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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-21438 September 28, 1966

AIR FRANCE, petitioner,vs.RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS,respondents.

Lichauco, Picazo and Agcaoili for petitioner.Bengzon Villegas and Zarraga for respondent R. Carrascoso.

SANCHEZ, J.:

The Court of First Instance of Manila 1 sentenced petitionerto pay respondent Rafael Carrascoso P25,000.00 by way of moraldamages; P10,000.00 as exemplary damages; P393.20

representing the difference in fare between first class and touristclass for the portion of the trip Bangkok-Rome, these variousamounts with interest at the legal rate, from the date of the filingof the complaint until paid; plus P3,000.00 for attorneys' fees; andthe costs of suit.

On appeal,2 the Court of Appeals slightly reduced theamount of refund on Carrascoso's plane ticket from P393.20 to

P383.10, and voted to affirm the appealed decision "in all otherrespects", with costs against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as " fullysupported by the evidence of record", are:

Plaintiff, a civil engineer, was a member of a group of 48Filipino pilgrims that left Manila for Lourdes on March 30, 1958.

On March 28, 1958, the defendant, Air France, through itsauthorized agent, Philippine Air Lines, Inc., issued to plaintiff a

"first class" round trip airplane ticket from Manila to Rome. FromManila to Bangkok, plaintiff travelled in "first class", but atBangkok, the Manager of the defendant airline forced plaintiff tovacate the "first class" seat that he was occupying because, in thewords of the witness Ernesto G. Cuento, there was a "white man",

who, the Manager alleged, had a "better right" to the seat. Whenasked to vacate his "first class" seat, the plaintiff, as was to beexpected, refused, and told defendant's Manager that his seatwould be taken over his dead body; a commotion ensued, and,according to said Ernesto G. Cuento, "many of the Filipino

passengers got nervous in the tourist class; when they found out

that Mr. Carrascoso was having a hot discussion with the whiteman [manager], they came all across to Mr. Carrascoso and

pacified Mr. Carrascoso to give his seat to the white man"(Transcript, p. 12, Hearing of May 26, 1959); and plaintiffreluctantly gave his "first class" seat in the plane.3

1. The trust of the relief petitioner now seeks is that wereview "all the findings" 4 of respondent Court of Appeals.Petitioner charges that respondent court failed to make completefindings of fact on all the issues properly laid before it. We are

asked to consider facts favorable to petitioner, and then, tooverturn the appellate court's decision.

Coming into focus is the constitutional mandate that "No

decision shall be rendered by any court of record withoutexpressing therein clearly and distinctly the facts and the law onwhich it is based". 5 This is echoed in the statutory demand that a

judgment determining the merits of the case shall state "clearly

and distinctly the facts and the law on which it is based"; 6 andthat "Every decision of the Court of Appeals shall containcomplete findings of fact on all issues properly raised before it". 7

A decision with absolutely nothing to support it is a nullity. Itis open to direct attack. 8 The law, however, solely insists that adecision state the "essential ultimate facts" upon which thecourt's conclusion is drawn. 9 A court of justice is not hideboundto write in its decision every bit and piece of evidence 10presented by one party and the other upon the issues raised.Neither is it to be burdened with the obligation "to specify in thesentence the facts" which a party "considered as proved". 11 This

is but a part of the mental process from which the Court drawsthe essential ultimate facts. A decision is not to be so clogged withdetails such that prolixity, if not confusion, may result. So long as

the decision of the Court of Appeals contains the necessary factsto warrant its conclusions, it is no error for said court to withholdtherefrom "any specific finding of facts with respect to theevidence for the defense". Because as this Court well observed,"There is no law that so requires". 12 Indeed, "the mere failure tospecify (in the decision) the contentions of the appellant and thereasons for refusing to believe them is not sufficient to hold thesame contrary to the requirements of the provisions of law and

the Constitution". It is in this setting that in Manigque, it was heldthat the mere fact that the findings "were based entirely on theevidence for the prosecution without taking into consideration oreven mentioning the appellant's side in the controversy as shownby his own testimony", would not vitiate the judgment. 13 If thecourt did not recite in the decision the testimony of each witnessfor, or each item of evidence presented by, the defeated party, itdoes not mean that the court has overlooked such testimony or

such item of evidence. 14 At any rate, the legal presumptions arethat official duty has been regularly performed, and that all the

matters within an issue in a case were laid before the court andpassed upon by it. 15

Findings of fact, which the Court of Appeals is required tomake, maybe defined as "the written statement of the ultimatefacts as found by the court ... and essential to support thedecision and judgment rendered thereon". 16 They consist of thecourt's "conclusions" with respect to the determinative facts in

issue". 17 A question of law, upon the other hand, has beendeclared as "one which does not call for an examination of theprobative value of the evidence presented by the parties." 18

2. By statute, "only questions of law may be raised" in an

appeal by certiorari from a judgment of the Court of Appeals. 19

That judgment is conclusive as to the facts. It is not appropriatelythe business of this Court to alter the facts or to review the

questions of fact. 20

With these guideposts, we now face the problem of whetherthe findings of fact of the Court of Appeals support its judgment.

3. Was Carrascoso entitled to the first class seat he c laims?

It is conceded in all quarters that on March 28, 1958 he paidto and received from petitioner a first class ticket. But petitioner


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asserts that said ticket did not represent the true and completeintent and agreement of the parties; that said respondent knew

that he did not have confirmed reservations for first class on anyspecific flight, although he had tourist class protection; that,

accordingly, the issuance of a first class ticket was no guaranteethat he would have a first class ride, but that such would dependupon the availability of first class seats.

These are matters which petitioner has thoroughlypresented and discussed in its brief before the Court of Appealsunder its third assignment of error, which reads: "The trial courterred in finding that plaintiff had confirmed reservations for, and

a right to, first class seats on the "definite" segments of hisjourney, particularly that from Saigon to Beirut". 21

And, the Court of Appeals disposed of this contention thus:

Defendant seems to capitalize on the argument that theissuance of a first-class ticket was no guarantee that thepassenger to whom the same had been issued, would be

accommodated in the first-class compartment, for as in the caseof plaintiff he had yet to make arrangements upon arrival at everystation for the necessary first-class reservation. We are notimpressed by such a reasoning. We cannot understand how areputable firm like defendant airplane company could have theindiscretion to give out tickets it never meant to honor at all. Itreceived the corresponding amount in payment of first-classtickets and yet it allowed the passenger to be at the mercy of itsemployees. It is more in keeping with the ordinary course ofbusiness that the company should know whether or riot thetickets it issues are to be honored or not.22

Not that the Court of Appeals is alone. The trial courtsimilarly disposed of petitioner's contention, thus:

On the fact that plaintiff paid for, and was issued a "Firstclass" ticket, there can be no question. Apart from his testimony,see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1",and defendant's own witness, Rafael Altonaga, confirmed

plaintiff's testimony and testified as follows:

Q. In these tickets there are marks "O.K." From what you know,what does this OK mean?

A. That the space is confirmed.

Q. Confirmed for first class?

A. Yes, "first class". (Transcript, p. 169)

x x x x x x x x x

Defendant tried to prove by the testimony of its witnessesLuis Zaldariaga and Rafael Altonaga that although plaintiff paid

for, and was issued a "first class" airplane ticket, the ticket was

subject to confirmation in Hongkong. The court cannot give creditto the testimony of said witnesses. Oral evidence cannot prevail

over written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l","C" and "C-1" belie the testimony of said witnesses, and clearlyshow that the plaintiff was issued, and paid for, a first class ticketwithout any reservation whatever.

Furthermore, as hereinabove shown, defendant's ownwitness Rafael Altonaga testified that the reservation for a "firstclass" accommodation for the plaintiff was confirmed. The courtcannot believe that after such confirmation defendant had a

verbal understanding with plaintiff that the "first class" ticketissued to him by defendant would be subject to confirmation in

Hongkong. 23

We have heretofore adverted to the fact that except for aslight difference of a few pesos in the amount refunded onCarrascoso's ticket, the decision of the Court of First Instance was

affirmed by the Court of Appeals in all other respects. We hold

the view that such a judgment of af firmance has merged thejudgment of the lower court. 24 Implicit in that affirmance is adetermination by the Court of Appeals that the proceeding in theCourt of First Instance was free from prejudicial error and "all

questions raised by the assignments of error and all questionsthat might have been raised are to be regarded as finallyadjudicated against the appellant". So also, the judgment affirmed"must be regarded as free from all error". 25 We reached thispolicy construction because nothing in the decision of the Court ofAppeals on this point would suggest that its findings of fact are inany way at war with those of the trial court. Nor was saidaffirmance by the Court of Appeals upon a ground or grounds

different from those which were made the basis of theconclusions of the trial court. 26

If, as petitioner underscores, a first-class-ticket holder is notentitled to a first class seat, notwithstanding the fact that seatavailability in specific flights is therein confirmed, then an airpassenger is placed in the hollow of the hands of an airline. Whatsecurity then can a passenger have? It will always be an easymatter for an airline aided by its employees, to strike out the verystipulations in the ticket, and say that there was a verbalagreement to the contrary. What if the passenger had a schedule

to fulfill? We have long learned that, as a rule, a writtendocument speaks a uniform language; that spoken word could benotoriously unreliable. If only to achieve stability in the relationsbetween passenger and air carrier, adherence to the ticket soissued is desirable. Such is the case here. The lower courts refusedto believe the oral evidence intended to defeat the covenants inthe ticket.

