torts negligence

7/31/2019 Torts Negligence

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Negligence

Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 76093 March 21, 1989

AIR FRANCE, petitioner,

vs.

THE COURT OF APPEALS AND NARCISO O. MORALES, respondents.

Siguion Reyna, Montecillo & Ongsiako for petitioner.

Morales & Joyas Law Office for private respondent.

PADILLA, J.:

This is a petition for review on certiorari of the decision ** of the Court of Appeals,

dated 1986, in CA-G.R. CV No. 69875, entitled "Narciso Morales vs. Air

France,"dismissing herein petitioner's appeal from the adverse ruling of the trial court

(Branch 33, CFI of Rizal, Kalookan City) *** and the latter's denial of its motion for

reconsideration. The respondent Court of Appeals likewise denied petitioner's motion

for reconsideration of its decision in a resolution dated 25 September 1986.

In reviewing the records, we find:

Sometime in October 1977, private respondent Narciso Morales thru his

representative, Ms. Janet Tolentino, purchased an airline ticket from Aspac

Management Corporation, petitioner's General Sales Agent in Makati, for P 9,426.00

plus P 1,413.90 travel tax, of which P 413.90 were later refunded to Ms. Tolentino.

The itinerary covered by the ticket included several cities, with certain segments

thereof restricted by markings of "non endorsable' and 'valid on AF (meaning Air

France) only', as herein specified:

CARRIER EXPRESS

ITINERARY SPECIFIED RESTRICTIONS

New York/Paris Air France NONENDORSABLE VALID ON AF ONLY

Paris/Stockholm Air France NONENDORSABLE VALID ON AF ONLY

Stockholm/Copenhagen None

Copenhagen/London None

London/Amsterdam None

Amsterdam/Hamburg None

Humburg/Frankfurt None

Frankfurt/Paris Air France NONENDORSABLE VALID ON AF ONLY

Paris/Geneva Air France NONENDORSABLE VALID ON AF ONLY

Geneva/Madrid None

Madrid/Nice Air France NONENDORSABLE VALID ON AF ONLY

Nice/Rome Air France NONENDORSABLE VALID ON AF ONLY

Rome/Athens None

Athens/Tel Aviv None

Tel Avive/Bangkok Air France NONENDORSABLE VALID ON AF ONLY

Bangkok/Manila Air France NONENDORSABLE VALID ON AF ONLY 1

While in New York, U.S.A. on 3 November 1977, private respondent Morales obtained

three (3) medical certificates (Exhibits G, G-1, G-2) attesting to ear an infection which

necessitated medical treatment. From New York, he flew to Paris, Stockholm and then

Copenhagen where he made representations with petitioner's office to shorten his trip


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by deleting some of the cities in the itinerary. Respondent Morales was informed that,

as a matter of procedure, confirmation of petitioner's office in Manila (as ticketing

office) must be secured before shortening of the route (already paid for). Air France in

Amsterdam telexed AF Manila requesting for rerouting of the passenger to

Amsterdam, Hamburg, Geneva, Rome, Hongkong, Manila. 2

As there was no immediate response to the telex, respondent proceeded to Hamburg

where he was informed of AF Manila's negative reply. After reiterating his need to

flying home on a shorter route due to his ear infection, and presentation of supportingmedical certificates, again, the airline office made the necessary request to Manila on

23 November 1977 for a Hamburg, Paris, Geneva, Rome, Paris, Hongkong and Manila

route. Still, the request was denied. Despite respondent as protest and offer to pay any

fare difference, petitioner did not relent in its position. Respondent, therefore, had to

buy an entirely new set of tickets, paying 1,914 German marks for the homeward

route, namely:

Itinerary Carrier Date Reservation

Hamburg/Frankfurt LH 26 Nov. OK (Lufthansa)

Frankfurt/Geneva SR 26 Nov. OK (Swissair)

Geneva/Rome AZ 29 Nov. OK (Alitalia)

Rome/Hongkong BA 02 Dec. OK (British Airways)

Hongkong/Manila PR Open Open (Philippine Airlines) 3

Upon arrival in Manila, respondent sent a letter-complaint to Air France dated 20

December 1977 thru Aspac Management Corporation. Respondent Morales was

advised to surrender the unused flight coupons for a refund of its value, but he kept

the same and, instead, filed a complaint for breach of contract of carriage and

damages.

CFI Judge Marcelino Sayo found Air France in evident bad faith for violation of the

contract of carriage, aggravated by the threatening attitude of its employees in

Hamburg. Considering the social and economic standing of respondent, who is

chairman of the board of directors of a multi-million corporation and a member of

several civic and business organizations, an award of moral and exemplary damages, in

addition to the actual damages incurred, was deemed proper under the circumstances.

The dispositive part of the CFI decision states:

WHEREFORE, this Court hereby renders judgment for the plaintiff

and orders the defendant to pay to the plaintiff the sum of 1,914

German Marks, in its equivalent in Philippine Peso, as actual

damages, the sum of P 1,000,000.00 as moral damages, and the

further sum of P 800,000.00 as exemplary damages, with legal

interest thereon from date of the filing of the complaint until fully

paid, plus the sum equal to 20% thereof as attorney's fees, with costs

against the plaintiff. 4

On appeal to the Court of Appeals, the award of damages was modified as follows:

ACCORDINGLY, the judgment appealed from is hereby modified so

that it will read as follows: Judgment is hereby rendered in favor of

the plaintiff against the defendant ordering ther defendant to pay to

said plaintiff the following.

(1) 1,914 German Marks in its equivalent in Philippine peso at

prevailing rate of exchange as actual damages, with legal interest

thereon from the date of the filing of the complaint until fully paid;

(2) P 500,000.00, as moral damages;

(3) P 150,000.00, as exemplary damages; and

(4) 5% of the amount of actual, moral and exemplary damages which

are recoverable, as attorney's fees. 5

Questioning the factual findings of the respondent court, petitioner comes to this court

for review citing three (3) errors:

1. The conclusion that there is a breach of contract is premised on a

misapprehension of facts.

2. Failure to apply the doctrine of avoidable consequence in the

present case.

3. Award of exorbitant damages and attorney's fees.

After considering respondent's comment, the Court resolved to give due courses to the

petition, and required the parties to file their respective memoranda. Complying with


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the resolution of 26 October 1987, private respondent filed his reply memorandum on

17 December 1987. This is the last pleading on record.

While this Court is not a trier of facts, yet, when the findings of respondent court are

without citation of specific evidence on which they are based, there is sufficient reason

for the Court to review the appellate court's decision.6

The respondent court's ruling that there was breach of contract of carriage is premised

on petitioner's refusal to re-route respondent and, in effect, requiring him to purchase

a new set of tickets. Petitioner refutes this conclusion, claiming that the original ticket

was discountedand non-endorsableon certain segments. Eventually respondent flew

on his chosen route with different airlines.

Under the factual milieu, was there really a breach of contract of carriage on the part

of the petitioner, as to justify the award to private respondent of actual, moral and

exemplary damages? We find none.

International Air Transportation Association (IATA) Resolution No. 275 e, 2., special

note reads: "Where a fare is restricted and such restrictions are not clearly evident

from the required entries on the ticket, such restrictions may be written, stamped orreprinted in plain language in the Endorsement/Restrictions" box of the applicable

flight coupon(s); or attached thereto by use of an appropriate notice." 7 Voluntary

changes to tickets, 8 while allowable, are also covered by (IATA) Resolution No. 1013,

Art. II, which provides: "1. changes to the ticket requested by the passenger will be

subject to carriers regulations.

Private respondent wanted a rerouting to Hamburg, Geneva, Rome, Hongkong and

Manilas 9 which shortened the original itinerary on the ticket issued by AF Manila

through ASPAC, its general sales agent. Considering the original restrictions on the

ticket, it was not unreasonable for Air France to deny the request.

Besides, a recurring ear infection was pleaded as reason necessitating urgent return to

Manila. Assumingarguendo a worsening pain or discomfort, private respondent

appears to have still proceeded to four (4) other cities covering a period of at least six

(6) days and leaving open his date of departure from Hongkong to Manila.10And, even

if he claimed to have undergone medical examination upon arrival in Manila, no

medical certificate was presented. He failed to even remember his date of arrival in

Manila.

