passengers.
The decision of the Court of Appeals was, affirmed, with the
SECOND DIVISION
[G.R. No. 122039. May 31, 2000.]
VICENTE CALALAS, petitioner, vs. COURT OF
APPEALS, ELIZA JUJEURCHE SUNGA and
FRANCISCO SALVA, respondents.
Leo B. Diocos for petitioner.
Enrique S. Empleo for E.J. Sunga.
Eduardo T. Sedillo for F. Salva.
SYNOPSIS
Sunga filed a complaint for damages against Calalas, alleging violation of the
contract of carriage by the former in failing to exercise the diligence required of him
as a common carrier. Calalas, on the other hand, filed a third-party complaint against
Francisco Salva, the owner of the Isuzu truck that bumped their passenger jeepney.
The lower court rendered judgment against Salva as third-party defendant and
absolved Calalas of liability, holding that it was the driver of the Isuzu truck who
was responsible for the accident. It took cognizance of another case (Civil Case No.
3490), filed by Calalas against Salva and Verena for quasi-delict, in which Branch 37
of the same court held Salva and his driver Verena jointly liable to Calalas for the
damage to his jeepney. On appeal, the Court of Appeals reversed the ruling of the
lower court on the ground that Sunga's cause of action was based on a contract of
carriage, not quasi-delict, and that the common carrier failed to exercise the diligence
required under the Civil Code. The appellate court dismissed the third-party
complaint against Salva and adjudged Calalas liable for damages to Sunga. Hence,
this petition.
It is immaterial that the proximate cause of the collision between the jeepney and the
truck was the negligence of the truck driver. The doctrine of proximate cause is
applicable only in actions for quasi-delict, not in actions involving breach of
contract. In the case at bar, upon the happening of the accident, the presumption of
negligence at once arose, and it became the duty of petitioner to prove that he had
observed extraordinary diligence in the care of his passengers. The fact that Sunga
was seated in an "extension seat" placed her in a peril greater than that to which the
other passengers were exposed. Therefore, not only was petitioner unable to
overcome the presumption of negligence imposed on him for the injury sustained by
Sunga, but also, the evidence showed he was actually negligent in transporting
modification that the award of moral damages was deleted.
SYLLABUS
1. CIVIL LAW; TORTS AND DAMAGES; QUASI-DELICT AND BREACH OF
CONTRACT; DISTINGUISHED; CASE AT BAR. — The issue in Civil Case No.
3490 was whether Salva and his driver Verena were liable for quasi-delict for the
damage caused to petitioner's jeepney. On the other hand, the issue in this case is
whether petitioner is liable on his contract of carriage. The first, quasi-delict, also
known as culpa aquiliana or culpa extra contractual, has as its source the negligence
of the tortfeasor. The second, breach of contract or culpa contractual, is premised
upon the negligence in the performance of a contractual obligation. Consequently,
in quasi-delict, the negligence or fault should be clearly established because it is the
basis of the action, whereas in breach of contract, the action can be prosecuted
merely by proving the existence of the contract and the fact that the obligor, in this
case the common carrier, failed to transport his passenger safely to his destination. In
case of death or injuries to passengers, Art. 1756 of the Civil Code provides that
common carriers are presumed to have been at fault or to have acted negligently
unless they prove that they observed extraordinary diligence as defined in Arts. 1733
and 1755 of the Code. This provision necessarily shifts to the common carrier the
burden of proof.
2. ID.; ID.; ID.; DOCTRINE OF PROXIMATE CAUSE; NOT APPLICABLE IN
ACTIONS INVOLVING BREACH OF CONTRACT; RATIONALE. — The
doctrine of proximate cause is applicable only in actions for quasi-delict, not in
actions involving breach of contract. The doctrine is a device for imputing liability to
a person where there is no relation between him and another party. In such a case,
the obligation is created by law itself. But, where there is a pre-existing contractual
relation between the parties, it is the parties themselves who create the obligation,
and the function of the law is merely to regulate the relation thus created. Insofar as
contracts of carriage are concerned, some aspects regulated by the Civil Code are
those respecting the diligence required of common carriers with regard to the safety
of passengers as well as the presumption of negligence in cases of death or injury to
passengers.
3. ID.; ID.; ID.; CASO FORTUITO; DEFINED; REQUIREMENTS THEREOF. —
A caso fortuito is an event which could not be foreseen, or which, though foreseen,
was inevitable. This requires that the following requirements be present: (a) the
cause of the breach is independent of the debtor's will; (b) the event is unforeseeable
or unavoidable; (c) the event is such as to render it impossible for the debtor to fulfill
his obligation in a normal manner, and (d) the debtor did not take part in causing the
injury to the creditor. Petitioner should have foreseen the danger of parking his
jeepney with its body protruding two meters into the highway.
4. ID.; DAMAGES; MORAL DAMAGES; WHEN IT MAY BE RECOVERED. —
As a general rule, moral damages are not recoverable in actions for damages
predicated on a breach of contract for it is not one of the items enumerated under Art.
2219 of the Civil Code. As an exception, such damages are recoverable: (1) in cases
in which the mishap results in the death of a passenger, as provided in Art. 1764, in
relation to Art. 2206 (3) of the Civil Code; and (2) in the cases in which the carrier is
guilty of fraud or bad faith, as provided in Art. 2220. SCDaET
DECISION
MENDOZA, J p:
This is a petition for review on certiorari of the decision 1 of the Court of Appeals,
dated March 31, 1991, reversing the contrary decision of the Regional Trial Court,
Branch 36, Dumaguete City, and awarding damages instead to private respondent
Eliza Jujeurche Sunga as plaintiff in an action for breach of contract of
carriage. prLL
The facts, as found by the Court of Appeals, are as follows:
At 10 o'clock in the morning of August 23, 1989, private respondent Eliza Jujeurche
G. Sunga, then a college freshman majoring in Physical Education at the Siliman
University, took a passenger jeepney owned and operated by petitioner Vicente
Calalas. As the jeepney was filled to capacity of about 24 passengers, Sunga was
given by the conductor an "extension seat," a wooden stool at the back of the door at
the rear end of the vehicle.
On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a
passenger off. As she was seated at the rear of the vehicle, Sunga gave way to the
outgoing passenger. Just as she was doing so, an Isuzu truck driven by Iglecerio
Verena and owned by Francisco Salva bumped the left rear portion of the jeepney.
As a result, Sunga was injured. She sustained a fracture of the "distal third of the left
tibia-fibula with severe necrosis of the underlying skin." Closed reduction of the
fracture, long leg circular casting, and case wedging were done under sedation. Her
confinement in the hospital lasted from August 23 to September 7, 1989. Her
attending physician, Dr. Danilo V. Oligario, an orthopedic surgeon, certified she
would remain on a cast for a period of three months and would have to ambulate in
crutches during said period. dctai
On October 9, 1989, Sunga filed a complaint for damages against Calalas, alleging
violation of the contract of carriage by the former in failing to exercise the diligence
required of him as a common carrier. Calalas, on the other hand, filed a third-party
complaint against Francisco Salva, the owner of the Isuzu truck.
The lower court rendered judgment, against Salva as third-party defendant and
absolved Calalas of liability, holding that it was the driver of the Isuzu truck who
was responsible for the accident. It took cognizance of another case (Civil Case No.
3490), filed by Calalas against Salva and Verena, for quasi-delict, in which Branch
37 of the same court held Salva and his driver Verena jointly liable to Calalas for the
damage to his jeepney.
On appeal to the Court of Appeals, the ruling of the lower court was reversed on the
ground that Sunga's cause of action was based on a contract of carriage, not quasi-
delict, and that the common carrier failed to exercise the diligence required under the
Civil Code. The appellate court dismissed the third-party complaint against Salva
and adjudged Calalas liable for damages to Sunga. The dispositive portion of its
decision reads:
WHEREFORE, the decision appealed from is hereby
REVERSED and SET ASIDE, and another one is entered
ordering defendant-appellee Vicente Calalas to pay plaintiff-
appellant:
(1) P50,000.00 as actual and compensatory damages;
(2) P50,000.00 as moral damages;
(3) P10,000.00 as attorney's fees; and
(4) P1,000.00 as expenses of litigation; and
(5) to pay the costs.
SO ORDERED.
Hence, this petition. Petitioner contends that the ruling in Civil Case No. 3490 that
the negligence of Verena was the proximate cause of the accident negates his
liability and that to rule otherwise would be to make the common carrier an insurer
of the safety of its passengers. He contends that the bumping of the jeepney by the
truck owned by Salva was a caso fortuito. Petitioner further assails the award of
moral damages to Sunga on the ground that it is not supported by evidence. prLL
The petition has no merit.
The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the
driver and the owner of the truck liable for quasi-delict ignores the fact that she was
never a party to that case and, therefore, the principle of res judicata does not apply.
Nor are the issues in Civil Case No. 3490 and in the present case the same. The issue
in Civil Case No. 3490 was whether Salva and his driver Verena were liable
forquasi-delict for the damage caused to petitioner's jeepney. On the other hand, the
issue in this case is whether petitioner is liable on his contract of carriage. The
first,quasi-delict, also known as culpa aquiliana or culpa extra contractual, has as its
source the negligence of the tortfeasor. The second, breach of contract or culpa
contractual, is premised upon the negligence in the performance of a contractual
obligation.
Consequently, in quasi-delict, the negligence or fault should be clearly established
because it is the basis of the action, whereas in breach of contract, the action can be
prosecuted merely by proving the existence of the contract and the fact that the
obligor, in this case the common carrier, failed to transport his passenger safely to
his destination. 2 In case of death or injuries to passengers, Art. 1756 of the Civil
Code provides that common carriers are presumed to have been at fault or to have
acted negligently unless they prove that they observed extraordinary diligence as
defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the
common carrier the burden of proof.
There is, thus, no basis for the contention that the ruling in Civil Case No. 3490,
finding Salva and his driver Verena liable for the damage to petitioner's jeepney,
should be binding on Sunga. It is immaterial that the proximate cause of the collision
between the jeepney and the truck was the negligence of the truck driver. The
doctrine of proximate cause is applicable only in actions for quasi-delict, not in
actions involving breach of contract. The doctrine is a device for imputing liability to
a person where there is no relation between him and another party. In such a case,
the obligation is created by law itself. But, where there is a pre-existing contractual
relation between the parties, it is the parties themselves who create the obligation,
and the function of the law is merely to regulate the relation thus created. Insofar as
contracts of carriage are concerned, some aspects regulated by the Civil Code are
those respecting the diligence required of common carriers with regard to the safety
of passengers as well as the presumption of negligence in cases of death or injury to
passengers. It provides: llcd
ARTICLE 1733. Common carriers, from the nature of their
business and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to all
the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is
further expressed in Articles 1734, 1735, and 1746, Nos. 5, 6,
and 7, while the extraordinary diligence for the safety of the
passengers is further set forth in Articles 1755 and 1756. LLjur
ARTICLE 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due
regard for all the circumstances.
ARTICLE 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence as prescribed by Articles 1733 and 1755.
In the case at bar, upon the happening of the accident, the presumption of negligence
at once arose, and it became the duty of petitioner to prove that he had to observe
extraordinary diligence in the care of his passengers.
Now, did the driver of jeepney carry Sunga "safely as far as human care and
foresight could provide, using the utmost diligence of very cautious persons, with
due regard for all the circumstances" as required by Art. 1755? We do not think so.
Several factors militate against petitioner's contention.
First, as found by the Court of Appeals, the jeepney was not properly parked, its rear
portion being exposed about two meters from the broad shoulders of the highway,
and facing the middle of the highway in a diagonal angle. This is a violation of
the R.A. No. 4136, as amended, or the Land Transportation and Traffic Code, which
provides:
SECTION 54. Obstruction of Traffic. — No person shall drive
his motor vehicle in such a manner as to obstruct or impede the
passage of any vehicle, nor, while discharging or taking on
passengers or loading or unloading freight, obstruct the free
passage of other vehicles on the highway. LLpr
Second, it is undisputed that petitioner's driver took in more passengers than the
allowed seating capacity of the jeepney, a violation of §32(a) of the same law. It
provides:
Exceeding registered capacity. — No person operating any
motor vehicle shall allow more passengers or more freight or
cargo in his vehicle than its registered capacity.
The fact that Sunga was seated in an "extension seat" placed her in a peril greater
than that to which the other passengers were exposed. Therefore, not only was
petitioner unable to overcome the presumption of negligence imposed on him for the
injury sustained by Sunga, but also, the evidence shows he was actually negligent in
transporting passengers.
We find it hard to give serious thought to petitioner's contention that Sunga's taking
an "extension seat" amounted to an implied assumption of risk. It is akin to arguing
that the injuries to the many victims of the tragedies in our seas should not be
compensated merely because those passengers assumed a greater risk of drowning by
boarding an overloaded ferry. This is also true of petitioner's contention that the
jeepney being bumped while it was improperly parked constitutes caso
fortuito. A caso fortuito is an event which could not be foreseen, or which, though
foreseen, was inevitable. 3 This requires that the following requirements be present:
(a) the cause of the breach is independent of the debtor's will; (b) the event is
unforeseeable or unavoidable; (c) the event is such as to render it impossible for the
debtor to fulfill his obligation in a normal manner, and (d) the debtor did not take
part in causing the injury to the creditor. 4 Petitioner should have foreseen the danger WHEREFORE, the decision of the Court of Appeals, dated March 31, 1995, and its
of parking his jeepney with its body protruding two meters into the highway. dctai resolution, dated September 11, 1995, are AFFIRMED, with the MODIFICATION
that the award of moral damages is DELETED.
Finally, petitioner challenges the award of moral damages alleging that it is
excessive and without basis in law. We find this contention well taken. SO ORDERED.
In awarding moral damages, the Court of Appeals stated: Bellosillo and Buena, JJ., concur.
Plaintiff-appellant at the time of the accident was a first-year Quisumbing and De Leon, Jr., JJ., are on leave.
college student in that school year 1989-1990 at the Siliman
University, majoring in Physical Education. Because of the ||| (Calalas v. Court of Appeals, G.R. No. 122039, [May 31, 2000], 388 PHIL 146-
injury, she was not able to enroll in the second semester of that 155)
school year. She testified that she had no more intention of
continuing with her schooling, because she could not walk and
decided not to pursue her degree, major in Physical Education
"because of my leg which has a defect already."
Plaintiff-appellant likewise testified that even while she was
under confinement, she cried in pain because of her injured left
foot. As a result of her injury, the Orthopedic Surgeon also
certified that she has "residual bowing of the fracture side." She
likewise decided not to further pursue Physical Education as her
major subject, because "my left leg . . . has a defect
already." LLphil
Those are her physical pains and moral sufferings, the inevitable
bedfellows of the injuries that she suffered. Under Article 2219
of the Civil Code, she is entitled to recover moral damages in the
sum of P50,000.00, which is fair, just and reasonable.
As a general rule, moral damages are not recoverable in actions for damages
predicated on a breach of contract for it is not one of the items enumerated under Art.
2219 of the Civil Code. 5 As an exception, such damages are recoverable: (1) in
cases in which the mishap results in the death of a passenger, as provided in Art.
1764, in relation to Art. 2206(3) of the Civil Code; and (2) in the cases in which the
carrier is guilty of fraud or bad faith, as provided in Art. 2220. 6
In this case, there is no legal basis for awarding moral damages since there was no
factual finding by the appellate court that petitioner acted in bad faith in the
performance of the contract of carriage. Sunga's contention that petitioner's
admission in open court that the driver of the jeepney failed to assist her in going to a
nearby hospital cannot be construed as an admission of bad faith. The fact that it was
the driver of the Isuzu truck who took her to the hospital does not imply that
petitioner was utterly indifferent to the plight of his injured passenger. If at all, it is
merely implied recognition by Verena that he was the one at fault for the
accident. LLpr

THIRD DIVISION
[G.R. No. 118664. August 7, 1998.]
JAPAN AIRLINES, petitioner, vs. THE COURT OF
APPEALS, ENRIQUE AGANA, MARIA ANGELA NINA
AGANA, ADALIA B. FRANCISCO and JOSE
MIRANDA, respondents.
SYNOPSIS
Private respondents boarded a Japan Airlines (JAL) flight in San Francisco,
California bound for Manila with an overnight stopover at Narita, Japan at JAL's
expense. Due to the Mt. Pinatubo eruption, private respondents' trip to Manila was
cancelled. JAL rebooked all the Manila-bound passengers and paid for the hotel
expenses for their unexpected overnight stay. The flight of private respondents was
again cancelled due to NAIA's indefinite closure. Since JAL did not defray their
hotel accommodation expenses during their stay in Narita, Japan, private respondents
were forced to pay for their accommodations and meal expenses from their personal
funds.
The private respondents then filed an action for damages against JAL before the
Regional Trial Court of Quezon City. The trial court rendered judgment in favor of
private respondent holding JAL liable for damages. The Court of Appeals affirmed
the decision but lowered the amount of the damages. Hence, this petition.
The Supreme Court held that when JAL was prevented from resuming its flight to
Manila due to the effects of Mt. Pinatubo eruption, whatever losses or damages in
the form of hotel and meal expenses the stranded passengers incurred, cannot be
charged to JAL. The Court, however, did not completely absolved JAL from any
liability. While JAL was no longer required to defray private respondents' living
expenses during their stay in Narita, Japan on account of fortuitous event, JAL had
the duty to make the necessary arrangements to transport private respondents on the
first available connecting flight to Manila. Petitioner JAL reneged on its obligation to
look after the comfort and convenience of its passengers when it declassified private
respondents from "transit passengers" to "new passengers"
The decision is affirmed with modification as to the damages.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; COMMON CARRIERS;
NOT LIABLE TO INJURIES OR DAMAGES CAUSED BY FORTUITOUS
EVENT. — A contract to transport passengers is quite different in kind and degree
from any other contractual relation. It is safe to conclude that it is a relationship
imbued with public interest. Failure on the part of the common carrier to live up to
the exacting standards of care and diligence renders it liable for any damages that
may be sustained by its passengers. However, this is not to say that common carriers
are absolutely responsible for all injuries or damages even if the same were caused
by a fortuitous event. To rule otherwise would render the defense of "force majeure,"
as an exception from any liability, illusory and ineffective. AECIaD
2. ID.; ID.; ID.; ID.; DISRUPTION OF FLIGHT DUE TO ERUPTION OF MT.
PINATUBO, A "FORCE MAJEURE". — Accordingly, there is no question that
when a party is unable to fulfill his obligation because of "force majeure," the
general rule is that he cannot be held liable for damages for non-performance.
Corollarily, when JAL was prevented from resuming its flight to Manila due to the
effects of Mt. Pinatubo eruption, whatever losses or damages in the form of hotel and
meal expenses the stranded passengers incurred, cannot be charged to JAL. Yet it is
undeniable that JAL assumed the hotel expenses of respondents for their unexpected
overnight stay on June 15, 1991. Admittedly, to be stranded for almost a week in a
foreign land was an exasperating experience for the private respondents. To be sure,
they underwent distress and anxiety during their unanticipated stay in Narita, but
their predicament was not due to the fault or negligence of JAL but the closure of
NAIA to international flights. Indeed, to hold JAL, in the absence of bad faith or
negligence, liable for the amenities of its stranded passengers by reason of a
fortuitous event is too much of a burden to assume.
3. ID.; ID.; ID.; ID.; AIRLINE PASSENGERS MUST TAKE RISKS INCIDENT
TO MODE OF TRAVEL. — It has been held that airline passengers must take such
risks incident to the mode of travel. In this regard, adverse weather conditions or
extreme climatic changes are some of the perils involved in air travel, the
consequences of which the passengers must assume or expect. After all, common
carriers are not the insurer of all risks.
4. ID.; ID.; ID.; ID.; PAL CASE (226 SCRA 423) NOT APPLICABLE TO CASE
AT BAR. — The factual background of the PAL case is different from the instant
petition. In that case there was indeed a fortuitous event resulting in the diversion of
the PAL flight. However, the unforeseen diversion was worsened when "private
respondents (passenger) was left at the airport and could not even hitch a ride in a
Ford Fiera loaded with PAL personnel," not to mention the apparent apathy of the
PAL station manager as to the predicament of the stranded passengers. In light of
these circumstances, we held that if the fortuitous event was accompanied by neglect
and malfeasance by the carrier's employees, an action for damages against the carrier
is permissible. Unfortunately, for private respondents, none of these conditions are
present in the instant petition. SDAcaT
5. ID.; ID.; ID.; LIABLE FOR PAYMENT OF NOMINAL DAMAGES FOR
FAILURE TO MAKE ARRANGEMENTS ON THE FIRST AVAILABLE
CONNECTING FLIGHT FOR THE PASSENGERS' FINAL DESTINATION;
CASE AT BAR. — We are not prepared, however, to completely absolve petitioner
JAL from any liability. It must be noted that private respondents bought tickets from
the United States with Manila as their final destination. While JAL was no longer
required to defray private respondents' living expenses during their stay in Narita on
account of the fortuitous event, JAL had the duty to make the necessary
arrangements to transport private respondents on the first available connecting flight
to Manila. Petitioner JAL reneged on its obligation to look after the comfort and
convenience of its passengers when it declassified private respondents from "transit
passengers" to "new passengers" as a result of which private respondents were
obliged to make the necessary arrangements themselves for the next flight to Manila.
Consequently, the award of nominal damages is in order. Nominal damages are
adjudicated in order that a right of a plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized and for the purpose of indemnifying
any loss suffered by him. The court may award nominal damages in every obligation
arising from any source enumerated in Article 1157, or in every case where any
property right has been invaded. Petitioner JAL is ordered to pay each of the private
respondents nominal damages in the sum of P100,000.00 each including attorney's
fees of P50,000.00 plus costs. TICDSc
DECISION
ROMERO, J p:
Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL)
seeking the reversal of the decision of the Court of Appeals, 1 which affirmed with
modification the award of damages made by the trial court in favor of herein private
respondents Enrique Agana, Maria Angela Nina Agana, Adelia Francisco and Jose
Miranda. dctai
On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL 001 in
San Francisco, California bound for Manila. Likewise, on the same day private
respondents Enrique Agana, Maria Angela Nina Agana and Adelia Francisco left
Los Angeles, California for Manila via JAL flight No. JL 061. As an incentive for
traveling on the said airline, both flights were to make an overnight stopover at
Narita, Japan, at the airlines' expense, thereafter proceeding to Manila the following
day.
Upon arrival at Narita, Japan on June 14, 1991, private respondents were billeted at
Hotel Nikko Narita for the night. The next day, private respondents, on the final leg
of their journey, went to the airport to take their flight to Manila However, due to the
Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino International
Airport (NAIA), rendering it inaccessible to airline traffic. Hence, private
respondents' trip to Manila was cancelled indefinitely.
To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-
bound passengers on flight No. 741 due to depart on June 16, 1991 and also paid for
the hotel expenses for their unexpected overnight stay. On June 16, 1991, much to
the dismay of the private respondents, their long anticipated flight to Manila was
again cancelled due to NAIA's indefinite closure. At this point, JAL informed the
private respondents that it would no longer defray their hotel and accommodation
expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991, private
respondents were forced to pay for their accommodations and meal expenses from
their personal funds from June 16 to June 21, 1991. Their unexpected stay in Narita
ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741.
