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STIPULATIONS LIMITING LIABILITY (1757, (1757, 1758,1759,1760) 1758,1759,1760)
For Both Part VI. And Part VIII. *Note: the relevant ruling is the same for both since it refers to Article 1759 on the liability of common carriers re: act of employees. employees.
MARAÑAN VS. VS. PEREZ G.R. No. L-22272, June 26, 1967
FACTS: Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned and operated by Pascual Perez when he was stabbed and kil led by the driver, Simeon Valenzuela. Valenzuela was prosecuted for homicide in the Court of First Instance of Batangas. Found guilty, he was sentenced to suffer imprisonment and to indemnify the heirs of the deceased in the sum of P6,000. Appeal from said convi ction w as taken to the Court of Appeals. Appeals. On December 6 1961, while appeal was pending in the Court of Appeals, Antonia Marañan, Rogelio's mother, filed an action in the Court of First Instance of Batangas to recover damages from Perez and Valenzuela. Marañan’s claim: Antonia Marañan alleges that Perez and Valenzuela are both liable for the death of her son. Specificall y for Perez, his liability liabi lity arises from breach of contract contract of carriage. Perez’s defense: Perez claimed that the death was a caso fortuito for which the carrier was not liable. He relies relies solel y on the ruli ng enunciated in Gillaco v. Manila Railroad Co ., 97 Phil. 884, that the carrier is under under no absolute absolut e liabili ty for assaults assaults of o f its it s employees upon the passengers.
The court a quo , after trial, found for the plaintiff and awarded her P3,000 as damages against Perez. The claim against Valenzuela was dismissed. From this ruling, both plaintiff and Perez appealed to this Court, the former asking for more damages and the latter insisting on non-liability. Subsequently, the Court of Appeals affirmed the judgment of conviction earlier mentioned.
ISSUE: W/N Perez is to be held liable.
RULING: The attendant facts and controlling law of the Gillaco case case and the one at bar are very different. In the Gillaco case, the passenger passenger was k illed outside the scope scope and th e course of duty of the guilty employee. Now here, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose hands the carrier had entrusted the duty of executing the contract of carriage. In other words, unlike the Gillaco case, the killing of the passenger here took place in the course course of duty of the guilt y employee employee and w hen the employee was acting w ithin the scope scope of his duties. Moreover, the Gillaco case was decided under the provisions of the Civil Code of 1889 which, unlike the present Civil Code, did not impose upon common carriers absolute liability for the safety of passengers against willful assaults or negligent acts committed by their employees. The death of the passenger in the Gillaco case was truly a fortuitous event which exempted the carrier from liability. Unlike the old Civil Code, the new Civil Code of the Philippines expressly makes the common carrier liable for intentional assaults committed by its employees upon its passengers, by the wording of Art. 1759 which categorically states that Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the former's employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers. carriers.
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The Civil Code provisions on the subject of Common Carriers are new and were taken from Anglo-American Anglo-American Law . There, the basis of the carrier's liability for assaults on passengers committed by its drivers rests either on: respo ndeat superior; or (1) the doctrine of respondeat
(2) the principle that it is the carrier's impl ied duty to transport the passenger safely. Under the first, which is the minority view, the carrier is liable only when the act of the employee is wi thin the scope scope of his authority authori ty and dut y. It is not sufficient that the act be w ithin the course of employment only. Under the second view, upheld by the majority and also by the later cases, it is enough that the assault happens within the course of the employee's duty. It is no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders.The carrier's liability here is absolute in the sense that it practically secures the passengers from assaults committed by its own employees.
As can be gleaned from Art. 1759, the Civil Code of the Philippines evidently follows the rule based on the second view. At least three very cogent reasons underlie this rule. (1) the special undertaking of the carrier requires that it furnish its passenger that full measure of protection afforded by the exercise of the high degree of care prescribed by the law, inter alia from violence and insults at the hands of strangers and other passengers, but above all, all , from the acts of the carrier's carrier's ow n servant s charged charged with the t he passenger's passenger's safety; (2) said liability of the carrier for the servant's violation of duty to passengers, is the result of the formers confiding in the servant's hands the performance of his contract to safely transport the passenger, delegating therewith the duty of protecting the passenger with the utmost care prescribed by law; and (3) as between the carrier and the passenger, the former must bear the risk of wrongful acts or negligence of the carrier's employees against passengers, since it, and not the passengers, has power to select and remove them. Accordingly, it is the carrier's strict obligation to select its drivers and similar employees w ith due regard regard not only to their tec t echnical hnical competen ce and and physical ability, abil ity, but also, no less l ess important, to their total personality, including their patterns of behavior, moral fibers, and social attitude.
Applying this stringent norm to the facts in this case, therefore, the lower court rightly adjud ged the defendant carrier liable pursuant to Art. Art. 1759 1759 of the Civi l Code.
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EFFECT of of CONTRIBUTORY NEGLIGENCE OF A PASSENGER (1761,1762) (1761,1762)
FACTS: (Davao case)
LARA v. VALENCIA
Lara was an inspector for the Bureau Bureau of Forestry. The defendant is engaged in the business of exporting exporting logs from his lumber concession concession in Cotabato. Lara went to to said concession concession upon instructions of his chief to classify the logs of defendant which were about to be loaded on a ship anchored in the port port of Parang. The work of Lara lasted for for six d ays during w hich he contracted malaria fever. On a later date, date, Lara w ho then in a hurry to return to Davao asked defendant if he could if he could take him in his pick-up as there was then no other means of transportation, to which defendant agree, and in that same morning the pick-up left Parang bound for Davao taking along six passengers, passengers, including includi ng Lara. The pick-up has a front seat where the driver and two passengers can be accommodated and the back has a steel flooring enclosed with a steel walling of 16 to 17 inches tall on the sides and with a 19 inches tall walling walli ng at at the back. back. In the middle mi ddle Lara sat on a bag. Before Before leaving, Parang, defendant invited Lara to sit with him on the front seat but Lara declined. It was their understanding that upon reaching barrio Samoay, Cotabato, the passengers would alight and take a passenger bus bound for Davao, but when they arrived at that place, only one alighted and the other passengers requested defendant to allow them to ride with him up to Davao because there was then no available bus that they could take in going to that that place. place. Defendant Defendant again accommodated accommo dated the passenger passenger s.
When they continued their trip, the sitting arrangement of the passengers remained the same, Lara being seated on a bag in the middle with his arms on a suitcase and his head covered by a jacket. Upon reaching reaching Km. 96, barrio Catidt Catidt uan, Lara Lara accidentall accidentall y fell from the pick-up and as a result he suffere suffered d serious injuries. Valencia stopped the pick -up to see w hat happened happened to Lara. He sought the help of the residents of that place and applied w ater to Lara but but to no avail. They brought Lara to the nearest place place w here they th ey could could find a doctor docto r and not having found any they took to ok him to St. Joseph’s clinic of Kidapw an. But w hen Lara arrived, he was already dead. From there th ey proceeded to Davao City and and immediately notified the local authorities. Lara contented: contented: Valencia is li able for failure to exerc exercise ise extraordinar y dili gence.
Valencia argued: what happened is beyond Valencia’s co ntrol. Lara is asleep when he fell from t he pick-up. pick-up.
ISSUE: WON Valencia is liable for the death of Lara. NO. RULING: There is every reason to believe that the unfortunate happening was only due to an unforeseen accident accused by the fact that at the time the deceased was half asleep and must have fallen from the pick-up when it ran into some stones causing it to jerk considering that the road was then bumpy, rough and full of stones. The finding of the trial court that the pick-up was running at more than 40 kilometers per hour is not supported by the evidence. This is a mere surmise made by the trial court considering the time the pick-up left barrio Samoay and the time the accident occured in relation to the distance covered by the pick-up. And even if this is correct, still we say that such speed is not unreasonable considering that they were traveling on a national road and the traffic then was not heavy. We may rather attribute the incident to lack of care on the part of the deceased considering that the pick-up was open and he was then in a crouching position. Indeed, the law provides that "A passenger must observe the diligence of a good father of a family to avoid injury to himself" (Article (Article 1761, new Civil C ode), ode), w hich means that if the injury t o the passenger passenger has been proximately cau caused sed by his own ow n negligence, the carrier carrier cannot be held liable. All things considered, we are persuaded to conclude that the accident occurred not due to the negligence of defendant but to circumstances beyond his control and so he should be exempt from liability.
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CONTRIBUTORY NEGLIGENCE, EFFECT
CLEMENTE BRINAS V PPL OF THE PHILIPPINES AND CA G.R. No. L-30309 November 25, 1983
FACTS On January 6, 1957, 55-year old Martina Bool and her 3-year-old granddaughter Esmelita Gesmundo were among the passengers of Train No. 522 operated by Manila Railroad Company from Tagkawayan, Quezon station bound for Lucasan, Tiaong in Quezon. On th e way t o Lucasan, in Hondagua, the train was taken over by Milan -the engine man, Brinas, the conductor and Buencamino as assistant conductor. Upon approaching Barrio Lagalag in Tiaong at about 8:00 p.m. of that same night, the train slowed down and the conductor shouted 'Lusacan', 'Lusacan'. Thereupon, Martina walked towards the left door facing Tiaong carrying with her Esmelita on one hand and their baggages on the other. As they were were near the door, the train suddenly picked up speed. As a result the old w oman and the child stumbled and they were seen no more. It took three minutes more before the train stopped at the next barrio, Lusacan, and the victims were not among the passengers who disembarked thereat. A day after, the corpses of Martina and Esmelita were found along the railroad tracks in Barrio Lagalag with the head crushed and limbs severed. Autopsy reports revealed that both died instantaneously from shock as a result of being ran over by the wheel of the train and collision with steel objects. A criminal case was filed against MRR employees for their failure to provide lamps and lights; and failure to take necessary precautions to avoid accidents. Brinas, the conductor was found guilty beyond reasonable doubt for double homi cide thru reckless imprudence. The other accused were acquitted. During the pendency of the criminal case, the heirs of the deceased filed a separate civil action against MRR to recover damages resulting from the incident.
The Complaint As found by the CA, It is undisputed that the victims were on board the second coach where the Brinas was assigned as condu ctor and that when the train slackened its speed and the conductor shouted "Lusacan, Lusacan", they stood up and proceeded to the nearest exit. It is also undisputed that the train unexpectedly resumed its regular speed and as a result "the old woman and the child stumbled and they were seen no more. It was negligence on the conductor's part to announce the next flag stop when said stop w as still a full three minutes ahead. It w as found that Brina's announcement w as premature and erroneous.
Defense of Bri nas Brinas argues that it was negligence per se for Martina Bool to go to the door of the coach while the train was still in motion and that it was this negligence that was the proximate cause of their deaths.
