Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 92288 February 9, 1993 BRITISH AIRWAYS, INC., petitioner, vs. THE HON. COURT OF A EA!S, T"e#$%& '()(*(o+, a+, FIRST INTERNATIONA! TRA'ING AN' GENERA! SER-ICES, respondents. Quasha, Asperilla, Ancheta, Pea & Nolasco for petitioner. Monina P. Lee for private respondent.

NOCON, J.: This is a petition for review on certiorari to annul and set aside the decision dated November 15, 1989 of the Court of Appeals 1 affirming the decision of the trial court 2 in ordering petitioner ritish Airwa!s, "nc. to pa! private respondent #irst "nternational Trading and $eneral %ervices actual damages, moral damages, corrective or e&emplar! damages, attorne!'s fees and the costs as well as the (esolution dated #ebruar! 15, 199) 3 den!ing petitioner's *otion for (econsideration in the appealed decision. "t appears on record that on #ebruar! 15, 1981, private respondent #irst "nternational Trading and $eneral %ervices Co., a dul! licensed domestic recruitment and placement agenc!, received a tele& message from its principal (+,AC+ -ngineering and Contracting %ervices in .eddah, %audi Arabia to recruit #ilipino contract wor/ers in behalf of said principal. . 0uring the earl! part of *arch 1981, said principal paid to the .eddah branch of petitioner ritish Airwa!s, "nc. airfare tic/ets for 91 contract wor/ers with specific instruction to transport said wor/ers to .eddah on or before *arch 1), 1981. As soon as petitioner received a prepaid tic/et advice from its .eddah branch to transport the 91 wor/ers, private respondent was immediatel! informed b! petitioner that its principal had forwarded 91 prepaid tic/ets. Thereafter, private respondent instructed its travel agent, A0 Travel and Tours. "nc., to boo/ the 91 wor/ers with petitioner but the latter failed to fl! said wor/ers, thereb! compelling private respondent to borrow mone! in the amount of 21)3,314.)) in order to purchase airline tic/ets from

the other airlines as evidenced b! the cash vouchers 5-&hibits 6 6, 6C6 and 6C71 to C7869 for the 91 wor/ers it had recruited who must leave immediatel! since the visas of said wor/ers are valid onl! for 35 da!s and the ureau of -mplo!ment %ervices mandates that contract wor/ers must be sent to the :ob site within a period of 1) da!s. %ometime in the first wee/ of .une, 1981, private respondent was again informed b! the petitioner that it had received a prepaid tic/et advice from its .eddah branch for the transportation of ;8 contract wor/ers. "mmediatet!, private respondent instructed its travel agent to boo/ the ;8 contract wor/ers with the petitioner but the latter was onl! able to boo/ and confirm 14 seats on its .une 9, 1981 flight. <owever, on the date of the scheduled flight onl! 9 wor/ers were able to board said flight while the remaining 8 wor/ers were reboo/ed to .une 1), 1981 which boo/ings were again cancelled b! the petitioner without an! prior notice to either private respondent or the wor/ers. Thereafter, the 8 wor/ers were reboo/ed to the .ul! 3,1981 flight of petitioner with 4 more wor/ers boo/ed for said flight. =nfortunatel!, the confirmed boo/ings of the 11 wor/ers were again cancelled and reboo/ed to .ul! 8, 1981. +n .ul! 4, 1981, private respondent paid the travel ta& of the said wor/ers as re>uired b! the petitioner but when the receipt of the ta& pa!ments was submitted, the latter informed private respondent that it can onl! confirm the seats of the 1; wor/ers on its .ul! 8, 1981 flight. <owever, the confirmed seats of said wor/ers were again cancelled without an! prior notice either to the private respondent or said wor/ers. The 1; wor/ers were finall! able to leave for .eddah after private respondent had bought tic/ets from the other airlines. As a result of these incidents, private respondent sent a letter to petitioner demanding compensation for the damages it had incurred b! the latter's repeated failure to transport its contract wor/ers despite confirmed boo/ings and pa!ment of the corresponding travel ta&es. +n .ul! ;1, 1981, the counsel of private respondent sent another letter to the petitioner demanding the latter to pa! the amount of 215),))).)) representing damages and unreali?ed profit or income which was denied b! the petitioner. +n August 8, 1981, private respondent received a tele& message from its principal cancelling the hiring of the remaining recruited wor/ers due to the dela! in transporting the wor/ers to .eddah. / +n .anuar! ;8, 198;, private respondent filed a complaint for damages against petitioner with the (egional Trial Court of *anila, ranch 1 in Civil Case No. 8;73451. +n the other hand, petitioner, alleged in its Answer with counterclaims that it received a tele& message from .eddah on *arch ;), 1981 advising that the principal of private respondent had prepaid the airfares of 1)) persons to transport private respondent's contract wor/ers from *anila to .eddah on or before *arch 1), 1981. <owever, due to the unavailabilit! of space and limited time, petitioner had to return to its sponsor in

.eddah the prepaid tic/et advice conse>uentl! not even one of the alleged 91 contract wor/ers were boo/ed in an! of its flights. +n .une 5, 1981, petitioner received another prepaid tic/et advice to transport 14 contract wor/ers of private respondent to .eddah but the travel agent of the private respondent boo/ed onl! 1) contract wor/ers for petitioner's .une 9, 1981 flight. <owever, onl! 9 contract wor/ers boarded the scheduled flight with 1 passenger not showing up as evidenced b! the 2hilippine Airlines' passenger manifest for #light A7 );) 5-&hibit 686, 687A6, 687 6 and 687C69. 0 Thereafter, private respondent's travel agent boo/ed seats for 5 contract wor/ers on petitioner's .ul! 3, 1981 flight but said travel agent cancelled the boo/ing of ; passengers while the other 1 passengers did not show up on said flight. %ometime in .ul! 1981, the travel agent of the private respondent boo/ed 8 more contract wor/ers in addition to the previous 5 contract wor/ers who were not able to board the .ul! 3, 1981 flight with the petitioner's .ul! 8, 1981 flight which was accepted b! petitioner sub:ect to reconfirmation. <owever on .ul! 4, 1981, petitioner's computer s!stem bro/e down which resulted to petitioner's failure to get a reconfirmation from %audi Arabia Airlines causing the automatic cancellation of the boo/ings of private respondent's 1; contract wor/ers. "n the morning of .ul! 8, 1981, the computer s!stem of the petitioner was reinstalled and immediatel! petitioner tried to reinstate the boo/ings of the 1; wor/ers with either $ulf Air or %audi Arabia Airlines but both airlines replied that no seat was available on that date and had to place the 1; wor/ers on the wait list. %aid information was dul! rela!ed to the private respondent and the 1; wor/ers before the scheduled flight. After due trial on or on August ;8, 1985, the trial court rendered its decision, the dispositive portion of which reads as follows@
A<-(-#+(-, in view of all the foregoing, this Court renders :udgment@ 1. +rdering the defendant to pa! the plaintiff actual damages in the sum of 21)8,)14.))B ;. +rdering defendant to pa! moral damages to the plaintiff in the amount of 2;),))).))B 1. +rdering the defendant to pa! the plaintiff 21),))).)) b! wa! of corrective or e&emplar! damagesB 3. +rdering the defendant to pa! the plaintiff 1)C of its total claim for and as attorne!'s feesB and 5. To pa! the costs. 1

+n *arch 11, 1984, petitioner appealed said decision to respondent appellate court after the trial court denied its *otion for (econsideration on #ebruar! ;8, 1984.

+n November 15, 1989, respondent appellate court affirmed the decision of the trial court, the dispositive portion of which reads@
A<-(-#+(-, the decision appealed from is hereb! A##"(*-0 with costs against the appellant. 8

+n 0ecember 9, 1989, petitioner filed a *otion for (econsideration which was also denied. <ence, this petition. "t is the contention of petitioner that private respondent has no cause of action against it there being no perfected contract of carriage e&isting between them as no tic/et was ever issued to private respondent's contract wor/ers and, therefore, the obligation of the petitioner to transport said contract wor/ers did not arise. #urthermore, private respondent's failure to attach an! tic/et in the complaint further proved that it was never a part! to the alleged transaction. 2etitioner's contention is untenable. 2rivate respondent had a valid cause of action for damages against petitioner. A cause of action is an act or omission of one part! in violation of the legal right or rights of the other. 9 2etitioner's repeated failures to transport private respondent's wor/ers in its flight despite confirmed boo/ing of said wor/ers clearl! constitutes breach of contract and bad faith on its part. "n resolving petitioner's theor! that private respondent has no cause of action in the instant case, the appellate court correctl! held that@
"n dealing with the contract of common carriage of passengers for purpose of accurac!, there are two 5;9 aspects of the same, namel!@ 5a9 the contract 6to carr! 5at some future time9,6 which contract is consensual and is necessaril! perfected b! mere consent 5%ee Article 1154, Civil Code of the 2hilippines9, and 5b9 the contract 6of carriage6 or 6of common carriage6 itself which should be considered as a real contract for not until the carrier is actuall! used can the carrier be said to have alread! assumed the obligation of a carrier. 52aras, Civil Code Annotated, Dol. D, p. 3;9, -leventh -d.9 "n the instant case, the contract 6to carr!6 is the one involved which is consensual and is perfected b! the mere consent of the parties. There is no dispute as to the appellee's consent to the said contract 6to carr!6 its contract wor/ers from *anila to .eddah. The appellant's consent thereto, on the other hand, was manifested b! its acceptance of the 2TA or prepaid tic/et advice that (+,AC+ -ngineering has prepaid the airfares of the appellee's contract wor/ers advising the appellant that it must transport the contract wor/ers on or before the end of *arch, 1981 and the other batch in .une, 1981. -ven if a 2TA is merel! an advice from the sponsors that an airline is authori?ed to issue a tic/et and thus no tic/et was !et issued, the fact remains that the passage had alread! been paid for b! the principal of the appellee, and the appellant had accepted such pa!ment. The e&istence of this pa!ment was never ob:ected to nor >uestioned b! the

appellant in the lower court. Thus, the cause or consideration which is the fare paid for the passengers e&ists in this case. The third essential re>uisite of a contract is an ob:ect certain. "n this contract 6to carr!6, such an ob:ect is the transport of the passengers from the place of departure to the place of destination as stated in the tele&. Accordingl!, there could be no more pretensions as to the e&istence of an oral contract of carriage imposing reciprocal obligations on both parties. "n the case of appellee, it has full! complied with the obligation, namel!, the pa!ment of the fare and its willingness for its contract wor/ers to leave for their place of destination. +n the other hand, the facts clearl! show that appellant was remiss in its obligation to transport the contract wor/ers on their flight despite confirmation and boo/ings made b! appellee's travelling agent. &&& &&& &&& esides, appellant /new ver! well that time was of the essence as the prepaid tic/et advice had specified the period of compliance therewith, and with emphasis that it could onl! be used if the passengers fl! on A. =nder the circumstances, the appellant should have refused acceptance of the 2TA from appellee's principal or to at least inform appellee that it could not accommodate the contract wor/ers. &&& &&& &&& Ahile there is no dispute that (+,AC+ -ngineering advanced the pa!ment for the airfares of the appellee's contract wor/ers who were recruited for (+,AC+ -ngineering and the said contract wor/ers were the intended passengers in the aircraft of the appellant, the said contract 6to carr!6 also involved the appellee for as recruiter he had to see to it that the contract wor/ers should be transported to (+,AC+ -ngineering in .eddah thru the appellant's transportation. #or that matter, the involvement of the appellee in the said contract 6to carr!6 was well demonstrated when the appellant upon receiving the 2TA immediatel! advised the appellee thereof. 12

2etitioner also contends that the appellate court erred in awarding actual damages in the amount of 21)8,)14.)) to private respondent since all e&penses had alread! been subse>uentl! reimbursed b! the latter's principal. "n awarding actual damages to private respondent, the appellate court held that the amount of 21)8,)14.)) representing actual damages refers to private respondent's second cause of action involving the e&penses incurred b! the latter which were not reimbursed b! (+,AC+ -ngineering. <owever, in the Complaint 11 filed b! private respondent, it was alleged that private respondent suffered actual damages in the amount of 21)8,)14.)) representing the mone! it borrowed from friends and financiers which is 21)3,314.)) for the 91 airline tic/ets and 21,4)).)) for the travel ta& of the 1; wor/ers. "t is clear therefore that the actual damages private respondent see/s to recover are the airline tic/ets and travel ta&es it spent for its wor/ers which were alread! reimbursed b! its principal and not for an! other e&penses it had incurred in the process of recruiting said contract wor/ers. "nasmuch as all e&penses including the processing

fees incurred b! private respondent had alread! been paid for b! the latter's principal on a staggered basis as admitted in open court b! its managing director, *rs. ienvenida rusellas. 12 Ae do not find an!more :ustification in the appellate court's decision in granting actual damages to private respondent. Thus, while it ma! be true that private respondent was compelled to borrow mone! for the airfare tic/ets of its contract wor/ers when petitioner failed to transport said wor/ers, the reimbursements made b! its principal to private respondent failed to support the latter's claim that it suffered actual damages as a result of petitioner's failure to transport said wor/ers. "t is undisputed that private respondent had consistentl! admitted that its principal had reimbursed all its e&penses. Article ;199 of the Civil Code provides that@
-&cept as provided b! law or b! stipulations, one is entitled to an ade>uate compensation onl! for such pecuniar! loss suffered b! him as he has dul! proved. %uch compensation is referred to as actual or compensator! damages.

#urthermore, actual or compensator! damages cannot be presumed, but must be dul! proved, and proved with reasonable degree of certaint!. A court cannot rel! on speculation, con:ecture or guesswor/ as to the fact and amount of damages, but must depend upon competent proof that the! have suffered and on evidence of the actual amount thereof. 13 <owever, private respondent is entitled to an award of moral and e&emplar! damages for the in:ur! suffered as a result of petitioner's failure to transport the former's wor/ers because of the latter's patent bad faith in the performance of its obligation. As correctl! pointed out b! the appellate court@
As evidence had proved, there was complete failure on the part of the appellant to transport the 91 contract wor/ers of the appellee on or before *arch 1), 1981 despite receipt of the pa!ment for their airfares, and acceptance of the same b! the appellant, with specific instructions from the appellee's principal to transport the contract wor/ers on or before *arch 1), 1981. No previous notice was ever registered b! the appellant that it could not compl! with the same. And then followed the detestable act of appellant in unilaterall! cancelling, boo/ing and reboo/ing unreasonabl! the flight of appellee's contract wor/ers in .une to .ul!, 1981 without prior notice. And all of these actuations of the appellant indeed constitute malice and evident bad faith which had caused damage and besmirched the reputation and business image of the appellee. 1.

As to the alleged damages suffered b! the petitioner as stated in its counterclaims, the record shows that no claim for said damages was ever made b! the petitioner immediatel! after their alleged occurrence therefore said counterclaims were mere afterthoughts when private respondent filed the present case. A<-(-#+(-, the assailed decision is hereb! A##"(*-0 with the *+0"#"CAT"+N that the award of actual damages be deleted from said decision.

%+ +(0-(-0. Narvasa, C.J., Feliciano, Re alado and Ca!pos, Jr., JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 11.201 Au3u*% 23, 199/ 4OREAN AIR!INES CO., !T'., petitioner, vs. COURT OF A EA!S a+, 5UANITO C. !A U6, respondents. G.R. No. 1138.2 Au3u*% 23, 199/ 5UANITO C. !A U6, petitioner, vs. COURT OF A EA!S a+, 4OREAN AIR!INES CO., !T'., respondents. (-%+,=T"+N

FRANCISCO, J.: The case is of 198) vintage. "t originated from the (egional Trial Court, appealed to the Court of Appeals, then finall! elevated to this Court. #rom the Court's disposition of the case stemmed incidents which are now the sub:ects for resolution. To elaborate@ "n an action for breach of contract of carriage, Eorean Airlines, Co., ,td., 5EA,9 was ordered b! the trial court to pa! actualFcompensator! damages, with legal interest, attorne!'s fees and costs of suit in favor of plaintiff .uanito C. ,apu?. 1 oth parties appealed to the Court of Appeals, but the trial court's :udgment was merel! modified@ the award of compensator! damages reduced, an award for moral and e&emplar! damages added, with 4C interest per annu! from the date of filing of the complaint, and the attorne!'s fees and costs deleted. The parties subse>uentl! elevated the case to this Court, doc/eted as $.(. No. 113)41 and $.(. No. 11183;. +n August 1, 1993, the Court in a consolidated decision affirmed the decision of the Court of Appeals, modified onl! as to the commencement date of the award of legal interest, i.e., from the date of the decision of the trial court and not from the date of filing of the complaint. 2 The parties filed their respective motions for

reconsideration with EA,, for the first time, assailing the Court's lac/ of :urisdiction to impose legal interest as the complaint allegedl! failed to pra! for its award. "n a resolution dated %eptember ;1, 1993, the Court resolved to den! both motions for reconsideration with finalit!. Notwithstanding, EA, filed subse>uent pleadings as/ing for reconsideration of the Court's consolidated decision and again impugning the award of legal interest. ,apu?, meanwhile, filed a motion for earl! resolution of the case followed b! a motion for e&ecution dated *arch 13, 1995, pra!ing for the issuance of a writ of e&ecution. EA,, in response, filed its +pposition and %upplemental Argument in %upport of the +pposition dated *arch ;8, 1995, and *arch 1), 1995, respectivel!. Additionall!, on *a! 1, 1995, ,apu? filed another =rgent *otion for -arl! (esolution stating that the case has been pending for fifteen !ears which EA, admitted in its Comment filed two da!s later, albeit stressing that its pleadings were not intended for dela!. 3 EA,'s asseveration that the Court lac/s :urisdiction to award legal interest is devoid of merit. oth the complaint and amended complaint against EA, dated November ;8, 198), and .anuar! 5, 1981, respectivel!, pra!ed for reliefs and remedies to which ,apu? ma! be entitled in law and e>uit!. The award of legal interest is one such relief, as it is based on e>uitable grounds dul! sanctioned b! Article ;;1) of the Civil Code which provides that@ 6GiHnterest ma!, in the discretion of the Court, be allowed upon damages awarded for breach of contract6. . #urthermore, in its petition for review before the Court of Appeals, EA, did not >uestion the trial court's imposition of legal interest. ,i/ewise, in its appeal before the Court, EA, never bewailed the award of legal interest. "n fact, EA, too/ e&ception onl! with respect to the date when legal interest should commence to run. / "ndeed, it was onl! in its motion for reconsideration when suddenl! its imposition was assailed for having been rendered without :urisdiction. To strengthen its languid position, EA,'s subse>uent pleadings clothed its attac/ with constitutional import for alleged violation of its right to due process. There is no cogent reason and none appears on record that could sustain EA,'s scheme as EA, was ampl! given, in the courts below and in this Court, occasion to ventilate its case. Ahat is repugnant to due process is the denial of opportunit! to be heard 0 which opportunit! EA, was e&tensivel! afforded. Ahile it is a rule that :urisdictional >uestion ma! be raised at an! time, this, however, admits of an e&ception where, as in this case, estoppel has supervened. 1 This court has time and again frowned upon the undesirable practice of a part! submitting his case for decision and then accepting the :udgment, onl! if favorable, and attac/ing it for lac/ of :urisdiction when adverse. 8 The Court shall not countenance EA,'s undesirable moves. Ahat attenuates EA,'s unmeritorious importuning is that the assailed decision has long ac>uired finalit!. "t is a settled rule that a :udgment which has ac>uired finalit! becomes immutable and unalterable, hence ma! no longer be modified in an! respect e&cept onl! to correct clerical errors or mista/e. 9 +nce a :udgment becomes final, all the issues between the parties are deemed resolved and laid to rest. EA,'s filing of numerous pleadings dela!ed the disposition of the case which for fifteen !ears remained pending. This practice ma! constitute abuse of the Court's processes

for it tends to impede, obstruct and degrade the administration of :ustice. "n Li "i! #ho v. $o %iu "o, et al., 12 the Court gave this reminder to litigants and law!ers' ali/e@
,itigation must end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of :ustice that, once a :udgment has become final, the winning part! be not, through a mere subterfuge, deprived of the fruits of the verdict. Courts must therefore guard against an! scheme calculated to bring about the result. Constituted as the! are to put an end to controversies, courts should frown upon an! attempt to prolong them. 11

,i/ewise, in &ano an v. 'erna 12 the Court reminded law!ers of their responsibilit! as officers of the court in this manner@
As officers of the court, law!ers have a responsibilit! to assist in the proper administration of :ustice. The! do not discharge this dut! b! filing pointless petitions that onl! add to the wor/load of the :udiciar!, especiall! this Court, which is burdened enough as it is. A :udicious stud! of the facts and the law should advise them when a case, such as this, should not de permitted to be filed to merel! clutter the alread! congested :udicial doc/ets. The! do not advance the cause of law or their clients b! commencing litigations that for sheer lac/ of merit do not deserve the attention of the courts. 13

A law!er owes fidelit! to the cause of his client, but not at the e&pense of truth and the administration of :ustice. 1. Counsel for EA, is reminded that it is his dut! not to undul! dela! a case, impede the e&ecution of a :udgment or misuse Court processes. 1/ Aith respect to ,apu?' motion for e&ecution, suffice to state that the application for a writ of e&ecution should be addressed to the court of origin and not to this Court. As the :udgment has become final and e&ecutor! then all that is left of the trial court is the ministerial act of ordering the e&ecution thereof. ACC+(0"N$,I, EA,'s motion for reconsideration is 0-Nl-0. Counsel for EA, is hereb! warned that repetition of his undesirable practice shall be dealt with severel!. Re alado, Puno and Mendo(a, JJ., concur. Narvasa, C.J., is on leave. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 9//82 O7%ober 1, 1991 'ANGWA TRANS ORTATION CO., INC. a+, THEO'ORE !AR'I6ABA! y 8A!EC'AN, petitioners, vs.

COURT OF A EA!S, INOCENCIA CU'IA8AT, E8I!IA CU'IA8AT BAN'OY, FERNAN'O CU'!A8AT, 8ARRIETA CU'IA8AT, NOR8A CU'IA8AT, 'ANTE CU'IA8AT, SA8UE! CU'IA8AT a+, !IGAYA CU'IA8AT, a## He(r* o$ %&e #a%e e,r(%o Cu,(a9a% re:re*e+%e, by I+o7e+7(a Cu,(a9a%, respondents. Francisco %. Re)es La* +ffice for petitioners. Antonio C. de $u(!an for private respondents.

REGA!A'O, J.:p +n *a! 11, 1985, private respondents filed a complaint 1 for damages against petitioners for the death of 2edrito Cudiamat as a result of a vehicular accident which occurred on *arch ;5, 1985 at *arivic, %apid, *an/a!an, enguet. Among others, it was alleged that on said date, while petitioner Theodore *. ,ardi?abal was driving a passenger bus belonging to petitioner corporation in a rec/less and imprudent manner and without due regard to traffic rules and regulations and safet! to persons and propert!, it ran over its passenger, 2edrito Cudiamat. <owever, instead of bringing 2edrito immediatel! to the nearest hospital, the said driver, in utter bad faith and without regard to the welfare of the victim, first brought his other passengers and cargo to their respective destinations before banging said victim to the ,epanto <ospital where he e&pired. +n the other hand, petitioners alleged that the! had observed and continued to observe the e&traordinar! diligence re>uired in the operation of the transportation compan! and the supervision of the emplo!ees, even as the! add that the! are not absolute insurers of the safet! of the public at large. #urther, it was alleged that it was the victim's own carelessness and negligence which gave rise to the sub:ect incident, hence the! pra!ed for the dismissal of the complaint plus an award of damages in their favor b! wa! of a counterclaim. +n .ul! ;9, 1988, the trial court rendered a decision, effectivel! in favor of petitioners, with this decretal portion@
"N D"-A +# A,, T<- #+(-$+"N$, :udgment is hereb! pronounced that 2edrito Cudiamat was negligent, which negligence was the pro&imate cause of his death. Nonetheless, defendants in e>uit!, are hereb! ordered to pa! the heirs of 2edrito Cudiamat the sum of 21),))).)) which appro&imates the amount defendants initiall! offered said heirs for the amicable settlement of the case. No costs. %+ +(0-(-0. 2

Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision 3 in CA7$.(. CD No. 195)3 promulgated on August 13, 199), set aside the decision of the lower court, and ordered petitioners to pa! private respondents@

1. The sum of Thirt! Thousand 521),))).))9 2esos b! wa! of indemnit! for death of the victim 2edrito CudiamatB ;. The sum of Twent! Thousand 52;),))).))9 b! wa! of moral damagesB 1. The sum of Two <undred -ight! -ight Thousand 52;88,))).))9 2esos as actual and compensator! damagesB 3. The costs of this suit. .