Obviously, still reeling from the experience, private respondents, on July 25, 1991,
commenced an action for damages against JAL before the Regional Trial Court of
Quezon City, Branch 104. 2 To support their claim, private respondents asserted that
JAL failed to live up to its duty to provide care and comfort to its stranded
passengers when it refused to pay for their hotel and accommodation expenses from
June 16 to 21, 1991 at Narita, Japan. In other words, they insisted that JAL was
obligated to shoulder their expenses as long as they were still stranded in Narita. On
the other hand, JAL denied this allegation and averred that airline passengers have
no vested right to these amenities in case a flight is cancelled due to " force
majeure."
On June 18, 1992, the trial court rendered its judgment in favor of private
respondents holding JAL liable for damages, viz.:
"WHEREFORE, judgment is rendered in favor of plaintiffs
ordering the defendant Japan Airlines to pay the plaintiffs
Enrique Agana, Adalia B. Francisco and Maria Angela Nina
Agana the sum of One million Two Hundred forty-six Thousand
Nine Hundred Thirty-Six Pesos (P1,246,936.00) and Jose
Miranda the sum of Three Hundred Twenty Thousand Six
Hundred sixteen and 31/100 (P320,616.31) as actual, moral and
exemplary damages and pay attorney's fees in the amount of
Two Hundred Thousand Pesos (P200,000.00), and to pay the
costs of suit."
Undaunted, JAL appealed the decision before the Court of Appeals, which, however,
with the exception of lowering the damages awarded affirmed the trial court's
finding, 3 thus:
''Thus, the award or moral damages should be as it is hereby
reduced to P200,000.00 for each of the plaintiffs, the exemplary
damages to P300,000.00 and the attorney's fees to P100,000.00
plus the costs.
 WHEREFORE, with the foregoing Modification, the judgment
appealed from is hereby AFFIRMED in all other
respects." LLphil
JAL filed a motion for reconsideration which proved futile and unavailing. 4
Failing in its bid to reconsider the decision, JAL has now filed this instant petition.
The issue to be resolved is whether JAL, as a common carrier has the obligation to
shoulder the hotel and meal expenses of its stranded passengers until they have
reached their final destination, even if the delay were caused by " force majeure."
To begin with, there is no dispute that the Mt. Pinatubo eruption prevented JAL from
proceeding to Manila on schedule. Likewise, private respondents concede that such
event can be considered as " force majeure" since their delayed arrival in Manila was
not imputable to JAL. 5
However, private respondents contend that while JAL cannot be held responsible for
the delayed arrival in Manila, it was nevertheless liable for their living expenses
during their unexpected stay in Narita since airlines have the obligation to ensure the
comfort and convenience of its passengers. While we sympathize with the private
respondents' plight, we are unable to accept this contention.
We are not unmindful of the fact that in a plethora of cases we have consistently
ruled that a contract to transport passengers is quite different in kind and degree from
any other contractual relation. It is safe to conclude that it is a relationship imbued
with public interest. Failure on the part of the common carrier to live up to the
exacting standards of care and diligence renders it liable for any damages that may
be sustained by its passengers. However, this is not to say that common carriers are
absolutely responsible for all injuries or damages even if the same were caused by a
fortuitous event. To rule otherwise would render the defense or " force majeure" as
an exception from any liability, illusory and ineffective.
Accordingly, there is no question that when a party is unable to fulfill his obligation
because of "force majeure," the general rule is that he cannot be held liable for
damages for non-performance. 6 Corollarily, when JAL was prevented from
resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever
losses or damages in the form of hotel and meal expenses the stranded passengers
incurred, cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel
expenses of respondents for their unexpected overnight stay on June 15, 1991.
Admittedly, to be stranded for almost a week in a foreign land was an exasperating
experience for the private respondents. To be sure, they underwent distress and
anxiety during their unanticipated stay in Narita, but their predicament was not due
to the fault or negligence of JAL but the closure of NAIA to international flights.
Indeed, to hold JAL, in the absence of bad faith or negligence, liable for the
amenities of its stranded passengers by reason of a fortuitous event is too much of a
burden to assume.
Furthermore, it has been held that airline passengers must take such risks incident to
the mode of travel. 7 In this regard, adverse weather conditions or extreme climatic
changes are some of the perils involved in air travel, the consequences of which the
passenger must assume or expect. After all, common carriers are not the insurer of
all risks. 8
Paradoxically, the Court of Appeals, despite the presence of "force majeure," still
ruled against JAL relying in our decision in PAL v. Court of Appeals, 9 thus:
"The position taken by PAL in this case clearly illustrates its
failure to grasp the exacting standard required by law.
Undisputably, PAL's diversion of its flight due to inclement
weather was a fortuitous event. Nonetheless, such occurrence
did not terminate PAL's contract with its passengers. Being in
the business of air carriage and the sole one to operate in the
country, PAL is deemed equipped to deal with situations as in
the case at bar. What we said in one case once again must be
stressed, i.e., the relation of carrier and passenger continues until
the latter has been landed at the port of destination and has left
the carrier's premises. Hence, PAL necessarily would still have
to exercise extraordinary diligence in safeguarding the comfort,
convenience and safety of its stranded passengers until they have
reached their final destination. On this score, PAL grossly failed
considering the then ongoing battle between government forces
and Muslim rebels in Cotabato City and the fact that the private
respondent was a stranger to the place."
The reliance is misplaced. The factual background of the PAL case is different from
the instant petition. In that case there was indeed a fortuitous event resulting in the
diversion of the PAL flight. However, the unforeseen diversion was worsened when
"private respondents (passenger) was left at the airport and could not even hitch a
ride in a Ford Fiera loaded with PAL personnel," 10 not to mention the apparent
apathy of the PAL station manager as to the predicament of the stranded
passengers. 11In light of these circumstances, we held that if the fortuitous event was
accompanied by neglect and malfeasance by the carrier's employees, an action for
damages against the carrier is permissible. Unfortunately, for private respondents,
none of these conditions are present in the instant petition. cdasia
We are not prepared, however, to completely absolve petitioner JAL from any
liability. It must be noted that private respondents bought tickets from the United
States with Manila as their final destination. While JAL was no longer required to
defray private respondents' living expenses during their stay in Narita on account of
the fortuitous event, JAL had the duty to make the necessary arrangements to
transport private respondents on the first available connecting flight to Manila.
Petitioner JAL reneged on its obligation to look after the comfort and convenience of
its passengers when it declassified private respondents from "transit passengers" to
"new passengers" as a result of which private respondents were obliged to make the
necessary arrangements themselves for the next flight to Manila. Private respondents
were placed on the waiting list from June 20 to June 24. To assure themselves of a
seat on an available flight, they were compelled to stay in the airport the whole day
of June 22, 1991 and it was only at 8:00 p.m. of the aforesaid date that they were
advised that they could be accommodated in said flight which flew at about 9:00
a.m. the next day.
We are not oblivious to the fact that the cancellation of JAL flights to Manila from
June 15 to June 21, 1991 caused considerable disruption in passenger booking and
reservation. In fact, it would be unreasonable to expect, considering NAIA's closure,
that JAL flight operations would be normal on the days affected. Nevertheless, this
does not excuse JAL from its obligation to make the necessary arrangements to
transport private respondents on its first available flight to Manila. After all, it had a
contract to transport private respondents from the United States to Manila as their
final destination.
Consequently, the award of nominal damages is in order. Nominal damages are
adjudicated in order that a right of a plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized and not for the purpose of
indemnifying any loss suffered by him. 12 The court may award nominal damages in
every obligation arising from any source enumerated in Article 1157, or in every
case where any property right has been invaded. 13
WHEREFORE, in view of the foregoing, the decision of the Court of Appeals dated
December 22, 1993 is hereby MODIFIED. The award of actual moral and exemplary
damages is hereby DELETED. Petitioner JAL is ordered to pay each of the private
respondents nominal damages in the sum of P100,000.00 each including attorney's
fees of P50,000.00 plus costs. LLpr
SO ORDERED.
Narvasa, C .J ., Kapunan and Purisima, JJ ., concur.
||| (Japan Airlines v. Court of Appeals, G.R. No. 118664, [August 7, 1998], 355 PHIL
444-454)

SECOND DIVISION
[G.R. No. 84458. November 6, 1989.]
ABOITIZ SHIPPING CORPORATION, petitioner, vs. HON.
COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C.
VIANA, SPS. ANTONIO VIANA and GORGONIA VIANA,
and PIONEER STEVEDORING
CORPORATION, respondents.
Herenio E. Martinez for petitioner.
M.R. Villaluz Law Office for private respondent.
SYLLABUS
1. COMMERCIAL LAW; COMMON CARRIERS; CARRIER-PASSENGER
RELATIONSHIP; CONTINUES UNTIL PASSENGER HAS BEEN LANDED AT
THE PORT OF DESTINATION AND HAS LEFT VESSEL OWNER'S DOCK OR
PREMISES. — The rule is that the relation of carrier and passenger continues until
the passenger has been landed at the port of destination and has left the vessel owner's
dock or premises. Once created, the relationship will not ordinarily terminate until the
passenger has, after reaching his destination, safely alighted from the carrier's
conveyance or had a reasonable opportunity to leave the carrier's premises. All persons
who remain on the premises a reasonable time after leaving the conveyance are to be
deemed passengers, and what is a reasonable time or a reasonable delay within this
rule is to be determined from all the circumstances, and includes a reasonable time to
see after his baggage and prepare for his departure. The carrier-passenger relationship
is not terminated merely by the fact that the person transported has been carried to his
destination if, for example, such person remains in the carrier's premises to claim his
baggage.
2. ID.; ID.; ID.; EXISTENCE OF A REASONABLE CAUSE AS WILL JUSTIFY
PRESENCE OF VICTIM ON OR NEAR PETITIONER'S VESSEL, A PRIMARY
FACTOR. — It is apparent from the case of La Mallorca vs. Court of Appeals, et. al.
that what prompted the Court to rule as it did in said case is the fact of the passenger's
reasonable presence within the carrier's premises. That reasonableness of time should
be made to depend on the attending circumstances of the case, such as the kind of
common carrier, the nature of its business, the customs of the place, and so forth, and
therefore precludes a consideration of the time element per se without taking into
account such other factors. It is thus of no moment whether in the cited case of La
Mallorca there was no appreciable interregnum for the passenger therein to leave the
carrier's premises whereas in the case at bar, an interval of one (1) hour had elapsed
before the victim met the accident. The primary factor to be considered is the existence
of a reasonable cause as will justify the presence of the victim on or near the
petitioner's vessel. We believe there exists such a justifiable cause.
3. ID.; ID.; ID.; PASSENGERS OF VESSELS ARE AUDITED A LONGER
PERIOD OF TIME TO DISEMBARK FROM SHIP THAN OTHER COMMON
CARRIERS; REASON. — It is of common knowledge that, by the very nature of
petitioner's business as a shipper, the passengers of vessels are allotted a longer period
of time to disembark from the ship than other common carriers such as a passenger
bus. With respect to the bulk of cargoes and the number of passengers it can load, such
vessels are capable of accommodating a bigger volume of both as compared to the
capacity of a regular commuter bus. Consequently, a ship passenger will need at least
an hour as is the usual practice, to disembark from the vessel and claim his baggage
whereas a bus passenger can easily get off the bus and retrieve his luggage in a very
short period of time. Verily, petitioner cannot categorically claim, through the bare
expedient of comparing the period of time entailed in getting the passenger's cargoes,
that the ruling in La Mallorca is inapplicable to the case at bar. On the contrary, if we
are to apply the doctrine enunciated therein to the instant petition, we cannot in reason
doubt that the victim Anacleto Viana was still a passenger at the time of the incident.
When the accident occurred, the victim was in the act of unloading his cargoes, which
he had every right to do, from petitioner's vessel. As earlier stated, a carrier is duty
bound not only to bring its passengers safely to their destination but also to afford them
a reasonable time to claim their baggage.
4. ID.; ID.; ID.; VICTIM RETRIEVING HIS BAGGAGE, DEEMED A
PASSENGER OF CARRIER. — It is not definitely shown that one (1) hour prior to
the incident, the victim had already disembarked from the vessel. Petitioner failed to
prove this. What is clear to us is that at the time the victim was taking his cargoes, the
vessel had already docked an hour earlier. In consonance with common shipping
procedure as to the minimum time of one (1) hour allowed for the passengers to
disembark, it may be presumed that the victim had just gotten off the vessel when he
went to retrieve his baggage. Yet, even if he had already disembarked an hour earlier,
his presence in petitioner's premises was not without cause. The victim had to claim
his baggage which was possible only one (1) hour after the vessel arrived since it was
admittedly standard procedure in the case of petitioner's vessels that the unloading
operations shall start only after that time. Consequently, under the foregoing
circumstances, the victim Anacleto Viana is still deemed a passenger of said carrier at
the time of his tragic death.
5. ID.; ID.; DUTIES THEREOF, CITED. — Common carriers are, from the nature of
their business and for reasons of public policy, bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the passengers
transported by them, according to all the circumstances of each case. More particularly,
a common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due
regard for all the circumstances.
6. ID.; ID.; CONTRACT OF CARRIAGE; DEATH OR INJURY OF PASSENGER
GIVES RISE TO AN ACTION FOR BREACH, PROOF REQUIRED TO PROVE
BREACH. — Where a passenger dies or is injured, the common carrier is presumed
to have been at fault or to have acted negligently. This gives rise to an action for breach
of contract of carriage where all that is required of plaintiff is to prove the existence
of the contract of carriage and its non-performance by the carrier, that is, the failure of
the carrier to carry the passenger safely to his destination, which, in the instant case,
necessarily includes its failure to safeguard its passenger with extraordinary diligence
while such relation subsists.
7. ID.; ID.; ID.; PRESUMPTION OF VESSEL'S NEGLIGENCE; HIGHEST
DEGREE OF CARE AND DILIGENCE REQUIRED. — The presumption is,
therefore, established by law that in case of a passenger's death or injury the operator
of the vessel was at fault or negligent, having failed to exercise extraordinary diligence,
and it is incumbent upon it to rebut the same. This is in consonance with the avowed
policy of the State to afford full protection to the passengers of common carriers which
can be carried out only by imposing a stringent statutory obligation upon the latter.
Concomitantly, this Court has likewise adopted a rigid posture in the application of
the law by exacting the highest degree of care and diligence from common carriers,
bearing utmost in mind the welfare of the passengers who often become hapless
victims of indifferent and profit-oriented carriers. We cannot in reason deny that
petitioner failed to rebut the presumption against it. Under the facts obtaining in the
present case, it cannot be gainsaid that petitioner had inadequately complied with the
required degree of diligence to prevent the accident from happening.
8. ID.; ID.; ID.; EXTRAORDINARY DILIGENCE NOT SHOWN BY
PRECAUTIONARY MEASURES OF PETITIONER. — The evidence does not show
that there was a cordon of drums around the perimeter of the crane, as claimed by
petitioner. It also adverted to the fact that the alleged presence of visible warning signs
in the vicinity was disputable and not indubitably established. Thus, we are not
inclined to accept petitioner's explanation that the victim and other passengers were
sufficiently warned that merely venturing into the area in question was fraught with
serious peril. Definitely, even assuming the existence of the supposed cordon of drums
loosely placed around the unloading area and the guard's admonitions against entry
therein, these were at most insufficient precautions which pale into insignificance if
considered vis-a-vis the gravity of the danger to which the deceased was exposed.
There is no showing that petitioner was extraordinarily diligent in requiring or seeing
to it that said precautionary measures were strictly and actually enforced to subserve
their purpose of preventing entry into the forbidden area. By no stretch of liberal
evaluation can such perfunctory acts approximate the "utmost diligence of very
cautious persons" to be exercised "as far as human care and foresight can provide"
which is required by law of common carriers with respect to their passengers.
9. ID.; ID.; ID.; EVEN IF VICTIM IS CONTRIBUTORILY NEGLIGENT,
PROXIMATE AND DIRECT CAUSE OF VICTIM'S DEATH IS PETITIONER'S
FAILURE TO OBSERVE EXTRAORDINARY DILIGENCE. — While the victim
was admittedly contributorily negligent, still petitioner's aforesaid failure to exercise
extraordinary diligence was the proximate and direct cause of, because it could
definitely have prevented, the former's death. Moreover, in paragraph 5.6 of its petition,
at bar, petitioner has expressly conceded the factual finding of respondent Court of
Appeals that petitioner did not present sufficient evidence in support of its submission
that the deceased Anacleto Viana was guilty of gross negligence. Petitioner cannot
now be heard to claim otherwise.
10. ID.; ID.; NEGLIGENCE; IMPUTATION THEREOF ON PRIVATE
RESPONDENT CORPORATION, NOT PROPER; RATIONALE. — Aboitiz joined
Pioneer in proving the alleged gross negligence of the victim, hence its present
contention that the death of the passenger was due to the negligence of the crane
operator cannot be sustained both on grounds of estoppel and for lack of evidence on
its present theory. Even in its answer filed in the court below it readily alleged that
Pioneer had taken the necessary safeguards insofar as its unloading operations were
concerned, a fact which appears to have been accepted by the plaintiff therein by not
impleading Pioneer as a defendant, and likewise inceptively by Aboitiz by filing its
third-party complaint only after ten (10) months from the institution of the suit against
it. Parenthetically, Pioneer is not within the ambit of the rule on extraordinary
diligence required of, and the corresponding presumption of negligence foisted on,
common carriers like Aboitiz. This, of course, does not detract from what we have said
that no negligence can be imputed to Pioneer but, that on the contrary, the failure of
Aboitiz to exercise extraordinary diligence for the safety of its passenger is the
rationale for our finding on its liability.
DECISION
REGALADO, J p:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of
the decision 1 of respondent Court of Appeals, dated July 29, 1988, the decretal
portion of which reads:
"WHEREFORE, the judgment appealed from as modified by the
order of October 27, 1982, is hereby affirmed with the
modification that appellant Aboitiz Shipping is hereby ordered to
pay plaintiff-appellees the amount of P30,000.00 for the death of
Anacleto Viana; actual damages of P9,800.00; P160,000.00 for
unearned income; P7,200.00 as support for deceased's parents;-
P20,000.00 as moral damages; P10,000.00 as attorney's fees; and
to pay the costs."
The undisputed facts of the case, as found by the court a quo and adopted by
respondent court, are as follows: cdrep
 "The evidence disclosed that on May 11, 1975, Anacleto Viana
boarded the vessel M/V Antonia, owned by defendant, at the port
at San Jose, Occidental Mindoro, bound for Manila, having
purchased a ticket (No. 117392) in the sum of P23.10 (Exh. 'B').
On May 12, 1975, said vessel arrived at Pier 4, North Harbor,
Manila, and the passengers therein disembarked, a gangplank
having been provided connecting the side of the vessel to the pier.
Instead of using said gangplank, Anacleto Viana disembarked on
the third deck which was on the level with the pier. After said
vessel had landed, the Pioneer Stevedoring Corporation took over
the exclusive control of the cargoes loaded on said vessel pursuant
to the Memorandum of Agreement dated July 26, 1975 (Exh. '2')
between the third party defendant Pioneer Stevedoring
Corporation and defendant Aboitiz Shipping Corporation.
"The crane owned by the third party defendant and operated by its
crane operator Alejo Figueroa was placed alongside the vessel and
one (1) hour after the passengers of said vessel had disembarked,
it started operation by unloading the cargoes from said vessel.
While the crane was being operated, Anacleto Viana who had
already disembarked from said vessel obviously remembering
that some of his cargoes were still loaded in the vessel, went back
to the vessel, and it was while he was pointing to the crew of the
said vessel to the place where his cargoes were loaded that the
crane hit him, pinning him between the side of the vessel and the
crane. He was thereafter brought to the hospital where he later
expired three (3) days thereafter, on May 15, 1975, the cause of
his death according to the Death Certificate (Exh. 'C') being
"hypostatic pneumonia secondary to traumatic fracture of the
pubic bone lacerating the urinary bladder" (See also Exh. 'B'). For
his hospitalization, medical, burial and other miscellaneous
expenses, Anacleto's wife, herein plaintiff, spent a total of
P9,800.00 (Exhibits 'E', 'E-1', to 'E-5'). Anacleto Viana who was
only forty (40) years old when he met said fateful accident (Exh.
'E') was in good health. His average annual income as a farmer or
a farm supervisor was 400 cavans of palay annually. His parents,
herein plaintiffs Antonio and Gorgonia Viana, prior to his death
had been recipient of twenty (20) cavans of palay as support or
P120.00 monthly. Because of Anacleto's death, plaintiffs suffered
mental anguish and extreme worry or moral damages. For the
filing of the instant case, they had to hire a lawyer for an agreed
fee of ten thousand (P10,000.00) pesos." 2
Private respondents Vianas filed a complaint 3 for damages against petitioner
corporation (Aboitiz, for brevity) for breach of contract of carriage.
In its answer, 4 Aboitiz denied responsibility contending that at the time of the
accident, the vessel was completely under the control of respondent Pioneer
Stevedoring Corporation (Pioneer, for short) as the exclusive stevedoring contractor
of Aboitiz, which handled the unloading of cargoes from the vessel of Aboitiz. It is
also averred that since the crane operator was not an employee of Aboitiz, the latter
cannot be held liable under the fellow-servant rule. prcd
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint 5 against
Pioneer imputing liability thereto for Anacleto Viana's death as having been allegedly
caused by the negligence of the crane operator who was an employee of Pioneer under
its exclusive control and supervision.
Pioneer, in its answer to the third-party complaint, 6 raised the defenses that Aboitiz
had no cause of action against Pioneer considering that Aboitiz is being sued by the
Vianas for breach of contract of carriage to which Pioneer is not a party; that Pioneer
had observed the diligence of a good father of a family both in the selection and
supervision of its employees as well as in the prevention of damage or injury to anyone
including the victim Anacleto Viana; that Anacleto Viana's gross negligence was the
direct and proximate cause of his death; and that the filing of the third-party complaint
was premature by reason of the pendency of the criminal case for homicide through
reckless imprudence filed against the crane operator, Alejo Figueroa.
In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was ordered to
pay the Vianas for damages incurred, and Pioneer was ordered to reimburse Aboitiz
for whatever amount the latter paid the Vianas. The dispositive portion of said decision
provides:
"WHEREFORE, judgment is hereby rendered in favor of the
plaintiffs:
"(1) ordering defendant Aboitiz Shipping Corporation to pay to
plaintiffs the sum of P12,000.00 for the death of Anacleto Viana;
P9,800.00 as actual damages; P533,200.00 value of the 10,664
cavans of palay computed at P50.00 per cavan; P10,000.00 as
attorney's fees; P5,000.00, value of the 100 cavans of palay as
support for five (5) years for deceased (sic) parents, herein
plaintiffs Antonio and Gorgonia Viana computed at P50.00 per
cavan; P7,200.00 as support for deceased's parents computed at
P120.00 a month for five years pursuant to Art. 2206, Par. 2, of
the Civil Code; P20,000.00 as moral damages, and costs; and
"(2) ordering the third party defendant Pioneer Stevedoring
Corporation to reimburse defendant and third party plaintiff-
Aboitiz Shipping Corporation the said amounts that it is ordered
to pay to herein plaintiffs."
