Transorient vs Ucpb Full Txt

8/13/2019 Transorient vs Ucpb Full Txt

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SECOND DIVISION[G.R. No. 148496. March 19, 2002]

VIRGINES CALVO doing business under the name and style TRANSORIENT CONTAINER TERMINAL SERVICES,INC., petitioner, vs. UCPB GENERAL INSURANCE CO., INC. (formerly Allied Guarantee Ins. Co., Inc.) respondent.D E C I S I O NMENDOZA, J.:

This is a petition for review of the decision,[1] dated May 31, 2001, of the Court of Appeals, affirming the decision[2]of the Regional Trial Court, Makati City, Branch 148, which ordered petitioner to pay respondent, as subrogee, theamount of P93,112.00 with legal interest, representing the value of damaged cargo handled by petitioner, 25%thereof as attorneys fees, and the cost of the suit.

The facts are as follows:Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services, Inc. (TCTSI), a sole proprietorshipcustoms broker. At the time material to this case, petitioner entered into a contract with San Miguel Corporation(SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the PortArea in Manila to SMCs warehouse at the Tabacalera Compound, Romualdez St., Ermita, Manila. The cargo wasinsured by respondent UCPB General Insurance Co., Inc.

On July 14, 1990, the shipment in question, contained in 30 metal vans, arrived in Manila on board M/V HayakawaMaru and, after 24 hours, were unloaded from the vessel to the custody of the arrastre operator, Manila PortServices, Inc. From July 23 to July 25, 1990, petitioner, pursuant to her contract with SMC, withdrew the cargo fromthe arrastre operator and delivered it to SMCs warehouse in Ermita, Manila. On July 25, 1990, the goods wereinspected by Marine Cargo Surveyors, who found that 15 reels of the semi-chemical fluting paper werewet/stained/torn and 3 reels of kraft liner board were likewise torn. The damage was placed at P93,112.00.

SMC collected payment from respondent UCPB under its insurance contract for the aforementioned amount. In turn,respondent, as subrogee of SMC, brought suit against petitioner in the Regional Trial Court, Branch 148, Makati City,which, on December 20, 1995, rendered judgment finding petitioner liable to respondent for the damage to the

shipment.

The trial court held:

It cannot be denied . . . that the subject cargoes sustained damage while in the custody of defendants. Evidencesuch as the Warehouse Entry Slip (Exh. E); the Damage Report (Exh. F) with entries appearing therein, classifiedas TED and TSN, which the claims processor, Ms. Agrifina De Luna, claimed to be tearrage at the end andtearrage at the middle of the subject damaged cargoes respectively, coupled with the Marine Cargo Survey Report(Exh. H - H-4-A) confirms the fact of the damaged condition of the subject cargoes. The surveyor[s] report (Exh.H-4-A) in particular, which provides among others that:

. . . we opine that damages sustained by shipment is attributable to improper handling in transit presumably whilstin the custody of the broker . . . .

is a finding which cannot be traversed and overturned.

The evidence adduced by the defendants is not enough to sustain [her] defense that [she is] are not liable.Defendant by reason of the nature of [her] business should have devised ways and means in order to prevent the

damage to the cargoes which it is under obligation to take c ustody of and to forthwith deliver to the consignee.Defendant did not present any evidence on what precaution [she] performed to prevent [the] said incident, hence thepresumption is that the moment the defendant accepts the cargo [she] shall perform s uch extraordinary diligencebecause of the nature of the cargo.

. . . .

Generally speaking under Article 1735 of the Civil Code, if the goods are proved to have been lost, destroyed ordeteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove

that they have observed the extraordinary diligence required by law. The burden of the plaintiff, therefore, is tmerely that the goods he transported have been lost, destroyed or deteriorated. Thereafter, the burden is shthe carrier to prove that he has exercised the extraordinary diligence required by law. Thus, it has been heldmere proof of delivery of goods in good order to a carrier, and of their arrival at the place of destination in badmakes out a prima facie case against the carrier, so that if no explanation is given as to how the injury occurcarrier must be held responsible. It is incumbent upon the carrier to prove that the loss was due to accidentother circumstances inconsistent with its liability. (cited in Commercial Laws of the Philippines by Agbayani, Vol. IV, 1989 Ed.)

Defendant, being a customs brother, warehouseman and at the same time a common carrier is supposed [toexercise [the] extraordinary diligence required by law, hence the extraordinary responsibility lasts from the timgoods are unconditionally placed in the possession of and received by the carrier for transportation until the sare delivered actually or constructively by the carrier to the consignee or to the person who has the right to re

the same.[3]Accordingly, the trial court ordered petitioner to pay the following amounts

1. The sum of P93,112.00 plus interest;

2. 25% thereof as lawyers fee;

3. Costs of suit.[4]

The decision was affirmed by the Court of Appeals on appeal. Hence this petition for review on certiorari.

Petitioner contends that:

I. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR [IN] DECIDING THE CANOT ON THE EVIDENCE PRESENTED BUT ON PURE SURMISES, SPECULATIONS AND MANIFESTLYMISTAKEN INFERENCE.

II. THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR IN CLASSIFYING THEPETITIONER AS A COMMON CARRIER AND NOT AS PRIVATE OR SPECIAL CARRIER WHO DID NOT HITS SERVICES TO THE PUBLIC.[5]

It will be convenient to deal with these contentions in the inverse order, for if petitioner is not a common carrialthough both the trial court and the Court of Appeals held otherwise, then she is indeed not liable beyond wordinary diligence in the vigilance over the goods transported by her, would require.[6] Consequently, any dathe cargo she agrees to transport cannot be presumed to have been due to her fault or negligence.

Petitioner contends that contrary to the findings of the trial court and the Court of Appeals, she is not a commcarrier but a private carrier because, as a customs broker and warehouseman, she does not indiscriminatelyservices out to the public but only offers the same to select parties with whom she may contract in the conduher business.

The contention has no merit. In De Guzman v. Court of Appeals,[7] the Court dismissed a similar contentionheld the party to be a common carrier, thus

The Civil Code defines common carriers in the following terms:

Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of cor transporting passengers or goods or both, by land, water, or air for compensation, offering their services topublic.

The above article makes no distinction between one whose principal business activity is the carrying of peor goods or both, and one who does such carrying only as an ancillary activity . . . Article 1732 also carefullmaking any distinction between a person or enterprise offering transportation service on a regular or scheduand one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732


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distinguish between a carrier offering its services to the general public, i.e., the general community or population,and one who offers services or solicits business only from a narrow segment of the general population. We thinkthat Article 1732 deliberately refrained from making such distinctions.

So understood, the concept of common carrier under Article 1732 may be seen to coincide neatly with the notion ofpublic service, under the Public Service Act (Commonwealth Act No. 1416, as amended) which at least partiallysupplements the law on common carriers set forth in the Civil Code. Under Section 13, paragraph (b) of the PublicService Act, public service includes:

x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire orcompensation, with general or limited clientele, whether permanent, occasional or accidental, and done for generalbusiness purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either forfreight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier

service of any class, express service, s teamboat, or steamship line, pontines, ferries and water craft, engaged in thetransportation of passengers or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum,sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations and other similarpublic services. x x x [8]

There is greater reason for holding petitioner to be a common carrier because the transportation of goods is anintegral part of her business. To uphold petitioners contention would be to deprive those with whom she contractsthe protection which the law affords them notwithstanding the fact that the obligation to carry goods for hercustomers, as already noted, is part and parcel of petitioners business.

Now, as to petitioners liability, Art. 1733 of the Civil Code provides:

Common carriers, from the nature of their business and for reasons of public policy, are bound to observeextraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them,according to all the circumstances of each case. . . .

In Compania Maritima v. Court of Appeals,[9] the meaning of extraordinary diligence in the vigilance over goods

was explained thus:The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier toknow and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it forsale, carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and touse all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercisedue care in the handling and stowage, including such methods as their nature requires.

