Transportation Law#1: Mallari, Sr. v. Court of Appeals, 324 SCRA 147FACTS:Mallari Jr. was the driving a passenger jeepney owned by his father, co-petitioner herein. The jeep collided with the delivery van of Bulletin Publishing Corp. while travelling on the National Nighway in Bataan. Mallari Jr. proceeded to overtake a fiera which had stopped in front of him. He negotiated the curve and moved in the opposite lane in order to overtake the fiera. As he passed the vehicle he saw the delivery van of Bulletin and the vehicles collided. The points of collision were the and the left rear portion of the passenger jeepney and the left front side of the delivery van. The 2 right wheels of the delivery van were on the right shoulder of the road and pieces of debris from the accident were found scattered along the shoulder of the road up to a certain portion of the lane travelled by the passenger jeepney. The impact caused the jeepney to turn around and fall on its left side resulting in injuries to its passengers one of whom was Israel Reyes who eventually died due to the gravity of his injuries.The widow of Reyes filed a complaint to recover damages from Mallari, Jr. and Sr. and Bulletin as well. The trial court found that the proximate cause of the collision was the negligence of the driver of the Bulletin delivery van, considering the fact that the left front portion of the delivery truck hit and bumped the left rear portion of the passenger jeepney. On appeal, the court reversed the decision of the lower court and held that it was Mallari Jr. who was negligent. Hence this petition.

ISSUE:WON petitioners herein should be held liable for the death of Reyes.

RULING:The Court affirmed the decision of the Court of Appeals and held that Mallari Jr. and Sr. who are responsible for the death of Reyes. The collision was caused by the sole negligence of petitioner Alfredo Mallari Jr. who admitted that immediately before the collision and after he rounded a curve on the highway, he overtook a Fiera which had stopped on his lane and that he had seen the van driven by Angeles before overtaking the Fiera. This act of overtaking was in clear violation of Sec. 41, pars. (a) and (b), of RA 4136 as amended, otherwise known as The Land Transportation and Traffic Code. The rule is settled that a driver abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary situation has the duty to see to it that the road is clear and not to proceed if he cannot do so in safety. Article 2185 of the NCC, there is a presumption of negligence on the part of a person driving a motor vehicle if at the time of the mishap he was violating a traffic regulation. Petitioners herein failed to present satisfactory evidence to overcome this legal presumption. Therefore they shall be liable for the loss of Reyes’ life.

#2: Bayasen v. Court of Appeals, G.R. No. L-25785FACTS:Petitioner Saturnino Bayasen, the Rural Health Physician in Sagada, Mountain Province, went to barrio Ambasing to visit a patient. Two nurses from the Saint Theodore’s Hospital in Sagada, Elena Awichen and Dolores Balcita, rode with him in the jeep assigned for the use of the Rural Health Unit. Later, at Ambasing, the girls, who wanted to gather flowers, again asked if they could ride with him up to a certain place on the way to barrio Suyo which he intended to visit anyway. Dr. Bayasen again allowed them to ride, Elena sitting herself between him and Dolores. On the way, the jeep went over a precipice. About 8 feet below the road, it was blocked by a pine tree. The three, were thrown out of the jeep. Elena was found lying in a creek further below. She suffered a skull fracture which caused her death. Saturnino Bayasen was charged by with Homicide Thru Reckless Imprudence. Trial Court found Bayasen sentenced him to an indeterminate penalty of 4 Months and 1 Day of arresto mayor as minimum, to 1 Year, 7 Months and 10 Days of prision correccional, as maximum, indemnify the heirs Elena Awichen P3,000.00 as compensatory damages, P1,000.00 as attorney’s fees and P1,886.00 for burial expenses of the deceased, and to pay the costs. On Appeal, CA affirmed the decision of the trial court with the modifications that the indemnity was increased to P6,000.00; the award of attorney’s fees was set aside; and that the maximum of the prison term was raised to 1 Year, 7 Months, and 17 Days of prision correccional. The motion for reconsideration of Bayasen was denied. Hence, the petition for review on certiorari.

ISSUE:WON the reckless driving of accused-petitioner was the proximate cause of the death of the victim.

RULING:The proximate cause of the tragedy was the skidding of the rear wheels of the jeep and not the unreasonable speed of the petitioner because there was no evidence on record to prove or support the finding that the petitioner was driving at “an unreasonable speed”. The star witness of the prosecution, Dolores Balcita who was one of the passengers in the jeep, testified that Saturnino Bayasen was driving his jeep moderately just before the accident and categorically stated that she did not know what caused the jeep to fall into the precipice. It is a well-known physical fact 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. Herein, under the particular circumstances, Bayasen who skidded could not be

Transportation Lawregarded as negligent, the skidding being an unforeseen event, so that Bayasen had a valid excuse for his departure from his regular course.The negligence of Bayasen has not having been sufficiently established, his guilt of the crime charged has not been proven beyond reasonable doubt. He is, therefore, entitled to acquittal. The Supreme Court set aside the decision of the Court of Appeals sought to be reviewed, and acquitted Bayasen of the crime charged in the information in Criminal Case 1056 of the CFI of Mountain Province, with costs de oficio.

#3: Cervantes vs. Court of Appeals, 304 SCRA 25FACTS:In compliance with a Compromise Agreement entered into by the contending parties, PAL issued to petitioner Nicholas Cervantes on March 27, 1989, a round trip ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila. Such ticket expressly provided an expiry date of one year from issuance. Four days before the expiration of the subject ticket, Cervantes used it. Upon his arrival in Los Angeles, he immediately booked his return ticket to Manila with PAL. The same was confirmed for April 2, 1990. Upon learning that PAL was making a stop-over to San Francisco, Cervantes made arrangements with PAL for him to board such flight. On April 2, when Cervantes checked in the PAL counter in San Francisco, he was not allowed to board. The PAL personnel marked ticket “TICKET NOT ACCEPTED DUE TO EXPIRATION OF VALIDITY” on his ticket. Cervantes filed a complaint for breach of contract.

ISSUE:WON PAL is liable for breach of contract.

RULING:The Supreme Court held that PAL is not liable. Petitioner Cervantes was fully aware that there was a need to send a letter to the legal counsel of PAL for the extension of the period of validity of his ticket. The PAL agent was not privy to the said agreement, thus the agent acted without authority when they confirmed the flights of the petitioner. When the petitioner knows that the agent was acting beyond his power, the principal cannot be held liable for the acts of the agent. It further held that Cervantes acted in bad faith since he bought a back-up ticket to ensure his departure. The employees of PAL were guilty only of simple negligence.

#4: Pestaño vs. Spouses Sumayang, G.R. No. 139875FACTS:On August 9, 1986, Ananias Sumayang along with his friend Manuel Romagos was riding a motorcycle along the National highway in Cebu. Upon a junction where the highway was connected, they were hit by a passenger bus driven by Gregorio Pestaño and owned by Metro Cebu Auto Bus Corp. Such bus tried to overtake them sending the motorcycle upon the pavement, resulting to the death pf the passengers of the motorcycle. Actions were filed by the heirs of Sumayang against the driver and the owner of Metro Cubu and its insurer.

ISSUE:WON Metro Cebu and Pestaño are liable for the death of the passengers of the motorcycle.

RULING:The Supreme Court held that Metro Cebu and Pestañ are liable for the death of Sumayang and Romagos. As a professional driver operating a public transport bus, he should have anticipated that overtaking at a junction was a perilous maneuver and thus should have exercised extreme caution. The vehicular collision was caused by Pestaño’s negligence when he attempted to overtake the motorcycle. In addition, Articles 2180 and 2176 of the Civil Code provide that owners and managers are responsible for damages caused by their employees. The employer is presumed to be negligent in the selection or supervision of its employees when an injury is caused by the latter’s negligence. As evidence has shown that the bus operated with a defective speedometer, it further proved that Metro Cebu was negligent in the supervision over its driver. It thus failed to conduct its business with the diligence required by law.

#5: Maranan v. Perez, 20 SCRA 412FACTS:Rogelio Carachea was a passenger in a taxicab operated by Pascual perez when he was stabbed and killed by the driver, who was found guilty of homicide in the CFI. While an appeal at the CA, Antonia Maranan, Rogelio’s mother, filed an action to recover damages for the death of her son. The CFI awarded her P3000 as damages against Perez dismissing the claim against the driver.

ISSUE:WON the carrier is liable for the assaults of its employee upon the passengers.

RULING:

Transportation LawUnder Art. 1739 of the Civil Code, “a common carrier are liable for the death of or injuries to passengers through the negligence or willful acts of the former’s employees, although such employees may have ached beyond the scope of their authority or in violation of the order of the common carrier.It is the carrier’s strict obligation to select its drivers and similar employees with due regard not only to technical competence but also to this total personality, their behavior and thus moral fiber.The dismissal of the claim against the driver is correct. Plaintiff’s action was predicated in breach of contract of carriage and the cab driver was not a part thereto. His civil liability is covered on the criminal case.