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein they
similarly raised the trial court's failure to declare that Anacleto Viana acted with gross
negligence despite the overwhelming evidence presented in support thereof. In
addition, Aboitiz alleged, in opposition to Pioneer's motion, that under the
memorandum of agreement the liability of Pioneer as contractor is automatic for any
damages or losses whatsoever occasioned by and arising from the operation of its
arrastre and stevedoring service. LLjur
In an order dated October 27, 1982, 8 the trial court absolved Pioneer from liability
for failure of the Vianas and Aboitiz to preponderantly establish a case of negligence
against the crane operator which the court a quo ruled is never presumed, aside from
the fact that the memorandum of agreement supposedly refers only to Pioneer's
liability in case of loss or damage to goods handled by it but not in the case of personal
injuries, and, finally, that Aboitiz cannot properly invoke the fellow-servant rule
simply because its liability stems from a breach of contract of carriage. The dispositive
portion of said order reads:
"WHEREFORE, judgment is hereby modified insofar as third
party defendant Pioneer Stevedoring Corporation is concerned
rendered in favor of the plaintiffs:
"(1) Ordering defendant Aboitiz Shipping Corporation to pay the
plaintiffs the sum of P12,000.00 for the death of Anacleto Viana;
P9,000.00 (sic) as actual damages; P533,200.00 value of the
10,664 cavans of palay computed at P50.00 per cavan; P10,000.00
as attorney's fees; P5,000.00 value of the 100 cavans of palay as
support for five (5) years for deceased's parents, herein plaintiffs
Antonio and Gorgonia Viana, computed at P50.00 per cavan;
P7,200.00 as support for deceased's parents computed at P120.00
a month for five years pursuant to Art. 2206, Par. 2, of the Civil
Code; P20,000.00 as moral damages, and costs; and"
(2) Absolving third-party defendant Pioneer Stevedoring
Corporation for (sic) any liability for the death of Anacleto Viana,
the passenger of M/V Antonia owned by defendant third party
plaintiff Aboitiz Shipping Corporation it appearing that the
negligence of its crane operator has not been established therein."
Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same
to respondent Court of Appeals which affirmed the findings of the trial court except
as to the amount of damages awarded to the Vianas. llcd
Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:
"(A) In holding that the doctrine laid down by this Honorable
Court in La Mallorca vs. Court of Appeals, et al. (17 SCRA 739,
July 27, 1966) is applicable to the case in the face of the
undisputable fact that the factual situation under the La Mallorca
case is radically different from the facts obtaining in this case;
"(B) In holding petitioner liable for damages in the face of the
finding of the court a quo and confirmed by the Honorable
respondent Court of Appeals that the deceased, Anacleto Viana
was guilty of contributory negligence, which, we respectfully
submit, contributory negligence was the proximate cause of his
death; specifically the Honorable respondent Court of Appeals
failed to apply Art. 1762 of the New Civil Code;"
(C) In the alternative assuming the holding of the Honorable
respondent Court of Appeals that petitioner may be legally
condemned to pay damages to the private respondents we
respectfully submit that it committed a reversible error when it
dismissed petitioner's third party complaint against private
respondent Pioneer Stevedoring Corporation instead of
compelling the latter to reimburse the petitioner for whatever
damages it may be compelled to pay to the private respondents
Vianas." 9
At threshold, it is to be observed that both the trial court and respondent Court of
Appeals found the victim Anacleto Viana guilty of contributory negligence, but
holding that it was the negligence of Aboitiz in prematurely turning over the vessel to
the arrastre operator for the unloading of cargoes which was the direct, immediate and
proximate cause of the victim's death.
I. Petitioner contends that since one (1) hour had already elapsed from the time
Anacleto Viana disembarked from the vessel and that he was given more than ample
opportunity to unload his cargoes prior to the operation of the crane, his presence on
the vessel was no longer reasonable and he consequently ceased to be a passenger.
Corollarily, it insists that the doctrine in La Mallorca vs. Court of Appeals, et al. 10 is
not applicable to the case at bar.
The rule is that the relation of carrier and passenger continues until the passenger has
been landed at the port of destination and has left the vessel owner's dock or
premises. 11 Once created, the relationship will not ordinarily terminate until the
passenger has, after reaching his destination, safely alighted from the carrier's
conveyance or had a reasonable opportunity to leave the carrier's premises. All persons
who remain on the premises a reasonable time after leaving the conveyance are to be
deemed passengers, and what is a reasonable time or a reasonable delay within this
rule is to be determined from all the circumstances, and includes a reasonable time to
see after his baggage and prepare for his departure. 12 The carrier-passenger
relationship is not terminated merely by the fact that the person transported has been
carried to his destination if, for example, such person remains in the carrier's premises
to claim his baggage. 13
It was in accordance with this rationale that the doctrine in the aforesaid case of La
Mallorca was enunciated, to wit:
"It has been recognized as a rule that the relation of carrier and
passenger does not cease at the moment the passenger alights from
the carrier's vehicle at a place selected by the carrier at the point
of destination, but continues until the passenger has had a
 reasonable time or a reasonable opportunity to leave the carrier's
premises. And, what is a reasonable time or a reasonable delay
within this rule is to be determined from all the circumstances.
Thus, a person who, after alighting from a train, walks along the
station platform is considered still a passenger. So also, where a
passenger has alighted at his destination and is proceeding by the
usual way to leave the company's premises, but before actually
doing so is halted by the report that his brother, a fellow passenger,
has been shot, and he in good faith and without intent of engaging
in the difficulty, returns to relieve his brother, he is deemed
reasonably and necessarily delayed and thus continues to be a
passenger entitled as such to the protection of the railroad
company and its agents. llcd
"In the present case, the father returned to the bus to get one of his
baggages which was not unloaded when they alighted from the
bus. Racquel, the child that she was, must have followed the father.
However, although the father was still on the running board of the
bus waiting for the conductor to hand him the bag or bayong, the
bus started to run, so that even he (the father) had to jump down
from the moving vehicle. It was at this instance that the child, who
must be near the bus, was run over and killed. In the circumstances,
it cannot be claimed that the carrier's agent had exercised the
'utmost diligence' of a 'very cautious person' required by Article
1755 of the Civil Code to be observed by a common carrier in the
discharge of its obligation to transport safely its passengers . . .
The presence of said passengers near the bus was not
unreasonable and they are, therefore, to be considered still as
passengers of the carrier, entitled to the protection under their
contract of carriage." 14
It is apparent from the foregoing that what prompted the Court to rule as it did in said
case is the fact of the passenger's reasonable presence within the carrier's premises.
That reasonableness of time should be made to depend on the attending circumstances
of the case, such as the kind of common carrier, the nature of its business, the customs
of the place, and so forth, and therefore precludes a consideration of the time
element per se without taking into account such other factors. It is thus of no moment
whether in the cited case of La Mallorca there was no appreciable interregnum for the
passenger therein to leave the carrier's premises whereas in the case at bar, an interval
of one (1) hour had elapsed before the victim met the accident. The primary factor to
be considered is the existence of a reasonable cause as will justify the presence of the
victim on or near the petitioner's vessel. We believe there exists such a justifiable cause.
It is of common knowledge that, by the very nature of petitioner's business as a shipper,
the passengers of vessels are allotted a longer period of time to disembark from the
ship than other common carriers such as a passenger bus. With respect to the bulk of
cargoes and the number of passengers it can load, such vessels are capable of
accommodating a bigger volume of both as compared to the capacity of a regular
commuter bus. Consequently, a ship passenger will need at least an hour as is the usual
practice, to disembark from the vessel and claim his baggage whereas a bus passenger
can easily get off the bus and retrieve his luggage in a very short period of time. Verily,
petitioner cannot categorically claim, through the bare expedient of comparing the
period of time entailed in getting the passenger's cargoes, that the ruling in La
Mallorca is inapplicable to the case at bar. On the contrary, if we are to apply the
doctrine enunciated therein to the instant petition, we cannot in reason doubt that the
victim Anacleto Viana was still a passenger at the time of the incident. When the
accident occurred, the victim was in the act of unloading his cargoes, which he had
every right to do, from petitioner's vessel. As earlier stated, a carrier is duty bound not
only to bring its passengers safely to their destination but also to afford them a
reasonable time to claim their baggage.
It is not definitely shown that one (1) hour prior to the incident, the victim had already
disembarked from the vessel. Petitioner failed to prove this. What is clear to us is that
at the time the victim was taking his cargoes, the vessel had already docked an hour
earlier. In consonance with common shipping procedure as to the minimum time of
one (1) hour allowed for the passengers to disembark, it may be presumed that the
victim had just gotten off the vessel when he went to retrieve his baggage. Yet, even
if he had already disembarked an hour earlier, his presence in petitioner's premises was
not without cause. The victim had to claim his baggage which was possible only one
(1) hour after the vessel arrived since it was admittedly standard procedure in the case
of petitioner's vessels that the unloading operations shall start only after that time.
Consequently, under the foregoing circumstances, the victim Anacleto Viana is still
deemed a passenger of said carrier at the time of his tragic death. prcd
II. Under the law, common carriers are, from the nature of their business and for
reasons of public policy, bound to observe extraordinary diligence in the vigilance
over the goods and for the safety of the passengers transported by them, according to
all the circumstances of each case. 15 More particularly, a common carrier is bound to
carry the passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for all the
circumstances. 16 Thus, where a passenger dies or is injured, the common carrier is
presumed to have been at fault or to have acted negligently. 17 This gives rise to an
action for breach of contract of carriage where all that is required of plaintiff is to
prove the existence of the contract of carriage and its non-performance by the carrier,
that is, the failure of the carrier to carry the passenger safely to his
destination, 18 which, in the instant case, necessarily includes its failure to safeguard
its passenger with extraordinary diligence while such relation subsists.
The presumption is, therefore, established by law that in case of a passenger's death or
injury the operator of the vessel was at fault or negligent, having failed to exercise
extraordinary diligence, and it is incumbent upon it to rebut the same. This is in
consonance with the avowed policy of the State to afford full protection to the
passengers of common carriers which can be carried out only by imposing a stringent
statutory obligation upon the latter. Concomitantly, this Court has likewise adopted a
rigid posture in the application of the law by exacting the highest degree of care and
diligence from common carriers, bearing utmost in mind the welfare of the passengers
who often become hapless victims of indifferent and profit-oriented carriers. We corresponding presumption of negligence foisted on, common carriers like Aboitiz.
cannot in reason deny that petitioner failed to rebut the presumption against it. Under This, of course, does not detract from what we have said that no negligence can be
the facts obtaining in the present case, it cannot be gainsaid that petitioner had imputed to Pioneer but, that on the contrary, the failure of Aboitiz to exercise
inadequately complied with the required degree of diligence to prevent the accident extraordinary diligence for the safety of its passenger is the rationale for our finding
from happening. on its liability.
As found by the Court of Appeals, the evidence does not show that there was a cordon WHEREFORE, the petition is DENIED and the judgment appealed from is hereby
of drums around the perimeter of the crane, as claimed by petitioner. It also adverted AFFIRMED in toto.
to the fact that the alleged presence of visible warning signs in the vicinity was
disputable and not indubitably established. Thus, we are not inclined to accept SO ORDERED.
petitioner's explanation that the victim and other passengers were sufficiently warned Melencio-Herrera (Chairman), Paras, Padilla and Sarmiento, JJ., concur.
that merely venturing into the area in question was fraught with serious peril.
Definitely, even assuming the existence of the supposed cordon of drums loosely ||| (Aboitiz Shipping Corp. v. Court of Appeals, G.R. No. 84458, [November 6, 1989],
placed around the unloading area and the guard's admonitions against entry therein, 258-A PHIL 665-680)
these were at most insufficient precautions which pale into insignificance if considered
vis-a-vis the gravity of the danger to which the deceased was exposed. There is no
showing that petitioner was extraordinarily diligent in requiring or seeing to it that said
precautionary measures were strictly and actually enforced to subserve their purpose
of preventing entry into the forbidden area. By no stretch of liberal evaluation can such
perfunctory acts approximate the "utmost diligence of very cautious persons" to be
exercised "as far as human care and foresight can provide" which is required by law
of common carriers with respect to their passengers.

While the victim was admittedly contributorily negligent, still petitioner's aforesaid
failure to exercise extraordinary diligence was the proximate and direct cause of,
because it could definitely have prevented, the former's death. Moreover, in paragraph
5.6 of its petition, at bar, 19 petitioner has expressly conceded the factual finding of
respondent Court of Appeals that petitioner did not present sufficient evidence in
support of its submission that the deceased Anacleto Viana was guilty of gross
negligence. Petitioner cannot now be heard to claim otherwise. LLpr
No excepting circumstance being present, we are likewise bound by respondent court's
declaration that there was no negligence on the part of Pioneer Stevedoring
Corporation, a confirmation of the trial court's finding to that effect, hence our
conformity to Pioneer's being absolved of any liability.
As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged
gross negligence of the victim, hence its present contention that the death of the
passenger was due to the negligence of the crane operator cannot be sustained both on
grounds of estoppel and for lack of evidence on its present theory. Even in its answer
filed in the court below it readily alleged that Pioneer had taken the necessary
safeguards insofar as its unloading operations were concerned, a fact which appears to
have been accepted by the plaintiff therein by not impleading Pioneer as a defendant,
and likewise inceptively by Aboitiz by filing its third-party complaint only after ten
(10) months from the institution of the suit against it. Parenthetically, Pioneer is not
within the ambit of the rule on extraordinary diligence required of, and the

THIRD DIVISION
[G.R. No. 139875. December 4, 2000.]
GREGORIO PESTAÑO and METRO CEBU AUTOBUS
CORPORATION, petitioners, vs. Spouses TEOTIMO
SUMAYANG and PAZ C. SUMAYANG,respondents.
Bugarin & Bugarin Law Office for petitioners.
Atty. Paterno S. Compra for private respondents.
SYNOPSIS
On August 9, 1986, at around 2:00 o'clock P.M., Ananias Sumayang was riding a
motorcycle along the national highway in Ilihan, Tabagon, Cebu. Riding with him was
his friend Manuel Romagos. As they came upon a junction, a passenger bus driven by
petitioner Gregorio Pestaño and owned by Petitioner Metro Cebu Autobus
Corporation hit them. The bus had tried to overtake them sending the motorcycle and
its passengers hurtling upon the pavement. Both Ananias Sumayang and Manuel
Romagos died.
The Regional Trial Court found petitioners liable for death indemnity, loss of earning
capacity of the deceased Ananias Sumayang, and for necessary interment expenses.
The Court of Appeals affirmed petitioners' liability for the accident and for
Sumayang's death. It agreed with the trial court that the vehicular collision was caused
by Pestaño's negligence when he attempted to overtake the motorcycle. The appellate
court opined that petitioner Metro Bus had shown laxity in the conduct of its operations
and in the supervision of its employees when it allowed petitioner Pestaño to ply his
route despite the defective speedometer. Having failed to observe the extraordinary
diligence required of public transportation companies, it was held vicariously liable to
the victims of the vehicular accident. The appellate court, however, raised to P50,000
the granted indemnity for the death of the victim in accordance with prevailing
jurisprudence. It also affirmed the award of loss of earning capacity based on his life
expectancy.
Hence, this petition.
The Supreme Court finds no cogent reason to reverse or modify the Court of Appeals'
factual findings. Factual findings of the CA affirming those of the trial court are
conclusive and binding on this Court. In quasi-delicts, such findings are crucial
because negligence is largely a matter of evidence.
When an injury is caused by the negligence of a servant or an employee, the master or
employer is presumed to be negligent either in the selection or in the supervision of
that employee. This presumption may be overcome only by satisfactorily showing that
the employer exercised the care and the diligence of a good father of a family in the
selection and the supervision of its employee. The negligence alluded to here is in its
supervision over its driver, not in that which directly caused the accident. The fact that
Pestaño was able to use a bus with a faulty speedometer shows that Metro Cebu was
remiss in the supervision of its employees and in the proper care of its vehicles. It had
thus failed to conduct its business with the diligence required by law. The Court,
therefore, affirmed the decision of the appellate court.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF COURT OF
APPEALS, AFFIRMING THOSE OF TRIAL COURT, ARE CONCLUSIVE AND
BINDING ON SUPREME COURT. — Factual findings of the CA affirming those of
the trial court are conclusive and binding on this Court. Petitioners failed to
demonstrate that this case falls under any of the recognized exceptions to this rule.
Indeed, the issue of negligence is basically factual and, in quasi-delicts, crucial in the
award of damages. EHcaDT
2. CIVIL LAW; QUASI-DELICT; PRESUMPTION OF EMPLOYER'S
NEGLIGENCE IN SELECTION OR SUPERVISION OF EMPLOYEE, WHEN
ARISES; HOW MAY BE OVERCOME. — Under Articles 2180 and 2176 of the
Civil Code, owners and managers are responsible for damages caused by their
employees. When an injury is caused by the negligence of a servant or an employee,
the master or employer is presumed to be negligent either in the selection or in the
supervision of that employee. This presumption may be overcome only by
satisfactorily showing that the employer exercised the care and the diligence of a good
father of a family in the selection and the supervision of its employee.
3. ID.; DAMAGES; INDEMNITY FOR DEATH CAUSED BY A QUASI-DELICT
FIXED AT P50,000.00. — The indemnity for death caused by a quasi-delict used to
be pegged at P3,000, based on Article 2206 of the Civil Code. However, the amount
has been gradually increased through the years because of the declining value of our
currency. At present, prevailing jurisprudence fixes the amount at P50,000.
4. ID.; ID.; LOSS OF EARNING CAPACITY; COMPUTATION THEREOF IS
BASED ON LIFE EXPECTANCY OF DECEASED. — The Court has consistently
computed the loss of earning capacity based on the life expectancy of the deceased,
and not on that of the heir. Even Villa Rey Transit did likewise. HAaDcS
5. ID.; ID.; ID.; FACTORS IN THE AWARD THEREOF. — The award for loss of
earning capacity is based on two factors: (1) the number of years on which the
computation of damages is based and (2) the rate at which the loss sustained by the
heirs is fixed. The first factor refers to the life expectancy, which takes into
consideration the nature of the victim's work, lifestyle, age and state of health prior to
the accident. The second refers to the victim's earning capacity minus the necessary
living expenses. Stated otherwise, the amount recoverable is that portion of the
earnings of the deceased which the beneficiary would have received — the net
earnings of the deceased.
DECISION
PANGANIBAN, J p:
Factual findings of the Court of Appeals, affirming those of the trial judge, are binding
on this Court. In quasi-delicts, such findings are crucial because negligence is largely
a matter of evidence. In computing an award for lost earning capacity, the life
expectancy of the deceased, not that of the heir, is used as basis.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
assailing the April 21, 1999 Decision and the August 6, 1999 Resolution of the Court
of Appeals 1 (CA) in CA-GR CV No. 30289. The questioned Decision disposed as
follows:
"WHEREFORE, premises considered, the instant appeal is
hereby DENIED. The assailed Decision of the lower court is
hereby AFFIRMED with the aforesaid modification regarding the
award of death penalty."
The Resolution of August 6, 1999 denied reconsideration. 2
The Facts
The events leading to this Petition were summarized by the Court of Appeals as
follows:
"It appears from the records that at around 2:00 o'clock [o]n the
afternoon of August 9, 1986, Ananias Sumayang was riding a
motorcycle along the national highway in Ilihan, Tabagon, Cebu.
Riding with him was his friend Manuel Romagos. As they came
upon a junction where the highway connected with the road
leading to Tabagon, they were hit by a passenger bus driven by
[Petitioner] Gregorio Pestaño and owned by [Petitioner] Metro
Cebu Autobus Corporation (Metro Cebu, for brevity), which had
tried to overtake them, sending the motorcycle and its passengers
hurtling upon the pavement. Both Ananias Sumayang and Manuel
Romagos were rushed to the hospital in Sogod, where Sumayang
was pronounced dead on arrival. Romagos was transferred to the
Cebu Doctors' Hospital, but he succumbed to his injuries the day
after. STHAID
"Apart from the institution of criminal charges against Gregorio
Pestaño, [Respondents] Teotimo and Paz Sumayang, as heirs of
Ananias Sumayang, filed this civil action for damages against
Gregorio Pestaño, as driver of the passenger bus that rammed the
deceased's motorcycle, Metro Cebu, as owner and operator of the
said bus, and Perla Compania de Seguros, as insurer of Metro
Cebu. The case was docketed as Civil Case No. CEB-6108.
"On November 9, 1987, upon motion of [Petitioner] Pestaño,
Judge Pedro C. Son ordered the consolidation of the said case with
Criminal Case No. 10624, pending in Branch 16 of the same Court,
involving the criminal prosecution of Gregorio Pestaño for
[d]ouble [h]omicide thru [r]eckless [i]mprudence. Joint trial of the
two cases thereafter ensued, where the following assertions were
made:
'[Respondents] rely mainly on the testimonies of Ignacio
Neis, Pat. Aquilino Dinoy and Teotimo Sumayang,
father of the deceased. Neis declared that he saw the
incident while he was sitting on a bench beside the
highway; that both vehicles c[a]me from the North; that
as the motorcycle approached the junction to Tab[a]gon,
the driver Ananias Sumayang signalled with his left arm
to indicate that he was taking the Tab[a]gon Road; that
the motorcycle did turn left but as it did so, it was
bumped by an overspeeding bus; that the force of the
impact threw Ananias Sumayang and his companion
Manuel Romagos about 14 meters away. The motorcycle,
Neis continued, was badly damaged as it was dragged by
the bus.
'On the other hand, Pat. Dinoy testified that he was in the
nearby house of Ruben Tiu [when] he heard the sound or
noise caused by the collision; that he immediately went
to the scene where he found Ananias Sumayang and
Manuel Romagos lying on the road bleeding and badly
injured; that he requested the driver of a PU vehicle to
take them to a hospital; that he took note of the various
distances which he included in his sketch (Exh. J) that
the probable point of impact was at the left lane of the
highway and right at the junction to Tab[a]gon (Exh J-
11); that he based his conclusion on the 'scratches' caused
by the motorcycle's footrest on the asphalt pavement;
that he described the damage caused to the motorcycle in
his sketch (Exh J); that on the part of the bus, the right
end of its front bumper was bent and the right portion of
the radiator grill was dented. Pat. Dinoy acknowledged
that he met at the scene Ignacio Neis who informed him
that he saw the incident.
'On the contrary, Pestaño blamed Sumayang for the
accident. He testified that when he first blew the horn the
motorcycle which was about 15 or 20 meters ahead went
to the right side of the highway that he again blew the
horn and accelerated in order to overtake the motorcycle;
that when he was just one meter behind, the motorcycle
suddenly turned left towards the Tab[a]gon [R]oad and
was bumped by his bus; that he was able to apply his
break only after the impact. Pestaño's testimony was
corroborated by Ireneo Casilia who declared that he was
one of the passengers of the bus; that the motorcycle
suddenly turned left towards Tab[a]gon [R]oad without
giving any signal to indicate its maneuver; that the bus
was going at 40 kph when the accident occurred.
'To substantiate its defense of bonos pater
familias [petitioner] [c]orporation recalled to the witness
box Gregorio Pestaño who explained how his driving
experience and ability were tested by the company
before he was hired. He further declared that the
management gave regular lectures to drivers and
conductors touching on various topics like speeding,
parking, loading and treatment of passengers, and that
before he took to the road at 2:30 AM of that day he
checked together with the mechanic the tires, brake,
signal lights as well as the tools to be brought along. He
did the same thing before commencing his return trip
from Hagnaya, San Remegio later in the day.