In the case at bar, petitioner denies liability for the damage to the cargo. She claims that the spoilage or wettagetook place while the goods were in the custody of either the carrying vessel M/V Hayakawa Maru, whichtransported the cargo to Manila, or the arrastre operator, to whom the goods were unloaded and who allegedly keptthem in open air for nine days from July 14 to July 23, 1998 notwithstanding the fact that some of the containerswere deformed, cracked, or otherwise damaged, as noted in the Marine Survey Report (Exh. H), to wit:

MAXU-2062880 - rain gutter deformed/cracked

ICSU-363461-3 - left side rubber gasket on door distorted/partly loose

PERU-204209-4 - with pinholes on roof panel right portion

TOLU-213674-3 - wood flooring we[t] and/or with signs of water soaked

MAXU-201406-0 - with dent/crack on roof panel

ICSU-412105-0 - rubber gasket on left side/door panel partly detached loosened.[10]

In addition, petitioner claims that Marine Cargo Surveyor Ernesto Tolentino testified that he has no personalknowledge on whether the container vans were first stored in petitioners warehouse prior to their delivery to consignee. She likewise claims that after withdrawing the container vans from the arrastre operator, her drivRicardo Nazarro, immediately delivered the cargo to SMCs warehouse in Ermita, Manila, which is a mere thminute drive from the Port Area where the cargo came from. Thus, the damage to the cargo could not have tplace while these were in her custody.[11]

Contrary to petitioners assertion, the Survey Report (Exh. H) of the Marine Cargo Surveyors indicates that wshipper transferred the cargo in question to the arrastre operator, these were covered by clean EquipmentInterchange Report (EIR) and, when petitioners employees withdrew the cargo from the arrastre operator, thso without exception or protest either with regard to the condition of container vans or their contents. The SReport pertinently reads

Details of Discharge:Shipment, provided with our protective supervision was noted discharged ex vessel to dock of Pier #13 SoutHarbor, Manila on 14 July 1990, containerized onto 30 x 20 secure metal vans, covered by clean EIRs. Excslight dents and paint scratches on side and roof panels, these containers were deemed to have [been] recegood condition.

. . . .

Transfer/Delivery:

On July 23, 1990, shipment housed onto 30 x 20 cargo containers was [withdrawn] by Transorient ConServices, Inc. . . . without exception.

[The cargo] was finally delivered to the consignees storage warehouse located at Tabacalera CompounRomualdez Street, Ermita, Manila from July 23/25, 1990.[12]

As found by the Court of Appeals:

From the [Survey Report], it [is] clear that the shipment was discharged from the vessel to the arrastre, MarinServices Inc., in good order and condition as evidenced by clean Equipment Interchange Reports (EIRs). Habeen any damage to the shipment, there would have been a report to that effect made by the arrastre operatcargoes were withdrawn by the defendant-appellant from the arrastre still in good order and condition as the were received by the former without exception, that is, without any report of damage or loss. Surely, if the covans were deformed, cracked, distorted or dented, the defendant-appellant would report it immediately to theconsignee or make an exception on the delivery receipt or note the same in the Warehouse Entry Slip (WESof these took place. To put it simply, the defendant-appellant received the shipment in good order and conddelivered the same to the consignee damaged. We can only conclude that the damages to the cargo occurrit was in the possession of the defendant-appellant. Whenever the thing is lost (or damaged) in the possessidebtor (or obligor), it shall be presumed that the loss (or damage) was due to his fault, unless there is proof tcontrary. No proof was proffered to rebut this legal presumption and the presumption of negligence attachedcommon carrier in case of loss or damage to the goods.[13]

Anent petitioners insistence that the cargo could not have been damaged while in her custody as s he immeddelivered the containers to SMCs compound, suffice it to say that t o prove the exercise of extraordinary diligpetitioner must do more than merely show the possibility that some other party could be responsible for the d

It must prove that it used all reasonable means to ascertain the nature and characteristic of goods tendered[transport] and that [it] exercise[d] due care in the handling [thereof]. Petitioner failed to do this.

Nor is there basis to exempt petitioner from liability under Art. 1734(4), which provides

Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is dany of the following causes only:

. . . .


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(4) The character of the goods or defects in the packing or in the containers.

. . . .

For this provision to apply, the rule is that if the improper packing or, in this case, the defect/s in the container, is/areknown to the carrier or his employees or apparent upon ordinary observation, but he nevertheless accepts the samewithout protest or exception notwithstanding such condition, he is not relieved of liability for damage resultingtherefrom.[14] In this case, petitioner accepted the cargo without exception despite the apparent defects in some ofthe container vans. Hence, for failure of petitioner to prove that she exercised extraordinary diligence in the carriageof goods in this case or that she is exempt from liability, the presumption of negligence as provided under Art.1735[15] holds.

WHEREFORE, the decision of the Court of Appeals, dated May 31, 2001, is AFFIRMED.

SO ORDERED.

Bellosillo, (Chairman), Quisumbing, Buena, and De Leon, Jr., JJ., concur.

FIRST DIVISION[G.R. No. 141910. August 6, 2002]

FGU INSURANCE CORPORATION, petitioner, vs. G.P. SARMIENTO TRUCKING CORPORATION and LAMBERTM. EROLES, respondents.D E C I S I O NVITUG, J.:

G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura S.D.white refrigerators aboard one of its Isuzu truck, driven by Lambert Eroles, from the plant site of Concepcion

Industries, Inc., along South Superhighway in Alabang, Metro Manila, to the Central Luzon Appliances in DagupanCity. While the truck was traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban,Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in damage to the cargoes.

FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value of thecovered cargoes in the sum of P204,450.00. FGU, in turn, being the subrogee of the rights and interests ofConcepcion Industries, Inc., sought reimbursement of the amount it had paid to the latter from GPS. Since thetrucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract of carriageagainst GPS and its driver Lambert Eroles with the Regional Trial Court, Branch 66, of Makati City. In its answer,respondents asserted that GPS was the exclusive hauler only of Concepcion Industries, Inc., since 1988, and it wasnot so engaged in business as a common carrier. Respondents further claimed that the cause of damage waspurely accidental.

The issues having thus been joined, FGU presented its evidence, establishing the extent of damage to the cargoesand the amount it had paid to the assured. GPS, instead of submitting its evidence, filed with leave of court a motionto dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed to prove that it wasa common carrier.

The trial court, in its order of 30 April 1996,[1] granted the motion to dismiss, explaining thusly:

Under Section 1 of Rule 131 of the Rules of Court, it is provided that Each party must prove his own affirmativeallegation, xxx.

In the instant case, plaintiff did not present any single evidence that would prove that defendant is a commoncarrier.

x x x x x x x x x

Accordingly, the application of the law on common carriers is not warranted and the presumption of fault ornegligence on the part of a common carrier in case of loss, damage or deterioration of goods during transpo1735 of the Civil Code is not availing.

Thus, the laws governing the contract between the owner of the cargo to whom the plaintiff was subrogatedowner of the vehicle which transports the cargo are the laws on obligation and contract of the Civil Code as wthe law on quasi delicts.

Under the law on obligation and contract, negligence or fault is not presumed. The law on quasi delict provisome presumption of negligence but only upon the attendance of some circumstances. Thus, Article 2185 p

Art. 2185. Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has beenegligent if at the time of the mishap, he was violating any traffic regulation.

Evidence for the plaintiff shows no proof that defendant was violating any traffic regulation. Hence, the presof negligence is not obtaining.

Considering that plaintiff failed to adduce evidence that defendant is a common carrier and defendants drivthe one negligent, defendant cannot be made liable for the damages of the subject cargoes.[2]

The subsequent motion for reconsideration having been denied,[3] plaintiff interposed an appeal to the CourtAppeals, contending that the trial court had erred (a) in holding that the appellee corporation was not a commcarrier defined under the law and existing jurisprudence; and (b) in dismissing the complaint on a demurrer toevidence.

The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. The appellate court, in its dof 10 June 1999, [4] discoursed, among other things, that -

"x x x in order for the presumption of negligence provided for under the law governing common carrier (ArticleCivil Code) to arise, the appellant must first prove that the appellee is a common carrier. Should the appella

prove that the appellee is a common carrier, the presumption would not arise; consequently, the appellant wohave to prove that the carrier was negligent.

"x x x x x x x x x

"Because it is the appellant who insists that the appellees can still be considered as a common carrier, despi`limited clientele, (assuming it was really a common carrier), it follows that it (appellant) has the burden of prthe same. It (plaintiff-appellant) must establish his case by a preponderance of evidence, which means thatevidence as a whole adduced by one side is superior to that of the other. (Summa Insurance Corporation vsof Appeals, 243 SCRA 175). This, unfortunately, the appellant failed to do -- hence, the dismissal of the placomplaint by the trial court is justified.

"x x x x x x x x x

"Based on the foregoing disquisitions and considering the circumstances that the appellee trucking corporatiobeen its exclusive contractor, hauler since 1970, defendant has no choice but to comply with the directive ofprincipal, the inevitable conclusion is that the appellee is a private carrier.

"x x x x x x x x x

"x x x the lower court correctly ruled that 'the application of the law on common carriers is not warranted and presumption of fault or negligence on the part of a common carrier in case of loss, damage or deterioration ogood[s] during transport under [article] 1735 of the Civil Code is not availing.' x x x .

"Finally, We advert to the long established rule that conclusions and findings of fact of a trial court are entitlegreat weight on appeal and should not be disturbed unless for strong and valid reasons."[5]


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On June 5, 1987, the Republic of the Philippines, through the Department of Health (DOH), and the Cooperative forAmerican Relief Everywhere, Inc. (CARE) signed an agreement wherein CARE would acquire from the United Statesgovernment donations of non-fat dried milk and other food products from January 1, 1987 to December 31, 1989. Inturn, the Philippines would transport and distribute the donated commodities to the intended beneficiaries in thecountry.