#6: Philippine National Railways vs. CA, 139 SCRA 87FACTS:Winifredo Tupang was a paying passenger who boarded Train No. 516 f the Philippine National Railways at Camarines Sur bound for Manila. Due to some mechanical defect, the train stopped which took two hours before the train could resume its trip to Manila. Unfortunately, upon passing Iyam Bridge at Lucena, Tupang fell off the train resulting to his death. Alarm was raised by the passengers that somebody fell but the train did not stop. Instead, the train conductor called the station agent and requested for verification of the confirmation. Rosario Tupang, the deceased’s widow filed a cmplaint against PNR for breach of contract f carriage. However, PNR raised as a defense hat it was a mere agency of the Philippine government without distinct or separate personality of it own. Likewise, they contended that their funds are governmental in character, thus they are not subject to garnishment or execution.

ISSUE:WON PNR could be held liable for damages for the death of Winifredo Tupang.

RULING:The Supreme Court held that PNR should be held liable. The Philippine National Railways is not exempt from garnishment. It descends to a level of a citizen, thus it cannot assail non-suability as a bar for damages. Under PA 4156, PNR was created generally with all powers of a corporation under the Corporation Law. Hence, the characteristics and attributes of a corporation is fully applicable to PNR. PNR may sue and be sued and could be subjected to court processes just like any other corporation. The Supreme Court held that PNR should be held liable for the death of Winifredo Tupang because it acted in bad faith as it did not stop despite the alarm raised by its passengers. PNR has the obligation to transport its passengers to their destination and to observe extraordinary diligence in doing so.

#7: Bachelor Express, Inc. v. Court of Appeals, G.R. No. 85691FACTS:Ornominio Beter and Narcisa Rautraut were passengers of a bus belonging to petitioner Bachelor Express, Inc. While the bus was on its way to Cagayan de Oro, a passenger at the rear portion suddenly stabbed another passenger. The stabbing cause commotion and panic amount 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 heirs of the deceased sued the bus company Evidence adduced showed that the bus driver did not immediately stop the bus at the height of the commotion; the bus was speeding from a full stop; and the victims fell from the bus door when it was opened or gave way while the bus was still running.

Petitioner denied liability on the ground that the death of its two passengers was caused by a force majeure as it was due to the act of a third person who was beyond its control and supervision. In line with this, petitioner also argued that it is not an insurer of its passengers.

ISSUE:WON the case at bar is within the context of force majeure

RULING:The sudden act o 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 proves that it was not negligent in causing the injuries resulting from such accident. Considering the factual findings in this case, it is clear that petitioner has failed to overcome the presumption of fault and negligence found in the law governing common carriers. The argument that the petitioners are not insurers of their passengers deserves no merit in view of the failure of the petitioners to observe extraordinary diligence in transporting safely the passengers to their destination as warranted by law.

#8: Fortune Express vs. Court of Appeals, 305 SCRA 14FACTS:

Transportation LawA bus of petitioner Fortune Express, Inc. figured an accident with a jeepney in Lanao del Norte which resulted to the death of several passengers of the jeepney including two Maranaos. A Constabulary agent investigated that the jeepney was owned by a Maranao and certain Maranaos were planning to take revenge on petitioner by burning some of its buses. Subsequently, the Operations Manager of Fortune Express was advised to take precautionary measures. Four days after the accident, three armed Maranaos pretended to be passengers of a bus of petitioner. They seized such bus and set it on fire. The passengers of the bus were asked to get off, but one passenger, Atty. Talib Caorong went back to retrieve something. He was shot and killed during the incident. Petitioner contends that the seizure by the armed assailants was a fortuitous event thus it cannot be held liable.

ISSUE:WON Fortune Express is liable for the death of Atty. Caorong.

RULING:The Supreme Court held that the seizure of the bus by the armed Maranaos cannot be assailed as a fortuitous event. The requisite of unforseeability to be considered forced majeure is lacking. Fortune Express knew that Maranaos were planning to burn some of its passenger buses and yet petitioner did nothing to protect the safety of its passengers. Petitioner’s employees failed to prevent the attack on one of its passengers because they did not exercise the diligence of a good father of a family. Hence, petitioner should be held liable for the death of Atty. Caorong. Art. 1763 of the New Civil Code provides that the common carrier is responsible for injuries suffered by a passenger on account of willful acts of other passengers, if the employees of the common carrier could have prevented the act through proper diligence. Because of Fortune Express’s negligence, the seizure of the bus by the armed Maranaos was made possible.

#9: Villa Rey Transit, Inc. v. Court of Appeals, 31 SCRA 511FACTS:Policarpio Quintos, Jr. boarded a Villa Rey Transit bus at Pangasinan which was bound for Manila. He was seated at the first seat on the right side of the bus. The bus met an accident at a bridge in Pampanga. It hit the back of a bullcart full of hay while it was crossing the said bridge. Unfortunately, there was a bamboo pole tied to the cart and the end of this bamboo pole penetrated through the wind shield of the bus and hit the face of Quintos. A La Mallorca bus was passing by the same bridge and helped bring Quintos, Jr. and those who were on board the bullcart to the hospital. The bamboo pole caused a severe injury to his eye and head which later on resulted into his death.A complaint was filed by the sisters of Quintos to recover damages from Villa Rey Transit. The Court of First Instance held that Villa Rey Transit is liable to pay actual or compensatory damages in the amount of 63,750 pesos as well as attorney’s fees. Villa Rey Transit appealed the case and the Court of Appeals affirmed the decision of the lower court. Hence this petition.

ISSUE:WON the amount awarded as damages to the heirs of Quintos is proper.

RULING:The Court modified the award of damages to the heirs of Quintos. It explained that the award of damages is computed with regard to the life expectancy of the deceased and the rate of losses sustained by the deceased sisters. The court emphasized that the life expectancy of the victim is very important in the computation of actual damages however it is not the sole basis for computation of the said amount. Expenses shall be deducted from the amount determined to be the monthly income of the deceased. It is proper to deduct living expenses that the victim would have also incurred if he were alive.

#10: Soberano v. Manila Railroad & Benguet Auto Line, 18 SCRA 732FACTS:Juana Soberano was a passenger of a Benguet Auto line bus bound for Baguio from Ilocos Sur. She has brought on board the bus some eggs which was her business. When the bus reached Naguilian road it hit a stone embankment, this caused the bus to fall from a 65-foot precipice. As a result of the accident 2 passengers died and several passengers were injured. Soberano was also injured in the said accident. All of her belongings were lost and destroyed as a result of the accident.The defendant in this case offered to pay 5,000 pesos for the injury and loss caused by the accident. However, Soberano rejected the offer and instituted a case to recover damages in the amount of 76,757.76 pesos. The lower court awarded 5,000 pesos for actual or compensatory damages. Petitioner herein claims that the award of damages is not enough and that the defendant herein was in bad faith for not satisfying her claim. Hence this petition.

ISSUE:WON Soberano is entitled to recover a higher amount as to damages for the injury and loss she sustained.

Transportation LawRULING:The Court held that the award of actual damages, in relation to loss of earning capacity should be increased from 5,000 to 15,000 pesos. Petitioner herein suffered physical injuries which resulted in a loss of positive economic values. She had been a merchant since 1950 and she has been earning 1,500 pesos a year. Therefore, the award of damages with regard to her loss of earning capacity should be increased to 15,000 pesos. In addition to this amount, the defendant herein shall also pay for the unpaid allowances and the loss of profit for the eggs which were damaged in the accident.Defendant herein cannot be held to be in bad faith for not satisfying the claim of the petitioner. It was justified in rejecting the claim of the petitioner because the amount asked of them was too much. The defendant in this case did not compel Soberano to file a case, she rejected the offer of the former and decided to push through with this case. Therefore, no other damages should be awarded to the petitioner.

#11: Marchan vs. Mendoza, G.R. No. L-24471FACTS:A passenger bus of the Philippine Rabbit Bus Lines, driven by Silverio Marchan, fell into a ditch while travelling on its way to Manila. As a result of which respondents Arsenio Mendoza, his wife and child, passengers of the said bus were thrown out to the ground resulting in their multiple injuries. It was proven that the bus was traveling at high speed without due regard to the safety of its passengers and that passengers complained and asked Machan, the driver to slow down. On the contrary, Marchan increased its speed while approaching a truck which was then parked, apparently to avoid collision with the incoming vehicle from the opposite direction. The rear tires of the bus skidded because of its high speed which caused the bus to fall into a ditch. Subsequently, Marchan was convicted for physical injuries through reckless imprudence.

ISSUE:WON Marchan and Philippine Rabbit Bus Lines are liable for the injuries suffered by its passengers.

RULING:The Supreme Court held that the proximate cause of the accident was the gross negligence of Marchan who when driving is expected to have employed the highest degree of care. He should have been assiduously prudent in handling his vehicle to insure the safety of his passengers. There is no reason why he shouldn’t stop the vehicle upon noticing a parked truck in front of him. He must have taken precautionary measures in securing the safety of his passengers. Philippine Rabbit is also liable because common carriers cannot escape liability for the death or injuries to passengers through the negligence and willfull acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders. The awarding of compensatory damages is reasonable because Arsenio Mendoza had suffered paralysis on the lower extremities, which will incapacitate him to engage in his customary occupation throughout the remaining years of his life. The awarding of exemplary damages likewise is found just although the plaintiffs did not specify such claim. The court is called upon the exercise and can use its discretion in the imposition of punitive or exemplary damages even though not expressly prayed or pleaded in the plaintiffs' complaint.

