Transpo Digest Cc.docx

BASCOS vs. COURT OF APPEALS and RODOLFO A. CIPRIANO G.R. No. 101089 April 7, 1993 FACTS: Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short) entered into a hauling contract with Jibfair Shipping Agency Corp whereby the former bound itself to haul the latter’s 2,000 m/tons of soya bean meal to the warehouse in Calamba, Laguna. To carry out its obligation, CIPTRADE, through Cipriano, subcontracted with Bascos to transport and to deliver 400 sacks of soya bean meal from the Manila Port Area to Calamba, Laguna. Petitioner failed to deliver the said cargo. As a consequence of that failure, Cipriano paid Jibfair Shipping Agency the amount of the lost goods in accordance with their contract. Cipriano demanded reimbursement from petitioner but the latter refused to pay. Eventually, Cipriano filed a complaint for a sum of money and damages with writ of preliminary attachment for breach of a contract of carriage. The trial court granted the writ of preliminary attachment. In her answer, petitioner interposed the defense that there was no contract of carriage since CIPTRADE leased her cargo truck to load the cargo from Manila Port Area to Laguna and that the truck carrying the cargo was hijacked and being a force majeure, exculpated petitioner from any liability After trial, the trial court rendered a decision in favor of Cipriano and against Bascos ordering the latter to pay the former for actual damages for attorney’s fees and cost of suit. The “Urgent Motion To Dissolve/Lift preliminary Attachment” Bascos is DENIED for being moot and academic. Petitioner appealed to the Court of Appeals but respondent Court affirmed the trial court’s judgment. Hence this petition for review on certiorari ISSUE: (1) WON petitioner a common carrier (2) WON the hijacking referred to a force majeure HELD: The petition is DISMISSED and the decision of the Court of Appeals is hereby AFFIRMED. 1. YES In disputing the conclusion of the trial and appellate courts that petitioner was a common carrier, she alleged in this petition that the contract between her and Cipriano was lease of the truck. She also stated that: she was not catering to the general public. Thus, in her answer to the amended complaint, she said that she does business under the same style of A.M. Bascos Trucking, offering her trucks for lease to those who have cargo to move, not to the general public but to a few customers only in view of the fact that it is only a small business. We agree with the respondent Court in its finding that petitioner is a common carrier.

Article 1732 of the Civil Code defines a common carrier as “(a) person, corporation or firm, or association 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 test to determine a common carrier is “whether the given undertaking is a part of the business engaged in by the carrier which he has held out to the general public as his occupation rather than the quantity or extent of the business transacted.” 12 In this case, petitioner herself has made the admission that she was in the trucking business, offering her trucks to those with cargo to move. Judicial admissions are conclusive and no evidence is required to prove the same. 13 But petitioner argues that there was only a contract of lease because they offer their services only to a select group of people. Regarding the first contention, the holding of the Court in De Guzman vs. Court of Appeals 14 is instructive. In referring to Article 1732 of the Civil Code, it held thus: “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.” 2. NO Likewise, We affirm the holding of the respondent court that the loss of the goods was not due to force majeure. Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods transported by them. Accordingly, they are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or deteriorated. There are very few instances when the presumption of negligence does not attach and these instances are enumerated in Article 1734. 19 In those cases where the presumption is applied, the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption. In this case, petitioner alleged that hijacking constituted force majeure which exculpated her from liability for the loss of the cargo. In De Guzman vs. Court of Appeals, the Court held that hijacking, not being included in the provisions of Article 1734, must be dealt with under the provisions of Article 1735 and thus, the common carrier is presumed to have been at fault or negligent. To exculpate the carrier from liability arising from hijacking, he must prove that the robbers or the hijackers acted with grave or irresistible threat, violence, or force. This is in accordance with Article 1745 of the Civil Code which provides:

“Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy; xx

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(6) That the common carrier’s liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violences or force, is dispensed with or diminished;” xx NOTES: 1. She cited as evidence certain affidavits which referred to the contract as “lease”. These affidavits were made by Jesus Bascos and by petitioner herself and Cipriano and CIPTRADE did not object to the presentation of affidavits by petitioner where the transaction was referred to as a lease contract. Both the trial and appellate courts have dismissed them as self-serving and petitioner contests the conclusion. We are bound by the appellate court’s factual conclusions. Yet, granting that the said evidence were not self-serving, the same were not sufficient to prove that the contract was one of lease. It must be understood that a contract is what the law defines it to be and not what it is called by the contracting parties. Furthermore, petitioner presented no other proof of the existence of the contract of lease. He who alleges a fact has the burden of proving it. 2. Having affirmed the findings of the respondent Court on the substantial issues involved, We find no reason to disturb the conclusion that the motion to lift/dissolve the writ of preliminary attachment has been rendered moot and academic by the decision on the merits.

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Transportation Case Digest: Planters Products Inc v. CA (1993) G.R. No. 101503 September 15, 1993 Lessons Applicable: Charter Party (Transportation)

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FACTS: 

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June 16 1974: Mitsubishi International Corporation (Mitsubishi) of New York, U.S.A., 9,329.7069 M/T of Urea 46% fertilizer bought by Planters Products, Inc. (PPI) on aboard the cargo vessel M/V "Sun Plum" owned by private Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San Fernando, La Union, Philippines, as evidenced by Bill of Lading May 17 1974: a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General Charter was entered into between Mitsubishi as shipper/charterer and KKKK as shipowner, in Tokyo, Japan Before loading the fertilizer aboard the vessel, 4 of her holds were all presumably inspected by the charterer's representative and found fit The hatches remained closed and tightly sealed throughout the entire voyage

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July 3, 1974: PPI unloaded the cargo from the holds into its steelbodied dump trucks which were parked alongside the berth, using metal scoops attached to the ship, pursuant to the terms and conditions of the charter-partly o hatches remained open throughout the duration of the discharge o Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was transported to the consignee's warehouse located some 50 meters from the wharf o Midway to the warehouse, the trucks were made to pass through a weighing scale where they were individually weighed for the purpose of ascertaining the net weight of the cargo. o The port area was windy, certain portions of the route to the warehouse were sandy and the weather was variable, raining occasionally while the discharge was in progress. o Tarpaulins and GI sheets were placed in-between and alongside the trucks to contain spillages of the ferilizer o It took 11 days for PPI to unload the cargo Cargo Superintendents Company Inc. (CSCI), private marine and cargo surveyor, was hired by PPI to determine the "outturn" of the cargo shipped, by taking draft readings of the vessel prior to and after discharge o shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating 18 M/T was contaminated with dirt Certificate of Shortage/Damaged Cargo prepared by PPI o short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having been polluted with sand, rust and dirt PPI sent a claim letter 1974 to Soriamont Steamship Agencies (SSA), the resident agent of the carrier, KKKK, for P245,969.31 representing the cost of the alleged shortage in the goods shipped and the diminution in value of that portion said to have been contaminated with dirt o SSA: what they received was just a request for shortlanded certificate and not a formal claim, and that they "had nothing to do with the discharge of the shipment RTC: failure to destroy the presumption of negligence against them, SSA are liable CA: REVERSED - failed to prove the basis of its cause of action

ISSUE: W/N a time charter between a shipowner and a charterer transforms a common carrier into a private one as to negate the civil law presumption of negligence in case of loss or damage to its cargo HELD: NO. petition is DISMISSED 

When PPI chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ of the shipowner and therefore continued to be under its direct supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the charterer did not have any control of the means in doing so

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carrier has sufficiently overcome, by clear and convincing proof, the prima facie presumption of negligence. The hatches remained close and tightly sealed while the ship was in transit as the weight of the steel covers made it impossible for a person to open without the use of the ship's boom. bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage. More so, with a variable weather condition prevalent during its unloading o This is a risk the shipper or the owner of the goods has to face. Clearly, KKKK has sufficiently proved the inherent character of the goods which makes it highly vulnerable to deterioration; as well as the inadequacy of its packaging which further contributed to the loss. o On the other hand, no proof was adduced by the petitioner showing that the carrier was remise in the exercise of due diligence in order to minimize the loss or damage to the goods it carried.

First Philippine Industrial Corp v. CA FACTS: Petitioner is a grantee of a pipeline concession under RA No. 387, as amended, to contract, install and operate oil pipelines. The original pipeline concession was granted in 1967 and renewed by the Energy Regulatory Board in 1992. Petitioner applied for a mayor's permit with the Office of the Mayor of Batangas City. However, before the mayor's permit could be issued, the respondent City Treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local Government Code .The respondent City Treasurer assessed a business tax on the petitioner based on the gross receipts for products pumped at GPS-1 for the fiscal year 1993. In order not to hamper its operations, petitioner paid the tax under protest for the first quarter of 1993. Petitioner filed a letter-protest addressed to the respondent City Treasurer which asserts the fact that FPIC is a pipeline operator granted with a government concession under the Petroleum Act and as such, is exempt from paying tax on gross receipts under Sec. 133(h) of the LGC. It also asserted that transportation contractors are not included in the enumeration of contractors under Sec. 131(e) of the LGC, thus, the authority to impose tax "on contractors and other independent contractors" under this provision does not include Respondent City Treasurer denied the protest contending that petitioner cannot be considered engaged in transportation business, thus it cannot claim exemption under Section 133 (j) of the Local Government Code. Petitioner filed with the RTC of Batangas City a complaint for tax refund with prayer for writ of preliminary injunction against respondents City of Batangas and Adoracion Arellano in her capacity as City Treasurer. Respondents argued that petitioner cannot be exempt from taxes under Section 133 (j) of the Local Government Code as said exemption applies only to "transportation contractors and persons engaged in the transportation by hire and common carriers by air, land and water." They assert that pipelines are not included in the term "common carrier" which refers solely to ordinary carriers such as trucks, trains, ships and the like and that the term

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"common carrier" under the said code pertains to the mode or manner by which a product is delivered to its destination. RTC dismissed the complaint and ruled that FIPC is not a common carrier but a special carrier extending its services and facilities to a single specific customer under a special contract. CA affirmed RTC’s Decision.

