VICENTE ERIC DG BELMONTE

Transportation Law Case Digest

Atty. Pablito A. Carpio

1. CALVO V. UCPB GENERAL INSURANCE  G.R. NO. 148496 MARCH 19, 2002

FACTS: 

Petitioner Virgines Calvo, owner of Tran orient Container Terminal Services, Inc. (TCTSI),
and a custom broker, 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 port area to the Tabacalera Compound, Ermita, Manila. The cargo was insured by
respondent UCPB General Insurance Co., Inc. 

On July 14, 1990, contained in 30 metal vans, arrived in Manila on board “M/V Hayakawa
Maru”. After 24 hours, they were unloaded from vessel to the custody of the arrastre
operator, Manila Port Services, Inc. From July 23 to 25, 1990, petitioner, pursuant to her
contract with SMC, withdrew the cargo from the arrastre operator and delivered it to SMC’s
warehouse in Manila. On July 25, the goods were inspected by Marine Cargo Surveyors,
reported that 15 reels of the semi-chemical fluting paper were “wet/stained/torn” and 3 reels
of kraft liner board were also torn. The damages cost P93,112.00. 

SMC collected the said amount from respondent UCPB under its insurance contract.
Respondent on the other hand, as a subrogee of SMC, brought a suit against petitioner in
RTC, Makati City. On December 20, 1995, the RTC rendered judgment finding petitioner
liable for the damage to the shipment. The decision was affirmed by the CA. 

ISSUE: 

Whether Calvo is a common carrier? 

RULING:

In this case the contention of the petitioner, that he is not a common carrier but a private
carrier, has no merit. 

Article 1732 makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as ancillary
activity. Article 1732 also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduled basis and one offering
such service on an occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the "general public," i.e., the general
community or population, and one who offers services or solicits business only from a
narrow segment of the general population. We think that Article 1733 deliberately refrained
from making such distinction. (De Guzman v. CA, 68 SCRA 612) 

Te concept of “common carrier” under Article 1732 coincide with the notion of “public
service”, under the Public Service Act which partially supplements the law on common
carrier. Under Section 13, paragraph (b) of the Public Service Act, it includes: 

“ x x x every person that now or hereafter may own, operate, manage, or control in the
Philippines, for hire or compensation, with general or limited clientele, whether permanent,
occasional or accidental, and done for general business purposes, any common carrier,
railroad, street railway, traction railway, subway motor vehicle, either for freight or
passenger, or both, with or without fixed route and whatever may be its classification, freight
or carrier service of any class, express service, steamboat, or steamship line, pontines, ferries
and water craft, engaged in the transportation 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 similar
public services. x x x”

2. PHILIPPINE AIRLINES, INC. VS. CIVIL AERONAUTICS BOARD 270 SCRA

538)

FACTS: 

Grand Air applied for a Certificate of Public Convenience and Necessity with the Civil
Aeronautics Board (CAB). The Chief Hearing Officer issued a notice of hearing directing
Grand Air to serve a copy of the application and notice to all scheduled Philippine Domestic
operators. Grand Air filed its compliance and requested for a Temporary Operating Permit
(TOP). PAL filed an opposition to the application on the ground that the CAB had no
jurisdiction to hear the application until Grand Air first obtains a franchise to operate from
Congress. The Chief Hearing Officer denied the opposition and the CAB approved the
issuance of the TOP for a period of 3 months. The opposition for the TOP was likewise
denied. The CAB justified its assumption of jurisdiction over Grand Air’s application on the
basis of Republic Act 776 which gives it the specific power to issue any TOP or Certificate of
Public Convenience and Necessity. 

ISSUE: 
Whether CAB can issue a Certificate of Public Convenience and Necessity or TOP even
though the prospective operator does not have a legislative franchise? 

RULING:

Yes, as mentioned by the CAB, it is duly authorized to do so under Republic Act 776 and a
legislative franchise is not necessary before it may do so, since Congress has delegated the
authority to authorize the operation of domestic air transport services to the CAB, an
administrative agency. The delegation of such authority is not without limits since Congress
had set specific standard and limitations on how such authority should be exercised. 

Public convenience and necessity exists when the proposed facility will meet a reasonable
want of the public and supply a need which the existing facilities do not adequately afford. 

Thus, the Board should be allowed to continue hearing the application, since it has
jurisdiction over it provided that the applicant meets all the requirements of the law.

3. ALFREDO MALLARI SR. V. CA, GR NO. 128607, 2000-01-31

FACTS:

On 14 October 1987, at about 5:00 o'clock in the morning, the passenger jeepney driven by
petitioner Alfredo Mallari Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided
with the delivery van of respondent Bulletin Publishing Corp. (BULLETIN, for brevity)
along the National Highway in Barangay San Pablo, Dinalupihan, Bataan.

Petitioner Mallari Jr. testified that he went to the left lane of the highway and overtook a
Fiera which had stopped on the right lane. Before he passed by the Fiera, he saw the van of
respondent BULLETIN coming from the opposite direction. It was driven by one Felix
Angeles.

The sketch of the accident showed that the collision occurred after Mallari Jr. overtook the
Fiera while negotiating a curve in the highway. The points of collision were the left rear
portion of the passenger jeepney and the left front side of the delivery van of BULLETIN.

The 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.

On 16 December 1987 Claudia G. Reyes, the widow of Israel M. Reyes, filed a complaint for
damages with the Regional Trial Court of Olongapo City against Alfredo Mallari Sr. and
Alfredo Mallari Jr., and also against BULLETIN, its driver Felix Angeles, and the N.V.
Netherlands Insurance Company.

The trial court found that the proximate cause of the collision was the negligence of Felix
Angeles, driver of the Bulletin delivery van, considering the fact that the left front portion of
the delivery truck driven by Felix Angeles hit and bumped the left rear portion of the...
passenger jeepney driven by Alfredo Mallari Jr.

It also dismissed the complaint against the... other defendants Alfredo Mallari Sr. and Alfredo
Mallari Jr.

On appeal the Court of Appeals modified the decision of the trial court and found no
negligence on the part of Angeles and consequently of his employer, respondent BULLETIN.
Instead, the appellate court ruled that the collision was caused by the sole negligence of
petitioner Alfredo Mallari Jr. who admitted that immediately before the collision and after he
rounded a curve on the highway, he overtook a Fiera which had stopped on his lane and that
he had seen the van driven by Angeles before overtaking the Fiera.

