TRANSPORTATION

LAW
Case digests of the new cases based on the
syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

• Cognizant of the foregoing, the LTFRB issued a

DEFINITION OF A COMMON CARRIER press release on January 27, 2017 informing the
riding public that DBDOYC, which is considered as
a TNC, cannot legally operate. Despite such
Land Transportation Franchising and Regulatory warning, however, DBDOYC continued to operate
Board (LTFRB) vs. Valenzuela, 896 SCRA 37, G.R. and offer its services to the riding public sans any
No. 242860 March 11, 2019 effort to obtain a certificate ofTNC accreditation.

Principle: The fact that its drivers are not physically hailed • In response, DBDOYC, on July 4, 2018, filed a
on the street does not automatically render Angkas- Petition for Declaratory Relief with Application for
accredited drivers as private carriers. Temporary Restraining Order/Writ of Preliminary
Injunction19 against petitioners before the RTC alle
Facts:
• ging that: (a) it is not a public transportation
• On May 8, 2015, the Department of provider since Angkas app is a mere tool that
Transportation and Communications (DOTC), the connects the passenger and the motorcycle driver;
predecessor of DOTr, set the standard (b) Angkas and its drivers are not engaged in the
classifications for public transport conveyances to delivery of a public service.
be used as basis for the issuance of a Certificate
of Public Convenience (CPC) for public utility Issue: Whether or not Transport Network Vehicles and
vehicles (PUVs). The DOTC, through DO 2015-11, Companies such as Angkas are common carriers. [YES]
created two (2) new classifications, namely,
Transportation Network Companies (TNC) and Ruling:
Transportation Network Vehicle Service (TNVS).
Section 15 of the Public Service Act requires that, except for
• Although DO 2015-11 made mention of TNVS, the certain exemptions, no public service shall operate in the
term was not clearly defined until June 19, 2017, Philippines without possessing a CPC. In turn, the then DOTC
when the DOTr issued DO 201 7-11which set the (which had supervision and control over the LTFRB that had
rules and procedures on the issuance of franchises assumed certain powers of the old Public Service Commission)
for public transport routes and services, including issued DO 97-1097 providing for the standard classifications
TNCs and TNVS. DO 2017-11 further provided of all PUVs before they can be issued a CPC. This department
that "[m]otorcycles x x x are likewise not allowed order was later amended by the above stated DOs 2015-
as public transport conveyance." 11 and 2017-11 and thereafter, the LTFRB issued various
memorandum circulars governing the rules for TNC and TNVS
• Consequently, the LTFRB issued various accreditation, which rules DBDOYC purportedly failed to
memorandum circulars to govern the issuance of the comply.
necessary CPC for a TNVS and the accreditation
of a TNC. In its issuances, the LTFRB declared that As stated in the Public Service Act, the term “public service”
a TNC is treated as a transport provider, whose covers any person who owns, operates, manages, or controls
accountability commences from the acceptance by in the Philippines, for hire or compensation, with general or
its TNVS while online. On the other hand, the limited clientele, whether permanent, occasional or
accountability of the TNVS, as a common carrier, accidental, and done for general business purposes, any
attaches from the time the TNVS is online and offers common carrier. The Civil Code defines “common earners” in
its services to the riding public. the following terms: Article 1732. Common carriers are
persons, corporations, firms or associations engaged in the
• Meanwhile, on May 26, 2016, DBDOYC registered business of carrying or transporting passengers or goods or
its business with the Securities and Exchange both, by land, water, or air for compensation, offering their
Commission (SEC), and subsequently, in December services to the public.
2016, launched "Angkas," an online and on-
demand motorcycle-hailing mobile application In this relation, DBDOYC posits that its accredited bikers are
(Angkas or Angkas app) that pairs drivers of private carriers as they do not hold out their services
motorcycles with potential passengers without, generally to the public because they cannot just be hailed on
however, obtaining the mandatory certificate of the street as they only contract via the Angkas online front.
TNC accreditation from the LTFRB. In this regard, However, the Court is hard-pressed to rule — at least at this
DBDOYC accredited Angkas drivers and allowed point, and for the purpose of determining the validity of the
them to offer their transport services to the public writ of preliminary injunction — that these bikers are only
despite the absence of CPCs. private carriers who may publicly ply their trade without any
regulation. As the Court observes, the genius behind the

1 COMPILED BY: ELIZA DEN A. DEVILLERES

ATENEO DE DAVAO COLLEGE OF LAW
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

Angkas app is that it removes the inconvenience of having to

physically hail for public transportation by creating a virtual
system wherein practically the same activity may now be
done at the tip of one’s fingers. As it is the trend of modern
technology, previously cumbersome mundane activities, such
as paying bills, ordering food, or reserving accommodations,
can now be accomplished through a variety of online
platforms. By DBDOYC’s own description, it seems to be that
Angkas app is one of such platforms. As such, the fact that its
drivers are not physically hailed on the street does not
automatically render Angkas-accredited drivers as private
carriers.

Even if it is assumed that Angkas-accredited bikers are not

treated as common carriers and hence, would not make
DBDOYC fall under the “public service” definition, it does not
necessarily mean that the business of holding out private
motorcycles for hire is a legitimate commercial venture.
Section 7 of RA 4136 states that: Section 7. Registration
Classification.—Every motor vehicle shall be registered under
one of the following described classifications: (a) private
passenger automobiles; (b) private trucks; and (c) private
motorcycles, scooters, or motor wheel attachments. Motor
vehicles registered under these classifications shall not be
used for hire under any circumstances and shall not be used
to solicit, accept, or be used to transport passengers or
freight for pay.

The Court therefore concludes that no clear and unmistakable

right exists in DBDOYC’s favor; hence, the RTC gravely
abused its discretion in issuing the assailed injunctive writ. In
the final analysis, the business of holding one’s self out as a
transportation service provider, whether done through online
platforms or not, appears to be one which is imbued with
public interest and thus, deserves appropriate regulations.
With the safety of the public further in mind, and given that,
at any rate, the above said administrative issuances are
presumed to be valid until and unless they are set aside, the
nullification of the assailed injunctive writ on the ground of
grave abuse of discretion is in order.

2 COMPILED BY: ELIZA DEN A. DEVILLERES

ATENEO DE DAVAO COLLEGE OF LAW
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

that if they wanted to board the plane, they should

Fernando vs. Northwest Airlines, Inc., 817 SCRA 233, produce their credit cards and pay for their new
G.R. No. 212038, G.R. No. 212043 February 8, 2017 tickets, otherwise Northwest would order their
luggage off-loaded from the plane. The Fernandos
Principle: A contract of carriage is defined as one whereby a printed coupon tickets and rushe back to the
certain person or association of persons obligate themselves to boarding gates since the plane was about to
transport persons, things, or goods from one place to another for depart. But when the Fernandos reached the
a fixed price. Under Article 1732 of the Civil Code, this boarding gate, the plane had already departed.
“persons, corporations, firms, or associations engaged in the Hence this petition.
business of carrying or transporting passengers or goods or both,
by land, water, or air, for compensation, offering their services Issue: Whether or not a contract of carriage existed
to the public” is called a common carrier. between Northwest and the Fernandos. [YES]

Facts: Ruling:

• Sometime on December 20, 2001, Jesus Fernando A contract of carriage is defined as one whereby a certain
arrived at the LA Airport via Northwest Airlines person or association of persons obligate themselves to
Flight No. NW02 to join his family who flew earlier transport persons, things, or goods from one place to another
to the said place for a reunion for the Christmas for a fixed price. Under Article 1732 of the Civil Code, this
holidays. He was asked by the Immigration Officer “persons, corporations, firms, or associations engaged in the
to have his return ticket verified and validated business of carrying or transporting passengers or goods or
since the date reflected thereon. Instead the both, by land, water, or air, for compensation, offering their
personnel of the respondent merely glanced at his services to the public” is called a common
ticket without checking its status with the computer carrier. Undoubtedly, a contract of carriage existed between
and peremptorily said that the ticket has been used Northwest and the Fernandos. They voluntarily and freely
and could not be considered as valid. He presented gave their consent to an agreement whose object was the
his Elite Platinum World Perks Card but the transportation of the Fernandos from LA to Manila, and
personnel refused to check the validity of the ticket whose cause or consideration was the fare paid by the
in the computer, instead, looked at Jesus Fernando Fernandos to Northwest.
with contempt, then informed the Immigration
Officer that the ticket is not valid. In an action based on a breach of contract of carriage, the
aggrieved party does not have to prove that the common
• The Immigration Officer brought Jesus Fernando to carrier was at fault or was negligent. All that he has to prove
the interrogation room of the Immigration and is the existence of the contract and the fact of its
Naturalization Services (INS) where he was asked nonperformance by the carrier. As the aggrieved party, the
humiliating questions for more than two (2) hours. Fernandos only had to prove the existence of the contract
When he was finally cleared by the Immigration and the fact of its nonperformance by Northwest, as carrier,
Officer, he was granted only a twelve (12)-day in order to be awarded compensatory and actual damages.
stay in the United States (US), instead of the usual Therefore, having proven the existence of a contract of
six (6) months. He further incurred other expenses carriage between Northwest and the Fernandos, and the fact
due to the said incident. of non-performance by Northwest of its obligation as a
common carrier, it is clear that Northwest breached its
• The second incident happened on January 29, contract of carriage with the Fernandos. Thus, Northwest
2002, the Fernandos were on their way back to the opened itself to claims for compensatory, actual, moral and
Philippines. When the Fernandos reached the gate exemplary damages, attorney’s fees and costs of suit.
area where boarding passes need to be
presented, Northwest supervisor Linda Tang Article 1733 of the New Civil Code provides that common
stopped them and demanded for the presentation carriers, from the nature of their business and for reasons of
of their paper tickets. They failed to present the public policy, are bound to observe extraordinary diligence
same since Northwest issued electronic tickets in the vigilance over the goods and for the safety of the
(attached to the boarding passes) which they passengers transported by them, according to all the
showed to the supervisor. The personnel rudely circumstances of each case. Also, Article 1755 of the same
pulled them out of the queue. Elizabeth Fernando Code states that a common carrier is bound to carry the
explained to Linda Tang that the matter could be passengers safely as far as human care and foresight can
sorted out by simply verifying their electronic provide, using the utmost diligence of very cautious persons,
tickets in her computer and all she had to do was with due regard for all the circumstances. We, thus, sustain
click and punch in their Elite Platinum World Perks the findings of the CA and the RTC that Northwest committed
Card number. But Linda Tang arrogantly told them a breach of contract “in failing to provide the spouses with
the proper assistance to avoid any inconvenience” and that