ISSUE: W/N petitioner – an oil pipeline owner – is a common carrier? RULING: YES. A "common carrier" may be defined, broadly, as one who holds himself out to the public as engaged in the business of transporting persons or property from place to place, for compensation, offering his services to the public generally. Art. 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or association 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 test for determining whether a party is a common carrier of goods is: 1. He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the transportation of goods for person generally as a business and not as a casual occupation; 2. He must undertake to carry goods of the kind to which his business is confined; 3. He must undertake to carry by the method by which his business is conducted and over his established roads; and 4. The transportation must be for hire. Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons who choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has a limited clientele does not exclude it from the definition of a common carrier. As correctly pointed out by petitioner, the definition of "common carriers" in the Civil Code makes no distinction as to the means of transporting, as long as it is by land, water or air. It does not provide that the transportation of the passengers or goods should be by motor vehicle. In fact, in the United States, oil pipe line operators are considered common carriers. Under the Petroleum Act of the Philippines (RA 387), petitioner is considered a "common carrier." Thus, Article 86 thereof provides that: Art. 86. Pipe line concessionaire as common carrier. — A pipe line shall have the preferential right to utilize installations for the transportation of petroleum owned by him, but is obligated to utilize the remaining transportation capacity pro rata for the transportation of such other petroleum as may be offered by others for transport, and to charge without

discrimination such rates as may have been approved by the Secretary of Agriculture and Natural Resources. Republic Act 387 also regards petroleum operation as a public utility. Pertinent portion of Article 7 thereof provides: that everything relating to the exploration for and exploitation of petroleum . . . and everything relating to the manufacture, refining, storage, or transportation by special methods of petroleum, is hereby declared to be a public utility. The Bureau of Internal Revenue likewise considers the petitioner a "common carrier." In BIR Ruling No. 069-83, it declared: . . . since [petitioner] is a pipeline concessionaire that is engaged only in transporting petroleum products, it is considered a common carrier under Republic Act No. 387 . . . . Such being the case, it is not subject to withholding tax prescribed by Revenue Regulations No. 13-78, as amended. From the foregoing disquisition, there is no doubt that petitioner is a "common carrier" and, therefore, exempt from the business tax as provided for in Section 133 (j), of the Local Government Code, to wit: Sec. 133.Common Limitations on the Taxing Powers of Local Government Units. — Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: xxx (j) Taxes on the gross receipts of transportation contractors and persons engaged in the transportation of passengers or freight by hire and common carriers by air, land or water, except as provided in this Code.

Mendoza v. PAL FACTS: Mendoza was the owner of the Cita Theater located in the City of Naga, Camarines Sur, where he used to exhibit movie pictures booked from movie producers or film owners in Manila. To take advantage of the yearly town fiesta at Naga, he decided to exhibit a film which would fit the occasion. On Aug 1948, he contracted with LVN pictures, Inc. (movie producer in MNL) for him to show during the town fiesta the Tagalog film entitled “Himala ng Birhen” or Miracle of the Virgin. He made extensive preparations; he had 2K posters printed and later distributed not only in the City of Naga but also in the neighboring towns. He also advertised in a weekly of general circulation in the province. The posters and advertisement stated that the film would be

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shown in the Cita theater on the 17th and 18th of September, corresponding to the eve and day of the fiesta itself. LVN Pictures Inc. delivered to the defendant Philippine Airlines (PAL) a can containing the film "Himala ng Birhen" consigned to the Cita Theater. This can of films was loaded on flight 113 of PAL. For reasons not explained by PAL, but which would appear to be the fault of its employees or agents, this can of film was not unloaded at Pili Air Port and it was brought back to Manila. Mendoza who had completed all arrangements for the exhibition of the film, went to the Air Port and inquired from the defendant's station master there about the can of film. Said station master could not explain why the film was not unloaded and sent several radiograms to his principal in Manila making inquiries and asking that the film be sent to Naga immediately. After investigation and search in the Manila office, the film was finally located the following day (Sept 18) and then shipped to the Pili Air Port on Sept 20. Mendoza received it and exhibited the film but he had missed his opportunity to realize a large profit as he expected for the people after the fiesta had already left for their towns. Mendoza brought this action against the PAL. After trial, the lower court found that because of his failure to exhibit the film "Himala ng Birhen" during the town fiesta, Mendoza suffered damages or rather failed to earn profits in the amount of P3K but finding the PAL not liable for said damages, dismissed the complaint. PAL claimed that under paragraph 6 of the Way Bill printed on the back thereof, there was no obligation on its part to carry the film in question on any specified time, it could not be held accountable for the delay of about three days. RTC found that although the defendant was not obligated to load the film on any specified plane or on any particular day, once said can film was loaded and shipped on one of its planes making trip to Camarines, then it assumed the obligation to unload it at its point of destination and deliver it to the consignee, and its unexplained failure to comply with this duty constituted negligence. It however found that fraud was not involved and that defendant was debtor in GF. RTC held that not because plaintiff failed to realize profits in the sum of P3K due to the negligence of the defendant, should the latter be made to reimburse him said sum. Applying provisions of Art. 1107 of the Civil Code which provides that losses and those foreseen, or which might have been foreseen, at the time of constituting the obligation, and which are a necessary consequence of the failure to perform it, the trial court held that inasmuch as these damages suffered by Mendoza were not foreseen or could not have been foreseen at the time that the defendant accepted the can of film for shipment, for the reason that neither the shipper LVN Pictures Inc. nor the consignee Mendoza had called its attention to the special circumstances attending the shipment and the showing of the film during the town fiesta of Naga, plaintiff may not recover the damages sought. Counsel for appellant insists that the articles of the Code of Commerce rather than those of the Civil Code should have been applied in deciding this case for the reason that the shipment of the can of film is an act of commerce. It argued that although the contract of transportation was not by land or waterways as defined in said Art. 349, nevertheless, air transportation being analogous to land and water transportation, should be considered as

included, especially in view of the second paragraph of Art. 2 of the same Code which says that transactions covered by the Code of Commerce and all others of analogous character shall be deemed acts of commerce. The trial court, however, disagreed to this contention and opined that air transportation not being expressly covered by the Code of Commerce, cannot be governed by its provisions. ISSUE: -

W/N PAL is a common carrier? W/N PAL is liable for the late delivery of goods to consignee Mendoza?

RULING: 1) YES. The obvious reason for its non-inclusion in the Code of Commerce was that at the time of its promulgation, transportation by air on a commercial basis was not yet known. In the United Sates where air transportation has reached its highest development, an airline company engaged in the transportation business is regarded as a common carrier. There can be no doubt, under the general law of common carriers, that those air lines and aircraft owners engaged in the passenger service on regular schedules on definite routes, who solicit the patronage of the traveling public, advertise schedules for routes, time of leaving, and rates of fare, and make the usual stipulation as to baggage, are common carriers by air.

2) NO. Under Art. 1107 of the Civil Code, a debtor in good faith like the defendant herein, may be held liable only for damages that were foreseen or might have been foreseen at the time the contract of the transportation was entered into. The trial court correctly found that the defendant company could not have foreseen the damages that would be suffered by Mendoza upon failure to deliver the can of film on the 17th of September, 1948 for the reason that the plans of Mendoza to exhibit that film during the town fiesta and his preparations, specially the announcement of said exhibition by posters and advertisement in the newspaper, were not called to the defendant's attention. Common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right of prompt delivery, unless such common carriers previously assume the obligation. Said rights and obligations are created by a specific contract entered into by the parties