ISSUE:

Petitioners contend that there is no evidence to show that petitioner Mallari Jr. overtook a
vehicle at a curve on the road at the time of the accident and that the testimony of Angeles on
the overtaking made by Mallari Jr.

RULING:

The Court of Appeals correctly found, based on the sketch and spot report of the police
authorities which were not disputed by petitioners, that the collision occurred immediately
after petitioner Mallari Jr. overtook a vehicle in front of it while traversing a curve on the...
highway.

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 which provides:

Sec. 41. Restrictions on overtaking and passing. - (a) The driver of a vehicle shall not drive to
the left side of the center line of a highway in overtaking or passing another vehicle
proceeding in the same direction, unless such left side is clearly visible... and is free of
oncoming traffic for a sufficient distance ahead to permit such overtaking or passing to be
made in safety.
(b)The driver of a vehicle shall not overtake or pass another vehicle proceeding in the same
direction when approaching the crest of a grade, nor upon a curve in the highway, where the
driver's view along the highway is obstructed within a distance of five... hundred feet ahead
except on a highway having two or more lanes for movement of traffic in one direction where
the driver of a vehicle may overtake or pass another vehicle:

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.[4] When a motor vehicle is... approaching or rounding
a curve, there is special necessity for keeping to the right side of the road and the driver does
not have the right to drive on the left hand side relying upon having time to turn to the right if
a car approaching from the opposite direction comes into... view.[5]

Clearly, the proximate cause of the collision resulting in the death of Israel Reyes, a
passenger of the jeepney, was the sole negligence of the driver of the passenger jeepney,
petitioner Alfredo Mallari Jr., who recklessly operated and drove his jeepney in a lane where
overtaking was not allowed by traffic rules. Under Art. 2185 of the Civil Code, unless there is
proof to the contrary, it is presumed that a person driving a motor vehicle has been negligent
if at the time of the... mishap he was violating a traffic regulation. As found by the appellate
court, petitioners failed to present satisfactory evidence to overcome this legal presumption.

4.CALALAS V CA

FACTS:

Private respondent Eliza Jujeurche G. Sunga took a passenger jeepney owned and operated
by petitioner Vicente Calalas. As the jeepney was already full, Calalas gave Sunga an stool at
the back of the door at the rear end of the vehicle.

Along the way, the jeepney stopped to let a passenger off. Sunga stepped down to give way
when an Isuzu truck owned by Francisco Salva and driven by Iglecerio Verena bumped the
jeepney. As a result, Sunga was injured. Sunga filed a complaint against Calalas for violation
of contract of carriage. Calalas filed a third party complaint against Salva.

The trial court held Salva liable and absolved Calalas, taking cognisance of another civil case
for quasi-delict wherein Salva and Verena were held liable to Calalas. The Court of Appeals
reversed the decision and found Calalas liable to Sunga for violation of contract of carriage.

ISSUE:

Whether the decision in the case for quasi delict between Calalas on one hand and Salva and
Verena on the other hand, is res judicata to the issue in this case
RULING:

The argument that Sunga is bound by the ruling in Civil Case No. 3490 finding the driver and
the owner of the truck liable for quasi-delict ignores the fact that she was never a party to that
case and, therefore, the principle of res judicata does not apply. Nor are the issues in Civil
Case No. 3490 and in the present case the same. The issue in Civil Case No. 3490 was
whether Salva and his driver Verena were liable for quasi-delict for the damage caused to
petitioner's jeepney. On the other hand, the issue in this case is whether petitioner is liable on
his contract of carriage.

The first, quasi-delict, also known as culpa aquiliana or culpa extra contractual, has as its
source the negligence of the tortfeasor. The second, breach of contract or culpa contractual, is
premised upon the negligence in the performance of a contractual obligation. Consequently,
in quasi-delict, the negligence or fault should be clearly established because it is the basis of
the action, whereas in breach of contract, the action can be prosecuted merely by proving the
existence of the contract and the fact that the obligor, in this case the common carrier, failed
to transport his passenger safely to his destination.

In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that common
carriers are presumed to have been at fault or to have acted negligently unless they prove that
they observed extraordinary diligence as defined in Arts. 1733 and 1755 of the Code. This
provision necessarily shifts to the common carrier the burden of proof. It is immaterial that
the proximate cause of the collision between the jeepney and the truck was the negligence of
the truck driver.

The doctrine of proximate cause is applicable only in actions for quasi-delict, not in actions
involving breach of contract. The doctrine is a device for imputing liability to a person where
there is no relation between him and another party. In such a case, the obligation is created by
law itself. But, where there is a pre-existing contractual relation between the parties, it is the
parties themselves who create the obligation, and the function of the law is merely to regulate
the relation thus created.

5. PHILIPPINE AMERICAN GENERAL INSURANCE CO., INC. VS. MGG

MARINE SERVICES, INC. (G.R. NO. 135645, MARCH 8, 2002)

FACTS:

On March 1, 1987, San Miguel Corporation insured several beer bottle cases with petitioner
Philippine American General Insurance Company. The cargo were loaded on board the M/V
Peatheray Patrick-G to be transported from Mandaue City to Bislig, Surigao del Sur.
After having been cleared by the Coast Guard Station in Cebu the previous day, the vessel
left the port of Mandaue City for Bislig, Surigao del Sur on March 2, 1987. The weather was
calm when the vessel started its voyage.
The following day, M/V Peatheray Patrick-G listed and subsequently sunk off Cawit Point,
Cortes, Surigao del Sur. As a consequence thereof, the cargo belonging to San Miguel
Corporation was lost.

Petitioner paid San Miguel Corporation the full amount of the cargo pursuant to the terms of
their insurance contract, and as subrogee filed with the Regional Trial Court (RTC) of Makati
City a case for collection against private respondents to recover the amount it paid.

Meanwhile, the Board of Marine Inquiry conducted its own investigation and found that the
cause of the sinking of the vessel was the existence of strong winds and enormous waves in
Surigao del Sur, a fortuitous event that could not have been for seen at the time the M/V
Peatheray Patrick-G left the port of Mandaue City. It was further held by the Board that said
fortuitous event was the proximate and only cause of the vessel's sinking.