2etitioners' motion for reconsideration was denied b! the Court of Appeals in its resolution dated +ctober 3, 199), / hence this petition with the central issue herein being whether respondent court erred in reversing the decision of the trial court and in finding petitioners negligent and liable for the damages claimed. "t is an established principle that the factual findings of the Court of Appeals as a rule are final and ma! not be reviewed b! this Court on appeal. <owever, this is sub:ect to settled e&ceptions, one of which is when the findings of the appellate court are contrar! to those of the trial court, in which case a ree&amination of the facts and evidence ma! be underta/en. 0 "n the case at bar, the trial court and the Court of Appeal have discordant positions as to who between the petitioners an the victim is guilt! of negligence. 2erforce, we have had to conduct an evaluation of the evidence in this case for the prope calibration of their conflicting factual findings and legal conclusions. The lower court, in declaring that the victim was negligent, made the following findings@
This Court is satisfied that 2edrito Cudiamat was negligent in tr!ing to board a moving vehicle, especiall! with one of his hands holding an umbrella. And, without having given the driver or the conductor an! indication that he wishes to board the bus. ut defendants can also be found wanting of the necessar! diligence. "n this connection, it is safe to assume that when the deceased Cudiamat attempted to board defendants' bus, the vehicle's door was open instead of being closed. This should be so, for it is hard to believe that one would even attempt to board a vehicle 5i9n motion if the door of said vehicle is closed. <ere lies the defendant's lac/ of diligence. =nder such circumstances, e>uit! demands that there must be something given to the heirs of the victim to assuage their feelings. This, also considering that initiall!, defendant common carrier had made overtures to amicabl! settle the case. "t did offer a certain monetar! consideration to the victim's heirs. 1

<owever, respondent court, in arriving at a different opinion, declares that@

#rom the testimon! of appellees'own witness in the person of Ditaliano %afarita, it is evident that the sub:ect bus was at full stop when the victim 2edrito Cudiamat boarded the same as it was precisel! on this instance where a certain *iss Abeno:a alighted from the bus. *oreover, contrar! to the assertion of the appellees, the victim did indicate his intention to board the bus as can be seen from the testimon! of the said witness when he declared that 2edrito Cudiamat was no longer wal/ing and made a sign to board the bus when the latter was still at a distance from him. "t was at the instance when 2edrito

Cudiamat was closing his umbrella at the platform of the bus when the latter made a sudden :er/ movement 5as9 the driver commenced to accelerate the bus. -videntl!, the incident too/ place due to the gross negligence of the appellee7driver in prematurel! stepping on the accelerator and in not waiting for the passenger to first secure his seat especiall! so when we ta/e into account that the platform of the bus was at the time slipper! and wet because of a dri??le. The defendants7appellees utterl! failed to observe their dut! and obligation as common carrier to the end that the! should observe e&tra7ordinar! diligence in the vigilance over the goods and for the safet! of the passengers transported b! them according to the circumstances of each case 5Article 1811, New Civil Code9. 8

After a careful review of the evidence on record, we find no reason to disturb the above holding of the Court of Appeals. "ts aforesaid findings are supported b! the testimon! of petitioners' own witnesses. +ne of them, Dirginia Abalos, testified on cross7e&amination as follows@
J "t is not a fact *adam witness, that at bun/house 53, that is before the place of the incident, there is a crossingK A The wa! going to the mines but it is not being pass5ed9 b! the bus. J And the incident happened before bun/house 54, is that not correctK A ,t happened -et*een ./ and .0 -un1houses . 9

The bus conductor, *artin Anglog, also declared@

J Ahen !ou arrived at ,epanto on *arch ;5, 1985, will !ou please inform this <onorable Court if there was anv unusual incident that occurredK A Ahen we delivered a baggage at *arivic because a person ali hted there -et*een &un1house .0 and ./. J Ahat happened when !ou delivered this passenger at this particular place in ,epantoK A 2hen *e reached the place, a passen er ali hted and , si nalled !) driver. 2hen *e stopped *e *ent out -ecause , sa* an u!-rella a-out a split second and , si nalled a ain the driver, so the driver stopped and *e *ent do*n and *e sa* Pedrito Cudia!at as1in for help -ecause he *as l)in do*n. J <ow far awa! was this certain person, 2edrito Cudiamat, when !ou saw him l!ing down L from the bus how far was heK A "t is about two to three meters. J +n *hat direction of the -us *as he found a-out three !eters fro! the -us, *as it at the front or at the -ac13 A At the -ac1, sir. 12 5-mphasis supplied.9

The foregoing testimonies show that the place of the accident and the place where one of the passengers alighted were both between un/houses 51 and 53, hence the finding of the Court of Appeals that the bus was at full stop when the victim boarded the same is correct. The! further confirm the conclusion that the victim fell from the platform

of the bus when it suddenl! accelerated forward and was run over b! the rear right tires of the vehicle, as shown b! the ph!sical evidence on where he was thereafter found in relation to the bus when it stopped. =nder such circumstances, it cannot be said that the deceased was guilt! of negligence. The contention of petitioners that the driver and the conductor had no /nowledge that the victim would ride on the bus, since the latter had supposedl! not manifested his intention to board the same, does not merit consideration. Ahen the bus is not in motion there is no necessit! for a person who wants to ride the same to signal his intention to board. A public utilit! bus, once it stops, is in effect ma/ing a continuous offer to bus riders. <ence, it becomes the dut! of the driver and the conductor, ever! time the bus stops, to do no act that would have the effect of increasing the peril to a passenger while he was attempting to board the same. The premature acceleration of the bus in this case was a breach of such dut!. 11 "t is the dut! of common carriers of passengers, including common carriers b! railroad train, streetcar, or motorbus, to stop their conve!ances a reasonable length of time in order to afford passengers an opportunit! to board and enter, and the! are liable for in:uries suffered b! boarding passengers resulting from the sudden starting up or :er/ing of their conve!ances while the! are doing so. 12 #urther, even assuming that the bus was moving, the act of the victim in boarding the same cannot be considered negligent under the circumstances. As clearl! e&plained in the testimon! of the aforestated witness for petitioners, Dirginia Abalos, th bus had 6:ust started6 and 6was still in slow motion6 at the point where the victim had boarded and was on its platform. 13 "t is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving slowl!. 1. An ordinaril! prudent person would have made the attempt board the moving conve!ance under the same or similar circumstances. The fact that passengers board and alight from slowl! moving vehicle is a matter of common e&perience both the driver and conductor in this case could not have been unaware of such an ordinar! practice. The victim herein, b! stepping and standing on the platform of the bus, is alread! considered a passenger and is entitled all the rights and protection pertaining to such a contractual relation. <ence, it has been held that the dut! which the carrier passengers owes to its patrons e&tends to persons boarding cars as well as to those alighting therefrom. 1/ Common carriers, from the nature of their business and reasons of public polic!, are bound to observe e&traordina diligence for the safet! of the passengers transported b! the according to all the circumstances of each case. 10 A common carrier is bound to carr! the passengers safel! as far as human care and foresight can provide, using the utmost diligence ver! cautious persons, with a due regard for all the circumstances. 11

"t has also been repeatedl! held that in an action based on a contract of carriage, the court need not ma/e an e&press finding of fault or negligence on the part of the carrier in order to hold it responsible to pa! the damages sought b! the passenger. ! contract of carriage, the carrier assumes the e&press obligation to transport the passenger to his destination safel! and observe e&traordinar! diligence with a due regard for all the circumstances, and an! in:ur! that might be suffered b! the passenger is right awa! attributable to the fault or negligence of the carrier. This is an e&ception to the general rule that negligence must be proved, and it is therefore incumbent upon the carrier to prove that it has e&ercised e&traordinar! diligence as prescribed in Articles 1811 and 1855 of the Civil Code. 18 *oreover, the circumstances under which the driver and the conductor failed to bring the gravel! in:ured victim immediatel! to the hospital for medical treatment is a patent and incontrovertible proof of their negligence. "t defies understanding and can even be stigmati?ed as callous indifference. The evidence shows that after the accident the bus could have forthwith turned at un/ 54 and thence to the hospital, but its driver instead opted to first proceed to un/ 8) to allow a passenger to alight and to deliver a refrigerator, despite the serious condition of the victim. The vacuous reason given b! petitioners that it was the wife of the deceased who caused the dela! was tersel! and correctl! confuted b! respondent court@
... The pretension of the appellees that the dela! was due to the fact that the! had to wait for about twent! minutes for "nocencia Cudiamat to get dressed deserves scant consideration. "t is rather scandalous and deplorable for a wife whose husband is at the verge of d!ing to have the lu&ur! of dressing herself up for about twent! minutes before attending to help her distressed and helpless husband. 19

#urther, it cannot be said that the main intention of petitioner ,ardi?abal in going to un/ 8) was to inform the victim's famil! of the mishap, since it was not said bus driver nor the conductor but the companion of the victim who informed his famil! thereof. 22 "n fact, it was onl! after the refrigerator was unloaded that one of the passengers thought of sending somebod! to the house of the victim, as shown b! the testimon! of Dirginia Abalos again, to wit@
J Ah!, what happened to !our refrigerator at that particular timeK A " as/ed them to bring it down because that is the nearest place to our house and when " went down and as/ed somebod! to bring down the refrigerator, " also as/ed somebod! to call the famil! of *r. Cudiamat. C+=(T@ J Ah! did !ou as/ somebod! to call the famil! of *r. CudiamatK A ecause *r. Cudiamat met an accident, so " as/ somebod! to call for the famil! of *r. Cudiamat. J ut nobod! as/5ed9 !ou to call for the famil! of *r. CudiamatK A No sir. 21

Aith respect to the award of damages, an oversight was, however, committed b! respondent Court of Appeals in computing the actual damages based on the gross income of the victim. The rule is that the amount recoverable b! the heirs of a victim of a tort is not the loss of the entire earnings, but rather the loss of that portion of the earnings which the beneficiar! would have received. "n other words, onl! net earnings, not gross earnings, are to be considered, that is, the total of the earnings less e&penses necessar! in the creation of such earnings or income and minus living and other incidental e&penses. 22 Ae are of the opinion that the deductible living and other e&pense of the deceased ma! fairl! and reasonabl! be fi&ed at 25)).)) a month or 24,))).)) a !ear. "n ad:udicating the actual or compensator! damages, respondent court found that the deceased was 38 !ears old, in good health with a remaining productive life e&pectanc! of 1; !ears, and then earning 2;3,))).)) a !ear. =sing the gross annual income as the basis, and multipl!ing the same b! 1; !ears, it accordingl! awarded 2;88,))). Appl!ing the aforestated rule on computation based on the net earnings, said award must be, as it hereb! is, rectified and reduced to 2;14,))).)). <owever, in accordance with prevailing :urisprudence, the death indemnit! is hereb! increased to 25),))).)). 23 A<-(-#+(-, sub:ect to the above modifications, the challenged :udgment and resolution of respondent Court of Appeals are hereb! A##"(*-0 in all other respects. %+ +(0-(-0. Melencio45errera 6Chairperson7, Paras, Padilla and %ar!iento, JJ., concur.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 145804 February 6, 2003

L G!T R" L TR"NS T "UT!OR T# $ RO%OLFO ROM"N, petitioners, vs M"R&OR E N"' %"%, !e(r) o* +,e La+e N C"NOR N"' %"% $ PRU%ENT SECUR T# "GENC#, respon!ents DECISION ' TUG, J.: The case before the Court is an appeal fro" the !ecision an! resolution of the Court of #ppeals, pro"ul$ate! on %& #pril %''' an! (' October %''', respectivel), in C#*+ R CV No ,'&%', entitle! -Mar.orie Navi!a! an! /eirs of the 0ate Nicanor Navi!a! vs Ro!olfo Ro"an, et al ,1hich has "o!ifie! the !ecision of (( #u$ust (223 of the Re$ional Trial Court, 4ranch %,,, Pasi$ Cit), e5oneratin$ Pru!ent Securit) #$enc) 6Pru!ent7 fro" liabilit) an! fin!in$ 0i$ht Rail Transit #uthorit) 60RT#7 an! Ro!olfo Ro"an liable for !a"a$es on account of the !eath of Nicanor Navi!a! On (8 October (229, about half an hour past seven o:cloc; in the evenin$, Nicanor Navi!a!, then !run;, entere! the EDS# 0RT station after purchasin$ a -to;en- 6representin$ pa)"ent of the fare7 <hile Navi!a! 1as stan!in$ on the platfor" near the 0RT trac;s, =unelito Escartin, the securit) $uar! assi$ne! to the area approache! Navi!a! # "isun!erstan!in$ or an altercation bet1een the t1o apparentl) ensue! that le! to a fist fi$ht No evi!ence, ho1ever, 1as a!!uce! to in!icate ho1 the fi$ht starte! or 1ho, bet1een the t1o, !elivere! the first blo1 or ho1 Navi!a! later fell on the 0RT trac;s #t the e5act "o"ent that Navi!a! fell, an 0RT train, operate! b) petitioner Ro!olfo Ro"an, 1as co"in$ in Navi!a! 1as struc; b) the "ovin$ train, an! he 1as ;ille! instantaneousl) On '3 Dece"ber (228, the 1i!o1 of Nicanor, herein respon!ent Mar.orie Navi!a!, alon$ 1ith her chil!ren, file! a co"plaint for !a"a$es a$ainst =unelito Escartin, Ro!olfo Ro"an, the 0RT#, the Metro Transit Or$ani>ation, Inc 6Metro Transit7, an! Pru!ent for the !eath of her husban! 0RT# an! Ro"an file! a counterclai" a$ainst Navi!a! an! a cross*clai" a$ainst Escartin an! Pru!ent Pru!ent, in its ans1er, !enie! liabilit) an! averre! that it ha! e5ercise! !ue !ili$ence in the selection an! supervision of its securit) $uar!s The 0RT# an! Ro"an presente! their evi!ence 1hile Pru!ent an! Escartin, instea! of presentin$ evi!ence, file! a !e"urrer conten!in$ that Navi!a! ha! faile! to prove that Escartin 1as ne$li$ent in his assi$ne! tas; On (( #u$ust (223, the trial court ren!ere! its !ecision? it a!.u!$e!@

-</EREFORE, .u!$"ent is hereb) ren!ere! in favor of the plaintiffs an! a$ainst the !efen!ants Pru!ent Securit) an! =unelito Escartin or!erin$ the latter to pa) .ointl) an! severall) the plaintiffs the follo1in$@ -a7 (7 #ctual !a"a$es of P88,39' ''? %7 Co"pensator) !a"a$es of P889,A%' ''? 97 In!e"nit) for the !eath of Nicanor Navi!a! in the su" of PA',''' ''? -b7 Moral !a"a$es of PA',''' ''? -c7 #ttorne):s fees of P%','''? -!7 Costs of suit -The co"plaint a$ainst !efen!ants 0RT# an! Ro!olfo Ro"an are !is"isse! for lac; of "erit -The co"pulsor) counterclai" of 0RT# an! Ro"an are li;e1ise !is"isse! -( Pru!ent appeale! to the Court of #ppeals On %& #u$ust %''', the appellate court pro"ul$ate! its no1 assaile! !ecision e5oneratin$ Pru!ent fro" an) liabilit) for the !eath of Nicanor Navi!a! an!, instea!, hol!in$ the 0RT# an! Ro"an .ointl) an! severall) liable thusl)@ -</EREFORE, the assaile! .u!$"ent is hereb) MODIFIED, b) e5oneratin$ the appellants fro" an) liabilit) for the !eath of Nicanor Navi!a!, =r Instea!, appellees Ro!olfo Ro"an an! the 0i$ht Rail Transit #uthorit) 60RT#7 are hel! liable for his !eath an! are hereb) !irecte! to pa) .ointl) an! severall) to the plaintiffs*appellees, the follo1in$ a"ounts@ a7 P88,39' '' as actual !a"a$es? b7 PA',''' '' as no"inal !a"a$es? c7 PA',''' '' as "oral !a"a$es? !7 PA',''' '' as in!e"nit) for the !eath of the !ecease!? an! e7 P%',''' '' as an! for attorne):s fees -% The appellate court ratiocinate! that 1hile the !ecease! "i$ht not have then as )et boar!e! the train, a contract of carria$e theretofore ha! alrea!) e5iste! 1hen the victi" entere! the place 1here passen$ers 1ere suppose! to be after pa)in$ the fare an! $ettin$ the correspon!in$ to;en therefor In e5e"ptin$ Pru!ent fro" liabilit), the court stresse! that there 1as nothin$ to lin; the securit) a$enc) to the !eath of Navi!a! It sai! that Navi!a! faile! to sho1 that Escartin inflicte! fist blo1s upon the victi" an! the evi!ence "erel) establishe! the fact of !eath of Navi!a! b) reason of his havin$ been hit b) the train o1ne! an! "ana$e! b) the 0RT# an!

operate! at the ti"e b) Ro"an The appellate court faulte! petitioners for their failure to present e5pert evi!ence to establish the fact that the application of e"er$enc) bra;es coul! not have stoppe! the train The appellate court !enie! petitioners: "otion for reconsi!eration in its resolution of (' October %''' In their present recourse, petitioners recite alle$e! errors on the part of the appellate court? vi>@ -I T/E /ONOR#40E COBRT OF #PPE#0S +R#VE0C ERRED 4C DISRE+#RDIN+ T/E FINDIN+S OF F#CTS 4C T/E TRI#0 COBRT -II T/E /ONOR#40E COBRT OF #PPE#0S +R#VE0C ERRED IN FINDIN+ T/#T PETITIONERS #RE 0I#40E FOR T/E DE#T/ OF NIC#NOR N#VID#D, =R -III T/E /ONOR#40E COBRT OF #PPE#0S +R#VE0C ERRED IN FINDIN+ T/#T RODO0FO ROM#N IS #N EMP0OCEE OF 0RT# -9 Petitioners 1oul! conten! that the appellate court i$nore! the evi!ence an! the factual fin!in$s of the trial court b) hol!in$ the" liable on the basis of a s1eepin$ conclusion that the presu"ption of ne$li$ence on the part of a co""on carrier 1as not overco"e Petitioners 1oul! insist that Escartin:s assault upon Navi!a!, 1hich cause! the latter to fall on the trac;s, 1as an act of a stran$er that coul! not have been foreseen or prevente! The 0RT# 1oul! a!! that the appellate court:s conclusion on the e5istence of an e"plo)er*e"plo)ee relationship bet1een Ro"an an! 0RT# lac;e! basis because Ro"an hi"self ha! testifie! bein$ an e"plo)ee of Metro Transit an! not of the 0RT# Respon!ents, supportin$ the !ecision of the appellate court, conten!e! that a contract of carria$e 1as !ee"e! create! fro" the "o"ent Navi!a! pai! the fare at the 0RT station an! entere! the pre"ises of the latter, entitlin$ Navi!a! to all the ri$hts an! protection un!er a contractual relation, an! that the appellate court ha! correctl) hel! 0RT# an! Ro"an liable for the !eath of Navi!a! in failin$ to e5ercise e5traor!inar) !ili$ence i"pose! upon a co""on carrier 0a1 an! .urispru!ence !ictate that a co""on carrier, both fro" the nature of its business an! for reasons of public polic), is bur!ene! 1ith the !ut) of e5ercisin$ ut"ost !ili$ence in ensurin$ the safet) of passen$ers 8 The Civil Co!e, $overnin$ the liabilit) of a co""on carrier for !eath of or in.ur) to its passen$ers, provi!es@

-#rticle (&AA # co""on carrier is boun! to carr) the passen$ers safel) as far as hu"an care an! foresi$ht can provi!e, usin$ the ut"ost !ili$ence of ver) cautious persons, 1ith a !ue re$ar! for all the circu"stances -#rticle (&A, In case of !eath of or in.uries to passen$ers, co""on carriers are presu"e! to have been at fault or to have acte! ne$li$entl), unless the) prove that the) observe! e5traor!inar) !ili$ence as prescribe! in articles (&99 an! (&AA -#rticle (&A2 Co""on carriers are liable for the !eath of or in.uries to passen$ers throu$h the ne$li$ence or 1illful acts of the for"er:s e"plo)ees, althou$h such e"plo)ees "a) have acte! be)on! the scope of their authorit) or in violation of the or!ers of the co""on carriers -This liabilit) of the co""on carriers !oes not cease upon proof that the) e5ercise! all the !ili$ence of a $oo! father of a fa"il) in the selection an! supervision of their e"plo)ees -#rticle (&,9 # co""on carrier is responsible for in.uries suffere! b) a passen$er on account of the 1illful acts or ne$li$ence of other passen$ers or of stran$ers, if the co""on carrier:s e"plo)ees throu$h the e5ercise of the !ili$ence of a $oo! father of a fa"il) coul! have prevente! or stoppe! the act or o"ission The la1 reDuires co""on carriers to carr) passen$ers safel) usin$ the ut"ost !ili$ence of ver) cautious persons 1ith !ue re$ar! for all circu"stances A Such !ut) of a co""on carrier to provi!e safet) to its passen$ers so obli$ates it not onl) !urin$ the course of the trip but for so lon$ as the passen$ers are 1ithin its pre"ises an! 1here the) ou$ht to be in pursuance to the contract of carria$e , The statutor) provisions ren!er a co""on carrier liable for !eath of or in.ur) to passen$ers 6a7 throu$h the ne$li$ence or 1ilful acts of its e"plo)ees or b7 on account of 1ilful acts or ne$li$ence of other passen$ers or of stran$ers if the co""on carrier:s e"plo)ees throu$h the e5ercise of !ue !ili$ence coul! have prevente! or stoppe! the act or o"ission & In case of such !eath or in.ur), a carrier is presu"e! to have been at fault or been ne$li$ent, an!3 b) si"ple proof of in.ur), the passen$er is relieve! of the !ut) to still establish the fault or ne$li$ence of the carrier or of its e"plo)ees an! the bur!en shifts upon the carrier to prove that the in.ur) is !ue to an unforeseen event or to force "a.eure 2 In the absence of satisfactor) e5planation b) the carrier on ho1 the acci!ent occurre!, 1hich petitioners, accor!in$ to the appellate court, have faile! to sho1, the presu"ption 1oul! be that it has been at fault,(' an e5ception fro" the $eneral rule that ne$li$ence "ust be prove! (( The foun!ation of 0RT#:s liabilit) is the contract of carria$e an! its obli$ation to in!e"nif) the victi" arises fro" the breach of that contract b) reason of its failure to e5ercise the hi$h !ili$ence reDuire! of the co""on carrier In the !ischar$e of its co""it"ent to ensure the safet) of passen$ers, a carrier "a) choose to hire its o1n e"plo)ees or avail itself of the services of an outsi!er or an in!epen!ent fir" to un!erta;e the tas; In either case, the co""on carrier is not relieve! of its responsibilities un!er the contract of carria$e Shoul! Pru!ent be "a!e li;e1ise liableE If at all, that liabilit) coul! onl) be for tort un!er the provisions of #rticle %(&,(% an! relate! provisions, in con.unction 1ith #rticle %(3',(9 of the Civil Co!e The pre"ise, ho1ever, for the e"plo)er:s liabilit) is ne$li$ence or fault on the part

of the e"plo)ee Once such fault is establishe!, the e"plo)er can then be "a!e liable on the basis of the presu"ption .uris tantu" that the e"plo)er faile! to e5ercise !ili$entissi"i patris fa"ilies in the selection an! supervision of its e"plo)ees The liabilit) is pri"ar) an! can onl) be ne$ate! b) sho1in$ !ue !ili$ence in the selection an! supervision of the e"plo)ee, a factual "atter that has not been sho1n #bsent such a sho1in$, one "i$ht as; further, ho1 then "ust the liabilit) of the co""on carrier, on the one han!, an! an in!epen!ent contractor, on the other han!, be !escribe!E It 1oul! be soli!ar) # contractual obli$ation can be breache! b) tort an! 1hen the sa"e act or o"ission causes the in.ur), one resultin$ in culpa contractual an! the other in culpa aDuiliana, #rticle %(28(8 of the Civil Co!e can 1ell appl) (A In fine, a liabilit) for tort "a) arise even un!er a contract, 1here tort is that 1hich breaches the contract (, State! !ifferentl), 1hen an act 1hich constitutes a breach of contract 1oul! have itself constitute! the source of a Duasi*!elictual liabilit) ha! no contract e5iste! bet1een the parties, the contract can be sai! to have been breache! b) tort, thereb) allo1in$ the rules on tort to appl) (& Re$rettabl) for 0RT, as 1ell as perhaps the survivin$ spouse an! heirs of the late Nicanor Navi!a!, this Court is conclu!e! b) the factual fin!in$ of the Court of #ppeals that -there is nothin$ to lin; 6Pru!ent7 to the !eath of Nicanor 6Navi!a!7, for the reason that the ne$li$ence of its e"plo)ee, Escartin, has not been !ul) proven 5 5 5 - This fin!in$ of the appellate court is not 1ithout substantial .ustification in our o1n revie1 of the recor!s of the case There bein$, si"ilarl), no sho1in$ that petitioner Ro!olfo Ro"an hi"self is $uilt) of an) culpable act or o"ission, he "ust also be absolve! fro" liabilit) Nee!less to sa), the contractual tie bet1een the 0RT an! Navi!a! is not itself a .uri!ical relation bet1een the latter an! Ro"an? thus, Ro"an can be "a!e liable onl) for his o1n fault or ne$li$ence The a1ar! of no"inal !a"a$es in a!!ition to actual !a"a$es is untenable No"inal !a"a$es are a!.u!icate! in or!er that a ri$ht of the plaintiff, 1hich has been violate! or inva!e! b) the !efen!ant, "a) be vin!icate! or reco$ni>e!, an! not for the purpose of in!e"nif)in$ the plaintiff for an) loss suffere! b) hi" (3 It is an establishe! rule that no"inal !a"a$es cannot co*e5ist 1ith co"pensator) !a"a$es (2 -!EREFORE, the assaile! !ecision of the appellate court is #FFIRMED 1ith MODIFIC#TION but onl) in that 6a7 the a1ar! of no"inal !a"a$es is DE0ETED an! 6b7 petitioner Ro!olfo Ro"an is absolve! fro" liabilit) No costs SO ORDERED Davi!e, =r , C = , 6Chair"an7, Cnares*Santia$o, Carpio an! #>cuna, == , concur Republic of the Philippines SUPREME COURT Manila T/IRD DIVISION G.R. No. !;.1822 'e7e9ber 22, 1988

E'RO 'E GU68AN, petitioner, vs. COURT OF A EA!S a+, ERNESTO CEN'ANA, respondents. 8icente 9. Millora for petitioner. Jacinto Callanta for private respondent.