#12: De Caliston vs. Court of Appeals, 122 SCRA 958FACTS:Juana Sonza Vda. De Darrocha was run over by a passenger bus driven by Dalmacio which resulted to the former’s death. Da Rrocha was a USVA pensioner. She was survived by her only child, Gloria Darrocha de Caliston. Dalmacio was convicted subsequently of homicide thru reckless imprudence. He was sentenced to imprisonment and was ordered to pay de Caliston P15,000 for the death of Darrocha, P5,000 as moral damages, P5,000 for burial expenses and P10,000 for loss of pension, which the deceased had failed to receive. On appeal, the CA modified the CFI decision and absolved Dalmacio from the payment of the P10,000 for loss of pension and credited him for the amount of P5,000, previously paid to de Caliston under a vehicular insurance policy obtained by the bus owner.

ISSUE:WON the deletion of the P10, 000 awarded for the loss of pension proper.

RULING:Yes, the deletion of damages for loss of pension was unwarranted. The pension of the decedent being a sure income was cut short by her death, for which Dalmacio was responsible. The surviving heir, de Caliston, is entitled to the award of P10, 000, which is just equivalent to the pension the decedent would have received for one year if she did not die. The P5, 000 paid to de Caliston 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 bus owner 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.#13: Cachero v. Manila Yellow Taxicab, 101 PHIL 523FACTS:Atty. Cachero, plaintiff herein, boarded a taxicab owned by the Manila Yellow Taxicab Co., Inc. The said taxicab bumped against a Meralco post. The taxicab was badly smashed and the plaintiff fell out of the

Transportation Lawvehicle to the ground. As a result of the accident, he suffered slight physical injuries. The driver of the taxi was prosecuted and convicted criminally. Respondent herein offered to settle the case and the plaintiff demanded the amount of P79,245.65 as for damages. Respondent refused to pay the said amount. Plaintiff then proceeded to file a case to recover the same amount through the courts. The CFI rendered a decision in favor of the plaintiff and ordered that respondent pay the amount of P700 for medical and transportation allowances, attorney’s fees and professional fees. Both parties appealed and the decision was affirmed. Hence this petition.

ISSUE:WON Cachero is entitled to recover damages other than those already awarded.

RULING:The Court modified the decision of the lower court. The award of professional fees were reduced to P2,000 and the award of moral damages of P2,000. Plaintiff in this case did not maintain his action against all persons liable for the breach of the contract of common carriage. Since he did not include the driver in this complaint he may not recover moral damages. Respondent herein did not commit any criminal offense against the plaintiff, it was the driver who was the reason behind the injury. This case does not fall under Article 2219 of the NCC therefore he is not entitled to be awarded moral damages.

#14: Fores v. Miranda, 105 PHIL 266FACTS:Ireneo Miranda, a professor of Fine Arts, was a passenger of a passenger jeepney registered to Fores but actuall operated by Sackerman. The vehicle was descending the Sta. Mesa bridge at an excessive rate of speed, and the driver lost control of the same which caused it to swerve and to hit the bridge wall. As a result of the accident, Five of the passengers were injured, including the respondent herein. He suffered a fracture of the upper right humerus. He was taken to the National Orthopedic Hospital for treatment, and later was subjected to a series of operations. At the time of the trial, it appears that respondent had not yet recovered the use of his right arm. The driver was charged with serious physical injuries through reckless imprudence, and upon interposing a plea of guilty was sentenced accordingly. The lower court awarded actual damages to the respondent. On appeal, the Court reduced the amount of actual damages and added the award of moral damages and attorney’s fees. Hence this petition.

ISSUE:WON the award of moral damages and attorney’s fee was proper.

RULING:The Court held that the award of moral damages is not proper in this case. As a general rule, moral damages are not awarded to the victim in cases of breach of contract of common carriage. The exception is that if such accident resulted in the death of the passenger, in which case Article 1764 of the NCC, makes the carrier subject to Article 2206 of the NCC. In case death did not result from the accident, moral damages may be recovered if the common carrier is found guilty of gross negligence amounting to bad faith or malice. In the case at bar there was no bad faith on the part of the common carrier. Therefore, respondent is not entitled to moral damages. As to the issue of attorney’s fee, the court may moto proprio award moral damages as the case may be. Attorney’s fees may be awarded by the court if it is deemed to be just and equitable. Therefore, the Court set aside the decision of the Court of Appeals as far as moral damages are concerned.

#15: Lopez v. Pan American Airways, 16 SCRA 431FACTS:Senator Lopez and party (plaintiffs) made reservations for first class accommodations with Pan American Airways (Pan Am) for a flight from Tokyo to San Francisco. Pan Am’s San Francisco Head Office confirmed the reservations made by the plaintiffs. The first class tickets for the said flight were subsequently issued by Pan Am in favor the plaintiffs. As scheduled, plaintiffs left Manila by Northwest Airlines and arrived in Tokyo the same day. As soon they arrived, Senator Lopez requested Minister Busuego of the Philippine Embassy to contact Pan Am’s Tokyo Office regarding their first class accommodations for that evening’s flight. However, they found out that all first class seats were booked. Pan Am’s agent mistakenly cancelled the reservation made by the plaintiffs and deliberately withheld the incident from the latter. Pan Am took the chance that some of the passengers would cancel their first class seats and they would be able to accommodate the plaintiffs. This never happened. Since the first class seats therein were all taken, Pan Am’s Tokyo Office informed the plaintiffs that it could not accommodate them in that trip as first-class passengers. Due to the urgency of their arrival in the United States they were constrained to take the flight from Tokyo to San Francisco as tourist passengers.

ISSUE:WON Pan Am is liable for moral, exemplary damages and attorney’s fees.

RULING:The Court held that Pan Am’s actions amounted to bad faith and malice which entitled

Transportation Lawthe plaintiffs herein to be awarded moral and exemplary damages. The act of misleading plaintiffs to believe that they had in fact purchased first class tickets when in they have not was a willfull breach of the contract of common carriage. Said actions of Pan Am may indeed have been prompted by nothing more that the promotion of its self-interest in holding on to Senator Lopez and party as passengers in its flight and foreclosing their chances to seek the services of other airlines that may have been able to afford them first class accommodations. Therefore plaintiffs are entitled to receive the award of moral damages. The award of exemplary damages is also proper in this case because such damages are recoverable in breach of contract where the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. Lastly, a working contract for an attorney’s fees, shall control the amount to be paid therefore unless found by the court to be unconscionable or unreasonable.

#16: Ortigas, Jr. v. Lufthansa, 64 SCRA 610FACTS:Petitioner is booked on a first class accommodation in defendants airline from Rome to Manila. The booking was confirmed by its airlines office. The airline employee upong seeing his Filipino nationality disallowed his boarding and the seat was given to a Belgian. Petitioner has a heart ailment and is advised by physician to take only frst class accommodations. He was promised to be transferred to first class on all succeeding layovers from Cairo to Hongkong to no avail. Damages was filed. Trial court awarded Moral and Exemplary damages.

ISSUE:WON defendant is liable for damages.

RULING:Yes. Inattenton and lack of care on the carrier rsulting in the failure of the passenger to be accommodated in a class availed of and contracted amounts to bad faith and fraud. Furthermore, the preference to a Belgian passenger is also a wanton disregard of his right from discrimination. The successive false representations of transferring him to first class is an act of malice and bad faith. This entitles petitioner to moral damages in accordance to Articlec 2220. Moral damages is increased to Php15,000 and Exemplary damages to Php100,000.

#17: Philippine Rabbit Bus Lines v. Esguerra, 117 SCRA 741FACTS:Respondent herein boarded a bus of the plaintiff herein which was bound for Pampanga from Manila. He sat a few seats behind the driver on the left side of the bus near the window. While on route to Pampanga, the bus sideswiped with a freight truck owned and operated by Transport Contractors, the latter coming from the opposite side of the highway. The window glass near the driver's seat of the bus was detached and the left side of its body was damaged. During the course of the accident, the left forearm of Esguerra was hit by a hard blunt object. It caused the breaking of its bones into small fragments while the soft tissues of the muscles and the skin were mascerated. He was immediately brought to the Bulacan Provincial Hospital in Malolos, Bulacan for treatment. Unfortunately, because of the severe damage caused, his left arm was amputated.

Defendant herein filed a case to recover damages. The lower court rendered a decision in favor of Esguerra, finding that both vehicles were reckless in driving. On appeal, the court affirmed the decision of the lower court and awarded actual and moral damages to the respondent herein. Hence this petition.

ISSUE:WON the respondent is entitled to receive moral damages.

