1|TRANSPORTATION LAW CASE DIGEST
JAPAN AIRLINES vs. SIMANGAN
GR No. 170141 April 22, 2008
Third Division Reyes
FACTS:
Respondent needed to go to the US to donate his kidney to his ailing
cousin. Having obtained an emergency US Visa, respondent purchased a round trip
ticket from petitioner JAL. He was scheduled to a flight bound for LA via Japan. On
the date of his flight, respondent passed through rigid immigration and security
routines before being allowed to board a JAL plane.
While inside the plane, respondent was asked to show his travel
documents. After which he was ordered by the crew to leave the plane, imputing
that respondent is carrying falsified travel documents. Respondent pleaded but was
ignored and under constraint he gets off the plane. The plane took off and
respondent was left behind.
Respondent was refunded with the cost of his ticket minus 500 USD, when
JAL found out eventually that his travel documents were not falsified and in order.
Respondent filed an action for damages against JAL.
RTC RULING:
JAL is liable for beach of contract of carriage, and should pay 1M as MD,
500K as ED, 250K as AF + cost of suit. JAL appealed contending it is not guilty of
breach of contract of carriage and not liable for damages.
CA RULING:
Affirmed RTC decision with modification as to amount of damages for
being scandalously excessive. 500K MD, 250K ED and NO AT.
ISSUE:
WON JAL is guilty of breach of contract of carriage.
WON Simangan is entitled to moral and exemplary damages.
HELD:
JAL is guilty of breach of contract of carriage and is liable for damages.
Petition of JAL was denied. CA decision was affirmed with modification. 500K ED,
100K ED, 200K AF.
RATIO:
Breach of contract of carriage
In an action for breach of contract of carriage, all that is required of
plaintiff is to prove the existence of such contract and its non-performance by the
carrier through the failure to carry the passenger safely to his destination. Simangan
complied with these requisites. Damage was accrued by JAL when Simangan was
bumped off despite his protestations and valid travel documents and
notwithstanding his contract of carriage with JAL.
Award of moral damages in breach of contract of carriage.
As a general rule, moral damages are not recoverable in actions for
damages predicated on a breach of contract for it is not enumerated under Art
2219 NCC. As an exception, such damages are recoverable in:
1. Mishaps resulting to a death of a passenger (Art. 1764 NCC)
2. When carrier is guilty of fraud or bad faith (Art. 2220)
JAL breached its contract of carriage with respondent in bad faith, when its
crew ordered respondent to disembark while the latter is already settled in his
assigned seat under the guise of verifying the genuineness of his travel documents.
Inattention to and lack of care for the interest of its passengers who are entitled ot
its utmost consideration, particularly as to their convenience, amount to bad faith
which entitles the passenger to award of moral damages.
Award of exemplary damages in breach of contract of carriage.
Exemplary damages maybe recovered in contractual obligations as a way
of example or correction for the public good.JAL is liable for exemplary damages as
its acts constitute wanton, oppressive and malevolent acts against respondent.
Passengers have the right to be treated by the carrier’s employees with kindness,
respect, courtesy and due consideration and are entitled to be protected against
personal misconduct, injurious language, indignities and abuses from such
employees.
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1. Laws applicable
Undoubtedly, there was, between Trans-Asia and Arroyo, a contract of common carriage. The
laws of primary application then are the provisions on common carriers under Section 4,
Chapter 3, Title VIII, Book IV of the Civil Code, while for all other matters not regulated
thereby, the Code of Commerce and special laws.
2. Article 1733 NCC, Extraordinary diligence; Article 1755, Utmost diligence of very
cautious persons
Under Article 1733 of the Civil Code, Trans-Asia was bound to observe extraordinary diligence
Trans-Asia Shipping Lines vs. CA (GR 118126, 4 March 1996) in ensuring the safety of Arroyo. That meant that Trans-Asia was, pursuant to Article 1755 of
Third Division, Davide Jr. (J): 4 concur the said Code, bound to carry Arroyo safely as far as human care and foresight could provide,
using the utmost diligence of very cautious persons, with due regard for all the circumstances.
