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Module 1
8. Sarkies Tour Phil. v. Facts: Fatima boarded Sarkies' De Luxe bus bringing 3 pieces of
CA, 280 SCRA 58 luggage with her. During a stopover at Daet, it was discovered
that only one bag remained in the open compartment. Private
respondents, asking assistance from the radio stations and from
Philtranco bus drivers who plied the same route, were able to
recover one of Fatima's bags. After a few weeks, private
respondents formally demanded from petitioner. In a letter,
petitioner admitted its liability by apologizing and assuring
respondents that efforts were being made to recover the lost
items. Months later, respondents filed a case to recover the
value of the remaining lost items claiming that the loss was due
to petitioner's failure to observe extraordinary diligence.

Doctrine:
Under the Civil Code, "(c)ommon carriers, from the nature
of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance
over the goods . . . transported by them," and this liability
"lasts from the time the goods are unconditionally placed
in the possession of, and received by the carrier for
transportation until the same are delivered, actually or
constructively, by the carrier to . . . the person who has a
right to receive them," unless the loss is due to any of the
excepted causes under Article 1734 thereof.
The cause of the loss in the case at bar was petitioner's
negligence in not ensuring that the doors of the baggage
compartment of its bus were securely fastened. As a
result of this lack of care, almost all of the luggages were
lost, to the prejudice of the paying passengers.
Where the common carrier accepted its passenger's
baggage for transportation and even had it placed in the
vehicle by its own employee, its failure to collect the
freight charge is the common carrier's own lookout. It is
responsible for the consequent loss of the baggage.
16. Mindanao Terminal Facts: Del Monte contracted Mindanao Terminal, a stevedoring
v. Phoenix Assurance, company, to load and stow a shipment of 146,288 cartons of
587 SCRA 429 fresh green Philippine bananas and 15,202 cartons of fresh
pineapples belonging to Del Monte into the cargo hold of the
vessel M/V Mistrau. The vessel was docked at the port of Davao
City and the goods were to be transported by it to the port of
Inchon, Korea in favor of consignee Taegu Industries, Inc. Del
Monte insured the shipment under an "open cargo policy" with
private respondent Phoenix Assurance and McGee & Co. Inc.
Upon arrival at the port of Inchon, Korea. It was then discovered
upon discharge that some of the cargo was in bad condition. In a
survey report, it was stated that some of the shipment were so
damaged that they no longer had commercial value.

Doctrine:
Article 1173 of the Civil Code is very clear that if the law
or contract does not state the degree of diligence which is
to be observed in the performance of an obligation then
that which is expected of a good father of a family or
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ordinary diligence shall be required.

o Mindanao Terminal had acted merely as a labor
provider in the case at bar. There is no specific
provision of law that imposes a higher degree of
diligence than ordinary diligence for a stevedoring
company or one who is charged only with the
loading and stowing of cargoes. It was neither
alleged nor proven by Phoenix and McGee that
Mindanao Terminal was bound by contractual
stipulation to observe a higher degree of diligence
than that required of a good father of a family.
Thus, following Article 1173, Mindanao Terminal
was required to observe ordinary diligence only in
loading and stowing the cargoes of Del Monte
Produce aboard M/V Mistrau.
Distinction between an arrastre and a stevedore.
o Stevedoring refers to the handling of the cargo in
the holds of the vessel or between the ship's
tackle and the holds of the vessel. The
responsibility of the stevedore ends upon the
loading and stowing of the cargo in the vessel.
o Arrastre, a Spanish word which refers to hauling
of cargo, comprehends the handling of cargo on
the wharf or between the establishment of the
consignee or shipper and the ship's tackle. The
responsibility of the arrastre operator lasts until
the delivery of the cargo to the consignee. The
service is usually performed by longshoremen. An
arrastre operator should observe the same degree
of diligence as that required of a common carrier
and a warehouseman while a stevedoring is not.
Mindanao Terminal, as a stevedore, was only charged with
the loading and stowing of the cargoes from the pier to
the ships cargo hold; it was never the custodian of the
shipment of Del Monte Produce. A stevedore is not a
common carrier for it does not transport goods or
passengers; it is not akin to a warehouseman for it does
not store goods for profit. The loading and stowing of
cargoes would not have a far reaching public ramification
as that of a common carrier and a warehouseman; the
public is adequately protected by our laws on contract
and on quasi-delict. The public policy considerations in
legally imposing upon a common carrier or a
warehouseman a higher degree of diligence is not present
in a stevedoring outfit which mainly provides labor in
loading and stowing of cargoes for its clients.
Module 2
7. Fortune Express Inc Facts: A bus of Fortune Express figured in an accident with a
v. CA, 305 SCRA 14 jeepney in Kauswagan, Lanao del Norte, resulting in the death of
several passengers of the jeepney, including two Maranaos.
Upon investigation it was found out that the owner of the jeep
was a Maranao resident and that certain Maranaos were planning
to take revenge on the petitioner by burning some of its buses.
Hence
authorities, informed petitioners of the impending threat. A few
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days later, three armed Maranaos who pretended to be