RULING:The Court held that the Court of Appeals erred in awarding moral damages to the respondent herein. As a general rule 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. In the case at bar, the Court finds that both vehicles were in their respective lanes and both were equally negligent. The Court does not find that there was malice or bad faith on the part of the driver of the petitioner herein. Therefore the award of moral damages is deleted and the rest affirmed.

#18: Sweet Lines v. Court of Appeals, 121 SCRA 769FACTS:The respondents, having first class tickets, boarded the M/V Sweet Grace to Catbalogan. The vessel had some engine problems which led to a change of schedule and they were thus delayed for a substantial amount of time. Furthermore, the vessel bought the respondents to Tacloban instead of Catbalogan. This led the respondents to purchase another set of tickets and to ride another ferryboat going to Catbalogan.

Transportation LawThe respondents then sued the petitioner carrier for damages for the breach of contract of carriage.

ISSUE:WON the petitioner is liable for damages.

RULING:The Court held that the petitioner is liable for damages specifically moral damages because there was bad faith on its part. The Court found that such bad faith is present based on three circumstances namely:1. Petitioner did not give any notice to the respondents as to the change of schedule of the vessel.2. The petitioner knew fully that it would take no less than fifteen (15) hours to effect the repairs of the damaged engine. The petitioner also assured that the vessel will leave within a short period of time and when the defendants wanted to leave the trip petitioner stated that the “the vessel is already leaving.”3. The petitioner did not even offer to refund the tickets and provide for their transportation from Tacloban to Catbalogan.

#19: Prudencio v. Alliance Transport System, 148 SCRA 440FACTS:Dra. Sofia L. Prudenciado was driving her own car along Taft Avenue to go to the Philippine Normal College Compound where she would hold classes. As she was moving slowly in a normal rate, her car was then hit by the taxi operated by the respondent. The accident caused the petitioner physical injuries and a brain concussion. She then filed for an action for damages against respondent. The lower court, finding the respondent’s driver to be negligent, granted the damages and the Court of Appeals reduced the damages. The petitioner then appealed from the decision of the appellate court.

ISSUE:WON the award of damages by the Court of Appeals was correct.

RULING:The Court held that the reduction of the moral damages by the appellate court to the petitioner was unreasonable and drastic. The reason was that the trial court found the respondent to be grossly negligent in injuring the petitioner. The award of moral damages was proper. The appeal by the petitioner is proper because, as a doctor, she has reasonable fears that such accident due to the carelessness of the respondent’s driver can greatly affect her profession.

Exemplary damages are also awarded to the petitioner to provide for an example or correction to public good. The reason is that the respondent’s driver was driving at a high speed on a rainy day and on a slippery road with complete disregard with the safety of other people.

#20: Trans World Airlines v. Court of Appeals, 165 SCRA 143FACTS:Atty. Vinluan purchased a first class ticket from the petitioner. Such ticket was twice confirmed and yet the petitioner abruptly told the respondent that there were no longer any available seats in the first class and that he will be downgraded to the economy class. When he protested an employee of the petitioner arrogantly threatened the respondent. In addition, he also saw that several Caucasians who arrived much later were accommodated in the first class when the other passengers did not show up. The respondent then sued the petitioner for damages.

ISSUE:WON the petitioner is liable for damages.

RULING:The Court held that the petitioner is liable for moral and exemplary damages. The discrimination in this case is obvious and the humiliation brought to the respondent is indisputable. The petitioner showed lack of care in accommodating the respondent in the class that the latter contracted. In addition, the petitioner rudely informed the respondent of such downgrading of class. Such awarding of damages would serve as an example and a discouragement to carriers who may repeat such oppressive and discriminatory acts.

#21: Armovit v. Court of Appeals, 184 SCRA 476FACTS:The petitioners in this case all resided in the United States and went home to the Philippines for a Christmas visit. On their return trip to the United States, they were bumped off at the airport due to an erroneous entry in their plane tickets relating to the departure time. The petitioners checked in the airport an hour and fifteen minutes earlier than what was indicated in their airline tickets. Upon their check in, the employees of the respondent airlines impolitely informed them that the plane was already taking off and that their check in time was way earlier and entirely different from what was stated in their tickets. The petitioners then sued the respondent airlines for damages.

Transportation LawISSUE:WON the respondent is liable for damages.

RULING:The Court held that the respondent is liable for damages. Actual damages were awarded to the petitioner due to bumped off that occurred. Moral damages were also awarded because the Court found that the respondent was gross negligent in the issuance of the tickets as to the correct time of departure. In addition, the act of the respondent in rudely informing the petitioner of such bumped off is an indication that there was bad faith and malice on the part of the respondent. Furthermore, the relative of the petitioner stated how badly wounded the feelings of the petitioners were. Exemplary damages were also awarded as to provide for an example to the public good. Lastly, nominal damages were properly deleted since such damages cannot co-exist with actual damages.

#22: Pedro de Guzman v. Court of Appeals, G.R. No. L-47822FACTS:Herein respondent Ernesto Cendana was engaged in buying up used bottles and scrap metal in Pangasinan. Normally, after collection respondent would bring such material to Manila for resale. He utilized (2) two six-wheelers trucks which he owned for the purpose. Upon returning to Pangasinan, he would load his vehicle with cargo belonging to different merchants to different establishments in Pangasisnan which respondents charged a freight fee for. Sometime in November 1970, herein petitioner Pedro de Guzman, a merchant and dealer of General Milk Company Inc. in Pangasinan contracted with respondent for hauling 750 cartons of milk. Unfortunately, only 150 cartons made it, as the other 600 cartons were intercepted by hijackers along Marcos Highway. Hence, petitioners commenced an action against private respondent.In his defense, respondent argued that he cannot be held liable due to force majuere, and that he is not a common carrier and hence is not required to exercise extraordinary diligence.

ISSUE:WON respondent is a common carrier.

RULING:The court ruled the affirmative. Article 1732 of the New Civil Code avoids any 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. It also avoids a distinction between a person or enterprise offering transportation services on a regular or scheduled basis and one offering such services on an occasional, episodic, and unscheduled basis.

#23: Planters Products, Inc. v. Court of Appeals, G.R. No. 101503FACTS:Planters Products (Planters) purchased from Mitsubishi International Corporation of USA of 9,000 metric tons of urea fertilizer which the latter shipped abroad the cargo vessel owned by private respondent Kyosei Kisin Kabushiki Kaisha (KKKK) from America to La Union. Prior to its voyage, a time charter party was entered into between Mitusbishi as shipper/charterer and KKKK as ship-owner. After the Urea fertilizer was loaded in bulk by stevedored hired by the shipper, the steel hatches were closed with heavy iron lids which remained closed during the entire journey.Upon arrival of the vessel, the hatches were opened with the use of the vessel boom. Planters unloaded the cargo from the holders into the steel bodied dump trucks. Each time the dump trucks were filled up, its load of urea was covered with tarpaulin before it was transported to the consignee’s warehouse located some (50) fifty meteres from the wharf. It took (11) eleven days from planters to unload the cargo. The report submitted by private marine and cargo surveyors revealed a shortage in the cargo, and some portion in the cargo was contaminated with dirt, rendering the same unfit for commerce. Planters filed an action for damages bu the appellate court absolved the carrier from liability.

ISSUE:WON the respondent is a common carrier.

RULING:The court rules the affirmative as to the respondent being a common carrier. The term common carrier is defined in Article 1732 of the Civil Code. The definition refers to carriers either by land, water, or air which holds themselves out as ready to engage in carrying goods on transporting passengers or both for compensation as a public employment and not as a casual occupation; if the undertaking is a single transaction, not a part of the general business or corporation, although involving the carriage of goods for a fee, then the person or corporation offering such services is a private carrier. In the case at bar respondent carrier transports goods indiscriminately for all persons. Being such, he is a common carrier.

#24: F.C. Fisher v. Yangco Steamship Company, G.R. No. L-8095

Transportation LawFACTS:On June 10, 1912, the directors of Yangco Steamship Company which is duly licensced to engage in the coastwise trade in the Philippines, adopted a resolution which was thereafter ratified and affirmed by the shareholders of the company expressly declaring and providing that the classes of merchandise to be carried by the company in its business as a common carrier to include dynamite, power or other explosives and other expressly prohibiting the officers, agents, and servatnts of the company from offering to carry or accepting to carry said articles.In view of the resolution passed the collector of customs suspended the issuance of clearances for the vessles unless they allow the carriage of such articles. Hence, herein petitioner a major stockholder filed a petition for prohibition.

ISSUE:WON the resolution of Yanco is justified.

RULING:The court rules the negative. Common carrier in the jurisdiction cannot lawfully decline to accept a particular class of goods, unless it appears that for some sufficient reason the discrimination is reasonable and necessary. Yangco Steamships Company 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 regulation in the interest of the public as the legislators may deem proper.

#25: United States v. Quinajon, G.R. No. 8686FACTS:Herein defendants were charged with the violation of Act No. 98. The accused herein have been engaged for more than (4) four years in the transportation of passengers and merchandise in the port of Curimao, in the loading and unloading of passengers and merchandise by means of voyages from the shore. The facts state that sometime in September 1912, the said accused, by means of voyages, unloaded 5,986 sacks of rice belonging to the provincial government of Ilocos Norte where they regularly charge 6 cents for the unloading and loading of each package of merchandise.

