Case Doctrines on Transportation Law

De Guzman vs. Court of Appeals

Article 1732 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.

            The Court of Appeals referred to the fact that private respondent held no certificate of public convenience. A certificate of public convenience is not a requisite for the incurring of liability. 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.

Planters Products, Inc. vs. CA

It is not disputed that respondent carrier, in the ordinary course of business, operates as a common carrier, transporting goods indiscriminately for all persons. When petitioner 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 the charterer be charged, 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. This is evident in the present case considering that the steering of the ship, the manning of the decks, the determination of the course of the voyage and other technical incidents of maritime navigation were all consigned to the officers and crew who were screened, chosen and hired by the shipowner. It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both the vessel and its crew, that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property of the charterer.

Fisher vs. Yangco

In construing Act 98 for the alleged violation, the test is whether the refusal of YSC to carry the explosives without qualification or conditions may have the effect of subjecting any person or locality or the traffic is such explosives to an unduly unreasonable or unnecessary prejudice or discrimination.  Common carriers in this jurisdiction cannot lawfully decline to accept a particular class of goods unless it appears that for some sufficient reason the discrimination for such is reasonable and necessary.  YSC has not met those conditions.

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

US vs. Quinahon

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

Loadstar Shipping Co., Inc. vs. CA

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

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

First Philippine Industrial Corporation vs. CA

Based on Article 1732 NCC, 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. (De Guzman Ruling upheld)

            Respondent’s argument that the term “common carrier” as used in Section 133(j) of the Local Government Code refers only to common carriers transporting goods and passengers through moving vehicles or vessels either by land, sea or water is erroneous. The definition of “common carriers” in NCC 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 transporting of the passengers or goods should be by motor vehicle.

Home Insurance Company vs. American Steamship Agencies, Inc.

The NCC provisions on common carriers should not apply where the common carrier is not acting as such but as a private carrier. 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 valid.

            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 strict public policy governing common carrier 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. The stipulation exempting the owner from liability for negligence of its agent is not against public policy and is deemed valid. Recovery can’t be had, for loss or damage to the cargo against shipowners, unless the same is due to personal acts or negligence of said owner or its managers, as distinguished from agents or employees.

San Pablo vs. PANTRANCO

Considering the environmental circumstances of the case, the conveyance of passengers, trucks and cargo from Matnog to Allen is certainly not a ferry boat service but a coastwise or interisland shipping service. Under no circumstance can the sea between Matnog and Allen be considered a continuation of the highway. While a ferry boat service has been considered as a continuation of the highway when crossing rivers or even lakes, which are small body of waters - separating the land, however, when as in this case the two terminals, Matnog and Allen are separated by an open sea it can not be considered as a continuation of the highway. Respondent PANTRANCO should secure a separate CPC for the operation of an interisland or coastwise shipping service in accordance with the provisions of law. Its CPC as a bus transportation cannot be merely amended to include this water service under the guise that it is a mere private ferry service.

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

 National Steel Corporation vs. CA

In the instant case, it is undisputed that VSI did not offer its services to the general public. It carried passengers or goods only for those it chose under a special contract of charter party. It is a private carrier that renders tramping service and as such, does not transport cargo or shipment for the general public. Its services are available only to specific persons who enter into a special contract of charter party with its owner. Consequently, the rights and obligations of VSI and NSC, including their respective liability for damage to the cargo, are determined primarily by stipulations in their contracts of private carriage or charter party.

            Unlike in a contract involving a common carrier, private carriage does not involve the general public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier.

KMU vs. Garcia

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

            By its terms, public convenience or necessity generally means something fitting or suited to the public need. As one of the basic requirements for the grant of a CPC, public convenience and necessity exists when the proposed facility or service meets a reasonable want of the public and supply a need which the existing facilities do not adequately supply. The existence or non-existence of public convenience and necessity is therefore a question of fact that must be established by evidence, real and/or testimonial; empirical data; statistics and such other means necessary, in a public hearing conducted for that purpose. The object and purpose of such procedure, among other things, is to look out for, and protect, the interests of both the public and the existing transport operators.

Tatad vs. Garcia

In law, there is a clear distinction between the "operation" of a public utility and the ownership of the facilities and equipment used to serve the public.  The right to operate a public utility may exist independently and separately from the ownership of the facilities thereof. One can own said facilities without operating them as a public utility, or conversely, one may operate a public utility without owning the facilities used to serve the public. The devotion of property to serve the public may be done by the owner or by the person in control thereof who may not necessarily be the owner thereof.

Samar Mining Company, Inc. vs. Nordeutscher Lloyd

The validity of stipulations in bills of lading exempting the carrier from liability for loss or damage to the goods when the same are not in its actual custody has been upheld. There is no doubt that Art. 1738 finds no applicability to the instant case. The said article contemplates a situation where the goods had already reached their place of destination and are stored in the warehouse of the carrier. The subject goods were still awaiting transshipment to their port of destination, and were stored in the warehouse of a third party when last seen and/or heard of.

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

Eastern Shipping Lines vs. Intermediate Appellate Court

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

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

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

Petitioner Carrier claims that the loss of the vessel by fire exempts it from liability under the phrase "natural disaster or calamity.” However, the Court said that fire may not be considered a natural disaster or calamity. This must be so as it arises almost invariably from some act of man or by human means. It does not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity. It may even be caused by the actual fault or privity of the carrier.

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

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

National Development Company vs. CA

Significantly, under the provisions of the Code of Commerce, particularly Articles 826 to 839, the shipowner or carrier, is not exempt from liability for damages arising from collision due to the fault or negligence of the captain. Primary liability is imposed on the shipowner or carrier in recognition of the universally accepted doctrine that the shipmaster or captain is merely the representative of the owner who has the actual or constructive control over the conduct of the voyage.