3 COMPILED BY: ELIZA DEN A. DEVILLERES

ATENEO DE DAVAO COLLEGE OF LAW
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

the actuations of Northwest in both subject incidents “fall short

of the utmost diligence of a very cautious person expected of
it.” Both ruled that considering that the Fernandos are not just
ordinary passengers but, in fact, frequent flyers of Northwest,
the latter should have been more courteous and
accommodating to their needs so that the delay and
inconveniences they suffered could have been avoided.
Northwest was remiss in its duty to provide the proper and
adequate assistance to them.

Passengers do not contract merely for transportation. They

have a right to be treated by the carrier’s employees with
kindness, respect, courtesy and due consideration. They are
entitled to be protected against personal misconduct, injurious
language, indignities and abuses from such employees. So it
is, that any rule or discourteous conduct on the part of
employees towards a passenger gives the latter an action for
damages against the carrier. In requiring compliance with the
standard of extraordinary diligence, a Standard which is, in
fact, that of the highest possible degree of diligence, from
common carriers and in creating a presumption of negligence
against them, the law seeks to compel them to control their
employees, to tame their reckless instincts and to force them
to take adequate care of human beings and their property.

4 COMPILED BY: ELIZA DEN A. DEVILLERES

ATENEO DE DAVAO COLLEGE OF LAW
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

Unitrans International Forwarders, Inc. vs. Bureau of Customs (BOC) the Import Entry Internal
<br/>Insurance Company of North America, 896 SCRA Revenue Declaration together with other pertinent
595, G.R. No. 203865 March 13, 2019 documents, as well as to pick up the shipment and
then transport and deliver the said shipment to the
Principle: If the goods are lost, destroyed or deteriorated, consignee's premises in good condition.
common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence as required in Article 1733. Issue: Whether or not Unitrans should be held liable. [YES]

To overcome the presumption of negligence, the common Ruling:

carrier must establish by adequate proof that it exercised
extraordinary diligence over the goods. It must do more than Emphasis must be placed on the fact that Unitrans itself
merely show that some other party could be responsible for the admitted, through its own witness and general manager, Del
damage. Rosario, that in handling the subject shipment and making sure
that it was delivered to the consignee’s premises in good
Facts: condition as the delivery/forwarding agent, Unitrans was
acting as a freight forwarding entity and an accredited non-
• ICNA filed an Amended Complaint[5] for collection vessel operating common carrier. Article 1735 of the Civil
of sum of money (Complaint) arising from marine Code states that if the goods are lost, destroyed or
insurance coverage on two (2) musical instruments deteriorated, common carriers are presumed to have been at
imported from Melbourne Australia... instituted fault or to have acted negligently, unless they prove that they
against South East Asia Container Line (SEACOL) observed extraordinary diligence as required in Article
and the unknown owner/charterer of the vessel 1733. In turn, Article 1733 states that common carriers, from
M/S Buxcrown, both doing business in the the nature of their business and for reasons of public policy,
Philippines through its local ship agent Unitrans, are bound to observe extraordinary diligence in the vigilance
and against the unknown charterer of M/S Doris over the goods and for the safety of the passengers
Wullf, doing business in the Philippines through its transported by them, according to all the circumstances of
local ship agent TSA,... SEACOL... solicited and each case.
received shipment of pieces of STC musical
instruments from the shipper Dominant Musical Jurisprudence holds that a common carrier is presumed to
Instrument for transportation to and delivery at the have been negligent if it fails to prove that it exercised
port of Manila, complete and in good condition. extraordinary vigilance over the goods it transported. When
the goods shipped are either lost or arrived in damaged
• EACOL then loaded the insured shipment on board condition, a presumption arises against the carrier of its
M/S Buxcrown for transportation from Melbourne failure to observe that diligence, and there need not be an
Australia to Singapore. In Singapore, the shipment express finding of negligence to hold it liable. To overcome
was transferred from M/S Buxcrown to M/S Doris the presumption of negligence, the common carrier must
Wullf for final transportation to the port of Manila. establish by adequate proof that it exercised extraordinary
diligence over the goods. It must do more than merely show
• Shipment was insured with ICNA against all risk... that some other party could be responsible for the damage.
in favor of the consignee, San Miguel Foundation. In the instant case, considering that it is undisputed that the
subject goods were severely damaged, the presumption of
negligence on the part of the common carrier, i.e., Unitrans,
• M/S Doris Wullf arrived and docked at the arose. Hence, it had to discharge the burden, by way of
Manila... and upon stripping the contents thereof, it adequate proof, that it exercised extraordinary diligence
was found that two of the cartons containing the over the goods; it is not enough to show that some other party
musical instruments were in bad order condition. might have been responsible for the damage. Unitrans failed
to discharge this burden. Hence, it cannot escape liability.
• Unitrans then delivered the subject shipment to the
consignee.It was found out that two units of musical
instruments were damaged and could no longer be
used for their intended purpose, hence were
declared a total loss.Obviously, the damages
sustained by the insured cargo were caused by the
fault and negligence of the [therein] defendants.

• In its Answer with Counterclaim Unitrans' obligation

was limited to paying on behalf of San Miguel the
necessary duties and kindred fees, file with the

5 COMPILED BY: ELIZA DEN A. DEVILLERES

ATENEO DE DAVAO COLLEGE OF LAW
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

Tan vs. Great Harvest Enterprises, Inc., 897 SCRA 586, insisting that she merely accommodated it. Tan also
G.R. No. 220400 March 20, 2019 pointed out that since Great Harvest instructed her
(*J. Leonen) driver to change the point of delivery without her
consent, it should bear the loss brought about by its
Principle: Common carriers are obligated to exercise deviation from the original unloading point.
extraordinary diligence over the goods entrusted to their care.
This is due to the nature of their business, with the public policy • Regional Trial Court of Manila found Karamihan
behind it geared toward achieving allocative efficiency and guilty as an accessory after the fact of theft,...
minimizing the inherently inequitable dynamics between the Regional Trial Court of Quezon City granted Great
parties to the transaction. Harvest's Complaint for sum of money. It found that
Tan entered into a verbal contract of hauling with
Facts: Great Harvest, and held her responsible for her
driver's failure to deliver the soya beans to Great
• Great Harvest hired Tan to transport 430 bags of Harvest.
soya beans worth P230,000.00 from Tacoma
Integrated Port Services, Inc. (Tacoma) in Port Area, • But the Court of Appeals dismissed it in its March
Manila to Selecta Feeds in Camarin, Novaliches, 13, 2015 Decision.
Quezon City.[5] That same day, the bags of soya
beans were loaded into Tan's hauling truck. Her Issue: Whether or not Tan should be held liable. [YES]
employee, Rannie Sultan Cabugatan (Cabugatan),
then delivered the goods to Selecta Feeds.[6] At Ruling:
Selecta Feeds, however, the shipment was rejected.
Upon learning of the rejection, Great Harvest Article 1732 of the Civil Code defines common carriers as
instructed Cabugatan to deliver and unload the “persons, corporations, firms or associations engaged in the
soya beans at its warehouse in Malabon. Yet, the business of carrying or transporting passengers or goods or
truck and its shipment never reached Great both, by land, water or air, for compensation, offering their
Harvest's warehouse. services to the public.” The Civil Code outlines the degree of
diligence required of common carriers in Articles 1733, 1755,
• Great Harvest asked Tan about the missing and 1756: ARTICLE 1733. Common carriers, from the nature
delivery. At first, Tan assured Great Harvest that of their business and for reasons of public policy, are bound
she would verify the whereabouts of its shipment, to observe extraordinary diligence in the vigilance over the
but after a series of follow-ups, she eventually goods and for the safety of the passengers transported by
admitted that she could not locate both her truck them, according to all the circumstances of each case. . . . .
and Great Harvest's goods.[8] She reported her ARTICLE 1755. A common carrier is bound to carry the
missing truck to the Western Police District Anti- passengers safely as far as human care and foresight can
Carnapping Unit and the National Bureau of provide, using the utmost diligence of very cautious persons,
Investigation.[9] On February 19, 1994, the with a due regard for all the circumstances. ARTICLE 1756. In
National Bureau of Investigation informed Tan that case of death of or injuries to passengers, common carriers
her missing truck had been found in Cavite. are presumed to have been at fault or to have acted
However, the truck had been cannibalized and had negligently, unless they prove that they observed
no cargo in it.[10] Tan spent over P200,000.00 to extraordinary diligence as prescribed in Articles 1733 and
have it fixed. 1755.