Home Insurance Co. v. American Steamship Agencies FACTS: "Consorcio Pesquero del Peru of South America" shipped freight pre-paid at Chimbate, Peru, 21,740 jute bags of Peruvian fish meal through SS Crowborough on January 17, 1963. The cargo, consigned to SMC and insured by Home Insurance Company for $202,505, arrived in Manila on March 7, 1963 and was discharged into the lighters of Luzon Stevedoring Company. When the cargo was delivered to consignee San Miguel Brewery Inc/SMC there were shortages amounting to P12,033.85, causing SMC to lay claims against Luzon Stevedoring Corporation, Home Insurance Company and the American Steamship Agencies, owner and operator of SS Crowborough. Because the others denied liability, Home Insurance Company paid the consignee P14,870.71 — the insurance value of the loss, as full settlement of the claim. Having been refused reimbursement by both the Luzon Stevedoring Corporation and American Steamship Agencies, Home Insurance Company, as subrogee to the consignee, filed against them before the CFI a complaint for recovery of P14,870.71 with legal interest, plus attorney's fees. In answer, Luzon Stevedoring Corporation alleged that it delivered with due diligence the goods in the same quantity and quality that it had received the same from the carrier. American Steamship Agencies OTOH, denied liability by alleging that under the provisions of the Charter party referred to in the bills of lading, the charterer, not the shipowner, was responsible for any loss or damage of the cargo. Furthermore, it claimed to have exercised due diligence in stowing the goods and that as a mere forwarding agent, it was not responsible for losses or damages to the cargo. CFI absolved Luzon Stevedoring Corporation, having found the latter to have merely delivered what it received from the carrier in the same condition and quality, and ordered American Steamship Agencies to pay plaintiff. It held that the non-liability claim of American Steamship Agencies under the charter party contract is not tenable because Article 587 of the Code of Commerce makes the ship agent also civilly liable for damages in favor of third persons due to the conduct of the captain of the carrier; the stipulation in the charter party contract exempting the owner from liability is against public policy under Article 1744 of the Civil Code; In case of loss, destruction or deterioration of goods, common carriers are presumed at fault or negligent under Article 1735 of the Civil Code unless they prove extraordinary diligence, and they cannot by contract exempt themselves from liability resulting from their negligence or that of their servants; and when goods are delivered to the carrier in good order and the same are in bad order at the place of destination, the carrier is prima facie liable. ISSUE: Is the stipulation in the charter party of the owner's non-liability valid so as to absolve the American Steamship Agencies from liability for loss? NO RULING: A perusal of the charter party referred to shows that while the possession and control of the ship were not entirely transferred to the charterer, the vessel was chartered to its full and complete

capacity. Furthermore, the, charter had the option to go north or south or vice-versa, loading, stowing and discharging at its risk and expense. Accordingly, the charter party contract is one of affreightment over the whole vessel rather than a demise. As such, the liability of the shipowner for acts or negligence of its captain and crew, would remain in the absence of stipulation. Section 2, paragraph 2 of the charter party, provides that the owner is liable for loss or damage to the goods caused by personal want of due diligence on its part or its manager to make the vessel in all respects seaworthy and to secure that she be properly manned, equipped and supplied or by the personal act or default of the owner or its manager. Said paragraph, however, exempts the owner of the vessel from any loss or damage or delay arising from any other source, even from the neglect or fault of the captain or crew or some other person employed by the owner on board, for whose acts the owner would ordinarily be liable except for said paragraph. The provisions of our Civil Code on common carriers were taken from Anglo-American law. Under American jurisprudence, a common carrier undertaking to carry a special cargo or chartered to a special person only, becomes a private carrier. As a private carrier, a stipulation exempting the owner from liability for the negligence of its agent is not against public policy, and is deemed valid. The Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only if the strict public policy governing common carriers is applied. Such policy has no force where the public at large is not involved, as in the case of a ship totally chartered for the use of a single party. And furthermore, in a charter of the entire vessel, the bill of lading issued by the master to the charterer, as shipper, is in fact and legal contemplation merely a receipt and a document of title not a contract, for the contract is the charter party. The consignee may not claim ignorance of said charter party because the bills of lading expressly referred to the same. Accordingly, the consignees under the bills of lading must likewise abide by the terms of the charter party. And as stated, recovery cannot be had thereunder, for loss or damage to the cargo, against the shipowners, unless the same is due to personal acts or negligence of said owner or its manager, as distinguished from its other agents or employees. In this case, no such personal act or negligence has been proved.

Cathay Pacific Airways, Ltd. V. CA WHO WON: Tomas Alcantara DOCTRINE: Although the Warsaw Convention has the force and effect of law in this country, being a treaty commitment assumed by the Philippine government, said convention does not operate as an exclusive enumeration of the instances for declaring a carrier liable for breach of contract of carriage or as an absolute limit of the extent of that liability. The Warsaw Convention declares the carrier liable for damages in the enumerated cases and under certain limitations. However, it must not be construed to preclude the operation of the Civil Code and other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating the rights of its passengers under the contract of carriage, especially if willful misconduct on the part of the carrier's employees is found or established. FACTS: On 19 October 1975, respondent Tomas L. Alcantara was a first class passenger of petitioner Cathay Pacific Airways, Ltd. (CATHAY) on its flight from Manila to Hongkong and onward from Hongkong to Jakarta on another flight. The purpose of his trip was to attend the following day, a conference with the Director General of Trade of Indonesia, Alcantara being the Executive Vice-President and General Manager of Iligan Cement Corporation, Chairman of the Export Committee of the Philippine Cement Corporation, and representative of the Cement Industry Authority and the Philippine Cement Corporation. Alcantara checked in his luggage which contained not only his clothing and articles for personal use but also papers and documents he needed for the conference. Upon his arrival in Jakarta, respondent discovered that his luggage was missing. When he inquired about his luggage from CATHAY's representative in Jakarta, Alcantara was told that his luggage was left behind in Hongkong. For this, respondent Alcantara was offered $20.00 as "inconvenience money" to buy his immediate personal needs until the luggage could be delivered to him. His luggage finally reached Jakarta more than twenty four (24) hours after his arrival. However, it was not delivered to him at his hotel but was required by petitioner to be picked up by an official of the Philippine Embassy. Alcantara filed a complaint against CATHAY with the CFI praying for damages. CFI ordered CATHAY to pay Alcantara moral, temperate, exemplary and attorney’s fees. Both parties appealed to the CA. CATHAY assailed the conclusion of the trial court that it was accountable for breach of contract and questioned the non-application by the court of the Warsaw Convention as well as the excessive damages awarded on the basis of its finding that respondent Alcantara was rudely treated by petitioner's employees during the time that his luggage could not be found. For his part, respondent Alcantara assigned as error the failure of the trial court to grant the full amount of damages sought in his complaint. CA rendered its decision affirming the findings of fact of the trial court but modifying its award by increasing the moral damages to P80K exemplary damages to P20K and temperate or moderate damages to P10K.

ISSUE/S: 1. W/N the award of damages was proper? YES save for the award of temperate damages. 2. W/N the Warsaw Convention is applicable to the present case? NO RULING: 1. Both the trial court and the appellate court found that CATHAY was grossly negligent and reckless when it failed to deliver the luggage of petitioner at the appointed place and time. CATHAY alleges that as a result of mechanical trouble, all pieces of luggage on board the first aircraft bound for Jakarta were unloaded and transferred to the second aircraft which departed an hour and a half later. Yet, as the CA noted, petitioner was not even aware that it left behind private respondent's luggage until its attention was called by the Hongkong Customs authorities. More, bad faith or otherwise improper conduct may be attributed to the employees of petitioner. While the mere failure of CATHAY to deliver respondent's luggage at the agreed place and time did not ipso facto amount to willful misconduct since the luggage was eventually delivered to private respondent, albeit belatedly, the Court is persuaded that the employees of CATHAY acted in bad faith. Where in breaching the contract of carriage the defendant airline is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of obligation which the parties had foreseen or could have reasonably foreseen. In that case, such liability does not include moral and exemplary damages. Conversely, if the defendant airline is shown to have acted fraudulently or in bad faith, the award of moral and exemplary damages is proper. However, respondent Alcantara is not entitled to temperate damages, contrary to the ruling of the court a quo, in the absence of any showing that he sustained some pecuniary loss. t cannot be gainsaid that respondent's luggage was ultimately delivered to him without serious or appreciable damage. 2. Although the Warsaw Convention has the force and effect of law in this country, being a treaty commitment assumed by the Philippine government, said convention does not operate as an exclusive enumeration of the instances for declaring a carrier liable for breach of contract of carriage or as an absolute limit of the extent of that liability. The Warsaw Convention declares the carrier liable for damages in the enumerated cases and under certain limitations. However, it must not be construed to preclude the operation of the Civil Code and other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating the rights of its passengers under the contract of carriage, especially if willful misconduct on the part of the carrier's employees is found or established, which is what was manifested in the instant case. For, the Warsaw Convention itself provides in Art. 25 that —(1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with the law of the court to which the case is submitted, is considered to be equivalent to willful misconduct; (2) Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is

caused under the same circumstances by any agent of the carrier acting within the scope of his employment; When petitioner airline misplaced respondent's luggage and failed to deliver it to its passenger at the appointed place and time, some special species of injury must have been caused to him. For sure, the latter underwent profound distress and anxiety, and the fear of losing the opportunity to fulfill the purpose of his trip. In fact, for want of appropriate clothings for the occasion brought about by the delay of the arrival of his luggage, to his embarrassment and consternation respondent Alcantara had to seek postponement of his pre-arranged conference with the Director General of Trade of the host country. In one case, this Court observed that a traveller would naturally suffer mental anguish, anxiety and shock when he finds that his luggage did not travel with him and he finds himself in a foreign land without any article of clothing other than what he has on. Thus, respondent is entitled to moral and exemplary damages De Guzman v. CA and Cendana FACTS: Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan which he would bring to Manila for resale. He utilized two (2) sixwheeler trucks which he owned for hauling the material to Manila. On the return trip to Pangasinan, respondent would load his vehicles with cargo which various merchants wanted delivered to differing establishments in Pangasinan. For that service, respondent charged freight rates which were commonly lower than regular commercial rates. Sometime in November 1970, petitioner Pedro de Guzman a merchant and authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta, Pangasinan, contracted with respondent for the hauling of 750 cartons of Liberty filled milk from a warehouse of General Milk in Makati, Rizal, to petitioner's establishment in Urdaneta on or before 4 December 1970. Accordingly, respondent loaded in Makati the merchandise on to his trucks: 150 cartons were loaded on a truck driven by respondent himself, while 600 cartons were placed on board the other truck which was driven by Manuel Estrada, respondent's driver and employee. Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never reached petitioner, since the truck which carried these boxes was hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac, by armed men who took with them the truck, its driver, his helper and the cargo. De Guzman commenced action against Cendena in the CFI of Pangasinan, demanding payment of P 22,150 representing the claimed value of the lost merchandise, plus damages and attorney's fees. Petitioner argued that private respondent, being a common carrier, and having failed to exercise the extraordinary diligence required of him by the law, should be held liable for the value of the undelivered goods.

