% t(e 6CJs %ecision. IssueB B(ic( la= s(all *overn loss or %estruction of *oo%s %ue to collision of vessels outsi%e $(ilippine =aters, an% t(e e@tent of lia2ilit7O Ge$dB 6(is issue (as alrea%7 2een lai% to rest 27 t(is Court of 8astern S(ippin* .ines &nc. v. &AC !1+/ SC A 16"G17/ T1"87U# &n t(e case at 2ar, it (as 2een esta2lis(e% t(at t(e *oo%s in Duestion are transporte% from San 'rancisco, California an% 6o;7o, 5apan to t(e $(ilippines an% t(at t(e7 =ere lost or %ue to a collision =(ic( =as foun% to (ave 2een cause% 27 t(e ne*li*ence or fault of 2ot( captains of t(e colli%in* vessels. ,n%er t(e a2ove rulin*, it is evi%ent t(at t(e la=s of t(e $(ilippines =ill appl7, an% it is immaterial t(at t(e collision actuall7 occurre% in forei*n =aters, suc( as &se 9a7, 5apan. &t appears, (o=ever, t(at collision falls amon* matters not specificall7 re*ulate% 27 t(e Civil Co%e, so t(at no reversi2le error can 2e foun% in respon%ent courses application to t(e case at 2ar of Articles 826 to 83", 9oo; 6(ree of t(e Co%e of Commerce, =(ic( %eal e@clusivel7 =it( collision of vessels. 4ore specificall7, Article 826 of t(e Co%e of Commerce provi%es t(at =(ere collision is imputa2le to t(e personnel of a vessel, t(e o=ner of t(e vessel at fault, s(all in%emnif7 t(e losses an% %ama*es incurre% after an e@pert appraisal. 9ut more in point to t(e instant case is Article 827 of t(e same Co%e,

=(ic( provi%es t(at if t(e collision is imputa2le to 2ot( vessels, eac( one s(all suffer its o=n %ama*es an% 2ot( s(all 2e soli%aril7 responsi2le for t(e losses an% %ama*es suffere% 27 t(eir car*oes. Si*nificantl7, un%er t(e provisions of t(e Co%e of Commerce, particularl7 Articles 826 to 83", t(e s(ipo=ner or carrier, is not e@empt from lia2ilit7 for %ama*es arisin* from collision %ue to t(e fault or ne*li*ence of t(e captain. $rimar7 lia2ilit7 is impose% on t(e s(ipo=ner or carrier in reco*nition of t(e universall7 accepte% %octrine t(at t(e s(ipmaster or captain is merel7 t(e representative of t(e o=ner =(o (as t(e actual or constructive control over t(e con%uct of t(e vo7a*e. 6(e a*reement 2et=een NDC an% 4C$ s(o=s t(at 4C$ is appointe% as a*ent, a term 2roa% enou*( to inclu%e t(e concept of s(ip a*ent in maritime la=. &n fact 4C$ =as even conferre% all t(e po=ers of t(e o=ner of t(e vessel, inclu%in* t(e po=er to contract in t(e name of t(e NDC. 9ot( o=ner an% a*ent s(oul% 2e %eclare% :ointl7 an% severall7 lia2le since t(e o2li*ation =(ic( is t(e su2:ect of t(e action (a% its ori*in in a fortuitous act an% %i% not arise from contract. CA %ecision is affirme%.

II. CONTRACTUAL EFFECTS A. Vigilance over Good

#E(I+AN !s. A(DA? FactsB 9ienveni%o Gelisan is t(e o=ner of a frei*(t truc;. Defen%ant 9ienvei%o Gelisan an% o2erto o2erto entere% into a contact un%er=(ic( 8spiritu (ire% t(e same frei*(t truc; of Gelisan for t(e purpose of (aulin* rice, su*ar, flour an% fertilizer. &t also a*ree% t(at 8spiritu s(all 2ear an% pa7 all losses an% %ama*es atten%in* t(e carria*e of t(e *oo%s to 2e (aule% 27 (im. 9enito Al%a7, a truc;in* operator (a% ;no=n o2erto 8spiritu. Al%a7 (a% a contact to (aul t(e fertilizer of t(e Atlas 'ertilizer Corporation from $ier 1, Nort( 0ar2or, to its Bare(ouse in 4an%alu7on*. Al%a7 met 8spiritu at t(e *ate of $ier 1 an% t(e latter offere% t(e use of (is truc; =it( t(e %river an% (elper. 6(e offer =as accepte% 27 Al%a7 an% (e instructe% (is c(ec;er to let o2erto 8spiritu (aul t(e fertilizer. 8spiritu ma%e t=o (auls of zoo2a*s of fertilizer per trip. 6(e fertilizer =as %elivere% to t(e %river an% (elper of 8spiritu =it( t(e necessar7 =a72ill receipts. 8spiritu, (o=ever, %i% not %eliver t(e fertilizer to t(e Atlas 'ertilizer 2o%e*a at 4an%alu7on*. 6(us, 9enito Al%a7 =as compelle% to pa7 t(e value of t(e 1// 2a*s of fertilizers to Atlas 'ertilizer Corporation an% file% a compliant a*ainst o2erto 8spiritu an% 9ienveni%o Gelisan =it( t(e C'& of 4anila. 6(e C'& of 4anila rule% t(at o2erto 8spiritu =as t(e onl7 one lia2le. ?n appeal, CA rule% t(at 9ienveni%o Gelisan is li;e=ise lia2le for 2ein* t(e re*istere% o=ner of t(e truc;. IssueB B(et(er or not Gelisan s(oul% 2e (el% soli%aril7 lia2le =it( 8spiritu, 2ein* t(e re*istere% o=ner of t(e truc;. Ge$dB )es, Gelisan s(oul% 2e (el% soli%aril7 lia2le =it( 8spiritu, 2ein* t(e re*istere% o=ner of t(e truc;. 6(e Court (as invaria2l7 (el% in several %ecisions t(at t(e re*istere% o=ner of a pu2lic service ve(icle is responsi2le for %ama*es t(at ma7 arise from conseDuences inci%ent to its operation or t(at ma7 2e cause% to an7 of t(e passen*ers t(erein. 6(e claim of t(e petitioner t(at (e is not lia2le in vie= of t(e lease contract e@ecute% 27 an% 2et=een (im an% o2erto 8spiritu =(ic( e@empts (im from lia2ilit7 to t(ir%

persons, cannot 2e sustaine% 2ecause it appears t(at t(e lease contract, a%verte% to, (a% not 2een approve% 27 t(e $u2lic service Commission. &t is settle% in our :urispru%ence t(at if t(e propert7 covere% 27 a franc(ise is transferre% or lease% to anot(er =it(out o2tainin* t(e reDuisite approval, t(e transfer is not 2in%in* upon t(e pu2lic or t(ir% persons. 0o=ever, Gelisan is not =it(out recourse 2ecause (e (as a ri*(t to 2e in%emnifie% 27 o2erto 8spiritu for t(e amount t(at (e ma7 2e reDuire% to pa7 as %ama*es for t(e in:ur7 cause% to 9enito Al%a7, since t(e lease contract in Duestion, alt(ou*( not effective a*ainst t(e pu2lic for not (avin* 2een approve% 27 t(e $u2lic Service Commission, is vali% an% 2in%in* 2et=een t(e contractin* parties. 6(e Court rule% t(at t(e petitioner is D8N&8D. Bit( costs a*ainst t(e petitioner. &ENEDICTO !s. IAC FactsB $rivate respon%ent Green(ills Boo% &n%ustries Compan7, &nc., a lum2er manufacturin* firm, operates a sa=mill in -uirino. Sometime in 4a7 1"8/, private respon%ent 2oun% itself to sell an% %eliver to 9lue Star 4a(o*an7, &nc. !H9lue StarI#, a compan7 in 9ulacan 1//,/// 2oar% feet of sa=n lum2er =it( t(e un%erstan%in* t(at an initial %eliver7 =oul% 2e ma%e on 4a7 1+, 1"8/. 6o effect its first %eliver7, private respon%entJs resi%ent mana*er Domina%or Cruz, contracte% <ir*ilio .icu%en, t(e %river of a car*o truc; to transport its sa=n lum2er to t(e consi*nee 9lue Star in <alenzuela, 9ulacan. 6(e car*o truc; =as re*istere% in t(e name of petitioner 4a. .uisa 9ene%icto, t(e proprietor of 4acoren 6ruc;in*, a 2usiness enterprise en*a*e% in (aulin* frei*(t. ?n 4a7 1+, 1"8/, cruz in t(e presence an% =it( t(e consent of %river .icu%en, supervise% t(e loa%in* of sa=n lum2er =it( invoice a2oar% t(e car*o truc;. 6(ereafter, t(e 4ana*er of 9lue Star calle% up Green(illsJ presi%ent, informin* (im t(at t(e sa=n lum2er on 2oar% t(e su2:ect car*o truc; (a% not 7et arrive% in 9ulacan. 6(e latter t(en informe% Green(illsJ resi%ent mana*er. Still, 9lue Star (a% not receive% t(e sa=n lum2er an% =ere constraine% to loo; for ot(er suppliers. 6(us, private respon%ent Green(ills file% criminal case a*ainst %river .uci%en for estafa an% also a*ainst petitioner 9ene%icto for recover7 of t(e value of t(e lost sa=n lum2er plus %ama*es 2efore t(e 6C of Da*upan Cit7. 6(e trial court rule% a*ainst 9ene%icto an% .uci%en. ?n appeal, t(e &AC affirme% t(e %ecision of t(e trial court in toto. IssueB B(et(er or not petitioner 9ene%icto, 2ein* t(e re*istere% o=ner of t(e carrier, s(oul% 2e (el% lia2le for t(e value of t(e un%elivere% or lost sa=n lum2er. Ge$dB )es, 9ene%icto is lia2le for t(e un%elivere% or lost sa=n lum2er as re*istere% o=ner. 6(ere is no %ispute t(at petitioner 9ene%icto (as 2een (ol%in* (erself out to t(e pu2lic as en*a*e% in t(e 2usiness of (aulin* or transportin* *oo%s for (ire or compensation. $etitioner 9ene%icto is, in 2rief, a common carrier. 6(e prevailin* %octrine on common carrier ma;es t(e re*istere% o=ner lia2le for conseDuences flo=in* from t(e operations of t(e carrier, even t(ou*( t(e specific ve(icle involve% ma7 alrea%7 (ave 2een transferre% to anot(er person. 6(is %octrine rests upon t(e principle t(at in %ealin* =it( ve(icles re*istere% un%er t(e $u2lic Service .a=, t(e pu2lic (as t(e ri*(t to assume t(at t(e re*istere% o=ner is t(e actual or la=ful o=ner t(ereof. &t =oul% 2e ver7 %ifficult an% often impossi2le as a practical matter, for mem2ers of t(e *eneral pu2lic to enforce t(e ri*(ts of action t(at t(e7 ma7 (ave for in:uries inflicte% 27 t(e ve(icles 2ein* ne*li*entl7 operate% if t(e7 s(oul% 2e reDuire% to prove =(o t(e actual o=ner is. 6(e re*istere% o=ner is not allo=e% to %en7 lia2ilit7 27 provin* t(e i%entit7 of t(e alle*e% transferee. &n t(e case at 2ar, private respon%ent is not reDuire% to *o 2e7on% t(e ve(icleJs certificate of re*istration to ascertain t(e o=ner of t(e carrier. &n t(is re*ar%, t(e letter presente% 27 petitioner alle*e%l7 =ritten 27 9en:amin 6ee a%mittin* t(at .icu%en =as (is %river, (a% no evi%entiar7 value not onl7 2ecause

9en:amin 6ee =as not presente% in court to testif7 on t(is matter 2ut 2ecause of t(e afore mentione% %octrine. 6o permit t(e ostensi2le or re*istere% o=ner to prove =(o t(e actual o=ner is, =oul% 2e to set at nau*(t t(e purpose or pu2lic polic7 =(ic( infuses t(at %octrine. 6(e Court rule% t(at t(e $etition fro evie= is Denie%. PGI(TRANCO +ER,ICE ENTERPRI+E+3 INC. !s. CA FactsB 6(e victim amon Acuesta =as ri%in* in (is eas7 ri%er 2ic7cle alon* Cal2a7o* Cit7. Also in Cal2a7o* Cit7, %efen%ant $(iltranco %riven 27 %efen%ant o*asiones Dolina 4anil(i* =as 2ein* pus(e% 27 some persons in or%er to start its en*ine. As t(e 2us =as pus(e%, its en*ine starte% t(ere27 t(e 2us continue% its runnin* motion an% it occurre% at t(e time =(en amon A. Acuesta =(o =as still ri%in* on (is 2ic7cle =as %irectl7 in front of t(e sai% 2us. As t(e en*ine of $(iltranco starte% a2ruptl7 an% su%%enl7, its runnin* motion =as also en(ance% 27 t(e sai% functionin* en*ine, t(ere27 2umpe% on t(e victim amon. As a result, fell an% =as ran over 27 t(e 2us. Still, t(e 2us %i% not stop alt(ou*( it (a% alrea%7 2umpe% an% ran over t(e victimE instea%, it procee%e% runnin*. 6(ereafter, $Fs*t. )a2ao =(o =as t(en :o**in* approac(e% t(e 2us %river %efen%ant 4anil(i* an% si*nale% (im to stop, 2ut t(e latter %i% not listen. So, t(e police officer intro%uce% (imself an% or%ere% t(e latter to stop. 6(e sai% %efen%ant %rivers stoppe% t(e $(iltranco 2us. 6(e trial court ren%ere% a %ecision or%erin* t(e petitioners to :ointl7 an% severall7 pa7 t(e private respon%ent. ?n appeal, t(e CA affirme% t(e %ecision of t(e trial court. IssueB B(et(er or not petitioner $(iltranco as t(e re*istere% o=ner of a pu2lic service is lia2le for %ama*es arisin* from t(e tortuous acts of t(e %river. Ge$dB )es, petitioner $(iltranco as t(e re*istere% o=ner is still lia2le. Article 2176 of t(e Civil Co%e provi%es t(at, HB(oever 27 act or omission causes %ama*e to anot(er, t(ere 2ein* fault or ne*li*ence, is o2li*e% to pa7 for t(e %ama*e %one. Suc( fault or ne*li*ence, if t(ere is no preGe@istin* contractual relation 2et=een t(e parties, is calle% a DuasiG %elict an% is *overne% 27 t(e provision of t(is C(apter. 'urt(er, Article 218/ of t(e Civil Co%e states t(at, Ht(e o2li*ation impose% 27 Art. 2176 is %eman%a2le not onl7 for oneJs o=n acts or omissions, 2ut for t(ose of persons for =(om one is responsi2le. &n t(e case at 2ar, t(e lia2ilit7 of t(e re*istere% o=ner of a pu2lic service ve(icle, li;e petitioner $(iltranco, for %ama*es arisin* from t(e tortuous acts of t(e %river is primar7, %irect, an% :oint an% severall7 or soli%ar7 =it( t(e %river. Since t(e emplo7erJs lia2ilit7 is primar7, %irect an% soli%ar7, its onl7 recourse if t(e :u%*ment for %ama*es is satisfie% 27 it is to recover =(at it (as pai% from its emplo7ee =(o committe% t(e fault or ne*li*ence =(ic( *ave rise to t(e action 2ase% on DuasiG %elict. 6(e court rule% t(at t(e petition is partl7 *rante%. +ANTO+ !s. +I&*# FactsB $rior to April 26, 1"63, <i%a% =as %ul7 aut(orize% passen*er :eepne7 operator. Also, prior to sai% %ate, petitioner Santos =as t(e o=ner of a passen*er :eep, 2ut (e (a% no certificate of pu2lic convenience for t(e operation of t(e ve(icle as a pu2lic passen*er :eep. Santos t(en transferre% (is :eep to t(e name of <i%a% so t(at it coul% 2e operate% un%er t(e latterJs certificate of pu2lic convenience. 6(us, Santos 2ecame =(at is ;no=n as a ;a2it operator. 'or t(e protection of Santos, <i%a% e@ecute% a reGtransfer %ocument to t(e former, =(ic( =as to 2e a private %ocument presuma2l7 to 2e re*istere% if an% =(en it =as %eci%e% t(at t(e passen*er :eep of Santos =as to 2e =it(%ra=n from t(e ;a2it a*reement.

?n April 26, 1"63, private respon%ent Si2u* =as 2umpe% 27 a passen*er :eepne7 operate% 27 vi%a% an% %riven 27 Severo Gra*as. 6(us, file% a complaint for %ama*es. 5u%*ment =as ren%ere% in favor of Si2u*. ?n April 1/, 1"61, t(e S(eriff of 4anila levie% on a motor ve(icle, re*istere% in t(e name of <i%a%, an% sc(e%ule% t(e pu2lic auction sale. 6(e ne@t %a7, Santos presente% a t(ir%Gpart7 claim =it( t(e S(eriff, as a result, Santos, institute% an Action for Dama*es an% &n:unction =it( a pra7er for $reliminar7 4an%ator7 &n:unction. ?n ?cto2er 11, 1"6+, 2ranc( S affirme% SantosJ o=ners(ip of t(e :eepne7 in Duestion. Si2u* sou*(t relief from respon%ent Appellate Court. espon%ent Court (el% t(at Santos ma7 not 2e permitte% to prove (is o=ners(ip over a particular ve(icle 2ein* levie% upon 2ut re*istere% in anot(erJs name in a separate action. IssueB B(et(er or not a :eepne7 re*istere% in t(e name of <i%a%, an aut(orize% pu2lic utilit7 operator 2ut is actuall7 o=ne% 27 Santos !t(e ;a2it operator#, =(ic( 2umpe% Si2u* 2e sol% at a pu2lic auction to satisf7 t(e courtJs a=ar%. Ge$dB )es, t(e :eepne7 un%er t(e H;a2it s7stemI =(ic( 2umpe% Si2u can 2e sol% at pu2lic auction to satisf7 t(e courtJs a=ar%. Sec. 2/ !*# of t(e $u2lic Service Act provi%esL Hit s(all 2e unla=ful for an7 pu2lic service or for t(e o=ner, lessee or operator t(ereof, =it(out t(e approval or aut(orization of t(e Commission previousl7 (a%G !*# to sell, alienate, mort*a*e, encum2er or lease its propert7, franc(ise certificates, privile*es, or ri*(ts, or an7 part t(ereof. &n t(e case at 2ar, Santos (a% fictitiousl7 sol% t(e :eepne7 to <i%a%, =(o (a% 2ecome t(e re*istere% o=ner an% operator of recor% at t(e time of t(e acci%ent. &t is true t(at <i%a% (a% e@ecute% a reG sale to Santos, 2ut t(e %ocument =as not re*istere%. Alt(ou*( Santos, as t(e ;a2it, =as t(e true o=ner as a*ainst <i%a%, t(e latter, as t(e re*istere% o=nerF operator an% *rantee of t(e franc(ise, is %irectl7 an% primaril7 responsi2le an% lia2le for %ama*es cause% to Si2u*, t(e in:ure% part7, as a conseDuence of t(e ne*li*ent or careless operation of t(e ve(icle. 6(is rulin* is 2ase% on t(e principle t(at t(e operator of recor% is consi%ere% t(e operator of t(e ve(icle in contemplation of la= as re*ar%s t(e pu2lic an% t(ir% persons even if t(e ve(icle involve% in t(e acci%ent (a% 2een sol% to anot(er =(ere suc( sale (a% not 2een approve% 27 t(e t(en $u2lic Service commission. 6(e court rule% t(at t(e petition for revie= file% 27 Santos is %ismisse%.

(ITA ENTERPRI+E+3 INC. !s. CA FactsB Sometime in 1"66, t(e spouses Nicasio ?campo an% 'rancisca Garcia, (erein private respon%ent purc(ase% in installment from t(e Delta 4otor Sales Corp. five 6o7ota Corona Stan%ar% cars to 2e use% as ta@ica2s. Since t(e7 (a% no franc(ise to operate ta@ica2s, t(e7 contracte% =it( petitioner, for t(e use of t(e latterJs certificate of pu2lic convenience in consi%eration of an initial pa7ment of $1,/// an% a mont(l7 rental of $2// per ta@i ca2 unit. A2out a 7ear later, one of sai% ta@ica2s %riven 27 t(eir emplo7ee, 8meterio 4artin, colli%e% =it( a motorc7cle =(ose %river, 'lorante Galvez, %ie% from t(e (ea% in:uries sustaine%. A criminal case =as file% a*ainst t(e %river =(ile a civil case =as file% a*ainst .ita enterprises see;in* for %ama*es. &n t(e C'& of 4anila, petitioner .ita 8nterprises =as a%:u%*e% lia2le for %ama*es as t(e re*istere% o=ner of t(e ta@ica2. 6(us, a =rit of e@ecution =as issue% an% one of t(e ve(icles of respon%ent spouses =as levie% upon an% sol% at pu2lic auction. 6(ereafter, respon%ent Nicasio ?campo %eci%e% to re*ister (is ta@ica2 in (is name, 2ut .ita 8nterprises alle*e%l7 refuse%. 0ence, t(e spouses file% a complaint. 6(e C'& of 4anila or%ere% .ita 8nterprises to transfer t(e re*istration certificate. ?n Appeal, t(e &AC mo%ifie% t(e %ecision.

IssueB B(et(er or not t(e parties entere% into a H;a2it s7stemI Ge$dB )es, t(e parties entere% into a H;a2it s7stemI. 6(e parties (erein operate% un%er an arran*ement, commonl7 ;no=n as t(e H;a2it s7stemI, =(ere27 a person =(o (as 2een *rante% a certificate of convenience allo=s anot(er person =(o o=ns motor ve(icles to operate un%er suc( franc(ise for a fee. A certificate of pu2lic convenience is a special privile*e conferre% 27 t(e *overnment. A2use of t(is privile*e 27 t(e *rantees t(ereof cannot 2e countenance%. 6(e ;a2it s7stem (as 2een i%entifie% as one of t(e root causes of t(e prevalence of *raft an% corruption in t(e *overnment transportation services. 6(us, t(e concept of 3a2it s7stem 2ein* contrar7 to pu2lic polic7 an% voi% an% e@istent, t(e court cannot allo= eit(er of t(e parties to enforce an ille*al contract 2u leaves t(em 2ot( =(ere it fin%s t(em. 6(e Court rule% t(at t(e %ecisions ren%ere% 27 t(e C'& of 4anila an% &AC are (ere27 annulle% an% set asi%e. TEIA MAR8ETIN# !s. IAC FactsB ?n 4a7 ", 1"7+, t(e %efen%ant 2ou*(t from t(e plaintiff a motorc7cle =it( complete accessories an% a si%ecar in t(e total consi%eration of $8,///.//. ?ut of t(e total purc(ase price t(e %efen%ant *ave a %o=n pa7ment of $1,7//.// =it( a promise t(at (e =oul% pa7 plaintiff t(e 2alance =it(in si@t7 %a7s. 6(e %efen%ant, (o=ever, faile% to compl7 =it( (is promise an% so upon (is o=n reDuest, t(e perio% of pa7in* t(e 2alance =as e@ten%e% to one 7ear in mont(l7 installments until 5anuar7 1"76 =(en (e stoppe% pa7in* an7more. 6(e plaintiff ma%e %eman%s 2ut :ust t(e same t(e %efen%ant faile% to compl7 t(us forcin* plaintiff to consult a la=7er an% file t(is action for (is %ama*e. &t also appears an% t(e court so fin%s t(at t(e %efen%ant purc(ase% t(e motorc7cle in Duestion an% t(e Court so fin%s t(at %efen%ant purc(ase% t(e motorc7cle in Duestion, particularl7 for t(e purpose of en*a*in* an% usin* t(e same in transportation 2usiness an% for t(is purpose sai% trimo2ile unit =as attac(e% to t(e plaintiffJs transportation line =(o (a% t(e franc(ise, so muc( so t(at in t(e re*istration certificate, t(e plaintiff appears to 2e t(e o=ner of t(e unit. 'urt(ermore, it appears to (ave 2een a*ree% furt(er 2et=een, t(e plaintiff an% t(e %efen%ant, t(at plaintiff =oul% un%erta;e t(e 7earl7 re*istration of t(e unit in Duestion =it( t(e .6C. 6(us, for t(e re*istration of t(e unit for t(e 7ear 1"76, per a*reement, t(e %efen%ant *ave to t(e plaintiff t(e amount of $82.// of rits re*istration, as =ell as t(e insurance covera*e of t(e unit. $etitioner 6e:a 4ar;etin* an%For An*el 5aucian file% an action for t(e Hsum of mone7 =it( %ama*esI. 6(e cit7 court ren%ere% :u%*ment in favor of petitioner. ?n appeal, t(e %ecision =as affirme% in toto. IssueB B(et(er or not ;a2it s7stem applies in t(e instant case. Ge$dB )es, t(e parties operate% un%er an a*reement calle% H;a2it s7stemI. 6(is is a s7stem =(ere27 a person =(o (as 2een *rante% a certificate of pu2lic convenience allo=s anot(er person =(o o=ns motor ve(icles to operate un%er suc( franc(ise for a fee. A certificate of pu2lic convenience is a special privile*e conferre% 27 t(e *overnment. Alt(ou*( not outri*(tl7 penalize% as a criminal offense, t(e ;a2it s7stem is invaria2l7 reco*nize% as 2ein* contrar7 to pu2lic polic7 an% t(erefore, voi% an% ine@istent un%er Article 11/1 of t(e Civil Co%e. 6(us, court =ill not ai% eit(er part7 to enforce an ille*al contract, 2ut =ill leave 2ot( =(ere it fin%s t(em. 6(e court rule% t(at t(e petition is (ere27 %ismisse% for lac; of merit. 6(e assaile% %ecision of t(e &AC no= t(e CA is A''& 48D.

MA#&OO !s. &ERNARDO FactsB 6(e spouses 4a*2oo are t(e parents of t(e 8G7ear ol% c(il% ;ille% in a motor ve(icle acci%ent, t(e ve(icle o=ne% 27 t(e %efen%ant 9ernar%o. At t(e time of t(e acci%ent, sai% passen*er :eepne7 =as %riven 27 Cora%o oDue. 6(e contract 2et=een Conra%o oDue an% %efen%ant Delfin 9ernar%o =as t(at oDue =as to pa7 to %efen%ant t(e sum of $8.//, =(ic( (e pai% to sai% %efen%ant, for privile*e of %rivin* t(e :eepne7, it 2ein* t(eir a*reement t(at =(atever earnin*s oDue coul% ma;e out of t(e use of t(e :eepne7 in transportin* passen*ers from one point to anot(er =oul% 2elon* entirel7 to Conra%o oDue. As a result of t(e acci%ent, Conra%o oDue =as prosecute% for (omici%e t(ru rec;less impru%ence 2efore t(e C'& of 4anila, an% t(at upon arrai*nment, Conra%o oDue plea%e% *uilt7 to t(e information an% =as sentence% to a :ail term, to in%emnif7 t(e (eirs of t(e %ecease% in t(e sum of $3, ///.// =it( su2si%iar7 imprisonment in case of insolvenc7. Conra%o oDue serve% (is sentence 2ut (e =as not a2le to pa7 t(e in%emnit7 2ecause (e =as insolvent. IssueB B(et(er or not an emplo7erGemplo7ee relations(ip e@ists 2et=een a :eepne7G o=ner an% a %river un%er a H2oun%ar7 s7stemI a*reement. Ge$dB )es, t(ere e@ist an emplo7erGemplo7ee relations(ip un%er a 2oun%ar7 s7stem arran*ement. 6(e features =(ic( c(aracterize t(e 2oun%ar7 s7stemG namel7, t(e fact t(at t(e %river %oes not receive a fi@e% =a*e 2ut *ets onl7 t(e e@cess of t(e amount of fares collecte% 27 (im over t(e amount (e pa7s to t(e :eepG o=ner, an% t(at t(e *asoline consume% 27 t(e :eepne7 is for t(e account of t(e %riverG are not sufficient to =it(%ra= t(e relations(ip 2et=een t(em from t(at of emplo7erG emplo7ee. ConseDuentl7, t(e :eepne7G o=ner is su2si%iaril7 lia2le as emplo7er in accor%ance =it( article 1/3 of t(e evise% $enal Co%e. 6(e Court rule% t(at t(e :u%*ment appeale% from is (ere27 affirme%. #ANLON !s. CA FactsB &n 1"6+, private respon%ent 6umam2in* contracte% t(e services of petitioner Ganzon to (aul 3/+ tons of scrap iron from 4ariveles, 9ataan on 2oar% t(e latterJs li*(ter. $ursuant to t(eir a*reement, private respon%ent %elivere% t(e scrap iron to t(e captain for loa%in*. B(en (alf of t(e scrap iron =as loa%e%, 4a7or A%vincula %eman%e% $+,///.// from private respon%ents, =(ic( t(e latter refuse% to *ive, promptin* t(e 4a7or to %ra= (is *un an% s(oot at (im. 6(e *uns(ot =as not fatal 2ut (e (a% to 2e ta;en to a (ospital. 6(ereafter, t(e loa%in* of t(e scrap iron =as resume%. 6(e Actin* 4a7or, accompanie% 27 t(ree policemen, or%ere% t(e captain an% (is cre= to %ump t(e scrap iron, =it( t(e rest 2rou*(t to Nassco Compoun%. A receipt =as issue% statin* t(at t(e 4unicipalit7 of 4ariveles (a% ta;en custo%7 of t(e scrap iron. IssueB B(et(er or not petitioner is *uilt7 of 2reac( of contract of transportation an% in imposin* a lia2ilit7 a*ainst (im commencin* from t(e time t(e scrap iron =as place% in (is custo%7 an% control (ave no 2asis in fact an% in la=. Ge$dB )es, petitioner is *uilt7 of 2reac( of t(e contract of transportation. 97 t(e sai% act of %eliver7, t(e scraps =ere uncon%itionall7 place% in t(e possession an% control of t(e common carrier, an% upon t(eir receipt 27 t(e carrier for transportation, t(e contract of carria*e =as %eeme% perfecte%. ConseDuentl7, t(e petitionerG carrierJs e@traor%inar7 responsi2ilit7 for t(e loss, %estruction or %eterioration of t(e *oo%s commence%. $ursuant to Article 1736, suc( e@traor%inar7 responsi2ilit7 =oul% cease onl7 upon t(e %eliver7, actual or constructive, 27 t(e carrier to t(e consi*nee, or to t(e person =(o (as a ri*(t to receive t(em. 6(e

fact t(at part of t(e s(ipment (a% not 2een (ea%e% t(e li*(ter %i% not impair t(e sai% contract of transportation as t(e *oo%s remaine% in t(e custo%7 an% control of t(e carrier, al2eit still unloa%e%. 6(e Court rule% t(at t(e petition is D8N&8D.

EA+TERN +GIPPIN# (INE+3 INC. !s. CA FactsB ?n Septem2er 1, 1"78, t(irteen coils of uncoate% 7G =ire stress relieve% for preG stresse% concrete =ere s(ippe% on 2oar% t(e vessel H5upri <entureI o=ne% an% operate% 27 petitioner, for %eliver7 to stresste; $ostG 6ensionin* $(ilippines in 4anila. 6(e sai% car*o =as insure% 27 respon%ent operator 8. azon, from =(om t(e consi*neeJs 2ro;er receive% for %eliver7 to consi*neeJs =are(ouse. &t appears t(at =(ile en route, t(e vessel encountere% ver7 rou*( seas an% storm7 =eat(er, for t(e %a7s, =(ic( cause% it to poun% an% roll (eavil7. 6(e coils =(ic( =ere =rappe% in 2urlap clot( an% car%2oar% paper =ere store% in t(e lo=er (ol% of t(e (atc( of t(e vessel =(ic( =ere rust7 on one si%e eac( an% it =as foun% t(at t(e H=ettin*I =as cause% 27 fres( =ater t(at entere% t(e (atc(. 6(e complaint t(at =as file% 27 t(e first Nation=i%e Assurance Corporation !insurer# a*ainst 8astern S(ippin* .ines an% '. azon in 6C, 4anila =as %ismisse%. ?n appeal, t(e :u%*ment appeale% from is (ere27 S86 AS&D8. ?nl7 8astern S(ippin* .ines, &nc. file% t(is petition. IssueB B(et(er or not rains an% rou*( is consi%ere% as caso fortuito =(ic( =oul% e@empt petitioner from lia2ilit7 for t(e %eterioration of t(e car*o. Ge$dB No, suc( is not consi%ere% caso fortuito =(ic( =oul% e@empt from lia2ilit7 for t(e %eterioration of t(e car*o. Art. 1737 of t(e Civil Co%e provi%es t(at, Hcommon carrier are 2oun% to o2serve e@traor%inar7 vi*ilance over *oo%s accor%in* to all circumstances of eac( case.I 'urt(er Article 173+ of t(e Civil Co%e provi%es t(at, Hif t(e *oo%s are lost, %estro7e%, or %eteriorate%, common carriers are presume% to (ave 2een at fault or to (ave acte% ne*li*entl7, unless t(e7 prove t(at t(e7 o2serve% e@traor%inar7 %ili*ence as reDuire% in Article 1733.I &n t(e case at 2ar, (eav7 rains an% rou*( seas =ere not caso fortuito, 2ut normal occurrences t(at an oceanG *oin* vessel, particularl7 in t(e mont( of Septem2er, is a mont( of rains an% (eav7 seas =oul% encounter as a matter of routine. 6(e7 are not unforeseen nor unforeseea2le. 6(ese are con%itions t(at oceanG *oin* vessels =oul% encounter an% provi%e for, in t(e or%inar7 course of vo7a*e. 6(at rain =ater !not sea =ater# foun% its =a7 into t(e (ol%s of t(e 5upri <enture is a clear in%ication t(at care an% foresi*(t %i% not atten% t(e closin* of s(ips (atc(es so t(at rain =ater =oul% not fin% its =a7 into t(e car*o (ol%s of t(e s(ip. Since, t(e carrier (as faile% to esta2lis( an7 caso fortuito, t(e presumption 27 la= of fault or ne*li*ence on t(e part of t(e carrier applies. 6(e Court rule% t(at t(e petition is D&S4&SS8D. +AR8IE+ TO*R+ PGI(IPPINE+ !s. CO*RT OF APPEA(+ FactsB ?n Au*ust 31, 1"81, 'atima 2oar%e% petitionerJs De lu@e 2us in 4anila on (er =a7 to .e*aspi Cit7. 0er 2rot(er (elpe% (er loa% t(ree pieces of lu**a*e containin* all of (er optometr7 revie= 2oo;s, materials an% eDuipment, trial contact lenses, passport an% visa. 0er 2elon*in*s =ere ;ept in t(e 2a**a*e compartment an% %urin* t(e stopover at Daet, it =as %iscovere% t(at onl7 one 2a* (a% remaine% in t(e 2a**a*e compartment. Some of t(e passen*ers su**este% retracin* t(e route to tr7 to recover t(e items, 2ut t(e %river i*nore% t(em an% procee%e% to .e*aspi Cit7. 'atima reporte% t(e loss to (er mot(er, =(o =ent to petitionerJs office. $etitioner merel7 offere% (er one t(ousan% pesos for eac( piece of lu**a*e lost, =(ic( s(e turne% %o=n. 'atima as;e% t(e (elp of ra%io

stations an% even from $(iltranco 2us %rivers =(o plie% t(e same route. 6(us, one of 'atimaJs 2a*s =as recovere%. espon%ents, t(rou*( counsel, %eman%e% satisfaction of t(eir complaint from petitioner. $etitioner apolo*ize% t(rou*( a letter. After more t(an nine mont(s of fruitless =aitin*, respon%ents %eci%e% to file t(e case. 6(e trial court rule% in favor of respon%ents. ?n appeal, t(e appellate court affirme% t(e trial courtJs :u%*ment. IssueB B(et(er or not petitioner is lia2le for t(e lost 2a**a*eJs of 'atima. Ge$dB 6(e petitioner is lia2le for t(e lost 2a**a*eJs. ,n%er t(e Civil Co%e, Hcommon carriers from t(e nature of t(eir 2usiness an% for reasons of pu2lic polic7 are 2oun% to o2serve e@traor%inar7 %ili*ence an% vi*ilance over *oo%s transporte% 27 t(e,I an% t(is lia2ilit7 Hlast from t(e time t(e *oo%s are uncon%itionall7 place% in t(e possession of, an% receive% 27 t(e carrier for transportation until t(e same are %elivere%, actuall7 or constructivel7, 27 t(e carrier to t(e person =(o (as a ri*(t to receive t(em, Hunless t(e loss is %ue to an7 of t(e e@cepte% causes un%er Article 1731 t(ereof. &n t(e case at 2ar, t(e cause of t(e loss =as petitionerJs ne*li*ence in not ensurin* t(at t(e %oors of t(e 2a**a*e compartment of its 2us =ere securel7 fastene%. As a result of t(is lac; of care, almost all t(e 2a**a*e =as lost to t(e pre:u%ice of t(e pa7in* passen*ers. 6(us, petitioner is (el% lia2le. 6(e Court affirme% t(e %ecision of t(e Court of Appeals =it( mo%ification.

,A(ENL*E(A GARDJOOD AND IND*+TRIA( +*PP(? INC. !s. CA FactsB <alenzuela (ar%=oo% entere% into an a*reement =it( Seven 9rot(er S(ippin* Corporation =(ere27 t(e latter un%ertoo; to loa% on 2oar% its vessel 4F< Seven Am2assa%or t(e formers lauan roun% lo*s num2erin* "1/ at t(e port of &sa2ela for s(ipment to 4anila. $etitioner insure% t(e lo*s a*ainst loss an%For %ama*e =it( Sout( Sea Suret7 an% &nsurance Compan7. 6(e sai% vessel san; resultin* on t(e loss of plaintiffJs insure% 2a*s. 9ot( respon%ent an% insurer %enie% lia2ilit7. After trial, t(e court (el% t(at t(e pro@imate cause of t(e los is t(e ne*li*ence of t(e captain an% t(e stipulation in t(e c(arter part7 limitin* respon%entJs lia2ilit7 is voi% 2ein* a*ainst pu2lic polic7 citin* Article 171+ of t(e Civil Co%e. 6(e Court of Appeals affirme% in part t(e 6C :u%*ment 27 sustainin* t(e lia2ilit7 of Sout( Suret7 an% &nsurance Compan7, 2ut mo%ifie% it 27 (ol%in* t(at Seven 9rot(ers =as not lia2le for t(e lost of t(e car*o. IssueB B(et(er or not t(e stipulation in t(e c(arter part7 e@emptin* t(e s(ipGo=ner from lia2ilit7 for t(e loss of t(e car*o arisin* from t(e ne*li*ence of its captain vali%. Ge$d B 6(e stipulation in t(e instant case is vali%. &n a contract of private carria*e, t(e parties ma7 vali%l7 stipulate t(at responsi2ilit7 for t(e car*o rests solel7 on t(e c(arterer, e@emptin* t(e s(ipGo=ner from lia2ilit7 for t(e loss of or %ama*e to t(e car*o cause% even 27 t(e ne*li*ence of t(e s(ip captain. $ursuant to Article 13/6 of t(e Civil Co%e, suc( stipulation is vali% 2ecause it is freel7 entere% into 27 t(e parties an% t(e same is not contrar7 to la=, morals, *oo% customs, pu2lic or%er or pu2lic polic7. &n t(e case at 2ar, t(e c(arter part7 2et=een t(e petitioner an% private respon%ent stipulate% t(at t(e Ho=ners s(all not 2e responsi2le for loss, split, s(ort lan%in*, 2rea;a*es an% an7 ;in% of %ama*es to t(e car*oI. 6(is stipulation is %eeme% vali% as it is un%ispute% t(at private respon%ent acte% as a private carrier in transportin* petitionerJs lauan lo*s. 6(us, Article 171+ an% ot(er Civil Co%e provisions on common

carriers =(ic( =ere cite% 27 t(e petitioner ma7 not 2e applie% unless e@pressl7 stipulate% 27 t(e parties in t(eir c(arter part7. 6(e petition is %enie% 27 t(e Court.