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

Gelisan vs. Alday

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

Benedicto vs. Intermediate Appellate Court

The prevailing doctrine in common carriers make the owner liable for consequences having from the operations of the carrier even though the specific vehicle involved may have been transferred to another person.  This doctrine rests upon the principle in dealing with vehicles registered under Public Service Law, the public has the right to assume that the registered owner is the actual or lawful owner thereof.  It would be very difficult and often impossible as a practical matter, for members of the general public to enforce the rights of action that they may have for injuries inflicted by the vehicles being negligently operated if they should be required to prove who the actual owner is. The registered owner is not allowed to deny liability by proving the identity of the alleged transferee.  Thus, contrary to petitioner’s claim, private respondents are not required to go beyond the vehicle’s certificate of registration to ascertain the owner of the carrier.

PHILTRANCO Service Enterprise, Inc. vs. Court of Appeals

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

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

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

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

Santos vs. Sibug

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

Lita Enterprises Inc. vs. Intermediate Appellate Court

Unquestionably, the parties herein operated under an arrangement, comonly known as the "kabit system", whereby a person who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee. A certificate of public convenience is a special privilege conferred by the government . Abuse of this privilege by the grantees thereof cannot be countenanced. Although not outrightly penalized as a criminal offense, the "kabit system" is invariably recognized as being contrary to public policy and, therefore, void and inexistent under Article 1409 of the Civil Code, It is a fundamental principle that the court will not aid either party to enforce an illegal contract, but will leave them both where it finds them.

Teja Marketing vs. Intermediate Appellate Court

The ruling in Lita Enterprises Inc. vs. IAC is upheld. The defect of in existence of a contract is permanent and cannot be cured by ratification or by prescription. The mere lapse of time cannot give efficacy to contracts that are null and void.

Magboo vs. Bernardo

The features which characterize the boundary system are not sufficient to withdraw the relationship between the parties from that of employer and employee. The owner continued to be the operator of the vehicle in legal contemplation and as such, he is responsible for the consequences incident to its operation. To exempt from liability the owner of a public vehicle who operates it under the “boundary system” on the ground that he is a mere lessor would be not only to abet flagrant violations of the Public Service Law but also to place the riding public at the mercy of reckless and irresponsible drivers.

Ganzon vs. CA

Petitioner Ganzon failed to show that the loss of the scrap iron due to any cause enumerated in Art. 1734.  The order of the acting Mayor did not constitute valid authority for petitioner to carry out.  In any case, the intervention of the municipal officials was not of a character that would render impossible the fulfillment by the carrier of its obligation.  The petitioner was not duly bound to obey the illegal order to dump into the sea the scrap of iron. Moreover, there is absence of sufficient proof that the issuance of the same order was attended with such force or intimidation as to completely overpower the will of the petitioner’s employees.

By the delivery made during Dec. 1, 1956, the scraps were unconditionally placed in the possession and control of the common carrier, and upon their receipt by the carrier of transportation, the contract of carriage was deemed perfected. Consequently, Ganzon’s extraordinary responsibility for the loss, destruction or deterioration of the goods commenced. According to Art 1738, such extraordinary responsibility would cease only upon the delivery by the carrier to the consignee or persons with right to receive them. The fact that part of the shipment had not been loaded on board did not impair the contract of transportation as the goods remained in the custody & control of the carrier.

Eastern Shipping Lines vs. Court of Appeals

The heavy seas and rains referred to in the master’s report were not caso fortuito but normal occurrences that an ocean-going vessel, particularly in the month of September which, in our area, is a month of rains and heavy seas would encounter as a matter of routine. They are not unforeseen nor unforeseeable. These are conditions that ocean-going vessels would encounter and provide for, in the ordinary course of a voyage. That rain water (not sea water) found its way into the holds of the Jupri Venture is a clear indication that care and foresight did not attend the closing of the ship's hatches so that rain water would not find its way into the cargo holds of the ship.

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

Sarkies Tours Phils vs. Court of Appeals

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

Where the common carrier accepted its passenger's baggage for transportation and even had it placed in the vehicle by its own employee, its failure to collect the freight charge is the common carrier's own lookout. It is responsible for the consequent loss of the baggage. In the instant case, defendant appellant's employee even helped Fatima Minerva Fortades and her brother load the luggages/baggages in the bus' baggage compartment, without asking that they be weighed, declared, receipted or paid for. Neither was this required of the other passengers.

Valenzuela Hardwood & Industrial Supply vs. Court of Appeals

In a contract of private carriage, the parties may validly stipulate that responsibility for the cargo rests solely on the charterer, exempting the shipowner from liability for loss of or damage to the cargo caused even by the negligence of the ship captain. Pursuant to Article 1306 17 of the Civil Code, such stipulation is valid because it is freely entered into by the parties and the same is not contrary to law, morals, good customs, public order, or public policy. Indeed, their contract of private carriage is not even a contract of adhesion. We stress that in a contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would be binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the general public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general public cannot justifiably be applied to a ship transporting commercial goods as a private carrier. Consequently, the public policy embodied therein is not contravened by stipulations in a charter party that lessen or remove the protection given by law in contracts involving common carriers.

Yobido vs. Court of Appeals

The explosion of the new tire is not a fortuitous event. There are human factors involved in the situation. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle. Neither may the fact that the tire bought and used is of a brand name noted for quality, resulting in the conclusion that it could not explode within five day’s use. It is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito. Moreover, a common carrier may not be absolved from liability in case of force majeure. A common carrier must still prove that it was not negligent in causing the death or injury resulting from the accident. Thus, having failed to overthrow the presumption of negligence with clear and convincing evidence, petitioners are hereby held liable for damages.