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Cendena denied that he was a common carrier and argued that he could not be held responsible for the value of the lost goods, such loss having been due to force majeure. RTC found private respondent to be a common carrier and held him liable for the value of the undelivered goods as well as P4K as damages and P 2K as attorney's fees. CA reversed the judgment of the trial court and held that respondent had been engaged in transporting return loads of freight "as a casual occupation — a sideline to his scrap iron business" and not as a common carrier.

ISSUE/S: W/N Cendena may, under the facts presented, be properly characterized as a common carrier? W/N Cendena, assuming it is a common carrier, may be held liable for the loss of goods? RULING: 1. YES. It appears to the Court that private respondent is properly characterized as a common carrier even though he merely "back-hauled" goods for other merchants from Manila to Pangasinan, although such back-hauling was done on a periodic or occasional rather than regular or scheduled manner, and even though private respondent's principal occupation was not the carriage of goods for others. There is no dispute that private respondent charged his customers a fee for hauling their goods; that fee frequently fell below commercial freight rates is not relevant here. A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers. That liability arises the moment a person or firm acts as a common carrier, without regard to whether or not such carrier has also complied with the requirements of the applicable regulatory statute and implementing regulations and has been granted a certificate of public convenience or other franchise. To exempt private respondent from the liabilities of a common carrier because he has not secured the necessary certificate of public convenience, would be offensive to sound public policy; that would be to reward private respondent precisely for failing to comply with applicable statutory requirements. 2. NO. The specific cause alleged in the instant case — the hijacking of the carrier's truck — does not fall within any of the five (5) categories of exempting causes listed in Article 1734. It would follow, therefore, that the hijacking of the carrier's vehicle must be dealt with under the provisions of Article 1735, in other words, that the private respondent as common carrier is presumed to have been at fault or to have acted negligently. This presumption, however, may be overthrown by proof of extraordinary diligence on the part of private respondent. The duty of extraordinary diligence in the vigilance over goods is, under Article 1733, given additional specification not only by Articles 1734 and 1735 but also by Article 1745, numbers 4, 5 and 6.

Under Article 1745 (6) above, a common carrier is held responsible —and will not be allowed to divest or to diminish such responsibility— even for acts of strangers like thieves or robbers, except where such thieves or robbers in fact acted "with grave or irresistible threat, violence or force." The limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force." In the instant case, armed men held up the second truck owned by private respondent which carried petitioner's cargo. The record shows that the accused were charged with willfully and unlawfully taking and carrying away with them the second truck, driven by Manuel Estrada and loaded with the 600 cartons of Liberty filled milk destined for delivery at petitioner's store in Urdaneta, Pangasinan. The decision of the trial court shows that the accused acted with grave, if not irresistible, threat, violence or force. Three (3) of the five (5) hold-uppers were armed with firearms. The robbers not only took away the truck and its cargo but also kidnapped the driver and his helper, detaining them for several days and later releasing them in another province (in Zambales). The hijacked truck was subsequently found by the police in Quezon City. CFI convicted all the accused of robbery, though not of robbery in band. Thus, the occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary diligence.

Southern Lines, Inc. v. CA FACTS: Sometime in 1948, the City of Iloilo requested for rice from the National Rice and Corn Corporation (hereafter referred to as NARIC) in Manila. NARIC, pursuant to the order, shipped 1,726 sacks of rice consigned to the City of Iloilo on board the SS "General Wright" belonging to the Southern Lines, Inc. Each sack of rice weighed 75 kilos and the entire shipment as indicated in the bill of lading had a total weight of 129,450 kilos. According to the bill of lading, the cost of the shipment was P63,115.50. The City of Iloilo received the shipment and paid the amount of P63,115.50. However, it was noted that the foot of the bill of lading that there was shortage was equivalent to 41 sacks of rice with a net weight of 13,319 kilos, the proportionate value of which was P6,486.35. The City of Iloilo filed a complaint in the Court of First Instance of Iloilo against NARIC and the Southern Lines, Inc. for the recovery of the amount of P6,486.35 representing the value of the shortage of the shipment of rice. After trial, the lower court absolved NARIC from the complaint, but sentenced the Southern Lines, Inc. to pay. The Southern Lines, Inc. appealed to the Court of Appeals which affirmed the judgment of the trial court. Hence, this petition for review. ISSUE: Whether or not the defendant-carrier, the herein petitioner, is liable for the loss or shortage of the rice shipped? YES RULING: Under the provisions of Article 361 of the Code of Commerce, the defendant-carrier in order to free itself from liability, was only obliged to prove that the damages suffered by the goods were "by virtue of the nature or defect of the articles." Under the provisions of Article 362, the plaintiff, in order to hold the defendant liable, was obliged to prove that the damages to the goods by virtue of their nature, occurred on account of its negligence or because the defendant did not take the precaution adopted by careful persons. Petitioner claims exemption from liability by contending that the shortage in the shipment of rice was due to such factors as the shrinkage, leakage or spillage of the rice on account of the bad condition of the sacks at the time it received the same and the negligence of the agents of respondent City of Iloilo in receiving the shipment. The contention is untenable, for, if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting thereform. Furthermore, according to the Court of Appeals, "appellant (petitioner) itself frankly admitted that the strings that tied the bags of rice were broken; some bags were with holes and plenty of rice were spilled inside the hull of the boat, and that the personnel of the boat collected no less than 26 sacks of rice which they had distributed among themselves." This finding, which is binding upon this Court, shows that the shortage resulted from the negligence of petitioner.

Sulpicio Lines v. Domingo Curso WHO WON: Sulpicio Lines DOCTRINE: Moral damages may be recovered in an action upon breach of contract of carriage only when: (a) where death of a passenger results, or (b) it is proved that the carrier was guilty of fraud and bad faith, even if death does not result. Article 2206 of the Civil Code entitles the descendants, ascendants, illegitimate children, and surviving spouse of the deceased passenger to demand moral damages for mental anguish by reason of the death of the deceased.

FACTS: On October 23, 1988, Dr.Curso boarded at the port of Manila the MV Doña Marilyn, an interisland vessel owned and operated by petitioner Sulpicio Lines, Inc., bound for Tacloban City. Unfortunately, the MV Doña Marilyn sank in the afternoon of October 24, 1988 while at sea due to the inclement sea and weather conditions brought about by Typhoon Unsang. The body of Dr.Curso was not recovered, along with hundreds of other passengers of the ill-fated vessel. At the time of his death, Dr.Curso was 48 years old, and employed as a resident physician at the Naval District Hospital in Naval, Biliran. He had a basic monthly salary of P3,940 and would have retired from government service by December 20, 2004 at the age of 65. Respondents (surviving bros and sis of Dr. Curso) sued petitioner in the RTC to claim damages based on breach of CoC by sea, averring that petitioner had acted negligently in transporting Dr. Curso and the other passengers. They stated, among others, that their parents had predeceased Dr. Curso, who died single and without issue and that, as such, they were Dr.Curso’s surviving heirs and successors in interest entitled to recover moral and other damages. RTC dismissed the complaint due to the following reasons: (1) the sinking of the vessel was due to force majeure; (2) the officers of the MV Doña Marilyn had acted with the diligence required of a common carrier; (3) the sinking of the vessel and the death of its passengers, including Dr.Curso, could not have been avoided; (4) there was no basis to consider the MV Doña Marilyn not seaworthy at the time of the voyage; (5) the findings of the Special Board of Marine Inquiry (SBMI) constituted to investigate the disaster absolved the petitioner, its officers, and crew of any negligence and administrative liability; and (6) the respondents failed to prove their claim for damages. CA reversed RTC’s ruling. It found inadequate proof to show that Sulpicio Lines, Inc., or its officers and crew, had exercised the required degree of diligence to acquit the Sulpicio Lines of liability since (1) the court finds inadequate explanation why the officers of the M.V. Doña Marilyn had not apprised themselves of the weather reports on the approach of typhoon "Unsang" which had the power of a signal no. 3 cyclone, bearing upon the general direction of the path of the M.V. Doña Marilyn; (2) there was no account of the acts and decision of the crew of the ill-fated ship. It does not appear what occurred during that time, or what weather reports were received and acted upon by the ship captain; (3) the fitness of the ship for the voyage is of doubtful character since at the first sign of bad weather, the ship’s hydraulic system failed and had to be repaired mid-voyage, making the vessel a

virtual derelict amidst a raging storm at sea. CA ordered Sulpicio Lines to pay plaintiff heirs of Dr.Curso indemnity for the latter’s death, loss of earning capacity, moral damages and costs of suit. Sulpicio appealed the said decision due to CA’s decision to award the surviving brothers and sisters of the late Dr. Cenon moral damages among others.

absence of the latter’s descendants, ascendants, illegitimate children, and surviving spouse. However, they were not included among the persons entitled to recover moral damages, as enumerated in Article 2219 of the Civil Code. Article 2219 circumscribes the instances in which moral damages may be awarded. The said provision does not include succession in the collateral line as a source of the right to recover moral damages.