• Tan filed a Complaint against Cabugatan and Law and economics provide the policy justification of our
Rody Karamihan (Karamihan), whom she accused existing jurisprudence. The extraordinary diligence required
of conspiring with each other to steal the shipment by the law of common carriers is primarily due to the nature
entrusted to her.[12] An Information[13] for theft of their business, with the public policy behind it geared
was filed against Karamihan, while Cabugatan toward achieving allocative efficiency between the parties to
was charged with qualified theft.[14] On March 2, the transaction. Allocative efficiency is an economic term that
1994, Great Harvest, through counsel, sent Tan a describes an optimal market where customers are willing to
letter demanding full payment for the missing bags pay for the goods produced. Thus, both consumers and
of soya beans. On April 26, 1994, it sent her producers benefit and stability is achieved. The notion of
another demand letter. Still, she refused to pay for common carriers is synonymous with public service under
the missing shipment or settle the matter with Great Commonwealth Act No. 146 or the Public Service Act. Due to
Harvest.[15] Thus, on June 2, 1994, Great Harvest the public nature of their business, common carriers are
filed a Complaint for sum of money against compelled to exercise extraordinary diligence since they will
Tan.[16] In her Answer, Tan denied that she be burdened with the externalities or the cost of the
entered into a hauling contract with Great Harvest,

6 COMPILED BY: ELIZA DEN A. DEVILLERES

ATENEO DE DAVAO COLLEGE OF LAW
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

consequences of their contract of carriage if they fail to take

the precautions expected of them.

Common carriers are mandated to internalize or shoulder the

costs under the contracts of carriage. This is so because a
contract of carriage is structured in such a way that
passengers or shippers surrender total control over their
persons or goods to common carriers, fully trusting that the
latter will safely and timely deliver them to their destination.
In light of this inherently inequitable dynamics — and the
potential harm that might befall passengers or shippers if
common carriers exercise less than extraordinary diligence
— the law is constrained to intervene and impose sanctions
on common carriers for the parties to achieve allocative
efficiency. Here, petitioner is a common carrier obligated to
exercise extraordinary diligence over the goods entrusted to
her. Her responsibility began from the time she received the
soya beans from respondent’s broker and would only cease
after she has delivered them to the consignee or any person
with the right to receive them.

Article 1734 of the Civil Code holds a common carrier fully

responsible for the goods entrusted to him or her, unless there
is enough evidence to show that the loss, destruction, or
deterioration of the goods falls under any of the enumerated
exceptions: ARTICLE 1734. 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.

7 COMPILED BY: ELIZA DEN A. DEVILLERES

ATENEO DE DAVAO COLLEGE OF LAW
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

that the contents thereof were no longer retrieved.

II. COMMON CARRIER OF GOODS Only the container van with Serial No. GATU
(Vigilance Over Goods) 040516-3 reached the warehouse. As a
consequence, Honda Trading suffered losses in the
total amount of ₱2,121,917.04, representing the
Keihin-Everett Forwarding Co., Inc. vs. Tokio Marine value of the lost 40 bundles of Aluminum Alloy
Malayan Insurance Co., Inc., 891 SCRA 332, G.R. No. Ingots.
212107 January 28, 2019
• Claiming to have paid Honda Trading’s insurance
Principle: Under Article 1736 of the Civil Code, a common claim for the loss it suffered, respondent Tokio
carrier’s extraordinary responsibility over the shipper’s goods Marine commenced the instant suit on October 10,
lasts from the time these goods are unconditionally placed in the 2006 with the filing of its complaint for damages
possession of, and received by, the carrier for transportation, against petitioner Keihin-Everett. Respondent Tokio
until they are delivered, actually or constructively, by the Marine maintained that it had been subrogated to
carrier to the consignee, or to the person who has a right to all the rights and causes of action pertaining to
receive them. Honda Trading.

Facts: • Served with summons, petitioner Keihin-Everett

denied liability for the lost shipment on the ground
• In 2005, Honda Trading Phils. Ecozone Corporation that the loss thereof occurred while the same was
(Honda Trading) ordered 80 bundles of Aluminum in the possession of respondent Sunfreight
Alloy Ingots from PT Molten Aluminum Producer Forwarders. Hence, petitioner Keihin-Everett filed
Indonesia (PT Molten). PT Molten loaded the goods a third-party complaint against the latter, who, in
in two container vans with Serial Nos. TEXU turn, denied liability on the ground that it was not
389360-5 and GATU 040516-3 which were, in privy to the contract between Keihin-Everett and
turn, received in Jakarta, Indonesia by Nippon Honda Trading. If at all, respondent Sunfreight
Express Co., Ltd. for shipment to Manila. Forwarders claimed that its liability cannot exceed
the ₱500,000.00 fixed in its Accreditation
• Aside from insuring the entire shipment with Tokio Agreement with petitioner Keihin-Everett.
Marine & Nichido Fire Insurance Co., Inc. (TMNFIC)
under Policy No. 83-00143689, Honda Trading Issue: Whether or not Keihin-Everett liable to Tokio Marine.
also engaged the services of petitioner Keihin- [YES]
Everett to clear and withdraw the cargo from the
pier and to transport and deliver the same to its Ruling:
warehouse at the Laguna Technopark in Biñan,
Laguna. Meanwhile, petitioner Keihin-Everett had In this light, Keihin-Everett, as a common carrier, is mandated
an Accreditation Agreement with respondent to observe, under Article 1733 of the Civil Code,
Sunfreight Forwarders whereby the latter extraordinary diligence in the vigilance over the goods it
undertook to render common carrier services for transports according to all the circumstances of each case. In
the former and to transport inland goods within the the event that the goods are lost, destroyed or deteriorated,
Philippines. it is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary
• The shipment arrived in Manila on November 3, diligence. To be sure, under Article 1736 of the Civil Code, a
2005 and was, accordingly, offloaded from the common carrier’s extraordinary responsibility over the
ocean liner and temporarily stored at the CY Area shipper’s goods lasts from the time these goods are
of the Manila International Port pending release unconditionally placed in the possession of, and received by,
by the Customs Authority. On November 8, 2005, the carrier for transportation, until they are delivered,
the shipment was caused to be released from the actually or constructively, by the carrier to the consignee, or
pier by petitioner Keihin-Everett and turned over to the person who has a right to receive them. Hence, at the
to respondent Sunfreight Forwarders for delivery time Keihin-Everett turned over the custody of the cargoes to
to Honda Trading. En route to the latter’s Sunfreight Forwarders for inland transportation, it is still
warehouse, the truck carrying the containers was required to observe extraordinary diligence in the vigilance
hijacked and the container van with Serial No. of the goods. Failure to successfully establish this carries with
TEXU 389360-5 was reportedly taken away. it the presumption of fault or negligence, thus, rendering
Although said container van was subsequently Keihin-Everett liable to Honda Trading for breach of contract.
found in the vicinity of the Manila North Cemetery
and later towed to the compound of the Metro
Manila Development Authority (MMDA), it appears