ISSUE:WON the provincial government was prejudiced by the preferential privileges in favor of the shippers.

RULING:The court rules the affirmative. Sec. 5 of Act No. 98, provides that any person or corporation who may be damaged by the common carrier of any matter or things prohibited shall be entitled to sue or recover all damages so incurred. It is not believed that that law prohibits common carrier from making special rates for handling merchandise when the same are made for the purpose of increasing the business which are regarded as sound. That does not require absolute equality in all cases; it only applies where the services performed in the different cases are substantially the same and conditions similar.

#26: Loadstar Shipping Co. Inc. v. Court of Appelas, G.R. No. 131621FACTS:On November 19, 1984 herein petitioner shipping company carried, a shipment of (3) three bulk items on board its M/V Cherokee, which amounted to P6,067,178.00, the same being insured by the Manila Insurance Co. (MIC). The vessel in turn was insured by Prudential Guarantee and Assurance, Inc. of P4 million. Unfortunately the ship sank in the are of Limasawa.MIC settled the insurance with the consignee and asked for the subrogation receipt, then MIC filed a claim against Loadstar. PGAI alleging the sinking was due to the fault and negligence of Loadstar. In their defense, Loadstar set up the argument of force majuere. PGAI was dropped from the case afer proving MIC had no locus standi against them. Inter alia all other defenses, Loadstar argues that it cannot be considered a common carrier because it was issued a certificate of public convenience and that it carried a particular type of cargo for a particular shipper.

ISSUE:WON Loadstar’s Cherokee is a common carrier.

RULING:The court rules the affirmative that the M/V Cherokee is a common carrier. It is not necessary that the carrier be issued a certificate of public convenience and their public character is not altered by the fact that the carriage of the goods in question was periodic, occasional, episodic, or unscheduled. Additionally, the second argument of Loadstar must fail; that the M/V Cherokee was carrying a particular type of cargo for one shipper which appears to be purely coincidental is not reason enough to convert a vessel that is a common carrier to a private one, especially where, as in the case, it was shown that the vessel was also carrying passengers.

#27: National Steel Corporation v. Court of Appeals, G.R. Nos. 112287/112350

Transportation LawFACTS:Herein petitioner of G.R. No. 112350, Vlasons Shipping entered into a contract of afreightment on contract of vogage4 charter line with the petitioner of the other consolidated case, National Steel Corporation (NSC), whereby the latter hired Vlason’s vessel, the M/V Vlasons I to make a voyage to load steel products from Ilagan City to Manila. Under the agreement, the loading and unloading of the cargoes are the responsibility of the charter and the owner shall no be liable of the loss or damage of the cargo arising from the unseaworthiness unless counsel by want of diligence on the part of the owners to make the vessel seaworthy and to secure that it is properly manned, equipped and supplied.Upon arrival on August 12, 1974, it was found that nearly all the tin plates and hot rolled sheets were wet and rusty. The cargo was unloaded by the charterer Hence the petitioner filed for a claim of damages amounting to P941,145.58, alleging the negligence of the master and crew of the ship.

ISSUE:WON Vlasons Shipping is made liable notwithstanding the Charter Party stipulations.

RULING:The courts rule the negative. At bottom, this appeal really hinges on a factual issue as to then, how, and who caused the damages to the cargo. Ranged against NSC are two formidable truhs. First, it was found that such damage was brought about during the unloading process when the rain seeped into the cargo due to the negligence of the stevedores employed by it.Second and more importantly, the agreement between the parties “The Contact of Voyage Charter Party for Hire” placed the burden of proof of such loss or damage upon the shipper, not upon the ship owner. Such stipulation, while disadvantageous to the NSC, is valid because the parties entered into a contract of private charter, not one of common carriage.Basic too is the doctrine that courts cannot relieve a party from the effects of a private contract fully entered into, on the ground that it is allegedly one-sided or unfair to the plaintiff. It has been held that the true test of a common carrier of passengers/goods is the carriage of the same, provided it has space, for all who opt to avail for its transportation service for a fee.

#28: Kilusang Mayo Uno Labor Center vs. Garcia Jr., G.R. No. 115381FACTS:Petition for certiorari assails the constitutionality and validity of circulars released by the Land Transportation Franchising and Regulatory Board (LTFRB). Such circulars authorized provincial bus and jeepney operators to increase or decrease the prescribed transportation fares without application with the LTFRB fro a period of one year. Likewise, it established a presumption of public need for certificates of public convenience (CPC). Petitioner KMU claims however that the authority given by LTFRB to provincial bus operators to set a fare range is unconstitutional, invalid and illegal. Also, the establishment of the presumption of public need for a proposed transport service without having to prove public necessity, is likewise illegal it being violative of Public Service Act and the Rules of Court.

ISSUE:WON such circulars released by the LTFRB is valid.

RULING:The Supreme Court held that the authority given by the LTFRB to the provincial bus operators to set a fare range over and above the authorized existing fare is illegal and invalid. This is tantamount to an undue delegation of legislative authority. The policy of allowing the provincial bus operators to change and increase their fares would result not only to a chaotic situation but also to an anarchic state of affairs. This would leave the riding public at the mercy of transport operators who may change fares every hour, every day, every month as he may wish to do so. The Supreme Court held that rate-fixing is a delicate and sensitive government function that requires dexterity of judgment with a settled goal of arriving at a just and reasonable rate accepted by both the public and the utility. With regard to the presumption of public need, CPC is an authorization granted by the LTFRB for the operation of land transportation services for public use as required by law. Public convenience or necessity generally means something fitting for public need. Thus in the case at bar, it was founded that the LTFRB committed grave abuse of discretion is issuing orders to regulate the transport sector. Such circulars are deemed null and void and of no force or effect.

#29: Tatad v. Garcia, G.R. No. 114222FACTS:EDSA LRT Consortium, a foreign corporation, was awarded with the construction of Light Rail Transit III (LRT III) as the only bidder who has qualified with the requirements provided by the PBAC. The said foreign corporation will construct the LRT III in a “Built-Lease-Transfer” agreement that such public utility will be leased by the government through the Department of Transportation and Communication (DOTC) and then it would be subsequently sold by the corporation to the government. An objection was raised by the petitioner stating that the awarding of the bid to the said corporation is against the Constitution. It was provided in the Constitution that only Filipinos are entitled to operate a public utility such as the LRT III.

Transportation LawISSUE:WON the awarding of the bid to EDSA LRT Consortium is against the Constitution.

RULING:The Court held that there is a distinction in the “operation” of a public utility and ownership in the facilities and equipment to serve the public. The EDSA LRT Consortium fall under the latter because the said corporation will not operate the public utility. The said corporation will only own the facilities and equipment such as the train carts, the railings and the booths. In addition, such ownership will then be subsequently transferred to the government under “Built-Lease-Transfer” agreement. With that said, the operation of the public utility will fall to the Filipinos through its government. Therefore, the awarding of the bid to EDSA LRT Consortium is not against the provisions of the Constitution.

#30: Samar Mining Co. v. Nordeutscher Lloyd & C.F. Sharp & Co. Inc., G.R. No. L-28673FACTS:Herein petitioner and defendant entered into a contract where the former agreed to ship a crate of optima wielded wedge wire sleeves, with the Bill of Lading indicated the effective transportation from Germany to Manila only.From Manila, the crate was to be further transported to Davao. The carrier had unloaded and delivered the goods in the rouded warehouse in Manila.Unfortunately, the goods were lost and never reached Davao City.

ISSUE:WON herein petitioner is liable for the loss.

RULING:The court rules the negative, when the carrier under the terms of the Bill of Lading had delivered the goods at the port of destination, at that point he merely becomes the agent of the consignee and ceases to be liable for any loss a damage of goods transported.Furthermore, there is no applicability of Article 1738 of the New Civil Code, which contemplates liability of the carrier of the shipment of goods while stored in the warehouse of the carrier. However, in the present case, the warehouse belonged to a third person.

#31: Gelisan v. Alday, 154 SCRA 388FACTS:Herein petitioner is Bienvenido Gelisan, is the owner of a freight truck. He and Roberto Espiritu entered into a contract under which Espiritu hired the freight truck Gelisan for the purpose of hauling sugar, flour, and fertilizers. It also stipulated that Espiritu shall bear the loss and damage attending the goods to be hauled by him.Benito Alday, a trucking operator who knew of Espiritu, had a contract to haul the fertilizers of Atlas Fertilizer Corporation from Pier 4, North Harborn, to Mandaluyong.Alday met Espiritu at the gate of Pier 4 and the latter offered the use of his truck with the driver and helper. Alday accepted and instructed the checker to let Espiritu hau fertilizer.Espiritu managed 200 bags of fertilizer per trip. The fertilizer was delivered to the driver and maid with the necessary way bill receipt. However, Espiritu never delivered the fertilizer to the Atlas Fertilizer bodega in Mandaluyong.Hence, Alday was compelled to pay for the loss of 400 tags to Atlas Fertilizer Corporation and filed a complaint against Espiritu and Gelisan with the CFI Manila.While the CFI ruled that Espiritu alone is liable, the Court of Appeals ruled to include Gelisan.