?O&IDO !s. CO*RT OF APPEA(+ FactsB Spouses 6ito an% .en7 6um2o7 an% t(eir minor c(il%ren 2oar%e% a )o2i%o .iner 2us at Suri*ao%el Sur. alon* $icop oa%, A*usan %el Sur, t(e left front tire of t(e 2us e@plo%e%. 6(e 2us fell into a ravine aroun% t(e t(ree feet from t(e roa% an% struc; a tree. 6(e inci%ent resulte% in t(e %eat( if 6ito 6um2o7 an% p(7sical in:uries to ot(er passen*ers. .en7 file% a case of 2reac( of contract of carria*e a*ainst petitioners. 6(e o=ners of )o2i%o .iner 9us. Al2erto an% Cresencio )o2i%o raise% t(e affirmative %efense of caso fortuito. 6(e7 claime% t(at t(e 2us =as not full as t(ere =ere onl7 32 passen*ers out of t(e 12 seatin* capacit7. 6(e7 also claime% t(at t(e 2us =as runnin* as spee% pr H6/ to +/I an% t(at t(e tire =as 2ran%Gne=. espon%ents on t(e ot(er (an%, asserte% t(e violation of t(e contract of carria*e =as 2rou*(t a2out 27 t(e %riverJs failure to e@ercise t(e %ili*ence reDuire% of t(e carrier. .en7 claime% t(at t(e =as runnin* fast in a =in%in* roa% =(ic( =as not cemente% an% =as =et 2ecause of t(e rain. IssueB B(et(er or not t(e tire 2lo= out is consi%ere% a fortuitous event =(ic( =oul% e@empt petitioners from lia2ilit7. Ge$dB 6(e tire 2lo= out is not consi%ere% as a fortuitous event =(ic( =oul% e@empt petitioners from lia2ilit7. Article 17+6 of t(e Civil Co%e provi%es t(at, Hin case of %eat( or in:uries to passen*ers, common carriers are presume% to (ave 2een at fault or to (ave acte% ne*li*entl7 unless t(e7 prove t(at t(e7 o2serve% e@traor%inar7 %ili*ence as prescri2e% in Articles 1733 an% 17++.I 'urt(er, Article 17++ provi%es t(at Ha common carrier is 2oun% to carr7 t(e passen*ers safel7 as far as (uman care an% foresi*(t can provi%e usin* t(e utmost %ili*ence of ver7 cautious persons =it( %ue re*ar% for all circumstances..I &n t(e case at 2ar, t(e e@plosion of t(e ne= tire ma7 not 2e consi%ere% a fortuitous event. 6(ere are (uman factors involve% in t(e situation. 6(e fact t(at t(e tire =as ne= %i% not impl7 t(at it =as entirel7 free from manufacturin* %efects or t(at it =as properl7 mounte% on t(e ve(icle. Neit(er ma7 t(e fact t(at t(e tire 2ou*(t an% use% in t(e ve(icle is of a 2ran% name note% for Dualit7, resultin* in t(e conclusion t(at it coul% not e@plo%e =it(in five %a7s use. 9e t(at as it ma7, it is settle% t(at an acci%ent cause% eit(er 27 %efects in t(e automo2ile or t(rou*( t(e ne*li*ence of its %river is not a case fortuit7 t(at =oul% e@empt t(e carrier from lia2ilit7 for %ama*es. 4oreover, a common carrier ma7 not 2e a2solve% from lia2ilit7 in case of force ma:eure or fortuitous event alone. 6(e common carrier must still prove t(at it =as not ne*li*ent in causin* t(e %eat( or in:ur7 resultin* from an acci%ent. 6(us, (avin* faile% to %isc(ar*e its %ut7 to overt(ro= t(e presumption of ne*li*ence =it( clear an% convincin* evi%ence, petitioners are (ere27 (el% lia2le for %ama*es. 6(e Court rule% t(at t(e Decision of t(e Court of Appeals is (ere27 affirme%. COMPANIA MARITIMA !s. IN+*RANCE CO. OF NORTG AMERICA FactsB 4acleo% an% Co. contracte%, first 27 telep(one an% later confirme% 27 a formal =ritten 2oo;in* issue% 27 4acleo% an% Co. t(e services of t(e petitioner Campania 4aritime for t(e s(ipment of 2ales of (emp from Davao to 4anila. 6=o li*(ters of t(e petitioner loa%e% sai% car*o from 4acleo%Js =(arf at Davao

a=aitin* t(e arrival of anot(er vessel of t(e petitioner for loa%in*. ?ne of t(e li*(ters sun; =(ic( 4acleo% suffere% %ama*e $+1, /18.++. $etitioner %enie% t(e lia2ilit7 on t(e *roun%s t(at t(ere =as no 2ill of la%in* issue% t(ere27 resultin* to t(e nonGe@istence of carria*e contract, t(at t(e sin;in* =as %ue to a fortuitous event an% t(at t(e respon%ent (as no personalit7. IssueB B(et(er or not t(ere is a perfecte% contract of carria*e. Ge$dB 6(ere =as a complete contract of carria*e t(e consummation of =(ic( (as alrea%7 2e*un =(en t(e s(ipper %elivere% t(e car*o to t(e carrier an% t(e latter too; possession of t(e same 27 placin* it on a li*(ter manne% 27 its aut(orize% emplo7ees, un%er =(ic( 4acleo% 2ecame entitle% to t(e privile*e secure% to (im 27 la=. 6(e responsi2ilit7 of t(e carrier commence% on t(e actual %eliver7 to, or receipt 27, t(e carrier or its aut(orize% a*ent, of t(e *oo%s. 6(e 2ar*es or li*(ters =ere merel7 emplo7e% as t(e first step of t(e vo7a*e. As to t(e issuance of a 2ill of la%in*, alt(ou*( Art. 3+/ of t(e Co%e of Commerce provi%es t(at t(e s(ipper as =ell as t(e carrier ma7 mutuall7 %eman% t(at a 2ill of la%in* 2e issue%, it is not in%ispensa2le. As re*ar%s to t(e form of t(e contract of carria*e, it can 2e sai% t(at provi%e% t(ere is a meetin* of t(e min%s an% from suc( meetin* arise ri*(ts an% o2li*ations, t(ere s(oul% 2e no limitations as to form. A 2ill of la%in* is not essential to t(e contract, alt(ou*( it ma7 2ecome o2li*ator7 27 reason of t(e re*ulations or as a con%ition impose% in t(e contract 27 t(e a*reement of t(e parties t(emselves. 6(e Co%e of Commerce %oes not %eman% as a necessar7 reDuisite in t(e contract of transportation, t(e %eliver7 of a 2ill of la%in* to t(e s(ipper, 2ut *ives t(e ri*(t to 2ot( t(e s(ipper an% carrier to mutuall7 %eman% of eac( ot(er t(e %eliver7 of t(e sai% 2ill. 5u%*ment a*ainst petitioner is affirme%. (* DO !s. &INAMIRA FactsB Delta Compan7 of Ne= )or; s(ippe% si@ cases of films an% p(oto*rap(ic supplies to 9inamira. 6(e s(ip arrive% in Ce2u an% %isc(ar*e% (er car*o, placin* it in t(e custo%7 of t(e arrastre operator appointe% 27 t(e 9ureau of Customs. 6(e car*o =as c(ec;e% 2ot( 27 t(e steve%orin* compan7 an% t(e arrastre operator an% =as foun% in *oo% or%er. ?n t(e contract of carria*e, (o=ever, it =as stipulate% t(at t(e carrier in no lon*er lia2le for t(e car*o upon its %eliver7 to t(e (an%s of t(e customs aut(orities. 6(e car*o =as later %elivere% to 9inamira an% a marine surve7or foun% t(at some =ere missin* value% at $321.63. .o=er Court (el% t(at t(e carrier lia2le. IssueB B(et(er or not t(e stipulations limitin* t(e lia2ilit7 of t(e carrier is vali%. Ge$dB B(ile %eliver7 of t(e car*o to t(e customs aut(orities is not %eliver7 to t(e consi*nee of t(e person =(o (as t(e ri*(t to receive t(em as contemplate% in Article 1736 of t(e Civil Co%e 2ecause in suc( case t(e *oo%s are still in t(e (an%s of t(e *overnment an% t(e o=ner cannot 2e e@ercise %ominion over t(em, (o=ever, t(e parties ma7 a*ree to limit t(e lia2ilit7 of t(e carrier consi%erin* t(at t(e *oo%s (ave still to *o t(rou*( t(e inspection of t(e customs aut(orities 2efore t(e7 are actull7 turne% over to t(e consi*nee. 6(ese stipulations limitin* lia2ilit7 is not contrar7 to morals or pu2lic polic7. 6(is is a situation =(ere t(e carrier loses control of t(e *oo%s 2ecause of a custom re*ulation an% it is unfair t(at it 2e ma%e responsi2le for an7 loss or %ama*e t(at ma7 2e cause% to t(e *oo%s %urin* t(e interre*num. 5u%*ment reverse%.

AMERICAN PRE+IDENT (INE+3 (TD. !s. CA FactsB American $resi%ent .ines !A$.# vessel $resi%ent Bas(in*ton!Carrier for s(ort# receive an% loa%e% on 2oar% at .os An*eles, California, t(e su2:ect of t(e s(ipment of one !1# unit of Su2mersi2le 5oc;7 $ump, containe% in !3# 2o@es, complete an% in *oo% or%er con%ition, covere% 27 Commercial &nvoice No. 6/2"+6, an% $ac;in* .ist. &t =as for transport to 4anila in favor or .in%ale Development Corporation, t(e consi*nee. 6(e CA &8 , t(ru 'or=ar%ers Direct Container .ines, &nc., issue% its clean 9ill of .a%in* No. C0&G4N.G 12/. 6(e s(ipment =as insure% 27 'G, &ns. Corp. for $181, 812.21 6(e %efen%ant CA &8 transs(ippe% t(e s(ipment in 0on*;on* on 2oar% t(e vessel 4S P$artasJ, =(ic( arrive% at t(e $ort of 4anila, on Septem2er 6, 1"87. ?n t(e same %ate, t(e s(ipment =as %isc(ar*e% an% turne% over to 4arina $ort Services, &nc.!Arrastre/, =it( one 2o@ in 2a% or%er con%ition, s(o=in* si*ns of (avin* 2een previousl7 tampere%E (ence, covere% 27 a 6urn over Surve7 Car*oes No. AG/88+1. 6(e car*o remaine% =it( t(e A AS6 8 for ten %a7s until it =as =it(%ra=n on April 16, 1"87 27 t(e %efen%ant 2ro;er =(ic( %elivere% t(e same to t(e consi*nee, aforementione%, at its =are(ouse, =(ere t(e sai% s(ipment =as e@amine% an% inventorie%, an% t(e one 2o@ %isc(ar*e% from t(e CA &8 Js vessel in 2a% or%er con%ition, =as foun% s(ort of one piece =aster cone an% one piece 4ain elief value%, per invoice, at $28, 218.+8. $rivate respon%ent 'G, &ns. Corp. file% a complaint for recover7 of a sum of mone7 a*ainst A$., 4arina $ort Services, &nc., an% .C4 9ro;era*e Co., &nc. 6(e trial court foun% in favor of private respon%ent an% or%ere% A$. to pa7 private respon%ent t(e amount of $28, 218.+8. &n actual %ama*es, IssueB B(at la= is applica2le t(e Civil Co%e provisions or C?GSAO Ge$dB 6(e Civil Co%e. Bit( re*ar% to t(e contention of t(e carrier t(at C?GSA s(oul% control in t(is case, t(e same is of no moment. Art. 1763 of t(e Ne= Civil Co%e provi%es t(at Ht(e la=s of t(e countr7 to =(ic( t(e *oo%s are transporte% s(all *overn t(e lia2ilit7 of t(e common carrier in case of loss, %estruction an% %eterioration.I 6(is means t(at t(e la= of t(e $(ilippines on t(e Ne= Civil Co%e. ,n%er 1766 of NCC, Hin all matter not re*ulate% 27 t(is Co%e, t(e ri*(ts an% o2li*ations of common carriers s(all 2e *overne% 27 t(e Co%e of Commerce an% 27 Special .a=s.I Art. 1736G1738, NCC *overns sai% ri*(ts an% o2li*ations. 6(erefore, alt(ou*( Sec 1!+# of C?GSA states t(at t(e carrier s(all not 2e lia2le in an amount e@cee%in* M+// per pac;a*e unless t(e value of t(e *oo%s (a% 2een %eclare% 27 t(e s(ipper an% asserte% in t(e 2ill of la%in*, sai% section is merel7 supplementar7 to t(e provisions of t(e Ne= Civil Co%e.

+ER,ANDO !s. PGI(IPPINE +TEAM NA,I#ATION CO. FactsB Clara ,) 9ico an% Amparo Servan%o loa%e% on 2oar% t(e $(ilippine Steam Navi*ation vessel, 'SG 176, for carria*e from 4anila to $ulupun%an, Ne*ros ?cci%ental, car*oes of rice an% colore% paper as evi%ence% 27 t(e correspon%in* 2ills of la%in* issue% 27 t(e carrier. ,pon arrival of t(e vessel at $ulupan%an in t(e mornin* of Novem2er 18, 1"63, t(e car*oes =ere %isc(ar*e%, complete an% in *oo% or%er, unto t(e =are(ouse of t(e 9ureau of Customs. A2out 2L// p.m. of t(e same %a7, sai% =are(ouse =as raze% 27 a fire of un;no=n ori*in, %estro7in* Servan%oJs car*oes. IssueB B(et(er or not t(e stipulations in t(e 2ill of la%in* limitin* t(e lia2ilit7 of carrier is vali%. Ge$dB 6(e court a Duo (el% t(at t(e %eliver7 of t(e s(ipment on Duestion to t(e =are(ouse of t(e 9ureau of Customs is not t(e %eliver7 contemplate% 27 Article 1736E an% since t(e 2urnin* of t(e =are(ouse

occurre% 2efore actual or constructive %eliver7 of t(e *oo%s to t(e appellees, t(e loss is c(ar*ea2le a*ainst t(e appellant. 0o=ever, t(at in t(e 2ills of la%in* issue% for t(e car*oes in Duestion, parties a*ree% to limit t(e responsi2ilit7 of t(e carrier for t(e loss or %ama*e t(at ma7 2e cause% to t(e s(ipment 27 insertin* t(erein t(e follo=in* stipulation. HClause 11. Carrier s(all not 2e responsi2le for loss or %ama*e to s(ipments 2ille% Ho=nerJs ris;I unless suc( %ama*e is %ue to ne*li*ence of carrier. Nor s(all carrier 2e responsi2le for loss or %ama*e cause 27 force ma:eure, %an*ers or acci%ents of t(e sea or ot(er =atersE =arE pu2lic enemies, @@@ fire @@@.I Be sustain t(e vali%it7 of t(e a2ove stipulationE t(ere is not(in* t(erein t(at is contrar7 to la=, morals or pu2lic polic7. Appellees =oul% conten% t(at t(e a2ove stipulation %oes not 2in% t(em 2ecause it =as printe% in fine letters on t(e 2ac; of t(e 2ills of la%in*E an% t(at t(e7 %i% not si*n t(e same. 6(is ar*ument overloo;s t(e pronouncement of t(is Court in ?n* )iu vs. Court of Appeals. HB(ile it ma7 2e true t(at petitioner (a% not si*ne% t(e plane tic;et, (e is nevert(eless 2oun% 27 t(e provisions t(ereof. Suc( provisions (ave 2een (el% to 2e part of t(e contract of carria*e an% vali% an% 2in%in* upon t(e passen*er re*ar%less of t(e latterJs lac; of ;no=le%*e or assent to t(e re*ulation.I 6(ere is not(in* in t(e recor% to s(o= t(at appellant carrier in %ela7 in t(e performance of its o2li*ation nor t(at =as t(e cause of t(e fire t(at 2ro;e out in t(e CustomJs =are(ouse in an7=a7 attri2uta2le to t(e ne*li*ence of t(e appellant or its emplo7ees.

#ANLON !s. CO*RT OF APPEA(+ FactsB Gelacio 6umam2in* contracte% t(e services of 4auro 9. Ganzon to (aul 3/+ tons of scrap iron from 4ariveles, 9ataan, to t(e port of 4anila on 2oar% t(e li*(ter .C6 H9atman.I Ganzon t(en sent (is li*(ter H9atmanI to 4ariveles =(ere it %oc;e%. ?n Decem2er 1, 1"+6, Gelacio 6umam2in* %elivere% t(e scrap iron to %efen%ant 'ilomeno NizaE captain of t(e li*(ter, for loa%in* =(ic( =as actuall7 2e*an on t(e same %ate 27 t(e cre= of t(e li*(ter. B(en a2out of t(e scrap of t(e scrap iron =as alrea%7 loa%e%, 4a7or A%vincula of 4ariveles, 9ataan, arrive% an% %eman%e% $+, ///.// from 6umam2in*. 6(e latter resiste% t(e s(a;e%o=n an% after a (eate% ar*ument, 4a7or A%vincula %re= (is *un an% fire% at 6umam2in*. 6(e *uns(ot =as not fatal 2ut 6umam2in* (a% to 2e ta;en to a (ospital in 9alan*a, 9ataan, for treatment. After some time, t(e loa%in* of t(e scrap iron =as resume%. 9ut on Decem2er 1, 1"+6, Actin* 4a7or 9asillo u2, accompanie% 27 t(e t(ree policemen, or%ere% Captain 'ilomeno Niza an% (is cre= to %ump t(e scrap iron =(ere t(e li*(ter =as %oc;e%. 6(e rest =as 2rou*t( to t(e compoun% of NASSC?. Actin* 4a7or u2 issue% a receipt statin* t(at t(e 4unicipalit7 of 4ariveles (a% ta;en custo%7 of t(e scrap iron. IssueB B(et(er or not t(e scrap iron =ere alrea%7 %elivere%. Ge$dB $etitioner Ganzon insists t(at t(e scrap iron (a% not 2een uncon%itionall7 place% un%er (is custo%7 an% control to ma;e (im lia2le. 0o=ever, (e completel7 a*rees =it( t(e respon%ent CourtJs fin%in* t(at on Decem2er 1, 1"+6, t(e private respon%ent %elivere% t(e scraps to Captain Niza for loa%in* in t(e li*(ter H9atman.I 6(at t(e petitioner, t(ru (is emplo7ees, actuall7 receive% t(e scraps is freel7 a%mitte%. 97 t(e sai% act of %eliver7, t(e scraps =ere uncon%itionall7 place% in t(e possession an% control of t(e common carrier an% upon t(eir receipt 27 t(e carrier for transportation, t(e contract of carria*e =as %eeme% perfecte%. ConseDuentl7, t(e petitionerGcarrierJs e@traor%ina7 responsi2ilit7 for t(e loss, %estruction, or %eterioration of t(e *oo%s commence%.

$ursuant to Art. 1738, suc( e@traor%inar7 responsi2ilit7 =oul% cease onl7 upon t(e %eliver7, actual or constructive, 27 t(e carrier to t(e consi*nee, or to t(e person =(o (as a ri*(t to receive t(em. 6(e fact t(at part of t(e s(ipment (a% not 2een loa%e% on 2oar% t(e li*(ter %i% not impair t(e sai% contract of transportation as t(e *oo%s remaine% in t(e custo%7 an% control of t(e carrier, al2eit unloa%e%.

+A(*DO3 IR. !s. CO*RT OF APPEA(+ FactsB After t(e %eat( of plaintiffJs mot(er, Crispina Salu%o, $omiers;i an% Son 'uneral 0ome of C(ica*o 2rou*(t t(e remains to Continental 4ortuar7 Air Services =(ic( 2oo;e% t(e s(ipment of t(e remains from C(ica*o to San 'rancisco 27 6BA an% from San 'rancisco to 4anila =it( $A.. 6(e remains =ere ta;en to t(e C(ica*o Airport, 2ut it turne% out t(at t(ere =ere t=o 2o%ies in t(e sai% airport. Some(o= t(e t=o 2o%ies =ere s=itc(e%E t(e cas;et 2earin* t(e remains of plaintiffJs mot(er =as mista;enl7 sent to 4e@ico an% =as opene% t(ere. 6(e s(ipment =as imme%iatel7 loa%e% on $A. fli*(t an% arrive% on 4anila a %a7 after it e@pecte% arrival on ?cto2er 2", 1"76. $laintiff file% a %ama*e suit =it( C'& of .e7te, conten%in* t(at 6rans Borl% Airlines an% $A. =ere lia2le for miss(ipment, t(e eventual %ela7 on t(e %eliver7 of t(e car*o containin* t(e remains, an% of t(e %iscourtes7 of its emplo7ees to t(em. 6(e court a2solve t(e t=o airline companies of an7 lia2ilit7. 6(e CA affirme% suc( %ecision. IssueB B(et(er or not t(e carrier is lia2le for %ama*es. Ge$dB 6(e recor%s reveal t(at petitioners, particularl7 4aria an% Saturnino Salu%o, a*onise% for nearl7 five (ours, over t(e possi2ilit7 of losin* t(eir mot(erJs mortal remains, unatten%e% to an% =it(out an7 assurance from t(e emplo7ees of 6BA t(at t(e7 =ere %oin* an7t(in* a2out t(e situation. 6(e7 =ere entitle% to t(e un%erstan%in* an% (umane consi%eration calle% of 27 an% commensurate =it( t(e e@traor%inar7 %ili*ence reDuire% for common carriers, an% not t(e col% insensitivit7 to t(eir pre%icament. Common sense coul% an% s(oul% (ave %ictate% t(at t(e7 e@ert a little effort in ma;in* a more e@tensive inDuir7 27 t(emselves or t(rou*( t(eir superiors, rat(er t(an :ust s(ru* off t(e pro2lem =it( a callous an% uncarin* remar; t(at t(e7 (a% no ;no=le%*e a2out it. Bit( all t(e mo%ern communications eDuipment rea%il7 availa2le to t(em, it coul% (ave easil7 facilitate% sai% inDuir7. 6BAJs apat(etic stance =(ile not le*all7 repre(ensi2le is morall7 %eplora2le. .osin* a love% one, especiall7 oneJs parent, is a painful e@perience. ?ur culture accor%s utmost ten%erness (uman feelin*s to=ar% an% in reverence to t(e %ea%. 6(at t(e remains of t(e %ecease% =ere su2seDuentl7 %elivere%, al2eit, 2elate%l7 an% eventuall7 lai% in (er final restin* place is of little consolation. 6(e imperviousness %ispla7e% 27 6BAJs personnel, even for :ust t(at fraction of time, =as especiall7 con%emna2le particularl7 in t(e (ours of 2ereavement of t(e famil7 of Crispina Salu%o, intensifie% 27 an*uis( %ue to t(e uncertaint7 of t(e =(erea2outs of t(eir mot(erJs remains. 6BAJs personnel =ere remiss in t(e o2servance of t(at *enuine (uman concern an% professional attentiveness reDuire% an% e@pecte% of t(em. 6(e fore*oin* o2servations, (o=ever, %o not appear to 2e applica2le to respon%ent $A.. No attri2ution of %iscourtes7 or in%ifference (as 2een ma%e a*ainst $A. 27 petitioners an%, in fact, petitioner 4aria Salu%o testifie% t(at it =as to $A. t(e7 repaire% after failin* to receive proper attention from 6BA. &t =as from $A. t(at t(e7 receive% confirmation t(at t(eir mot(erJs remains =oul% 2e on t(e same fli*(t =it( t(em. $etitionerJs ri*(t to 2e treate% =it( %ue courtes7 in accor%ance =it( t(e %e*ree of %ili*ence reDuire% 27 la= to 2e e@ercise% 27 ever7 common carrier =as violate% 27 t(e 6BA an% t(is entitles t(em, atleast to nominal %ama*es from 6BA alone. Articles 2221 an% 2222 of t(e Civil Co%e ma;e it clear t(at nominal %ama*es are not inten%e% for in%emnification of loss suffere% 2ut for t(e vin%ication or reco*nition

of a ri*(t violate% or inva%e%. 6(e7 are recovera2le =(ere some in:ur7 (as 2een %one 2ut t(e amount of =(ic( t(e evi%ence fails to s(o=, t(e assessment of %ama*es 2ein* left to t(e %iscretion of t(e court accor%in* to t(e circumstances of t(e case.

MACAM !s. CO*RT OF APPEA(+ FactsB $etitioner 9enito 4acam s(ippe% on 2oar% t(e vessel Nen 5ian*, t(rou*( local a*ent respon%ent Ballem $(ilippines S(ippin*, &nc. =atermelons value% at ,SM+,"+/.// an% fres( man*oes value% at ,SM11,273.16. 6(e s(ipment =as 2oun% for 0on*;on* =it( $a;istan 9an; as consi*nee an% Great $rospect Compan7 of 3o=loon, 0on*;on* as notif7 part7. $etitionerJs %epositor7 2an;. Consoli%ate% 9an;in* Corporation!S?.&D9AN3# pai% petitioner in a%vance t(e total value of t(e s(ipment of ,SM2/,223.16. ,pon arrival in 0on*;on*, t(e s(ipment =as %elivere% 27 respon%ent BA..84 %irectl7 to G$C, not to $a;istan 9an;, an% =it(out t(e reDuire% 2ill of la%in* (avin* 2een surren%ere%. Su2seDuentl7, G$C faile% to pa7 $a;istan 9an; suc( t(at t(e latter, still in possession of t(e ori*inal 2ills of la%in*, refuse% to pa7 petitioner t(rou*( S?.&D9AN3. Since S?.&D9AN3 alrea%7 preGpai% petitioner t(e value of t(e s(ipment, it %eman%e% pa7ment from respon%ent BA..84 2ut =as refuse%. $etitioner returne% t(e amount involve% to S?.&D9AN3, an% t(en %eman%e% pa7ment from respon%ent BA..84 in =ritin* 2ut to no avail. 0ence petitioner sou*(t collection of t(e value of t(e s(ipment if ,SM2/,223.16 from respon%ents 2efore t(e 6C of 4anila, 2ases on %eliver7 of t(e s(ipment to G$C =it(out presentation of t(e 2ills of la%in* an% 2an; *uarantee. IssueB B(et(er or not respon%ents are lia2le to petitioner for releasin* t(e *oo%s to G$C =it(out t(e 2ills of la%in* or 2an; *uaranteeO Ge$dB ,n%er Art. 1736 of t(e Civil Co%e, t(e e@traor%inar7 responsi2ilit7 of t(e common carrier lasts until actual or constructive %eliver7 of t(e car*oes to t(e consi*nee or to t(e person =(o (as a ri*(t to receive t(em. $A3&S6AN 9AN3 =as in%icate% in t(e 2ills of la%in* as consi*nee =(ereas G$C =as notif7in* part7. 0o=ever, in t(e e@port invoices G$C =as clearl7 name% as 2u7erFimporter. $etitioner also referre% to G$C as suc( in (is %eman% letter to respon%ent BA..84 an% in (is complaint 2efore t(e trial court. 6(is premise %ra=s us to conclu%e t(at t(e %eliver7 of t(e car*oes to G$C as 2u7erFimporter =(ic(, conforma2l7 =it( Art. 1736 (a%, ot(er t(an t(e consi*nee, t(e ri*(t to receive t(em =as proper. 6(e real issue is =(et(er respon%ents are lia2le to petitioner for releasin* t(e *oo%s to G$C =it(out t(e 2ills of la%in* or 2an; *uarantee. 'rom t(e testimon7 of petitioner, =e *at(er t(at (e (as 2een transactin* =it( G$C as 2u7erFimporter for aroun% 2 to 3 7ears alrea%7. B(en man*oes an% =atermelons are in season, (is s(ipment to G$C usin* t(e facilities of respon%ents is t=ice or t(rice a =ee;. 6(e *oo%s are release% to G$C. &t (as 2een t(e practice of petitioner to reDuest t(e s(ippin* lines to imme%iatel7 release peris(a2le car*oes suc( as =atermelons an% fres( man*oes t(rou*( telep(one calls 27 (imself or (is Hpeople.I &n transactions covere% 27 a letter of cre%it, 2an; *uarantee is normall7 reDuire% 27 t(e s(ippin* lines prior to releasin* t(e *oo%s. 9ut for 2u7ers usin* tele*rap(ic transfers, petitioner %ispenses =it( t(e 2an; *uarantee 2ecause t(e *oo%s are alrea%7 full7 pai%. &n (is several 7ears of 2usiness relations(ip =it( G$C an% respon%ents, t(ere =as not a sin*le instance =(en t(e 2ill of la%in* =as first presente% 2efore t(e release of t(e car*oes. MAER+8 (INE !s. CO*RT OF APPEA(+

FactsB $rivate respon%ent!consi*nee# or%ere% from 8li .ill7. &nc.!s(ipper# 6//,/// empt7 *elatin capsules for t(e manufacture of (is p(armaceutical pro%ucts. 6(e 4emoran%um of S(ipment provi%es t(at t(e s(ipper a%vise% t(e consi*nee t(at t(e *oo%s =ere alrea%7 s(ippe% on 2oar% t(e vessel of petitioner for s(ipment to t(e $(ilippines via ?a;lan%, California. 6(e specifie% %ate of arrival =as April 3, 1"77. 'or reasons un;no=n, sai% car*o of capsules =ere mis(ippe% an% %iverte% to ic(mon%, <ir*inia, ,SA an% t(en transporte% 2ac; to ?a;lan%, California. 6(e *oo%s finall7 arrive% in t(e $(ilippines on 5une 1/, 1"77 or after t=o mont(s from t(e %ate specifie%. 6(e consi*nee refuse% to ta;e %eliver7 of t(e *oo%s. $rivate respon%ent alle*in* *ross ne*li*ence an% un%ue %ela7 in t(e %eliver7 of t(e *oo%s, file% an action for rescission of contract =it( %ama*es a*ainst petitioner an% s(ipper. $etitioner alle*e% t(at t(e *oo%s =ere transporte% in accor%ance =it( t(e 2ill of la%in*!..It(e Carrier %oes not un%erta;e t(at t(e *oo%s s(all arrive at t(e port of %isc(ar*e or t(e place of %eliver7 at an7 particular time..I# an% t(at its lia2ilit7 un%er t(e la= attac(es onl7 in case of loss, %estruction or %eterioration of t(e *oo%s as provi%e% for in Article 1731 NCC. 6(e s(ipper alle*e% t(at t(e misGs(ipment =as %ue solel7 to t(e *ross ne*li*ence of petitioner. 6(e 6C %ismisse% t(e complaint a*ainst t(e s(ipper an% rule% in favor of t(e consi*nee. 6C rule% t(at t(e stipulation in t(e 9?. is in t(e nature of contract of a%(esion an% t(erefore voi%. CA affirme% sai% %ecision, (ence t(e present petition. IssueB B(et(er or not respon%ent is entitle% to %ama*es resultin* from %ela7 in t(e %eliver7 of t(e s(ipment in t(e a2sence in t(e 2ill of la%in* of a stipulation on t(e perio% of %eliver7. Ge$dB )es. B(ile it is true t(at common carriers are not o2li*ate% 27 la= to carr7 an% to %eliver merc(an%ise, an% persons are not veste% =it( t(e ri*(t to prompt %eliver7, unless suc( common carriers previousl7 assume t(e o2li*ation to %eliver at a *iven %ate or time, %eliver7 of s(ipment or car*o s(oul% at least 2e ma%e =it(in a reasona2le time. An e@amination of t(e su2:ect 2ill of la%in* s(o=s t(at t(e su2:ect s(ipment =as estimate% to arrive in 4anila on April 3, 1"77. B(ile t(ere =as no special contract entere% into 27 t(e parties in%icatin* t(e %ate of arrival of t(e su2:ect s(ipment, petitioner nevert(eless, =as ver7 =ell a=are of t(e specific %ate =(en t(e *oo%s =ere e@pecte% to arrive as in%icate% in t(e 2ill of la%in* itself. &n t(is re*ar%, t(ere arises no nee% to e@ecute anot(er contract for t(e purpose as it =oul% 2e a mere superfluit7. &n t(e case 2efore us, =e fin% t(at a %ela7 in t(e %eliver7 of t(e *oo%s spannin* a perio% of t=o mont(s an% seven %a7s falls =as 2e7on% t(e realm of reasona2leness. Bit( respect to t(e rulin* t(at contracts of a%(esion are voi%, SC sai% t(at it =as necessaril7 so an% t(at it is a settle% rule t(at 2ills of la%in* are contracts not entirel7 pro(i2ite%. ?+MAE( !s. &ARRETTO FactsB)smael, a %omestic corporation see;s to recover from 9arretto $","1/, =(ic( is t(e alle*e% value of four cases of merc(an%ise =(ic( it %elivere% to t(e steams(ip An%res, at 4anila to 2e s(ippe% to Suri*ao. 6(e sai% merc(an%ise =as never %elivere% to t(e consi*nee Solomon S(aruff. 9arretto %enie% all t(e alle*ations a*ainst (im statin* t(at t(e sai% merc(an%ise =as never %elivere% to (im. 0e also state% t(at un%er t(e provision of para*rap( 7 of t(e printe% con%ition at t(e 2ac; of t(e 2ill of la%in*, plaintiffJs ri*(t of action is 2arre% for t(e reason t(at it =as not 2rou*(t =it(in 6/ %a7s from t(e time t(e cause of action accrue%. 9arretto also alle*e% t(at in provision 12 of t(e 2ill of la%in*, (e is not lia2le for t(e e@cess of $3//.// for an7 pac;a*e of sil; unless t(e value an% contents of suc( pac;a*e are correctl7 %eclare% in t(e 2ill of la%in* at t(e time of s(ipment. 6(e lo=er court ren%ere% its :u%*ment in favor of )smael > co. IssueB B(et(er or not t(e stipulation in t(e 2ill of la%in* limitin* t(e lia2ilit7 of %efen%ant of not more t(an $3// is vali%.

Ge$dB No, t(e stipulation is not vali%. A common carrier cannot la=full7 stipulate for e@emption from lia2ilit7, unless suc( e@emption is :ust an%reasona2le an% t(e contract is freel7 an% fairl7 ma%e. A common carrier cannot la=full7 stipulate for t(e e@emption from lia2ilit7, unless suc( e@emption is :ust an% reasona2le. 6(e carrier cannot limit its lia2ilit7 for in:ur7 to or loss of *oo%s s(ippe% if suc( =as cause% 27 its o=n ne*li*ence. 9ase% upon t(e fin%in*s of fact of t(e trial court =(ic( are sustaine% 27 t(e evi%ence, t(e plaintiff %elivere% to t(e %efen%ants 161 cases of sil; consi*ne% an% to 2e %elivere% 27 t(e %efen%ants to Salomon S(aruff in Suri*ao. 'our of suc( cases =ere never %elivere% to t(e consi*nee, an% t(e evi%ence s(o=s t(at t(eir value is t(e alle*e% in t(e complaint. Also, t(e *oo%s in Duestion =ere s(ippe% from 4anila on ?cto2er 2+, 1"22, to 2e %elivere% to Salomon S(aruff in Suri*ao, $laintiffKs ori*inal complaint =as file% on April 17, 1"23, or a little less t(an si@ mont(s after t(e s(ipment =as ma%e. 6(e lo=er court also points out t(at t(e con%itions in Duestion Care not printe% on t(e triplicate copies =(ic( =ere %elivere% to t(e plaintiff,C an% t(at 27 reason t(ereof t(e7 Care not 2in%in* upon t(e plaintiff.C 6(e clause in Duestion provi%es t(at t(e carrier s(all not 2e lia2le for loss or %ama*e from an7 cause or for an7 reason to an amount in e@cess of $3// Cfor an7 sin*le pac;a*e of sil; or ot(er valua2le car*o.C 6(e evi%ence s(o=s t(at 161 CcasesC =ere s(ippe%, an% t(at t(e value of eac( case =as ver7 near $2,+//. &n t(is situation, t(e limit of %efen%antsK lia2ilit7 for eac( case of sil; Cfor loss or %ama*e from an7 cause or for an7 reasonC =oul% put it in t(e po=er of t(e %efen%ants to (ave ta;en t(e =(ole car*o of 161 cases of sil; at a valuation of $3// for eac( case, or less t(an oneGei*(t of its actual value. &f t(at rule of la= s(oul% 2e sustaine%, no sil; =oul% ever 2e s(ippe% from one islan% to anot(er in t(e $(ilippines. Suc( a limitation of value is unconsciona2le an% voi% as a*ainst pu2lic polic7. 6(ere is no merit in t(e appeal. 6(e :u%*ment of t(e lo=er court is affirme%. +GEJARAM !s. PGI(IPPINE AIR (INE+3 INC. FactsB S(e=aram, a pa7in* passen*er on %efen%antKs aircraft fli*(t from Qam2oan*a Cit7 2oun% for 4anila. 0e c(ec;e% in t(ree pieces of 2a**a*es, a suitcase an% t=o ot(er pieces. B(en plaintiff $armanan% S(e=aram arrive% in 4anila, (is suitcase %i% not arrive =it( (is fli*(t 2ecause it =as sent to &li*an. &t =as foun% out t(at it =as mista**e% 27 %efen%antJs personnel. 6(e station a*ent of t(e $A. in &li*an cause% t(e 2a**a*e to 2e sent to 4anila for %eliver7 to plaintiff. Defen%ant a%mitte% t(at t(e t=o items !6ransistor a%io an% t(e ollfle@ Camera# coul% not 2e foun% insi%e t(e suitcase. An action for %ama*es =as institute% a*ainst $A.. 6C rule% t(at t(e loss of t(e articles =as %ue to t(e ne*li*ence of t(e emplo7ees of $A.. $A. (o=ever =as or%ere% to pa7 %ama*es of $1//.// onl7, as t(is =as its limite% lia2ilit7 as state% in t(e tic;et. !H6(e lia2ilit7, if an7, for loss or %ama*e to c(ec;e% 2a**a*e or for %ela7 in t(e %eliver7 t(ereof is limite% to its value an%, unless t(e passen*er %eclares in a%vance a (i*(er valuation an% pa7 an a%%itional c(ar*e t(erefor, t(e value s(all 2e conclusivel7 %eeme% not to e@cee% $1//.// for eac( tic;et.I#. An appeal =as t(en 2rou*(t up 27 plaintiff. IssueB B(et(er or not t(e limite% lia2ilit7 rule applies. Ge$dB No. 6(e limite% lia2ilit7 rule s(all not appl7. 6(e reDuirements provi%e% in Article 17+/ of t(e Ne= Civil Co%e must 2e complie% =it( 2efore a common carrier can claim a limitation of its pecuniar7 lia2ilit7 in case of loss, %estruction or %eterioration of t(e *oo%s it (as un%erta;en to transport. &n t(e case 2efore us Be 2elieve t(at t(e reDuirements of sai% article (ave not 2een met. &t can not 2e sai% t(at t(e appellee (a% actuall7 entere% into a contract =it( t(e appellant, em2o%7in* t(e con%itions as printe% at t(e 2ac; of t(e tic;et. 6(e fact t(at t(ose con%itions are printe% at t(e 2ac; of t(e tic;et stu2 in letters so small t(at t(e7 are (ar% to rea% =oul% not =arrant t(e presumption t(at t(e appellee =as a=are of t(ose con%itions suc( t(at (e (a% Cfairl7 an% freel7 a*ree%C to t(ose con%itions.

S(e=aram %i% not a*ree to t(e stipulation on t(e tic;et, as manifeste% 27 t(e fact t(at S(e=aram %i% not si*n t(e tic;et.

ON# ?I* !s. CO*RT OF APPEA(+ FactsB $etitioner =as pa7in* passen*er of respon%ent $(ilippine Airlines on 2oar% fli*(t No. "16G from 4actan Ce2u 2oun% for 9utuan Cit7. 0e =as sc(e%ule% to atten% t(e trial in t(e Court of 'irst instance , 9r. && t(ereat. As a passen*er, (e c(ec;e% in one piece of lu**a*e, a 2ull maleta. 6(e plane left 4actan Airport, Ce2u Cit7 at a2out 1pm an% arrive% at 9acasi Airport, 9utuan Cit7 at past 2pm of t(e same %a7. ,pon arrival, petitioner claime% (is lu**a*e 2ut it coul% not 2e foun%. Accor%in* to petitioner, it =as onl7 after reactin* in%i*nantl7 to t(e loss t(at t(e matter =as atten%e% 27 t(e porter cler; =(ic( (o=ever, t(e later %enie%. B(en t(e lu**a*e =as %elivere% to t(e petitioner =it( t(e information t(at t(e loc; =as open, (e foun% out t(at t(e fol%er containin* %ocuments an% transcripts =ere missin*, asi%e from t(e t=o *ift items for (is parentsGinGla=. $etitioner refuse% to accept t(e lu**a*e. $etitioner file% a Complaint a*ainst $A. for %ama*es for 2reac( of contract of transportation. 6(e lo=er Court foun% $A. to (ave acte% in 2a% fait( an% =it( malice an% %eclare% petitioner entitle% to moral %ama*es. CA (el% t(at $A. =as *uilt7 onl7 of simple ne*li*ence, reverse% t(e :u%*ment of t(e trial Court *rantin* petitioner moral an% e@emplar7 %ama*es, 2ut or%ere% $A. to pa7 plaintiff t(e sum of $1//.//, t(e 2a**a*e lia2ilit7 assume% 27 it un%er t(e con%ition of carria*e printe% at t(e 2ac; of t(e tic;et. 0ence t(e present petition. IssueB B(et(er or not $A. acte% =it( *ross ne*li*ence. Ge$dB No. $A. %i% not act in 2a% fait(. &t =as t(e %ut7 of $A. to loo; for petitionerJs lu**a*e =(ic( (a% 2een miscarrie%. $A. e@erte% %ili*ent efforts to locate t(e plaintiffJs 2a**a*e. $etitioner is neit(er entitle% to e@emplar7 %ama*es. 8@emplar7 %ama*es can onl7 2e *rante% if t(e %efen%ant as;e% in a =anton, frau%ulent, rec;less, oppressive or malevolent manner, =(ic( loss, in accor%ance =it( t(e stipulation =ritten at t(e 2ac; of t(e tic;et is limite% to $1// per lu**a*e plaintiff not (avin* %eclare% a *reater value an% not (avin* calle% t(e attention of t(e %efen%ant on its value a% pai% t(e tariff t(ereon. B(ile it ma7 2e true t(at petitioner (a% not si*ne% t(e plane tic;et, (e is nevert(eless 2oun% 27 t(e provisions t(ereof. CSuc( provisions (ave 2een (el% to 2e a part of t(e contract of carria*e, an% vali% an% 2in%in* upon t(e passen*er re*ar%less of t(e latterKs lac; of ;no=le%*e or assent to t(e re*ulationC. &t is =(at is ;no=n as a contract of Ca%(esionC, in re*ar%s =(ic( it (as 2een sai% t(at contracts of a%(esion =(erein one part7 imposes a rea%7 ma%e form of contract on t(e ot(er, as t(e plane tic;et in t(e case at 2ar, are contracts not entirel7 pro(i2ite%. 6(e one =(o a%(eres to t(e contract is in realit7 free to re:ect it entirel7E if (e a%(eres, (e *ives (is consent. A contract limitin* lia2ilit7 upon an a*ree% valuation %oes not offen% a*ainst t(e polic7 of t(e la= for2i%%in* one from contractin* a*ainst (is o=n ne*li*ence.