'The corporation also presented its maintenance
supervisor, Agustin Pugeda, Jr., and its manager,
Alfonso Corominas, Jr. who corroborated Pestaño's
testimony that his driving ability was thoroughly tested,
and that all drivers underwent periodic lecture on various
aspects of safety driving including pertinent traffic
regulations. They also confirmed the thorough checkup
of every vehicle before it would depart and that the
performance of the drivers was being monitored by
several inspectors posted at random places along the
route.'
"In judgment, the lower court found [petitioners] liable to the
[respondents], in the amounts of P30,000.00 for death indemnity,
P829,079 for loss of earning capacity of the deceased Ananias
Sumayang, and P36,000.00 for necessary interment expenses. The
liability of defendant Perla Compania de Seguros, Inc., however,
was limited only to the amount stipulated in the insurance policy,
which [was] P12,000 for death indemnity and P4,500.00 for burial
expenses.
"In so ruling, the lower court found [Petitioner] Pestaño to have
been negligent in driving the passenger bus that hit the deceased.
It was shown that Pestaño negligently attempted to overtake the
motorcycle at a dangerous speed as they were coming upon a
junction in the road, and as the motorcycle was about to turn left
towards Tabagon. The court likewise found Metro Cebu directly
and primarily liable, along with Pestaño, the latter's employer
under Article 2180 of the Civil Code, as [Petitioner] Metro Cebu
failed to present evidence to prove that it had observed . . . [the]
diligence of a good father of a family to prevent damage. Nor has
Metro Cebu proven that it had exercised due diligence in the
supervision of its employees and in the maintenance of
vehicles." 3
Ruling of the Court of Appeals
The CA affirmed respondent's liability for the accident and for Sumayang's death.
Pestaño was negligent when he tried to overtake the victim's motorcycle at the
Tabagon junction. As a professional driver operating a public transport vehicle, he
should have taken extra precaution to avoid accidents, knowing that it was perilous to
overtake at a junction, where adjoining roads had brought about merging and diverging
traffic.
The appellate court opined that Metro Cebu had shown laxity in the conduct of its
operations and in the supervision of its employees. By allowing the bus to ply its route
despite the defective speedometer, said petitioner showed its indifference towards the
proper maintenance of its vehicles. Having failed to observe the extraordinary
diligence required of public transportation companies, it was held vicariously liable to
the victims of the vehicular accident.
In accordance with prevailing jurisprudence, the CA raised to P50,000 the granted
indemnity for the death of the victim. It also affirmed the award of loss of earning
capacity based on his life expectancy. Such liability was assessed, not as a pension for
the claiming heirs, but as a penalty and an indemnity for the driver's negligent act.
Hence, this Petition. 4
 Issues
Petitioners submit the following issues 5 for our consideration:
"1. The Court of Appeals misapplied facts of weight and
substance affecting the result of the case.
"2. The Court of Appeals misapplied R.A. 4136 as regards the
behavior of the deceased at the time of the accident.
"3. The Court of Appeals erred in ruling that the award of
damages representing income that deceased could have earned be
considered a penalty.
"4. The Court of Appeals, contrary to Article 2204, Civil Code,
raised the award of P30,000.00 damages representing indemnity
for death to P50,000.00.
"5. The Court of Appeals used as basis for the loss of earning
capacity, the life expectancy of the [d]eceased instead of that of
the respondents which was shorter." 6
In short, they raise these questions: whether the CA erred (1) in applying Section 45
of RA 4136 when it ruled that negligence in driving was the proximate cause of the
accident; (2) in increasing the civil indemnity from P30,000 to P50,000; and (3) in
using the life expectancy of the deceased instead of the life expectancies of
respondents.
The Court's Ruling
The Petition has no merit.
First Issue: Negligence
Petitioners contend that Pestaño was not under any obligation to slow down when he
overtook the motorcycle, because the deceased had given way to him upon hearing the
bus horn. Seeing that the left side of the road was clearly visible and free of oncoming
traffic, Pestaño accelerated his speed to pass the motorcycle. Having given way to the
bus, the motorcycle driver should have slowed down until he had been overtaken.
They further contend that the motorcycle was not in the middle of the road nearest to
the junction as found by the trial and the appellate courts, but was on the inner lane.
This explains why the damage on the bus were all on the right side — the right end of
the bumper and the right portion of the radiator grill were bent and dented. Hence, they
insist that it was the victim who was negligent.
We disagree. Petitioners are raising a question of fact based on Pestaño's testimony
contradicting that of Eyewitness Ignacio Neis and on the location of the dents on the
bumper and the grill. Neis testified that as the two vehicles approached the junction,
the victim raised his left arm to signal that he was turning left to Tabagon, but that the
latter and his companion were thrown off the motorcycle after it was bumped by the
overspeeding bus.
These contentions have already been passed upon by the trial and the appellate courts.
We find no cogent reason to reverse or modify their factual findings. The CA agreed
with the trial court that the vehicular collision was caused by Pestaño's negligence
when he attempted to overtake the motorcycle. As a professional driver operating a
public transport bus, he should have anticipated that overtaking at a junction was a
perilous maneuver and should thus have exercised extreme caution.
Factual findings of the CA affirming those of the trial court are conclusive and binding
on this Court. Petitioners failed to demonstrate that this case falls under any of the
recognized exceptions to this rule. 7 Indeed, the issue of negligence is basically factual
and, in quasi-delicts, crucial in the award of damages.
Petitioners aver that the CA was wrong in attributing the accident to a faulty
speedometer and in implying that the accident could have been avoided had this
instrument been properly functioning. EcHIDT
This contention has no factual basis. Under Articles 2180 and 2176 of the Civil Code,
owners and managers are responsible for damages caused by their employees. When
an injury is caused by the negligence of a servant or an employee, the master or
employer is presumed to be negligent either in the selection or in the supervision of
that employee. This presumption may be overcome only by satisfactorily showing that
the employer exercised the care and the diligence of a good father of a family in the
selection and the supervision of its employee. 8
The CA said that allowing Pestaño to ply his route with a defective speedometer
showed laxity on the part of Metro Cebu in the operation of its business and in the
supervision of its employees. The negligence alluded to here is in its supervision over
its driver, not in that which directly caused the accident. The fact that Pestaño was able
to use a bus with a faulty speedometer shows that Metro Cebu was remiss in the
supervision of its employees and in the proper care of its vehicles. It had thus failed to
conduct its business with the diligence required by law.
Second Issue: Life Indemnity
Petitioners aver that the CA erred in increasing the award for life indemnity from
P30,000 to P50,000, without specifying any aggravating circumstance to justify the
increment as provided in the Civil Code. 9
This contention is untenable. The indemnity for death caused by a quasi-delict used to
be pegged at P3,000, based on Article 2206 of the Civil Code. However, the amount
has been gradually increased through the years because of the declining value of our
currency. At present, prevailing jurisprudence fixes the amount at P50,000. 10
 Third Issue: Loss of Earning Capacity

Petitioners cite Villa Rey Transit, Inc. v. Court of Appeals, 11 which held:
"The determination of the indemnity to be awarded to the heirs of
a deceased person has therefore no fixed basis. . . . The life
expectancy of the deceased or of the beneficiary, whichever is
shorter, is an important factor. . . . ."
They contend that the CA used the wrong basis for its computation of earning
capacity.
We disagree. The Court has consistently computed the loss of earning capacity based
on the life expectancy of the deceased, 12 and not on that of the heir. 13 Even Villa
Rey Transit did likewise.
The award for loss of earning capacity is based on two factors: (1) the number of years
on which the computation of damages is based and (2) the rate at which the loss
sustained by the heirs is fixed. 14 The first factor refers to the life expectancy, which
takes into consideration the nature of the victim's work, lifestyle, age and state of
health prior to the accident. The second refers to the victim's earning capacity minus
the necessary living expenses. Stated otherwise, the amount recoverable is that portion
of the earnings of the deceased which the beneficiary would have received — the net
earnings of the deceased. 15

WHEREFORE, the Petition is DENIED and the assailed Decision and Resolution
AFFIRMED. Cost against petitioners.
SO ORDERED.
Melo, Vitug, and Gonzaga-Reyes, JJ ., concur.
||| (Pestaño v. Spouses Sumayang, G.R. No. 139875, [December 4, 2000], 400 PHIL
740-751)

SECOND DIVISION
[G.R. No. 125483. February 1, 2001.]
LUDO AND LUYM
CORPORATION, petitioner, vs. COURT OF APPEALS,
GABISAN SHIPPING LINES, INC. and/or ANSELMO
OLASIMAN, respondents.
Baduel, Espina & Associates for petitioner.
Atty. Adelino B. Sitoy for private respondents.
SYNOPSIS
When private respondents' vessel came to dock at petitioner's wharf, it rammed and
destroyed a fender pile cluster. Petitioner subsequently filed a damage suit for the
cost of repair. Eyewitness Naval, petitioner's employee, testified that he guided the
vessel to its docking place and shouted "Reverse" to the vessel's crew, but it was too
late when the latter responded.
Petitioners' witnesses, marine surveyor Degamo and diver Alferez who dived two or
three times after the incident, confirmed the damage caused by private respondents'
vessel. On the other hand, private respondents presented diver, Lazara, a
mere bodegero, who stated that there was no damage, but later testified in court that
he found a crack on one side of the pile cluster and saw seashells and seaweeds
underneath an uprooted post.
After trial, the trial court rendered judgment ordering private respondents to pay
damages to petitioner. The Court of Appeals, however, reversed the decision,
finding: petitioner's eyewitness Naval as incompetent; there were other vessels which
also used the wharf for berthing; there was no positive proof to show that it was
private respondents' vessel which rammed the pile cluster; and the seashells and
seaweeds under the uprooted post indicated that the breaking happened a long time
ago.
On appeal, petitioner argued; that private respondents did not assign as an error
Naval's incompetence to testify on the negligence of private respondents' officers and
crew; and maintained that they did not ram and damage the pile cluster.
The Supreme Court held: that the Court of Appeals can rule on the competency of
Naval to testify to determine the issue of negligence of private respondents' officers
and crew, which was a properly assigned error; that the trial court's finding that
witnesses of the prosecution are credible is entitled to respect for it was the trial
judge who had the chance to observe the witnesses below; and that applying the
doctrine of res ipsa loquitur, there exists a presumption of negligence against private
respondents which the latter failed to overcome.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PETITION FOR REVIEW
ON CERTIORARI; REVIEW IS LIMITED ONLY TO QUESTIONS OF LAW;
EXCEPTIONS. — While the rule is that this Court is limited only to questions of
law in a petition for review, there are exceptions, among which are when the factual
findings of the Court of Appeals and the trial court conflict, and when the appellate
court based its conclusion entirely on speculations, surmises, or conjectures.
2. ID; EVIDENCE; CREDIBILITY OF WITNESSES; FINDINGS OF THE TRIAL
COURT THEREON ARE ENTITLED TO RESPECT ON APPEAL; CASE AT
BAR. — Our review of the records constrains us to conclude that indeed MV
Miguela rammed and damaged petitioner's fender pile cluster. Naval and Espina
witnessed the incident, saw the impact and heard cracking sounds thereafter. The
trial court found them credible. We respect this observation of the trial court, for in
the appreciation of testimonial evidence and attribution of values to the declaration
of witnesses, it is the trial judge who had the chance to observe the witnesses and
was in a position to determine if the witnesses are telling the truth or not.
3. CIVIL LAW; DAMAGES; APPLICABILITY OF THE DOCTRINE OF RES
IPSA LOQUITUR IN CASE AT BAR. — The doctrine of res ipsa loquitur was
explained in Batiquin vs. Court of Appeals, 258 SCRA 334 (1996), . . . The doctrine
recognizes that parties may establish prima facie negligence without direct proof and
allows the principle to substitute for specific proof of negligence. This is invoked
when under the circumstances, direct evidence is absent and not readily available. In
our view, all the requisites for recourse to this doctrine exist. First, MV Miguela was
under the exclusive control of its officers and crew. Petitioner did not have direct
evidence on what transpired within as the officers and crew maneuvered the vessel to
its berthing place. We note the Court of Appeals' finding that Naval and Espina were
not knowledgeable on the vessel's maneuverings, and could not testify on the
negligence of the officers and crew. Second, aside from the testimony that MV
Miguelarammed the cluster pile, private respondent did not show persuasively other
possible causes of the damage. Applying now the above, there exists a presumption
of negligence against private respondents which we opine the latter failed to
overcome. cCTaSH
DECISION
QUISUMBING, J p:
This petition for review 1 under Rule 45 of the Revised Rules of Court seeks to
annul and set aside the decision 2 dated January 10, 1996 of the Court of Appeals
which reversed and set aside the decision of the Regional Trial Court of Cebu City,
Branch IX, and the resolution 3 dated June 11, 1996, denying petitioner's motion for
reconsideration.
Petitioner Ludo & Luym Corporation is a domestic corporation engaged in copra
processing with plant and business offices in Cebu City. Private Respondent Gabisan
Shipping Lines was the registered owner and operator of the motor vessel MV
Miguela, while the other private respondent, Anselmo Olasiman, was its captain.
Petitioner owns and operates a private wharf used by vessels for loading and
unloading of copra and other processed products. Among its wharf's facilities are
fender pile clusters for docking and mooring.
On May 21, 1990, at around 1:30 P.M., while MV Miguela was docking at
petitioner's wharf, it rammed and destroyed a fender pile cluster. Petitioner
demanded damages from private respondents. The latter refused. Hence, petitioner
filed a complaint for damages before the Regional Trial Court of Cebu.
Petitioner's evidence during trial showed that on May 21, 1990, at 1:30 P.M., MV
Miguela came to dock at petitioner's wharf. Ireneo Naval, petitioner's employee,
guided the vessel to its docking place. After the guide (small rope) was thrown from
the vessel and while the petitioner's security guard was pulling the big rope to be tied
to the bolar, MV Miguela did not slow down. The crew did not release the vessel's
anchor. Naval shouted "Reverse" to the vessel's crew, but it was too late when the
latter responded, for the vessel already rammed the pile cluster. The impact
disinclined the pile cluster and deformed the cable wires wound around it. Naval
immediately informed the vessel's captain and its chiefmate of the incident, and
instructed the guard-on-duty, Alfredo Espina, to make a spot report. The incident
was reported to Atty. Du, petitioner's vice-president for legal and corporate affairs.
Atty. Du in turn sent formal demand letters to private respondents. Marine surveyor
Carlos Degamo inspected the damage on the pile cluster and found that one post was
uprooted while two others were loosened and that the pile cluster was leaning
shoreward. Degamo hired skin diver Marvin Alferez, who found that one post was
broken at about 7 inches from the seabed and two other posts rose and cracked at the
bottom. Based on these findings, Degamo concluded that the two raised posts were
also broken under the seabed and estimated the cost of repair and replacement at
P95,000.00.
Private respondents denied the incident and the damage. Their witnesses claimed that
the damage, if any, must have occurred prior to their arrival and caused by another
vessel or by ordinary wear and tear. They averred that MV Miguela started to slow
down at 100 meters and the crew stopped the engine at 50 meters from the pier; that
Capt. Anselmo Olasiman did not order the anchor's release and chief mate Manuel
Gabisan did not hear Naval shout "Reverse". Respondents claimed that Naval had no
business in the vessels' maneuvering. When Naval informed the vessel's officers of
the incident, Olasiman sent their bodega man, Ronilo Lazara, to dive on the same
afternoon to check on the alleged damage. Lazara told Olasiman that there was no
damage. However, during direct examination, Lazara testified that he found a crack
on the side of the pile cluster, one post detached from the seabed at a distance of
about 7 inches, and seashells and seaweeds directly underneath the uprooted post.
There were scattered pieces of copra at the place where MV Miguela docked, which
indicated the prior docking by other vessels. After MV Miguela left, another vessel
docked in the same area. Petitioner did not prevent MV Miguela from departing.
When chiefmate Gabisan went to Atty. Du, the latter told him not to mind the
incident.
On rebuttal, petitioner presented Atty. Du who testified that Gabisan never went to
his office after receiving the letter-complaint; that petitioner never received any reply
to its demand letters; and that the first time Atty. Du saw Gabisan was during the
pre-trial.
On May 14, 1993, the trial court disposed the case in favor of petitioner, thus:
WHEREFORE, premises considered, this court hereby renders
judgment in favor of the plaintiff, ordering the defendants,
jointly and severally, to pay the plaintiff the following:
1) Php 70,000.00 actual damages, plus interest at the rate of 12%
per annum from the time the decision is received by defendants
until fully paid;
2) Php 15,000.00 exemplary damages;
3) Php 15,000.00 attorney's fees;
4) Php 10,000.00 litigation expenses.
COSTS AGAINST THE DEFENDANTS.
SO ORDERED. 4
In finding in favor of petitioner, the trial court found that it was able to prove by
preponderance of evidence that MV Miguela rammed and damaged the pile cluster;
that petitioner's witnesses, Naval and Espina, actually saw the incident; that
respondents failed to refute the testimony of marine surveyor Degamo and skin diver
Alferez on the damages; that the officers and crew of MV Miguela were negligent;
and that respondents are solidarily liable for the damages.
Upon private respondent's appeal, the Court of Appeals reversed the trial court on
January 10, 1996, in its decision that reads:
WHEREFORE, in view of the foregoing, judgment is rendered
REVERSING and SETTING aside the decision of the Court a
 quo, hereby entering a new one DISMISSING the Complaint for
lack of merit.
No pronouncement as to costs.
SO ORDERED. 5
The CA found that petitioner's eyewitness Naval was incompetent to testify on the
negligence of the crew and officers of MV Miguela; that there were other vessels that
used the wharf for berthing and petitioner's evidence did not positively prove that it
was MV Miguela that rammed the pile cluster; that the photographs of the pile cluster
taken after the incident showed no visible damages; that, as shown by private
respondents' witness, there were seashells and seaweeds directly under the uprooted
post, which indicated that the breaking happened a long time ago.
The CA denied the motion for reconsideration. Hence, this petition for review where
petitioner assigns the following errors:
A. THE COURT OF APPEALS ACTED IN EXCESS OF ITS
JURISDICTION WHEN IT WENT BEYOND THE
ISSUES RAISED IN THE ASSIGNMENT OF
ERRORS OF PRIVATE RESPONDENT.
B. THE DECISION OF THE COURT OF APPEALS IS
GROUNDED ON SPECULATION, SURMISES AND
CONJECTURES AND HAS DEPARTED FROM THE
RULES ON EVIDENCE.
C. THE COURT OF APPEALS MISAPPREHENDED THE
FACTS AND ITS FINDINGS IS TOTALLY NOT IN
ACCORD WITH THE EVIDENCE ON RECORD.
D. THE COURT OF APPEALS DEPARTED FROM THE
RULE OF RES IPSA LOQUITUR. 6 EcICSA
The issues for resolution can be reduced into three:
1. Did the CA go beyond the issues raised?
2. Can this Court review factual questions in this case?
3. Is the doctrine of res ipsa loquitur applicable to this case?
On the first issue, petitioner argues that private respondents did not assign as an error
eyewitness Ireneo Naval's incompetence to testify on the negligence of MV
Miguela's officers and crew. Private respondent's brief contained nothing but general
statements and reproductions of excerpts of the transcript of stenographic notes
(TSN) which could not pass for a valid assignment of errors.
We note that Naval's incompetence was not one of the assigned errors in private
respondents' brief. 7 However, private respondents raised it in connection with the
issue of their negligence, which appeared in the second assigned error. In
reproducing the portion of the TSN consisting of Naval's cross examination, private
respondents' counsel was indirectly attacking Naval's competence and invoking it vis
a vis the trial court's finding, based on Naval's testimony, that MV Miguela was
sailing at a speed unusual for a docking vessel. 8 The CA did not err in addressing
the matter. An appellate court can consider an unassigned error on which depends
the determination of the question in the properly assigned error. 9 The issue of
negligence of MV Miguela's officers and crew depends significantly on the
determination of whether Naval is competent to testify on the maneuvering of a
docking vessel.
The second issue is whether or not we can review questions of fact. Petitioner, in its
second and third assigned errors, claims that the appellate court relied on
speculations and conjectures when it ruled that MV Miguela could not have rammed
the pile cluster because of the presence of other vessels; that petitioner's evidence,
corroborated by those of private respondents, is positive and sufficient to prove
respondents' liability; that evidence on record showed the negligence and
recklessness of MV Miguela's officers and crew; and that the crew were grossly
incompetent and incapable to man the vessel.
Private respondents claim that the above are conclusions of fact which this Court
may not review.
While the rule is that this Court is limited only to questions of law in a petition for
review, there are exceptions, among which are when the factual findings of the Court
of Appeals and the trial court conflict, and when the appellate court based its
conclusion entirely on speculations, surmises, or conjectures. 10
Our review of the records constrains us to conclude that indeed MV Miguela rammed
and damaged petitioner's fender pile cluster. Naval and Espina witnessed the
incident, saw the impact and heard cracking sounds thereafter. The trial court found
them credible. We respect this observation of the trial court, for in the appreciation
of testimonial evidence and attribution of values to the declaration of witnesses, it is
the trial judge who had the chance to observe the witnesses and was in a position to
determine if the witnesses are telling the truth or not. 11 Further, private respondents'
witnesses, Olasiman and Gabisan, acknowledged that Naval was at the pier waving a
handkerchief to direct them to their berthing place. 12
Private respondents' claim that they could not have rammed and damaged the pile
cluster because other vessels used the same area for berthing is a mere speculation
unworthy of credence.
Petitioner's witnesses, marine surveyor Degamo and diver Alferez, confirmed the
damage. Degamo had eighteen years of experience as marine surveyor and belonged
to an independent survey company. Alferez was hired and directly supervised by
Degamo for the task. 13 The latter testified during trial that he examined the pile
cluster at the portion above the water line by going near it and found that one cluster
pile was moving, two were loose, and the whole pile cluster was leaning shoreward
and misaligned. 14 Alferez, under oath, testified that he dived two or three times and Olasiman can not estimate how long it takes before the engine goes to slow astern
saw one broken post and two slightly uprooted ones with a crack on each. 15 after the engine is restarted. From these declarations, the conclusion is that it was
already too late when the captain ordered reverse. By then, the vessel was only 4
On the other hand, private respondents' evidence on this matter was contradictory. meters from the pier, 20 and thus rammed it.
As testified by Olasiman, when he asked Lazara on the result of his diving, the latter
said that there was no damage. 16 However, when Lazara testified in court, he said Respondent company's negligence consists in allowing incompetent crew to man its
he found a crack on the side of the pile cluster, with one pile no longer touching the vessel. As shown also by petitioner, both Captain Olasiman and Chief Mate Gabisan
seabed and directly underneath it were seashells and seaweeds. Further, he said that did not have a formal training in marine navigation. The former was a mere
he informed the captain about this. 17 We find Lazara's testimony as an afterthought, elementary graduate 21 while the latter is a high school graduate. Their experience in
lacking credibility. In addition, Leonilo Lazara, was a mere bodegero of MV navigation 22 was only as a watchman and a quartermaster, respectively.
Miguela. He could not possibly be a competent witness on marine surveys. 18
WHEREFORE, the petition is GRANTED. The decision and resolution of the Court
Finally, is the doctrine of res ipsa loquitur applicable to this case? Petitioner argues of Appeals are ANNULLED AND SET ASIDE, and the decision of the Regional
that the Court of Appeals erred when it reversed the trial court for the latter's heavy Trial Court of Cebu City, Branch IX, is hereby REINSTATED.
reliance on Naval's testimony. The appellate court overlooked the fact that aside
from Naval's testimony, the trial court also relied on the principle of res ipsa Costs against private respondents.
loquitur to establish private respondents' negligence. SO ORDERED.