ISSUE:

Whether respondent MGG should be held liable.

RULING:

No. [Common carriers, from the nature of their business and for reasons of public policy, are
mandated to observe extraordinary diligence in the vigilance over the goods and for the safety
of the passengers transported by them. Owing to this high degree of diligence required of
them, common carriers, as a general rule, are presumed to have been at fault or negligent if
the goods transported by them are lost, destroyed or if the same deteriorated.

However, this presumption of fault or negligence does not arise in the cases enumerated
under Article 1734 of the Civil Code:
Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following causes only:(1) Flood, storm, earthquake,
lightning or other natural disaster or calamity;(2) Act of the public enemy in war, whether
international or civil;(3) Act or omission of the shipper or owner of the goods;(4) The
character of the goods or defects in the packing or in the containers;(5) Order or act of
competent public authority.]

In order that a common carrier may be absolved from liability where the loss, destruction or
deterioration of the goods is due to a natural disaster or calamity, it must further be shown
that the such natural disaster or calamity was the proximate and only cause of the loss; there
must be "an entire exclusion of human agency from the cause of the injury of the
loss."Moreover, even in cases where a natural disaster is the proximate and only cause of the
loss, a common carrier is still required to exercise due diligence to prevent or minimize loss
before, during and after the occurrence of the natural disaster, for it to be exempt from
liability under the law for the loss of the goods. If a common carrier fails to exercise due
diligence--or that ordinary care which the circumstances of the particular case demand -- to
preserve and protect the goods carried by it on the occasion of a natural disaster, it will be
deemed to have been negligent, and the loss will not be considered as having been due to a
natural disaster under Article 1734 (1).

[In the case at bar, the issues may be narrowed down to whether the loss of the cargo was due
to the occurrence of a natural disaster, and if so, whether such natural disaster was the sole
and proximate cause of the loss or whether private respondents were partly to blame for
failing to exercise due diligence to prevent the loss of the cargo.

The parties do not dispute that on the day the M/V Peatheray Patrick-G sunk, said vessel
encountered strong winds and huge waves ranging from six to ten feet in height. The vessel
listed at the port side and eventually sunk at Cawit Point, Cortes, Surigao del Sur.

The Court of Appeals, citing the decision of the Board of Marine Inquiry in the
administrative case against the vessel's crew (BMI--646-87), found that the loss of the cargo
was due solely to the existence of a fortuitous event, particularly the presence of strong winds
and huge waves at Cortes, Surigao del Sur on March 3, 1987:]

6. EMMANUEL and ROSEMARIE HERBOSA v. COURT OF APPEALS

andPROFESSIONAL VIDEO EQUIPMENT (PVE)G.R. No. 119086, January 25,
2002DE LEON, JR., J.:

FACTS:

The facts show that on January 25, 1982 petitioner spouses sued Professional Video
Equipment (PVE for brevity), a division of private respondent Solid Distributors, Inc., for
breach of contract with damages.

The case stemmed from the failure of PVE to record on video the petitioners' wedding
celebration allegedly due to the gross negligence of its crew as well as the lack of supervision
on the part of the general manager of the PVE.

Petitioners also alleged that said failure on the part of PVE to perform its obligation caused
deep disappointment, anxiety and an irreparable break in the continuity of an established
family tradition of recording by film or slide historical and momentous family events
especially wedding celebrations and for which they were entitled to be paid actual, moral and
exemplary damages including attorney's fees.
In its Answer, PVE claimed that it had diligently supervised its VTR crew in the video
recording of petitioners' wedding and reception and that its crew acted in good faith and with
due care and proper diligence of a good father of a family.(5)

Furthermore, PVE disclaimed any liability for the damagedvideotape by invoking force
majeure or fortuitous event andasserted that a defective transistor caused the breakdown inits
videotape recorder.The court rendered its decision in favor of the petitioners, therebyordering
defendant to pay the plaintiffs actual, moral and exemplarydamages in the amount of
P100,000.00, P10,000.00 for attorney's feesand to pay the costs of these proceedings.The CA
totally set aside the trial court's award for damages for havingno basis both in fact and in
law.Hence, this petition for review.

ISSUE:

Should PVE be exempt from liability on ground of fortuitousevent

RULING:

The SC held in the negative. Having invoked fortuitous event, it was incumbent upon said
respondent to adduce sufficient and convincing proof to establish its defense. However, said
respondent failed to substantiate its bare allegation on the alleged defective transistor. At any
rate, in order that fortuitous event may exempt PVE from liability, it is necessary that it be
free from negligence.

The record shows, however, that the alleged malfunctioning of the video tape recorder
occurred at the beginning of the video coverage at the residence of the bride. The PVE crew
miserably failed to detect the defect in the video tape recorder and that they discovered the
same rather too late after the wedding reception. There appeared to be no valid reason why
the alleged defect in the video tape recorder had gone undetected. There was more than
sufficient time for the PVE crew to check the video tape recorder. The misfortune that befell
the then newly-wed couple, petitioners herein, could have been avoided by a timely exercise
of minimum prudence by the crew of PVE to check any possible mechanical defect in the
video tape recorder, which defect could have been detected earlier and remedial measures
could have been made to ensure full video tape coverage of the petitioners' wedding
celebration. But PVE or respondent Solid Distributors, Inc. did not.

THUS, the failure to record on videotape the wedding celebration of the petitioners
constitutes malicious breach of contract as well as gross negligence on the part of respondent
Solid Distributors, Inc. Moreover, PVE cannot seek refuge under Article 2180 of the New
Civil Code by claiming that it exercised due care in the selection and supervision of its
employees and that its employees are experienced in their respective trade. That defense, as
provided in the last paragraph of Article 2180 of the New Civil Code, may be availed of only
where the liability arises from culpa aquilana and not from culpa contractual such as in the
case at bar.
7. ARADA V CA 2010 SCRA 624

FACTS:

Petitioner Arada, who was the owner of M/L Maya, a common carrier, entered into contract
on March 24, 1982 with the private respondent San Miguel Corporation to transport its 9,824
cases of beer empties valued at P176,824.80 from the port of San Carlos City, Negros
Occidental to Mandaue City.