Compania Maritima vs. Insurance Co. of North America

The receipt of goods by the carrier has been said to lie at the foundation of the contract to carry and deliver, and if actually no goods are received there can be no such contract. 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, is a good delivery and binds the vessel receiving the freight, the liability commencing at the time of delivery to the lighter and, similarly, where there is a contract to carry goods from one port to another, and they cannot be loaded directly on the vessel and lighters are sent by the vessel to bring the goods to it, the lighters are for the time its substitutes, so that the bill of landing is applicable to the goods as soon as they are placed on the lighters.

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. A bill of lading is not indispensable for the creation of a contract of carriage. The bill of lading is juridically a documentary proof of the stipulations and conditions agreed upon by both parties. The liability of the carrier as common carrier begins with the actual delivery of the goods for transportation, and not merely with the formal execution of a receipt or bill of lading; the issuance of a bill of lading is not necessary to complete delivery and acceptance. 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.

Lu Do vs. Binamira

While delivery of the cargo to the consignee, or to the person who has a right to receive them, contemplated in Article 1736, because in such case the goods are still in the hands of the Government and the owner cannot exercise dominion over them, we believe however that the parties may agree to limit the liability of the carrier considering that the goods have still to through the inspection of the customs authorities before they are actually turned over to the consignee. This is a situation where we may say that the carrier losses control of the goods because of a custom regulation and it is unfair that it be made responsible for what may happen during the interregnum.

American President Lines, Ltd. vs. Klepper

With regard to the contention of the carrier that COGSA should control in this case, the same is of as moment.  Art. 1763 of the New Civil Code provides that “the laws of the country to which the goods are transported shall govern the liability of the common carrier in case of loss, destruction and deterioration.”  This means that the law of the Philippines on the New Civil Code.  Under 1766 of NCC, “in all matter not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by Special Laws.”  Art. 1736-1738, NCC governs said rights and obligations.  Therefore, although Sec 4(5) of COGSA states that the carrier shall not be liable in an amount exceeding $500 per package unless the value of the goods had been declared by the shipper and asserted in the bill of lading, said section is merely supplementary to the provisions of the New Civil Code.

Servando vs. Phil. Steam

The court a quo held that the delivery of the shipment in question to the warehouse of the Bureau of Customs is not the delivery contemplated by Article 1736; and since the burning of the warehouse occurred before actual or constructive delivery of the goods to the appellees, the loss is chargeable against the appellant.

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

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

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

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

“While it may be true that petitioner had not signed the plane ticket, he is nevertheless bound by the provisions thereof. 'Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation'. It is what is known as a contract of 'adhesion', in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent."

Saludo, Jr. vs. Court of Appeals

Except as may be prohibited by law, there is nothing to prevent an inverse order of events, that is, the execution of the bill of lading even prior to actual possession and control by the carrier of the cargo to be transported. There is no law which requires that the delivery of the goods for carriage and the issuance of the covering bill of lading must coincide in point of time or, for that matter, that the former should precede the latter. While we agree with petitioners' statement that "an airway bill estops the carrier from denying receipt of goods of the quantity and quality described in the bill," a further reading and a more faithful quotation of the authority cited would reveal that "(a) bill of lading may contain constituent elements of estoppel and thus become something more than a contract between the shipper and the carrier. . . . (However), as between the shipper and the carrier, when no goods have been delivered for shipment no recitals in the bill can estop the carrier from showing the true facts . . . Between the consignor of goods and receiving carrier, recitals in a bill of lading as to the goods shipped raise only a rebuttable presumption that such goods were delivered for shipment. As between the consignor and a receiving carrier, the fact must outweigh the recital."

There is a holding in most jurisdictions that the acceptance of a bill of lading without dissent raises a presumption that all terms therein were brought to the knowledge of the shipper and agreed to by him, and in the absence of fraud or mistake, he is estopped from thereafter denying that he assented to such terms. This rule applies with particular force where a shipper accepts a bill of lading with full knowledge of its contents, and acceptance under such circumstances makes it a binding contract. In order that any presumption of assent to a stipulation in a bill of lading limiting the liability of a carrier may arise, it must appear that the clause containing this exemption from liability plainly formed a part of the contract contained in the bill of lading. A stipulation printed on the back of a receipt or bill of lading or on papers attached to such receipt will be quite as effective as if printed on its face, if it is shown that the consignor knew of its terms. Thus, where a shipper accepts a receipt which states that its conditions are to be found on the back, such receipt comes within the general rule, and the shipper is held to have accepted and to be bound by the conditions there to be found.

Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the carrier. This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner exercises the right of stoppage in transitu, and terminates only after the lapse of a reasonable time for the acceptance, of the goods by the consignee or such other person entitled to receive them. And, there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them. Where such a delivery has thus been accepted by the carrier, the liability of the common carrier commences. Only when such fact of delivery has been unequivocally established can the liability for loss, destruction or deterioration of goods in the custody of the carrier, absent the excepting causes under Article 1734, attach and the presumption of fault of the carrier under Article 1735 be invoked.

Macam vs. CA

The extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a right to receive them. PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was the notify party. However, in the export invoices GPC was clearly named as buyer/importer. Petitioner also referred to GPC as such in his demand letter to respondent WALLEM and in his complaint before the trial court. This premise draws us to conclude that the delivery of the cargoes to GPC as buyer/importer which, conformably with Art. 1736 had, other than the consignee, the right to receive them was proper.