+EA.(AND +ER,ICE3 INC. !s. IAC FactsB SeaGlan%, a forei*n s(ippin* an% for=ar%in* compan7 license% to %o 2usiness in t(e $(ilippines, receive% from Sea2orne 6ra%in* Compan7 in California a s(ipment consi*ne% to Sen 0iap 0in*. 6(e s(ipper not (avin* %eclare% t(e value of t(e s(ipment, no value =as in%icate% in t(e 9?.. 6(e s(ipment =as %isc(ar*e% in 4anila, an% =(ile a=aitin* transs(ipment to Ce2u t(e car*o =as stolen an% never

recovere%. 6(e lo=er court sentences SeaGlan% to pa7 Cue t(e value of t(e lost car*o, t(e unrealize% profit an% attorne7s fees. 6(e CA affirme% t(e %ecision, (ence t(e petition. IssueB B(et(er or not t(e consi*nee of sea2orne frei*(t is 2oun% 27 stipulations in t(e coverin* 2ill of la%in* limitin* to a fi@e% amount t(e lia2ilit7 of t(e carrier for loss or %ama*e to t(e car*o =(ere its value is not %eclare% in t(e 2ill. Ge$dB )es. 6(ere is no Duestion of t(e ri*(t of a consi*nee in a 2ill of la%in* to recover from t(e carrier or s(ipper for loss of, or %ama*e to, *oo%s 2ein* transporte% un%er sai% 2ill, alt(ou*( t(at %ocument ma7 (ave 2een %ra=n up onl7 27 t(e consi*nor an% t(e carrier =it(out t(e intervention of t(e consi*nee. Since t(e lia2ilit7 of a common carrier for loss of or %ama*e to *oo%s transporte% 27 it un%er a contract of carria*e so *overne% 27 t(e la=s of t(e countr7 of %estination an% t(e *oo%s in Duestion =ere s(ippe% from t(e ,nite% States to t(e $(ilippines, t(e lia2ilit7 of SeaG.an% (as Cue is *overne% primaril7 27 t(e Civil Co%e, an% as or%aine% 27 t(e sai% Co%e, supplementar7, in all matters not cluttere% t(ere27, 27 t(e Co%e of Commerce an% special la=s. ?ne of t(ese supplementar7 special la=s is t(e Carria*e of *oo%s 27 Sea Act !C?GSA#, ma%e applica2le to all contracts for t(e carria*e 27 sea to an% from t(e $(ilippines $orts in 'orei*n 6ra%e 27 Comm. Act. 6+. 8ven if Section 1!+# of C?GSA %i% not list t(e vali%it7 an% 2in%in* effect of t(e lia2ilit7 limitation clause in t(e 2ill of la%in* (ere are full7 su2stantial on t(e 2asis alone of Article 171" an% 17+/ of t(e Civil Co%e. 6(e :ustices of suc( stipulation is implicit in its *ivin* t(e o=ner or s(ipper t(e option of avoi%in* accrual of lia2ilit7 limitation 27 t(e simple e@pe%ient of %eclarin* t(e value of t(e s(ipment in t(e 2ill of la%in*. 6(e stipulation in t(e 2ill of la%in* limitin* t(e lia2ilit7 of SeaG.an% for loss or %ama*es to t(e s(ipment covere% 27 sai% rule to ,SM+// per pac;a*e unless t(e s(ipper %eclares t(e value of t(e s(ipment an% pa7s a%%itional c(ar*es is vali% an% 2in%in* on Cue. CITADE( (INE+3 INC. !s. CO*RT OF APPEA(+ FactsB $etitioner is t(e *eneral a*ent of t(e vessel HCar%i*an 9a7F Strai*(t 8nterprisesI, =(ile private respon%ent 4anila Bine 4erc(ants, &nc. as t(e consi*nee is t(e importer of t(e su2:ect s(ipment of Dun(ill ci*arettes from 8n*lan%. ?n or a2out 4arc( 17,1"7", t(e vessel HCar%i*anI loa%e% on 2oar% at 8n*lan% for carria*e to 4anila, 18/ 'il2rate cartons of mi@e% 9ritis( manufacture% ci*arettes calle% HDun(ill &nternational 'ilterI > HDun(ill &nternational 4ent(olI, as evi%ence% 27 a 9ill of .a%in*. Clause 6 of t(e 2ills of la%in* issue% 27 t(e carrier states to limit t(e latterJs lia2ilit7 to ,SM2.// per ;ilo.6(e s(ipment arrive% at t(e port of 4anila $ier 13 an% t(e container van =as receive% 27 8. azon an arrastre. 6(ereafter, t(e container van containin* t=o s(ipments =as strippe%. ?ne s(ipment =as %elivere% an% t(e ot(er, containin* t(e ci*arettes =ere place% in t=o containers %ue to t(e lac; of space, 2ot( of t(em %ul7 pa%loc;e% an% seale% 27 t(e representative of t(e carrier. ?n 4a7 1, 1"7", t(e carrierJs (ea%c(ec;er %iscovere% t(at one of t(e container van (a% a %ifferent pa%loc; an% t(e seale% =as tampere% =it(. &t =as foun% out t(at "/ cases of t(e ci*arettes =ere missin*. 9ase% on t(e investi*ation con%ucte% 27 t(e arrastre, t(e car*o =as not formall7 turne% over 27 t(e carrier. 6(e consi*nee file% a complaint a*ainst t(e carrier %eman%in* $31+,/// =(ic( is t(e mar;et value of t(e *oo%s. 6(e carrier a%mitte% t(e loss in its repl7 letter 2ut alle*e% t(at t(e sai% matter is un%er t(e control of t(e arrastre t(erefore, t(e consi*nee file% a complaint a*ainst t(e arrastre. 6(e lo=er court %eci%e% to a2solve t(e arrastre form an7 lia2ilit7. CA affirme% t(e %ecision of t(e lo=er court. IssueB B(et(er or not t(e stipulation limitin* t(e lia2ilit7 of t(e carrier containe% in t(e 2ill of la%in* is 2in%in* on t(e consi*nee.

Ge$dB )es, t(e stipulation is vali%. 9asic is t(e rule t(at a stipulation limitin* t(e lia2ilit7 of t(e carrier to t(e value of t(e *oo%s appearin* in t(e 2ill of la%in*, unless t(e s(ipper or o=ner %eclares a *reater value, is 2in%in*. 'urt(ermore, a contract fi@in* t(e sum t(at ma7 2e recovere% 27 t(e o=ner or s(ipper for t(e loss, %estruction or %eterioration of t(e *oo%s is vali%, if it is reasona2le an% :ust un%er t(e circumstances, an% (as 2een fairl7 an% freel7 a*ree% upon. &n t(is case, t(e a=ar% of $31+,/// 2ase% on t(e alle*e% mar;et value of t(e *oo%s is erroneous. &t is provi%e% in Clause 6 t(at its lia2ilit7 is limite% to ,SM2.//F;ilo. 6(e consi*nee also a%mits in t(e memoran%um t(at t(e value of t(e *oo%s %oes not appear in t(e 2ill of la%in*. 0ence, t(e stipulation on t(e carrierJs limite% lia2ilit7 applies. 6(e 2ill of la%in* s(o=s t(at 12/ cartons =ei*(t 2,"78 ;ilos or 21.82;ilosFcarton. Since "/ cartons =ere lost an% t(e =ei*(t of sai% cartons is 2,233.8/, t(e carrierJs lia2ilit7 amounts onl7 to ,SM1,167.6/. 6(e :u%*ment of CA is (ere27 mo%ifie%. E,ERETT +TEAM+GIP CORPORATION !s. CO*RT OF APPEA(+ FactsB $rivate respon%ent 0ernan%ez 6ra%in* Co. importe% t(ree crates of 2us spare parts from 5apan from its supplier 4aruman 6ra%in* 2ase% t(ere. 6(e crates =ere s(ippe% from 5apan to 4anila on 2oar% a vessel o=ne% 27 petitionerJs principal, 8verett ?rient .ines. ,pon arrival at t(e port of 4anila, it =as %iscovere% t(at one of t(e crater =as missin*. espon%ent ma%e a formal claim for t(e recover7 of t(e actual value of t(e lost spare parts containe% in t(e missin* crates. 6(e trial court ren%ere% :u%*ment in favor of private respon%ent, or%erin* petitioner to pa7 )1,++2,+//.//. An appeal =as 2rou*(t 27 petitioner onl7 1//,/// 7en =as offere% 27 petitioner, t(e ma@imum amount stipulate% in clause 18 of t(e 9?.. 6(e Court of Appeals %elete% t(e a=ar% of attorne7Ks fees 2ut affirme% t(e trial courtKs fin%in*s =it( t(e a%%itional o2servation t(at private respon%ent can not 2e 2oun% 27 t(e terms an% con%itions of t(e 2ill of la%in* 2ecause it =as not priv7 to t(e contract of carria*e. $etitioner no= comes to SC ar*uin* t(at t(e Court of Appeals erre% !1# in rulin* t(at t(e consent of t(e consi*nee to t(e terms an% con%itions of t(e 2ill of la%in* is necessar7 to ma;e suc( stipulations 2in%in* upon itE !2# in (ol%in* t(at t(e carrierKs limite% pac;a*e lia2ilit7 as stipulate% in t(e 2ill of la%in* %oes not appl7 in t(e instant caseE an% !3# in allo=in* private respon%ent to full7 recover t(e full alle*e% value of its lost car*o. IssueB B(et(er or not t(e petitioner is lia2le for t(e actual value an% not t(e ma@imum value recovera2le un%er t(e 2ill of la%in*. Ge$dB No. A stipulation in t(e 2ill of la%in* limitin* t(e lia2ilit7 of t(e common carrier for t(e loss, %ama*es of car*o to a certain sum, unless t(e s(ipper %eclares or a (i*(er value is sanctione% 27 la=, particularl7 Articles 171" an% 17+/ of t(e Civil Co%e. $ursuant to t(e aforeGDuote% provisions of la=, it is reDuire% t(at t(e stipulation limitin* t(e common carrierKs lia2ilit7 for loss must 2e Creasona2le an% :ust un%er t(e circumstances, an% (as 2een freel7 an% fairl7 a*ree% upon.C !he bill of lading sub"ect of the present controversy specifically provides, among others: %&. 'll claims for which the carrier may be liable shall be ad"usted 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 conse(uential loss. !he carrier shall not be liable for any loss of or any damage to or in any connection with, goods in an amount e)ceeding *ne +undred thousand ,en in -apanese Currency .,%//,///.//0 or its e(uivalent in any other currency per package or customary freight unit .whichever is least0 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 1ill of 2ading and e)tra freight is paid as re(uired.

6(e a2ove stipulations are, to our min%, reasona2le an% :ust. &n t(e 2ill of la%in*, t(e carrier ma%e it clear t(at its lia2ilit7 =oul% onl7 2e up to ?ne 0un%re% 6(ousan% !)1//,///.//# )en. 0o=ever, t(e s(ipper, 4aruman 6ra%in*, (a% t(e option to %eclare a (i*(er valuation if t(e value of its car*o =as (i*(er t(an t(e limite% lia2ilit7 of t(e carrier. Consi%erin* t(at t(e s(ipper %i% not %eclare a (i*(er valuation, it (a% itself to 2lame for not compl7in* =it( t(e stipulations. 6o %efeat t(e carrierKs limite% lia2ilit7, t(e aforecite% Clause 18 of t(e 2ill of la%in* reDuires t(at t(e s(ipper s(oul% (ave %eclare% in =ritin* a (i*(er valuation of its *oo%s 2efore receipt t(ereof 27 t(e carrier an% insert t(e sai% %eclaration in t(e 2ill of la%in*, =it( e@tra frei*(t pai%. 6(ese reDuirements in t(e 2ill of la%in* =ere never complie% =it( 27 t(e s(ipper, (ence, t(e lia2ilit7 of t(e carrier un%er t(e limite% lia2ilit7 clause stan%s. 6(e commercial &nvoice %oes not in itself sufficientl7 an% convincin*l7 s(o= t(at petitioner (as ;no=le%*e of t(e value of t(e car*o as conten%e% 27 private respon%ent. &RITI+G AIRJA?+ !s. CO*RT OF APPEA(+ FactsB 4a(tani o2taine% t(e services of a certain 4r. Gemar to prepare (is travel plan to 9om2a7, &n%ia. 4r. Gemar purc(ase% a tic;et from 9ritis( Air=a7s, (o=ever since it (a% no tic;et fli*(ts from 4anila to 9om2a7, 4a(tani (a% to ta;e a connectin* fli*(t to 9om2a7. $rior to (is %eparture, 4a(tani c(ec;e% in t(e $A. counter in 4anila (is t=o pieces of lu**a*e containin* (is clot(in* an% personal effects, confi%ent t(at upon reac(in* 0on* 3on*, t(e same =oul% 2e transferre% to t(e 9A fli*(t 2oun% for 9om2a7. ,nfortunatel7, =(en 4a(tani arrive% in 9om2a7, (e %iscovere% t(at (is lu**a*e =as missin* an% t(at upon inDuir7 from t(e 9A representatives, (e =as tol% t(at t(e same mi*(t (ave 2een %iverte% to .on%on. After plaintiff =aite% for (is lu**a*e for one =ee;, 9A finall7 a%vise% (im to file a claim. 4a(tani file% (is complaint for %ama*es. 9A file% a t(ir%Gpart7 complaint a*ainst $A. alle*in* t(at t(e reason for t(e nonGtransfer of t(e lu**a*e =as %ue to t(e latterKs late arrival in 0on*;on*, t(us leavin* (ar%l7 an7 time for t(e proper transfer of 4a(taniKs lu**a*e to t(e 9A aircraft 2oun% for 9om2a7. 6C ren%ere% its %ecision in favor of 4a(tani, =(ic( CA affirme%, (ence t(e instant petition. 9A alle*e% t(at t(ere s(oul% (ave 2een no separate a=ar% for t(e lu**a*e an% t(e contents t(ereof since 4a(tani faile% to %eclare a separate (i*(er valuation for t(e lu**a*e an% t(erefore, its lia2ilit7 is limite%, at most, onl7 to t(e amount state% in t(e tic;et. IssueB B(et(er or not 9A is lia2le for t(e compensator7 %ama*es. Ge$dB )es. 6(e contract of transportation =as e@clusivel7 2et=een 4a(tani an% 9A. 6(e latter merel7 en%orsin* t(e 4anila to 0on* 3on* lo* of t(e formerJs :ourne7 to $A., as its su2contractor or a*ent. Con%itions of contacts =as one of continuous air transportation from 4anila to 9om2a7. 6(e Court of Appeals s(oul% (ave 2een co*nizant of t(e =ellGsettle% rule t(at an a*ent is also responsi2le for an7 ne*li*ence in t(e performance of its function an% is lia2le for %ama*es =(ic( t(e principal ma7 suffer 27 reason of its ne*li*ent act. 6(e t(ir%Gpart7 complaint =as t(erefore reinstate%. Since t(e instant petition =as 2ase% on 2reac( of contract of carria*e, 4a(tani can onl7 sue 9A an% not $A., since t(e latter =as not a part7 in t(e contract. 6(e contention of 9A =it( respect to limite% lia2ilit7 =as overrule% alt(ou*( it is reco*nize% in t(e $(ilippines, statin* t(at 9A (a% =aive% t(e %efense of limite% lia2ilit7 =(en it allo=e% 4a(tani to testif7 as to t(e actual %ama*es (e incurre% %ue to t(e misplacement of (is lu**a*e, =it(out an7 o2:ection. G. E. GEACOC8 COMPAN? !s. MACONDRA? H COMPAN?3 INC. FactsB 6(e plaintiff s(ippe% 8%monton cloc;s from Ne= )or; to 4anila on 2oar% a vessel of t(e %efen%ant. 6(e 9?. (as t(e follo=in* stipulationsL

%. t is mutually agreed that the value of the goods receipted for above does not e)ceed 34// per freight ton, or, in proportion for any part of a ton, unless the value be e)pressly stated herein and ad valorem freight paid thereon. 5. 'lso, that in the event of claims for short delivery of, or damage to, cargo being made, the carrier shall not be liable for more than the net invoice price plus freight and insurance less all charges saved, and any loss or damage for which the carrier may be liable shall be ad"usted pro rata on the said basis. 6(e cloc;s =ere not %elivere% %espite %eman%s. $laintiff claime% $12/.//, t(e mar;et value of t(e cloc;s, =(ile %efen%ant ten%ere% onl7 $76.36, t(e proportionate frei*(t ton value. 6(e trial court %eci%e% for t(e plaintiff for $226./2, t(e invoice value plus frei*(t an% insurance. 9ot( appeale%. 6(e claim of t(e plaintiff is 2ase% upon t(e ar*ument t(at t(e clause in t(e 2ill of la%in*, limitin* t(e lia2ilit7 of t(e carrier, are contrar7 to pu2lic or%er an%, t(erefore, null an% voi%. 6(e %efen%ant, on t(e ot(er (an%, conten%s t(at clause 1 is vali%, an% clause " s(oul% (ave not 2een applie% 27 t(e lo=er court. IssueB 4a7 a common carrier, 27 stipulations inserte% in t(e 2ill of la%in*, limit its lia2ilit7 for t(e loss of or %ama*e to t(e car*o to an a*ree% valuation of t(e latterO Ge$dB )es. 6(ree ;in%s of stipulations (ave often 2een ma%e in a 2ill of la%in*. 6(e first is one e@emptin* t(e carrier from an7 an% all lia2ilit7 for loss or %ama*e occasione% 27 its o=n ne*li*ence. 6(e secon% is one provi%in* for an unDualifie% limitation of suc( lia2ilit7 to an a*ree% valuation. An% t(e t(ir% is one limitin* t(e lia2ilit7 of t(e carrier to an a*ree% valuation unless t(e s(ipper %eclares a (i*(er value an% pa7s a (i*(er rate of frei*(t. Accor%in* to an almost uniform =ei*(t of aut(orit7, t(e first an% secon% ;in%s of stipulations are invali% as 2ein* contrar7 to pu2lic polic7, 2ut t(e t(ir% is vali% an% enforcea2le. A rea%in* of clauses 1 an% " of t(e 2ill of la%in* (ere in Duestion, (o=ever, clearl7 s(o=s t(at t(e present case falls =it(in t(e t(ir% stipulation, to =itL 6(at a clause in a 2ill of la%in* limitin* t(e lia2ilit7 of t(e carrier to a certain amount unless t(e s(ipper %eclares a (i*(er value an% pa7s a (i*(er rate of frei*(t, is vali% an% enforcea2le. 6(us, if a common carrier *ives to a s(ipper t(e c(oice of t=o rates, t(e lo=er of t(e con%itione% upon (is a*reein* to a stipulate% valuation of (is propert7 in case of loss, even 27 t(e carrierKs ne*li*ence, if t(e s(ipper ma;es suc( a c(oice, un%erstan%in*l7 an% freel7, an% names (is valuation, (e cannot t(ereafter recover more t(an t(e value =(ic( (e t(us places upon (is propert7. A limitation of lia2ilit7 2ase% upon an a*ree% value to o2tain a lo=er rate %oes not conflict =it( an7 soun% principle of pu2lic polic7E an% it is not conforma2le to plain principles of :ustice t(at a s(ipper ma7 un%erstate value in or%er to re%uce t(e rate an% t(en recover a lar*er value in case of loss. +JEET (INE+3 INC. !s. TE,E+ FactsB $rivate respon%ents Att7. 6an%o* an% 6iro, a contractors 2ou*(t tic;ets for <o7a*e at t(e 2ranc( office of petitioner, a s(ippin* compan7 transportin* interGislan% passen*ers an% car*oes, at Ca*a7an %e ?ro Cit7. espon%ents =ere to 2oar% petitionerKs vessel 2oun% for 6a*2ilaran Cit7 via t(e port of Ce2u. ,pon learnin* t(at t(e vessel =as not procee%in* to 9o(ol, since man7 passen*ers =ere 2oun% for Suri*ao, private respon%ents per a%vice, =ent to t(e 2ranc( office for proper relocation to anot(er vessel. 9ecause t(e sai% vessel =as alrea%7 fille% to capacit7, t(e7 =ere force% to a*ree Cto (i%e at t(e car*o section to avoi% inspection of t(e officers of t(e $(ilippine Coast*uar%.C $rivate respon%ents alle*e% t(at t(e7 =ere, %urin* t(e trip,C Ce@pose% to t(e scorc(in* (eat of t(e sun an% t(e %ust comin* from t(e s(ipKs car*o of corn *rits,C an% t(at t(e tic;ets t(e7 2ou*(t at Ca*a7an %e ?ro Cit7 for 6a*2ilaran =ere not (onore% an% t(e7 =ere constraine% to pa7 for ot(er tic;ets. &n vie= t(ereof, private respon%ents sue% petitioner for %ama*es an% for 2reac( of contract of carria*e 2efore Court of 'irst &nstance of 4isamis ?riental. $etitioner move% to %ismiss t(e complaint on t(e *roun% of improper venue. 6(is motion =as premise% on t(e con%ition printe%

at t(e 2ac; of t(e tic;ets, Con%ition No. 11, =(ic( rea%sL H&t is (ere27 a*ree% an% un%erstoo% t(at an7 an% all actions arisin* out of t(e con%itions an% provisions of t(is tic;et, irrespective of =(ere it is issue%, s(all 2e file% in t(e competent courts in t(e Cit7 of Ce2u.I 6(e motion =as %enie% (ence t(e instant petition. IssueB &s Con%ition No. 11 printe% at t(e 2ac; of t(e petitionerKs passa*e tic;ets purc(ase% 27 private respon%ents, =(ic( limits t(e venue of actions arisin* from t(e contract of carria*e to t(eCourt of 'irst &nstance of Ce2u, vali% an% enforcea2leO Ge$dB No. Consi%ere% in t(e li*(t of circumstances prevailin* in t(e interGislan% s(ippin* in%ustr7 in t(e countr7 to%a7, Be fin% an% (ol% t(at Con%ition No. 11 printe% at t(e 2ac; of t(e passa*e tic;ets s(oul% 2e (el% as voi% an% unenforcea2le for t(e follo=in* reasons first, un%er circumstances o2li*ation in t(e interG islan% s(ippin* in%ustr7, it is not :ust an% fair to 2in% passen*ers to t(e terms of t(e con%itions printe% at t(e 2ac; of t(e passa*e tic;ets, on =(ic( Con%ition No. 11 is $rinte% in fine letters, an% secon%, Con%ition No. 11 su2verts t(e pu2lic polic7 on transfer of venue of procee%in*s of t(is nature, since t(e same =ill pre:u%ice ri*(ts an% interests of innumera2le passen*ers locate% in %ifferent places of t(e countr7 =(o, un%er Con%ition No. 11, =ill (ave to file suits a*ainst petitioner onl7 in t(e Cit7 of Ce2u. Consi%erin* t(e e@pense an% trou2le a passen*er resi%in* outsi%e of Ce2u Cit7 =oul% incur to prosecute a claim in t(e Cit7 of Ce2u, (e =oul% most pro2a2l7 %eci%e not to file t(e action at all. 6(e con%ition =ill t(us %efeat, instea% of en(ance, t(e en%s of :ustice. ,pon t(e ot(er (an%, petitioner (as 2ranc(es or offices in t(e respective ports of call of its vessels an% can affor% to liti*ate in an7 of t(ese places. 0ence, t(e filin* of t(e suit in t(e C'& of 4isamis ?riental, as =as %one in t(e instant case, =ill not cause inconvenience to, muc( less pre:u%ice, petitioner. F*I+*M&IN#3 +R. !s. CO*RT OF APPEA(+ FactsB Nor2erto -uisum2in* Sr. an% Gunt(er .eoffler =ere amon* t(e passen*ers of $A.Js plane from 4actan Cit7 Ce2u to 4anila. 6(ere =as an e@c(an*e of *uns(ot 2et=een a Senior N9& a*ent <illarin an% t(e four arme% (i:ac;ers one of =(ic( =as HQal%7I =(o is a suspect in t(e ;illin* of 5u%*e <al%ez. Qal%7 t(en announce% to t(e passen*ers an% t(e pilots t(at it =as a (i:ac;e% an% or%ere% t(e pilot not to sen% an7 S?S. 6(e ro22ers %iveste% t(e passen*ers of t(eir 2elon*in*s inclu%in* -uisum2in* =(o =as %iveste% =it( (is :e=elries an% cas( amountin* to $18,6+/.// an% .eoffler =it( (is =atc(, =allet an% cas( amountin* to $1,7//. -uisum2in* suffere% a s(oc; for a *un (a% 2een pointe% at (im 27 one of t(e (ol% uppers. 6(e four (i:ac;ers succee%e% in t(eir escape upon arrival at 4anila. Conten%in* t(at t(e Caforesai% loss is a result of 2reac( of $A.Ks contractual o2li*ation to carr7 t(em an% t(eir 2elon*in*s an% effects to t(eir 4anila %estination =it(out loss or %ama*e, an% constitutes a serious %ereliction of $A.Ks le*al %ut7 to e@ercise e@traor%inar7 %ili*ence in t(e vi*ilance over t(e same, -uisum2in* an% .oeffler 2rou*(t suit a*ainst $A. to recover t(e value of t(e propert7 lost 27 t(em to t(e ro22ers as =ell as moral an% e@emplar7 %ama*es.6(e C'& %ismisse% t(e complaint an% t(e CA affirme% t(e C'&Js %ecision. 0ence t(e instant petition. 6(e plaintiffs %eclare% t(at t(eir suit =as institute% C... pursuant to Civil Co%e articles 17+1, ""8, 2/// an% 2//1 an% on t(e *roun% t(at in relation to sai% Civil Co%e article 2//1 t(e complaine%Gof act of t(e arme% ro22ers is not a force ma:eure, as t(e Kuse of armsK or Kirresisti2le forceK =as not ta;en a%vanta*e of 27 sai% arme% ro22ers in *ainin* entrance to %efen%antKs illGfate% plane in Duestions. An%, =it( respect to sai% Civil Co%e article 1""8, it is not essential t(at t(e lost effects an% 2elon*in*s of plaintiffs =ere actuall7 %elivere% to %efen%antKs plane personnel or t(at t(e latter =ere notifie% t(ereof. IssueB 1# B(et(er or not (i:ac;in*Gro22er7 =as force ma:eure. 2# B(et(er or not $A. =as ne*li*ent to overcome t(e (iG:ac;in*Gro22er7.

Ge$dB 14 )es. 6(e Court rule% t(at un%er t(e facts, Ct(e (i*(:ac;in*Gro22er7 =as force ma:eure,C o2servin* t(atL (i:ac;ers %o not 2oar% an airplane t(rou*( a 2latant %ispla7 of firepo=er an% violent fur7. 'irearms, (an%G*rena%es, %7namite, an% e@plosives are intro%uce% into t(e airplane surreptitiousl7 an% =it( t(e utmost cunnin* an% stealt(, alt(ou*( t(ere is an occasional use of innocent (osta*es =(o =ill 2e col%l7 mur%ere% unless a plane is *iven to t(e (i:ac;ersK complete %isposal. 24 No, $A. =as not ne*li*ent so as to overcome t(e force ma:eure nature of t(e (iG:ac;in*. 0i:ac;ers %o not 2oar% an airplane t(rou*( a 2latant %ispla7 of firepo=er an% violent fur7. 'irearms an% *rena%es are 2rou*(t to t(e plane surreptitiousl7. $A. coul% not (ave 2een faulte% for =ant of %ili*ence, particularl7 for failin* to ta;e positive measures to implement Civil Aeronautics A%ministration re*ulations pro(i2itin* civilians from carr7in* firearms on 2oar% t(e plane. 6(e use of t(e most sop(isticate% electronic %etection %evices ma7 (ave minimize% (i:ac;in* 2ut still ineffective a*ainst trul7 %eterminin* (i:ac;ers. 6(e petition is %enie% an% appeale% %ecision of CA is affirme%. PAN AMERICAN JOR(D AIRJA?+3 INC. !s. RAPADA+ FactsB $rivate respon%ent (el% $assen*er 6ic;et an% 9a**a*e Claim C(ec; for petitionerKs 'li*(t =it( t(e route from Guam to 4anila. B(ile stan%in* in line to 2oar% t(e fli*(t at t(e Guam airport, apa%as =as or%ere% 27 petitionerKs (an%carr7 control a*ent to c(ec;Gin (is Samsonite attac(e case. apa%as proteste% pointin* to t(e fact t(at ot(er coGpassen*ers =ere permitte% to (an%carr7 2ul;ier 2a**a*es. 0e steppe% out of t(e line onl7 to *o 2ac; a*ain at t(e en% of it to tr7 if (e can *et t(rou*( =it(out (avin* to re*ister (is attac(e case. 0o=ever, t(e same man in c(ar*e of (an%carr7 control %i% not fail to notice (im an% or%ere% (im a*ain to re*ister (is 2a**a*e. 'or fear t(at (e =oul% miss t(e plane if (e insiste% an% ar*ue% on personall7 ta;in* t(e valise =it( (im, (e acce%e% to c(ec;in* it in. 0e t(en *ave (is attac(e case to (is 2rot(er =(o (appene% to 2e aroun% an% =(o c(ec;e% it in for (im, 2ut =it(out %eclarin* its contents or t(e value of its contents. ,pon arrivin* in 4anila apa%as claime% an% =as *iven all (is c(ec;e%Gin 2a**a*es e@cept t(e attac(e case. 0e sent (is son, 5or*e apa%as to reDuest for t(e searc( of t(e missin* lu**a*e. 6(e petitioner e@erte% efforts to locate t(e lu**a*e t(rou*( t(e $an American Borl% Air=a7sG4anila &nternational Airport !$AN A4G4&A# 9a**a*e Service. apa%as receive% a letter from t(e petitionerKs counsel offerin* to settle t(e claim for t(e sum of M16/.// representin* t(e petitionerKs alle*e% limit of lia2ilit7 for loss or %ama*e to a passen*erKs personal propert7 un%er t(e contract of carria*e 2et=een apa%as an% $AN A4. efusin* to accept t(is ;in% of settlement, apa%as file% t(e instant action for %ama*es. 6(e lo=er court rule% in favor of apa%as after fin%in* no stipulation *ivin* notice to t(e 2a**a*e lia2ilit7 limitation. ?n appeal, t(e Court of Appeals affirme% t(e trial court %ecision. 0ence, t(is petition. IssueB B(et(er or not a passen*er is 2oun% 27 t(e terms of a passen*er tic;et %eclarin* t(e limitations of carrierJs lia2ilit7 Ge$dB )es. 6(e Barsa= Convention, as amen%e%, specificall7 provi%es t(at it is applica2le to international carria*e =(ic( it %efines in Article 1, par. 2 as follo=sL !60 7or the purposes of this Convention, the e)pression $international carriage$ means any carriage in which, according to the agreement between the parties, the place of departure and the place of destination, whether or not there be a breach in the carriage or a transhipment, are situated either within the territories of two +igh Contracting 8arties or within the territory of a single +igh Contracting 8arty if there is an agreed stopping place within the territory of another State, even if that State is not a +igh Contracting 8arty. Carriage between two points within the territory of a single +igh Contracting 8arty without an agreed stopping place within the territory of another State is not international carriage for the purposes of this Convention. .$+igh Contracting 8arty$ refers to a state which has ratified or adhered to the Convention, or which has not effectively denounced the Convention 9'rticle :/'.l0;0.

No=(ere in t(e Barsa= Convention, as amen%e%, is suc( a %etaile% notice of 2a**a*e lia2ilit7 limitations reDuire%. Nevert(eless, it s(oul% 2ecome a common, safe an% practical custom amon* air carriers to in%icate 2efore(an% t(e precise sums eDuivalent to t(ose fi@e% 27 t(e Convention. 6(e Convention *overns t(e availment of t(e lia2ilit7 limitations =(ere t(e 2a**a*e c(ec; is com2ine% =it( or incorporate% in t(e passen*er tic;et. &n t(e case at 2ar, t(e 2a**a*e c(ec; is com2ine% =it( t(e passen*er tic;et in one %ocument of carria*e. 6(e passen*er tic;et complies =it( Article 3, =(ic( provi%esL !c# a notice to t(e effect t(at, if t(e passen*erKs :ourne7 involves an ultimate %estination or stop in a countr7 ot(er t(an t(e countr7 of %eparture, t(e Barsa= Convention ma7 2e applica2le an% t(at t(e Convention *overns an% in most cases limits t(e lia2ilit7 of carriers for %eat( or personal in:ur7 an% in respect of loss of or %ama*e to 2a**a*e. B(at t(e petitioner is concerne% a2out is =(et(er or not t(e notice, =(ic( it %i% not fail to state in t(e plane tic;et an% =(ic( it %eeme% to (ave 2een rea% an% accepte% 27 t(e private respon%ent =ill 2e consi%ere% 27 t(is Court as a%eDuate un%er t(e circumstances of t(is case. As earlier state%, t(e Court fin%s t(e provisions in t(e plane tic;et sufficient to *overn t(e limitations of lia2ilities of t(e airline for loss of lu**a*e. 6(e passen*er, upon contractin* =it( t(e airline an% receivin* t(e plane tic;et, =as e@pecte% to 2e vi*ilant insofar as (is lu**a*e is concerne%. &f t(e passen*er fails to a%%uce evi%ence to overcome t(e stipulations, (e cannot avoi% t(e application of t(e lia2ilit7 limitations. 6(e facts s(o= t(at t(e private respon%ent actuall7 refuse% to re*ister t(e attac(e case an% c(ose to ta;e it =it( (im %espite (avin* 2een or%ere% 27 t(e $ANA4 a*ent to c(ec; it in. &n attemptin* to avoi% re*isterin* t(e lu**a*e 27 *oin* 2ac; to t(e line, private respon%ent manifeste% a %isre*ar% of airline rules on allo=a2le (an%carrie% 2a**a*es. $ru%ence of a reasona2l7 careful person also %ictates t(at cas( an% :e=elr7 s(oul% 2e remove% from c(ec;e%GinGlu**a*e an% place% in oneKs poc;ets or in a (an%carrie% 4anilaGpaper or plastic envelope. 6(e alle*e% lac; of enou*( time for (im to ma;e a %eclaration of a (i*(er value an% to pa7 t(e correspon%in* supplementar7 c(ar*es cannot :ustif7 (is failure to compl7 =it( t(e reDuirement t(at =ill e@clu%e t(e application of limite% lia2ilit7. A(ITA(IA !s. IAC FactsB Dr. 'elipa $a2lo, an associate professor in ,$, =as invite% to a meetin* of t(e Department of esearc( an% &sotopes of t(e 5oint 'A?G&A8A Division of Atomic 8ner*7 in 'oo% an% A*riculture of ,N in &spra, &tal7. 6o fulfill t(is en*a*ement, Dr. $a2lo 2oo;e% passa*e on petitioner airline, A.&6A.&A. S(e arrive% in 4ilan on t(e %a7 2efore t(e meetin* in accor%ance =it( t(e itinerar7 an% time ta2le set for (er 27 A.&6A.&A. S(e =as (o=ever tol% 27 t(e petitionerJs personnel t(ere at 4ilan t(at (er lu**a*e =as %ela7e% inasmuc( as t(e same =as in one of t(e succee%in* fli*(ts from ome to 4ilan. 0er lu**a*e consiste% of t=o suitcases. 9ut t(e ot(er fli*(ts arrivin* from ome %i% not (ave (er 2a**a*e on 2oar%. 6(e suitcases =ere not actuall7 restore% to $rof. $a2lo 27 petitioner until eleven mont(s an% four mont(s after t(e institution of (er action. IssueB Di% petitioner acte% in 2a% fait( so as to entitle private respon%ent to %ama*esO Ge$dB No. 6(e Barsa= Convention %oes not e@clu%e lia2ilit7 for ot(er 2reac(es of contract 27 t(e carrier. 6(usL C6(e Convention %oes not t(us operate as an e@clusive enumeration of t(e instances of an airlineKs lia2ilit7, or as an a2solute limit of t(e e@tent of t(at lia2ilit7. 4oreover, sli*(t reflection rea%il7 lea%s to t(e conclusion t(at it s(oul% 2e %eeme% a limit of lia2ilit7 onl7 in t(ose cases =(ere t(e cause of t(e %eat( or in:ur7 to person, or %estruction, loss or %ama*e to propert7 or %ela7 in its transport is not attri2uta2le to or atten%e% 27 an7 =ilful miscon%uct, 2a% fait(, rec;lessness, or ot(er=ise improper con%uct on t(e part of an7 official or

emplo7ee for =(ic( t(e carrier is responsi2le, an% t(ere is ot(er=ise no special or e@traor%inar7 form of resultin* in:ur7. 6(e ConventionKs provisions, in s(ort, %o not re*ulate or e@clu%e lia2ilit7 for ot(er 2reac(es of contract 27 t(e carrierK or miscon%uct of its officers an% emplo7ees, or for some particular or e@ceptional t7pe of %ama*e, ?t(er=ise, Kan air carrier =oul% 2e e@empt from an7 lia2ilit7 for %ama*es in t(e event of its a2solute refusal, in 2a% fait(, to compl7 =it( a contract of carria*e, =(ic( is a2sur%.K Nor ma7 it for a moment 2e suppose% t(at if a mem2er of t(e aircraft complement s(oul% inflict some p(7sical in:ur7 on a passen*er, or maliciousl7 %estro7 or %ama*e t(e latterKs propert7, t(e Convention mi*(t successfull7 2e plea%e% as t(e sole *au*e to %etermine t(e carrierKs lia2ilit7 to t(e passen*er. Neit(er ma7 t(e Convention 2e invo;e% to :ustif7 t(e %isre*ar% of some e@traor%inar7 sort of %ama*e resultin* to a passen*er an% preclu%e recover7 t(erefor 2e7on% t(e limits set 27 sai% Convention. &t is in t(is sense t(at t(e Convention (as 2een applie%, or i*nore%, %epen%in* on t(e peculiar facts presente% 27 eac( case. &n t(e case at 2ar, no 2a% fait( or ot(er=ise improper con%uct ma7 2e ascri2e% to t(e emplo7ees of petitioner airlineE an% Dr. $a2loKs lu**a*e =as eventuall7 returne% to (er, 2elate%l7, it is true, 2ut =it(out apprecia2le %ama*e. 6(e fact is, nevert(eless, t(at some species of in:ur7 =as cause% to Dr. $a2lo 2ecause petitioner A.&6A.&A misplace% (er 2a**a*e an% faile% to %eliver it to (er at t(e time appointe%Ga 2reac( of its contract of carria*e, to 2e sureG=it( t(e result t(at s(e =as una2le to rea% t(e paper an% ma;e t(e scientific presentation !consistin* of sli%es, autora%io*rams or films, ta2les an% ta2ulations# t(at s(e (a% painsta;in*l7 la2ore% over, at t(e presti*ious international conference, to atten% =(ic( s(e (a% travele% (un%re%s of miles, to (er em2arrassment an% t(e %isappointment an% anno7ance of t(e or*anizers. 6(ere can 2e no %ou2t t(at Dr. $a2lo un%er=ent profoun% %istress an% an@iet7, =(ic( *ra%uall7 turne% to panic an% finall7 %espair, from t(e time s(e learne% t(at (er suitcases =ere missin* up to t(e time =(en, (avin* *one to ome, s(e finall7 realize% t(at s(e =oul% no lon*er 2e a2le to ta;e part in t(e conference. Certainl7, t(e compensation for t(e in:ur7 suffere% 27 Dr. $a2lo cannot un%er t(e circumstances 2e restricte% to t(at prescri2e% 27 t(e Barsa= Convention for %ela7 in t(e transport of 2a**a*e. S(e is not, of course, entitle% to 2e compensate% for loss or %ama*e to (er lu**a*e. As alrea%7 mentione%, (er 2a**a*e =as ultimatel7 %elivere% to (er in 4anila, tar%il7, 2ut safel7. S(e is (o=ever entitle% to nominal %ama*esG=(ic(, as t(e la= sa7s, is a%:u%icate% in or%er t(at a ri*(t of t(e plaintiff, =(ic( (as 2een violate% or inva%e% 27 t(e %efen%ant, ma7 2e vin%icate% an% reco*nize%, an% not for t(e purpose of in%emnif7in* t(e plaintiff for an7 loss suffere%Gan% t(is Court a*rees t(at t(e respon%ent Court of Appeals correctl7 set t(e amount t(ereof at $1/,///.//.C

