Law on Transportation_case Digest

7/31/2019 Law on Transportation_case Digest

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LAW ON

TRANSPORTATION


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I. CONCEPT OF COMMON CARRIER

1. DefinitionArticle 1732 NCC,

De Guzman vs. Court of Appeals 168 SCRA 612 (1993)Planters Products Inc vs. CA 226 SCRA 76 (1993)

2. CharacteristicsFisher vs. Yangco Steamship Co. 31 Phil 1 (1915)US vs. Quinahon 31 Phil 189Loadstar Shipping Co., Inc. vs. Court of Appeals 315 SCRA

339 (1999)First Phil. Industrial vs. Court of Appeals 300 SCRA 661

(1998)

3. Distinguished from Private CarrierHome Insurance Co. vs. American Steamship 23 SCRA 24 (1968)San Pablo vs. Pantranco 153 SCRA 199

(1987)National Steel Corp. vs. Court of Appeals 283 SCRA 45

(1997)

4. Government Regulation of Common Carriers BusinessKMU Labor Center vs. Garcia, Jr. 239 SCRA 386 (1994)

Tatad vs. Garcia, Jr. 241 SCRA 334 (1997)

5. Governing LawSamar Mining Co., Inc. vs. Nordeutscher Llyod 132 SCRA 529

(1984)Eastern Shipping Lines vs. IAC 150 SCRA 464 (1984)National Development Co. vs. Court of Appeals 164 SCRA 593 (1988)

II. CONTRACTUAL EFFECTS

A. VIGILANCE OVER GOODS

1. Extra-ordinary Diligence Required of Common Carriers (Article1733, NCC)

a. Registered Owner RuleGelisan vs. Alday 154 SCRA 388 (1987)Benedicto vs. IAC 187 SCRA 547 (1990)Philtranco Service Enterprises, Inc. vs. CA 273

SCRA 562 (1997)


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b. Kabit SystemSantos vs. Sibug 104 SCRA 520 (1981)Lita Enterprises, Inc. vs. CA 148 SCRA 347

(1987)Teja Marketing vs. IAC 148 SCRA 347 (1987)

c. Boundary SystemMagboo vs. Bernardo 7 SCRA 952 (1963)

2. Liability of Carriers for Loss, Destruction and Deterioration ofGoods; Exceptions; Presumption of Negligence

Articles 1734-1735; Articles 1739-1743 Eastern Shipping Lines vs. IAC, supra

Ganzon vs. CA 161 SCRA 646 (1985)Eastern Shipping Lines vs. Court of Appeals 196 SCRA 570 (1991)Sarkies Tours Phils., Inc. vs. Court of Appeals280 SCRA 58 (1997)

Valenzuela Hardwood & Industrial Supply vs. Court of Appeals 274SCRA 642 (1997)

Yobido vs. Court of Appeals 281 SCRA 1 (1997)

3. Commencement, Duration and Termination of carriersresponsibility over the goods (Articles 1736-1738, NCC)

Compania Maritima vs. Insurance Co. of North America 12SCRA 213 (1964)

Lu Do vs. Binamira 101 Phil. 120 (1957)American President Lines Ltd. vs. Klepper 110 PHIL 243Servando vs. Phil. Steam 117 SCRA 832

(1982)Ganzon vs. Court of Appeals, supraSaludo, Jr. vs. Court of Appeals 207 SCRA 498

(1992)Macam vs. Court of Appeals 313 SCRA 77

(1999)

4. Stipulations Limiting Carriers Liability

a. Articles 1744-1745, NCC; Degree of DiligenceReasonable time in the deliveryCase: Maersk Line vs. Court of Appeals 222 SCRA 108

(1993)

b. Articles 1749-1750, NCC; Amount of Liability

Ysmael vs. Barretto 51 PHIL 90 (1927)


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Shewaram vs. Philippine Airlines 17 SCRA 606(1966)

Ong Yiu vs. Court of Appeals 91 SCRA 223(1966)Sea Land Services, Inc. vs. Intermediate Appellate Court 153 SCRA

552 (1987)Citadel Lines, Inc. vs. Court of Appeals 184 SCRA 544 (1990)Everett Seamship Corp. vs. Court of Appeals 297 SCRA 496 (1998)British Airways vs. Court of Appeals 285 SCRA 450 (1998)H.E. Heacock Co. vs. Macondray & Co. 42 PHIL 205 (1921)

c. Void Stipulation (Art. 1745, NCC)Case: Sweet Lines vs. Teves 83 SCRA 361 (1978)

5. Passengers Baggages (Article 1754, NCC) Quisumbing, Sr. vs. Court of Appeals 189 SCRA 605

(1990)Pan American Airlines vs. Rapadas 209 SCRA 67

(1992)British Airways vs. Court of Appeals, supraAlitalia vs. Intermediate Appellate Court 192 SCRA 9

(1990)

B. SAFETY OF PASSENGERS

1. Utmost Diligence Required of Common Carriers (Article1755, NCC)

Nocum vs. Laguna Tayabas bus. Co. vs. CA 83 SCRA 386 (1978)Mecenas vs. CA 180 SCRA 83 (1989)Negros Navigation Co., Inc. vs. CA 281 SCRA 717 (1997)Korean Airlines Co. Ltd. vs. CA 234 SCRA 14 (1999)Fortune Express, Inc. vs. CA 305 SCRA 14 (1999)Gatchalian vs. Delim 203 SCRA 126 (1991)Del Castillo vs. Jaymalin 112 SCRA 629 (1982)

A. Doctrine of Last Clear ChancePhilippine Rabbit Bus Lines vs. IAC 189 SCRA 158

(1990)Bustamante vs. CA 193 SCRA 603 (1991)

B. Accomodation PassengerLara vs. Valencia 104 SCRA 65 (1958)


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C. Carrier not an insurer against all risksNecessito vs. Paras 104 Phil. 75 (1958)

Japan Airlines vs. CA 294 SCRA 19 (1998)

D. Res Ipsa LoquiturLayugan vs. IAC 167 SCRA 363 (1988)

2. Commencement, Duration and Termination of CarriersResponsibility

La Mallorca vs. De Jesus 17 SCRA 739 (1966)Aboitiz Shipping Co. vs. Court of Appeals 179 SCRA 95 (1989)Mallari Sr. vs. Court of Appeals 324 SCRA 147 (2000)

3. Presumption of Negligence: Liability of Carriers for death orinjury to passengers; Exceptions (Articles 1756-1758, NCC)

Bayasen vs. Court of Appeals 103 SCRA 197 (1981)Cervantes vs. Court of Appeals 304 SCRA 27 (1999)Calalas vs. Court of Appeals 332 SCRA 356 (2000)Pestao vs. Sumayang 346 SCRA 870 (2000)

4. Negligence or intentional assault by carriers employee

Gillaco vs. Manila Railroad Co. 97 Phil. 884 (1955)Maranan vs. Perez 20 SCRA 412 (1967)

5. Passengers duty to observe diligence to avoid injury;contributory negligence

PNR vs. Court of Appeals 139 SCRA 87 (1985)Isaac vs. Al Ammen Trans 101 Phil 1046 (1957)

6. Injury to passenger due to acts of co-passenger or stranger

Bachelor Express, Inc vs. Court of Appeals 188 SCRA 216 (1990)Fortune Express Inc. vs. CA, supra

III. DAMAGES (Article 1764, NCC)

A. Actual/Compensatory Damages (Arts. 2199, 2201, 2203, NCC)Cariaga vs. LTB Co., & MRR 110 PHIL 346 (1960)Villa Rey Transit, Inc. vs. Court of Appeals 31 SCRA 511 (1970)Pan American World Airways vs. IAC 153 SCRA 521 (1987)Gatchalian vs. Delim 203 SCRA 126 (1991)

1. Recovery for Physical InjuriesSoberano vs. MRR & Benguet Auto Line 18 SCRA 732 (1966)


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Marchan vs. Mendoza 24 SCRA 888 (1968)

2. Damages in case of deathDe Caliston vs. CA 122 SCRA 958 (1983)PAL vs. CA 185 SCRA 110 (1990)

B. Moral Damages (Arts. 2206, 2216-2217, 2219-2220, NCC)Cachero vs. Manila Yellow Taxi Cab 101 Phil. 523 (1957)Fores vs. Miranda 105 Phil. 266 (1959)Lopez vs. Pan American 16 SCRA 431 (1966)Ortigas Jr. vs. Lufthansa 64 SCRA 610 (1975)Phil. Rabbit Bus Lines vs. Esguerra 117 SCRA 741 (1982)Sweet Lines vs. Court of Appeals 121 SCRA 769 (1983)Pan American World Airways vs. IAC, supra

TransWorld Airlines vs. CA 165 SCRA 143 (1988)Armovit vs. Court of Appeals 184 SCRA 476 (1990)PAL vs. CA 106 SCRA 391

C. Exemplary Damages (Arts. 2229, 2232-2233, NCC)Prudenciado vs. Alliance Transport 148 SCRA 440 (1987)Marchan vs. Mendoza, supra.