8 COMPILED BY: ELIZA DEN A. DEVILLERES

ATENEO DE DAVAO COLLEGE OF LAW
 TRANSPORTATION LAW
Case digests of new cases
based on the updated syllabus of Atty. Melissa Romana P. Suarez
(SY 2020-2021)

based on an obligation arising from other sources, such as

III. COMMON CARRIER OF PASSENGERS law or contract. Thus, the obligation of the common carrier to
(Nature of Responsibility Definition) indemnify its passenger or his heirs for injury or death arises
from the contract of carriage entered into by the common
carrier and the passenger.
People vs. Go, 888 SCRA 726, G.R. No. 210816
December 10, 2018 On the other hand, "the essence of the quasi offense of
criminal negligence under [A]rticle 365 of the RPC lies in the
Principle: Diligence Required of Common Carriers; Under Article execution of an imprudent or negligent act that, if
1755 of the Civil Code, a common carrier is bound to carry the intentionally done, would be punishable as a felony. The law
passengers safely as far as human care and foresight can provide penalizes, thus, the negligent or careless act, not the result
using the utmost diligence of very cautious persons with due thereof. The gravity of the consequence is only taken into
regard for all the circumstances. account to determine the penalty; it does not qualify the
substance of the offense."
A civil action based on the contractual liability of a common
carrier is distinct from an action based on criminal negligence. Consequently, in criminal cases for reckless imprudence, the
negligence or fault should be established beyond reasonable
Facts: doubt because it is the basis of the action, whereas in breach of
contract, the action can be prosecuted merely by proving the
• On June 20, 2008, M/V Princess of the Stars existence of the contract and the fact that the common carrier
(Stars), a passenger cargo owned and operated failed to transport his passenger safely to his destination. The first
by Sulpicio Lines, Inc. (SLI), was expected to depart punishes the negligent act, with civil liability being a mere
at 8:00 p.m. from the Port of Manila for Cebu City. consequence of a finding of guilt, whereas the second seeks
indemnification for damages. Moreover, the first is governed by
• At 11:00 a.m. of June 20, 2008, PAGASA issued the provisions of the RPC, and not by those of the Civil Code.
Severe Weather Bulletin (SWB) No. 7, raising Thus, it is beyond dispute that a civil action based on the
Storm Warning Signal (SWS) No. 1 over Romblon, contractual liability of a common carrier is distinct from an action
Marinduque, Southern Quezon, Cebu, Bohol, Panay based on criminal negligence.
Island, and Surigao del Norte. SWB No. 7 stated
that the eye of Typhoon Frank was located 60 In this case, the criminal action instituted against respondent
kilometers northeast of Guiuan, Eastern Samar, and involved exclusively the criminal and civil liability of the latter
forecasted to move west northwest at 19 kilometers arising from his criminal negligence as responsible officer of
per hour. SLI. It must be emphasized that there is a separate civil action
instituted against SLI based on culpa contractual incurred by
it due to its failure to carry safely the passengers of Stars to
• Since the vessel was caught in the eye of the storm,
their place of destination. The civil action against a shipowner
it eventually capsized.
for breach of contract of carriage does not preclude criminal
prosecution against its employees whose negligence resulted
• Of the 849 persons on board, only 32 survived, in the death of or injuries to passengers.
227 died and 592 were reported missing.

Issue: Whether or not Sulpicio Lines is also criminally

liable. [NOT YET]

Ruling:

Under Article 1755 of the Civil Code, a common carrier is

bound to carry the passengers safely as far as human care
and foresight can provide using the utmost diligence of very
cautious persons with due regard for all the circumstances.
Moreover, under Article 1756 of the Civil Code, in case of
death or injuries to passengers, a common carrier is presumed
to have been at fault or to have acted negligently, unless it
proves that it observed extraordinary diligence. In addition,
pursuant to Article 1759 of the same Code, it is liable for the
death of, or injuries to passengers through the negligence or
willful acts of the former’s employees. These provisions
evidently refer to a civil action based not on the act or
omission charged as a felony in a criminal case, but to one

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III. COMMON CARRIER OF PASSENGERS The resolution of this case must consider two (2) rules. First,
(Liability for Quasi-Delict) Article 2180’s specification that “[e]mployers shall be liable
for the damages caused by their employees . . . acting within
the scope of their assigned tasks[.]” Second, the operation of
Caravan Travel and Tours International, Inc. vs. Abejar, the registered-owner rule that registered owners are liable
783 SCRA 368, G.R. No. 170631 February 10, 2016 for death or injuries caused by the operation of their vehicles.
(*J. Leonen) These rules appear to be in conflict when it comes to cases in
which the employer is also the registered owner of a vehicle.
Principle: The plaintiff may first prove the employer's ownership Article 2180 requires proof of two things: first, an
of the vehicle involved in a mishap by presenting the vehicle's employment relationship between the driver and the owner;
registration in evidence. Thereafter, a disputable presumption and second, that the driver acted within the scope of his or
that the requirements for an employer's liability under Article her assigned tasks. On the other hand, applying the
21801 of the Civil Code have been satisfied will arise. The registered-owner rule only requires the plaintiff to prove that
burden of evidence then shifts to the defendant to show that no the defendant-employer is the registered owner of the
liability under Article 2180 has ensued. This case, thus, vehicle. The registered-owner rule was articulated as early
harmonizes the requirements of Article 2180, in relation to as 1957 in Erezo, et al. v. Jepte, 102 Phil. 103, where this
Article 21762 of the Civil Code, and the so-called registered- court explained that the registration of motor vehicles, as
owner rule as established in this court's rulings in Aguilar, Sr. v. required by Section 5(a) of Republic Act No. 4136, the Land
Commercial Savings Bank,3Del Carmen, Jr. v. Bacoy,4Filcar Transportation and Traffic Code, was necessary “not to make
Transport Services v. Espinas,5 and Mendoza v. Spouses Gomez. said registration the operative act by which ownership in
vehicles is transferred, . . . but to permit the use and operation
Facts: of the vehicle upon any public highway[.]” Its “main aim . . .
is to identify the owner so that if any accident happens, or
• On July 13, 2000, Jesmariane R. Reyes (Reyes) that any damage or injury is caused by the vehicle on the
was walking along the west-bound lane of public highways, responsibility therefor can be fixed on a
Sampaguita Street, United Parañaque Subdivision definite individual, the registered owner.”
IV, Parañaque City. A Mitsubishi L-300 van with
plate number PKM 195 was travelling along the Aguilar, Sr. v. Commercial Savings Bank, 360 SCRA 395
east-bound lane, opposite Reyes. To avoid an (2001), Del Carmen, Jr. v. Bacoy, 671 SCRA 91 (2012), Filcar
incoming vehicle, the van swerved to its left and hit Transport Services v. Espinas, 674 SCRA 117 (2012), and
Reyes. Alex Espinosa (Espinosa), a witness to the Mendoza v. Spouses Gomez, 726 SCRA 505 (2014), should
accident, went to her aid and loaded her in the not be taken to mean that Article 2180 of the Civil Code
back of the van. Espinosa told the driver of the van, should be completely discarded in cases where the
Jimmy Bautista (Bautista), to bring Reyes to the registered-owner rule finds application. As acknowledged
hospital. Instead of doing so, Bautista appeared to in Filcar, there is no categorical statutory pronouncement in
have left the van parked inside a nearby the Land Transportation and Traffic Code stipulating the
subdivision with Reyes still in the van. Fortunately liability of a registered owner. The source of a registered
for Reyes, an unidentified civilian came to help and owner’s liability is not a distinct statutory provision, but
drove Reyes to the hospital. remains to be Articles 2176 and 2180 of the Civil Code:
While Republic Act No. 4136 or the Land Transportation and
• Upon investigation, it was found that the registered Traffic Code does not contain any provision on the liability of
owner of the van was Caravan. Caravan is a registered owners in case of motor vehicle mishaps, Article
corporation engaged in the business of organizing 2176, in relation with Article 2180, of the Civil Code imposes
travels and tours.[20] Bautista was Caravan's an obligation upon Filcar, as registered owner, to answer for
employee assigned to drive the van as its service the damages caused to Espinas’ car. Thus, it is imperative to
driver. apply the registered-owner rule in a manner that harmonizes
it with Articles 2176 and 2180 of the Civil Code. Rules must
be construed in a manner that will harmonize them with other
• Caravan shouldered the hospitalization expenses
rules so as to form a uniform and consistent system of
of Reyes. Despite medical attendance, Reyes died
jurisprudence. In light of this, the words used in Del
two (2) days after the accident.
Carmen are particularly notable. There, this court stated that
Article 2180 “should defer to” the registered-owner rule. It
never stated that Article 2180 should be totally abandoned.
Issue: Whether or not Caravan should be held liable for the
negligence of its employee Bautista. [YES]
The appropriate approach is that in cases where both the
registered-owner rule and Article 2180 apply, the plaintiff
must first establish that the employer is the registered owner
Ruling:
of the vehicle in question. Once the plaintiff successfully

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proves ownership, there arises a disputable presumption that

the requirements of Article 2180 have been proven. As a
consequence, the burden of proof shifts to the defendant to
show that no liability under Article 2180 has arisen. This
disputable presumption, insofar as the registered owner of
the vehicle in relation to the actual driver is concerned,
recognizes that between the owner and the victim, it is the
former that should carry the costs of moving forward with the
evidence. The victim is, in many cases, a hapless pedestrian
or motorist with hardly any means to uncover the employment
relationship of the owner and the driver, or any act that the
owner may have done in relation to that employment.

Employing a person holding a nonprofessional driver’s license

to operate another’s motor vehicle violates Section 24 of the
Land Transportation and Traffic Code, which provides: SEC.
24. Use of driver’s license and badge.—. . . . . . . No owner
of a motor vehicle shall engage, employ, or hire any person
to operate such motor vehicle, unless the person sought to be
employed is a duly licensed professional driver. Evidently,
petitioner did not only fail to exercise due diligence when it
selected Bautista as service driver; it also committed an actual
violation of law.