Facts: Atty. Renato Arroyo, a public attorney, bought a ticket Trans-Asia Shipping Lines Inc., Herein, Trans-Asia failed to discharge this obligation.
a corporation engaged in inter-island shipping, for the voyage of M/V Asia Thailand vessel to
Cagayan de Oro City from Cebu City on 12 November 1991. At around 5:30p.m of the said 3. Vessel was unseaworthy even before voyage began; Unseaworthiness defined, a
day, Arroyo boarded the M/V Asia Thailand vessel. At that instance, Arroyo noticed that some clear breach of duty of carrier
repair work were being undertaken on the engine of the vessel. The vessel departed at Before commencing the contracted voyage, Trans-Asia undertook some repairs on the
around 11:00 p.m. with only 1 engine running. After an hour of slow voyage, the vessel cylinder head of one of the vessel’s engines. But even before it could finish these repairs, it
stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some allowed the vessel to leave the port of origin on only one functioning engine, instead of two.
passengers demanded that they should be allowed to return to Cebu City for they were no Moreover, even the lone functioning engine was not in perfect condition as sometime after it
longer willing to continue their voyage to Cagayan de Oro City. The captain acceded [sic] to had run its course, it conked out. This caused the vessel to stop and remain adrift at sea, thus
their request and thus the vessel headed back to Cebu City. At Cebu City, Arroyo, together in order to prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel was
with the other passengers who requested to be brought back to Cebu City, were allowed to unseaworthy even before the voyage began. For a vessel to be seaworthy’, it must be
disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Arroyo, the next day, adequately equipped for the voyage and manned with a sufficient number of competent
boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of officers and crew. The failure of a common carrier to maintain in seaworthy condition its
Trans-Asia. vessel involved in a contract of carriage is a clear breach of is duty prescribed in Article 1755
On account of the failure of Trans-Asia to transport him to the place of destination on 12 of the Civil Code.
November 1991, Arroyo filed before the trial court a complaint for damages against Trans- 4. Article 1764 NCC; Liability for damages
Asia. After due trial, the trial court rendered its decision and ruled that the action was only for As to its liability for damages, Article 1764 of the Civil Code expressly provides that “Damages
breach of contract, with Articles 1170, 1172, and 1173 of the Civil Code as applicable law — in cases comprised in this Section shall be awarded in accordance with Title XVIII of this
not Article 2180 of the same Code. The Court dismissed the complaint as it did not appear Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused
that Arroyo was left in the Port of Cebu because of the fault, negligence, malice or wanton by the breach of contract by common carrier. The damages comprised in Title XVIII of the
attitude of Trans-Asia’s employees; and likewise dismissed Trans-Asia’s counterclaim is Civil Code are actual or compensatory, moral, nominal, temperate or moderate, liquidated,
likewise dismissed it not appearing also that filing of the case by Arroyo was motivated by and exemplary.”
malice or bad faith. 5. Actual and compensatory damages
Unsatisfied, Arroyo appealed to the Court of Appeals (CA-GR CV 39901). In its decision of 23 Actual or compensatory damages represent the adequate compensation for pecuniary loss
November 1994, the Court of Appeals reversed the trial court’s decision by applying Article suffered and for profits the obligee failed to obtain.
1755 in relation to Articles 2201, 2208, 2217, and 2232 of the Civil Code and, accordingly,
awarded (1) P20,000.00 as moral damages; (2) P10,000.00 as exemplary damages; (3) 6. Damages resulting in contracts or quasi-contracts
P5,000.00 as attorney’s fees; and (4) Cost of suit. Trans-Asia instituted the petition for review In contracts or quasi-contracts, the obligor is liable for all the damages which may be
on certiorari. reasonably attributed to the non- performance of the obligation if he is guilty of fraud, bad
The Supreme Court denied the petition, and affirmed the challenged decision of the Court of faith, malice, or wanton attitude.
