Transportation Law Atty.
Pascasio
CATHAY PACIFIC AIRWAYS LTD., petitioner,
vs. SPOUSES DANIEL VASQUEZ and MARIA LUISA MADRIGAL VASQUEZ, respondents.
[G.R. No. 150843. March 14, 2003]
FACTS:
In respondents’ return flight to Manila from Hongkong, they were deprived of their original seats in
Business Class with their companions because of overbooking. Since respondents were privileged
members, their seats were upgraded to First Class. Respondents refused but eventually
persuaded to accept it. Upon return to Manila, they demanded that they be indemnified in the
amount of P1million for the “humiliation and embarrassment” caused by its employees. Petitioner’s
Country Manager failed to respond. Respondents instituted action for damages. The RTC ruled in
favor of respondents. The Court of Appeals affirmed the RTC decision with modification in the
award of damages.
ISSUE:
Whether or not the petitioners (1) breached the contract of carriage, (2) acted with fraud and (3)
were liable for damages.
RULING:
(1) YES. Although respondents have the priority of upgrading their seats, such priority may be
waived, as what respondents did. It should have not been imposed on them over their vehement
objection.
(2) NO. There was no evident bad faith or fraud in upgrade of seat neither on overbooking of flight
as it is within 10% tolerance.
(3) YES. Nominal damages (Art. 2221, NCC) were awarded in the amount of P5,000.00. Moral
damages (Art.2220, NCC) and attorney’s fees were set aside and deleted from the Court of
Appeals’ ruling.
Fabre vs. Court of Appeals
259 SCRA 426 G.R. No. 111127 July 26, 1996
Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of a Mazda minibus. They used the
bus principally in connection with a bus service for school children which they operated in Manila. It
was driven by Porfirio Cabil.
On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF)
arranged with the petitioners for the transportation of 33 members of its Young Adults Ministry from
Manila to La Union and back in consideration of which private respondent paid petitioners the
amount of P3,000.00.
EG Velasco
The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at
Carmen was under repair, so that petitioner Cabil, who was unfamiliar with the area (it being his
first trip to La Union), was forced to take a detour through the town of Ba-ay in Lingayen,
Pangasinan. At 11:30 that night, petitioner Cabil came upon a sharp curve on the highway. The
road was slippery because it was raining, causing the bus, which was running at the speed of 50
kilometers per hour, to skid to the left road shoulder. The bus hit the left traffic steel brace and sign
along the road and rammed the fence of one Jesus Escano, then turned over and landed on its left
side, coming to a full stop only after a series of impacts. The bus came to rest off the road. A
coconut tree which it had hit fell on it and smashed its front portion. Because of the mishap, several
passengers were injured particularly Amyline Antonio.
Criminal complaint was filed against the driver and the spouses were also made jointly liable.
Spouses Fabre on the other hand contended that they are not liable since they are not a common
carrier. The RTC of Makati ruled in favor of the plaintiff and the defendants were ordered to pay
jointly and severally to the plaintiffs. The Court of Appeals affirmed the decision of the trial court.
Issue: Whether the spouses Fabre are common carriers?
Held: Petition was denied. Spouses Fabre are common carriers.
The Supreme Court held that this case actually involves a contract of carriage. Petitioners, the
Fabres, did not have to be engaged in the business of public transportation for the provisions of the
Civil Code on common carriers to apply to them. As this Court has held: 10 Art. 1732, Common
carriers are persons, corporations, firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air for compensation, offering their
services to the public.
The above article makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as an ancillary activity
(in local idiom, as "a sideline"). Article 1732 also carefully avoids making any distinction between a
person or enterprise offering transportation service on a regular or scheduled basis and one
offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the "general public," i.e., the general
community or population, and one who offers services or solicits business only from a narrow
segment of the general population. We think that Article 1732 deliberately refrained from making
such distinctions.
AIR FRANCE V CARRASCOSO September 28, 1966 AIR FRANCE, petitioner, vs. RAFAEL
CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents

FACTS:
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for
Lourdes on March 30, 1958.
On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines,
Inc., issued to plaintiff a "first class" round trip airplane ticket from Manila to Rome. From Manila to
Bangkok, plaintiff travelled in "first class", but at Bangkok, the Manager of the defendant airline
forced plaintiff to vacate the "first class" seat that he was occupying because, in the words of the
witness Ernesto G. Cuento, there was a "white man", who, the Manager alleged, had a "better
right" to the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be expected,
refused, and told defendant's Manager that his seat would be taken over his dead body. After
some commotion, plaintiff reluctantly gave his "first class" seat in the plane.
DECISION OF LOWER COURTS:
1. CFI – Manila: sentenced petitioner to pay respondent Rafael Carrascoso P25,000.00 by way of
moral damages; P10,000.00 as exemplary damages; P393.20 representing the difference in fare
between first class and tourist class for the portion of the trip Bangkok- Rome, these various
amounts with interest at the legal rate, from the date of the filing of the complaint until paid; plus
P3,000.00 for attorneys' fees; and the costs of suit.
2. CA: slightly reduced the amount of refund on Carrascoso's plane ticket from P393.20 to
P383.10, and voted to affirm the appealed decision "in all other respects", with costs against
petitioner.
Air France contends that respondent knew that he did not have confirmed reservations for first
class on any specific flight, although he had tourist class protection; that, accordingly, the issuance
of a first class ticket was no guarantee that he would have a first class ride, but that such would
depend upon the availability of first class seats.
ISSUE:
Is Carrascoso entitled to damages?
RULING:
Yes. The manager not only prevented Carrascoso from enjoying his right to a first class seat;
worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the
humiliation of having to go to the tourist class compartment - just to give way to another passenger
whose right thereto has not been established. Certainly, this is bad faith. Unless, of course, bad
faith has assumed a meaning different from what is understood in law. For, "bad faith"
contemplates a "state of mind affirmatively operating with furtive design or with some motive of
self-interest or will or for ulterior purpose."
For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer. Article
21 of the Civil Code says:
Transportation Law Atty. Pascasio
EG Velasco
ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
The contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or
malfeasance of the carrier's employees, naturally, could give ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be treated by the
carrier's employees with kindness, respect, courtesy and due consideration.
Although the relation of passenger and carrier is "contractual both in origin and nature"
nevertheless "the act that breaks the contract may be also a tort". The stress of Carrascoso's
action as we have said, is placed upon his wrongful expulsion. This is a violation of public duty by
the petitioner air carrier — a case of quasi-delict. Damages are proper.
Tiu vs. Arriesgado
G.R. No. 138060, September 1, 2004
Facts: At about 10:00 p.m. of March 15, 1987, the cargo truck marked "Condor Hollow Blocks and
General Merchandise" bearing plate number GBP-675 was loaded with firewood in Bogo, Cebu
and left for Cebu City. Upon reaching Sitio Aggies, Poblacion, Compostela, Cebu, just as the truck
passed over a bridge, one of its rear tires exploded. The driver, Sergio Pedrano, then parked along
the right side of the national highway and removed the damaged tire to have it vulcanized at a
nearby shop, about 700 meters away. Pedrano left his helper, Jose Mitante, Jr. to keep watch over
the stalled vehicle, and instructed the latter to place a spare tire six fathoms away behind the
stalled truck to serve as a warning for oncoming vehicles. The trucks tail lights were also left on. It
was about 12:00 a.m., March 16, 1987.
At about 4:45 a.m., D Rough Riders passenger bus with plate number PBP-724 driven by Virgilio
Te Laspiñas was cruising along the national highway of Sitio Aggies, Poblacion, Compostela,
Cebu. The passenger bus was also bound for Cebu City, and had come from Maya,
Daanbantayan, Cebu. Among its passengers were the Spouses Pedro A. Arriesgado and Felisa
Pepito Arriesgado, who were seated at the right side of the bus, about three (3) or four (4) places
from the front seat.
As the bus was approaching the bridge, Laspiñas saw the stalled truck, which was then about 25
meters away. He applied the breaks and tried to swerve to the left to avoid hitting the truck. But it
was too late; the bus rammed into the trucks left rear. The impact damaged the right side of the
bus and left several passengers injured. Pedro Arriesgado lost consciousness and suffered a
fracture in his right colles. His wife, Felisa, was brought to the Danao City Hospital. She was later
transferred to the Southern Island Medical Center where she died shortly thereafter.
Respondent Pedro A. Arriesgado then filed a complaint for breach of contract of carriage, damages
and attorneys fees before the Regional Trial Court of Cebu City, Branch 20, against the petitioners,
D Rough Riders bus operator William Tiu and his driver, Virgilio Te Laspiñas on May 27, 1987. The
respondent alleged that the passenger bus in question was cruising at a fast and high speed along
the national road, and that petitioner Laspiñas did not take precautionary measures to avoid the
accident.
 Transportation Law Atty. Pascasio
EG Velasco
The petitioners, for their part, filed a Third-Party Complaint against the following: respondent On June 11, 1973 the plaintiff filed a complaint in the CFI Manila embodying 3 causes of action
Philippine Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tiu’s insurer; respondent involving 3 separate and different shipments. The third cause of action therein involved the cargo
Benjamin Condor, the registered owner of the cargo truck; and respondent Sergio Pedrano, the now subject of this present litigation.
driver of the truck. They alleged that petitioner Laspiñas was negotiating the uphill climb along the
national highway of Sitio Aggies, Poblacion, Compostela, in a moderate and normal speed. It was
further alleged that the truck was parked in a slanted manner, its rear portion almost in the middle
of the highway, and that no early warning device was displayed. Petitioner Laspiñas promptly On December 11, 1974, Judge Serafin Cuevas issued an Order dismissing the first two causes of
applied the brakes and swerved to the left to avoid hitting the truck head-on, but despite his efforts action. The third cause of action which covered the cargo subject of this case now was likewise
to avoid damage to property and physical injuries on the passengers, the right side portion of the dismissed but without prejudice as it was not covered by the settlement. Because of the dismissal
bus hit the cargo truck’s left rear. of the complaint with respect to the third cause of action, DOLE instituted this present complaint on
January 6, 1975.
HELD: The rules which common carriers should observe as to the safety of their passengers are
set forth in the Civil Code, Articles 1733, 1755and 1756. It is undisputed that the respondent and
his wife were not safely transported to the destination agreed upon. In actions for breach of
contract, only the existence of such contract, and the fact that the obligor, in this case the common Maritime filed an answer pleading inter alia the affirmative defense of prescription under the
carrier, failed to transport his passenger safely to his destination are the matters that need to be provisions of the Carriage of Goods by Sea Act. The Trial Court granted the motion, scheduling the
proved. This is because under the said contract of carriage, the petitioners assumed the express preliminary hearing on April 27, 1977. The record before the Court does not show whether or not
obligation to transport the respondent and his wife to their destination safely and to observe
that hearing was held, but under date of May 6, 1977, Maritime filed a formal motion to dismiss
extraordinary diligence with due regard for all circumstances. Any injury suffered by the
passengers in the course thereof is immediately attributable to the negligence of the carrier. Upon invoking once more the ground of prescription.
the happening of the accident, the presumption of negligence at once arises, and it becomes the
duty of a common carrier to prove that he observed extraordinary diligence in the care of his
passengers. It must be stressed that in requiring the highest possible degree of diligence from
The Trial Court, after due consideration, resolved the matter in favor of Maritime and dismissed the
common carriers and in creating a presumption of negligence against them, the law compels them
to curb the recklessness of their drivers. While evidence may be submitted to overcome such complaint.
presumption of negligence, it must be shown that the carrier observed the required extraordinary
diligence, which means that the carrier must show the utmost diligence of very cautious persons as
far as human care and foresight can provide, or that the accident was caused by fortuitous event.
Issue:
As correctly found by the trial court, petitioner Tiu failed to conclusively rebut such presumption.
The negligence of petitioner Laspiñas as driver of the passenger bus is, thus, binding against Whether or not Article 1155 of the Civil Code applies in lieu of the COGSA.
petitioner Tiu, as the owner of the passenger bus engaged as a common carrier.