ISSUES 1. 2.
Were the deceased passengers contributorily negligent? YES If yes, will such contributory negligence of victims extinguish liability of an employee of a common CARRIER? NO
RULING The Court agrees w ith CA that the negligence of Brinas in prematurely and erroneousl y announcing the next flag stop was the proximate cause of the deaths of Martina Bool and Emelita Gesmundo. This announcement prompted the victims to stand and proceed to the
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nearest exit. Without said announcement, the victims would have been safely seated in their respective seats when the train jerked as it picked up speed. The connection between the premature and erroneous announcement of Brinas and the deaths of the victims is direct and natural, unbroken by any intervening efficient causes. Any negligence of the victi ms was at most contributory and does not exculpate the accused from criminal liability . As this Court held in Tucker v. Milan, CA G.R. No. 7059-R, June 3, 1953: 'The proximate cause of the injury is not necessarily the immediate cause of, or the cause near est in time to, the injury. It is only when the causes are independent of each other that the nearest is to be charged with the disaster. So long as there is a natural, direct and continuous sequence between the negligent act the injury (sic) that it can reasonably be said that but for the act the injury could not have occurred, such negligent act is the proximate cause of the injury, and whoever is responsible therefor e is liable f or damages resulting therefr om.One who negligently creates a dangerous condition cannot escape liability for the natural and probable consequences thereof, although the act of a third person, or an act of God for which he is not responsible intervenes to precipitate the loss .
Important to Note: It i s a matt er of comm on knowledge and experi ence about common carriers like trains and buses that before reaching a station or flagstop they slow down and the conductor announces the name of the place. It is also a matt er of comm on experience that as the train or bus slackens its speed, some passengers usually stand and proceed to the nearest exit, ready to disembark as the train or bus comes to a full stop. This is especially true of a train because passengers feel that if the train resumes its run before they are able to disembark; there is no way to stop it as a bus may be stopped. Other Issue: On alleged error of C A to include in t he judgment of Brinas’ criminal case, pa ym ent of indemnity with subsidiary imprisonment in case of insolvency after the heirs of victims commenced a separate civil action against MRR. The source of the obligation sought to be enforced in the separate civil action is culpa contractual, not an act or omission punishable by law. W e also note from Brinas’ arguments and from the title of the civil case that the party defendant is the Manila Railroad Company and not petitioner-appellant Briñas Culpa contractual and an act or omission punishable by law are two distinct sources of oblig ation.
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ISAAC VS AMMEN
FACTS: 1. BUS - A. L. Ammen Transportation Co., Inc., hereinafter referred to as defendant 2. Plaintiff boarded their bus as a passenger paying the required fare from Ligao, Albay bound for Pili, Camarines Sur, but before reaching his destination, the bus collided with a motor vehicle
of the pick-up type coming from the opposite direction, as a result of which plaintiff's left arm was completely severed and the severed portion fell inside the bus. 3. Plaintiff was rushed to a hospital in Iriga, Camarines Sur where he was given blood transfusion to save his life. After four days, he was transferred to another hospital in Tabaco, Albay, where he under went treatment for three months. He was moved later to the Orthopedic Hospital where he was operated on and stayed there for another two months. For these services, he incurred expenses amounting to P623.40, excluding medical fees which were paid by defendant. 3. His l eft arm was completely severed. 4. Plaintiff chose to hold defendant liable to its contractual obligation.
CARRIER: 5. ― injury suffered by plainti ff was due entirely to t he fault or negligenc e of the driver of the pick-
up car which collided with the bus driven by its driver and to the contributory negligence of plaintiff himsel f .‖
6. Defendant further claim s that the accident w hich resulted in the injury of plaint iff is one which defendant could not foresee or, though foreseen, was inevitable. RTC = collision occurred due to the negligence of the driver of the pick-up car and not to that of the driver of the bus it appearing that the latter did everything he could to avoid the same but that notwithstanding his efforts, he was not able to avoid it. ISSUE: WON there is contributory negligence on the part of plaintiff? YES. kay gigawas nia iang left arm.
HELD: 1. The bus was running at a moderate speed because it had just stopped at the school zone of Matacong, Polangui, Albay. The pick-up car was at full speed and was running outside of its proper lane. The driver of the bus, upon seeing the manner in w hich the pick -up was then running, swerved the bus to the very extreme right of the road until its front and rear wheels have gone over the pile of stones or gravel situated on the rampart of the road. 2. Said driver could not move the bus further without endangering the safety of his passengers. Despite all these efforts, t he rear left side w as hit. 3. A circumstances which miliates against the stand of appellant is the fact borne out by the evidence that when he boarded the bus in question, he seated himself on the left side thereof
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resting his left arm on the window sill but with his left elbow outside the window, this being his position in the bus w hen the collision took place. 4. It is for this reason that the collision resulted in the severance of said left arm from the body of appellant thus doing him a great damage. 5. It is therefore apparent that appellant is guilty of contributory negligence. Had he not placed
his left arm on the window sill with a portion thereof protruding outside, perhaps the injury would have been avoided as is the case with the other passenger. It is to be noted that appellant was the only victi m of the colli sion. 6. Although contributory negligence cannot relieve the carrier but can only reduce its liability (Article 1762), thi s cir cumstance which further militates against plaintiff’s position.
7. It is a prevailing rule that it is negligence per se for passengers on a railroad to protrude any part of his body and that no recovery can be had for injury. 8. NOTE: IF A CERRIER’S EMPLOYEE IS CONFRONTED WITH A SUDDEN EMERGENCY, he is not held
the same degree of care h e woul d otherw ise be required in the absenc e of such emergency.
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PNR v. CA FACTS: The facts show that on September 10, 1972, at about 9:00 o'clock in the evening, Winifredo Tupang, husband of plaintiff Rosario Tupang, boarded 'Train No. 516 of appellant at Libmanan, Camarines Sur, as a paying passenger bound for Manila. Due to some mechanical defect, the train stopped at Sipocot, Camarines Sur, for repairs, taking some two hours before the train could resume its trip to Manila. Unfortunately, upon passing Iyam Bridge at Lucena, Quezon, Winifredo Tupang fell off the train resulting in his death.The train did not stop despite the alarm raised by the other passengers that somebody fell from the train. Instead, the train conductor Perfecto Abrazado, called the station agent at Candelaria, Quezon, and requested for verification of the information. Police authorities of Lucena City were dispatched to the Iyam Bridge where they foun d the lifeless body of Winifredo Tupang. Contention of Tupang: PNR did not exercise the utmost diligence required by law as common carrier. Argument of PNR: It is not liable invoking the doctrine of state immunity and contributory negligence, alleging that Tupang chose to sit on the flatform, hence should have tightly hold the bar.
ISSUE: WON PNR is liable for damages for the death of Winifredo Tupang. YES. RULING: A passenger is guilty of contributory negligence where he chose to ride on the open platform of a train and failed to hold tightly on the vertical grab bar. Moral and exemplary damages is not due in this case. But while the petitioner failed to exercise extraordinary diligence as required by law, it appears that the deceased was chargeable with contributory negligence. Since he opted to sit on the platform between the coaches of the train, he should have held tightly and tenaciously on the upright metal bar found at the side of the said platform to avoid falling off from the speeding train. Such contributory negligence, while not exempting the PNR from liability, nevertheless justified the deletion of the amount adjudicated as moral damages. By the same t oken, the award of exemplary damages must be set aside. Exemplary damages may be allowed only in cases where the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. There being no evidence of fraud, mali ce or bad faith on t he part of petitioner, the grant of exemplary damag es should be discarded.
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LIABILITY OF A CC FOR ACTS OF ITS EMPLOYEES MARANAN VS PEREZ (PLEASE REFER SA PINAKA UNA NA DIGEST)
CORNELIA A. DE GILLACO, ET AL., vs. MANILA RAILROAD COMPANY, FACTS: Tomas Gillaco, the husband of plaintiff, was a passenger in the early morning in the train of Manila Railroad (MRR) Company from Laguna to Manila at about 7:30 am. When the train reached the Paco Railro ad Station, Emilio Devesa, a train guard of MRR was al so in the station. He was assigned to guard the Manil a-San Fernando (La Union) trains and he was wait ing for the same train to take him to Tutuban Station, to report for duty which was to start from 9am to 7 pm of the same day. Devesa, having a long standing personal grudge against Gillaco,shot him with the carbine furnished to him by MRR for use his use as such train guard upon seeing him inside the train coach. Gillaco died as a result. CFI awarded damages to the plaintiff. It held the Railroad company responsible on the ground that a contract of transportation implies protection of the passengers against acts of personal violence by the agents or employees of the carrier. MRR’s contention: No liability attached to the employer of Devesa who was convicted by the CA of homicide. Employer is not responsible for subsidiary ex delicto , under Art. 103 of the RPC, because the crime was not committed while the slayer was in the actual performance of his ordinary duties and service;
Nor is it responsible ex contractu, since the complaint did not aver sufficient facts to establish such liability, and no negligence on appellant's party was shown.
ISSUE: Whether or not MRR should be liable for damages to the plaintiff because of the crime committed by its employee? No. HELD: While a passenger is entitled to protection from personal violence by the carrier or its agents or employees, since the contract of transportation obligates the carrier to transport a passenger safely to his destination. But under the law of the case, this responsibility extends only to those that the carrier could foresee or avoid through the exercise of the degree of care and diligence required of it. The old Civil Code of 1889 (which was in force in 1946, when Gillaco was shot) did not impose upon the carriers absolute liability for assaults of their employees upon the passengers. Here, the act of Devesa in shooting passenger Gillaco was entirely unforeseeable by the MRR. The latter had no means to ascertain or anticipate that the two would meet, nor could it reasonably foresee every personal rancor that might exist between each one of its many employees and any one of the thousands of eventual passengers riding in its trains. The shooting in question was therefore "caso fortuito" within the definition of article 105 of the old Civil Code, being both unforeseeable and inevitable under the given circumstances; and pursuant to established doctrine, the resulting breach of appellant's contract of safe carriage with the late Tomas Gillaco was excused thereby. When the crime took place, Devesa had no duties to discharge in connection with the transportation of the deceased from Calamba to Manila. His duty starts at 9 am which was 2 hours after the event. Devesa was therefore under no obligation to safeguard the passenger of the Calamba-Manila train, where the deceased was riding; and the killing of Gillaco was not done in line of duty. The position of Devesa at the time was that of another would be passenger, a stranger also aw aiting transportation, and not t hat of an employee assigned to discharge an y of the duties that the Railroad had assumed by its contract with the deceased. Therefore, Devesa's assault cannot be deemed in law a breach of Gillaco's contract of transportation by a servant or employee of the carrier.