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SUMMARY OF

CASE DOCTRINES

De Guzman vs. Court of Appeals

Article 1732 makes no distinction between one whose principal businessactivity is the carrying of persons or goods or both, and one who does suchcarrying only as an ancillary activity (in local Idiom as "a sideline"). Article 1732also carefully avoids making any distinction between a person or enterpriseoffering transportation service on a regular or scheduled basis and one offering

such service on an occasional, episodic or unscheduled basis. Neither doesArticle 1732 distinguish between a carrier offering its services to the "generalpublic," i.e., the general community or population, and one who offers servicesor solicits business only from a narrow segment of the general population.

The Court of Appeals referred to the fact that private respondent held nocertificate of public convenience. A certificate of public convenience is not arequisite for the incurring of liability. That liability arises the moment a personor firm acts as a common carrier, without regard to whether or not such carrier


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has also complied with the requirements of the applicable regulatory statuteand implementing regulations and has been granted a certificate of publicconvenience or other franchise. To exempt private respondent from theliabilities of a common carrier because he has not secured the necessarycertificate of public convenience, would be offensive to sound public policy;that would be to reward private respondent precisely for failing to comply withapplicable statutory requirements.

Planters Products, Inc. vs. CA

It is not disputed that respondent carrier, in the ordinary course ofbusiness, operates as a common carrier, transporting goods indiscriminatelyfor all persons. When petitioner chartered the vessel M/V "Sun Plum", the shipcaptain, its officers and compliment were under the employ of the shipownerand therefore continued to be under its direct supervision and control. Hardlythen can the charterer be charged, a stranger to the crew and to the ship, withthe duty of caring for his cargo when the charterer did not have any control ofthe means in doing so. This is evident in the present case considering that thesteering of the ship, the manning of the decks, the determination of the courseof the voyage and other technical incidents of maritime navigation were allconsigned to the officers and crew who were screened, chosen and hired bythe shipowner. It is therefore imperative that a public carrier shall remain assuch, notwithstanding the charter of the whole or portion of a vessel by one ormore persons, provided the charter is limited to the ship only, as in the case ofa time-charter or voyage-charter. It is only when the charter includes both thevessel and its crew, that a common carrier becomes private, at least insofar asthe particular voyage covering the charter-party is concerned. Indubitably, ashipowner in a time or voyage charter retains possession and control of theship, although her holds may, for the moment, be the property of thecharterer.

Fisher vs. Yangco

In construing Act 98 for the alleged violation, the test is whether therefusal of YSC to carry the explosives without qualification or conditions mayhave the effect of subjecting any person or locality or the traffic is suchexplosives to an unduly unreasonable or unnecessary prejudice ordiscrimination. Common carriers in this jurisdiction cannot lawfully decline toaccept a particular class of goods unless it appears that for some sufficientreason the discrimination for such is reasonable and necessary. YSC has notmet those conditions.

The nature of the business of a common carrier as a public employmentis such that it is within the power of the State to impose such just regulations inthe interest of the public as the legislator may deem proper.

US vs. Quinahon


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There is no pretense that it actually cost more to handle the rice for theprovince than it did for the merchants with whom the special contracts weremade. There was a clear discrimination against the province which isprohibited by the law. It is however not believed that the law prohibits commoncarriers from making special rates for the handling and transporting ofmerchandise, when the same are made for the purpose of increasing theirbusiness and to manage their important interests upon the same principleswhich are regarded as sound and adopted in other trades and pursuits.Absolute equality is not required in all cases. It is only unjust, undue andunreasonable discrimination which the law forbids. The law of equality is inforce only where the services performed in the different cases are substantiallythe same and the circumstances and conditions are similar.

Loadstar Shipping Co., Inc. vs. CA

Loadstar submits that the vessel was a private carrier because it wasnot issued a CPC; it did not have a regular trip or schedule nor a fixed route;and there was only one shipper, one consignee for a special cargo.

The SC held that Loadstar is a common carrier. It is not necessary thatthe carrier be issued a CPC, and this character is not altered by the fact thatthe carriage of the goods in question was periodic, occasional, episodic orunscheduled.

First Philippine Industrial Corporation vs. CA

Based on Article 1732 NCC, there is no doubt that petitioner is acommon carrier. It is engaged in the business of transporting or carryinggoods, i.e. petroleum products, for hire as a public employment. It undertakesto carry for all persons indifferently, that is, to all persons who choose toemploy its services, and transports the goods by land and for compensation.

The fact that petitioner has a limited clientele does not exclude it from thedefinition of a common carrier. (De Guzman Ruling upheld)

Respondents argument that the term common carrier as used inSection 133(j) of the Local Government Code refers only to common carrierstransporting goods and passengers through moving vehicles or vessels eitherby land, sea or water is erroneous. The definition of common carriers in NCCmakes no distinction as to the means of transporting as long as it is by land,water or air. It does not provide that the transporting of the passengers orgoods should be by motor vehicle.

Home Insurance Company vs. American Steamship Agencies, Inc.

The NCC provisions on common carriers should not apply where thecommon carrier is not acting as such but as a private carrier. Under American

Jurisprudence, a common carrier undertaking to carry a special cargo or


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chartered to a special person only becomes a private carrier. As a privatecarrier, a stipulation exempting the owner from liability for the negligence of itsagent is valid.

The stipulation in the charter party absolving the owner from liability forloss due to the negligence of its agent would be void only if strict public policygoverning common carrier is applied. Such policy has no force where the publicat large is not involved, as in the case of a ship totally chartered for the use ofa single party. The stipulation exempting the owner from liability fornegligence of its agent is not against public policy and is deemed valid.Recovery cant be had, for loss or damage to the cargo against shipowners,unless the same is due to personal acts or negligence of said owner or itsmanagers, as distinguished from agents or employees.

San Pablo vs. PANTRANCO

Considering the environmental circumstances of the case, theconveyance of passengers, trucks and cargo from Matnog to Allen is certainlynot a ferry boat service but a coastwise or interisland shipping service. Underno circumstance can the sea between Matnog and Allen be considered acontinuation of the highway. While a ferry boat service has been considered asa continuation of the highway when crossing rivers or even lakes, which aresmall body of waters - separating the land, however, when as in this case thetwo terminals, Matnog and Allen are separated by an open sea it can not beconsidered as a continuation of the highway. Respondent PANTRANCO shouldsecure a separate CPC for the operation of an interisland or coastwise shippingservice in accordance with the provisions of law. Its CPC as a bustransportation cannot be merely amended to include this water service underthe guise that it is a mere private ferry service.

The contention of private respondent PANTRANCO that its ferry serviceoperation is as a private carrier, not as a common carrier for its exclusive usein the ferrying of its passenger buses and cargo trucks is absurd. PANTRANCOdoes not deny that it charges its passengers separately from the charges forthe bus trips and issues separate tickets whenever they board the MV "BlackDouble" that crosses Matnog to Allen, PANTRANCO cannot pretend that inissuing tickets to its passengers it did so as a private carrier and not as acommon carrier. The Court does not see any reason why inspite of its amendedfranchise to operate a private ferry boat service it cannot accept walk-inpassengers just for the purpose of crossing the sea between Matnog and Allen.Indeed evidence to this effect has been submitted.

National Steel Corporation vs. CA

In the instant case, it is undisputed that VSI did not offer its services tothe general public. It carried passengers or goods only for those it chose undera special contract of charter party. It is a private carrier that renders trampingservice and as such, does not transport cargo or shipment for the general


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public. Its services are available only to specific persons who enter into aspecial contract of charter party with its owner. Consequently, the rights andobligations of VSI and NSC, including their respective liability for damage to thecargo, are determined primarily by stipulations in their contracts of privatecarriage or charter party.

Unlike in a contract involving a common carrier, private carriage doesnot involve the general public. Hence, the stringent provisions of the Civil Codeon common carriers protecting the general public cannot justifiably be appliedto a ship transporting commercial goods as a private carrier.

KMU vs. Garcia

The issuance of a Certificate of Public Convenience is determined by publicneed. The presumption of public need for a service shall be deemed in favor ofthe applicant, while the burden of proving that there is no need for theproposed service shall be the oppositor's.

By its terms, public convenience or necessity generally meanssomething fitting or suited to the public need. As one of the basic requirementsfor the grant of a CPC, public convenience and necessity exists when theproposed facility or service meets a reasonable want of the public and supply aneed which the existing facilities do not adequately supply. The existence ornon-existence of public convenience and necessity is therefore a question offact that must be established by evidence, real and/or testimonial; empiricaldata; statistics and such other means necessary, in a public hearing conductedfor that purpose. The object and purpose of such procedure, among otherthings, is to look out for, and protect, the interests of both the public and theexisting transport operators.