Held:
PHILIPPINE AMERICAN GENERAL INSURANCE CO., INC. and TAGUM PLASTICS, No. Article 1155 of the Civil Code provides that the prescription of actions is interrupted by the
INC., petitioners, making of an extrajudicial written demand by the creditor
vs.
SWEET LINES, INC., DAVAO VETERANS ARRASTRE AND PORT SERVICES, INC. and HON.
COURT OF APPEALS, respondents.
Section 3, paragraph 6 of the COGSA provides that:

DOLE PHILIPPINES, INC. v MARITIME COMPANY OF THE PHILIPPINES

Facts:
The cargo subject of the instant case was discharged in Dadiangas unto the custody of the
consignee, Dole Philippines. The corresponding claim for the damages sustained by the cargo was
filed by the plaintiff with the defendant, Maritime Company on May 4, 1972.
the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit
is brought within one year after delivery of the goods or the date when the goods should have been
delivered; Provided, That, if a notice of loss or damage, either apparent or conceded, is not given
as provided for in this section, that fact shall not affect or prejudice the right of the shipper to bring
suit within one year after the delivery of the goods or the date when.the goods should have been
delivered.

1. Dole argues that since the provisions of the Civil Code are, by express mandate of said Code,
suppletory of deficiencies in the Code of Commerce and special laws in matters governed by the
latter and there being a patent deficiency with respect to the tolling of the prescriptive period
provided for in the Carriage of Goods by Sea Act, prescription under said Act is subject to the