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CARLOS SINGSON vs. COURT OF APPEALS and CATHAY PACIFIC AIRWAY, INC., FACTS: On 24 May 1988 CARLOS SINGSON and his cousin Crescentino Tiongson bought from Cathay Pacific Airways, Ltd. (CATHAY), at its Metro Manila ticket outlet 2 open-dated, identically routed, round trip plane tickets for the purpose of spending their vacation in the United States. Each ticket consisted of six (6) flight coupons ((FC) corresponding to this itinerary: FC 1 – MNL – Hong Kong (HK) FC 2 – HK – San Francisco
FC 3 – S an Francisco – LA FC 4 – LA – San Francisco
FC 5 – San Francisco – HK FC 6 – HK - MNL
The procedure was that at the start of each leg of the trip a flight coupon per travel would be removed from the ticket booklet so that at the end of the trip no more coupon would be left in the ticket booklet. On 6 June 1988 they left Manila on board CATHAY's and arrived safely in Los Angeles. After staying there for about 3 weeks they decided to return to the Philippines. On 30 June 1988 they arranged for their return flight at CATHAY's LA Office and chose 1 July 1988, a Friday, for their departure. While Tiongson easily got a booking for the flight, SINGSON was not as lucky. It was discovered that his ticket booklet did not have FC No. 5. Instead, w hat was in his t icket was FC 3 which was supposed to have been used and removed from the ticket booklet. There was a 5 day delay in the verification process. It was not until 6 July 1988 that CATHAY was finally able to arrange for his return flight to Manila. On 26 August 1988 SINGSON commenced an action for damages against CATHAY. Singson’s contentions: He remonstrated that it was the airline's agent/representative who must have committed the mistake of tearing off the wrong flight coupon; that he did not have enough money to buy new tickets; He was told to go to San Franciso and conduct investigations when CATHAY could conclude the investigation in a matter of minutes because of its facilities.. Thus he and his cousin Tiongson, w ho deferred hi s ow n flight to accompany him, w ere forced to leave for San Francisco on the night of 1 July 1988 to verify the missing ticket. Cathay’s contention: Since petitioner was holding an "open-dated" ticket, which meant that he was not booked on a specific flight on a particular date, there was no contract of carriage yet existing such that CATHAY's refusal to immediately book him could not be construed as breach of contract of carriage. It argues that it is only w hen passenger is confirmed on a particular flight and on a particular date specifically stated in his ticket that its refusal to board the passenger will result in a breach of contract. That they need to verify the status of the ticket therefore it needs to send a request by telex to its HK headquarters to retrieve the information. The delay in verification w as due to the time difference between HK and LA and the coinciding non -worki ng days in the United States.
RTC: Favored Singson, holding that CATHAY was guilty of gross negligence amounting to malice and bad faith and adjudged to pay damages.
CA: Reversed RTC’s. N o breach of contract o f carriage for what they have are only op en dated tickets, not confirmed. As a "chance passenger," the latter had no automatic right to fly on that flight and on that date.
ISSUE: Whether a breach of contract was committed by CATHAY that may be attributed to the fault of its employees on account of the missing flight coupon? YES. HELD: CATHAY undoubtedly committed a breach of contract when it refused to confirm petitioner's flight reservation back to the Philippines on account of his missing flight coupon. The round trip ticket issued by the carrier to the passenger was in itself a complete written contract by and between the carrier and the passenger. It has all the elements of a complete written contract (C-O-C). Singson was not a mere "chance passenger with no superior right to be boarded on a specific flight.‖
CATHAY was r esponsible for the loss of the ticket. One of two (2) things may be surmised:
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1. 2.
US Air (CATHAY's ag ent) had m istakenly detached th e San Francisco -Hongkong flight coupon thinking that it w as the San Francisco-Los Angeles portion; or, Petitioner's booklet of tickets did not from issuance include a San Francisco-Hongkong flight coupon.
In either case, the loss of the coupon was attributed to the negligence of CATHAY's agents and was the proximate cause of the non-confirmation of petitioner's return flight on 1 July 1988. Had CATHAY's agents been diligent in double checking the coupons they were supposed to detach from the passengers' tickets, there would have been no reason for CATHAY not to confirm petitioner's booking. To hold that no contractual breach was committed by CATHAY and totally absolve it from any liability would in effect put a premium on the negligence of its agent, contrary to the policy of the law requiring common carriers to exercise extraordinary diligence.
The following circumstances attended the breach of contract by CATHAY, to wit: a. the coupon corresponding to the SF- HK flight was missing due to the negligence of CATHAY's agents (as shown above) b. Both passengers presented their ticket booklets bearing identical itineraries to prove that there had been a mistake in removing the coupons of petitioner. c. CATHAY's Timothy Remedios testified that he was able to ascertain from his flight reservations computer that petitioner indeed had reservations booked for travel on their return flight, but CATHAY apparently ignored this and peremptorily refused to confirm petitioner's flight — while ready to confirm his traveling companion's identically routed plane ticket — on the lame and flimsy excuse that the existence and validity of the missing ticket must first be verified; d. petitioner was directed by CATHAY to go to its SF office and make the verification concerning the lost coupon himself. This, notwithstanding the fact that CATHAY was responsible for the loss of the ticket and had all the necessary equipment, which could facilitate the verification right there at its Los Angeles Office. e. CATHAY’s HK personnel never acted promptly and timely on the request for verification. It strangely took them more than twenty-four (24) hours to complete the verification process and to sent their reply to LA.
Taken together, they indubitably signify more than ordinary inadvertence or inattention and thus constitute a radical departure from the extraordinary standard of care required of common carriers. These circumstances reflect the carrier's utter lack of care and sensitivity to the needs of its passengers, clearly constitutive of gross negligence, recklessness and wanton disregard of the rights of the latter, acts evidently indistinguishable or no different from fraud, malice and bad faith. Therefore, CATHAY is liable to Singson for the negligence made by its employees.
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LIGHT RAIL TRANSIT AUTHORITY and RODOLFO ROMAN VS. MARJORIE NAVIDAD and PRUDENT SECURITY AGENCY Facts: On October 14, 1993, Nicanor Navidad, then drunk, entered the EDSA LRT Station. While standing on the platform near the LRT Tracks, Junelito Escartin, the security guard assigned to the area approached Navidad. A misunderstanding or altercation between the two apparently ensued which led to a fist fight. At the exact moment that Navidad fell, an LRT Train, operated by Rodolfo Roman, was coming in. Navidad was struck by the moving train and he was killed instantaneously. The wife of Navidad brought an action against LRTA, Roman, Escartin and Prudent. For LRTA and Roman: LRTA and Roman would ensist that Escartin’s assault on Navidad, which caused the latter to fall on the tracks, was an act of a stranger that could not have been foreseen or prevented. The LRTA also contended that there exists no employer-employee relarionship between Roman and LRTA as Roman himself testi fied that he is an employee of Metro Transit and not LRTA.
RTC ruled in favor of the respondents. CA affirmed with modifications. For Respondents: Respondent contended that a contract of carriage was deemed created from the moment Navi dad paid the LRT fare and entered the premises of the LRTA, entitl ing Navidad to all rights and protection under a contractual relation. And that the CA had correctly held LRTA and Roman liable for the death of Navidad.
Issues: 1. 2. 3.
WON LRTA is liable. WON Roman, as the driver of the train, is also liable. Is Prudent Security as the employer of Escartin liable?
Ruling: 1.
YES.
"Article 1755. A comm on carrier is bound to carr y the passengers s afely as far as hum an care and foresight can provi de, using the utmost diligence of very cauti ous persons, with a due regard for all the circumstances. "Article 1756. I n case of death of or injuries to passengers, common carriers are presumed t o have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755." "Article 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the form er’s employees, although such em ployees m ay have acted beyond the scope of their authority or in violation of the orders of the common carriers. "This liability of the comm on carriers does not cease upon proof that they exercised all the diligence of a good father of a fam ily in the selection and supervision of thei r employees." "Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers, if the common carrier’s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or om ission."
The law renders a common carrier liable for the death of or injury to passengers: 1. Through the negligence or willful act s of its employess;
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2. On account of willful acts or negligence of other passengers or of strangers if t he common carrier’s employees t hrough t he exercise of due diligence could have prevented or stopped the act or omission. In case of such death or injury, a carrier is presumed to have been at fault or been negligent, andby simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carri er to prove that the injury is due to an unforeseen event or to force majeure. The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victim arises from the breach of that contract by reason of its failure to exercise the high diligence required of the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier may choose to hire its own employees or avail itself of the services of an outsider or an independent firm to undertake the task. In either case, the common carrier is NOT relieved of its responsibil ities under the contract of carriage.
2. NO. There is no showing that Roman himself is guilty of any culpable act or omission, therefore, he must also be absolved from liability. Needless to say, the contractual tie between LRTA and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be made liable only for his own fault or negligence. But again, it was not proven that he was negligent. 3. NO. If at all, that liability could only be for tort. The premise, however, for the employer’s liability is negligence or fault on the part of the employee. Once such fault is established, the employer can then be made liable on the basis of the presumption juris tantum that the employer failed to exercise dili gentissimi patris families i n the selection and supervision of its employe es. However, There is nothing to link Prudent to the death of Navidad, for the reason that the negligence of its employee, has not been duly proven.
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CATHAY PACIFIC AIRWAYS, LTD., vs. SPOUSES DANIEL VAZQUEZ and MARIA LUISA MADRIGAL VAZQUEZ FACTS: Spouses Dr. Daniel Earnshaw Vazquez and Maria Luisa Madrigal Vazquez with two friends went to Hongkong for pleasure and business. For their return flight to Manila, they were booked on Cathay’s Flight CX-905. Upon boarding, Dr. Vazquez presented his boarding pass to the ground stewardess, who in turn inserted it into a computer at the gate. The ground stewardess was assisted by a ground attendant by the name of Clara Chiu. When Ms. Chiu glanced at the computer monitor, she saw a message that there w as a ―seat change‖ from Business Class to First Class for the Vazquez. Ms. Chiu approached Dr. Vazquez and told him that the Vazquez’s accommodations were upgraded to First Class.
Dr. Vazquez refused the upgrade, reasoning that it would not look nice for them as hosts to travel in First Class and their guests, in the Business Class. Moreover, they were going to discuss business matters during the flight. He also told Ms. Chiu that she could have other passengers instead transferred to the First Class Section. Ms. Chiu consulted her supervisor, who told her to handle the situation and to convince the Vazquez to accept the upgrading. Ms. Chiu informed the latter that the Business Class was fully booked, and that since they were Marco Polo Club members they had the priority to be upgraded to the First Class. Dr. Vazquez continued to refuse, so Ms. Chiu told them that if they would not avail themselves of the privilege, they would not be allowed to take the flight. Eventually, after talking to his two friends, Dr. Vazquez gave in and proceeded to the First Class Cabin. Upon their return in Manila, the Vasquezes sent a letter to Cathay demanding that they be indemnified in the amount of 1 million for the humiliation and embarrassment caused by its employees. However, for failure of Cathay to give a feedback, Vazquezes instituted an action for damages.