ISSUE:WON Gelisan be held solidarily liable with Espiritu.

RULING:The court rules the affirmative, Gelisan being the registered owner of the truck. The court has held invariably in several decisions that the registered owner of a public service vehicle is responsible for damages that may arise from consequences incidental to its operation or that may be caused by any of the passengers therein.The claim that the petitioner is not liable in view of the lease contract executed by and between him and Roberto Espiritu which exempts him from liability to third persons cannot be sustained because it appears that the lease contract, adverted to, had not been approved by the Public Dercric Commision.It is settled in our jurisprudence that if a property covered by a franchise is transferred or leased to another without the requisite approval, the transfer is not binding upon the public and third persons.

Transportation LawHowever, Gelisan is not without recourse as he may be indemnified by Espiritu the amount he many have been udered to pay for the damages.

#32: Philtranco Service Enterprise v. Court of Appeals, 273 SCRA 563FACTS:The victim herein, Ramon Asuesta was riding in his easy rider tricycle along Calbayog City. Also in the city, herein defendant Philtranco’s bus was driven by defendant Rogasiones Dolira Manilbing was being pushed by some persons in order to start its engine. As the bus was pushed, its engine started thereby the bus continued on its running motion and it occurred at the time when Ramon Asuesta, who was still riding on his bicycle was directly (was) in front of the said bus. Due to the abrupt start of the bus’ engine, it thereby bumped on the victim Ramon. As a result, he fell and was run over by the bus.Still, the bus did not halt after hitting the victim. Thereafter P/Sgt. Yabao, who was then jogging approached the driver defendant and signaled him to stop, but the driver only stopped when the former introduced himself as a police officer. The trial court rendered a decision ordering the petitioner (Philtranco) to jointly and severally pay the private respondents. On appeal, the CA affirmed the decision.

ISSUE:WON the court erred in holding Philtranco liable being the registered owner of a public service for the tortuous act of the driver.

RULING:The courts ruled the negative. The Appellate court was correct in holding herein petitioner liable. Article 2176 of the New Civil Code provides that “whoever by act or omission causes damage to another, these being fault or negligence, is obligated to pay for the damage done.” Such fault or negligence, if there is no pre-existing contractual relation between the parties is called a quasi-delict. Further, Article 2180 of the Civil Code states that “The obligation imposed by Article 2176 is demandable not only for ones owns acts or omissions, but for whom one is responsible.”In the case at bar, the liability of the registered owner of a public service vehicle, like petitioner Philtranco, for damages arising from the tortuous acts of the driver are primary, direct and joint and solidary, its only recourse if the judgement for damages is satisfied by it is to be recovered what it has paid from its employee who committed the fault or negligence which gave rise to the action based on the quasi-delict.

#33: Santos v. Sibug, G.R. No. L-26815FACTS:Santos, who owns a jeep, entered into an arrangement with Vivad that the latter will fictitiously purchase the jeep so that Santos may use the Certificate of Public Convenience (CPC) of Vivad. Subsequently, the Sibug was bumped by the said jeep. Damages was then awarded to Sibug against Vivad and his driver. The Sheriff of Manila then levied the jeep and sold it in a public auction. Santos then files of the third-party claim with the Sheriff stating that he owns the jeep and such sale is null and void because the property levied is not owned by Vivad.

ISSUE:WON the levy and auction sale made on the jeep is null and void.

RULING:The Court held that the agreement entered into by Santos and Vivad is a “Kabit System,” which is prohibited by law. Such system was not approved by the Public Service Commission (PSC) therefore Vivad is the owner of the jeep in legal contemplation. Since Vivad is the owner of the jeep according to law, then it cannot be said that the Sheriff seized the property belonging to a stranger. The auction sale is still valid according to the Court.#34: Lita Enterprises, Inc. v. IAC, G.R. No. L-64693FACTS:Spouse Ocampo purchased 5 toyota standard cars from delta motors in installments to be used as taxi cabs. However, since they do not have any franchise to operate taxicabs, they entered in an agreement with Lita enterprises for the use of the latter’s certificate of public convenience, commonly known as Kabit system. Later on, the taxi collided into a motorcycle resulting to the death of the driver of the motorcycle Emeterio Martin. Lita enterprises were adjudged liable and two of the taxicabs were levied upon and sold at a public auction. Thereafter the spouses Ocampo decided to register the taxicabs in their own name and ask Lita enterprise to return the papers but the latter refused. Hence this petition.

ISSUE:WON the agreement between the parties is valid.

RULING:The Court held that the agreement between the parties is not valid. Under the arrangement of kabit system, whereby a person who has been granted a certificate of convenience allows another person who owns motor vehicles to operate under such for a fee. The Kabit System has been identifies as one of the root causes of prevalence of graft and corruption in the government transportation offices. It is void being

Transportation Lawcontrary to public policy. And the parties have no right of action against each other because they are in pari delicto, the court will leave them both where it finds them.

#35: Teja Marketing vs. IAC, 148 SCRA 347FACTS:Respondent purchased from petitioner a tiyajle. Such tiyalje amounted to a total value of P800. Respondent was able to pay the purchase price but however left a balance of P1, 700. Subsequently, a chattel mortgage was executed over the said balance. It was found by the court that the defendant purchased the motorcycle for the purpose of engaging and using the same for transportation business. To be able to use the vehicle, the tricycle was attached to the plaintiff’s transportation line, which had the franchise. In effect, the registration certificate is under petitioner’s name. It appeared that they agreed that the petitioner would undertake the yearly registration of the unit in the Land Transportation Commission.

ISSUE:WON relief may be granted to any of the parties.

RULING:The Supreme Court held that neither of the two parties are entitled for relief. Both parties have entered into an illegal contract, thus no action arises out from any illicit transaction. The parties operated under an agreement known as the “Kabit System”. Such system operates when a person who has been granted a certificate of public convenience allows another person who owns a motor vehicle to operate under such franchise for a fee. A certificate of public convenience is a special privilege which cannot be countenanced. This illegitimate arrangement has been recognized as one of the root causes of the frequency of graft and corruption in the government transportation affairs. It is declared void it being against public policy. It is a fundamental principle that the court will not aid either party to enforce an illegal contract and will leave both where it finds them. The defects of the contract are permanent and cannot be ratified. Thus, both parties are culpable of their illicit indenture.

#36: Magboo v. Bernardo, G.R. No. L-16790FACTS:The petitioners filed an action against the respondent who is the owner of the jeep and who is being claimed to be responsible for the death of the petitioner’s 8 year old child in a vehicular accident. The respondent denies being liable for the death of the said child because he claimed that there was no employer-employee relationship between him and the driver of the said jeep because of the boundary system that they are following. The respondent claims that only the driver should be liable because the relationship between the two is that of a lessor-lessee. Respondent also claims that he should not be held subsidiary liable because the driver of the jeep pleaded guilty to a criminal case without respondent’s knowledge.

ISSUE:WON the respondent is liable for the death of the child of the petitioners.

RULING:The Court held that the respondent should be liable because the lease he made with the driver of the jeep was not approved by the Public Service Commission (PSC). Since the lease was made without such approval, the owner continued to be the operator of the jeep in legal contemplation and such was responsible for the consequences of his operation. The Court also held that the claim of the respondent in stating that he did not know of the plea made by the driver, which prevented him from proving his innocence, was raised too late in the case therefore the respondent is estopped from enforcing any claim regarding to that matter.#37: Eastern Shipping Lines, Inc. vs. Court of Appeals, 196 SCRA 570FACTS:SS Eastern Comet, owned by defendant Eastern Shipping Lines was engaged in the business of shipment from Japan to the Philippines. Through the SS Eastern Comet, two fiber drums of riboflavin were shipped from Yokohama to Manila. The shipment was discharged upon arrival into the custody of defendant Metro Port Service, Inc. However, the latter refused to one drum after claiming that such unwanted drum was in bad order. Defendant Allied Brokerage Corporation received the shipment from Metro Port and detected that one drum was opened and without seal. The goods were then delivered to the consignee’s warehouse. The latter noted that one drum contained spillages, while the rest of the contents were adulterated. As a consequence of the damage Mercantile Insurance Company paid the consignee under its marine policy insurance and instituted civil action against defendants as subrogee. The Court of Appeals affirmed judgment holding the common carrier, arrastre operator, and customs brokers jointly and severally liable.

ISSUE:WON Eastern Shipping Lines, Inc. can be held severally and jointly liable with Metro Port and Allied brokerage.

Transportation LawRULING:The Supreme Court held that Esatern Shipping Lines, Inc can be held liable. As what was already decided in Fireman’s Fund Isurance, Co. vs Metro Port Service, Inc, the legal relationship between the consignee and the arrastre operator is analogous to that of a depositor and a warehouseman. Further explained, the relationship between the consignee and the common carrier is comparable to that of the consignee and the arrastre operator. Since it is the duty of the Arrastre to take good care of the goods that are in its custody and to deliver them in good condition to the consignee, such responsibility also devolves upon the carrier. The duty of the consignee to guard the goods and shelter it from destruction or impairment is also shouldered by the common carrier. Both are therefore charged with the obligation to deliver the goods in good condition to the consignee.