Appeals, subject to the modification as to the award for attorney’s fees which is set aside; with 7. Moral damages
costs against Trans-Asia. Moral damages include moral suffering, mental anguish, fright, serious anxiety, besmirched
reputation, wounded feelings, moral shock, social humiliation, or similar injury. They may be
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recovered in the cases enumerated in Article 2219 of the Civil Code, likewise, if they are the
proximate result of, as herein, Trans-Asia’s breach of the contract of carriage. Anent a breach
of a contract of common carriage, moral damages may be awarded if the common carrier
acted fraudulently or in bad faith.
8. Exemplary damages; not a matter of right
Exemplary damages are imposed by way of example or correction for the public good, in
addition to moral, temperate, liquidated or compensatory damages. In contracts and quasi-
contracts, exemplary damages may be awarded if the defendant acted in a wanton fraudulent,
reckless, oppressive or malevolent manner. It cannot, however, be considered as a matter of
right; the court having to decide whether or not they should be adjudicated. Before the court
may consider an award for exemplary damages, the plaintiff must first show that he is entitled
to moral, temperate or compensatory damages; but it is not necessary that he prove the
monetary value thereof.
9. Article 1169 not applicable
The Court of Appeals did not grant Arroyo actual or compensatory damages, reasoning that
no delay was incurred since there was no demand, as required by Article 1169 of the Civil
Code. This article, however, finds no application in the case because, as there was in fact no
delay in the commencement of the contracted voyage. If any delay was incurred, it was after
the commencement of such voyage, more specifically, when the voyage was subsequently
interrupted when the vessel had to stop near Kawit Island after the only functioning engine
conked out.
10. Article 698 of the Code of Commerce applies suppletorily to Article 1766 NCC;
Rights and duties of parties arising out of delay
As to the rights and duties of the parties strictly arising out of such delay, the Civil Code is
silent. However, as correctly pointed out by the petitioner, Article 698 of the Code of
Commerce specifically provides for such a situation. It reads “In case a voyage already begun
should be interrupted, the passengers shall be obliged to pay the fare in proportion to the
distance covered, without right to recover for losses and damages if the interruption is due to
fortuitous event or force majeure, but with a right to indemnity if the interruption should have
been caused by the captain exclusively. If the interruption should be caused by the disability
of the vessel and a passenger should agree to await the repairs, he may not be required to
pay any increased price of passage, but his living expenses during the stay shall be for his
own account.” This article applies suppletorily pursuant to Article 1766 of the Civil Code.
11. Article 698 of the Code of Commerce must be read with Articles 2199, 2200, 2201,
and 2208 in relation to Article 21 NCC; Arroyo not entitled to actual or compensatory
damages
The cause of the delay or interruption was Trans-Asia’s failure to observe extraordinary
diligence. Article 698 must then be read together with Articles 2199, 2200, 2201, and 2208 in
relation to Article 21 of the Civil Code. In so reading, it means that Trans-Asia is liable for any
pecuniary loss or loss of profits which Arroyo may have suffered by reason thereof. For
Arroyo, such would be the loss of income if unable to report to his office on the day he was
supposed to arrive were it not for the delay. This, however, assumes that he stayed on the
vessel and was with it when it thereafter resumed its voyage; but he did not. As he and some
passengers resolved not to complete the voyage, the vessel had to return to its port of origin
and allow them to disembark. Arroyo then took Trans-Asia’s other vessel the following day,
using the ticket he had purchased for the previous day’s voyage. Any further delay then in
Arroyo’s arrival at the port of destination was caused by his decision to disembark. Had he
remained on the first vessel, he would have reached his destination at noon of 13 November
1991, thus been able to report to his office in the afternoon. He, therefore, would have lost
only the salary for half of a day. But actual or compensatory damages must be proved, which
Arroyo failed to do. There is no convincing evidence that he did not receive his salary for 13
November 1991 nor that his absence was not excused.
12. Trans-Asia is liable for moral and exemplary damages
Trans-Asia is liable for moral and exemplary damages. In allowing its unseaworthy M/V Asia
Thailand to leave the port of origin and undertake the contracted voyage, with full awareness
that it was exposed to perils of the sea, it deliberately disregarded its solemn duty to exercise
extraordinary diligence and obviously acted with bad faith and in a wanton and reckless
manner.