The real issue is whether respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank guarantee. From the testimony of petitioner, we gather that he has been transacting with GPC as buyer/importer for around two (2) or three (3) years already. When mangoes and watermelons are in season, his shipment to GPC using the facilities of respondents is twice or thrice a week. The goods are released to GPC. It has been the practice of petitioner to request the shipping lines to immediately release perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his "people." In transactions covered by a letter of credit, bank guarantee is normally required by the shipping lines prior to releasing the goods. But for buyers using telegraphic transfers, petitioner dispenses with the bank guarantee because the goods are already fully paid. In his several years of business relationship with GPC and respondents, there was not a single instance when the bill of lading was first presented before the release of the cargoes.

Maersk Line vs. CA

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

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

Ysmael vs. Barretto

Limiting the common carrier’s liability for loss or damage from any cause or for any reason for less than 1/8 the actual value of the goods is unconscionable and therefore against public policy. A common carrier cannot lawfully stipulate for exemption from liability, unless such exemption is just and reasonable and the contract is freely and fairly made.

Shewaram vs. Philippine Airlines

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

Ong Yiu vs. Court of Appeals

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

Sea Land Services, Inc. vs. IAC

Since the liability of a common carrier for loss of or damage to goods transported by it under a contract of carriage so governed by the laws of the country of destination and the goods in question were shipped from the United States to the Philippines, the liability of common carrier to the consignee is governed primarily by the Civil Code. Applying the Civil Code provisions (Article 1749 and 1750) the stipulation in the bill of lading limiting the liability of the common carrier for loss or damages to the shipment covered by said rule unless the shipper declares the value of the shipment and pays additional charges is valid and binding on the consignee.

Citadel Lines, Inc. vs. CA

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

            In this case, the award based on the alleged market value of the goods is erroneous. It is provided in a clause in the BOL that its liability is limited to US$2.00/kilo. The consignee also admits in the memorandum that the value of the goods does not appear in the bill of lading. Hence, the stipulation on the carrier’s limited liability applies.

Everett Seamship Corp. vs. CA

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

The commercial Invoice does not in itself sufficiently and convincingly show that the common carrier has knowledge of the value of the cargo as contended by the shipper.

British Airways vs. CA

The contract of transportation was exclusively between the passenger and common carrier BA.  The latter merely endorsing the Manila to Hong Kong log of the former’s journey to PAL, as its subcontractor or agent.  Conditions of contracts were one of continuous air transportation. Well-settled rule that an agent is also responsible for any negligence in the performance of its function and is liable for damages which the principal may suffer by reason of its negligent act. When an action is based on breach of contract of carriage, the passenger can only sue BA and not PAL, since the latter was not a party in the contract.

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

H.E. Heacock Co. vs. Macondray

Three kinds of stipulations have often been made in a bill of lading. The first is one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. The second is one providing for an unqualified limitation of such liability to an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight. According to an almost uniform weight of authority, the first and second kinds of stipulations are invalid as being contrary to public policy, but the third is valid and enforceable.

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

Sweet Lines Inc. vs. TEVES

Considered in the light of circumstances prevailing in the inter-island shipping industry in the country today, We find and hold that Condition No. 14 printed at the back of the passage tickets should be held as void and unenforceable for the following reasons first, under circumstances obligation in the inter-island shipping industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets, on which Condition No. 14 is Printed in fine letters, and second, Condition No. 14 subverts the public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and interests of innumerable passengers located in different places of the country who, under Condition No. 14, will have to file suits against petitioner only in the City of Cebu. Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all. The condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause inconvenience to, much less prejudice, petitioner.

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

(1) Defendants- Appellants did not give notice to plaintiffs-appellates as to the change of scheduled of the vessel;

(2) Knowing fully well that it would take no less than fifteen hours to effect the repairs of the damaged engine, defendants- appellants instead made announce ment of assurance that the vessel would leave within a short period of time, and when plaintiff-appellees wanted to leave the port and gave up the trip, defendants- appellants employees would come and say, “we are leaving already”.

(3) Defendants- appellants did not offer to refund plaintiffs-appellees’ tickets nor provide them with transportation form Tacloban to Catbalogan.

Quisumbing Sr. vs. Court of Appeals

The highjacking-robbery was force majeure. The hijackers do not board an airplane through a blatant display of firepower and violent fury. Firearms, hand-grenades, dynamite, and explosives are introduced into the airplane surreptitiously and with the utmost cunning and stealth, although there is an occasional use of innocent hostages who will be coldly murdered unless a plane is given to the hijackers' complete disposal.

PAL was not negligent so as to overcome the force majeure nature of the hi-jacking. Hijackers do not board an airplane through a blatant display of firepower and violent fury. Firearms and grenades are brought to the plane surreptitiously. PAL could not have been 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 the plane. The use of the most sophisticated electronic detection devices may have minimized hijacking but still ineffective against truly determining hijackers.

Pan American World Airways, Inc. vs. Rapadas

The Warsaw Convention governs the availment of the liability limitations where the baggage check is combined with or incorporated in the passenger ticket. In the case at bar, the baggage check is combined with the passenger ticket in one document of carriage. The passenger ticket complies with Article 3, which provides:

 (c) a notice to the effect that, if the passenger's journey involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss of or damage to baggage.

The provisions in the plane ticket are sufficient to govern the limitations of liabilities of the airline for loss of luggage. The passenger, upon contracting with the airline and receiving the plane ticket, was expected to be vigilant insofar as his luggage is concerned. If the passenger fails to adduce evidence to overcome the stipulations, he cannot avoid the application of the liability limitations.

The facts show that the private respondent actually refused to register the attache case and chose to take it with him despite having been ordered by the PANAM agent to check it in. In attempting to avoid registering the luggage by going back to the line, private respondent manifested a disregard of airline rules on allowable handcarried baggages. Prudence of a reasonably careful person also dictates that cash and jewelry should be removed from checked-in-luggage and placed in one's pockets or in a handcarried Manila-paper or plastic envelope.