ISSUE: Are the surviving brothers and sisters of a passenger of a vessel that sinks during a voyage entitled to recover moral damages from the vessel owner as common carrier? NO

In fine, moral damages may be recovered in an action upon breach of contract of carriage only when: (a) where death of a passenger results, or (b) it is proved that the carrier was guilty of fraud and bad faith, even if death does not result. Article 2206 of the Civil Code entitles the descendants, ascendants, illegitimate children, and surviving spouse of the deceased passenger to demand moral damages for mental anguish by reason of the death of the deceased.

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RULING:

As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract, unless there is fraud or bad faith. As an exception, moral damages may be awarded in case of breach of contract of carriage that results in the death of a passenger, in accordance with Article 1764, in relation to Article 2206 (3), of the Civil Code, which provide: Article 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. Article 2206. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition: xxx (3) The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Verily, the omission from Article 2206 (3) of the brothers and sisters of the deceased passenger reveals the legislative intent to exclude them from the recovery of moral damages for mental anguish by reason of the death of the deceased. Thus, the CA erred in awarding moral damages to the respondents. Essentially, the purpose of moral damages is indemnity or reparation, that is, to enable the injured party to obtain the means, diversions, or amusements that will serve to alleviate the moral suffering he has undergone by reason of the tragic event. According to Villanueva v. Salvador, the conditions for awarding moral damages are: (a) there must be an injury, whether physical, mental, or psychological, clearly substantiated by the claimant; (b) there must be a culpable act or omission factually established; (c) the wrongful act or omission of the defendant must be the proximate cause of the injury sustained by the claimant; and (d) the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code. To be entitled to moral damages, the respondents must have a right based upon law. It is true that under Article 1003 of the Civil Code they succeeded to the entire estate of the late Dr.Curso in the

Mallari v. CA and Bulletin Publishing Corp. WHO WON: Bulletin DOCTRINE: In an action based on contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible for the payment of damages sought by the passenger. Under Art. 1755 of the Civil Code, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious persons with due regard for all the circumstances. Moreover, under Art. 1756 of the Civil Code, in case of death or injuries to passengers, a common carrier is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence. Further, pursuant to Art. 1759 of the same Code, it is liable for the death of or injuries to passengers through the negligence or willful acts of the former’s employees. This liability of the common carrier does not cease upon proof that it exercised all the diligence of a good father of a family in the selection of its employees. FACTS: On Oct 1987, the passenger jeepney driven by petitioner Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with the delivery van of respondent Bulletin Publishing Corp. (Bulletin) along the National Highway in Barangay San Pablo, Dinalupihan, Bataan. The collision occurred after Mallari Jr. overtook the Fiera while negotiating a curve in the highway. The points of collision were the left rear portion of the passenger jeepney and the left front side of the delivery van of Bulletin. The two right wheels of the delivery van were on the right shoulder of the road and pieces of debris from the accident were found scattered along the shoulder of the road up to a certain portion of the lane travelled by the passenger jeepney. The impact caused the jeepney to turn around and fall on its left side resulting in injuries to its passengers one of whom was Israel Reyes who eventually died due to the gravity of his injuries. Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for damages with the RTC against Alfredo Mallari Sr. and Alfredo Mallari Jr., and also against Bulletin, its driver Felix Angeles, and the N.V. Netherlands Insurance Company. RTC found that the proximate cause of the collision was the negligence of Felix Angeles, driver of the Bulletin delivery van,

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considering the fact that the left front portion of the delivery truck driven by Felix Angeles hit and bumped the left rear portion of the passenger jeepney driven by Alfredo Mallari Jr. CA modified the decision of the RTC and found no negligence on the part of Angeles and Bulletin (his employer). It ruled that the collision was caused by the sole negligence of petitioner Alfredo Mallari Jr. who admitted that immediately before the collision and after he rounded a curve on the highway, he overtook a Fiera which had stopped on his lane and that he had seen the van driven by Angeles before overtaking the Fiera. CA ordered the Mallaris to compensate Reyes and absolved respondent Bulletin.

ISSUE: Who among the two carriers in a collision is liable to the injuries sustained by the plaintiff’s husband? Mallaris RULING: The SC found that the proximate cause of the collision resulting in the death of Israel Reyes, a passenger of the jeepney, was the sole negligence of the driver of the passenger jeepney, petitioner Alfredo Mallari Jr., who recklessly operated and drove 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 is presumed that a person driving a motor vehicle has been negligent if at the time of the mishap he was violating a traffic regulation. As found by the appellate court, petitioners failed to present satisfactory evidence to overcome this legal presumption. The negligence and recklessness of the driver of the passenger jeepney is binding against petitioner Mallari Sr., who was the owner of the passenger jeepney engaged as a common carrier, considering the fact that in an action based on contract of carriage, the court need not make an express finding of fault or negligence on the part of the carrier in order to hold it responsible for the payment of damages sought by the passenger. Under Art. 1755 of the Civil Code, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide using the utmost diligence of very cautious persons with due regard for all the circumstances. Moreover, under Art. 1756 of the Civil Code, in case of death or injuries to passengers, a common carrier is presumed to have been at fault or to have acted negligently, unless it proves that it observed extraordinary diligence. Further, pursuant to Art. 1759 of the same Code, it is liable for the death of or injuries to passengers through the negligence or willful acts of the former’s employees. This liability of the common carrier does not cease upon proof that it exercised all the diligence of a good father of a family in the selection of its employees. Clearly, by the contract of carriage, the carrier jeepney owned by Mallari Sr. assumed the express obligation to transport the passengers to their destination safely and to observe extraordinary diligence with due regard for all the circumstances, and any injury or death that might be suffered by its passengers is right away attributable to the fault or negligence of the carrier.

Quisumbing v. CA WHO WON: PAL DOCTRINE: Where the [common carrier] has faithfully complied with the requirements of government agencies and adhered to the established procedures and precautions of the airline industry at any particular time, its failure to take certain steps that a passenger in hindsight believes should have been taken is not the negligence or misconduct which mingles with force majeure as an active and cooperative cause. FACTS: Norberto Quisumbing, Sr. and Gunther Leoffler were among the of PAL’s Fokker 'Friendship' PIC-536 plane in its flight of November 6, 1968 which left Mactan City at about 7:30 in the evening with Manila for its destination. After the plane had taken off, Florencio O. Villarin, a Senior NBI Agent who was also a passenger of the said plane, noticed a certain 'Zaldy,' a suspect in the killing of Judge Valdez, seated at the front seat near the door leading to the cockpit of the plane. Villarin then scribbled a note addressed to the pilot of the plane requesting the latter to contact NBI duty agents in Manila for the said agents to ask the Director of the NBI to send about six NBI agents to meet the plane because the suspect in the killing of Judge Valdez was on board After receiving the note, 15 mins after take-off, Capt. Luis Bonnevie, Jr., came out of the cockpit and sat beside Villarin at the rear portion of the plane and explained that he could not send the message because it would be heard by all ground aircraft stations. Villarin, however, told the pilot of the danger of commission of violent acts on board the plane by the notorious 'Zaldy' and his three companions. While the pilot and Villarin were talking, 'Zaldy' and one of his companions walked to the rear and stood behind them. 'Zaldy' and his three (3) companions returned to their seats, but after a few minutes they moved back to the rear throwing ugly looks at Villarin. Soon thereafter an exchange of gunshots ensued between Villarin and 'Zaldy' and the latter's companions. 'Zaldy' announced to the passengers and the pilots in the cockpit that it was a hold-up and ordered the pilot not to send any SOS. The hold-uppers divested passengers of their belongings. Specifically, Norberto Quisumbing, Sr. was divested of [pieces of jewelry] and cash in the total amount of P18,650 out of which recoveries were made amounting to P4,550. On the other hand, Gunther Leoffler was divested of a wrist watch, cash and a wallet in the total of P1,700 As a result of the incident, Quisumbing, Sr. suffered shock, because a gun had been pointed at him by one of the holduppers. Upon landing at the Manila International Airport. 'Zaldy' and his three companions succeeded in escaping. Quisumbing and Loeffler brought suit against PAL in the CFI, to recover the value of the property lost by them to the robbers as well as moral and exemplary damages, attorney's fees and expenses of litigation. The plaintiffs declared that their suit was instituted pursuant to Civil Code articles 1754, 998, 2000 and 2001 and on the ground that in relation to said Civil Code article 2001 the complained-of act of the armed robbers is not a force majeure, as

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the 'use of arms' or 'irresistible force' was not taken advantage of by said armed robbers in gaining entrance to defendant's ill-fated plane in question. PAL denied liability alleging that the robbery during the flight and after the aircraft was forcibly landed at the Manila Airport did indeed constitute force majeure, and neither of the plaintiffs had notified PAL "or its crew or employees that they were in possession of cash, German marks and valuable [pieces of jewelry] and watches" or surrendered said items to "the crew or personnel on board the aircraft." CFI rendered judgment 'dismissing plaintiffs' complaint. It upheld PAL’s contention. Plaintiffs appealed to the CA. CA affirmed CFI. It rejected the argument that "the use of arms or irresistible force" referred to in Article 2001 constitutes force majeure only if resorted to gain entry into the airplane, and not if it attends "the robbery itself.” It also ruled that PAL could not be faulted for want of diligence, particularly for failing "to take positive measures to implement Civil Aeronautics Administration regulations prohibiting civilians from carrying firearms on board aircrafts;" and that "the absence of coded transmissions, the amateurish behaviour of the pilot in dealing with the NBI agent, the allegedly open cockpit door, and the failure to return to Mactan, in the light of the circumstances of the case were not negligent acts sufficient to overcome the force majeure nature of the armed robbery.