13. Trans-Asia’s assertion shows lack of genuine concern for safety of passengers;
Trans-Asia cannot expect passengers to act in manner it desired
Trans-Asia’s assertions that the safety of the vessel and passengers was never at stake
because the sea was “calm” in the vicinity where it stopped as faithfully recorded in the
vessel’s log book demonstrates beyond cavil Trans-Asia’s lack of genuine concern for the
safety of its passengers. It was, perhaps, only providential than the sea happened to be calm.
Even so, Trans-Asia should not expect its passengers to act in the manner it desired. The
passengers were not stoics; becoming alarmed, anxious, or frightened at the stoppage of a
vessel at sea in an unfamiliar zone a nighttime is not the sole prerogative of the faint-hearted.
More so in the light of the many tragedies at sea resulting in the loss of lives of hopeless
passengers and damage to property simply because common carriers failed in their duty to
exercise extraordinary diligence in the performance of their obligations.
14. Article 2208 NCC
Article 2208 of the Civil Code provides that “ In the absence of stipulation, attorney’ s fees and
expenses of litigation, other than judicial costs cannot be recovered except: (1) When
exemplary damages are awarded; (2) When the defendant’s act or omission has compelled
the plaintiff to litigate with third persons or to incur expenses to protect his interest.”
15. Award of attorney’s fees not justified
Under Article 2208 of the Civil Code, Attorney’s fees are recoverable only in the concept of
actual damages, not as moral damages nor judicial costs. Hence, to merit such an award, it is
settled that the amount thereof must be proven. Moreover, such must be specifically prayed
for and may not be deemed incorporated within a general prayer for “such other relief and
remedy as the court may deem just and equitable. The statement that the “plaintiff was forced
to litigate in order that he can claim moral and exemplary damages for the suffering he
incurred” does not satisfy the benchmark of “factual, legal and equitable justification” needed
as basis for an award of attorney’s fees. In sum, for lack of factual and legal basis, the award
of attorney’s fees must be deleted.
4|TRANSPORTATION LAW CASE DIGEST
Air France v. Carrascoso
G.R. No. L-21438, Sept. 28, 1966
FACTS:
Carrascoso, a civil engineer, was a first class passenger of Air France on his way to Rome for
a pilgrimage. From Manila to Bangkok, he traveled in ‘first class,’ but at Bangkok, the Manager
of Air France forced him to vacate his seat in favor of a ‘white man’ who had a ‘better right to
the seat.’ Carrascoso filed for moral damages, averring in his complaint the contract of
carriage betweenAir France and himself. Air France claims that to authorize an award for
moral damages there must be an averment of fraud or bad faith, upon which Carrascoso’s
complaint is silent.
ISSUE:
 Whether or not Carrascoso is entitled to an award for moral damages
HELD:
The foregoing substantially aver: First, That there was a contract to furnish plaintiff a first class
passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was
breached when petitioner failed to furnish first class transportation at Bangkok; and Third,
That there was bad faith when petitioner’s employee compelled Carrascoso to leave his first
class accommodation berth “after he was already seated” and to take a seat in the tourist
class, by reason of which he suffered inconvenience, embarrassment and humiliation, thereby
causing him mental anguish, serious anxiety, wounded feelings and social humiliation,
resulting in moral damages. It is true that there is no specific mention of the term bad faith in
the complaint. But, the inference of bad faith is there; it may be drawn from the facts and
circumstances set forth therein. The contract was averred to establish the relation between
the parties. But the stress of the action is put on wrongful expulsion.
NOTA BENE: Here there is a contract of carriage between the parties and such contract was
breached by Air France when it wrongfully forced Carrascoso to vacate the first class seat
which he paid for. The wrongful expulsion is independent of the breach since even without the
contract, such wrongful expulsion may still make Air France liable for damages. In other
words, the wrongful expulsion is in itself a tort.