Vazquezes:
1. when they inform ed Ms. Chiu that they preferred to stay in Business Class, Ms. Chiu obstinately, uncompromisingly and in a loud, discourteous and harsh voice threatened that they could not board and leave with the flight unless they go to First Class, since the Business Class was overbooked. Ms. Chius loud and stringent shouting annoyed, embarrassed, and humiliated them because the incident was witnessed by all the other passengers waiting for boarding. 2. A flight stewardess instructed Dr. Vazquez to put his roll-on luggage in the overhead storage compartment. Because he was not assisted by any of the crew in putting up his luggage, his bilateral carpal tunnel syndrome was aggravated, causing him extreme pain on his arm and wrist.
Cathay:
1. It is a practice among comm ercial airlines to upgrade passengers to the next better class of accommodation, whenever an opportunity arises, such as when a certain section is fully booked. Priority in upgrading is given to its frequent flyers, who are considered favored passengers like the Vazquezes. When Ms. Chiu inform ed the Vazquezes that they were upgraded to First Class, Dr. Vazquez refused. He then stood at the entrance of the boarding apron, blocking the queue of passengers from boarding the plane, which inconvenienced other passengers. He shouted that it was impossible for him and his wife to be upgraded without his two friends who were traveling wi th them. Because of Dr. Vazquezs outburst, Ms. Chiu thought of upgrading the traveling companions of the Vazquezes. But when she checked the computer, she learned that the Vazquezes companio ns did not have priority for upgrading. She then tried to book the Vazquezes again to their original seats but the business class was fully booked. 2. Its employees at the Hong Kong airport acted in good faith in dealing with the Vazquezes; none of them shouted, humiliated, embarrassed, or committed any act of disrespect against the Vazquezes
ISSUES: 1. Whether or not by upgrading the seat accommodation of the Vazquez from Business Class to First Class Cathay breached its contract of carriage with the Vazquez.
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2. Whether or not the Vazquez are entitled to damages.
RULING: In previous cases, the breach of contract of carriage consisted in either the bumping off of a passenger with confirmed reservation or the downgrading of a passenger’s seat accommodation from one class to a lower class. In this case, what happened was the reverse. The Vazquez never denied that they were members of Cathay’s Marco Polo Club. They knew that as members of the Club, they had priority for upgrading of their seat accommodation at no extra cost when an opportunity arises. But, just like other privileges, such priority could be waived.
The Vazquez should have been consulted first whether they wanted to avail themselves of the privilege or would consent to a change of seat accommodation before their seat assignments were given to other passengers. Normally, one would appreciate and accept an upgrading, for it would mean a better accommodation. But, whatever their reason was and however odd it might be, the Vazquez had every right to decline the upgrade and insist on the Business Class accommodation they had booked for and which was designated in their boarding passes. They clearly waived their priority or preference when they asked that other passengers be given the upgrade. It should not have been imposed on them over their vehement objection. By insisting on the upgrade, Cathay breached its contract of carriage with the Vazquez.
The Court, however, is not convinced that the upgrading or the breach of contract was attended by fraud or bad faith. Bad faith and fraud are allegations of fact that demand clear and convincing proof. It is not persuaded by the Vazquez’s argument that the overbooking of the Business Class Section constituted bad faith on the part of Cathay. Section 3 of the Economic Regulation No. 7 of the Civil Aeronautics Board, as amended, provides that an overbooking that does not exceed ten percent is not considered deliberate and therefore does not amount to bad faith. The Court of Appeals awarded each of the Vazquez moral damages in the amount of P250, 000. In this case, SC ruled that the breach of contract of carriage was not attended by fraud or bad faith. The Cou rt of Appeals’ award of moral damages has, therefore, no leg to stand on. The most that can be adjudged in favor of the Vazquez for Cathay’s breach of contract is an award for nominal damages under Article 2221 of the New Civil Code.
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JAPAN AIRLINES VS. JESUS SIMANGAN (Pasensya na po k ung merong m ga side comm ents but this will allow the reader a bett er understanding o f the case...)
Facts: In 1991, SImangan is set to go to Los Angeles, USA. ( HE WILL BE DONATING HIS KIDNEY ) Having obtained an emergency visa (importante ito kasi ito ang dahilan ng lahat), Simangan purchased a round trip ticket from JAL and he was issued the corresponding boarding pass. He was scheduled to a particular flight bound for LA, USA via Narita, Japan. On July 29, 1992 Simangan went to NAIA. He was allowed to check-in at JAL’s counter. His plane ticket, boarding pass, travel authority and personal articles were subjected to rigid immigration and security routines. After passing through said immigration and security procedures he was allowed by JAL to enter the plane. While inside the plane he was suspected of carrying falsified travel documents (mag-TNT lang daw kasi siya saJapan, parang pretense lang daw na pupunta siyang States yun pala bababa siya sa Narita tapos he’ll work in Japan.) After showing his documents including his EMERGENCY VISA (apparently this was the first time na nakakita ang crew ng PAROLE/EMERGENCY VISA issued by the US GOVERNMENT) Shortly after, the stewardess HAUGHTILY ordered him to stand up and leave the plane. He even pleaded wit h JAL to just closel y monitor his m ovements w hen the plane stops over in Narita (imagine!!! bantayan na lang daw siya sa Narita just to show na hindi nga siya mag-TNT). His pleas were ignored. He was then constrained to go out of the plane. In short, he was bumped off the flight. Simangan went to JAL’s ground office. The plane took off. Only to find out that his travel documents were, indeed, IN ORDER.
Simangan sued JAL for damages. For JAL: JAL denied the material allegations of the complaint. It argued, among others, that its failure to allow respondent to fly on his scheduled departure w as due to "a ne ed for his travel documents to be authenticated by the Unit ed States Embass y becaus e no one from JAL's airport staff had encount ered a parole visa before.
Issues: WON JAL is liable.
Ruling: YES. JAL is liable for it is guilty of breach of contract of carriage. Simangan bought a plane ticket from JAL. His ticket, boarding pass, travel authority and personal articles were subjected to rigid immigration and security procedures and after passing through immigration and security procedure he was allowed by JAL to enter the plane. Concisely, there is now a contract of carriage between the tw o. Nevertheless, he w as bumped off the flight thus J AL failed to comply with its obligations under the contract of carriage. JAL justifies its action by arguing that there was a need to verify the authenticity of Simangan’s travel documents. It alleged that no one from its airport staff had encountered a parole visa before. It further contended that Simangan agreed to fly the next day hence there was a novation. JAL, accordingly, is not guilty of breach as Simangan was not able to travel to the US due to his voluntary desistance. The contention is untenable. JAL admitted and definitely declared that it cannot wait for Mr. Simangan, it gave him no choice but to be left behind. He was unceremoniously bumped off despite his protests and valid documents.
Considering that he was forced to get out of the plane and l eft behind against his w ill, he could not have freely consented to be rebooked the next day. In short, he did not agree to the
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novation. Novations implies a waiver and such waiver must be express. Apart from the fact that Mr. Simangan passed all the immigration procedures JAL should have known that he is indeed carrying valid travel documents. Besides, the power to admit an alien into the country of desti nation is a sovereign act w hich cannot be interfered by JA L. (Kung ayaw ng States ev entually na papasukin sa kanilang bansa si Simangan then si la dapat ang magdecide hindi ang JAL) In an action for breach of contract of carriage there are two requisites: 1. The existence of a contract of carriage; 2. Its non-performance by the common carrier through the carrier’s failure to carry the passenger safely to his destination. The two requisites are present in this case. JAL is liable for moral damages because the acts committed by it amount to bad faith. It is firmly settled thatmoral damages are recoverable in suits predicated on breach of a contract of carriage where it is proved that the carrier was guilty of fraud or bad faith, as in this case. Inattention to and lack of care for the interests of its passengers who are entitled to its utmost consideration, particularly as to their convenience, amount to bad faith which entitles the passenger to an award of moral damages.
Neglect or malfeasance of the carrier's employees could give ground for an action for damages. Passengers have a right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration and are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. (PAK!)
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NORTHWEST AIRLINES, INC., vsSPOUSES EDWARD J. HESHAN AND NELIA L. HESHAN AND DARA GANESSA L. HESHAN, REPRESENTED BY HER PARENTS EDWARD AND NELIA HESHAN, FACTS: Edward Heshan purchased 3 roundtrip tickets from him, his wife and daughter Dara for their trip from Manila to Missouri to attend an ice skating competition where Dara was to participate. After the event, they went back to the airport to take their connecting flight from Memphis to Los Angeles. They arrived 3 hours early. When the check-in counter opened, they were 2nd in queue. However, when his turn came and they presented their tickets to Ken Carns, Northwest’s customer service agent, Edward was asked to step aside and wait to be called again. After all the other departing passengers were given their boarding passes, the Heshans were told to board the plane without any boarding pass given to them. Inside the plane, the Heshans noticed that only one vacant passenger seat was available, which was offered to Dara, while Edward and Nelia were directed to occupy two "folding seats" which were crew seats intended for the stewardesses. Upset that there were not enough passenger seats for them, the Heshans complained to the cabin crew about the matter but were told that if they did not like to occupy the seats, they were free to disembark from the plane. And disembark they did, complaining thereafter to Carns about their situation. Petitioner’s plane then departed for Memphis without respondents onboard. Respondents sent a letter t o petitioner to demand indemnification for the breach of contract of carriage. Petitioner replied that respondents were prohibited to board Flight No. 972M for "verbally abus[ing] [the] flight crew." As their demand remained unheeded, respondents filed a complaint for breach of contract with damages with the RTC. Petitioner: denied that the Heshans were told to occupy "folding seats" or crew seats since "[Federal Aviation Authority] regulations say no passengers are to sit there." As for respondents not having been given boarding passes, petitioner asserted that that does not in itself mean that the flight was overbooked, for [t]his is done on last minute boarding when flights are full and in order to get passengers on their way and to get the plane out on time. This is acceptable procedure. Furthermore, it did not violate the contract of carriage since respondents were eventually transported from Memphis to Los Angeles, albeit via another airline, and that respondents made no claim of having sustained injury during the carriage Respondents: If indeed crew seats were offered to them, its crew would have had nowhere to sit and the pl ane would not have been able to depart and that in reality, they voluntarily disembarked from the aircraft because they were not willing to wait to be seated together. Petitioner was guilty of breach of contract. They cite Singapore Airlines v. Fernandez, which ruled: [W]hen an airline issues a ticket to a passenger, confirmed for a particular flight on a certain date, a contract of carriage arises. The passenger then has every right to expect that he be transported on that flight and on that date. If he does not, then the carrier opens itself to a suit for a breach of contract of carriage RTC: rendered decision in favor of the Heshans. The TC found that Edward was second in the queue for boarding passes. Yet, Edward was unceremoniously sidelined and curtly told to wait without any explanations why. His concerned seeking for explanations was repeatedly rebuffed by the airline employees. When, at last, they were told to board the aircraft
although they had not yet been issued boarding passes, which they thought to be highly unusual, they soon discovered, to their dismay, that the plane was fully booked, with only one seat left for the 3 of them. Edward and Nelia rejected the offer [to take ] the crew seats. [Respondents] were thus forced to disembark. CA: sustained the trial court’s findings but reduced the award of moral and exemplary damages. The appeallate court held that it becomes a highly irregular situation t hat despite the
fact that the [respondents] showed up on time at the boarding area[,] they were made to go in last and sans any boarding passes. Thus, Ca held that it can be logically inferred that the reason
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why no boarding passes were immediately issued to the [respondents] is because Flight 972 from St. Louis to Memphis is full and the [respondents] were bumped off fr om their flight . ISSUE: Whether Northw est Airlines is liable for breach of contract of carriage. YES RULING: The SC agreed with the factual findings of the lower court. Petitioner failed to satisfactorily explain why it did not issue boarding passes to respondents who were confirmed passengers, even after they had checked -in their luggage three hours earlier. That respondent s did not reserve seats prior to checking-in did not excuse the non-issuance of boarding passes. Petitioner’s assertion that respondents disembarked from the plane when their request to be seated together was ignored does not i mpress. The SC agr eed wit h the finding of the CA that the fact that the Heshans still boarded the plane ten (10) minutes prior to the departure time, despite knowing that they would be seated apart, is a clear manifestation of the Appellees’ willingness to abandon their request and just board the plane in order to catch th eir flight . But as it turns out, there were not enough seats for the three of them.