#38: Sarkies Tours Philipines, Inc. vs. CA, G.R. No. 108897FACTS:Fatima Fortades was a passenger of one of the buses of petitioner Sarkies Tours bound for Legazpi City. She had onboard luggages which contained important documents and personal belongings. Her belongings were kept in the baggage compartment of the bus, but during a stopover at Daet, it was discovered that only one bag remained in the open compartment. The others, including Fatima's things, were missing and might have dropped along the way. Despite the suggestion of the passengers to retrace its route in order to recover their luggage, the driver nevertheless neglected them and continued driving. Consequently, respondents filed a case to recover the value of the remaining lost items, as well as moral and exemplary damages, attorney's fees and expenses of litigation. They claimed that the loss was due to petitioner's failure to observe extraordinary diligence in the care of Fatima's luggage and that petitioner dealt with them in bad faith from the start. Petitioner, on the other hand, disowned any liability for the loss on the ground that Fatima allegedly did not declare any excess baggage upon boarding its bus.

ISSUE:WON Sarkies is liable for damages for lost propery of its passengers.

RULING:The Supreme Court held that Sarkies is liable for the loss. The cause of the loss was petitioner's negligence in not ensuring that the doors of the baggage compartment of its bus were securely fastened. As a result of this lack of care, almost the entire luggage was lost, to the prejudice of the paying passengers. 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. 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. The awarding of actual damages to respondents is just because their efforts in recovering the lost items must be well compensated. Moral and exemplary damages must also be awarded in the presence of bad faith and negligence on the part of the common carrier.

#39: Yobido v. Court of Appeals, 281 SCRA 1FACTS:The spouses Tumboy and their minor children boarded a bus operated by the Yobido Bus Liner to Davao City. On the way to their destination, the front left tire of the bus exploded which led to the bus falling into a ravine and causing the death of Tito Tumboy and physical injuries to the other passengers. The defendants then filed a case against the petitioner for breach of the contract of carriage. The petitioner claims that it is not liable because the tire explosion is a caso fortuito.

ISSUE:WON the petitioner is liable for the accident.

RULING:The Court held that the tire explosion cannot be considered as a fortuitous event. The reason is that the common carrier has the burden of proof that it exercised extraordinary diligence in the carriage of the passengers. There is always a presumption of negligence on the common carrier in cases of death or injury and that the carrier needs to present contrary evidence that it was not negligent and that it exercised the required diligence of the law. The carrier cannot rely on the defense that the tire was brand new or that it had daily check-ups regarding the parts of the bus.

#40: Compania Maritima v. Insurance Co. of North America, 12 SCRA 213FACTS:Macleod & Co., contracted, first by telephone and later confirmed by a formal written booking issued by Macleod & Co., the services of the petitioner Comapania Maritima for the shipment of bales of lamp from Davao to Manila. Two lighters of the petitioners loaded the said cargo from Macleod’s wharf at Davao awaiting the arrival of another vessel of the petitioner for reloading. One of the lighters sunk of which Macleod suffered a total of P64,018. Respondent insurers of said cargo paid Macleod, and being subrogated to Macleod’s right, filed a claim to collect from the petitioner the amount it paid to Macleod. Petitioner denied liability on the grounds that there was no bill of lading issued thereby resulting to be non-

Transportation Lawexistence of the contract; that the sinking was due to a fortuitous event and the respondent has no personality.

ISSUE:WON there was a contract and whether or not there was a fortuitous event.

RULING:There was complete contract of carriage the consummation of which has already begun when the shipper delivered the cargo to the carrier and the latter took possession of the same by placing it on a lighter manned by its two authorized employers under which Macleod become entitled to the privilege of law. The responsibility of the carrier commenced on the actual delivery and receipt by, the carrier or its authorized agent of the goods. The barges or lighters were merely employed as the first step of the voyage. As to the issuance of the bill of lading, it is not required or essential to the contract, although it may become obligatory by reason of regulations or as a condition injured in the contract by the agreement of the parties themselves.

#41: Lu Do v. Binamara, 101 PHIL 120FACTS:Delta Company of New York shipped 6 cases of film and photographic supplies to respondent herein. Having arrived at the Cebu port, it discharged her cargo placing it in the custody of the arrastre operator appointed by the Bureau of Customs. The cargo was checked and found to be in good order. Later on the goods were delivered to Binamara. After inspection it was found out that some cargo were missing. Binamara demanded from the carrier indemnity for the loss it sustained. However, the carrier denied liability relying on the stipulation in the contract of carriage. It provides that the carrier is no longer liable for the cargo after delivery of the same to the customs authorities. The lower court rendered a decision in favor of Binamara. Hence this petition.

ISSUE:WON the common carrier is liable for the lost cargo.

RULING:The Court held that the carrier is no longer liable for the loss of the goods. The general rule is that delivery must be made to the consignee or the person authorized to receive the goods, without such delivery the carrier shall be liable for the loss or destruction of goods while in their custody. However, parties may agree to limit the liability of the carrier considering that the goods have to go through the inspection of the customs authorities before they are actually turned over to the authorities. The stipulation in this case is binding upon the parties it being not contrary to law, morals, or public policy.

#42: American President Lines, Ltd. Vs. Klepper, 110 Phil 243FACTS:Klepper on board SS Pre. Cleveland and Yokohama, Japan and lift van containing personal and household effects. Upon its arrival in Manila and while the lift van was being unloaded by crane, it fell on the pier and its contents were spilled and scattered, as a result of which, Klepper bought an action for damages against the carrier. While the carrier does not dispute liability, it, however, contends that the same cannot exceed $500, invoking in its favor the bill of lading and Sec. 4(5) of the carriage of goods by Sea Act (COGSA). The trial Court ordered the carrier to pay Klepper with a right to reimbursement from Delgado Brothers, the operator of the crane. The CA affirmed the said decision. The carrier appealed.

ISSUE:WON the carrier can be held liable beyond that stated in the bill of lading and that provided in COGSA.

RULING:The carrier should only pay Klepper the sum of $500. The shipper who accepted the bill of lading impliedly id bound by its items. While 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 mater 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.

#43: Servando v. Philippine Steam Navigation Co., 117 SCRA 832FACTS:Clara Uy Bico and Amparo Servando loaded on board the appellant's vessel, FS-176, for carriage from Manila to Pulupandan, Negros Occidental cargoes of cavans of rice and cartons of colored paper which were evidenced by bills of lading.

Transportation LawUpon arrival of the vessel at Pulupandan the cargoes were discharged, complete and in good order, unto the warehouse of the Bureau of Customs. At about 2:00 in the afternoon of the same day, said warehouse was razed by a fire of unknown origin, destroying appellees' cargoes. Before the fire, however, appellee Uy Bico was able to take delivery of 907 cavans of rice Appellees' claims for the value of said goods were rejected by the appellant.

ISSUE:WON carrier is liable for the loss of the cargo.

RULING: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. Article 1736 of the Civil Code imposes upon common carriers the duty to observe extraordinary diligence from the moment the goods are unconditionally placed in their possession "until the same are delivered, actually or constructively, by the carrier to the consignee or to the person who has a right to receive them, without prejudice to the provisions of Article 1738."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...The Court sustains the validity of the above stipulation. There is nothing therein that is contrary to law, morals or public policy. Therefore, the carrier is no longer liable for the loss of the goods.

#44: Saludo, Jr. v. Court of Appeals, 207 SCRA 498FACTS:Plaintiff herein together with Pomierski and Son Funeral Home of Chicago brought the remains of plaintiff’s mother to Continental Mortuary Air Services which booked the shipment of the remains from Chicago to San Francisco by Trans World Airways (TWA) and from San Francisco to Mania with Philippine Airlines (PAL). The remains were taken to the Chicago Airport, but it turned out that there were 2 bodies in the said airport. Somehow the 2 bodies were switched, and the remains of plaintiff’s mother was shipped to Mexico instead. The shipment was immediately loaded on another PAL flight and it arrived the day after the expected arrival. Plaintiff filed a claim for damages in court. The lower court absolved both airlines and upon appeal it was affirmed by the court.

ISSUE:WON the 2 airlines should be held liable for damages.

RULING: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 eo instanti. Hence, while we agree with petitioners that the extraordinary diligence statutorily required to be observed by the carrier instantaneously commences upon delivery of the goods thereto, for such duty to commence there must in fact have been delivery of the cargo subject of the contract of carriage. 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 exempting causes under Article 1734, attach and the presumption of fault of the carrier under Article 1735 be invoked.

#45: Macam v. Court of Appeals, 313 SCRA 77FACTS:Petitioner Macam exported watermelons and mangoes to Hong Kong, Great Prospect Company is the consignee. The bill of lading stated that one of the bill must be presented by the Pakistan Bank as consignee and GPC as the notify party. Upon arrival in Hong Kong, the shipment was delivered by the carrier directly to GPC and not to Pakistan Bank and without surrendering the bill of lading.