ISSUE: W/N common carrier PAL is liable to plaintiffs? NO RULING: The Supreme Court is convinced of the correctness of the essential conclusion of both the trial and appellate courts that the evidence does indeed fail to prove any want of diligence on the part of PAL, or that, more specifically, it had failed to comply with applicable regulations or universally accepted and observed procedures to preclude hijacking; and that the particular acts singled out by the petitioners as supposedly demonstrative of negligence were, in the light of the circumstances of the case, not in truth negligent acts "sufficient to overcome the force majeure nature of the armed robbery." Where the defendant has faithfully complied with the requirements of government agencies and adhered to the established procedures and precautions of the airline industry at any particular time, its failure to take certain steps that a passenger in hindsight believes should have been taken is not the negligence or misconduct which mingles with force majeure as an active and cooperative cause. Under the circumstance of the instant case, the acts of the airline and its crew cannot be faulted as negligence. The hijackers had already shown their willingness to kill. One passenger was in fact killed and another survived gunshot wounds. The lives of the rest of the passengers and crew were more important than their properties. Cooperation with the hijackers until they released their hostages at the runway end near the South Superhighway was dictated by the circumstances.

Aboitiz Shipping v. CA WHO WON: Vianas DOCTRINE: All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure. The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier's premises to claim his baggage FACTS: On May 11, 1975, Anacleto Viana boarded the vessel M/V Antonia owned by defendant Aboitiz Shipping Corp (Aboitiz), at the port at San Jose, Occidental Mindoro, bound for Manila, having purchased a a ticket in the sum of P23.10. A day after, said vessel arrived at Pier 4, North Harbor, Manila, and the passengers therein disembarked, a gangplank having been provided connecting the side of the vessel to the pier. Instead of using said gangplank Anacleto Viana disembarked on the third deck which was on the level with the pier. After said vessel had landed, the Pioneer Stevedoring Corporation (Pioneer) took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement (MOA) between the third-party defendant Pioneer and defendant Aboitiz. The crane owned by Pioneer and operated by its crane operator Alejo Figueroa was placed alongside the vessel and one (1) hour after the passengers of said vessel had disembarked, it started operation by unloading the cargoes from said vessel. While the crane was being operated, Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him between the side of the vessel and the crane. Anacleto was thereafter brought to the hospital where he later died 3 days after. The cause of his deathbeing "hypostatic pneumonia secondary to traumatic fracture of the pubic bone lacerating the urinary bladder". Private respondent Vianas filed a complaint for damages against Aboitiz for breach of CoC. Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely under the control of Pioneer as the exclusive stevedoring contractor of Aboitiz, which handled the unloading of cargoes from the vessel of Aboitiz. It is also averred that since the crane operator was not an employee of Aboitiz, the latter cannot be held liable under the fellow-servant rule. Thereafter, Aboitiz filed a third-party complaint against Pioneer. Pioneer averred, among among other things, that Aboitiz had no cause of action against Pioneer considering that Aboitiz is being sued by the Vianas for breach of contract of carriage to which Pioneer is not a party and that Pioneer had observed the diligence of a good father of a family both in the selection and supervision of its employees as well as in the prevention of damage or injury to anyone including the victim Anacleto Viana.

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RTC ruled in favor of Vianas and ordered Aboitiz to pay the Vianas for damages incurred and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter has paid the Vianas. Both Aboitiz and Pioneer filed separate MRs wherein they raised that Anacleto acted with gross negligence. RTC absolved Pioneer from liability for failure of the Vianas and Aboitiz to establish a case of negligence against the crane operator which is never presumed aside from the fact that the MOA refers only to Pioneer's liability in case of loss or damage to goods handled by it but not in the case of personal injuries, and, finally that Aboitiz cannot properly invoke the fellow-servant rule simply because its liability stems from a breach of contract of carriage. CA affirmed.

ISSUE: W/N common carrier Aboitiz is liable for the death of Viana resulting from the accidental fall of the crane towards him? YES RULING: The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure. The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier's premises to claim his baggage In the case at bar, the SC ruled that there was justifiable cause for the presence of Anacleto on or near the petitioner’s vessel an hour after the petitioner disembarked from the vessel. It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers of vessels are allotted a longer period of time to disembark from the ship than other common carriers such as a passenger bus. With respect to the bulk of cargoes and the number of passengers it can load, such vessels are capable of accommodating a bigger volume of both as compared to the capacity of a regular commuter bus. Consequently, a ship passenger will need at least an hour as is the usual practice, to disembark from the vessel and claim his baggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a very short period of time. When the accident occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from petitioner's vessel. As earlier stated, a carrier is duty bound not only to bring its passengers safely to their destination but also to afford them a reasonable time to claim their baggage. While the victim was admittedly contributorily negligent, still Aboitiz’s failure to exercise extraordinary diligence was the proximate and direct cause of, because it could definitely have prevented, the former's death.

The Court also held that there was no negligence on the part of Pioneer, a confirmation of the trial court's finding to that effect, hence, it is absolved from liability.

La Mallorca v. De Jesus WHO WON: De Jesus and Tolentino DOCTRINE: To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier in the occurrence of the injury will defeat the defense of force majeure. FACTS: Lolita De Jesus, 20 yr old daughter of respondent Valentin De Jesus and wife of Manolo Tolentino, died from a head-on collision between La Mallorca and Pampanga Bus Co’s (LaMallorca-Pambusco) bus, on which she was a passenger and freight truck traveling in the opposite direction. The immediate cause of the collision was the fact that the driver of the bus lost control of the wheel when its left front tire suddenly exploded. De Jesus and Tolentino filed a civil suit with the trial court which sentenced LaMallorcaPambusco to pay plaintiffs damages (inclusive of moral damages). Petitioner now filed an appeal by certiorari with the CA alleging that a tire blow-out is a FE and gives rise to no liability for negligence. ISSUE: W/N the common carrier must be exonerated from liability due to the occurrence of a fortuitous event by way of a tire blow-out? NO RULING: To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier in the occurrence of the injury will defeat the defense of force majeure. (This was actually cited in Gatchalian v. DeLim but such doctrine applies very well in this case. Also there was not much principle enunciated here and so I just chose to cite this one) In the case at bar, the Court found that the cause of blow-out was known. The inner tube of the left front tire, according to petitioner’s own evidence and as found by the CA “was pressed between the inner circle of the left wheel and the rim which has slipped out of the wheel.” This was a mechanical defect of the conveyance or a fault in its equipment which was easily discoverable if the bus had been subjected to a more thorough, or rigid check-up before it took to the road that morning. Moreover, both the trial court and CA found as a fact that the bus was running quite fast immediately before the accident. Considering that the tire which exploded was not new – petitioner describes it as not so very worn out – the plea of casa fortuito cannot be entertained.

Moral damages are recoverable by reason of the death of a passenger caused by the breach of CoC by virtue of Art. 1764 in rel to Art. 2206. Trans World Airlines v. CA WHO WON: Vinluan

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On the other hand, Vinluan 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.

ISSUE: W/N defendant carrier is liable for breach of CoC and if so, how much? DOCTRINE: The social standing of plaintiff in the community may be considered by the Court in awarding moral and exemplary damages for injuries sustained from a carrier’s breach of CoC. FACTS: 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. While in Paris, he went to the office of Trans World Airlines (TWA) and confirmed a reservation for first class accommodation on board from New York to San Francisco which was scheduled to depart on April 20, 1979. On April 20, 1979, at around 8AM, Vinluan reconfirmed his reservation for first class accommodation on board with its New York office. He was advised that his reservation was confirmed. He was even requested to indicate his seat preference. On the schedule date of his departure, Vinluan presented his ticket for check-in at the counter of TWA at JFK International Airport at about 9AM the scheduled time of the departure being 11AM. 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 his flight, Vinluan also 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. Vinluan filed an action for damages against the TWA in the CFI alleging breach of CoC and bad faith. CFI found for plaintiff and ordered defendant carrier to pay damages (actualdifference in fare between first class and economy, moral damages, exemplary and attorney’s fees). CA affirmed but modified interest and reduced AFees. Petitioner contends that because of maintenance problems of the aircraft on the day of the flight, said flight was cancelled and a special flight was organized to operate. Vinluan’s flight was to have utilized a (Lockheed 101) plane with 34 first class seats, but instead, a smaller plane (Boeing 707) with only 16 first class seats was substituted for use. Hence, passengers who had first class reservations had to be accommodated 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 the flight to San Francisco.