With a claim for a large amount of damages, the Court finds it unsual for respondent, a

lawyer, to easily forget vital information to substantiate his plea. It is also essential

before an award of damages that the claimant must satisfactorily prove during the trial

the existence of the factual basis of the damages and its causal connection to

defendant's acts.11

In KLM Royal Dutch Airlines v. CA,12 the Court observed-

.... As noted by the Court of Appeals that condition was printed in

letters so small that one would have to use a magnifying glass to read

the words. Under the circumstances, it would be unfair and

inequitable to charge the respondents with automatic knowledge or

notice of the said condition so as to preclude any doubt that it was

fairly and freely agreed upon by the respondents when they accepted

the passage tickets issued to them by the KLM. As the airline which

issued those tickets with the knowledge that the respondents would

be flown on the various legs of their journey by different air

carriers, the KLM was chargeable with the duty and responsibility of

specifically informing the respondents of conditions prescribed in their

tickets or in the very least, to ascertain that the respondent read them

before they accepted their passage tickets. A thorough search of the

records, however, inexplicably fails to show that any effort was

exerted by the KLM officials or employees to discharge in a propermanner this responsibility to the respondents. Consequently, We

hold that the respondents cannot be bound by the provision in

question by which KLM unilaterally assumed the role of a mere

ticket-issuing agent for other airlines and limited its liability only to

untoward occurrences on its own lines. (Emphasis supplied)

Unlike in the KLM case where the breach of contract was aggravated by the

discourteous and arbitrary conduct of an official of the Aer Lingus which the KLM had

engaged to transport the respondents, here. Air France employees in Hamburg

informed private respondent that his tickets were partly stamped "non-endorsable"

and "valid on Air France only."13 Mere refusal to accede to the passenger's wishesdoes not necessarily translate into damages in the absence of bad faith.14 To our mind,

respondent has failed to show wanton, malevolent or reckless misconduct imputable

to petitioner in its refusal to re-route.

Air France Manila acted upon the advise of ASPAC in denying private respondent's

request. There was no evident bad faith when it followed the advise not to authorize

rerouting.15 At worst, the situation can be considered a case of inadvertence on the

part of ASPAC in not explaining the non-endorsable character of the ticket. Of

importance, however, is the fact that private respondent is a lawyer, and the

restriction box 16 clearly indicated the non-endorsable character of the ticket.


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Omissions by ordinary passengers may be condoned but more is expected of members

of the bar who cannot feign ignorance of such limitations and restrictions. An award of

moral and exemplary damages cannot be sustained under the circumstances, but

petitioner has to refund the unused coupons in the Air France ticket to the private

respondent.

WHEREFORE, the judgement appealed from is REVERSED and SET ASIDE. Petitioner is

ordered, however, to refund to private respondent the value of the unused coupons in

the passenger's ticket issued to him by the petitioner. No costs.

SO ORDERED.

Melencio-Herrera, (Chairperson), Paras, Sarmiento and Regalado JJ., concur:


SUPREME COURT

Manila

EN BANC

G.R. No. L-21438 September 28, 1966

AIR FRANCE, petitioner,vs.

RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.

Lichauco, Picazo and Agcaoili for petitioner.

Bengzon Villegas and Zarraga for respondent R. Carrascoso.

SANCHEZ,J.:

The Court of First Instance of Manila1

sentenced petitioner to pay respondent

Rafael Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary

damages; P393.20 representing the difference in fare between first class and tourist

class for the portion of the trip Bangkok-Rome, these various amounts with interest at

the legal rate, from the date of the filing of the complaint until paid; plus P3,000.00 forattorneys' fees; and the costs of suit.

On appeal,2

the Court of Appeals slightly reduced the amount of refund on

Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the appealed

decision "in all other respects", with costs against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as " fully supported by the evidence of

record", are:

Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left

Manila for Lourdes on March 30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent,

Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket from

Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", but at

Bangkok, the Manager of the defendant airline forced plaintiff to vacate the "first

class" seat that he was occupying because, in the words of the witness Ernesto G.

Cuento, there was a "white man", who, the Manager alleged, had a "better right" to

the seat. When asked to vacate his "first class" seat, the plaintiff, as was to be

expected, refused, and told defendant's Manager that his seat would be taken over his

dead body; a commotion ensued, and, according to said Ernesto G. Cuento, "many of

the Filipino passengers got nervous in the tourist class; when they found out that Mr.

Carrascoso was having a hot discussion with the white man [manager], they came allacross to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man"

(Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave his "first

class" seat in the plane.3

1. The trust of the relief petitioner now seeks is that we review "all the

findings"4

of respondent Court of Appeals. Petitioner charges that respondent court

failed to make complete findings of fact on all the issues properly laid before it. We are

asked to consider facts favorable to petitioner, and then, to overturn the appellate

court's decision.

Coming into focus is the constitutional mandate that "No decision shall be

rendered by any court of record without expressing therein clearly and distinctly the

facts and the law on which it is based".

5

This is echoed in the statutory demand that ajudgment determining the merits of the case shall state "clearly and distinctly the facts

and the law on which it is based";6

and that "Every decision of the Court of Appeals

shall contain complete findings of fact on all issues properly raised before it".7

A decision with absolutely nothing to support it is a nullity. It is open to direct

attack.8

The law, however, solely insists that a decision state the "essential ultimate

facts" upon which the court's conclusion is drawn.9

A court of justice is not hidebound

to write in its decision every bit and piece of evidence10

presented by one party and

the other upon the issues raised. Neither is it to be burdened with the obligation "to

specify in the sentence the facts" which a party "considered as proved".11

This is but a

part of the mental process from which the Court draws the essential ultimate facts. A

decision is not to be so clogged with details such that prolixity, if not confusion, may

result. So long as the decision of the Court of Appeals contains the necessary facts towarrant its conclusions, it is no error for said court to withhold therefrom "any specific

finding of facts with respect to the evidence for the defense". Because as this Court

well observed, "There is no law that so requires".12

Indeed, "the mere failure to specify

(in the decision) the contentions of the appellant and the reasons for refusing to

believe them is not sufficient to hold the same contrary to the requirements of the

provisions of law and the Constitution". It is in this setting that in Manigque, it was held

that the mere fact that the findings "were based entirely on the evidence for the

prosecution without taking into consideration or even mentioning the appellant's side

in the controversy as shown by his own testimony", would not vitiate the

judgment.13

If the court did not recite in the decision the testimony of each witness

for, or each item of evidence presented by, the defeated party, it does not mean that


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desirable. Such is the case here. The lower courts refused to believe the oral evidence

intended to defeat the covenants in the ticket.

The foregoing are the considerations which point to the conclusion that there are

facts upon which the Court of Appeals predicated the finding that respondent

Carrascoso had a first class ticket and was entitled to a first class seat at Bangkok,

which is a stopover in the Saigon to Beirut leg of the flight.27

We perceive no "welter of

distortions by the Court of Appeals of petitioner's statement of its position", as charged

by petitioner.28

Nor do we subscribe to petitioner's accusation that respondent

Carrascoso "surreptitiously took a first class seat to provoke an issue".29

And thisbecause, as petitioner states, Carrascoso went to see the Manager at his office in

Bangkok "to confirm my seat and because from Saigon I was told again to see the

Manager".30

Why, then, was he allowed to take a first class seat in the plane at

Bangkok, if he had no seat? Or, if another had a better right to the seat?

4. Petitioner assails respondent court's award of moral damages. Petitioner's

trenchant claim is that Carrascoso's action is planted upon breach of contract; that to

authorize an award for moral damages there must be an averment of fraud or bad

faith;31

and that the decision of the Court of Appeals fails to make a finding of bad

faith. The pivotal allegations in the complaint bearing on this issue are:

3. That ... plaintiff entered into a contractof air carriage with the Philippine Air Lines

for a valuable consideration, the latter acting as general agents for and in behalf of thedefendant, under which said contract, plaintiff was entitled to, as defendant agreed to

furnish plaintiff, First Class passage on defendant's plane during the entire duration of

plaintiff's tour of Europe with Hongkong as starting point up to and until plaintiff's

return trip to Manila, ... .

4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon

to Bangkok, defendant furnished to the plaintiff First Class accommodation but only

after protestations, arguments and/or insistence were made by the plaintiff with

defendant's employees.