Petitioner’s argument that it should be excused from liability

because Bautista was already dropped as a party is equally
unmeritorious. The liability imposed on the registered owner
is direct and primary. It does not depend on the inclusion of
the negligent driver in the action. Agreeing to petitioner’s
assertion would render impotent the rationale of the motor
registration law in fixing liability on a definite person.
Bautista, the driver, was not an indispensable party under
Rule 3, Section 7 of the 1997 Rules of Civil Procedure. Rather,
he was a necessary party under Rule 3, Section 8. Instead of
insisting that Bautista — who was nothing more than a
necessary party — should not have been dropped as a
defendant, or that petitioner, along with Bautista, should have
been dropped, petitioner (as a codefendant insisting that the
action must proceed with Bautista as party) could have opted
to file a cross-claim against Bautista as its remedy. The 1997
Rules of Civil Procedure spell out the rules on joinder of
indispensable and necessary parties. These are intended to
afford “a complete determination of all possible issues, not
only between the parties themselves but also as regards to
other persons who may be affected by the judgment.”

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bicycle. But as he turned, Aparra had to swerve to

Torreon vs. Aparra, Jr., 848 SCRA 380, G.R. No. 188493 the left to avoid hitting Marcelo Subiano, who was
December 13, 2017 allegedly standing on the side of the road. Because
(*J. Leonen) the road was only four (4) meters and 24 inches
wide, rough, and full of potholes, Aparra lost
Principle: Lack of documentary evidence is not fatal to a claim control of the truck and they fell off the wharf.
for the deceased's lost earning capacity. Testimony from a
competent witness familiar with his salary is a sufficient basis to • Consequently, Rodolfo and Monalisa died while
determine the deceased's income before his death. Johanna and Abellana were injured.

Facts: • On April 3, 1990, Vivian and Abellana filed a

criminal complaint for Reckless Imprudence
• On November 1, 1989, Vivian's husband, Rodolfo resulting to Double Homicide, Multiple Serious
Torreon (Rodolfo), and daughters, Monalisa Physical Injuries and Damage to Property against
Torreon (Monalisa) and Johanna Ava Torreon Aparra and Caballes.
(Johanna), arrived with Felomina Abellana
(Abellana) at the municipal wharf of Jetafe, Bohol. • During the trial, Abellana testified that Rodolfo
They came from Cebu City aboard M/B Island was the General Manager of her businesses in
Traders, a motor boat owned and operated by Butuan City. As manager, Rodolfo was in charge of
Carmelo Simolde (Simolde). three (3) drugstores, an apartment, and rice fields.
He was earning a basic salary of P1 0,000.00 and
• After they disembarked from the motor boat, they received a 20% commission on the profit of the
looked for a vehicle that would transport them from businesses, thus, earning more or less P15,000.00.
the wharf to the poblacion of Jetafe. A cargo truck Abellana claimed that she could not present her
entered the wharf and their fellow passengers accounting books to the court because she had
boarded it. Abellana, Rodolfo, and his daughters already disposed of them.
chose not to board the already-overcrowded truck.
Instead, they waited for a different vehicle to bring Issue: Whether or not the lack of documentary evidence is
them to the poblacion. However, they were fatal to a claim for the deceased’s lost earning capacity.
informed that only the cargo truck, which was also [NO]
owned and operated by Simolde, would enter the
wharf. Ruling:

• Approximately 10 minutes later, the same cargo The same rules on damages are applicable whether or not
truck returned to the wharf. Again, fellow the death occurred as a result of a crime or a quasi-delict. To
passengers from M/B Island Traders started summarize, the heirs are entitled to recover: 1. As indemnity
embarking it. This time, Rodolfo, Monalisa, for the death of the victim of the offense — P12,000.00,
Johanna, and Abellana also boarded it. Abellana without the need of any evidence or proof of damages, and
was seated in front, while Rodolfo and his even though there may have been mitigating circumstances
daughters were with the rest of the passengers at attending the commission of the offense [now P50,000.00]. 2.
the back of the truck. Because there were no As indemnity for loss of earning capacity of the deceased —
proper seats at the back of the truck, the 30 or an amount to be fixed by the court according to the
more passengers were either standing or sitting on circumstances of the deceased related to his actual income at
their bags. the time of death and his probable life expectancy, the said
indemnity to be assessed and awarded by the court as a
• While passengers were getting on the truck, matter of duty, unless the deceased had no earning capacity
Simolde called Felix Caballes (Caballes), the at said time on account of permanent disability not caused
official truck driver. Caballes approached Simolde by the accused. If the deceased was obliged to give support,
but left the engine running. While Simolde and under Art. 291, Civil Code, the recipient who is not an heir,
Caballes were talking, Generoso Aparra, Jr. may demand support from the accused for not more than five
(Aparra), Simolde's chief diesel mechanic, started years, the exact duration to be fixed by the court. 3. As moral
driving the truck. Upon seeing the truck move, damages for mental anguish — an amount to be fixed by
Caballes rushed to the truck and sat beside the court. This may be recovered even by the illegitimate
Aparra. However, instead of taking control of the descendants and ascendants of the deceased. 4. As
vehicle, Caballes allowed Aparra to drive. exemplary damages, when the crime is attended by one or
more aggravating circumstances — an amount to be fixed in
• Shortly thereafter, Aparra maneuvered the truck to the discretion of the court, the same to be considered
the right side of the road to avoid hitting a parked separate from fines. 5. As attorney’s fees and expenses of

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litigation — the actual amount thereof (but only when a

separate civil action to recover civil liability has been filed or
when exemplary damages are awarded). 6. Interests in the
proper cases. 7. It must be emphasized that the indemnities
for loss of earning capacity of the deceased and for moral
damages are recoverable separately from and in addition
to the fixed sum of P12,000.00 corresponding to the
indemnity for the sole fact of death, and that these damages
may, however, be respectively increased or lessened
according to the mitigating or aggravating circumstances,
except items 1 and 4 above, for obvious reasons.

Pleyto v. Lomboy, 432 SCRA 329 (2004), provided the

formula to compute a deceased’s earning capacity: It is well-
settled in jurisprudence that the factors that should be taken
into account in determining the compensable amount of lost
earnings are: (1) the number of years for which the victim
would otherwise have lived; and (2) the rate of loss sustained
by the heirs of the deceased. Jurisprudence provides that the
first factor, i.e., life expectancy, is computed by applying the
formula (2/3 x [80 - age at death]) adopted in the American
Expectancy Table of Mortality or the Actuarial Combined
Experience Table of Mortality. As to the second factor, it is
computed by multiplying the life expectancy by the net
earnings of the deceased, i.e., the total earnings less
expenses necessary in the creation of such earnings or income
and less living and other incidental expenses. The net earning
is ordinarily computed at fifty percent (50%) of the gross
earnings. Thus, the formula used by this Court in computing
loss of earning capacity is: Net Earning Capacity = [2/3 x
(80 - age at time of death) x (gross annual income -
reasonable and necessary living expenses)].

Generally, the Civil Code does not allow interest upon

unliquidated claims or damages to be recovered unless they
can be established with reasonable certainty. The rationale
for this is because it would be unfair to require the liable
person to pay interest on a sum that is yet to be determined.

However, the courts, in the interest of justice, may impose

interest on unliquidated claims or damages upon judgment. In
this case, there is no need to impose a moratory interest. Actual
damages to compensate for the deceased’s lost earnings are
already granted. Payment for Rodolfo’s lost earning capacity
should be enough to cover the actual damages suffered by his
heirs.