The foregoing are the considerations which point to theconclusion that there are facts upon which the Court of Appeals

predicated the finding that respondent Carrascoso had a first classticket and was entitled to a first class seat at Bangkok, which is astopover in the Saigon to Beirut leg of the flight. 27 We perceive

no "welter of distortions by the Court of Appeals of petitioner'sstatement of its position", as charged by petitioner. 28 Nor do wesubscribe to petitioner's accusation that respondent Carrascoso"surreptitiously took a first class seat to provoke an issue". 29 Andthis because, as petitioner states, Carrascoso went to see the

Manager at his office in Bangkok "to confirm my seat and becausefrom Saigon I was told again to see the Manager". 30 Why, then,was he allowed to take a first class seat in the plane at Bangkok, ifhe had no seat? Or, if another had a better right to the seat?

4. Petitioner assails respondent court's award of moral

damages. Petitioner's trenchant claim is that Carrascoso's actionis planted upon breach of contract; that to authorize an award for

moral damages there must be an averment of fraud or badfaith;31 and that the decision of the Court of Appeals fails tomake a finding of bad faith. The pivotal allegations in thecomplaint bearing on this issue are:

3. That ... plaintiff entered into a contract of air carriage with thePhilippine Air Lines for a valuable consideration, the latter actingas general agents for and in behalf of the defendant, under whichsaid contract, plaintiff was entitled to, as defendant agreed to


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furnish plaintiff, First Class passage on defendant's plane duringthe entire duration of plaintiff's tour of Europe with Hongkong as

starting point up to and until plaintiff's return trip to Manila, ... .

4. That, during the first two legs of the trip from Hongkong toSaigon and from Saigon to Bangkok, defendant furnished to theplaintiff First Class accommodation but only after protestations,

arguments and/or insistence were made by the plaintiff with

defendant's employees.

5. That finally, defendant failed to provide First Class passage, butinstead furnished plaintiff only Tourist Class accommodations

from Bangkok to Teheran and/or Casablanca, ... the plaintiff hasbeen compelled by defendant's employees to leave the First Classaccommodation berths at Bangkok after he was already seated.

6. That consequently, the plaintiff, desiring no repetition of theinconvenience and embarrassments brought by defendant'sbreach of contract was forced to take a Pan American WorldAirways plane on his return trip from Madrid to Manila.32

x x x x x x x x x

2. That likewise, as a result of defendant's failure to furnishFirst Class accommodations aforesaid, plaintiff sufferedinconveniences, embarrassments, and humiliations, therebycausing plaintiff mental anguish, serious anxiety, woundedfeelings, social humiliation, and the like injury, resulting in moraldamages in the amount of P30,000.00. 33

x x x x x x x x x

The foregoing, in our opinion, substantially aver: First, Thatthere was a contract to furnish plaintiff a first class passagecovering, amongst others, the Bangkok-Teheran leg; Second, Thatsaid contract was breached when petitioner failed to furnish firstclass transportation at Bangkok; and Third, that there was badfaith when petitioner's employee compelled Carrascoso to leavehis first class accommodation berth "after he was already, seated"

and to take a seat in the tourist class, by reason of which hesuffered inconvenience, embarrassments and humiliations,

thereby causing him mental anguish, serious anxiety, woundedfeelings and social humiliation, resulting in moral damages. It istrue that there is no specific mention of the term bad faith in the

complaint. But, the inference of bad faith is there, it may bedrawn from the facts and circumstances set forth therein. 34 Thecontract was averred to establish the relation between theparties. But the stress of the action is put on wrongful expulsion.

Quite apart from the foregoing is that (a) right the start ofthe trial, respondent's counsel placed petitioner on guard on whatCarrascoso intended to prove: That while sitting in the plane inBangkok, Carrascoso was ousted by petitioner's manager whogave his seat to a white man; 35 and (b) evidence of bad faith in

the fulfillment of the contract was presented without objection on

the part of the petitioner. It is, therefore, unnecessary to inquireas to whether or not there is sufficient averment in the complaint

to justify an award for moral damages. Deficiency in thecomplaint, if any, was cured by the evidence. An amendmentthereof to conform to the evidence is not even required. 36 Onthe question of bad faith, the Court of Appeals declared:

That the plaintiff was forced out of his seat in the first classcompartment of the plane belonging to the defendant Air Francewhile at Bangkok, and was transferred to the tourist class not onlywithout his consent but against his will, has been sufficiently

established by plaintiff in his testimony before the court,corroborated by the corresponding entry made by the purser of

the plane in his notebook which notation reads as follows:

"First-class passenger was forced to go to the tourist classagainst his will, and that the captain refused to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento,

who was a co-passenger. The captain of the plane who was askedby the manager of defendant company at Bangkok to interveneeven refused to do so. It is noteworthy that no one on behalf ofdefendant ever contradicted or denied this evidence for the

plaintiff. It could have been easy for defendant to present itsmanager at Bangkok to testify at the trial of the case, or yet tosecure his disposition; but defendant did neither. 37

The Court of appeals further stated

Neither is there evidence as to whether or not a priorreservation was made by the white man. Hence, if the employees

of the defendant at Bangkok sold a first-class ticket to him whenall the seats had already been taken, surely the plaintiff shouldnot have been picked out as the one to suffer the consequencesand to be subjected to the humiliation and indignity of beingejected from his seat in the presence of others. Instead ofexplaining to the white man the improvidence committed bydefendant's employees, the manager adopted the more drasticstep of ousting the plaintiff who was then safely ensconsced in h isrightful seat. We are strengthened in our belief that this probablywas what happened there, by the testimony of defendant'switness Rafael Altonaga who, when asked to explain the meaning

of the letters "O.K." appearing on the tickets of plaintiff, said "thatthe space is confirmed for first class. Likewise, Zenaida Faustino,another witness for defendant, who was the chief of theReservation Office of defendant, testified as follows:

"Q How does the person in the ticket-issuing office know whatreservation the passenger has arranged with you?

A They call us up by phone and ask for the confirmation." (t.s.n.,p. 247, June 19, 1959)

In this connection, we quote with approval what the trialJudge has said on this point:

Why did the, using the words of witness Ernesto G. Cuento,"white man" have a "better right" to the seat occupied by Mr.Carrascoso? The record is silent. The defendant airline did notprove "any better", nay, any right on the part of the "white man"

to the "First class" seat that the plaintiff was occupying and forwhich he paid and was issued a corresponding "first class" ticket.

If there was a justified reason for the action of thedefendant's Manager in Bangkok, the defendant could have easily

proven it by having taken the testimony of the said Manager by

deposition, but defendant did not do so; the presumption is thatevidence willfully suppressed would be adverse if produced [Sec.

69, par (e), Rules of Court]; and, under the circumstances, theCourt is constrained to find, as it does find, that the Manager ofthe defendant airline in Bangkok not merely asked but threatenedthe plaintiff to throw him out of the plane if he did not give up his"first class" seat because the said Manager wanted toaccommodate, using the words of the witness Ernesto G. Cuento,the "white man".38


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It is really correct to say that the Court of Appeals in thequoted portion first transcribed did not use the term "bad faith".

But can it be doubted that the recital of facts therein points tobad faith? The manager not only prevented Carrascoso from

enjoying his right to a first class seat; worse, he imposed hisarbitrary will; he forcibly ejected him from his seat, made himsuffer the humiliation of having to go to the tourist class

compartment - just to give way to another passenger whose right

thereto has not been established. Certainly, this is bad faith.Unless, of course, bad faith has assumed a meaning different fromwhat is understood in law. For, "bad faith" contemplates a "stateof mind affirmatively operating with furtive design or with some

motive of self-interest or will or for ulterior purpose." 39

And if the foregoing were not yet sufficient, there is theexpress finding of bad faith in the judgment of the Court of FirstInstance, thus:

The evidence shows that the defendant violated its contractof transportation with plaintiff in bad faith, with the aggravating

circumstances that defendant's Manager in Bangkok went to theextent of threatening the plaintiff in the presence of manypassengers to have him thrown out of the airplane to give the"first class" seat that he was occupying to, again using the wordsof the witness Ernesto G. Cuento, a "white man" whom he(defendant's Manager) wished to accommodate, and thedefendant has not proven that this "white man" had any "betterright" to occupy the "first class" seat that the plaintiff wasoccupying, duly paid for, and for which the corresponding "firstclass" ticket was issued by the defendant to him.40

5. The responsibility of an employer for the tortious act of itsemployees need not be essayed. It is well settled in law. 41 Forthe willful malevolent act of petitioner's manager, petitioner, hisemployer, must answer. Article 21 of the Civil Code says:

ART. 21. Any person who willfully causes loss or injury toanother in a manner that is contrary to morals, good customs orpublic policy shall compensate the latter for the damage.

In parallel circumstances, we applied the foregoing legal

precept; and, we held that upon the provisions of Article 2219(10), Civil Code, moral damages are recoverable. 42

6. A contract to transport passengers is quite different inkind and degree from any other contractual relation. 43 And this,because of the relation which an air-carrier sustains with thepublic. Its business is mainly with the travelling public. It invitespeople to avail of the comforts and advantages it offers. The

contract of air carriage, therefore, generates a relation attendedwith a public duty. Neglect or malfeasance of the carrier'semployees, naturally, could give ground for an action fordamages.