5. That finally, defendant failed to provide First Class passage, but instead furnished

plaintiff only TouristClass accommodations from Bangkok to Teheran and/or

Casablanca, ... the plaintiff has been compelledby defendant's employees to leave the

First Class accommodation berths at Bangkok after he was already seated.6. That consequently, the plaintiff, desiring no repetition of the inconvenience and

embarrassments brought by defendant's breach of contract was forced to take a Pan

American World Airways plane on his return trip from Madrid to Manila.32

x x x x x x x x x

2. That likewise, as a result of defendant's failure to furnish First Class

accommodations aforesaid, plaintiff suffered inconveniences, embarrassments, and

humiliations, thereby causing plaintiff mental anguish, serious anxiety, wounded

feelings, social humiliation, and the like injury, resulting in moral damages in the

amount of P30,000.00.33

x x x x x x x x x

The foregoing, in our opinion, substantially aver: First, That there was a contract

to furnish plaintiff a first class passage covering, amongst others, the Bangkok-Teheran

leg; Second, That said contract was breached when petitioner failed to furnish first

class transportation at Bangkok; and Third, that there was bad faith when petitioner's

employee compelled Carrascoso to leave his first class accommodation berth "after he

was already, seated"and to take a seat in the tourist class, by reason of which he

suffered inconvenience, embarrassments and humiliations, thereby causing him

mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in

moral damages. It is true that there is no specific mention of the term bad faith in thecomplaint. But, the inference of bad faith is there, it may be drawn from the facts and

circumstances set forth therein.34

The contract was averred to establish the relation

between the parties. But the stress of the action is put on wrongful expulsion.

Quite apart from the foregoing is that (a) right the start of the trial, respondent's

counsel placed petitioner on guard on what Carrascoso intended to prove: That while

sitting in the plane in Bangkok, Carrascoso wasoustedby petitioner's manager who

gave his seat to a white man;35

and (b) evidence of bad faith in the fulfillment of the

contract was presented without objection on the part of the petitioner. It is, therefore,

unnecessary to inquire as to whether or not there is sufficient averment in the

complaint to justify an award for moral damages. Deficiency in the complaint, if any,

was cured by the evidence. An amendment thereof to conform to the evidence is noteven required.36

On the question of bad faith, the Court of Appeals declared:

That the plaintiff was forced out of his seat in the first class compartment of the

plane belonging to the defendant Air France while at Bangkok, and was transferred to

the tourist class not only without his consent but against his will, has been sufficiently

established by plaintiff in his testimony before the court, corroborated by the

corresponding entry made by the purser of the plane in his notebook which notation

reads as follows:

"First-class passenger was forced to go to the tourist class against his will, and

that the captain refused to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-

passenger. The captain of the plane who was asked by the manager of defendant

company at Bangkok to intervene even refused to do so. It is noteworthy that no oneon behalf of defendant ever contradicted or denied this evidence for the plaintiff. It

could have been easy for defendant to present its manager at Bangkok to testify at the

trial of the case, or yet to secure his disposition; but defendant did neither.37

The Court of appeals further stated

Neither is there evidence as to whether or not a prior reservation was made by

the white man. Hence, if the employees of the defendant at Bangkok sold a first-class

ticket to him when all the seats had already been taken, surely the plaintiff should not

have been picked out as the one to suffer the consequences and to be subjected to the

humiliation and indignity of being ejected from his seat in the presence of others.

Instead of explaining to the white man the improvidence committed by defendant's

employees, the manager adopted the more drastic step of ousting the plaintiff who


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was then safely ensconsced in his rightful seat. We are strengthened in our belief that

this probably was what happened there, by the testimony of defendant's witness

Rafael Altonaga who, when asked to explain the meaning of the letters "O.K."

appearing on the tickets of plaintiff, said "that the space is confirmed for first class.

Likewise, Zenaida Faustino, another witness for defendant, who was the chief of the

Reservation Office of defendant, testified as follows:

"Q How does the person in the ticket-issuing office know what reservation the

passenger has arranged with you?

A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)In this connection, we quote with approval what the trial Judge has said on this

point:

Why did the, using the words of witness Ernesto G. Cuento, "white man" have a

"better right" to the seat occupied by Mr. Carrascoso? The record is silent. The

defendant airline did not prove "any better", nay, any right on the part of the "white

man" to the "First class" seat that the plaintiff was occupying and for which he paid and

was issued a corresponding "first class" ticket.

If there was a justified reason for the action of the defendant's Manager in

Bangkok, the defendant could have easily proven it by having taken the testimony of

the said Manager by deposition, but defendant did not do so; the presumption is that

evidence willfully suppressed would be adverse if produced [Sec. 69, par (e), Rules ofCourt]; and, under the circumstances, the Court is constrained to find, as it does find,

that the Manager of the defendant airline in Bangkok not merely asked but threatened

the plaintiff to throw him out of the plane if he did not give up his "first class" seat

because the said Manager wanted to accommodate, using the words of the witness

Ernesto G. Cuento, the "white man".38

It is really correct to say that the Court of Appeals in the quoted portion first

transcribed did not use the term "bad faith". But can it be doubted that the recital of

facts therein points to bad faith? The manager not only prevented Carrascoso from

enjoying his right to a first class seat; worse, he imposed his arbitrary will; he forcibly

ejected him from his seat, made him suffer the humiliation of having to go to the

tourist class compartment - just to give way to another passenger whose right thereto

has not been established. Certainly, this is bad faith. Unless, of course, bad faith hasassumed a meaning different from what is understood in law. For, "bad faith"

contemplates a "state of mind affirmatively operating with furtive design or with some

motive of self-interest or will or for ulterior purpose."39

And if the foregoing were not yet sufficient, there is the express finding ofbad

faith in the judgment of the Court of First Instance, thus:

The evidence shows that the defendant violated its contract of transportation

with plaintiff in bad faith, with the aggravating circumstances that defendant's

Manager in Bangkok went to the extent of threatening the plaintiff in the presence of

many passengers to have him thrown out of the airplane to give the "first class" seat

that he was occupying to, again using the words of the witness Ernesto G. Cuento, a

"white man" whom he (defendant's Manager) wished to accommodate, and the

defendant has not proven that this "white man" had any "better right" to occupy the

"first class" seat that the plaintiff was occupying, duly paid for, and for which the

corresponding "first class" ticket was issued by the defendant to him.40

5. The responsibility of an employer for the tortious act of its employees need not

be essayed. It is well settled in law.41

For the willful malevolent act of petitioner's

manager, petitioner, his employer, must answer. Article 21 of the Civil Code says:

ART. 21. Any person who willfully causes loss or injury to another in a manner

that is contrary to morals, good customs or public policy shall compensate the latter

for the damage.In parallel circumstances, we applied the foregoing legal precept; and, we held

that upon the provisions of Article 2219 (10), Civil Code, moral damages are

recoverable.42

6. A contract to transport passengers is quite different in kind and degree from

any other contractual relation.43

And this, because of the relation which an air-carrier

sustains with the public. Its business is mainly with the travelling public. It invites

people to avail of the comforts and advantages it offers. The contract of air carriage,

therefore, generates a relation attended with a public duty. Neglect or malfeasance of

the carrier's employees, naturally, could give ground for an action for damages.

Passengers do not contract merely for transportation. They have a right to be

treated by the carrier's employees with kindness, respect, courtesy and dueconsideration. They are entitled to be protected against personal misconduct, injurious

language, indignities and abuses from such employees. So it is, that any rule or

discourteous conduct on the part of employees towards a passenger gives the latter an

action for damages against the carrier.44

Thus, "Where a steamship company45

had accepted a passenger's check, it was a

breach of contract and a tort, giving a right of action for its agent in the presence of

third persons to falsely notify her that the check was worthless and demand payment

under threat of ejection, though the language used was not insulting and she was not

ejected."46

And this, because, although the relation of passenger and carrier is

"contractual both in origin and nature" nevertheless "the act that breaks the contract

may be also a tort".47

And in another case, "Where a passenger on a railroad train,

when the conductor came to collect his fare tendered him the cash fare to a pointwhere the train was scheduled not to stop, and told him that as soon as the train

reached such point he would pay the cash fare from that point to destination, there

was nothing in the conduct of the passenger which justified the conductor in using

insulting language to him, as by calling him a lunatic,"48

and the Supreme Court of

South Carolina there held the carrier liable for the mental suffering of said

passenger.1awphl.nt

Petitioner's contract with Carrascoso is one attended with public duty. The stress

of Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is a

violation of public duty by the petitioner air carrier a case ofquasi-delict. Damages

are proper.