!. Sa"e#$ o" Pa enger

NOC*M !s. (A#*NA TA?A&A+ &*+ CO. FactsB A passen*er 2oar%e% t(e respon%ents 2us carr7in* a 2o@ =(ic( suc( person atteste% to t(e con%uctor as containin* clot(es an% miscellaneous items. Appellee, =(o =as a passen*er in appellantKs 9us No. 12/ t(en ma;in* a trip =it(in t(e 2arrio of Dita, 4unicipalit7 of 9a7, .a*una, =as in:ure% as a conseDuence of t(e e@plosion of firecrac;ers, containe% in t(e 2o@ 2rou*(t 27 t(e coGpassen*er. IssueB Di% .69 Co. e@ercise t(e e@traor%inar7 %ili*ence reDuire%O

Ge$dB )es, fairness %eman%s t(at in measurin* a common carrierKs %ut7 to=ar%s its passen*ers, allo=ance must 2e *iven to t(e reliance t(at s(oul% 2e repose% on t(e sense of responsi2ilit7 of all t(e passen*ers in re*ar% to t(eir common safet7. &t is to 2e presume% t(at a passen*er =ill not ta;e =it( (im an7t(in* %an*erous to t(e lives an% lim2s of (is coGpassen*ers, not to spea; of (is o=n. Not to 2e li*(tl7 consi%ere% must 2e t(e ri*(t to privac7 to =(ic( eac( passen*er is entitle%. 0e cannot 2e su2:ecte% to an7 unusual searc(, =(en (e protests t(e innocuousness of (is 2a**a*e an% not(in* appears to in%icate t(e contrar7, as in t(e case at 2ar. &n ot(er =or%s, inDuir7 ma7 2e ver2all7 ma%e as to t(e nature of a passen*erKs 2a**a*e =(en suc( is not out=ar%l7 percepti2le, 2ut 2e7on% t(is, constitutional 2oun%aries are alrea%7 in %an*er of 2ein* trans*resse%. Callin* a policeman to (is ai%, as su**este% 27 t(e service manual invo;e% 27 t(e trial :u%*e, in compellin* t(e passen*er to su2mit to more ri*i% inspection, after t(e passen*er (a% alrea%7 %eclare% t(at t(e 2o@ containe% mere clot(es an% ot(er miscellaneous, coul% not (ave :ustifie% invasion of a constitutionall7 protecte% %omain. MECENA+ !s. CA FactsB 4F6 C6aclo2an Cit7,C a 2ar*eGt7pe oil tan;er o=ne% 27 t(e $(ilippine National ?il Compan7 !$N?C# an% operate% 27 t(e $N?C S(ippin* an% 6ransport Corporation !$N?C S(ippin*#, (avin* unloa%e% its car*o, left for Ne*ros ?cci%ental =(en it colli%e% =it( a carrier s(ip name% Don 5uan. B(en t(e collision occurre%, t(e sea =as calm, t(e =eat(er fair an% visi2ilit7 *oo%. As a result of t(is collision, t(e 4F< CDon 5uanC san; an% (un%re%s of its passen*ers peris(e%. Amon* t(e illGfate% passen*ers =ere t(e parents of petitioners, t(e spouses $erfecto 4ecenas an% Sofia 4ecenas, =(ose 2o%ies =ere never foun% %espite intensive searc( 27 petitioners. IssueB B(et(er or not t(e respon%ents =ere ne*li*entO Ge$dB )es, t(e 2e(aviour of t(e captain of t(e CDon 5uanC in tills instanceGpla7in* ma(:on* C2efore an% up to t(e time of collision constitutes 2e(aviour t(at is simpl7 unaccepta2le on t(e part of t(e master of a vessel to =(ose (an%s t(e lives an% =elfare of at least seven (un%re% fift7 !7+/# passen*ers (a% 2een entruste%. B(et(er or not Capt. Santiste2an =as CoffG%ut7C or ConG%ut7C at or aroun% t(e time of actual collision is Duite immaterialE t(ere is, 2ot( realisticall7 spea;in* an% in contemplation of la=, no suc( t(in* as CoffG%ut7C (ours for t(e master of a vessel at sea t(at is a common carrier upon =(om t(e la= imposes t(e %ut7 of e@traor%inar7 %ili*ence. 6(e recor% s(o=s t(at t(e CDon 5uanC san; =it(in ten !1/# to fifteen !1+# minutes after initial contact =it( t(e C6aclo2an Cit7. B(ile t(e failure of Capt. Santiste2an to supervise (is officers an% cre= in t(e process of a2an%onin* t(e s(ip an% (is failure to avail of measures to prevent t(e too rapi% sin;in* of (is vessel after collision, %i% not cause t(e collision 27 t(emselves, suc( failures %ou2tless contri2ute% materiall7 to t(e conseDuent loss of life an%, moreover, =ere in%icative of t(e ;in% an% level of %ili*ence e@ercise% 27 Capt. Santiste2an in respect of (is vessel an% (is officers an% men prior to actual contact 2et=een t(e t=o !2# vessels. 6(e officerGonG=atc( in t(e CDon 5uanC a%mitte% t(at (e (a% faile% to inform Capt. Santiste2an not onl7 of t(e Cimminent %an*er of collisionC 2ut even of Ct(e actual collision itself C 6(ere is also evi%ence t(at t(e CDon 5uanC =as carr7in* more passen*ers t(an s(e (a% 2een certifie% as allo=e% to carr7. ,n%er t(ese circumstances, a presumption of *ross ne*li*ence on t(e part of t(e vessel !(er officers an% cre=# an% of its s(ipGo=ner arises. NE#RO+ NA,I#ATION CO. !s. CA

FactsB $rivate respon%ent amon 4iran%a purc(ase% from t(e Ne*ros Navi*ation Co., &nc. four special ca2in tic;ets for (is =ife, %au*(ter, son an% niece =(o =ere *oin* to 9acolo% Cit7 to atten% a famil7 reunion 2oar%in* t(e Don 5uan. Don 5uan colli%e% off t(e 6a2las Strait in 4in%oro, =it( t(e 4F6 6aclo2an Cit7, an oil tan;er o=ne% 27 t(e $(ilippine National ?il Compan7 !$N?C# an% t(e $N?C S(ippin* an% 6ransport Corporation !$N?CFS6C#. As a result, t(e 4F< Don 5uan san;. Several of (er passen*ers peris(e% in t(e sea tra*e%7. 6(e 2o%ies of some of t(e victims =ere foun% an% 2rou*(t to s(ore, 2ut t(e four mem2ers of private respon%entsK families =ere never foun%. IssueB B(et(er or not t(e petitioners e@ercise% t(e e@traor%inar7 %ili*ence reDuire%O Ge$dB No. As =it( t(e 4ecenas case, t(is Court foun% petitioner *uilt7 of ne*li*ence in !1# allo=in* or toleratin* t(e s(ip captain an% cre= mem2ers in pla7in* ma(:on* %urin* t(e vo7a*e, !2# in failin* to maintain t(e vessel sea=ort(7 an% !3# in allo=in* t(e s(ip to carr7 more passen*ers t(an it =as allo=e% to carr7. Also, t(e %ut7 to e@ercise %ue %ili*ence inclu%es t(e %ut7 to ta;e passen*ers or car*oes t(at are =it(in t(e carr7in* capacit7 of t(e vessel. 8OREAN AIR(INE+ CO. !s. CA FactsB 5uanito C. .apuz, an automotive electrician, =as contracte% for emplo7ment in 5e%%a(, Sau%i Ara2ia. .apuz =as suppose% to leave via 3orean Airlines. &nitiall7, (e =as C=aitGliste%,C =(ic( meant t(at (e coul% onl7 2e accommo%ate% if an7 of t(e confirme% passen*ers faile% to s(o= up at t(e airport 2efore %eparture. B(en t=o of suc( passen*ers %i% not appear, .apuz an% anot(er person 27 t(e name of $erico =ere *iven t(e t=o unclaime% seats. As (e =as a2out to 2oar% t(e sai% airline a 3A. officer pointe% to (im an% s(oute% CDo=nV Do=nVC 0e =as t(us 2arre% from ta;in* t(e fli*(t. B(en (e later as;e% for anot(er 2oo;in*, (is tic;et =as cancele% 27 3A.. ConseDuentl7, (e =as una2le to report for (is =or; in Sau%i Ara2ia =it(in t(e stipulate% 2G=ee; perio% an% so lost (is emplo7ment. IssueB B(et(er or not 3A. committe% a 2reac( of t(e Contract of Carria*eO Ge$dB )es. 6(e status of .apuz as stan%27 passen*er =as c(an*e% to t(at of a confirme% passen*er =(en (is name =as entere% in t(e passen*er manifest of 3A. for its 'li*(t No. 38 "/3. 0is clearance t(rou*( immi*ration an% customs clearl7 s(o=s t(at (e (a% in%ee% 2een confirme% as a passen*er of 3A. in t(at fli*(t. 3A. t(us committe% a 2reac( of t(e contract of carria*e 2et=een t(em =(en it faile% to 2rin* .apuz to (is %estination. 6(is Court (as (el% t(at a contract to transport passen*ers is %ifferent in ;in% an% %e*ree from an7 ot(er contractual relation. 6(e 2usiness of t(e carrier is mainl7 =it( t(e travelin* pu2lic. &t invites people to avail t(emselves of t(e comforts an% a%vanta*es it offers. 6(e contract of air carria*e *enerates a relation atten%e% =it( a pu2lic %ut7. $assen*ers (ave t(e ri*(t to 2e treate% 27 t(e carrierKs emplo7ees =it( ;in%ness, respect, courtes7 an% %ue consi%eration. 6(e7 are entitle% to 2e protecte% a*ainst personal miscon%uct, in:urious lan*ua*e, in%i*nities an% a2uses from suc( emplo7ees. So it is t(at an7 %iscourteous con%uct on t(e part of t(ese emplo7ees to=ar% a passen*er *ives t(e latter an action for %ama*es a*ainst t(e carrier. FORT*NE EMPRE++ !s. CA

FactsB $etitioner is a 2us compan7 in nort(ern 4in%anao. A 2us of petitioner fi*ure% in an acci%ent =it( a :eepne7 in 3aus=a*an, .anao %el Norte, resultin* in t(e %eat( of several passen*ers of t(e :eepne7, inclu%in* t=o 4aranaos. 6(e Consta2ular7 officer foun% out t(at certain 4aranaos =ere plannin* to ta;e reven*e on t(e petitioner 27 2urnin* some of its 2uses. ?n Novem2er 22, 1"8", t(ree arme% 4aranaos =(o preten%e% to 2e passen*ers, seize% a 2us of petitioner at .inamon, .anao %el Norte =(ile on its =a7 to &li*an Cit7. 6(e7 starte% pourin* *asoline insi%e t(e 2us, as t(e ot(er (el% t(e passen*er at 2a7 =it( a (an%*un t(en or%ere% t(e passen*er to *et off t(e 2us. A passen*er Att7. Caoron* plea%e% =it( t(e 4aranaos to spare t(e 2us %river 2ut t(e 4aranaos s(ot (im. IssueB B(et(er or not t(e petitioners =ere *uilt7 of a 2reac( of t(e contract of carria*eO Ge$dB )es, Art. 1763 of t(e Civil Co%e provi%es t(at a common carrier is responsi2le for in:uries suffere% 27 a passen*er on account of =ilfull acts of ot(er passen*ers, if t(e emplo7ees of t(e common carrier coul% (ave prevente% t(e act t(rou*( t(e e@ercise of t(e %ili*ence of a *oo% fat(er of a famil7. &n t(e present case, it is clear t(at 2ecause of t(e ne*li*ence of petitionerKs emplo7ees, t(e seizure of t(e 2us 27 4anan**olo an% (is men =as ma%e possi2le. Despite =arnin* 27 t(e $(ilippine Consta2ular7 at Ca*a7an %e ?ro t(at t(e 4aranaos =ere plannin* to ta;e reven*e on t(e petitioner 27 2urnin* some of its 2uses an% t(e assurance of petitionerKs operation mana*er, Dios%a%o 9ravo, t(at t(e necessar7 precautions =oul% 2e ta;en, petitioner %i% not(in* to protect t(e safet7 of its passen*ers. 0a% petitioner an% its emplo7ees 2een vi*ilant t(e7 =oul% not (ave faile% to see t(at t(e malefactors (a% a lar*e Duantit7 of *asoline =it( t(em. ,n%er t(e circumstances, simple precautionar7 measures to protect t(e safet7 of passen*ers, suc( as fris;in* passen*ers an% inspectin* t(eir 2a**a*es, prefera2l7 =it( nonGintrusive *a%*ets suc( as metal %etectors, 2efore allo=in* t(em on 2oar% coul% (ave 2een emplo7e% =it(out violatin* t(e passen*erKs constitutional ri*(ts. 6(e acts of 4aranaos coul% not 2e consi%ere% as caso fortuito 2ecause t(ere =as alrea%7 a =arnin* 27 t(e $C. No contri2utor7 ne*li*ence coul% 2e attri2ute% to t(e %ecease%. 6(e assailantKs motive =as to retaliate for t(e loss of life of t=o 4aranaos as a result of t(e collision 2et=een petitionerKs 2us an% t(e :eepne7 in =(ic( t(e t=o 4aranaos =ere ri%in*. 6(e arme% men actuall7 allo=e% %ecease% to retrieve somet(in* from t(e 2us. B(at apparentl7 an*ere% t(em =as (is attempt to (elp t(e %river of t(e 2us 27 plea%in* for (is life. #ATCGA(IAN !s. DE(IM FactsB $etitioner e7nal%a Gatc(alian 2oar%e% respon%entKs mini 2us. B(ile t(e 2us =as runnin* alon* t(e (i*(=a7 in 9arrio $a7ocpoc, 9auan*, ,nion, Ca snappin* soun%C =as su%%enl7 (ear% at one part of t(e 2us an%, s(ortl7 t(ereafter, t(e ve(icle 2umpe% a cement flo=er pot on t(e si%e of t(e roa%, =ent off t(e roa%, turne% turtle an% fell into a %itc( as a result petitioner sustaine% in:uries. As s(e an% several ot(ers =ere confine% in a (ospital, respon%ent Delim pai% for t(e (ospitalization e@penses an% (a% t(e passen*ers si*n a =aiver statin* t(at t(e7 =ere no lon*er intereste% to file a complaint. Not=it(stan%in* t(is %ocument, petitioner Gat(alian file% a complaint. IssueB B(et(er or not t(e private respon%ent =ere ne*li*ent. Ge$dB 6(e recor% 7iel%s affirmative evi%ence of fault or ne*li*ence on t(e part of respon%ent common carrier. 6(e %river %i% not stop to c(ec; if an7t(in* (a% *one =ron* =it( t(e 2us =(en t(e snappin* soun% =as (ear% an% ma%e ;no=n to (im 27 t(e passen*ers, instea% tol% t(em t(at it =as normal. 6(e %riverKs repl7 necessaril7 in%icate% t(at t(e same Csnappin* soun%C (a% 2een (ear% in t(e 2us on previous

occasions. 6(is coul% onl7 mean t(at t(e 2us (a% not 2een c(ec;e% p(7sicall7 or mec(anicall7 to %etermine =(at =as causin* t(e Csnappin* soun%C =(ic( (a% occurre% so freDuentl7 t(at t(e %river (a% *otten accustome% to it. Suc( a soun% is o2viousl7 alien to a motor ve(icle in *oo% operatin* con%ition, an% even a mo%icum of concern for life an% lim2 of passen*ers %ictate% t(at t(e 2us 2e c(ec;e% an% repaire%. 6(e o2vious continue% failure of respon%ent to loo; after t(e roa%=ort(iness an% safet7 of t(e 2us, couple% =it( t(e %riverKs refusal or ne*lect to stop t(e miniG2us after (e (a% (ear% once a*ain t(e Csnappin* soun%C an% t(e cr7 of alarm from one of t(e passen*ers, constitute% =anton %isre*ar% of t(e p(7sical safet7 of t(e passen*ers, an% (ence *ross ne*li*ence on t(e part of respon%ent an% (is %river. 9ecause =(at is involve% (ere is t(e lia2ilit7 of a common carrier for in:uries sustaine% 27 passen*ers in respect of =(ose safet7 a common carrier must e@ercise e@traor%inar7 %ili*ence, =e must construe an7 suc( purporte% =aiver most strictl7 a*ainst t(e common carrier. 'or a =aiver to 2e vali% an% effective, it must not 2e contrar7 to la=, morals, pu2lic polic7 or *oo% customs. A cursor7 e@amination of t(e purporte% =aiver =ill rea%il7 s(o= t(at appellees %i% not actuall7 =aive t(eir ri*(t to claim %ama*es from appellant for t(e latterKs failure to compl7 =it( t(eir contract of carria*e. All t(at sai% %ocument proves is t(at t(e7 e@presse% a C%esireC to ma;e t(e =aiver =(ic( o2viousl7 is not t(e same as ma;in* an actual =aiver of t(eir ri*(t. A =aiver of t(e ;in% invo;e% 27 appellant must 2e clear an% uneDuivocal. A person is entitle% to t(e p(7sical inte*rit7 of (is or (er 2o%7E if t(at inte*rit7 is violate% or %iminis(e%, actual in:ur7 is suffere% for =(ic( actual or compensator7 %ama*es are %ue an% assessa2le. $etitioner Gatc(alian is entitle% to 2e place% as nearl7 as possi2le in t(e con%ition t(at s(e =as 2efore mis(ap. A scar, especiall7 one on t(e face of t(e =oman, resultin* from t(e infliction of in:ur7 upon (er, is a violation of 2o%il7 inte*rit7, *ivin* raise to a le*itimate claim for restoration to (er con%ition ante. DE( CA+TI((O !s. IA?MA(IN FactsB 4ario %el Castillo, a %eafGmute, son of plaintiff Severo %el Castillo 2oar%e% a 2us of private respon%ent 2us line. ,pon ali*(tin* from t(e 2us, (e fell an% %ie% as a result. espon%ents conten% t(at t(e pro@imate cause of 4arioKs %eat( =as (is rec;lessness an% *ross ne*li*ence in :umpin* out of t(e 2us =(ile in motion. IssueB B(et(er or not respon%ents e@ercise% e@traor%inar7 %ili*ence. Ge$dB No, common carriers are responsi2le for t(e %eat( of t(eir passen*ers !Articles 1761 an% 22/6 of t(e Civil Co%e#. 6(is lia2ilit7 inclu%es t(e loss of t(e earnin* capacit7 of t(e %ecease%. &t appears proven t(at t(e %efen%ant corporations faile% to e@ercise t(e %ili*ence t(at =as t(eir %ut7 to o2serve accor%in* to Articles 1733 an% 17++. 6(e con%uctor =as apprise% of t(e fact t(at 4ario %el Castillo =as %eaf an% %um2. Bit( t(is ;no=le%*e t(e con%uctor s(oul% (ave ta;en e@traGor%inar7 care for t(e safet7 of t(e sai% passen*er. &n t(is (e faile%. PGI(IPPINE RA&&IT &*+ (INE+ !s. IAC FactsB Catalina $ascua =it( several ot(ers 2oar%e% t(e :eep o=ne% 27 spouses &si%ro 4an*une an% Guillerma Carreon an% %riven 27 6ranDuilino 4analo 2oun% for Carmen, osales, $an*asinan. ,pon reac(in* 6arlac t(e ri*(t rear =(eel of t(e :eepne7 =as %etac(e%, so it =as runnin* in an un2alance% position. 4analo steppe% on t(e 2ra;e, as a result of =(ic(, t(e :eepne7 =(ic( =as t(en runnin* on t(e eastern lane !its ri*(t of =a7# ma%e a ,Gturn, inva%in* an% eventuall7 stoppin* on t(e

=estern lane an% =as (it 27 t(e petitioner compan7Js 2us causin* t(e %eat( of Catalina $ascua an% t=o ot(er passen*ers. IssueB Bet(er or not t(e Doctrine of .ast Clear C(ance applies in t(e case at 2arO Ge$dB No, 6(e principle a2out Ct(e last clearC c(ance, =oul% call for application in a suit 2et=een t(e o=ners an% %rivers of t(e t=o colli%in* ve(icles. &t %oes not arise =(ere a passen*er %eman%s responsi2ilit7 from t(e carrier to enforce its contractual o2li*ations. 'or it =oul% 2e ineDuita2le to e@empt t(e ne*li*ent %river of t(e :eepne7 an% its o=ners on t(e *roun% t(at t(e ot(er %river =as li;e=ise *uilt7 of ne*li*ence.C &t is t(e rule un%er t(e su2stantial factor test t(at if t(e actorKs con%uct is a su2stantial factor in 2rin*in* a2out (arm to anot(er, t(e fact t(at t(e actor neit(er foresa= nor s(oul% (ave foreseen t(e e@tent of t(e (arm or t(e manner in =(ic( it occurre% %oes not prevent (im from 2ein* lia2le. 6(e 2us %riverKs con%uct is not a su2stantial factor in 2rin*in* a2out (arm to t(e passen*ers of t(e :eepne7. &t cannot 2e sai% t(at t(e 2us =as travellin* at a fast spee% =(en t(e acci%ent occurre% 2ecause t(e spee% of 8/ to "/ ;ilometers per (our, assumin* suc( calculation to 2e correct, is 7et =it(in t(e spee% limit allo=e% in (i*(=a7s. 6(e %river cannot 2e (el% :ointl7 an% severall7 lia2le =it( t(e carrier in case of 2reac( of t(e contract of carria*e. 6(e rationale 2e(in% t(is is rea%il7 %iscerni2le. 'irstl7, t(e contract of carria*e is 2et=een t(e carrier an% t(e passen*er, an% in t(e event of contractual lia2ilit7, t(e carrier is e@clusivel7 responsi2le t(erefore to t(e passen*er, even if suc( 2reac( 2e %ue to t(e ne*li*ence of (is %river. &n ot(er =or%s, t(e carrier can neit(er s(ift (is lia2ilit7 on t(e contract to (is %river nor s(are it =it( (im, for (is %riverKs ne*li*ence is (is. Secon%l7, if Be ma;e t(e %river :ointl7 an% severall7 lia2le =it( t(e carrier, t(at =oul% ma;e t(e carrierKs lia2ilit7 personal instea% of merel7 vicarious an% conseDuentl7, entitle% to recover onl7 t(e s(are =(ic( correspon%s to t(e %river, contra%ictor7 to t(e e@plicit provision of Article 2181 of t(e Ne= Civil Co%e. &*+TAMANTE !s. CA FactsB A collision occurre% 2et=een a *ravel an% san% truc;, an% a 4az%a passen*er 2us alon* t(e national roa% at Cali2u7o, 6anza, Cavite. 6(e front left si%e portion !2aran%illa# of t(e 2o%7 of t(e truc; si%es=ipe% t(e left si%e =all of t(e passen*er 2us, rippin* off t(e sai% =all from t(e %riverKs seat to t(e last rear seat. Due to t(e impact, several passen*ers of t(e 2us =ere t(ro=n out an% %ie% as a result of t(e in:uries t(e7 sustaine%, Amon* t(ose ;ille% =ere o*elio 9ustamante an% (is spouse an% c(il%ren, an% several ot(ers. Durin* t(e inci%ent, t(e car*o truc; =as %riven 27 %efen%ant 4ontesiano an% o=ne% 27 %efen%ant Del $ilarE =(ile t(e passen*er 2us =as %riven 27 %efen%ant Susulin. 6(e ve(icle =as re*istere% in t(e name of %efen%ant Novelo 2ut =as o=ne% an%For operate% as a passen*er 2us :ointl7 27 %efen%ants 4a*ti2a7 an% Serra%o, un%er a franc(ise, =it( a line from Naic, Cavite, to 9aclaran, $aranaDue, 4etro 4anila, an% vice versa, =(ic( Novelo sol% to 4a*ti2a7 on Novem2er 8, 1"81, an% =(ic( t(e latter transferre% to Serra%o !Cerra%o# on 5anuar7 18, 1"83. After a careful perusal of t(e circumstances of t(e case, t(e trial court reac(e% t(e conclusion Ct(at t(e ne*li*ent acts of 2ot( %rivers contri2ute% to or com2ine% =it( eac( ot(er in %irectl7 causin* t(e acci%ent =(ic( le% to t(e %eat( of t(e aforementione% persons. &t coul% not 2e %etermine% from t(e evi%ence t(at it =as onl7 t(e ne*li*ent act of one of t(em =(ic( =as t(e pro@imate cause of t(e collision. &n vie= of t(is, t(e lia2ilit7 of t(e t=o %rivers for t(eir ne*li*ence must 2e soli%ar7. 'rom sai% %ecision, onl7 %efen%ants 'e%erico %el $ilar an% 8%il2erto 4ontesiano, o=ner an% %river, respectivel7, of t(e san% an% *ravel truc; (ave interpose% an appeal 2efore t(e respon%ent Court of Appeals, =(ic( set asi%e t(e trial courtJs %ecision. 0ence t(e present petition.

IssueB B(et(er t(e respon%ent court (as properl7 an% le*all7 applie% t(e %octrine of Clast clear c(anceC in t(e present case %espite its o=n fin%in* t(at appellant car*o truc; %river 8%il2erto 4ontesiano =as a%mitte%l7 ne*li*ent in %rivin* (is car*o truc; ver7 fast on a %escen%in* roa% an% in t(e presence of t(e 2us %river comin* from t(e opposite %irection. Ge$dB 6(e respon%ent court a%opte% t(e %octrine of Clast clear c(ance.C 6(e %octrine, state% 2roa%l7, is t(at t(e ne*li*ence of t(e plaintiff %oes not preclu%e a recover7 for t(e ne*li*ence of t(e %efen%ant =(ere it appears t(at t(e %efen%ant, 27 e@ercisin* reasona2le care an% pru%ence, mi*(t (ave avoi%e% in:urious conseDuences to t(e plaintiff not=it(stan%in* t(e plaintiffKs ne*li*ence. &n ot(er =or%s, t(e %octrine of last clear c(ance means t(at even t(ou*( a personKs o=n acts ma7 (ave place% (im in a position of peril, an% an in:ur7 results, t(e in:ure% person is entitle% to recover7. As t(e %octrine is usuall7 state%, a person =(o (as t(e last clear c(ance or opportunit7 of avoi%in* an acci%ent, not=it(stan%in* t(e ne*li*ent acts of (is opponent or t(at of a t(ir% person impute% to t(e opponent is consi%ere% in la= solel7 responsi2le for t(e conseDuences of t(e acci%ent. !San*co, 6orts an% Dama*es, 1t( 8%., 1"86, p. 16+#. 6(e practical import of t(e %octrine is t(at a ne*li*ent %efen%ant is (el% lia2le to a ne*li*ent plaintiff, or even to a plaintiff =(o (as 2een *rossl7 ne*li*ent in placin* (imself in peril, if (e, a=are of t(e plaintiffs peril, or accor%in* to some aut(orities, s(oul% (ave 2een a=are of it in t(e reasona2le e@ercise of %ue case, (a% in fact an opportunit7 later t(an t(at of t(e plaintiff to avoi% an acci%ent !+7 Am. 5ur., 2%, pp. 7"8G7""#. All premises consi%ere%, t(e Court is convince% t(at t(e respon%ent Court committe% an error of la= in appl7in* t(e %octrine of last clear c(ance as 2et=een t(e %efen%ants, since t(e case at 2ar is not a suit 2et=een t(e o=ners an% %rivers of t(e colli%in* ve(icles 2ut a suit 2rou*(t 27 t(e (eirs of t(e %ecease% passen*ers a*ainst 2ot( o=ners an% %rivers of t(e colli%in* ve(icles. 6(erefore, t(e respon%ent court erre% in a2solvin* t(e o=ner an% %river of t(e car*o truc; from lia2ilit7. (ARA !s. ,A(ENCIA FactsB 6(e %ecease% =as an inspector of t(e 9ureau of 'orestr7 statione% in Davao. 6(e %efen%ant is en*a*e% in t(e 2usiness of e@portin* lo*s from (is lum2er concession in Cota2ato. .ara =ent to sai% concession upon instructions of (is c(ief to classif7 t(e lo*s of %efen%ant =(ic( =ere a2out to 2e loa%e% on a s(ip anc(ore% in t(e port of $aran*. .ara 2oar%e% =it( several ot(ers a pic;Gup 2oun% for Davao an% =ere seate% at t(e 2ac; on an improvise% 2enc(. .ara acci%entall7 fell from t(e pic;Gup an% as a result (e suffere% serious in:uries =(ic( lea% to (is %eat(. IssueB B(et(er or not t(e respon%ent faile% to e@ercise t(e or%inar7 %ili*ence reDuire%O Ge$dB )es. 6(e o=ner an% %river of a ve(icle o=es to accommo%ation passen*ers or invite% *uests merel7 t(e %ut7 to e@ercise reasona2le care so t(at t(e7 ma7 2e transporte% safel7 to t(eir %estination. 6(us, C6(e rule is esta2lis(e% 27 =ei*(t of aut(orit7 t(at t(e o=ner or operator of an automo2ile o=es t(e %ut7 to an invite% *uest to e@ercise reasona2le care in its operation, an% not unreasona2l7 to e@pose (im to %an*er an% in:ur7 27 increasin* t(e (azar% of travel. 6(e o=ner of t(e ve(icle in t(e case at 2ar is onl7 reDuire% to o2serve or%inar7 care, an% is not in %ut7 2oun% to e@ercise e@traor%inar7 %ili*ence as reDuire% 27 our la=. A passen*er must o2serve t(e %ili*ence of a fat(er of a famil7 to avoi% in:ur7 to (imself =(ic( means t(at if t(e in:ur7 to t(e passen*er (as 2een pro@imatel7 cause% 27 (is o=n ne*li*ence, t(e carrier cannot 2e (el% lia2le.

NECE++ITO !s. PARA+ FactsB Severina Garces an% (er oneG7ear ol% son 2oar%e% passen*er auto truc; of t(e $(ilippine a22it 9us .ines. 6(e truc; entere% a =oo%en 2ri%*e, 2ut t(e front =(eels s=erve% to t(e ri*(tE t(e %river lost control, an% after =rec;in* t(e 2ri%*eKs =oo%en rails, t(e truc; fell on its ri*(t si%e into a cree; =(ere =ater =as 2reast %eep. 6(e mot(er, Severina Garces, =as %ro=ne%E t(e son,t(e truc; fell on its ri*(t si%e into a cree; =(ere =ater =as 2reast %eep. 6(e mot(er, Severina Garces, =as %ro=ne%E t(e son sustaine% in:uries. IssueB B(et(er or not t(e carrier is lia2le Ge$dB B(ile t(e carrier is not an insurer of t(e safet7 of t(e passen*ers, it s(oul% nevert(eless 2e (el% to ans=er for t(e la=s its eDuipment if suc( fla=s =ere at all %iscovera2le. &n t(is connection, t(e manufacturer of t(e %efective appliance is consi%ere% in la= t(e a*ent of t(e carrier, an% t(e *oo% repute of t(e manufacturer =ill not relieve t(e carrier from lia2ilit7. 6(e rationale of t(e carrierKs lia2ilit7 is t(e fact t(at t(e passen*er (as no privit7 =it( t(e manufacturer of t(e %efective eDuipmentE (ence, (e (as no reme%7 a*ainst (im, =(ile t(e carrier usuall7 (as. IAPAN AIR(INE+ !s. CA FactsB $rivate respon%ents 2oar%e% t(e 5A. fli*(ts to 4anila =it( a stop over at Narita 5apan at t(e airlinesK e@pense. ,pon arrival at Narita private respon%ents =ere 2illete% at 0otel Ni;;o Narita for t(e ni*(t. 6(e ne@t %a7, private respon%ents =ent to t(e airport to ta;e t(eir fli*(t to 4anila. 0o=ever, %ue to t(e 4t. $inatu2o eruption ren%ere% NA&A inaccessi2le to airline traffic. 0ence, private respon%entsK trip to 4anila =as cancelle% in%efinitel7. 5A. t(en 2oo;e% anot(er fli*(t fort t(e passen*ers an% a*ain ans=ere% for t(e (otel accommo%ations 2ut still t(e succee%in* fli*(ts =ere cancelle%. IssueB B(et(er or not 5A. =as o2li*ate% to ans=er for t(e accommo%ation e@penses %ue to t(e force ma:eure. Ge$dB No, t(ere is no Duestion t(at =(en a part7 is una2le to fulfill (is o2li*ation 2ecause of Cforce ma:eure,C t(e *eneral rule is t(at (e cannot 2e (el% lia2le for %ama*es for nonGperformance. Corollaril7, =(en 5A. =as prevente% from resumin* its fli*(t to 4anila %ue to t(e effects of 4t. $inatu2o eruption, =(atever losses or %ama*es in t(e form of (otel an% meal e@penses t(e stran%e% passen*ers incurre%, cannot 2e c(ar*e% to 5A.. )et it is un%enia2le t(at 5A. assume% t(e (otel e@penses of respon%ents for t(eir une@pecte% overni*(t sta7 on 5une 1+, 1""1. &t (as 2een (el% t(at airline passen*ers must ta;e suc( ris;s inci%ent to t(e mo%e of travel. &n t(is re*ar%, a%verse =eat(er con%itions or e@treme climatic c(an*es are some of t(e perils involve% in air travel, t(e conseDuences of =(ic( t(e passen*er must assume or e@pect. B(ile 5A. =as no lon*er reDuire% to %efra7 private respon%entsK livin* e@penses %urin* t(eir sta7 in Narita on account of t(e fortuitous event, 5A. (a% t(e %ut7 to ma;e t(e necessar7 arran*ements to transport private respon%ents on t(e first availa2le connectin* fli*(t to 4anila. $etitioner 5A. rene*e% on its o2li*ation to loo; after t(e comfort an% convenience of its passen*ers =(en it %eclassifie% private

respon%ents from Ctransit passen*ersC to Cne= passen*ersC as a result of =(ic( private respon%ents =ere o2li*e% to ma;e t(e necessar7 arran*ements t(emselves for t(e ne@t fli*(t to 4anila.

(A?*#AN !s. IAC FactsB $e%ro 6. .a7u*an file% an action for %ama*es a*ainst Go%ofre%o &si%ro, alle*in* t(at =(ile at 9aret2et, 9a*a2a*, Nueva <izca7a, t(e $laintiff an% a companion =ere repairin* t(e tire of t(eir car*o truc; =(ic( =as par;e% alon* t(e ri*(t si%e of t(e National 0i*(=a7E t(at %efen%antKs truc;, %riven rec;lessl7 27 Daniel Serrano 2umpe% t(e plaintiff, t(at as a result, plaintiff =as in:ure% an% (ospitalize%. Defen%ant countere% t(at t(e plaintiff =as merel7 a 27stan%er, not a truc; (elper 2ein* a 2rot(erG inGla= of t(e %river of sai% truc; an% (ence must suffer t(e %ama*es. 6(e trial court %eci%e% in favor of t(e plaintiff, =(ic( =as reverse% 27 t(e CA, (ence t(e present petition. IssueB BFN %efen%ant is a2solve% 27 virtue of t(e %octrine of res ipsa loDuitur. Ge$dB No. es ipsa loDuitur is a %octrine =(ic( states t(usL CB(ere t(e t(in* =(ic( causes in:ur7 is s(o=n to 2e un%er t(e mana*ement of t(e %efen%ant, an% t(e acci%ent is suc( as in t(e or%inar7 course of t(in*s %oes not (appen if t(ose =(o (ave t(e mana*ement use proper care, it affor%s reasona2le evi%ence, in t(e a2sence of an e@planation 27 t(e %efen%ant, t(at t(e acci%ent arose from =ant of care. &t is clear t(at t(e %river %i% not ;no= (is responsi2ilities 2ecause (e apparentl7 %i% not c(ec; (is ve(icle 2efore (e too; it on t(e roa%. &f (e %i% (e coul% (ave %iscovere% earlier t(at t(e 2ra;e flui% pipe on t(e ri*(t =as cut, an% coul% (ave repaire% it an% t(us t(e acci%ent coul% (ave 2een avoi%e%. 4oreover, to our min%, t(e fact t(at t(e private respon%ent use% to instruct (is %river to 2e careful in (is %rivin*, t(at t(e %river =as license%, an% t(e fact t(at (e (a% no recor% of an7 acci%ent, as foun% 27 t(e respon%ent court, are not sufficient to %estro7 t(e fin%in* of ne*li*ence of t(e e*ional 6rial Court *iven t(e facts esta2lis(e% at t(e trial 6(e private respon%ent or (is mec(anic, =(o must 2e competent, s(oul% (ave con%ucte% a t(orou*( inspection of (is ve(icle 2efore allo=in* (is %river to %rive it. &n t(e li*(t of t(e circumstances o2tainin* in t(e case, =e (ol% t(at &si%ro faile% to prove t(at t(e %ili*ence of a *oo% fat(er of a famil7 in t(e supervision of (is emplo7ees =(ic( =oul% e@culpate (im from soli%ar7 lia2ilit7 =it( (is %river to t(e petitioner. espon%ent &si%ro posits t(at an7 immo2ile o2:ect alon* t(e (i*(=a7, li;e a par;e% truc;, poses serious %an*er to a movin* ve(icle =(ic( (as t(e ri*(t to 2e on t(e (i*(=a7. 0e ar*ues t(at since t(e par;e% car*o truc; in t(is case =as a t(reat to life an% lim2 an% propert7, it =as incum2ent upon t(e %river as =ell as t(e petitioner, =(o claims to 2e a (elper of t(e truc; %river, to e@ercise e@treme care so t(at t(e motorist ne*otiatin* t(e roa% =oul% 2e properl7 fore=arne% of t(e peril of a par;e% ve(icle. &si%ro su2mits t(at t(e 2ur%en of provin* t(at care an% %ili*ence =ere o2serve% is s(ifte% to t(e petitioner, for, as previousl7 claime%, (is !&si%roKs# &suzu truc; (a% a ri*(t to 2e on t(e roa%, =(ile t(e immo2ile car*o truc; (a% no 2usiness, so to spea;, to 2e t(ere. .i;e=ise, &si%ro proffers t(at t(e petitioner must s(o= to t(e satisfaction of a reasona2le min% t(at t(e %river an% (e !petitioner# (imself, provi%e% an earl7 =arnin* %evice, li;e t(at reDuire% 27 la=, or, 27 some ot(er a%eDuate means t(at =oul% properl7 fore=arn ve(icles of t(e impen%in* %an*er t(at t(e par;e% ve(icle pose% consi%erin* t(e time, place, an% ot(er peculiar circumstances of t(e occasion. A2sent suc( proof of care, as in t(e case at 2ar, &si%ro conclu%es, =oul%, un%er t(e %octrine of es ipsa loDuitur, evo;e t(e presumption of ne*li*ence on t(e part of t(e %river of t(e par;e% car*o truc; as =ell as (is (elper, t(e petitioner (erein, =(o =as fi@in* t(e flat tire of t(e sai% truc;. espon%ent &si%roKs contention is untena2le.

(A MA((ORCA !s. DE IE+*+ FactsB $laintiffs (us2an% an% =ife, to*et(er =it( t(eir minor c(il%ren, 2oar%e% a .a 4allorca 2us. ,pon arrival at t(eir %estination, plaintiffs an% t(eir c(il%ren ali*(te% from t(e 2us an% t(e fat(er le% t(em to a s(a%e% spot a2out + meters a=a7 from t(e ve(icle. 6(e fat(er returne% to t(e 2us to *et a piece of 2a**a*e =(ic( =as not unloa%e%. 0e =as follo=e% 27 (er %au*(ter aDuel. B(ile t(e fat(er =as still on t(e runnin* 2oar% a=aitin* for t(e con%uctor to *ive (is 2a**a*e, t(e 2us starte% to run so t(at t(e fat(er (a% to :ump. aDuel, =(o =as near t(e 2us, =as run over an% ;ille%. 6(e .o=er Court ren%ere% :u%*ment for t(e plaintiff =(ic( =as affirme% 27 CA, (ol%in* .a 4allorca lia2le for DuasiG%elict. .a 4allorca conten%e% t(at =(en t(e c(il% =as ;ille%, s(e =as no lon*er a passen*er an% t(erefore t(e contract of carria*e (a% terminate%. IssueB B(et(er or not t(e %ecease% is consi%ere% to 2e still a passen*er of t(e 2us to =(ic( t(e petitioner coul% 2e (el% lia2le. Ge$dB )es. &t is a reco*nize% rule t(at t(e relation 2et=een carrier an% passen*ers %oes not cease at t(e moment t(e passen*er ali*(ts from t(e carrierJs premises, to 2e %etermine% from t(e circumstances. &n t(is case, t(ere =as no utmost %ili*ence. 'irstl7, t(e %river, alt(ou*( stoppin* t(e 2us, %i% not put off t(e en*ine. Secon%l7, (e starte% to run t(e 2us even 2efore t(e 2us con%uctor *ave (im t(e si*nal an% =(ile t(e latter =as unloa%in* car*o. 0ere t(e presence of sai% passen*ers near t(e 2us =as not unreasona2le an% t(e %uration of responsi2ilit7 still e@ists. A&OITIL +GIPPIN# CORPORATION !s. CA FactsB Anacleto <iana 2oar%e% t(e vessel o=ne% 27 %efen%ant A9?&6&Q, at t(e port at San 5ose, ?cci%ental 4in%oro, 2oun% for 4anila. Sai% vessel arrive% at $ier 1, Nort( 0ar2or, 4anila, an% t(e passen*ers t(erein %isem2ar;e%, a *an*plan; (avin* 2een provi%e% connectin* t(e si%e of t(e vessel to t(e pier. &nstea% of usin* sai% *an*plan; Anacleto <iana %isem2ar;e% on t(e t(ir% %ec; =(ic( =as on t(e level =it( t(e pier. After sai% vessel (a% lan%e%, t(e $ioneer Steve%orin* Corporation too; over t(e e@clusive control of t(e car*oes loa%e% on sai% vessel pursuant to t(e 4emoran%um of A*reement 2et=een t(e t(ir% part7 %efen%ant $ioneer Steve%orin* Corporation an% %efen%ant A2oitiz. 6(e crane o=ne% 27 t(e t(ir% part7 %efen%ant an% operate% 27 its crane operator Ale:o 'i*ueroa =as place% alon*si%e t(e vessel an% one (our after t(e passen*ers of sai% vessel (a% %isem2ar;e%, it starte% operation 27 unloa%in* t(e car*oes from sai% vessel. B(ile t(e crane =as 2ein* operate%, Anacleto <iana =(o (a% alrea%7 %isem2ar;e% from sai% vessel o2viousl7 remem2erin* t(at some of (is car*oes =ere still loa%e% in t(e vessel, =ent 2ac; to t(e vessel, an% it =as =(ile (e =as pointin* to t(e cre= of t(e sai% vessel to t(e place =(ere (is car*oes =ere loa%e% t(at t(e crane (it (im, pinnin* (im 2et=een t(e si%e of t(e vessel an% t(e crane. 0e =as t(ereafter 2rou*(t to t(e (ospital =(ere (e later %ie%. $rivate respon%ents <ianas file% a complaint for %ama*es a*ainst A2oitiz for 2reac( of contract of carria*e. A2oitiz %enie% responsi2ilit7 conten%in* t(at at t(e time of t(e acci%ent, t(e vessel =as completel7 un%er t(e control of $ioneer as t(e =(ic( (an%le% t(e unloa%in* of car*oes from t(e vessel of A2oitiz. &t is also averre% t(at since t(e crane operator =as not an emplo7ee of A2oitiz, t(e latter cannot 2e (el% lia2le un%er t(e fello=Gservant rule. 5u%*ment is ren%ere% in favor of t(e plantiffs. 6(e trial court a2solve% $ioneer from lia2ilit7 for failure of t(e <ianas an% A2oitiz to prepon%erantl7 esta2lis(e% a case of ne*li*ence a*ainst t(e crane operator =(ic( t(e court rule% is never presume%. A2oitiz appeale% t(e same to respon%ent Court of Appeals =(ic( affirme% t(e fin%in*s of of t(e trial court e@cept as to t(e amount of %ama*es a=ar%e% to t(e <ianas. 0ence t(e instant petition. IssueB B(et(er or not t(e responsi2ilit7 of A2oitiz to t(e victim cease% =(en it %isem2ar;e% from t(e vessel.