FE!ICIANO, J.: (espondent -rnesto Cendana, a :un/ dealer, was engaged in bu!ing up used bottles and scrap metal in 2angasinan. =pon gathering sufficient >uantities of such scrap material, respondent would bring such material to *anila for resale. <e utili?ed two 5;9 si&7wheeler truc/s which he owned for hauling the material to *anila. +n the return trip to 2angasinan, respondent would load his vehicles with cargo which various merchants wanted delivered to differing establishments in 2angasinan. #or that service, respondent charged freight rates which were commonl! lower than regular commercial rates. %ometime in November 198), petitioner 2edro de $u?man a merchant and authori?ed dealer of $eneral *il/ Compan! 52hilippines9, "nc. in =rdaneta, 2angasinan, contracted with respondent for the hauling of 85) cartons of ,ibert! filled mil/ from a warehouse of $eneral *il/ in *a/ati, (i?al, to petitioner's establishment in =rdaneta on or before 3 0ecember 198). Accordingl!, on 1 0ecember 198), respondent loaded in *a/ati the merchandise on to his truc/s@ 15) cartons were loaded on a truc/ driven b! respondent himself, while 4)) cartons were placed on board the other truc/ which was driven b! *anuel -strada, respondent's driver and emplo!ee. +nl! 15) bo&es of ,ibert! filled mil/ were delivered to petitioner. The other 4)) bo&es never reached petitioner, since the truc/ which carried these bo&es was hi:ac/ed somewhere along the *acArthur <ighwa! in 2ani>ui, Tarlac, b! armed men who too/ with them the truc/, its driver, his helper and the cargo. +n 4 .anuar! 1981, petitioner commenced action against private respondent in the Court of #irst "nstance of 2angasinan, demanding pa!ment of 2 ;;,15).)), the claimed value of the lost merchandise, plus damages and attorne!'s fees. 2etitioner argued that private respondent, being a common carrier, and having failed to e&ercise the e&traordinar! diligence re>uired of him b! the law, should be held liable for the value of the undelivered goods. "n his Answer, private respondent denied that he was a common carrier and argued that he could not be held responsible for the value of the lost goods, such loss having been due to force !a:eure.

+n 1) 0ecember 1985, the trial court rendered a 0ecision 1 finding private respondent to be a common carrier and holding him liable for the value of the undelivered goods 52 ;;,15).))9 as well as for 2 3,))).)) as damages and 2 ;,))).)) as attorne!'s fees. +n appeal before the Court of Appeals, respondent urged that the trial court had erred in considering him a common carrierB in finding that he had habituall! offered truc/ing services to the publicB in not e&empting him from liabilit! on the ground of force !a:eure; and in ordering him to pa! damages and attorne!'s fees. The Court of Appeals reversed the :udgment of the trial court and held that respondent had been engaged in transporting return loads of freight 6as a casual occupation L a sideline to his scrap iron business6 and not as a common carrier. 2etitioner came to this Court b! wa! of a 2etition for (eview assigning as errors the following conclusions of the Court of Appeals@
1. that private respondent was not a common carrierB ;. that the hi:ac/ing of respondent's truc/ was force !a:eureB and 1. that respondent was not liable for the value of the undelivered cargo. 5(ollo, p. 1119

Ae consider first the issue of whether or not private respondent -rnesto Cendana ma!, under the facts earlier set forth, be properl! characteri?ed as a common carrier. The Civil Code defines 6common carriers6 in the following terms@
Article 181;. Common carriers are persons, corporations, firms or associations engaged in the business of carr!ing or transporting passengers or goods or both, b! land, water, or air for compensation, offering their services to the public.

The above article ma/es no distinction between one whose principal business activit! is the carr!ing of persons or goods or both, and one who does such carr!ing onl! as an ancillar) activit! 5in local "diom as 6a sideline69. Article 181; also carefull! avoids ma/ing an! distinction between a person or enterprise offering transportation service on a re ular or scheduled -asis and one offering such service on an occasional, episodic or unscheduled -asis. Neither does Article 181; distinguish between a carrier offering its services to the 6 eneral pu-lic,6 i.e., the general communit! or population, and one who offers services or solicits business onl! from a narrow segment of the general population. Ae thin/ that Article 1811 deliberaom ma/ing such distinctions. %o understood, the concept of 6common carrier6 under Article 181; ma! be seen to coincide neatl! with the notion of 6public service,6 under the 2ublic %ervice Act 5Commonwealth Act No. 1314, as amended9 which at least partiall! supplements the law on common carriers set forth in the Civil Code. =nder %ection 11, paragraph 5b9 of the 2ublic %ervice Act, 6public service6 includes@
... ever! person that now or hereafter ma! own, operate, manage, or control in the 2hilippines, for hire or compensation, *ith eneral or li!ited clientele, *hether

per!anent, occasional or accidental, and done for eneral -usiness purposes, an) co!!on carrier, railroad, street railwa!, traction railwa!, subwa! motor vehicle, either for freight or passenger, or both, with or without fi&ed route and whatever ma! be its classification, freight or carrier service of an! class, e&press service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or both, ship!ard, marine repair shop, wharf or doc/, ice plant, ice7refrigeration plant, canal, irrigation s!stem, gas, electric light, heat and power, water suppl! and power petroleum, sewerage s!stem, wire or wireless communications s!stems, wire or wireless broadcasting stations and other similar public services. ... 5-mphasis supplied9

"t appears to the Court that private respondent is properl! characteri?ed as a common carrier even though he merel! 6bac/7hauled6 goods for other merchants from *anila to 2angasinan, although such bac/7hauling was done on a periodic or occasional rather than regular or scheduled manner, and even though private respondent's principal occupation was not the carriage of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their goodsB that fee fre>uentl! fell below commercial freight rates is not relevant here. The Court of Appeals referred to the fact that private respondent held no certificate of public convenience, and concluded he was not a common carrier. This is palpable error. A certificate of public convenience is not a re>uisite for the incurring of liabilit! under the Civil Code provisions governing common carriers. That liabilit! arises the moment a person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the re>uirements of the applicable regulator! statute and implementing regulations and has been granted a certificate of public convenience or other franchise. To e&empt private respondent from the liabilities of a common carrier because he has not secured the necessar! certificate of public convenience, would be offensive to sound public polic!B that would be to reward private respondent precisel! for failing to compl! with applicable statutor! re>uirements. The business of a common carrier impinges directl! and intimatel! upon the safet! and well being and propert! of those members of the general communit! who happen to deal with such carrier. The law imposes duties and liabilities upon common carriers for the safet! and protection of those who utili?e their services and the law cannot allow a common carrier to render such duties and liabilities merel! facultative b! simpl! failing to obtain the necessar! permits and authori?ations. Ae turn then to the liabilit! of private respondent as a common carrier. Common carriers, 6b! the nature of their business and for reasons of public polic!6 2 are held to a ver! high degree of care and diligence 56e&traordinar! diligence69 in the carriage of goods as well as of passengers. The specific import of e&traordinar! diligence in the care of goods transported b! a common carrier is, according to Article 1811, 6further e&pressed in Articles 1813,1815 and 1835, numbers 5, 4 and 86 of the Civil Code.

Article 1813 establishes the general rule that common carriers are responsible for the loss, destruction or deterioration of the goods which the! carr!, 6 unless the same is due to an) of the follo*in causes onl)@
519 #lood, storm, earth>ua/e, lightning or other natural disaster or calamit!B 5;9 Act of the public enem! in war, whether international or civilB 519 Act or omission of the shipper or owner of the goodsB 539 The character7of the goods or defects in the pac/ing or7in the containersB and 559 +rder or act of competent public authorit!.

"t is important to point out that the above list of causes of loss, destruction or deterioration which e&empt the common carrier for responsibilit! therefor, is a closed list. Causes falling outside the foregoing list, even if the! appear to constitute a species of force ma:eure fall within the scope of Article 1815, which provides as follows@
,n all cases other than those !entioned in nu!-ers <, =, 0, / and . of the precedin article, if the oods are lost, destro)ed or deteriorated, co!!on carriers are presu!ed to have -een at fault or to have acted ne li entl), unless the) prove that the) o-served e>traordinar) dili ence as re>uired in Article 1811. 5-mphasis supplied9

Appl!ing the above7>uoted Articles 1813 and 1815, we note firstl! that the specific cause alleged in the instant case L the hi:ac/ing of the carrier's truc/ L does not fall within an! of the five 559 categories of e&empting causes listed in Article 1813. "t would follow, therefore, that the hi:ac/ing of the carrier's vehicle must be dealt with under the provisions of Article 1815, in other words, that the private respondent as common carrier is presumed to have been at fault or to have acted negligentl!. This presumption, however, ma! be overthrown b! proof of e&traordinar! diligence on the part of private respondent. 2etitioner insists that private respondent had not observed e&traordinar! diligence in the care of petitioner's goods. 2etitioner argues that in the circumstances of this case, private respondent should have hired a securit! guard presumabl! to ride with the truc/ carr!ing the 4)) cartons of ,ibert! filled mil/. Ae do not believe, however, that in the instant case, the standard of e&traordinar! diligence re>uired private respondent to retain a securit! guard to ride with the truc/ and to engage brigands in a firelight at the ris/ of his own life and the lives of the driver and his helper. The precise issue that we address here relates to the specific re>uirements of the dut! of e&traordinar! diligence in the vigilance over the goods carried in the specific conte&t of hi:ac/ing or armed robber!. As noted earlier, the dut! of e&traordinar! diligence in the vigilance over goods is, under Article 1811, given additional specification not onl! b! Articles 1813 and 1815 but also b! Article 1835, numbers 3, 5 and 4, Article 1835 provides in relevant part@
An! of the following or similar stipulations shall be considered unreasonable, un:ust and contrar! to public polic!@

&&& &&& &&& 559 that the common carrier shall not be responsible for the acts or omissions of his or its emplo!eesB 549 that the common carrier's liabilit! for acts committed b! thieves, or of ro--ers who do not act with rave or irresisti-le threat, violence or force, is dispensed with or diminishedB and 589 that the common carrier shall not responsible for the loss, destruction or deterioration of goods on account of the defective condition of the car vehicle, ship, airplane or other e>uipment used in the contract of carriage. 5-mphasis supplied9

=nder Article 1835 549 above, a common carrier is held responsible L and will not be allowed to divest or to diminish such responsibilit! L even for acts of strangers li/e thieves or robbers, e>cept where such thieves or robbers in fact acted 6with grave or irresistible threat, violence or force.6 Ae believe and so hold that the limits of the dut! of e&traordinar! diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robber! which is attended b! 6grave or irresistible threat, violence or force.6 "n the instant case, armed men held up the second truc/ owned b! private respondent which carried petitioner's cargo. The record shows that an information for robber! in band was filed in the Court of #irst "nstance of Tarlac, ranch ;, in Criminal Case No. 198 entitled 6People of the Philippines v. Felipe &oncorno, Napoleon Presno, Ar!ando Mesina, +scar +ria and one John 9oe.6 There, the accused were charged with willfull! and unlawfull! ta/ing and carr!ing awa! with them the second truc/, driven b! *anuel -strada and loaded with the 4)) cartons of ,ibert! filled mil/ destined for deliver! at petitioner's store in =rdaneta, 2angasinan. The decision of the trial court shows that the accused acted with grave, if not irresistible, threat, violence or force. 3 Three 519 of the five 559 hold7uppers were armed with firearms. The robbers not onl! too/ awa! the truc/ and its cargo but also /idnapped the driver and his helper, detaining them for several da!s and later releasing them in another province 5in Mambales9. The hi:ac/ed truc/ was subse>uentl! found b! the police in Jue?on Cit!. The Court of #irst "nstance convicted all the accused of robber!, though not of robber! in band. . "n these circumstances, we hold that the occurrence of the loss must reasonabl! be regarded as >uite be!ond the control of the common carrier and properl! regarded as a fortuitous event. "t is necessar! to recall that even common carriers are not made absolute insurers against all ris/s of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that the! shall have complied with the rigorous standard of e&traordinar! diligence. Ae, therefore, agree with the result reached b! the Court of Appeals that private respondent Cendana is not liable for the value of the undelivered merchandise which was lost because of an event entirel! be!ond private respondent's control.

ACC+(0"N$,I, the 2etition for (eview on certiorari is hereb! 0-N"-0 and the 0ecision of the Court of Appeals dated 1 August 1988 is A##"(*-0. No pronouncement as to costs. %+ +(0-(-0. Fernan, C.J., $utierre(, Jr., &idin and Cortes, JJ., concur.

F(r)+ P,(.(//(0e 01u)+r(a. Cor/. 2). C"

Facts: Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January 199 ! petitioner applied for mayor"s permit in #atangas. $o%e&er! t'e (reasurer re)uired petitioner to pay a local ta* based on gross receipts amounting to P9 +!,7+.,-. .n order not to 'amper its operations! petitioner paid t'e ta*es for t'e first )uarter of 1993 amounting to P/39!,19.,1 under protest. 0n January /,! 199-! petitioner filed a letter1protest to t'e 2ity (reasurer! claiming t'at it is e*empt from local ta* since it is engaged in transportation business. ('e respondent 2ity (reasurer denied t'e protest! t'us! petitioner filed a complaint before t'e Regional (rial 2ourt of #atangas for ta* refund. Respondents assert t'at pipelines are not included in t'e term 3common carrier4 %'ic' refers solely to ordinary carriers or motor &e'icles. ('e trial court dismissed t'e complaint! and suc' %as affirmed by t'e 2ourt of Appeals. Issue: 5'et'er a pipeline business is included in t'e term 3common carrier4 so as to entitle t'e petitioner to t'e e*emption Held: Article 173/ of t'e 2i&il 2ode defines a 6common carrier6 as 6any person! corporation! firm or association engaged in t'e business of carrying or transporting passengers or goods or bot'! by land! %ater! or air! for compensation! offering t'eir ser&ices to t'e public.6 ('e test for determining %'et'er a party is a common carrier of goods is7 819 $e must be engaged in t'e business of carrying goods for ot'ers as a public employment! and must 'old 'imself out as ready to engage in t'e transportation of goods for person generally as a business and not as a casual occupation: 8/9 $e must underta;e to carry goods of t'e ;ind to %'ic' 'is business is confined: 839 $e must underta;e to carry by t'e met'od by %'ic' 'is business is conducted and o&er 'is establis'ed roads: and

8-9 ('e transportation must be for 'ire. #ased on t'e abo&e definitions and re)uirements! t'ere is no doubt t'at petitioner is a common carrier. .t is engaged in t'e business of transporting or carrying goods! i.e. petroleum products! for 'ire as a public employment. .t underta;es to carry for all persons indifferently! t'at is! to all persons %'o c'oose to employ its ser&ices! and transports t'e goods by land and for compensation. ('e fact t'at petitioner 'as a limited clientele does not e*clude it from t'e definition of a common carrier. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 12/9.8 'e7e9ber 29, 1998 FIRST HI!I INE IN'USTRIA! COR ORATION, :e%(%(o+er, )*. COURT OF A EA!S, HONORAB!E ATERNO -. TAC;AN, BATANGAS CITY a+, A'ORACION C. ARE!!ANO, (+ &er o$$(7(a# 7a:a7(%y a* C(%y Trea*urer o$ Ba%a+3a*, re*:o+,e+%*.

8ARTINE6, J.: T&(* :e%(%(o+ $or re)(e" o+ certiorari a**a(#* %&e 'e7(*(o+ o$ %&e Cour% o$ A::ea#* ,a%e, No)e9ber 29, 199/, (+ CA;G.R. S No. 30821, a$$(r9(+3 %&e ,e7(*(o+ o$ %&e Re3(o+a# Tr(a# Cour% o$ Ba%a+3a* C(%y, Bra+7& 8., (+ C()(# Ca*e No. .293, "&(7& ,(*9(**e, :e%(%(o+er*< 7o9:#a(+% $or a bu*(+e** %a= re$u+, (9:o*e, by %&e C(%y o$ Ba%a+3a*. e%(%(o+er (* a 3ra+%ee o$ a :(:e#(+e 7o+7e**(o+ u+,er Re:ub#(7 A7% No. 381, a* a9e+,e,, %o 7o+%ra7%, (+*%a## a+, o:era%e o(# :(:e#(+e*. T&e or(3(+a# :(:e#(+e 7o+7e**(o+ "a* 3ra+%e, (+ 1901 1 a+, re+e"e, by %&e E+er3y Re3u#a%ory Boar, (+ 1992. 2 So9e%(9e (+ 5a+uary 199/, :e%(%(o+er a::#(e, $or a 9ayor<* :er9(% "(%& %&e O$$(7e o$ %&e 8ayor o$ Ba%a+3a* C(%y. Ho"e)er, be$ore %&e 9ayor<* :er9(% 7ou#, be (**ue,, %&e re*:o+,e+% C(%y Trea*urer re>u(re, :e%(%(o+er %o :ay a #o7a# %a= ba*e, o+ (%* 3ro** re7e(:%* $or %&e $(*7a# year 1993 :ur*ua+% %o %&e !o7a# Go)er+9e+% Co,e 3. T&e re*:o+,e+% C(%y Trea*urer a**e**e, a bu*(+e** %a= o+ %&e :e%(%(o+er a9ou+%(+3 %o 9/0,210.2. :ayab#e (+ $our (+*%a##9e+%* ba*e, o+ %&e 3ro** re7e(:%* $or :ro,u7%* :u9:e, a% G S;1 $or %&e $(*7a# year 1993 "&(7& a9ou+%e,

%o 181,081,1/1.22. I+ or,er +o% %o &a9:er (%* o:era%(o+*, :e%(%(o+er :a(, %&e %a= u+,er :ro%e*% (+ %&e a9ou+% o$ 239,219.21 $or %&e $(r*% >uar%er o$ 1993. O+ 5a+uary 22, 199., :e%(%(o+er $(#e, a #e%%er;:ro%e*% a,,re**e, %o %&e re*:o+,e+% C(%y Trea*urer, %&e :er%(+e+% :or%(o+ o$ "&(7& rea,*?
#ea*e +o%e %&a% our Co9:a+y @F ICA (* a :(:e#(+e o:era%or "(%& a 3o)er+9e+% 7o+7e**(o+ 3ra+%e, u+,er %&e e%ro#eu9 A7%. I% (* e+3a3e, (+ %&e bu*(+e** o$ %ra+*:or%(+3 :e%ro#eu9 :ro,u7%* $ro9 %&e Ba%a+3a* re$(+er(e*, )(a :(:e#(+e, %o Su7a% a+, 5TF a+,a7a+ Ter9(+a#*. A* *u7&, our Co9:a+y (* e=e9:% $ro9 :ay(+3 %a= o+ 3ro** re7e(:%* u+,er Se7%(o+ 133 o$ %&e !o7a# Go)er+9e+% Co,e o$ 1991 . . . . 8oreo)er, Tra+*:or%a%(o+ 7o+%ra7%or* are +o% (+7#u,e, (+ %&e e+u9era%(o+ o$ 7o+%ra7%or* u+,er Se7%(o+ 131, ara3ra:& @&A o$ %&e !o7a# Go)er+9e+% Co,e. T&ere$ore, %&e au%&or(%y %o (9:o*e %a= Bo+ 7o+%ra7%or* a+, o%&er (+,e:e+,e+% 7o+%ra7%or*B u+,er Se7%(o+ 1.3, ara3ra:& @eA o$ %&e !o7a# Go)er+9e+% Co,e ,oe* +o% (+7#u,e %&e :o"er %o #e)y o+ %ra+*:or%a%(o+ 7o+%ra7%or*. T&e (9:o*(%(o+ a+, a**e**9e+% 7a++o% be 7a%e3or(Ce, a* a 9ere $ee au%&or(Ce, u+,er Se7%(o+ 1.1 o$ %&e !o7a# Go)er+9e+% Co,e. T&e *a(, *e7%(o+ #(9(%* %&e (9:o*(%(o+ o$ $ee* a+, 7&ar3e* o+ bu*(+e** %o *u7& a9ou+%* a* 9ay be 7o99e+*ura%e %o %&e 7o*% o$ re3u#a%(o+, (+*:e7%(o+, a+, #(7e+*(+3. He+7e, a**u9(+3 ar3ue+,o %&a% F IC (* #(ab#e $or %&e #(7e+*e $ee, %&e (9:o*(%(o+ %&ereo$ ba*e, o+ 3ro** re7e(:%* (* )(o#a%()e o$ %&e a$ore7(%e, :ro)(*(o+. T&e a9ou+% o$ 9/0,210.2. @ 239,219.21 :er >uar%erA (* +o% 7o99e+*ura%e %o %&e 7o*% o$ re3u#a%(o+, (+*:e7%(o+ a+, #(7e+*(+3. T&e $ee (* a#rea,y a re)e+ue ra(*(+3 9ea*ure, a+, +o% a 9ere re3u#a%ory (9:o*(%(o+. .