On the day of its departure he was not given clearance by the Philippine Coast Guard due to a
typhoon but was allowed to leave on the next day as there was no storm and the sea was
calm. While navigating towards Cebu, a storm developed and the vessel capsized along with
its cargo. The crew was rescued and brought to Palompon, Leyte where Vivencio Babao, its
crew captain, filed a marine protest.

The Board and Marine Inquiry and the Commandant of the Philippine Coast Guard both
exonerated and absolved the owner/operator officers and crew of the ill-fated M/L Maya
from any administrative liability on account of said incident.

The private respondent filed a complaint in the RTC, Branch 12 of Cebu City for recovery of
the value of the cargoes anchored on breach of contract of carriage, and after due hearing,
said court rendered decision dismissing the plaintiff’s claim with respect to the first cause of
action. The counterclaim was also dismissed.

Private respondent appealed to the CA and said court reversed RTC’s decision ruling that
petitioner failed to observe extraordinary diligence over the cargoes, ordering him to pay San
Miguel Corporation the amount of P176,824.80 representing the value of the cargoes lost
with interest at legal rate from the date of filing of the complaint.

Hence, this petition.

ISSUE:

Whether the petitioner is liable for the value of the lost cargoes?
RULING:

There is no doubt that petitioner was exercising its functions as a common carrier when it
entered into a contract with private respondent to carry and transport the latter’s cargoes. He
is burdened by law with the duty of exercising extraordinary diligence not only in ensuring
the safety of passengers, but in caring for the goods transported by it.
The loss or destruction or deterioration of goods turned over to the common carrier for the
conveyance to a designated destination raises instantly a presumption of fault or negligence
on the part of the carrier, save only where such loss, destruction or damage arises from
extreme circumstances such as a natural disaster or calamity.

In order that the common carrier may be exempted from responsibility, the natural disaster
must have been the proximate and only cause of the loss. However, the common carrier must
exercise due diligence to prevent or minimize the loss before, during and after the occurrence
of flood, storm or other natural disaster in order that the common carrier may be exempted
from liability for the destruction or deterioration of the goods.

Records show that Babao knew of the coming of a typhoon but did not check where it was
headed by using his vessel’s barometer and radio. Neither did he monitor and record the
weather conditions everyday. Had he done so, while navigating for 31 hours, he could have
anticipated the strong winds and big waves and had taken shelter. For failing to do this, it
constitute lack of foresight and minimum vigilance over its cargoes taking into account the
surrounding circumstances of the case.

The decision was affirmed.

8. SERVANDO VS. PHILIPPINE STEAM NAVIGATION CO. 117 SCRA 832

FACTS:

Clara Uy Bico (1,528 cavans of rice worth P40,907.50) and Amparo Servando (44 cartons of
colored paper toys and general merchandise worth P1,070.50) loaded on board Philippine
Steam Navigation Co.'s vessel, FS-176 for carriage from Manila to Pulupandan, Negros
Occidental

Bill of Lading:
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.
Upon arrival of the vessel at Pulupandan, in the morning of November 18, 1963, the cargoes
were discharged, complete and in good order, unto the warehouse of the Bureau of Customs.

At 2 pm: warehouse was razed by fire. Howwever, Before the fire, 907 cavans of rice were
delivered by Uy Bico.  

Uy Bico and Servando filed a claim for the value but was rejected by Philippine Steam.

CFI: favored UY Bico and Sercando

The Delivery of the shipment in question to the warehouse of the Bureau of Customs is not
the delivery contemplated by Article 1736

ISSUE:

Whether Philippine Steam should not be liable because of the stipulation in the bill of lading
exempting it from fortuitous event

RULING:

YES. The judgement was set aside

The Agreement was in iteration of  Article 1174. Except in cases expressly specified by the
law, or when it is otherwise declared by stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be responsible for those events which could
not be foreseen, or which, though foreseen, were inevitable.
'caso fortuito' presents the following essential characteristics: (1) the cause of the unforeseen
and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must
be independent of the human will; (2) it must be impossible to foresee the event which
constitutes the 'caso fortuito', or if it can be foreseen, it must be impossible to avoid; (3) the
occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a
normal manner; and (4) the obligor must be free from any participation in the aggravation of
the injury resulting to the creditor." In the case at bar, the burning of the customs warehouse
was an extraordinary event which happened independently of the will of the appellant. The
latter could not have foreseen the event.

Nothing in the record to show that appellant carrier ,incurred in delay in the performance of
its obligation.
9. TELENGTAN BROTHERS AND SONS VS. UNITED STATES LINES 

FACTS:

Private respondent K-Line is a foreign shipping company doing biz in PH, its shipping agent
is respondent Smith, Bell & Co., Inc. It is a member of the Far East Conference, the body
which fixes rates by agreement of its member-shipowners. The conference is registered with
the U.S. Federal Maritime Commission.

Van Reekum Paper, Inc. entered into a contract of affreightment with the K-Line for the
shipment of 468 rolls of container board liners from Georgia to Manila, consigned to herein
petitioner La Suerte Cigar. The contract of affreightment was embodied in Bill of Lading
issued by the carrier to the shipper. The expenses of loading and unloading were for the
account of the consignee (La Suerte). The shipment was packed in 12 container vans. At
Tokyo, the cargo was transhipped on two vessels of the K-Line. Ten (10) container vans were
loaded on the 1st vessel, while two (2) were loaded on another vessel.

On June 11, the first vessel arrived at the port of Manila. La Suerte was notified in writing of
the ship's arrival, together with information that container demurrage would be charged
unless the consignee took delivery of the cargo within ten (10) days.

On June 21, the other vessel arrived and was discharged of its contents the next day. On the
same day the shipping agent Smith, Bell & Co. released the Delivery Permit for twelve (12)
containers to the broker upon payment of freight charges on the bill of lading. On June 22, La
Suerte’s broker presented the shipping documents to the Bureau of Customs. But the latter
refused to act on them because the manifest of the 1st vessel covered only 10 containers,
whereas the bill of lading covered 12 containers.

The broker therefore sent back the manifest to Smith, Bell & Co with the request that the
manifest be amended. Smith, Bell & Co. refused on the ground that an amendment would
violate the Tariff and Customs Code relating to unmanifested cargo.

Later however, it agreed to add a footnote reading "Two container vans carried by other
vessel to complete the shipment of twelve containers under the bill of lading."