RULING: The Court found that the discrimination shown by petitioner in accommodating Caucasians in their first-class seats is obvious and the humiliation to which Vinluan was subjected is undeniable. Consequently, the award of moral and exemplary damages by the respondent court is in order. Indeed, Vinluan had shown that the alleged switch of planes 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. 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. At the time of this unfortunate incident, Vinluan 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 P300K and the exemplary damages should be reduced to P200K. 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.

Cathay Pacific Airways, Ltd. V. CA WHO WON: Tomas Alcantara DOCTRINE: Although the Warsaw Convention has the force and effect of law in this country, being a treaty commitment assumed by the Philippine government, said convention does not operate as an exclusive enumeration of the instances for declaring a carrier liable for breach of contract of carriage or as an absolute limit of the extent of that liability. The Warsaw Convention declares the carrier liable for damages in the enumerated cases and under certain limitations. However, it must not be construed to preclude the operation of the Civil Code and other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating the rights of its passengers under the contract of carriage, especially if willful misconduct on the part of the carrier's employees is found or established. FACTS: On 19 October 1975, respondent Tomas L. Alcantara was a first class passenger of petitioner Cathay Pacific Airways, Ltd. (CATHAY) on its flight from Manila to Hongkong and onward from Hongkong to Jakarta on another flight. The purpose of his trip was to attend the following day, a conference with the Director General of Trade of Indonesia, Alcantara being the Executive Vice-President and General Manager of Iligan Cement Corporation, Chairman of the Export Committee of the Philippine Cement Corporation, and representative of the Cement Industry Authority and the Philippine Cement Corporation. Alcantara checked in his luggage which contained not only his clothing and articles for personal use but also papers and documents he needed for the conference. Upon his arrival in Jakarta, respondent discovered that his luggage was missing. When he inquired about his luggage from CATHAY's representative in Jakarta, Alcantara was told that his luggage was left behind in Hongkong. For this, respondent Alcantara was offered $20.00 as "inconvenience money" to buy his immediate personal needs until the luggage could be delivered to him. His luggage finally reached Jakarta more than twenty four (24) hours after his arrival. However, it was not delivered to him at his hotel but was required by petitioner to be picked up by an official of the Philippine Embassy. Alcantara filed a complaint against CATHAY with the CFI praying for damages. CFI ordered CATHAY to pay Alcantara moral, temperate, exemplary and attorney’s fees. Both parties appealed to the CA. CATHAY assailed the conclusion of the trial court that it was accountable for breach of contract and questioned the non-application by the court of the Warsaw Convention as well as the excessive damages awarded on the basis of its finding that respondent Alcantara was rudely treated by petitioner's employees during the time that his luggage could not be found. For his part, respondent Alcantara assigned as error the failure of the trial court to grant the full amount of damages sought in his complaint. CA rendered its decision affirming the findings of fact of the trial court but modifying its award by increasing the moral damages to P80K exemplary damages to P20K and temperate or moderate damages to P10K.

ISSUE/S: 1. W/N the award of damages was proper? YES save for the award of temperate damages. 2. W/N the Warsaw Convention is applicable to the present case? NO RULING: 1. Both the trial court and the appellate court found that CATHAY was grossly negligent and reckless when it failed to deliver the luggage of petitioner at the appointed place and time. CATHAY alleges that as a result of mechanical trouble, all pieces of luggage on board the first aircraft bound for Jakarta were unloaded and transferred to the second aircraft which departed an hour and a half later. Yet, as the CA noted, petitioner was not even aware that it left behind private respondent's luggage until its attention was called by the Hongkong Customs authorities. More, bad faith or otherwise improper conduct may be attributed to the employees of petitioner. While the mere failure of CATHAY to deliver respondent's luggage at the agreed place and time did not ipso facto amount to willful misconduct since the luggage was eventually delivered to private respondent, albeit belatedly, the Court is persuaded that the employees of CATHAY acted in bad faith. Where in breaching the contract of carriage the defendant airline is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural and probable consequences of the breach of obligation which the parties had foreseen or could have reasonably foreseen. In that case, such liability does not include moral and exemplary damages. Conversely, if the defendant airline is shown to have acted fraudulently or in bad faith, the award of moral and exemplary damages is proper. However, respondent Alcantara is not entitled to temperate damages, contrary to the ruling of the court a quo, in the absence of any showing that he sustained some pecuniary loss. t cannot be gainsaid that respondent's luggage was ultimately delivered to him without serious or appreciable damage. 2. Although the Warsaw Convention has the force and effect of law in this country, being a treaty commitment assumed by the Philippine government, said convention does not operate as an exclusive enumeration of the instances for declaring a carrier liable for breach of contract of carriage or as an absolute limit of the extent of that liability. The Warsaw Convention declares the carrier liable for damages in the enumerated cases and under certain limitations. However, it must not be construed to preclude the operation of the Civil Code and other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating the rights of its passengers under the contract of carriage, especially if willful misconduct on the part of the carrier's employees is found or established, which is what was manifested in the instant case. For, the Warsaw Convention itself provides in Art. 25 that —(1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with the law of the court to which the case is submitted, is considered to be equivalent to willful misconduct; (2) Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is

caused under the same circumstances by any agent of the carrier acting within the scope of his employment; When petitioner airline misplaced respondent's luggage and failed to deliver it to its passenger at the appointed place and time, some special species of injury must have been caused to him. For sure, the latter underwent profound distress and anxiety, and the fear of losing the opportunity to fulfill the purpose of his trip. In fact, for want of appropriate clothings for the occasion brought about by the delay of the arrival of his luggage, to his embarrassment and consternation respondent Alcantara had to seek postponement of his pre-arranged conference with the Director General of Trade of the host country. In one case, this Court observed that a traveller would naturally suffer mental anguish, anxiety and shock when he finds that his luggage did not travel with him and he finds himself in a foreign land without any article of clothing other than what he has on. Thus, respondent is entitled to moral and exemplary damages

Gacal vs. Philippine Airlines (183 SCRA 189, G.R. No. 55300 March 16, 1990) Facts: Plaintiffs Franklin Gacal, his wife and three others were passengers of PAL plane at Davao Airport for a flight to Manila, not knowing that the flight, were Commander Zapata with other members of Moro National Liberation Front. They were armed with grenades and pistols. After take off, the members of MNLF announced a hijacking and directed the pilot to fly directly to Libya, later to Sabah. They were, however, forced to land in Zamboanga airport for refueling, because the plane did not have enough fuel to make direct flight to Sabah. When the plane began to taxi at the runaway of Zamboanga airport, it was met by two armored cars of the military. An armored car subsequently bumped the stairs leading inside the plane. That commenced the battle between the military and the hijackers, which led ultimately to the liberation of the plane’s surviving crew and passengers with the final score of ten passengers and three hijackers dead. Issue: Whether or not hijacking is a case fortuito or force majeure, which would exempt an aircraft from liability for, damages to its passengers and personal belongings that were lost during the incident? Held: In order to constitute a caso fortuito that would exempt from liability under Art 1174 of the civil code, it is necessary that the following elements must occur: (a) the cause of the breach of obligation must be independent of human will; (b) the event must be unforeseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; (d) the debtor must be free from any participation in or aggravation of the injury to the creditor. Applying the above guidelines, the failure to transport the petitioners safely from Davao to Manila was due to the skyjacking incident staged buy the MNLF without connection to the private respondent, hence, independent of will of PAL or its passengers.

Patricio Hufana, contending that the incident was their fault. The lower court found that the accident was due to the concurrent negligence of the drivers of the two buses and held both the two drivers and their employers jointly and severally liable for damages. The Court of Appeals affirmed the finding of concurrent negligence on the part of the two buses but held that only Vilaun is liable because Aquino, as driver, cannot be made jointly and severally liable in a contract of carriage. It ruled that the Hufana’s cannot be made liable since the plaintiffs did not amend their complaints in the main action so as to assert a claim against them. Issue: Whether Patricio and Gregorio Hufana should be made equally liable although they were third-party defendants and not principal defendants Held: The fact that the respondents were not sued as principal defendants but were brought into the cases as third party defendants should not preclude a finding of their liability. Section 5 Rule 12 of the Rules of Court, precluding a judgment in favor of a plaintiff and against a third party defendant where the plaintiff has not amended his complaint to assert a claim against a third party defendant, applies only to cases where the third party defendant is brought in on an allegation of liability to the defendants. It does not apply where a third- party defendant is impleaded on the ground of direct liability to the plaintiffs, in which case no amendment of the plaintiffs complaint is necessary. In this case the third-party complaints filed by Viluan and Aquino charged Gregorio and Patrcio Hufana with direct liability to the plaintiffs. Amendment of the complaint is not necessary and is merely a matter of form since the liability of the Hufana’s as third-party defendant was already asserted in the third-party complaint. Regardless whether the injury is quasi-delict or breach of contract of carriage, in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. Zamboanga Transportation Co. vs. CA

Viluan vs. CA G.R. Nos. L-21477-81 (April 29, 1966)

GR L-25292, 29 November 1969) FACTS: In the evening of 13 August 1955, the spouses Ramon and Josefina Dagamanuel boarded a bus at Manicahan, Zamboanga City, to attend a benefit dance at the Bunguiao Elementary School, also in Zamboanga City, where Josefina was a public school teacher. After the dance, the couple boarded the same bus to return to Manicahan. At around 1 a.m. of 14 August 1955, the bus (1955 TPU-1137), and driven by Valeriano Marcos, fell off the road and pinned to death the said spouses and several other passengers.