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Cacho vs. Manahan, 851 SCRA 483, G.R. No. 203081

January 17, 2018
Using this test, Manahan was clearly negligent when he was
Principle: When an injury is caused by the negligence of an relatively driving fast on a narrow highway and approaching
employee there instantly arises a presumption of the law that a similarly narrow bridge. We must bear in mind that a bus
there was negligence on the part of the employer either in the is a significantly large vehicle which would be difficult to
selection of his employee or in the supervision over him after maneuver and stop if it were travelling at a high speed. On
such selection. top of this, the time of the accident was on or about sunrise
Facts: when visibility on the road was compromised. Manahan
should have been more prudent and careful in his driving the
• The present case arose from a complaint for bus especially considering that Dagupan Bus is a common
damages filed by the petitioners, the wife and carrier. Given the nature of the business and for reasons of
children of Bismark Cacho (Cacho), against public policy, the common carrier is bound “to observe
Gerardo Manahan (Manahan), Dagupan Bus Co., extraordinary diligence in the vigilance over the goods and
Inc. (Dagupan Bus), and Renato de Vera (De Vera), for the safety of the passengers transported by them,
the owner of R. M. De Vera Construction (De Vera according to all the circumstances of each case.” Moreover,
Construction). we can also say that Manahan was legally presumed
negligent under Article 2185 of the Civil Code, which
• The records disclose that on 30 June 1999 a provides: “unless there is proof to the contrary, it is presumed
vehicular accident occurred along the national that a person driving a motor vehicle has been negligent if at
highway at Pogo, Alaminos, Pangasinan, near the the time of the mishap, he was [in violation of] any traffic
Embarcadero Bridge. At around 5:00 a.m. on the regulation.” Based on the place and time of the accident,
said date, Cacho was driving a Nissan Sentra with Manahan was actually violating a traffic rule found in R.A.
Plate No. UAM 778 from Alaminos, Pangasinan to No. 4136, otherwise known as the Land Transportation and
Bani, Pangasinan, when it collided with a Dagupan Traffic Code.
Bus, with Plate No. AVD 548, traversing on the
opposite lane. The car had already crossed the Considering that the bus was already approaching the
bridge when it collided with the bus which was just Embarcadero Bridge, Manahan should have already slowed
about to enter the bridge. The collision caused down a few meters away from the bridge. Actually, he should
heavy damage to the front of the bus, the total have stopped farther away from the bridge because he
wreckage of the Nissan Sentra, Cacho’s instant would have been able to see that Cacho’s car was already
death, and multiple injuries to three (3) passengers crossing the bridge. An experienced and competent bus
inside the car. driver would be able to know how to properly react upon
seeing another vehicle ahead that is about to exit a narrow
• The complaint alleged that Cacho’s car was hit by bridge. Obviously, Manahan failed to do so. Having
the bus because the latter swerved to the left lane established Manahan’s negligence, he is liable with Dagupan
as it tried to avoid a pile of boulders placed on the Bus to indemnify Cacho’s heirs. Article 2180, in relation to
shoulder of the road. These boulders were Article 2176, of the Civil Code provides that the employer of
negligently placed by De Vera Construction a negligent employee is liable for the damages caused by
contracted by the local government to do some the latter. When an injury is caused by the negligence of an
work on the Embarcadero Bridge. employee there instantly arises a presumption of the law that
there was negligence on the part of the employer either in
the selection of his employee or in the supervision over him
• Dagupan Bus, the owner and operator of the bus, after such selection. The presumption, however, may be
and Manahan, the bus driver, jointly filed their rebutted by a clear showing on the part of the employer that
answer with counterclaim and cross-claims. They it had exercised the care and diligence of a good father of
claimed that it was Cacho who drove fast coming a family in the selection and supervision of his employee.
from the bridge and bumped into the bus that was Hence, to escape solidary liability, for a quasi-delict
on full stop; and that Cacho had to swerve to the committed by its employees, an employer must overcome the
left because there were boulders of rocks scattered presumption by presenting convincing proof that it exercised
on his lane. the care and diligence of a good father of a family in the
selection and supervision of its employees. When an
employee causes damage due to his own negligence while
Issue: Whether or not Dagupan Bus Co. is liable to the heirs performing his own duties, the juris tantum presumption arises
of Cacho. [YES, it is solidarily liable with its driver Gerardo that his employer is negligent, rebuttable only by proof of
Cacho and Rodolfo De Vera to the heirs of Cacho.] ob servance of the diligence of a good father of a family. In
the selection of prospective employees, employers are
required to examine them as to their qualifications,
Ruling: experience, and service records. With respect to the

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supervision of employees, employers must formulate

standard operating procedures, monitor their
implementation, and impose disciplinary measures for
breaches thereof. These facts must be shown by concrete
proof, including documentary evidence.

While the immediate beneficiaries of the standard of

extraordinary diligence are the passengers, they are not the
only persons the law seeks to benefit. If we were to solely
require this standard of diligence for a common carrier’s
passengers, this would be incongruent to the State’s
responsibility to curb accidents on the road. That common
carriers should carefully observe the statutory standard of
extraordinary diligence in respect of their passengers, such
diligence should similarly benefit pedestrians and the owners
and passengers of other vehicles who are equally entitled to
the safe and convenient use of our roads and highways.

Since the damages imposed were the result of a complaint

for damages based on a quasi-delict, the interest on these
awards must be computed from the date when the RTC
rendered its decision in the civil case, or on 26 January 2004,
as it was at this time that a quantification of the damages
may be deemed to have been reasonably ascertained. From
the finality of a judgment awarding a sum of money until it is
satisfied, the award shall be considered a forbearance of
credit, regardless of whether the award in fact pertained to
one. To be consistent with the foregoing, the interest on the
monetary awards shall then be fixed at six percent (6%) per
annum, until the damages are fully paid.

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Imperial vs. Heirs of Neil Bayaban and Mary Lou

Bayaban, 881 SCRA 383, G.R. No. 197626 October 3, Issue: Whether or not Imperial is liable to the Bayaban
2018 spouses. [YES, it is solidarily liable with its employee
(*J. Leonen) Laranaga to the Bayaban spouses.]

Principle: The burden of proving that a negligent act of an Ruling:

employee was performed within the scope of his or her assigned
tasks rests with the plaintiff. When the plaintiff has discharged Articles 2176 and 2180 of the Civil Code were derived from
this burden, as in this case, the presumption that the employer Articles 1902 and 1903 of the Spanish Civil Code of 1889.
was negligent arises, and the employer must put forward Article 2176 defines “quasi-delict” as the fault or negligence
evidence showing that he or she had exercised the due diligence that causes damage to another, there being no preexisting
of a good father of a family in the selection and supervision of contractual relations between the parties. On the other hand,
the employee. Failing to dispute this presumption renders the Article 2180 enumerates persons who are vicariously liable
employer solidarily liable with the employee for the quasi-delict. for the fault or negligence of persons over whom they
exercise control, whether absolute or limited.
Facts:
This Court explained the legal fiction of vicarious liability
• On December 14, 2003, at about 3:00 p.m., two in Cangco v. Manila Railroad Co., 38 Phil. 768 (1918).
(2) vehicles, a van and a tricycle, figured in an Though involving Articles 1902 and 1903 of the Spanish Civil
accident along Sumulong Highway, Antipolo City. Code of 1889, Cangco’s explanation of the law’s rationale
The Mitsubishi L-300 van with plate number USX remains relevant considering that Articles 1902 and 1903,
931 was owned and registered under Imperial's and the present Articles 2176 and 2180 are similarly
name, and was driven by Laraga. The tricycle with worded. In Cangco: With respect to extra contractual
plate number DU 8833 was driven by Gerardo obligation arising from negligence, whether of act or
Mercado (Mercado). omission, it is competent for the legislature to elect — and our
Legislature has so elected — to limit such liability to cases in
• On board the tricycle were the Bayaban Spouses, which the person upon whom such an obligation is imposed is
who sustained injuries. morally culpable or, on the contrary, for reasons of public
policy, to extend that liability, without regard to the lack of
• For the injuries they sustained, the Bayaban moral culpability, so as to include responsibility for the
Spouses had to undergo therapy and post-medical negligence of those persons whose acts or omissions are
treatment. imputable, by a legal fiction, to others who are in a position
to exercise an absolute or limited control over them. The
legislature which adopted our Civil Code has elected to limit
• The Bayaban Spouses demanded compensation extra contractual liability — with certain well-defined
from Imperial, Laraga, and Mercado for the exceptions — to cases in which moral culpability can be
hospital bills and loss of income that they sustained directly imputed to the persons to be charged. This moral
while undergoing therapy and post-medical responsibility may consist in having failed to exercise due
treatment.9 When neither Imperial, Laraga, nor care in one’s own acts, or in having failed to exercise due
Mercado heeded their demand, the Bayaban care in the selection and control of one’s agents or servants,
Spouses filed a Complaint10 for damages before or in the control of persons who, by reason of their status,
the Regional Trial Court of Antipolo City, occupy a position of dependency with respect to the person
impleading Imperial, Laraga, and Mercado as made liable for their conduct. Specifically for employers,
defendants. they are deemed liable or morally responsible for the fault
or negligence of their employees but only if the employees
• For the injuries they sustained, the Bayaban are acting within the scope of their assigned tasks. An act is
Spouses had to undergo therapy and post-medical deemed an assigned task if it is “done by an employee, in
treatment.8 furtherance of the interests of the employer or for the account
of the employer at the time of the infliction of the injury or
• The Bayaban Spouses demanded compensation damage.”
from Imperial, Laraga, and Mercado for the
hospital bills and loss of income that they sustained This Court finds that respondents have discharged the burden
while undergoing therapy and post-medical of proof necessary to hold Imperial vicariously liable under
treatment.9 When neither Imperial, Laraga, nor Article 2180 of the Civil Code. There is no question here that
Mercado heeded their demand, the Bayaban Laraga was petitioner’s driver, hence, his employee, as this
Spouses filed a Complaint10 for damages before fact was admitted by petitioner. This Court likewise finds that
the Regional Trial Court of Antipolo City, respondents have established that Laraga was acting within
impleading Imperial, Laraga, and Mercado as the scope of his assigned tasks at the time of the accident. It
defendants. was 3:00 p.m. and Laraga was driving in Antipolo City,

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where, as alleged by petitioner, his greenhouse and garden

were located. It is worth noting that according to petitioner,
he loaned the van to Pascua for the maintenance of his
greenhouse and the repair of the water line pipes in his
garden. The logical conclusion is that Laraga was driving the
van in connection with the upkeep of petitioner’s Antipolo
greenhouse and garden. Laraga was driving the van in
furtherance of the interests of petitioner at the time of the
accident. The defense that Sunday was supposedly Laraga’s
day off fails to convince. There is no proof whatsoever of the
truthfulness of this allegation, with Laraga not having
appeared in court to testify on this matter.