ISSUE:WON there was a valid delivery.

RULING:The extraordinary responsibility of common carriers last until actual or constructive delivery of the cargo to the consignee or his agent. Pakistan was indicted as consignee and GPC was the notify party. However, in the export invoice, GPC was clearly named as buyer or importer. Petitioner referred to GPC as such in his demand letter to respondent and his complaint before the court. This premise brings into conclusion that

Transportation Lawthe deliveries of the cargo to GPC as buyer or importer is in conformity with Art. 1736 of the Civil Code. Therefore, there was a valid delivery.

#46: Juan Ysmael & Co. v. Barreto & Co., 51 PHIL 90FACTS:Plaintiff seeks to recover from defendant the alleged value of the four cases of merchandise which it delivered to the steamship ANDRES on October 23, 1922, at Manila, to be shipped to Surogao. Said shipment was never delivered to the consignee. The defendants rely only on clause 7 of the bill of lading whereby it was provided that action not brought within 610 days from the time the cause of action accrued still be barred, and on clause 12 which provided that the defendants are not liable for any package in excess of P300 unless the value and contracts of such package are correctly stated in the bill of lading at the time of the shipment. The goods in question were shipped from Manila on October 25, 1922, or a little less that 6 months after the shipment was made.

ISSUE:WON the action was brought within a reasonable time.

RULING:The action was brought within a reasonable time as those words are specified and defined in the authorities sited. It is true that both the plaintiff and the defendants are residents of the City of Manila, but it is also true that Surigao where the goods in question were to be delivered is one of the most distant places from Manila in the Philippine Islands. In the very nature of things, plaintiff would not want to commence its action until such time as it had made a full and careful investigation of all of the material facts and even the law of the case, so as to determine whether or not defendants were liable for its loss.Clause 12 places a limit of P300 for “any single package of silk.” The evidence of each case very near P2,500. In this situation, the limit of defendant’s liability for each package of silk for loss or damage from any cause of for any reason, would put it in the power of the defendant to have taken the whole cargo of 64 cases of silk at a valuation of P300 of each case, or less than 1/8 of its actual value. If that rule of law should be sustained, no silk would ever be shipped from one island to another in the Philippines. Such a limitation in value is valid as against public policy.

#47: Shewaram v. Philippine Airlines, 17 SCRA 606FACTS:Shewaram, petitioner herein, is a Hindu from Davao. He boarded a PAL plane for a trip to Manila. He checked in 3 pieces of baggage, a suitcase 2 other pieces. One of the suitcases were mistagged by the defendant and as a result the said suitcase did not arrive with him in Manila. He was shown a similar bag, but the contents did not belong to him. Among his things in the suitcase was a Rollflex camera and Transistor Radio 7. His baggage was later on returned but the camera and radio were missing. He demanded indemnity for his loss from PAL. The latter offered to pay P100 for his loss but Shewaram. Defendant herein claimed that the PAL ticket, on the reverse side, stated in fine print that if the value of baggage is not stated, and the baggage is lost, the maximum liability of PAL is P100.00. If value in excess of P100.00 is stated, PAL will charge extra because PAL is being held liable for an amount exceeding P100.00. Shewaram rejected the offer and demanded full payment of P800.00 for the amount of the things he lost. PAL refused to do so.

ISSUE:WON the stipulation limiting the liability of PAL shall apply in the case at bar.

RULING:The Court held that PAL is liable for the loss of the petitioner herein. The stipulation in at the back of the ticket shall not be binding against the petitioner. Article 1750 of the NCC provides that Article 1750 the pecuniary liability of a common carrier may, by contract, be limited to a fixed amount. It is required, however, that the contract must be "reasonable and just under the circumstances and has been fairly and freely agreed upon." In this case, the court believes that the requirements of said article have not been met. It cannot be said that the petitioner had actually entered into a contract with the PAL, embodying the conditions as printed at the back of the ticket stub that was to the petitioner. 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 petitioner was aware of those conditions such that he had "fairly and freely agreed" to those conditions.

#48: Everett Steamship Corporation v. Court of Appeals, 297 SCRA 496FACTS:Hernandez Trading Co., respondent herein, imported 3 crates of bus spare parts from its supplier, Maruman Trading Company, Ltd., a foreign corporation based in Japan. The crates were shipped from Japan to Manila on board "ADELFAEVERETTE," a vessel owned by the principal of the petitioner herein, Everett Orient Lines. The said crates were covered by Bill of Lading No. NGO53MN. The vessel arrived in Manila and it was discovered that the one crate was missing. This was confirmed and admitted by petitioner in its letter of January 13, 1992 addressed to private respondent, which thereafter made a

Transportation Lawformal claim upon petitioner for the value of the lost cargo amounting to One Million Five Hundred Fifty Two Thousand Five Hundred (Y1,552,500.00) Yen, the amount shown in an Invoice No. MTM-941, dated November 14, 1991. However, petitioner offered to pay only One Hundred Thousand (Y100,000.00) Yen, the maximum amount stipulated under Clause 18 of the covering bill of lading which limits the liability of petitioner. Respondent rejected the offer and filed a case to collect payment for the loss against the petitioner.

ISSUE:WON the petitioner is liable for the actual value and not the maximum value recoverable under the bill of lading.

RULING:A stipulation in the bill of lading limiting the liability of the common carrier for the loss, damages of cargo to a certain sum, unless the shipper declares or a higher value is sanctioned by law, particularly Articles 1749 and 1780 of the Civil Code. The stipulations in the bill of lading are reasonable and just. In the bill of lading, the carrier made it clear that its liability would only be up to Y100,000.00 (Yen). However, the shipper, Maruman Trading, 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 trial court’s decision that private respondent could not have fairly agreed to the limited liability clause in the bill of lading because the said condition were printed in small letters does not make the bill of lading invalid.

#49: British Airways v. Court of Appeals, G.R. No. 121824FACTS:On April 6, 1989, Mahtani decided to visit his relative in Bombay, India. In anticipation of his visit, he obtained the services of a certain Mr. Gemar to prepare his travel plan. Since british Airways had no ticket flights from Manila to Bombay, Maktani had to take a connecting flight to Bombay on board British Airways. Prior to his departure, Maktani checked in the PAL counter in Manila his two pieces of luggage containing his clothing and personal effects, confident that upon reaching Hong Kong, the same would be transferred to the BA flight bound for Bombay, Unfortunately, when Maktani arrived in Bombay, he discovered that his luggage was missing and that upon inquiry from the BA representatives, he was told that the same might have been diverted to London. After plaintiff waiting for his luggage for one week, BA finally advised him to file a claim accomplishing the property.

ISSUE:WON defendant BA is liable for compulsory damages and attorney’s fee, as well as the dismissal of its third party complaint against PAL.

RULING:The contract of transportation was exclusively between Maktani and 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 contacts was one of continuous air transportation from Manila to Bombay. The Court of Appeals should have been cognizant of the 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. Since the instant petition was based on breach of contract of carriage, Maktani can only sue BA and not PAL, since the latter was not a party in the contract.

#50: Quisumbing Sr. vs. Court of Appeals, 189 SCRA 605FACTS:Norberto Quisumbing and Gunther Loeffler were passengers of PAL’s Fokker “Friendship” plane flying from Macatan City bound to Manila. A senior NBI agent, Florencio O. Villarin, a senior NBI agent and also one of the passengers of the said plane, saw a certain “Zaldy” boarded on the same flight. Zaldy was a suspect for the killing of a Judge Valdez. Villarin sent a note to the Captain of the plane requesting that they contact the NBI director to send agents on their point of destination because of the presence of Zaldy. However, Captain Luis Bonnevie came out of the cockpit and informed Villarin the he could not send the message because it would be heard by all ground aircraft stations. Villarin advised the Captain of the danger having Zaldy and his companions onboard. Consequently, gunshots ensued between Zaldy’s group and Villarin. Zaldy announced a hold-up and obtained the belongings of the passengers. Zaldy and his companions successfully escaped upon landing in Manila. Petitioners now demand from PAL indemnity for their lost belongings. The petitioners contended that PAL is liable for breach of contract of carriage, for not transporting them and their belongings at the point of destination without loss or damage. As a defense, PAL interposed that the incident was force majeure.

ISSUE:WON PAL can be held liable for the loss of petitioners’ belongings due to the hi-jacking.

RULING:The Supreme Court held that PAL cannot be held liable for the loss of property. Where the defendants has faithfully complied with the requirements of government agencies and adhered to the established

Transportation Lawprocedures and precautions of the airline industry and particular time, its failure to take certain steps that a passenger in hindsight believes should have been done is not the negligence or misconduct which mingles with force majeure as an active and cooperative cause. It was proven that PAL cannot be faulted with negligence. Hence, there was no breach of contract of carriage because there was no clear evidence that PAL acted in bad faith in their obligation to transport the passengers and their properties at the point of destination. The mandatory use of the most sophisticated electronic devices may have minimized hijackings but all these have proved ineffective against truly determined hijackers. Such incident which occurred was indeed force majeure.