Ge$dB No. 6(e rule is t(at t(e relation of carrier an% passen*er continues until t(e passen*er (as 2een lan%e% at t(e port of %estination an% (as left t(e vessel o=nerKs %oc; or premises. ?nce create%, t(e relations(ip =ill not or%inaril7 terminate until t(e passen*er (as, after reac(in* (is %estination, safel7 ali*(te% from t(e carrierKs conve7ance or (a% a reasona2le opportunit7 to leave t(e carrierKs premises. All persons =(o remain on t(e premises a reasona2le time after leavin* t(e conve7ance are to 2e %eeme% passen*ers, an% =(at is a reasona2le time or a reasona2le %ela7 =it(in t(is rule is to 2e %etermine% from all t(e circumstances, an% inclu%es a reasona2le time to see after (is 2a**a*e an% prepare for (is %eparture. 6(e carrierGpassen*er relations(ip is not terminate% merel7 27 t(e fact t(at t(e person transporte% (as 2een carrie% to (is %estination if, for e@ample, suc( person remains in t(e carrierKs premises to claim (is 2a**a*e. B(en t(e acci%ent occurre%, t(e victim =as in t(e act of unloa%in* (is car*oes, =(ic( (e (a% ever7 ri*(t to %o, from petitionerKs vessel. 8ven if (e (a% alrea%7 %isem2ar;e% an (our earlier, (is presence in petitionerKs premises =as not =it(out cause. 6(e victim (a% to claim (is 2a**a*e =(ic( =as possi2le onl7 one (our after t(e vessel arrive% since it =as a%mitte%l7 stan%ar% proce%ure in t(e case of petitionerKs vessels t(at t(e unloa%in* operations s(all start onl7 after t(at time. ConseDuentl7, un%er t(e fore*oin* circumstances, t(e victim Anacleto <iana is still %eeme% a passen*er of sai% carrier at t(e time of (is tra*ic %eat(. As foun% 27 t(e Court of Appeals, t(e evi%ence %oes not s(o= t(at t(ere =as a cor%on of %rums aroun% t(e perimeter of t(e crane, as claime% 27 petitioner. &t also a%verte% to t(e fact t(at t(e alle*e% presence of visi2le =arnin* si*ns in t(e vicinit7 =as %isputa2le an% not in%u2ita2l7 esta2lis(e%. 6(us, =e are not incline% to accept petitionerKs e@planation t(at t(e victim an% ot(er passen*ers =ere sufficientl7 =arne% t(at merel7 venturin* into t(e area in Duestion =as frau*(t =it( serious peril. 0ence, A2oitiz is ne*li*ent. $ioneer (a% ta;en t(e necessar7 safe*uar%s insofar as its unloa%in* operations =ere concerne%, a fact =(ic( appears to (ave 2een accepte% 27 t(e plaintiff t(erein 27 not implea%in* $ioneer as a %efen%ant, an% li;e=ise inceptivel7 27 A2oitiz 27 filin* its t(ir%Gpart7 complaint onl7 after ten mont(s from t(e institution of t(e suit a*ainst it. $arent(eticall7, $ioneer is not =it(in t(e am2it of t(e rule on e@traor%inar7 %ili*ence reDuire% of, an% t(e correspon%in* presumption of ne*li*ence foiste% on, common carriers li;e A2oitiz. MA((ARI +R. !s. CA FactsB 6(e passen*er :eepne7 %riven 27 petitioner Alfre%o 4allari 5r. an% o=ne% 27 (is coGpetitioner Alfre%o 4allari Sr. colli%e% =it( t(e %eliver7 van of respon%ent 9ulletin alon* t(e National 0i*(=a7 in 9aran*a7 San $a2lo, Dinalupi(an, 9ataan. 6(e impact cause% t(e :eepne7 to turn aroun% an% fall on its left si%e resultin* in in:uries to its passen*ers one of =(om =as &srael e7es =(o eventuall7 %ie% %ue to t(e *ravit7 of (is in:uries. 6(e =i%o= of t(e victim, file% a complaint for %ama*es a*ainst petitioners an% also a*ainst 9,..86&N, its %river 'eli@ An*eles, an% t(e N.<. Net(erlan%s &nsurance Compan7. 6(e trial court foun% t(at t(e pro@imate cause of t(e collision =as t(e ne*li*ence of 'eli@ An*eles, %river of t(e 9ulletin %eliver7 van, consi%erin* t(e fact t(at t(e left front portion of t(e %eliver7 truc; %riven 27 'eli@ An*eles (it an% 2umpe% t(e left rear portion of t(e passen*er :eepne7 %riven 27 Alfre%o 4allari 5r. 0ence, t(e trial court (el% t(at 9,..86&N an% 'eli@ An*eles are :ointl7 an% severall7 lia2le. &t also %ismisse% t(e complaint a*ainst t(e ot(er %efen%ants Alfre%o 4allari Sr. an% Alfre%o 4allari 5r. ?n appeal t(e Court of Appeals mo%ifie% t(e %ecision of t(e trial court an% foun% no ne*li*ence on t(e part of An*eles an% conseDuentl7 of (is emplo7er, respon%ent 9,..86&N. &nstea%, t(e appellate court rule% t(at t(e collision =as cause% 27 t(e sole ne*li*ence of petitioner Alfre%o 4allari 5r. =(o a%mitte% t(at imme%iatel7 2efore t(e collision an% after (e roun%e% a curve on t(e (i*(=a7, (e overtoo; a 'iera =(ic( (a% stoppe% on (is lane an% t(at (e (a% seen t(e van %riven 27 An*eles 2efore overta;in* t(e 'iera. 0ence t(is petition. IssueB B(et(er or not petitioners are ne*li*ent.

Ge$dB )es. 6(e Court of Appeals correctl7 foun%, t(at t(e collision occurre% imme%iatel7 after petitioner 4allari 5r. overtoo; a ve(icle in front of it =(ile traversin* a curve on t(e (i*(=a7. 6(is act of overta;in* =as in clear violation of Sec. 11, pars. !a# an% !2#, of A 1136 as amen%e%, ot(er=ise ;no=n as 6(e .an% 6ransportation an% 6raffic Co%e.
Sec. :%. <estrictions on overtaking and passing. .a0 !he driver of a vehicle shall not drive to the left side of the center line of a highway in overtaking or passing another vehicle proceeding in the same direction, unless such left side is clearly visible and is free of oncoming traffic for a sufficient distance ahead to permit such overtaking or passing to be made in safety. .b0 !he driver of a vehicle shall not overtake or pass another vehicle proceeding in the same direction when approaching the crest of a grade, nor upon a curve in the highway, where the driver's view along the highway is obstructed within a distance of five hundred feet ahead e)cept on a highway having two or more lanes for movement of traffic in one direction where the driver of a vehicle may overtake or pass another vehicle: 8rovided !hat on a highway, within a business or residential district, having two or more lanes for movement of traffic in one direction, the driver of a vehicle may overtake or pass another vehicle on the right.

6(e rule is settle% t(at a %river a2an%onin* (is proper lane for t(e purpose of overta;in* anot(er ve(icle in an or%inar7 situation (as t(e %ut7 to see to it t(at t(e roa% is clear an% not to procee% if (e cannot %o so in safet7. B(en a motor ve(icle is approac(in* or roun%in* a curve, t(ere is special necessit7 for ;eepin* to t(e ri*(t si%e of t(e roa% an% t(e %river %oes not (ave t(e ri*(t to %rive on t(e left (an% si%e rel7in* upon (avin* time to turn to t(e ri*(t if a car approac(in* from t(e opposite %irection comes into vie=. &n t(e instant case, 27 (is o=n a%mission, petitioner 4allari 5r. alrea%7 sa= t(at t(e 9,..86&N %eliver7 van =as comin* from t(e opposite %irection an% failin* to consi%er t(e spee% t(ereof since it =as still %ar; at +L// oKcloc; in t(e mornin* min%lessl7 occupie% t(e left lane an% overtoo; t=o ve(icles in front of it at a curve in t(e (i*(=a7. Clearl7, t(e pro@imate cause of t(e collision resultin* in t(e %eat( of &srael e7es, a passen*er of t(e :eepne7, =as t(e sole ne*li*ence of t(e %river of t(e passen*er :eepne7, petitioner Alfre%o 4allari 5r., =(o rec;lessl7 operate% an% %rove (is :eepne7 in a lane =(ere overta;in* =as not allo=e% 27 traffic rules. ,n%er Art. 218+ of t(e Civil Co%e, unless t(ere is proof to t(e contrar7, it is presume% t(at a person %rivin* a motor ve(icle (as 2een ne*li*ent if at t(e time of t(e mis(ap (e =as violatin* a traffic re*ulation. As foun% 27 t(e appellate court, petitioners faile% to present satisfactor7 evi%ence to overcome t(is le*al presumption. ,n%er Art. 17++ of t(e Civil Co%e, a common carrier is 2oun% to carr7 t(e passen*ers safel7 as far as (uman care an% foresi*(t can provi%e usin* t(e utmost %ili*ence of ver7 cautious persons =it( %ue re*ar% for all t(e circumstances. 4oreover, un%er Art. 17+6 of t(e Civil Co%e, in case of %eat( or in:uries to passen*ers, a common carrier is presume% to (ave 2een at fault or to (ave acte% ne*li*entl7, unless it proves t(at it o2serve% e@traor%inar7 %ili*ence. 'urt(er, pursuant to Art. 17+" of t(e same Co%e, it is lia2le for t(e %eat( of or in:uries to passen*ers t(rou*( t(e ne*li*ence or =illful acts of t(e formerKs emplo7ees. 6(is lia2ilit7 of t(e common carrier %oes not cease upon proof t(at it e@ercise% all t(e %ili*ence of a *oo% fat(er of a famil7 in t(e selection of its emplo7ees. Clearl7, 27 t(e contract of carria*e, t(e carrier :eepne7 o=ne% 27 4allari Sr. assume% t(e e@press o2li*ation to transport t(e passen*ers to t(eir %estination safel7 an% to o2serve e@traor%inar7 %ili*ence =it( %ue re*ar% for all t(e circumstances, an% an7 in:ur7 or %eat( t(at mi*(t 2e suffere% 27 its passen*ers is ri*(t a=a7 attri2uta2le to t(e fault or ne*li*ence of t(e carrier. &A?A+EN !s. CA FactsB $etitioner =as c(ar*e% of 0omici%e 6(ru ec;less &mpru%ence, 2ein* t(en t(e %river an% person inG c(ar*e of ural (ealt( ,nit 5eep, %rove alon* Su7o 4unicipal oa%, Sa*a%a, 4ountain $rovince in a ne*li*ent, careless an% impru%ent manner. Sai% :eep fell over a precipice in t(e a2ovementione% place causin* t(ere27 t(e %eat( of 8lena A=ic(en. After trial, t(e petitioner =as foun% *uilt7 of t(e c(ar*e. 6(e %ecision =as affirme% in CA, (ence t(e instant petition.

IssueB B(et(er or not petitioner is entitle% to acDuittal on t(e *roun% t(at t(e fin%in* of t(e Court of Appeals t(at t(e pro@imate cause of t(e %eat( of A=ic(en =as t(e petitionerKs Cne*li*ence in %rivin* at an unreasona2le spee%C is openl7 contrar7 to t(e evi%ence of t(e prosecution. Ge$dB )es. &t is o2vious t(at t(e pro@imate cause of t(e tra*e%7 =as t(e s;i%%in* of t(e rear =(eels of t(e :eep an% not t(e Cunreasona2le spee%C of t(e petitioner 2ecause t(ere is no evi%ence on recor% to prove or support t(e fin%in* t(at t(e petitioner =as %rivin* at Can unreasona2le spee%C. &t is a =ell ;no=n p(7sical tact t(at cars ma7 s;i% on *reas7 or slipper7 roa%s, as in t(e instant case, =it(out fault on account of t(e manner of (an%lin* t(e car. S;i%%in* means partial or complete loss of control of t(e car un%er circumstances not necessaril7 impl7in* ne*li*ence. &t ma7 occur =it(out fault. No ne*li*ence as a matter of la= can, t(erefore, 2e c(ar*e% to t(e petitioner. &n fact, t(e moment (e felt t(at t(e rear =(eels of t(e :eep s;i%%e%, (e promptl7 %rove it to t(e left (an% si%e of t(e roa%, parallel to t(e slope of t(e mountain, 2ecause as (e sai%, (e =ante% to pla7 safe an% avoi% t(e em2an;ment. ,n%er t(e particular circumstances of t(e instant case, t(e petitionerG %river =(o s;i%%e% coul% not 2e re*ar%e% as ne*li*ent, t(e s;i%%in* 2ein* an unforeseen event, so t(at t(e petitioner (a% a vali% e@cuse for (is %eparture from (is re*ular course. 6(e ne*li*ence of t(e petitioner not (avin* 2een sufficientl7 esta2lis(e%, (is *uilt of t(e crime c(ar*e% (as not 2een proven 2e7on% reasona2le %ou2t. 0e is, t(erefore, entitle% to acDuittal. CER,ANTE+ !s. CA FactsB $A. issue% to t(e petitioner a roun% trip plane tic;et for 4anilaG0onoluluG.os An*elesG0onoluluG 4anila, =(ic( tic;et e@pressl7 provi%e% an e@pir7 of %ate of one 7ear from issuance, i.e., until 4arc( 27, 1""/. ?n 4arc( 23, 1""/, four %a7s 2efore t(e e@pir7 %ate of su2:ect tic;et, t(e petitioner use% it. ,pon (is arrival in .os An*eles on t(e same %a7, (e imme%iatel7 2oo;e% (is .os An*elesG4anila return tic;et =it( t(e $A. office, an% it =as confirme% for t(e April 2, 1""/ fli*(t. ,pon learnin* t(at t(e same $A. plane =oul% ma;e a stopGover in San 'rancisco, an% consi%erin* t(at (e =oul% 2e t(ere on April 2, 1""/, petitioner ma%e arran*ements =it( $A. for (im to 2oar% t(e fli*(t &n San 'rancisco instea% of 2oar%in* in .os An*eles. ?n April 2, 1""/, =(en t(e petitioner c(ec;e% in at t(e $A. counter in San 'rancisco, (e =as not allo=e% to 2oar%. 6(e $A. personnel concerne% mar;e% t(e follo=in* notation on (is tic;etL C6&C386 N?6 ACC8$68D D,8 8S$& A6&?N ?' <A.&D&6).C $etitioner Cervantes file% a Complaint for Dama*es, for 2reac( of contract of carria*e. 9ut t(e sai% complaint =as %ismisse% for lac; of merit. ?n appeal, t(e lo=er courtJs %ecision =as up(el%, (ence t(e instant petition. IssueB B(et(er or not t(e act of t(e $A. a*ents in confirmin* su2:ect tic;et e@ten%e% t(e perio% of vali%it7 of petitionerKs tic;et. Ge$dB No. Since t(e $A. a*ents are not priv7 to t(e sai% A*reement an% petitioner ;ne= t(at a =ritten reDuest to t(e le*al counsel of $A. =as necessar7, (e cannot use =(at t(e $A. a*ents %i% to (is a%vanta*e. 6(e sai% a*ents, accor%in* to t(e Court of Appeals, acte% =it(out aut(orit7 =(en t(e7 confirme% t(e fli*(ts of t(e petitioner. ,n%er Article 1"8" of t(e Ne= Civil Co%e, t(e acts an a*ent 2e7on% t(e scope of (is aut(orit7 %o not 2in% t(e principal, unless t(e latter ratifies t(e same e@pressl7 or implie%l7. 'urt(ermore, =(en t(e t(ir% person !(erein petitioner# ;no=s t(at t(e a*ent =as actin* 2e7on% (is po=er or aut(orit7, t(e principal cannot 2e (el% lia2le for t(e acts of t(e a*ent. &f t(e sai% t(ir% person is a=are of suc( limits of aut(orit7, (e is to 2lame, an% is not entitle% to recover %ama*es from t(e a*ent, unless t(e latter un%ertoo; to secure t(e principalKs ratification. &n a=ar%in* moral %ama*es for 2reac( of contract of carria*e, t(e 2reac( must 2e =anton an% %eli2eratel7 in:urious or t(e one responsi2le acte% frau%ulentl7 or =it( malice or 2a% fait(. $etitioner ;ne=

t(ere =as a stron* possi2ilit7 t(at (e coul% not use t(e su2:ect tic;et, so muc( so t(at (e 2ou*(t a 2ac;Gup tic;et to ensure (is %eparture. S(oul% t(ere 2e a fin%in* of 2a% fait(, =e are of t(e opinion t(at it s(oul% 2e on t(e petitioner. B(at t(e emplo7ees of $A. %i% =as one of simple ne*li*ence. No in:ur7 resulte% on t(e part of petitioner 2ecause (e (a% a 2ac;Gup tic;et s(oul% $A. refuse to accommo%ate (im =it( t(e use of su2:ect tic;et. Neit(er can t(e claim for e@emplar7 %ama*es 2e up(el%. Suc( ;in% of %ama*es is impose% 27 =a7 of e@ample or correction for t(e pu2lic *oo%, an% t(e e@istence of 2a% fait( is esta2lis(e%. CA(A(A+ !s. CA FactsB $rivate respon%ent 8liza Sun*a, t(en a colle*e fres(man ma:orin* in $(7sical 8%ucation at t(e Siliman ,niversit7, too; a passen*er :eepne7 o=ne% an% operate% 27 petitioner <icente Calalas. As t(e :eepne7 =as fille% to capacit7 of a2out 21 passen*ers, Sun*a =as *iven 27 t(e con%uctor an Ce@tension seat,C a =oo%en stool at t(e 2ac; of t(e %oor at t(e rear en% of t(e ve(icle. ?n t(e =a7 to $o2lacion Si2ulan, Ne*ros ?cci%ental, t(e :eepne7 stoppe% to let a passen*er off. As s(e =as seate% at t(e rear of t(e ve(icle, Sun*a *ave =a7 to t(e out*oin* passen*er. 5ust as s(e =as %oin* so, an &suzu truc; %riven 27 &*lecerio <erena an% o=ne% 27 'rancisco Salva 2umpe% t(e left rear portion of t(e :eepne7. As a result, Sun*a =as in:ure%. Sun*a file% a complaint for %ama*es a*ainst Calalas, alle*in* violation of t(e contract of carria*e 27 t(e former in failin* to e@ercise t(e %ili*ence reDuire% of (im as a common carrier. Calalas, on t(e ot(er (an%, file% a t(ir%Gpart7 complaint a*ainst 'rancisco Salva, t(e o=ner of t(e &suzu truc;. 6(e lo=er court ren%ere% :u%*ment a*ainst Salva as t(ir%Gpart7 %efen%ant an% a2solve% Calalas of lia2ilit7, (ol%in* t(at it =as t(e %river of t(e &suzu truc; =(o =as responsi2le for t(e acci%ent. &t too; co*nizance of anot(er case !Civil Case No. 31"/#, file% 27 Calalas a*ainst Salva an% <erena, for DuasiG %elict, in =(ic( t(e same court (el% Salva an% (is %river <erena :ointl7 lia2le to Calalas for t(e %ama*e to (is :eepne7. ?n appeal to t(e Court of Appeals, t(e rulin* of t(e lo=er court =as reverse% on t(e *roun% t(at Sun*aKs cause of action =as 2ase% on a contract of carria*e, not DuasiG%elict, an% t(at t(e common carrier faile% to e@ercise t(e %ili*ence reDuire% un%er t(e Civil Co%e. 6(e appellate court %ismisse% t(e t(ir%G part7 complaint a*ainst Salva an% a%:u%*e% Calalas lia2le for %ama*es to Sun*a. 0ence, t(is petition. $etitioner conten%s t(at t(e rulin* in Civil Case No. 31"/ t(at t(e ne*li*ence of <erena =as t(e pro@imate cause of t(e acci%ent ne*ates (is lia2ilit7 an% t(at to rule ot(er=ise =oul% 2e to ma;e t(e common carrier an insurer of t(e safet7 of its passen*ers. 0e conten%s t(at t(e 2umpin* of t(e :eepne7 27 t(e truc; o=ne% 27 Salva =as a caso fortuito. $etitioner furt(er assails t(e a=ar% of moral %ama*es to Sun*a on t(e *roun% t(at it is not supporte% 27 evi%ence. IssueB S(oul% 2e petitioner 2e a2solve% if (is contentions are consi%ere%O Ge$dB No. 6(ere is no 2asis for t(e contention t(at t(e rulin* in Civil Case No. 31"/, fin%in* Salva an% (is %river <erena lia2le for t(e %ama*e to petitionerKs :eepne7, s(oul% 2e 2in%in* on Sun*a. &t is immaterial t(at t(e pro@imate cause of t(e collision 2et=een t(e :eepne7 an% t(e truc; =as t(e ne*li*ence of t(e truc; %river. 6(e %octrine of pro@imate cause is applica2le onl7 in actions for DuasiG%elict, not in actions involvin* 2reac( of contract. 6(e %octrine is a %evice for imputin* lia2ilit7 to a person =(ere t(ere is no relation 2et=een (im an% anot(er part7. &n suc( a case, t(e o2li*ation is create% 27 la= itself. 9ut, =(ere t(ere is a preGe@istin* contractual relation 2et=een t(e parties, it is t(e parties t(emselves =(o create t(e o2li*ation, an% t(e function of t(e la= is merel7 to re*ulate t(e relation t(us create%. &nsofar as contracts of carria*e are concerne%, some aspects re*ulate% 27 t(e Civil Co%e are t(ose respectin* t(e %ili*ence reDuire% of common carriers =it( re*ar% to t(e safet7 of passen*ers as =ell as t(e presumption of ne*li*ence in cases of %eat( or in:ur7 to passen*ers. &n DuasiG%elict, t(e ne*li*ence or fault s(oul% 2e clearl7 esta2lis(e% 2ecause it is t(e 2asis of t(e action, =(ereas in 2reac( of contract, t(e action can 2e prosecute% merel7 27 provin* t(e e@istence of t(e contract an% t(e fact t(at t(e o2li*or, in t(is case t(e common carrier, faile% to transport (is passen*er

safel7 to (is %estination. &n case of %eat( or in:uries to passen*ers, Art. 17+6 of t(e Civil Co%e provi%es t(at common carriers are presume% to (ave 2een at fault or to (ave acte% ne*li*entl7 unless t(e7 prove t(at t(e7 o2serve% e@traor%inar7 %ili*ence as %efine% in Arts. 1733 an% 17++ of t(e Co%e. 6(is provision necessaril7 s(ifts to t(e common carrier t(e 2ur%en of proof. No=, %i% t(e %river of :eepne7 carr7 Sun*a Csafel7 as far as (uman care an% foresi*(t coul% provi%e, usin* t(e utmost %ili*ence of ver7 cautious persons, =it( %ue re*ar% for all t(e circumstancesC as reDuire% 27 Art. 17++O Be %o not t(in; so. 'irst, t(e :eepne7 =as not properl7 par;e%, its rear portion 2ein* e@pose% a2out t=o meters from t(e 2roa% s(oul%ers of t(e (i*(=a7, an% facin* t(e mi%%le of t(e (i*(=a7 in a %ia*onal an*le. 6(e petitionerKs %river too; in more passen*ers t(an t(e allo=e% seatin* capacit7 of t(e :eepne7. 6(ese are violations of t(e .an% 6ransportation an% 6raffic Co%e. $etitioner s(oul% (ave foreseen t(e %an*er of par;in* (is :eepne7 =it( its 2o%7 protru%in* t=o meters into t(e (i*(=a7. As a *eneral rule, moral %ama*es are not recovera2le in actions for %ama*es pre%icate% on a 2reac( of contract for it is not one of t(e items enumerate% un%er Art. 221" of t(e Civil Co%e. As an e@ception, suc( %ama*es are recovera2leL !1# in cases in =(ic( t(e mis(ap results in t(e %eat( of a passen*er, as provi%e% in Art. 1761, in relation to Art. 22/6!3# of t(e Civil Co%eE an% !2# in t(e cases in =(ic( t(e carrier is *uilt7 of frau% or 2a% fait(, as provi%e% in Art. 222/.&n t(is case, t(ere is no le*al 2asis for a=ar%in* moral %ama*es since t(ere =as no factual fin%in* 27 t(e appellate court t(at petitioner acte% in 2a% fait( in t(e performance of t(e contract of carria*e. PE+TANO !s. +*MA?AN# FactsB Ananias Suma7an* =as ri%in* a motorc7cle alon* t(e national (i*(=a7 in &li(an, 6a2a*on, Ce2u. i%in* =it( (im =as (is frien% 4anuel oma*os. As t(e7 came upon a :unction =(ere t(e (i*(=a7 connecte% =it( t(e roa% lea%in* to 6a2a*on, t(e7 =ere (it 27 a passen*er 2us %riven 27 $estaAo an% o=ne% 27 4etro Ce2u =(ic( (a% trie% to overta;e t(em, sen%in* t(e motorc7cle an% its passen*ers (urtlin* upon t(e pavement. Apart from t(e institution of criminal c(ar*es a*ainst $estaAo, espon%entG(eirs, file% t(is civil action for %ama*es a*ainst petitioners. 6(e cases =ere consoli%ate%. 6(e lo=er court foun% petitioners lia2le. Sai% %ecision =as affirme% 27 CA, (ence t(is petition. IssueB B(et(er or not petitioner $estaAo =as ne*li*ent Ge$dB )es. $etitioners conten% t(at $estaAo =as not un%er an7 o2li*ation to slo= %o=n =(en (e overtoo; t(e motorc7cle, 2ecause t(e %ecease% (a% *iven =a7 to (im upon (earin* t(e 2us (orn. Seein* t(at t(e left si%e of t(e roa% =as clearl7 visi2le an% free of oncomin* traffic, $estaAo accelerate% (is spee% to pass t(e motorc7cle. 0avin* *iven =a7 to t(e 2us, t(e motorc7cle %river s(oul% (ave slo=e% %o=n until (e (a% 2een overta;en. 6(e7 furt(er conten% t(at t(e motorc7cle =as not in t(e mi%%le of t(e roa% nearest to t(e :unction 2ut =as on t(e inner lane. 6(is e@plains =(7 t(e %ama*es on t(e 2us =ere all on t(e ri*(t si%e G t(e ri*(t en% of t(e 2umper an% t(e ri*(t portion of t(e ra%iator *rill =ere 2ent an% %ente%. SC %isa*ree% =it( t(is contention an% consi%ere% t(e fin%in*s of CA, 2ase% on t(e testimon7 of t(e =itnesses, =(erein, it =as foun% out t(at as t(e t=o ve(icles approac(e% t(e :unction, t(e victim raise% (is left arm to si*nal t(at (e =as turnin* left to 6a2a*on, 2ut t(at t(e latter an% (is companion =ere t(ro=n off t(e motorc7cle after it =as 2umpe% 27 t(e overspee%in* 2us. As a professional %river operatin* a pu2lic transport 2us, $estaAo s(oul% (ave anticipate% t(at overta;in* at a :unction =as a perilous maneuver an% s(oul% t(us (ave e@ercise% e@treme caution. $etitioners also aver t(at t(e CA =as =ron* in attri2utin* t(e acci%ent to a fault7 spee%ometer an% in impl7in* t(at t(e acci%ent coul% (ave 2een avoi%e% (a% t(is instrument 2een properl7 functionin*. 6(is contention (as no factual 2asis. ,n%er Articles 218/ an% 2176 of t(e Civil Co%e, o=ners an% mana*ers are responsi2le for %ama*es cause% 27 t(eir emplo7ees. B(en an in:ur7 is cause% 27 t(e ne*li*ence of a servant or an emplo7ee, t(e master or emplo7er is presume% to 2e ne*li*ent eit(er in t(e selection or in t(e

supervision of t(at emplo7ee. 6(is presumption ma7 2e overcome onl7 27 satisfactoril7 s(o=in* t(at t(e emplo7er e@ercise% t(e care an% t(e %ili*ence of a *oo% fat(er of a famil7 in t(e selection an% t(e supervision of its emplo7ee. #I((ACO !s. MANI(A RAI(ROAD COMPAN? FactsB .ieut. 6omas Gillaco, (us2an% of t(e plaintiff, =as a passen*er in t(e earl7 mornin* train of t(e 4anila ailroa% Compan7 from Calam2a, .a*una to 4anila. B(en t(e train reac(e% t(e $aco ailroa% station, 8milio Devesa, a train *uar% of t(e 4anila ailroa% Compan7 (appene% to 2e in sai% station =aitin* for t(e same train =(ic( =oul% ta;e (im to 6utu2an Station, =(ere (e =as *oin* to report for %ut7. 8milio Devesa (a% a lon* stan%in* personal *ru%*e a*ainst 6omas Gillaco, 2ecause of t(is, Devesa s(ot Gillaco =it( t(e car2ine furnis(e% to (im 27 t(e 4anila ailroa% Compan7 for (is use as suc( train *uar%, upon seein* (im insi%e t(e train coac(. 6omas %ie%. Devesa =as convicte% of (omici%e. A complaint for %ama*es =as file% 27 t(e victimJs =i%o=. Dama*es =ere a=ar%e% to t(e plaintiff, (ence t(e instant petition. AppellantKs contention is t(at, no lia2ilit7 attac(es to it as emplo7er of t(e 8milio Devesa 2ecause t(e crime =as not committe% =(ile t(e sla7er =as in t(e actual performance of (is or%inar7 %uties an% service an% t(at no ne*li*ence on appellantKs part =as s(o=n. IssueB B(et(er or not appellant coul% 2e (el% lia2le for t(e acts of its emplo7ee. Ge$dB No. B(ile a passen*er is entitle% to protection from personal violence 27 t(e carrier or its a*ents or emplo7ees, since t(e contract of transportation o2li*ates t(e carrier to transport a passen*er safel7 to (is %estination, t(e responsi2ilit7 of t(e carrier e@ten%s onl7 to t(ose acts t(at t(e carrier coul% foresee or avoi% t(rou*( t(e e@ercise of t(e %e*ree of care an% %ili*ence reDuire% of it. &n t(e present case, t(e act of t(e train *uar% of t(e 4anila ailroa% Compan7 in s(ootin* t(e passen*er !2ecause of a personal *ru%*e nurture% a*ainst t(e latter since t(e 5apanese occupation# =as entirel7 unforseea2le 27 t(e 4anila ailroa% Co. 6(e latter (a% no means to ascertain or anticipate t(at t(e t=o =oul% meet, nor coul% it reasona2l7 forsee ever7 personal rancor t(at mi*(t e@ist 2et=een eac( one of its man7 emplo7ees an% an7 one of t(e t(ousan%s of eventual passen*ers ri%in* in its trains. 6(e s(ootin* in Duestion =as t(erefore Ccaso fortuitoC =it(in t(e %efinition of Art. 11/+ of t(e ol% Civil Co%e !=(ic( is t(e la= applica2le#, 2ein* 2ot( unforeseea2le an% inevita2le un%er t(e *iven circumstancesE an% pursuant to esta2lis(e% %octrine, t(e resultin* 2reac( of t(e compan7Ks contract of safe carria*e =it( t(e %ecease% =as e@cuse% t(ere27. MARANAN !s. PEREL FactsB o*elio Corac(ea, on ?cto2er 18, 1"6/, =as a passen*er in a ta@ica2 o=ne% an% operate% 27 $ascual $erez =(en (e =as sta22e% an% ;ille% 27 t(e %river, Simeon <alenzuela. <alenzuela =as prosecute% for (omici%e in t(e Court of 'irst &nstance of 9atan*as an% =as foun% *uilt7. B(ile appeal =as pen%in* in t(e Court of Appeals, Antonia 4aranan, o*elioKs mot(er, file% an action to recover %ama*es. 6(e court %eci%e% in plaintiffJs favor. 0ence t(e instant petition. IssueB B(et(er or not %efen%antG operators coul% 2e (el% lia2le for %ama*es Ge$dB )es. Defen%antGappellant relies solel7 on t(e rulin* enunciate% in Gillaco v. 4anila ailroa% Co., "7 $(il. 881, t(at t(e carrier is un%er no a2solute lia2ilit7 for assaults of its emplo7ees upon t(e passen*ers. 6(e atten%ant facts an% controllin* la= of t(at case an% t(e one at 2ar are ver7 %ifferent (o=ever. &n t(e Gillaco case, t(e passen*er =as ;ille% outsi%e t(e scope an% t(e course of %ut7 of t(e *uilt7 emplo7ee. No= (ere, t(e ;illin* =as perpetrate% 27 t(e %river of t(e ver7 ca2 transportin* t(e passen*er, in =(ose (an%s t(e carrier (a% entruste% t(e %ut7 of e@ecutin* t(e contract of carria*e. &n ot(er =or%s, unli;e t(e Gillaco

case, t(e ;illin* of t(e passen*er (ere too; place in t(e course of %ut7 of t(e *uilt7 emplo7ee an% =(en t(e emplo7ee =as actin* =it(in t(e scope of (is %uties. 4oreover, t(e Gillaco case =as %eci%e% un%er t(e provisions of t(e Civil Co%e of 188" =(ic(, unli;e t(e present Civil Co%e, %i% not impose upon common carriers a2solute lia2ilit7 for t(e safet7 of passen*ers a*ainst =ilful assaults or ne*li*ent acts committe% 27 t(eir emplo7ees. 6(e %eat( of t(e passen*er in t(e Gillaco case =as trul7 a fortuitous event =(ic( e@empte% t(e carrier from lia2ilit7. 6(e Civil Co%e provisions on t(e su2:ect of Common Carriers are ne= an% =ere ta;en from An*loG American .a=. 6(ere, t(e 2asis of t(e carrierKs lia2ilit7 for assaults on passen*ers committe% 27 its %rivers rests eit(er on !1# t(e %octrine of respon%eat superior or !2# t(e principle t(at it is t(e carrierKs implie% %ut7 to transport t(e passen*er safel7. ,n%er t(e first, =(ic( is t(e minorit7 vie=, t(e carrier is lia2le onl7 =(en t(e act of t(e emplo7ee is =it(in t(e scope of (is aut(orit7 an% %ut7. &t is not sufficient t(at t(e act 2e =it(in t(e course of emplo7ment onl7. ,n%er t(e secon% vie=, up(el% 27 t(e ma:orit7 an% also 27 t(e later cases, it is enou*( t(at t(e assault (appens =it(in t(e course of t(e emplo7eeKs %ut7. &t is no %efense for t(e carrier t(at t(e act =as %one in e@cess of aut(orit7 or in %iso2e%ience of t(e carrierKs or%ers. 6(e carrierKs lia2ilit7 (ere is a2solute in t(e sense t(at it practicall7 secures t(e passen*ers from assaults committe% 27 its o=n emplo7ees. As can 2e *leane% from Art. 17+", t(e Civil Co%e of t(e $(ilippines evi%entl7 follo=s t(e rule 2ase% on t(e secon% vie=. At least t(ree ver7 co*ent reasons un%erlie t(is rule. !1# t(e special un%erta;in* of t(e carrier reDuires t(at it furnis( its passen*er t(at full measure of protection affor%e% 27 t(e e@ercise of t(e (i*( %e*ree of care prescri2e% 27 t(e la=, inter alia from violence an% insults at t(e (an%s of stran*ers an% ot(er passen*ers, 2ut a2ove all, from t(e acts of t(e carrierKs o=n servants c(ar*e% =it( t(e passen*erKs safet7E !2# sai% lia2ilit7 of t(e carrier for t(e servantKs violation of %ut7 to passen*ers, is t(e result of t(e formers confi%in* in t(e servantKs (an%s t(e performance of (is contract to safel7 transport t(e passen*er, %ele*atin* t(ere=it( t(e %ut7 of protectin* t(e passen*er =it( t(e utmost care prescri2e% 27 la=E an% !3# as 2et=een t(e carrier an% t(e passen*er, t(e former must 2ear t(e ris; of =ron*ful acts or ne*li*ence of t(e carrierKs emplo7ees a*ainst passen*ers, since it, an% not t(e passen*ers, (as po=er to select an% remove t(em. Accor%in*l7, it is t(e carrierKs strict o2li*ation to select its %rivers an% similar emplo7ees =it( %ue re*ar% not onl7 to t(eir tec(nical competence an% p(7sical a2ilit7, 2ut also, no less important, to t(eir total personalit7, inclu%in* t(eir patterns of 2e(avior, moral fi2ers, an% social attitu%e. Appl7in* t(is strin*ent norm to t(e facts in t(is case, t(erefore, t(e lo=er court ri*(tl7 a%:u%*e% t(e %efen%ant carrier lia2le pursuant to Art. 17+" of t(e Civil Co%e. 6(e %ismissal of t(e claim a*ainst t(e %efen%ant %river =as also correct. $laintiffKs action =as pre%icate% on 2reac( of contract of carria*e7 an% t(e ca2 %river =as not a part7 t(ereto. 0is civil lia2ilit7 is covere% in t(e criminal case =(erein (e =as convicte% 27 final :u%*ment. PGI(IPPINE NATIONA( RAI(JA?+ !s. CA FactsB Binifre%o 6upan*, (us2an% of plaintiff, 2oar%e% a train of appellant at .i2manan, Camarines Sur, as a pa7in* passen*er 2oun% for 4anila. Due to some mec(anical %efect, t(e train stoppe% at Sipocot, Camarines Sur, for repairs. ,nfortunatel7, upon passin* &7am 9ri%*e at .ucena, -uezon, Binifre%o 6upan* fell off t(e train resultin* in (is %eat(.6(e train %i% not stop %espite t(e alarm raise% 27 t(e ot(er passen*ers t(at some2o%7 fell from t(e train. ,pon complaint file% 27 osario t(e lo=er court after trial, (el% $N lia2le for %ama*es for 2reac( of contract of carria*e. 6(e %ecision =as sustaine% 27 t(e appellate court (ence t(e present petition, =(erein $N raise% for t(e first time, as a %efense, t(e %octrine of state immunit7 from suit. &t alle*e% t(at it is a mere a*enc7 of t(e $(ilippine *overnment =it(out %istinct or separate personalit7 of its o=n, an% t(at its fun%s are *overnmental in c(aracter an%, t(erefore, not su2:ect to *arnis(ment or e@ecution.