O+ 8ar7& 8, 199., %&e re*:o+,e+% C(%y Trea*urer ,e+(e, %&e :ro%e*% 7o+%e+,(+3 %&a% :e%(%(o+er 7a++o% be 7o+*(,ere, e+3a3e, (+ %ra+*:or%a%(o+ bu*(+e**, %&u* (% 7a++o% 7#a(9 e=e9:%(o+ u+,er Se7%(o+ 133 @DA o$ %&e !o7a# Go)er+9e+% Co,e. / O+ 5u+e 1/, 199., :e%(%(o+er $(#e, "(%& %&e Re3(o+a# Tr(a# Cour% o$ Ba%a+3a* C(%y a 7o9:#a(+% 0 $or %a= re$u+, "(%& :rayer $or "r(% o$ :re#(9(+ary (+Du+7%(o+ a3a(+*% re*:o+,e+%* C(%y o$ Ba%a+3a* a+, A,ora7(o+ Are##a+o (+ &er 7a:a7(%y a* C(%y Trea*urer. I+ (%* 7o9:#a(+%, :e%(%(o+er a##e3e,, inter alia, %&a%? @1A %&e (9:o*(%(o+ a+, 7o##e7%(o+ o$ %&e bu*(+e** %a= o+ (%* 3ro** re7e(:%* )(o#a%e* Se7%(o+ 133 o$ %&e !o7a# Go)er+9e+% Co,eE @2A %&e au%&or(%y o$ 7(%(e* %o (9:o*e a+, 7o##e7% a %a= o+ %&e 3ro** re7e(:%* o$ B7o+%ra7%or* a+, (+,e:e+,e+% 7o+%ra7%or*B u+,er Se7. 1.1 @eA a+, 1/1 ,oe* +o% (+7#u,e %&e au%&or(%y %o 7o##e7% *u7& %a=e* o+ %ra+*:or%a%(o+ 7o+%ra7%or* $or, a* ,e$(+e, u+,er Se7. 131 @&A, %&e %er9 B7o+%ra7%or*B e=7#u,e* %ra+*:or%a%(o+ 7o+%ra7%or*E a+,, @3A %&e C(%y Trea*urer (##e3a##y a+, erro+eou*#y (9:o*e, a+, 7o##e7%e, %&e *a(, %a=, %&u* 9er(%(+3 %&e (99e,(a%e re$u+, o$ %&e %a= :a(,. 1 Tra)er*(+3 %&e 7o9:#a(+%, %&e re*:o+,e+%* ar3ue, %&a% :e%(%(o+er 7a++o% be e=e9:% $ro9 %a=e* u+,er Se7%(o+ 133 @DA o$ %&e !o7a# Go)er+9e+% Co,e a* *a(, e=e9:%(o+ a::#(e* o+#y %o B%ra+*:or%a%(o+ 7o+%ra7%or* a+, :er*o+* e+3a3e, (+ %&e %ra+*:or%a%(o+ by &(re a+, 7o99o+ 7arr(er* by a(r, #a+, a+, "a%er.B

Re*:o+,e+%* a**er% %&a% :(:e#(+e* are +o% (+7#u,e, (+ %&e %er9 B7o99o+ 7arr(erB "&(7& re$er* *o#e#y %o or,(+ary 7arr(er* *u7& a* %ru7F*, %ra(+*, *&(:* a+, %&e #(Fe. Re*:o+,e+%* $ur%&er :o*(% %&a% %&e %er9 B7o99o+ 7arr(erB u+,er %&e *a(, 7o,e :er%a(+* %o %&e 9o,e or 9a++er by "&(7& a :ro,u7% (* ,e#()ere, %o (%* ,e*%(+a%(o+.
8

O+ O7%ober 3, 199., %&e %r(a# 7our% re+,ere, a ,e7(*(o+ ,(*9(**(+3 %&e 7o9:#a(+%, ru#(+3 (+ %&(* "(*e?
. . . #a(+%($$ (* e(%&er a 7o+%ra7%or or o%&er (+,e:e+,e+% 7o+%ra7%or. . . . %&e e=e9:%(o+ %o %a= 7#a(9e, by %&e :#a(+%($$ &a* be7o9e u+7#ear. I% (* a ru#e %&a% %a= e=e9:%(o+* are %o be *%r(7%#y 7o+*%rue, a3a(+*% %&e %a=:ayer, %a=e* be(+3 %&e #($eb#oo, o$ %&e 3o)er+9e+%. E=e9:%(o+ 9ay %&ere$ore be 3ra+%e, o+#y by 7#ear a+, u+e>u()o7a# :ro)(*(o+* o$ #a". #a(+%($$ 7#a(9* %&a% (% (* a 3ra+%ee o$ a :(:e#(+e 7o+7e**(o+ u+,er Re:ub#(7 A7% 381. @E=&(b(% AA "&o*e 7o+7e**(o+ "a* #a%e#y re+e"e, by %&e E+er3y Re3u#a%ory Boar, @E=&(b(% BA. Ye% +e(%&er *a(, #a" +or %&e ,ee, o$ 7o+7e**(o+ 3ra+% a+y %a= e=e9:%(o+ u:o+ %&e :#a(+%($$. E)e+ %&e !o7a# Go)er+9e+% Co,e (9:o*e* a %a= o+ $ra+7&(*e &o#,er* u+,er Se7. 131 o$ %&e !o7a# Ta= Co,e. Su7& be(+3 %&e *(%ua%(o+ ob%a(+e, (+ %&(* 7a*e @e=e9:%(o+ be(+3 u+7#ear a+, e>u()o7a#A re*or% %o ,(*%(+7%(o+* or o%&er 7o+*(,era%(o+* 9ay be o$ &e#:? 1. T&a% %&e e=e9:%(o+ 3ra+%e, u+,er Se7. 133 @DA e+7o9:a**e* o+#y common carriers *o a* +o% %o o)erbur,e+ %&e r(,(+3 :ub#(7 or 7o99u%er* "(%& %a=e*. Plaintiff (* +o% a 7o99o+ 7arr(er, bu% a *:e7(a# 7arr(er e=%e+,(+3 (%* *er)(7e* a+, $a7(#(%(e* %o a *(+3#e *:e7($(7 or B*:e7(a# 7u*%o9erB u+,er a B*:e7(a# 7o+%ra7%.B 2. T&e !o7a# Ta= Co,e o$ 1992 "a* ba*(7a##y e+a7%e, %o 3()e 9ore a+, e$$e7%()e #o7a# au%o+o9y %o #o7a# 3o)er+9e+%* %&a+ %&e :re)(ou* e+a7%9e+%*, %o 9aFe %&e9 e7o+o9(7a##y a+, $(+a+7(a##y )(ab#e %o *er)e %&e :eo:#e a+, ,(*7&ar3e %&e(r $u+7%(o+* "(%& a 7o+7o9(%a+% ob#(3a%(o+ %o a77e:% 7er%a(+ ,e)o#u%(o+ o$ :o"er*, . . . So, 7o+*(*%e+% "(%& %&(* :o#(7y e)e+ $ra+7&(*e 3ra+%ee* are %a=e, @Se7. 131A a+, 7o+%ra7%or* are a#*o %a=e, u+,er Se7. 1.3 @eA a+, 1/1 o$ %&e Co,e. 9

e%(%(o+er a**a(#e, %&e a$ore*a(, ,e7(*(o+ be$ore %&(* Cour% via a :e%(%(o+ $or re)(e". O+ February 21, 199/, "e re$erre, %&e 7a*e %o %&e re*:o+,e+% Cour% o$ A::ea#* $or 7o+*(,era%(o+ a+, a,Du,(7a%(o+. 12 O+ No)e9ber 29, 199/, %&e re*:o+,e+% 7our% re+,ere, a ,e7(*(o+ 11 a$$(r9(+3 %&e %r(a# 7our%<* ,(*9(**a# o$ :e%(%(o+er<* 7o9:#a(+%. e%(%(o+er<* 9o%(o+ $or re7o+*(,era%(o+ "a* ,e+(e, o+ 5u#y 18, 1990. 12

He+7e, %&(* :e%(%(o+. A% $(r*%, %&e :e%(%(o+ "a* ,e+(e, ,ue 7our*e (+ a Re*o#u%(o+ ,a%e, No)e9ber 11, 1990. 13 e%(%(o+er 9o)e, $or a re7o+*(,era%(o+ "&(7& "a* 3ra+%e, by %&(* Cour% (+ a Re*o#u%(o+ 1. o$ 5a+uary 22, 1991. T&u*, %&e :e%(%(o+ "a* re(+*%a%e,. e%(%(o+er 7#a(9* %&a% %&e re*:o+,e+% Cour% o$ A::ea#* erre, (+ &o#,(+3 %&a% @1A %&e :e%(%(o+er (* +o% a 7o99o+ 7arr(er or a %ra+*:or%a%(o+ 7o+%ra7%or, a+, @2A %&e e=e9:%(o+ *ou3&% $or by :e%(%(o+er (* +o% 7#ear u+,er %&e #a". T&ere (* 9er(% (+ %&e :e%(%(o+. A B7o99o+ 7arr(erB 9ay be ,e$(+e,, broa,#y, a* o+e "&o &o#,* &(9*e#$ ou% %o %&e :ub#(7 a* e+3a3e, (+ %&e bu*(+e** o$ %ra+*:or%(+3 :er*o+* or :ro:er%y $ro9 :#a7e %o :#a7e, $or 7o9:e+*a%(o+, o$$er(+3 &(* *er)(7e* %o %&e :ub#(7 3e+era##y. Ar%. 1132 o$ %&e C()(# Co,e ,e$(+e* a B7o99o+ 7arr(erB a* Ba+y :er*o+, 7or:ora%(o+, $(r9 or a**o7(a%(o+ e+3a3e, (+ %&e bu*(+e** o$ 7arry(+3 or %ra+*:or%(+3 :a**e+3er* or 3oo,* or bo%&, by #a+,, "a%er, or a(r, $or 7o9:e+*a%(o+, o$$er(+3 %&e(r *er)(7e* %o %&e :ub#(7.B T&e %e*% $or ,e%er9(+(+3 "&e%&er a :ar%y (* a 7o99o+ 7arr(er o$ 3oo,* (*?
1. He 9u*% be e+3a3e, (+ %&e bu*(+e** o$ 7arry(+3 3oo,* $or o%&er* a* a :ub#(7 e9:#oy9e+%, a+, 9u*% &o#, &(9*e#$ ou% a* rea,y %o e+3a3e (+ %&e %ra+*:or%a%(o+ o$ 3oo,* $or :er*o+ 3e+era##y a* a bu*(+e** a+, +o% a* a 7a*ua# o77u:a%(o+E 2. He 9u*% u+,er%aFe %o 7arry 3oo,* o$ %&e F(+, %o "&(7& &(* bu*(+e** (* 7o+$(+e,E 3. He 9u*% u+,er%aFe %o 7arry by %&e 9e%&o, by "&(7& &(* bu*(+e** (* 7o+,u7%e, a+, o)er &(* e*%ab#(*&e, roa,*E a+, .. T&e %ra+*:or%a%(o+ 9u*% be $or &(re. 1/

Ba*e, o+ %&e abo)e ,e$(+(%(o+* a+, re>u(re9e+%*, %&ere (* +o ,oub% %&a% :e%(%(o+er (* a 7o99o+ 7arr(er. I% (* e+3a3e, (+ %&e bu*(+e** o$ %ra+*:or%(+3 or 7arry(+3 3oo,*, i.e. :e%ro#eu9 :ro,u7%*, $or &(re a* a :ub#(7 e9:#oy9e+%. I% u+,er%aFe* %o 7arry $or a## :er*o+* (+,($$ere+%#y, %&a% (*, %o a## :er*o+* "&o 7&oo*e %o e9:#oy (%* *er)(7e*, a+, %ra+*:or%* %&e 3oo,* by #a+, a+, $or 7o9:e+*a%(o+. T&e $a7% %&a% :e%(%(o+er &a* a #(9(%e, 7#(e+%e#e ,oe* +o% e=7#u,e (% $ro9 %&e ,e$(+(%(o+ o$ a 7o99o+ 7arr(er. I+ De Guzman vs. Court of Appeals 10 "e ru#e, %&a%?
T&e abo)e ar%(7#e @Ar%. 1132, C()(# Co,eA 9aFe* +o ,(*%(+7%(o+ be%"ee+ o+e "&o*e :r(+7(:a# bu*(+e** a7%()(%y (* %&e 7arry(+3 o$ :er*o+* or 3oo,* or bo%&, a+, o+e "&o ,oe* *u7& 7arry(+3 o+#y a*

a+ a+7(##ary a7%()(%y @(+ #o7a# (,(o9, a* a B*(,e#(+eBA. Ar%(7#e 1132 . . . a)o(,* 9aF(+3 a+y ,(*%(+7%(o+ be%"ee+ a :er*o+ or e+%er:r(*e o$$er(+3 %ra+*:or%a%(o+ *er)(7e o+ a regular or scheduled basis a+, o+e o$$er(+3 *u7& *er)(7e o+ a+ occasional, episodic or unscheduled basis. Ne(%&er ,oe* Ar%(7#e 1132 ,(*%(+3u(*& be%"ee+ a 7arr(er o$$er(+3 (%* *er)(7e* %o %&e Bgeneral public,B i.e., %&e 3e+era# 7o99u+(%y or :o:u#a%(o+, a+, o+e "&o o$$er* *er)(7e* or *o#(7(%* bu*(+e** o+#y $ro9 a +arro" *e39e+% o$ %&e 3e+era# :o:u#a%(o+. We %&(+F %&a% Ar%(7#e 1811 ,e#(bera%e#y re$ra(+e, $ro9 9aF(+3 *u7& ,(*%(+7%(o+*. So u+,er*%oo,, %&e 7o+7e:% o$ B7o99o+ 7arr(erB u+,er Ar%(7#e 1132 9ay be *ee+ %o 7o(+7(,e +ea%#y "(%& %&e +o%(o+ o$ B:ub#(7 *er)(7e,B u+,er %&e ub#(7 Ser)(7e A7% @Co99o+"ea#%& A7% No. 1.10, a* a9e+,e,A "&(7& a% #ea*% :ar%(a##y *u::#e9e+%* %&e #a" o+ 7o99o+ 7arr(er* *e% $or%& (+ %&e C()(# Co,e. U+,er Se7%(o+ 13, :ara3ra:& @bA o$ %&e ub#(7 Ser)(7e A7%, B:ub#(7 *er)(7eB (+7#u,e*? e)ery :er*o+ %&a% +o" or &erea$%er 9ay o"+, o:era%e. 9a+a3e, or 7o+%ro# (+ %&e &(#(::(+e*, $or &(re or 7o9:e+*a%(o+, "(%& 3e+era# or #(9(%e, 7#(e+%e#e, "&e%&er :er9a+e+%, o77a*(o+a# or a77(,e+%a#, a+, ,o+e $or 3e+era# bu*(+e** :ur:o*e*, a+y 7o99o+ 7arr(er, ra(#roa,, *%ree% ra(#"ay, %ra7%(o+ ra(#"ay, *ub"ay 9o%or )e&(7#e, e(%&er $or $re(3&% or :a**e+3er, or bo%&, "(%& or "(%&ou% $(=e, rou%e a+, "&a%e)er 9ay be (%* 7#a**($(7a%(o+, $re(3&% or 7arr(er *er)(7e o$ a+y 7#a**, e=:re** *er)(7e, *%ea9boa%, or *%ea9*&(: #(+e, :o+%(+e*, $err(e* a+, "a%er 7ra$%, engaged in the transportation of :a**e+3er* or $re(3&% or bo%&, *&(:yar,, 9ar(+e re:a(r *&o:, "&ar$ or ,o7F, (7e :#a+%, (7e;re$r(3era%(o+ :#a+%, 7a+a#, (rr(3a%(o+ *y*%e9 3a*, e#e7%r(7 #(3&% &ea% a+, :o"er, "a%er *u::#y a+, power petroleum, *e"era3e *y*%e9, "(re or "(re#e** 7o99u+(7a%(o+* *y*%e9*, "(re or "(re#e** broa,7a*%(+3 *%a%(o+* a+, o%&er *(9(#ar :ub#(7 *er)(7e*. @E9:&a*(* Su::#(e,A

A#*o, re*:o+,e+%<* ar3u9e+% %&a% %&e %er9 B7o99o+ 7arr(erB a* u*e, (+ Se7%(o+ 133 @DA o$ %&e !o7a# Go)er+9e+% Co,e re$er* o+#y %o 7o99o+ 7arr(er* %ra+*:or%(+3 3oo,* a+, :a**e+3er* %&rou3& 9o)(+3 )e&(7#e* or )e**e#* e(%&er by #a+,, *ea or "a%er, (* erro+eou*. A* 7orre7%#y :o(+%e, ou% by :e%(%(o+er, %&e ,e$(+(%(o+ o$ B7o99o+ 7arr(er*B (+ %&e C()(# Co,e 9aFe* +o ,(*%(+7%(o+ a* %o %&e 9ea+* o$ %ra+*:or%(+3, a* #o+3 a* (% (* by #a+,, "a%er or a(r. I% ,oe* +o% :ro)(,e %&a% %&e %ra+*:or%a%(o+ o$ %&e :a**e+3er* or 3oo,* *&ou#, be by 9o%or )e&(7#e. I+ $a7%, (+ %&e U+(%e, S%a%e*, o(# :(:e #(+e o:era%or* are 7o+*(,ere, 7o99o+ 7arr(er*. 11 U+,er %&e e%ro#eu9 A7% o$ %&e &(#(::(+e* @Re:ub#(7 A7% 381A, :e%(%(o+er (* 7o+*(,ere, a B7o99o+ 7arr(er.B T&u*, Ar%(7#e 80 %&ereo$ :ro)(,e* %&a%?

Ar%. 80. (:e #(+e 7o+7e**(o+a(re a* 7o99o+ 7arr(er. G A :(:e #(+e *&a## &a)e %&e :re$ere+%(a# r(3&% %o u%(#(Ce (+*%a##a%(o+* $or %&e %ra+*:or%a%(o+ o$ :e%ro#eu9 o"+e, by &(9, bu% (* ob#(3a%e, %o u%(#(Ce %&e re9a(+(+3 %ra+*:or%a%(o+ 7a:a7(%y :ro ra%a $or %&e %ra+*:or%a%(o+ o$ *u7& o%&er :e%ro#eu9 a* 9ay be o$$ere, by o%&er* $or %ra+*:or%, a+, %o 7&ar3e "(%&ou% ,(*7r(9(+a%(o+ *u7& ra%e* a* 9ay &a)e bee+ a::ro)e, by %&e Se7re%ary o$ A3r(7u#%ure a+, Na%ura# Re*our7e*.

Re:ub#(7 A7% 381 a#*o re3ar,* :e%ro#eu9 o:era%(o+ a* a :ub#(7 u%(#(%y. er%(+e+% :or%(o+ o$ Ar%(7#e 1 %&ereo$ :ro)(,e*?
%&a% e)ery%&(+3 re#a%(+3 %o %&e e=:#ora%(o+ $or a+, e=:#o(%a%(o+ o$ :e%ro#eu9 . . . a+, e)ery%&(+3 re#a%(+3 %o %&e 9a+u$a7%ure, re$(+(+3, *%ora3e, or transportation b special methods of petroleum, (* &ereby ,e7#are, %o be a public utilit . @E9:&a*(* Su::#(e,A

T&e Bureau o$ I+%er+a# Re)e+ue #(Fe"(*e 7o+*(,er* %&e :e%(%(o+er a B7o99o+ 7arr(er.B I+ BIR Ru#(+3 No. 209;83, (% ,e7#are,?
. . . *(+7e H:e%(%(o+erI (* a :(:e#(+e 7o+7e**(o+a(re %&a% (* e+3a3e, o+#y (+ %ra+*:or%(+3 :e%ro#eu9 :ro,u7%*, (% (* 7o+*(,ere, a 7o99o+ 7arr(er u+,er Re:ub#(7 A7% No. 381 . . . . Su7& be(+3 %&e 7a*e, (% (* +o% *ubDe7% %o "(%&&o#,(+3 %a= :re*7r(be, by Re)e+ue Re3u#a%(o+* No. 13;18, a* a9e+,e,.

Fro9 %&e $ore3o(+3 ,(*>u(*(%(o+, %&ere (* +o ,oub% %&a% :e%(%(o+er (* a B7o99o+ 7arr(erB a+,, %&ere$ore, e=e9:% $ro9 %&e bu*(+e** %a= a* :ro)(,e, $or (+ Se7%(o+ 133 @DA, o$ %&e !o7a# Go)er+9e+% Co,e, %o "(%?
Se7. 133. Common !imitations on the "a#ing Powers of !ocal Government $nits. G U+#e** o%&er"(*e :ro)(,e, &ere(+, %&e e=er7(*e o$ %&e %a=(+3 :o"er* o$ :ro)(+7e*, 7(%(e*, 9u+(7(:a#(%(e*, a+, bara+3ay* *&a## +o% e=%e+, %o %&e #e)y o$ %&e $o##o"(+3? === === === @DA Ta=e* o+ %&e 3ro** re7e(:%* o$ %ra+*:or%a%(o+ 7o+%ra7%or* a+, :er*o+* e+3a3e, (+ %&e %ra+*:or%a%(o+ o$ :a**e+3er* or $re(3&% by &(re a+, 7o99o+ 7arr(er* by a(r, #a+, or "a%er, e=7e:% a* :ro)(,e, (+ %&(* Co,e.

T&e ,e#(bera%(o+* 7o+,u7%e, (+ %&e Hou*e o$ Re:re*e+%a%()e* o+ %&e !o7a# Go)er+9e+% Co,e o$ 1991 are (##u9(+a%(+3?
8R. AJUINO @AA. T&a+F you, 8r. S:eaFer. 8r. S:eaFer, "e "ou#, #(Fe %o :ro7ee, %o :a3e 9/, #(+e

1. I% *%a%e*? BSEC. 121 H+o" Se7. 131I. Co99o+ !(9(%a%(o+* o+ %&e Ta=(+3 o"er* o$ !o7a# Go)er+9e+% U+(%*.B . . . 8R. AJUINO @A.A. T&a+F you 8r. S:eaFer. S%(## o+ :a3e 9/, *ub:ara3ra:& /, o+ %a=e* o+ %&e bu*(+e** o$ %ra+*:or%a%(o+. T&(* a::ear* %o be o+e o$ %&o*e be(+3 ,ee9e, %o be e=e9:%e, $ro9 %&e %a=(+3 :o"er* o$ %&e #o7a# 3o)er+9e+% u+(%*. 8ay "e F+o" %&e rea*o+ "&y %&e %ra+*:or%a%(o+ bu*(+e** (* be(+3 e=7#u,e, $ro9 %&e %a=(+3 :o"er* o$ %&e #o7a# 3o)er+9e+% u+(%*K 8R. 5A-IER @E.A. 8r. S:eaFer, %&ere (* a+ e=7e:%(o+ 7o+%a(+e, (+ Se7%(o+ 121 @+o" Se7. 131A, #(+e 10, :ara3ra:& /. I% *%a%e* %&a% #o7a# 3o)er+9e+% u+(%* 9ay +o% (9:o*e %a=e* o+ %&e bu*(+e** o$ %ra+*:or%a%(o+, e=7e:% a* o%&er"(*e :ro)(,e, (+ %&(* 7o,e. No", 8r. S:eaFer, ($ %&e Ge+%#e9a+ "ou#, 7are %o 3o %o :a3e 98 o$ BooF II, o+e 7a+ *ee %&ere %&a% :ro)(+7e* &a)e %&e :o"er %o (9:o*e a %a= o+ bu*(+e** e+Doy(+3 a $ra+7&(*e a% %&e ra%e o$ +o% 9ore %&a+ o+e;&a#$ o$ 1 :er7e+% o$ %&e 3ro** a++ua# re7e(:%*. So, %ra+*:or%a%(o+ 7o+%ra7%or* "&o are e+Doy(+3 a $ra+7&(*e "ou#, be *ubDe7% %o %a= by %&e :ro)(+7e. T&a% (* %&e e=7e:%(o+, 8r. S:eaFer. W&a% "e "a+% %o 3uar, a3a(+*% &ere, 8r. S:eaFer, (* %&e (9:o*(%(o+ o$ %a=e* by #o7a# 3o)er+9e+% u+(%* o+ %&e 7arr(er bu*(+e**. !o7a# 3o)er+9e+% u+(%* 9ay (9:o*e %a=e* o+ %o: o$ "&a% (* a#rea,y be(+3 (9:o*e, by %&e Na%(o+a# I+%er+a# Re)e+ue Co,e "&(7& (* %&e *o; 7a##e, B7o99o+ 7arr(er* %a=.B We ,o +o% "a+% a ,u:#(7a%(o+ o$ %&(* %a=, *o "e Du*% :ro)(,e, $or a+ e=7e:%(o+ u+,er Se7%(o+ 12/ H+o" Se7. 131I %&a% a :ro)(+7e 9ay (9:o*e %&(* %a= a% a *:e7($(7 ra%e. 8R. AJUINO @A.A. T&a+F you $or %&a% 7#ar($(7a%(o+, 8r. S:eaFer. . . .
18

I% (* 7#ear %&a% %&e #e3(*#a%()e (+%e+% (+ e=7#u,(+3 $ro9 %&e %a=(+3 :o"er o$ %&e #o7a# 3o)er+9e+% u+(% %&e (9:o*(%(o+ o$ bu*(+e** %a= a3a(+*% 7o99o+ 7arr(er* (* %o :re)e+% a ,u:#(7a%(o+ o$ %&e *o;7a##e, B7o99o+ 7arr(er<* %a=.B e%(%(o+er (* a#rea,y :ay(+3 %&ree @3LA :er7e+% 7o99o+ 7arr(er<* %a= o+ (%* 3ro** *a#e*Mear+(+3* u+,er %&e Na%(o+a# I+%er+a# Re)e+ue Co,e. 19 To %a= :e%(%(o+er a3a(+ o+ (%* 3ro** re7e(:%* (+ (%* %ra+*:or%a%(o+ o$ :e%ro#eu9 bu*(+e** "ou#, ,e$ea% %&e :ur:o*e o$ %&e !o7a# Go)er+9e+% Co,e. WHEREFORE, %&e :e%(%(o+ (* &ereby GRANTE'. T&e ,e7(*(o+ o$ %&e re*:o+,e+% Cour% o$ A::ea#* ,a%e, No)e9ber 29, 199/ (+ CA;G.R. S No. 30821 (* RE-ERSE' a+, SET ASI'E. SO OR'ERE'. %ellosillo, Puno and &endoza, JJ., concur.