The manifest was approved for release only on July 3. On July 11, when the broker tried to
secure the release of the cargo, it was informed by Smith, Belle, & Co. that the free time for
removing the containers from the container yard had expired on June 26 for the first vessel,
and on July 9, in the case of the 2nd vessel, and that demurrage charges had begun to run a
day after the free time, respectively.
On July 13, La Suerte paid P47,680 representing the total demurrage charges on all the
containers, but it was not able to obtain its goods. It was able to obtain only a partial release
of the cargo because of the breakdown of the arrastre's equipment at the container yard. On
July 16, La Suerte sent a letter to Smith, Bell & Co. requesting reconsideration of the
demurrage charges, but was refused. Subsequently, La Suerte refused to pay any more
demurrage charges on the ground that the delay in the release of the cargo was not due to its
fault but to the breakdown of the equipment at the container yard.

La Suerte filed this suit in the RTC for specific performance to compel respondents to release
7 container vans consigned to it free of charge.

In their answer, private respondents claimed that they were not free to waive these charges
because under the United States Shipping Act of 1916 it was unlawful for any common
carrier engaged in transportation involving the foreign commerce to charge or collect a
greater or lesser compensation that the rates and charges specified in its tariffs on file with the
Federal Maritime Commission.

RTC dismissed petitioner's complaint. It cited the bill of lading which provided:

23. The ocean carrier shall have a lien on the goods, which shall survive delivery, for all
freight, dead freight, demurrage, damages, loss, charges, expenses and any other sums
whatsoever payable or chargeable to or for the account of the Merchant under this bill of
lading . . . . RTC likewise invoked clause 29 of the bill of lading which provided:

29. . . .The terms of the ocean carrier's applicable tariff, including tariffs covering intermodal
transportation on file with the Federal Maritime Commission and the Interstate Commission
or any other regulatory body which governs a portion of the carriage of goods, are
incorporated herein.

18. The RTC held that the bill of lading was the contract between the parties and, therefore,
petitioner was liable for demurrage charges. It rejected petitioner's claim of force majeure in
such a way that the delay in the delivery of the containers was caused by the breaking down
of the equipment of the arrastre operator. The Court reasoned that still plaintiff has to pay the
corresponding demurrage charges. The possibility that the equipment would break down was
not only foreseeable, but actually, foreseen, and was not caso fortuito. CA affirmed.

ISSUE:

Whether La Suerte is liable for demurrage for delay in removing its cargo from the containers
RULING:

YES but only for the period July 3 - 13, 1979 with respect to ten containers and from July 10
- July 13, 1979, in respect of two other containers.

Payment of demurrage La Suerte's contention is that the bill of lading does not provide for
the payment of container demurrage, as Clause 23 of the bill of lading only says
"demurrage," i.e., damages for the detention of vessels. Here there is no detention of vessels.
It invokes a case where SC defined "demurrage" as follows:

Demurrage, in its strict sense, is the compensation provided for in the contract of
affreightment for the detention of the vessel beyond the time agreed on for loading and
unloading. Essentially, demurrage is the claim for damages for failure to accept delivery…
Whatever may be the merit of petitioner's contention, the fact is that clause 29(a) also of the
bill of lading, in relation to Rule 21 of the Far East Conference Tariff , specifically provides
for the payment by the consignee of demurrage for the detention of containers and other
equipment after the so-called "free time."

A bill of lading is both a receipt and a contract. As a contract, its terms and conditions are
conclusive on the parties, including the consignee. The enforcement of the rules of the Far
East Conference and the Federal Maritime Commission is in accordance with R.A. 1407
which declares that the Philippines, in common with other maritime nations, recognizes the
international character of shipping in foreign trade and existing international practices in
maritime transportation and that it is
part of the national policy to cooperate with other friendly nations in the maintenance and
improvement of such practices. Period of Demurrage With respect to the period of La
Suerte’s liability, La Suerte cannot be held liable for demurrage starting June 27 on the 10
containers because the delay in obtaining release of the goods was not due to its fault.

The evidence shows that the Bureau of Customs refused to give an entry permit to petitioner
because the manifest issued by K-Line stated only 10 containers whereas the bill of lading
also issued by the K-Line showed there were 12 containers. For this reason, petitioner's
broker had to see Smith, Bell & Co. on June 22, but the latter did not immediately do
something to correct the manifest. Smith, Bell & Co. was asked to "amend" the manifest, but
it refused to do so on the ground that this would violate the law. It was only on June 29 that it
thought of adding instead a footnote, by which time the "free time" had already expired. Now
June 29 was a Friday. Again it is probable the correct manifest was presented to the Bureau
of Customs only on Monday, July 2, and therefore it was only on July 3 that it was approved.

It was therefore only from July 3 that La Suerte could have claimed its cargo and charged for
any delay With respect to the other two containers, demurrage was properly considered to
have accrued on July 10 since the "free time" expired on July 9. The period of delay,
however, for all the 12 containers must be deemed to have stopped on July 13, because on
this date petitioner paid P47,680.00. If it was not able to get its cargo from the container vans,
it was because of the breakdown of the shifter or cranes of the arrastre service operation. It
would be unjust to charge demurrage after July 13, since the delay in emptying the containers
was not due to the fault of La suerte In sum, we hold that petitioner can be held liable for
demurrage only for the period July 3-13, 1979 and that in accordance with the stipulation in
its bill of lading.

10. HOME INSURANCE COMPANY VS. AMERICAN STEAMSHIP AGENCIES,

INC. AND LUZON STEVEDORING CORPORATION G.R. NO. L-25599 APRIL 4,
1968

FACTS:

 “Consorcio Pesquero del Peru of South America” shipped freight pre-paid at Peru, jute bags
of Peruvian fish meal through SS Crowborough, covered by clean bills of lading. The cargo,
consigned to San Miguel Brewery, Inc., now San Miguel Corporation, and insured by Home
Insurance Company arrived in Manila and was discharged into the lighters of Luzon
Stevedoring Company. When the cargo was delivered to consignee San Miguel Brewery Inc.,
there were shortages causing the latter to lay claims against Luzon Stevedoring Corporation,
Home Insurance Company and the American Steamship Agencies (shipowner), owner and
operator of SS Crowborough.