Facts: The bus owned by Francisca Viluan, and driven by Hermenigildo Aquino raced with the overtaking bus driven by Gregorio Hufana and owned by Patricio Hufana. Aquino lost control of the bus, hitting a post and crashing into a tree, after which it burst into flames wherein seven persons were killed and thirteen others were injured. In the complaint for breach of contract of carriage and damages filed by the heirs of those who perished in the incident and Carolina Sabado, an injured passenger, Vilaun and Aquino filed third party complaints against Gregorio Hufana and his employer,

Jose Mario Dagamanuel, the only child of the deceased spouses, through his maternal grandmother as guardian ad-litem, Pascuala Julian de Punzalan, instituted an action against Zamboanga Transportation Co., Inc. (Zamtanco) and the Zamboanga Rapids Co., Inc. (Zambraco) for breach of contract of carriage, alleging that the accident was due to the fault and negligence of the driver in operating the bus and due to the negligence of the companies in their supervision of their driver. the trial court rendered judgment sentencing the three, jointly and severally, to indemnify the private respondents. The CA affirmed the decision of the court a quo.

The events rendered it impossible for PAL to perform its obligation in a normal manner and it cannot be faulted for negligence on the duty performed by the military. The existence of force majeure has been established thus exempting PAL from payment of damages.

(Juaniza vs Eugenio Jose, G.R. Nos. L-50127-28. March 30, 1979) ISSUE: Whether or not Zamtranco and Zambraco are jointly and severally liable. HELD: Yes. While it is true that according to previous decisions of the Supreme Court, transfer of a certificate of public convenience to operate a transportation service is not effective and binding insofar as the responsibility of the grantee under the franchise in its relation to the public is concerned, without the approval of the transfer by the Public Service Commission required by the Public Service Act, and that in contemplation of law, the transferor of such certificate continues to be the operator of the service as long as the transfer is not yet approved, and as such operator, he is the one responsible jointly and severally with his driver for damages incurred by passengers or third persons in consequence of injuries or deaths resulting from the operation of such service, the Court does not find any need for applying these rulings to the present case for the simple reason that in their respective third-party complaints, the companies both admitted separately that they are the owners of the bus involved in the incident in question and that Valeriano Marcos, the driver of said bus at the time of said incident, was in their employ. There is no application of the ruling in the previous cases to the present case. There, the registered owners invariably sought to pass on liability to the actual operators on the pretext that they had already sold or transferred their units to the latter, whereas in the present case, the registered owner, the Zambraco, admits whatever liability it has and vigorously objects to any finding that the actual operator, the Zamtranco, is also liable with it, claiming that as registered owner, it alone should be adjudged liable. We would not inquire into the motive of the Zambraco why instead of sharing whatever liability it has with the Zamtranco, it prefers to shoulder it alone. But the fact stands out in bold relief that although still the registered owner at the time of the accident, it had already sold the vehicle to Zamtranco and the latter was actually operating it. For the better protection of the public that both the owner of record and the actual operator, as held by the Court in the past, should be adjudged jointly and severally liable with the driver (see Dizon vs. Octavio, et al., 51 O.G. No. 8, 4059-4061; Castanares vs. Pages, CA-G.R. 21809-R, March 8, 1962; Redado vs. Bautista, CA-G.R. 19295-R, Sept. 19, 1961; Bering vs. Noeth, CA-G.R. 28483-R, April 29, 1965).

When a man and woman live together as husband and wife, but they are not married, or their marriage is void from the beginning, the property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules on co-ownership (Article 144, New Civil Code). The co-ownership contemplated, however, requires that both parties are not in anyway incapacitated to contract marriage. ● It is settled in our jurisprudence that only the registered owner of a public service vehicle is responsible for damages that may arise from consequences incident to its operation, or maybe caused to any of the passengers therein.

Facts: Eugenio Jose was the registered owner and operator of the passenger jeepney involved in an accident of collision with a freight train of the Philippine National Railways that took place on November 23, 1969 which resulted in the death to seven (7) and physical injuries to five (5) of its passengers. At the time of the accident, Eugenio Jose was legally married to Socorro Ramos but had been cohabiting with defendant-appellant, Rosalia Arroyo, for sixteen (16) years in a relationship akin to that of husband and wife. The trial court rendered a decision in a civil case for damages arising from the vehicular accident, ordering Eugenio Jose and Rosalia Arroyo to jointly and severally pay damages to the victims of the accident. Rosalia claims that it was error for the trial court to consider her a co-owner of the said jeepney, just because she had cohabited for many years as wife of Eugenio Jose, a legally married man. Issues: 1. Whether or not Article 144 of the Civil Code (now Article 148 of FC) is applicable in a case where one of the parties in a common-law relationship is incapacitated to marry. 2. Whether or not Rosalia can be held jointly and severally liable for damages with Eugenio. Held: 1. No. The co-ownership contemplated in Article 144 of the Civil Code requires that the man and the woman living together must not in any way be incapacitated to contract marriage. Since Eugenio Jose is legally married to Socorro Ramos, there is an impediment for him to contract marriage with Rosalia Arroyo. Under the aforecited provision of the Civil Code, Arroyo cannot be a co-owner of the jeepney. The jeepney belongs to the conjugal partnership of Jose and his legal wife. There is therefore no basis for the liability of Arroyo for damages arising from the death of, and physical injuries suffered by, the passengers of the jeepney which figured in the collision. 2. No. It is settled in our jurisprudence that only the registered owner of a public service vehicle is responsible for damages that may arise from consequences incident to its operation, or maybe caused to any of the passengers therein.

G.R. No. L-18965 October 30, 1964 Lessons Applicable: Actionable Document (Transportation)

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October, 1952: Macleod and Company of the Philippines (Macleod) contracted by telephone the services of the Compañia Maritima (CM), a shipping corporation, for: o shipment of 2,645 bales of hemp from the Macleod's Sasa private pier at Davao City to Manila o subsequent transhipment to Boston, Massachusetts, U.S.A. on board the S.S. Steel Navigator. This oral contract was later on confirmed by a formal and written booking issued by Macleod's branch office in Sasa and handcarried to CM's branch office in Davao in compliance with which the CM sent to Macleod's private wharf LCT Nos. 1023 and 1025 on which the loading of the hemp was completed on October 29, 1952. o The 2 lighters were manned each by a patron and an assistant patron.  The patrons of both barges issued the corresponding carrier's receipts and that issued by the patron of Barge No. 1025 reads in part:  Received in behalf of S.S. Bowline Knot in good order and condition from MACLEOD AND COMPANY OF PHILIPPINES, Sasa Davao, for transhipment at Manila onto S.S. Steel Navigator.  FINAL DESTINATION: Boston. Early hours of October 30: LCT No. 1025 sank, resulting in the damage or loss of 1,162 bales of hemp loaded therein o Macleod promptly notified the carrier's main office in Manila and its branch in Davao advising it of its liability The damaged hemp was brought to Odell Plantation in Madaum, Davao, for cleaning, washing, reconditioning, and redrying. o total loss adds up to P60,421.02

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All abaca shipments of Macleod were insured with the Insurance Company of North America against all losses and damages Macleod filed a claim for the loss it suffered with the insurance company and was paid P64,018.55 o subrogation agreement between Macleod and the insurance company wherein the Macleod assigned its rights over the insured and damaged cargo October 28, 1953.: failing to recover from the carrier P60,421.02 (amount supported by receipts), the insurance company instituted the present action CA affirmed RTC: ordering CM to pay the insurance co.

ISSUE: W/N there was a contract of carriage bet. CM (carrier) and Macleod (shipper) HELD: YES. Affirmed 

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receipt of goods by the carrier has been said to lie at the foundation of the contract to carry and deliver, and if actually no goods are received there can be no such contract o The liability and responsibility of the carrier under a contract for the carriage of goods commence on their actual delivery to, or receipt 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 that way o Whenever the control and possession of goods passes to the carrier and nothing remains to be done by the shipper, then it can be said with certainty that the relation of shipper and carrier has been established As regards the form of the contract of carriage it can be said that provided that there is a meeting of the minds and from such meeting arise rights and obligations, there should be no limitations as to form o The bill of lading is not essential

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Even where it is provided by statute that liability commences with the issuance of the bill of lading, actual delivery and acceptance are sufficient to bind the carrier marine surveyors, attributes the sinking of LCT No. 1025 to the 'non-water-tight conditions of various buoyancy compartments