Republic of the Philippines SUPREME COURT Manila T/IRD DIVISION

G.R. No. 112281 'e7e9ber 12, 1991 NATIONA! STEE! COR ORATION, petitioner, vs. COURT OF A EA!S AN' -!ASONS SHI ING, INC., respondents. G.R. No. 1123/2 'e7e9ber 12, 1991 -!ASONS SHI ING, INC., petitioner, vs. COURT OF A EA!S AN' NATIONA! STEE! COR ORATION, respondents.

ANGANIBAN, J.: The Court finds occasion to appl! the rules on the seaworthiness of private carrier, its owner's responsibilit! for damage to the cargo and its liabilit! for demurrage and attorne!'s fees. The Court also reiterates the well7/nown rule that findings of facts of trial courts, when affirmed b! the Court of Appeals, are binding on this Court. #he Case efore us are two separate petitions for review filed b! National %teel Corporation 5N%C9 and Dlasons %hipping, "nc. 5D%"9, both of which assail the August 1;, 1991 0ecision of the Court of Appeals. 1 The Court of Appeals modified the decision of the (egional Trial Court of 2asig, *etro *anila, ranch 141 in Civil Case No. ;1118. The (TC disposed as follows@
A<-(-#+(-, :udgment is hereb! rendered in favor of defendant and against the plaintiff dismissing the complaint with cost against plaintiff, and ordering plaintiff to pa! the defendant on the counterclaim as follows@ 1. The sum of 285,))).)) as unpaid freight and 288,))).)) as demurrage with interest at the legal rate on both amounts from April 8, 1984 until the same shall have been full! paidB ;. Attorne!'s fees and e&penses of litigation in the sum of 21)),))).))B and 1. Costs of suit.

%+ +(0-(-0. 2

+n the other hand, the Court of Appeals ruled@

A<-(-#+(-, premises considered, the decision appealed from is modified b! reducing the award for demurrage to 233,))).)) and deleting the award for attorne!'s fees and e&penses of litigation. -&cept as thus modified, the decision is A##"(*-0. There is no pronouncement as to costs. %+ +(0-(-0. 3

#he Facts The M8 8lasons , is a vessel which renders tramping service and, as such, does not transport cargo or shipment for the general public. "ts services are available onl! to specific persons who enter into a special contract of charter part! with its owner. "t is undisputed that the ship is a private carrier. And it is in the capacit! that its owner, Dlasons %hipping, "nc., entered into a contract of affreightment or contract of vo!age charter hire with National %teel Corporation. The facts as found b! (espondent Court of Appeals are as follows@
519 +n .ul! 18, 1983, plaintiff National %teel Corporation 5N%C9 as Charterer and defendant Dlasons %hipping, "nc. 5D%"9 as +wner, entered into a Contract of Do!age Charter <ire 5-&hibit 6 6B also -&hibit 6169 whereb! N%C hired D%"'s vessel, the *D 6D,A%+N% "6 to ma/e one 519 vo!age to load steel products at "ligan Cit! and discharge them at North <arbor, *anila, under the following terms and conditions, vi(@ 1. . . . ;. Cargo@ #ull cargo of steel products of not less than ;,5)) *T, 1)C more or less at *aster's option. 1. . . . 3. #reightF2a!ment@ 21).))Fmetric ton, #"+%T basis. 2a!ment upon presentation of ill of ,ading within fifteen 5159 da!s. 5. ,a!da!sFCancelling@ .ul! ;4, 1983FAug. 5, 1983. 4. ,oadingF0ischarging (ate@ 85) tons per AA0%<"NC. 5Aeather Aor/ing 0a! of ;3 consecutive hours, %unda!s and <olida!s "ncluded9. 8. 0emurrageF0ispatch@ 28,))).))F23,))).)) per da!. 8. . . . 9. Cargo "nsurance@ Charterer's andFor %hipper's must insure the cargoes. %hipowners not responsible for lossesFdamages e&cept on proven willful negligence of the officers of the vessel.

1). +ther terms@ 5a9 All termsFconditions of N+N?A'A, C@P GsicH or other internationall! recogni?ed Charter 2art! Agreement shall form part of this Contract. &&& &&& &&& The terms 6#.".+.%.T.6 which is used in the shipping business is a standard provision in the NANI+MA" Charter 2art! which stands for 6#reight "n and +ut including %tevedoring and Trading6, which means that the handling, loading and unloading of the cargoes are the responsibilit! of the Charterer. =nder 2aragraph 5 of the NANI+MA" Charter 2art!, it states, 6Charterers to load, stow and discharge the cargo free of ris1 and e>penses to o*ners. . . . 5-mphasis supplied9. =nder paragraph 1) thereof, it is provided that 65o9wners shall, before and at the beginning of the vo!age, e&ercise due diligence to ma/e the vessel seaworth! and properl! manned, e>uipped and supplied and to ma/e the holds and all other parts of the vessel in which cargo is carried, fit and safe for its reception, carriage and preservation. +wners shall not be liable for loss of or damage of the cargo arising or resulting from@ unseaworthiness unless caused b! want of due diligence on the part of the owners to ma/e the vessel seaworth!, and to secure that the vessel is properl! manned, e>uipped and supplied and to ma/e the holds and all other parts of the vessel in which cargo is carried, fit and safe for its reception, carriage and preservationB . . . B perils, dangers and accidents of the sea or other navigable watersB . . . B wastage in bul/ or weight or an! other loss or damage arising from inherent defect, >ualit! or vice of the cargoB insufficienc! of pac/ingB . . . B latent defects not discoverable b! due diligenceB an! other cause arising without the actual fault or privit! of +wners or without the fault of the agents or servants of owners.6 2aragraph 1; of said NANI+MA" Charter 2art! also provides that 65o9wners shall not be responsible for split, chafing andFor an! damage unless caused b! the negligence or default of the master and crew.6 5;9 +n August 4, 8 and 8, 1983, in accordance with the Contract of Do!age Charter <ire, the *D 6D,A%+N% "6 loaded at plaintiffs pier at "ligan Cit!, the N%C's shipment of 1,488 s/ids of tinplates and 9; pac/ages of hot rolled sheets or a total of 1,849 pac/ages with a total weight of about ;,381.19 metric tons for carriage to *anila. The shipment was placed in the three 519 hatches of the ship. Chief *ate $on?alo %abando, acting as agent of the vesselG,H ac/nowledged receipt of the cargo on board and signed the corresponding bill of lading, .,.2.2. No. );11 5-&hibit 6069 on August 8, 1983. 519 The vessel arrived with the cargo at 2ier 1;, North <arbor, *anila, on August 1;, 1983. The following da!, August 11, 1983, when the vessel's three 519 hatches containing the shipment were opened b! plaintiff's agents, nearl! all the s/ids of tinplates and hot rolled sheets were allegedl! found to be wet and rust!. The cargo was discharged and unloaded b! stevedores hired b! the Charterer. =nloading was completed onl! on August ;3, 1983 after incurring a dela! of eleven 5119 da!s due to the heav! rain which interrupted the unloading operations. 5-&hibit 6-69 539 To determine the nature and e&tent of the wetting and rusting, N%C called for a surve! of the shipment b! the *anila Ad:usters and %urve!ors Compan! 5*A%C+9. "n a letter to the N%C dated *arch 18, 1985 5-&hibit 6$69, *A%C+ made a report of its ocular inspection conducted on the cargo, both while it was still on board the vessel and later at the N0C warehouse in 2ure?a %t., %ta. *esa, *anila where the cargo was ta/en and stored. *A%C+ reported that it found wetting and rusting of the pac/ages of hot rolled sheets and metal covers of the tinplatesB that tarpaulin hatch covers were noted torn at various e&tentsB that containerFmetal casings of the s/ids were rusting all over. *A%C+ ventured the opinion that 6rusting of the tinplates was caused b! contact with %-A AAT-( sustained while still on board the vessel as a conse>uence of the heav! weather and rough seas encountered while en route to destination 5-&hibit 6#69. "t was also

reported that *A%C+'s surve!ors drew at random samples of bad order pac/ing materials of the tinplates and delivered the same to the *.".T. Testing ,aboratories for anal!sis. +n August 11, 1983, the *.".T. Testing ,aboratories issued (eport No. 188) 5-&hibit 6"69 which in part, states, 6The anal!sis of bad order samples of pac/ing materials . . . shows that wetting was caused b! contact with %-A AAT-(6. 559 +n %eptember 4, 1983, on the basis of the aforesaid (eport No. 188), plaintiff filed with the defendant its claim for damages suffered due to the downgrading of the damaged tinplates in the amount of 2931,135.18. Then on +ctober 1, 1983, plaintiff formall! demanded pa!ment of said claim but defendant D%" refused and failed to pa!. 2laintiff filed its complaint against defendant on April ;1, 1984 which was doc/eted as Civil Case No. ;1118, C#", (i?al. 549 "n its complaint, plaintiff claimed that it sustained losses in the aforesaid amount of 2931,135.18 as a result of the act, neglect and default of the master and crew in the management of the vessel as well as the want of due diligence on the part of the defendant to ma/e the vessel seaworth! and to ma/e the holds and all other parts of the vessel in which the cargo was carried, fit and safe for its reception, carriage and preservation L all in violation of defendant's underta/ing under their Contract of Do!age Charter <ire. 589 "n its answer, defendant denied liabilit! for the alleged damage claiming that the *D 6D,A%+N% "6 was seaworth! in all respects for the carriage of plaintiff's cargoB that said vessel was not a 6common carrier6 inasmuch as she was under vo!age charter contract with the plaintiff as charterer under the charter part!B that in the course of the vo!age from "ligan Cit! to *anila, the *D 6D,A%+N% "6 encountered ver! rough seas, strong winds and adverse weather condition, causing strong winds and big waves to continuousl! pound against the vessel and seawater to overflow on its dec/ and hatch covers, that under the Contract of Do!age Charter <ire, defendant shall not be responsible for lossesFdamages e&cept on proven willful negligence of the officers of the vessel, that the officers of said *D 6D,A%+N% "6 e&ercised due diligence and proper seamanship and were not willfull! negligentB that furthermore the Do!age Charter 2art! provides that loading and discharging of the cargo was on #"+%T terms which means that the vessel was free of ris/ and e&pense in connection with the loading and discharging of the cargoB that the damage, if an!, was due to the inherent defect, >ualit! or vice of the cargo or to the insufficient pac/ing thereof or to latent defect of the cargo not discoverable b! due diligence or to an! other cause arising without the actual fault or privit! of defendant and without the fault of the agents or servants of defendantB conse>uentl!, defendant is not liableB that the stevedores of plaintiff who discharged the cargo in *anila were negligent and did not e&ercise due care in the discharge of the cargoB land that the cargo was e&posed to rain and seawater spra! while on the pier or in transit from the pier to plaintiff's warehouse after discharge from the vesselB and that plaintiff's claim was highl! speculative and grossl! e&aggerated and that the small stain mar/s or sweat mar/s on the edges of the tinplates were magnified and considered total loss of the cargo. #inall!, defendant claimed that it had complied with all its duties and obligations under the Do!age Charter <ire Contract and had no responsibilit! whatsoever to plaintiff. "n turn, it alleged the following counterclaim@ 5a9 That despite the full and proper performance b! defendant of its obligations under the Do!age Charter <ire Contract, plaintiff failed and refused to pa! the agreed charter hire of 285,))).)) despite demands made b! defendantB 5b9 That under their Do!age Charter <ire Contract, plaintiff had agreed to pa! defendant the sum of 28,))).)) per da! for demurrage. The vessel was on demurrage for eleven 5119 da!s in *anila waiting for plaintiff to discharge its cargo from the vessel. Thus, plaintiff was liable to pa! defendant demurrage in the total amount of 288,))).)).

5c9 #or filing a clearl! unfounded civil action against defendant, plaintiff should be ordered to pa! defendant attorne!'s fees and all e&penses of litigation in the amount of not less than 21)),))).)). 589 #rom the evidence presented b! both parties, the trial court came out with the following findings which were set forth in its decision@ 5a9 The *D 6D,A%+N% "6 is a vessel of 2hilippine registr! engaged in the tramping service and is available for hire onl! under special contracts of charter part! as in this particular case. 5b9 That for purposes of the vo!age covered b! the Contract of Do!age Charter <ire 5-&h. 6169, the *D D,A%+N% "6 was covered b! the re>uired seaworthiness certificates including the Certification of Classification issued b! an international classification societ!, the N"22+N EA"." EI+EA" 5-&h. 6369B Coastwise ,icense from the oard of Transportation 5-&h. 6569B "nternational ,oadline Certificate from the 2hilippine Coast $uard 5-&h. 6469B Cargo %hip %afet! ->uipment Certificate also from the 2hilippine Coast $uard 5-&h. 6869B %hip (adio %tation ,icense 5-&h. 6869B Certificate of "nspection b! the 2hilippine Coast $uard 5-&h. 61;69B and Certificate of Approval for Conversion issued b! the ureau of Customs 5-&h. 6969. That being a vessel engaged in both overseas and coastwise trade, the *D 6D,A%+N% "6 has a higher degree of seaworthiness and safet!. 5c9 efore it proceeded to "ligan Cit! to perform the vo!age called for b! the Contract of Do!age Charter <ire, the *D 6D,A%+N% "6 underwent dr!doc/ing in Cebu and was thoroughl! inspected b! the 2hilippine Coast $uard. "n fact, sub:ect vo!age was the vessel's first vo!age after the dr!doc/ing. The evidence shows that the *D 6D,A%+N% "6 was seaworth! and properl! manned, e>uipped and supplied when it undertoo/ the vo!age. "t has all the re>uired certificates of seaworthiness. 5d9 The cargoFshipment was securel! stowed in three 519 hatches of the ship. The hatch openings were covered b! hatchboards which were in turn covered b! two or double tarpaulins. The hatch covers were water tight. #urthermore, under the hatchboards were steel beams to give support. 5e9 The claim of the plaintiff that defendant violated the contract of carriage is not supported b! evidence. The provisions of the Civil Code on common carriers pursuant to which there e&ists a presumption of negligence in case of loss or damage to the cargo are not applicable. As to the damage to the tinplates which was allegedl! due to the wetting and rusting thereof, there is unrebutted testimon! of witness Dicente Angliongto that tinplates 6sweat6 b! themselves when pac/ed even without being in contract 5 sic9 with water from outside especiall! when the weather is bad or raining. The trust caused b! sweat or moisture on the tinplates ma! be considered as a loss or damage but then, defendant cannot be held liable for it pursuant to Article 1813 of the Civil Case which e&empts the carrier from responsibilit! for loss or damage arising from the 6character of the goods . . .6 All the 1,849 s/ids of the tinplates could not have been damaged b! water as claimed b! plaintiff. "t was shown as claimed b! plaintiff that the tinplates themselves were wrapped in /raft paper lining and corrugated cardboards could not be affected b! water from outside.

5f9 The stevedores hired b! the plaintiff to discharge the cargo of tinplates were negligent in not closing the hatch openings of the *D 6D,A%+N% "6 when rains occurred during the discharging of the cargo thus allowing rainwater to enter the hatches. "t was proven that the stevedores merel! set up temporar! tents to cover the hatch openings in case of rain so that it would be eas! for them to resume wor/ when the rains stopped b! :ust removing the tent or canvas. ecause of this improper covering of the hatches b! the stevedores during the discharging and unloading operations which were interrupted b! rains, rainwater drifted into the cargo through the hatch openings. 2ursuant to paragraph 5 of the NANI+%A" GsicH Charter 2art! which was e&pressl! made part of the Contract of Do!age Charter <ire, the loading, stowing and discharging of the cargo is the sole responsibilit! of the plaintiff charterer and defendant carrier has no liabilit! for whatever damage ma! occur or ma!be GsicH caused to the cargo in the process. 5g9 "t was also established that the vessel encountered rough seas and bad weather while en route from "ligan Cit! to *anila causing sea water to splash on the ship's dec/ on account of which the master of the vessel 5*r. Antonio C. 0umlao9 filed a 6*arine 2rotest6 on August 11, 1983 5-&h. 61569B which can be invo/ed b! defendant as a force !a:eure that would e&empt the defendant from liabilit!. 5h9 2laintiff did not compl! with the re>uirement prescribed in paragraph 9 of the Do!age Charter <ire contract that it was to insure the cargo because it did not. <ad plaintiff complied with the re>uirement, then it could have recovered its loss or damage from the insurer. 2laintiff also violated the charter part! contract when it loaded not onl! 6steel products6, i.e. steel bars, angular bars and the li/e but also tinplates and hot rolled sheets which are high grade cargo commanding a higher freight. Thus plaintiff was able to ship grade cargo at a lower freight rate. 5i9 As regards defendant's counterclaim, the contract of vo!age charter hire under 2aragraph 3 thereof, fi&ed the freight at 21).)) per metric ton pa!able to defendant carrier upon presentation of the bill of lading within fifteen 5159 da!s. 2laintiff has not paid the total freight due of 285,))).)) despite demands. The evidence also showed that the plaintiff was re>uired and bound under paragraph 8 of the same Do!age Charter <ire contract to pa! demurrage of 28,))).)) per da! of dela! in the unloading of the cargoes. The dela! amounted to eleven 5119 da!s thereb! ma/ing plaintiff liable to pa! defendant for demurrage in the amount of 288,))).)).

Appealing the (TC decision to the Court of Appeals, N%C alleged si& errors@
" The trial court erred in finding that the *D 6D,A%+N% "6 was seaworth!, properl! manned, e>uipped and supplied, and that there is no proof of willful negligence of the vessel's officers. "" The trial court erred in finding that the rusting of N%C's tinplates was due to the inherent nature or character of the goods and not due to contact with seawater. """

The trial court erred in finding that the stevedores hired b! N%C were negligent in the unloading of N%C's shipment. "D The trial court erred in e&empting D%" from liabilit! on the ground of force ma:eure. D The trial court erred in finding that N%C violated the contract of vo!age charter hire. D" The trial court erred in ordering N%C to pa! freight, demurrage and attorne!'s fees, to D%". .

As earlier stated, the Court of Appeals modified the decision of the trial court b! reducing the demurrage from 288,))).)) to 233,))).)) and deleting the award of attorne!s fees and e&penses of litigation. N%C and D%" filed separate motions for reconsideration. "n a (esolution / dated +ctober ;), 1991, the appellate court denied both motions. =ndaunted, N%C and D%" filed their respective petitions for review before this Court. +n motion of D%", the Court ordered on #ebruar! 13, 1993 the consolidation of these petitions. 0 #he ,ssues "n its petition 1 and memorandum, 8 N%C raises the following >uestions of law and fact@ Questions of La*
1. Ahether or not a charterer of a vessel is liable for demurrage due to cargo unloading dela!s caused b! weather interruptionB ;. Ahether or not the alleged 6seaworthiness certificates6 5-&hibits 616, 636, 656, 646, 686, 686, 696, 6116 and 61;69 were admissible in evidence and constituted evidence of the vessel's seaworthiness at the beginning of the vo!agesB and 1. Ahether or not a charterer's failure to insure its cargo e&empts the shipowner from liabilit! for cargo damage.

Questions of Fact
1. Ahether or not the vessel was seaworth! and cargo7worth!B ;. Ahether or not vessel's officers and crew were negligent in handling and caring for N%C's cargoB 1. Ahether or not N%C's cargo of tinplates did sweat during the vo!age and, hence, rusted on their ownB and

3. Ahether or not N%C's stevedores were negligent and caused the wettingGFHrusting of N%C's tinplates.

"n its separate petition, 9 D%" submits for the consideration of this Court the following alleged errors of the CA@
A. The respondent Court of Appeals committed an error of law in reducing the award of demurrage from 288,))).)) to 233,))).)). . The respondent Court of Appeals committed an error of law in deleting the award of 21)),))) for attorne!'s fees and e&penses of litigation.

Amplif!ing the foregoing, D%" raises the following issues in its memorandum@ 12
". Ahether or not the provisions of the Civil Code of the 2hilippines on common carriers pursuant to which there e&istGsH a presumption of negligence against the common carrier in case of loss or damage to the cargo are applicable to a private carrier. "". Ahether or not the terms and conditions of the Contract of Do!age Charter <ire, including the Nan!o?ai Charter, are valid and binding on both contracting parties.

The foregoing issues raised b! the parties will be discussed under the following headings@ 1. Juestions of #act ;. -ffect of N%C's #ailure to "nsure the Cargo 1. Admissibilit! of Certificates 2roving %eaworthiness 3. 0emurrage and Attorne!'s #ees. #he CourtAs Rulin The Court affirms the assailed 0ecision of the Court of Appeals, e&cept in respect of the demurrage. Preli!inar) Matter@ Co!!on Carrier or Private Carrier3 At the outset, it is essential to establish whether D%" contracted with N%C as a common carrier or as a private carrier. The resolution of this preliminar! >uestion determines the law, standard of diligence and burden of proof applicable to the present case. Article 181; of the Civil Code defines a common carrier as 6persons, corporations, firms or associations engaged in the business of carr!ing or transporting passengers or goods or both, b! land, water, or air, for compensation, offering their services to the public.6 "t has been held that the true test of a common carrier is the carriage of passengers or goods, provided it has space, for all who opt to avail themselves of its

transportation service for a fee. 11 A carrier which does not >ualif! under the above test is deemed a private carrier. 6$enerall!, private carriage is underta/en b! special agreement and the carrier does not hold himself out to carr! goods for the general public. The most t!pical, although not the onl! form of private carriage, is the charter part!, a maritime contract b! which the charterer, a part! other than the shipowner, obtains the use and service of all or some part of a ship for a period of time or a vo!age or vo!ages.6 12 "n the instant case, it is undisputed that D%" did not offer its services to the general public. As found b! the (egional Trial Court, it carried passengers or goods onl! for those it chose under a 6special contract of charter part!.6 13 As correctl! concluded b! the Court of Appeals, the M8 8lasons , 6was not a common but a private carrier.6 1. Conse>uentl!, the rights and obligations of D%" and N%C, including their respective liabilit! for damage to the cargo, are determined primaril! b! stipulations in their contract of private carriage or charter part!. 1/ (ecentl!, in 8alen(uela 5ard*ood and ,ndustrial %uppl), ,nc., vs. Court of Appeals and %even &rothers %hippin Corporation , 10 the Court ruled@
. . . in a contract of private carriage, the parties ma! freel! stipulate their duties and obligations which perforce would be binding on them. =nli/e in a contract involving a common carrier, private carriage does not involve the general public. <ence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot :ustifiabl! be applied to a ship transporting commercial goods as a private carrier. Conse>uentl!, the public polic! embodied therein is not contravened b! stipulations in a charter part! that lessen or remove the protection given b! law in contracts involving common carriers. 11

B>tent of 8%,As Responsi-ilit) and Lia-ilit) +ver N%CAs Car o "t is clear from the parties' Contract of Do!age Charter <ire, dated .ul! 18, 1983, that D%" 6shall not be responsible for losses e&cept on proven willful negligence of the officers of the vessel.6 The NANI+MA" Charter 2art!, which was incorporated in the parties' contract of transportation further provided that the shipowner shall not be liable for loss of or a damage to the cargo arising or resulting from unseaworthiness, unless the same was caused b! its lac/ of due diligence to ma/e the vessel seaworth! or to ensure that the same was 6properl! manned, e>uipped and supplied,6 and to 6ma/e the holds and all other parts of the vessel in which cargo GwasH carried, fit and safe for its reception, carriage and preservation.6 18 The NANI+MA" Charter 2art! also provided that 6GoHwners shall not be responsible for split, chafing andFor an! damage unless caused b! the negligence or default of the master or crew.6 19 &urden of Proof "n view of the aforementioned contractual stipulations, N%C must prove that the damage to its shipment was caused b! D%"'s willful negligence or failure to e&ercise due diligence in ma/ing M8 8lasons , seaworth! and fit for holding, carr!ing and safe/eeping the cargo. "neluctabl!, the burden of proof was placed on N%C b! the parties' agreement.