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He was brought to the station and then to the

DAMAGES RECOVERABLE FROM COMMON hospital where he was discharged the next day.
CARRIERS
(Nominal, Temperate and Liquidated Damages) • Apart from losing P5,000.00 cash, shoes,
documents and his uniform, [Major Karaan] also lost
his Seiko watch and his brother's land title
Sulpicio Lines, Inc. (now known as Philippine Span Asia allegedly worth P3,000.00 and about P15,000.00
Carrier Corporation) vs. Karaan, 881 SCRA 588, G.R. No. respectively. Apart from the hospital bill, SLI paid
208590 October 3, 2018 him P2,000.00.

Principle: The law sanctions the award of temperate damages in • Major Karaan attested he saw life rafts secured to
case of insufficiency of evidence of actual loss suffered. the vessel when he boarded the same.
Facts: • Napoleon, likewise a retired soldier and
passenger of the ill-fated M/V Princess of the
• Respondents Major Victorio Karaan (Major Orient, testified that about 10:45 p.m., he heard a
Karaan), Napoleon Labrague (Napoleon) and loud sound coming from below the deck. It sounded
Herminia Labrague (Herminia) (Spouses like a container van falling and thereafter, the
Labrague), and Ely Liva (Liva) were passengers of vessel lifted to its side. He woke his wife Herminia,
M/V Princess of the Orient owned by petitioner their eight (8) year old daughter, Karen Hope, and
Sulpicio Lines, Inc. (now known as Philippine Span their helper Liva and got them life jackets before
Asia Carrier Corporation) when it sank on moving out to the stairway. They held on to the
September 18, 1998 somewhere between Cavite gangplank near the stairway while water was
and Batangas, near Fortune Island. rushing inside the ship. During those times, no vessel
crew could be seen. Oil was dripping from the
• On June 30, 1999, respondents lodged a ship's hull and when the ship was about to sink, they
Complaint based on breach of contract of carriage jumped into the sea. He was then holding his
against petitioner praying for various amounts of daughter but waves struck them apart. He was
damages as passengers/survivors of the sinking of able to grab a life raft loaded with three (3) other
petitioner's vessel. passengers. He heard his wife calling for help and
lifted her to the raft but he lost touch of their
• During trial, the respondents was presented as daughter. They were rescued the next day at
witnesses. Their testimonies were summarized by about 12:30 noon. They were then brought to the
the CA as follows: Municipal Hall where they were fed and then to
the SLI office at the port area where they were
• Major Karaan, a retired soldier, deposed that at given clothes. Their daughter's lifeless body was
about 8:00p.m. on September 18, 1998, he recovered in Tanza, Cavite. Consequently, he felt
boarded M/V Princess of the Orient bound for very sad consdering that she was their only child.
Cebu City from Manila. He was at Cabin No. 601 He also lost P26,000.00 cash and a video camera.
along with another passenger. The travel
commenced smoothly although there was a typhoon • Herminia affirmed Napoleon's recount of events.
at that time. However, about two (2) hours after, She recalled that while sleeping, she heard a loud
while he was lying in his cabin, he heard a loud sound and the things inside their cabin started to
sound which lasted for about 30 minutes. It sounded fall. That was when her husband woke them up.
like something heavy fell somewhere below the They wore their life jackets and tried to contact the
cabin. Then, the ship started to tilt, the lights went ships's crew through the intercom but to no avail.
out and the engine shut down. He went out of his Since the ship continued to capsize, they decided
cabin and saw the passengers already panicking. to go out to the upper deck but could not make it
He saw no SLI crew assisting them. He went to the because of the oil spilling all over them. They
upper level where he grabbed a life jacket. He instead went down and seeing that the water was
stayed there until the ship eventually sank. He went already inside the ship, they dived into the sea.
with the ship underwater but was able to swim They were separated from each other when a big
therefrom and hold on to a life raft. He could not wave hit them. Nobody was there to help them nor
see much at that time as it was very dark and the was there any order to abandon the ship. She was
rain poured heavily. He was rescued by a chopper able to take hold of the raft but they could not use
at about 2:30 or 3:00 in the afternoon of the next its broken paddle. The raft had medicines but they
day after being in the water for about 15 hours. chose not to use them as they could not read the

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directions. They were rescued at noon the following

day.

• On her cross-examination, she maintained that

when they went out of their cabin, she only saw
passengers but not a single crew from SLI. The
spouses are claiming moral damages of
P750,000.00 each.

• Liva corroborated her bosses' story. She further

added that when she was awakened by her boss,
she saw bottles and mirrors falling on the floor and
blocking the cabin door which delayed their exit
therefrom.

• The RTC issued an Order ordering petitioner to pay

damages.

Issue: May temperate damages be awarded when the

claim for actual damages was proven? [YES]

Ruling:

Undoubtedly, the law sanctions the award of temperate

damages in case of insufficiency of evidence of actual loss
suffered. Article 2224 of the Civil Code states: Article 2224.
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 cannot, from the nature of the
case, be provided with certainty. In this case, we find that no
egregious error on the part of the CA in imposing temperate
damages. The records of the case, which remain
uncontroverted, undoubtedly establishes that respondents
suffered loss during the unfortunate sinking of M/V Princess
of the Orient. However, no independent proof, other than
respondents’ bare claims, were presented to provide a
numerical value to their loss. Absent a contrary proof which
would justify decreasing or otherwise modifying the amount
pegged by the CA, this Court is constrained to affirm the
amounts it imposed as temperate damages.

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Estrada vs. Philippine Rabbit Bus Lines, Inc., 831 SCRA results, or it is proved that the carrier was guilty of
349, G.R. No. 203902 July 19, 2017 fraud or bad faith, even if death does not result.
The CA held that there was no evidence on record
Principle: Moral damages, as a general rule, are not recoverable indicative of fraud or bad faith on Philippine
in actions for damages predicated on breach of contract. Rabbit's part. Bad faith should be established by
However, as an exception, such damages are recoverable in clear and convincing evidence. Further, the CA
cases in which the mishap results in the death of a passenger and ruled that the driver may not be held liable under
in cases in which the carrier is guilty of fraud or bad faith. the contract of carriage as he is not a party to the
same. As such, the CA modified the RTC decision
Facts: and held that Philippine Rabbit as solely and
exclusively liable for actual damages and deleted
• A mishap occurred, between a passenger bus, the award of moral damages and attorney's fees.
driven by one Saylan and owned by Philippine
Rabbit Bus, Lines, Inc. and an Isuzu truck driven by Issue: Whether or not the decision of the CA was correct?
Urez and registered in the name of Cuyton. Before [YES]
the collision, the bus was following closely a
jeepney. When the jeepney stopped, the bus Ruling:
suddenly swerved to the left encroaching upon the
rightful lane of the Isuzu truck, which resulted in the Under Article 2219 of the Civil Code, moral damages are
collision of the two vehicles. Estrada, who was recoverable in the following and analogous cases: (a) a
an1ong the passengers of the bus, as evidenced by criminal offense resulting in physical injuries; (b) quasi-delicts
the ticket issued to him, was injured on his right arm causing physical injuries; (c) seduction, abduction, rape or
(which had to be amputated) as a consequence of other lascivious acts; (d) adultery or concubinage; (e) illegal
the accident. For the treatment of his injury, he or arbitrary detention or arrest; (f) illegal search; (g) libel,
incurred expenses as evidenced by various slander, or any other form of defamation; (h) malicious
receipts. prosecution; (i) acts mentioned in Article 309.