7. Petitioner draws our attention to respondent Carrascoso's testimony, thus


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Q You mentioned about an attendant. Who is that attendant and purser?

A When we left already that was already in the trip I could not help it. So one of

the flight attendants approached me and requested from me my ticket and I said,

What for? and she said, "We will note that you transferred to the tourist class". I said,

"Nothing of that kind. That is tantamount to accepting my transfer." And I also said,

"You are not going to note anything there because I am protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?A Well, the seats there are so close that you feel uncomfortable and you don't have

enough leg room, I stood up and I went to the pantry that was next to me and the

purser was there. He told me, "I have recorded the incident in my notebook." He read

it and translated it to me because it was recorded in French "First class passenger

was forced to go to the tourist class against his will, and that the captain refused to

intervene."

Mr. VALTE

I move to strike out the last part of the testimony of the witness because the best

evidence would be the notes. Your Honor.

COURT

I will allow that as part of his testimony.

49

Petitioner charges that the finding of the Court of Appeals that the purser made

an entry in his notebook reading "First class passenger was forced to go to the tourist

class against his will, and that the captain refused to intervene" is predicated upon

evidence [Carrascoso's testimony above] which is incompetent. We do not think so.

The subject of inquiry is not the entry, but the ouster incident. Testimony on the entry

does not come within the proscription of the best evidence rule. Such testimony is

admissible.49a

Besides, from a reading of the transcript just quoted, when the dialogue

happened, the impact of the startling occurrence was still fresh and continued to be

felt. The excitement had not as yet died down. Statements then, in this environment,

are admissible as part of the res gestae.50

For, they grow "out of the nervous

excitement and mental and physical condition of the declarant". 51 The utterance of thepurser regarding his entry in the notebook was spontaneous, and related to the

circumstances of the ouster incident. Its trustworthiness has been guaranteed.52

It

thus escapes the operation of the hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee of

petitioner. It would have been an easy matter for petitioner to have contradicted

Carrascoso's testimony. If it were really true that no such entry was made, the

deposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in

evidence.

8. Exemplary damages are well awarded. The Civil Code gives the court ample

power to grant exemplary damages in contracts and quasi- contracts. The only

condition is that defendant should have "acted in a wanton, fraudulent, reckless,

oppressive, or malevolent manner."53

The manner of ejectment of respondent

Carrascoso from his first class seat fits into this legal precept. And this, in addition to

moral damages.54

9. The right to attorney's fees is fully established. The grant of exemplary

damages justifies a similar judgment for attorneys' fees. The least that can be said is

that the courts below felt that it is but just and equitable that attorneys' fees be

given.55

We do not intend to break faith with the tradition that discretion well

exercised as it was here should not be disturbed.10. Questioned as excessive are the amounts decreed by both the trial court and

the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of

exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing these amounts

is primarily with the trial court.56

The Court of Appeals did not interfere with the same.

The dictates of good sense suggest that we give our imprimatur thereto. Because, the

facts and circumstances point to the reasonableness thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer

from reversible error. We accordingly vote to affirm the same. Costs against petitioner.

So ordered.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro,

JJ., concur.Bengzon, J.P., J., took no part.


SUPREME COURT

Manila

EN BANC

G.R. No. L-7664 August 29, 1958

MR. AND MRS. AMADOR C. ONG, plaintiffs-appellants,

vs.

METROPOLITAN WATER DISTRICT, defendant-appellee.

Tomas Tria Tirona for appellants.

Government Corporate Counsel Ambrosio Padilla and Juan C. Jimenez for appellee.BAUTISTA ANGELO,J.:

Plaintiffs spouses seek to recover from defendant, a government-owned corporation,

the sum of P50,000 as damages, P5,000 as funeral expenses, and P11,000 as attorneys'

fees, for the death of their son Dominador Ong in one of the swimming pools operated

by defendant.

Defendant admits the fact that plaintiffs' son was drowned in one of its swimming

pools but avers that his death was caused by his own negligence or by unavoidable

accident. Defendant also avers that it had exercised due diligence in the selection of,

and supervision over, its employees and that it had observed the diligence required by

law under the circumstances.


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After trial, the lower court found that the action of plaintiffs is untenable and

dismissed the complaint without pronouncement as to costs. Plaintiffs took the case on

appeal directly to this Court because the amount involved exceeds the sum of P50,000.

Defendant owns and operates three recreational swimming pools at its Balara filters,

Diliman, Quezon City, to which people are invited and for which a nominal fee of P0.50

for adults and P0.20 for children is charged. The main pool it between two small pools

of oval shape known as the "Wading pool" and the "Beginners Pool." There are diving

boards in the big pools and the depths of the water at different parts are indicated by

appropriate marks on the wall. The care and supervision of the pools and the usersthereof is entrusted to a recreational section composed of Simeon Chongco as chief,

Armando Rule, a male nurse, and six lifeguards who had taken the life-saving course

given by the Philippine Red Cross at the YMCA in Manila. For the safety of its patrons,

defendant has provided the pools with a ring buoy, toy roof, towing line, saving kit and

a resuscitator. There is also a sanitary inspector who is in charge of a clinic established

for the benefit of the patrons. Defendant has also on display in a conspicuous place

certain rules and regulations governing the use of the pools, one of which prohibits the

swimming in the pool alone or without any attendant. Although defendant does not

maintain a full-time physician in the swimming pool compound, it has however a nurse

and a sanitary inspector ready to administer injections or operate the oxygen

resuscitator if the need should arise.

In the afternoon of July 5, 1952, at about 1:00 o'clock, Dominador Ong, a 14-year old

high school student and boy scout, and his brothers Ruben and Eusebio, went to

defendant's swimming pools. This was not the first time that the three brothers had

gone to said natatorium for they had already been there four or five times before. They

arrived at the natatorium at about 1:45 p.m. After paying the requisite admission fee,

they immediately went to one of the small pools where the water was shallow. At

about 4:35 p.m., Dominador Ong told his brothers that he was going to the locker

room in an adjoining building to drink a bottle of coke. Upon hearing this, Ruben and

Eusebio went to the bigger pool leaving Dominador in the small pool and so they did

not see the latter when he left the pool to get a bottle of coke. In that afternoon, there

were two lifeguards on duty in the pool compound, namely, Manuel Abao and Mario

Villanueva. The tour of duty of Abao was from 8:00 to 12:00 in the morning and from2:00 to 6:00 in the afternoon, and of Villanueva from 7:30 to 11:30 a.m. and from

12:30 to 4:30 p.m. Between 4:00 to 5:00 that afternoon, there were about twenty

bathers inside the pool area and Manuel Abao was going around the pools to observe

the bathers in compliance with the instructions of h is chief.

Between 4:40 to 4:45 p.m., some boys who were in the pool area informed a bather by

the name of Andres Hagad, Jr., that somebody was swimming under water for quite a

long time. Another boy informed lifeguard Manuel Abao of the same happening and

Abao immediately jumped into the big swimming pool and retrieved the apparently

lifeless body of Dominador Ong from the bottom. The body was placed at the edge of

the pool and Abao immediately applied manual artificial respiration. Soon after, male

nurse Armando Rule came to render assistance, followed by sanitary inspector

Iluminado Vicente who, after being called by phone from the clinic by one of the

security guards, boarded a jeep carrying with him the resuscitator and a medicine kit,

and upon arriving he injected the boy with camphorated oil. After the injection,

Vicente left on a jeep in order to fetch Dr. Ayuyao from the University of the

Philippines. Meanwhile, Abao continued the artificial manual respiration, and when

this failed to revive him, they applied the resuscitator until the two oxygen tanks were

exhausted. Not long thereafter, Dr. Ayuyao arrived with another resuscitator, but the

same became of no use because he found the boy already dead. The doctor ordered

that the body be taken to the clinic.In the evening of the same day, July 5, 1952, the incident was investigated by the Police

Department of Quezon City and in the investigation boys Ruben Ong and Andres

Hagad, Jr. gave written statements. On the following day, July 6, 1952, an autopsy was

performed by Dr. Enrique V. de los Santos, Chief, Medico Legal Division, National

Bureau of Investigation, who found in the body of the deceased the following: an

abrasion on the right elbow lateral aspect; contusion on the right forehead; hematoma

on the scalp, frontal region, right side; a congestion in the brain with petechial

subcortical hemorrhage, frontal lobe; cyanosis on the face and on the nails; the lung

was soggy with fine froth in the bronchioles; dark fluid blood in the heart; congestion

in the visceral organs, and brownish fluid in the stomach. The death was due to

asphyxia by submersion in water.