Nonetheless, there is a need to substantially reduce the moral damages awarded by the appellate court. Moral damages are neither intended to impose a penalty to the wrongdoer, nor to enrich the claimant. Taking into consideration the facts and circumstances attendant to the case, an award to respondents of P500,000, instead of P2,000,000, as moral damages is to the Court reasonable.
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VALLACAR TRANSIT VS CATUBIG (on liability of a CC for acts of its employees) FACTS: Vallacar Transit is engaged in the business of transportation and is the franchise owner of a Ceres Bulilit bus. Quirio Cabnilla is employed as a regular bus driver of Vallacar Transit. Quintin Catubig Jr., husband of respondent, was on his way home riding in tandem on a motorcycle with his employee, Teddy Emperado. Catubig was one drivi ng the motorcycle. While approaching a curve at kilometers 59 and 60, Catubig tried to overtake a slow moving tenwheeler cargo truck by crossing over to the opposite lane , which was being traversed by the Ceres Bulilit bs, headed to the opposite direction. When the 2 vehicles collided, Catubig and Emperado were thrown from the motorcycle. Both of them died. A complaint for reckless imprudence resulting to double homicide was filed but was subsequently dismissed as the MCTC found that Cabanilla was not criminally liable because there was no negligence, not even contributory. Thereafter, respondent filed before the RTC a Complaint for Damages against petitioner, seeking actual, moral and exemplary damages for the death of her husband based on Article 2180 in relation to 2176 of the Civil Code. Contention of Petitioner (Common Carrier): The proximate cause of the vehicular collision was the sole negligence of Catubig when he imprudently overtook another vehicle at a curve and traversed the opposite lane of the road. RTC ruled in favor of petitioner, that is, the proximate cause of the collision was Catubig’s overtaking of the slow-moving truck and not the Ceres bus running very fast. Basis of RTC: 1.) Sketch showing that the point of impact occurred beyond the canter lane near a curve within the lane of the Ceres bus 2.) Testimonies that it was the motorcycle that recklessly tried to overtake a truck and encroaching the other side of the road 3.) Testimony of Nunally Maypa (Administrative and Personnel Manager) who was responsible for the hiring of personnel including drivers and conductors. She explained that in order to be hired as driver: (1) 35 to 45 years old; (2) at least 5 years experience in driving big trucks; (3) submit police, court and police clearances; and possess all necessary requirements for friving a motor vehicle more than 4,500 kilograms i.e. driver’s license with restriction code of 3 ; (4) initial interview, skills test, psychological exam involving defensive driving techniques; (5) upon passing the test, he must go through a 150day familiarization of the bus and road conditions. However, she admitted that Cabanilla was already an emplo yee driver prior to her appointment to her position. CA ruled that both Catubig and Cabanilla were negligent, the latter having failed to observe the hazards of overtaking and the former for running his vehicle at 100 km/hr.
ISSUE: WON Common Carrier has no liability under Article 2180, in relation to 2176, since the lower courts have found that there was no fault or negligence on the part o f the empl oyee driver
HELD: Yes, Common Carrier is not liable. Article 2180 in r elation to 2176 — imputing fault or negligence on the part of the employer for the fault or negligence of it employee--does not apply in this case because fault or negligence on
the part of the employee dri ver which would have made the employer liable for quasi -delict under 2176, has never been established . ―Art 2176: Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no preexisting contractual relation between the parties, is called a quasi-delict and i s governed b y the provisions of this Chapter.
Art 2180: The obligation imposed by Article 2176 is demandable not only for o ne’s own acts or omissions, but also for those persons for whom one is responsible.
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XXXX Employers shall be liable for damages caused by their employees and household helpers acting within the scope of their assigned tasks, even though the former are not engaged in any business or industry. XXXX The responsibility treated of in this article shall cease when the persons herein mentioned prove that they observed all the diligence of a good father of a family to prevent damage.‖ It having been established that the immediate and proximate cause of the death of Catubig was his own negligence, it is no longer necessary to delve into the Common Carrier’s defense
that i t exercised due diligence in the selection and super visi on of its employee driver. Note: This case also cited Sec 41(b),RA 4136, as amended, which provides that ov ertaking is not allowed while approaching a curve in the highway; and Sec 41(a) of the same law which provides that passing another vehicle proceeding on the same direction should only be resorted to by a driver if the highway is free from i ncoming vehicle to permit such overtaking to be made in safety. Violation of these is punished under the same law and under Art 365 of the RPC. POLICY:The presumption that employers are negligent under Article 2180 flows from the negligence of their employees. The presumption of fault or negligence on the part of the common carrier does not arise where it is found that the immediate and proximate cause of death or injury was the negligence of a party other than the common carrier’s employee.
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LIABILITY FOR ACTS OF STRANGERS/PASSENGERS (1763) MANILA RAILROAD COMPANY , vs. MACARIA BALLESTEROS, TIMOTEO CAMAYO, JOSE REYES and JULIAN MAIMBAN, JR., G.R. No. L-19161
Facts Privat e respondents are pass engers o f MRR’s bus driven b y Jose Anastacio. While the bus was in Bayombong, Nueva Vizcaya, Anastacio stopped the bus and got off to replace a defective spark plug. While he was thus engaged, one Dionisio Abello, an auditor assigned to MRR by the General Auditing Office, took the wheel and told the driver to sit somewhere else. With Abello driving, the bus proceeded on its way, from time to time stopping to pick up passengers. Anastacio tried twice to take the wheel back but Abello would not relinquish it.
While the bus was travelling Kms 328 and 329 in Isabela, a freight truck bound for Manila and driven by Marcial No cum was also travelling t he same road. When these two vehicles were about to meet at the bend of the road Marcial Nocum, in trying to evade several holes on the right lane, where his truck was running, swerved his truck towards the middle part of the road and in so doing, the left front fender and left side of the freight truck smashed the left side of the bus resulting in extensive damages to the body of the bus and injuries to seventeen of its passengers, ... including the respondents herein.
The Complaint The respondents herein thus filed a complaint for damages against MRR.
Defense/s by Common Carrier – MRR 1. 2.
The accident was caused by the negligence of the driver of the freight truck, Nocum. MRR should not be held li able for Abello’s acts who is not their emplo yee
Issue: Whether or not a common carrier may be held liable on account of negligence of a stranger YES Ruling Trial court found Abello was likewise reckless when he was driving the bus at the rate of from 40 to 50 kilometers per hour on a bumpy road at the moment of the collision. As opined by the Government Corporate Counsel: the acts of the bus personnel, par ticularly "in allowing Mr. Abello to dr ive despit e two o ccasions when the bus stopped and the regula r driver could have taken over, constitute reckless imprudence and wanton injurious conduct on the pa rt of the MRR employees." Furthermore, the defenses set up by MRR will not lie because of the following the provisions of Article 1763 of the Civil Code and section 48 (b) of the Motor Vehicle Law, which respectively provide as follows:
Art. 1763. A comm on carrier i s responsible for injuri es su ffered by a passenger on account of t he wilfull acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or o mission.
Sec. 48(b).No professional chauffeur shall permit any unlicensed person to drive the motor vehicle under his control, or permit a person, sitt ing beside him or in an y other part o f the car, to interfere with him in the operation of the motor vehicle, by allowing said person to take hold of the steering wheel, or i n an y other manner take part i n the manipulation or control of the car .
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PILAPIL VS CA (on liability for acts of strangers/passengers) FACTS: Plaintiff Jose Pilapil, a paying passenger, boarded Defendant’s bus. While said bus was negotiating the distance between Iriga City and Naga City, upon reaching the vicinity of the cemetery of the Municipality of Baao, Camarines Sur, on the way to Naga City, an unidentified man, a bystander along said national highway, hurled a stone at the left side of the bus, which hit petitioner above his left eye. Defendant’s personnel lost no time in bringing plaintiff to the provincial hospital in Naga City, where he was confined and treated. How ever, despite treatment, pl aintiff lost his left eye’s visio n and sustained permanent scar above his left eye.
Plaintiff passenger brought suit for damages alleging the following: 1.) The nature of the business of a transportation company requires assumption of risks and the stoning of the bus by a stranger resulting in injury is one such risk from which the common carrier may not exempt himself from liability. 2.) Defendant common carrier should have put something like mesh-work grills to cover the windows of t he bus. 3.) It is to the greater interest of the State If a carrier were made liable for stone-throwing incidents rather than have the bus riding public lose-confidence in the transportation system. RTC ruled in favor of plaintiff. CA reversed.