Tatad vs. Garcia

In law, there is a clear distinction between the "operation" of a publicutility and the ownership of the facilities and equipment used to serve thepublic. The right to operate a public utility may exist independently andseparately from the ownership of the facilities thereof. One can own saidfacilities without operating them as a public utility, or conversely, one mayoperate a public utility without owning the facilities used to serve the public.

The devotion of property to serve the public may be done by the owner or bythe person in control thereof who may not necessarily be the owner thereof.

Samar Mining Company, Inc. vs. Nordeutscher Lloyd

The validity of stipulations in bills of lading exempting the carrier fromliability for loss or damage to the goods when the same are not in its actualcustody has been upheld. There is no doubt that Art. 1738 finds no applicabilityto the instant case. The said article contemplates a situation where the goods


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had already reached their place of destination and are stored in the warehouseof the carrier. The subject goods were still awaiting transshipment to their portof destination, and were stored in the warehouse of a third party when lastseen and/or heard of.

Article 1736 is applicable to the instant suit. Under said article, thecarrier may be relieved of the responsibility for loss or damage to the goodsupon actual or constructive delivery of the same by the carrier to theconsignee, or to the person who has a right to receive them. In sales, actualdelivery has been defined as the ceding of corporeal possession by the seller,and the actual apprehension of corporeal possession by the buyer or by someperson authorized by him to receive the goods as his representative for thepurpose of custody or disposal. By the same token, there is actual delivery incontracts for the transport of goods when possession has been turned over tothe consignee or to his duly authorized agent and a reasonable time is givenhim to remove the goods. The court a quo found that there was actual deliveryto the consignee through its duly authorized agent, the carrier.

Eastern Shipping Lines vs. Intermediate Appellate Court

1) The law of the country to which the goods are to be transported governs theliability of the common carrier in case of their loss, destruction or deterioration.As the cargoes in question were transported from Japan to the Philippines, theliability of Petitioner Carrier is governed primarily by the Civil Code. However,in all matters not regulated by said Code, the rights and obligations of commoncarrier shall be governed by the Code of Commerce and by special laws. Thus,the Carriage of Goods by Sea Act, a special law, is suppletory to the provisionsof the Civil Code.

(2) Under the Civil Code, common carriers, from the nature of their businessand for reasons of public policy, are bound to observe extraordinary diligencein the vigilance over goods, according to all the circumstances of each case.Common carriers are responsible for the loss, destruction, or deterioration ofthe goods unless the same is due to any of the following causes only:

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

Petitioner Carrier claims that the loss of the vessel by fire exempts itfrom liability under the phrase "natural disaster or calamity. However, theCourt said that fire may not be considered a natural disaster or calamity. Thismust be so as it arises almost invariably from some act of man or by humanmeans. It does not fall within the category of an act of God unless caused bylightning or by other natural disaster or calamity. It may even be caused by theactual fault or privity of the carrier.

As the peril of the fire is not comprehended within the exception inArticle 1734, supra, Article 1735 of the Civil Code provides that all cases thanthose mention in Article 1734, the common carrier shall be presumed to havebeen at fault or to have acted negligently, unless it proves that it has observedthe extraordinary diligence required by law.


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And even if fire were to be considered a "natural disaster" within themeaning of Article 1734 of the Civil Code, it is required under Article 1739 ofthe same Code that the "natural disaster" must have been the "proximate andonly cause of the loss," and that the carrier has "exercised due diligence toprevent or minimize the loss before, during or after the occurrence of thedisaster. This Petitioner Carrier has also failed to establish satisfactorily.

National Development Company vs. CA

Significantly, under the provisions of the Code of Commerce, particularlyArticles 826 to 839, the shipowner or carrier, is not exempt from liability fordamages arising from collision due to the fault or negligence of the captain.Primary liability is imposed on the shipowner or carrier in recognition of theuniversally accepted doctrine that the shipmaster or captain is merely therepresentative of the owner who has the actual or constructive control over theconduct of the voyage.

The agreement between NDC and MCP shows that MCP is appointed asagent, a term broad enough to include the concept of ship agent in maritimelaw. In fact MCP was even conferred all the powers of the owner of the vessel,including the power to contract in the name of the NDC. Both owner and agentshould be declared jointly and severally liable since the obligation which is thesubject of the action had its origin in a fortuitous act and did not arise fromcontract.

Gelisan vs. Alday

The court has held in several decisions that the registered owner of apublic service is responsible for damages that may arise from consequencesincident to its operation or that may be caused to any of the passengerstherein. The claim of the petitioners that he is not liable in view of the leasecontract executed by and between him and Espiritu which exempts him fromliability to 3rd persons, cannot be sustained because it appears that the leasecontract had not been approved by the Public Service Commission. It is asettled rule in our jurisprudence that if the property covered by a Franchise istransferred or lease to another without obtaining the requisite approval, thetransfer is not binding upon the public and 3rd persons. However, Gelisan isnot without recourse because he has a right to be indemnified by Espiritu forthe amount he may be required to pay. This is due to the fact that the leasecontract in question, although not effective against the public is valid andbinding between the contracting parties.

Benedicto vs. Intermediate Appellate Court

The prevailing doctrine in common carriers make the owner liable forconsequences having from the operations of the carrier even though thespecific vehicle involved may have been transferred to another person. This


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doctrine rests upon the principle in dealing with vehicles registered underPublic Service Law, the public has the right to assume that the registeredowner is the actual or lawful owner thereof. It would be very difficult and oftenimpossible as a practical matter, for members of the general public to enforcethe rights of action that they may have for injuries inflicted by the vehiclesbeing negligently operated if they should be required to prove who the actualowner is. The registered owner is not allowed to deny liability by proving theidentity of the alleged transferee. Thus, contrary to petitioners claim, privaterespondents are not required to go beyond the vehicles certificate ofregistration to ascertain the owner of the carrier.

PHILTRANCO Service Enterprise, Inc. vs. Court of Appeals

We have consistently held that the liability of the registered owner of apublic service vehicle, like petitioner Philtranco, for damages arising from thetortious acts of the driver is primary, direct, and joint and several or solidarywith the driver. As to solidarity, Article 2194 expressly provides:

Art. 2194. The responsibility of two or more persons who are liable for aquasi-delict is solidary.

Since the employer's liability is primary, direct and solidary, its onlyrecourse if the judgment for damages is satisfied by it is to recover what it haspaid from its employee who committed the fault or negligence which gave riseto the action based on quasi-delict. Article 2181 of the Civil Code provides:

Art. 2181. Whoever pays for the damage caused by his dependents oremployees may recover from the latter what he has paid or delivered insatisfaction of the claim.

Santos vs. Sibug

Although SANTOS, as the kabit was the true owner as against VIDAD, thelatter, as the registered owner/operator and grantee of the franchise, is directlyand primarily responsible and liable for the damages caused to SIBUG, theinjured party, as a consequence of the negligent or careless operation of thevehicle. This ruling is based on the principle that the operator of record isconsidered the operator of the vehicle in contemplation of law as regards thepublic and third persons even if the vehicle involved in the accident had beensold to another where such sale had not been approved by the then PublicService Commission.

Lita Enterprises Inc. vs. Intermediate Appellate Court

Unquestionably, the parties herein operated under an arrangement,comonly known as the "kabit system", whereby a person who has been


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granted a certificate of convenience allows another person who owns motorsvehicles to operate under such franchise for a fee. A certificate of publicconvenience is a special privilege conferred by the government . Abuse of thisprivilege by the grantees thereof cannot be countenanced. Although notoutrightly penalized as a criminal offense, the "kabit system" is invariablyrecognized as being contrary to public policy and, therefore, void andinexistent under Article 1409 of the Civil Code, It is a fundamental principlethat the court will not aid either party to enforce an illegal contract, but willleave them both where it finds them.

Teja Marketing vs. Intermediate Appellate Court

The ruling in Lita Enterprises Inc. vs. IAC is upheld. The defect of in existence ofa contract is permanent and cannot be cured by ratification or by prescription.

The mere lapse of time cannot give efficacy to contracts that are null and void.

Magboo vs. Bernardo

The features which characterize the boundary system are not sufficient towithdraw the relationship between the parties from that of employer andemployee. The owner continued to be the operator of the vehicle in legalcontemplation and as such, he is responsible for the consequences incident toits operation. To exempt from liability the owner of a public vehicle whooperates it under the boundary system on the ground that he is a merelessor would be not only to abet flagrant violations of the Public Service Lawbut also to place the riding public at the mercy of reckless and irresponsible

drivers.

Ganzon vs. CA

Petitioner Ganzon failed to show that the loss of the scrap iron due toany cause enumerated in Art. 1734. The order of the acting Mayor did notconstitute valid authority for petitioner to carry out. In any case, theintervention of the municipal officials was not of a character that would renderimpossible the fulfillment by the carrier of its obligation. The petitioner wasnot duly bound to obey the illegal order to dump into the sea the scrap of iron.Moreover, there is absence of sufficient proof that the issuance of the same

order was attended with such force or intimidation as to completely overpowerthe will of the petitioners employees.By the delivery made during Dec. 1, 1956, the scraps were

unconditionally placed in the possession and control of the common carrier,and upon their receipt by the carrier of transportation, the contract of carriagewas deemed perfected. Consequently, Ganzons extraordinary responsibility forthe loss, destruction or deterioration of the goods commenced. According toArt 1738, such extraordinary responsibility would cease only upon the deliveryby the carrier to the consignee or persons with right to receive them. The fact


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that part of the shipment had not been loaded on board did not impair thecontract of transportation as the goods remained in the custody & control ofthe carrier.