The issue posed in this appeal is whether the death of minor Dominador Ong can be

attributed to the negligence of defendant and/or its employees so as to entitle

plaintiffs to recover damages.

The present action is governed by Article 2176 in relation to Article 2080 of the new

Civil Code. The first article provides that "whoever by act or omission causes damage to

another, there being fault or negligence, is obliged to pay for the damages done." Such

fault or negligence is called quasi-delict. Under the second article, this obligation is

demandable not only for one's own acts or omissions but also for those of persons for

whom one is responsible. In addition, we may quote the following authorities cited in

the decision of the trial court:

"The rule is well settled that the owners of resorts to which people generally are

expressly or by implication invited are legally bound to exercise ordinary care andprudence in the management and maintenance of such resorts, to the end of making

them reasonably safe for visitors" (Larkin vs. Saltair Beach Co., 30 Utah 86, 83 Pac.

686).

"Although the proprietor of a natatorium is liable for injuries to a patron, resulting

from lack of ordinary care in providing for his safety, without the fault of the patron, he

is not, however, in any sense deemed to be the insurer of the safety of patrons. And

the death of a patron within his premises does not cast upon him the burden of

excusing himself from any presumption of negligence" (Bertalot vs. Kinnare. 72 Ill. App.

52, 22 A. L. R. 635; Flora vs. Bimini Water Co., 161 Cal. 495, 119 Pac. 661). Thus

in Bertalot vs. Kinnare, supra, it was held that there could be no recovery for the death

by drowning of a fifteen-year boy in defendant's natatorium, where it appeared merely


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that he was lastly seen alive in water at the shallow end of the pool, and some ten or

fifteen minutes later was discovered unconscious, and perhaps lifeless, at the bottom

of the pool, all efforts to resuscitate him being without avail.

Since the present action is one for damages founded on culpable negligence, the

principle to be observed is that the person claiming damages has the burden of proving

that the damage is caused by the fault or negligence of the person from whom the

damage is claimed, or of one of his employees (Walter A. Smith & Co. vs. Cadwallader

Gibson Lumber Co., 55 Phil., 517). The question then that arises is: Have appellants

established by sufficient evidence the existence of fault or negligence on the part ofappellee so as to render it liable for damages for the death of Dominador Ong?

There is no question that appellants had striven to prove that appellee failed to take

the necessary precaution to protect the lives of its patrons by not placing at the

swimming pools efficient and competent employees who may render help at a

moment's notice, and they ascribed such negligence to appellee because the lifeguard

it had on the occasion minor Ong was drowning was not available or was attending to

something else with the result that his help came late. Thus, appellants tried to prove

through the testimony of Andres Hagad, Jr. and Ruben Ong that when Eusebio Ong and

Hagad, Jr. detected that there was a drowning person in the bottom of the big

swimming pool and shouted to the lifeguard for help, lifeguard Manuel Abao did not

immediately respond to the alarm and it was only upon the third call that he threw

away the magazine he was reading and allowed three or four minutes to elapse before

retrieving the body from the water. This negligence of Abao, they contend, is

attributable to appellee.

But the claim of these two witnesses not only was vehemently denied by lifeguard

Abao, but is belied by the written statements given by them in the investigation

conducted by the Police Department of Quezon City approximately three hours after

the happening of the accident. Thus, these two boys admitted in the investigation that

they narrated in their statements everything they knew of the accident, but, as found

by the trial, nowhere in said statements do they state that the lifeguard was chatting

with the security guard at the gate of the swimming pool or was reading a comic

magazine when the alarm was given for which reason he failed to immediately respond

to the alarm. On the contrary, what Ruben Ong particularly emphasized therein wasthat after the lifeguard heard the shouts for help, the latter immediately dived into the

poolto retrieve the person under water who turned out to be his brother. For this

reason, the trial court made this conclusion: "The testimony of Ruben Ong and Andres

Hagad, Jr. as to the alleged failure of the lifeguard Abao to immediately respond to

their callmay therefore be disregardedbecause they are belied by their written

statements. (Emphasis supplied.)

On the other hand, there is sufficient evidence to show that appellee has taken all

necessary precautions to avoid danger to the lives of its patrons or prevent accident

which may cause their death. Thus, it has been shown that the swimming pools of

appellee are provided with a ring buoy, toy roof, towing line, oxygen resuscitator and a

first aid medicine kit. The bottom of the pools is painted with black colors so as to

insure clear visibility. There is on display in a conspicuous place within the area certain

rules and regulations governing the use of the pools. Appellee employs six lifeguards

who are all trained as they had taken a course for that purpose and were issued

certificates of proficiency. These lifeguards work on schedule prepared by their chief

and arranged in such a way as to have two guards at a time on duty to look after the

safety of the bathers. There is a male nurse and a sanitary inspector with a clinic

provided with oxygen resuscitator. And there are security guards who are available

always in case of emergency.

The record also shows that when the body of minor Ong was retrieved from thebottom of the pool, the employees of appellee did everything possible to bring him

back to life. Thus, after he was placed at the edge of the pool, lifeguard Abao

immediately gave him manual artificial respiration. Soon thereafter, nurse Armando

Rule arrived, followed by sanitary inspector Iluminado Vicente who brought with him

an oxygen resuscitator. When they found that the pulse of the boy was abnormal, the

inspector immediately injected him with camphorated oil. When the manual artificial

respiration proved ineffective they applied the oxygen resuscitator until its contents

were exhausted. And while all these efforts were being made, they sent for Dr. Ayuyao

from the University of the Philippines who however came late because upon examining

the body he found him to be already dead. All of the foregoing shows that appellee has

done what is humanly possible under the circumstances to restore life to minor Ong

and for that reason it is unfair to hold it liable for his death.

Sensing that their former theory as regards the liability of appellee may not be of much

help, appellants now switch to the theory that even if it be assumed that the deceased

is partly to be blamed for the unfortunate incident, still appellee may be held liable

under the doctrine of "last clear chance" for the reason that, having the last

opportunity to save the victim, it failed to do so.

We do not see how this doctrine may apply considering that the record does not show

how minor Ong came into the big swimming pool. The only thing the record discloses is

that minor Ong informed his elder brothers that he was going to the locker room to

drink a bottle of coke but that from that time on nobody knew what happened to him

until his lifeless body was retrieved. The doctrine of last clear chance simply means

that the negligence of a claimant does not preclude a recovery for the negligence ofdefendant where it appears that the latter, by exercising reasonable care and

prudence, might have avoided injurious consequences to claimant notwithstanding his

negligence. Or, "As the doctrine usually is stated, a person who has the last clear

chance or opportunity of avoiding an accident, notwithstanding the negligent acts of

his opponent or the negligence of a third person which is imputed to his opponent, is

considered in law solely responsible for the consequences of the accident." (38 Am.

Jur. pp. 900-902)

It goes without saying that the plaintiff himself was not free from fault, for he was

guilty of antecedent negligence in planting himself in the wrong side of the road. But as

we have already stated, the defendant was also negligent; and in such case the

problem always is to discover which agent is immediately and directly responsible. It


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will be noted that the negligent acts of the two parties were not contemporaneous,

since the negligence of the defendant succeeded the negligence of the plaintiff by an

appreciable interval. Under these circumstances, the law is that a person who has the

last clear chance to avoid the impending harm and fails to do so is chargeable with the

consequences, without reference to the prior negligence of the other party. (Picart vs.

Smith, 37 Phil., 809)

Since it is not known how minor Ong came into the big swimming pool and it being

apparent that he went there without any companion in violation of one of the

regulations of appellee as regards the use of the pools, and it appearing that lifeguardAba__o responded to the call for help as soon as his attention was called to it and

immediately after retrieving the body all efforts at the disposal of appellee had been

put into play in order to bring him back to life, it is clear that there is no room for the

application of the doctrine now invoked by appellants to impute liability to appellee..