Because the others denied liability, Home Insurance Company paid SMBI the insurance
value of the loss, as full settlement of the claim. Having been refused reimbursement by both
the Luzon Stevedoring Corporation and American Steamship Agencies, Home Insurance
Company, as subrogee to the consignee, filed against them before the CFI of Manila a
complaint for recovery of the payment paid with legal interest, plus attorney’s fees.

In answer, Luzon Stevedoring Corporation alleged that it delivered with due diligence the
goods in the same quantity and quality that it had received the same from the carrier.

The CFI, after trial, absolved Luzon Stevedoring Corporation, having found the latter to have
merely delivered what it received from the carrier in the same condition and quality, and
ordered American Steamship Agencies to pay Home Insurance Company the amount
demanded with legal interest plus attorney’s fees.

Disagreeing with such judgment, American Steamship Agencies appealed directly to Us.
ISSUE:

Is the stipulation in the charter party of the owner’s non-liability valid so as to absolve the
American Steamship Agencies from liability for loss?

RULING:

The judgment appealed from is hereby reversed and appellant is absolved from liability to

plaintiff.

YES. The bills of lading, covering the shipment of Peruvian fish meal provide at the back
thereof that the bills of lading shall be governed by and subject to the terms and conditions of
the charter party, if any, otherwise, the bills of lading prevail over all the agreements. On the
bills are stamped “Freight prepaid as per charter party. Subject to all terms, conditions and
exceptions of charter party dated London, Dec. 13, 1962.”

Section 2, paragraph 2 of the charter party, provides that the owner is liable for loss or
damage to the goods caused by personal want of due diligence on its part or its manager to
make the vessel in all respects seaworthy and to secure that she be properly manned,
equipped and supplied or by the personal act or default of the owner or its manager. Said
paragraph, however, exempts the owner of the vessel from any loss or damage or delay
arising from any other source, even from the neglect or fault of the captain or crew or some
other person employed by the owner on board, for whose acts the owner would ordinarily be
liable except for said paragraph..

The provisions of our Civil Code on common carriers were taken from Anglo-American law.
Under American jurisprudence, a common carrier undertaking to carry a special cargo
or chartered to a special person only, becomes a private carrier. As a private carrier, a
stipulation exempting the owner from liability for the negligence of its agent is not against
public policy, and is deemed valid.

Such doctrine We find reasonable. The Civil Code provisions on common carriers should not
be applied where the carrier is not acting as such but as a private carrier. The stipulation in
the charter party absolving the owner from liability for loss due to the negligence of its agent
would be void only if the strict public policy governing common carriers is applied. Such
policy has no force where the public at large is not involved, as in the case of a ship totally
chartered for the use of a single party.

And furthermore, in a charter of the entire vessel, the bill of lading issued by the master to the
charterer, as shipper, is in fact and legal contemplation merely a receipt and a document of
title not a contract, for the contract is the charter party. The consignee may not claim
ignorance of said charter party because the bills of lading expressly referred to the same.
Accordingly, the consignees under the bills of lading must likewise abide by the terms of the
charter party. And as stated, recovery cannot be had thereunder, for loss or damage to the
cargo, against the shipowners, unless the same is due to personal acts or negligence of said
owner or its manager, as distinguished from its other agents or employees. In this case, no
such personal act or negligence has been proved.

11. BA FINANCE CORP VS. CA G.R. NO. 98275 NOVEMBER 13, 1992
 
FACTS:

Amare, the driver of an Isuzu truck was involved in an accident which caused the death of
three persons. Amare was found guilty beyond reasonable doubt of reckless imprudence. BA
Finance was found liable for damages since the truck was registered in its name.

BA Finance contends that it should not be held liable since it was not Amare’s employer at
the time of the accident. It also contends that the Isuzu truck was in the possession of Rock
Component Phil, by virtue of a lease agreement.

Hence, BA Finance wants to prove who the actual/real owner is at the time of the accident,
and in accordance with such proof, evade liability and lay the same on the person actually
owning the vehicle.

ISSUES:

1 Whether BA Finance should be held liable.

2 Whether BA Finance can escape liability by proving the actual/real owner of the truck.

RULING:

1 Yes, BA Finance is liable.

The registered owner of a certificate of public convenience is liable to the public for the
injuries or damages suffered by passengers or third persons caused by the operation of said
vehicle, even though the same had been transferred to a third person. Under the same
principle the registered owner of any vehicle, even if not used for a public service, should
primarily be responsible to the public or to the third persons for injuries caused the latter
while the vehicle is being driven on the highways or streets.

2. No, the law does not allow him. The law, with its aim and policy in mind, does not relieve
him directly of the responsibility that the law fixes and places upon him as an incident or
consequence of registration. This may appear harsh but nevertheless, a registered owner who
has already sold or transferred a vehicle has the recourse to a third-party complaint, in the
same action brought against him to recover for the damage or injury done, against the vendee
or transferee of the vehicle.

While the registered owner is primarily responsible for the damage caused, he has a right to
be indemnified by the real or actual owner of the amount that he may be required to pay as
damage for the injury caused.

12. BASCOS VS. COURT OF APPEALS AND RODOLFO A. CIPRIANO G.R. NO.
101089

FACTS:

Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE for short)

entered into a hauling contract with Jibfair Shipping Agency Corp whereby the former bound
itself to haul the latter’s 2,000 m/tons of soya bean meal to the warehouse in Calamba,
Laguna. To carry out its obligation, CIPTRADE, through Cipriano, subcontracted with
Bascos to transport and to deliver 400 sacks of soya bean meal from the Manila Port Area to
Calamba, Laguna. Petitioner failed to deliver the said cargo. As a consequence of that failure,
Cipriano paid Jibfair Shipping Agency the amount of the lost goods in accordance with their
contract.

Cipriano demanded reimbursement from petitioner but the latter refused to pay. Eventually,
Cipriano filed a complaint for a sum of money and damages with writ of preliminary
attachment for breach of a contract of carriage. The trial court granted the writ of preliminary
attachment.

In her answer, petitioner interposed the defense that there was no contract of carriage since
CIPTRADE leased her cargo truck to load the cargo from Manila Port Area to Laguna and
that the truck carrying the cargo was hijacked and being a force majeure, exculpated
petitioner from any liability.