Eastern Shipping Lines vs. Court of Appeals

The heavy seas and rains referred to in the masters report were notcaso fortuito but normal occurrences that an ocean-going vessel, particularly inthe month of September which, in our area, is a month of rains and heavy seaswould encounter as a matter of routine. They are not unforeseen norunforeseeable. These are conditions that ocean-going vessels would encounterand provide for, in the ordinary course of a voyage. That rain water (not seawater) found its way into the holds of the Jupri Venture is a clear indication thatcare and foresight did not attend the closing of the ship's hatches so that rainwater would not find its way into the cargo holds of the ship.

Since the carrier has failed to establish any caso fortuito, thepresumption by law of fault or negligence on the part of the carrier applies;and the carrier must present evidence that it has observed the extraordinarydiligence required by Article 1733 of the Civil Code in order to escape liabilityfor damage or destruction to the goods that it had admittedly carried in thiscase. No such evidence exists of record. Thus, the carrier cannot escapeliability.

Sarkies Tours Phils vs. Court of Appeals

Under the Civil Code, common carriers, from the nature of their businessand for reasons of public policy, are bound to observe extraordinary diligencein the vigilance over the goods transported by them, and this liability lasts fromthe time the goods are unconditionally placed in the possession of, andreceived by the carrier for transportation until the same are delivered, actuallyor constructively, by the carrier to the person who has a right to receive them,unless the loss is due to any of the excepted causes under Article 1734thereof.

Where the common carrier accepted its passenger's baggage fortransportation and even had it placed in the vehicle by its own employee, itsfailure to collect the freight charge is the common carrier's own lookout. It isresponsible for the consequent loss of the baggage. In the instant case,defendant appellant's employee even helped Fatima Minerva Fortades and herbrother load the luggages/baggages in the bus' baggage compartment, withoutasking that they be weighed, declared, receipted or paid for. Neither was thisrequired of the other passengers.

Valenzuela Hardwood & Industrial Supply vs. Court of Appeals

In a contract of private carriage, the parties may validly stipulate thatresponsibility for the cargo rests solely on the charterer, exempting the


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shipowner from liability for loss of or damage to the cargo caused even by thenegligence of the ship captain. Pursuant to Article 1306 17 of the Civil Code,such stipulation is valid because it is freely entered into by the parties and thesame is not contrary to law, morals, good customs, public order, or publicpolicy. Indeed, their contract of private carriage is not even a contract ofadhesion. We stress that in a contract of private carriage, the parties mayfreely stipulate their duties and obligations which perforce would be binding onthem. Unlike in a contract involving a common carrier, private carriage doesnot involve the general public. Hence, the stringent provisions of the Civil Codeon common carriers protecting the general public cannot justifiably be appliedto a ship transporting commercial goods as a private carrier. Consequently, thepublic policy embodied therein is not contravened by stipulations in a charterparty that lessen or remove the protection given by law in contracts involvingcommon carriers.

Yobido vs. Court of Appeals

The explosion of the new tire is not a fortuitous event. There are humanfactors involved in the situation. The fact that the tire was new did not implythat it was entirely free from manufacturing defects or that it was properlymounted on the vehicle. Neither may the fact that the tire bought and used isof a brand name noted for quality, resulting in the conclusion that it could notexplode within five days use. It is settled that an accident caused either bydefects in the automobile or through the negligence of its driver is not a casofortuito. Moreover, a common carrier may not be absolved from liability in caseof force majeure. A common carrier must still prove that it was not negligent incausing the death or injury resulting from the accident. Thus, having failed tooverthrow the presumption of negligence with clear and convincing evidence,petitioners are hereby held liable for damages.

Compania Maritima vs. Insurance Co. of North America

The receipt of goods by the carrier has been said to lie at the foundationof the contract to carry and deliver, and if actually no goods are received therecan be no such contract. The liability and responsibility of the carrier under acontract for the carriage of goods commence on their actual delivery to, orreceipt by, the carrier or an authorized agent and delivery to a lighter in charge

of a vessel for shipment on the vessel, where it is the custom to deliver in thatway, is a good delivery and binds the vessel receiving the freight, the liabilitycommencing at the time of delivery to the lighter and, similarly, where there isa contract to carry goods from one port to another, and they cannot be loadeddirectly on the vessel and lighters are sent by the vessel to bring the goods toit, the lighters are for the time its substitutes, so that the bill of landing isapplicable to the goods as soon as they are placed on the lighters.


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Whenever the control and possession of goods passes to the carrier andnothing remains to be done by the shipper, then it can be said with certaintythat the relation of shipper and carrier has been established. A bill of lading isnot indispensable for the creation of a contract of carriage. The bill of lading is

juridically a documentary proof of the stipulations and conditions agreed uponby both parties. The liability of the carrier as common carrier begins with theactual delivery of the goods for transportation, and not merely with the formalexecution of a receipt or bill of lading; the issuance of a bill of lading is notnecessary to complete delivery and acceptance. Even where it is provided bystatute that liability commences with the issuance of the bill of lading, actualdelivery and acceptance are sufficient to bind the carrier.

Lu Do vs. Binamira

While delivery of the cargo to the consignee, or to the person who has aright to receive them, contemplated in Article 1736, because in such case thegoods are still in the hands of the Government and the owner cannot exercisedominion over them, we believe however that the parties may agree to limitthe liability of the carrier considering that the goods have still to through theinspection of the customs authorities before they are actually turned over tothe consignee. This is a situation where we may say that the carrier lossescontrol of the goods because of a custom regulation and it is unfair that it bemade responsible for what may happen during the interregnum.

American President Lines, Ltd. vs. Klepper

With regard to the contention of the carrier that COGSA should control inthis case, the same is of as moment. Art. 1763 of the New Civil Code providesthat the laws of the country to which the goods are transported shall governthe liability of the common carrier in case of loss, destruction anddeterioration. This means that the law of the Philippines on the New CivilCode. Under 1766 of NCC, in all matter not regulated by this Code, the rightsand obligations of common carriers shall be governed by the Code ofCommerce and by Special Laws. Art. 1736-1738, NCC governs said rights andobligations. Therefore, although Sec 4(5) of COGSA states that the carrier shallnot be liable in an amount exceeding $500 per package unless the value of the

goods had been declared by the shipper and asserted in the bill of lading, saidsection is merely supplementary to the provisions of the New Civil Code.

Servando vs. Phil. Steam

The court a quo held that the delivery of the shipment in question to thewarehouse of the Bureau of Customs is not the delivery contemplated by


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Article 1736; and since the burning of the warehouse occurred before actual orconstructive delivery of the goods to the appellees, the loss is chargeableagainst the appellant.

It should be pointed out, however, that in the bills of lading issued forthe cargoes in question, the parties agreed to limit the responsibility of thecarrier for the loss or damage that may be caused to the shipment therein thefollowing stipulation:

Clause 14. Carrier shall not be responsible for loss or damage to shipmentsbilled 'owner's risk' unless such loss or damage is due to negligence of carrier.Nor shall carrier be responsible for loss or damage caused by force majeure,dangers or accidents of the sea or other waters; war; public enemies; . . .fire . ...

We sustain the validity of the above stipulation; there is nothing thereinthat is contrary to law, morals or public policy.

Appellees would contend that the above stipulation does not bind thembecause it was printed in fine letters on the back-of the bills of lading; and thatthey did not sign the same. This argument overlooks the pronouncement ofthis Court in Ong Yiu vs. Court of Appeals, where the same issue was resolvedin this wise:

While it may be true that petitioner had not signed the plane ticket, heis nevertheless bound by the provisions thereof. 'Such provisions have beenheld to be a part of the contract of carriage, and valid and binding upon the

passenger regardless of the latter's lack of knowledge or assent to theregulation'. It is what is known as a contract of 'adhesion', in regards which ithas been said that contracts of adhesion wherein one party imposes a readymade form of contract on the other, as the plane ticket in the case at bar, arecontracts not entirely prohibited. The one who adheres to the contract is inreality free to reject it entirely; if he adheres, he gives his consent."

Saludo, Jr. vs. Court of Appeals

Except as may be prohibited by law, there is nothing to prevent aninverse order of events, that is, the execution of the bill of lading even prior toactual possession and control by the carrier of the cargo to be transported.