provisions of Article 1155 of the Civil Code on tolling. Since Dole's claim for loss or damage was
filed on May 4, 1972 amounted to a written extrajudicial demand which would toll or interrupt
prescription under Article 1155, it operated to toll prescription also in actions under the Carriage of
Goods by Sea Act.
These arguments might merit weightier consideration were it not for the fact that the question has
already received a definitive answer, adverse to the position taken by Dole, in The Yek Tong Lin
Fire & Marine Insurance Co., Ltd. vs. American President Lines, Inc.
2. Dole argues that it was error for the court not to have considered the action of plaintiff-appellant
suspended by the extrajudicial demand which took place, according to defendant's own motion to
dismiss on August 22, 1952.
Court noticed that while plaintiff avoids stating any date when the goods arrived in Manila, it relies
upon the allegation made in the motion to dismiss that a protest was filed on August 22, 1952 —
which goes to show that plaintiff-appellant's counsel has not been laying the facts squarely before
the court for the consideration of the merits of the case. We have already decided that in a case
governed by the Carriage of Goods by Sea Act, the general provisions of the Code of Civil
Procedure on prescription should not be made to apply. (Chua Kuy vs. Everett Steamship Corp.,
G.R. No. L-5554, May 27, 1953.) We hold that in such a case the general provisions of the new
Civil Code (Art. 1155) cannot be made to apply, as such application would have the effect of
extending the one-year period of prescription fixed in the law. It is desirable that matters affecting
transportation of goods by sea be decided in as short a time as possible; the application of the
provisions of Article 1155 of the new Civil Code would unnecessarily extend the period and permit
delays in the settlement of questions affecting transportation, contrary to the clear intent and
purpose of the law.
Under Dole's theory, when its claim was received by Maritime, the one-year prescriptive period
was interrupted and began to run anew from May 4, 1972, affording Dole another period of one
year counted from that date within which to institute action on its claim for damage. Unfortunately,
Dole let the new period lapse without filing action. It instituted Civil Case No. 91043 only on June
11, 1973, more than one month after that period has expired and its right of action had prescribed.
G.R. No. 77638 July 12, 1990
MARITIME AGENCIES & SERVICES, INC., petitioner,
vs.
COURT OF APPEALS, and UNION INSURANCE SOCIETY OF CANTON, LTD., respondents.
G.R. No. 77674 July 12, 1990
UNION INSURANCE SOCIETY OF CANTON, LTD., petitioner,
vs.
COURT OF APPEALS, HONGKONG ISLAND CO., LTD., MARITIME AGENCIES & SERVICES,
INC., and/or VIVA CUSTOMS BROKERAGE, respondents.
Facts:
Transportation Law Atty. Pascasio
EG Velasco
Transcontinental Fertilizer Company of London chartered from Hongkong Island Shipping
Company of Hongkong the motor vessel named "Hongkong Island" for the shipment of 8073.35 MT
(gross) bagged urea from Novorossisk, Odessa, USSR to the Philippines, the parties signing for
this purpose a Uniform General Charter dated August 9, 1979. Of the total shipment, 5,400.04 MT
was for the account of Atlas Fertilizer Company as consignee, 3,400.04 to be discharged in Manila
and the remaining 2,000 MT in Cebu. The goods were insured by the consignee with the Union
Insurance Society of Canton, Ltd. for P6,779,214.00 against all risks. Maritime Agencies &
Services, Inc. was appointed as the charterer's agent and Macondray Company, Inc. as the
owner's agent. The vessel arrived in Manila and unloaded part of the consignee's goods, then
proceeded to Cebu to discharge the rest of the cargo. On October 31, 1979, the consignee filed a
formal claim against Maritime, copy furnished Macondray, for the amount of P87,163.54,
representing C & F value of the 1,383 shortlanded bags. The consignee filed another formal claim,
this time against Viva Customs Brokerage, for the amount of P36,030.23, representing the value of
574 bags of net unrecovered spillage. These claims having been rejected, the consignee then went
to Union, which on demand paid the total indemnity of P113,123.86 pursuant to the insurance
contract. As subrogee of the consignee, Union then filed a complaint for reimbursement of this
amount, with legal interest and attorney's fees, against Hongkong Island Company, Ltd., Maritime
Agencies & Services, Inc. and/or Viva Customs Brokerage. The complaint was amended to drop
Viva and implead Macondray Company, Inc. as a new defendant.
TC rendered judgment holding the defendants liable to pay the plaintiff the sum of P87,163.54 plus
12% interest from April 20, 1981 until the whole amount is fully paid, P1,000.00 as attorney's fees
and to pay one-half (1/2) of the costs; and defendant Maritime Agencies & Services, Inc., to pay
the plaintiff the sum of P36,030.23, plus 12% interest from April 20, 1981 until the whole amount is
fully paid, P600.00 as attorney's fees and to pay one-half (1/2) of the costs.
CA which rendered a decision on November 28, 1986 modified the TC decision, finding the
charterer Transcontinental Fertilizer Co., Ltd. represented by its agent Maritime Agencies &
Services, Inc. for the same liability but held that Hongkong Island Co., Ltd. represented by
Macondray Co., Inc. are accordingly exempted from any liability.
In G.R. No. 77638, Maritime pleads non-liability on the ground that it was only the charterer's agent
and should not answer for whatever responsibility might have attached to the principal. It also
argues that the respondent court erred in applying Articles 1734 and 1735 of the Civil Code in
determining the charterer's liability. In G.R. No. 77674, Union asks for the modification of the
decision of the respondent court so as to make Maritime solidarily and solely liable, its principal not