The government entered into a contract of carriage of goods with herein petitioner National Trucking and ForwardingCorporation (NTFC). Thus, the latter shipped 4,868 bags of non-fat dried milk through herein respondent LorenzoShipping Corporation (LSC) from September to December 1988. The consignee named in the bills of lading issuedby the respondent was Abdurahman Jama, petitioners branch supervisor in Zamboanga City.

On reaching the port of Zamboanga City, respondents agent, Efren Ruste[4] Shipping Agency, unloaded the 4,868bags of non-fat dried milk and delivered the goods to petitioners warehouse. Before each delivery, Rogelio Rizadaand Ismael Zamora, both delivery checkers of Efren Ruste Shipping Agency, requested Abdurahman to surrenderthe original bills of lading, but the latter merely presented certified true copies thereof. Upon completion of eachdelivery, Rogelio and Ismael asked Abdurahman to sign the delivery receipts. However, at times when Abdurahmanhad to attend to other business before a delivery was c ompleted, he instructed his subordinates to sign the deliveryreceipts for him.

Notwithstanding the precautions taken, the petitioner allegedly did not receive the subject goods. Thus, in a letterdated March 11, 1989, petitioner NTFC filed a formal claim for non-delivery of the goods shipped throughrespondent.

In its letter of April 26, 1989, the respondent explained that the cargo had already been delivered to AbdurahmanJama. The petitioner then decided to investigate the loss of the goods. But before the investigation was over,Abdurahman Jama resigned as branch supervisor of petitioner.

Noting but disbelieving respondents insistence that the goods were delivered, the government through the DOH,CARE, and NTFC as plaintiffs filed an action for breach of contract of carriage, against respondent as defendant,with the RTC of Manila.

After trial, the RTC resolved the case as follows:WHEREFORE, judgment is hereby rendered in favor of the defendant and against the plaintiffs, dismissing thelatters complaint, and ordering the plaintiffs, pursuant to the defendants counterclaim, to pay, jointly and solidarily,to the defendant, actual damages in the amount of P50,000.00, and attorneys fees in the amount of P70,000.00,plus the costs of suit.

SO ORDERED.[5]

Dissatisfied with the foregoing ruling, herein petitioner appealed to the Court of Appeals. It faulted the lower court fornot holding that respondent failed to deliver the cargo, and that respondent failed to exercise the extraordinarydiligence required of common carriers. Petitioner also assailed the lower court for denying its claims for actual,moral, and exemplary damages, and for awarding actual damages and attorneys fees to the respondent.[6]

The Court of Appeals found that the trial court did not commit any reversible error. It dismissed the appeal, andaffirmed the assailed decision in toto.

Undaunted, petitioner now comes to us, assigning the following errors:

I

THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO APPRECIATE AND APPLY THE LEGALSTANDARD OF EXTRAORDINARY DILIGENCE IN THE SHIPMENT AND DELIVERY OF GOODS TO THERESPONDENT AS A COMMON CARRIER, AS WELL AS THE ACCOMPANYING LEGAL PRESUMPTION OFFAULT OR NEGLIGENCE ON THE PART OF THE COMM ON CARRIER, IF THE GOODS ARE LOST,DESTROYED OR DETERIORATED, AS REQUIRED UNDER THE CIVIL CODE.

II

THE COURT OF APPEALS GRAVELY ERRED WHEN IT SUSTAINED THE BASELESS AND ARBITRARYAWARD OF ACTUAL DAMAGES AND ATTORNEYS FEES INASMUCH AS THE ORIGINAL COMPLAINT WFILED IN GOOD FAITH, WITHOUT MALICE AND WITH THE BEST INTENTION OF PROTECTING THEINTEREST AND INTEGRITY OF THE GOVERNMENT AND ITS CREDIBILITY AND RELATIONSHIP WITHINTERNATIONAL RELIEF AGENCIES AND DONOR STATES AND ORGANIZATION.[7]

The issues for our resolution are: (1) Is respondent presumed at fault or negligent as common carrier for the deterioration of the goods? and (2) Are damages and attorneys fees due respondent?

Anent the first issue, petitioner contends that the respondent is presumed negligent and liable for failure to abthe terms and conditions of the bills of lading; that Abdurahman Jamas failure to testify should not be held agpetitioner; and that the testimonies of Rogelio Rizada and Ismael Zamora, as employees of respondents ageEfren Ruste Shipping Agency, were biased and could not overturn the legal presumption of respondents faunegligence.

For its part, the respondent avers that it observed extraordinary diligence in the delivery of the goods. Prior treleasing the goods to Abdurahman, Rogelio and Ismael required the surrender of the original bills of lading,their absence, the certified true copies showing that Abdurahman was indeed the consignee of the goods. Inaddition, they required Abdurahman or his designated subordinates to sign the delivery receipts upon compleeach delivery.

We rule for respondent.

Article 1733[8] of the Civil Code demands that a common carrier observe extraordinary diligence over the gotransported by it. Extraordinary diligence is that extreme measure of care and caution which persons of unusprudence and circumspection use for securing and preserving their own property or rights.[9] This exacting simposed on common carriers in a contract of carriage of goods is intended to tilt the scales in favor of the shwho is at the mercy of the common carrier once the goods have been lodged for shipment. Hence, in case ogoods in transit, the common carrier is presumed under the law to have been at fault or negligent.[10] Howe

presumption of fault or negligence, may be overturned by competent evidence showing that the common carobserved extraordinary diligence over the goods.

In the instant case, we agree with the court a quo that the respondent adequately proved that it exercisedextraordinary diligence. Although the original bills of lading remained with petitioner, respondents agents defrom Abdurahman the certified true copies of the bills of lading. They also asked the latter and in his absencdesignated subordinates, to sign the cargo delivery receipts.

This practice, which respondents agents testified to be their standard operating procedure, finds support in A353 of the Code of Commerce:

ART. 353. . . .

After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to hby virtue of the exchange of this title with the thing transported, the respective obligations and actions shall bconsidered cancelled, .

In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, be

of its loss or of any other cause, he must give the latter a receipt for the goods delivered, this receipt producisame effects as the return of the bill of lading. (Emphasis supplied)

Conformably with the aforecited provision, the surrender of the original bill of lading is not a condition precedcommon carrier to be discharged of its contractual obligation. If surrender of the original bill of lading is not packnowledgment of the delivery by signing the delivery receipt suffices. This is what respondent did.

We also note that some delivery receipts were signed by Abdurahmans subordinates and not by Abdurahmahimself as consignee. Further, delivery checkers Rogelio and Ismael testified that Abdurahman was always


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at the initial phase of each delivery, although on the few occasions when Abdurahman could not stay to witness thecomplete delivery of the shipment, he authorized his subordinates to sign the delivery receipts for him. This, to ourmind, is sufficient and substantial compliance with the requirements.

We further note that, strangely, petitioner made no effort to disapprove Abdurahmans resignation until after theinvestigation and after he was cleared of any responsibility for the loss of the goods. With Abdurahman outside of itsreach, petitioner cannot now pass to respondent what could be Abdurahmans negligence, if indeed he wereresponsible.

On the second issue, petitioner submits there is no basis for the award of actual damages and attorneys fees. Itmaintains that its original complaint for sum of money with damages for breach of contract of carriage was notfraudulent, in bad faith, nor malicious. Neither was the institution of the action rash nor precipitate. Petitioner aversthe filing of the action was intended to protect the integrity and interest of the government and its relationship andcredibility with international relief agencies and donor states.

On the other hand, respondent maintains that petitioners suit was baseless and malicious because instead of goingafter its absconding employee, petitioner wanted to recoup its losses from respondent. The trial court and the Courtof Appeals were justified in granting actual damages and reasonable attorneys fees to respondent.

On this point, we agree with petitioner.

The right to litigate should bear no premium. An adverse decision does not ipso facto justify an award of attorneysfees to the winning party.[11] When, as in the instant case, petitioner was compelled to sue to protect the credibilityof the government with international organizations, we are not inclined to grant attorneys fees. We find no ill motiveon petitioners part, only an erroneous belief in the righteousness of its claim.

Moreover, an award of attorneys fees, in the concept of damages under Article 2208 of the Civil Code,[12] requiresfactual and legal justifications. While the law allows some degree of discretion on the part of the courts in awardingattorneys fees and expenses of litigation, the discretion must be exercised with great care approximating as closelyas possible, the instances exemplified by the law.[13] We have searched but found nothing in petitioners suit that

justifies the award of attorneys fees.

Respondent failed to show proof of actual pecuniary loss, hence, no actual damages are due in favor of respondent.[14]

WHEREFORE, the petition is PARTIALLY GRANTED. The assailed decision and resolution of the Court of Appealsin CA-G.R. CV No. 48349 dated January 16, 2002 and May 13, 2002 respectively, denying petitioners claim foractual, moral and exemplary damages are AFFIRMED. The award of actual damages and attorneys fees torespondent pursuant to the latters counterclaim in the trial court is DELETED.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., c oncur.