Passengers do not contract merely for transportation. They

have a right to be treated by the carrier's employees withkindness, respect, courtesy and due consideration. They are

entitled to be protected against personal misconduct, injuriouslanguage, indignities and abuses from such employees. So it is,that any rule or discourteous conduct on the part of employeestowards a passenger gives the latter an action for damagesagainst the carrier. 44

Thus, "Where a steamship company 45 had accepted apassenger's check, it was a breach of contract and a tort, giving aright of action for its agent in the presence of third persons to

falsely notify her that the check was worthless and demandpayment under threat of ejection, though the language used was

not insulting and she was not ejected." 46 And this, because,although the relation of passenger and carrier is "contractual both

in origin and nature" nevertheless "the act that breaks thecontract may be also a tort". 47 And in another case, "Where apassenger on a railroad train, when the conductor came to collect

his fare tendered him the cash fare to a point where the train was

scheduled not to stop, and told him that as soon as the trainreached such point he would pay the cash fare from that point todestination, there was nothing in the conduct of the passengerwhich justified the conductor in using insulting language to him,

as by calling him a lunatic," 48 and the Supreme Court of SouthCarolina there held the carrier liable for the mental suffering ofsaid passenger.1awphl.nt

Petitioner's contract with Carrascoso is one attended withpublic duty. The stress of Carrascoso's action as we have said, isplaced upon his wrongful expulsion. This is a violation of publicduty by the petitioner air carrier a case of quasi-delict.

Damages are proper.

7. Petitioner draws our attention to respondent Carrascoso'stestimony, thus

Q You mentioned about an attendant. Who is that attendant andpurser?

A When we left already that was already in the trip I couldnot help it. So one of the flight attendants approached me andrequested from me my ticket and I said, What for? and she said,

"We will note that you transferred to the tourist class". I said,"Nothing of that kind. That is tantamount to accepting mytransfer." And I also said, "You are not going to note anythingthere because I am protesting to this transfer".

Q Was she able to note it?

A No, because I did not give my ticket.

Q About that purser?

A Well, the seats there are so close that you feel uncomfortableand you don't have enough leg room, I stood up and I went to the

pantry that was next to me and the purser was there. He told me,"I have recorded the incident in my notebook." He read it andtranslated it to me because it was recorded in French "Firstclass passenger was forced to go to the tourist class against hiswill, and that the captain refused to intervene."

Mr. VALTE

I move to strike out the last part of the testimony of the witnessbecause the best evidence would be the notes. Your Honor.

COURT

I will allow that as part of his testimony. 49

Petitioner charges that the finding of the Court of Appealsthat the purser made an entry in his notebook reading "First classpassenger was forced to go to the tourist class against his will, andthat the captain refused to intervene" is predicated uponevidence [Carrascoso's testimony above] which is incompetent.We do not think so. The subject of inquiry is not the entry, but theouster incident. Testimony on the entry does not come within the


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proscription of the best evidence rule. Such testimony isadmissible. 49a

Besides, from a reading of the transcript just quoted, when

the dialogue happened, the impact of the startling occurrencewas still fresh and continued to be felt. The excitement had not asyet died down. Statements then, in this environment, are

admissible as part of the res gestae. 50 For, they grow "out of the

nervous excitement and mental and physical condition of thedeclarant". 51 The utterance of the purser regarding his entry inthe notebook was spontaneous, and related to the circumstancesof the ouster incident. Its trustworthiness has been guaranteed.

52 It thus escapes the operation of the hearsay rule. It forms partof the res gestae.

At all events, the entry was made outside the Philippines.And, by an employee of petitioner. It would have been an easymatter for petitioner to have contradicted Carrascoso'stestimony. If it were really true that no such entry was made, thedeposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony ofCarrascoso is admissible in evidence.

8. Exemplary damages are well awarded. The Civil Codegives the court ample power to grant exemplary damages incontracts and quasi- contracts. The only condition is thatdefendant should have "acted in a wanton, fraudulent, reckless,oppressive, or malevolent manner." 53 The manner of ejectmentof respondent Carrascoso from his first class seat fits into thislegal precept. And this, in addition to moral damages.54

9. The right to attorney's fees is fully established. The grantof exemplary damages justifies a similar judgment for attorneys'fees. The least that can be said is that the courts below felt that itis but just and equitable that attorneys' fees be given. 55 We donot intend to break faith with the tradition that discretion wellexercised as it was here should not be disturbed.

10. Questioned as excessive are the amounts decreed byboth the trial court and the Court of Appeals, thus: P25,000.00 as

moral damages; P10,000.00, by way of exemplary damages, andP3,000.00 as attorneys' fees. The task of fixing these amounts isprimarily with the trial court. 56 The Court of Appeals did not

interfere with the same. The dictates of good sense suggest thatwe give our imprimatur thereto. Because, the facts andcircumstances point to the reasonableness thereof.57

On balance, we say that the judgment of the Court of

Appeals does not suffer from reversible error. We accordinglyvote to affirm the same. Costs against petitioner. So ordered.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal,Zaldivar and Castro, JJ., concur.

Bengzon, J.P., J., took no part.

[G.R. No. 138060. September 1, 2004]

WILLIAM TIU, doing business under the name and style of DRough Riders, and VIRGILIO TE LAS PIAS petitioners, vs. PEDROA. ARRIESGADO, BENJAMIN CONDOR, SERGIO PEDRANO andPHILIPPINE PHOENIX SURETY AND INSURANCE, INC., respondents.D E C I S I O NCALLEJO, SR., J.:

This is a petition for review on certiorari under Rule 45 of theRules of Court from the Decision[1] of the Court of Appeals in CA-

G.R. CV No. 54354 affirming with modification the Decision[2] ofthe Regional Trial Court, 7th Judicial Region, Cebu City, Branch 20,

in Civil Case No. CEB-5963 for breach of contract of carriage,damages and attorneys fees, and the Resolution dated February26, 1999 denying the motion for reconsideration thereof.

The following facts are undisputed:

At about 10:00 p.m. of March 15, 1987, the cargo truck markedCondor Hollow Blocks and General Merchandise bearing plate

number GBP-675 was loaded with firewood in Bogo, Cebu and leftfor Cebu City. Upon reaching Sitio Aggies, Poblacion, Compostela,Cebu, just as the truck passed over a bridge, one of its rear tiresexploded. The driver, Sergio Pedrano, then parked along the rightside of the national highway and removed the damaged tire tohave it vulcanized at a nearby shop, about 700 meters away.[3]Pedrano left his helper, Jose Mitante, Jr. to keep watch over thestalled vehicle, and instructed the latter to place a spare tire six

fathoms away[4] behind the stalled truck to serve as a warning foroncoming vehicles. The trucks tail lights were also left on. It wasabout 12:00 a.m., March 16, 1987.

At about 4:45 a.m., D Rough Riders passenger bus with platenumber PBP-724 driven by Virgilio Te Laspias was cruising alongthe national highway of Sitio Aggies, Poblacion, Compostela,Cebu. The passenger bus was also bound for Cebu City, and hadcome from Maya, Daanbantayan, Cebu. Among its passengerswere the Spouses Pedro A. Arriesgado and Felisa PepitoArriesgado, who were seated at the right side of the bus, about

three (3) or four (4) places from the front seat.

As the bus was approaching the bridge, Laspias saw the stalledtruck, which was then about 25 meters away.[5] He applied thebreaks and tried to swerve to the left to avoid hitting the truck.But it was too late; the bus rammed into the trucks left rear. Theimpact damaged the right side of the bus and left severalpassengers injured. Pedro Arriesgado lost consciousness and

suffered a fracture in his right colles.[6] His wife, Felisa, wasbrought to the Danao City Hospital. She was later transferred to

the Southern Island Medical Center where she died shortlythereafter.[7]

Respondent Pedro A. Arriesgado then filed a complaint for breachof contract of carriage, damages and attorneys fees before theRegional Trial Court of Cebu City, Branch 20, against thepetitioners, D Rough Riders bus operator William Tiu and hisdriver, Virgilio Te Laspias on May 27, 1987. The respondent

alleged that the passenger bus in question was cruising at a fastand high speed along the national road, and that petitionerLaspias did not take precautionary measures to avoid theaccident.[8] Thus:

6. That the accident resulted to the death of the plaintiffs wife,

Felisa Pepito Arriesgado, as evidenced by a Certificate of Death, axerox copy of which is hereto attached as integral part hereof and

marked as ANNEXA, and physical injuries to several of itspassengers, including plaintiff himself who suffered a COLLESFRACTURE RIGHT, per Medical Certificate, a xerox copy of whichis hereto attached as integral part hereof and marked as ANNEX B hereof.

7. That due to the reckless and imprudent driving by defendantVirgilio Te Laspias of the said Rough Riders passenger bus,plaintiff and his wife, Felisa Pepito Arriesgado, failed to safely


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reach their destination which was Cebu City, the proximate causeof which was defendant-drivers failure to observe utmost

diligence required of a very cautious person under allcircumstances.