After trial, the trial court rendered a decision in favor of Cipriano and against Bascos ordering
the latter to pay the former for actual damages for attorney’s fees and cost of suit.

The “Urgent Motion To Dissolve/Lift preliminary Attachment” Bascos is DENIED for being
moot and academic.

Petitioner appealed to the Court of Appeals but respondent Court affirmed the trial court’s
judgment.
Hence this petition for review on certiorari.

ISSUES:

1. Whether petitioner a common carrier

2. Whether the hijacking referred to a force majeure

RULING:

 The petition is DISMISSED and the decision of the Court of Appeals is hereby AFFIRMED.

1. YES
In disputing the conclusion of the trial and appellate courts that petitioner was a common
carrier, she alleged in this petition that the contract between her and Cipriano was lease of the
truck. She also stated that: she was not catering to the general public. Thus, in her answer to
the amended complaint, she said that she does business under the same style of A.M. Bascos
Trucking, offering her trucks for lease to those who have cargo to move, not to the general
public but to a few customers only in view of the fact that it is only a small business.

We agree with the respondent Court in its finding that petitioner is a common carrier.

Article 1732 of the Civil Code defines a common carrier as “(a) person, corporation or firm,
or association engaged in the business of carrying or transporting passengers or goods or
both, by land, water or air, for compensation, offering their services to the public.” The test to
determine a common carrier is “whether the given undertaking is a part of the business
engaged in by the carrier which he has held out to the general public as his occupation rather
than the quantity or extent of the business transacted.” 12 In this case, petitioner herself has
made the admission that she was in the trucking business, offering her trucks to those with
cargo to move. Judicial admissions are conclusive and no evidence is required to prove the
same.

But petitioner argues that there was only a contract of lease because they offer their services
only to a select group of people. Regarding the first contention, the holding of the Court in
De Guzman vs. Court of Appeals 14 is instructive. In referring to Article 1732 of the Civil
Code, it held thus:

“The above article makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as an ancillary
activity (in local idiom, as a “sideline”). Article 1732 also carefully avoids making any
distinction between a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic or unscheduled
basis. Neither does Article 1732 distinguish between a carrier offering its services to the
“general public,” i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population. We think that Article
1732 deliberately refrained from making such distinctions.”

2. NO. Likewise, We affirm the holding of the respondent court that the loss of the goods was
not due to force majeure.

Common carriers are obliged to observe extraordinary diligence in the vigilance over the
goods transported by them. Accordingly, they are presumed to have been at fault or to have
acted negligently if the goods are lost, destroyed or deteriorated. There are very few instances
when the presumption of negligence does not attach and these instances are enumerated in
Article 1734. 19 In those cases where the presumption is applied, the common carrier must
prove that it exercised extraordinary diligence in order to overcome the presumption.

In this case, petitioner alleged that hijacking constituted force majeure which exculpated her
from liability for the loss of the cargo. In De Guzman vs. Court of Appeals, the Court held
that hijacking, not being included in the provisions of Article 1734, must be dealt with under
the provisions of Article 1735 and thus, the common carrier is presumed to have been at fault
or negligent. To exculpate the carrier from liability arising from hijacking, he must prove that
the robbers or the hijackers acted with grave or irresistible threat, violence, or force. This is in
accordance with Article 1745 of the Civil Code which provides:

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

(6) That the common carrier’s liability for acts committed by thieves, or of robbers who do
not act with grave or irresistible threat, violences or force, is dispensed with or diminished;”
xx

13.PHILIPPINE AIR LINES VS. COURT OF APPEALS GR 120262, 17 JULY 1997)

FACTS:

On 23 October 1988, Leovigildo A. Pantejo, then City Fiscal of Surigao City, boarded a PAL
plane in Manila and disembarked in Cebu City where he was supposed to take his connecting
flight to Surigao City. However, due to typhoon Osang, the connecting flight to Surigao City
was cancelled. To accommodate the needs of its stranded passengers, PAL initially gave out
cash assistance of P 100.00 and, the next day, P200.00, for their expected stay of 2 days in
Cebu. Pantejo requested instead that he be billeted in a hotel at the PAL’s expense because he
did not have cash with him at that time, but PAL refused. Thus, Pantejo was forced to seek
and accept the generosity of a co-passenger, an engineer named Andoni Dumlao, and he
shared a room with the latter at Sky View Hotel with the promise to pay his share of the
expenses upon reaching Surigao. On 25 October 1988 when the flight for Surigao was
resumed, Pantejo came to know that the hotel expenses of his co-passengers, one
Superintendent Ernesto Gonzales and a certain Mrs. Gloria Rocha, an Auditor of the
Philippine National Bank, were reimbursed by PAL. At this point, Pantejo informed Oscar
Jereza, PAL’s Manager for Departure Services at Mactan Airport and who was in charge of
cancelled flights, that he was going to sue the airline for discriminating against him. It was
only then that Jereza offered to pay Pantejo P300.00 which, due to the ordeal and anguish he
had undergone, the latter declined.

Pantejo filed a suit for damages against PAL with the RTC of Surigao City which, after trial,
rendered judgment, ordering PAL to pay Pantejo P300.00 for actual damages, P150,000.00 as
moral damages, P100,000.00 as exemplary damages, P15,000.00 as attorney’s fees, and 6%
interest from the time of the filing of the complaint until said amounts shall have been fully
paid, plus costs of suit.

On appeal, the appellate court affirmed the decision of the court a quo, but with the exclusion
of the award of attorney’s fees and litigation expenses.

The Supreme Court affirmed the challenged judgment of Court of Appeals, subject to the
modification regarding the computation of the 6% legal rate of interest on the monetary
awards granted therein to Pantejo.

ISSUE:

Whether petitioner airlines acted in bad faith when it failed and refused to provide hotel
accommodations for respondent Pantejo or to reimburse him for hotel expenses incurred by
reason of the cancellation of its connecting flight to Surigao City due to force majeur.

RULING:

A contract to transport passengers is quite different in kind and degree from any other
contractual relation, and this is because of the relation which an air carrier sustains with the
public. Its business is mainly with the travelling public. It invites people to avail of the
comforts and advantages it offers. The contract of air carriage, therefore, generates a relation
attended with a public duty. Neglect or malfeasance of the carrier’s employees naturally
could give ground for an action for damages.