The alleged lack of enough time for him to make a declaration of a higher value and to pay the corresponding supplementary charges cannot justify his failure to comply with the requirement that will exclude the application of limited liability.

Alitalia vs. Intermediate Appellate Court

The Warsaw Convention's provisions, do not regulate or exclude liability for other breaches of contract by the carrier' or misconduct of its officers and employees, or for some particular or exceptional type of damage, Otherwise, an air carrier would be exempt from any liability for damages in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd. In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but without appreciable damage.

There can be no doubt that Dr. Pablo underwent profound distress and anxiety, which gradually turned to panic and finally despair, from the time she learned that her suitcases were missing up to the time when, having gone to Rome, she finally realized that she would no longer be able to take part in the conference. Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage.

She is not, of course, entitled to be compensated for loss or damage to her luggage. As already mentioned, her baggage was ultimately delivered to her in Manila, tardily, but safely.

Nocum vs. Laguna Tayabas Bus Company

Fairness demands that in measuring a common carrier's duty towards its passengers, allowance must be given to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers, not to speak of his own. Not to be lightly considered must be the right to privacy to which each passenger is entitled. He cannot be subjected to any unusual search, when he protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the case at bar. In other words, inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible, but beyond this, constitutional boundaries are already in danger of being transgressed. Calling a policeman to his aid, as suggested by the service manual invoked by the trial judge, in compelling the passenger to submit to more rigid inspection, after the passenger had already declared that the box contained mere clothes and other miscellaneous, could not have justified invasion of a constitutionally protected domain.

Mecenas vs. CA

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

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

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

Negros Navigation Co., Inc. vs. CA

The Duty to exercise due diligence includes the duty to take passengers or cargoes that are within the carrying capacity of the vessel. (Same Ruling with Mecenas)

Korean Airlines Co., LTD. vs. CA

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

           

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

Fortune Express Inc. vs. CA

Art. 1763 of the Civil Code provides that a common carrier is responsible for injuries suffered by a passenger on account of wilfull acts of other passengers, if the employees of the common carrier could have prevented the act through the exercise of the diligence of a good father of a family. In the present case, it is clear that because of the negligence of petitioner's employees, the seizure of the bus by Mananggolo and his men was made possible.

Despite warning by the Philippine Constabulary at Cagayan de Oro that the Maranaos were planning to take revenge on the petitioner by burning some of its buses and the assurance of petitioner's operation manager, Diosdado Bravo, that the necessary precautions would be taken, petitioner did nothing to protect the safety of its passengers. Had petitioner and its employees been vigilant they would not have failed to see that the malefactors had a large quantity of gasoline with them. Under the circumstances, simple precautionary measures to protect the safety of passengers, such as frisking passengers and inspecting their baggages, preferably with non-intrusive gadgets such as metal detectors, before allowing them on board could have been employed without violating the passenger's constitutional rights.

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

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

Gatchalian vs. Delim

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

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

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

Del Castillo vs. Jaymalin

Common carriers are responsible for the death of their passengers (Articles 1764 and 2206 of the Civil Code). This liability includes the loss of the earning capacity of the deceased. It appears proven that the defendant corporations failed to exercise the diligence that was their duty to observe according to Articles 1733 and 1755. The conductor was apprised of the fact that Mario del Castillo was deaf and dumb. With this knowledge the conductor should have taken extra-ordinary care for the safety of the said passenger. In this he failed.

Phil. Rabbit Bus Lines vs. IAC

The principle about "the last clear" chance, would call for application in a suit between the owners and drivers of the two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of the jeepney and its owners on the ground that the other driver was likewise guilty of negligence."

It is the rule under the substantial factor test that if the actor's conduct is a substantial factor in bringing about harm to another, the fact that the actor neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent him from being liable. The bus driver's conduct is not a substantial factor in bringing about harm to the passengers of the jeepney. It cannot be said that the bus was travelling at a fast speed when the accident occurred because the speed of 80 to 90 kilometers per hour, assuming such calculation to be correct, is yet within the speed limit allowed in highways.

Bustamante vs. CA

The doctrine, stated broadly, is that the negligence of the plaintiff does not preclude a recovery for the negligence of the defendant where it appears that the defendant, by exercising reasonable care and prudence, might have avoided injurious consequences to the plaintiff notwithstanding the plaintiff's negligence. In other words, the doctrine of last clear chance means that even though a person's own acts may have placed him in a position of peril, and an injury results, the injured person is entitled to recovery. As the doctrine is usually stated, a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding the negligent acts of his opponent or that of a third person imputed to the opponent is considered in law solely responsible for the consequences of the accident.

All premises considered, the Court is convinced that the respondent Court committed an error of law in applying the doctrine of last clear chance as between the defendants, since the case at bar is not a suit between the owners and drivers of the colliding vehicles but a suit brought by the heirs of the deceased passengers against both owners and drivers of the colliding vehicles. Therefore, the respondent court erred in absolving the owner and driver of the cargo truck from liability.

Lara vs. Valencia

The owner and driver of a vehicle owes to accommodation passengers or invited guests merely the duty to exercise reasonable care so that they may be transported safely to their destination. Thus, "The rule is established by weight of authority that the owner or operator of an automobile owes the duty to an invited guest to exercise reasonable care in its operation, and not unreasonably to expose him to danger and injury by increasing the hazard of travel. The owner of the vehicle in the case at bar is only required to observe ordinary care, and is not in duty bound to exercise extraordinary diligence as required by our law.