8. That defendant William Tiu, being the owner and operator ofthe said Rough Riders passenger bus which figured in the said

accident, wherein plaintiff and his wife were riding at the time of

the accident, is therefore directly liable for the breach of contractof carriage for his failure to transport plaintiff and his wife safelyto their place of destination which was Cebu City, and whichfailure in his obligation to transport safely his passengers was due

to and in consequence of his failure to exercise the diligence of agood father of the family in the selection and supervision of hisemployees, particularly defendant-driver Virgilio Te Laspias.[9]

The respondent prayed that judgment be rendered in his favorand that the petitioners be condemned to pay the followingdamages:

1). To pay to plaintiff, jointly and severally, the amount ofP30,000.00 for the death and untimely demise of plaintiffs wife,Felisa Pepito Arriesgado;

2). To pay to plaintiff, jointly and severally, the amount ofP38,441.50, representing actual expenses incurred by the plaintiffin connection with the death/burial of plaintiffs wife;

3). To pay to plaintiff, jointly and severally, the amount ofP1,113.80, representing medical/hospitalization expensesincurred by plaintiff for the injuries sustained by him;

4). To pay to plaintiff, jointly and severally, the amount ofP50,000.00 for moral damages;

5). To pay to plaintiff, jointly and severally, the amount ofP50,000.00 by way of exemplary damages;

6). To pay to plaintiff, jointly and severally, the amount of

P20,000.00 for attorneys fees;

7). To pay to plaintiff, jointly and severally, the amount ofP5,000.00 for litigation expenses.

PLAINTIFF FURTHER PRAYS FOR SUCH OTHER RELIEFS ANDREMEDIES IN LAW AND EQUITY.[10]

The petitioners, for their part, filed a Third-Party Complaint[11] onAugust 21, 1987 against the following: respondent Philippine

Phoenix Surety and Insurance, Inc. (PPSII), petitioner Tius insurer;respondent Benjamin Condor, the registered owner of the cargotruck; and respondent Sergio Pedrano, the driver of the truck.They alleged that petitioner Laspias was negotiating the uphillclimb along the national highway of Sitio Aggies, Poblacion,

Compostela, in a moderate and normal speed. It was further

alleged that the truck was parked in a slanted manner, its rearportion almost in the middle of the highway, and that no early

warning device was displayed. Petitioner Laspias promptlyapplied the brakes and swerved to the left to avoid hitting thetruck head-on, but despite his efforts to avoid damage to propertyand physical injuries on the passengers, the right side portion ofthe bus hit the cargo trucks left rear. The petitioners furtheralleged, thus:

5. That the cargo truck mentioned in the aforequoted paragraphis owned and registered in the name of the third-party defendant

Benjamin Condor and was left unattended by its driver SergioPedrano, one of the third-party defendants, at the time of the

incident;

6. That third-party defendant Sergio Pedrano, as driver of thecargo truck with marked (sic) Condor Hollow Blocks & GeneralMerchandise, with Plate No. GBP-675 which was recklessly and

imprudently parked along the national highway of Compostela,

Cebu during the vehicular accident in question, and third-partydefendant Benjamin Condor, as the registered owner of the cargotruck who failed to exercise due diligence in the selection andsupervision of third-party defendant Sergio Pedrano, are jointly

and severally liable to the third-party plaintiffs for whateverliability that may be adjudged against said third-party plaintiffs orare directly liable of (sic) the alleged death of plaintiffs wife;

7. That in addition to all that are stated above and in the answerwhich are intended to show reckless imprudence on the part ofthe third-party defendants, the third-party plaintiffs herebydeclare that during the vehicular accident in question, third-party

defendant was clearly violating Section 34, par. (g) of the LandTransportation and Traffic Code

10. That the aforesaid passenger bus, owned and operated bythird-party plaintiff William Tiu, is covered by a common carrierliability insurance with Certificate of Cover No. 054940 issued byPhilippine Phoenix Surety and Insurance, Inc., Cebu City Branch, infavor of third-party plaintiff William Tiu which covers the periodfrom July 22, 1986 to July 22, 1987 and that the said insurance

coverage was valid, binding and subsisting during the time of theaforementioned incident (Annex A as part hereof);

11. That after the aforesaid alleged incident, third-party plaintiffnotified third-party defendant Philippine Phoenix Surety andInsurance, Inc., of the alleged incident hereto mentioned, but tono avail;

12. That granting, et arguendo et arguendi, if herein third-partyplaintiffs will be adversely adjudged, they stand to pay damages

sought by the plaintiff and therefore could also look up to thePhilippine Phoenix Surety and Insurance, Inc., for contribution,indemnification and/or reimbursement of any liability or

obligation that they might [be] adjudged per insurance coverageduly entered into by and between third-party plaintiff William Tiuand third-party defendant Philippine Phoenix Surety andInsurance, Inc.;*12+

The respondent PPSII, for its part, admitted that it had an existingcontract with petitioner Tiu, but averred that it had alreadyattended to and settled the claims of those who were injuredduring the incident.[13] It could not accede to the claim ofrespondent Arriesgado, as such claim was way beyond the

scheduled indemnity as contained in the contract of insurance.

[14]

After the parties presented their respective evidence, the trialcourt ruled in favor of respondent Arriesgado. The dispositiveportion of the decision reads:

WHEREFORE, in view of the foregoing, judgment is herebyrendered in favor of plaintiff as against defendant William Tiuordering the latter to pay the plaintiff the following amounts:


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1 - The sum of FIFTY THOUSAND PESOS (P50,000.00) as moraldamages;

2 - The sum of FIFTY THOUSAND PESOS (P50,000.00) as exemplary

damages;

3 - The sum of THIRTY-EIGHT THOUSAND FOUR HUNDRED FORTY-

ONE PESOS (P38,441.00) as actual damages;

4 - The sum of TWENTY THOUSAND PESOS (P20,000.00) asattorneys fees;

5 - The sum of FIVE THOUSAND PESOS (P5,000.00) as costs of suit;

SO ORDERED.[15]

According to the trial court, there was no dispute that petitionerWilliam Tiu was engaged in business as a common carrier, in viewof his admission that D Rough Rider passenger bus which figuredin the accident was owned by him; that he had been engaged in

the transportation business for 25 years with a soleproprietorship; and that he owned 34 buses. The trial court ruledthat if petitioner Laspias had not been driving at a fast pace, hecould have easily swerved to the left to avoid hitting the truck,thus, averting the unfortunate incident. It then concluded thatpetitioner Laspias was negligent.

The trial court also ruled that the absence of an early warningdevice near the place where the truck was parked was notsufficient to impute negligence on the part of respondentPedrano, since the tail lights of the truck were fully on, and the

vicinity was well lighted by street lamps.[16] It also found that thetestimony of petitioner Tiu, that he based the selection of hisdriver Laspias on efficiency and in-service training, and that thelatter had been so far an efficient and good driver for the past sixyears of his employment, was insufficient to prove that heobserved the diligence of a good father of a family in the selectionand supervision of his employees.

After the petitioners motion for reconsideration of the saiddecision was denied, the petitioners elevated the case to the

Court of Appeals on the following issues:

I WHETHER THIRD PARTY DEFENDANT SERGIO PEDRANO WAS

RECKLESS AND IMPRUDENT WHEN HE PARKED THE CARGO TRUCKIN AN OBLIQUE MANNER;

II WHETHER THE THIRD PARTY DEFENDANTS ARE JOINTLY ANDSEVERALLY LIABLE DIRECTLY TO PLAINTIFF-APPELLEE OR TO

DEFENDANTS-APPELLANTS FOR WHATEVER LIABILITY THAT MAYBE ADJUDGED TO THE SAID DEFENDANTS-APPELLANTS;

III WHETHER DEFENDANT-APPELLANT VIRGILIO TE LASPIASWAS GUILTY OF GROSS NEGLIGENCE;

IV WHETHER DEFENDANT-APPELLANT WILLIAM TIU HADEXERCISED THE DUE DILIGENCE OF A GOOD FATHER OF A FAMILY

IN THE SELECTION AND SUPERVISION OF HIS DRIVERS;

V GRANTING FOR THE SAKE OF ARGUMENT THAT DEFENDANT-APPELLANT WILLIAM TIU IS LIABLE TO PLAINTIFF-APPELLEE,WHETHER THERE IS LEGAL AND FACTUAL BASIS IN AWARDINGEXCESSIVE MORAL DAMAGES, EX[E]MPLARY DAMAGES,ATTORNEYS FEES AND LITIGATION EXPENSES TO PLAINTIFF-APPELLEE;

VI WHETHER THIRD PARTY DEFENDANT PHILIPPINE PHOENIXSURETY AND INSURANCE, INC. IS LIABLE TO DEFENDANT-

APPELLANT WILLIAM TIU.[17]

The appellate court rendered judgment affirming the trial courtsdecision with the modification that the awards for moral andexemplary damages were reduced to P25,000. The dispositive

portion reads:

WHEREFORE, the appealed Decision dated November 6, 1995 ishereby MODIFIED such that the awards for moral and exemplarydamages are each reduced to P25,000.00 or a total of P50,000.00

for both. The judgment is AFFIRMED in all other respects.

SO ORDERED.[18]

According to the appellate court, the action of respondentArriesgado was based not on quasi-delict but on breach ofcontract of carriage. As a common carrier, it was incumbent uponpetitioner Tiu to prove that extraordinary diligence was observed

in ensuring the safety of passengers during transportation. Sincethe latter failed to do so, he should be held liable for respondentArriesgados claim. The CA also ruled that no evidence waspresented against the respondent PPSII, and as such, it could notbe held liable for respondent Arriesgados claim, nor forcontribution, indemnification and/or reimbursement in case thepetitioners were adjudged liable.

The petitioners now come to this Court and ascribe the followingerrors committed by the appellate court:

I. THE HONORABLE COURT OF APPEALS ERRED IN NOT DECLARINGRESPONDENTS BENJAMIN CONDOR AND SERGIO PEDRANOGUILTY OF NEGLIGENCE AND HENCE, LIABLE TO RESPONDENTPEDRO A. ARRIESGADO OR TO PETITIONERS FOR WHATEVERLIABILITY THAT MAY BE ADJUDGED AGAINST THEM.