The doctrine of res ipsa loquitur was explained in Batiquin vs. Court of Appeals, 258 Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.
SCRA 334 (1996), thus:
||| (Ludo & Luym Corp. v. Court of Appeals, G.R. No. 125483, [February 1, 2001],
Where the thing which causes injury is shown to be under the
403 PHIL 749-759)
management of the defendant, and the accident is such as in the
ordinary course of things does not happen if those who have the
management use proper care, it affords reasonable evidence, in
the absence of an explanation by the defendant, that the accident
arose from want of care.
The doctrine recognizes that parties may establish prima facie negligence without
direct proof and allows the principle to substitute for specific proof of negligence.
This is invoked when under the circumstances, direct evidence is absent and not
readily available. 19
In our view, all the requisites for recourse to this doctrine exist. First, MV
Miguela was under the exclusive control of its officers and crew. Petitioner did not
have direct evidence on what transpired within as the officers and crew maneuvered
the vessel to its berthing place. We note the Court of Appeals' finding that Naval and
Espina were not knowledgeable on the vessel's maneuverings, and could not testify
on the negligence of the officers and crew. Second, aside from the testimony that MV
Miguela rammed the cluster pile, private respondent did not show persuasively other
possible causes of the damage. DTaSIc
Applying now the above, there exists a presumption of negligence against private
respondents which we opine the latter failed to overcome. Additionally, petitioner
presented tangible proof that demonstrated private respondents' negligence. As
testified by Capt. Olasiman, from command of "slow ahead" to "stop engine", the
vessel will still travel 100 meters before it finally stops. However, he ordered "stop
engine" when the vessel was only 50 meters from the pier. Further, he testified that
before the vessel is put to slow astern, the engine has to be restarted. However,

THIRD DIVISION
[G.R. No. 113003. October 17, 1997.]
ALBERTA YOBIDO and CRESENCIO
YOBIDO, petitioners, vs. COURT OF APPEALS, LENY
TUMBOY, ARDEE TUMBOY and JASMIN
TUMBOY, respondents.
Silvanio T. Liza for petitioners.
Gershon A. Patalinghug, Jr. for private respondents.
SYNOPSIS
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children, Ardee
and Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido bus bound for Davao
City. Along Picop road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of
the bus suddenly exploded. The bus fell into a ravine around three (3) feet from the
road and struck a tree which resulted in the death of Tito Tumboy and physical
injuries to other passengers. Thereafter, a complaint for breach of contract of
carriage, damages and attorney's fees was filed by Leny and her children against
Alberta Yobido, the owner of the bus, and Cresencio Yobido, its driver in the
Regional Trial Court of Davao City. After trial, the lower court rendered a decision
dismissing the action for lack of merit. Respondents appealed to the Court of
Appeals. On August 23, 1993, respondent court rendered a decision reversing that of
the lower court. In this instant petition, petitioners assert that the tire blowout that
caused the death of Tito Tumboy was a caso fortuito and herein respondent court
misapprehended the facts of the case, therefore, its findings cannot be considered
final which shall bind the Court. aIHSEc
The Supreme Court ruled that there is no reason to overturn the findings and
conclusions of the Court of Appeals. Petitioners' contention that they are exempted
from liability because the tire blowout was a fortuitous event that could not have
been foreseen, must fail. It is settled that an accident caused either by defects in the
automobile or through the negligence of its driver is not a caso fortuito that would
exempt the carrier from liability for damages. Accordingly, the challenged decision
is affirmed subject to modification that petitioners shall additionally pay herein,
respondents P20,000.00 as exemplary damages.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; FORTUITOUS EVENT;
CHARACTERISTICS THEREOF. — A fortuitous event is possessed of the
following characteristics: (a) the cause of the unforeseen and unexpected occurrence,
or the failure of the debtor to comply with his obligations must be independent of
human will; (b) it must be impossible to foresee the event which constitutes the caso
fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the occurrence
must be such as to render it impossible for the debtor to fulfill his obligation in a
normal manner; and (d) the obligor must be free from any participation in the
aggravation of the injury resulting to the creditor. As Article 1174 provides, no
person shall be responsible for a fortuitous event which could not be foreseen, or
which, though foreseen was inevitable. In other words, there must be an entire
exclusion of human agency from the cause of injury or loss.
2. ID.; COMMON CARRIER; WHEN A PASSENGER IS INJURED OR DIES
WHILE TRAVELLING, THE LAW PRESUMES THAT THE COMMON
CARRIER IS NEGLIGENT. — When a passenger boards a common carrier, he
takes the risks incidental to the mode of travel he has taken. After all, a carrier is not
an insurer of the safety of its passengers and is not bound absolutely and at all events
to carry them safely and without injury. However, when a passenger is injured or
dies while travelling, the law presumes that the common carrier is negligent. . . .
Article 1755 provides that "(a) common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the utmost diligence of
very cautious persons, with a due regard for all the circumstances." Accordingly,
the culpa contractual, once a passenger dies or is injured the carrier is presumed to
have been at fault or to have acted negligently. This disputable presumption may
only be overcome by evidence that the carrier had observed extraordinary diligence
as prescribed by Articles 1733, 1755 and 1756 of the Civil Code or that the death or
injury of the passenger was due to a fortuitous event. Consequently, the court need
not make an express finding of fault or negligence on the part of the carrier to hold it
responsible for damages sought by the passenger.
3. ID.; ID.; AN ACCIDENT CAUSED EITHER BY DEFECTS IN THE
AUTOMOBILE OR THROUGH THE NEGLIGENCE OF ITS DRIVER IS NOT
A CASO FORTUITO THAT WOULD EXEMPT THE CARRIER FROM
LIABILITY FOR DAMAGES. — The explosion of the new tire may not be
considered a fortuitous event. There are human factors involved in the situation. The
fact that the tire was new did not imply that it was entirely free from manufacturing
defects or that it was properly mounted on the vehicle. Neither may the fact that the
tire bought and used in the vehicle is of a brand name noted for quality, resulting in
the conclusion that it could not explode within five days' use. Be that as it may, it is
settled that an accident caused either by defects in the automobile or through the
negligence of its driver is not a caso fortuito that would exempt the carrier from
liability for damages.
4. ID.; ID.; PROOF THAT THE TIRE WAS NEW AND OF GOOD QUALITY IS
NOT SUFFICIENT PROOF THAT PETITIONER IS NOT NEGLIGENT. — It was
incumbent upon the defense to establish that it took precautionary measures
considering partially dangerous condition of the road. As stated above, proof that the
tire was new and of good quality is not sufficient proof that it was not negligent.
Petitioners should have shown that it undertook extraordinary diligence in the care of
its carrier such as conducting daily routinary check-ups of the vehicle's parts. As the
late Justice J.B.L. Reyes said: "It may be impracticable, as appellee argues, to require
of carriers to test the strength of each and every part of its vehicles before each trip,
but we are of the opinion that a due regard for the carrier's obligations toward the
traveling public demands adequate periodical tests to determine the condition and
strength of those vehicle portions the failure of which may endanger the safety of the
passengers."
5. ID.; ID.; PRESENCE OF CONTRADICTORY FACTS MUST BE RESOLVED
IN FAVOR OF LIABILITY IN VIEW OF THE PRESUMPTION OF
NEGLIGENCE OF THE CARRIER IN THE LAW; CASE AT BAR. — It is
interesting to note that petitioners proved through the bus conductor, Salce, that the
bus was running at "60-50" kilometers per hour only within the prescribed lawful
speed limit. However, they failed to rebut the testimony of Leny Tumboy that the
bus was running so fast that she cautioned the driver to slow down. These
contradictory facts must, therefore, be resolved in favor of liability in view of the
presumption of negligence of the carrier in the law.
6. ID.; ID.; DAMAGES; FOR THE DEATH OF A PASSENGER, THE HEIRS
ARE ENTITLED TO P50,000.00. — Having failed to discharge its duty to
overthrow the presumption of negligence with clear and convincing evidence,
petitioners are hereby held liable for damages. Article 1764 in relation to Article
2206 of the Civil Code prescribes the amount of at least three thousand pesos as
damages for the death of a passenger. Under prevailing jurisprudence, the award of
damages under Article 2206 has been increased to fifty thousand pesos (P50,000.00).
7. ID.; ID.; ID.; MORAL DAMAGES; RECOVERABLE WHEN THERE IS A
BREACH OF CONTRACT OF CARRIAGE RESULTING IN THE DEATH OF A
PASSENGER. — Moral damages are generally not recoverable in culpa
contractual except when bad faith had been proven. However, the same damages
may be recovered when breach of contract of carriage results in the death of a
passenger, as in this case. ISDCaT
8. ID.; ID.; EXEMPLARY DAMAGES; RESPONDENTS ARE ENTITLED TO
P20,000.00 AS EXEMPLARY DAMAGES BECAUSE PETITIONER IS DEEMED
TO HAVE ACTED RECKLESSLY. — Exemplary damages, awarded by way of
example or correction for the public good when moral damages are awarded, may
likewise be recovered in contractual obligations if the defendant acted in wanton,
fraudulent, reckless, oppressive, or malevolent manner. Because petitioners failed to
exercise the extraordinary diligence required of a common carrier, which resulted in
the death of Tito Tumboy, it is deemed to have acted recklessly. As such, private
respondents shall be entitled to exemplary damages in the amount of
P20,000.00. CaDEAT
DECISION
ROMERO, J p:
In this petition for review on certiorari of the decision of the Court of Appeals, the
issue is whether or not the explosion of a newly installed tire of a passenger vehicle
is a fortuitous event that exempts the carrier from liability for the death of a
passenger.
On April 26, 1988, spouses Tito and Leny Tumboy and their minor children named
Ardee and Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound
for Davao City. Along Picop Road in Km. 17, Sta. Maria, Agusan del Sur, the left
front tire of the bus exploded. The bus fell into a ravine around three (3) feet from
the road and struck a tree. The incident resulted in the death of 28-year-old Tito
Tumboy, and physical injuries to other passengers.
On November 21, 1988, a complaint for breach of contract of carriage, damages and
attorney's fees was filed by Leny and her children against Alberta Yobido, the owner
of the bus, and Cresencio Yobido, its driver, before the Regional Trial Court of
Davao City. When the defendants therein filed their answer to the complaint, they
raised the affirmative defense of caso fortuito. They also filed a third-party
complaint against Philippine Phoenix Surety and Insurance, Inc. This third-party
defendant filed an answer with compulsory counterclaim. At the pre-trial conference,
the parties agreed to a stipulation of facts. 1
Upon a finding that the third party defendant was not liable under the insurance
contract, the lower court dismissed the third party complaint. No amicable settlement
having been arrived at by the parties, trial on the merits ensued. cdasia
The plaintiffs asserted that violation of the contract of carriage between them and the
defendants was brought about by the driver's failure to exercise the diligence
required of the carrier in transporting passengers safely to their place of destination.
According to Leny Tumboy, the bus left Mangagoy at 3:00 o'clock in the afternoon.
The winding road it traversed was not cemented and was wet due to the rain; it was
rough with crushed rocks. The bus which was full of passengers had cargoes on top.
Since it was "running fast," she cautioned the driver to slow down but he merely
stared at her through the mirror. At around 3:30 p.m., in Trento, she heard something
explode and immediately, the bus fell into a ravine.
For their part, the defendants tried to establish that the accident was due to a
fortuitous event. Abundio Salce, who was the bus conductor when the incident
happened, testified that the 42-seater bus was not full as there were only 32
passengers, such that he himself managed to get a seat. He added that the bus was
running at a speed of "60 to 50" and that it was going slow because of the zigzag
road. He affirmed that the left front tire that exploded was a "brand new tire" that he
mounted on the bus on April 21, 1988 or only five (5) days before the incident. The
Yobido Liner secretary, Minerva Fernando, bought the new Goodyear tire from
Davao Toyo Parts on April 20, 1988 and she was present when it was mounted on
the bus by Salce. She stated that all driver applicants in Yobido Liner underwent
actual driving tests. before they were employed. Defendant Cresencio Yobido
underwent such test and submitted his professional driver's license and clearances
from the barangay, the fiscal and the police.
On August 29, 1991, the lower court rendered a decision 2 dismissing the action for
lack of merit. On the issue of whether or not the tire blowout was a caso fortuito, it
found that "the falling of the bus to the cliff was a result of no other outside factor
than the tire blow-out." It held that the ruling in the La Mallorca and Pampanga Bus
Co. v. De Jesus 3 that a tire blowout is "a mechanical defect of the conveyance or a
fault in its equipment which was easily discoverable if the bus had been subjected to
a more thorough or rigid check-up before it took to the road that morning" is
inapplicable to this case. It reasoned out that in said case, it was found that the
blowout was caused by the established fact that the inner tube of the left front tire
"was pressed between the inner circle of the left wheel and the rim which had slipped
out of the wheel." In this case, however, "the cause of the explosion remains a
mystery until at present." As such, the court added, the tire blowout was "a caso
fortuito which is completely an extraordinary circumstance independent of the will"
of the defendants who should be relieved of "whatever liability the plaintiffs may
have suffered by reason of the explosion pursuant to Article 1174 4 of the Civil
Code."
Dissatisfied, the plaintiffs appealed to the Court of Appeals. They ascribed to the
lower court the following errors: (a) finding that the tire blowout was a caso fortuito;
(b) failing to hold that the defendants did not exercise utmost and/or extraordinary
diligence required of carriers under Article 1755 of the Civil Code, and (c) deciding
the case contrary to the ruling in Juntilla v. Fontanar, 5 and Necesito v. Paras. 6
On August 23, 1993, the Court of Appeals rendered the Decision 7 reversing that of
the lower court. It held that:
"To Our mind, the explosion of the tire is not in itself a
fortuitous event. The cause of the blow-out, if due to a factory
defect, improper mounting, excessive tire pressure, is not an
unavoidable event. On the other hand, there may have been
adverse conditions on the road that were unforeseeable and/or
inevitable, which could make the blow-out a caso fortuito. The
fact that the cause of the blow-out was not known does not
relieve the carrier of liability. Owing to the statutory
presumption of negligence against the carrier and its obligation
to exercise the utmost diligence of very cautious persons to carry
the passenger safely as far as human care and foresight can
provide, it is the burden of the defendants to prove that the cause
of the blow-out was a fortuitous event. It is not incumbent upon
the plaintiff to prove that the cause of the blow-out is not caso
fortuito.
Proving that the tire that exploded is a new Goodyear tire is not sufficient to
discharge defendants' burden. As enunciated in Necesito vs. Paras, the passenger has
neither choice nor control over the carrier in the selection and use of its equipment
and the good repute of the manufacturer will not necessarily, relieve the carrier from
liability.
Moreover, there is evidence that the bus was moving
fast, and the road was wet and rough. The driver could have
explained that the blow out that precipitated the accident that
caused the death of Tito Tumboy could not have been prevented
even if he had exercised due care to avoid the same, but he was
not presented as witness."
The Court of Appeals thus disposed of the appeal as follows:
"WHEREFORE, the judgment of the court a quo is set aside and
another one entered ordering defendants to pay plaintiffs the sum
of P50,000.00 for the death of Tito Tumboy, P30,000.00 in
moral damages, and P7,000.00 for funeral and burial expenses.
SO ORDERED."
The defendants filed a motion for reconsideration of said decision which was denied
on November 4, 1993 by the Court of Appeals. Hence, the instant petition asserting
the position that the tire blowout that caused the death of Tito Tumboy was a caso
fortuito. Petitioners claim further that the Court of Appeals, in ruling contrary to that
of the lower court, misapprehended facts and, therefore, its findings of fact cannot be
considered final which shall bind this Court. Hence, they pray that this Court review
the facts of the case.
The Court did re-examine the facts and evidence in this case because of the
inapplicability of the established principle that the factual findings of the Court of
Appeals are final and may not be reviewed on appeal by this Court. This general
principle is subject to exceptions such as the one present in this case, namely, that the
lower court and the Court of Appeals arrived at diverse factual findings. 8 However,
upon such re-examination, we found no reason to overturn the findings and
conclusions of the Court of Appeals.
As a rule, when a passenger boards a common carrier, he takes the risks incidental to
the mode of travel he has taken. After all, a carrier is not an insurer of the safety of
its passengers and is not bound absolutely and at all events to carry them safely and
without injury. 9 However, when a passenger is injured or dies, while traveling, the
law presumes that the common carrier is negligent. Thus, the Civil Code provides:
"Art. 1756. In case of death or injuries to passengers, common
carriers are presumed to have been at fault or to have acted
 negligently, unless they prove that they observed extraordinary
diligence as prescribed in articles 1733 and 1755."
Article 1755 provides that "(a) common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the utmost diligence of
very cautious persons, with a due regard for all the circumstances." Accordingly,
in culpa contractual, once a passenger dies or is injured, the carrier is presumed to
have been at fault or to have acted negligently. This disputable presumption may
only be overcome by evidence that the carrier had observed extraordinary diligence
as prescribed by Articles 1733, 10 1755 and 1756 of the Civil Code or that the death
or injury of the passenger was due to a fortuitous event. 11 Consequently, the court
need not make an express finding of fault or negligence on the part of the carrier to
hold it responsible for damages sought by the passenger. 12
In view of the foregoing, petitioners' contention that they should be exempt from
liability because the tire blowout was no more than a fortuitous event that could not
have been foreseen, must fail. A fortuitous event is possessed of the following
characteristics: (a) the cause of the unforeseen and unexpected occurrence, or the
failure of the debtor to comply with his obligations, must be independent of human
will; (b) it must be impossible to foresee the event which constitutes the caso
fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the occurrence
must be such as to render it impossible for the debtor to fulfill his obligation in a
normal manner; and (d) the obligor must be free from any participation in the
aggravation of the injury resulting to the creditor. 13 As Article 1174 provides, no
person shall be responsible for a fortuitous event which could not be foreseen, or
which, though foreseen, was inevitable. In other words, there must be an entire
exclusion of human agency from the cause of injury or loss. 14 aisadc
Under the circumstances of this case, the explosion of the new tire may not be
considered a fortuitous event. There are human factors involved in the situation. The
fact that the tire was new did not imply that it was entirely free from manufacturing
defects or that it was properly mounted on the vehicle. Neither may the fact that the
tire bought and used in the vehicle is of a brand name noted for quality, resulting in
the conclusion that it could not explode within five days' use. Be that as it may, it is
settled that an accident caused either by defects in the automobile or through the
negligence of its driver is not a caso fortuito that would exempt the carrier from
liability for damages. 15
Moreover, a common carrier may not be absolved from liability in case of force
majeure or fortuitous event alone. The common carrier must still prove that it was
not negligent in causing the death or injury resulting from an accident. 16 This Court
has had occasion to state:
"While it may be true that the tire that blew-up was still good
because the grooves & the tire were still visible, this fact alone
does not make the explosion of the tire a fortuitous event. No
evidence was presented to show that the accident was due to
adverse road conditions or that precautions were taken by the
jeepney driver to compensate for any conditions liable to cause
accidents. The sudden blowing-up, therefore, could have been
caused by too much air pressure injected into the tire coupled by
the fact that the jeepney was overloaded and speeding at the time
of the accident." 17
It is interesting to note that petitioners proved through the bus conductor, Salce, that
the bus was running at "60-50" kilometers per hour only or within the prescribed
lawful speed limit. However, they failed to rebut the testimony of Leny Tumboy that
the bus was running so fast that she cautioned the driver to slow down. These
contradictory facts must, therefore, be resolved in favor of liability in view of the
presumption of negligence of the carrier in the law. Coupled with this is the
established condition of the road — rough, winding and wet due to the rain. It was
incumbent upon the defense to establish that it took precautionary measures
considering partially dangerous condition of the road. As stated above, proof that the
tire was new and of good quality is not sufficient proof that it was not negligent.
Petitioners should have shown that it undertook extraordinary diligence in the care of
its carrier, such as conducting daily routinary check-ups of the vehicle's parts. As the
late Justice J.B.L. Reyes said:
"It may be impracticable, as appellee argues, to require of
carriers to test the strength of each and every part of its vehicles
before each trip; but we are of the opinion that a due regard for
the carrier's obligations toward the traveling public demands
adequate periodical tests to determine the condition and strength
of those vehicle portions the failure of which may endanger the
safety of the passengers." 18
Having failed to discharge its duty to overthrow the presumption of negligence with
clear and convincing evidence, petitioners are hereby held liable for damages.Article
1764 19 in relation to Article 2206 20 of the Civil Code prescribes the amount of at
least three thousand pesos as damages for the death of a passenger. Under prevailing
jurisprudence, the award of damages under Article 2206 has been increased to fifty
thousand pesos (P50,000.00). 21
Moral damages are generally not recoverable in culpa contractual except when bad
faith had been proven. However, the same damages may be recovered when breach
of contract of carriage results in the death of a passenger, 22 as in this case.
Exemplary damages, awarded by way of example or correction for the public good
when moral damages are awarded, 23 may likewise be recovered in contractual
obligations if the defendant acted in wanton, fraudulent, reckless, oppressive, or
malevolent manner. 24 Because petitioners failed to exercise the extraordinary
diligence required of a common carrier, which resulted in the death of Tito Tumboy,
it is deemed to have acted recklessly. 25 As such, private respondents shall be
entitled to exemplary damages.
WHEREFORE, the Decision of the Court of Appeals is hereby AFFIRMED subject
to the modification that petitioners shall, in addition to the monetary awards therein,
be liable for the award of exemplary damages in the amount of P20,000.00. Costs
against petitioners.
SO ORDERED.
Narvasa, C .J ., Melo, Francisco and Panganiban, JJ ., concur.
||| (Yobido v. Court of Appeals, G.R. No. 113003, [October 17, 1997], 346 PHIL 1-
13)

SECOND DIVISION
[G.R. No. 119756. March 18, 1999.]
FORTUNE EXPRESS, INC., petitioner, vs. COURT OF
APPEALS, PAULIE U. CAORONG, and minor children
YASSER KING CAORONG, ROSE HEINNI and PRINCE
ALEXANDER, all surnamed CAORONG, and represented
by their mother PAULIE U. CAORONG, respondents.
Geocadin & Sabig Law Office for petitioner.
Alan L. Flores for private respondents.
SYNOPSIS
Petitioner Fortune Express, Inc. is a bus company in Northern Mindanao. On
November 18, 1989, one of its buses collided with a jeepney owned by a Maranao
which resulted in the death of several passengers of the jeepney including two
Maranaos. In relation thereto, the Philippine Constabulary of Cagayan de Oro
warned the petitioner, through its operations manager Diosdado Bravo, that the
Maranaos were planning to take revenge on the petitioner by burning some of its
buses. Bravo assured them that the necessary precautions to ensure the safety of lives
and properties of the passengers would be taken. On November 22, 1989, three
armed Maranaos who pretended to be passengers, seized and burned the bus of the
petitioner at Linamon, Lanao del Norte while on its way to Iligan City which resulted
in the death one of its passengers, Atty. Talib Caorong. Thus the heirs of Atty.
Caorong filed before the Regional Trial Court, Branch VI, Iligan City a complaint
for damages for breach of contract of carriage against the petitioner. The trial court
dismissed the complaint. However, the Court of Appeals reversed the decision of the
trial court.
Hence, this petition for review.