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

Necessito vs. Paras

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

Japan Airlines vs. CA

Accordingly, there is no question that when a party is unable to fulfill his obligation because of "force majeure," the general rule is that he cannot be held liable for damages for non-performance. Corollarily, when JAL was prevented from resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, whatever losses or damages in the form of hotel and meal expenses the stranded passengers incurred, cannot be charged to JAL. Yet it is undeniable that JAL assumed the hotel expenses of respondents for their unexpected overnight stay on June 15, 1991.

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

While JAL was no longer required to defray private respondents' living expenses during their stay in Narita on account of the fortuitous event, JAL had the duty to make the necessary arrangements to transport private respondents on the first available connecting flight to Manila. Petitioner JAL reneged on its obligation to look after the comfort and convenience of its passengers when it declassified private respondents from "transit passengers" to "new passengers" as a result of which private respondents were obliged to make the necessary arrangements themselves for the next flight to Manila.

Layugan vs. IAC

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

            Whether the cargo truck was parked along the road or on half the shoulder of the right side of the road would be of no moment taking into account the warning device consisting of the lighted kerosene lamp placed three or four meters from the back of the truck. But despite this warning which we rule as sufficient, the Isuzu truck driven by Daniel Serrano, an employee of the private respondent, still bumped the rear of the parked cargo truck. As a direct consequence of such accident the petitioner sustained injuries on his left forearm and left foot. It is clear therefore that the absence or want of care of Daniel Serrano has been established by clear and convincing evidence. It follows that the doctrine of Res ipsa loquitur is inapplicable, making the employer of the driver liable for the negligence of his employee.

La Mallorca vs. CA

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

It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment the passenger alights from the carrier's vehicle at a place selected by the carrier at the point of destination, but continues until the passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. And, what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances.

Aboitiz Shipping Co. vs. CA

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.

            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. Even if he had already disembarked an hour earlier, his presence in petitioner's premises was not without cause. The victim had to claim his baggage which was possible only one hour after the vessel arrived since it was admittedly standard procedure in the case of petitioner's vessels that the unloading operations shall start only after that time.

Mallari Sr. vs. CA

Clearly, the proximate cause of the collision resulting in the death of 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.

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.

Bayasen vs. CA

It is a well known physical tact that cars may skid on greasy or slippery roads, as in the instant case, without fault on account of the manner of handling the car. Skidding means partial or complete loss of control of the car under circumstances not necessarily implying negligence. It may occur without fault.

Under the particular circumstances of the instant case, the petitioner- driver who skidded could not be regarded as negligent, the skidding being an unforeseen event, so that the petitioner had a valid excuse for his departure from his regular course.

Cervantes vs. CA

Since the PAL agents are not privy to the said Agreement and petitioner knew that a written request to the legal counsel of PAL was necessary, he cannot use what the PAL agents did to his advantage. The said agents, acted without authority when they confirmed the flights of the petitioner. Under Article 1989 of the New Civil Code, the acts of an agent beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when the third person (herein petitioner) knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages from the agent, unless the latter undertook to secure the principal's ratification.

Calalas vs. CA

It is immaterial that the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions involving breach of contract. The doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between the parties, it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus created. Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those respecting the diligence required of common carriers with regard to the safety of passengers as well as the presumption of negligence in cases of death or injury to passengers.

In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are presumed to have been at fault or to have acted negligently unless they prove that they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof.

            The driver of jeepney did not carry “safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances" as required by Art. 1755. First, the jeepney was not properly parked, its rear portion being exposed about two meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle. The petitioner's driver took in more passengers than the allowed seating capacity of the jeepney. These are violations of the Land Transportation and Traffic Code. Therefore, there is no assumption of risk by the passenger.

Pestaño vs. Sumayang

In the case at bar, Pestaño, as a professional driver operating a public transport bus, should have anticipated that overtaking at a junction was a perilous maneuver and should thus have exercised extreme caution.

Under Articles 2180 and 2176 of the Civil Code, owners and managers are responsible for damages caused by their employees. When an injury is caused by the negligence of a servant or an employee, the master or employer is presumed to be negligent either in the selection or in the supervision of that employee. This presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and the supervision of its employee.

Gillaco vs. Manila Railroad

While a passenger is entitled to protection from personal violence by the carrier or its agents or employees, since the contract of transportation obligates the carrier to transport a passenger safely to his destination, the responsibility of the carrier extends only to those acts that the carrier could foresee or avoid through the exercise of the degree of care and diligence required of it. In the present case, the act of the train guard of the Manila Railroad Company in shooting the passenger (because of a personal grudge nurtured against the latter since the Japanese occupation) was entirely unforseeable by the Manila Railroad Co. The latter had no means to ascertain or anticipate that the two would meet, nor could it reasonably forsee every personal rancor that might exist between each one of its many employees and any one of the thousands of eventual passengers riding in its trains. The shooting in question was therefore "caso fortuito" within the definition of Art. 1105 of the old Civil Code (which is the law applicable), being both unforeseeable and inevitable under the given circumstances; and pursuant to established doctrine, the resulting breach of the company's contract of safe carriage with the deceased was excused thereby.

Maranan vs. Perez

The basis of the common carrier's liability under NCC for assaults on passengers committed by its drivers rests either on (1) the doctrine of respondeat superior or (2) the principle that it is the carrier's implied duty to transport the passenger safely.

Under the first, which is the minority view, the carrier is liable only when the act of the employee is within the scope of his authority and duty. It is not sufficient that the act be within the course of employment only. Under the second view, upheld by the majority and also by the later cases, it is enough that the assault happens within the course of the employee's duty. It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. The carrier's liability here is absolute in the sense that it practically secures the passengers from assaults committed by its own employees. Art. 1759, evidently follows the rule based on the second view.