The last clear chance doctrine can never apply where the party charged is required to

act instantaneously, and if the injury cannot be avoided by the application of all means

at hand after the peril is or should have been discovered; at least in cases in which any

previous negligence of the party charged cannot be said to have contributed to the

injury. O'Mally vs. Eagan, 77 ALR 582, 43 Wyo. 233, 350, 2, P2d 1063. (A.L.R. Digest,

Vol. 8, pp. 955-956)

Before closing, we wish to quote the following observation of the trial court, which we

find supported by the evidence: "There is (also) a strong suggestion coming from the

expert evidence presented by both parties that Dominador Ong might have dived

where the water was only 5.5 feet deep, and in so doing he might have hit or bumped

his forehead against the bottom of the pool, as a consequence of which he was

stunned, and which to h is drowning. As a boy scout he must have received instructions

in swimming. He knew, or have known that it was dangerous for him to dive in that

part of the pool."

Wherefore, the decision appealed from being in accordance with law and the evidence,

we hereby affirm the same, without pronouncement as to costs.


SUPREME COURTManila

THIRD DIVISION

G.R. No. L-51806 November 8, 1988

CIVIL AERONAUTICS ADMINISTRATION, petitioner,

vs.

COURT OF APPEALS and ERNEST E. SIMKE, respondents.

The Solicitor General for petitioner.

Ledesma, Guytingco, Veleasco & Associates for respondent Ernest E. Simke.

CORTES,J.:

Assailed in this petition for review on certiorari is the decision of the Court of Appeals

affirming the trial court decision which reads as follows:

WHEREFORE, judgment is hereby rendered ordering defendant to pay plaintiff the

amount of P15,589.55 as full reimbursement of his actual medical and hospital

expenses, with interest at the legal rate from the commencement of the suit; the

amount of P20,200.00 as consequential damages; the amount of P30,000.00 as moral

damages; the amount of P40,000.00 as exemplary damages; the further amount of

P20,000.00 as attorney's fees and the costs [Rollo, p. 24].

The facts of the case are as follows:Private respondent is a naturalized Filipino citizen and at the time of the incident was

the Honorary Consul Geileral of Israel in the Philippines.

In the afternoon of December 13, 1968, private respondent with several other persons

went to the Manila International Airport to meet his future son-in-law. In order to get a

better view of the incoming passengers, he and his group proceeded to the viewing

deck or terrace of the airport.

While walking on the terrace, then filled with other people, private respondent slipped

over an elevation about four (4) inches high at the far end of the terrace. As a result,

private respondent fell on his back and broke h is thigh bone.

The next day, December 14, 1968, private respondent was operated on for about three

hours.

Private respondent then filed an action for damages based on quasi-delict with the

Court of First Instance of Rizal, Branch VII against petitioner Civil Aeronautics

Administration or CAA as the entity empowered "to administer, operate, manage,

control, maintain and develop the Manila International Airport ... ." [Sec. 32 (24), R.A.

776].

Said claim for damages included, aside from the medical and hospital bills,

consequential damages for the expenses of two lawyers who had to go abroad in

private respondent's stead to finalize certain business transactions and for the

publication of notices announcing the postponement of private respondent's

daughter's wedding which had to be cancelled because of his accident [Record on

Appeal, p. 5].

Judgment was rendered in private respondent's favor prompting petitioner to appealto the Court of Appeals. The latter affirmed the trial court's decision. Petitioner then

filed with the same court a Motion for, Reconsideration but this was denied.

Petitioner now comes before this Court raising the following assignment of errors:

1. The Court of Appeals gravely erred in not holding that the present the CAA is really a

suit against the Republic of the Philippines which cannot be sued without its consent,

which was not given in this case.

2. The Court of Appeals gravely erred in finding that the injuries of respondent Ernest

E. Simke were due to petitioner's negligence although there was no substantial

evidence to support such finding; and that the inference that the hump or elevation

the surface of the floor area of the terrace of the fold) MIA building is dangerous just

because said respondent tripped over it is manifestly mistaken circumstances that


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justify a review by this Honorable Court of the said finding of fact of respondent

appellate court (Garcia v. Court of Appeals, 33 SCRA 622; Ramos v. CA, 63 SCRA 331.)

3. The Court of Appeals gravely erred in ordering petitioner to pay actual,

consequential, moral and exemplary damages, as well as attorney's fees to respondent

Simke although there was no substantial and competent proof to support said

awards I Rollo, pp. 93-94 1.

I

Invoking the rule that the State cannot be sued without its consent, petitioner

contends that being an agency of the government, it cannot be made a party-defendant in this case.

This Court has already held otherwise in the case ofNational Airports Corporation v.

Teodoro, Sr. [91 Phil. 203 (1952)]. Petitioner contends that the said ruling does not

apply in this case because: First, in the Teodoro case, the CAA was sued only in a

substituted capacity, the National Airports Corporation being the original party.

Second, in the Teodoro case, the cause of action was contractual in nature while here,

the cause of action is based on a quasi-delict. Third, there is no specific provision in

Republic Act No. 776, the law governing the CAA, which would justify the conclusion

that petitioner was organized for business and not for governmental purposes. [Rollo,

pp. 94-97].

Such arguments are untenable.

First, the Teodoro case, far from stressing the point that the CAA was only substituted

for the National Airports Corporation, in fact treated the CAA as the real party in

interest when it stated that:

xxx xxx xxx

... To all legal intents and practical purposes, the National Airports Corporation is dead

and the Civil Aeronautics Administration is its heir or legal representative, acting by the

law of its creation upon its own rights and in its own name. The better practice there

should have been to make the Civil Aeronautics Administration the third party

defendant instead of the National Airports Corporation. [National Airports Corp. v.

Teodoro, supra, p. 208.]

xxx xxx xxx

Second, the Teodoro case did not make any qualification or limitation as to whether ornot the CAA's power to sue and be sued applies only to contractual obligations. The

Court in the Teodoro case ruled that Sections 3 and 4 of Executive Order 365 confer

upon the CAA, without any qualification, the power to sue and be sued, albeit only by

implication. Accordingly, this Court's pronouncement that where such power to sue

and be sued has been granted without any qualification, it can include a claim based on

tort or quasi-delict [Rayo v. Court of First Instance of Bulacan, G.R. Nos. 55273-83,

December 19,1981, 1 1 0 SCRA 4561 finds relevance and applicability to the present

case.

Third, it has already been settled in the Teodoro case that the CAA as an agency is not

immune from suit, it being engaged in functions pertaining to a private entity.

xxx xxx xxx

The Civil Aeronautics Administration comes under the category of a private entity.

Although not a body corporate it was created, like the National Airports Corporation,

not to maintain a necessary function of government, but to run what is essentially a

business, even if revenues be not its prime objective but rather the promotion of travel

and the convenience of the travelling public. It is engaged in an enterprise which, far

from being the exclusive prerogative of state, may, more than the construction of

public roads, be undertaken by private concerns. [National Airports Corp. v. Teodoro,

supra, p. 207.]

xxx xxx xxxTrue, the law prevailing in 1952 when the Teodoro case was promulgated was Exec.

Order 365 (Reorganizing the Civil Aeronautics Administration and Abolishing the

National Airports Corporation). Republic Act No. 776 (Civil Aeronautics Act of the

Philippines), subsequently enacted on June 20, 1952, did not alter the character of the

CAA's objectives under Exec, Order 365. The pertinent provisions cited in the Teodoro

case, particularly Secs. 3 and 4 of Exec. Order 365, which led the Court to consider the

CAA in the category of a private entity were retained substantially in Republic Act 776,

Sec. 32 (24) and (25).Said Act provides:

Sec. 32. Powers and Duties of the Administrator. Subject to the general control and

supervision of the Department Head, the Administrator shall have among others, the

following powers and duties:

xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila

International Airport and all government-owned aerodromes except those controlled

or operated by the Armed Forces of the Philippines including such powers and duties

as: (a) to plan, design, construct, equip, expand, improve, repair or alter aerodromes or

such structures, improvement or air navigation facilities; (b) to enter into, make and

execute contracts of any kind with any person, firm, or public or private corporation or

entity; ... .