Article 1763 of the Civil Code provides that a common carrier is responsible for
injuries suffered by a passenger on account of the wilful acts of other passengers, if
the employees of the common carrier could have prevented the act through the
exercise of the diligence of a good father of a family. In the present case, it is clear
that because of the negligence of petitioner's employees, the seizure of the bus by
Manggolo and his men was made possible. Despite warning by the Philippine
Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge on
the petitioner by burning some of its buses and the assurance of petitioner's
operations manager, Diosdado Bravo, that the necessary precautions would be taken,
petitioner did nothing to protect the safety of its passengers. Had petitioner and its
employees been vigilant, they would not have failed to see that the malefactors had a
large quantity of gasoline with them. Under the circumstances, simple precautionary
measures to protect the safety of passengers, such as frisking passengers and
inspecting their baggages, preferably with non-intrusive gadgets such as metal
detectors, before allowing them on board could have been employed without
violating the passenger's constitutional rights.
The decision of the Court of Appeals was AFFIRMED.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; COMMON CARRIER;
RESPONSIBLE FOR INJURIES SUFFERED BY PASSENGER ON ACCOUNT
OF WILFUL ACTS OF OTHER PASSENGERS. — Art. 1763 of the Civil Code
provides that a common carrier is responsible for injuries suffered by a passenger on
account of the wilful acts of other passengers, if the employees of the common
carrier could have prevented the act through the exercise of the diligence of a good
father of a family. cdasia
2. ID.; ID.; ID.; CASE AT BAR. — In the present case, it is clear that because of the
negligence of petitioner's employees, the seizure of the bus by Mananggolo and his
men was made possible. Despite warning by the Philippine Constabulary at Cagayan
de Oro that the Maranaos were planning to take revenge on the petitioner by burning
some of its buses and the assurance of petitioner's operation manager, Diosdado
Bravo, that the necessary precautions would be taken, petitioner did nothing to
protect the safety of its passengers. Had petitioner and its employees been vigilant
they would not have failed to see that the malefactors had a large quantity of gasoline
with them. Under the circumstances, simple precautionary measures to protect the
safety of passengers, such as frisking passengers and inspecting their baggages,
preferably with non-intrusive gadgets such as metal detectors, before allowing them
on board could have been employed without violating the passenger's constitutional
rights.
3. ID.; ID.; FORTUITOUS EVENT; DEFINED. — Art. 1174 of the Civil Code
defines a fortuitous event as an occurrence which could not be foreseen or which
though foreseen, is inevitable. In Yobido v. Court of Appeals, we held that to be
considered as force majeure, it is necessary that: (1) the cause of the breach of the
obligation must be independent of the human will; (2) the event must be either
unforeseeable or unavoidable; (3) the occurrence must be such as to render it
impossible for the debtor to fulfill the obligation in a normal manner; and (4) the
obligor must be free of participation in, or aggravation of, the injury to the creditor.
The absence of any of the requisites mentioned above would prevent the obligor
from being excused from liability.
4. ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR. — Thus, in Vasquez v. Court
of Appeals, it was held that the common carrier was liable for its failure to take
necessary precautions against an approaching typhoon, of which it was warned,
resulting in the loss of the lives of several passengers. The event was foreseeable,
and, thus, the second requisite mentioned above was not fulfilled. This ruling applies
by analogy to the present case. Despite the report of PC agent Generalao that the
Maranaos were going to attack its buses, petitioner took no steps to safeguard the
lives and properties of its passengers. The seizure of the bus of the petitioner was
foreseeable and, therefore, was not a fortuitous event which would exempt petitioner
from liability.
5. ID.; ID.; DAMAGES; DECEASED NOT GUILTY OF CONTRIBUTORY
NEGLIGENCE. — The petitioner contends that Atty. Caorong was guilty of
contributory negligence in returning to the bus to retrieve something. But Atty.
Caorong did not act recklessly. It should be pointed out that the intended targets of
the violence were petitioner and its employee, not its passengers. The assailant's
motive was to retaliate for the loss of life of two Maranaos as a result of the collision
between petitioner's bus and the jeepney in which the two Maranaos were riding.
Mananggolo, the leader of the group which had hijacked the bus, ordered the
passengers to get off the bus as they intended to burn it and its driver. The armed
men actually allowed Atty. Caorong to retrieve something from the bus. What
apparently angered them was his attempt to help the driver of the bus by pleading for
his life. He was playing the role of the good Samaritan. Certainly, this act cannot be
considered an act of negligence, let alone recklessness.
6. ID.; ID.; ID.; INDEMNITY FOR DEATH. — Art. 1764 of the Civil Code, in
relation to Art. 2206 thereof, provides for the payment of indemnity for the death of
passengers caused by the breach of contract of carriage by a common carrier.
Initially fixed in Art. 2206 at P3,000.00, the amount of the said indemnity for death
has through the years been gradually increased in view of the declining value of the
peso. It is presently fixed at P50,000.00. Private respondents are entitled to this
amount.
7. ID.; ID.; ID.; ACTUAL DAMAGES. — Art. 2199 provides that "except as
provided by law or by stipulation, one is entitled to an adequate compensation only
for such pecuniary loss suffered by him as he has duly proved." The trial court found
that the private respondents spent P30,000.00 for the wake and burial of Atty.
Caorong. Since petitioner does not question this finding of the trial court, it is liable
to private respondents in the said amount as actual damages.
8. ID.; ID.; ID.; MORAL DAMAGES. — Under Art. 2206, the "spouse, legitimate
and illegitimate descendants and ascendants of the deceased may demand moral
damages for mental anguish by reason of the death of the deceased." The trial court
found that private respondent Paulie Caorong suffered pain from the death of her
husband and worry on how to provide support for their minor children, private
respondents Yasser King, Rose Heinni, and Prince Alexander. The petitioner
likewise does not question this finding of the trial court. Thus, in accordance with
recent decisions of this Court, we hold that the petitioner is liable to the private
respondents in the amount of P100,000.00 as moral damages for the death of Atty.
Caorong.
9. ID.; ID.; ID.; EXEMPLARY DAMAGES. — Art. 2232 provides that "in contracts
and quasi-contracts, the court may award exemplary damages if the defendant acted
in a wanton, fraudulent, reckless, oppressive, or malevolent manner." In the present
case, the petitioner acted in a wanton and reckless manner. Despite warning that the
Maranaos were planning to take revenge against the petitioner by burning some of its
buses, and contrary to the assurance made by its operations manager that the
necessary precautions would be taken, the petitioner and its employees did nothing to
protect the safety of passengers. Under the circumstances, we deem it reasonable to
award private respondents exemplary damages in the amount of P100,000.00.
10. ID.; ID.; ID.; ATTORNEY'S FEES MAY BE RECOVERED WHEN
EXEMPLARY DAMAGES ARE AWARDED. — Pursuant to Art. 2208, attorney's
fees may be recovered when, as in the instant case, exemplary damages are awarded.
In the recent case of Sulpicio Lines, Inc. v. Court of Appeals, we held an award of
P50,000.00 as attorney's fees to be reasonable. Hence, the private respondents are
entitled to attorney's fees in that amount.
11. ID.; ID.; ID.; COMPENSATION FOR LOSS OF EARNING CAPACITY. —
Art. 1764 of the Civil Code, in relation to Art. 2206 thereof, provides that in addition
to the indemnity for death arising from the breach of contract of carriage by a
common carrier, the "defendant shall be liable for the loss of the earning capacity of
the deceased, and the indemnity shall be paid to the heirs of the latter." The formula
established in decided cases for computing net earning capacity is as follows: Net
Earning Capacity = Life Expectancy x [Gross Annual Income - Necessary Living
Expenses]. Life expectancy is equivalent to two thirds (2/3) multiplied by the
difference of eighty (80) and the age of the deceased. IcESDA
DECISION
MENDOZA, J p:
This is an appeal by petition for review on certiorari of the decision, dated July 29,
1994, of the Court of Appeals, which reversed the decision of the Regional Trial
Court, Branch VI, Iligan City. The aforesaid decision of the trial court dismissed the
complaint of private respondents against petitioner for damages for breach of
contract of carriage filed on the ground that petitioner had not exercised the required
degree of diligence in the operation of one of its buses. Atty. Talib Caorong, whose
heirs are private respondents herein, was a passenger of the bus and was killed in the
ambush involving said bus.
The facts of the instant case are as follows:
Petitioner is a bus company in northern Mindanao. Private respondent Paulie
Caorong is the widow of Atty. Caorong, while private respondents Yasser King,
Rose Heinni, and Prince Alexander are their minor children.
On November 18, 1989, a bus of petitioner figured in an accident with a jeepney in
Kauswagan, Lanao del Norte, resulting in the death of several passengers of the
jeepney, including two Maranaos. Crisanto Generalao, a volunteer field agent of the
Constabulary Regional Security Unit No. X, conducted an investigation of the
accident. He found that the owner of the jeepney was a Maranao residing in
Delabayan, Lanao del Norte and that certain Maranaos were planning to take revenge
on the petitioner by burning some of its buses. Generalao rendered a report on his
findings to Sgt. Reynaldo Bastasa of the Philippine Constabulary Regional
Headquarters at Cagayan de Oro. Upon the instruction of Sgt. Bastasa he went to see
Diosdado Bravo, operations manager of petitioner, at its main office in Cagayan de
Oro City. Bravo assured him that the necessary precautions to insure the safety of
lives and property would be taken. 1
At about 6:45 P.M. on November 22, 1989, three armed Maranaos who pretended to
be passengers, seized a bus of petitioner at Linamon, Lanao del Norte while on its
way to Iligan City. Among the passengers of the bus was Atty. Caorong. The leader
of the Maranaos, identified as one Bashier Mananggolo, ordered the driver,
Godofredo Cabatuan, to stop the bus on the side of the highway. Mananggolo then
shot Cabatuan on the arm, which caused him to slump on the steering wheel. Then
one of the companions of Mananggolo started pouring gasoline inside the bus, as the
other held the passengers at bay with a handgun. Mananggolo then ordered the
passengers to get off the bus. The passengers, including Atty. Caorong, stepped out
of the bus and went behind the bushes in a field some distance from the
highway. 2LibLex
However, Atty. Caorong returned to the bus to retrieve something from the overhead
rack. At that time, one of the armed men was pouring gasoline on the head of the
driver. Cabatuan, who had meantime regained consciousness, heard Atty. Caorong
pleading with the armed men to spare the driver as he was innocent of any wrong
doing and was only trying to make a living. The armed men were, however, adamant
as they repeated their warning that they were going to burn the bus along with its
driver. During this exchange between Atty. Caorong and the assailants, Cabatuan
climbed out of the left window of the bus and crawled to the canal on the opposite
side of the highway. He heard shots from inside the bus. Larry de la Cruz, one of the
passengers, saw that Atty. Caorong was hit. Then the bus was set on fire. Some of
the passengers were able to pull Atty. Caorong out of the burning bus and rush him
to the Mercy Community Hospital in Iligan City, but he died while undergoing
operation. 3
The private respondents brought this suit for breach of contract of carriage in the
Regional Trial Court, Branch VI, Iligan City. In its decision, dated December 28,
1990, the trial court dismissed the complaint, holding as follows:
The fact that defendant, through Operations Manager Diosdado
Bravo, was informed of the "rumors" that the Moslems intended
to take revenge by burning five buses of defendant is established
since the latter also utilized Crisanto Generalao as a witness. Yet
despite this information, the plaintiffs charge, defendant did not
take proper precautions . . . . Consequently, plaintiffs now fault
the defendant for ignoring the report. Their position is that the
defendant should have provided its buses with security guards.
Does the law require common carriers to install security guards
in its buses for the protection and safety of its passengers? Is the
failure to post guards an omission of the duty to "exercise the
diligence of a good father of the family" which could have
prevented the killing of Atty. Caorong? To our mind, the
diligence demanded by law does not include the posting of
security guards in buses. It is an obligation that properly belongs
to the State. Besides, will the presence of one or two security
guards suffice to deter a determined assault of the lawless and
thus prevent the injury complained of? Maybe so, but again,
perhaps not. In other words, the presence of a security guard is
not a guarantee that the killing of Atty. Caorong would have
been definitely avoided.
xxx xxx xxx
Accordingly, the failure of defendant to accord faith and credit
to the report of Mr. Generalao and the fact that it did not provide
security to its buses cannot, in the light of the circumstances, be
characterized as negligence.
Finally, the evidence clearly shows that the assailants did not
have the least intention of harming any of the passengers. They
ordered all the passengers to alight and set fire on the bus only
after all the passengers were out of danger. The death of Atty.
Caorong was an unexpected and unforeseen occurrence over
which defendant had no control. Atty. Caorong performed an act
of charity and heroism in coming to the succor of the driver even
in the face of danger. He deserves the undying gratitude of the
driver whose life he saved. No one should blame him for an act
of extraordinary charity and altruism which cost his life. But
neither should any blame be laid on the doorstep of defendant.
His death was solely due to the willful acts of the lawless which
defendant could neither prevent nor stop. cdphil
xxx xxx xxx
WHEREFORE, in view of the foregoing, the complaint is
hereby dismissed. For lack of merit, the counter-claim is
likewise dismissed. No cost. 4
On appeal, however, the Court of Appeals reversed. It held:
In the case at bench, how did defendant-appellee react to the tip
or information that certain Maranao hotheads were planning to
burn five of its buses out of revenge for the deaths of two
Maranaos in an earlier collision involving appellee's bus? Except
for the remarks of appellee's operations manager that "we will
have our action . . . and I'll be the one to settle it personally,"
nothing concrete whatsoever was taken by appellee or its
employees to prevent the execution of the threat. Defendant-
appellee never adopted even a single safety measure for the
protection of its paying passengers. Were there available
safeguards? Of course, there were: one was frisking passengers
particularly those en route to the area where the threats were
likely to be carried out such as where the earlier accident
occurred or the place of influence of the victims or their locality.
If frisking was resorted to, even temporarily, . . . appellee might
be legally excused from liability. Frisking of passengers picked
up along the route could have been implemented by the bus
conductor; for those boarding at the bus terminal, frisking could
have been conducted by him and perhaps by additional
personnel of defendant-appellee. On hindsight, the handguns and
especially the gallon of gasoline used by the felons all of which
were brought inside the bus would have been discovered, thus
preventing the burning of the bus and the fatal shooting of the
victim.
Appellee's argument that there is no law requiring it to provide
guards on its buses and that the safety of citizens is the duty of
the government, is not well taken. To be sure, appellee is not
expected to assign security guards on all of its buses; if at all, it
has the duty to post guards only on its buses plying
predominantly Maranao areas. As discussed in the next
preceding paragraph, the least appellee could have done in
response to the report was to adopt a system of verification such
as the frisking of passengers boarding its buses. Nothing, and to
repeat, nothing at all, was done by defendant-appellee to protect
its innocent passengers from the danger arising from the
"Maranao threats." It must be observed that frisking is not a
novelty as a safety measure in our society. Sensitive places — in
fact, nearly all important places — have applied this method of
security enhancement. Gadgets and devices are available in the
market for this purpose. It would not have weighed much against
the budget of the bus company if such items were made
available to its personnel to cope up with situations such as the
"Maranao threats." prcd
In view of the constitutional right to personal privacy, our
pronouncement in this decision should not be construed as an
advocacy of mandatory frisking in all public conveyances. What
we are saying is that given the circumstances obtaining in the
case at bench that: (a) two Maranaos died because of a vehicular
collision involving one of appellee's vehicles; (b) appellee
received a written report from a member of the Regional
Security Unit, Constabulary Security Group, that the
tribal/ethnic group of the two deceased were planning to burn
five buses of appellee out of revenge; and (c) appellee did
nothing — absolutely nothing — for the safety of its passengers
travelling in the area of influence of the victims, appellee has
failed to exercise the degree of diligence required of common
carriers. Hence, appellee must be adjudged liable.
xxx xxx xxx
WHEREFORE, the decision appealed from is hereby
REVERSED and another rendered ordering defendant-appellee
to pay plaintiffs-appellants the following:
1) P3,399,649.20 as death indemnity;
2) P50,000.00 and P500.00 per appearance as attorney's fees;
and
Costs against defendant-appellee. 5
Hence, this appeal. Petitioner contends:
(A) THAT PUBLIC RESPONDENT ERRED IN REVERSING
THE DECISION OF THE REGIONAL TRIAL
COURT DATED DECEMBER 28, 1990 DISMISSING
THE COMPLAINT AS WELL AS THE
COUNTERCLAIM, AND FINDING FOR PRIVATE
RESPONDENTS BY ORDERING PETITIONER TO
PAY THE GARGANTUAN SUM OF P3,449,649.20
PLUS P500.00 PER APPEARANCE AS
ATTORNEY'S FEES, AS WELL AS DENYING
PETITIONER'S MOTION FOR
RECONSIDERATION AND THE SUPPLEMENT TO
SAID MOTION, WHILE HOLDING, AMONG
OTHERS, THAT PETITIONER BREACHED THE
CONTRACT OF CARRIAGE BY ITS FAILURE TO
EXERCISE THE REQUIRED DEGREE OF
DILIGENCE;
 (B) THAT THE ACTS OF THE MARANAO OUTLAWS
WERE SO GRAVE, IRRESISTIBLE, VIOLENT,
AND FORCEFUL, AS TO BE REGARDED AS CASO
FORTUITO; AND
(C) THAT PUBLIC RESPONDENT COURT OF APPEALS
SERIOUSLY ERRED IN HOLDING THAT
PETITIONER COULD HAVE PROVIDED
ADEQUATE SECURITY IN PREDOMINANTLY
MUSLIM AREAS AS PART OF ITS DUTY TO
OBSERVE EXTRA-ORDINARY DILIGENCE AS A
COMMON CARRIER. dctai
The instant petition has no merit.
First. Petitioner's Breach of the Contract of Carriage
Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries
suffered by a passenger on account of the wilful acts of other passengers, if the
employees of the common carrier could have prevented the act through the exercise
of the diligence of a good father of a family. In the present case, it is clear that
because of the negligence of petitioner's employees, the seizure of the bus by
Mananggolo and his men was made possible.
Despite warning by the Philippine Constabulary at Cagayan de Oro that the
Maranaos were planning to take revenge on the petitioner by burning some of its
buses and the assurance of petitioner's operation manager, Diosdado Bravo, that the
necessary precautions would be taken, petitioner did nothing to protect the safety of
its passengers.
Had petitioner and its employees been vigilant they would not have failed to see that
the malefactors had a large quantity of gasoline with them. Under the circumstances,
simple precautionary measures to protect the safety of passengers, such as frisking
passengers and inspecting their baggages, preferably with non-intrusive gadgets such
as metal detectors, before allowing them on board could have been employed
without violating the passenger's constitutional rights. As this Court intimated
in Gacal v. Philippine Air Lines, Inc., 6 a common carrier can be held liable for
failing to prevent a hijacking by frisking passengers and inspecting their baggages.
From the foregoing, it is evident that petitioner's employees failed to prevent the
attack on one of petitioner's buses because they did not exercise the diligence of a
good father of a family. Hence, petitioner should be held liable for the death of Atty.
Caorong.
Second. Seizure of Petitioner's Bus not a Case of Force Majeure
The petitioner contends that the seizure of its bus by the armed assailants was a
fortuitous event for which it could not be held liable. cdasia
Art. 1174 of the Civil Code defines a fortuitous event as an occurrence which could
not be foreseen or which though foreseen, is inevitable. In Yobido v. Court of
Appeals, 7 we held that to be considered as force majeure, it is necessary that: (1) the
cause of the breach of the obligation must be independent of the human will; (2) the
event must be either unforeseeable or unavoidable; (3) the occurrence must be such
as to render it impossible for the debtor to fulfill the obligation in a normal manner;
and (4) the obligor must be free of participation in, or aggravation of, the injury to
the creditor. The absence of any of the requisites mentioned above would prevent the
obligor from being excused from liability.
Thus, in Vasquez v. Court of Appeals, 8 it was held that the common carrier was
liable for its failure to take the necessary precautions against an approaching
typhoon, of which it was warned, resulting in the loss of the lives of several
passengers. The event was foreseeable, and, thus, the second requisite mentioned
above was not fulfilled. This ruling applies by analogy to the present case. Despite
the report of PC agent Generalao that the Maranaos were going to attack its buses,
petitioner took no steps to safeguard the lives and properties of its passengers. The
seizure of the bus of the petitioner was foreseeable and, therefore, was not a
fortuitous event which would exempt petitioner from liability.
Petitioner invokes the ruling in Pilapil v. Court of Appeals 9 and De Guzman
v. Court of Appeals 10 in support of its contention that the seizure of its bus by the
assailants constitutes force majeure. In Pilapil v. Court of Appeals, 11 it was held
that a common carrier is not liable for failing to install window grills on its buses to
protect passengers from injuries caused by rocks hurled at the bus by lawless
elements. On the other hand, in De Guzman v. Court of Appeals, 12 it was ruled that
a common carrier is not responsible for goods lost as a result of a robbery which is
attended by grave or irresistible threat, violence, or force.
It is clear that the cases of Pilapil and De Guzman do not apply to the present
case. Art. 1755 of the Civil Code provides that "a common carrier is bound to carry
the passengers as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances." Thus,
we held in Pilapil and De Guzman that the respondents therein were not negligent in
failing to take special precautions against threats to the safety of passengers which
could not be foreseen, such as tortious or criminal acts of third persons. In the
present case, this factor of unforeseeability (the second requisite for an event to be
considered force majeure) is lacking. As already stated, despite the report of PC
agent Generalao that the Maranaos were planning to burn some of petitioner's buses
and the assurance of petitioner's operations manager (Diosdado Bravo) that the
necessary precautions would be taken, nothing was really done by petitioner to
protect the safety of passengers. cda
Third. Deceased not Guilty of Contributory Negligence
The petitioner contends that Atty. Caorong was guilty of contributory negligence in
returning to the bus to retrieve something. But Atty. Caorong did not act recklessly.
It should be pointed out that the intended targets of the violence were petitioner and
its employees, not its passengers. The assailant's motive was to retaliate for the loss
of life of two Maranaos as a result of the collision between petitioner's bus and the
jeepney in which the two Maranaos were riding. Mananggolo, the leader of the group Attorney's Fees. Pursuant to Art. 2208, attorney's fees may be recovered when, as in
which had hijacked the bus, ordered the passengers to get off the bus as they the instant case, exemplary damages are awarded. In the recent case of Sulpicio
intended to burn it and its driver. The armed men actually allowed Atty. Caorong to Lines, Inc. v. Court of Appeals, 18 we held an award of P50,000.00 as attorney's fees
retrieve something from the bus. What apparently angered them was his attempt to to be reasonable. Hence, the private respondents are entitled to attorney's fees in that
help the driver of the bus by pleading for his life. He was playing the role of the good amount.
Samaritan. Certainly, this act cannot be considered an act of negligence, let alone Compensation for Loss of Earning Capacity. Art. 1764 of the Civil Code, in relation
recklessness. to Art. 2206 thereof, provides that in addition to the indemnity for death arising from
Fourth. Petitioner Liable to Private Respondents for Damages the breach of contract of carriage by a common carrier, the "defendant shall be liable
for the loss of the earning capacity of the deceased, and the indemnity shall be paid
We now consider the question of damages that the heirs of Atty. Caorong, private to the heirs of the latter." The formula established in decided cases for computing net
respondents herein, are entitled to recover from the petitioner. earning capacity is as follows: 19
Indemnity for Death. Art. 1764 of the Civil Code, in relation to Art. 2206 thereof,
provides for the payment of indemnity for the death of passengers caused by the
breach of contract of carriage by a common carrier. Initially fixed in Art. 2206 at
P3,000.00, the amount of the said indemnity for death has through the years been
gradually increased in view of the declining value of the peso. It is presently fixed at
P50,000.00. 13 Private respondents are entitled to this amount.