Republic of the PhilippinesSUPREME COURTManila

SECOND DIVISION

G.R. No. 84458 November 6, 1989

ABOITIZ SHIPPING CORPORATION, petitioner,vs.HON. COURT OF APPEALS, ELEVENTH DIVISION, LUCILA C. VIANA, SPS. ANTONIO VIANA and GORGONIAVIANA, and PIONEER STEVEDORING CORPORATION, respondents.

Herenio E. Martinez for petitioner.

M.R. Villaluz Law Office for private respondent.

REGALADO, J.:

In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of the decision 1 of responCourt of Appeals, dated July 29, 1988, the decretal portion of which reads:

WHEREFORE, the judgment appealed from as modified by the order of October 27, 1982, is hereby affirmedthe modification that appellant Aboitiz Shipping is hereby ordered to pay plaintiff-appellees the amount of P3for the death of Anacleto Viana; actual damages of P9,800.00; P150,000.00 for unearned income; P7,200.00support for deceased's parents; P20,000.00 as moral damages; P10,000.00 as attorney's fees; and to pay th

The undisputed facts of the case, as found by the court a quo and adopted by respondent court, are as follow

The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the vessel M/V Antonia, owned by deat the port at San Jose, Occidental Mindoro, bound for Manila, having purchased a ticket (No. 117392) in theP23.10 (Exh. 'B'). On May 12, 1975, said vessel arrived at Pier 4, North Harbor, Manila, and the passengersdisembarked, a gangplank having been provided connecting the side of the vessel to the pier. Instead of usingangplank Anacleto Viana disembarked on the third deck which was on the level with the pier. After said veslanded, the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vepursuant to the Memorandum of Agreement dated July 26, 1975 (Exh. '2') between the third party defendantStevedoring Corporation and defendant Aboitiz Shipping Corporation.

The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was placedalongside the vessel and one (1) hour after the passengers of said vessel had disembarked, it started operatunloading the cargoes from said vessel. While the crane was being operated, Anacleto Viana who had alreaddisembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vesseback to the vessel, and it was while he was pointing to the crew of the said vessel to the place where his cargwere loaded that the crane hit him, pinning him between the side of the v essel and the crane. He was thereabrought to the hospital where he later expired three (3) days thereafter, on May 15, 1975, the cause of his deaccording to the Death Certificate (Exh. "C") being "hypostatic pneumonia secondary to traumatic fracture ofpubic bone lacerating the urinary bladder" (See also Exh. "B"). For his hospitalization, medical, burial and othmiscellaneous expenses, Anacleto's wife, herein plaintiff, spent a total of P9,800.00 (Exhibits "E", "E-1", to "EAnacleto Viana who was only forty (40) years old when he met said fateful accident (Exh. 'E') was in good heaverage annual income as a farmer or a farm supervisor was 400 cavans of palay annually. His parents, hereplaintiffs Antonio and Gorgonia Viana, prior to his death had been recipient of twenty (20) cavans of palay asor P120.00 monthly. Because of Anacleto's death, plaintiffs suffered mental anguish and extreme worry or mdamages. For the filing of the instant case, they had to hire a lawyer for an agreed fee of ten thousand (P10,pesos. 2

Private respondents Vianas filed a complaint 3 for damages against petitioner corporation (Aboitiz, for brevitybreach of contract of carriage.

In its answer. 4 Aboitiz denied responsibility contending that at the time of the accident, the vessel was compunder the control of respondent Pioneer Stevedoring Corporation (Pioneer, for short) as the exclusive stevedcontractor of Aboitiz, which handled the unloading of cargoes from the vessel of Aboitiz. It is also averred tha

the crane operator was not an employee of Aboitiz, the latter cannot be held liable under the fellow-servant rThereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint 5 against Pioneer imputing liability therAnacleto Viana's death as having been allegedly caused by the negligence of the crane operator who was anemployee of Pioneer under its exclusive control and supervision.

Pioneer, in its answer to t he third-party complaint, 6 raised the defenses that Aboitiz had no cause of action aPioneer considering that Aboitiz is being sued by the Vianas for breach of contract of carriage to which Pionea party; that Pioneer had observed the diligence of a good father of a family both in the selection and superv


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the customs of the place, and so forth, and therefore precludes a consideration of the time element per se withouttaking into account such other factors. It is thus of no moment whether in the cited case of La Mallorca there was noappreciable interregnum for the passenger therein to leave the carrier's premises whereas in the case at bar, aninterval of one (1) hour had elapsed before the victim met the accident. The primary factor to be considered is theexistence of a reasonable cause as will justify the presence of the victim on or near the petitioner's vessel. Webelieve there exists such a justifiable cause.

It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers of vesselsare allotted a longer period of time to disembark from the ship than other common carriers such as a passenger bus.With respect to the bulk of cargoes and the number of passengers it can load, such vessels are capable ofaccommodating a bigger volume of both as compared to the capacity of a regular commuter bus. Consequently, aship passenger will need at least an hour as is the usual practice, to disembark from the vessel and c laim hisbaggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a very short period of time.Verily, petitioner cannot categorically claim, through the bare expedient of comparing the period of time entailed ingetting the passenger's cargoes, that the ruling in La Mallorca is inapplicable to the case at bar. On the contrary, ifwe are to apply the doctrine enunciated therein to the instant petition, we cannot in reason doubt that the victimAnacleto Viana was still a passenger at the time of the incident. When the accident occurred, the victim was in theact of unloading his cargoes, which he had every right to do, from petitioner's vessel. As earlier stated, a carrier isduty bound not only to bring its passengers safely to their destination but also to afford them a reasonable time toclaim their baggage.

It is not definitely shown that one (1) hour prior to the incident, the victim had already disembarked from the vessel.Petitioner failed to prove this. What is clear to us is that at the time the v ictim was taking his cargoes, the vessel hadalready docked an hour earlier. In consonance with common shipping procedure as to the minimum time of one (1)hour allowed for the passengers to disembark, it may be presumed that the victim had just gotten off the vessel whenhe went to retrieve his baggage. Yet, even if he had already disembarked an hour earlier, his presence in petitioner'spremises was not without cause. The victim had to claim his baggage which was possible only one (1) hour after thevessel arrived since it was admittedly standard procedure in the case of petitioner's vessels that the unloadingoperations shall start only after that time. Consequently, under the foregoing circumstances, the victim AnacletoViana is still deemed a passenger of said carrier at the time of his tragic death.

II. Under the law, common carriers are, from the nature of their business and for reasons of public policy,bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengerstransported by them, according to all the circumstances of each case. 15 More particularly, a common carrier isbound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence ofvery cautious persons, with a due regard for all the circumstances. 16 Thus, where a passenger dies or is injured,the common carrier is presumed to have been at fault or to have acted negligently. 17 This gives rise to an action forbreach of contract of carriage where all that is required of plaintiff is to prove the existence of the contract of carriageand its non-performance by the carrier, that is, the failure of the carrier to carry the passenger safely to hisdestination, 18 which, in the instant case, necessarily includes its failure to safeguard its passenger withextraordinary diligence while such relation subsists.

The presumption is, therefore, established by law that in case of a passenger's death or injury the operator of thevessel was at fault or negligent, having failed to exercise extraordinary diligence, and it is incumbent upon it to rebutthe same. This is in consonance with the avowed policy of the State to afford full protection to the passengers ofcommon carriers which can be carried out only by imposing a stringent statutory obligation upon the latter.Concomitantly, this Court has likewise adopted a rigid posture in the application of the law by exacting the highestdegree of care and diligence from common carriers, bearing utmost in mind the welfare of the passengers who oftenbecome hapless victims of indifferent and profit-oriented carriers. We cannot in reason deny that petitioner failed to

rebut the presumption against it. Under the facts obtaining in the present case, it cannot be gainsaid that petitionerhad inadequately complied with the required degree of diligence to prevent the accident from happening.

As found by the Court of Appeals, the evidence does not show that there was a cordon of drums around theperimeter of the crane, as claimed by petitioner. It also adverted to the fact that the alleged presence of visiblewarning signs in the vicinity was disputable and not indubitably established. Thus, we are not inclined to acceptpetitioner's explanation that the victim and other passengers were sufficiently warned that merely venturing into thearea in question was fraught with s erious peril. Definitely, even assuming the existence of the supposed cordon ofdrums loosely placed around the unloading area and the guard's admonitions against entry therein, these were at

most insufficient precautions which pale into insignificance if considered vis-a-vis the gravity of the danger tothe deceased was exposed. There is no showing that petitioner was extraordinarily diligent in requiring or seethat said precautionary measures were strictly and actually enforced to subserve their purpose of preventing into the forbidden area. By no stretch of liberal evaluation can such perfunctory acts approximate the "utmostdiligence of very cautious persons" to be exercised "as far as human care and foresight can provide" which isrequired by law of common carriers with respect to their passengers.