• Estrada then filed complaint for damages in the Since breach of contract is not one of the items enumerated
RTC for the injury that he sustained. He argued that under Article 2219, moral damages, as a general rule, are
pursuant to the contract of carriage between him not recoverable in actions for damages predicated on breach
and Philippine Rabbit, respondents were duty- of contract. However, as an exception, such damages are
bound to carry him safely as far as human care recoverable in cases in which the mishap results in the death
and foresight can provide, with utmost diligence of of a passenger and in cases in which the carrier is guilty of
a very cautious person, and with due regard for all fraud or bad faith.
the circumstances. However, through the fault and
negligence of Philippine Rabbit's driver, It is obvious that this case does not come under the first of the
respondents failed to transport him safely and abovementioned exceptions since Estrada did not die in the
resulted in the amputation of his right arm.The RTC mishap but merely suffered an injury. Nevertheless, Estrada
ruled in favour of Estrada wherein it found that contends that it falls under the second category since they
Saylan was negligent in driving the bus. The RTC aver that Philippine Rabbit is guilty of fraud or bad faith.
also held Philippine Rabbit jointly and severally
liable with Saylan in paying for moral and actual It has been held, however, that "allegations of bad faith and
damages, and attorney’s fees. fraud must be proved by clear and convincing
evidence."They are never presumed considering that they are
• On appeal, Philippine Rabbit imputed error upon serious accusations that can be so conveniently and casually
the RTC in granting moral damages. It argued that invoked. And unless convincingly substantiated by whoever is
moral damages are not recoverable in an action alleging them, they amount to mere slogans or mudslinging.
for damages predicated on breach of contract
except when death results or when the carrier is In this case, the fraud or bad faith that must be convincingly
guilty of fraud or bad faith. Since none of the two proved by petitioners should be one which was committed by
aforementioned circumstances are present in this Philippine Rabbit in breaching its contract of carriage with
case, Philippine Rabbit contended that it is Eduardo Estrada. Unfortunately for petitioners, the Court finds no
alone who should be held civilly liable. persuasive proof of such fraud or bad faith.

Nonetheless, since it was established that Estrada lost his right

• The CA ruled that Philippine Rabbit is correct in its arm, temperate damages in lieu of actual damages for
contention that moral damages are not loss/impairment of earning capacity may be awarded in his
recoverable in actions for damages predicated on favor. Under Article 2224, "temperate or moderate
a breach of contract, unless death of a passenger damages, which are more than nominal but less than

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compensatory damages, may be recovered when the court

finds that some pecuniary loss has been suffered but its
amount cannot, from the nature of the case, be proved with
certainty."

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JUDITH D. DARINES AND JOYCE D. DARINES v. The principle that, in an action for breach of contract of
PRESENT: EDUARDO QUIÑONES AND carriage, moral damages may be awarded only in case (1)
ROLANDO QUITAN an accident results in the death of a passenger; or (2) the
G.R. No. 206468, August 02, 2017, FIRST DIVISION, DEL carrier is guilty of fraud or bad faith, is pursuant to Article
CASTILLO, J. 1764, in relation to Article 2206(3) of the Civil Code, and
Article 2220 thereof, as follows:

Principle: An action for breach of contract of carriage, moral Article 1764. Damages in cases comprised in this Section shall
damages may be awarded only in case (1) an accident results be awarded in accordance with Title XVIII of this Book,
in the death of a passenger; or (2) the carrier is guilty of fraud concerning Damages. Article 2206 shall also apply to the death
or bad faith, is pursuant to Article 1764, in relation to Article of a passenger caused by the breach of contract by a common
2206(3) of the Civil Code, and Article 2220 thereof. To award carrier. (Emphasis supplied)
moral damages for breach of contract, therefore, without proof
of bad faith or malice on the part of the defendant, as required Article 2206. The amount of damages for death caused by a
by [Article 2220 of the Civil Code], would be to violate the crime or quasi-delict shall be at least three thousand pesos, even
clear provisions of the law, and constitute unwarranted judicial though there may have been mitigating circumstances. In
legislation. addition: (3) The spouse, legitimate and illegitimate descendants
and ascendants of the deceased may demand moral damages
Facts: for mental anguish by reason of the death of the deceased.

• Judith D. Darines and her daughter, Joyce D. Article 2220. Willful injury to property may be a legal ground
Darines alleged in their that they boarded the for awarding moral damages if the court should find that, under
Amianan Bus Line as paying passengers en route the circumstances, such damages are justly due. The same rule
from Carmen, Rosales, Pangasinan to Baguio City. applies to breaches of contract where the defendant acted
Respondent Rolando M. Quitan was the driver of fraudulently or in bad faith. (Emphasis supplied)
the bus. While travelling on Camp 3, Tuba, Benguet
along Kennon Road, the bus crashed into a truck The aforesaid concepts of fraud or bad faith and negligence
which was parked on the shoulder of Kennon Road. are basic as they are distinctly differentiated by law.
As a result, both vehicles were damaged; two Specifically, fraud or bad faith connotes "deliberate or
passengers of the bus died; and the other wanton wrong doing" or such deliberate disregard of
passengers, including petitioners, were injured. contractual obligations while negligence amounts to sheer
Joyce suffered cerebral concussion while Judith carelessness. Fraud includes "inducement through insidious
had an eye wound which required an operation. machination." In turn, insidious machination refers to such
deceitful strategy or such plan with an evil purpose. On the
• Petitioners argued that Quitan and respondent other hand, bad faith does not merely pertain to bad
Eduardo Quinones, the operator of Amianan Bus judgment or negligence but relates to a dishonest purpose,
Line, breached their contract of carriage as they and a deliberate doing of a wrongful act. Bad faith involves
failed to bring them safely to their destination. "breach of a known duty through some motive or interest or
They also contended that Quitan's reckless and ill will that partakes of the nature of fraud."
negligent driving caused the collision.
Consequently, they prayed for actual, moral, In other cases, the Court disallowed the recovery of moral
exemplary and temperate damages, and costs of damages in actions for breach of contract for lack of showing
suit. that the common carrier committed fraud or bad faith in
performing its obligation. Similarly, the Court did not also
• For their part, Quinones and Quitan disputed that, grant moral damages in an action for breach of contract as
during the incident, Quitan was driving in a careful, there was neither allegation nor proof that the common
prudent, and dutiful manner at the normal speed carrier committed fraud or bad faith. The Court declared that
of 40 kilometers per hour. According to them, the "[t]o award moral damages for breach of contract, therefore,
proximate cause of the incident was the negligence without proof of bad faith or malice on the part of the
of the truck driver, who parked the truck at the defendant, as required by [Article 2220 of the Civil Code],
roadside right after the curve without having would be to violate the clear provisions of the law, and
installed any early warning device. constitute unwarranted judicial legislation.

Issue: Whether or not award of moral damages may be The Court also sustains the CA's finding that petitioners are
recovered in this case. [NO] not entitled to exemplary damages. Pursuant to Articles 2229
and 2234 of the Civil Code, exemplary damages may be
Ruling: awarded only in addition to moral, temperate, liquidated, or
compensatory damages. Since petitioners are not entitled to
either moral, temperate, liquidated, or compensatory

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damages, then their claim for exemplary damages is bereft

of merit.

Finally, considering the absence of any of the circumstances

under Article 2208 of the Civil Code where attorney's fees
may be awarded, the same cannot be granted to petitioners.
All told, the CA correctly ruled that petitioners are not entitled
to moral and exemplary damages as well as attorney's fees.

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writ of preliminary injunction — that these bikers are only

PUBLIC SERVICE ACT private carriers who may publicly ply their trade without any
(Rules in Issuing CPC) regulation. As the Court observes, the genius behind the
Angkas app is that it removes the inconvenience of having to
physically hail for public transportation by creating a virtual
Land Transportation Franchising and Regulatory Board system wherein practically the same activity may now be
(LTFRB) vs. Valenzuela, 896 SCRA 37, G.R. No. 242860 done at the tip of one’s fingers. As it is the trend of modern
March 11, 2019 technology, previously cumbersome mundane activities, such
as paying bills, ordering food, or reserving accommodations,
can now be accomplished through a variety of online
Principle: Section 15 of the Public Service Act requires that, platforms. By DBDOYC’s own description, it seems to be that
except for certain exemptions, no public service shall operate in Angkas app is one of such platforms. As such, the fact that its
the Philippines without possessing a Certificate of Public drivers are not physically hailed on the street does not
Convenience (CPC). automatically render Angkas-accredited drivers as private
carriers.
The fact that its drivers are not physically hailed on the street
does not automatically render Angkas-accredited drivers as
private carriers.
Facts:

*This case has already been repeated. Please check the facts
above.

Issue: Whether or not Angkas is a common carrier which

needs a CPC to operate. [YES]

Ruling:

Section 15 of the Public Service Act requires that, except for

certain exemptions, no public service shall operate in the
Philippines without possessing a CPC. In turn, the then DOTC
(which had supervision and control over the LTFRB that had
assumed certain powers of the old Public Service Commission)
issued DO 97-1097 providing for the standard classifications
of all PUVs before they can be issued a CPC. This department
order was later amended by the above stated DOs 2015-
11 and 2017-11 and thereafter, the LTFRB issued various
memorandum circulars governing the rules for TNC and TNVS
accreditation, which rules DBDOYC purportedly failed to
comply.

As stated in the Public Service Act, the term “public service”

covers any person who owns, operates, manages, or controls
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. The Civil Code defines “common earners” in
the following terms: Article 1732. Common carriers are
persons, corporations, firms or associations 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.

In this relation, DBDOYC posits that its accredited bikers are

private carriers as they do not hold out their services
generally to the public because they cannot just be hailed on
the street as they only contract via the Angkas online front.
However, the Court is hard-pressed to rule — at least at this
point, and for the purpose of determining the validity of the

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