Actual Damages. Art. 2199 provides that "except as provided by law or by
stipulation, one is entitled to an adequate compensation only for such pecuniary loss Life expectancy is equivalent to two thirds (2/3) multiplied by the difference of
suffered by him as he has duly proved." The trial court found that the private eighty (80) and the age of the deceased. 20 Since Atty. Caorong was 37 years old at
respondents spent P30,000.00 for the wake and burial of Atty. Caorong. 14 Since the time of his death, 21 he had a life expectancy of 28 2/3 more years. 22 His
petitioner does not question this finding of the trial court, it is liable to private projected gross annual income, computed based on his monthly salary of
respondents in the said amount as actual damages. P11,385.00 23 as a lawyer in the Department of Agrarian Reform at the time of his
death, was P148,005.00. 24 Allowing for necessary living expenses of fifty percent
Moral Damages. Under Art. 2206, the "spouse, legitimate and illegitimate
(50%) 25 of his projected gross annual income, his total earning capacity amounts to
descendants and ascendants of the deceased may demand moral damages for mental
P2,121,404.90. 26 Hence, the petitioner is liable to the private respondents in the
anguish by reason of the death of the deceased." The trial court found that private
said amount as compensation for loss of earning capacity. cdlex
respondent Paulie Caorong suffered pain from the death of her husband and worry on
how to provide support for their minor children, private respondents Yasser King, WHEREFORE, the decision, dated July 29, 1994, of the Court of Appeals is hereby
Rose Heinni, and Prince Alexander. 15 The petitioner likewise does not question this AFFIRMED with the MODIFICATION that petitioner Fortune Express, Inc. is
finding of the trial court. Thus, in accordance with recent decisions of this ordered to pay the following amounts to private respondents Paulie, Yasser King,
Court, 16 we hold that the petitioner is liable to the private respondents in the Rose Heinni, and Prince Alexander Caorong:
amount of P100,000.00 as moral damages for the death of Atty. Caorong.
1. death indemnity in the amount of fifty thousand pesos (P50,000.00);
Exemplary Damages. Art. 2232 provides that "in contracts and quasi-contracts, the
court may award exemplary damages if the defendant acted in a wanton, fraudulent, 2. actual damages in the amount of thirty thousand pesos (P30,000.00);
reckless, oppressive, or malevolent manner." In the present case, the petitioner acted
3. moral damages in the amount of one hundred thousand pesos (P100,000.00);
in a wanton and reckless manner. Despite warning that the Maranaos were planning
to take revenge against the petitioner by burning some of its buses, and contrary to 4. exemplary damages in the amount of one hundred thousand pesos (P100,000.00);
the assurance made by its operations manager that the necessary precautions would
be taken, the petitioner and its employees did nothing to protect the safety of 5. attorney's fees in the amount of fifty thousand pesos (P50,000.00);
passengers. Under the circumstances, we deem it reasonable to award private
respondents exemplary damages in the amount of P100,000.00. 17 cdll
6. compensation for loss of earning capacity in the amount of two million one
hundred twenty-one thousand four hundred four pesos and ninety centavos
(P2,121,404.90); and
7. costs of suits.
SO ORDERED.
||| (Fortune Express, Inc. v. Court of Appeals, G.R. No. 119756, [March 18, 1999],
364 PHIL 480-496)

THIRD DIVISION
[G.R. No. 85691. July 31, 1990.]
BACHELOR EXPRESS, INCORPORATED, and
CRESENCIO RIVERA, petitioners, vs. THE HONORABLE
COURT OF APPEALS (Sixth Division), RICARDO
BETER, SERGIA BETER, TEOFILO RAUTRAUT and
ZOETERA RAUTRAUT, respondents.
Aquino W. Gambe for petitioners.
Tranquilino O. Calo, Jr. for private respondents.
DECISION
GUTIERREZ, JR., J p:
This is a petition for review of the decision of the Court of Appeals which reversed
and set aside the order of the Regional Trial Court, Branch I, Butuan City dismissing
the private respondents' complaint for collection of "a sum of money" and finding the
petitioners solidarily liable for damages in the total amount of One Hundred Twenty
Thousand Pesos (P120,000.00). The petitioners also question the appellate court's
resolution denying a motion for reconsideration.
On August 1, 1980, Bus No. 800 owned by Bachelor Express, Inc. and driven by
Cresencio Rivera was the situs of a stampede which resulted in the death of
passengers Ornominio Beter and Narcisa Rautraut.
The evidence shows that the bus came from Davao City on its way to Cagayan de
Oro City passing Butuan City; that while at Tabon-Tabon, Butuan City, the bus
picked up a passenger; that about fifteen (15) minutes later, a passenger at the rear
portion suddenly stabbed a PC soldier which caused commotion and panic among
the passengers; that when the bus stopped, passengers Ornominio Beter and Narcisa
Rautraut were found lying down the road, the former already dead as a result of head
injuries and the latter also suffering from severe injuries which caused her death
later. The passenger-assailant alighted from the bus and ran toward the bushes but
was killed by the police. Thereafter, the heirs of Ornomino Beter and Narcisa
Rautraut, private respondents herein (Ricardo Beter and Sergia Beter are the parents
of Ornominio while Teofilo Rautraut and Zoetera [should be Zotera] Rautraut are the
parents of Narcisa) filed a complaint for "sum of money" against Bachelor Express,
Inc. its alleged owner Samson Yasay, and the driver Rivera.
In their answer, the petitioners denied liability for the death of Ornominio Beter and
Narcisa Rautraut. They alleged that ". . . the driver was able to transport his
passengers safely to their respective places of destination except Ornominio Beter
and Narcisa Rautraut who jumped off the bus without the knowledge and consent,
much less, the fault of the driver and conductor and the defendants in this case; the
defendant corporation had exercised due diligence in the choice of its employees to
avoid as much as possible accidents; the incident on August 1, 1980 was not a traffic
accident or vehicular accident, it was an incident or event very much beyond the
control of the defendants; defendants were not parties to the incident complained of
as it was an act of a third party who is not in any way connected with the defendants
and of which the latter have no control and supervision; . . ." (Rollo, pp. 112-113).
After due trial, the trial court issued an order dated August 8, 1985 dismissing the
complaint.LibLex
Upon appeal however, the trial court's decision was reversed and set aside. The
dispositive portion of the decision of the Court of Appeals states:
"WHEREFORE, the Decision appealed from is REVERSED and
SET ASIDE and a new one entered finding the appellees jointly
and solidarily liable to pay the plaintiffs-appellants the following
amounts:
1) To the heirs of Ornominio Beter, the amount of Seventy Five
Thousand Pesos (P75,000.00) in loss of earnings and support,
moral damages, straight death indemnity and attorney's fees;
and,
2) To the heirs of Narcisa Rautraut, the amount of Forty Five
Thousand Pesos (P45,000.00) for straight death indemnity,
moral damages and attorney's fees. Costs against appellees."
(Rollo, pp. 71-72)
The petitioners now pose the following questions:
"What was the proximate cause of the whole incident? Why
were the passengers on board the bus panicked (sic) and why
were they shoving one another? Why did Narcisa Rautraut and
Ornominio Beter jump off from the running bus?"
The petitioners opine that answers to these questions are material to arrive at "a fair,
just and equitable judgment." (Rollo, p. 5) They claim that the assailed decision is
based on a misapprehension of facts and its conclusion is grounded on speculation,
surmises or conjectures.
As regards the proximate cause of the death of Ornominio Beter and Narcisa
Rautraut, the petitioners maintain that it was the act of the passenger who ran amuck
and stabbed another passenger of the bus. They contend that the stabbing incident
triggered off the commotion and panic among the passengers who pushed one
another and that "presumably out of fear and moved by that human instinct of self-
preservation Beter and Rautraut jumped off the bus while the bus was still running
resulting in their untimely death.' (Rollo, p. 6) Under these circumstances, the
petitioners asseverate that they were not negligent in the performance of their duties
and that the incident was completely and absolutely attributable to a third person, the
passenger who ran amuck, for without his criminal act, Beter and Rautraut could not
have been subjected to fear and shock which compelled them to jump off the running
bus. They argue that they should not be made liable for damages arising from acts of
third persons over whom they have no control or supervision.
Furthermore, the petitioners maintain that the driver of the bus, before, during and
after the incident was driving cautiously giving due regard to traffic rules, laws and
regulations. The petitioners also argue that they are not insurers of their passengers
as ruled by the trial court.
The liability, if any, of the petitioners is anchored on culpa contractual or breach of
contract of carriage. The applicable provisions of law under the New Civil Code are
as follows:
"ART. 1732. Common carriers are persons, corporations, firms
or associations engaged in the business of carrying or
transporting passengers or goods or both by land, water, or air,
for compensation, offering their services to the public.
"ART. 1733. Common carriers, from the nature of their business
and for reasons of public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for
the safety of the passengers transported by them, according to all
the circumstances of each case.
xxx xxx xxx
"ART. 1755. A common carrier is bound to carry the passengers
safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for
all the circumstances.
"ART. 1756. In case of death of or injuries to passengers,
common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in Articles 1733 and 1755."
There is no question that Bachelor Express, Inc. is a common carrier. Hence, from
the nature of its business and for reasons of public policy Bachelor Express, Inc. is
bound to carry its passengers safely as far as human care and foresight can provide
using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.
In the case at bar, Ornominio Beter and Narcisa Rautraut were passengers of a bus
belonging to petitioner Bachelor Express, Inc. and, while passengers of the bus,
suffered injuries which caused their death. Consequently, pursuant to Article 1756 of
the Civil Code, petitioner Bachelor Express, Inc. is presumed to have acted
negligently unless it can prove that it had observed extraordinary diligence in
accordance with Articles 1733 and 1755 of the New Civil Code.
Bachelor Express, Inc. denies liability for the death of Beter and Rautraut on its
posture that the death of the said passengers was caused by a third person who was
beyond its control and supervision. In effect, the petitioner, in order to overcome the
presumption of fault or negligence under the law, states that the vehicular incident
resulting in the death of passengers Beter and Rautraut was caused by force majeure
or caso fortuito over which the common carrier did not have any control.
Article 1174 of the present Civil Code states:
"Except in cases expressly specified by law, or when it is
otherwise declared by stipulations, or when the nature of the
obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or
which though foreseen, were inevitable."
The above - mentioned provision was substantially copied from Article 1105 of the
old Civil Code which states"
"No one shall be liable for events which could not be foreseen or
which, even if foreseen, were inevitable, with the exception of
the cases in which the law expressly provides otherwise and
those in which the obligation itself imposes liability."
In the case of Lasam v. Smith (45 Phil. 657 [1924]), we defined "events" which
cannot be foreseen and which, having been foreseen, are inevitable in the following
manner:
". . . The Spanish authorities regard the language employed as an
effort to define the term 'caso fortuito' and hold that the two
expressions are synonymous. (Manresa Comentarios al Codigo
Civil Español, vol. 8, pp. 88 et seq.; Scaevola, Codigo Civil, vol.
19, pp. 526 et seq.)
The antecedent to Article 1105 is found in Law II, Title 33,
Partida 7, which defines caso fortuito as 'ocasion que acaese por
aventura de que non se puede ante ver. E son estos,
derrivamientos de casas e fuego que enciende a so ora, e
quebrantamiento de navio, fuerca de ladrones.' (An event that
takes place by incident and could not have been foreseen.
Examples of this are destruction of houses, unexpected fire,
shipwreck, violence of robbers. . . .)
 Escriche defines caso fortuito as an unexpected event or act of
God which could neither be foreseen nor resisted, such as floods,
torrents, shipwrecks, conflagrations, lightning, compulsion,
insurrections, destruction of buildings by unforeseen accidents
and other occurrences of a similar nature.
In discussing and analyzing the term caso fortuito the
Enciclopedia Juridica Española says: 'In a legal sense and,
consequently, also in relation to contracts, a caso fortuito
presents the following essential characteristics: (1 ) The cause of
the unforeseen and unexpected occurrence, or of the failure of
the debtor to comply with his obligation, must be independent of
the human will. (2) It must be impossible to foresee the event
which constitutes the caso fortuito, or if it can be foreseen, it
must be impossible to avoid. (3) The occurrence must be such as
to render it impossible for the debtor to fulfill his obligation in a
normal manner. And (4) the obligor (debtor) must be free from
any participation in the aggravation of the injury resulting to the
creditor. (5 Enciclopedia Juridica Española, 309)
As will be seen, these authorities agree that some extraordinary
circumstance independent of the will of the obligor, or of his
employees, is an essential element of a caso fortuito. . . ."
The running amuck of the passenger was the proximate cause of the incident as it
triggered off a commotion and panic among the passengers such that the passengers
started running to the sole exit shoving each other resulting in the falling off the bus
by passengers Beter and Rautraut causing them fatal injuries. The sudden act of the
passenger who stabbed another passenger in the bus is within the context of force
majeure.
However, in order that a common carrier may be absolved from liability in case
of force majeure, it is not enough that the accident was caused by force majeure. The
common carrier must still prove that it was not negligent in causing the injuries
resulting from such accident. Thus, as early as 1912, we ruled:
"From all the foregoing, it is concluded that the defendant
is not liable for the loss and damage of the goods shipped
on the lorcha Pilar by the Chinaman, Ong Bien Sip,
inasmuch as such loss and damage were the result of a
fortuitous event or force majeure, and there was no
negligence or lack of care and diligence on the part of the
defendant company or its agents." (Tan Chiong Sian v.
Inchausti & Co., 22 Phil. 152 [1912] Emphasis supplied).
This principle was reiterated in a more recent case, Batangas Laguna Tayabas
Co. v. Intermediate Appellate Court (167 SCRA 379 [1988]), wherein we ruled:
". . . [F]or their defense of force majeure or act of God to prosper
the accident must be due to natural causes and exclusively
without human intervention." (Emphasis supplied)
Therefore, the next question to be determined is whether or not the petitioner's
common carrier observed extraordinary diligence to safeguard the lives of its
passengers.
In this regard the trial court and the appellate court arrived at conflicting factual
findings.
The trial court found the following facts:
"The parties presented conflicting evidence as to how the two
deceased Narcisa Rautruat and Ornominio Beter met their
deaths.
However, from the evidence adduced by the plaintiffs, the Court
could not see why the two deceased could have fallen off the bus
when their own witnesses testified that when the commotion
ensued inside the bus, the passengers pushed and shoved each
other towards the door apparently in order to get off from the
bus through the door. But the passengers also could not pass
through the door because according to the evidence the door was
locked.
On the other hand, the Court is inclined to give credence to the
evidence adduced by the defendants that when the commotion
ensued inside the bus, the two deceased panicked and, in state of
shock and fear, they jumped off from the bus by passing through
the window. prcd
It is the prevailing rule and settled jurisprudence that
transportation companies are not insurers of their passengers.
The evidence on record does not show that defendants' personnel
were negligent in their duties. The defendants' personnel have
every right to accept passengers absent any manifestation of
violence or drunkenness. If and when such passengers harm
other passengers without the knowledge of the transportation
company's personnel, the latter should not be faulted." (Rollo,
pp. 46-47)
A thorough examination of the records, however, show that there are material facts
ignored by the trial court which were discussed by the appellate court to arrive at a
different conclusion. These circumstances show that the petitioner common carrier
was negligent in the provision of safety precautions so that its passengers may be
transported safely to their destinations. The appellate court states: LibLex
"A critical eye must be accorded the lower court's conclusions of
fact in its tersely written ratio decidendi. The lower court
concluded that the door of the bus was closed; secondly, the
passengers, specifically the two deceased, jumped out of the
window. The lower court therefore concluded that the defendant
common carrier is not liable for the death of the said passengers
which it implicitly attributed to the unforeseen acts of the
unidentified passenger who went amuck.
There is nothing in the record to support the conclusion that the
solitary door of the bus was locked as to prevent the passengers
from passing through. Leonila Cullano, testifying for the
defense, clearly stated that the conductor opened the door when
the passengers were shouting that the bus stop while they were
in a state of panic. Sergia Beter categorically stated that she
actually saw her son fall from the bus as the door was forced
open by the force of the onrushing passengers.
Pedro Collango, on the other hand, testified that he shut the door
after the last passenger had boarded the bus. But he had quite
conveniently neglected to say that when the passengers had
panicked, he himself panicked and had gone to open the door.
Portions of the testimony of Leonila Cullano, quoted below, are
illuminating:
'xxx xxx xxx
Q When you said the conductor opened the door, the door at the
front or rear portion of the bus?
A Front door.
Q And these two persons whom you said alighted, where did
they pass, the fron(t) door or rear door?
A Front door.
xxx xxx xxx
(Tsn., p. 4, Aug. 8, 1984)
xxx xxx xxx
Q What happened after there was a commotion at the rear
portion of the bus?
A When the commotion occurred, I stood up and I noticed that
there was a passenger who was sounded (sic). The
conductor panicked because the passengers were
shouting 'stop, stop'. The conductor opened the bus.'"
(Tsn., p. 3, August 8, 1984).
Accordingly, there is no reason to believe that the deceased
passengers jumped from the window when it was entirely
possible for them to have alighted through the door. The lower
court's reliance on the testimony of Pedro Collango, as the
conductor and employee of the common carrier, is unjustified, in
the light of the clear testimony of Leonila Cullano as the sole
uninterested eyewitness of the entire episode. Instead we find
Pedro Collango's testimony to be infused by bias and fraught
with inconsistencies, if not notably unreliable for lack of
veracity. On direct examination, he testified:
xxx xxx xxx
Q So what happened to the passengers inside your bus?
A Some of the passengers jumped out of the window.
COURT:
Q While the bus was in motion?
A Yes, your Honor, but the speed was slow because we have just
picked up a passenger.
Atty. Gambe:
Q You said that at the time of the incident the bus was running
slow because you have just picked up a passenger. Can
you estimate what was your speed at that time?.
Atty. Calo:
No basis, your Honor, he is neither a driver nor a
conductor.
COURT:
Let the witness answer. Estimate only, the conductor
experienced.
Witness:
Not less than 30 to 40 miles.
COURT:
Kilometers or miles?
A Miles.
Atty. Gambe:
Q That is only your estimate by your experience?
 A Yes, sir, estimate.
(Tsn., pp. 4-5, Oct. 17, 1983).
At such speed of not less than 30 to 40 miles . . ., or about 48 to
65 kilometers per hour, the speed of the bus could scarcely be
considered slow considering that according to Collango himself,
the bus had just come from a full stop after picking a passenger
(Tsn, p. 4, id.) and that the bus was still on its second or third
gear (Tsn., p. 12, id.).
In the light of the foregoing, the negligence of the common
carrier, through its employees, consisted of the lack of
extraordinary diligence required of common carriers, in
exercising vigilance and utmost care of the safety of its
passengers, exemplified by the driver's belated stop and the
reckless opening of the doors of the bus while the same was
travelling at an appreciably fast speed. At the same time, the
common carrier itself acknowledged, through its administrative
officer, Benjamin Granada, that the bus was commissioned to
travel and take on passengers and the public at large, while
equipped with only a solitary door for a bus its size and loading
capacity, in contravention of rules and regulations provided for
under the Land Transportation and Traffic Code (RA 4136 as
amended.)" (Rollo, pp. 23-26)
Considering the factual findings of the Court of Appeals — the bus driver did not
immediately stop the bus at the height of the commotion; the bus was speeding from
a full stop; the victims fell from the bus door when it was opened or gave way while
the bus was still running; the conductor panicked and blew his whistle after people
had already fallen off the bus; and the bus was not properly equipped with doors in
accordance with law — it is clear that the petitioners have failed to overcome the
presumption of fault and negligence found in the law governing common carriers.
The petitioners' argument that the petitioners "are not insurers of their passengers"
deserves no merit in view of the failure of the petitioners to prove that the deaths of
the two passengers were exclusively due to force majeure and not to the failure of
the petitioners to observe extraordinary diligence in transporting safely the
passengers to their destinations as warranted by law. (See Batangas Laguna Tayabas
Co. v. Intermediate Appellate Court, supra).
The petitioners also contend that the private respondents failed to show to the court
that they are the parents of Ornominio Beter and Narcisa Rautraut respectively and
therefore have no legal personality to sue the petitioners. This argument deserves
scant consideration. We find this argument a belated attempt on the part of the
petitioners to avoid liability for the deaths of Beter and Rautraut. The private
respondents were identified as the parents of the victims by witnesses during the trial
and the trial court recognized them as such. The trial court dismissed the complaint
solely on the ground that the petitioners were not negligent.
Finally, the amount of damages awarded to the heirs of Beter and Rautraut by the
appellate court is supported by the evidence. The appellate court stated: prLL
"Ornominio Beter was 32 years of age at the time of his death,
single, in good health and rendering support and service to his
mother. As far as Narcisa Rautraut is concerned, the only
evidence adduced is to the effect that at her death, she was 23
years of age, in good health and without visible means of
support.
In accordance with Art. 1764 in conjunction with Art. 2206 of
the Civil Code, and established jurisprudence, several factors
may be considered in determining the award of damages,
namely: 1) life expectancy (considering the state of health of the
deceased and the mortality tables are deemed conclusive) and
loss of earning capacity; (2) pecuniary loss, loss of support and
service; and (3) moral and mental suffering (Alcantara, et el. v.
Surro, et al., 93 Phil. 470).
In the case of People v. Daniel (No. L-66551, April 25, 1985,
136 SCRA 92, at page 104), the High Tribunal, reiterating the
rule in Villa Rey Transit, Inc. v. Court of Appeals(31 SCRA
511), stated that the amount of loss of earning capacity is based
mainly on two factors, namely, (1) the number of years on the
basis of which the damages shall be computed; and (2) the rate
at which the losses sustained by the heirs should be fixed.
As the formula adopted in the case of Davila v. Philippine Air
Lines, 49 SCRA 497, at the age of 30 one's normal life
expectancy is 33 1/3 years based on the American Expectancy
Table of Mortality (2/3 x 80-32). By taking into account the pace
and nature of the life of a carpenter, it is reasonable to make
allowances for these circumstances and reduce the life
expectancy of the deceased Ornominio Beter to 25 years (People
v. Daniel, supra). To fix the rate of losses it must be noted that
Art. 2206 refers to gross earnings less necessary living expenses
of the deceased, in other words, only net earnings are to be
considered (People v. Daniel, supra; Villa Rey Transit, Inc. v.
Court of Appeals, supra).
Applying the foregoing rules with respect to Ornominio Beter, it
is both just and reasonable, considering his social standing and
position, to fix the deductible, living and incidental expenses at
the sum of Four Hundred Pesos (P400.00) a month, or Four
Thousand Eight Hundred Pesos (P4,800.00) annually. As to his
income, considering the irregular nature of the work of a daily
 wage carpenter which is seasonal, it is safe to assume that he
shall have worked for twenty (20) days a month at Twenty Five
Pesos (P25.00) a day or Five Hundred Pesos (P500.00) a month.