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

PNR vs. CA

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

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

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

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

If the carrier’s employee is confronted with a sudden emergency, he is not held to the same degree of care he would otherwise, be required in the absence of such emergency.

By placing his left arm on the window, petitioner is guilty of contributory negligence. It cannot however relieve the carrier but can only reduce its liability (ART. 1762). It is a prevailing rule that it is negligence per se for passengers on a railroad to protrude any part of his body and that no recovery can be had for an injury.

Bachelor Express Inc vs. CA

The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. The sudden act of the passenger who stabbed another passenger in the bus is within the context of force majeure. However, in order that a common carrier may be absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure. The common carrier must still prove that it was not negligent in causing the injuries resulting from such accident. In this case, Bachelor was negligent.

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

Cariaga vs. LTB Co

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

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

Villa Rey Transit, Inc. vs. CA

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

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

Pan American World Airways vs. IAC

By refusing to accommodate plaintiff in said flight, defendant had willfully and knowingly violated the contract of carriage and failed to bring the plaintiff to her place of destination under its contract with plaintiff. Bad faith was also present. Self enrichment or fraternal interest and not personal ill will may have been the motive of defendant, but it is malice nevertheless. The fact that plaintiff was ordered out under some pretext in order to accommodate a white man in an airline owned by an American firm with a reputation for bumping off non- Caucasian to accommodate whites is very regrettable.

           

Defendant having breached its contract with plaintiff in bad faith, it is not error to have awarded exemplary damages. The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good . In view of it nature, it should be imposed in such amount as to sufficiently and effectively deter similar breach of contract in the future by defendant and other airlines.

An award of attorney's fees is also in order, having found bad faith on the part of defendant.

Soberano vs. MRR

In case of physical injuries, moral damages are recoverable only by the party injured and not by his next of kin, unless there is express statutory provision to the contrary. In this case it was Juana Soberano, not her husband Jose, who sustained the bodily injuries.

Attorneys fees may only be awarded when the defendant's act or omission has compelled the plaintiff to litigate with third persons or incur expenses to protect his interest, or when the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid, just and demandable claim. It will be observed that the defendant companies offered to settle the case by offering to the Soberanos the additional sum of P5,000. The Soberanos, however, rejected the offer and proceeded to court to recover damages in the total sum of P76,757.76.

Marchan vs. Mendoza

It is argued that this Court is without jurisdiction to adjudicate the exemplary damages since there was no allegation nor prayer, nor proof, nor counterclaim of error for the same by the respondents. It is to be observed however, that in the complaint, plaintiffs "prayed for such other and further relief as this Court may deem just and equitable." Now, since the body of the complaint sought to recover damages against the defendant-carrier wherein plaintiffs prayed for indemnification for the damages they suffered as a result of the negligence of the driver who is appellant's employee and since exemplary damages is intimately connected with general damages, plaintiffs may not be expected to single out by express term the kind of damages they are trying to recover against the defendant's carrier. Suffice it to state that when plaintiffs prayed in their complaint for such other relief and remedies that may be availed of under the premises, in effect, therefore, the court is called upon the exercise and use its discretion whether the imposition of punitive or exemplary damages even though not expressly prayed or pleaded in the plaintiffs' complaint. Exemplary damages may be imposed by way of example or correction only in addition, among others, to compensatory damages, but that they cannot be recovered as a matter of right, their determination depending upon the discretion of the court. If the amount of exemplary damages need not be proved, it need not also be alleged, and the reason is obvious because it is merely incidental or dependent upon what the court may award as compensatory damages.

De Caliston vs. Court of Appeals

The deletion of the P10,000.00 awarded for loss of pension is unjustified. Under Article 2206 of the Civil Code: The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos, even though there may have been mitigating circumstances. In addition:

(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the latter. .

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

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

Philippine Airlines vs. CA 185 SCRA 110

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

For the settlement of the issue at hand, there are enough applicable local laws and jurisprudence. Under Article 1764 and Article 2206(1) of the Civil Code, the award of damages for death is computed on the basis of the life expectancy of the deceased, not of his beneficiary.

Cachero vs. Manila Yellow Taxi Cab

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

The present case does not come under any of the exceptions enumerated in Article 2208 of the Civil Code, specially of paragraph 2 thereof, because defendant's failure to meet its responsibility was not the cause that compelled the plaintiff to litigate or to incur expenses to protect his interests. The present action was instituted because plaintiff demanded an exorbitant amount for moral damages and naturally the defendant did not and could not yield to such demand. This is neither a case that comes under paragraph 11 of said Article because the Lower Court did not deem it just and equitable to award any amount for attorney's fees, on which point this Court agrees.

Fores vs. Miranda

The exception to the basic rule of damages now under consideration is a mishap resulting in the death of a passenger, in which case Article 1764 makes the common carrier expressly subject to the rule of Art. 2206, that entitles the spouse, descendants and ascendants of the deceased passenger to "demand moral damages for mental anguish by reason of the death of the deceased". But the exceptional rule of Art. 1764 makes it all the more evident that where the injured passenger does not die, moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. We think it is clear that the mere carelessness of the carrier's driver does not per se constitute or justify an inference of malice or bad faith on the part of the carrier; and in the case at bar there is no other evidence of such malice to support the award of moral damages by the Court of Appeals. To award moral damages for breach of contract, therefore, without proof of bad faith or malice on the part of the defendant, as required by Art. 2220, would be to violate the clear provisions of the law, and constitute unwarranted judicial legislation.