There is no law which requires that the delivery of the goods for carriage andthe issuance of the covering bill of lading must coincide in point of time or, for

that matter, that the former should precede the latter. While we agree withpetitioners' statement that "an airway bill estops the carrier from denyingreceipt of goods of the quantity and quality described in the bill," a furtherreading and a more faithful quotation of the authority cited would reveal that"(a) bill of lading may contain constituent elements of estoppel and thusbecome something more than a contract between the shipper and the carrier. .. . (However), as between the shipper and the carrier, when no goods havebeen delivered for shipment no recitals in the bill can estop the carrier fromshowing the true facts . . . Between the consignor of goods and receiving


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carrier, recitals in a bill of lading as to the goods shipped raise only arebuttable presumption that such goods were delivered for shipment. Asbetween the consignor and a receiving carrier, the fact must outweigh therecital."

There is a holding in most jurisdictions that the acceptance of a bill oflading without dissent raises a presumption that all terms therein were broughtto the knowledge of the shipper and agreed to by him, and in the absence offraud or mistake, he is estopped from thereafter denying that he assented tosuch terms. This rule applies with particular force where a shipper accepts abill of lading with full knowledge of its contents, and acceptance under suchcircumstances makes it a binding contract. In order that any presumption ofassent to a stipulation in a bill of lading limiting the liability of a carrier mayarise, it must appear that the clause containing this exemption from liabilityplainly formed a part of the contract contained in the bill of lading. A stipulationprinted on the back of a receipt or bill of lading or on papers attached to suchreceipt will be quite as effective as if printed on its face, if it is shown that theconsignor knew of its terms. Thus, where a shipper accepts a receipt whichstates that its conditions are to be found on the back, such receipt comeswithin the general rule, and the shipper is held to have accepted and to bebound by the conditions there to be found.

Explicit is the rule under Article 1736 of the Civil Code that theextraordinary responsibility of the common carrier begins from the time thegoods are delivered to the carrier. This responsibility remains in full force andeffect even when they are temporarily unloaded or stored in transit, unless theshipper or owner exercises the right of stoppage in transitu, and terminatesonly after the lapse of a reasonable time for the acceptance, of the goods by

the consignee or such other person entitled to receive them. And, there isdelivery to the carrier when the goods are ready for and have been placed inthe exclusive possession, custody and control of the carrier for the purpose oftheir immediate transportation and the carrier has accepted them. Where sucha delivery has thus been accepted by the carrier, the liability of the commoncarrier commences. Only when such fact of delivery has been unequivocallyestablished can the liability for loss, destruction or deterioration of goods in thecustody of the carrier, absent the excepting causes under Article 1734, attachand the presumption of fault of the carrier under Article 1735 be invoked.

Macam vs. CA

The extraordinary responsibility of the common carriers lasts until actualor constructive delivery of the cargoes to the consignee or to the person whohas a right to receive them. PAKISTAN BANK was indicated in the bills of ladingas consignee whereas GPC was the notify party. However, in the exportinvoices GPC was clearly named as buyer/importer. Petitioner also referred toGPC as such in his demand letter to respondent WALLEM and in his complaintbefore the trial court. This premise draws us to conclude that the delivery of


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the cargoes to GPC as buyer/importer which, conformably with Art. 1736 had,other than the consignee, the right to receive them was proper.

The real issue is whether respondents are liable to petitioner forreleasing the goods to GPC without the bills of lading or bank guarantee. Fromthe testimony of petitioner, we gather that he has been transacting with GPCas buyer/importer for around two (2) or three (3) years already. When mangoesand watermelons are in season, his shipment to GPC using the facilities ofrespondents is twice or thrice a week. The goods are released to GPC. It hasbeen the practice of petitioner to request the shipping lines to immediatelyrelease perishable cargoes such as watermelons and fresh mangoes throughtelephone calls by himself or his "people." In transactions covered by a letter ofcredit, bank guarantee is normally required by the shipping lines prior toreleasing the goods. But for buyers using telegraphic transfers, petitionerdispenses with the bank guarantee because the goods are already fully paid. Inhis several years of business relationship with GPC and respondents, there wasnot a single instance when the bill of lading was first presented before therelease of the cargoes.

Maersk Line vs. CA

While it is true that common carriers are not obligated by law to carryand to deliver merchandise, and persons are not vested with the right toprompt delivery, unless such common carriers previously assume theobligation to deliver at a given date or time, delivery of shipment or cargoshould at least be made within a reasonable time.

While there was no special contract entered into by the partiesindicating the date of arrival of the subject shipment, petitioner nevertheless,was very well aware of the specific date when the goods were expected toarrive as indicated in the bill of lading itself. In this regard, there arises no needto execute another contract for the purpose as it would be a mere superfluity.In the case before us, we find that a delay in the delivery of the goodsspanning a period of two months and seven days falls was beyond the realm ofreasonableness.

Ysmael vs. Barretto

Limiting the common carriers liability for loss or damage from anycause or for any reason for less than 1/8 the actual value of the goods isunconscionable and therefore against public policy. A common carrier cannotlawfully stipulate for exemption from liability, unless such exemption is justand reasonable and the contract is freely and fairly made.

Shewaram vs. Philippine Airlines


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It can not be said that a contract has been entered into between apassenger and the common carrier, embodying the conditions as printed at theback of the ticket. The fact that those conditions are printed at the back of theticket stub in letters so small that they are hard to read would not warrant thepresumption that the passenger was aware of those conditions such that hehad "fairly and freely agreed" to those conditions. The passenger is considerednot having agreed to the stipulation on the ticket, as manifested by the factthat he did not sign the ticket.

Ong Yiu vs. Court of Appeals

While it may be true that the passenger had not signed the plane ticket,he is nevertheless bound by the provisions thereof. "Such provisions have beenheld to be a part of the contract of carriage, and valid and binding upon thepassenger regardless of the latter's lack of knowledge or assent to theregulation". It is what is known as a contract of "adhesion", in regards which ithas been said that contracts of adhesion wherein one party imposes a readymade form of contract on the other, as the plane ticket in the case at bar, arecontracts not entirely prohibited. The one who adheres to the contract is inreality free to reject it entirely; if he adheres, he gives his consent. A contractlimiting liability upon an agreed valuation does not offend against the policy ofthe law forbidding one from contracting against his own negligence.

Sea Land Services, Inc. vs. IAC

Since the liability of a common carrier for loss of or damage to goodstransported by it under a contract of carriage so governed by the laws of thecountry of destination and the goods in question were shipped from the UnitedStates to the Philippines, the liability of common carrier to the consignee isgoverned primarily by the Civil Code. Applying the Civil Code provisions (Article1749 and 1750) the stipulation in the bill of lading limiting the liability of thecommon carrier for loss or damages to the shipment covered by said ruleunless the shipper declares the value of the shipment and pays additionalcharges is valid and binding on the consignee.

Citadel Lines, Inc. vs. CA

Basic is the rule that a stipulation limiting the liability of the carrier tothe value of the goods appearing in the bill of lading, unless the shipper orowner declares a greater value, is binding. Furthermore, a contract fixing thesum that may be recovered by the owner or shipper for the loss, destruction ordeterioration of the goods is valid, if it is reasonable and just under thecircumstances, and has been fairly and freely agreed upon.

In this case, the award based on the alleged market value of the goodsis erroneous. It is provided in a clause in the BOL that its liability is limited to


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US$2.00/kilo. The consignee also admits in the memorandum that the value ofthe goods does not appear in the bill of lading. Hence, the stipulation on thecarriers limited liability applies.

Everett Seamship Corp. vs. CA

In the bill of lading, the carrier made it clear that all claims for which itmay be liable shall be adjusted and settled on the basis of the shipper's netinvoice cost plus freight and insurance premiums, if paid, and in no event shallthe carrier be liable for any loss of possible profits or any consequential loss. Itsliability would only be up to One Hundred Thousand (Y100,000.00) Yen.However, the shipper, had the option to declare a higher valuation if the valueof its cargo was higher than the limited liability of the carrier. Considering thatthe shipper did not declare a higher valuation, it had itself to blame for notcomplying with the stipulations.

The commercial Invoice does not in itself sufficiently and convincinglyshow that the common carrier has knowledge of the value of the cargo ascontended by the shipper.

British Airways vs. CA

The contract of transportation was exclusively between the passengerand common carrier BA. The latter merely endorsing the Manila to Hong Konglog of the formers journey to PAL, as its subcontractor or agent. Conditions ofcontracts were one of continuous air transportation. Well-settled rule that anagent is also responsible for any negligence in the performance of its functionand is liable for damages which the principal may suffer by reason of itsnegligent act. When an action is based on breach of contract of carriage, thepassenger can only sue BA and not PAL, since the latter was not a party in thecontract.

The contention of BA with respect to limited liability was overruledalthough it is recognized in the Philippines, stating that BA had waived thedefense of limited liability when it allowed Mahtani(the passenger) to testify asto the actual damages he incurred due to the misplacement of his luggage,without any objection.