IssueB B(et(er or not $N can raise t(e %efense of %octrine of state immunit7 from suit. Ge$dB No. 6(e $N =as create% un%er ep. Act 11+6, as amen%e%. Section 1 of t(e sai% Act provi%esL 6(e $(ilippine national ail=a7s s(all (ave t(e follo=in* po=ersL a. 6o %o all suc( ot(er t(in*s an% to transact all suc( 2usiness %irectl7 or in%irectl7 necessar7, inci%ental or con%ucive to t(e attainment of t(e purpose of t(e corporationE an% 2. Generall7, to e@ercise all po=ers of a corporation un%er t(e Corporation .a=. ,n%er t(e fore*oin* section, t(e $N (as all t(e po=ers, t(e c(aracteristics an% attri2utes of a corporation un%er t(e Corporation .a=. 6(ere can 2e no Duestion t(en t(at t(e $N ma7 sue an% 2e sue% an% ma7 2e su2:ecte% to court processes :ust li;e an7 ot(er corporation. No=, is $N ne*li*entO )es. 6(e appellate court foun%, t(e petitioner %oes not %en7, t(at t(e train 2oar%e% 27 t(e %ecease% Binifre%o 6upan* =as so overGcro=%e% t(at (e an% man7 ot(er passen*ers (a% no c(oice 2ut to sit on t(e open platforms 2et=een t(e coac(es of t(e train. &t is li;e=ise un%ispute% t(at t(e train %i% not even slo= %o=n =(en it approac(e% t(e &7am 9ri%*e =(ic( =as un%er repair at t(e time, Neit(er %i% t(e train stop, %espite t(e alarm raise% 27 ot(er passen*ers t(at a person (a% fallen off t(e train at l7am 9ri%*e. 6(e petitioner (as t(e o2li*ation to transport its passen*ers to t(eir %estinations an% to o2serve e@traor%inar7 %ili*ence in %oin* so. Deat( or an7 in:ur7 suffere% 27 an7 of its passen*ers *ives rise to t(e presumption t(at it =as ne*li*ent in t(e performance of its o2li*ation un%er t(e contract of carria*e. 6(us, as correctl7 rule% 27 t(e respon%ent court, t(e petitioner faile% to overt(ro= suc( presumption of ne*li*ence =it( clear an% convincin* evi%ence. 9ut =(ile petitioner faile% to e@ercise e@traor%inar7 %ili*ence as reDuire% 27 la=, it appears t(at t(e %ecease% =as c(ar*ea2le =it( contri2utor7 ne*li*ence. Since (e opte% to sit on t(e open platform 2et=een t(e coac(es of t(e train, (e s(oul% (ave (el% ti*(tl7 an% tenaciousl7 on t(e upri*(t metal 2ar foun% at t(e si%e of sai% platform to avoi% fallin* off from t(e spee%in* train. Suc( contri2utor7 ne*li*ence, =(ile not e@emptin* t(e $N from lia2ilit7, nevert(eless :ustifie% t(e %eletion of t(e amount a%:u%icate% as moral %ama*es an% e@emplar7 %ama*es. 8@emplar7 %ama*es ma7 2e allo=e% onl7 in cases =(ere t(e %efen%ant acte% in a =anton, frau%ulent, rec;less, oppressive or malevolent manner. I+AAC !s. A.(. AMMEN TRAN+. CO. FactsB $laintiff 2oar%e% %efen%antJs 2us as pa7in* passen*er from Al2a7. 6(e 2us colli%e% =it( a pic;Gup truc; =(ic( =as comin* from opposite %irection tr7in* to s=erve from a pile of *ravel. As a result, (is left arm =as completel7 severe%. $laintiff c(ose to (ol% %efen%ant lia2le on its contractual o2li*ation. $laintiff 2rou*(t an action for %ama*es =(ic( t(e lo=er court %ismisse% (ol%in* t(e %river of t(e pic;Gup car ne*li*ent an% not t(at of t(e 2us. IssueB B(et(er or not t(e common carrier is lia2le. Ge$dB 6(e 2us =as runnin* at a mo%erate spee%. 6(e %river of t(e 2us upon t(e spee%in* pic;Gup truc; s=erve% t(e 2us to t(e ver7 e@treme ri*(t of t(e roa%. Sai% %river =oul% not move t(e 2us furt(er =it(out en%an*erin* t(e safet7 of (is passen*ers. Not=it(stan%in* all t(ese efforts, t(e rear left si%e =as (it. 6(is fin%in* of t(e lo=er court =as sustaine%. Also, of t(e carrierJs emplo7ee is confronte% =it( a su%%en emer*enc7, (e is not (el% to t(e same %e*ree of care (e =oul% ot(er=ise, (e reDuire% in t(e a2sence of suc( emer*enc7. 97 placin* (is left arm on t(e =in%o=, (e is *uilt7 of contri2utor7 ne*li*ence cannot relieve t(e carrier 2ut can onl7 re%uce its lia2ilit7 !A 6. 1762#, t(is is a circumstance =(ic( furt(er militates a*ainst plaintiffJs position. &t is a prevailin* rule t(at it is ne*li*ence per se for passen*ers on a railroa% to protru%e an7 part of (is 2o%7 an% t(at no recover7 can 2e (a% for an in:ur7.I

&ACGE(OR EMPRE++3 !s.CA FactsB 6(e 2us o=ne% 27 $etitioners came from Davao Cit7 on its =a7 to Ca*a7an %e ?ro Cit7 passin* 9utuan Cit7. B(ile at 6a2onG6a2on, 9utuan Cit7, t(e 2us pic;e% up a passen*er, t(at a2out fifteen minutes later, a passen*er at t(e rear portion su%%enl7 sta22e% a $C sol%ier =(ic( cause% commotion an% panic amon* t(e passen*ers. B(en t(e 2us stoppe%, passen*ers ?rnominio 9eter an% Narcisa autraut =ere foun% l7in* %o=n t(e roa%, t(e former alrea%7 %ea% as a result of (ea% in:uries an% t(e latter also sufferin* from severe in:uries =(ic( cause% (er %eat( later. 6(e passen*er assailant ali*(te% from t(e 2us an% ran to=ar% t(e 2us(es 2ut =as ;ille% 27 t(e police. 6(ereafter, t(e (eirs of ?rnominio 9eter an% Narcisa autraut, private respon%ents (erein file% a complaint for Csum of mone7C a*ainst 9ac(elor 8@press, &nc., its alle*e% o=ner an% t(e %river ivera. 6(e lo=er court %ismisse% t(e complaint. CA reverse% t(e %ecision, (ence t(e instant petition. IssueB B(et(er or not petitioner is ne*li*ent. Ge$dB )es. 6(e lia2ilit7, if an7, of t(e petitioners is anc(ore% on culpa contractual or 2reac( of contract of carria*e. Art. 1732, 1733, 17++ an% 17+6 are applica2le. 6(ere is no Duestion t(at 9ac(elor is a common carrier. 0ence, 9ac(elor is 2oun% to carr7 its passen*ers safel7 as far as (uman care an% foresi*(t can provi%e usin* t(e utmost %ili*ence of ver7 cautious persons, =it( a %ue re*ar% for all t(e circumstances. &n t(e case at 2ar, ?rnominio 9eter an% Narcisa autraut =ere passen*ers of a 2us 2elon*in* to 9ac(elor an%, =(ile passen*ers of t(e 2us, suffere% in:uries =(ic( cause% t(eir %eat(. ConseDuentl7, pursuant to Article 17+6 of t(e Civil Co%e, 9ac(elor is presume% to (ave acte% ne*li*entl7 unless it can prove t(at it (a% o2serve% e@traor%inar7 %ili*ence in accor%ance =it( Articles 1733 an% 17++ of t(e Ne= Civil Co%e. 9ac(elor %enies lia2ilit7 for t(e %eat( of 9eter an% autraut in t(at t(eir %eat( =as cause% 27 a t(ir% person =(o =as 2e7on% its control an% supervision. &n effect, t(e petitioner, in or%er to overcome t(e presumption of fault or ne*li*ence un%er t(e la=, states t(at t(e ve(icular inci%ent resultin* in t(e %eat( of passen*ers 9eter an% autraut =as cause% 27 force ma:eure or caso fortuito over =(ic( t(e common carrier %i% not (ave an7 control. 6(e runnin* amuc; of t(e passen*er =as t(e pro@imate cause of t(e inci%ent as it tri**ere% off a commotion an% panic amon* t(e passen*ers suc( t(at t(e passen*ers starte% runnin* to t(e sole e@it s(ovin* eac( ot(er resultin* in t(e fallin* off t(e 2us 27 passen*ers 9eter an% autraut causin* t(em fatal in:uries. 6(e su%%en act of t(e passen*er =(o sta22e% anot(er passen*er in t(e 2us is =it(in t(e conte@t of force ma:eure. 0o=ever, in or%er t(at a common carrier ma7 2e a2solve% from lia2ilit7 in case of force ma:eure, it is not enou*( t(at t(e acci%ent =as cause% 27 force ma:eure. 6(e common carrier must still prove t(at it =as not ne*li*ent in causin* t(e in:uries resultin* from suc( acci%ent. &n t(is case, 9ac(elor =as ne*li*ent. Consi%erin* t(e factual fin%in*s of t(e Court of AppealsGt(e 2us %river %i% not imme%iatel7 stop t(e 2us at t(e (ei*(t of t(e commotionE t(e 2us =as spee%in* from a full stopE t(e victims fell from t(e 2us %oor =(en it =as opene% or *ave =a7 =(ile t(e 2us =as still runnin*E t(e con%uctor panic;e% an% 2le= (is =(istle after people (a% alrea%7 fallen off t(e 2usE an% t(e 2us =as not properl7 eDuippe% =it( %oors in accor%ance =it( la=Git is clear t(at t(e petitioners (ave faile% to overcome t(e presumption of fault an% ne*li*ence foun% in t(e la= *overnin* common carriers. 6(e petitionersK ar*ument t(at t(e petitioners Care not insurers of t(eir passen*ersC %eserves no merit in vie= of t(e failure of t(e petitioners to prove t(at t(e %eat(s of t(e t=o passen*ers =ere e@clusivel7 %ue to force ma:eure an% not to t(e failure of t(e petitioners to o2serve e@traor%inar7 %ili*ence in transportin* safel7 t(e passen*ers to t(eir %estinations as =arrante% 27 la=. FORT*NE EMPRE++3 INC.3 !s.CA

FactsB A 2us of petitioner fi*ure% in an acci%ent =it( a :eepne7 in 3aus=a*an, .anao %el Norter, resultin* in t(e %eat( of several passen*ers of t(e :eepne7, inclu%in* t=o 4aranaos. A consta2ular7 a*ent investi*ate% an% foun% out t(at t(e o=ner of t(e :eepne7 =as a 4aranao an% t(at certain 4aranaos =ere plannin* to ta;e reven*e on t(e petitioner 27 2urnin* some of its 2uses. 6(e operations mana*er of petitioner =as a%vise% to ta;e precautionar7 measures. 'our %a7s after t(e acci%ent, t(ree arme% 4aranaos =(o preten%e% to 2e passen*ers seize% a 2us petitioner 2oun% for &li*an Cit7 an% set it on fire. Att7. 6ali2 Caoron*, =(ose (eirs are private respon%ents (erein =as a passen*er of t(e 2us an% =as s(ot an% ;ille% %urin* t(e inci%ent. 6(e private respon%ents 2rou*(t t(is suit for 2reac( of contract of carria*e. Complaint =as %ismisse% in t(e lo=er court 2ut its %ecision =as reverse% in CA, (ence t(e instant petition, =it( petitioners contention t(at t(e acts of t(e 4aranaos is caso fortuito. IssueB Bas t(ere 2reac( of contract of carria*eO Ge$dB )es. Art. 1763 of t(e Civil Co%e provi%es t(at a common carrier is responsi2le for in:uries suffere% 27 a passen*er on account of =ilfull acts of ot(er passen*ers, if t(e emplo7ees of t(e common carrier coul% (ave prevente% t(e act t(rou*( t(e e@ercise of t(e %ili*ence of a *oo% fat(er of a famil7. &n t(e present case, it is clear t(at 2ecause of t(e ne*li*ence of petitionerKs emplo7ees, t(e seizure of t(e 2us 27 4anan**olo an% (is men =as ma%e possi2le. Despite =arnin* 27 t(e $(ilippine Consta2ular7 at Ca*a7an %e ?ro t(at t(e 4aranaos =ere plannin* to ta;e reven*e on t(e petitioner 27 2urnin* some of its 2uses an% t(e assurance of petitionerKs operation mana*er, Dios%a%o 9ravo, t(at t(e necessar7 precautions =oul% 2e ta;en, petitioner %i% not(in* to protect t(e safet7 of its passen*ers. 0a% petitioner an% its emplo7ees 2een vi*ilant t(e7 =oul% not (ave faile% to see t(at t(e malefactors (a% a lar*e Duantit7 of *asoline =it( t(em. ,n%er t(e circumstances, simple precautionar7 measures to protect t(e safet7 of passen*ers, suc( as fris;in* passen*ers an% inspectin* t(eir 2a**a*es, prefera2l7 =it( nonGintrusive *a%*ets suc( as metal %etectors, 2efore allo=in* t(em on 2oar% coul% (ave 2een emplo7e% =it(out violatin* t(e passen*erKs constitutional ri*(ts. $etitioner invo;es t(e rulin* in $ilapil v. Court of Appeals, an% De Guzman v. Court of Appeals, in support of its contention t(at t(e seizure of its 2us 27 t(e assailants constitutes force ma:eure. &n $ilapil v. Court of Appeals, it =as (el% t(at a common carrier is not lia2le for failin* to install =in%o= *rills on its 2uses to protect t(e passen*ers from in:uries cause 27 roc;s (urle% at t(e 2us 27 la=less elements. ?n t(e ot(er (an%, in De Guzman v. Court of Appeals, it =as rule% t(at a common carriers is not responsi2le for *oo%s lost as a result of a ro22er7 =(ic( is atten%e% 27 *rave or irresista2le t(reat, violence, or force. &t is clear t(at t(e cases of $ilapil an% De Guzman %o not appl7 to t(e prensent case. Art. 17++ of t(e Civil Co%e provi%es t(at Ca common carrier is 2oun% to carr7 t(e passen*ers as far as (uman care an% foresi*(t can provi%e, usin* t(e utmost %ili*ence of ver7 cautious persons, =it( %ue re*ar% for all t(e circumstances.C 6(us, =e (el% in $ilapil an% De Guzman t(at t(e respon%ents t(erein =ere not ne*li*ent in failin* to ta;e special precautions a*ainst t(reats to t(e safet7 of passen*ers =(ic( coul% not 2e foreseen, suc( as tortious or criminal acts of t(ir% persons. &n t(e present case, t(is factor of unforeseea2ilit7 !t(e secon% reDuisite for an event to 2e consi%ere% force ma:eure# is lac;in*. As alrea%7 state%, %espite t(e report of $C a*ent Generalao t(at t(e 4aranaos =ere plannin* to 2urn some of petitionerKs 2uses an% t(e assurance of petitionerKs operation mana*er !Dios%a%o 9ravo# t(at t(e necessar7 precautions =oul% 2e ta;en, not(in* =as reall7 %one 27 petitioner to protect t(e safet7 of passen*ers. 6(e petitioner conten%s t(at Att7. Caoron* =as *uilt7 of contri2utor7 ne*li*ence in returnin* to t(e 2us to retrieve somet(in*. 9ut Att7. Caoron* %i% not act rec;lessl7. &t s(oul% 2e pointe% out t(at t(e inten%e% tar*ets of t(e violence =ere petitioners an% its emplo7ees, not its passen*ers. 6(e assailantKs motive =as to retaliate for t(e loss of life of t=o 4aranaos as a result of t(e collision 2et=een petitionerKs 2us an% t(e :eepne7 in =(ic( t(e t=o 4aranaos =ere ri%in*. 4anan**olo, t(e lea%er of t(e *roup =(ic( (a% (i:ac;e% t(e 2us, or%ere% t(e passen*ers to *et off t(e 2us as t(e7 inten%e% to 2urn it an% its %river. 6(e arme% men actuall7 allo=e% Att7. Caoron* to retrieve somet(in* from t(e 2us. B(at apparentl7 an*ere%

t(em =as (is attempt to (elp t(e %river of t(e 2us 27 plea%in* for (is life. 0e =as pla7in* t(e role of t(e *oo% Samaritan. Certainl7, t(is act cannot 2e consi%ere% an act of ne*li*ence, let alone rec;lessness.

III. DAMAGES A. Ac#%al&Co'(en a#or$ Da'age

CARIA#A !s. (A#*NA TA?A&A+ &*+ COMPAN? FactsB 8%*ar%o Caria*a, a fourt(G7ear me%ical stu%ent of t(e ,niversit7 of Santos 6omas =as a passen*er in one of t(e 2uses of .69, =(en it 2umpe% a*ainst t(e en*ine of a train passin* 27, =(en it reac(e% t(at part of t(e $o2lacion of 9a7, .a*una, =(ere t(e national (i*(=a7 crosse% a railroa% trac;. 6(e front part of t(e 2o%7 of t(e 2us =as =rec;e%, t(e %river of t(e 2us %ie%, an% man7 passen*ers inclu%in* 8%*ar%o =ere in:ure%. 6(e .69 pai% t(e sum of $16,"61.1+ for all t(e (ospital, me%ical an% miscellaneous e@penses incurre% from 5une 18, 1"+2 to April 1"+3. 'rom 5anuar7 1+, 1"+3 up to April of t(e same 7ear 8%*ar%o sta7e% in a private (ouse in -uezon Cit7, t(e .69 (avin* a*ree% to *ive (im a su2sistence allo=ance of $1/.// %ail7 %urin* (is convalescence. 6(e present action =as file% to recover from t(e .69 an% t(e 4 Co., t(e total sum of $312,///.// as actual, compensator7, moral an% e@emplar7 %ama*es, an% for 8%*ar%oJs parents, t(e sum of $18,///.// in t(e same concepts. 6(e .69 %isclaime% lia2ilit7 claimin* t(at t(e acci%ent =as %ue to t(e ne*li*ence of its coG%efen%ant, t(e 4anila ailroa% Compan7, for not provi%in* a crossin* 2ar at t(e point =(ere t(e national (i*(=a7 crosse% t(e rail=a7 trac;, an% for t(is reason file% t(e correspon%in* crossG claim a*ainst t(e latter compan7 to recover t(e total sum of $18,1"1.7+ representin* t(e e@penses pai% to 8%*ar%o. 6(e 4anila ailroa% Compan7, in turn, %enie% lia2ilit7 upon t(e complaint an% crossGclaim, alle*in* t(at it =as t(e rec;less ne*li*ence of t(e 2us %river t(at cause% t(e acci%ent. 6(e lo=er court (el% t(at it =as t(e ne*li*ence of t(e 2us %river t(at cause% t(e acci%ent an%, as a result, ren%ere% :u%*ment sentencin* t(e .69 to pa7 8%*ar%o t(e sum of $1/,1"/.// as compensator7 %ama*es, =it( interest at t(e le*al rate from t(e filin* of t(e coinplaint, an% %ismissin* t(e crossGclaim a*ainst t(e 4anila ailroa% Compan7. 'rom t(is %ecision t(e Caria*as an% t(e .69 appeale%.6(e Caria*as claim t(at t(e trial court erre%L in a=ar%in* onl7 $1/,1"/.// as compensator7 %ama*es to 8%*ar%oE in not a=ar%in* t(em actual an% moral %ama*es, an% in not sentencin* appellant .69 to pa7 attorne7Ks fees. IssueB B?N petitioners are entitle% to an increase in compensator7 %ama*es, an% for actual an% moral %ama*es, as =ell as attorne7s fees. Ge$dB 6(e fin%in*s of t(e trial court =as sustaine%. 'irstl7, t(e train =(istle (a% 2een soun%e% several times 2efore it reac(e% t(e crossin*E secon%l7, t(at anot(er .69 2us =(ic( arrive% at t(e crossin* a(ea% of t(e one =(ere 8%*ar%o =as a passen*er, pai% (ee% to t(e =arnin* an% stoppe% 2efore t(e Ccrossin*C. ,pon t(e =(ole evi%ence on t(e matter, t(e lo=er court foun% t(at t(e removal of t(e ri*(t frontal lo2e of t(e 2rain of 8%*ar%o re%uce% (is intelli*ence 27 a2out +/NE t(at %ue to t(e replacement of t(e ri*(t frontal 2one of (is (ea% =it( a tantalum plate 8%*ar%o (as to lea% a Duite an% retire% life 2ecause Cif t(e tantalum plate is presse% in or %ente% it =oul% cause (is %eat(.C 6(e impression one *at(ers from t(is evi%ence is t(at, as a result of t(e p(7sical in:uries suffere% 27 8%*ar%o Caria*a, (e is no= in a (elpless con%ition, virtuall7 an invali%, 2ot( p(7sicall7 an% mentall7.

Appellant .69 a%mits t(at un%er Art. 22/1 of t(e Civil Co%e t(e %ama*es for =(ic( t(e o2li*or, *uilt7 of a 2reac( of contract 2ut =(o acte% in *oo% fait(, is lia2le s(all 2e t(ose t(at are t(e natural an% pro2a2le conseDuences of t(e 2reac( an% =(ic( t(e parties (a% foreseen or coul% (ave reasona2l7 foreseen at t(e time t(e o2li*ation =as constitute%, provi%e% suc( %ama*es, accor%in* to Art. 21"" of t(e same Co%e, (ave 2een %ul7 prove%. ,pon t(is premise it claims t(at onl7 t(e actual %ama*es suffere% 27 8%*ar%o consistin* of me%ical, (ospital an% ot(er e@penses in t(e total sum of $17,71".7+ are =it(in t(is cate*or7. Be are of t(e opinion (o=ever, t(at t(e income =(ic( 8%*ar%o coul% earn if (e s(oul% finis( t(e me%ical course an% pass t(e correspon%in* 2oar% e@aminations must 2e %eeme% to 2e =it(in t(e same cate*or7 2ecause t(e7 coul% (ave reasona2l7 2een foreseen 27 t(e parties at t(e time (e 2oar%e% t(e 2us. ,pon consi%eration of all t(e facts t(is Court is of t(e opinion, an% so (ol%s, t(at t(e compensator7 %ama*es a=ar%e% to petitioner s(oul% 2e increase% to $2+,///.//.6(e claim for moral %ama*es an% attorne7Ks fees is %enie%. Article 221" of t(e Civil Co%e enumerates t(e instances =(en moral %ama*es ma7 2e covere% an% t(e case un%er consi%eration %oes not fall un%er an7 one of t(em. 6(e present action cannot come un%er $ara*rap( 2 of sai% article 2ecause it is not one of DuasiG%elict an% cannot 2e consi%ere% as suc( 2ecause of t(e preGe@istin* contractual relation 2et=een t(e .a*una .69 an% 8%*ar%o. Neit(er coul% .69 2e (el% lia2le to pa7 moral %ama*es un%er Article 222/ of t(e Civil Co%e on account of 2reac( of its contract of carria*e 2ecause it %i% not act frau%ulentl7 or in 2a% fait(. .69 (a% e@ercise% %ue %ili*ence in t(e selection an% supervision of its emplo7ees li;e t(e %rivers of its 2uses in connection =it( t(e %isc(ar*e of t(eir %uties an% so it must 2e consi%ere% an o2li*or in *oo% fait(. $etitioner is not entitle% to recover attorne7Ks fees, 2ecause t(is case %oes not fall un%er an7 of t(e instances enumerate% in Article 22/8 of t(e Civil Co%e. ,I((A RE? TRAN+IT3 INC. !s. CA FactsB An &zuzu 'irst Class passen*er 2us o=ne% an% operate% 27 t(e petitioner left .in*a7en, $an*asinan, for 4anila. Amon* its pa7in* passen*ers =as t(e %ecease%, $olicronio -uintos, 5r. B(en t(e ve(icle =as nearin* t(e Sa%saran 9ri%*e on t(e national (i*(=a7 in 2arrio Sto. Domin*o, municipalit7 of 4inalin, $ampan*a, it frontall7 (it t(e rear si%e of a 2ullcart fille% =it( (a7. As a result t(e en% of a 2am2oo pole place% on top of t(e (a7loa% an% tie% to t(e cart to (ol% it in place, (it t(e ri*(t si%e of t(e =in%s(iel% of t(e 2us. 6(e protru%in* en% of t(e 2am2oo pole, a2out 8 feet lon* from t(e rear of t(e 2ullcart, penetrate% t(rou*( t(e *lass =in%s(iel% an% lan%e% on t(e face of %ecease%, =(ic( cause% several =oun%s. Not=it(stan%in* t(e me%ical assistance, t(e -uintos %ie%. 6(e private respon%ents, 2rou*(t t(is action a*ainst petitioner for 2reac( of t(e contract of carria*e to recover t(e a**re*ate sum of $63,7+/.// as %ama*es, inclu%in* attorne7Ks fees. Sai% petitioner conten%e% t(at t(e mis(ap =as %ue to a fortuitous event, 2ut t(is pretense =as re:ecte% 27 t(e trial court an% t(e Court of Appeals, 2ot( of =(ic( foun% t(at t(e acci%ent an% t(e %eat( of $olicronio (a% 2een %ue to t(e ne*li*ence of t(e 2us %river. 0ence t(e instant petition. IssueB Di% CA erre% in its a=ar% of t(e %ama*es to t(e (eirs of -uintosO Ge$dB No. $etitioner maintains t(at t(e lo=er courts (a% erre% in placin* t(e life e@pectanc7 of -uintos at 33G1F3, (e 2ein* over 2" 7ears of a*e at t(e time of (is %emise an% in not actin* in accor%ance =it( Alcantara v. Surro in =(ic( t(e %ama*es =ere compute% on a four 7ear 2asis, %espite t(e fact t(at t(e victim t(erein =as 3" 7ears ol%, at t(e time of (is %eat(, an% (a% a life e@pectanc7 of 28."/ 7ears. 6(e case cite% is not, (o=ever, controllin* in t(e one at 2ar. &n t(e Alcantara case, none of t(e parties (a% Duestione% t(e propriet7 of t(e fourG7ear 2asis a%opte% 27 t(e trial court in ma;in* its a=ar% of %ama*es. 9ot( parties appeale%, 2ut onl7 as re*ar%s t(e amount t(ereof. &n a%%ition, t(e case (a% not t(ere27 lai% %o=n an7 rule on t(e len*t( of time to 2e use% in t(e computation of %ama*es. &t even %eclare% Ht(at t(e %etermination of t(e in%emnit7 to 2e a=ar%e% to t(e (eirs of a %ecease% person (as t(erefore no fi@e% 2asis. 4uc( is left to

t(e %iscretion of t(e court consi%erin* t(e moral an% material %ama*es involve%, an% so it (as 2een sai% t(at t(ere can 2e no e@act or uniform rule for measurin* t(e value of a (uman life an% t(e measure of %ama*es cannot 2e arrive% at 27 precise mat(ematical calculation, 2ut t(e amount recovera2le %epen%s on t(e particular facts an% circumstances of eac( case. 6(e life e@pectanc7 of t(e %ecease% or of t(e 2eneficiar7, =(ic(ever is s(orter, is an important factor.I 6(us, life e@pectanc7 is, not onl7 relevant, 2ut, also, an important element in fi@in* t(e amount recovera2le 27 private respon%ents (erein. Alt(ou*( it is not t(e sole element %eterminative of sai% amount, no co*ent reason (as 2een *iven to =arrant its %isre*ar% an% t(e a%option, in t(e case at 2ar, of a purel7 ar2itrar7 stan%ar%, suc( as a fourG7ear rule. &n s(ort, t(e Court of Appeals (as not erre% in 2asin* t(e computation of petitionerKs lia2ilit7 upon t(e life e@pectanc7 of $olicronio -uintos, 5r. Bit( respect to t(e rate at =(ic( t(e %ama*es s(all 2e compute%, petitioner impu*ns t(e %ecision appeale% from upon t(e *roun% t(at t(e %ama*es a=ar%e% t(erein =ill (ave to 2e pai% no=, =(ereas most of t(ose sou*(t to 2e in%emnifie% =ill 2e suffere% 7ears later. 6(is ar*ument is 2asicall7 true, an% t(is is, per(aps, one of t(e reasons =(7 t(e Alcantara case points out t(e a2sence of a Cfi@e% 2asisC for t(e ascertainment of t(e %ama*es recovera2le in liti*ations li;e t(e one at 2ar. 5ust t(e same, t(e force of t(e sai% ar*ument of petitioner (erein is offset 27 t(e fact t(at, alt(ou*( pa7ment of t(e a=ar% in t(e case at 2ar =ill (ave to ta;e place upon t(e finalit7 of t(e %ecision t(erein, t(e lia2ilit7 of petitioner (erein (a% 2een fi@e% at t(e rate onl7 of $2,181.// a 7ear, =(ic( is t(e annual salar7 of $olicronio -uintos, 5r. at t(e time of (is %eat(, as a 7oun* Ctrainin* assistantC in t(e 9acnotan Cement &n%ustries, &nc. &n ot(er =or%s, unli;e t(e Alcantara case, on =(ic( petitioner relies, t(e lo=er courts %i% not consi%er, in t(e present case, $olicronioKs potentialit7 an% capacit7 to increase (is future income. &n%ee%, upon t(e conclusion of (is trainin* perio%, (e =as suppose% to (ave a 2etter :o2 an% 2e promote% from time to time, an%, (ence, to earn more, if not consi%erin* t(e *ro=in* importance of tra%e, commerce an% in%ustr7 an% t(e concomitant rise in t(e income level of officers an% emplo7ees t(erein muc( more. PAN AMERICAN JOR(D AIRJA?+3 INC. !s. IAC FactsB $rivate respon%ent 6eofista $. 6initi*an, file% a complaint a*ainst petitioner for %ama*es arisin* from %efen%antKs alle*e% refusal to accommo%ate (er on $an Am 'li*(t No. 131 from Sto. Domin*o, epu2lica Dominica to San 5uan, $uerto ico not=it(stan%in* t(e fact t(at s(e possesse% a confirme% plane tic;et purc(ase% from $an AmJs ?ffice at Sto. Domin*o an% t(us causin* (er to suffer mental an*uis(, serious an@iet7, 2esmirc(e% reputation, =oun%e% feelin*s an% social (umiliation S(e pra7e% t(at s(e 2e a=ar%e% moral %ama*es of $+//,///.//, e@emplar7 %ama*es of $2//,///.//, attorne7Ks fees of $1//,///.// an% actual %ama*es sustaine% 27 (er in t(e amount of ,SM1,+16.1+. Defen%ant %enie% t(at plaintiff =as a confirme% passen*er since t(e tic;et issue% to (er =as on an open space 2asis =(ic( meant t(at s(e coul% onl7 2e accommo%ate% if an7 of t(e confirme% passen*ers faile% to s(o= up at t(e airport 2efore %eparture. 6(e lo=er court ren%ere% :u%*ment in favor of plaintiff an% a=ar%e% t(e amount of %ama*es as pra7e% for. Sai% %ecision =as affirme% (ence t(e instant petition. IssueB B(et(er or not t(e a=ar% of %ama*es =as proper. Ge$dB )es, 2ut su2:ect to mo%ifications. 'in%in*s of fact s(o= t(at plaintiff, a 2usiness=oman an% a multimillionaire in (er o=n ri*(t as evi%ence% !proprietor of Sampa*uita estaurant, Ne= )or; Cit7 ,SAE 6reasurer of t(e 4olave Development Corp., $(il., proprietor of Cavite 0ouse(ol% Appliances an% o=enaKs 0an%icraft, $(il.#, =as on a 2usiness trip =it( a $anGAm tic;et. B(ile in Sto. Domin*o, after tal;in* t(ru t(e telep(one =it( a certain 4rs. .ili2et( Barner, t(e former sai% t(at s(e !plaintiff# must 2e in San 5uan t(at same %a7, to si*n (er contract or lose it. $laintiff e@pecte% to ma;e a profit of M1,/// in sai% contract 2ut since s(e =asnJt a2le to 2oar% t(e fli*(t, sai% profit =as lost. ?t(er instances =(ic( cause% moral %ama*e to t(e plaintiff are t(e follo=in*L

1. B(ile plaintiff =as stan%in* in line preparator7 to 2oar%in* t(e aircraft, ene Nolasco, a $an Am emplo7ee or%ere% (er in a lou% voice to step out of line 2ecause (er tic;et =as not confirme% to (er consternation an% em2arrassment in t(e presence of several people =(o (ear% an% or%er. Despite (er $leas s(e =as not allo=e% to 2oar% t(e aircraft. An% as if to a%% insult to in:ur7, s(e sa= t(at (er seat =as *iven to a =(ite man. 2. B(en t(e plane too; off =it(out (er 2ut =it( (er lu**a*e on 2oar%. S(e =as force% to return to (er (otel =it(out an7 lu**a*e muc( less an e@tra %ress. &t =as a *oo% t(in* t(at t(e 0otel people remem2ere% (er 2ecause t(e7 %o not usuall7 accommo%ate female *uests, =it(out an7 lu**a*e to sta7 in t(e (otel. B(ile normall7, (otel accommo%ation =as pai% 2efore %eparture, plaintiff =as ma%e to pa7 t(e room accommo%ation petition in a%vance. &t is clear from t(e evi%ence t(at %efen%ant issue% a $assen*er 6ic;et an% 9a**a*e C(ec; =it( assi*ne% seat an% t(e correspon%in* pass an% 2a**a*e claim s7m2ol. $laintiff =as ma%e to pa7 t(e fare an% terminal fee. At t(e immi*ration section, plaintiffKs passport =as stampe% accor%in*l7. $laintiffKs name =as inclu%e% in t(e passen*er manifest. An% t(ese s(o= t(at plaintiff =as in%ee% a confirme% passen*er of %efen%antKs 'li*(t 131 for San 5uan. 6(ere =as, t(erefore, a contract or carria*e perfecte% 2et=een plaintiff an% %efen%ant for t(e latter to ta;e plaintiff to (er place of %estination. 97 refusin* to accommo%ate plaintiff in sai% fli*(t, %efen%ant (a% =illfull7 an% ;no=in*l7 violate% t(e contract of carria*e an% faile% to 2rin* t(e plaintiff to (er place of %estination un%er its contract =it( plaintiff. 9a% fait( =as also present. Self enric(ment or fraternal interest an% not personal ill =ill ma7 (ave 2een t(e motive of %efen%ant, 2ut it is malice nevert(eless. 6(e fact t(at plaintiff =as or%ere% out un%er some prete@t in or%er to accommo%ate a =(ite man in an airline o=ne% 27 an American firm =it( a reputation for 2umpin* off nonG Caucasian to accommo%ate =(ites is ver7 re*retta2le. Defen%ant (avin* 2reac(e% its contract =it( plaintiff in 2a% fait(, it is not error to (ave a=ar%e% e@emplar7 %ama*es. 6(e rational 2e(in% e@emplar7 or corrective %ama*es is, as t(e name implies, to provi%e an e@ample or correction for pu2lic *oo% . &n vie= of it nature, it s(oul% 2e impose% in suc( amount as to sufficientl7 an% effectivel7 %eter similar 2reac( of contract in t(e future 27 %efen%ant an% ot(er airlines. An a=ar% of attorne7Ks fees is also in or%er, (avin* foun% 2a% fait( on t(e part of %efen%ant. Be 2elieve, (o=ever t(e amount of some %ama*es a=ar%e% to 2e e@or2itantL Be t(erefore re%uce t(e moral an% e@emplar7 %ama*es to t(e com2ine% total sum of 6=o 0un%re% 6(ousan% !$2//,///.//# $esos an% t(e attorne7Ks fees to 6=ent7 6(ousan% !$2/,///.//# $esos. 6(e a=ar% of actual %ama*es in t(e amount of ?ne 6(ousan% 'ive 0un%re% 'ort7 Si@ American %ollars an% fifteen cents !,SM1,+16.1+# compute% at t(e e@c(an*e rate prevailin* at t(e time of pa7ment is (ere27 retaine% an% *rante%. #ATCGA(IAN !s. DE(IM FactsB e7nal%a Gatc(alian 2oar%e% respon%entJs mini2us at a point in Arin*a7, .a ,nion 2oun% for 9auan*. B(ile t(e 2us =as runnin* alon* t(e (i*(=a7, a Hsnappin* soun%I =as su%%enl7 (ear% at one part of t(e 2us an% s(ortl7 t(ereafter, t(e ve(icle 2umpe% a cement flo=er pot on t(e si%e of t(e roa%, turne% turtle an% fell into t(e %itc(. ,pon me%ical e@amination, petitioner =as foun% to (ave sustaine% p(7sical in:uries on t(e le*, arm an% fore(ea%. IssueB &s petitioner entitle% to actual an% compensator7 %ama*esO Ge$dB )es. A person is entitle% to t(e p(7sical inte*rit7 of (is or (er 2o%7E if t(at inte*rit7 is violate% or %iminis(e%, actual in:ur7 is suffere% for =(ic( actual or compensator7 %ama*es are %ue an% assessa2le.