While the victim was admittedly contributorily negligent, still petitioner's aforesaid failure to exercise extraorddiligence was the proximate and direct cause of, because it could definitely have prevented, the former's deaMoreover, in paragraph 5.6 of its petition, at bar, 19 petitioner has expressly conceded the factual finding ofrespondent Court of Appeals that petitioner did not present sufficient evidence in support of its submission thdeceased Anacleto Viana was guilty of gross negligence. Petitioner cannot now be heard to claim otherwise.

No excepting circumstance being present, we are likewise bound by respondent court's declaration that therenegligence on the part of Pioneer Stevedoring Corporation, a confirmation of the trial court's finding to that efhence our conformity to Pioneer's being absolved of any liability.

As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged gross negligence of the vihence its present contention that the death of the passenger was due to the negligence of the crane operatobe sustained both on grounds, of estoppel and for lack of evidence on its present theory. Even in its answer fthe court below it readily alleged that Pioneer had taken the necessary safeguards insofar as its unloadingoperations were concerned, a fact which appears to have been accepted by the plaintiff therein by not impleaPioneer as a defendant, and likewise inceptively by Aboitiz by filing its third-party complaint only after ten (10months from the institution of the suit against it. Parenthetically, Pioneer is not within the ambit of the rule onextraordinary diligence required of, and the corresponding presumption of negligence foisted on, common calike Aboitiz. This, of course, does not detract from what we have said that no negligence can be imputed to Pbut, that on the contrary, the failure of Aboitiz to exercise extraordinary diligence for the safety of its passengrationale for our finding on its liability.

WHEREFORE, the petition is DENIED and the judgment appealed from is hereby AFFIRMED in toto.

SO ORDERED.

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


SECOND DIVISION

G.R. No. 95582 October 7, 1991

DANGWA TRANSPORTATION CO., INC. and THEODORE LARDIZABAL y MALECDAN, petitioners,vs.COURT OF APPEALS, INOCENCIA CUDIAMAT, EMILIA CUDIAMAT BANDOY, FERNANDO CUDLAMAT,MARRIETA CUDIAMAT, NORMA CUDIAMAT, DANTE CUDIAMAT, SAMUEL CUDIAMAT and LIGAYA CUD

all Heirs of the late Pedrito Cudiamat represented by Inocencia Cudiamat, respondents.Francisco S. Reyes Law Office for petitioners.

Antonio C. de Guzman for private respondents.

REGALADO, J.:p


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On May 13, 1985, private respondents filed a complaint 1 for damages against petitioners for the death of PedritoCudiamat as a result of a vehicular accident which occurred on March 25, 1985 at Marivic, Sapid, Mankayan,Benguet. Among others, it was alleged that on said date, while petitioner Theodore M. Lardizabal was driving apassenger bus belonging to petitioner corporation in a reckless and imprudent manner and without due regard totraffic rules and regulations and safety to persons and property, it ran over its passenger, Pedrito Cudiamat.However, instead of bringing Pedrito immediately to the nearest hospital, the said driver, in utter bad faith andwithout regard to the welfare of the victim, first brought his other passengers and cargo to their respectivedestinations before banging said victim to the Lepanto Hospital where he expired.

On the other hand, petitioners alleged that they had observed and continued to observe the extraordinary diligencerequired in the operation of the transportation company and the supervision of the employees, even as they add thatthey are not absolute insurers of the safety of the public at large. Further, it was alleged that it was the victim's owncarelessness and negligence which gave rise to the subject incident, hence they prayed for the dismissal of the

complaint plus an award of damages in their favor by way of a counterclaim.

On July 29, 1988, the trial court rendered a decision, effectively in favor of petitioners, with this decretal portion:

IN VIEW OF ALL THE FOREGOING, judgment is hereby pronounced that Pedrito Cudiamat was negligent, whichnegligence was the proximate cause of his death. Nonetheless, defendants in equity, are hereby ordered to pay theheirs of Pedrito Cudiamat the sum of P10,000.00 which approximates the amount defendants initially offered saidheirs for the amicable settlement of the case. No costs.

SO ORDERED. 2

Not satisfied therewith, private respondents appealed to the Court of Appeals which, in a decision 3 in CA-G.R. CVNo. 19504 promulgated on August 14, 1990, set aside the decision of the lower court, and ordered petitioners to payprivate respondents:

1. The sum of Thirty Thousand (P30,000.00) Pesos by way of indemnity for death of the victim PedritoCudiamat;

2. The sum of Twenty Thousand (P20,000.00) by way of moral damages;

3. The sum of Two Hundred Eighty Eight Thousand (P288,000.00) Pesos as actual and compensatorydamages;

4. The costs of this s uit. 4

Petitioners' motion for reconsideration was denied by the Court of Appeals in its resolution dated October 4, 1990, 5hence this petition with the central issue herein being whether respondent court erred in reversing the decision of thetrial court and in finding petitioners negligent and liable for the damages claimed.

It is an established principle that the factual findings of the Court of Appeals as a rule are final and may not bereviewed by this Court on appeal. However, this is subject to settled exceptions, one of which is when the findings ofthe appellate court are contrary to those of the trial court, in which case a reexamination of the facts and evidencemay be undertaken. 6

In the case at bar, the trial court and the Court of Appeal have discordant positions as to who between the petitionersan the victim is guilty of negligence. Perforce, we have had to conduct an evaluation of the evidence in this case forthe prope calibration of their conflicting factual findings and legal conclusions.

The lower court, in declaring that the victim was negligent, made the following findings:

This Court is satisfied that Pedrito Cudiamat was negligent in trying to board a moving vehicle, especially with one ofhis hands holding an umbrella. And, without having given the driver or the conductor any indication that he wishes toboard the bus. But defendants can also be found wanting of the necessary diligence. In this connection, it is safe toassume that when the deceased Cudiamat attempted to board defendants' bus, the vehicle's door was open instead

of being closed. This should be so, for it is hard to believe that one would even attempt to board a vehicle (i)nif the door of said vehicle is closed. Here lies the defendant's lack of diligence. Under such circumstances, eqdemands that there must be something given to the heirs of the victim to assuage their feelings. This, alsoconsidering that initially, defendant common carrier had made overtures to amicably settle the case. It did offcertain monetary consideration to the victim's heirs. 7

However, respondent court, in arriving at a different opinion, declares that:

From the testimony of appellees'own witness in the person of Vitaliano Safarita, it is evident that the subject at full stop when the victim Pedrito Cudiamat boarded the same as it was precisely on this instance where a cMiss Abenoja alighted from the bus. Moreover, c ontrary to the assertion of the appellees, the victim did indicaintention to board the bus as can be seen from the testimony of the said witness when he declared that PedrCudiamat was no longer walking and made a sign to board the bus when the latter was still at a distance fromwas at the instance when Pedrito Cudiamat was closing his umbrella at the platform of the bus when the latte

a sudden jerk movement (as) the driver commenced to accelerate the bus.

Evidently, the incident took place due to the gross negligence of the appellee-driver in prematurely stepping accelerator and in not waiting for the passenger to first secure his seat especially so when we take into accothe platform of the bus was at the time slippery and wet because of a drizzle. The defendants-appellees utteto observe their duty and obligation as common carrier to the end that they should observe extra-ordinary dilin the vigilance over the goods and for the safety of the passengers transported by them according to thecircumstances of each case (Article 1733, New Civil Code). 8

After a careful review of the evidence on record, we find no reason to disturb the above holding of the Court Appeals. Its aforesaid findings are supported by the testimony of petitioners' own witnesses. One of them, ViAbalos, testified on cross-examination as follows:

Q It is not a fact Madam witness, that at bunkhouse 54, that is before the place of the incident, there is a cros

A The way going to the mines but it is not being pass(ed) by the bus.

Q And the incident happened before bunkhouse 56, is that not correct?

A It happened between 54 and 53 bunkhouses. 9

The bus conductor, Martin Anglog, also declared:

Q When you arrived at Lepanto on March 25, 1985, will you please inform this Honorable Court if there was unusual incident that occurred?

A When we delivered a baggage at Marivic because a person alighted there between Bunkhouse 53 and 54

Q What happened when you delivered this passenger at this particular place in Lepanto?

A When we reached the place, a passenger alighted and I signalled my driver. When we stopped we went oubecause I saw an umbrella about a split second and I signalled again the driver, so the driver stopped and wdown and we saw Pedrito Cudiamat asking for help because he was lying down.

Q How far away was this certain person, Pedrito Cudiamat, when you saw him lying down from the bus howas he?

A It is about two to three meters.

Q On what direction of the bus was he found about three meters from the bus, was it at the front or at the bac

A At the back, sir. 10 (Emphasis supplied.)


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The foregoing testimonies show that the place of the accident and the place where one of the passengers alightedwere both between Bunkhouses 53 and 54, hence the finding of the Court of Appeals that the bus was at full stopwhen the victim boarded the same is correct. They further confirm the conclusion that the victim fell from the platformof the bus when it suddenly accelerated forward and was run over by the rear right tires of the vehicle, as shown bythe physical evidence on where he was thereafter found in relation to the bus when it stopped. Under suchcircumstances, it cannot be said that the deceased was guilty of negligence.