passengers, seized a bus of the Fortune Express while on its way
to Iligan City. During the incident, one of the hijackers shot the
driver in the arm causing him to slump on the streeing wheel,
while another hijacker started pouring gasoline inside the bus, as
the other held the passengers at bay with a handgun. After
which the passengers were ordered to step out of the bus.
However, one of the passengers, Atty. Caorong, came back and
pleaded with the armed men to spare him as he was innocent of
any wrong doing and was only trying to make a living. During the
exchange, the driver (Cabanatuan) climbed out of the window.
Then he heard shots from inside the bus. One Larry de la Cruz,
saw Atty. Caorong got hit. Then the bus was set on fire. Some of
the passengers were able to pull Atty. Caorong out of the bus and
rush him to the Mercy Community Hospital in Illigan City, but he
died while undergoing operation.

Doctrine:
Art. 1763 of the Civil Code provides that a common
carrier is responsible for injuries suffered by a passenger
on account of willful acts of other passengers, if the
employees of the common carrier could have prevented
the act through the exercise of the diligence of a good
father of a family.
o In the present case, it is clear that because of the
negligence of petitioner's employees, the seizure
of the bus by Mananggolo and his men was made
possible. Despite warning by the Philippine
Constabulary at Cagayan de Oro that the
Maranaos were planning to take revenge on the
petitioner by burning some of its buses and the
assurance of petitioner's operation manager,
Diosdado Bravo, that the necessary precautions
would be taken, petitioner did nothing to protect
the safety of its passengers.
o Had petitioner and its employees been vigilant
they would not have failed to see that the
malefactors had a large quantity of gasoline with
them. Under the circumstances, simple
precautionary measures to protect the safety of
passengers, such as frisking passengers and
inspecting their baggages, preferably with non-
intrusive gadgets such as metal detectors, before
allowing them on board could have been
employed without violating the passenger's
constitutional rights.
In Gacal v. Philippine Air Lines, a common carrier can
be held liable for failing to prevent a hijacking by frisking
passengers and inspecting their baggages.
Art. 1174 of the Civil Code defines a fortuitous event as
an occurence which could not be foreseen, is inevitable.
In Yobido v. Court of Appeals, it was held that to
considered as force majeure, it is necessary that
o the cause of the breach of the obligation must be
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independent of the human will;

o the event must be either unforeseeable or
unavoidable;
o the occurence must be render it impossible for the
debtor to fulfill the obligation in a normal manner;
and
o the obligor must be free of participation in, or
aggravation of, the injury to the creditor. The
absence of any of the requisites mentioned above
would prevent the obligor from being excused
from liability.
In this case, despite the report of PC agent General that
the Maranaos were going to attack its buses, petitioner
took no steps to safeguard the lives and properties of its
passengers. The seizure of the bus of the petitioner was
foreseeable and, therefore, was not a fortuitous event
which would exempt petitioner from liabilty.
15. GV Florida Facts: Battung boarded petitioners bus bound for Manila. When
Transport Inc. v. HEirs the bus
of Romeo Battung, stopped in Nueva Ecija, another passenger shot Battung at his
Oct. 14, 2015 head, which
subsequently led to his death. Respondents filed a complaint for
damages
based on breach of contract of carriage against the petitioner,
the bus driver,
and the conductor.