$etitioner Gatc(alian is entitle% to 2e place% as nearl7 as possi2le in t(e con%ition t(at s(e =as 2efore mis(ap. A scar, especiall7 one on t(e face of t(e =oman, resultin* from t(e infliction of in:ur7 upon (er, is a violation of 2o%il7 inte*rit7, *ivin* raise to a le*itimate claim for restoration to (er condition ante. &n Araneta v. Are*la%o, 1/1 $(il. +2", t(is Court a=ar%e% actual or compensator7 %ama*es, for amon* ot(er t(in*s, t(e sur*ical removal of t(e scar on t(e face of a 7oun* 2o7 =(o (a% 2een in:ure% in a ve(icular collision. Be consi%er t(at t(e amount of $1+,///.// to recover t(e cost of suc( plastic sur*er7 is not unreasona2le. +O&ERANO !s. MANI(A RAI(ROAD COMPAN? FactsB 5uana So2erano 2oar%e% a 2us of t(e 9en*uet Auto .ine !9A.#, a su2si%iar7 of t(e 4anila ailroa% Co. !4 #, %riven 27 Santia*o Caccam, 2oun% for 9a*uio Cit7. &n t(at trip, 5uana 2rou*(t =it( (er 3,/21 c(ic;en e**s to 2e sol% in 9a*uio Cit7, an% some personal 2elon*in*s =(ic( s(e nee%e% in t(at trip. A2out t(ree ;ilometers a=a7 from 9a*uio Cit7, alon* t(e Na*uilian roa%, t(e 2us (it a stone em2an;ment, causin* it to fall into a 6+Gfoot %eep precipice, resultin* in %eat( to t=o of its passen*ers an% serious p(7sical in:uries to 5uana an% loss an% %estruction of all (er 2elon*in*s. 5uana So2erano %i% not intervene in t(e criminal case 2ecause s(e file% a formal reservation to institute a separate civil action for %ama*es an% in%emnit7 a*ainst t(e 4 an% t(e 9A.. 9ecause of t(e loss of t(e e**s an% t(e %estruction of t(e personal effects t(at 5uana 2rou*(t =it( (er in t(at trip, 5ose So2erano, (er (us2an%, %eman%e% from t(e %efen%ant companies t(e value t(ereof amountin* to $37/.66, of =(ic( sum t(e 4 pai% $3//. 6(e 4 also pai% t(e %ail7 e@penses, allo=ances, su2sistence, (ospitalization, me%ical fees an% me%icines of 5uana So2erano, as =ell as t(e service fees of (er careta;er. 6(e 4 (as pai% a total sum of $1,21". .ater t(e 4 offere% to settle t(e case e@tra:u%iciall7, ten%erin* to t(e So2eranos t(e a%%itional sum of $+,///. 6(e offer =as re:ecte%, an% t(e So2eranos file% t(e present action a*ainst t(e %efen%ant companies an% Caccam, to recover from t(em %ama*es in t(e total sum of $76,7+7.76. After %ue trial, t(e lo=er court ren%ere% t(e %ecision appeale% from, %ismissin* at t(e same time t(e complaint a*ainst Caccam. 6(e So2eranos move% to (ave t(e %ecision reconsi%ere%. 6(e motion for reconsi%eration =as %enie%E (ence t(e present recourse. IssueB B(et(er or not t(e amount of %ama*es a=ar%e% is a%eDuate. Ge$dB 6(e So2eranos initiall7 conten% t(at t(e lo=er court erre% in %isallo=in* t(eir claim of $2//, representin* t(e e@penses of 5uana So2erano in atten%in* as a =itness in t(e criminal case an% attorne7Ks fees incurre% in connection t(ere=it(. 6(is claim =as correctl7 %enie% 27 t(e lo=er court, 2ecause t(ese e@penses =ere properl7 ta@a2le in t(e criminal case. &t ma7 2e ar*ue% t(at t(e So2eranos coul% not (ave recovere% t(is sum in t(e criminal case 2ecause 5uana So2erano e@pressl7 file% a formal reservation to institute a separate civil action for %ama*es, 2ut suc( reservation %i% not preserve =(atever ri*(ts t(e7 (a% a*ainst Caccam on t(e 2asis of t(e latterKs impru%ence. 6(e reservation is ineffective as to Caccam as it %i% not inclu%e (im amon* t(ose a*ainst =(om t(eir ri*(ts (a% 2een reserve%. An% t(e So2eranos not (avin* intervene% in t(e criminal case, t(is claim must 2e consi%ere% as (avin* 2een implie%l7 a%:u%icate% in t(e criminal case, an% cannot t(erefore 2e ventilate% in t(e present action. 6(e So2eranos ne@t conten% t(at t(e lo=er court erre% in %en7in* t(eir claim for moral %ama*es in t(e sum of $1+,///, for t(e p(7sical sufferin*, mental an*uis(, serious an@iet7 an% fri*(t t(e7 suffere% as a conseDuence of t(e mis(ap. 6(e lo=er court %enie% t(is claim on t(e stren*t( of t(e oftGreiterate% rulin* of t(is Court t(at moral %ama*es cannot 2e recovere% a*ainst t(e emplo7er in actions 2ase% on a 2reac( of contract of carria*e in t(e a2sence of malice, frau%, or 2a% fait(. 6(e lo=er court ri*(tl7 %enie% t(e claim for moral %ama*es as far as 5ose So2erano is concerne%. &n case of p(7sical in:uries, moral %ama*es are

recovera2le onl7 27 t(e part7 in:ure% an% not 27 (is ne@t of ;in, unless t(ere is e@press statutor7 provision to t(e contrar7. &n t(is case it =as 5uana So2erano, not (er (us2an% 5ose, =(o sustaine% t(e 2o%il7 in:uries. 6(e claim for attorne7Ks fees =as also properl7 %enie% 27 t(e lo=er court. 6(e So2eranos aver t(at t(e7 =ere o2li*e% to file a separate civil action for %ama*es a*ainst t(e %efen%ant companies. 6(is claim is pre%icate% upon para*rap(s !2# an% !+# of article 22/8 of t(e Ne= Civil Co%e, =(ic( provi%e t(at attorne7Ks fees an% e@penses of liti*ation ma7 2e recovere% =(en t(e %efen%antKs act or omission (as compelle% t(e plaintiff to liti*ate =it( t(ir% persons or incur e@penses to protect (is interest, or =(en t(e %efen%ant acte% in *ross an% evi%ent 2a% fait( in refusin* to satisf7 t(e plaintiffKs plainl7 vali%, :ust an% %eman%a2le claim. &t =ill 2e o2serve% t(at t(e %efen%ant companies offere% to settle t(e case 27 offerin* to t(e So2eranos t(e a%%itional sum of $+,///. 6(e So2eranos, (o=ever, re:ecte% t(e offer an% procee%e% to court to recover %ama*es in t(e total sum of $76,7+7.76. &t =as not, t(erefore, t(e %efen%ant companies t(at compelle% t(e So2eranos to liti*ate, or to incur e@penses in connection =it( t(e liti*ation institute% 27 t(em. .astl7, t(e nature an% e@tent of t(e p(7sical in:uries suffere% 27 5uana So2erano (as t(e effect of ma;in* (er live an a2normal life. Consi%erin* all t(e facts t(is Court is of t(e opinion t(at t(e sum of $+,/// in compensator7 %ama*es a=ar%e% to (er for loss of earnin* capacit7 is ina%eDuateE t(e amount s(oul% 2e increase% to $1+,///. S(e s(oul% also 2e a=ar%e% t(e sum of $1+.3+, representin* unrealize% profits from t(e 3,/21 c(ic;en e**s =(ic( s(e 2rou*(t =it( (er in t(e trip an% =(ic( =ere %estro7e%. MARCGAN !s. MENDOLA FactsB A passen*er 2us of t(e $(ilippine a22it 9us .ines =(ic( =as t(en %riven 27 Silverio 4arc(an fell into a %itc( some=(ere in 9arrio 4alan%a7, $olo, 9ulacan, =(ile travellin* on its =a7 to 4anila. As a result of =(ic( Arsenio 4en%oza, (is =ife an% c(il%, =(o =ere t(en insi%e t(e 2us as passen*ers =ere t(ro=n out to t(e *roun% resultin* in t(eir multiple in:uries. Arsenio 4en%oza suffere% t(e most serious in:uries =(ic( %ama*e% (is verte2rae causin* t(e paral7sis of (is lo=er e@tremities. An action =as 2rou*(t to recover %ama*es a*ainst petitioners pre%icate% not onl7 on a 2reac( of contract of carria*e for failure to safel7 conve7 t(e plaintiffs to t(eir %estination, 2ut also on account of a criminal ne*li*ence on t(e part of %efen%ant %river. 6(e lo=er court rule% in favor of plaintiffs. 6(e a=ar% of $1/,///.// as compensator7 %ama*es =as affirme% 27 CA. &t (o=ever a%%e% t(e amount of $3/,///.// as e@emplar7 %ama*es an% sustaine% t(e a=ar% of attorne7Ks fees in t(e amount of $+,///.//. IssueB B(et(er or not t(e a=ar% of moral %ama*es =as proper. Ge$dB )es. 6(e amount of $1/,///.// a=ar%e% 27 t(e court as compensator7 %ama*es is Duite reasona2le an% fair, consi%erin* t(at plaintiff Arsenio 4en%oza (a% suffere% paral7sis on t(e lo=er e@tremities, =(ic( =ill incapacitate (im to en*a*e in (is customar7 occupation t(rou*(out t(e remainin* 7ears of (is life, especiall7 so if =e ta;e into account t(at plaintiff =as onl7 26 7ears ol% =(en (e met an acci%ent an% ta;in* t(e avera*e span of life of a 'ilipino, (e ma7 2e e@pecte% to live for 3/ 7ears more an% 2earin* in min% t(e earnin* capacit7 of Arsenio 4en%oza =(o 2efore t(e (appenin* of t(is acci%ent %erive% an income of almost $1//.// a mont( from t(e 2usiness of (is fat(erGinGla= as Assistant Supervisor of t(e small fairs an% (is income of $1//.// a mont( =(ic( (e %erive% as a professional 2o@er. DE CA(I+TON !s. CA FactsB B(ile %rivin* a passen*er 2us in 9acolo% Cit7, private respon%ent Geronimo Dalmacio ran over 5uana Sonza <%a. %e Darroc(a !a ,S<A pensioner# =(o %ie% instantl7, survive% 27 (er onl7 c(il%, Gloria Darroc(a %e Caliston, t(e (erein petitioner.

$rosecute% for (omici%e t(ru rec;less impru%ence, Dalmacio =as convicte% 27 t(e Court of 'irst &nstance of Ne*ros ?cci%ental, sentence% to imprisonment an% or%ere% to pa7 t(e (erein petitioner $1+,///.// for t(e %eat( of t(e victim, $+,///.// as moral %ama*es, $+,///.// for 2urial e@penses an% $1/,///.// for loss of pension =(ic( t(e %ecease% (a% faile% to receive. ?n appeal, t(e former Court of Appeals mo%ifie% t(e C'& %ecision 27 a2solvin* Dalmacio from t(e pa7ment of t(e $1/,///.// for loss of pension an% cre%ite% (im for t(e amount of $+,///.// previousl7 pai% to t(e (erein petitioner un%er a ve(icular insurance polic7 o2taine% 27 t(e 2us o=ner. IssueB B(et(er or not t(e %eletion of t(e $1/,///.// a=ar%e% for loss of pension is :ustifie%O Ge$dB 6(e %eletion of t(e $1/,///.// a=ar%e% for loss of pension is un:ustifie%. ,n%er Article 22/6 of t(e Civil Co%eL 6(e amount of %ama*es for %eat( cause% 27 a crime or DuasiG%elict s(all 2e at least t(ree t(ousan% pesos, even t(ou*( t(ere ma7 (ave 2een miti*atin* circumstances. &n a%%itionL !1# 6(e %efen%ant s(all 2e lia2le for t(e loss of t(e earnin* capacit7 of t(e %ecease%, an% t(e in%emnit7 s(all 2e pai% to t(e (eirs of t(e latter. 6(e pension of t(e %ece%ent 2ein* a sure income t(at =as cut s(ort 27 (er %eat( for =(ic( Dalmacio =as responsi2le, t(e survivin* (eir of t(e former is entitle% to t(e a=ar% of $ 1/,///.// =(ic( is :ust eDuivalent to t(e pension t(e %ece%ent =oul% (ave receive% for one 7ear if s(e %i% not %ie. ?n t(e ot(er (an%, t(e $+,///.// pai% to t(e (erein petitioner 27 t(e insurer of t(e passen*er 2us =(ic( fi*ure% in t(e acci%ent ma7 2e %eeme% to (ave come from t(e 2us o=ner =(o procure% t(e insurance. Since t(e civil lia2ilit7 !e@G%elicto# of t(e latter for t(e %eat( cause% 27 (is %river is su2si%iar7 an%, at 2ottom, arises from t(e same culpa, t(e insurance procee%s s(oul% 2e cre%ite% in favor of t(e errant %river. PGI(IPPINE AIR(INE+3 INC. !s. CA 1=' +CRA 11> FactsB ?n Novem2er 23, 1"6/, Starli*(t 'li*(t No. 26 of t(e $(ilippine Air .ines too; off from &loilo, on its =a7 to 4anila, =it( 33 persons on 2oar%, inclu%in* t(e planeKs complement. 6(e plane %i% not reac( its %estination 2ut cras(e% on 4t. 9aco, 4in%oro, one (our an% fifteen minutes after ta;eoff .6(e plane =as &%entifie% as $&GC133, a DCG3 t7pe aircraft manufacture% in 1"12 an% acDuire% 27 $A. in 1"18. &t (a% flo=n almost 18,/// (ours at t(e time of its illfate% fli*(t. &t (a% 2een certifie% as air=ort(7 27 t(e Civil Aeronautics A%ministration. Amon* t(e fatalities =as Nicanor $a%illa. 0e =as 2" 7ears ol%, sin*le. 0is mot(er, Nativi%a% A. <%a. %e $a%illa, =as (is onl7 le*al (eir. As a result of (er sonKs %eat(, 4rs. $a%illa file% a complaint !=(ic( =as amen%e% t=ice# a*ainst $A., %eman%in* pa7ment of $6//,/// as actual an% compensator7 %ama*es, plus e@emplar7 %ama*es an% $6/,/// as attorne7Ks fees. &n its ans=er, $A. %enie% t(at t(e acci%ent =as cause% 27 its ne*li*ence or t(at of an7 of t(e planeKs fli*(t cre=, an% t(at, moreover, t(e %ama*es sou*(t =ere e@cessive an% speculative. ?n Au*ust 31, 1"73, t(e trial court promul*ate% a %ecision, or%erin* t(e %efen%ant $(ilippine Air .ines, &nc. to pa7 t(e plaintiff Nativi%a% A. <%a. %e $a%illa t(e sum of $177,///.// as a=ar% for t(e e@pecte% income of t(e %ecease% NicanorE $1/,///.// as moral %ama*esE $1/,///.// as attorne7Ks feesE an% to pa7 t(e costs. ?n Appeal to t(e Court of Appeals t(e %ecision of t(e trial court =as affirme% in toto.

IssueB B(et(er or not t(e respon%ent court erre% in computin* t(e a=ar%e% in%emnit7 on t(e 2asis of t(e life e@pectanc7 of t(e late Nicanor A. $a%illa rat(er t(an on t(e life e@pectanc7 of private respon%ent, an% t(us erre% in a=ar%in* =(at appears to t(e petitioner as t(e e@cessive sum of $177,/// as in%emnit7 for loss of earnin*s. Ge$dB $etitioner relies on Ct(e principle of la= *enerall7 reco*nize% an% applie% 27 t(e courts in t(e ,nite% StatesC t(at Ct(e controllin* element in %eterminin* loss of earnin*s arisin* from %eat( is, as esta2lis(e% 27 aut(orities, t(e life e@pectanc7 of t(e %ecease% or of t(e 2eneficiar7, =(ic(ever is s(orter. 0o=ever, resort to forei*n :urispru%ence =oul% 2e proper onl7 if no la= or :urispru%ence is availa2le locall7 to settle a controvers7. 8ven in t(e a2sence of local statute an% case la=, forei*n :urispru%ence is onl7 persuasive. 'or t(e settlement of t(e issue at (an%, t(ere are enou*( applica2le local la=s an% :urispru%ence. ,n%er Article 1761 an% Article 22/6!1# of t(e Civil Co%e, t(e a=ar% of %ama*es for %eat( is compute% on t(e 2asis of t(e life e@pectanc7 of t(e %ecease%, not of (is 2eneficiar7. 6(e articles provi%eL Art. 1761. Dama*es in cases comprise% in t(is Section s(all 2e a=ar%e% in accor%ance =it( 6itle S<&&& of t(is 9oo;, concernin* Dama*es. Article 22/6 s(all also appl7 to t(e %eat( of a passen*er cause% 27 t(e 2reac( of contract 27 a common carrier. Art. 22/6. 6(e amount of %ama*es for %eat( cause% 27 a crime or DuasiG %elict s(all 2e at least t(ree t(ousan% pesos, even t(ou*( t(ere ma7 (ave 2een miti*atin* circumstances. &n a%%itionL !1# 6(e %efen%ant s(all 2e lia2le for t(e loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter E suc( in%emnit7 s(all in ever7 case 2e assesse% an% a=ar%e% 27 t(e court, unless t(e %ecease% on account of permanent p(7sical %isa2ilit7 not cause% 27 t(e %efen%ant, (a% no earnin* capacit7 at t(e time of (is %eat(. &n t(e case of =avila vs. 8'2, 1" SC A 1"7 =(ic( involve% t(e same tra*ic plane cras(, t(is Court %etermine% not onl7 $A.s lia2ilit7 for ne*li*ence or 2reac( of contract, 2ut also t(e manner of computin* t(e %ama*es %ue t(e plaintiff t(erein =(ic( it 2ase% on t(e life e@pectanc7 of t(e %ecease%, $e%ro Davila, 5r. B08 8'? 8, t(e petition is %ismisse%. 6(e %ecision of t(e trial court is affirme% =it( mo%ification. 6(e petitioner is or%ere% to pa7 t(e private respon%ent or (er (eirs %eat( in%emnit7 in t(e sum of $117,/// !not $177,///#, =it( le*al rate of interest of 6N per annum from t(e %ate of t(e :u%*ment on Au*ust 31, 1"73, until it is full7 pai%. Costs a*ainst t(e petitioner.

!. MORAL DAMAGES
CACGERO !s. MANI(A ?E((OJ TAMICA& CO.3 INC.3 FactsB Att7. Cac(ero 2oar%e% a )ello= 6a@ica2 %riven 27 Gre*orio 4ira A2inion an% o=ne% 27 t(e 4anila )ello= 6a@ica2 Co., &nc. ?n passin* ?roDuieta 2et=een Doroteo 5osW an% .ope %e <e*a streets, Gre*orio

4ira A2inion 2umpe% sai% ta@ica2 a*ainst a 4eralco post, =it( t(e result t(at t(e ca2 =as 2a%l7 smas(e% an% t(e plaintiff fell out of t(e ve(icle to t(e *roun%, sufferin* t(ere27 p(7sical in:uries, sli*(t in nature. 6(e c(auffeur =as su2seDuentl7 prosecute% 27 t(e Cit7 'iscal an% on 'e2ruar7 26, 1"+3, upon (is plea of *uilt7 t(e 4unicipal Court of 4anila sentence% (im to suffer 1 mont( an% 1 %a7 of arresto ma7or, an% to pa7 t(e costs. ?n Decem2er 17, 1"+2, 6ranDuilino '. Cac(ero a%%resse% a letter to t(e 4anila )ello= 6a@ica2 Co., &nc., =(ic( =as follo=e% 27 anot(er of 5anuar7 6, 1"+3, =(ic( (e as;s for %ama*es. 6(e 6a@ica2 Co. to avoi% e@penses an% time of liti*ation offere% to settle t(e case amica2l7 =it( plaintiff 2ut t(e latter onl7 a*ree% to re%uce (is %eman% to t(e sum of $72,/+/.2/ as (is onl7 2asis for settlement =(ic(, of course, =as not accepte% 27 sai% compan7. So plaintiff institute% an action in t(e Court of 'irst &nstance of 4anila. IssueB B(et(er or not t(e %efen%ant %eman%e% an e@or2itant moral %ama*esO Ge$dB &n all cases, t(e attorne7Ks fees an% e@penses of liti*ation must 2e reasona2le.6(e present action =as institute% 2ecause plaintiff %eman%e% an e@or2itant amount for moral %ama*es !$6/,///# an% naturall7 t(e %efen%ant %i% not an% coul% not 7iel% to suc( %eman%. 6(is is neit(er a case t(at comes un%er para*rap( 11 of Article 22/8 2ecause t(e .o=er Court %i% not %eem it :ust an% eDuita2le to a=ar% an7 amount for attorne7Ks fees. As Be a*ree =it( t(e trial 5u%*e on t(is point, Be cannot %eclare t(at (e erre% for not a=ar%in* to plaintiff an7 suc( fees in t(is case. C ealizin* its o2li*ation un%er its contract of carria*e =it( t(e plaintiff, an% 2ecause t(e facts of t(e case, as (ave 2een s(o=n, mar; it as more proper for t(e 4unicipal Court onl7, t(e %efen%ant, to avoi% t(e e@pense an% time of liti*ation, offere% to settle t(e case amica2l7 =it( plaintiff, 2ut t(e latter refuse% an% insiste% on (is %eman% for $72,/+/.2/ as t(e onl7 2asis for settlement, t(us a%%in* a clearl7 pett7 case to t(e alrea%7 overflo=in* %es; of t(e 0onora2le 4em2ers of t(is Court. Be a%mire an% respect at all times a man for stan%in* up an% fi*(tin* for (is ri*(ts, an% =(en sai% ri*(t consists in in:uries sustaine% %ue to a 2reac( of a contract of carria*e =it( us, s7mpat(7 an% un%erstan%in* are a%%e% t(ereto. 9ut =(en a person starts %eman%in* $2,/+/.2/ for a solitar7 2ruise an% sprain, in:uries for =(ic( t(e trial court, even at its *enerous alt(ou*( erroneous 2est, coul% onl7 *rant $+,"//, t(en respect an% s7mpat(7 *ive =a7 to somet(in* else. &t is time to fi*(t, for, in our (um2le opinion, t(ere is not(in* more loat(some nor trul7 =ort(7 of con%emnation t(an one =(o uses (is in:uries for ot(er purposes t(an :ust rectification. &f plaintiffKs claim is *rante%, it =oul% 2e a 2lessin*, not a misfortune, to 2e in:ure%.C 6(is case =as institute% 27 a la=7er =(o, as an officer of t(e courts, s(oul% 2e t(e first in (elpin* ,s in t(e a%ministration of :ustice, an% after *oin* over t(e recor% of t(is case, =e %o not (esitate to sa7 t(at t(e %eman% of t(is case, =e %o not (esitate to sa7 t(at t(e %eman% of $72,/+/.2/ for a su2lu@ation of t(e ri*(t (umerus 2one an% an insi*nificant contusion in K(e c(est, (as not even t(e sem2lance of reasona2leness. 6(e plaintiff (imself must (ave felt em2arrasse% 27 (is o=n attitu%e =(en after receivin* %efen%antKs 2rief as appellant, (e ma;es in (is 2rief as appellee t(e cate*orical statement t(at (e CD?8S N?6 N?B &NS&S6 N? $ 868ND &N 608 .8AS6 to collect from t(e %efen%ant all t(e %ama*es (e (a% claime% in (is complaint, 2ut instea% (e is su2mittin* (is case to t(e soun% %iscretion of t(e 0onora2le Court for t(e a=ar% of a reasona2le an% eDuita2le %ama*es allo=a2le 27 la=, to compensate t(e plaintiff of t(e sufferin* an% losses (e (a% un%er*one an% incurre% 2ecause of t(e acci%ent oftentimes mentione% in t(is 2rief in =(ic( plaintiff =as in:ure%C. 6(is ac;no=le%*ment comes too late, for plaintiff (as alrea%7 %eprive% t(e Court of Appeals of t(e occasion to e@ercise its appellate :uris%iction over t(is case =(ic( (e rec;lessl7 %umpe% to t(is Court. Be certainl7 cannot loo; =it( favor at t(is attitu%e of plaintiff. B(erefore, t(e %ecision appeale% from is (ere27 mo%ifie% 27 re%ucin* t(e amount a=ar%e% as unearne% professioral fees from $3,/// to $2,/// an% 27 eliminatin*, t(e moral %ama*es of $2,/// a=ar%e% 27 t(e .o=er Court to t(e plaintiff. Sai% %ecision is in all ot(er respects affirme%, =it(out pronouncement as to costs. &t is so or%ere%.

FORE+ !s. MIRANDA FactsB espon%ent =as one of t(e passen*ers on a :eepne7 %riven 27 8u*enio .u*a. B(ile t(e ve(icle =as %escen%in* t(e Sta. 4esa 2ri%*e at an e@cessive rate of spee%, t(e %river lost control t(ereof, causin* it to s=erve an% to (it t(e 2ri%*e =all. 6(e acci%ent occurre% on t(e mornin* of 4arc( 22, 1"+3. 'ive of t(e passen*ers =ere in:ure%, inclu%in* t(e respon%ent =(o suffere% a fracture of t(e upper ri*(t (umerus. 0e =as ta;en to t(e National ?rt(ope%ic 0ospital for treatment, an% later =as su2:ecte% to a series of operationsE t(e first on 4a7 23, 1"+3, =(en =ire loops =ere =oun% aroun% t(e 2ro;en 2ones an% scre=e% into placeE a secon%, effecte% to insert a metal splint, an% a t(ir% one to remove suc( splint. At t(e time of t(e trial, it appears t(at respon%ent (a% not 7et recovere% t(e use of (is ri*(t arm. 6(e %river =as c(ar*e% =it( serious p(7sical in:uries t(rou*( rec;less impru%ence, an% upon interposin* a plea of *uilt7 =as sentence% accor%in*l7. 6(e contention t(at t(e evi%ence %i% not sufficientl7 esta2lis( t(e i%entit7 of t(e ve(icle as t(at 2elon*in* to t(e petitioner =as re:ecte% 27 t(e appellate court =(ic( foun%, amon* ot(er t(in*s, t(at it carrie% plate No. 6$,G1163, series of 1"+2, -uezon Cit7, re*istere% in t(e name of $az 'ores, !appellant (erein# an% t(at t(e ve(icle even (a% t(e name of CDoAa $azC painte% 2elo= its =in%s(iel%. No evi%ence to t(e contrar7 =as intro%uce% 27 t(e petitioner, =(o relie% on an attac; upon t(e cre%i2ilit7 of t(e t=o policemen =(o =ent to t(e scene of t(e inci%ent. A point to 2e furt(er remar;e% is petitionerKs contention t(at on 4arc( 21, 1"+3, or one %a7 2efore t(e acci%ent (appene%, s(e alle*e%l7 sol% t(e passen*er :eep t(at =as involve% t(erein to a certain Carmen Sac;erman. 6(e CA a=ar%e% moral %ama*es to respon%ent (ence t(is petition. IssueB B(et(er or not t(e a=ar% of moral %ama*es *iven 27 t(e CA =as vali%O Ge$dB No. $etitionerJs contention of loss of income an% pa7ment of attorne7s fees cannot 2e t(e 2asis for t(e a=ar% of t(e %ama*es on t(e *roun% t(at a revie= of t(e recor%s faile% to %isclose a sufficient 2asis for t(e trial courtKs appraisal, since t(e onl7 evi%ence presente% on t(is point consiste% of respon%entKs 2are statement of (is e@penses an% t(e sai% loss of income. $etitioner fails to note t(at attorne7Ks fees are inclu%e% in t(e concept of actual %ama*es un%er t(e Civil Co%e an% ma7 2e a=ar%e% =(enever t(e court %eems it :ust an% eDuita2le. 4oral %ama*es are not recovera2le in %ama*e actions pre%icate% on a 2reac( of t(e contract of transportation, in vie= of Articles 221" an% 222/ of t(e ne= Civil Co%e, =(ic( provi%e as follo=sL CA 6. 221". 4oral %ama*es ma7 2e recovere% in t(e follo=in* an% analo*ous casesL !1# A criminal offense resultin* in p(7sical in:uriesE !2# -uasiG%elicts causin* p(7sical in:uriesE A 6. 222/. Billful in:ur7 to propert7 ma7 2e a le*al *roun% for a=ar%in* moral %ama*es if t(e court s(oul% fin% t(at, un%er t(e circumstances, suc( %ama*es are :ustl7 %ue. 6(e same rule applies to 2reac(es of contract =(ere t(e %efen%ant acte% frau%ulentl7 or in 2a% fait(.C 97 contrastin* t(e provisions of t(ese t=o articles it imme%iatel7 2ecomes apparent t(atL !a# &n case of 2reac( of contract !inclu%in* one of transportation# proof of 2a% fait( or frau% !%olus#, i.e., =anton or %eli2eratel7 in:urious con%uct, is essential to 5ustif7 an a=ar% of moral %ama*esE an% !2# 6(at a 2reac( of contract can not 2e consi%ere% inclu%e% in t(e %escriptive term Canalo*ous casesC use% in Art. 221"E not onl7 2ecause Art. 222/ specificall7 provi%es for t(e %ama*es t(at are cause% 27 contractual 2reac(, 2ut 2ecause t(e %efinition of DuasiG%elict in Art. 2176 of t(e Co%e e@pressl7 e@clu%es t(e cases =(ere t(ere is a Cpree@istin* contractual relation 2et=een t(e parties.C CA 6. 2176. B(oever 27 act or omission causes %ama*e to anot(er, t(ere 2ein* fault or ne*li*ence, is o2li*e% to pa7 for t(e %ama*e %one. Suc( fault or ne*li*ence, if t(ere is no preGe@istin*

contractual relation 2et=een t(e parties, is calle% a DuasiG%elict an% is *overne% 27 t(e provisions of t(is C(apter.C !he e)ception to the basic rule of damages now under consideration is a mishap resulting in the death of a passenger, in which case 'rticle %>?: makes the common carrier e)pressly sub"ect to the rule of 'rt. 66/?, that entitles the spouse, descendants and ascendants of the deceased passenger to $demand moral damages for mental anguish by reason of the death of the deceased$. 1ut the e)ceptional rule of 'rt. %>?: makes it all the more evident that where the in"ured passenger does not die, moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. We think it is clear that the mere carelessness of the carrier's driver does not per se constitute or "ustify an inference of malice or bad faith on the part of the carrier# and in the case at bar there is no other evidence of such malice to support the award of moral damages by the Court of 'ppeals. !o award moral damages for breach of contract, therefore, without proof of bad faith or malice on the part of the defendant, as re(uired by 'rt. 666/, would be to violate the clear provisions of the law, and constitute unwarranted "udicial legislation. 6(e su**estion t(at a carrierKs violation of its en*a*ement to safel7 transport t(e passen*er involves a 2reac( of t(e passen*erKs confi%ence, an% t(erefore s(oul% 2e re*ar%e% as a 2reac( of contract in 2a% fait(, :ustif7in* recover7 of moral %ama*es un%er Art. 222/ is untena2le, for un%er it t(e carrier =oul% al=a7s 2e %eeme% in 2a% fait(, in ever7 case its o2li*ation to t(e passen*er is infrin*e%, an% it =oul% 2e never accounta2le for simple ne*li*enceE =(ile un%er t(e la= !Art. 17+6# CA 6. 17+6. &n case of %eat( of or in:uries to passen*ers, common carriers are presume% to (ave 2een at fault or to (ave acte% ne*li*entl7, unless t(e7 prove t(at t(e7 o2serve% e@traor%inar7 %ili*ence as prescri2e% in articles 1733 an% 17++.C CA 6. 1762. 6(e contri2utor7 ne*li*ence of t(e passen*er %oes not 2ar recover7 of %ama*es for (is %eat( or in:uries, if t(e pro@imate cause t(ereof is t(e ne*li*ence of t(e common carrier, 2ut t(e amount of %ama*es s(all 2e eDuita2l7 re%uce%.C 6(e %istinction 2et=een frau%, 2a% fait( or malice in t(e sense of %eli2erate or =anton =ron* %oin* an% ne*li*ence !as mere carelessness# is too fun%amental in our la= to 2e i*nore%E t(eir conseDuences 2ein* clearl7 %ifferentiate% 27 t(e Co%e. CA 6. 22/1. &n contracts an% DuasiGcontracts, t(e %ama*es for=(ic( t(e o2li*or =(o acte% in *oo% fait( is lia2le s(all 2e t(ose t(at arc t(e, natural an% pro2a2le conseDuences of t(e 2reac( of t(e o2li*ation, an% =(ic( t(e parties (ave foreseen or coul% (ave reasona2l7 foreseen at t(e time t(e o2li*ation =as constitute%. &n case of frau%, 2a% fait(, malice or =anton attitu%e, t(e o2li*or s(all 2e responsi2le for all %ama*es =(ic( ma7 2e reasona2l7 attri2ute% to t(e nonGperformance of t(e o2li*ation.C &t is to 2e presume%, in t(e a2sence of statutor7 provision to t(e contrar7, t(at t(is %ifference =as in t(e min% of t(e la=ma;ers =(en in Art. 222/ t(e7 limite% recover7 of moral %ama*es to 2reac(es of contract in 2a% fait(. &t is true t(at ne*li*ence ma7 2e occasionall7 so *ross as to amount to maliceE 2ut t(at fact must 2e s(o=n in evi%ence, an% a carrierKs 2a% fait( is not to 2e li*(tl7 inferre% from a mere fin%in* t(at t(e contract =as 2reac(e% t(rou*( ne*li*ence of t(e carrierKs emplo7ees. &n vie= of t(e fore*oin* consi%erations, t(e %ecision of t(e Court of Appeals is mo%ifie% 27 eliminatin* t(e a=ar% of $+.///.// 27 =a7 of moral %ama*es t(e presumption is t(at common carriers acte% ne*li*entl7 !an% not maliciousl7#, an% Art. 1762 spea;s of ne*li*ence of t(e common carrier.

(OPEL !s.PAN AMERICAN JOR(D AIRJA?+ FactsB eservations for first class accommo%ations in 'li*(t No. 2 of $an American Borl% Air=a7s from 6o;7o to San 'rancisco =ere ma%e, 27 C)our 6ravel Gui%eC a*enc7, for t(en Senator 'ernan%o .opez, (is =ife 4aria 5. .opez, (is sonGinGla= Alfre%o 4onteli2ano, 5r., an% (is %au*(ter, 4rs. Alfre%o 4onteli2ano, 5r. $ANGA4Ks San 'rancisco (ea% office confirme% t(e reservations. 'irst class tic;ets for t(e a2ovementione% fli*(t =ere su2seDuentl7 issue%. As sc(e%ule% Senator .opez an% part7 left 4anila 27 Nort(=est Airlines.

As soon as t(e7 arrive% Senator .opez reDueste% 4inister 9usue*o of t(e $(ilippine 8m2ass7 to contact $ANGA4Ks 6o;7o office re*ar%in* t(eir first class accommo%ations for t(at evenin*Ks fli*(t. 'or t(e *iven reason t(at t(e first class seats t(erein =ere all 2oo;e% up, (o=ever, $ANGA4Ks 6o;7o office informe% 4inister 9usue*o t(at $ANGA4 coul% not accommo%ate Senator .opez an% part7 in t(at trip as first class passen*ers. Senator .opez t(ereupon *ave t(eir first class tic;ets to 4inister 9usue*o for (im to s(o= t(e same to $ANGA4Ks 6o;7o office, 2ut t(e latter firml7 reiterate% t(at t(ere =as no accommo%ation for t(em in t(e first class, statin* t(at t(e7 coul% not *o in t(at fli*(t unless t(e7 too; t(e tourist class t(erein. 6(e7 =ere constraine% to ta;e $ANGA4Ks fli*(t from 6o;7o to San 'rancisco as tourist passen*ers. Suit for %ama*es =as t(ereafter file% 27 Senator .opez an% part7 a*ainst $ANGA4. Alle*in* 2reac( of contracts in 2a% fait( 27 %efen%ant, plaintiffs as;e% for $+//,/// actual an% moral %ama*es, $1//,/// e@emplar7 %ama*es, $2+,/// attorne7Ks fees plus costs. $ANGA4 file% its ans=er, assertin* t(at its failure to provi%e first class accommo%ations to plaintiffs =as %ue to (onest error of its emplo7ees. Court of 'irst &nstance ren%ere% its %ecision in favor of plaintiffs. 9ot( (o=ever appeale% t(e %ecision. $laintiff pra7e% for an increase in t(e a=ar%. IssueB B(et(er or not plaintiff is entitle% to %ama*es. Ge$dB )es. Accor%in* to plaintiffs, %efen%ant acte% in 2a% fait( 2ecause it %eli2eratel7 refuse% to compl7 =it( its contract to provi%e first class accommo%ations to plaintiffs, out of racial pre:u%ice a*ainst ?rientals. A*ainst t(e fore*oin*, (o=ever, %efen%antKs evi%ence =oul% see; to esta2lis( its t(eor7 of (onest mista;e. &t sai% t(at t(e first class reservations of Senator .opez an% part7 =ere ma%e to*et(er =it( t(ose of four mem2ers of t(e ufino famil7. 6(e reservations emplo7ee mista;enl7 cancelle% all t(e seats t(at (a% 2een reserve%, t(at is, inclu%in* t(ose of Senator .opez an% part7. Since t(e fli*(t involve% =as still more t(an a mont( a=a7 an% confi%ent t(at reinstatement =oul% 2e ma%e, 0erranz for*ot t(e matter an% tol% no one a2out it e@cept (is coGemplo7ee. 'rom t(e fore*oin* evi%ence of %efen%ant, it is in effect a%mitte% t(at %efen%ant t(rou*( its a*ents first cancelle% plaintiffs, reservations 27 mista;e an% t(ereafter %eli2eratel7 an% intentionall7 =it((el% from plaintiffs or t(eir travel a*ent t(e fact of sai% cancellation, lettin* t(em *o on 2elievin* t(at t(eir first class reservations stoo% vali% an% confirme%. &n so mislea%in* plaintiffs into purc(asin* first class tic;ets in t(e conviction t(at t(e7 (a% confirme% reservations for t(e same, =(en in fact t(e7 (a% none, %efen%ant =illfull7 an% ;no=in*l7 place% itself into t(e position of (avin* to 2reac( its contracts =it( plaintiffs. All t(e time, in le*al contemplation suc( con%uct alrea%7 amounts to action in 2a% fait(. 'or 2a% fait( means a 2reac( of a ;no=n %ut7 t(rou*( some motive of interest or illG=ill. No= on t(e issue of amount of %ama*es. 'irst, t(en, as to moral %ama*es. As a pro@imate result of %efen%antKs 2reac( in 2a% fait( of its contracts =it( plaintiffs, t(e latter suffere% social (umiliation, =oun%e% feelin*s, serious an@iet7 an% mental an*uis(. 'or plaintiffs =ere travellin* =it( first class tic;ets issue% 27 %efen%ant an% 7et t(e7 =ere *iven onl7 t(e tourist class. At stopGovers, t(e7 =ere e@pecte% to 2e amon* t(e firstGclass passen*ers 27 t(ose a=aitin* to =elcome t(em, onl7 to 2e foun% amon* t(e tourist passen*ers. &t ma7 not 2e (umiliatin* to travel as tourist passen*ersE it is (umiliatin* to 2e compelle% to travel as suc(, contrar7 to =(at is ri*(tfull7 to 2e e@pecte% from t(e contractual un%erta;in*. Senator .opez =as t(en Senate $resi%ent $ro 6empore. &nternational carriers li;e %efen%ant ;no= t(e presti*e of suc( an office. An% (e =as former <iceG$resi%ent of t(e $(ilippines. Senator .opez =as *oin* to t(e ,nite% States to atten% a private 2usiness conference of t(e 9inal2a*anG&sa2ela Su*ar Compan7E 2ut (is aforesai% ran; an% position =ere 27 no means left 2e(in%, an% in fact (e (a% a secon% en*a*ement a=aitin* (im in t(e ,nite% StatesL a 2anDuet ten%ere% 27 'ilipino frien%s in (is (onor as Senate $resi%ent $ro 6empore. 'or t(e moral %ama*es sustaine% 27 (im, t(erefore, an a=ar% of $1//,///.// is appropriate. Consi%erin* also t(e p(7sical %iscomfort of t(e =ife of Senator .opez as =ell as t(e mem2ers of (is famil7, it s(oul% 2e impose% in suc( an amount as to sufficientl7 an% effectivel7 %eter similar 2reac( of contracts in t(e future 27 %efen%ant or ot(er airlines. &n t(is li*(t, =e fin% it :ust to a=ar% $7+,///.// as e@emplar7 or corrective %ama*es.

A =ritten contract for attorne7Ks services s(all control t(e amount to 2e pai% t(erefor unless foun% 27 t(e court to 2e unconsciona2le or unreasona2le. 6(e amount of $2+, /// is reasona2le, consi%erin* t(e attorne7Js prominence in t(e le*al profession, an% t(at t(e %efense counselJs fees is more t(an (alf t(e sai% amount. &n conclu%in*, let it 2e stresse% t(at t(e amount of %ama*es a=ar%e% in t(is appeal (as 2een %etermine% 27 a%eDuatel7 consi%erin* t(e official, political, social, an% financial stan%in* of t(e offen%e% parties on one (an%, an% t(e 2usiness an% financial position of t(e offen%er on t(e ot(er.