II. THE HONORABLE COURT OF APPEALS ERRED IN FINDINGPETITIONERS GUILTY OF NEGLIGENCE AND HENCE, LIABLE TO

RESPONDENT PEDRO A. ARRIESGADO.

III. THE HONORABLE COURT OF APPEALS ERRED IN FINDINGPETITIONER WILLIAM TIU LIABLE FOR EXEMPLARY DAMAGES,ATTORNEYS FEES AND LITIGATION EXPENSES.

IV.THE HONORABLE COURT OF APPEALS ERRED IN NOT FINDINGRESPONDENT PHILIPPINE PHOENIX SURETY AND INSURANCE, INC.LIABLE TO RESPONDENT PEDRO A. ARRIESGADO OR TOPETITIONER WILLIAM TIU.[19]

According to the petitioners, the appellate court erred in failing toappreciate the absence of an early warning device and/or built-inreflectors at the front and back of the cargo truck, in clearviolation of Section 34, par. (g) of the Land Transportation and

Traffic Code. They aver that such violation is only a proof of

respondent Pedranos negligence, as provided under Article 2185of the New Civil Code. They also question the appellate courts

failure to take into account that the truck was parked in anoblique manner, its rear portion almost at the center of the road.As such, the proximate cause of the incident was the grossrecklessness and imprudence of respondent Pedrano, creating thepresumption of negligence on the part of respondent Condor insupervising his employees, which presumption was not rebutted.The petitioners then contend that respondents Condor andPedrano should be held jointly and severally liable to respondentArriesgado for the payment of the latters claim.


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The petitioners, likewise, aver that expert evidence should have

been presented to prove that petitioner Laspias was driving at avery fast speed, and that the CA could not reach such conclusion

by merely considering the damages on the cargo truck. It was alsopointed out that petitioner Tiu presented evidence that he hadexercised the diligence of a good father of a family in the selection

and supervision of his drivers.

The petitioners further allege that there is no legal and factualbasis to require petitioner Tiu to pay exemplary damages as noevidence was presented to show that the latter acted in a

fraudulent, reckless and oppressive manner, or that he had anactive participation in the negligent act of petitioner Laspias.

Finally, the petitioners contend that respondent PPSII admitted inits answer that while it had attended to and settled the claims ofthe other injured passengers, respondent Arriesgados claimremained unsettled as it was beyond the scheduled indemnityunder the insurance contract. The petitioners argue that said

respondent PPSII should have settled the said claim in accordancewith the scheduled indemnity instead of just denying the same.

On the other hand, respondent Arriesgado argues that two of theissues raised by the petitioners involved questions of fact, notreviewable by the Supreme Court: the finding of negligence onthe part of the petitioners and their liability to him; and the awardof exemplary damages, attorneys fees and litigation expenses inhis favor. Invoking the principle of equity and justice, respondentArriesgado pointed out that if there was an error to be reviewedin the CA decision, it should be geared towards the restoration of

the moral and exemplary damages to P50,000 each, or a total ofP100,000 which was reduced by the Court of Appeals to P25,000each, or a total of only P50,000.

Respondent Arriesgado also alleged that respondents Condor andPedrano, and respondent Phoenix Surety, are parties with whomhe had no contract of carriage, and had no cause of actionagainst. It was pointed out that only the petitioners needed to be

sued, as driver and operator of the ill-fated bus, on account oftheir failure to bring the Arriesgado Spouses to their place of

destination as agreed upon in the contract of carriage, using theutmost diligence of very cautious persons with due regard for allcircumstances.

Respondents Condor and Pedrano point out that, as correctlyruled by the Court of Appeals, the proximate cause of theunfortunate incident was the fast speed at which petitionerLaspias was driving the bus owned by petitioner Tiu. According

to the respondents, the allegation that the truck was notequipped with an early warning device could not in any way haveprevented the incident from happening. It was also pointed outthat respondent Condor had always exercised the due diligencerequired in the selection and supervision of his employees, and

that he was not a party to the contract of carriage between the

petitioners and respondent Arriesgado.

Respondent PPSII, for its part, alleges that contrary to theallegation of petitioner Tiu, it settled all the claims of thoseinjured in accordance with the insurance contract. It further aversthat it did not deny respondent Arriesgados claim, andemphasizes that its liability should be within the scheduled limitsof indemnity under the said contract. The respondent concludesthat while it is true that insurance contracts are contracts ofindemnity, the measure of the insurers liability is determined bythe insureds compliance with the terms thereof.

The Courts Ruling

At the outset, it must be stressed that this Court is not a trier of

facts.[20] Factual findings of the Court of Appeals are final andmay not be reviewed on appeal by this Court, except when thelower court and the CA arrived at diverse factual findings.[21] The

petitioners in this case assail the finding of both the trial and the

appellate courts that petitioner Laspias was driving at a very fastspeed before the bus owned by petitioner Tiu collided withrespondent Condors stalled truck. This is clearly one of fact, notreviewable by the Court in a petition for review under Rule

45.[22]

On this ground alone, the petition is destined to fail.

However, considering that novel questions of law are likewiseinvolved, the Court resolves to examine and rule on the merits ofthe case.

Petitioner LaspiasWas negligent in drivingThe Ill-fated bus

In his testimony before the trial court, petitioner Laspias claimedthat he was traversing the two-lane road at Compostela, Cebu at aspeed of only forty (40) to fifty (50) kilometers per hour beforethe incident occurred.[23] He also admitted that he saw the truckwhich was parked in an oblique position at about 25 metersbefore impact,[24] and tried to avoid hitting it by swerving to theleft. However, even in the absence of expert evidence, the

damage sustained by the truck[25] itself supports the finding ofboth the trial court and the appellate court, that the D RoughRider bus driven by petitioner Laspias was traveling at a fastpace. Since he saw the stalled truck at a distance of 25 meters,petitioner Laspias had more than enough time to swerve to hisleft to avoid hitting it; that is, if the speed of the bus was only 40to 50 kilometers per hour as he claimed. As found by the Court ofAppeals, it is easier to believe that petitioner Laspias was driving

at a very fast speed, since at 4:45 a.m., the hour of the accident,there were no oncoming vehicles at the opposite direction.

Petitioner Laspias could have swerved to the left lane withproper clearance, and, thus, could have avoided the truck.[26]Instinct, at the very least, would have prompted him to apply the

breaks to avert the impending disaster which he must haveforeseen when he caught sight of the stalled truck. As we hadoccasion to reiterate:

A man must use common sense, and exercise due reflection in all

his acts; it is his duty to be cautious, careful and prudent, if notfrom instinct, then through fear of recurring punishment. He isresponsible for such results as anyone might foresee and for actswhich no one would have performed except through culpableabandon. Otherwise, his own person, rights and property, and

those of his fellow beings, would ever be exposed to all manner of

danger and injury.[27]

We agree with the following findings of the trial court, which wereaffirmed by the CA on appeal:

A close study and evaluation of the testimonies and thedocumentary proofs submitted by the parties which have directbearing on the issue of negligence, this Court as shown bypreponderance of evidence that defendant Virgilio Te Laspiasfailed to observe extraordinary diligence as a driver of thecommon carrier in this case. It is quite hard to accept his version


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of the incident that he did not see at a reasonable distance aheadthe cargo truck that was parked when the Rough Rider [Bus] just

came out of the bridge which is on an (sic) [more] elevatedposition than the place where the cargo truck was parked. With

its headlights fully on, defendant driver of the Rough Rider was ina vantage position to see the cargo truck ahead which was parkedand he could just easily have avoided hitting and bumping the

same by maneuvering to the left without hitting the said cargo

truck. Besides, it is (sic) shown that there was still much room orspace for the Rough Rider to pass at the left lane of the saidnational highway even if the cargo truck had occupied the entireright lane thereof. It is not true that if the Rough Rider would

proceed to pass through the left lane it would fall into a canalconsidering that there was much space for it to pass withouthitting and bumping the cargo truck at the left lane of saidnational highway. The records, further, showed that there was noincoming vehicle at the opposite lane of the national highwaywhich would have prevented the Rough Rider from not swervingto its left in order to avoid hitting and bumping the parked cargotruck. But the evidence showed that the Rough Rider instead of

swerving to the still spacious left lane of the national highwayplowed directly into the parked cargo truck hitting the latter at itsrear portion; and thus, the (sic) causing damages not only toherein plaintiff but to the cargo truck as well.[28]

Indeed, petitioner Laspias negligence in driving the bus isapparent in the records. By his own admission, he had just passeda bridge and was traversing the highway of Compostela, Cebu at aspeed of 40 to 50 kilometers per hour before the collisionoccurred. The maximum speed allowed by law on a bridge is only30 kilometers per hour.[29] And, as correctly pointed out by the

trial court, petitioner Laspias also violated Section 35 of the LandTransportation and Traffic Code, Republic Act No. 4136, asamended:

Sec. 35. Restriction as to speed. (a) Any person driving a motorvehicle on a highway shall drive the same at a careful and prudentspeed, not greater nor less than is reasonable and proper, havingdue regard for the traffic, the width of the highway, and or any

other condition then and there existing; and no person shall driveany motor vehicle upon a highway at such speed as to endanger

the life, limb and property of any person, nor at a speed greaterthan will permit him to bring the vehicle to a stop within theassured clear distance ahead.[30]