(25) To determine, fix, impose, collect and receive landing fees, parking space fees,

royalties on sales or deliveries, direct or indirect, to any aircraft for its use of aviation

gasoline, oil and lubricants, spare parts, accessories and supplies, tools, other royalties,

fees or rentals for the use of any of the property under its management and control.xxx xxx xxx

From the foregoing, it can be seen that the CAA is tasked with private or non-

governmental functions which operate to remove it from the purview of the rule on

State immunity from suit. For the correct rule as set forth in the Tedoro case states:

xxx xxx xxx

Not all government entities, whether corporate or non-corporate, are immune from

suits. Immunity functions suits is determined by the character of the objects for which

the entity was organized. The rule is thus stated in Corpus Juris:

Suits against State agencies with relation to matters in which they have assumed to act

in private or non-governmental capacity, and various suits against certain corporations

created by the state for public purposes, but to engage in matters partaking more of


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the nature of ordinary business rather than functions of a governmental or political

character, are not regarded as suits against the state. The latter is true, although the

state may own stock or property of such a corporation for by engaging in business

operations through a corporation, the state divests itself so far of its sovereign

character, and by implication consents to suits against the corporation. (59 C.J., 313)

[National Airport Corporation v. Teodoro, supra, pp. 206-207; Emphasis supplied.]

This doctrine has been reaffirmed in the recent case ofMalong v. Philippine National

Railways [G.R. No. L-49930, August 7, 1985, 138 SCRA 631, where it was held that the

Philippine National Railways, although owned and operated by the government, wasnot immune from suit as it does not exercise sovereign but purely proprietary and

business functions. Accordingly, as the CAA was created to undertake the management

of airport operations which primarily involve proprietary functions, it cannot avail of

the immunity from suit accorded to government agencies performing strictly

governmental functions.

II

Petitioner tries to escape liability on the ground that there was no basis for a finding of

negligence. There can be no negligence on its part, it alleged, because the elevation in

question "had a legitimate purpose for being on the terrace and was never intended to

trip down people and injure them. It was there for no other purpose but to drain water

on the floor area of the terrace" [Rollo, P. 99].

To determine whether or not the construction of the elevation was done in a negligent

manner, the trial court conducted an ocular inspection of the premises.

xxx xxx xxx

... This Court after its ocular inspection found the elevation shown in Exhs. A or 6-A

where plaintiff slipped to be a step, a dangerous sliding step, and the proximate cause

of plaintiffs injury...

xxx xxx xxx

This Court during its ocular inspection also observed the dangerous and defective

condition of the open terrace which has remained unrepaired through the years. It has

observed the lack of maintenance and upkeep of the MIA terrace, typical of many

government buildings and offices. Aside from the litter allowed to accumulate in the

terrace, pot holes cause by missing tiles remained unrepaired and unattented. Theseveral elevations shown in the exhibits presented were verified by this Court during

the ocular inspection it undertook. Among these elevations is the one (Exh. A) where

plaintiff slipped. This Court also observed the other hazard, the slanting or sliding step

(Exh. B) as one passes the entrance door leading to the terrace [Record on Appeal, U.S.,

pp. 56 and 59; Emphasis supplied.]

The Court of Appeals further noted that:

The inclination itself is an architectural anomaly for as stated by the said witness, it is

neither a ramp because a ramp is an inclined surface in such a way that it will prevent

people or pedestrians from sliding. But if, it is a step then it will not serve its purpose,

for pedestrian purposes. (tsn, p. 35, Id.) [rollo, p. 29.]

These factual findings are binding and conclusive upon this Court. Hence, the CAA

cannot disclaim its liability for the negligent construction of the elevation since under

Republic Act No. 776, it was charged with the duty of planning, designing, constructing,

equipping, expanding, improving, repairing or altering aerodromes or such structures,

improvements or air navigation facilities [Section 32, supra, R.A. 776]. In the discharge

of this obligation, the CAA is duty-bound to exercise due diligence in overseeing the

construction and maintenance of the viewing deck or terrace of the airport.

It must be borne in mind that pursuant to Article 1173 of the Civil Code, "(t)he fault or

negligence of the obligor consists in the omission of that diligence which is required bythe nature of the obligation and corresponds with the circumstances of the person, of

the time and of the place." Here, the obligation of the CAA in maintaining the viewing

deck, a facility open to the public, requires that CAA insure the safety of the viewers

using it. As these people come to the viewing deck to watch the planes and passengers,

their tendency would be to look to where the planes and the incoming passengers are

and not to look down on the floor or pavement of the viewing deck. The CAA should

have thus made sure that no dangerous obstructions or elevations exist on the floor of

the deck to prevent any undue harm to the public.

The legal foundation of CAA's liability for quasi-delict can be found in Article 2176 of

the Civil Code which provides that "(w)hoever by act or omission causes damage to

another, there being fault or negligence, is obliged to pay for the damage done... As

the CAA knew of the existence of the dangerous elevation which it claims though, was

made precisely in accordance with the plans and specifications of the building for

proper drainage of the open terrace [See Record on Appeal, pp. 13 and 57; Rollo, p.

391, its failure to have it repaired or altered in order to eliminate the existing hazard

constitutes such negligence as to warrant a finding of liability based on quasi-delict

upon CAA.

The Court finds the contention that private respondent was, at the very least, guilty of

contributory negligence, thus reducing the damages that plaintiff may recover,

unmeritorious. Contributory negligence under Article 2179 of the Civil Code

contemplates a negligent act or omission on the part of the plaintiff, which although

not the proximate cause of his injury, contributedto his own damage, the proximate

cause of the plaintiffs own injury being the defendant's lack of due care. In the instantcase, no contributory negligence can be imputed to the private respondent,

considering the following test formulated in the early case ofPicart v. Smith, 37 Phil.

809 (1918):

The test by which to determine the existence of negligence in a particular case may be

stated as follows: Did the defendant in doing the alleged negligent act use that

reasonable care and caution which an ordinarily prudent man would have used in the

same situation? If not, then he is guilty of negligence. The law here in effect adopts the

standard supposed to be supplied by the imaginary conduct of the

discreetpaterfamilias of the Roman law. The existence of the negligence in a given

case is not determined by reference to the personal judgment of the actor in the

situation before him. The law considers what would be reckless, blameworthy, or


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Page 14 of28

negligent in the man of ordinary intelligence and prudence and determines liability by

that.

The question as to what would constitute the conduct of a prudent man in a given

situation must of course be always determined in the light of human experience and in

view of the facts involved in the particular case. Abstract speculations cannot be here

of much value but this much can be profitably said: Reasonable men-overn their

conduct by the circumstances which are before them or known to them. They are not,

and are not supposed to be omniscient of the future. Hence they can be expected to

take care only when there is something before them to suggest or warn of danger.Could a prudent man, in the case under consideration, foresee harm as a result of the

course actually pursued' If so, it was the duty of the actor to take precautions to guard

against that harm. Reasonable foresight of harm, followed by the ignoring of the

suggestion born of this prevision, is always necessary before negligence can be held to

exist.... [Picart v. Smith, supra, p. 813; Emphasis supplied.]

The private respondent, who was the plaintiff in the case before the lower court, could

not have reasonably foreseen the harm that would befall him, considering the

attendant factual circumstances. Even if the private respondent had been looking

where he was going, the step in question could not easily be noticed because of its

construction. As the trial court found:

In connection with the incident testified to, a sketch, Exhibit O, shows a section of the

floorings oil which plaintiff had tripped, This sketch reveals two pavements adjoining

each other, one being elevated by four and one-fourth inches than the other. From the

architectural standpoint the higher, pavement is a step. However, unlike a step

commonly seen around, the edge of the elevated pavement slanted outward as one

walks to one interior of the terrace. The length of the inclination between the edges of

the two pavements is three inches. Obviously, plaintiff had stepped on the inclination

because had his foot landed on the lower pavement he would not have lost his

balance. The same sketch shows that both pavements including the inclined portion

are tiled in red cement, and as shown by the photograph Exhibit A, the lines of the

tilings are continuous. It would therefore be difficult for a pedestrian to see the

inclination especially where there are plenty of persons in the terrace as was the

situation when plaintiff fell down. There was no warning sign to direct one's attentionto the change in the elevation of the floorings. [Rollo, pp. 2829.]

III

Finally, petitioner appeals to this Court the award of damages to private respondent.

The liability of CAA to answer for damages, whether actual, moral or exemplary,

cannot be seriously doubted in view of one conferment of the power to sue and be

sued upon it, which, as held in the case ofRayo v. Court of First Instance, supra,

includes liability on a claim for quasi-dilict. In the aforestated case, the liability of the

National Power Corporation to answer for damages resulting from its act of sudden,

precipitate and simultaneous opening of the Angat Dam, which caused the death of

several residents of the area and the destruction of properties, was upheld since the

o,rant of the power to sue and be sued upon it necessarily implies that it can be held

answerable for its tortious acts or any wrongful act for that matter.