Doctrine:
While the law requires the highest degree of diligence
from common carriers in the safe transport of their
passengers and creates a presumption of negligence
against them, it does not, however, make the carrier an
insurer of the absolute safety of its passengers.
The law exacts from common carriers extraordinary
diligence in ensuring the safety of its passengers.
Further, Article 1756 of the Civil Code provides that "[i]n
case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in Articles 1733 and
1755."
o Article 1756, in creating a presumption of fault or
negligence on the part of the common carrier
when its passenger is injured, merely relieves the
latter, for the time being, from introducing
evidence to fasten the negligence on the former,
because the presumption stands in the place of
evidence. Being a mere presumption, however, it
is rebuttable by proof that the common carrier had
exercised extraordinary diligence as required by
law in the performance of its contractual
obligation, or that the injury suffered by the
passenger was solely due to a fortuitous event.
The foregoing provisions notwithstanding, it should be
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pointed out that the law does not make the common
carrier an insurer of the absolute safety of its passengers.
Pilapil v. CA: Where the injury sustained by the passenger
was in no way due (1) to any defect in the means of
transport or in the method of transporting, or (2) to the
negligent or willful acts of the common carrier's
employees with respect to the foregoing - such as when
the injury arises wholly from causes created by strangers
which the carrier had no control of or prior knowledge to
prevent there would be no issue regarding the common
carrier's negligence in its duty to provide safe and
suitable care, as well as competent employees in relation
to its transport business; as such, the presumption of
fault/negligence foisted under Article 1756 of the Civil
Code should not apply.
o In this case, Battung's death was neither caused
by any defect in the means of transport or in the
method of transporting, or to the negligent or
willful acts of petitioner's employees, in their
capacities as driver and conductor. It involves the
death of Battung wholly caused by the
surreptitious act of a co-passenger who, after
consummating such crime, hurriedly alighted from
the vehicle.
o Thus, there is no proper issue on petitioner's duty
to observe extraordinary diligence in ensuring the
safety of the passengers transported by it, and the
presumption of fault/negligence against petitioner
under Article 1756 in relation to Articles 1733 and
1755 of the Civil Code should not apply.
On the other hand, since a co-passenger caused
Battungs death, the applicable provision is Art. 1763 of
the Civil Code which states that "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 omission."
While it is true the passengers of appellant's bus should
not be made to suffer for something over which they had
no control, fairness demands that in measuring a
common carrier's duty towards its passengers, allowance
must be given to the reliance that should be reposed on
the sense of responsibility of all the passengers in regard
to their common safety. It is to be presumed that a
passenger will not take with him anything dangerous to
the lives and limbs of his co-passengers, not to speak of
his own.
Module 3
8. Zalamea v. CA, 228 Facts: Spouses Zalamea and their daughter bought 3 tickets
SCRA 23 from the Manila agent of TWA for a flight to NY to LA. Two of the
three tickets were purchased at a discount of 75% while the
other was a full fare ticket. All 3 were confirmed reservations. On
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the day of the scheduled flight, the Zalameas were placed on the
wait-list despite having checked-in an hour earlier than their
scheduled flight. This was due to over-booking. Later, Mr.
Zalamea was eventually allowed to board the flight to LA
(apparently, he was holding his daughters full priced ticket) but
the wife and the daughter were denied boarding. Even in the
next TWA flight to LA, they could not be accommodated because
it was also fully booked. The wife and daughter were constrained
to book another flight and purchased 2 tickets from American
Airlines. The spouses Z filed a complaint for damages based on
breach of contract of air carriage. Lower court ruled in favor of
the Spouses Z and awarded moral and exemplary damages.
However, CA deleted the moral and exemplary damages on
ground that no fraud or bad faith on the part of TWA was
present.