Under Article 2185 of the Civil Code, a person driving a vehicle ispresumed negligent if at the time of the mishap, he was violatingany traffic regulation.[31]

Petitioner Tiu failed toOvercome the presumptionOf negligence against him asOne engaged in the businessOf common carriage

The rules which common carriers should observe as to the safetyof their passengers are set forth in the Civil Code, Articles

1733,[32] 1755[33] and 1756.[34] In this case, respondentArriesgado and his deceased wife contracted with petitioner Tiu,as owner and operator of D Rough Riders bus service, fortransportation from Maya, Daanbantayan, Cebu, to Cebu City forthe price of P18.00.[35] It is undisputed that the respondent andhis wife were not safely transported to the destination agreedupon. In actions for breach of contract, only the existence of suchcontract, and the fact that the obligor, in this case the commoncarrier, failed to transport his passenger safely to his destination

are the matters that need to be proved.[36] This is because underthe said contract of carriage, the petitioners assumed the express

obligation to transport the respondent and his wife to theirdestination safely and to observe extraordinary diligence with due

regard for all circumstances.[37] Any injury suffered by thepassengers in the course thereof is immediately attributable tothe negligence of the carrier.[38] Upon the happening of the

accident, the presumption of negligence at once arises, and it

becomes the duty of a common carrier to prove that he observedextraordinary diligence in the care of his passengers.[39] It mustbe stressed that in requiring the highest possible degree ofdiligence from common carriers and in creating a presumption of

negligence against them, the law compels them to curb therecklessness of their drivers.[40]

While evidence may be submitted to overcome such presumptionof negligence, it must be shown that the carrier observed therequired extraordinary diligence, which means that the carriermust show the utmost diligence of very cautious persons as far ashuman care and foresight can provide, or that the accident was

caused by fortuitous event.[41] As correctly found by the trialcourt, petitioner Tiu failed to conclusively rebut suchpresumption. The negligence of petitioner Laspias as driver ofthe passenger bus is, thus, binding against petitioner Tiu, as theowner of the passenger bus engaged as a common carrier.[42]

The Doctrine ofLast Clear ChanceIs Inapplicable in theCase at Bar

Contrary to the petitioners contention, the principle of last clearchance is inapplicable in the instant case, as it only applies in asuit between the owners and drivers of two colliding vehicles. Itdoes not arise where a passenger demands responsibility fromthe carrier to enforce its contractual obligations, for it would beinequitable to exempt the negligent driver and its owner on theground that the other driver was likewise guilty of negligence.[43]The common law notion of last clear chance permitted courts to

grant recovery to a plaintiff who has also been negligent providedthat the defendant had the last clear chance to avoid the casualty

and failed to do so. Accordingly, it is difficult to see what role, ifany, the common law of last clear chance doctrine has to play in ajurisdiction where the common law concept of contributory

negligence as an absolute bar to recovery by the plaintiff, hasitself been rejected, as it has been in Article 2179 of the CivilCode.[44]

Thus, petitioner Tiu cannot escape liability for the death of

respondent Arriesgados wife due to the negligence of petitionerLaspias, his employee, on this score.

Respondents Pedrano andCondor were likewise

Negligent

In Phoenix Construction, Inc. v. Intermediate Appellate Court,[45]

where therein respondent Dionisio sustained injuries when hisvehicle rammed against a dump truck parked askew, the Courtruled that the improper parking of a dump truck without anywarning lights or reflector devices created an unreasonable riskfor anyone driving within the vicinity, and for having created suchrisk, the truck driver must be held responsible. In ruling againstthe petitioner therein, the Court elucidated, thus:


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In our view, Dionisios negligence, although later in point oftime than the truck drivers negligence, and therefore closer to

the accident, was not an efficient intervening or independentcause. What the petitioners describe as an intervening cause

was no more than a foreseeable consequence of the risk createdby the negligent manner in which the truck driver had parked thedump truck. In other words, the petitioner truck driver owed a

duty to private respondent Dionisio and others similarly situated

not to impose upon them the very risk the truck driver hadcreated. Dionisios negligence was not that of an independent andoverpowering nature as to cut, as it were, the chain of causationin fact between the improper parking of the dump truck and the

accident, nor to sever the juris vinculum of liability.

We hold that private respondent Dionisios negligence was onlycontributory, that the immediate and proximate cause of theinjury remained the truck drivers lack of due care.*46+

In this case, both the trial and the appellate courts failed toconsider that respondent Pedrano was also negligent in leavingthe truck parked askew without any warning lights or reflectordevices to alert oncoming vehicles, and that such failure createdthe presumption of negligence on the part of his employer,respondent Condor, in supervising his employees properly andadequately. As we ruled in Poblete v. Fabros:[47]

It is such a firmly established principle, as to have virtually formedpart of the law itself, that the negligence of the employee givesrise to the presumption of negligence on the part of the

employer. This is the presumed negligence in the selection andsupervision of employee. The theory of presumed negligence, incontrast with the American doctrine of respondeat superior,where the negligence of the employee is conclusively presumedto be the negligence of the employer, is clearly deducible fromthe last paragraph of Article 2180 of the Civil Code which providesthat the responsibility therein mentioned shall cease if theemployers prove that they observed all the diligence of a good

father of a family to prevent damages. *48+

The petitioners were correct in invoking respondent Pedranosfailure to observe Article IV, Section 34(g) of the Rep. Act No.4136, which provides:

(g) Lights when parked or disabled. Appropriate parking lightsor flares visible one hundred meters away shall be displayed at acorner of the vehicle whenever such vehicle is parked onhighways or in places that are not well-lighted or is placed in such

manner as to endanger passing traffic.

The manner in which the truck was parked clearly endangeredoncoming traffic on both sides, considering that the tire blowoutwhich stalled the truck in the first place occurred in the wee hours

of the morning. The Court can only now surmise that the

unfortunate incident could have been averted had respondentCondor, the owner of the truck, equipped the said vehicle with

lights, flares, or, at the very least, an early warning device.[49]Hence, we cannot subscribe to respondents Condor andPedranos claim that they should be absolved from liabilitybecause, as found by the trial and appellate courts, the proximatecause of the collision was the fast speed at which petitionerLaspias drove the bus. To accept this proposition would be tocome too close to wiping out the fundamental principle of lawthat a man must respond for the foreseeable consequences of hisown negligent act or omission. Indeed, our law on quasi-delicts

seeks to reduce the risks and burdens of living in society and toallocate them among its members. To accept this proposition

would be to weaken the very bonds of society.[50]

The Liability ofRespondent PPSIIas Insurer

The trial court in this case did not rule on the liability ofrespondent PPSII, while the appellate court ruled that, as noevidence was presented against it, the insurance company is notliable.

A perusal of the records will show that when the petitioners filedthe Third-Party Complaint against respondent PPSII, they failed toattach a copy of the terms of the insurance contract itself. OnlyCertificate of Cover No. 054940*51+ issued in favor of Mr. WilliamTiu, Lahug, Cebu City signed by Cosme H. Boniel was appendedto the third-party complaint. The date of issuance, July 22, 1986,the period of insurance, from July 22, 1986 to July 22, 1987, as

well as the following items, were also indicated therein:

SCHEDULED VEHICLE

MODEL

MAKE

TYPE OF BODY

COLOR

BLT FILE NO.

Isuzu Forward

Bus

blue mixed

PLATE NO. PBP-724

SERIAL/CHASSIS NO. SER450-1584124

MOTOR NO. 677836

AUTHORIZED CAPACITY 50

UNLADEN WEIGHT 6Cyls. Kgs.

SECTION 1/11

*LIMITS OF LIABILITY P50,000.00

PREMIUMS PAID

A. THIRD PARTY LIABILITY

B. PASSENGER LIABILITY

Per Person P12,000.00


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Per Accident P50,000

P540.0052

In its Answer53 to the Third-Party Complaint, the respondentPPSII admitted the existence of the contract of insurance, in viewof its failure to specifically deny the same as required under then

Section 8(a), Rule 8 of the Rules of Court,54 which reads:

Sec. 8. How to contest genuineness of such documents. When anaction or defense is founded upon a written instrument copied inor attached to the corresponding pleading as provided in the

preceding section, the genuineness and due execution of theinstrument shall be deemed admitted unless the adverse party,under oath, specifically denies them, and sets forth what heclaims to be the facts; but the requirement of an oath does notapply when the adverse party does not appear to be a party tothe instrument or when compliance with an order for inspectionof the original instrument is refused.