ISSUE: What is the degree of diligence required to be exercised by a common carrier for the protection of its passengers from willful acts of strangers? HELD: Only that of a good father of the family Article 1763: A comm on carrier is r esponsible for i njuries suffered b y a passenger on account of willful acts or negligence of other passengers or of stranger s, if the common carrier’s employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission. The presumption of fault or negligence against the carrier is only a disputable presumption. It gives in where contrary facts are established proving either that the carrier had exercised the degree of diligence required by law, or the injury was due to a fortuitous event. With the injury arising w holly from causes created by strangers over w hich the carrier had no control or even knowledge or could not have prevented, the presumption is rebutted and the carrier is not and ought not to be held liable. A common carrier is not an insurer of the absolute safety of the passengers. Where the carrier uses cars of the most approved type, in general use by others engaged in the same occupation, and exercises a high degree of care in maintaining them in suitable condition, the carrier cannot be charged with negligence in this respect. POLICY: While as a general rule, common carriers are bound to exercise extraordinary diligence in the safe transport of their passengers, when the violation of the contract is due to the willful acts of strangers, as in the instant case, the degree of care essential to be exercised by the common carrier for the protection of its passenger is only that of a good father of a family.
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JAPAN AIRLINES VS ASUNCION FACTS: On March 27, 1992, respondents Michael and Jeanette Asuncion left Manila on board Japan Airlines (JAL) Fli ght 742 bound for Los Angeles. Their itinerary included a stop -over in Narita. Upon arrival at Narita, Mrs. Noriko Etou-Higuchi of JAL endorsed their applications for shore pass and directed them to the Japanese immigration official. A shore pass is required of a foreigner aboard a vessel or aircraft who desires to stay in the neighborhood of the port of call for not more than 72 hours. During their interview, the Japanese immigration official noted that Michael appeared shorter than his height as indicated in his passport. Because of this inconsistency, respondents were denied shore pass entries and w ere brought instead to the Narita Airport Rest House where they were billeted ov ernight. The immi gration official also handed Mrs. Higu chi a Notice where it was stated that respondents were to be watched so as not to escape. Mr. Atsushi Takemoto of the International Service Center (ISC), the agency tasked by Japans Immigration Department to handle passengers who were denied shore pass entries, brought respondents to the Narita Airport Rest House where they stayed overnight until their departure the following day for Los Angeles. Respondents were charged US$400.00 each for their accommodation, security service and meals. On December 12, 1992, respondents filed a complaint for damages claiming that JAL did not fully apprise them of their travel requirements and that they were rudely and forcibly detained at Narita Airport. JAL’s contention: The refusal of the Japanese immigration authorities to issue shore passes to respondents is an act of state which JAL cannot interfere with or prevail upon.
ISSUE: WON JAL is guilty of breach of contract and is liable for the detention of the respondents at Narita Airport. NO RTC ruled in favor of respondents. CA affirmed.
RULING: JAL did not breach its contract of carriage with respondents. 1) It may be true that JAL has the duty to inspect whether its passengers have the necessary travel documents, however, such duty does not ext end to checking the veracity of every entry in these documents. JAL could not v ouch for the authenticit y of a passport and the correctne ss of the entries therein. The power to admit or not an alien into the country is a sovereign act which cannot be interfered with even by JAL. This is not within the ambit of the contract of carriage entered into by JAL and herein respondents. As such, JAL should not be faulted for the denial of respondents shore pass applications. 2)Prior to their departure, respondents were aware that upon arrival in Narita, they must secure shore pass entries for their overnight stay. 3)Respondents claimed that petitioner breached its contract of carriage when it failed to explain to the immigration authorities that they had overnight vouchers at the Hotel Nikko Narita. They imputed that JAL did not exhaust all means to prevent the denial of their shore pass entry applications. To reiterate, JAL or any of its representatives have no authority to interfere with or influence the immigration authorities. The most that could be expected of JAL is to endorse respondents applications, w hich they did. 4)Upon being notified of the denial of respondents applications, Mrs. Higuchi immediately made reservations for respondents at the Narita Airport Rest House which is really more a hotel than a detention house as claimed by respondents.
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Nowhere in respondent Michaels testimony did he state categorically that Mrs. Higuchi or any other employee of JAL treated them rudely or exhibited improper behavior throughout their stay. We therefore find JAL not remiss in its obligations as a common carrier. Accordingly, there being no breach of contract on the part of petitioner, the award of actual, moral and exemplary damages, as well as attorneys fees and costs of the suit in favor of respondents Michael and Jeanette Asuncion, is DELETED for lack of basis.
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PUBLIC SERVICE ACT I. DEFINITION ALBANO VS. REYES Note: Discussion as to the definition of a public utilit y was not emphasized in this case. I copied it from the book of Chavez.
FACTS: On 1987, The Philippine Ports Authority (PPA) board, by virtue of Res. No. 850, directed the PPA management to prepare for the public bidding of the development, management and operation of the Manila International Container Terminal (MICT) at the Port of Manila. A Bidding Committee was formed by the DOTC Secretary Reyes for the public bidding. After evaluation of several bids, the Bidding Committee recommended the award of the contract to respondent International Container Terminal Services, Inc. (ICTSI). Accordingly, DOTC secretary, declared the ICTSI consortium as the winning bidder. On 1988, the President of the Philippines approved the same with directives that PPA shall still have the r esponsibility for planning, detailed engineering, construction, expansion, rehabil itation and capital dredging of the port, as well as the determination of how the revenues of the port system shall be allocated for future works; and the contractor shall not collect taxes and duties except that in the case of wharfage or tonnage dues. Petitioner Albano, as taxpayer and Congr essman, assailed the legali ty of the award and claimed that since the MICT is a p ublic utilit y, it needs a legislative franchise b efore it can legally operate as a public utility.
ISSUE:
Whether the MICT requires a legislat ive franchise because it is a public utility? No.
HELD:
While the PPA has been tasked under E.O. No. 30 with the management and operation of the MICT and to undertake the provision of cargo handling and port related services thereat, the law provides that such shall be ―in accordance with P.D. 857 and other applicable laws and regulations‖. P.D. 857 expressly empow ers the PPA to provide services w ithin Port Districts ―whether on its own, by contract, or otherwise‖. A “public utility” is a business or service engaged in regularly sup plying the public with some
commodity or service of public consequence such as electricity, gas, water, transportation, telephone, or telegraph service. Apart from statues which define the public utilities that are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case. As its name indicates, however, the term public utility implies public use and service to the public. In this case, even if the MICT b e considered a p ublic utilit y, its operation would not necessarily need a franchise from the legislature because the law has granted certain administrative agencies th e power to grant l icenses for or to authorize the operation of public utili ties. Reading E.O. 30 and P.D. 857 together, it is clear that the lawmaker has empowered the PPA to undertake by itself the operation and management of the MICP or to authorize its operation and management by another by contract or other means, at its option. That the Constitution provides in Art. XII, Sec. 11 that the issuance of a franchise, certificate or other form of authorization for the operation of a public utility shall be subject to amendment, alteration or repeal by Congress does not necessarily, imply, as petitioner posits that only Congress has the power to grant such authorization. Our statute books are replete with laws granting specified agencies in the Executive Branch the power to issue such authorization for certain classes of public utilities. The Public Service Act (CA No. 146) provides ―"public service" includes 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 whether may be its classification, freight or carrier service of any class, express service,
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steamboat or steamship line, ponti nes, ferries, and water craft, engaged in th e transportation of passengers or freight or both, shipyard, marine railways, marine repair shop, [warehouse] 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 system, wire or wi reless broadcasting stati ons and other similar public services… ‖ (Sec. 13b) In holding that the contract is valid, the Court stated that franchises issued by Congress are not
required before each and every public utility may operate. The law has granted certain administrative agencies the power to grant licenses or to authorize the operation of certain public utilities
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II.
Certificate of Public Convenience Kilusang Mayo Uno Labor Center v. Jesus Garcia, Jr., LTFRB, Provincial BusOperators Association of the Philippines (PBOAP)
Facts: On June 26 1990, then Secretary of DOTC, Oscar Orbos, issued Memorandum Circular No. 90-395 to then LTFRB Chairman, Remedios A.S. Fernando allowing provincial bus operators to charge passengers rates wit hin a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year. On December 5, 1990, private respondent Provincial Bus Operators Association of the Philippines, Inc. (PBOAP) filed an application for fare rate increase. An across -the-board increase of eight and a half centavos (P.0085) per kilometre for all types of provincial buses with a minimum maximum fare range of 15% over and below the proposed basic per kilometre fare rate, with the said minim um-maximum fare range applying only to ordinary, first class and premium class buses and a fifty-centavo (P0.50) per kilometre fare for aircon buses were sought. Later on, PBOAP reduced its applied proposed fare to an across-the-board increase of six and a half (P0.065) centavos per kil ometre for ordinary buses. Although oppo sed, the LTRFB rendered a decision granting the fare rate increase. On March 30, 1992, then Secretary of the Department of Transportation and Communications Pete Nicomedes Prado issued Department Order No. 92-587 defining the policy framework on the regulation of transport services. Relevant portions to this case are: 1. In determining public need, the presumption of need for a service shall be deemed in favor of the applicant. The burden of proving that there is no need for a proposed service shall be with the oppositor(s). 2. Passenger fares shall also be deregulated, except for the lowest class of passenger service (normally third class passenger transport) for which the government will fix indicative or reference fares. Operators of particular services may fix their own fares within a range 15% above and below the indicative or reference rate. Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing, announced a fare increase of twenty (20%) percent of the existing fares. Said increased fares were to be made effective on March 16, 1994. On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares. On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit.
ISSUE:
W/N establishment of a presumption of public need in favor of an applicant for a proposed transport service without having to prove public necessity is illegal for being violative of the Public Service Act and the Rules of Court? YES HELD: The Court ruled that the LTFRB exceeded its mandate by imposing a rate range thereby resulting in an improper delegation of it’s rate fixing powers. Also the Court defined what public
convenience is, stating that it generally means something fitted or suited to the public need and it’s existence or non -existence is a question of fact that must be established by evidence, real and/or testimonial, empirical data, statistics and such other means necessary, in a public hearing conducted for the purpose. The Court, in the beginning of the case, also stated that public utilities are privately owned and operated businesses whose services are essential to the general public A certificate of public convenience (CPC) is an authorization granted by the LTFRB for the operation of land transportation services for public use as required by law. Pursuant to Section 16(a) of the Public Service Act, the following requisites must be met before a CPC can be granted:
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1.
2. 3.
The applicant m ust be a citizen of the Philippi nes or a corporation or co-partnership, association or joint-stock company constituted and organized under the law of the Philippines, at least 60% of its stock or paid up capital must belong entirely to citizens of the Phili ppines The applicant must be financially capable of undertaking the proposed service and meeting the responsibilities incident to it s operation The applicant must prove that the operation of the public service proposed and the authorization to do business will promote the public interest in a proper and suitable manner. It is understood that there must be proper notice and hearing before the PSC can exercise its power to issue a CPC.