having been impleaded and so not subject to the jurisdiction of our courts. These two cases were
consolidated and given due course, the parties being required to submit simultaneous memoranda.
Issue: WON defendants are liable for the cargo
Ruling:
A demise involves the transfer of full possession and control of the vessel for the period covered by
the contract, the charterer obtaining the right to use the vessel and carry whatever cargo it
chooses, while manning and supplying the ship as well. A time charter is a contract to use a vessel
for a particular period of time, the charterer obtaining the right to direct the movements of the
vessel during the chartering period, although the owner retains possession and control. A voyage
charter is a contract for the hire of a vessel for one or a series of voyages usually for the purpose of
transporting goods for the charterer. The voyage charter is a contract of affreightment and is
considered a private carriage. Tested by those definitions, the agreement entered into in the cases
at bar should be considered. This brings us to the basic question of who, in this kind of charter,
shall be liable for the cargo. A voyage charter being a private carriage, the parties may freely
contract respecting liability for damage to the goods and other matters. The basic principle is that
"the responsibility for cargo loss falls on the one who agreed to perform the duty involved" in
accordance with the terms of most voyage charters. This is true in the present cases where the
 Transportation Law Atty. Pascasio
EG Velasco
charterer was responsible for loading, stowage and discharging at the ports visited, while the
owner was responsible for the care of the cargo during the voyage. The ruling in Home Insurance
Co. v. American Steamship Agencies, Inc. cannot benefit Hongkong, because there was no Plaintiff instituted present petition for recovery of damages against respondents for breach of
showing in that case that the vessel was at fault. In the cases at bar, the trial court found that 1,383 contract. The defendants, however, maintain that plaintiff’s reason for going to the beach was not
bags were shortlanded, which could only mean that they were damaged or lost on board the vessel to relieve himself but because he had a quarrel with his wife.
before unloading of the shipment. It is not denied that the entire cargo shipped by the charterer in
Odessa was covered by a clean bill of lading. 16 As the bags were in good order when received in
the vessel, the presumption is that they were damaged or lost during the voyage as a result of their
negligent improper stowage. For this the ship owner should be held liable vessel. As the charterer ISSUE:
was itself the carrier, it was made liable for the acts of the ship captain who was responsible for the
cargo while under the custody of the vessel. As for the charterer's agent, the evidence showed that Whether or not plaintiff is entitled to damages for breach of contract.
it represented the vessel when it took charge of the unloading of the cargo and issued cargo
receipts (or tally sheets) in its own name. Claims against the vessel for the losses/damages
sustained by that cargo were also received and processed by it.
HELD:
As a result, the charterer's agent was also considered a ship agent and so was held to be solidarily
liable with its principal. The facts in the cases at bar are different. The charterer did not represent YES, plaintiff is entitled to damages. Firstly, plaintiff’s testimony about what he did upon reaching
itself as a carrier and indeed assumed responsibility ability only for the unloading of the cargo, i.e, the beach is uncontradicted. Furthermore, there is absolutely no direct evidence about said alleged
after the goods were already outside the custody of the vessel. In supervising the unloading of the quarrel. If such was true, surely, plaintiff would not have walked back from the beach to the
cargo and issuing Daily Operations Report and Statement of Facts indicating and describing the terminal before the plane had resumed its flight to Manila, thereby exposing his presence to the full
day-to-day discharge of the cargo, Maritime acted in representation of the charterer and not of the view of those who were looking for him.
vessel. It thus cannot be considered a ship agent. As a mere charterer's agent, it cannot be held
solidarily liable with Transcontinental for the losses/damages to the cargo outside the custody of
the vessel. Notably, Transcontinental was disclosed as the charterer's principal and there is no
question that Maritime acted within the scope of its authority. We affirm the factual findings but Anent the request of the common carrier to inspect the bags of plaintiff, it appears that Captain
must modify the legal conclusions. As previously discussed, the liability of Macondray can no Zentner received information that one of the passengers expressed a fear of a bomb on board the
longer be enforced because the claim against it has prescribed; and as for Maritime, it cannot be plane. As a result, he asked for the plaintiff’s bags to verify the bomb. Nevertheless, this claim is
held liable for the acts of its known principal resulting in injury to Union. The interest must also be unfounded. The Captain failed to explain why he seemingly assumed that the alleged
reduced to the legal rate of 6%, conformably to our ruling in Reformina v. Tomol 24 and Article 2209 apprehension of his information was justified. Plaintiff himself intimated to them that he was well
of the Civil Code, and should commence, not on April 20, 1981, but on September 19, 1980, date known to the US State Department and that the Captain was not even aware of the informant’s
of the filing of the original complaint. The decision of the respondent court is SET ASIDE and that
name or any circumstances which may substantiate the latter’s fear of a certain bomb.
of the trial court is REINSTATED. The parties shall bear their respective costs.