H.E. Heacock Co. vs. Macondray

Three kinds of stipulations have often been made in a bill of lading. Thefirst is one exempting the carrier from any and all liability for loss or damageoccasioned by its own negligence. The second is one providing for anunqualified limitation of such liability to an agreed valuation. And the third isone limiting the liability of the carrier to an agreed valuation unless the shipperdeclares a higher value and pays a higher rate of freight. According to analmost uniform weight of authority, the first and second kinds of stipulations


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are invalid as being contrary to public policy, but the third is valid andenforceable.

If a common carrier gives to a shipper the choice of two rates and if theshipper makes such a choice, understandingly and freely, and names hisvaluation, he cannot thereafter recover more than the value which he thusplaces upon his property. A limitation of liability based upon an agreed valuedoes not conflict with any sound principle of public policy; and it is notconformable to plain principles of justice that a shipper may understate valuein order to reduce the rate and then recover a larger value in case of loss.

Sweet Lines Inc. vs. TEVES

Considered in the light of circumstances prevailing in the inter-islandshipping industry in the country today, We find and hold that Condition No. 14printed at the back of the passage tickets should be held as void andunenforceable for the following reasons first, under circumstances obligation inthe inter-island shipping industry, it is not just and fair to bind passengers tothe terms of the conditions printed at the back of the passage tickets, on whichCondition No. 14 is Printed in fine letters, and second, Condition No. 14subverts the public policy on transfer of venue of proceedings of this nature,since the same will prejudice rights and interests of innumerable passengerslocated in different places of the country who, under Condition No. 14, willhave to file suits against petitioner only in the City of Cebu. Considering theexpense and trouble a passenger residing outside of Cebu City would incur toprosecute a claim in the City of Cebu, he would most probably decide not to filethe action at all. The condition will thus defeat, instead of enhance, the ends of

justice. Upon the other hand, petitioner has branches or offices in therespective ports of call of its vessels and can afford to litigate in any of theseplaces. Hence, the filing of the suit in the CFI of Misamis Oriental, as was donein the instant case, will not cause inconvenience to, much less prejudice,petitioner.

Under Art. 2220 of the Civil Code, moral damages are justly due inbreaches of contract where the defendant acted fraudulently or in bad faith.Both the Trial Court and the Appellate Court found that there was bad faith onthe part of petitioner in that:

(1) Defendants- Appellants did not give notice to plaintiffs-appellates as to thechange of scheduled of the vessel;(2) Knowing fully well that it would take no less than fifteen hours to effect therepairs of the damaged engine, defendants- appellants instead made announcement of assurance that the vessel would leave within a short period of time,and when plaintiff-appellees wanted to leave the port and gave up the trip,defendants- appellants employees would come and say, we are leavingalready.(3) Defendants- appellants did not offer to refund plaintiffs-appellees ticketsnor provide them with transportation form Tacloban to Catbalogan.


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being transgressed. Calling a policeman to his aid, as suggested by the servicemanual invoked by the trial judge, in compelling the passenger to submit tomore rigid inspection, after the passenger had already declared that the boxcontained mere clothes and other miscellaneous, could not have justifiedinvasion of a constitutionally protected domain.

Mecenas vs. CA

The behaviour of the captain of the "Don Juan" in tills instance-playingmahjong "before and up to the time of collision constitutes behaviour that issimply unacceptable on the part of the master of a vessel to whose hands thelives and welfare of at least seven hundred fifty (750) passengers had beenentrusted. Whether or not Capt. Santisteban was "off-duty" or "on-duty" at oraround the time of actual collision is quite immaterial; there is, bothrealistically speaking and in contemplation of law, no such thing as "off-duty"hours for the master of a vessel at sea that is a common carrier upon whomthe law imposes the duty of extraordinary diligence.

The record shows that the "Don Juan" sank within ten (10) to fifteen (15)minutes after initial contact with the "Tacloban City. While the failure of Capt.Santisteban to supervise his officers and crew in the process of abandoning theship and his failure to avail of measures to prevent the too rapid sinking of hisvessel after collision, did not cause the collision by themselves, such failuresdoubtless contributed materially to the consequent loss of life and, moreover,were indicative of the kind and level of diligence exercised by Capt.Santisteban in respect of his vessel and his officers and men prior to actualcontact between the two (2) vessels. The officer-on-watch in the "Don Juan"admitted that he had failed to inform Capt. Santisteban not only of the"imminent danger of collision" but even of "the actual collision itself " There isalso evidence that the "Don Juan" was carrying more passengers than she hadbeen certified as allowed to carry.

Under these circumstances, a presumption of gross negligence on thepart of the vessel (her officers and crew) and of its ship-owner arises.

Negros Navigation Co., Inc. vs. CA

The Duty to exercise due diligence includes the duty to take passengers orcargoes that are within the carrying capacity of the vessel. (Same Ruling withMecenas)

Korean Airlines Co., LTD. vs. CA


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The status of Lapuz as standby passenger was changed to that of aconfirmed passenger when his name was entered in the passenger manifest ofKAL for its Flight No. KE 903. His clearance through immigration and customsclearly shows that he had indeed been confirmed as a passenger of KAL in thatflight. KAL thus committed a breach of the contract of carriage between themwhen it failed to bring Lapuz to his destination.

This Court has held that a contract to transport passengers is different inkind and degree from any other contractual relation. The business of thecarrier is mainly with the traveling public. It invites people to avail themselvesof the comforts and advantages it offers. The contract of air carriage generatesa relation attended with a public duty. Passengers have the right to be treatedby the carrier's employees with kindness, respect, courtesy and dueconsideration. They are entitled to be protected against personal misconduct,injurious language, indignities and abuses from such employees. So it is thatany discourteous conduct on the part of these employees toward a passengergives the latter an action for damages against the carrier.

Fortune Express Inc. vs. CA

Art. 1763 of the Civil Code provides that a common carrier is responsiblefor injuries suffered by a passenger on account of wilfull acts of otherpassengers, if the employees of the common carrier could have prevented theact through the exercise of the diligence of a good father of a family. In thepresent case, it is clear that because of the negligence of petitioner'semployees, the seizure of the bus by Mananggolo and his men was madepossible.

Despite warning by the Philippine Constabulary at Cagayan de Oro thatthe Maranaos were planning to take revenge on the petitioner by burning someof its buses and the assurance of petitioner's operation manager, DiosdadoBravo, that the necessary precautions would be taken, petitioner did nothing toprotect the safety of its passengers. Had petitioner and its employees beenvigilant they would not have failed to see that the malefactors had a largequantity of gasoline with them. Under the circumstances, simple precautionarymeasures to protect the safety of passengers, such as frisking passengers andinspecting their baggages, preferably with non-intrusive gadgets such as metaldetectors, before allowing them on board could have been employed withoutviolating the passenger's constitutional rights.

The acts of Maranaos could not be considered as caso fortuito becausethere was already a warning by the PC.

No contributory negligence could be attributed to the deceased. Theassailant's motive was to retaliate for the loss of life of two Maranaos as aresult of the collision between petitioner's bus and the jeepney in which thetwo Maranaos were riding. The armed men actually allowed deceased toretrieve something from the bus. What apparently angered them was hisattempt to help the driver of the bus by pleading for his life.


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Gatchalian vs. Delim

The record yields affirmative evidence of fault or negligence on the partof respondent common carrier. The driver did not stop to check if anything hadgone wrong with the bus when the snapping sound was heard and madeknown to him by the passengers, instead told them that it was normal. Thedriver's reply necessarily indicated that the same "snapping sound" had beenheard in the bus on previous occasions. This could only mean that the bus hadnot been checked physically or mechanically to determine what was causingthe "snapping sound" which had occurred so frequently that the driver hadgotten accustomed to it. Such a sound is obviously alien to a motor vehicle ingood operating condition, and even a modicum of concern for life and limb ofpassengers dictated that the bus be checked and repaired. The obviouscontinued failure of respondent to look after the roadworthiness and safety ofthe bus, coupled with the driver's refusal or neglect to stop the mini-bus afterhe had heard once again the "snapping sound" and the cry of alarm from oneof the passengers, constituted wanton disregard of the physical safety of thepassengers, and hence gross negligence on the part of respondent and hisdriver.

Because what is involved here is the liability of a common carrier forinjuries sustained by passengers in respect of whose safety a common carriermust exercise extraordinary diligence, we must construe any such purportedwaiver most strictly against the common carrier. For a waiver to be valid andeffective, it must not be contrary to law, morals, public policy or good customs.A cursory examination of the purported waiver will readily show that appelleesdid not actually waive their right to claim damages from appellant for thelatter's failure to comply with their contract of carriage. All that said documentproves is that they expressed a "desire" to make the waiver which obviously isnot the same as making an actual waiver of their right. A waiver of the kindinvoked by appellant must be clear and unequivocal.

A person is entitled to the physical integrity of his or her body; if thatintegrity is violated or diminished, actual injury is suffered for which actual orcompensatory damages are due and assessable. Petitioner Gatchalian isentitled to be placed as nearly as possible in the condition that she was beforemishap. A scar, especially one on the face of the woman, resulting from theinfliction of injury upon her, is a violation of bodily integrity, giving raise to alegitimate claim for restoration to her condition ante.