The ―presumption of a public need for a service‖ provision is entirely incompatible and inconsistent with Section 16(c)(iii) of the Public Service Act which requires that before a CPC will be issued, the applicant must prove by proper notice and hearing that the operation of the public service proposed will promote public interest in a proper and suitable manner
The pow er of a regulatory body to issue a CPC is founded on the condition that after full -dress hearing and investigation, it shall find, as a fact that the proposed operation is for the convenience of the public. Basic convenience is the primary consideration for which a CPC is issued, and that fact alone must be consistently borne in mind. Also, existing operators in subject routes must be given an opportunity to offer proof and oppose the application. Therefore, an applicant must, at all times, be required to prove his capacity and capability to furnish the service which he has undertaken to render. And all t his will be possible only if a public hearing were conducted for that purpose.
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PHILIPPINE AIRLINES, INC., petitioner, vs. CIVIL AERONAUTICS BOARD and GRAND INTERNATIONAL AIRWAYS, INC., respondents. FACTS: On November 24, 1994 GrandAir applied for a Certificate of Public Convenience and Necessity with the Civil Aeronautics Board, which application was docketed as CAB Case No. EP-12711. GrandAir complied with the corresponding notice to all scheduled Philippine Domestic operators and requested for the issuance of a Temporary Operating Permit. Philippine Airlines INC (PAL) filed its Opposition to GrandAir’s application: PAL argued that CAB has no jurisdiction to hear the application unti l GrandAir first obtained a franchise to operate from Congress. It alleges that GrandAir does not possess a legislative franchise authoriz ing it to engage in air transportation service wi thin the Philippines or elsewhere. Such franchise is, as argued, a requisite for the issuance of a Certificate of Public Convenience or Necessity by the respondent Board, as mandated under Section 11, Article XII of the Constitution. GrandAir, on the other hand, relies on its interpretation of the provisions of Republic Act 776 and posits that a l egislative franchise is no longer a requirement for the issuance of a Certificate of Public Convenience and Necessity or a Temporary Operating Permit, following the Court's pronouncements in the cases of Avia Filipinas vs. Civil Aeronautics Board, and Silangan Airways, Inc. vs. Grand International Airways. CAB denied PAL's Opposition and promulgated Resolution No. 119 approving the issuance of a Temporary Operating Permit in favor of Grand Air to engage in scheduled domestic air transportation services, particularly the Manila-Cebu, Manila-Davao, and converse routes for a period of three months, i.e., from December 22, 1994 to March 22, 1994. And upon motion by private respondent, the temporary permit was extended for a period of six (6) months or up to September 22, 1 995.
ISSUE 1: WHETHER OR NOT CONGRESS, IN ENACTING REPUBLIC ACT 776, HAS DELEGATED THE AUTHORITY TO AUTHORIZE THE OPERATION OF DOMESTIC AIR TRANSPORT SERVICES TO THE RESPONDENT BOARD, SUCH THAT CONGRESSIONAL MANDATE FOR THE APPROVAL OF SUCH AUTHORI TY IS NO LONGER NECE SSARY.
HELD 1: The Civil Aeronautics Board has the authority to issue a Certificate of Public Convenience and Necessity, or Temporary Operating Permit to a domestic air transport operator, who, though not possessing a legislative franchise, meets all the other requirements prescribed by the law. Such requirements were enumerated in Section 21 of R.A. 776. There is nothing in the law nor in the Constitution, which indicates that a legislative franchise is an indispensable requirement for an entity to operate as a domestic air transport operator. Although Section 11 of Article XII recognizes Congress' control over any franchise, certificate or authority to operate a public utility, it does not mean Congress has exclusive authority to issue the same. Franchises issued by Congress are not required before each and every public utility may operate. In many instances, Congress has seen it fit to delegate this function to government agencies, specialized particularly in their respectiv e areas of public service.
ISSUE 2: WON THERE IS A DISTINCTION BETWEEN CERTIFICATE OF PUBLIC CONVENIENCE AND CERTIFICATE OF CONVENIENCE AND PUBLIC NECESSITY
HELD 2: Many and varied are the definitions of certificates of public convenience which courts and legal writers have drafted. Some statutes use the terms "convenience and necessity" while others use only the words "public convenience." The terms "convenience and necessity", if used together in a statute, are usually held not to be separable, but are construed together. Both words modify each other and must be construed together. The word 'necessity' is so connected, not as an additional requirement but to modify and qualify what might otherwise be taken as the strict significance of the word necessity. Public convenience and necessity exists when the proposed facility will meet a reasonable want of the publi c and supply a need w hich the
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existing facilities do not adequately afford. It does not mean or require an actual physical necessity or an indispensable thing. "The terms 'convenience' and 'necessity' are to be construed together, although they are not synonymous, and effect must be given both. The convenience of the public must not be circumscribed by according to the word 'necessity' its strict meaning or an essential requisites. " [22] The use of the word "necessity", in conjunction with "public convenience" in a certificate of authorization to a public service entity to operate, does not in any way modify the nature of such certification, or the requirements for the issuance of the same. It is the law which determines the requisites for the issuance of such certification, and not the title indicating the certificate. According to t he book: In v iew of this case, there is no more distinction between certificate of public convenience and certificate of convenience and public necessity. In sum, respondent Board should now be allowed to continue hearing the application of GrandAir for the issuance of a Certificate of Public Convenience and Necessity, there being no legal obstacle to the exercise of its jurisdiction.
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RIZAL VS MUNICIPALITY OF MORONG FACTS:(Note: this decision is a consolidation of 2 cases) Rizal Light & Ice Co. was granted by the Commission a certificate of public convenience and necessity for the installation, operation and maintenance of an electric light, heat and power service in the municipality of Morong, Rizal The Public Service Commission required the petitioner to appear before it to show cause why it should not be penalized for violation of the conditions of its certificate of public convenience and the regulations of the Commission, and for failure to comply with the directives to raise its service voltage and maintain them within the limits prescribed in the Revised Order No. 1 of the Commission, and to acquire and install a kilowattmeter to indicate the load in kilowatts at any particular time of the generating unit. The motion was then set for hearing. In a petition filed in the same case, the municipality of Morong formally asked the Commission to revoke petitioner's certificate of public convenience and to forfeit its franchise on the ground, among other things, that it failed to comply with the conditions of said certificate and franchise. Meanwhile, inspections had been made of petitioner's electric plant and installations When the case was called for hearing, petitioner failed to appear again so municipality was then allowed to present its documentary evidence, and thereafter the case was submitted for decision In its decision on the basis of the inspection reports, Comm ission found that the petitioner "cannot render the efficient, adequate and satisfactory electric service required by its certificate and that it is against public interest to allow it to continue its operation." Accordingly, it ordered the cancellatio n and revocation of petitioner's cert ificate of public convenience and the forfeiture of its franchise. Petitioner moved for reconsideration of the decision but before said motion for reconsideration was filed, having been granted a municipal franchise by respondent municipality to install, operate and maintain an electric heat, light and power service in said municipality - Morong Electric filed with the Commission an application for a certificate of public convenience and necessity for said service Petitioner opposed in writing the application of Morong Electric, alleging among other things, that it is a holder of a certificate of public convenience to operate an electric light, heat and power service in the same municipality of Morong, Rizal, and that the approval of said application would not promote public convenience, but w ould only cause ruinous and w asteful competition. On the basis of the evidence adduced, the Commission ruled that the certificate of the petitioner was already declared revoked and cancelled; the Commission approved the application of Morong Electric and ordered the issuance in its favor of the corresponding certificate of public convenience and necessity. Hence these two cases; petitioner contends that (1) the cancellation of petitioner's certificate of public convenience was unwarranted because no sufficient evidence was adduced against the petitioner and that petitioner was not able to present evidence in its defense, (2) the Commission erred when it did not give to petitioner protection to its investment and (3) that the Commissi on erred in imposing the extrem e penalty of revocation of the certificate.
ISSUE 1: WON the cancellation of petitioner's certificate of public convenience w as unwarranted because no sufficient evidence was adduced against the petitioner and that petitioner was not able to present evidence in its defense
HELD 1: No. Settled is the rule that in reviewing the decision of the Public Service Commission this Court is not required to examine the proof de novo and determine for itself whether or not the preponderance of evidence really justifies the decision. The only function of this Court is to
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determine whether or not there is evidence before the Commission upon which its decision might reasonably be based. This Court will not substitute its discretion for that of the Commission on questions of fact and will not interfere in the latter's decision unless it clearly appears that there is no evidence to support it. Inasmuch as the only function of this Court in reviewing the decision of the Commission is to determine whether there is sufficient evidence before the Commission upon which its decision can reasonably be based, as it is not required to examine the proof de novo , the evidence that should be made the basis of this Court's determination should be only those presented in this case before the Commission. The Commission based its decision on the inspection reports submitted by its engineers who conducted the inspection of petitioner's electric service upon orders of the Commission.Said inspection reports specify in detail the deficiencies incurred, and violations committed, by the petitioner resulting in the inadequacy of its service. SC considers that said reports are sufficient to serve reasonably as bases of the decision in question. It should be emphasized, in this connection that said reports, are not mere documentary proofs presented for the consideration of the Commission, but are the results of the Commission's own observations and investigations which it can rightfully take into consideration, particularly in this case where the petitio ner had not presented an y evidence in its defense, and speaking o f petitioner's failure to present evidence, as well as its failure to cross-examine the authors of the inspection reports, petitioner should not complain because it had waived not only its right to cross-examine but also it s right to present evidence.
According to the book: The present case, wherein the operator is not of good standing- is one of the exceptions to prior operator rule. ISSUE 2: WON the "protection-of-investment rule" apply in the present case
HELD 2: No. Petitioner invokes the "protection-of-investment rule" enunciated by this Court in Batangas Transport ation Co. vs. Orlanes in this w ise: The Government having taken over the control and supervision of all public utilities, so long as an operator under a prior license complies with the terms and conditions of his license and reasonable rules and regulations for its operation and meets the reasonable demands of the public, it is the duty of the Commission to protect rather than to destroy his investment by the granting of the second license to another person for the same thing over the same route of travel. The granting of such a license does not serve its convenience or promote the interests of the public. The court ruled however, that the rule is not absolute, for nobody has exclusive right to secure a franchise or a certificate of public convenience. In the present case, it has been shown by ample evidence that the petitioner, despite ample time and opportunity given to it by the Commission, had failed to render adequate, sufficient and satisfactory service and had violated the important conditions of its certificate as well as the directives and the rules and regulations of the Commission, the rule cannot apply. To apply that rule unqualifiedly is to encourage violation or disregard of the terms and conditions of the certificate and the Commission's directives and regulations, and would close the door to other applicants who could establish, operate and provide adequate, efficient and satisfactory service for the b enefit and convenience of th e inhabitants. It should be emphasized that the paramount consideration should always be the public interest and public convenience. The duty of the Commission to protect investment of a public utility operator refers only to operators of good standing — those who comply with the laws, rules and regulations — and not to operators who are unconcerned with the public interest and whose investments have failed or deteriorated because of their own fault.