Zulueta v. Pan American World Airways, Inc.

Defendants further argue that plaintiff was also guilty of contributory negligence for failure to
reboard the plane within the 30 minutes announced before the passengers debarked therefrom.
G.R. No. L-28589, February 29, 1972
This may have justified a reduction of the damages had plaintiff been unwittingly left by the plane,
Concepcion, C.J. owing to the negligence of PANAM personnel, or even, wittingly, if he could not be found before
the plane’s departure. It does not, and cannot have such justification in the case at bar, plaintiff
having shown up before the plane had taken off and he having been off-loaded intentionally and
with malice.
FACTS:

Spouses Rafael Zulueta and Telly Albert Zulueta, with their daughter boarded a PANAM plane
from Honolulu to Manila, the first leg of which was Wake Island. While on stopover, Mr. Zulueta With all the foregoing, it is clear that plaintiff is entitled to damages from respondent company.
found the need to relieve himself and after finding the terminal’s comfort rooms full, he walked
down the beach to do his business. Meanwhile, the flight was called and Mr. Zulueta’s absence
was noticed. Heading towards the ram, plaintiff remarked, “You people almost made me miss your
flight. You have a defective announcing system and I was not paged.” Gatchalian v. Delim

Facts:

Instead of allowing plaintiff to board the plane, however, the airport manager stopped plaintiff and
asked him to surrender his baggages for inspection. Refusing to comply with the order, plaintiff was
On July 11, 1973, petitioner Reynalda Gatchalian boarded as paying passenger a minibus owned
not allowed to board the plane. His wife and daughter were able to proceed but were instructed to
by respondents. While the bus was running along the highway, a “snapping sound” was heard, and
leave their baggages behind. after a short while, the bus bumped a cement flower pot, turned turtle and fell into a ditch. The

passengers were confined in the hospital, and their bills were paid by respondent’s spouse on July
14. Before Mrs. Delim left, she had the injured passengers sign an already prepared affidavit
waiving their claims against respondents. Petitioner was among those who signed.
Notwithstanding the said document, petitioner filed a claim to recover actual and moral damages
for loss of employment opportunities, mental suffering and inferiority complex caused by the scar
on her forehead. Respondents raised in defense force majeure and the waiver signed by petitioner.
The trial court upheld the validity of the waiver and dismissed the complaint. The appellate court
ruled that the waiver was invalid, but also that the petitioner is not entitled to damages.
Issues:
(1) Whether there was a valid waiver
(2) Whether the respondent was negligent
(3) Whether the petitioner is entitled to actual and moral damages
Held:
(1) We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of
action had been made by petitioner. A waiver, to be valid and effective, must in the first place be
couched in clear and unequivocal terms which leave no doubt as to the intention of a person to
give up a right or benefit which legally pertains to him. A waiver may not casually be attributed to a
person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right
vested in such person.
The circumstances under which the Joint Affidavit was signed by petitioner Gatchalian need to be
considered. Petitioner testified that she was still reeling from the effects of the vehicular accident
when the purported waiver in the form of the Joint Affidavit was presented to her for signing; that
while reading the same, she experienced dizziness but that, seeing the other passengers who had
also suffered injuries sign the document, she too signed without bothering to read the Joint
Affidavit in its entirety. Considering these circumstances, there appears substantial doubt whether
petitioner understood fully the import of the Joint Affidavit (prepared by or at the instance of private
respondent) she signed and whether she actually intended thereby to waive any right of action
against private respondent.
Finally, because what is involved here is the liability of a common carrier for injuries sustained by
passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we
must construe any such purported waiver most strictly against the common carrier. To uphold a
supposed waiver of any right to claim damages by an injured passenger, under circumstances like
those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence
exacted by the law from common carriers and hence to render that standard unenforceable. We
believe such a purported waiver is offensive to public policy.
Transportation Law Atty. Pascasio
EG Velasco
(2) In case of death or injuries to passengers, a statutory presumption arises that the common
carrier was at fault or had acted negligently "unless it proves that it [had] observed extraordinary
diligence as prescribed in Articles 1733 and 1755." To overcome this presumption, the common
carrier must show to the court that it had exercised extraordinary diligence to present the injuries.
The standard of extraordinary diligence imposed upon common carriers is considerably more
demanding than the standard of ordinary diligence. A common carrier is bound to carry its
passengers safely "as far as human care and foresight can provide, using the utmost diligence of a
very cautious person, with due regard to all the circumstances".
The records before the Court are bereft of any evidence showing that respondent had exercised
the extraordinary diligence required by law. The obvious continued failure of respondent to look
after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop
the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of
the passengers, constituted wanton disregard of the physical safety of the passengers, and hence
gross negligence on the part of respondent and his driver.
(3) At the time of the accident, she was no longer employed in a public school. Her employment as
a substitute teacher was occasional and episodic, contingent upon the availability of vacancies for
substitute teachers. She could not be said to have in fact lost any employment after and by reason
of the accident. She may not be awarded damages on the basis of speculation or conjecture.
Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another
matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or
diminished, actual injury is suffered for which actual or compensatory damages are due and
assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that
she was before the mishap. A scar, especially one on the face of the woman, resulting from the
infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for
restoration to her conditio ante.
Moral damages may be awarded where gross negligence on the part of the common carrier is
shown. Considering the extent of pain and anxiety which petitioner must have suffered as a result
of her physical injuries including the permanent scar on her forehead, we believe that the amount
of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as attorney's fees is
in fact even more modest.
Merchan v. Mendoza
G.R. No. L-24471, August 30, 1968
Fernando, J.
FACTS:

Respondents Arsenio Mendoza, Leonarda Ilaya and Zenaida Mendoza boarded a bus owned and
operated by Philippine Rabbit Bus Lines driven by Silverio Marchan. While travelling on its way to
Manila, it fell into a ditch causing the passengers inside the bus to be thrown out to the ground
resulting in their multiple injuries. Thereafter, Marchan was convicted for serious, less serious and
slight physical injuries through reckless imprudence.
As such, respondents filed to recover damages from herein petitioners. Petitioners, on the other
hand, contends there is can be no implied contract of carriage between them and the passengers,
hence, there can be no basis for the recovery of damages from breach of contract.
ISSUE:
Whether or not there is a contract of carriage between the bus company and the passengers and
consequently, whether or not Article 1759 is applicable in the present case.
HELD:
YES, there is a contract of carriage between the parties and Article 1759 is applicable in the case
at bar. Respondents were waiting for a passenger bus and the moment they boarded the bus
being driven by Marchan, they were treated as passengers thereto, for they paid their
corresponding fees. The riding public is not expected to inquire from time to time before hey board
the passenger bus whether or not the driver who is at the steering wheel of said bus was
authorized to drive said vehicle or that said driver is acting within the scope of his authority and
observing the existing rules and regulations required of him by the management.
Common carriers cannot escape liability “for the death of or injuries to passengers through the
negligence and willful acts of the former’s employees, although such employees may have acted
beyond the scope of their authority or in violation of orders”. Clearly, the applicability of Article 1759
is indisputable.
De Caliston v. Court of Appeals
G.R. No. L-63135, June 24, 1983
Plana, J.
FACTS:
Private respondent Geronimo Dalmacio ran over Juana Sonza Vda. de Darrocha, a USVA
pensioner, survived by her only child, Gloria Garrocha de Caliston, herein petitioner. Private
respondent Dalamcio was prosecuted for and convicted of homicide through reckless imprudence.
On appeal, the Court of Appeals absolved Dalmacio from the payment of P10,000 for the loss of
pension.
ISSUE:
Whether or not the deletion of the P10,000 award for the loss of pension is proper.
Transportation Law Atty. Pascasio
EG Velasco
HELD:
NO, the deletion of the P10,000 award for loss of pension is unjustified. The pension of the
decedent being a sure income was cut short by her death. The surviving heir of the decedent is
entitled to the award of P10,000 which is a just equivalent to the pension the decedent would have
received for one year if she did not die.
Trans World Airlines vs. CA
Rogelio A. Vinluan is a practicing lawyer who had to travel in April, 1979 to several cities in Europe
and the U.S. to attend to some matters involving several clients. He entered into a contract for air
carriage for valuable consideration with Japan Airlines first class from Manila to Tokyo, Moscow,
Paris, Hamburg, Zurich, New York, Los Angeles, Honolulu and back to Manila thru the same airline
and other airlines it represents for which he was issued the corresponding first class tickets for the
entire trip.
On April 18, 1979, while in Paris, he went to the office of Trans World Airlines (TWA) at the De
Gaulle Airport and secured therefrom confirmed reservation for first class accommodation on board
its Flight No. 41 from New York to San Francisco which was scheduled to depart on April 20, 1979.
A validated stub was attached to the New York-Los Angeles portion of his ticket evidencing is
confirmed reservation for said flight with the mark "OK." [1] On April 20, 1979, at about 8:00 o'clock
A.M., Vinluan reconfirmed his reservation for first class accommodation on board TWA Flight No.
41 with its New York. He was advised that his reservation was confirmed. He was even requested
to indicate his seat preference on said flight on said scheduled date of departure of TWA Flight No.
41. Vinluan presented his ticket for check-in at the counter on TWA at JFK International Airport at
about 9:45 o'clock A.M., the scheduled time of the departure being 11:00 o'clock A.M. He was
informed that there was no first class seat available for him on the flight. He asked for an
explanation but TWA employees on duty declined to give any reason. When he began to protest,
one of the TWA employees, a certain Mr. Braam, rudely threatened him with the words "Don't
argue with me, I have a very bad temper."
To be able to keep his schedule, Vinluan was compelled to take the economy seat offered to him
and he was issued a "refund application" as he was downgraded from first class to economy class.
While waiting for the departure of Flight No. 41. Vinluan noticed that other passengers who were
white Caucasians and who had checked-in later than him were given preference in some first class
seats which became available due to "no show" passengers.
On February 15, 1980, Vinluan filed an action for damages against the TWA in the Court of First
Instance of Rizal alleging breach of contract and bad faith. After trial on the merits, a decision was
rendered the dispositive part of which reads as follows:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiff against the defendant holding
the latter liable to the former for the amount representing the difference in fare between first class
and economy class accommodations an board Flight No. 6041 from New York to San Francisco,
the amount of P500,000.00 as moral damages the amount of P300,000.00 as exemplary damages,
and the amount of P100,000.00 as and for attorney's fees, all such amounts to earn interest at the
rate of twelve (12%) percent per annum from February 15, 1980 when the complaint was filed until
fully paid.
Correspondingly, defendant's counterclaim is dismissed.