The contention of petitioners that the driver and the conductor had no knowledge that the victim would ride on thebus, since the latter had supposedly not manifested his intention to board the same, does not merit consideration.When the bus is not in motion there is no necessity for a person who wants to ride the same to signal his intention toboard. A public utility bus, once it stops, is in effect making a continuous offer to bus riders. Hence, it becomes theduty of the driver and the conductor, every time the bus stops, to do no act that would have the effect of increasingthe peril to a passenger while he was attempting to board the same. The premature acceleration of the bus in thiscase was a breach of such duty. 11

It is the duty of common c arriers of passengers, including common carriers by railroad train, streetcar, or motorbus,to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to board andenter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerkingof their conveyances while they are doing so. 12

Further, even assuming that the bus was moving, the act of the victim in boarding the same cannot be considerednegligent under the circumstances. As clearly explained in the testimony of the aforestated witness for petitioners,Virginia Abalos, th bus had "just started" and "was still in slow motion" at the point where the victim had boarded andwas on its platform. 13

It is not negligence per se, or as a matter of law, for one attempt to board a train or streetcar which is moving slowly.14 An ordinarily prudent person would have made the attempt board the moving conveyance under the same orsimilar circumstances. The fact that passengers board and alight from slowly moving vehicle is a matter of commonexperience both the driver and conductor in this case could not have been unaware of such an ordinary practice.

The victim herein, by stepping and standing on the platform of the bus, is already considered a passenger and isentitled all the rights and protection pertaining to such a contractual relation. Hence, it has been held that the dutywhich the carrier passengers owes to its patrons extends to persons boarding cars as well as to those alightingtherefrom. 15

Common carriers, from the nature of their business and reasons of public policy, are bound to observe extraordinadiligence for the safety of the passengers transported by the according to all the circumstances of each case. 16 Acommon carrier is bound to carry the passengers safely as far as human care and foresight can provide, using theutmost diligence very cautious persons, with a due regard for all the circumstances. 17

It has also been repeatedly held that in an action based on a contract of carriage, the court need not make anexpress finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damagessought by the passenger. By contract of carriage, the carrier assumes the express obligation to transport thepassenger to his destination safely and observe extraordinary diligence with a due regard for all the circumstances,and any injury that might be suffered by the passenger is right away attributable to the fault or negligence of thecarrier. This is an exception to the general rule that negligence must be proved, and it is therefore incumbent uponthe carrier to prove that it has exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the CivilCode. 18

Moreover, the circumstances under which the driver and the conductor failed to bring the gravely injured victimimmediately to the hospital for medical treatment is a patent and incontrovertible proof of their negligence. It defiesunderstanding and can even be stigmatized as callous indifference. The evidence shows that after the accident thebus could have forthwith turned at Bunk 56 and thence to the hospital, but its driver instead opted to first proceed toBunk 70 to allow a passenger to alight and to deliver a refrigerator, despite the serious condition of the victim. Thevacuous reason given by petitioners that it was the wife of the deceased who caused the delay was tersely andcorrectly confuted by respondent court:

... The pretension of the appellees that the delay was due to the fact that they had to wait for about twenty mfor Inocencia Cudiamat to get dressed deserves scant consideration. It is rather scandalous and deplorable fwhose husband is at the verge of dying to have the luxury of dressing herself up for about twenty minutes beattending to help her distressed and helpless husband. 19

Further, it cannot be said that the main intention of petitioner Lardizabal in going to Bunk 70 was to inform thevictim's family of the mishap, since it was not said bus driver nor the conductor but the companion of the victinformed his family thereof. 20 In fact, it was only after the refrigerator was unloaded that one of the passengthought of sending somebody to the house of the victim, as shown by the testimony of Virginia Abalos again

Q Why, what happened to your refrigerator at that particular time?

A I asked them to bring it down because that is the nearest place to our house and when I went dowasked somebody to bring down the refrigerator, I also asked somebody to call the family of Mr. Cudiamat.

COURT:

Q Why did you ask somebody to cal l the family of Mr. Cudiamat?

A Because Mr. Cudiamat met an accident, so I ask somebody to call for the family of Mr. Cudiamat.

Q But nobody ask(ed) you to call for the family of Mr. Cudiamat?

A No sir. 21

With respect to the award of damages, an oversight was, however, committed by respondent Court of Appeacomputing the actual damages based on the gross income of the victim. The rule is that the amount recoverathe heirs of a victim of a tort is not the loss of the entire earnings, but rather the loss of that portion of the earwhich the beneficiary would have received. In other words, only net earnings, not gross earnings, are to beconsidered, that is, the total of the earnings less expenses necessary in the creation of such earnings or incominus living and other incidental expenses. 22

We are of the opinion that the deductible living and other expense of the deceased may fairly and reasonablyfixed at P500.00 a month or P6,000.00 a year. In adjudicating the actual or compensatory damages, respondcourt found that the deceased was 48 years old, in good health with a remaining productive life expectancy oyears, and then earning P24,000.00 a year. Using the gross annual income as the basis, and multiplying theby 12 years, it accordingly awarded P288,000. Applying the aforestated rule on computation based on the neearnings, said award must be, as it hereby is, rectified and reduced to P216,000.00. However, in accordanceprevailing jurisprudence, the death indemnity is hereby increased to P50,000.00. 23

WHEREFORE, subject to the above modifications, the challenged judgment and resolution of respondent CoAppeals are hereby AFFIRMED in all other respects.

SO ORDERED.

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


EN BANC

G.R. No. L-20761 July 27, 1966

LA MALLORCA, petitioner,


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vs.HONORABLE COURT OF APPEALS, MARIANO BELTRAN, ET AL., respondents.

G. E. Yabut, R. Monterey and M.C. Lagman for petitioner.Ahmed Garcia for respondents.

BARRERA, J.:

La Mallorca seeks the review of the decision of the Court of Appeals in CA-G.R. No. 23267-R, holding it liable forquasi-delict and ordering it to pay to respondents Mariano Beltran, et al., P6,000.00 for the death of his minordaughter Raquel Beltran, plus P400.00 as actual damages.

The facts of the case as found by the Court of Appeals, briefly are:

On December 20, 1953, at about noontime, plaintiffs, husband and wife, together with their minor daughters, namely,Milagros, 13 years old, Raquel, about 4 years old, and Fe, over 2 years old, boarded the Pambusco Bus No. 352,bearing plate TPU No. 757 (1953 Pampanga), owned and operated by the defendant, at San Fernando, Pampanga,bound for Anao, Mexico, Pampanga. At the time, they were carrying with them four pieces of baggages containingtheir personal belonging. The conductor of the bus, who happened to be a half-brother of plaintiff Mariano Beltran,issued three tickets (Exhs. A, B, & C) covering the full fares of the plaintiff and their eldest child, Milagros. No farewas charged on Raquel and Fe, since both were below the height at which fare is charged in accordance with theappellant's rules and regulations.

After about an hour's trip, the bus reached Anao whereat it s topped to allow the passengers bound therefor, amongwhom were the plaintiffs and their c hildren to get off. With respect to the group of the plaintiffs, Mariano Beltran, thencarrying some of their baggages, was the first to get down the bus, followed by his wife and his children. Mariano ledhis companions to a shaded spot on the left pedestrians side of the road about four or five meters away from thevehicle. Afterwards, he returned to the bus in controversy to get his other bayong, which he had left behind, but in sodoing, his daughter Raquel followed him, unnoticed by her father. While said Mariano Beltran was on the runningboard of the bus waiting for the conductor to hand him his bayong which he left under one of its seats near the door,the bus, whose motor was not shut off while unloading, suddenly started moving forward, evidently to resume its trip,notwithstanding the fact that the conductor has not given the driver the customary s ignal to start, since saidconductor was still attending to the baggage left behind by Mariano Beltran. Incidentally, when the bus was againplaced into a complete stop, it had travelled about ten meters from the point where the plaintiffs had gotten off.

Sensing that the bus was again in motion, Mariano Beltran immediately jumped from the running board withoutgetting his bayong from the c onductor. He landed on the side of the road almost in front of the shaded place wherehe left his wife and children. At that precise time, he saw people beginning to gather around the body of a child lyingprostrate on the ground, her skull crushed, and without life. The child was none other than his daughter Raquel, whowas run over by the bus in which she rode earlier together with her parents.

For the death of their said child, the plaintiffs commenced the present suit against the defendant seeking to recoverfrom the latter an aggregate amount of P16,000 to cover moral damages and actual damages sustained as a resultthereof and attorney's fees. After trial on the merits, the court below rendered the judgment in question.

On the basis of these facts, the trial court found defendant liable for breach of contract of carriage and sentenced itto pay P3,000.00 for the death of the child and P400.00 as compensatory damages representing burial expensesand costs.