ISSUE 3: WON the penalty imposed by the Comm ission on t he petitioner — that is, t he revocation of the certificate and the forfeit ure of the franchise w ere proper
HELD 3: Yes. It should be observed that Section 16(n) of Commonwealth Act No. 146, as amended, confers upon the Commission ample power and discretion to order the cancellation and revocation of any certificate of public convenience issued to an operator who has
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violated, or has willfully and contumaciously refused to comply with, any order, rule or regulation of the Commission or any provision of law. What matters is that there is evidence to support the action of the Commission. In the instant case, as shown by the evidence, the contumacious refusal of the petitioner since 1954 to comply wit h the directives, rules and r egulations of the C ommission, its violation of the conditions of its certificate and its incapability to comply with its commitment as shown by its inadequate service, were the circumstances that warranted the action of the Com mission in not merely imposing a fine but in revoking altogether petitioner's certificate. To allow petitioner to continue its operation would be to sacrifice public interest and convenience in favor of private interest. A grant of a certificate of public conveni ence confers no property rights but is a m ere license or privilege, and such privilege is forfeited when the grantee fails to comply with his commitments behind which lies the paramount interest of the public, for public necessity cannot be made to wait, nor sacrificed for private convenience. (Collector of Internal Revenue v. Estate of F. P. Buan, et al., L-11438 and Santiago Sambrano, et al. v. PSC, et al., L-11439 & L-11542-46, July 31, 1958) (T)he Public Service Commission, ... has the power to specify and define the terms and conditions upon w hich the public utility shall be operated, and to m ake reasonable rules and regulations for its operation and the compensation which the utility shall receive for its services to the public, and for any failure to comply with such rules and regulations or the violation of any of the terms and conditions for which the license was granted, the Commission has ample power to enforce the provisions of the license or even to revoke it, for any failure or neglect to comply with any of its terms and provisions . (Batangas Trans. Co. v. Orlanes, 52 Phil. 455, 460; emphasis supplied) Presumably, the petitioner has in mind Section 21 of Commonwealth Act No. 146, as amended, which provides that a public utility operator violating or failing to comply with the terms and conditions of any certificate, or any orders, decisions or regulations of the Commission, shall be subject to a fine and that the Commission is authorized and empowered to impose such fine, after due notice and hearing. It should be noted, however, that the last sentence of said section states that the remedy provided therein "shall not be a bar to, or affect any other remedy provided in this Act but shall be cumulative and additional to such remedy or remedies." In other words, the imposition of a fine may only be one of the remedies which the Commission may resort to, in its discretion. But that remedy is not exclusive of, or has preference over, the other remedies. And this Court will not substitute its discretion for that of the Commission, as long as there is evidence to support the exercise of that discretion by the Commission.
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BATANGAS TRANSPORTATION CO. VS. CAYETANO ORLANES FACTS Orlanes is holder of a certificate of public convenience to operate an autobus line from Taal to Lucena, passing through Batangas, Bolbok and Bantilan (in Batangas Province) and Candelaria and Sariaya (Tayabas Province) without any fixed schedule and is prohibited to accept passengers or cargo from Taal to any point before Balbok, and vi ce versa. He filed an application for a permit before the Public Service Commission wherein he seeks to have a certificate of public convenience to operate with fixed times of departure between Taal and Bantilan and to nullify the prohibition against him by granting him the right to receive passengers and and cargo at point s between Taal and Bantilan. Batangas Transportation Company (BTC) operates a regular service of auto t rucks between the principal municipalities of the Province of Batangas and some of those of the Province of Tayabas; Since 1918, it has been operating a regular service between Taal and Rosario, and that in 1920, its service was extended to the municipality of San Juan de Bolbok, with a certificate of public convenience issued by the Public Service Commi ssion. BTC applied to the Commission for a permit to increase the number of trip hours at and between the same places from Batangas to Rosario, and/or for an order that all irregular operators be prohibited from operating their respective licenses, unless th ey should observ e the interval of t wo hours before, or one hour after, the regular hours of the Batangas Transportation Company. The Com mission granted the petit ion of Orlanes. BTC filed a mot ion for a rehearing which was denied. Hence this petition before the SC.
ISSUE: Whether or not a certificate of public convenience should be issued to Orlanes, a second operator, to operate a public utility in competition with BTC, a first operator, that is already operating, adequate and satisfactor y service?
HELD: NO. An autobus line is a public utility, and, as such, is a common carrier and an important factor in the business affairs of the country. The Public Service Commission, as provided in Act No. 3108, as amended by Act No. 3316, has the power to specify and define the terms and conditions upon which the public utility shall be operated, and to m ake reasonable rules and regulations for i ts operation, and t o fix the compensation which it shall receive for its services to the public, and for good cause may suspend or even revoke a license when once granted. The power of the Commission to issue a certificate of public convenience depends on the condition precedent that, after a full hearing and investigation, the Commission shall have found as a fact that the operation of the proposed public service and its authority to do business must be based upon t he finding that it is for the convenience of the public. There is no claim or pretense that BTC has violated any of the terms and conditions of its license. Neither does the Public Service Commission find as a fact that the granting of a license to Orlanes as a regular operator between the points in question is required or necessary for the convenience of the traveling public, or that there is any complaint or criticism by the public of the services rendered by the Batangas Transportation Company over the route in question. Evidence is conclusive that BTC operated its line five years before Orlanes ever turned a wheel, yet the legal effect of the decision of the Commission is to give an irregular operator, who was the last in t he field, a preferential right over a regular operator, w ho was the first in the field. Th at is not the law, and there is no legal principle upon which it can be sustained. The fact that the Commission has previously granted a license to any person to operate a bus line over a giv en highway and refuses to grant a sim ilar license to another person ov er the same highway, does not in the least create a monopoly in the person of the licensee, for the reason that at all times the Public Service Commission has the power to say what is a reasonable compensation to the utility, and to make reasonable rules and regulations for the convenience
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of the traveling public and to enforce them. So long as the first licensee keeps and performs the terms and conditions of its license and complies with the reasonable rules and regulations of the Commission and meets the reasonable demands of the public, it should have more or less of a vested and preferential right over a person who seeks to acquire another and a later li cense over the same route. Otherwise, the first license would not have protection on his investment, and would be subject to ruinous competition and thus defeat the very purpose and intent for which the Public Service Commission w as created. It does not appear that the public has ever made any complaint the Batangas Transportation Company, yet on its own volition and to meet the increase of its business, it has applied to the Public Service Commission for authority to increase the number of daily trips to nineteen, thus showing a spirit that ought to be comm ended. The rule has been laid down, without dissent in numerous decisions (SC cites US cases), that where an operator is rendering good, sufficient and adequate service to the public, that the convenience does not require and the public interests will not be promoted in a proper and suitable manner by giving another operator a certificate of public convenience to operate a competing line over the same route. The Government having taken over the control and supervision of all public utilities, so long as an operator under a prior license complies with the terms and conditions of his license and reasonable rules and regulation for its operation and meets the reasonable demands of the public, it is the duty of the Commission to protect rather than to destroy his investment by the granting of a subsequent license to another for the same thing over the same route of travel. The granting of such a license does not serve its convenience or promote the interests of the public. The decision of the Public S ervice Comm ission, granting to Orlanes the li cense in que stion, is revoked and set aside for being in direct conflict with the underlying and fundamental principles for which the Commission was created. The case is remanded to the Commission.
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RAYMUNDO TRANSPORTATION CO., INC. VS. VICTORINO CERVO FACTS: Immediately after the liberation of the Philippines, Victorino Cervo secured an emergency certificate of public convenience to operate one-auto truck from Pililla to Manila from the Public Service Commission. Such certificate expired on December 31, 1948 and was extended for an indefinite period in line with the policy of the Commission. Cervo filed a petition for the conversion of his emergency certificate into a permanent one. The application was first heard before Chief Atty. Aspillera who was authorized by the Commission to receive the evidence. Only petitioner filed its opposition to the application on the following grounds: (1) that appellee should not have being allowed to invade Pililla-Manila line because petitioner has been operating on it even before the war; (2) to allow Cervo to operate on the same line would result in a ruinous competition wit h petitioner; (3) that public necessity does not require the service proposed by Cervo; and if it so requires, petitioner should had been given the preference to put up such additional service; and (4) it is unwise to grant a permanent certificate of public convenience to Cervo after petitioner had completed its pre-war equipment of 51 units pursuant to their requirement of the Commission. The Commission granted the permanent certificate applied for by Cervo. Its MR denied, petitioner filed a petition for review before the SC.
ISSUE: Whether or not a permanent certificate of public convenience should be granted to Cervo?
HELD: YES (1) The fact that petitioner has been operating on the Pililla-Manila line for a long time does not preclude the Public Service Commission from granting an additional permit to operate on the same line if public necessity so demands. This is a matter for the Commission to determine. In it many factors are involved, and as long as they are met by the applicant the granting of a new permit is justi fied. Public necessit y and convenience are of paramount importance. (2) The claim to allow Cervo to operate on the same line would only result in a ruinous competition is a question which depends upon the requirements of the travelling public. When public necessity requires that a new operator may be allowed to put up an additional service, that cannot be considered a ruinous competition, for it is to be presumed that the demand of the passengers in that li ne is such as to justi fy the requirements of all those who are in the service. Competition if wholesome a constructive should be allows because it tend to promote satisfaction and efficiency in the management and operation of the public service. This is what the Public Service Commission did: to allow w holesome completion. There is no show ing that the competition is ruinous or prejudicial to the petitioner. (3) to (4) Whether public necessit y of convenience warrant the putting up of additional service on the part of Cervo is a question of fact which the Public Service Commission has found in the affirmative. This finding, being supported by sufficient evidence should not be disturbed. The plea that if public necessity requires the putting up of additional service such privilege should be given to the petitioner which is old in the service is tenable, but there are cases where this cannot be done without causing injustice to emergency operators who were forced to enter the field due to the inability of old operators to rehabilitate and resume their former service in keeping w ith the demand of the trav elling public. And one of this operators is the petitioner which only recently acquired the needed equipment to put its service on a pre-war level. To deprive Cervo of the privilege already enjoyed by him after investing money and effort for the sole purpose of giving preference to the peitioner would be most unfair and unjust and cannot in equity be sanctioned by this Court. Such a ruling would lead to a monopoly and this should be avoided.