This view finds further support in the Code of Commerce which pertinentl! provides@
Art. 141. Merchandise shall -e transported at the ris1 and venture of the shipper, if the contrar) has not -een e>pressl) stipulated. Therefore, the damage and impairment suffered b! the goods during the transportation, due to fortuitous event, force !a:eure, or the nature and inherent defect of the things, shall be for the account and ris/ of the shipper. The burden of proof of these accidents is on the carrier. Art. 14;. The carrier, however, shall be liable for damages arising from the cause mentioned in the preceding article if proofs against him show that the! occurred on account of his negligence or his omission to ta/e the precautions usuall! adopted b! careful persons, unless the shipper committed fraud in the bill of lading, ma/ing him to believe that the goods were of a class or >ualit! different from what the! reall! were.

ecause the M8 8lasons , was a private carrier, the shipowner's obligations are governed b! the foregoing provisions of the Code of Commerce and not b! the Civil Code which, as a general rule, places the pri!a facie presumption of negligence on a common carrier. "t is a hornboo/ doctrine that@
"n an action against a private carrier for loss of, or in:ur! to, cargo, the burden is on the plaintiff to prove that the carrier was negligent or unseaworth!, and the fact that the goods were lost or damaged while in the carrier's custod! does not put the burden of proof on the carrier. %ince . . . a private carrier is not an insurer but underta/es onl! to e&ercise due care in the protection of the goods committed to its care, the burden of proving negligence or a breach of that dut! rests on plaintiff and proof of loss of, or damage to, cargo while in the carrier's possession does not cast on it the burden of proving proper care and diligence on its part or that the loss occurred from an e&cepted cause in the contract or bill of lading. <owever, in discharging the burden of proof, plaintiff is entitled to the benefit of the presumptions and inferences b! which the law aids the bailor in an action against a bailee, and since the carrier is in a better position to /now the cause of the loss and that it was not one involving its liabilit!, the law re>uires that it come forward with the information available to it, and its failure to do so warrants an inference or presumption of its liabilit!. <owever, such inferences and presumptions, while the! ma! affect the burden of coming forward with evidence, do not alter the burden of proof which remains on plaintiff, and, where the carrier comes forward with evidence e&plaining the loss or damage, the burden of going forward with the evidence is again on plaintiff. Ahere the action is based on the shipowner's warrant! of seaworthiness, the burden of proving a breach thereof and that such breach was the pro&imate cause of the damage rests on plaintiff, and proof that the goods were lost or damaged while in the carrier's possession does not cast on it the burden of proving seaworthiness. . . . Ahere the contract of carriage e&empts the carrier from liabilit! for unseaworthiness not discoverable b! due diligence, the carrier has the preliminar! burden of proving the e&ercise of due diligence to ma/e the vessel seaworth!. 22

"n the instant case, the Court of Appeals correctl! found the N%C 6has not ta/en the correct position in relation to the >uestion of who has the burden of proof. Thus, in its brief 5pp. 1)7119, after citing Clause 1) and Clause 1; of the NANI+MA" Charter 2art! 5incidentall! plaintiff7appellant's GN%C'sH interpretation of Clause 1; is not even correct9, it argues that 'a careful e&amination of the evidence will show that D%" miserabl! failed

to compl! with an! of these obligation's as if defendant7appellee GD%"H had the burden of proof.6 21 First ,ssue@ Questions of Fact ased on the foregoing, the determination of the following factual >uestions is manifestl! relevant@ 519 whether D%" e&ercised due diligence in ma/ing M8 8lasons , seaworth! for the intended purpose under the charter part!B 5;9 whether the damage to the cargo should be attributed to the willful negligence of the officers and crew of the vessel or of the stevedores hired b! N%CB and 519 whether the rusting of the tinplates was caused b! its own 6sweat6 or b! contact with seawater. These >uestions of fact were threshed out and decided b! the trial court, which had the firsthand opportunit! to hear the parties' conflicting claims and to carefull! weigh their respective evidence. The findings of the trial court were subse>uentl! affirmed b! the Court of Appeals. Ahere the factual findings of both the trial court and the Court of Appeals coincide, the same are binding on this Court. 22 Ae stress that, sub:ect to some e&ceptional instances, 23 onl! >uestions of law L not >uestions of fact L ma! be raised before this Court in a petition for review under (ule 35 of the (ules of Court. After a thorough review of the case at bar, we find no reason to disturb the lower court's factual findings, as indeed N%C has not successfull! proven the application of an! of the aforecited e&ceptions. 2as M8 8lasons , %ea*orth)3 "n an! event, the records reveal that D%" e&ercised due diligence to ma/e the ship seaworth! and fit for the carriage of N%C's cargo of steel and tinplates. This is shown b! the fact that it was dr!loc/ed and inspected b! the 2hilippine Coast $uard before it proceeded to "ligan Cit! for its vo!age to *anila under the contract of vo!age charter hire. 2. The vessel's vo!age from "ligan to *anila was the vessel's first vo)a e after dr)doc1in . The 2hilippine Coast $uard %tation in Cebu cleared it as sea*orth), fitted and eCuippedB it !et all reCuire!ents for tradin as car o vessel . 2/ The Court of Appeals itself sustained the conclusion of the trial court that M8 8lasons , was seaworth!. Ae find no reason to modif! or reverse this finding of both the trial and the appellate courts. 2ho 2ere Ne li ent@ %ea!en or %tevedores3 As noted earlier, the N%C had the burden of proving that the damage to the cargo was caused b! the negligence of the officers and the crew of M8 8lasons , in ma/ing their vessel seaworth! and fit for the carriage of tinplates. N%C failed to discharge this burden.

efore us, N%C relies heavil! on its claim that M8 8lasons , had used an old and torn tarpaulin or canvas to cover the hatches through which the cargo was loaded into the cargo hold of the ship. "t faults the Court of Appeals for failing to consider such claim as an 6uncontroverted fact6 20 and denies that M8 8lasons , 6was e>uipped with new canvas covers in tandem with the old ones as indicated in the *arine 2rotest . . .6 21 Ae disagree. The records sufficientl! support D%"'s contention that the ship used the old tarpaulin, onl! in addition to the new one used primaril! to ma/e the ship's hatches watertight. The foregoing are clear from the marine protest of the master of the M8 8lasons ,, Antonio C. 0umlao, and the deposition of the ship's boatswain, .ose 2ascua. The salient portions of said marine protest read@
. . . That the *FD 6D,A%+N% "6 departed "ligan Cit! or about )81) hours of August 8, 1983, loaded with appro&imatel! ;,388.9 tons of steel plates and tin plates consigned to National %teel CorporationB that before departure, the vessel was rigged, full! e>uipped and cleared b! the authoritiesB that on or about August 9, 1983, while in the vicinit! of the western part of Negros and 2ana!, we encountered ver! rough seas and strong winds and *anila office was advised b! telegram of the adverse weather conditions encounteredB that in the morning of August 1), 1983, the weather condition changed to worse and strong winds and big waves continued pounding the vessel at her port side causing sea water to overflow on dec/ andhatch 5 sic9 covers and which caused the first la!er of the canvass covering to give wa! while the new canvass covering still holding onB That the weather condition improved when we reached 0umali 2oint protected b! *indoroB that we re7secured the canvass covering bac/ to positionB that in the afternoon of August 1), 1983, while entering *aricaban 2assage, we were again e&posed to moderate seas and heav! rainsB that while approaching #ortune "sland, we encountered again rough seas, strong winds and big waves which caused the same canvass to give wa! and leaving the new canvass holding onB &&& &&& &&& 28

And the relevant portions of .ose 2ascua's deposition are as follows@

> Ahat is the purpose of the canvas coverK a %o that the cargo would not be soa/ed with water. > And will !ou describe how the canvas cover was secured on the hatch openingK A"TN-%% a "t was placed flat on top of the hatch cover, with a little canvas flowing over the sides and we placeGdH a flat bar over the canvas on the side of the hatches and then we placeGdH a stopper so that the canvas could not be removed. ATTI 0-, (+%A("+ > And will !ou tell us the si?e of the hatch openingK The length and the width of the hatch opening.

a #ort!7five feet b! thirt!7five feet, sir. &&& &&& &&& > <ow was the canvas supported in the middle of the hatch openingK a There is a hatch board. ATTI 0-, (+%A("+ > Ahat is the hatch board made ofK a "t is made of wood, with a handle. > And aside from the hatch board, is there an! other material there to cover the hatchK a There is a beam supporting the hatch board. > Ahat is this beam made ofK a "t is made of steel, sir. > "s the beam that was placed in the hatch opening covering the whole hatch openingK a No, sir. > <ow man! hatch beams were there placed across the openingK a There are five beams in one hatch opening. ATTI 0-, (+%A("+ > And on top of the beams !ou said there is a hatch board. <ow man! pieces of wood are put on topK a 2lent!, sir, because there are several pieces on top of the hatch beam. > And is there a space between the hatch boardsK a There is none, sir. > The! are tight togetherK a Ies, sir. > <ow tightK a Der! tight, sir.

> Now, on top of the hatch boards, according to !ou, is the canvass cover. <ow man! canvas coversK a Two, sir. 29

That due diligence was e&ercised b! the officers and the crew of the M8 8lasons , was further demonstrated b! the fact that, despite encountering rough weather twice, the new tarpaulin did not give wa! and the ship's hatches and cargo holds remained waterproof. As aptl! stated b! the Court of Appeals, 6. . . we find no reason not to sustain the conclusion of the lower court based on overwhelming evidence, that the M8 A8LA%+N% ,A was seaworth! when it undertoo/ the vo!age on August 8, 1983 carr!ing on board thereof plaintiff7appellant's shipment of 1,488 s/ids of tinplates and 9; pac/ages of hot rolled sheets or a total of 1,849 pac/ages from N%C's pier in "ligan Cit! arriving safel! at North <arbor, 2ort Area, *anila, on August 1;, 1983B . . . 32 "ndeed, N%C failed to discharge its burden to show negligence on the part of the officers and the crew of M8 8lasons ,. +n the contrar!, the records reveal that it was the stevedores of N%C who were negligent in unloading the cargo from the ship. The stevedores emplo!ed onl! a tent7li/e material to cover the hatches when strong rains occasioned b! a passing t!phoon disrupted the unloading of the cargo. This tent7 li/e covering, however, was clearl! inade>uate for /eeping rain and seawater awa! from the hatches of the ship. Dicente Angliongto, an officer of D%", testified thus@
ATTI MA*+(A@ J Now, during !our testimon! on November 5, 1989, !ou stated on August 13 !ou went on board the vessel upon notice from the National %teel Corporation in order to conduct the inspection of the cargo. 0uring the course of the investigation, did !ou chance to see the discharging operationK A"TN-%%@ A Ies, sir, upon m! arrival at the vessel, " saw some of the tinplates alread! discharged on the pier but ma:orit! of the tinplates were inside the hall, all the hatches were opened. J "n connection with these cargoes which were unloaded, where is the place. A At the 2ier. J Ahat was used to protect the same from weatherK ATTI ,+2-M@ Ae ob:ect, !our <onor, this >uestion was alread! as/ed. This particular matter . . . the transcript of stenographic notes shows the same was covered in the direct e&amination. ATTI MA*+(A@

2recisel!, !our <onor, we would li/e to go on detail, this is the serious part of the testimon!. C+=(T@ All right, witness ma! answer. ATTI ,+2-M@ J Ahat was used in order to protect the cargo from the weatherK A A base of canvas was used as cover on top of the tin plates, and tents were built at the opening of the hatches. J Iou also stated that the hatches were alread! opened and that there were tents constructed at the opening of the hatches to protect the cargo from the rain. Now, will !ou describe GtoH the Court the tents constructed. A The tents are :ust a base of canvas which loo/ li/e a tent of an "ndian camp raiseGdH high at the middle with the whole side separated down to the hatch, the si?e of the hatch and it is soa/s GsicH at the middle because of those weather and this can be used onl! to temporaril! protect the cargo from getting wet b! rains. J No*, is this procedure adopted -) the stevedores of coverin tents proper3 A No, sir, at the ti!e the) *ere dischar in the car o, there *as a t)phoon passin -) and the hatch tent *as not ood enou h to hold all of it to prevent the *ater soa1in throu h the canvass and enter the car o . J ,n the course of )our inspection, Mr. An lin to DsicE, did )ou see in fact the *ater enter and soa1 into the canvass and tinplates. A ?es, sir, the second ti!e , *ent there, , sa* it . J As owner of the vessel, did !ou not advise the National %teel Corporation GofH the procedure adopted b! its stevedores in discharging the cargo particularl! in this tent covering of the hatchesK A Ies, sir, " did the first time " saw it, " called the attention of the stevedores but the stevedores did not mind at all, so, called the attention of the representative of the National %teel but nothing was done, :ust the same. #inall!, " wrote a letter to them. 31

N%C attempts to discredit the testimon! of Angliongto b! >uestioning his failure to complain immediatel! about the stevedores' negligence on the first da! of unloading, pointing out that he wrote his letter to petitioner onl! seven da!s later. 32 The Court is not persuaded. Angliongto's candid answer in his afore>uoted testimon! satisfactoril! e&plained the dela!. %even da!s lapsed because he first called the attention of the stevedores, then the N%C's representative, about the negligent and defective procedure adopted in unloading the cargo. This series of actions constitutes a reasonable response in accord with common sense and ordinar! human e&perience. Dicente

Angliongto could not be blamed for calling the stevedores' attention first and then the N%C's representative on location before formall! informing N%C of the negligence he had observed, because he was not responsible for the stevedores or the unloading operations. "n fact, he was merel! e&pressing concern for N%C which was ultimatel! responsible for the stevedores it had hired and the performance of their tas/ to unload the cargo. Ae see no reason to reverse the trial and the appellate courts' findings and conclusions on this point, vi(@
"n the T<"(0 assigned error, GN%CH claims that the trial court erred in finding that the stevedores hired b! N%C were negligent in the unloading of N%C's shipment. Ae do not thin/ so. %uch negligence according to the trial court is evident in the stevedores hired b! GN%CH, not closing the hatch of M8 A8LA%+N% ,A when rains occurred during the discharging of the cargo thus allowing rain water and seawater spra! to enter the hatches and to drift to and fall on the cargo. "t was proven that the stevedores merel! set up temporar! tents or canvas to cover the hatch openings when it rained during the unloading operations so that it would be easier for them to resume wor/ after the rains stopped b! :ust removing said tents or canvass. "t has also been shown that on August ;), 1983, D%" 2resident Dicente Angliongto wrote GN%CH calling attention to the manner the stevedores hired b! GN%CH were discharging the cargo on rain! da!s and the improper closing of the hatches which allowed continuous heav! rain water to lea/ through and drip to the tinplates' covers and GDicente AngliongtoH also suggesting that due to four 539 da!s continuos rains with strong winds that the hatches be totall! closed down and covered with canvas and the hatch tents lowered. 5-&h. 61169. This letter was received b! GN%CH on ;; August 1983 while discharging operations were still going on 5-&hibit 6117A69. 33

The fact that N%C actuall! accepted and proceeded to remove the cargo from the ship during unfavorable weather will not ma/e D%" liable for an! damage caused thereb!. "n passing, it ma! be noted that the N%C ma! see/ indemnification, sub:ect to the laws on prescription, from the stevedoring compan! at fault in the discharge operations. 6A stevedore compan! engaged in discharging cargo . . . has the dut! to load the cargo . . . in a prudent manner, and it is liable for in:ur! to, or loss of, cargo caused b! its negligence . . . and where the officers and members and crew of the vessel do nothing and have no responsibilit! in the discharge of cargo b! stevedores . . . the vessel is not liable for loss of, or damage to, the cargo caused b! the negligence of the stevedores . . .6 3. as in the instant case. 9o #inplates F%*eatF3 The trial court relied on the testimon! of Dicente Angliongto in finding that 6. . . tinplates 'sweat' b! themselves when pac/ed even without being in contact with water from outside especiall! when the weather is bad or raining . . .6 3/ The Court of Appeals affirmed the trial court's finding. A discussion of this issue appears inconse>uential and unnecessar!. As previousl! discussed, the damage to the tinplates was occasioned not b! airborne moisture but b! contact with rain and seawater which the stevedores negligentl! allowed to seep in during the unloading.

%econd ,ssue@ Bffect of N%CAs Failure to ,nsure the Car o The obligation of N%C to insure the cargo stipulated in the Contract of Do!age Charter <ire is totall! separate and distinct from the contractual or statutor! responsibilit! that ma! be incurred b! D%" for damage to the cargo caused b! the willful negligence of the officers and the crew of M8 8lasons ,. Clearl!, therefore, N%C's failure to insure the cargo will not affect its right, as owner and real part! in interest, to file an action against D%" for damages caused b! the latter's willful negligence. Ae do not find an!thing in the charter part! that would ma/e the liabilit! of D%" for damage to the cargo contingent on or affected in an! manner b! N%C's obtaining an insurance over the cargo. #hird ,ssue@ Ad!issi-ilit) of Certificates Provin %ea*orthiness N%C's contention that M8 8lasons , was not seaworth! is anchored on the alleged inadmissibilit! of the certificates of seaworthiness offered in evidence b! D%". The said certificates include the following@ 1. Certificate of "nspection of the 2hilippines Coast $uard at Cebu ;. Certificate of "nspection from the 2hilippine Coast $uard 1. "nternational ,oad ,ine Certificate from the 2hilippine Coast $uard 3. Coastwise ,icense from the oard of Transportation 5. Certificate of Approval for Conversion issued b! the ureau of Customs 30 N%C argues that the certificates are hearsa! for not having been presented in accordance with the (ules of Court. "t points out that -&hibits 1, 3 and 11 allegedl! are 6not written records or acts of public officers6B while -&hibits 5, 4, 8, 8, 9, 11 and 1; are not 6evidenced b! official publications or certified true copies6 as re>uired b! %ections ;5 and ;4, (ule 11;, of the (ules of Court. 31 After a careful e&amination of these e&hibits, the Court rules that -&hibits 1, 3, 5, 4, 8, 8, 9 and 1; are inadmissible, for the! have not been properl! offered as evidence. -&hibits 1 and 3 are certificates issued b! private parties, but the! have not been proven b! one who saw the writing e&ecuted, or b! evidence of the genuineness of the handwriting of the ma/er, or b! a subscribing witness. -&hibits, 5, 4, 8, 8, 9, and 1; are photocopies, but their admission under the best evidence rule have not been demonstrated. Ae find, however, that -&hibit 11 is admissible under a well7settled e&ception to the hearsa! rule per %ection 33 of (ule 11) of the (ules of Court, which provides that 65e9ntries in official records made in the performance of a dut! b! a public officer of the 2hilippines, or b! a person in the performance of a dut! speciall! en:oined b! law, are

pri!a facie evidence of the facts therein stated.6 38 -&hibit 11 is an original certificate of the 2hilippine Coast $uard in Cebu issued b! ,ieutenant .unior $rade Noli C. #lores to the effect that 6the vessel 'D,A%+N% "' was dr!doc/ed . . . and 2C$ "nspectors were sent on board for inspection . . . After completion of dr!doc/ing and dul! inspected b! 2C$ "nspectors, the vessel 'D,A%+N% "', a cargo vessel, is in seaworth! condition, meets all re>uirements, fitted and e>uipped for trading as a cargo vessel was cleared b! the 2hilippine Coast $uard and sailed for Cebu 2ort on .ul! 1), 1983.6 5 sic9 N%C's claim, therefore, is obviousl! misleading and erroneous. At an! rate, it should be stressed that N%C has the burden of proving that M8 8lasons , was not seaworth!. As observed earlier, the vessel was a private carrier and, as such, it did not have the obligation of a common carrier to show that it was seaworth!. "ndeed, N%C glaringl! failed to discharge its dut! of proving the willful negligence of D%" in ma/ing the ship seaworth! resulting in damage to its cargo. Assailing the genuineness of the certificate of seaworthiness is not sufficient proof that the vessel was not seaworth!. Fourth ,ssue@ 9e!urra e and Attorne)As Fees The contract of vo!age charter hire provides inter alia@
&&& &&& &&& ;. Cargo@ #ull cargo of steel products of not less than ;,5)) *T, 1)C more or less at *aster's option. &&& &&& &&& 4. ,oadingF0ischarging (ate@ 85) tons per AA0%<"NC. 8. 0emurrageF0ispatch@ 28,))).))F23,))).)) per da!. 39

The Court defined demurrage in its strict sense as the compensation provided for in the contract of affreightment for the detention of the vessel be!ond the la!time or that period of time agreed on for loading and unloading of cargo. .2 "t is given to compensate the shipowner for the nonuse of the vessel. +n the other hand, the following is well7 settled@
,a!time runs according to the particular clause of the charter part!. . . . "f la!time is e&pressed in 6running da!s,6 this means da!s when the ship would be run continuousl!, and holida!s are not e&cepted. A >ualification of 6weather permitting6 e&cepts onl! those da!s when bad weather reasonabl! prevents the wor/ contemplated. .1

"n this case, the contract of vo!age charter hire provided for a four7da! la!timeB it also >ualified la!time as AA0%<"NC or weather wor/ing da!s %unda!s and holida!s included. .2 The running of la!time was thus made sub:ect to the weather, and would cease to run in the event unfavorable weather interfered with the unloading of cargo. .3 Conse>uentl!, N%C ma! not be held liable for demurrage as the four7da! la!time

allowed it did not lapse, having been tolled b! unfavorable weather condition in view of the AA0%<"NC >ualification agreed upon b! the parties. Clearl!, it was error for the trial court and the Court of Appeals to have found and affirmed respectivel! that N%C incurred eleven da!s of dela! in unloading the cargo. The trial court arrived at this erroneous finding b! subtracting from the twelve da!s, specificall! August 11, 1983 to August ;3, 1983, the onl! da! of unloading unhampered b! unfavorable weather or rain, which was August ;;, 1983. ased on our previous discussion, such finding is a reversible error. As mentioned, the respondent appellate court also erred in ruling that N%C was liable to D%" for demurrage, even if it reduced the amount b! half. Attorne)As Fees D%" assigns as error of law the Court of Appeals' deletion of the award of attorne!'s fees. Ae disagree. Ahile D%" was compelled to litigate to protect its rights, such fact b! itself will not :ustif! an award of attorne!'s fees under Article ;;)8 of the Civil Code when 6. . . no sufficient showing of bad faith would be reflected in a part!'s persistence in a case other than an erroneous conviction of the righteousness of his cause . . .6 .. *oreover, attorne!'s fees ma! not be awarded to a part! for the reason alone that the :udgment rendered was favorable to the latter, as this is tantamount to imposing a premium on one's right to litigate or see/ :udicial redress of legitimate grievances. ./ Bpilo ue At bottom, this appeal reall! hinges on a factual issue@ when, how and who caused the damage to the cargoK (anged against N%C are two formidable truths. #irst, both lower courts found that such damage was brought about during the unloading process when rain and seawater seeped through the cargo due to the fault or negligence of the stevedores emplo!ed b! it. asic is the rule that factual findings of the trial court, when affirmed b! the Court of Appeals, are binding on the %upreme Court. Although there are settled e&ceptions, N%C has not satisfactoril! shown that this case is one of them. %econd, the agreement between the parties L the Contract of Do!age Charter <ire L placed the burden of proof for such loss or damage upon the shipper, not upon the shipowner. %uch stipulation, while disadvantageous to N%C, is valid because the parties entered into a contract of private charter, not one of common carriage. asic too is the doctrine that courts cannot relieve a parr! from the effects of a private contract freel! entered into, on the ground that it is allegedl! one7sided or unfair to the plaintiff. The charter part! is a normal commercial contract and its stipulations are agreed upon in consideration of man! factors, not the least of which is the transport price which is determined not onl! b! the actual costs but also b! the ris/s and burdens assumed b! the shipper in regard to possible loss or damage to the cargo. "n recognition of such factors, the parties even stipulated that the shipper should insure the cargo to protect itself from the ris/s it undertoo/ under the charter part!. That N%C failed or neglected to protect itself with such insurance should not adversel! affect D%", which had nothing to do with such failure or neglect.