Annually, his income would amount to Six Thousand Pesos
(P6,000.00) or One Hundred Fifty Thousand Pesos
(P150,000.00) for twenty five years. Deducting therefrom his
necessary expenses, his heirs would be entitled to Thirty
Thousand Pesos (P30,000.00) representing loss of support and
service (P150,000.00 less P120,000.00). In addition, his heirs are
entitled to Thirty Thousand Pesos (P30,000.00) as straight death
indemnity pursuant to Article 2206 (People v. Daniel, supra).
For damages for their moral and mental anguish, his heirs are
entitled to the reasonable sum of P10,000.00 as an exception to
the general rule against moral damages in case of breach of
contract rule Art. 2200 (Necesito v. Paras, 104 Phil. 75). As
attorney's fees, Beter's heirs are entitled to P5,000.00. All in all,
the plaintiff-appellants Ricardo and Sergia Beter as heirs of their
son Ornominio are entitled to an indemnity of Seventy Five
Thousand Pesos (P75,000.00). cdphil
In the case of Narcisa Rautraut, her heirs are entitled to a straight
death indemnity of Thirty Thousand Pesos (P30,000.00), to
moral damages in the amount of Ten Thousand Pesos
(P10,000.00) and Five Thousand Pesos (P5,000.00) as attorneys
fees, or a total of Forty Five Thousand Pesos (P45,000.00) as
total indemnity for her death in the absence of any evidence that
she had visible means of support." (Rollo, pp. 30-31)
WHEREFORE, the instant petition is DISMISSED. The questioned decision dated
May 19, 1988 and the resolution dated August 1, 1988 of the Court of Appeals are
AFFIRMED.
SO ORDERED.
||| (Bachelor Express, Inc. v. Court of Appeals, G.R. No. 85691, [July 31, 1990], 266
PHIL 233-249)

THIRD DIVISION
[G.R. No. 143008. June 10, 2002.]
SMITH BELL DODWELL SHIPPING AGENCY
CORPORATION, petitioner, vs. CATALINO BORJA and
INTERNATIONAL TOWAGE AND TRANSPORT
CORPORATION, respondents.
Del Rosario and Del Rosario for petitioner.
Castillo and Poblador for respondent ITTC.
Manalo Puno Jocson & Placido Law Offices for respondent Borja.
Amado D. Valdez & Associates for respondents.
SYNOPSIS
Respondent Catalino Borja, customs inspector of the Bureau of Customs, was
assigned to inspect petitioner's vessel, M/T King Family, which was due to arrive at
the port of Manila on September 24, 1987. At about 11 o'clock in the morning on
September 24, 1987, while the vessel was unloading chemicals unto the two barges
owned by respondent ITTC, a sudden explosion occurred setting the vessels afire.
Respondent Borja was at that time inside the cabin preparing reports. As a result of
the fire and explosion, respondent Borja suffered damages and injuries. His attending
physician diagnosed respondent Borja to be permanently disabled. Hence, for
injuries suffered, respondent Borja asked for damages. However, both petitioner and
respondent ITTC denied liabilities and attributed to each other negligence.
Thereafter, the Regional Trial Court found that the fire and the explosion had
originated from petitioner's vessel. It, therefore, held petitioner liable for damages
and loss of income. The Court of Appeals affirmed in toto the decision of the trial
court. Petitioner elevated the matter before the Supreme Court via a petition for
review on certiorari. caEIDA
The Court found no cogent reason to overturn the factual findings of the lower
courts. Nothing is more settled in jurisprudence than that the Court is bound by the
factual findings of the Court of Appeals when these are supported by substantial
evidence and are not under any of the exceptions, more so, when such findings
affirm those of the trial court. Hence, the Court reviews only issues of law. TSHIDa
The Court found the petitioner negligent. While knowing that their vessel was
carrying dangerous inflammable chemicals — alkyl benzene and methyl
methacrylate monomer — its officers and crew failed to take all the necessary
precautions to prevent an accident. The Court held that the owner or the person in
possession and control of a vessel and the vessel are liable for all natural and
proximate damage caused to persons and property by reason of negligent
management or navigation. Hence, the decision of the Court of Appeals was
affirmed by the Court, but with modification with respect to the amount of actual
damages for loss of earning capacity.SEHACI
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FACTUAL FINDINGS OF COURT OF
APPEALS; BINDING UPON THE SUPREME COURT WHEN SUPPORTED BY
SUBSTANTIAL EVIDENCE. — Both the RTC and the CA ruled that the fire and
the explosion had originated from petitioner's vessel. We find no cogent reason to
overturn these factual findings. Nothing is more settled in jurisprudence than that this
Court is bound by the factual findings of the Court of Appeals when these are
supported by substantial evidence and are not under any of the exceptions in Fuentes
v. Court of Appeals, more so, when such findings affirm those of the trial
court. cTAaDC
2. CIVIL LAW; QUASI-DELICTS; NEGLIGENCE; EXPLAINED; CASE AT
BAR. — Negligence is conduct that creates undue risk of harm to another. It is the
failure to observe that degree of care, precaution and vigilance that the circumstances
justly demand, whereby that other person suffers injury. Petitioner's vessel was
carrying chemical cargo — alkyl benzene and methyl methacrylate monomer. While
knowing that their vessel was carrying dangerous inflammable chemicals, its officers
and crew failed to take all the necessary precautions to prevent an accident.
Petitioner was, therefore, negligent. CHaDIT
3. ID.; ID.; ELEMENTS; ESTABLISHED IN CASE AT BAR. — The three
elements of quasi delict are: (a) damages suffered by the plaintiff, (b) fault or
negligence of the defendant, and (c) the connection of cause and effect between the
fault or negligence of the defendant and the damages inflicted on the plaintiff. All
these elements were established in this case. Knowing fully well that it was carrying
dangerous chemicals, petitioner was negligent in not taking all the necessary
precautions in transporting the cargo. IcAaEH
4. ID.; ID.; OWNER OR PERSON IN CONTROL OF A VESSEL AND THE
VESSEL ARE LIABLE FOR ALL NATURAL AND PROXIMATE DAMAGE
CAUSED TO PERSONS AND PROPERTY BY REASON OF NEGLIGENT
MANAGEMENT OR NAVIGATION; CASE AT BAR. — As a result of the fire
and the explosion during the unloading of the chemicals from petitioner's vessel,
Respondent Borja suffered the following damage and injuries: "(1) chemical burns of
the face and arms; (2) inhalation of fumes from burning chemicals; (3) exposure to
the elements [while] floating in sea water for about three (3) hours; (4)
homonymous hemianopsia or blurring of the right eye [which was of] possible toxic
origin; and (5) [c]erebral infract with neo-vascularization, left occipital region with
right sided headache and the blurring of vision of right eye." Hence, the owner or the
person in possession and control of a vessel and the vessel are liable for all natural
and proximate damage caused to persons and property by reason of negligent
management or navigation.
5. ID.; DAMAGES; REASONABLENESS OF DAMAGES AWARDED;
FACTORS. — In determining the reasonableness of the damages awarded under
Article 1764 in conjunction with Article 2206 of the Civil Code, the factors to be
considered are: (1) life expectancy (considering the health of the victim and the
mortality table which is deemed conclusive) and loss of earning capacity; (b)
pecuniary loss, loss of support and service; and (c) moral and mental sufferings. The
loss of earning capacity is based mainly on the number of years remaining in the
person's expected life span. In turn, this number is the basis of the damages that shall
be computed and the rate at which the loss sustained by the heirs shall be
fixed. IEcaHS
6. ID.; ID.; ACTUAL DAMAGES; LOSS OF EARNING CAPACITY; AMOUNT
RECOVERABLE; FORMULA. — The formula for the computation of loss of
earning capacity is as follows: Net earning capacity = Life expectancy x [Gross
Annual Income — Living Expenses (50% of gross annual income)], where life
expectancy = 2/3 (80 – the age of the deceased). Petitioner is correct in arguing that
it is net income (or gross income less living expenses) which is to be used in the
computation of the award for loss of income. Villa Rey Transit v. Court of
Appeals explained that "the amount recoverable is not the loss of the entire earning,
but rather the loss of that portion of the earnings which the beneficiary would have
received." Hence, in fixing the amount of the said damages, the necessary expenses
of the deceased should be deducted from his earnings. In other words, only net
earnings, not gross earnings, are to be considered; that is, the total of the earnings
less expenses necessary in the creation of such earnings or income, less living and
other incidental expenses. When there is no showing that the living expenses
constituted a smaller percentage of the gross income, we fix the living expenses at
half of the gross income. To hold that one would have used only a small part of the
income, with the larger part going to the support of one's children, would be
conjectural and unreasonable.
7. ID.; ID.; ID.; ID.; LIFE EXPECTANCY; NOT PEGGED AT 65 YEARS; CASE
AT BAR. — Counsel for Respondent Borja is also correct in saying that life
expectancy should not be based on the retirement age of government employees,
which is pegged at 65. In Negros Navigation Co., Inc. v. CA, the Court resolved that
in calculating the life expectancy of an individual for the purpose of determining loss
of earning capacity under Article 2206(1) of the Civil Code, it is assumed that the
deceased would have earned income even after retirement from a particular job.
Respondent Borja should not be situated differently just because he was a
government employee. Private employees, given the retirement packages provided
by their companies, usually retire earlier than government employees; yet, the life
expectancy of the former is not pegged at 65 years.
8. ID.; ID.; ID.; ID.; ID.; PEGGED AT 80 YEARS EVEN IF PERSON LIVED
BEYOND SAID AGE. — Petitioner avers that Respondent Borja died nine years
after the incident and, hence, his life expectancy of 80 years should yield to the
reality that he was only 59 when he actually died. We disagree. The Court uses the
American Experience/Expectancy Table of Mortality or the Actuarial or Combined
Experience Table of Mortality, which consistently pegs the life span of the average
Filipino at 80 years, from which it extrapolates the estimated income to be earned by
the deceased had he or she not been killed. Respondent Borja's demise earlier than
the estimated life span is of no moment. For purposes of determining loss of earning
capacity, life expectancy remains at 80. Otherwise, the computation of loss of
earning capacity will never become final, being always subject to the eventuality of
the victim's death. The computation should not change even if Borja lived beyond 80
years. Fair is fair.
9. ID.; ID.; AWARD OF MORAL DAMAGES AND ATTORNEY'S FEES,
PROPER IN CASE AT BAR. — Having been duly proven, the moral damages and
attorney's fees awarded are justified under the Civil Code's Article 2219, paragraph
2; and Article 2208, paragraph 11, respectively.
DECISION
PANGANIBAN, J p:
The owner or the person in possession and control of a vessel is liable for all natural
and proximate damages caused to persons and property by reason of negligence in its
management or navigation. The liability for the loss of the earning capacity of the
deceased is fixed by taking into account the net income of the victim at the time of
death — of the incident in this case — and that person's probable life expectancy.
The Case
Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court,
challenging the March 6, 2000 Decision 1 and the April 25, 2000 Resolution 2 of the
Court of Appeals 3 (CA) in CA-G.R. CV No. 57470. The assailed Decision disposed
as follows:
"WHEREFORE, premises considered, the instant appeal is
hereby DENIED. The questioned decision of the lower court is
hereby AFFIRMED in toto. No pronouncement as to costs." 4
Reconsideration was denied in the assailed Resolution.
The Facts
The facts of the case are set forth by the CA as follows:
"It appears that on September 23, 1987, Smith Bell [herein
petitioner] filed a written request with the Bureau of Customs for
the attendance of the latter's inspection team on vessel M/T King
Family which was due to arrive at the port of Manila on
September 24, 1987.
"Said vessel contained 750 metric tons of alkyl benzene and
methyl methacrylate monomer.
"On the same day, Supervising Customs Inspector Manuel Ma.
D. Nalgan instructed [Respondent Catalino Borja] to board said
vessel and perform his duties as inspector upon the vessel's
arrival until its departure. At that time, [Borja] was a customs
inspector of the Bureau of Customs receiving a salary of
P31,188.25 per annum.
"At about 11 o'clock in the morning on September 24, 1987,
while M/T King Family was unloading chemicals unto two (2)
barges [—] ITTC 101 and CLC-1002 [—] owned by
[Respondent] ITTC, a sudden explosion occurred setting the
vessels afire. Upon hearing the explosion, [Borja], who was at
that time inside the cabin preparing reports, ran outside to check
what happened. Again, another explosion was heard.
"Seeing the fire and fearing for his life, [Borja] hurriedly jumped
over board to save himself. However, the [water] [was] likewise
on fire due mainly to the spilled chemicals. Despite the
tremendous heat, [Borja] swam his way for one (1) hour until he
was rescued by the people living in the squatters' area and sent to
San Juan De Dios Hospital.
"After weeks of intensive care at the hospital, his attending
physician diagnosed [Borja] to be permanently disabled due to
the incident. [Borja] made demands againstSmith Bell and ITTC
for the damages caused by the explosion. However, both denied
liabilities and attributed to each other negligence." 5
The trial court 6 (RTC) ruled in favor of Respondent Borja and held petitioner liable
for damages and loss of income. The RTC disposed as follows:
"WHEREFORE, premises considered, judgment is hereby
rendered ordering [Petitioner] Smith Bell Dodwell [S]hipping
Agency Corporation to pay [Borja]:
1. The amount of P495,360.00 as actual damages for
loss of earning capacity:
2. The amount of P100,000.00 for moral damages; and
3. The amount of P50,000.00 for and as reasonable
attorney's fees.
"The cross-claim of [Petitioner] Smith Bell Dodwell Shipping
Agency Corporation against co-defendant International Towage
and Transport Corporation and the latter's counterclaim against
[Borja] and cross-claim with compulsory counterclaim
against Smith Bell are hereby ordered dismissed." 7
Ruling of the Court of Appeals
Affirming the trial court, the CA rejected the plea of petitioner that it be exonerated
from liability for Respondent Borja's injuries. Contrary to the claim of petitioner that
no physical evidence was shown to prove that the explosion had originated from its
vessel, the CA held that the fire had originated from M/T King Family. This
conclusion was amply supported by the testimonies of Borja and Eulogio Laurente
(the eyewitness of International Towage and Transport Corporation or ITTC) as well
as by the investigation conducted by the Special Board of Marine Inquiry and
affirmed by the secretary of the Department of National Defense. On the other hand,
the RTC, which the CA sustained, had not given probative value to the evidence of
petitioner, whose sole eyewitness had not shown up for cross-examination.
Hence, this Petition. 8
The Issues
In its Memorandum, 9 petitioner raises the following issues:
"1. Whether petitioner should be held liable for the injuries of
Respondent Catalino Borja.
"2. Whether Respondent ITTC should be held liable for the
injuries of Respondent Catalino Borja.
"3. Assuming without admitting that Respondent
Catalino Borja is entitled to damages, whether
Respondent Borja is entitled to the amount of damages awarded
to him by the trial court." 10
Simply put, these issues can be summed up in these two questions: (1) Who, if any,
is liable for Borja's injuries? (2) What is the proper amount of liability?
This Court's Ruling
The Petition is partly meritorious.
First Issue:
Responsibility for Injuries
Petitioner avers that both lower courts labored under a misapprehension of the facts.
It claims that the documents adduced in the RTC conclusively revealed that the
explosion that caused the fire on M/T King Family had originated from the
barge ITTC-101, a conclusion based on three grounds. First, the Survey Report (Exh.
"10") dated October 21, 1987 submitted by the Admiral Surveyors and Adjusters,
Inc., showed that no part of M/T King Family sustained any sharp or violent damage
that would otherwise be observed if indeed an explosion had occurred on it. On the
other hand, the fact that the vessel sustained cracks on its shell plating was noted in
two Survey Reports from Greutzman Divers Underwater Specialist, dated October 6,
1987 (Exh. "11"), and during the underwater inspection on the sunken barge ITTC-
101.
Second, external fire damage on the hull of M/T King Family indicated that the fire
had started from outside the vessel and from ITTC-101. The port side of the vessel to
which the ITTC barge was tied was completely gutted by fire, while the starboard
side to which the barge CLC-1002 was tied sustained only slight fire damage.
Third, testimonial evidence proved that the explosion came from the barge of the
ITTC and not from its vessel. Security Guard Vivencio Estrella testified that he had
seen the sudden explosion of monomer on the barge with fire that went up to about
60 meters. Third Mate Choi Seong Hwan and Second Mate Nam Bang Choun ofM/T
King Family narrated that while they were discharging the chemicals, they saw and
heard an explosion from the barge ITTC-101. Chief Security Guard Reynaldo Patron,
in turn, testified that he was 7 to 10 meters away from the barge when he heard the
explosion from the port side of M/T King Family and saw the barge already on fire.
We are not persuaded. Both the RTC and the CA ruled that the fire and the explosion
had originated from petitioner's vessel. Said the trial court:
"The attempts of [Petitioner] Smith Bell to shift the blame on . . .
ITTC were all for naught. First, the testimony of its alleged
eyewitness was stricken off the record for his failure to appear
for cross-examination (p. 361, Record). Second, the documents
offered to prove that the fire originated from barge ITTC-101
were all denied admission by the [c]ourt for being, in effect,
hearsay (pp. 335 and 362). . . . Thus, there is nothing in the
record to support [petitioner's] contention that the fire and
explosion originated from barge ITTC-101." 11
We find no cogent reason to overturn these factual findings. Nothing is more settled
in jurisprudence than that this Court is bound by the factual findings of the Court of
Appeals when these are supported by substantial evidence and are not under any of
the exceptions in Fuentes v. Court of Appeals; 12 more so, when such findings
affirm those of the trial court. 13 Verily, this Court reviews only issues of law.
Negligence is conduct that creates undue risk of harm to another. It is the failure to
observe that degree of care, precaution and vigilance that the circumstances justly
demand, whereby that other person suffers injury. 14 Petitioner's vessel was carrying
chemical cargo — alkyl benzene and methyl methacrylate monomer. 15 While
knowing that their vessel was carrying dangerous inflammable chemicals, its officers
and crew failed to take all the necessary precautions to prevent an accident.
Petitioner was, therefore, negligent.
The three elements of quasi delict are: (a) damages suffered by the plaintiff, (b) fault
or negligence of the defendant, and (c) the connection of cause and effect between
the fault or negligence of the defendant and the damages inflicted on the
plaintiff. 16 All these elements were established in this case. Knowing fully well that
it was carrying dangerous chemicals, petitioner was negligent in not taking all the
necessary precautions in transporting the cargo.
As a result of the fire and the explosion during the unloading of the chemicals from
petitioner's vessel, Respondent Borja suffered the following damage and injuries:
"(1) chemical burns of the face and arms; (2) inhalation of fumes from burning
chemicals; (3) exposure to the elements [while] floating in sea water for about three
(3) hours; (4) homonymous hemianopsia or blurring of the right eye [which was of]
possible toxic origin; and (5) [c]erebral infract with neovascularization, left occipital
region with right sided headache and the blurring of vision of right eye." 17
Hence, the owner or the person in possession and control of a vessel and the vessel
are liable for all natural and proximate damage caused to persons and property by
reason of negligent management or navigation. 18
Second Issue:
Amount of Liability
Petitioner insists that Borja is not entitled to the full amount of damages awarded by
the lower courts. It disputes the use of his gross earning as basis for the computation
of the award for loss of earning capacity. Both courts, in computing the value of such
loss, used the remaining years of the victim as a government employee and the
amount he had been receiving per annum at the time of the incident.
Counsel for Respondent Borja, on the other hand, claims that petitioner had no cause
to complain, because the miscomputation had ironically been in its favor. The
multiplier used in the computation was erroneously based on the remaining years in
government service, instead of the life expectancy, of the victim. Borja's counsel also
points out that the award was based on the former's meager salary in 1987, or about
23 years ago when the foreign exchange was still P14 to $1. Hence, the questioned
award is consistent with the primary purpose of giving what is just, moral and legally
due the victim as the aggrieved party.
Both parties have a point. In determining the reasonableness of the damages awarded
under Article 1764 in conjunction with Article 2206 of the Civil Code, the factors to
be considered are: (1) life expectancy (considering the health of the victim and the
mortality table which is deemed conclusive) and loss of earning capacity; (b)
pecuniary loss, loss of support and service; and (c) moral and mental
sufferings. 19 The loss of earning capacity is based mainly on the number of years
remaining in the person's expected life span. In turn, this number is the basis of the
damages that shall be computed and the rate at which the loss sustained by the heirs
shall be fixed.20
The formula for the computation of loss of earning capacity is as follows: 21
Net earning capacity = Life expectancy x [Gross Annual Income
- Living Expenses (50% of gross annual income)],
where life expectancy = 2/3 (80 — the age of the
deceased ) 22
Petitioner is correct in arguing that it is net income (or gross income less living
expenses) which is to be used in the computation of the award for loss of
income. Villa Rey Transit v. Court of Appeals 23 explained that "the amount
recoverable is not the loss of the entire earning, but rather the loss of that portion of
the earnings which the beneficiary would have received." Hence, in fixing the
amount of the said damages, the necessary expenses of the deceased should be
deducted from his earnings.
In other words, only net earnings, not gross earnings, are to be considered; that is, the
total of the earnings less expenses necessary in the creation of such earnings or
income, less living and other incidental expenses. When there is no showing that the
living expenses constituted a smaller percentage of the gross income, we fix the
living expenses at half of the gross income. To hold that one would have used only a
small part of the income, with the larger part going to the support of one's children,
would be conjectural and unreasonable. 24
being always subject to the eventuality of the victim's death. The computation should
not change even if Borja lived beyond 80 years. Fair is fair.
Based on the foregoing discussion, the award for loss of earning capacity should be
computed as follows:
Loss of earning = [2 (80-50)] x [(P2,752 x 12)-16,512]
capacity ————
3
= P330,240
Having been duly proven, the moral damages and attorney's fees awarded are
justified under the Civil Code's Article 2219, paragraph 2; and Article 2208,
paragraph 11, respectively.
WHEREFORE, the Petition is PARTLY GRANTED. The assailed Decision is
AFFIRMED with the following MODIFICATIONS: petitioner is ordered to pay the
heirs of the victim damages in the amount of P320,240 as loss of earning capacity,
moral damages in the amount of P100,000, plus another P50,000 as attorney's fees.
Costs against petitioner. DSETac

Counsel for Respondent Borja is also correct in saying that life expectancy should SO ORDERED.
not be based on the retirement age of government employees, which is pegged at 65. ||| (Smith Bell Dodwell Shipping Agency Corp. v. Borja, G.R. No. 143008, [June 10,
In Negros Navigation Co., Inc. v. CA, 25 the Court resolved that in calculating the
2002], 432 PHIL 913-926)
life expectancy of an individual for the purpose of determining loss of earning
capacity under Article 2206(1) of the Civil Code, it is assumed that the deceased
would have earned income even after retirement from a particular job.
Respondent Borja should not be situated differently just because he was a
government employee. Private employees, given the retirement packages provided
by their companies, usually retire earlier than government employees; yet, the life
expectancy of the former is not pegged at 65 years.
Petitioner avers that Respondent Borja died nine years after the incident and, hence,
his life expectancy of 80 years should yield to the reality that he was only 59 when
he actually died.
We disagree. The Court uses the American Experience/Expectancy Table of
Mortality or the Actuarial or Combined Experience Table of Mortality, which
consistently pegs the life span of the average Filipino at 80 years, from which it
extrapolates the estimated income to be earned by the deceased had he or she not
been killed. 26
Respondent Borja's demise earlier than the estimated life span is of no moment. For
purposes of determining loss of earning capacity, life expectancy remains at 80.
Otherwise, the computation of loss of earning capacity will never become final,