ORTI#A+3 IR. !s. (*FTGAN+A #ERMAN AIR(INE+ FactsB 6(e S(arp 6ravel Service, t(e travel %epartment of C. '. S(arp, &nc., t(e ma:orit7 interestGinG=(ic( is (el% 27 oc(a 7 Cia., &nc., General A*ents of t(e %efen%ant, .uft(ansa German Airlines issue% to t(e plaintiff 'irst Class $an American 6ic;et =(ic( =oul% ta;e (im from 4anila, t(e place of %eparture, to 0on*;on*, various cities in t(e ,nite% States, 8urope, Asia, t(e 'ar 8ast, an% t(en 2ac; to 4anila, t(e place of %estination. ?rti*asK tic;et for all t(ese %ifferent le*s of (is :ourne7 =as first class. 0e left 4anila as sc(e%ule%. &n Ne= )or;, (e %eci%e% to leave out some cities, inclu%e% in (is ori*inal itinerar7, to 2e in 0on*;on*, for several appointments (e (a% t(ere. ?rti*as arrive% in %ue course in ome. 6o 2e sure (e coul% fl7 first class to 0on*;on*, for (is appointments t(ere t(e ne@t %a7, ?rti*as =ent to t(e office of t(e Alitalia to 2oo; passa*e. 6(e man at t(e counter of t(e Alitalia office tol% (im it (a% no fli*(t on 4on%a7 2ut t(e .uft(ansa (a%. 6(e man t(ereupon calle% up t(e office of t(e .uft(ansa an%, after tal;in* to an emplo7ee t(ereof, tol% ?rti*as t(at t(e .uft(ansa (a% no first class, 2ut onl7 econom7 seats availa2le. ?rti*as =as not =illin* to ta;e an econom7 seat an% reDueste% t(e emplo7ee to call up ot(er airlines. 6(e emplo7ee after=ar%s informe% ?rti*as t(at t(e .uft(ansa (a% a first class seat availa2le. ?rti*as imme%iatel7 as;e% (im to *et t(e seat an% to see to it t(at (is tic;et 2e confirme% an% vali%ate% for t(e fli*(t an% a first class seat. 6(e man t(ereafter as;e% for ?rti*asK passport an% ot(er travel papers an% attac(e% a vali%atin* stic;er on fli*(t coupon No. 1 =(ic( correspon%e% to t(e omeG0on*;on* le* of (is 6BA 6ic;et. 6(e follo=in* 4on%a7, ?rti*as c(ec;e% out of (is (otel an% too; a ta@i to t(e terminal. 0e unloa%e% (is 2a**a*e an% procee%e% to t(e counter in c(ar*e of t(e .uft(ansa passen*ers. 6(e la%7 at t(e counter tol% (im t(at .uft(ansa (a% no space for (im t(at %a7. ?rti*as reDueste% (er to c(ec; =it( (er main office, =(ic( s(e %i% 27 callin* it up. After callin*, s(e apolo*ize% an% sai% t(e plaintiffKs tic;et =as in or%er an% =oul% 2e confirme% an% vali%ate%. ?n (er reDuest, ?rti*as (a% (is lu**a*e =ei*(e% an% =as *iven t(e free lu**a*e allo=ance of a first class passen*er. 0e =as furt(ermore as;e% to pa7 8// liras for 2us fare an% 7// liras as em2ar;ation ta@. An emplo7ee in t(e airport as;e% for (is passport an% ot(er papers an%, after e@aminin* (is passport, =(ere (is 'ilipino nationalit7 appears, sai% (e coul% not 2oar% t(e plane t(at %a7 2ecause (is seat =oul% 2e *iven to a 9el*ian. After an ar*ument =it( t(e emplo7ee, ?rti*as ma%e anot(er reDuest, t(at t(e emplo7ee call ot(er airlines to inDuire if t(e7 (a% fli*(ts to 0on*;on* t(at %a7 2ut (e once more turne% %o=n t(e plea an% insiste% t(at ?rti*as travel econom7, =it( t(e promise t(at (e =ill 2e transferre% to first class in Cairo an% on=ar% to 0on*;on*. 0e =as constraine% to a*ree =it( t(e arran*ement. ,pon arrival in Cairo, t(e plaintiff reDueste% t(e .uft(ansa a*ent to transfer (im to first class 2ut t(e a*ent sai% (e coul% not an% t(at (e %i% not receive an7 communication from ome to t(at effect. At D(ar(am, t(e plaintiff once more reDueste% a transfer to first class 2ut =as also tol% 27 t(e .uft(ansa a*ent t(at (e (a% not receive% an7 communication a2out t(e c(an*e an% t(e reDuest coul% not 2e *rante%. &n Calcutta, ?rti*as once a*ain reDueste% a transfer or t(at (e 2e assiste% in 2oo;in* passa*e on ot(er planes 2ut =as also refuse%. &t =as onl7 in 9an*;o; =(en t(e c(ief ste=ar% as;e% (im if (e =ante% to move over to first class 2ut (avin* 2een alrea%7 em2arrasse% an% (umiliate% an% t(e trip to 0on*;on* 2ein* onl7 t(ree (ours, (e sai% (e =oul% not as a

si*n of protest. 6(e fore*oin* facts resulte% in t(e filin* of t(e case 27 t(e plaintiff a*ainst %efen%ant, in =(ic( an a=ar% of moral an% e@emplar7 %ama*es =as or%ere% an% no= su2:ect of an appeal. IssueB B(et(er or not plaintiff is entitle% to %ama*es. Ge$dB )es. 4anuel ?ta7za, *eneral mana*er of 'ilital, &nc., =(ic( is t(e *eneral a*ent of t(e Alitalia in t(e $(ilippines, testifie% t(at space reservation t(rou*( telep(one calls 2et=een airlines is permitte% 27 &A6AKs, C4anual of 6raffic Conference esolutionsC an% t(at telep(one calls for reservation 27 one airline to anot(er is in fact accepte% proce%ure in accor%ance =it( t(e official airline *ui%e of t(e Air 6raffic Conference an% &nternational Air 6ransport Association. 6(ere =as, t(erefore, a vali% an% 2in%in* contract 2et=een .uft(ansa an% t(e plaintiff to transport (im as a first class passen*er from ome to 0on*;on*, an% t(is a*reement t(e %efen%ant violate% 27 compellin* t(e plaintiff to travel as an econom7 passen*er. &t cannot 2e sai% t(e 2reac( =as t(e result of an (onest mista;e or e@cusa2le ne*li*ence. 6(ere is evi%ence t(at t(e %efen%ant acte% =it( 2a% fait( an% in =illful %isre*ar% of t(e plaintiffs ri*(ts. &t is ?ur consi%ere% vie= t(at =(en it comes to contracts of common carria*e, inattention an% lac; of care on t(e part of t(e carrier resultin* in t(e failure of t(e passen*er to 2e accommo%ate% in t(e class contracte% for amounts to 2a% fait( or frau% =(ic( entitles t(e passen*er to t(e a=ar% of moral %ama*es in accor%ance =it( Article 222/ of t(e Civil Co%e. 9ut in t(e instant case, t(e 2reac( appears to 2e of *raver nature, since t(e preference *iven to t(e 9el*ian passen*er over plaintiff =as %one =illfull7 an% in =anton %isre*ar% of plaintiffKs ri*(ts an% (is %i*nit7 as a (uman 2ein* an% as a 'ilipino, =(o ma7 not 2e %iscriminate% a*ainst =it( impunit7. .uft(ansa conten%s, (o=ever, t(at t(ere coul% not (ave 2een an7 possi2le %iscrimination 27 reason of race a*ainst ?rti*as 2ecause from (is appearance, sai% plaintiff can easil7 2e ta;en for a 8uropean or =(ite more t(an (is o=n =itness Ama%o Castro an% 2esi%es, t(ere =ere ot(er ?rientals in t(e same fli*(t on t(at occasion. &t is ar*ue% t(at an7 suc( polic7 =oul% 2e selfG%efeatin*, since it =oul% certainl7 2e %ama*in* to its o=n 2usiness. A*ain, t(is ratiocination is untena2le, for =(at appears from t(e evi%ence is not reall7 a case of a *eneral polic7 of %iscriminatin* a*ainst ?rientals or nonG=(ites, 2ut a specific act of .uft(ansa emplo7ee at t(e airport of *ivin* preference to a 9el*ian after e@aminin* ?rti*as passport =(erein (is 'ilipino nationalit7 is note%. As foun% 27 t(e lo=er court =(at =orsene% t(e situation of ?rti*as =as t(at .uft(ansa succee%e% in ;eepin* (im as its passen*er 27 assurin* (im t(at (e =oul% 2e *iven first class accommo%ation at Cairo, t(e ne@t station, t(e proper arran*ements t(erefor (avin* 2een ma%e alrea%7, =(en in trut( suc( =as not t(e case. 6(us, instea% of compl7in* =it( t(e reDuest of ?rti*as t(at ot(er airlines 2e contacte% to fin% out it t(e7 (a% first class space for (im, t(e .uft(ansa emplo7ee =(o (a% in%ifferentl7 tol% (im a2out (is %o=n*ra%in* pai% ver7 little attention if ever to sai% reDuest. Alt(ou*( moleste% an% em2arrasse% to t(e point t(at (e (a% to ta;e nitro*l7cerine pills to =ar% off a possi2le (eart attac;, ?rti*as (ar%l7 (a% an7 c(oice, since (is lu**a*e =as alrea%7 in t(e plane. 6o (is %isappointment, =(en t(e plane reac(e% Cairo, (e =as tol% 27 t(e .uft(ansa office t(ere t(at no =or% at all (a% 2een receive% from ome an% t(e7 (a% no space for (im in first class. Borse, similar false representations =ere ma%e to (im at D(ar(am an% Calcutta. &t =as onl7 at 9an*;o; =(ere for t(e first time, ?rti*as =as at last informe% t(at (e coul% (ave a first class seat in t(at le* of t(e fli*(t, from 9an*;o; to 0on*;on*. 6(is ?rti*as re:ecte%, if onl7 to ma;e patent (is %ispleasure an% in%i*nation at 2ein* so inconsi%eratel7 treate% in t(e earlier part of (is :ourne7. 4oreover, it is ar*ue%, t(e econom7 class accommo%ations are not muc( %ifferent from first class an% ?rti*as =as not %ela7e% in (is trip. Be cannot see t(e point. A passen*er contracts for first class accommo%ations for man7 reasons peculiar to (imself an% pa7s a (i*(er price t(erefor, an% it is certainl7 not for t(e airplane to sa7 later, after it %eprives (im of (is space in or%er to favor anot(er passen*er, t(at econom7 class is an7=a7 :ust as *oo% as first class. &n t(e li*(t of all t(e fore*oin*, t(ere can 2e no %ou2t as to t(e ri*(t of ?rti*as to %ama*es, 2ot( moral an% e@emplar7. Be (ave uniforml7 up(el% t(e ri*(t of a passen*er to %ama*es in all cases =(erein, after (avin* contracte% an% pai% for first class accommo%ations %ul7 confirme% an% vali%ate%, (e is

transferre% over (is o2:ection to econom7, class, =(ic( (e (as to ta;e in or%er to 2e a2le to arrive at (is %estination on (is sc(e%ule% time. DISPOSITIVE: B08 8'? 8, t(e :u%*ment appeale% from is mo%ifie% 27 raisin* t(e a=ar% of moral an% e@emplar7 %ama*es to plaintiff ?rti*as to $1+/,///.// an% $1//,///.//, respectivel7. &n all ot(er respects, inclu%in* as to t(e pa7ment of interests on t(e sai% amounts, t(e same is affirme%.

PGI(IPPINE RA&&IT &*+ (INE+3 INC. !s.E+#*ERRA FactsB $atrocinio 8s*uerra =as a pa7in* passen*er of 9us No. 223 of $(ilippine a22it 9us .ines, &nc. 0e 2oar%e% t(e sai% 2us at t(e 4anila terminal a2out four oKcloc; in t(e afternoon of Novem2er 6, 1"61, 2oun% for San 'ernan%o, $ampan*a. 0e sat at t(e leftGen% of t(e fourt( ro= 2e(in% t(e %river, close to t(e =in%o=. As t(e 2us approac(e% 2arrio San 4arcos, Calumpit, 9ulacan, a frei*(t truc; o=ne% an% operate% 27 t(e 6ransport Contractors, &nc. =as comin* from t(e opposite %irection. 6(e ve(icles si%es=ipe% eac( ot(er. 6(e =in%o= *lass near t(e %riverKs seat of t(e a22it 9us =as %etac(e% an% t(e left si%e of its 2o%7 =as %ama*e%. 6(e left forearm of $atrocinio 8s*uerra =as (it 27 a (ar% 2lunt o2:ect, 2rea;in* t(e 2ones into small fra*ments =(ile t(e soft tissues of t(e muscles an% t(e s;in =ere mascerate%. 0e =as imme%iatel7 2rou*(t to t(e 9ulacan $rovincial 0ospital in 4alolos, 9ulacan for treatment. 6(e left arm =as amputate%. $laintiff file% a case a*ainst t(e $(ilippine a22it 9us .ines, &nc. an% t(e 6ransport Contractors, &nc., to*et(er =it( t(eir respective %rivers, pra7in* t(at :u%*ment 2e ren%ere% in favor of t(e plaintiff an% a*ainst t(e %efen%ants reDuirin* t(em to pa7, :ointl7 an% severall7 %ama*es, actual an% compensator7, moral an% e@emplar7, liti*ation e@penses an% costs. 6(e Court of Appeals affirme% C'&Js %ecision. IssueB B(et(er or not t(e a=ar% of moral %ama*es is proper Ge$dB No. 6(e contention of petitioners =it( respect to t(e a=ar% of moral %ama*es is meritorious. 6(is Court (as repeate%l7 (el% t(at moral %ama*es are not recovera2le in actions for %ama*es pre%icate% on a 2reac( of t(e contract of transportation, as in t(e instant case, in vie= of t(e provisions of Articles 221" an% 222/ of t(e Ne= Civil Co%e. 6(e e@ceptions are !1# =(ere t(e mis(ap results in t(e %eat( of a passen*er, an% !2# =(ere it is prove% t(at t(e carrier =as *uilt7 of frau% or 2a% fait(, even if %eat( %oes not result. 6(e Court of Appeals foun% t(at t(e t=o ve(icles si%es=ipe% eac( ot(er at t(e mi%%le of t(e roa%. &n ot(er =or%s 2ot( ve(icles =ere in t(eir respective lanes an% t(at t(e7 %i% not inva%e t(e lane of t(e ot(er. &t cannot 2e sai% t(erefore t(at t(ere =as frau% or 2a% fait( on t(e part of t(e carrierKs %river. 6(is 2ein* t(e case, no moral %ama*es are recovera2le. +JEET (INE+ !s. CA FactsB $rivate respon%ents purc(ase% firstGclass tic;ets from petitioner at t(e latterJs office in Ce2u Cit7. 6(e7 =ere to 2oar% petitionerJs vessel. 4F< S=eet Grace, 2oun% for Cat2alo*an, Bestern Samar. &nstea% of %epartin* at t(e sc(e%ule% (our of a2out mi%ni*(t on 5ul7 8, 1"72, t(e vessel set sail at 3L//am of 5ul7 ", 1"72, onl7 to 2e to=e% 2ac; to ce2u %ue to en*ine trou2le, arrvin* at a2out 1L//pm n t(e same %a7. epairs (avin* 2een accomplis(e%, t(e vessel lifte% anc(or a*ain on 5ul7 1/, 1"72 at aroun% 8L//am.

&nstea% of %oc;in* to Cat2alo*an, =(ic( =as t(e first port of call, t(e vessel procee%e% %irect to 6aclo2an at aroun% "L//pm of 5ul7 1/, 1"72. $rivate respon%ents (a% no recourse 2ut to %isem2ar; an% 2oar% a ferr72oat to Cat2alo*an. 0ence, t(is suit for %ama*es for 2reac( of contract of carria*e =(ic( t(e 6rial court, affirme% 27 t(e CA, %eci%e% in favor of plaintiffs. IssueB B(et(er or not moral %ama*es ma7 2e ri*(tfull7 %eman%e%. Ge$dB )es. ,n%er Art. 222/ of t(e Civil Co%e, moral %ama*es are :ustl7 %ue in 2reac(es of contract =(ere t(e %efen%ant acte% frau%ulentl7 or in 2a% fait(. 9ot( t(e 6rial Court an% t(e Appellate Court foun% t(at t(ere =as 2a% fait( on t(e part of petitioner in t(atL !1# Defen%antsG Appellants %i% not *ive notice to plaintiffsGappellates as to t(e c(an*e of sc(e%ule% of t(e vesselE !2# 3no=in* full7 =ell t(at it =oul% ta;e no less t(an fifteen (ours to effect t(e repairs of t(e %ama*e% en*ine, %efen%antsG appellants instea% ma%e announce ment of assurance t(at t(e vessel =oul% leave =it(in a s(ort perio% of time, an% =(en plaintiffGappellees =ante% to leave t(e port an% *ave up t(e trip, %efen%antsG appellants emplo7ees =oul% come an% sa7, H=e are leavin* alrea%7I. !3# Defen%antsG appellants %i% not offer to refun% plaintiffsGappelleesJ tic;ets nor provi%e t(em =it( transportation form 6aclo2an to Cat2alo*an. 6(at t(e fin%in* of 2a% fait( is 2in%in* on us, since it is not t(e function of t(e court to anal7ze an% revie= evi%ence on t(is point all over a*ain, asi%e from t(e fact t(at =e fin% it fait(ful to t(e meanin* of 2a% fait( enunciate% t(usL H9a% fait( means a 2reac( of a ;no=n %ut7 t(rou*( some motive or interest or ill =ill. Self enric(ment or fraternal interest, an% not personal ill =ill, ma7 (ave 2een t(e motive, 2ut it is malice nevert(eless.I ,n%er t(e circumstances, (o=ever, =e fin% t(e a=ar% of moral %ama*es e@cessive an% accor%in*l7 re%uce t(em from $7+,///.// to $3,///.// respectivel7 for eac( of t(e private respon%ents. 5u%*ment 4?D&'&8D . TRAN+ JOR(D AIR(INE+ !s. CA FactsB o*elio A. <inluan is a practicin* la=7er =(o entere% into a contract for air carria*e for valua2le consi%eration =it( 5apan Airlines first class from 4anila to 6o;7o, 4osco=, $aris, 0am2ur*, Quric(, Ne= )or;, .os An*eles, 0onolulu an% 2ac; to 4anila t(ru t(e same airline an% ot(er airlines it represents for =(ic( (e =as issue% t(e correspon%in* first class tic;ets for t(e entire trip. ?n April 18, 1"7", =(ile in $aris, (e =ent to t(e office of 6rans Borl% Airlines !6BA# an% secure% t(erefrom confirme% reservation for first class accommo%ation on 2oar% its 'li*(t No. 11 from Ne= )or; to San 'rancisco. A vali%ate% stu2 =as attac(e% to t(e Ne= )or;G.os An*eles portion of (is tic;et evi%encin* (is confirme% reservation for sai% fli*(t =it( t(e mar; C?3 C ?n April 2/, 1"7", at a2out 8L// oKcloc; A.4., <inluan reconfirme% (is reservation for first class accommo%ation on 2oar% 6BA 'li*(t No. 11 =it( its Ne= )or; office. 0e =as a%vise% t(at (is reservation =as confirme%. <inluan presente% (is tic;et for c(ec;Gin at t(e counter of 6BA at 5'3 &nternational Airport at a2out "L1+ oKcloc; A.4., t(e sc(e%ule% time of t(e %eparture 2ein* 11L// oKcloc; A.4. 0e =as informe% t(at t(ere =as no first class seat availa2le for (im on t(e fli*(t. 0e as;e% for an e@planation 2ut 6BA emplo7ees on %ut7 %ecline% to *ive an7 reason. B(en (e

2e*an to protest, one of t(e 6BA emplo7ees, a certain 4r. 9raam, ru%el7 t(reatene% (im =it( t(e =or%s CDonKt ar*ue =it( me, & (ave a ver7 2a% temper.C 6o 2e a2le to ;eep (is sc(e%ule, <inluan =as compelle% to ta;e t(e econom7 seat offere% to (im an% (e =as issue% a refun% applicationC as (e =as %o=n*ra%e% from first class to econom7 class. B(ile =aitin* for t(e %eparture of 'li*(t No. 11. <inluan notice% t(at ot(er passen*ers =(o =ere =(ite Caucasians an% =(o (a% c(ec;e%Gin later t(an (im =ere *iven preference in some first class seats =(ic( 2ecame availa2le %ue to Cno s(o=C passen*ers. ?n 'e2ruar7 1+, 1"8/, <inluan file% an action for %ama*es a*ainst t(e 6BA in t(e Court of 'irst &nstance of izal alle*in* 2reac( of contract an% 2a% fait(. 6(e C'& rule% in favor of <inluan =(ic( =as affirme% 27 t(e Court of appeals =it( some mo%ifications. IssueB B(et(er or not 6rans Borl% s(oul% 2e lia2le for %ama*es. Ge$dB espon%ent (a% a first class tic;et for 'li*(t No. 11 of petitioner from Ne= )or; to San 'rancisco on April 2/, 1"7". &t =as t=ice confirme% an% 7et respon%ent unceremoniousl7 tol% (im t(at t(ere =as no first class seat availa2le for (im an% t(at (e (a% to 2e %o=n*ra%e% to t(e econom7 class. As (e proteste%, (e =as arro*antl7 t(reatene% 27 one 4r. 9raam. Borst still, =(ile (e =as =aitin* for t(e fli*(t, (e sa= t(at several Caucasians =(o arrive% muc( later =ere accommo%ate% in first class seats =(en t(e ot(er passen*ers %i% not s(o= up. 6(e %iscrimination is o2vious an% t(e (umiliation to =(ic( private respon%ent =as su2:ecte% is un%enia2le. ConseDuentl7, t(e a=ar% of moral an% e@emplar7 %ama*es 27 t(e respon%ent court is in or%er. &n%ee%, private respon%ent (a% s(o=n t(at t(e alle*e% s=itc( of planes from a .oc;(ee% 1/11 to a smaller 9oein* 7/7 =as 2ecause t(ere =ere onl7 138 confirme% econom7 class passen*ers =(o coul% ver7 =ell 2e accommo%ate% in t(e smaller plane an% not 2ecause of maintenance pro2lems. $etitioner sacrifice% t(e comfort of its first class passen*ers inclu%in* private respon%ent <inluan for t(e sa;e of econom7. Suc( inattention an% lac; of care for t(e interest of its passen*ers =(o are entitle% to its utmost consi%eration, particularl7 as to t(eir convenience, amount to 2a% fait( =(ic( entitles t(e passen*er to t(e a=ar% of moral %ama*es. + 4ore so in t(is case =(ere instea% of courteousl7 informin* private respon%ent of (is 2ein* %o=n*ra%e% un%er t(e circumstances, (e =as an*ril7 re2uffe% 27 an emplo7ee of petitioner. At t(e time of t(is unfortunate inci%ent, t(e private respon%ent =as a practicin* la=7er, a senior partner of a 2i* la= firm in 4anila. 0e =as a %irector of several companies an% =as active in civic an% social or*anizations in t(e $(ilippines. Consi%erin* t(e circumstances of t(is case an% t(e social stan%in* of private respon%ent in t(e communit7, (e is entitle% to t(e a=ar% of moral an% e@emplar7 %ama*es. 0o=ever, t(e moral %ama*es s(oul% 2e re%uce% to $3//,///.//, an% t(e e@emplar7 %ama*es s(oul% 2e re%uce% to $2//,///.//. 6(is a=ar% s(oul% 2e reasona2l7 sufficient to in%emnif7 private respon%ent for t(e (umiliation an% em2arrassment t(at (e suffere% an% to serve as an e@ample to %iscoura*e t(e repetition of similar oppressive an% %iscriminator7 acts. ARMO,IT !s.CO*RT OF APPEA(+ FactsB &n ?cto2er 1"81, t(e petitioners %eci%e% to spen% t(eir C(ristmas (oli%a7s =it( relatives an% frien%s in t(e $(ilippines, so t(e7 purc(ase% from private respon%ent, !Nort(=est Airlines, &nc.# t(ree !3# roun% trip airline tic;ets from t(e ,.S. to 4anila an% 2ac;, plus t(ree !3# tic;ets for t(e rest of t(e c(il%ren, t(ou*( not involve% in t(e suit. 8ac( tic;et of t(e petitioners =(ic( =as in t(e (an%=ritin* of private respon%entKs tic;ets sales a*ent contains t(e follo=in* entr7 on t(e 4anila to 6o;7o portion of t(e return fli*(tL from 4anila to 6o;7o, NB fli*(t //2, %ate 17 5anuar7, time 1/L3/ A.4. Status, ?3.

?n t(eir return trip from 4anila to t(e ,.S. sc(e%ule% on 5anuar7 17, 1"82, petitioner arrive% at t(e c(ec;Gin counter of private respon%ent at t(e 4anila &nternational Airport at "L1+ in t(e mornin*, =(ic( is a *oo% one !1# (our an% fifteen !1+# minutes a(ea% of t(e 1/L3/ A.4. sc(e%ule% fli*(t time recite% in t(eir tic;ets. $etitioners =ere ru%el7 informe% t(at t(e7 cannot 2e accommo%ate% inasmuc( as 'li*(t //2 sc(e%ule% at "L1+ a.m. =as alrea%7 ta;in* off an% t(e 1/L3/ A.4. fli*(t time entere% in t(eir plane tic;ets =as erroneous. $revious to t(e sai% %ate of %eparture petitioners reGconfirme% t(eir reservations t(rou*( t(eir representative 8rnesto 4a%ria*a =(o personall7 presente% t(e t(ree !3# tic;ets at t(e private respon%entKs o@as 9oulevar% office. 6(e %eparture time in t(e t(ree !3# tic;ets of petitioners =as not c(an*e% =(en reG confirme%. 6(e names of petitioners appeare% in t(e passen*er manifest an% confirme% as $assen*er Nos. 3/6, 3/7, an% 3/8, 'li*(t //2. 0erein petitioner Dr. Armovit proteste% in e@treme a*itation t(at 2ecause of t(e 2umpGoff (e =ill not 2e a2le to ;eep (is appointments =it( (is patients in t(e ,.S. $etitioners suffere% an*uis(, =oun%e% feelin*s, an% serious an@iet7 %a7 an% ni*(t of 5anuar7 17t( until t(e mornin* of 5anuar7 18t( =(en t(e7 =ere finall7 informe% t(at seats =ill 2e availa2le for t(em on t(e fli*(t t(at %a7. 9ecause of t(e refusal of t(e private respon%ent to (ee% t(e repeate% %eman%s of t(e petitioners for compensator7 %ama*es arisin* from t(e aforesai% 2reac( of t(eir airGtransport contracts, petitioners =ere compelle% to file an action for %ama*es in t(e e*ional 6rial Court of 4anila. 6(e 6C a=ar%e% actual %ama*es, moral %ama*es, e@emplar7 %ama*es an% nominal %ama*es to t(e plaintiffs 2ut t(e CA eliminate% t(e a=ar% for moral an% nominal %ama*es. IssueB B(et(er or not t(e elimination of t(e CA of t(e a=ar% for moral %ama*es. Ge$dB )es. 6(e contention of t(e CA t(at t(e appellees %i% not ta;e t(e =itness stan% to testif7 on t(eir Csocial (umiliation, =oun%e% feelin*s an% an@iet7C an% t(e 2reac( of contract =as not malicious or frau%ulent =as =it(out merit. 6(e CA overloo;e% t(e fact t(at a 7ear after t(e inci%ent t(ere =as a turmoil in t(e countr7 2ecause of t(e assassination of 9eni*no ADuino an% t(at violent %emonstrations in t(e countr7 =ere sensationalize% in t(e ,.S. me%ia so petitioners =ere a%vise% to refrain from returnin* to t(e $(ilippines at t(e time =(en t(e7 =ere sc(e%ule% to testif7. Nevert(eless, Att7. Armovit, 2rot(er of Dr. Armovit, too; t(e =itness stan% for (e =as t(ere from t(e time t(e7 c(ec;e% in until t(e time t(e7 =ere ru%el7 informe% t(at t(eir fli*(t (a% alrea%7 ta;en off. An*ere% an% frustrate% Dr. Armovit tol% t(e sai% c(ec;GinGofficer t(at (e (a% to 2e accommo%ate% t(at mornin* so t(at (e coul% atten% to all (is appointments in t(e ,.S.E t(at petitioner 5acDueline Armovit also complaine% a2out not 2ein* a2le to report for =or; at t(e e@piration of (er leave of a2senceE t(at =(ile petitioner (a% to accept private respon%entKs offer for (otel accommo%ations at t(e $(ilippine <illa*e 0otel so t(at t(e7 coul% follo= up an% =ait for t(eir fli*(t out of 4anila t(e follo=in* %a7, petitioners %i% not use t(eir meal coupons supplie% 2ecause of t(e limitations t(ereon so t(e7 (a% to spen% for lunc(, %inner, an% 2rea;fast in t(e sum of $1,3//.// =(ile =aitin* to 2e flo=n out of 4anilaE t(at Dr. Armovit (a% to fore*o t(e professional fees for t(e me%ical appointments (e misse% %ue to (is ina2ilit7 to ta;e t(e 5anuar7 17 fli*(tE t(at t(e petitioners =ere finall7 a2le to fl7 out of 4anila on 5anuar7 18, 1"82, 2ut =ere assure% of t(is fli*(t onl7 on t(e ver7 mornin* of t(at %a7, so t(at t(e7 e@perience% an@iet7 until t(e7 =ere assure% seats for t(at fli*(t.

No %ou2t Att7. a7mun% ArmovitKs testimon7 a%eDuatel7 an% sufficientl7 esta2lis(e% t(e serious an@iet7, =oun%e% feelin*s an% social (umiliation t(at petitioners suffere% upon (avin* 2een 2umpe% off. 0o=ever, consi%erin* t(e circumstances of t(is case =(ere27 t(e private respon%ent atten%e% to t(e pli*(t of t(e petitioners, ta;in* care of t(eir accommo%ations =(ile =aitin* an% 2oar%in* t(em in t(e fli*(t 2ac; to t(e ,.S. t(e follo=in* %a7, t(e Court fin%s t(at t(e petitioners are entitle% to moral %ama*es in t(e amount of $1//,///.// eac(. Also, t(e *ross ne*li*ence committe% 27 private respon%ent in t(e issuance of t(e tic;ets =it( entries as to t(e time of t(e fli*(t, t(e failure to correct suc( erroneous entries an% t(e manner 27 =(ic( petitioners =ere ru%el7 informe% t(at t(e7 =ere 2umpe% off are clear indicia of suc( malice an% 2a% fait( an% esta2lis( t(at private respon%ent committe% a 2reac( of contract =(ic( entitles petitioners to moral %ama*es. 6(e %eletion of t(e nominal %ama*es 27 t(e appellate court is =ellGta;en since t(ere is an a=ar% of actual %ama*es. Nominal %ama*es cannot coGe@ist =it( actual or compensator7 %ama*es. B(erefore t(e %ecision of t(e CA is mo%ifie% provi%in* t(e a=ar% for moral %ama*es. PGI(IPPINE AIR(INE+ !s. CO*RT OF APPEA(+ 1>< +CRA 3;1 FactsB $rivate respon%ent 5esus Samson fle= as coGpilot on a re*ular fli*(t from 4anila to .e*aspi =it( Captain Delfin 9ustamante in a plane 2elon*in* to petitioner $A.. 6(e airplane cras(Glan%e% 2e7on% t(e run=a7 %ue to t(e slo= reaction an% poor :u%*ment of sai% captain, =(en it %i% not maintain t(e reDuire% pressure on t(e 2ra;es an% not=it(stan%in* t(e %ili*ent efforts of Samson. 6(e :olt cause% in:uries to Samson. An% instea% of $A. *ivin* Samson e@pert an% proper me%ical treatment it referre% (im to a *eneral me%ical practitioner. No=, on *roun%s of p(7sical %isa2ilit7 Samson =as %isc(ar*e% from $A.Js emplo7, =(ic( cause% (im to file a complaint for %ama*es. $A. %enie% lia2ilit7 on t(e *roun% of fortuitous event, an% t(at t(e p(7sical (ea%ac(es an% %izziness e@perience 27 Samson =ere %ue to emotional %istur2ance over (is ina2ilit7 to pass t(e reDuire% up*ra%in* course *iven 27 $A.. 5u%*ement =as ren%ere% in favor of Samson in t(e lo=er court =(ic( =as affirme% 27 CA =it( some mo%ification, 27 imposin* le*al rate of interest on t(e unearne% income of Samson. 0ence t(e instant petition. IssueB &s t(ere a causal connection 2et=een t(e in:uries suffere% 27 private respon%ent %urin* t(e acci%ent an% t(e su2seDuent perio%ic %izziness, (ea%ac(e an% *eneral %e2ilit7 alle*e%l7 cause% 27 t(e acci%ent an% private respon%entJs %isc(ar*e from emplo7ment, =(ic( furt(er =arrants t(e a=ar% of %ama*esO Ge$dB )es. 6(e %izziness, (ea%ac(es an% *eneral %e2ilit7 of private respon%ent =ere afterGeffects of t(e cras(Glan%in*. Doctors presente% 27 $A. even a%mit t(e vital facts a2out SamsonJs 2rain in:ur7. 6(ere =as also *ross ne*li*ence 27 $A. for allo=in* Capt. 9ustamante to fl7 on t(e t(at fateful %a7 of t(e acci%ent, even if (e =as sic;, (avin* tumor on (is nose. No one =ill certif7 t(e fitness to fl7 a plane of one sufferin* from t(e %isease. ?ne mont( prior to t(e cras(Glan%in*, =(en t(e pilot =as preparin* to lan% in Daet, private respon%ent =arne% (im t(at t(e7 =ere not in t(e vicinit7 of Daet 2ut a2ove t(e to=n of .i*ao. 6(e plane (it outsi%e t(e airstrip. &n anot(er instance, t(e pilot =oul% (it t(e 4a7on <olcano (a% not t(e plaintiff =arne% (im. 6(ese more t(an prove =(at private respon%ent (a% complaine% of. Disre*ar% t(ereof 27 $A. is con%emna2le.

0avin* affirme% t(e *ross ne*li*ence an% casual connection of t(e afterGeffects of t(e acci%ent, t(e a=ar% of %ama*es =as li;e=ise affirme%. 6(e *rant of compensator7 %ama*esT$2/1,///U 27 computin* t(e 2asic salar7 per annum at $7+/.// a mont( an% $3//.// a mont( for e@tra pa7 for e@tra fl7in* time inclu%in* 2onus ever7 7ear is :ustifie%. 6(e *rant of moral %ama*esT$+/,///U =as also :ustifie%, (avin* consi%ere% t(e 2a% fait( of $A.. 6(e ne*li*ence of $A. is clearl7 a DuasiG%elict an% t(erefore Art. 221"!2# is applica2le, :ustif7in* t(e recover7 of moral %ama*es. 8ven from t(e stan%point of t(e petitioner t(at t(ere is an emplo7eeGemplo7er relations(ip 2et=een it an% private respon%ent arisin* from t(e contract of emplo7ment, private respon%ent is still entitle% to moral %ama*es in vie= of t(e fin%in* of 2a% fait( or malice, appl7in* t(e provisions of Article 222/.

C. E)e'(lar$ Da'age
PR*DENCIADO !s. A((IANCE TRAN+PORT +?+TEM3 INC. FactsB $etitioner =as %rivin* (er o=n C(evrolet 9el Air car alon* Arroceros Street =it( t(e intention of crossin* 6aft Avenue in or%er to turn left, to *o to t(e $(ilippine Normal Colle*e Compoun% =(ere s(e =oul% (ol% classes. S(e claime% t(at s(e =as %rivin* (er car at t(e rate of 1/ ;mp(, t(at 2efore crossin* 6aft Ave. s(e stoppe% (er car an% loo;e% to t(e ri*(t an% to t(e left an% not noticin* an7 onGcomin* ve(icle on eit(er si%e s(e slo=l7 procee%e% on first *ear to cross t(e same, 2ut =(en s(e =as almost at t(e center, near t(e islan% t(ereof, 5ose .e7son =(o =as %rivin* $eopleKs 6a@ica2 o=ne% an% operate% 27 Alliance 6ransport S7stem, &nc., su%%enl7 2umpe% an% struc; petitionerJs car, t(ere27 causin* p(7sical in:uries in %ifferent parts of (er 2o%7, sufferin* more particularl7 2rain concussion =(ile (er car =as %ama*e% to t(e e@tent of $2,1+1.27. 6(e %ama*e to t(e ta@ica2 amounte% to $1"/.//. $etitioner file% a complaint for %ama*es a*ainst respon%ents. 6(e lo=er court foun% 5ose .e7son *uilt7 of ne*li*ence. Alliance 6ransport S7stem, &nc. faile% to prove to t(e satisfaction of t(e court t(at it (a% e@ercise% t(e reDuire% %ili*ence of a *oo% fat(er of t(e famil7 in t(e selection, supervision an% control of its emplo7ees. 9ot( %efen%ants =ere (el% :ointl7 an% severall7 lia2le for t(e p(7sical in:uries suffere% 27 t(e plaintiff as =ell as for t(e %ama*e to (er car, in a%%ition to t(e ot(er conseDuential %ama*es pra7e% for. 6(e a=ar% =as $2,1+1.27 for actual %ama*es representin* t(e cost for t(e repair of t(e car of plaintiffE $2+,///.// as moral %ama*esE $+,///.// as e@emplar7 %ama*esE an% t(e furt(er sum of $3,///.// as attorne7Ks fees, =it( costs a*ainst t(e %efen%ants. CA mo%ifie% t(e a=ar%, re%ucin* t(e amount of moral %ama*es from $2+,/// to $2,/// an% eliminatin* t(e a=ar% of e@emplar7 %ama*es an% attorne7Ks fees. 0ence t(e instant petition. IssueB B(et(er or not t(e Court of Appeals is :ustifie% in mo%if7in* or c(an*in* t(e *rant of %ama*es 27 t(e trial court. Ge$dB No. A careful revie= of t(e recor%s ma;es it rea%il7 apparent t(at t(e in:uries sustaine% 27 petitioner are not as serious or e@tensive as t(e7 =ere claime% to 2e, to =arrant t(e %ama*es a=ar%e% 27 t(e trial court. &n fact, a closer scrutin7 of t(e e@(i2its s(o=in* a mo%erate %ama*e to t(e car can 27 no stretc( of t(e ima*ination pro%uce a lo*ical conclusion t(at suc( %isastrous effects of t(e acci%ent sou*(t to 2e esta2lis(e%, actuall7 too; place, not to mention t(e fact t(at suc( =ere not supporte% 27 t(e me%ical fin%in*s presente%. ,nDuestiona2l7, t(erefore, t(e %ama*es impose% 27 t(e lo=er court s(oul% 2e re%uce% to more reasona2le levels. ?n t(e ot(er (an%, it =ill 2e o2serve% t(at t(e re%uction of t(e %ama*es ma%e 27 t(e Court of Appeals is 2ot( too %rastic an% unrealistic, to pass t(e test of reasona2leness, =(ic( appears to 2e t(e un%erl7in* 2asis to :ustif7 suc( re%uction. B(ile t(e %ama*es sou*(t to 2e recovere% =ere not satisfactoril7 esta2lis(e% to t(e e@tent %esire% 27 t(e petitioner, it =as nonet(eless not %ispute% t(at an

acci%ent occurre% %ue to t(e fault an% ne*li*ence of t(e respon%ents t(at Dra. $ru%encia%o suffere% a 2rain concussion =(ic( alt(ou*( mil% can a%mitte%l7 pro%uce t(e effects complaine% of 27 (er an% t(at t(ese s7mptoms can %evelop after several 7ears an% can lea% to some, serious (an%icaps or pre%ispose t(e patient to ot(er sic;ness. 9ein* a %octor 27 profession, (er fears can 2e more real an% intense t(an an or%inar7 person. ?t(er=ise state%, s(e is un%enia2l7 a proper recipient of moral %ama*es =(ic( are proportionate to (er sufferin*. As to e@emplar7 %ama*es, Article 2231 of t(e Civil Co%e provi%esL H&n DuasiG%elicts, e@emplar7 %ama*es ma7 2e *rante% if t(e %efen%ant acte% =it( *rave ne*li*ence.I 6(e rationale 2e(in% e@emplar7 or corrective %ama*es is, as t(e name implies, to provi%e an e@ample or correction for t(e pu2lic *oo%. 6(e fin%in*s of t(e trial court is apparent, =(ic( 2ecame t(e 2asis of t(e a=ar% of e@emplar7 %ama*es t(at respon%ent %river =as runnin* at (i*( spee% after turnin* to t(e ri*(t alon* 6aft Ave. comin* from A7ala 9oulevar%, consi%erin* t(at t(e traffic =as clear. 'ailin* to notice petitionerKs car, (e faile% to appl7 (is 2ra;es an% %i% not even s=erve to t(e ri*(t to avoi% t(e collision. 4uc( more, it =as rainin* t(at time an% t(e roa%s are slipper7. 6(e freDuent inci%ence of acci%ents of t(is nature cause% 27 ta@i %rivers in%ee% %eman%s corrective measures. 6(is (o=ever =as overrule% 27 CA an% %i% not su2scri2e% to t(e fact t(at t(e %river =as *rossl7 ne*li*ent, in =(ic( t(is Court fin%s t(at it (as erre%. DI+PO+ITI,EB $ 84&S8S C?NS&D8 8D, t(e assaile% %ecision of t(e Court of Appeals is (ere27 4?D&'&8D insofar as t(e a=ar% of %ama*es is concerne%E an% respon%ents are or%ere% to :ointl7 an% severall7 pa7 t(e petitionerE !1# t(e sum of $2,1+1.27 for actual %ama*es representin* t(e cost of t(e repair of (er carE !2# t(e sum of $1+,///.// as moral %ama*esE !3# t(e sum of $+,///.// as e@emplar7 %ama*esE an% !1# t(e sum of $3,///.// as attorne7Ks fees. No pronouncement as to costs. MARCGAN !s. MENDOLA FactsB A passen*er 2us of t(e $(ilippine a22it 9us .ines =(ic( =as t(en %riven 27 Silverio 4arc(an fell into a %itc( some=(ere in 9arrio 4alan%a7, $olo, 9ulacan, =(ile travellin* on its =a7 to 4anila. As a result of =(ic( Arsenio 4en%oza, (is =ife an% c(il%, =(o =ere t(en insi%e t(e 2us as passen*ers =ere t(ro=n out to t(e *roun% resultin* in t(eir multiple in:uries. Arsenio 4en%oza suffere% t(e most serious in:uries =(ic( %ama*e% (is verte2rae causin* t(e paral7sis of (is lo=er e@tremities. An action =as 2rou*(t to recover %ama*es a*ainst petitioners pre%icate% not onl7 on a 2reac( of contract of carria*e for failure to safel7 conve7 t(e plaintiffs to t(eir %estination, 2ut also on account of a criminal ne*li*ence on t(e part of %efen%ant %river. 6(e lo=er court rule% in favor of plaintiffs. 6(e a=ar% of $1/,///.// as compensator7 %ama*es =as affirme% 27 CA. &t (o=ever a%%e% t(e amount of $3/,///.// as e@emplar7 %ama*es an% sustaine% t(e a=ar% of attorne7Ks fees in t(e amount of $+,///.//. IssueB B(et(er or not t(ere s(oul% 2e an a=ar% of e@emplar7 %ama*es. Ge$dB )es. &t is ar*ue% t(at t(is Court is =it(out :uris%iction to a%:u%icate t(e e@emplar7 %ama*es since t(ere =as no alle*ation nor pra7er, nor proof, nor counterclaim of error for t(e same 27 t(e respon%ents. &t is to 2e o2serve% (o=ever, t(at in t(e complaint, plaintiffs Cpra7e% for suc( ot(er an% furt(er relief as t(is Court ma7 %eem :ust an% eDuita2le.C No=, since t(e 2o%7 of t(e complaint sou*(t to recover %ama*es a*ainst t(e %efen%antGcarrier =(erein plaintiffs pra7e% for in%emnification for t(e %ama*es t(e7 suffere% as a result of t(e ne*li*ence of t(e %river =(o is appellantKs emplo7ee an% since e@emplar7 %ama*es is intimatel7 connecte% =it( *eneral %ama*es, plaintiffs ma7 not 2e e@pecte% to sin*le out 27 e@press term t(e ;in% of %ama*es t(e7 are tr7in* to recover a*ainst t(e %efen%antKs carrier. Suffice it to state t(at =(en plaintiffs pra7e% in t(eir complaint for suc( ot(er relief an% reme%ies t(at ma7 2e availe% of un%er t(e premises, in effect, t(erefore, t(e court is calle% upon t(e e@ercise an% use its %iscretion =(et(er t(e imposition of punitive or e@emplar7 %ama*es even t(ou*( not e@pressl7 pra7e% or plea%e% in t(e plaintiffsK

complaint. 8@emplar7 %ama*es ma7 2e impose% 27 =a7 of e@ample or correction onl7 in a%%ition, amon* ot(ers, to compensator7 %ama*es, 2ut t(at t(e7 cannot 2e recovere% as a matter of ri*(t, t(eir %etermination %epen%in* upon t(e %iscretion of t(e court. &f t(e amount of e@emplar7 %ama*es nee% not 2e prove%, it nee% not also 2e alle*e%, an% t(e reason is o2vious 2ecause it is merel7 inci%ental or %epen%ent upon =(at t(e court ma7 a=ar% as compensator7 %ama*es. 6(ere is no reason to consi%er t(at t(e lo=er court erre% in a=ar%in* t(e $+,/// attorne7s fees. A mo%ification of t(e %ecision (o=ever is proper. espon%ents are entitle% to interest for t(e amount of compensator7 %ama*es from t(e %ate of t(e %ecision of t(e lo=er court an% le*al interest on t(e e@emplar7 %ama*es from t(e %ate of t(e %ecision of t(e Court of Appeals.