Lopez vs. Pan American

As a proximate result of defendant's breach in bad faith of its contracts with plaintiffs, the latter suffered social humiliation, wounded feelings, serious anxiety and mental anguish. For plaintiffs were travelling with first class tickets issued by defendant and yet they were given only the tourist class. At stop-overs, they were expected to be among the first-class passengers by those awaiting to welcome them, only to be found among the tourist passengers. It may not be humiliating to travel as tourist passengers; it is humiliating to be compelled to travel as such, contrary to what is rightfully to be expected from the contractual undertaking. Senator Lopez was then Senate President Pro Tempore. International carriers like defendant know the prestige of such an office. And he was former Vice-President of the Philippines. Senator Lopez was going to the United States to attend a private business conference of the Binalbagan-Isabela Sugar Company; but his aforesaid rank and position were by no means left behind, and in fact he had a second engagement awaiting him in the United States: a banquet tendered by Filipino friends in his honor as Senate President Pro Tempore. For the moral damages sustained by him, therefore, an award of P100,000.00 is appropriate.

A written contract for attorney's services shall control the amount to be paid therefor unless found by the court to be unconscionable or unreasonable. A consideration of the attorney’s prominence as well as comparison of the defense counsel’s fees could well establish the reasonableness of the attorney’s fees, such as in this case.

Ortigas Jr. vs. Lufthansa

It is Our considered view that when it comes to contracts of common carriage, inattention and lack of care on the part of the carrier resulting in the failure of the passenger to be accommodated in the class contracted for amounts to bad faith or fraud which entitles the passenger to the award of moral damages in accordance with Article 2220 of the Civil Code. But in the instant case, the breach appears to be of graver nature, since the preference given to the Belgian passenger over plaintiff was done willfully and in wanton disregard of plaintiff's rights and his dignity as a human being and as a Filipino, who may not be discriminated against with impunity. What worsened the situation of was that Lufthansa succeeded in keeping Ortigas as its passenger by assuring him that he would be given first class accommodation at the next stations, the proper arrangements therefor having been made already, when in truth such was not the case.

A passenger contracts for first class accommodations for many reasons peculiar to himself and pays a higher price therefor, and it is certainly not for the airplane to say later, after it deprives him of his space in order to favor another passenger, that economy class is anyway just as good as first class.

We have uniformly upheld the right of a passenger to damages in all cases wherein, after having contracted and paid for first class accommodations duly confirmed and validated, he is transferred over his objection to economy, class, which he has to take in order to be able to arrive at his destination on his scheduled time.

Philippine Rabbit Bus Lines vs. Esguerra

Moral damages are not recoverable in actions for damages predicated on a breach of the contract of transportation, as in the instant case, in view of the provisions of Articles 2219 and 2220 of the New Civil Code. The exceptions are (1) where the mishap results in the death of a passenger, and (2) where it is proved that the carrier was guilty of fraud or bad faith, even if death does not result. The Court of Appeals found that the two vehicles sideswiped each other at the middle of the road. In other words. both vehicles were in their respective lanes and that they did not invade the lane of the other. It cannot be said therefore that there was fraud or bad faith on the part of the carrier's driver. This being the case, no moral damages are recoverable.

Trans World Airlines vs. CA

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, the private respondent was a practicing lawyer, a senior partner of a big law firm in Manila. He was a director of several companies and was active in civic and social organizations in the Philippines. Considering the circumstances of this case and the social standing of private respondent in the community, he is entitled to the award of moral and exemplary damages.

Armovit vs. CA

The gross negligence committed by private respondent(Northwest Airlines) in the issuance of the tickets by the erroneous entry of the date of departure and without changing or correcting the error when the tickets were presented for re-confirmation and the manner by which petitioners were rudely informed that they were bumped off are clear indicia of such malice and bad faith and establish that private respondent committed a breach of contract which entitles petitioners to moral damages.

The deletion of the nominal damages by the appellate court is well-taken since there is an award of actual damages. Nominal damages cannot co-exist with actual or compensatory damages.

Philippine Airlines vs. CA 106 SCRA 391

            There was gross negligence by PAL for allowing Capt. Bustamante to fly on the that fateful day of the accident, even if he was sick, having tumor on his nose. No one will certify the fitness to fly a plane of one suffering from the disease. One month prior to the crash-landing, when the pilot was preparing to land in Daet, private respondent warned him that they were not in the vicinity of Daet but above the town of Ligao. The dizziness, headaches and general debility of private respondent were after-effects of the crash-landing. And therefore there is causal connection between the accident and said after-effects. The negligence of PAL is clearly a quasi-delict and therefore Art. 2219(2) is applicable, justifying the recovery of moral damages. Even from the standpoint of the petitioner that there is an employee-employer relationship between it and private respondent arising from the contract of employment, private respondent is still entitled to moral damages in view of the finding of bad faith or malice, applying the provisions of Article 2220.

Prudenciado vs. Alliance Transport

Dra. Prudenciado suffered a brain concussion which although mild can admittedly produce the effects complained of by her and that these symptoms can develop after several years and can lead to some, serious handicaps or predispose the patient to other sickness. Being a doctor by profession, her fears can be more real and intense than an ordinary person. Otherwise stated, she is undeniably a proper recipient of moral damages which are proportionate to her suffering.

            As to exemplary damages, Article 2231 of the Civil Code provides: “In quasi-delicts, exemplary damages may be granted if the defendant acted with grave negligence.” The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for the public good. Respondent driver was running at high speed after turning to the right along Taft Ave. coming from Ayala Boulevard, considering that the traffic was clear. Failing to notice petitioner's car, he failed to apply his brakes and did not even swerve to the right to avoid the collision. Much more, it was raining that time and the roads are slippery. The frequent incidence of accidents of this nature caused by taxi drivers indeed demands corrective measures.