Del Castillo vs. Jaymalin

Common carriers are responsible for the death of their passengers(Articles 1764 and 2206 of the Civil Code). This liability includes the loss of theearning capacity of the deceased. It appears proven that the defendantcorporations failed to exercise the diligence that was their duty to observeaccording to Articles 1733 and 1755. The conductor was apprised of the factthat Mario del Castillo was deaf and dumb. With this knowledge the conductor


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should have taken extra-ordinary care for the safety of the said passenger. Inthis he failed.

Phil. Rabbit Bus Lines vs. IAC

The principle about "the last clear" chance, would call for application in asuit between the owners and drivers of the two colliding vehicles. It does notarise where a passenger demands responsibility from the carrier to enforce itscontractual obligations. For it would be inequitable to exempt the negligentdriver of the jeepney and its owners on the ground that the other driver waslikewise guilty of negligence."

It is the rule under the substantial factor test that if the actor's conductis a substantial factor in bringing about harm to another, the fact that the actorneither foresaw nor should have foreseen the extent of the harm or themanner in which it occurred does not prevent him from being liable. The busdriver's conduct is not a substantial factor in bringing about harm to thepassengers of the jeepney. It cannot be said that the bus was travelling at afast speed when the accident occurred because the speed of 80 to 90kilometers per hour, assuming such calculation to be correct, is yet within thespeed limit allowed in highways.

Bustamante vs. CA

The doctrine, stated broadly, is that the negligence of the plaintiff doesnot preclude a recovery for the negligence of the defendant where it appearsthat the defendant, by exercising reasonable care and prudence, might haveavoided injurious consequences to the plaintiff notwithstanding the plaintiff'snegligence. In other words, the doctrine of last clear chance means that eventhough a person's own acts may have placed him in a position of peril, and aninjury results, the injured person is entitled to recovery. As the doctrine isusually stated, a person who has the last clear chance or opportunity ofavoiding an accident, notwithstanding the negligent acts of his opponent orthat of a third person imputed to the opponent is considered in law solelyresponsible for the consequences of the accident.

All premises considered, the Court is convinced that the respondentCourt committed an error of law in applying the doctrine of last clear chance asbetween the defendants, since the case at bar is not a suit between the ownersand drivers of the colliding vehicles but a suit brought by the heirs of thedeceased passengers against both owners and drivers of the colliding vehicles.

Therefore, the respondent court erred in absolving the owner and driver of thecargo truck from liability.

Lara vs. Valencia


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The owner and driver of a vehicle owes to accommodation passengersor invited guests merely the duty to exercise reasonable care so that they maybe transported safely to their destination. Thus, "The rule is established byweight of authority that the owner or operator of an automobile owes the dutyto an invited guest to exercise reasonable care in its operation, and notunreasonably to expose him to danger and injury by increasing the hazard oftravel. The owner of the vehicle in the case at bar is only required to observeordinary care, and is not in duty bound to exercise extraordinary diligence asrequired by our law.

A passenger must observe the diligence of a father of a family to avoidinjury to himself which means that if the injury to the passenger has beenproximately caused by his own negligence, the carrier cannot be held liable.

Necessito vs. Paras

While the carrier is not an insurer of the safety of the passengers, itshould nevertheless be held to answer for the laws its equipment if such flawswere at all discoverable. In this connection, the manufacturer of the defectiveappliance is considered in law the agent of the carrier, and the good repute ofthe manufacturer will not relieve the carrier from liability. The rationale of thecarrier's liability is the fact that the passenger has no privity with themanufacturer of the defective equipment; hence, he has no remedy againsthim, while the carrier usually has.

Japan Airlines vs. CA

Accordingly, there is no question that when a party is unable to fulfill hisobligation because of "force majeure," the general rule is that he cannot beheld liable for damages for non-performance. Corollarily, when JAL wasprevented from resuming its flight to Manila due to the effects of Mt. Pinatuboeruption, whatever losses or damages in the form of hotel and meal expensesthe stranded passengers incurred, cannot be charged to JAL. Yet it isundeniable that JAL assumed the hotel expenses of respondents for theirunexpected overnight stay on June 15, 1991.

It has been held that airline passengers must take such risks incident tothe mode of travel. In this regard, adverse weather conditions or extremeclimatic changes are some of the perils involved in air travel, the consequencesof which the passenger must assume or expect.

While JAL was no longer required to defray private respondents' livingexpenses during their stay in Narita on account of the fortuitous event, JAL hadthe duty to make the necessary arrangements to transport private respondentson the first available connecting flight to Manila. Petitioner JAL reneged on itsobligation to look after the comfort and convenience of its passengers when itdeclassified private respondents from "transit passengers" to "new


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passengers" as a result of which private respondents were obliged to make thenecessary arrangements themselves for the next flight to Manila.

Layugan vs. IAC

Res ipsa loquitur is a doctrine which states thus: "Where the thing whichcauses injury is shown to be under the management of the defendant, and theaccident is such as in the ordinary course of things does not happen if thosewho have the management use proper care, it affords reasonable evidence, inthe absence of an explanation by the defendant, that the accident arose fromwant of care.The doctrine of Res ipsa loquitur as a rule of evidence is peculiarto the law of negligence which recognizes that prima facie negligence may beestablished without direct proof and furnishes a substitute for specific proof ofnegligence.The doctrine can be invoked when and only when, under thecircumstances involved, direct evidence is absent and not readily available.

Whether the cargo truck was parked along the road or on half theshoulder of the right side of the road would be of no moment taking intoaccount the warning device consisting of the lighted kerosene lamp placedthree or four meters from the back of the truck. But despite this warning whichwe rule as sufficient, the Isuzu truck driven by Daniel Serrano, an employee ofthe private respondent, still bumped the rear of the parked cargo truck. As adirect consequence of such accident the petitioner sustained injuries on his leftforearm and left foot.It is clear therefore that the absence or want of care ofDaniel Serrano has been established by clear and convincing evidence. Itfollows that the doctrine of Res ipsa loquitur is inapplicable, making theemployer of the driver liable for the negligence of his employee.

La Mallorca vs. CA

The liability of the carrier for the child, who was already led by the fatherto a place about 5 meters away from the bus for her safety under the contractof carriage, persists. The relation of carrier and passenger does not necessarilycease where the latter, after alighting from the car, aids the carrier's servant oremployee in removing his baggage from the car.

It has been recognized as a rule that the relation of carrier andpassenger does not cease at the moment the passenger alights from thecarrier'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 reasonableopportunity to leave the carrier's premises. And, what is a reasonable time or areasonable delay within this rule is to be determined from all thecircumstances.

Aboitiz Shipping Co. vs. CA


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The rule is that the relation of carrier and passenger continues until thepassenger has been landed at the port of destination and has left the vesselowner's dock or premises. Once created, the relationship will not ordinarilyterminate until the passenger has, after reaching his destination, safelyalighted from the carrier's conveyance or had a reasonable opportunity toleave the carrier's premises. All persons who remain on the premises areasonable 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 bedetermined from all the circumstances, and includes a reasonable time to seeafter his baggage and prepare for his departure. The carrier-passengerrelationship is not terminated merely by the fact that the person transportedhas been carried to his destination if, for example, such person remains in thecarrier's premises to claim his baggage.

When the accident occurred, the victim was in the act of unloading hiscargoes, which he had every right to do, from petitioner's vessel. Even if hehad already disembarked an hour earlier, his presence in petitioner's premiseswas not without cause. The victim had to claim his baggage which was possibleonly one hour after the vessel arrived since it was admittedly standardprocedure in the case of petitioner's vessels that the unloading operations shallstart only after that time.

Mallari Sr. vs. CA

Clearly, the proximate cause of the collision resulting in the death of apassenger of the jeepney, was the sole negligence of the driver of thepassenger jeepney, petitioner Alfredo Mallari Jr., who recklessly operated anddrove his jeepney in a lane where overtaking was not allowed by traffic rules.Under Art. 2185 of the Civil Code, unless there is proof to the contrary, it ispresumed that a person driving a motor vehicle has been negligent if at thetime of the mishap he was violating a traffic regulation.

Under Art. 1755 of the Civil Code, a common carrier is bound to carrythe passengers safely as far as human care and foresight can provide using theutmost diligence of very cautious persons with due regard for all thecircumstances. Moreover, under Art. 1756 of the Civil Code, in case of death orinjuries to passengers, a common carrier is presumed to have been at fault orto have acted negligently, unless it proves that it observed extraordinarydiligence. Further, pursuant to Art. 1759 of the same Code, it is liable for thedeath of or injuries to passengers through the negligence or willful acts of theformer's employees. This liability of the common carrier does not cease uponproof that it exercised all the diligence of a good father of a family in theselection of its employees.