Doctrine:
TWA contends that there was neither fraud or bad faith
because under the Code of Federal Regulations by the
Civil Aeronautics Board of the US it is allowed to overbook
flights. However, the U.S. law or regulation allegedly
authorizing overbooking has never been proved. Foreign
laws do not prove themselves nor can the courts take
judicial notice of them. They must be alleged and proved.
o Assuming arguendo that U.S. Code of Federal
Regulations does exist, it is not applicable to the
case at bar in accordance with the principle of lex
loci contractus which require that the law of the
place where the airline ticket was issued should be
applied by the court where the passengers are
residents and State by the defendant airline. Since
the tickets were sold and issued in the Philippines,
the applicable law in this case would be Philippine
law.
o Alitalia Airways v. Court of Appeals: Where an
airline had deliberately overbooked, it took the risk
of having to deprive some passengers of their
seats in case all of them would show up for the
check in. For the indignity and inconvenience of
being refused a confirmed seat on the last minute,
said passenger is entitled to an award of moral
damages.
A contract to transport passengers is quite
different in kind and degree from any other
contractual relation. This is so, for a
contract of carriage generates a relation
attended with public duty a duty to
provide public service and convenience to
its passengers which must be paramount to
self-interest or enrichment.
o Even on the assumption that overbooking is
allowed, TWA is still guilty of bad faith in not
informing its passengers beforehand that it could
breach the contract of carriage even if they have
confirmed tickets if there was overbooking.
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TWA should have incorporated stipulations

on overbooking on the tickets issued or to
properly inform its passengers about these
policies so that the latter would be
prepared for such eventuality or would
have the choice to ride with another airline.
TWA also contended that the practice of overbooking and
the airline system of boarding priorities are reasonable
policies, which when implemented do not amount to bad
faith.
o But TWA did not present any argument of
substance to show that Spouses were duly
apprised of the overbooked condition of the flight
or that there is a hierarchy of boarding priorities in
booking passengers. The failure of TWA to so
inform them when it could easily have done so
thereby enabling respondent to hold on to them as
passengers up to the last minute amounts to bad
faith. TWA placed its self-interest over the rights of
petitioners under their contracts of carriage. Such
conscious disregard of petitioners' rights makes
TWA liable for moral damages.
o To deter breach of contracts by TWA in similar
fashion in the future, SC adjudged TWA liable for
exemplary damages, as well.
Spouses Zalamea had not shown with certainty that the
act of TWA in allowing Mr. Zalamea to use the ticket of her
daughter was due to inadvertence or deliberate act. They
also failed to establish that they did not accede to said
agreement. The logical conclusion, therefore, is that both
petitioners and TWA agreed, albeit impliedly, to the
course of action taken.
In accordance with Article 2201, New Civil Code, TWA
should, therefore, be responsible for all damages which
may be reasonably attributed to the non-performance of
its obligation.
In Alitalia Airways v. Court of Appeals, this Court explicitly
held that a passenger is entitled to be reimbursed for the
cost of the tickets he had to buy for a flight to another
airline.
The award to petitioners of attorney's fees is also justified
under Article 2208(2) of the Civil Code which allows
recovery when the defendant's act or omission has
compelled plaintiff to litigate or to incur expenses to
protect his interest.
However, the award for moral damages and exemplary
damages by the trial court is excessive in the light of the
fact that only Suthira and Liana Zalamea were actually
"bumped off." An award of P50,000.00 moral damages
and another P50,000.00 exemplary damages would
suffice under the circumstances obtaining in the instant
case.