On appeal to the Court of Appeals, La Mallorca claimed that there could not be a breach of contract in the case, forthe reason that when the child met her death, she was no longer a passenger of the bus involved in the incident and,therefore, the contract of carriage had already terminated. Although the Court of Appeals sustained this theory, itnevertheless found the defendant-appellant guilty of quasi-delict and held the latter liable for damages, for thenegligence of its driver, in accordance with Article 2180 of the Civil Code. And, the Court of Appeals did not only findthe petitioner liable, but increased the damages awarded the plaintiffs-appellees to P6,000.00, instead of P3,000.00granted by the trial court.

In its brief before us, La Mallorca contends that the Court of Appeals erred (1) in holding it liable for quasi-deconsidering that respondents complaint was one for breach of contract, and (2) in raising the award of damagP3,000.00 to P6,000.00 although respondents did not appeal from the decision of the lower court.

Under the facts as found by the Court of Appeals, we have to sustain the judgement holding petitioner liable damages for the death of the child, Raquel Beltran. It may be pointed out that although it is true that respondMariano Beltran, his wife, and their children (including the deceased child) had alighted from the bus at a placdesignated for disembarking or unloading of passengers, it was also established that the father had to returnvehicle (which was still at a stop) to get one of his bags or bayong that was left under one of the seats of the There can be no controversy that as far as the father is concerned, when he returned to the bus for his bayowas not unloaded, the relation of passenger and carrier between him and the petitioner remained subsisting.relation of carrier and passenger does not necessarily cease where the latter, after alighting from the car, aidcarrier's servant or employee in removing his baggage from the car.1 The issue to be determined here is wheto the child, who was already led by the father to a place about 5 meters away from the bus, the liability of th

for her safety under the contract of carriage also persisted.

It has been recognized as a rule that the relation of carrier and passenger does not cease at the moment thepassenger alights from the carrier's vehicle at a place selected by the carrier at the point of destination, but cuntil the passenger has had a reasonable time or a reasonable opportunity to leave the carrier's premises. Ais a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. Thperson who, after alighting from a train, walks along the station platform is considered still a passenger.2 So where a passenger has alighted at his destination and is proceeding by the usual way to leave the company'premises, but before actually doing so is halted by the report that his brother, a fellow passenger, has been she in good faith and without intent of engaging in the difficulty, returns to relieve his brother, he is deemedreasonably and necessarily delayed and thus continues to be a passenger entitled as such to the protection railroad and company and its agents.3

In the present case, the father returned to the bus to get one of his baggages which was not unloaded when alighted from the bus. Raquel, the child that she was, must have followed the father. However, although the fwas still on the running board of the bus awaiting for the conductor to hand him the bag or bayong, the bus srun, so that even he (the father) had to jump down from the moving vehicle. It was at this instance that the chmust be near the bus, was run over and killed. In the circumstances, it cannot be claimed that the carrier's agexercised the "utmost diligence" of a "very cautions person" required by Article 1755 of the Civil Code to be oby a common carrier in the discharge of its obligation to transport safely its passengers. In the first place, thealthough stopping the bus, nevertheless did not put off the engine. Secondly, he started to run the bus even bthe bus conductor gave him the signal to go and while the latter was still unloading part of the baggages of thpassengers Mariano Beltran and family. The presence of said passengers near the bus was not unreasonabthey are, therefore, to be considered still as passengers of the carrier, entitled to the protection under their coof carriage.

But even assuming arguendo that the contract of carriage has already terminated, herein petitioner can be hfor the negligence of its driver, as ruled by the Court of Appeals, pursuant to Article 2180 of the Civil Code.Paragraph 7 of the complaint, which reads

That aside from the aforesaid breach of contract, the death of Raquel Beltran, plaintiffs' daughter, was causenegligence and want of exercise of the utmost diligence of a very cautious person on the part of the defendatheir agent, necessary to transport plaintiffs and their daughter safely as far as human care and foresight canin the operation of their vehicle.

is clearly an allegation for quasi-delict. The inclusion of this averment for quasi-delict, while incompatible withother claim under the contract of carriage, is permissible under Section 2 of Rule 8 of the New Rules of Courallows a plaintiff to allege causes of action in the alternative, be they compatible with each other or not, to thethat the real matter in controversy may be resolved and determined.4

The plaintiffs sufficiently pleaded the culpa or negligence upon which the claim was predicated when it was ain the complaint that "the death of Raquel Beltran, plaintiffs' daughter, was caused by the negligence and waexercise of the utmost diligence of a very cautious person on the part of the defendants and their agent." Thiallegation was also proved when it was established during the trial that the driver, even before receiving the


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signal from the conductor, and while there were still persons on the running board of the bus and near it, started torun off the vehicle. The presentation of proof of the negligence of its employee gave rise to the presumption that thedefendant employer did not exercise the diligence of a good father of the family in the selection and supervision of itsemployees. And this presumption, as the Court of Appeals found, petitioner had failed to overcome. Consequently,petitioner must be adjudged peculiarily liable for the death of the child Raquel Beltran.

The increase of the award of damages from P3,000.00 to P6,000.00 by the Court of Appeals, however, cannot besustained. Generally, the appellate court can only pass upon and consider questions or issues raised and argued inappellant's brief. Plaintiffs did not appeal from that portion of the judgment of the trial court awarding them onP3,000.00 damages for the death of their daughter. Neither does it appear that, as appellees in the Court of Appeals,plaintiffs have pointed out in their brief the inadequacy of the award, or that the inclusion of the figure P3,000.00 wasmerely a clerical error, in order that the matter may be treated as an exception to the general rule.5 Hereinpetitioner's contention, therefore, that the Court of Appeals committed error in raising the amount of the award fordamages is, evidently, meritorious.1wph1.t

Wherefore, the decision of the Court of Appeals is hereby modified by sentencing, the petitioner to pay to therespondents Mariano Beltran, et al., the sum of P3,000.00 for the death of the child, Raquel Beltran, and the amountof P400.00 as actual damages. No costs in this instance. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur.Makalintal, J., concurs in the result.

SECOND DIVISION[G.R. No. 140349. June 29, 2005]

SULPICIO LINES, INC., petitioner, vs. FIRST LEPANTO-TAISHO INSURANCE CORPORATION, respondent.D E C I S I O NCHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari assailing the Decision[1] of the Court of Appeals reversing theDecision[2] of the Regional Trial Court (RTC) of Manila, Branch XIV, dismissing the complaint for damages for failureof the plaintiff to prove its case with a preponderance of evidence. Assailed as well is the Resolution[3] of the Court

of Appeals denying petitioners Motion for Reconsideration.

THE FACTS

On 25 February 1992, Taiyo Yuden Philippines, Inc. (owner of the goods) and Delbros, Inc. (shipper) entered into acontract, evidenced by Bill of Lading No. CEB/SIN-008/92 issued by the latter in favor of the owner of the goods, forDelbros, Inc. to transport a shipment of goods consisting of three (3) wooden crates containing one hundred thirty-six(136) cartons of inductors and LC compound on board the V Singapore V20 from Cebu City to Singapore in favor ofthe consignee, Taiyo Yuden Singapore Pte, Ltd.

For the carriage of said shipment from Cebu City to Manila, Delbros, Inc. engaged the services of the vessel M/VPhilippine Princess, owned and operated by petitioner Sulpicio Lines, Inc. (carrier). The vessel arrived at the NorthHarbor, Manila, on 24 February 1992.

During the unloading of the shipment, one crate c ontaining forty-two (42) cartons dropped from the cargo hatch tothe pier apron. The owner of the goods examined the dropped cargo, and upon an alleged finding that the contentsof the crate were no longer usable for their intended purpose, they were rejected as a total loss and returned to CebuCity.

The owner of the goods filed a claim with herein petitioner-carrier for the recovery of the value of the rejected cargowhich was refused by the latter. Thereafter, the owner of the goods sought payment from respondent First Lepanto-Taisho Insurance Corporation (insurer) under a marine insurance policy issued to the former. Respondent-insurerpaid the claim less thirty-five percent (35%) salvage value or P194, 220.31.

The payment of the insurance claim of the owner of the goods by the respondent-insurer subrogated the latter towhatever right or legal action the owner of the goods may have against Delbros, Inc. and petitioner-carrier, Sulpicio

Lines, Inc. Thus, respondent-insurer then filed claims for reimbursement from Delbros, Inc. and petitioner-caSulpicio Lines, Inc. which were subsequently denied.

On 04 November 1992, respondent-insurer filed a suit for damages docketed as Civil Case No. 92-63337 wittrial court against Delbros, Inc. and herein petitioner-carrier. On 05 February 1993, petitioner-carrier filed its with Counterclaim. Delbros, Inc. filed on 15 April 1993 its Answer with Counterclaim and Cross-claim, alleginassuming the contents of the c rate in question were truly in bad order, fault is with herein petitioner-carrier wresponsible for the unloading of the crates.