Bayasen vs. CA

It is a well known physical tact that cars may skid on greasy or slippery roads,as in the instant case, without fault on account of the manner of handling the


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second view, upheld by the majority and also by the later cases, it is enoughthat the assault happens within the course of the employee's duty. It is nodefense for the carrier that the act was done in excess of authority or indisobedience of the carrier's orders. The carrier's liability here is absolute inthe sense that it practically secures the passengers from assaults committedby its own employees. Art. 1759, evidently follows the rule based on thesecond view.

Accordingly, it is the carrier's strict obligation to select its drivers andsimilar employees with due regard not only to their technical competence andphysical ability, but also, no less important, to their total personality, includingtheir patterns of behavior, moral fibers, and social attitude.

PNR vs. CA

When a train boarded by the deceased passenger was so over-crowdedthat he and many other passengers had no choice but to sit on the openplatforms between the coaches of the train, the common carrier is negligent.

Likewise when the train did not even slow down when it approached theIyam Bridge which was under repair at the time, neither did the train stop,despite the alarm raised by other passengers that a person had fallen off thetrain at lyam Bridge, there was negligence. The petitioner has the obligation totransport its passengers to their destinations and to observe extraordinarydiligence in doing so. Death or any injury suffered by any of its passengersgives rise to the presumption that it was negligent in the performance of itsobligation under the contract of carriage.

But while petitioner failed to exercise extraordinary diligence as requiredby law, it appears that the deceased was chargeable with contributorynegligence. Since he opted to sit on the open platform between the coaches ofthe train, he should have held tightly and tenaciously on the upright metal barfound at the side of said platform to avoid falling off from the speeding train.

Isaac vs. A.L. Ammen Trans. Co.

If the carriers employee is confronted with a sudden emergency, he is not heldto the same degree of care he would otherwise, be required in the absence ofsuch emergency.By placing his left arm on the window, petitioner is guilty of contributorynegligence. It cannot however relieve the carrier but can only reduce itsliability (ART. 1762). It is a prevailing rule that it is negligence per se forpassengers on a railroad to protrude any part of his body and that no recoverycan be had for an injury.

Bachelor Express Inc vs. CA

The running amuck of the passenger was the proximate cause of theincident as it triggered off a commotion and panic among the passengers such


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that the passengers started running to the sole exit shoving each otherresulting in the falling off the bus by passengers Beter and Rautraut causingthem fatal injuries. The sudden act of the passenger who stabbed anotherpassenger in the bus is within the context of force majeure. However, in orderthat 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 commoncarrier must still prove that it was not negligent in causing the injuries resultingfrom such accident. In this case, Bachelor was negligent.

Considering the factual findings of the Court of Appeals-the bus driverdid not immediately stop the bus at the height of the commotion; the bus wasspeeding from a full stop; the victims fell from the bus door when it wasopened or gave way while the bus was still running; the conductor panickedand blew his whistle after people had already fallen off the bus; and the buswas not properly equipped with doors in accordance with law.

Cariaga vs. LTB Co

The income which deceased could earn if he should finish the medicalcourse and pass the corresponding board examinations must be deemed to bewithin the same category provided for by Art. 2201 of the Civil Code, which arethose that are the natural and probable consequences of the breach and whichthe parties had foreseen or could have reasonably foreseen at the time theobligation was constituted.

LTB could not be held liable to pay moral damages under Article 2220 of theCivil Code on account of breach of its contract of carriage because it did notact fraudulently or in bad faith. LTB had exercised due diligence in theselection and supervision of its employees like the drivers of its buses inconnection with the discharge of their duties and so it must be considered anobligor in good faith.

Villa Rey Transit, Inc. vs. CA

Life expectancy is, not only relevant, but, also, an important element infixing the amount recoverable by private respondents herein. Although it is notthe sole element determinative of said amount, no cogent reason has beengiven to warrant its disregard and the adoption, in the case at bar, of a purelyarbitrary standard, such as a four-year rule.

When the liability of common carrier had been fixed at a minimal rate ofonly of P2,184.00 a year, which is the annual salary of deceased at the time ofhis death, as a young "training assistant" and when the deceaseds potentialityand capacity to increase his future income was not considered said liabilitymay be enforced upon finality of the decision.

Pan American World Airways vs. IAC


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are trying to recover against the defendant's carrier. Suffice it to state thatwhen plaintiffs prayed in their complaint for such other relief and remedies thatmay be availed of under the premises, in effect, therefore, the court is calledupon the exercise and use its discretion whether the imposition of punitive orexemplary damages even though not expressly prayed or pleaded in theplaintiffs' complaint. Exemplary damages may be imposed by way of exampleor correction only in addition, among others, to compensatory damages, butthat they cannot be recovered as a matter of right, their determinationdepending upon the discretion of the court. If the amount of exemplarydamages need not be proved, it need not also be alleged, and the reason isobvious because it is merely incidental or dependent upon what the court mayaward as compensatory damages.

De Caliston vs. Court of Appeals

The deletion of the P10,000.00 awarded for loss of pension is unjustified.Under Article 2206 of the Civil Code: The amount of damages for death causedby a crime or quasi-delict shall be at least three thousand pesos, even thoughthere may have been mitigating circumstances. In addition:(1) The defendant shall be liable for the loss of the earning capacity of thedeceased, and the indemnity shall be paid to the heirs of the latter. .

The pension of the decedent being a sure income that was cut short byher death for which Dalmacio was responsible, the surviving heir of the formeris entitled to the award of P 10,000.00 which is just equivalent to the pensionthe decedent would have received for one year if she did not die.

On the other hand, the P5,000.00 paid to the herein petitioner by theinsurer of the passenger bus which figured in the accident may be deemed tohave come from the bus owner who procured the insurance. Since the civilliability (ex-delicto) of the latter for the death caused by his driver is subsidiaryand, at bottom, arises from the same culpa, the insurance proceeds should becredited in favor of the errant driver.

Philippine Airlines vs. CA 185 SCRA 110

Petitioner relies on "the principle of law generally recognized andapplied by the courts in the United States" that "the controlling element indetermining loss of earnings arising from death is, as established byauthorities, the life expectancy of the deceased or of the beneficiary,whichever is shorter. However, resort to foreign jurisprudence would be properonly if no law or jurisprudence is available locally to settle a controversy. Evenin the absence of local statute and case law, foreign jurisprudence is onlypersuasive.

For the settlement of the issue at hand, there are enough applicablelocal laws and jurisprudence. Under Article 1764 and Article 2206(1) of the CivilCode, the award of damages for death is computed on the basis of the lifeexpectancy of the deceased, not of his beneficiary.


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Cachero vs. Manila Yellow Taxi Cab

While under the law, employers are made responsible for the damagescaused by their employees acting within the scope of their assigned task,plaintiff, in the present case, does not maintain his action against all thepersons who might be liable for the damages caused but on an alleged breachof contract of carriage and against the defendant employer alone. However,the defendant taxicab company has not committed any criminal offenseresulting in physical injuries against the plaintiff. The one that committed theoffense against plaintiff is the driver of defendant's taxicab but he was notmade party defendant to the case. Therefore, plaintiff is not entitled tocompensation for moral damages as his case does not come within theexception of paragraph 1 of Article 2219 of the Civil Code.

The present case does not come under any of the exceptionsenumerated in Article 2208 of the Civil Code, specially of paragraph 2 thereof,because defendant's failure to meet its responsibility was not the cause thatcompelled the plaintiff to litigate or to incur expenses to protect his interests.

The present action was instituted because plaintiff demanded an exorbitantamount for moral damages and naturally the defendant did not and could notyield to such demand. This is neither a case that comes under paragraph 11 ofsaid Article because the Lower Court did not deem it just and equitable toaward any amount for attorney's fees, on which point this Court agrees.

Fores vs. Miranda

The exception to the basic rule of damages now under consideration is amishap resulting in the death of a passenger, in which case Article 1764 makesthe common carrier expressly subject to the rule of Art. 2206, that entitles thespouse, descendants and ascendants of the deceased passenger to "demandmoral damages for mental anguish by reason of the death of the deceased".But the exceptional rule of Art. 1764 makes it all the more evident that wherethe injured passenger does not die, moral damages are not recoverable unlessit is proved that the carrier was guilty of malice or bad faith. We think it is clearthat the mere carelessness of the carrier's driver does not per se constitute or

justify an inference of malice or bad faith on the part of the carrier; and in thecase at bar there is no other evidence of such malice to support the award ofmoral damages by the Court of Appeals. To award moral damages for breachof contract, therefore, without proof of bad faith or malice on the part of thedefendant, as required by Art. 2220, would be to violate the clear provisions ofthe law, and constitute unwarranted judicial legislation.

Lopez vs. Pan American

As a proximate result of defendant's breach in bad faith of its contractswith plaintiffs, the latter suffered social humiliation, wounded feelings, seriousanxiety and mental anguish. For plaintiffs were travelling with first class tickets


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Moral damages are not recoverable in actions for damages predicatedon a breach of

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