In fact, respondent PPSII did not dispute the existence of suchcontract, and admitted that it was liable thereon. It claimed,however, that it had attended to and settled the claims of thoseinjured during the incident, and set up the following as specialaffirmative defenses:

Third party defendant Philippine Phoenix Surety and Insurance,Inc. hereby reiterates and incorporates by way of reference thepreceding paragraphs and further states THAT:-

8. It has attended to the claims of Vincent Canales, Asuncion

Batiancila and Neptali Palces who sustained injuries during theincident in question. In fact, it settled financially their claims pervouchers duly signed by them and they duly executed Affidavit[s]of Desistance to that effect, xerox copies of which are heretoattached as Annexes 1, 2, 3, 4, 5, and 6 respectively;

9. With respect to the claim of plaintiff, herein answering thirdparty defendant through its authorized insurance adjuster

attended to said claim. In fact, there were negotiations to thateffect. Only that it cannot accede to the demand of said claimant

considering that the claim was way beyond the scheduledindemnity as per contract entered into with third party plaintiffWilliam Tiu and third party defendant (Philippine Phoenix Surety

and Insurance, Inc.). Third party Plaintiff William Tiu knew allalong the limitation as earlier stated, he being an old hand in thetransportation business; 55

Considering the admissions made by respondent PPSII, the

existence of the insurance contract and the salient terms thereofcannot be dispatched. It must be noted that after filing its answer,respondent PPSII no longer objected to the presentation ofevidence by respondent Arriesgado and the insured petitionerTiu. Even in its Memorandum56 before the Court, respondent

PPSII admitted the existence of the contract, but averred as

follows:

Petitioner Tiu is insisting that PPSII is liable to him forcontribution, indemnification and/or reimbursement. This has nobasis under the contract. Under the contract, PPSII will pay allsums necessary to discharge liability of the insured subject to thelimits of liability but not to exceed the limits of liability as sostated in the contract. Also, it is stated in the contract that in theevent of accident involving indemnity to more than one person,the limits of liability shall not exceed the aggregate amount sospecified by law to all persons to be indemnified.57

As can be gleaned from the Certificate of Cover, such insurance

contract was issued pursuant to the Compulsory Motor VehicleLiability Insurance Law. It was expressly provided therein that the

limit of the insurers liability for each person was P12,000, whilethe limit per accident was pegged at P50,000. An insurer in anindemnity contract for third party liability is directly liable to the

injured party up to the extent specified in the agreement but it

cannot be held solidarily liable beyond that amount.58 Therespondent PPSII could not then just deny petitioner Tius claim; itshould have paid P12,000 for the death of Felisa Arriesgado,59and respondent Arriesgados hospitalization expenses of

P1,113.80, which the trial court found to have been dulysupported by receipts. The total amount of the claims, even whenadded to that of the other injured passengers which therespondent PPSII claimed to have settled,60 would not exceed theP50,000 limit under the insurance agreement.

Indeed, the nature of Compulsory Motor Vehicle LiabilityInsurance is such that it is primarily intended to provide

compensation for the death or bodily injuries suffered byinnocent third parties or passengers as a result of the negligentoperation and use of motor vehicles. The victims and/or theirdependents are assured of immediate financial assistance,regardless of the financial capacity of motor vehicle owners.61 Asthe Court, speaking through Associate Justice Leonardo A.Quisumbing, explained in Government Service Insurance Systemv. Court of Appeals:62

However, although the victim may proceed directly against theinsurer for indemnity, the third party liability is only up to the

extent of the insurance policy and those required by law. While itis true that where the insurance contract provides for indemnityagainst liability to third persons, and such persons can directly suethe insurer, the direct liability of the insurer under indemnitycontracts against third party liability does not mean that theinsurer can be held liable in solidum with the insured and/or theother parties found at fault. For the liability of the insurer is basedon contract; that of the insured carrier or vehicle owner is based

on tort.

Obviously, the insurer could be held liable only up to the extent ofwhat was provided for by the contract of insurance, in accordancewith the CMVLI law. At the time of the incident, the schedule of

indemnities for death and bodily injuries, professional fees andother charges payable under a CMVLI coverage was provided forunder the Insurance Memorandum Circular (IMC) No. 5-78 whichwas approved on November 10, 1978. As therein provided, themaximum indemnity for death was twelve thousand (P12,000.00)

pesos per victim. The schedules for medical expenses were alsoprovided by said IMC, specifically in paragraphs (C) to (G).63

Damages to beAwarded

The trial court correctly awarded moral damages in the amount ofP50,000 in favor of respondent Arriesgado. The award of

exemplary damages by way of example or correction of the publicgood,64 is likewise in order. As the Court ratiocinated inKapalaran Bus Line v. Coronado:65

While the immediate beneficiaries of the standard ofextraordinary diligence are, of course, the passengers and ownersof cargo carried by a common carrier, they are not the onlypersons that the law seeks to benefit. For if common carrierscarefully observed the statutory standard of extraordinary


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diligence in respect of their own passengers, they cannot help butsimultaneously benefit pedestrians and the passengers of other

vehicles who are equally entitled to the safe and convenient useof our roads and highways. The law seeks to stop and prevent the

slaughter and maiming of people (whether passengers or not) onour highways and buses, the very size and power of which seemto inflame the minds of their drivers. Article 2231 of the Civil Code

explicitly authorizes the imposition of exemplary damages in cases

of quasi-delicts if the defendant acted with grossnegligence.66

The respondent Pedro A. Arriesgado, as the surviving spouse and

heir of Felisa Arriesgado, is entitled to indemnity in the amount ofP50,000.00.67

The petitioners, as well as the respondents Benjamin Condor andSergio Pedrano are jointly and severally liable for said amount,conformably with the following pronouncement of the Court inFabre, Jr. vs. Court of Appeals:68

The same rule of liability was applied in situations where thenegligence of the driver of the bus on which plaintiff was ridingconcurred with the negligence of a third party who was the driverof another vehicle, thus causing an accident. In Anuran v. Buo,Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate Court,and Metro Manila Transit Corporation v. Court of Appeals, the buscompany, its driver, the operator of the other vehicle and thedriver of the vehicle were jointly and severally held liable to theinjured passenger or the latters heirs. The basis of this allocationof liability was explained in Viluan v. Court of Appeals, thus:

Nor should it make difference that the liability of petitioner *busowner] springs from contract while that of respondents [ownerand driver of other vehicle] arises from quasi-delict. As early as1913, we already ruled in Gutierrez vs. Gutierrez, 56 Phil. 177,that in case of injury to a passenger due to the negligence of thedriver of the bus on which he was riding and of the driver ofanother vehicle, the drivers as well as the owners of the twovehicles are jointly and severally liable for damages. Some

members of the Court, though, are of the view that under thecircumstances they are liable on quasi-delict.69

IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLYGRANTED. The Decision of the Court of Appeals is AFFIRMED with

MODIFICATIONS:

(1) Respondent Philippine Phoenix Surety and Insurance, Inc. andpetitioner William Tiu are ORDERED to pay, jointly and severally,respondent Pedro A. Arriesgado the total amount of P13,113.80;

(2) The petitioners and the respondents Benjamin Condor andSergio Pedrano are ORDERED to pay, jointly and severally,respondent Pedro A. Arriesgado P50,000.00 as indemnity;P26,441.50 as actual damages; P50,000.00 as moral damages;

P50,000.00 as exemplary damages; and P20,000.00 as attorneys

fees.

SO ORDERED.

Austria-Martinez, (Acting Chairman), Tinga, and Chico-Nazario, JJ.,concur.Puno J., (Chairman), on official leave

Republic of the PhilippinesSUPREME COURTManila

FIRST DIVISION

G.R. No. 153563 February 07, 2005

NATIONAL TRUCKING AND FORWARDING CORPORATION,petitioner,

vs.

LORENZO SHIPPING CORPORATION, Respondent.

D E C I S I O N

QUISUMBING, J.:

For review on certiorari are the Decision1 dated January 16, 2002,of the Court of Appeals, in CA-G.R. CV No. 48349, and itsResolution,2 of May 13, 2002, denying the motion forreconsideration of herein petitioner National Trucking andForwarding Corporation (NTFC). The impugned decision affirmedin toto the judgment3 dated November 14, 1994 of the Regional

Trial Court (RTC) of Manila, Branch 53, in Civil Case No. 90-52102.

The undisputed facts, as summarized by the appellate court, areas follows:

On June 5, 1987, the Republic of the Philippines, through theDepartment of Health (DOH), and the Cooperative for AmericanRelief Everywhere, Inc. (CARE) signed an agreement wherein CAREwould acquire from the United States government donations ofnon-fat dried milk and other food products from January 1, 1987to December 31, 1989. In turn, the Philippines would transport

and distribute the donated commodities to the intendedbeneficiaries in the country.

The government entered into a contract of carriage of goods withherein petitioner National Trucking and Forwarding Corporation(NTFC). Thus, the latter shipped 4,868 bags of non-fat dried milkthrough herein respondent Lorenzo Shipping Corporation (LSC)from September to December 1988. The consignee named in the

bills of lading issued by the respondent was Abdurahman Jama,petitioners branch supervisor in Zamboanga City.

On reaching the port of Zamboanga City, respondents agent,Efren Ruste4 Shipping Agency, unloaded the 4,868 bags of non-fat

dried milk and delivered the goods to petitioners warehouse.Before each delivery, Rogelio Rizada and Ismael Zamora, bothdelivery checkers of Efren Ruste Shipping Agency, requestedAbdurahman to surrender the original bills of lading, but the lattermerely presented certified true copies thereof. Upon completion

of each delivery, Rogelio and Ismael asked Abdurahman to signthe delivery receipts. However, at times when Abdurahman hadto attend to other business before a delivery was completed, heinstructed his subordinates to sign the delivery receipts for him.

Notwithstanding the precautions taken, the petitioner allegedly

did not receive the subject goods. Thus, in a letter dated March11, 1989, petitioner NTFC filed a formal claim for non-delivery of

the goods shipped through respondent.

In its letter of April 26, 1989, the respondent explained that thecargo had already been delivered to Abdurahman Jama. Thepetitioner then decided to investigate the loss of the goods. Butbefore the investigation was over, Abdurahman Jama resigned asbranch supervisor of petitioner.