A<-(-#+(-, premises considered, the instant consolidated petitions are hereb! 0-N"-0. The >uestioned 0ecision of the Court of Appeals is A##"(*-0 with the *+0"#"CAT"+N that the demurrage awarded to D%" is deleted. No pronouncement as to costs. %+ +(0-(-0. Narvasa, C.J., Ro!ero, Melo and Francisco, JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 101083. "/r(. 4, 1333. ESTRE00IT# M 4#SCOS, petitioners, vs COBRT OF #PPE#0S an! RODO0FO # CIPRI#NO, respon!ents Mo!esto S 4ascos for petitioner Pelae>, #!riano F +re$orio for private respon!ent SC00#4BS ( CIVI0 0#<? COMMON C#RRIERS? DEFINED? TEST TO DETERMINE COMMON C#RRIER G #rticle (&9% of the Civil Co!e !efines a co""on carrier as -6a7 person, corporation or fir", or association en$a$e! in the business of carr)in$ or transportin$ passen$ers or $oo!s or both, b) lan!, 1ater or air, for co"pensation, offerin$ their services to the public The test to !eter"ine a co""on carrier is -1hether the $iven un!erta;in$ is a part of the business en$a$e! in b) the carrier 1hich he has hel! out to the $eneral public as his occupation rather than the Duantit) or e5tent of the business transacte! The hol!in$ of the Court in De +u>"an vs Court of #ppeals is instructive In referrin$ to #rticle (&9% of the Civil Co!e, it hel! thus@ -The above article "a;es no !istinction bet1een one 1hose principal business activit) is the carr)in$ of persons or $oo!s or both, an! one 1ho !oes such carr)in$ onl) as an ancillar) activit) 6in local i!io", as a -si!eline-7 #rticle (&9% also carefull) avoi!s "a;in$ an) !istinction bet1een a person or enterprise offerin$ transportation service on a re$ular or sche!ule! basis an! one offerin$ such service on an occasional, episo!ic or unsche!ule! basis Neither !oes #rticle (&9% !istin$uishe! bet1een a carrier offerin$ its services to the -$eneral public,- i e , the $eneral co""unit) or population, an! one 1ho offers services or solicits business onl) fro" a narro1 se$"ent of the $eneral population <e thin; that #rticle (&9% !eliberatel) refraine! fro" "a;in$ such !istinctions -

% ID ? ID ? DI0I+ENCE REHBIRED IN VI+I0#NCE OVER +OODS TR#NSPORTED? </EN PRESBMPTION OF NE+0I+ENCE #RISES? /O< PRESBMPTION OVERC#ME? </EN PRESBMPTION M#DE #4SO0BTE G Co""on carriers are obli$e! to observe e5traor!inar) !ili$ence in the vi$ilance over the $oo!s transporte! b) the" #ccor!in$l), the) are presu"e! to have been at fault or to have acte! ne$li$entl) if the $oo!s are lost, !estro)e! or !eteriorate! There are ver) fe1 instances 1hen the presu"ption of ne$li$ence !oes not attach an! these instances are enu"erate! in #rticle (&98 In those cases 1here the presu"ption is applie!, the co""on carrier "ust prove that it e5ercise! e5traor!inar) !ili$ence in or!er to overco"e the presu"ption The presu"ption of ne$li$ence 1as raise! a$ainst petitioner It 1as petitionerIs bur!en to overco"e it Thus, contrar) to her assertion, private respon!ent nee! not intro!uce an) evi!ence to prove her ne$li$ence /er o1n failure to a!!uce sufficient proof of e5traor!inar) !ili$ence "a!e the presu"ption conclusive a$ainst her 9 ID ? ID ? /I=#CJIN+ OF +OODS? C#RRIER PRESBMED NE+0I+ENT? /O< C#RRIER #4SO0VED FROM 0I#4I0ITC G In De +u>"an vs Court of #ppeals, the Court hel! that hi.ac;in$, not bein$ inclu!e! in the provisions of #rticle (&98, "ust be !ealt 1ith un!er the provisions of #rticle (&9A an! thus, the co""on carrier is presu"e! to have been at fault or ne$li$ent To e5culpate the carrier fro" liabilit) arisin$ fro" hi.ac;in$, he "ust prove that the robbers or the hi.ac;ers acte! 1ith $rave or irresistible threat, violence, or force This is in accor!ance 1ith #rticle (&8A of the Civil Co!e 1hich provi!es@ -#rt (&8A #n) of the follo1in$ or si"ilar stipulations shall be consi!ere! unreasonable, un.ust an! contrar) to public polic) 6,7 That the co""on carrierIs liabilit) for acts co""itte! b) thieves, or of robbers 1ho !o not act 1ith $rave or irresistible threat, violences or force, is !ispense! 1ith or !i"inishe!-? In the sa"e case, the Supre"e Court also hel! that@ -Bn!er #rticle (&8A 6,7 above, a co""on carrier is hel! responsible G an! 1ill not be allo1e! to !ivest or to !i"inish such responsibilit) G even for acts of stran$ers li;e thieves or robbers, e5cept 1here such thieves or robbers in fact acte! -1ith $rave of irresistible threat, violence of force,- <e believe an! so hol! that the li"its of the !ut) of e5traor!inar) !ili$ence in the vi$ilance over the $oo!s carrie! are reache! 1here the $oo!s are lost as a result of a robber) 1hich is atten!e! b) -$rave or irresistible threat, violence or force 8 REMEDI#0 0#<? EVIDENCE? =BDICI#0 #DMISSIONS CONC0BSIVE G In this case, petitioner herself has "a!e the a!"ission that she 1as in the truc;in$ business, offerin$ her truc;s to those 1ith car$o to "ove =u!icial a!"issions are conclusive an! no evi!ence is reDuire! to prove the sa"e A ID ? ID ? 4BRDEN OF PROOF RESTS <IT/ P#RTC </O #00E+ES # F#CT G Petitioner presente! no other proof of the e5istence of the contract of lease /e 1ho alle$es a fact has the bur!en of provin$ it , ID ? ID ? #FFID#VITS NOT CONSIDERED 4EST EVIDENCE IF #FFI#NTS #V#I0#40E #S <ITNESSES G <hile the affi!avit of =uanito Mor!en, the truc; helper in the hi.ac;e! truc;, 1as presente! as evi!ence in court, he hi"self 1as a 1itness as coul! be $leane! fro" the contents of the petition #ffi!avits are not consi!ere! the best evi!ence if the affiants are available as 1itnesses

& CIVI0 0#<? O40I+#TIONS #ND CONTR#CTS? CONTR#CT IS </#T 0#< DEFINES IT TO 4E G +rantin$ that the sai! evi!ence 1ere not self*servin$, the sa"e 1ere not sufficient to prove that the contract 1as one of lease It "ust be un!erstoo! that a contract is 1hat the la1 !efines it to be an! not 1hat it is calle! b) the contractin$ parties DECISION C#MPOS, =R , = p@ This is a petition for revie1 on certiorari of the !ecision KK of the Court of #ppeals in -RODO0FO # CIPRI#NO, !oin$ business un!er the na"e CIPRI#NO TR#DIN+ ENTERPRISES plaintiff*appellee, vs ESTRE00IT# M 4#SCOS, !oin$ business un!er the na"e of 4#SCOS TRBCJIN+, !efen!ant*appellant,- C # *+ R CV No %A%(,, the !ispositive portion of 1hich is Duote! hereun!er@ -PREMISES consi!ere!, <e fin! no reversible error in the !ecision appeale! fro", 1hich is hereb) affir"e! in toto Costs a$ainst appellant - ( The facts, as $athere! b) this Court, are as follo1s@ Ro!olfo # Cipriano representin$ Cipriano Tra!in$ Enterprise 6CIPTR#DE for short7 entere! into a haulin$ contract % 1ith =ibfair Shippin$ #$enc) Corporation 1hereb) the for"er boun! itself to haul the latterIs %,''' "Ltons of so)a bean "eal fro" Ma$allanes Drive, Del Pan, Manila to the 1arehouse of Purefoo!s Corporation in Cala"ba, 0a$una To carr) out its obli$ation, CIPTR#DE, throu$h Ro!olfo Cipriano, subcontracte! 1ith Estrellita 4ascos 6petitioner7 to transport an! to !eliver 8'' sac;s of so)a bean "eal 1orth P(A,,8'8 '' fro" the Manila Port #rea to Cala"ba, 0a$una at the rate of PA' '' per "etric ton Petitioner faile! to !eliver the sai! car$o #s a conseDuence of that failure, Cipriano pai! =ibfair Shippin$ #$enc) the a"ount of the lost $oo!s in accor!ance 1ith the contract 1hich state! that@ -( CIPTR#DE shall be hel! liable an! ans1erable for an) loss in ba$s !ue to theft, hi.ac;in$ an! non*!eliver) or !a"a$es to the car$o !urin$ transport at "ar;et value, -9 Cipriano !e"an!e! rei"burse"ent fro" petitioner but the latter refuse! to pa) Eventuall), Cipriano file! a co"plaint for a su" of "one) an! !a"a$es 1ith 1rit of preli"inar) attach"ent 8 for breach of a contract of carria$e The pra)er for a <rit of Preli"inar) #ttach"ent 1as supporte! b) an affi!avit A 1hich containe! the follo1in$ alle$ations@ -8 That this action is one of those specificall) "entione! in Sec (, Rule A& the Rules of Court, 1hereb) a 1rit of preli"inar) attach"ent "a) la1full) issue, na"el)@ -6e7 in an action a$ainst a part) 1ho has re"ove! or !ispose! of his propert), or is about to !o so, 1ith intent to !efrau! his cre!itors?A That there is no sufficient securit) for the clai" sou$ht to be enforce! b) the present action?

, That the a"ount !ue to the plaintiff in the above*entitle! case is above all le$al counterclai"s?The trial court $rante! the 1rit of preli"inar) attach"ent on Februar) (&, (23& In her ans1er, petitioner interpose! the follo1in$ !efenses@ that there 1as no contract of carria$e since CIPTR#DE lease! her car$o truc; to loa! the car$o fro" Manila Port #rea to 0a$una? that CIPTR#DE 1as liable to petitioner in the a"ount of P((,''' '' for loa!in$ the car$o? that the truc; carr)in$ the car$o 1as hi.ac;e! alon$ Canoni$o St , Paco, Manila on the ni$ht of October %(, (233? that the hi.ac;in$ 1as i""e!iatel) reporte! to CIPTR#DE an! that petitioner an! the police e5erte! all efforts to locate the hi.ac;e! properties? that after preli"inar) investi$ation, an infor"ation for robber) an! carnappin$ 1ere file! a$ainst =ose Opriano, et al ? an! that hi.ac;in$, bein$ a force "a.eure, e5culpate! petitioner fro" an) liabilit) to CIPTR#DE #fter trial, the trial court ren!ere! a !ecision KKK the !ispositive portion of 1hich rea!s as follo1s@ -</EREFORE, .u!$"ent is hereb) ren!ere! in favor of plaintiff an! a$ainst !efen!ant or!erin$ the latter to pa) the for"er@ ( The a"ount of ONE /BNDRED FIFTC*SIM T/OBS#ND FOBR /BNDRED FOBR PESOS 6P(A,,8'8 ''7 as an 6sic7 for actual !a"a$es 1ith le$al interest of (%N per cent per annu" to be counte! fro" Dece"ber 8, (23, until full) pai!? % The a"ount of FIVE T/OBS#ND PESOS 6PA,''' ''7 as an! for attorne)Is fees? an! 9 The costs of the suit The -Br$ent Motion To DissolveL0ift preli"inar) #ttach"ent- !ate! March (', (23& file! b) !efen!ant is DENIED for bein$ "oot an! aca!e"ic SO ORDERED - , Petitioner appeale! to the Court of #ppeals but respon!ent Court affir"e! the trial courtIs .u!$"ent ConseDuentl), petitioner file! this petition 1here she "a;es the follo1in$ assi$n"ent of errors? to 1it@ -I T/E RESPONDENT COBRT ERRED IN /O0DIN+ T/#T T/E CONTR#CTB#0 RE0#TIONS/IP 4ET<EEN PETITIONER #ND PRIV#TE RESPONDENT <#S C#RRI#+E OF +OODS #ND NOT 0E#SE OF C#R+O TRBCJ II +R#NTIN+, EM +R#TI# #R+BMENTI, T/#T T/E FINDIN+ OF T/E RESPONDENT COBRT T/#T T/E CONTR#CTB#0 RE0#TIONS/IP 4ET<EEN PETITIONER #ND PRIV#TE RESPONDENT <#S C#RRI#+E OF +OODS IS CORRECT, NEVERT/E0ESS,

IT ERRED IN FINDIN+ PETITIONER 0I#40E T/EREBNDER 4EC#BSE T/E 0OSS OF T/E C#R+O <#S DBE TO FORCE M#=EBRE, N#ME0C, /I=#CJIN+ III T/E RESPONDENT COBRT ERRED IN #FFIRMIN+ T/E FINDIN+ OF T/E TRI#0 COBRT T/#T PETITIONERIS MOTION TO DISSO0VEL0IFT T/E <RIT OF PRE0IMIN#RC #TT#C/MENT /#S 4EEN RENDERED MOOT #ND #C#DEMIC 4C T/E DECISION OF T/E MERITS OF T/E C#SE - & The petition presents the follo1in$ issues for resolution@ 6(7 1as petitioner a co""on carrierE? an! 6%7 1as the hi.ac;in$ referre! to a force "a.eureE The Court of #ppeals, in hol!in$ that petitioner 1as a co""on carrier, foun! that she a!"itte! in her ans1er that she !i! business un!er the na"e # M 4ascos Truc;in$ an! that sai! a!"ission !ispense! 1ith the presentation b) private respon!ent, Ro!olfo Cipriano, of proofs that petitioner 1as a co""on carrier The respon!ent Court also a!opte! in toto the trial courtIs !ecision that petitioner 1as a co""on carrier, Moreover, both courts appreciate! the follo1in$ pieces of evi!ence as in!icators that petitioner 1as a co""on carrier@ the fact that the truc; !river of petitioner, Ma5i"o San$la), receive! the car$o consistin$ of 8'' ba$s of so)a bean "eal as evi!ence! b) a car$o receipt si$ne! b) Ma5i"o San$la)? the fact that the truc; helper, =uanito Mor!en, 1as also an e"plo)ee of petitioner? an! the fact that control of the car$o 1as place! in petitionerIs care In !isputin$ the conclusion of the trial an! appellate courts that petitioner 1as a co""on carrier, she alle$e! in this petition that the contract bet1een her an! Ro!olfo # Cipriano, representin$ CIPTR#DE, 1as lease of the truc; She cite! as evi!ence certain affi!avits 1hich referre! to the contract as -lease- These affi!avits 1ere "a!e b) =esus 4ascos 3 an! b) petitioner herself 2 She further averre! that =esus 4ascos confir"e! in his testi"on) his state"ent that the contract 1as a lease contract (' She also state! that@ she 1as not caterin$ to the $eneral public Thus, in her ans1er to the a"en!e! co"plaint, she sai! that she !oes business un!er the sa"e st)le of # M 4ascos Truc;in$, offerin$ her truc;s for lease to those 1ho have car$o to "ove, not to the $eneral public but to a fe1 custo"ers onl) in vie1 of the fact that it is onl) a s"all business (( <e a$ree 1ith the respon!ent Court in its fin!in$ that petitioner is a co""on carrier #rticle (&9% of the Civil Co!e !efines a co""on carrier as -6a7 person, corporation or fir", or association en$a$e! in the business of carr)in$ or transportin$ passen$ers or $oo!s or both, b) lan!, 1ater or air, for co"pensation, offerin$ their services to the public - The test to !eter"ine a co""on carrier is -1hether the $iven un!erta;in$ is a part of the business en$a$e! in b) the carrier 1hich he has hel! out to the $eneral public as his occupation rather than the Duantit) or e5tent of the business transacte! - (% In this case, petitioner herself has "a!e the a!"ission that she 1as in the truc;in$ business, offerin$ her truc;s to those 1ith car$o to "ove =u!icial a!"issions are conclusive an! no evi!ence is reDuire! to prove the sa"e (9 4ut petitioner ar$ues that there 1as onl) a contract of lease because the) offer their services onl) to a select $roup of people an! because the private respon!ents, plaintiffs in the lo1er court, !i!

not ob.ect to the presentation of affi!avits b) petitioner 1here the transaction 1as referre! to as a lease contract Re$ar!in$ the first contention, the hol!in$ of the Court in De +u>"an vs Court of #ppeals (8 is instructive In referrin$ to #rticle (&9% of the Civil Co!e, it hel! thus@ -The above article "a;es no !istinction bet1een one 1hose principal business activit) is the carr)in$ of persons or $oo!s or both, an! one 1ho !oes such carr)in$ onl) as an ancillar) activit) 6in local i!io", as a -si!eline-7 #rticle (&9% also carefull) avoi!s "a;in$ an) !istinction bet1een a person or enterprise offerin$ transportation service on a re$ular or sche!ule! basis an! one offerin$ such service on an occasional, episo!ic or unsche!ule! basis Neither !oes #rticle (&9% !istin$uish bet1een a carrier offerin$ its services to the -$eneral public,- i e , the $eneral co""unit) or population, an! one 1ho offers services or solicits business onl) fro" a narro1 se$"ent of the $eneral population <e thin; that #rticle (&9% !eliberatel) refraine! fro" "a;in$ such !istinctions Re$ar!in$ the affi!avits presente! b) petitioner to the court, both the trial an! appellate courts have !is"isse! the" as self*servin$ an! petitioner contests the conclusion <e are boun! b) the appellate courtIs factual conclusions Cet, $rantin$ that the sai! evi!ence 1ere not self*servin$, the sa"e 1ere not sufficient to prove that the contract 1as one of lease It "ust be un!erstoo! that a contract is 1hat the la1 !efines it to be an! not 1hat it is calle! b) the contractin$ parties (A Further"ore, petitioner presente! no other proof of the e5istence of the contract of lease /e 1ho alle$es a fact has the bur!en of provin$ it (, 0i;e1ise, <e affir" the hol!in$ of the respon!ent court that the loss of the $oo!s 1as not !ue to force "a.eure Co""on carriers are obli$e! to observe e5traor!inar) !ili$ence in the vi$ilance over the $oo!s transporte! b) the" (& #ccor!in$l), the) are presu"e! to have been at fault or to have acte! ne$li$entl) if the $oo!s are lost, !estro)e! or !eteriorate! (3 There are ver) fe1 instances 1hen the presu"ption of ne$li$ence !oes not attach an! these instances are enu"erate! in #rticle (&98 (2 In those cases 1here the presu"ption is applie!, the co""on carrier "ust prove that it e5ercise! e5traor!inar) !ili$ence in or!er to overco"e the presu"ption In this case, petitioner alle$e! that hi.ac;in$ constitute! force "a.eure 1hich e5culpate! her fro" liabilit) for the loss of the car$o In De +u>"an vs Court of #ppeals, %' the Court hel! that hi.ac;in$, not bein$ inclu!e! in the provisions of #rticle (&98, "ust be !ealt 1ith un!er the provisions of #rticle (&9A an! thus, the co""on carrier is presu"e! to have been at fault or ne$li$ent To e5culpate the carrier fro" liabilit) arisin$ fro" hi.ac;in$, he "ust prove that the robbers or the hi.ac;ers acte! 1ith $rave or irresistible threat, violence, or force This is in accor!ance 1ith #rticle (&8A of the Civil Co!e 1hich provi!es@ -#rt (&8A #n) of the follo1in$ or si"ilar stipulations shall be consi!ere! unreasonable, un.ust an! contrar) to public polic)? 555 555 555

6,7 That the co""on carrierIs liabilit) for acts co""itte! b) thieves, or of robbers 1ho !o not act 1ith $rave or irresistible threat, violences or force, is !ispense! 1ith or !i"inishe!?In the sa"e case, %( the Supre"e Court also hel! that@ -Bn!er #rticle (&8A 6,7 above, a co""on carrier is hel! responsible G an! 1ill not be allo1e! to !ivest or to !i"inish such responsibilit) G even for acts of stran$ers li;e thieves or robbers e5cept 1here such thieves or robbers in fact acte! 1ith $rave or irresistible threat, violence or force <e believe an! so hol! that the li"its of the !ut) of e5traor!inar) !ili$ence in the vi$ilance over the $oo!s carrie! are reache! 1here the $oo!s are lost as a result of a robber) 1hich is atten!e! b) -$rave or irresistible threat, violence or force To establish $rave an! irresistible force, petitioner presente! her accusator) affi!avit, %% =esus 4ascosI affi!avit, %9 an! =uanito Mor!enIs %8 -Sala)sa)- /o1ever, both the trial court an! the Court of #ppeals have conclu!e! that these affi!avits 1ere not enou$h to overco"e the presu"ption PetitionerIs affi!avit about the hi.ac;in$ 1as base! on 1hat ha! been tol! her b) =uanito Mor!en It 1as not a first*han! account <hile it ha! been a!"itte! in court for lac; of ob.ection on the part of private respon!ent, the respon!ent Court ha! !iscretion in assi$nin$ 1ei$ht to such evi!ence <e are boun! b) the conclusion of the appellate court In a petition for revie1 on certiorari, <e are not to !eter"ine the probative value of evi!ence but to resolve Duestions of la1 Secon!l), the affi!avit of =esus 4ascos !i! not !1ell on ho1 the hi.ac;in$ too; place Thir!l), 1hile the affi!avit of =uanito Mor!en, the truc; helper in the hi.ac;e! truc;, 1as presente! as evi!ence in court, he hi"self 1as a 1itness as coul! be $leane! fro" the contents of the petition #ffi!avits are not consi!ere! the best evi!ence if the affiants are available as 1itnesses %A The subseDuent filin$ of the infor"ation for carnappin$ an! robber) a$ainst the accuse! na"e! in sai! affi!avits !i! not necessaril) "ean that the contents of the affi!avits 1ere true because the) 1ere )et to be !eter"ine! in the trial of the cri"inal cases The presu"ption of ne$li$ence 1as raise! a$ainst petitioner It 1as petitionerIs bur!en to overco"e it Thus, contrar) to her assertion, private respon!ent nee! not intro!uce an) evi!ence to prove her ne$li$ence /er o1n failure to a!!uce sufficient proof of e5traor!inar) !ili$ence "a!e the presu"ption conclusive a$ainst her /avin$ affir"e! the fin!in$s of the respon!ent Court on the substantial issues involve!, <e fin! no reason to !isturb the conclusion that the "otion to liftL!issolve the 1rit of preli"inar) attach"ent has been ren!ere! "oot an! aca!e"ic b) the !ecision on the "erits In the li$ht of the fore$oin$ anal)sis, it is Our opinion that the petitionerIs clai" cannot be sustaine! The petition is DISMISSED an! the !ecision of the Court of #ppeals is hereb) #FFIRMED SO ORDERED Narvasa, C = , Pa!illa, Re$ala!o an! Nocon, == , concur

T! R% % ' S ON

SPOUSES %"NTE CRU5 a01 LEONOR" CRU5, Pe+(+(o0er),

G.R. No. 186312

Present@

C#RPIO MOR#0ES, J., Chairperson, 4RION, 6 2er)u) 6 4ERS#MIN, #4#D,K an! VI00#R#M#, =R , JJ. SUN !OL %"#S, NC., Re)/o01e0+. Pro"ul$ate!@

=une %2, %'('