The discriminatory act of PAL against Pantejo ineludibly makes the former liable for moral
damages under Article 21 in relation to Article 2219 (10) of the Civil Code. As held in
Alitalia Airways vs. CA, et al., such inattention to and lack of care by the airline for the
interest of its passengers who are entitled to its utmost consideration, particularly as to their
convenience, amount to bad faith which entitles the passenger to the award of moral
damages.

Moral damages are emphatically not intended to enrich a plaintiff at the expense of the
defendant. They are awarded only to allow the former to obtain means, diversion, or
amusements that will serve to alleviate the moral suffering he has undergone due to the
defendant’s culpable action and must, perforce, be proportional to the suffering inflicted.
However, substantial damages do not translate into excessive damages. Herein, except for
attorney’s fees and costs of suit, it will be noted that the Courts of Appeals affirmed point by
point the factual findings of the lower court upon which the award of damages had been
based.

The interest of 6% imposed by the court should be computed from the date of rendition of
judgment and not from the filing of the complaint.

The rule has been laid down in Eastern Shipping Lines, Inc. vs. Court of Appeals, et. al. that
“when an obligation, not constituting a loan or forbearance of money, is breached, an interest
on the amount of damages awarded may be imposed at the discretion of the court at the rate
of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages
except when or until the demand can be established with reasonable certainty. Accordingly,
where the demand is established with reasonable certainty, the interest shall begin to run from
the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such
certainty cannot be so reasonably established at the time the demand is made, the interest
shall begin to run only from the date the judgment of the court is made (at which time the
quantification of damages may be deemed to have been reasonably ascertained). The actual
base for the computation of legal interest shall, in any case, be on the amount finally
adjudged.” This is because at the time of the filling of the complaint, the amount of the
damages to which Pantejo may be entitled remains unliquidated and not known, until it is
definitely ascertained, assessed and determined by the court, and only after the presentation
of proof thereon.

14.VICTORY LINER V. ROSALITO GAMMAD, GR NO. 159636, 2004-11-25

FACTS:

The facts as testified by respondent Rosalito Gammad show that on March 14, 1996, his wife
Marie Grace Pagulayan-Gammad,[3] was on board an air-conditioned Victory Liner bus
bound for Tuguegarao, Cagayan from Manila.  At about 3:00 a.m., the bus while... running at
a high speed fell on a ravine somewhere in Barangay Baliling, Sta. Fe, Nueva Vizcaya, which
resulted in the death of Marie Grace and physical injuries to other passengers.[4]
On May 14, 1996, respondent heirs of the deceased filed a complaint[5] for damages arising
from culpa contractual against petitioner.  In its answer,[6] the petitioner claimed that the
incident was purely accidental and... that it has always exercised extraordinary diligence in its
50 years of operation.

After several re-settings,[7] pre-trial was set on April 10, 1997.[8] For failure to appear on the
said date, petitioner was declared as in default.[9]  However, on petitioner's motion[10] to lift
the order of default, the same was granted by the trial court.[11]

At the pre-trial on May 6, 1997, petitioner did not want to admit the proposed stipulation that
the deceased was a passenger of the Victory Liner Bus which fell on the ravine and that she
was issued Passenger Ticket No. 977785.  Respondents, for their part, did not accept...
petitioner's proposal to pay P50,000.00.

ISSUES:

1. Whether petitioner's counsel was guilty of gross negligence;

2. Whether petitioner should be held liable for breach of contract of carriage;
3. Whether the award of damages was proper.

RULING:

Petitioner was correctly found liable for breach of contract of carriage.  A common carrier is
bound to carry its passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with due regard... to all the circumstances.  In a
contract of carriage, it is presumed that the common carrier was at fault or was negligent
when a passenger dies or is injured. Unless the presumption is rebutted, the court need not
even make an express finding of fault or negligence on... the part of the common carrier. This
statutory presumption may only be overcome by evidence that the carrier exercised
extraordinary diligence

In the instant case, there is no evidence to rebut the statutory presumption that the proximate
cause of Marie Grace's death was the negligence of petitioner.  Hence, the courts below
correctly ruled that petitioner was guilty of breach of contract of carriage.

Article 1764[35] in relation to Article 2206[36] of the Civil Code, holds the common carrier
in breach of its contract of carriage that results in the death of a passenger liable to pay the
following: (1) indemnity for death, (2)... indemnity for loss of earning capacity, and (3) moral
damages.
In the present case, respondent heirs of the deceased are entitled to indemnity for the death of
Marie Grace which under current jurisprudence is fixed at P50,000.00.[37]

The award of compensatory damages for the loss of the deceased's earning capacity should be
deleted for lack of basis.  As a rule, documentary evidence should be presented to
substantiate the claim for damages for loss of earning capacity.  By way of exception,
damages... for loss of earning capacity may be awarded despite the absence of documentary
evidence when (1) the deceased is self-employed earning less than the minimum wage under
current labor laws, and judicial notice may be taken of the fact that in the deceased's line of
work no... documentary evidence is available; or (2) the deceased is employed as a daily
wage worker earning less than the minimum wage under current labor laws.

However, the fact of loss having been established, temperate damages in the amount of
P500,000.00 should be awarded to respondents.  Under Article 2224 of the Civil Code,
temperate or moderate damages, which are more than nominal but less than compensatory
damages, may be... recovered when the court finds that some pecuniary loss has been
suffered but its amount can not, from the nature of the case, be proved with certainty.

Respondents in the instant case should be awarded moral damages to compensate for the grief
caused by the death of the deceased resulting from the petitioner's breach of contract of
carriage.  Furthermore, the petitioner failed to prove that it exercised the extraordinary...
diligence required for common carriers, it is presumed to have acted recklessly.[49]  Thus,
the award of exemplary damages is proper.  Under the circumstances, we find it reasonable to
award respondents the amount of P100,000.00 as moral damages... and P100,000.00 as
exemplary damages.  These amounts are not excessive.[50]

In the instant case, petitioner should be held liable for payment of interest as damages for
breach of contract of carriage.  Considering that the amounts payable by petitioner has been
determined with certainty only in the instant petition, the interest due shall be... computed
upon the finality of this decision at the rate of 12% per annum until satisfaction, per
paragraph 3 of the afore cited rule.