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Noting but disbelieving respondents insistence that the goodswere delivered, the government through the DOH, CARE, and

NTFC as plaintiffs filed an action for breach of contract of carriage,against respondent as defendant, with the RTC of Manila.

After trial, the RTC resolved the case as follows:

WHEREFORE, judgment is hereby rendered in favor of the

defendant and against the plaintiffs, dismissing the latterscomplaint, and ordering the plaintiffs, pursuant to thedefendants counterclaim, to pay, jointly and solidarily, to thedefendant, actual damages in the amount of P50,000.00, and

attorneys fees in the amount of P70,000.00, plus the costs of suit.

SO ORDERED.5

Dissatisfied with the foregoing ruling, herein petitioner appealedto the Court of Appeals. It faulted the lower court for not holdingthat respondent failed to deliver the cargo, and that respondentfailed to exercise the extraordinary diligence required of common

carriers. Petitioner also assailed the lower court for denying itsclaims for actual, moral, and exemplary damages, and forawarding actual damages and attorneys fees to the respondent.6

The Court of Appeals found that the trial court did not commitany reversible error. It dismissed the appeal, and affirmed theassailed decision in toto.

Undaunted, petitioner now comes to us, assigning the followingerrors:

I

THE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TOAPPRECIATE AND APPLY THE LEGAL STANDARD OFEXTRAORDINARY DILIGENCE IN THE SHIPMENT AND DELIVERY OFGOODS TO THE RESPONDENT AS A COMMON CARRIER, AS WELLAS THE ACCOMPANYING LEGAL PRESUMPTION OF FAULT ORNEGLIGENCE ON THE PART OF THE COMMON CARRIER, IF THE

GOODS ARE LOST, DESTROYED OR DETERIORATED, AS REQUIREDUNDER THE CIVIL CODE.

II

THE COURT OF APPEALS GRAVELY ERRED WHEN IT SUSTAINEDTHE BASELESS AND ARBITRARY AWARD OF ACTUAL DAMAGESAND ATTORNEYS FEES INASMUCH AS THE ORIGINAL COMPLAINTWAS FILED IN GOOD FAITH, WITHOUT MALICE AND WITH THEBEST INTENTION OF PROTECTING THE INTEREST AND INTEGRITY

OF THE GOVERNMENT AND ITS CREDIBILITY AND RELATIONSHIPWITH INTERNATIONAL RELIEF AGENCIES AND DONOR STATESAND ORGANIZATION.7

The issues for our resolution are: (1) Is respondent presumed at

fault or negligent as common carrier for the loss or deterioration

of the goods? and (2) Are damages and attorneys fees duerespondent?

Anent the first issue, petitioner contends that the respondent ispresumed negligent and liable for failure to abide by the termsand conditions of the bills oflading; that Abdurahman Jamasfailure to testify should not be held against petitioner; and thatthe testimonies of Rogelio Rizada and Ismael Zamora, asemployees of respondents agent, Efren Ruste Shipping Agency,were biased and could not overturn the legal presumption ofrespondents fault or negligence.

For its part, the respondent avers that it observed extraordinary

diligence in the delivery of the goods. Prior to releasing the goodsto Abdurahman, Rogelio and Ismael required the surrender of the

original bills of lading, and in their absence, the certified truecopies showing that Abdurahman was indeed the consignee ofthe goods. In addition, they required Abdurahman or his

designated subordinates to sign the delivery receipts upon

completion of each delivery.

We rule for respondent.

Article 17338 of the Civil Code demands that a common carrierobserve extraordinary diligence over the goods transported by it.Extraordinary diligence is that extreme measure of care andcaution which persons of unusual prudence and circumspectionuse for securing and preserving their own property or rights.9 Thisexacting standard imposed on common carriers in a contract ofcarriage of goods is intended to tilt the scales in favor of theshipper who is at the mercy of the common carrier once the

goods have been lodged for shipment. Hence, in case of loss ofgoods in transit, the common carrier is presumed under the lawto have been at fault or negligent.10 However, the presumptionof fault or negligence, may be overturned by competent evidenceshowing that the common carrier has observed extraordinarydiligence over the goods.

In the instant case, we agree with the court a quo that therespondent adequately proved that it exercised extraordinarydiligence. Although the original bills of lading remained withpetitioner, respondents agents demanded from Abdurahman the

certified true copies of the bills of lading. They also asked thelatter and in his absence, his designated subordinates, to sign thecargo delivery receipts.

This practice, which respondents agents testified to be theirstandard operating procedure, finds support in Article 353 of theCode of Commerce:

ART. 353. . . .

After the contract has been complied with, the bill of lading whichthe carrier has issued shall be returned to him, and by virtue ofthe exchange of this title with the thing transported, the

respective obligations and actions shall be considered cancelled,.

In case the consignee, upon receiving the goods, cannot returnthe bill of lading subscribed by the carrier, because of its loss or of

any other cause, he must give the latter a receipt for the goodsdelivered, this receipt producing the same effects as the return ofthe bill of lading. (Emphasis supplied)

Conformably with the aforecited provision, the surrender of the

original bill of lading is not a condition precedent for a common

carrier to be discharged of its contractual obligation. If surrenderof the original bill of lading is not possible, acknowledgment of the

delivery by signing the delivery receipt suffices. This is whatrespondent did.

We also note that some delivery receipts were signed byAbdurahmans subordinates and not by Abdurahman himself asconsignee. Further, delivery checkers Rogelio and Ismael testifiedthat Abdurahman was always present at the initial phase of eachdelivery, although on the few occasions when Abdurahman couldnot stay to witness the complete delivery of the shipment, he


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authorized his subordinates to sign the delivery receipts for him.This, to our mind, is sufficient and substantial compliance with the

requirements.

We further note that, strangely, petitioner made no effort todisapprove Abdurahmans resignation until after the investigationand after he was cleared of any responsibility for the loss of the

goods. With Abdurahman outside of its reach, petitioner cannot

now pass to respondent what could be Abdurahmans negligence,if indeed he were responsible.

On the second issue, petitioner submits there is no basis for the

award of actual damages and attorneys fees. It maintains that itsoriginal complaint for sum of money with damages for breach ofcontract of carriage was not fraudulent, in bad faith, normalicious. Neither was the institution of the action rash norprecipitate. Petitioner avers the filing of the action was intendedto protect the integrity and interest of the government and itsrelationship and credibility with international relief agencies anddonor states.

On the other hand, respondent maintains that petitioners suitwas baseless and malicious because instead of going after itsabsconding employee, petitioner wanted to recoup its losses fromrespondent. The trial court and the Court of Appeals werejustified in granting actual damages and reasonable attorneysfees to respondent.

On this point, we agree with petitioner.

The right to litigate should bear no premium. An adverse decision

does not ipso facto justify an award of attorneys fees to thewinning party.11 When, as in the instant case, petitioner wascompelled to sue to protect the credibility of the governmentwith international organizations, we are not inclined to grantattorneys fees. We find no ill motive on petitioners part, only anerroneous belief in the righteousness of its claim.

Moreover, an award of attorneys fees, in the concept of damages

under Article 2208 of the Civil Code,12 requires factual and legaljustifications. While the law allows some degree of discretion on

the part of the courts in awarding attorneys fees and expenses oflitigation, the discretion must be exercised with great careapproximating as closely as possible, the instances exemplified by

the law.13 We have searched but found nothing in petitionerssuit that justifies the award of attorneys fees.

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

WHEREFORE, the petition is PARTIALLY GRANTED. The assaileddecision and resolution of the Court of Appeals in CA-G.R. CV No.48349 dated January 16, 2002 and May 13, 2002 respectively,denying petitioners claim for actual, moral and exemplary

damages are AFFIRMED. The award of actual damages and

attorneys fees to respondent pursuant to the latterscounterclaim in the trial court is DELETED.

SO ORDERED.

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

[G.R. No. 150751. September 20, 2004]

CENTRAL SHIPPING COMPANY, INC., petitioner, vs. INSURANCECOMPANY OF NORTH AMERICA, respondent.

D E C I S I O NPANGANIBAN, J.:

A common carrier is presumed to be at fault or negligent. It shallbe liable for the loss, destruction or deterioration of its cargo,

unless it can prove that the sole and proximate cause of such

event is one of the causes enumerated in Article 1734 of the CivilCode, or that it exercised extraordinary diligence to prevent orminimize the loss. In the present case, the weather conditionencountered by petitioners vessel was not a storm or a natural

disaster comprehended in the law. Given the known weathercondition prevailing during the voyage, the manner of stowageemployed by the carrier was insufficient to secure the cargo fromthe rolling action of the sea. The carrier took a calculated risk inimproperly securing the cargo. Having lost that risk, it cannot nowdisclaim any liability for the loss.

The Case

Before the Court is a Petition for Review[1] under Rule 45 of theRules of Court, seeking to reverse and set aside the March 23,2001 Decision[2] of the Court of Appeals (CA) in CA-GR CV No.48915. The assailed Decision disposed as follows:

WHEREFORE, the decision of the Regional Trial Court of MakatiCity, Branch 148 dated August 4, 1994 is hereby MODIFIED in sofar as the award of attorneys fees is DELETED. The decision isAFFIRMED in all other respects.*3+

The CA denied petitioners Motion for Reconsideration in itsNovember 7, 2001 Resolution.[4]

The Facts

The factual antecedents, summarized by the trial court andadopted by the appellate court, are as follows:

On July 25, 1990 at Puerto Princesa, Palawan, the [petitioner]received on board its vessel, the

transpo digests ausl to print

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