With respect to actual or compensatory damages, the law mandates that the same be

proven.

Art. 2199. Except as provided by law or by stipulation, one are entitled to an adequate

compensation only for such pecuniary loss suffered by him as he has duly proved. Such

compensation is referred to as actual on compensatory damages [New Civil Code].

Private respondent claims P15,589.55 representing medical and hospitalization bills.

This Court finds the same to have been duly proven through the testimony of Dr.Ambrosio Tangco, the physician who attended to private respondent (Rollo, p. 26) and

who Identified Exh. "H" which was his bill for professional services [Rollo, p. 31].

Concerning the P20,200.00 alleged to have been spent for other expenses such as the

transportation of the two lawyers who had to represent private respondent abroad

and the publication of the postponement notices of the wedding, the Court holds that

the same had also been duly proven. Private respondent had adequately shown the

existence of such losses and the amount thereof in the testimonies before the trial

court [CA decision, p. 81. At any rate, the findings of the Court of Appeals with respect

to this are findings of facts [One Heart Sporting Club, Inc. v. Court of Appeals, G.R. Nos.

5379053972, Oct. 23, 1981, 108 SCRA 4161 which, as had been held time and again,

are, as a general rule, conclusive before this Court [Sese v. Intermediate Appellate

Court, G.R. No. 66186, July 31, 1987,152 SCRA 585].

With respect to the P30,000.00 awarded as moral damages, the Court holds private

respondent entitled thereto because of the physical suffering and physical injuries

caused by the negligence of the CAA [Arts. 2217 and 2219 (2), New Civil Code].

With respect to the award of exemplary damages, the Civil Code explicitly, states:

Art. 2229. Exemplary or corrective damages, are imposed, by way of example or

correction for the public good, in addition to the moral, liquidated or compensatory

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted

with gross negligence.

Gross negligence which, according to the Court, is equivalent to the term "notorious

negligence" and consists in the failure to exercise even slight care [Caunan v. Compania

General de Tabacos, 56 Phil. 542 (1932)] can be attributed to the CAA for its failure toremedy the dangerous condition of the questioned elevation or to even post a warning

sign directing the attention of the viewers to the change in the elevation of the

floorings notwithstanding its knowledge of the hazard posed by such elevation [Rollo,

pp. 28-29; Record oil Appeal, p. 57]. The wanton disregard by the CAA of the safety of

the people using the viewing deck, who are charged an admission fee, including the

petitioner who paid the entrance fees to get inside the vantage place [CA decision, p. 2;

Rollo, p. 25] and are, therefore, entitled to expect a facility that is properly and safely

maintained justifies the award of exemplary damages against the CAA, as a

deterrent and by way of example or correction for the public good. The award of

P40,000.00 by the trial court as exemplary damages appropriately underscores the

point that as an entity changed with providing service to the public, the CAA. like all


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other entities serving the public. has the obligation to provide the public with

reasonably safe service.

Finally, the award of attorney's fees is also upheld considering that under Art. 2208 (1)

of the Civil Code, the same may be awarded whenever exemplary damages are

awarded, as in this case, and,at any rate, under Art. 2208 (11), the Court has the

discretion to grant the same when it is just and equitable.

However, since the Manila International Airport Authority (MIAA) has taken over the

management and operations of the Manila International Airport [renamed Ninoy

Aquino International Airport under Republic Act No. 6639] pursuant to Executive OrderNo. 778 as amended by executive Orders Nos. 903 (1983), 909 (1983) and 298 (1987)

and under Section 24 of the said Exec. Order 778, the MIAA has assumed all the debts,

liabilities and obligations of the now defunct Civil Aeronautics Administration (CAA),

the liabilities of the CAA have now been transferred to the MIAA.

WHEREFORE, finding no reversible error, the Petition for review on certiorari is DENIED

and the decision of the Court of Appeals in CA-G.R. No. 51172-R is AFFIRMED.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.

SECOND DIVISION

[G.R. No. 119602. October 6, 2000]

WILDVALLEY SHIPPING CO., LTD.petitioner, vs. COURT OF APPEALS and PHILIPPINE

PRESIDENT LINES INC., respondents.

D E C I S I O N

BUENA,J.:

This is a petition for review on certiorariseeking to set aside the decision of the Court

of Appeals which reversed the decision of the lower court in CA-G.R. CV No. 36821,

entitled "Wildvalley Shipping Co., Ltd., plaintiff-appellant, versus Philippine President

Lines, Inc., defendant-appellant."

The antecedent facts of the case are as follows:

Sometime in February 1988, the Philippine Roxas, a vessel owned by Philippine

President Lines, Inc., private respondent herein, arrived in Puerto Ordaz, Venezuela, to

load iron ore. Upon the completion of the loading and when the vessel was ready toleave port, Mr. Ezzar del Valle Solarzano Vasquez, an official pilot of Venezuela, was

designated by the harbour authorities in Puerto Ordaz to navigate the Philippine Roxas

through the Orinoco River.[1]

He was asked to pilot the said vessel on February 11,

1988[2]

boarding it that night at 11:00 p.m.[3]

The master (captain) of the Philippine Roxas, Captain Nicandro Colon, was at the bridge

together with the pilot (Vasquez), the vessel's third mate (then the officer on watch),

and a helmsman when the vessel left the port[4]

at 1:40 a.m. on February 12,

1988.[5]

Captain Colon left the bridge when the vessel was under way.[6]

The Philippine Roxas experienced some vibrations when it entered the San Roque

Channel at mile 172.[7]

The vessel proceeded on its way, with the pilot assuring the

watch officer that the vibration was a result of the shallowness of the channel.

[8]

Between mile 158 and 157, the vessel again experienced some vibrations .[9]

These

occurred at 4:12 a.m.[10]

It was then that the watch officer called the master to the

bridge.[11]

The master (captain) checked the position of the vessel[12]

and verified that it was in

the centre of the channel.[13]

He then went to confirm, or set down, the position of the

vessel on the chart.[14]

He ordered Simplicio A. Monis, Chief Officer of the President

Roxas, to check all the double bottom tanks.[15]

At around 4:35 a.m., the Philippine Roxas ran aground in the Orinoco River ,[16]

thus

obstructing the ingress and egress of vessels.As a result of the blockage, the Malandrinon, a vessel owned by herein petitioner

Wildvalley Shipping Company, Ltd., was unable to sail out of Puerto Ordaz on that day.

Subsequently, Wildvalley Shipping Company, Ltd. filed a suit with the Regional Trial

Court of Manila, Branch III against Philippine President Lines, Inc. and Pioneer

Insurance Company (the underwriter/insurer of Philippine Roxas) for damages in the

form of unearned profits, and interest thereon amounting to US $400,000.00 plus

attorney's fees, costs, and expenses of litigation. The complaint against Pioneer

Insurance Company was dismissed in an Order dated November 7, 1988.[17]

At the pre-trial conference, the parties agreed on the following facts:

"1. The jurisdictional facts, as specified in their respective pleadings;

"2. That defendant PPL was the owner of the vessel Philippine Roxas at the time of the

incident;

"3. That defendant Pioneer Insurance was the insurance underwriter for defendant

PPL;

"4. That plaintiff Wildvalley Shipping Co., Inc. is the owner of the vessel Malandrinon,

whose passage was obstructed by the vessel Philippine Roxas at Puerto Ordaz,

Venezuela, as specified in par. 4, page 2 of the complaint;

"5. That on February 12, 1988, while the Philippine Roxas was navigating the channel at

Puerto Ordaz, the said vessel grounded and as a result, obstructed navigation at the

channel;

"6. That the Orinoco River in Puerto Ordaz is a compulsory pilotage channel;

"7. That at the time of the incident, the vessel, Philippine Roxas, was under the

command of the pilot Ezzar Solarzano, assigned by the government thereat, butplaintiff claims that it is under the command of the master;

"8. The plaintiff filed a case in Middleburg, Holland which is related to the present case;

"9. The plaintiff caused the arrest of the Philippine Collier, a vessel owned by the

defendant PPL;

"10. The Orinoco River is 150 miles long and it takes approximately 12 hours to

navigate out of the said river;

"11. That no security for the plaintiff's claim was given until after the Philippine Collier

was arrested; and

"12. That a letter of guarantee, dated 12-May-88 was issued by the Steamship Mutual

Underwriters Ltd."[18]
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