Petitioner-carrier filed its Answer to Delbros, Inc.s cross-claim asserting that it observed extraordinary diligenthe handling, storage and general care of the shipment and that subsequent inspection of the shipment by thAdjusters and Surveyors Company showed that the contents of the third crate that had fallen were found to bapparent sound condition, except that 2 cello bags each of 50 pieces ferri inductors No. LC FL 112270K-60 unaccounted for and missing as per packaging list.

After hearing, the trial court dismissed the complaint for damages as well as the counterclaim filed by thereindefendant Sulpicio Lines, Inc. and the cross-claim filed by Delbros, Inc. According to the RTC:

The plaintiff has failed to prove its case. The first witness for the plaintiff merely testified about the payment claim based on the documents accompanying the claim which were the Packing List, Commercial Invoices, BLading, Claims Statement, Marine Policies, Survey Report, Marine Risk Note, and the letter to Third Party caand shipping lines (Exhibit A-J).

The check was paid and delivered to the assured as evidenced by the check voucher and the subrogation re

On cross-examination by counsel for the Sulpicio Lines, he said that their company paid the claim less 35% svalue based on the adjuster report. This testimony is hearsay.

The second witness for the plaintiff, Arturo Valdez, testified, among others, that he, together with a co-surveyrepresentative of Sulpicio Lines had conducted a survey of the shipment at the compound of Sulpicio Lines. prepared a survey report (Exhibits G and G-1) and took a picture of shipment (Exhibit G-2).

On cross-examination, he said that two cartons were torn at the sides with top portion flaps opened and the 4cartons were properly sealed and in good order conditions. Two cartons were already opened and slightlydamaged. He merely looked at them but did not conduct an inspection of the contents. What he was referrislightly damaged were the cartons only and not the contents.

From the foregoing evidence, it is apparent that the plaintiff had failed to prove its c ase with a preponderanceevidence.

.

WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered dismissing the Complaidefendant Sulpicio Lines counterclaim and defendant Delbros Inc.s cross-claim.[4]

A Motion for Reconsideration was then filed by herein respondent-insurer and subsequently denied by the triin an Order dated 07 February 1995 on the ground that it did not raise any new issue. Thus, respondent-insinstituted an appeal with the Court of Appeals, which reversed the dismissal of the complaint by the lower codecretal portion of which reads:

WHEREFORE, the appeal is granted. The decision appealed from is REVERSED. Defendants-appellees Deand Sulpicio Lines are hereby ordered to pay, jointly and severally, plaintiff-appellant the sum of P194,220.3representing actual damages, plus legal interest counted from the filing of the complaint until fully paid.[5]

The appellate court disposed of the issues in the case in this wise:

Furthermore, the evidence shows that one of the three crates fell during the unloading at the pier in Manila. wooden crate which fell was damaged such that this particular crate was not anymore sent to Singapore and


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instead shipped back to Cebu from Manila. Upon examination, it was found that two (2) cartons of the forty-two (42)cartons contained in this crate were externally damaged. They were torn at the sides and their top portions or flapswere open. These facts were admitted by all the parties. Defendant-appellees, however, insist that it was only theexternal packaging that was damaged, and that there was no actual damage to the goods such that would makethem liable to the shipper. This theory is erroneous. When the goods are placed at a common carriers possessionfor delivery to a specified consignee, they are in good order and c ondition and are supposed to be transported anddelivered to the consignee in the same state. In the case herein, the goods were received by defendant-appelleeDelbros in Cebu properly packed in cardboard cartons and then placed in wooden crates, for delivery to theconsignee in Singapore. However, before the shipment reached Singapore (while it was in Manila) one crate and 2cartons contained therein were not anymore in their original state. They were no longer fit to be sent to Singapore.

.

As We have already found, there is damage suffered by the goods of the shipper. This consists in the destruction of

one wooden crate and the tearing of two of the cardboard boxes therein rendering then unfit to be sent toSingapore. Defendant-appellee Sulpicio Lines admits that this crate fell while it was being unloaded at the Manilapier. Falling of the crate was negligence on the part of defendant-appellee Sulpicio Lines under the doctrine of resipsa loquitur. Defendant-appellee Sulpicio Lines cannot exculpate itself from liability because it failed to prove that itexercised due diligence in the selection and supervision of its employees to prevent the damage.[6]

On 21 June 1999, herein petitioner-carrier filed its Motion for Reconsideration of the decision of the Court of Appealswhich was subsequently denied in a Resolution dated 13 October 1999. Hence, the instant petition.

During the pendency of the appeal before this Court, Delbros, Inc. filed a manifestation stating that its appeal[7] filedbefore this Court had been dismissed for being filed out of time and thus the case as against it was declared closedand terminated. As a consequence, it paid in full the amount of the damages awarded by the appellate court to therespondent-insurer. Before this Court, Delbros, Inc. prays for reimbursement, contribution, or indemnity from its co-defendant, herein petitioner-carrier Sulpicio Lines, Inc. for whatever it had paid to respondent-insurer in c onsonancewith the decision of the appellate court declaring both Delbros, Inc. and petitioner-carrier Sulpicio Lines, Inc. jointlyand severally liable.

ISSUES

Petitioner-carrier raises the following issues in its petition:

1. The Court of Appeals erred in not holding that the trial court justly and correctly dismissed the complaint againstSulpicio Lines, which dismissal is already final.

2. The Court of Appeals erred in not dismissing the appeal for failure of appellant to comply with the technicalrequirement of the Rules of Court.

RULING OF THE COURT

We shall first address the procedural issue raised by petitioner-carrier, Sulpicio Lines, Inc. that the Court of Appealsshould have dismissed the appeal for failure of respondent-insurer to attach a copy of the decision of the trial court toits appellants brief in violation of Rule 44, Section 13(h) of the Rules of Civil Procedure.[8]

A perusal of the records will show, however, that in a Resolution[9] dated 13 August 1996, the Court of Appealsrequired herein respondent-insurer to submit seven (7) copies of the questioned decision within five (5) days fromnotice. Said Resolution was properly complied with.

As a rule, the right to appeal is a statutory right and one who seeks to avail of that right must comply with the mannerrequired by the pertinent rules for the perfection of an appeal. Nevertheless, this Court has allowed the filing of anappeal upon subsequent compliance with the requirements imposed by law, where a strict application of thetechnical rules will impair the proper administration of justice. As enunciated by the Court in the case of Jaro v.Court of Appeals:[10]

There is ample jurisprudence holding that the subsequent and substantial compliance of an appellant may carelaxation of the rules of procedure. In Cusi-Hernandez vs. Diaz [336 SCRA 113] and Piglas-Kamao vs. NatLabor Relations Commission [357SCRA 640], we ruled that the subsequent submission of the missing documwith the motion for reconsideration amounts to substantial compliance. The reasons behind the failure of thepetitioners in these two cases to comply with the required attachments were no longer scrutinized.[11]

We see no error, therefore, on the part of the Court of Appeals when it gave due course to the appeal afterrespondent-insurer had submitted copies of the RTC decision, albeit belatedly.

We now come to the substantial issues alleged by petitioner-carrier. The pivotal question to be considered iresolution of this issue is whether or not, based on the evidence presented during the trial, the owner of the grespondent-insurers predecessor-in-interest, did incur damages, and if so, whether or not petitioner-carrier isfor the same.

It cannot be denied that the shipment sustained damage while in the custody of petitioner-carrier. It is not disthat one of the three (3) crates did fall from the cargo hatch to the pier apron while petitioner-carrier was unlothe cargo from its vessel. Neither is it impugned that upon inspection, it was found that two (2) cartons werethe side and the top flaps were open and that two (2) cello bags, each of 50 pieces ferri inductors, were missthe cargo.

Petitioner-carrier contends that its liability, if any, is only to the extent of the cargo damage or loss and shouldinclude the lack of fitness of the shipment for transport to Singapore due to the damaged packing. This iserroneous. Petitioner-carrier seems to belabor under the misapprehension that a distinction must be made bthe cargo packaging and the contents of the cargo. According to it, damage to the packaging is not tantamodamage to the cargo. It must be stressed that in the case at bar, the damage sustained by the packaging ofcargo while in petitioner-carriers custody resulted in its unfitness to be transported to its consignee in SingapSuch failure to ship the cargo to its final destination because of the ruined packaging, indeed, resulted in damon the part of the owner of the goods.

The falling of the crate during the unloading is evidence of petitioner-carriers negligence in handling the cargcommon carrier, it is expected to observe extraordinary diligence in the handling of goods placed in its possefor transport.[12] The standard of extraordinary diligence imposed upon common carriers is c onsiderably mo

demanding than the standard of ordinary diligence, i.e., the diligence of a good paterfamilias established in reof the ordinary relations between members of society.[13] A common carrier is bound to transport its cargo apassengers safely "as far as human care and foresight can provide, using the utmost diligence of a very cautperson, with due regard to all circumstances.[14] The extraordinary diligence in the vigilance

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