Costs against the defendant.
SO ORDERED."
Not satisfied therewith, the TWA appealed to the Court of Appeals wherein in due course a
decision was rendered on May 27, 1987,[2] the dispositive part of which reads as follows:
"WHEREFORE, the decision dated March 8, 1984 is hereby modified by (1) fixing the interest
which appellant must pay on the awards of moral and exemplary damages at six percent (6%) per
annum from the date of the decision a quo, March 8, 1984 until date of full payment and (2)
reducing the attorney's fees to P50,000.00 without interest, the rest of the decision is affirmed.
Costs against appellant.
SO ORDERED."
Hence, the herein petition for review.
The theory of the petitioner is that because of maintenance problems of the aircraft on the day of
the flight, TWA Flight No. 41 was cancelled and a special Flight No. 6041 was organized to operate
in lieu of Flight No. 41.[3] Flight No. 41 was to have utilized a Lockheed 1011 with 34 first class
seats, but instead, a smaller Boeing 707 with only 16 first class seats was substituted for use in
Flight No. 6041. Hence, passengers who had first class reservations on Flight No. 41 had to be
accommodated on Flight No. 6041 on a first-come, first-served basis. An announcement was
allegedly made to all passengers in the entire terminal of the airport advising them to get boarding
cards for Flight No. 6041 to San Francisco and that the first ones getting them would get first
preference as to seats in the aircraft. It denied declining to give any explanation for the
downgrading of private respondent as well as the discourteous attitude of Mr. Braam.
On the other hand, private respondent asserts that he did not hear such announcement at the
terminal and that he was among the early passengers to present his ticket for check-in only to be
informed that there was no first class seat available for him and that he had to be downgraded.
The petitioner contends that the respondent Court of Appeals committed a grave abuse of
discretion in finding that petitioner acted maliciously and discriminatorily, and in granting excessive
moral and exemplary damages and attorney's fees.
The contention is devoid of merit. Private respondent had a first class ticket for Flight No. 41 of
petitioner from New York to San Francisco on April 20, 1979. It was twice confirmed and yet
respondent unceremoniously told him that there was no first class seat available for him and that
he had to be downgraded to the economy class. As he protested, he was arrogantly threatened by
one Mr. Braam. Worst still, while he was waiting for the flight, he saw that several Caucasians who
arrived much later were accommodated in first class seats when the other passengers did not
show up.
The discrimination is obvious and the humiliation to which private respondent was subjected is
undeniable. Consequently, the award of moral and exemplary damages by the respondent court is
in order.[4]
Indeed, private respondent had shown that the alleged switch of planes from a Lockheed 1011 to a
smaller Boeing 707 was because there were only 138 confirmed economy class passengers who
could very well be accommodated in the smaller plane and not because of maintenance problems.
Petitioner sacrificed the comfort of its first class passengers including private respondent Vinluan
for the sake of economy. Such inattention and lack of care for the interest of its passengers who
are entitled to its utmost consideration, particularly as to their convenience, amount to bad faith
which entitles the passenger to the award of moral damages. [5] More so in this case where instead
of courteously informing private respondent of his being downgraded under the circumstances, he
was angrily rebuffed by an employee of petitioner.
Transportation Law Atty. Pascasio
EG Velasco
At the time of this unfortunate incident, the private respondent was a practicing lawyer, a senior
partner of a big law firm in Manila. He was a director of several companies and was active in civic
and social organizations in the Philippines. Considering the circumstances of this case and the
social standing of private respondent in the community, he is entitled to the award of moral and
exemplary damages. However, the moral damages should be reduced to P300,000.00, and the
exemplary damages should be reduced to P200,000.00. This award should be reasonably
sufficient to indemnify private respondent for the humiliation and embarrassment that he suffered
and to serve as an example to discourage the repetition of similar oppressive and discriminatory
acts.
WHEREFORE, with the above modification reducing the moral and exemplary damages as above-
stated, the decision subject of the petition for review is AFFIRMED in all other respects, without
pronouncement as to costs in this instance.
SO ORDERED.
Prudenciado v. Alliance Transport System
G.R. No. L-33836, March 16, 1987
Paras, J.
FACTS:
While crossing Taft Avenue, Dra. Sofia Prudenciado was suddenly bumped by Jose Leyson who
was driving a taxicab owned and operated by Alliance Transport System, Inc. As a result, Dra.
Prudenciado suffered physical injuries in different parts of her body, including a brain concussion
which subjected her to several physical examinations.
After due hearing, Jose Leyson was found guilty of negligence in the performance of his duties as
a taxicab driver which is the proximate cause of the accident and that Alliance Transport System
failed to prove that it had exercised the required diligence of a good father of a family in the
selection, supervision, and control of its employees.
Petitioner questions the award of the damages of the Court of Appeals.
ISSUE:
Whether or not the Court of Appeals is justified in modifying the grant of damages by the trial court.
HELD:
YES and NO. A careful review of the record makes it readily apparent that the injuries sustained by
Dra. Prudenciado are not as serious or extensive as they were claimed to be, which proof merely
consisted in her own uncorroborated testimony, and which are not enough to warrant the damages
awarded by the trial court.
 Transportation Law Atty. Pascasio
EG Velasco

On the other hand, the reduction of the damages made by the Court of Appeals is both too drastic
and unrealistic to pass the test of reasonableness. Being a doctor by profession, petitioner’s fears
can be more real and intense than an ordinary person, thus, she is undeniably a proper recipient of
moral damages which are proportionate to her suffering.

With regard to exemplary damages, Article 2231 of the Civil Code provides that exemplary
damages may be had if the defendant acted with grave negligence. A driver running at full speed
on a rainy day, on a slippery road in complete disregard of the hazards to life and limbs of other
people cannot be said to be acting in anything less than gross negligence. The frequent incidence
of accidents of this nature caused by taxi drivers indeed demands corrective measures.