5************************************************* 5

%EC S ON

C"RP O MOR"LES, J.7

Spouses Dante an! 0eonora Cru> 6petitioners7 lo!$e! a Co"plaint on =anuar) %A, %''((O(P a$ainst Sun /oli!a)s, Inc 6respon!ent7 1ith the Re$ional Trial Court 6RTC7 of Pasi$ Cit) for !a"a$es arisin$ fro" the !eath of their son Ruelito C Cru> 6Ruelito7 1ho perishe! 1ith his 1ife on Septe"ber ((, %''' on boar! the boat M/B Coco Beach III that capsi>e! en route to 4atan$as fro" Puerto +alera, Oriental Min!oro 1here the couple ha! sta)e! at Coco 4each Islan! Resort 6Resort7 o1ne! an! operate! b) respon!ent

The sta) of the ne1l) 1e! Ruelito an! his 1ife at the Resort fro" Septe"ber 2 to ((, %''' 1as b) virtue of a tour pac;a$e*contract 1ith respon!ent that inclu!e! transportation to an! fro" the Resort an! the point of !eparture in 4atan$as

Mi$uel C Matute 6Matute7,%O%P a scuba !ivin$ instructor an! one of the survivors, $ave his account of the inci!ent that le! to the filin$ of the co"plaint as follo1s@
1 2

Matute sta)e! at the Resort fro" Septe"ber 3 to ((, %'''

/e 1as

ori$inall) sche!ule! to leave the Resort in the afternoon of Septe"ber (', %''', but 1as a!vise! to sta) for another ni$ht because of stron$ 1in!s an! heav) rains

On Septe"ber ((, %''', as it 1as still 1in!), Matute an! %A other Resort $uests inclu!in$ petitioners: son an! his 1ife tre;;e! to the other si!e of the Coco 4each "ountain that 1as sheltere! fro" the 1in! 1here the) boar!e! M/B Coco Beach III, 1hich 1as to ferr) the" to 4atan$as

Shortl) after the boat saile!, it starte! to rain

#s it "ove! farther a1a)

fro" Puerto +alera an! into the open seas, the rain an! 1in! $ot stron$er, causin$ the boat to tilt fro" si!e to si!e an! the captain to step for1ar! to the front, leavin$ the 1heel to one of the cre1 "e"bers

The 1aves $ot "ore un1iel!) #fter $ettin$ hit b) t1o bi$ 1aves 1hich ca"e one after the other, M/B Coco Beach III capsi>e! puttin$ all passen$ers un!er1ater

The passen$ers, 1ho ha! put on their life .ac;ets, stru$$le! to $et out of the boat Bpon seein$ the captain, Matute an! the other passen$ers 1ho reache! the

surface as;e! hi" 1hat the) coul! !o to save the people 1ho 1ere still trappe! un!er the boat The captain replie! QIligtas niyo na lang ang sarili niyoR 6=ust save )ourselves7

/elp ca"e after about 8A "inutes 1hen t1o boats o1ne! b) #sia Divers in Saban$, Puerto +alera passe! b) the capsi>e! M/B Coco Beach III 4oar!e! on those t1o boats 1ere %% persons, consistin$ of (3 passen$ers an! four cre1 "e"bers, 1ho 1ere brou$ht to Pisa Islan! petitioners: son an! his 1ife, !ie! !urin$ the inci!ent Ei$ht passen$ers, inclu!in$

#t the ti"e of Ruelito:s !eath, he 1as %3 )ears ol! an! e"plo)e! as a contractual 1or;er for Mitsui En$ineerin$ F Shipbuil!in$ #rabia, 0t! in Sau!i #rabia, 1ith a basic "onthl) salar) of S2'' 9O9P

Petitioners, b) letter of October %,, %''',8O8P !e"an!e! in!e"nification fro" respon!ent for the !eath of their son in the a"ount of at least P8,''','''

Repl)in$, respon!ent, b) letter !ate! Nove"ber &, %''', AOAP !enie! an) responsibilit) for the inci!ent 1hich it consi!ere! to be a fortuitous event
3 4 5

It

nevertheless offere!, as an act of co""iseration, the a"ount of P(',''' to petitioners upon their si$nin$ of a 1aiver

#s petitioners !ecline! respon!ent:s offer, the) file! the Co"plaint, as earlier reflecte!, alle$in$ that respon!ent, as a co""on carrier, 1as $uilt) of ne$li$ence in allo1in$ M/B Coco Beach III to sail not1ithstan!in$ stor" 1arnin$ bulletins issue! b) the Philippine #t"ospheric, +eoph)sical an! #strono"ical Services #!"inistration 6P#+#S#7 as earl) as A@'' a " of Septe"ber ((, %''' O,P
,

In its #ns1er,&O&P respon!ent !enie! bein$ a co""on carrier, alle$in$ that its boats are not available to the $eneral public as the) onl) ferr) Resort $uests an! cre1 "e"bers Nonetheless, it clai"e! that it e5ercise! the ut"ost !ili$ence in ensurin$ the safet) of its passen$ers? contrar) to petitioners: alle$ation, there 1as no stor" on Septe"ber ((, %''' as the Coast +uar! in fact cleare! the vo)a$e? an! M/B Coco Beach III 1as not fille! to capacit) an! ha! sufficient life .ac;ets for its passen$ers 4) 1a) of Counterclai", respon!ent alle$e! that it is entitle! to an a1ar! for attorne):s fees an! liti$ation e5penses a"ountin$ to not less than P9'','''

Carlos 4onDuin, captain of M/B Coco Beach III, averre! that the Resort custo"aril) reDuires four con!itions to be "et before a boat is allo1e! to sail, to
6 7

1it@ 6(7 the sea is cal", 6%7 there is clearance fro" the Coast +uar!, 697 there is clearance fro" the captain an! 687 there is clearance fro" the Resort:s assistant "ana$er 3O3P /e a!!e! that M/B Coco Beach III "et all four con!itions on Septe"ber ((, %''',2O2P but a subasco or sDuall, characteri>e! b) stron$ 1in!s an! bi$ 1aves, su!!enl) occurre!, causin$ the boat to capsi>e ('O('P

4) Decision of Februar) (,, %''A,((O((P 4ranch %,& of the Pasi$ RTC !is"isse! petitioners: Co"plaint an! respon!ent:s Counterclai"

Petitioners: Motion for Reconsi!eration havin$ been !enie! b) Or!er !ate! Septe"ber %, %''A,(%O(%P the) appeale! to the Court of #ppeals

4) Decision of #u$ust (2, %''3,(9O(9P the appellate court !enie! petitioners: appeal, hol!in$, a"on$ other thin$s, that the trial court correctl) rule! that respon!ent is a private carrier 1hich is onl) reDuire! to observe or!inar) !ili$ence? that respon!ent in fact observe! e5traor!inar) !ili$ence in transportin$ its $uests on boar! M/B Coco Beach III? an! that the pro5i"ate cause of the inci!ent 1as a sDuall, a fortuitous event
8 9 10 11 12 13

Petitioners: Motion for Reconsi!eration havin$ been !enie! b) Resolution !ate! =anuar) (,, %''2,(8O(8P the) file! the present Petition for Revie1 (AO(AP

Petitioners "aintain the position the) too; before the trial court, a!!in$ that respon!ent is a co""on carrier since b) its tour pac;a$e, the transportin$ of its $uests is an inte$ral part of its resort business The) infor" that another !ivision of the appellate court in fact hel! respon!ent liable for !a"a$es to the other survivors of the inci!ent

Bpon the other han!, respon!ent conten!s that petitioners faile! to present evi!ence to prove that it is a co""on carrier? that the Resort:s ferr) services for $uests cannot be consi!ere! as ancillar) to its business as no inco"e is !erive! therefro"? that it e5ercise! e5traor!inar) !ili$ence as sho1n b) the con!itions it ha! i"pose! before allo1in$ M/B Coco Beach III to sail? that the inci!ent 1as cause! b) a fortuitous event 1ithout an) contributor) ne$li$ence on its part? an! that the other case 1herein the appellate court hel! it liable for !a"a$es involve! !ifferent plaintiffs, issues an! evi!ence (,O(,P

The petition is i"presse! 1ith "erit

14 15 16

Petitioners correctl) rel) on De Guzman v. Court of characteri>in$ respon!ent as a co""on carrier

ppeals(&O(&P in

The Civil Co!e !efines Qco""on carriersR in the follo1in$ ter"s@ #rticle (&9% Co""on carriers are persons, corporations, fir"s or associations en$a$e! in the business of carr)in$ or transportin$ passen$ers or $oo!s or both, b) lan!, 1ater, or air for co"pensation, offerin$ their services to the public The above article "a;es 0o 1()+(08+(o0 be+9ee0 o0e 9,o)e /r(08(/a. bu)(0e)) a8+(2(+y () +,e 8arry(0: o* /er)o0) or :oo1) or bo+,, a01 o0e 9,o 1oe) )u8, 8arry(0: o0.y a) a0 a08(..ary a8+(2(+y 6in local i!io", as Qa si!elineR7 "r+(8.e 1432 a.)o 8are*u..y a2o(1) ;a<(0: a0y 1()+(08+(o0 be+9ee0 a person or enterprise offerin$ transportation service on a re:u.ar or )8,e1u.e1 ba)() a01 one offerin$ such service on an o88a)(o0a., e/()o1(8 or u0)8,e1u.e1 ba)() Ne(+,er 1oe) "r+(8.e 1432 1()+(0:u(), be+9ee0 a carrier offerin$ its services to the =:e0era. /ub.(8,> i e , the $eneral co""unit) or population, a01 one 1ho offers services or solicits business onl) fro" a 0arro9 )e:;e0+ o* +,e :e0era. /o/u.a+(o0 <e thin; that #rticle (&99 !eliberatel) refraine! fro" "a;in$ such !istinctions So un!erstoo!, the concept of Qco""on carrierR un!er #rticle (&9% "a) be seen to coinci!e neatl) 1ith the notion of Qpublic service,R un!er the Public Service #ct 6Co""on1ealth #ct No (8(,, as a"en!e!7 1hich at least partiall) supple"ents the la1 on co""on carriers set forth in the Civil Co!e Bn!er Section (9, para$raph 6b7 of the Public Service #ct, Qpublic serviceR inclu!es@ ever) person that no1 or hereafter "a) o1n, operate, "ana$e, or control in the Philippines, for hire or co"pensation, 1ith $eneral or li"ite! clientele, 1hether per"anent, occasional or acci!ental, an! !one for $eneral business purposes, an) co""on carrier, railroa!, street rail1a), traction rail1a), sub1a) "otor vehicle, either for frei$ht or passen$er, or both, 1ith or 1ithout fi5e! route an! 1hatever "a) be its classification, frei$ht or carrier service of an) class, e5press service, stea"boat, or stea"ship line, pontines, ferries an! 1ater craft, en$a$e! in the transportation of passen$ers or frei$ht or both, ship)ar!, "arine repair shop, 1harf or !oc;, ice plant, ice*refri$eration plant, canal, irri$ation s)ste",
17

$as, electric li$ht, heat an! po1er, 1ater suppl) an! po1er petroleu", se1era$e s)ste", 1ire or 1ireless co""unications s)ste"s, 1ire or 1ireless broa!castin$ stations an! other si"ilar (3 public services O(3P 6e"phasis an! un!erscorin$ supplie! 7

In!ee!, respon!ent is a co""on carrier Its ferr) services are so intert1ine! 1ith its "ain business as to be properl) consi!ere! ancillar) thereto its havin$ its o1n Coco Beach boats The constanc) of respon!ent:s ferr) services in its resort operations is un!erscore! b) #n! the tour pac;a$es it offers, 1hich inclu!e the ferr) services, "a) be availe! of b) an)one 1ho can affor! to pa) the sa"e These services are thus available to the public

That respon!ent !oes not char$e a separate fee or fare for its ferr) services is of no "o"ent It 1oul! be i"pru!ent to suppose that it provi!es sai! services at a loss The Court is a1are of the practice of beach resort operators offerin$ tour pac;a$es to factor the transportation fee in arrivin$ at the tour pac;a$e price That $uests 1ho opt not to avail of respon!ent:s ferr) services pa) the sa"e a"ount is li;e1ise inconseDuential overpai! These $uests "a) onl) be !ee"e! to have

#s De Guzman instructs, #rticle (&9% of the Civil Co!e !efinin$ Qco""on carriersR has !eliberatel) refraine! fro" "a;in$ !istinctions on 1hether the carr)in$ of persons or $oo!s is the carrier:s principal business, 1hether it is offere! on a re$ular basis, or 1hether it is offere! to the $eneral public The intent of the la1 is thus to not consi!er such !istinctions Other1ise, there is no tellin$
18

ho1 "an) other !istinctions "a) be concocte! b) unscrupulous business"en en$a$e! in the carr)in$ of persons or $oo!s in or!er to avoi! the le$al obli$ations an! liabilities of co""on carriers

Bn!er the Civil Co!e, co""on carriers, fro" the nature of their business an! for reasons of public polic), are boun! to observe e5traor!inar) !ili$ence for the safet) of the passen$ers transporte! b) the", accor!in$ to all the circu"stances of each case (2O(2P The) are boun! to carr) the passen$ers safel) as far as hu"an care an! foresi$ht can provi!e, usin$ the ut"ost !ili$ence of ver) cautious persons, 1ith !ue re$ar! for all the circu"stances %'O%'P

<hen a passen$er !ies or is in.ure! in the !ischar$e of a contract of carria$e, it is presu"e! that the co""on carrier is at fault or ne$li$ent In fact, there is even no nee! for the court to "a;e an e5press fin!in$ of fault or ne$li$ence on the part of the co""on carrier This statutor) presu"ption "a) onl) be overco"e b) evi!ence that the carrier e5ercise! e5traor!inar) !ili$ence %(O%(P

19 20 21

Respon!ent nevertheless harps on its strict co"pliance 1ith the earlier "entione! con!itions of vo)a$e before it allo1e! M/B Coco Beach III to sail on Septe"ber ((, %''' Respon!ent:s position !oes not i"press

The evi!ence sho1s that P#+#S# issue! %8*hour public 1eather forecasts an! tropical c)clone 1arnin$s for shippin$ on Septe"ber (' an! ((, %''' a!visin$ of tropical !epressions in Northern 0u>on 1hich 1oul! also affect the province of Min!oro %%O%%P 4) the testi"on) of Dr Frisco Nilo, supervisin$ 1eather specialist of P#+#S#, sDualls are to be e5pecte! un!er such 1eather con!ition %9O%9P

# ver) cautious person e5ercisin$ the ut"ost !ili$ence 1oul! thus not brave such stor") 1eather an! put other people:s lives at ris; The e5traor!inar) !ili$ence reDuire! of co""on carriers !e"an!s that the) ta;e care of the $oo!s or lives entruste! to their han!s as if the) 1ere their o1n This respon!ent faile! to !o

22 23

Respon!ent:s insistence that the inci!ent 1as cause! b) a fortuitous event !oes not i"press either

The ele"ents of a -fortuitous event- are@ 6a7 the cause of the unforeseen an! une5pecte! occurrence, or the failure of the !ebtors to co"pl) 1ith their obli$ations, "ust have been in!epen!ent of hu"an 1ill? 6b7 the event that constitute! the caso fortuito "ust have been i"possible to foresee or, if foreseeable, i"possible to avoi!? 6c7 the occurrence "ust have been such as to ren!er it i"possible for the !ebtors to fulfill their obli$ation in a nor"al "anner? an! 6!7 the obli$or "ust have been free fro" an) participation in the a$$ravation of the resultin$ in.ur) to the cre!itor %8O%8P

To full) free a co""on carrier fro" an) liabilit), the fortuitous event "ust have been the /ro?(;a+e a01 o0.y 8au)e of the loss #n! it shoul! have e5ercise! !ue !ili$ence to prevent or "ini"i>e the loss before, !urin$ an! after the occurrence of the fortuitous event %AO%AP

Respon!ent cites the sDuall that occurre! !urin$ the vo)a$e as the fortuitous event that overturne! M/B Coco Beach III #s reflecte! above, ho1ever, the occurrence of sDualls 1as e5pecte! un!er the 1eather con!ition of Septe"ber ((,
24 25

%''' Moreover, evi!ence sho1s that M/B Coco Beach III suffere! en$ine trouble before it capsi>e! an! san; %,O%,P The inci!ent 1as, therefore, not co"pletel) free fro" hu"an intervention

The Court nee! not belabor ho1 respon!ent:s evi!ence li;e1ise fails to !e"onstrate that it e5ercise! !ue !ili$ence to prevent or "ini"i>e the loss before, !urin$ an! after the occurrence of the sDuall

#rticle (&,8%&O%&P vis!"!vis #rticle %%',%3O%3P of the Civil Co!e hol!s the co""on carrier in breach of its contract of carria$e that results in the !eath of a passen$er liable to pa) the follo1in$@ 6(7 in!e"nit) for !eath, 6%7 in!e"nit) for loss of earnin$ capacit) an! 697 "oral !a"a$es

Petitioners are entitle! to in!e"nit) for the !eath of Ruelito 1hich is fi5e! at PA',''' %2O%2P
26 27 28 29

#s for !a"a$es representin$ unearne! inco"e, the for"ula for its co"putation is@

Net Earnin$ Capacit)

life e5pectanc) 5 * reasonable an! necessar)

6$ross annual inco"e livin$ e5penses7

0ife e5pectanc) is !eter"ine! in accor!ance 1ith the for"ula@ % L 9 5 O3' G a$e of !ecease! at the ti"e of !eathP9'O9'P

The first factor, i.e., life e5pectanc), is co"pute! b) appl)in$ the for"ula 6%L9 5 O3' G a$e at !eathP7 a!opte! in the #"erican E5pectanc) Table of Mortalit) or the #ctuarial of Co"bine! E5perience Table of Mortalit) 9(O9(P The secon! factor is co"pute! b) "ultipl)in$ the life e5pectanc) b) the net earnin$s of the !ecease!, i.e., the total earnin$s less e5penses necessar) in the creation of such earnin$s or inco"e an! less livin$ an! other inci!ental e5penses 9% O9%P The loss is not eDuivalent to the entire earnin$s of the !ecease!, but onl) such portion as he 1oul! have use! to support his !epen!ents or heirs /ence, to be !e!ucte! fro" his $ross earnin$s are the necessar) e5penses suppose! to be use! b) the !ecease! for his o1n nee!s 99O99P

30 31 32 33

In co"putin$ the thir! factor necessar) livin$ e5pense, #mith Bell Do$%ell #hipping gency Corp. v. Bor&a98O98P teaches that 1hen, as in this case, there is no sho1in$ that the livin$ e5penses constitute! the s"aller percenta$e of the $ross inco"e, the livin$ e5penses are fi5e! at half of the $ross inco"e

#ppl)in$ the above $ui!elines, the Court !eter"ines RuelitoIs life e5pectanc) as follo1s@

0ife e5pectanc) T %L9 5 O3' * a$e of !ecease! at the ti"e of !eathP %L9 5 O3' * %3P %L9 5 OA%P 0ife e5pectanc) T 9A

Docu"entar) evi!ence sho1s that Ruelito 1as earnin$ a basic "onthl) salar) of S2''9AO9AP 1hich, 1hen converte! to Philippine peso appl)in$ the annual avera$e e5chan$e rate of S( T P88 in %''',9,O9,P a"ounts to P92,,'' net earnin$ capacit) is thus co"pute! as follo1s@ Ruelito:s

34 35 36

Net Earnin$ Capacit) T life e5pectanc) 5 6$ross annual inco"e * reasonable an! necessar) livin$ e5penses7

T 9A 5 6P8&A,%'' * P%9&,,''7 T 9A 5 6P%9&,,''7

Net Earnin$ Capacit) T P3,9(,,'''

Respectin$ the a1ar! of "oral !a"a$es, since respon!ent co""on carrier:s breach of contract of carria$e resulte! in the !eath of petitioners: son, follo1in$ #rticle (&,8 vis!"!vis #rticle %%', of the Civil Co!e, petitioners are entitle! to "oral !a"a$es

Since respon!ent faile! to prove that it e5ercise! the e5traor!inar) !ili$ence reDuire! of co""on carriers, it is presu"e! to have acte! rec;lessl), thus 1arrantin$ the a1ar! too of e5e"plar) !a"a$es, 1hich are $rante! in contractual obli$ations if the !efen!ant acte! in a 1anton, frau!ulent, rec;less, oppressive or "alevolent "anner 9&O9&P

37

Bn!er the circu"stances, it is reasonable to a1ar! petitioners the a"ount of P('',''' as "oral !a"a$es an! P('',''' as e5e"plar) !a"a$es 93O93P

Pursuant to #rticle %%'392O92P of the Civil Co!e, attorne)Is fees "a) also be a1ar!e! 1here e5e"plar) !a"a$es are a1ar!e! The Court fin!s that ('N of the total a"ount a!.u!$e! a$ainst respon!ent is reasonable for the purpose

Finall), 'astern #hipping (ines, Inc. v. Court of ppeals 8'O8'P teaches that 1hen an obli$ation, re$ar!less of its source, i.e., la1, contracts, Duasi*contracts, !elicts or Duasi*!elicts is breache!, the contravenor can be hel! liable for pa)"ent of interest in the concept of actual an! co"pensator) !a"a$es, sub.ect to the follo1in$ rules, to 1it G

( <hen the obli$ation is breache!, an! it consists in the pa)"ent of a su" of "one), i e , a loan or forbearance of "one), the interest !ue shoul! be that 1hich "a) have been stipulate! in 1ritin$ Further"ore, the interest !ue shall itself earn le$al interest fro" the ti"e it is .u!iciall) !e"an!e! In the absence of stipulation, the rate of interest shall be (%N per annu" to be co"pute! fro" !efault, i e , fro" .u!icial or e5tra.u!icial !e"an! un!er an! sub.ect to the provisions of #rticle ((,2 of the Civil Co!e % <hen an obli$ation, not constitutin$ a loan or forbearance of "one), is breache!, an interest on the a"ount of !a"a$es a1ar!e! "a) be
38 39 40

i"pose! at the !iscretion of the court at the rate of ,N per annu" No interest, ho1ever, shall be a!.u!$e! on unliDui!ate! clai"s or !a"a$es e5cept 1hen or until the !e"an! can be establishe! 1ith reasonable certaint) #ccor!in$l), 1here the !e"an! is establishe! 1ith reasonable certaint), the interest shall be$in to run fro" the ti"e the clai" is "a!e .u!iciall) or e5tra.u!iciall) 6#rt ((,2, Civil Co!e7 but 1hen such certaint) cannot be so reasonabl) establishe! at the ti"e the !e"an! is "a!e, the interest shall be$in to run onl) fro" the !ate the .u!$"ent of the court is "a!e 6at 1hich ti"e the Duantification of !a"a$es "a) be !ee"e! to have been reasonabl) ascertaine!7 The actual base for the co"putation of le$al interest shall, in an) case, be on the a"ount finall) a!.u!$e! 9 <hen the .u!$"ent of the court a1ar!in$ a su" of "one) beco"es final an! e5ecutor), the rate of le$al interest, 1hether the case falls un!er para$raph ( or para$raph %, above, shall be (%N per annu" fro" such finalit) until its satisfaction, this interi" perio! bein$ !ee"e! to be b) then an eDuivalent to a forbearance of cre!it 6e"phasis supplie!7

Since the a"ounts pa)able b) respon!ent have been !eter"ine! 1ith certaint) onl) in the present petition, the interest !ue shall be co"pute! upon the finalit) of this !ecision at the rate of (%N per annu" until satisfaction, in accor!ance 1ith para$raph nu"ber 9 of the i""e!iatel) cite! $ui!eline in 'aster #hipping (ines, Inc.

-!EREFORE, the Court of #ppeals Decision of #u$ust (2, %''3 is RE'ERSE% an! SET "S %E =u!$"ent is ren!ere! in favor of petitioners or!erin$ respon!ent to pa) petitioners the follo1in$@ 6(7 PA',''' as in!e"nit) for the !eath of Ruelito Cru>? 6%7 P3,9(,,''' as in!e"nit) for Ruelito:s loss of earnin$ capacit)? 697 P('',''' as "oral !a"a$es? attorne)s fees? an! 6,7 the costs of suit 687 P('',''' as e5e"plar) !a"a$es? 6A7 ('N of the total a"ount a!.u!$e! a$ainst respon!ent as

The total a"ount a!.u!$e! a$ainst respon!ent shall earn interest at the rate of (%N per annu" co"pute! fro" the finalit) of this !ecision until full pa)"ent

SO ORDERED