Lara vs. Valencia (GR L-9907, 30 June 1958)
En Banc, Bautista Angelo (J): 7 concur
Facts: Demetrio Lara went to the lumber concession of Brigido R. Valencia in Parang,
Cotabato upon instructions of his chief in order to classify the logs of defendant which were
then ready to be exported and to be loaded on a ship anchored in the port of Parang. It took
Lara 6 days to do his work during which he contracted malaria fever and for that reason he
evinced a desire to return immediately to Davao. At that time, there was no available bus that
could take him back to Davao and so he requested Valencia if he could take him in his own
pick-up. Valencia agreed and, together with Lara, other passengers tagged along, most of
them were employees of the Government. Valencia merely accommodated them and did not
charge them any fee for the service. It was also their understanding that upon reaching barrio
Samoay, the passengers would alight and transfer to a bus that regularly makes the trip to
Davao but unfortunately there was none available at the time and so the same passengers,
including Lara, again requested Valencia to drive them to Davao. Valencia again
accommodated them and upon reaching Km. 96, Lara accidentally fell suffering fatal injuries.
An action for damages was brought by Lourdes J. Lara, et. al. against Valencia in the CFI of
Davao for the death of one Demetrio Lara, Sr. allegedly caused by the negligent act of
Valencia. Valencia denied the charge of negligence and set up certain affirmative defenses
and a counterclaim. The court after hearing rendered judgment ordering Valencia to pay Lara,
et. al. the following amount: (a) P10,000 as moral damages; (b) P3,000 as exemplary
damages; and (c) P1,000 as attorney’s fees, in addition to the costs of action. Both parties
appealed to the Supreme Court because the damages claimed in the complaint exceed the
sum of P50,000.
The Supreme Court reversed the decision appealed from, without pronouncement as to costs.
1. Lara, et. al. merely accommodation passaengers who paid nothing for service;
Degree of diligence required of owner of vehicle
The deceased, as well as his companions who rode in the pick-up of Valencia, were merely
accommodation passengers who paid nothing for the service and so they can be considered
as invited guests within the meaning of the law. As accommodation passengers or invited
guests, Valencia as owner and driver of the pick-up owes to them merely the duty to exercise
5|TRANSPORTATION LAW CASE DIGEST

reasonable care so that they may be transported safely to their destination. Thus, “The rule is have fallen from the pick-up when it ran into some stones causing it to jerk considering that
established by the weight of authority that the owner or operator of an automobile owes the the road was then bumpy, rough and full of stones. All things considered, the accident
duty to an invited guest to exercise reasonable care in its operation, and not unreasonably to occurred not due to the negligence of Valencia but to circumstances beyond his control and
expose him to danger and injury by increasing the hazard of travel. This rule, as frequently so he should be exempt from liability.
stated by the courts, is that an owner of an automobile owes a guest the duty to exercise
ordinary or reasonable care to avoid injuring him. Since one riding in an automobile is no less
a guest because he asked for the privilege of doing so, the same obligation of care is imposed
upon the driver as in the case of one expressly invited to ride” Valencia, therefore, is only
required to observe ordinary care, and is not in duty bound to exercise extraordinary diligence
as required of a common carrier by Philippine law.

2. Valencia had done what a reasonable prudent man would have done
Valencia was not in duty bound to take the deceased in his own pick-up to Davao because
from Parang to Cotabato there was a line of transportation that regularly makes trips for the
public, and if Valencia agreed to take the deceased in his own car, it was only to
accommodate him considering his feverish condition and his request that he be so
accommodated. The passengers who rode in the pick-up of Valencia took their respective
seats therein at their own choice and not upon indication of Valencia with the particularity that
Valencia invited the deceased to sit with him in the front seat but which invitation the
deceased declined. The reason for this can only be attributed to his desire to be at the back
so that he could sit on a bag and travel in a reclining position because such was more
convenient for him due to his feverish condition. All the circumstances thereof clearly indicate
that Valencia had done what a reasonable prudent man would have done under the
circumstances.

3. Finding as to speed not supported by evidence; else, speed not unreasonable

The finding of the trial court that the pick-up was running at more than 40 kilometers per hour
is not supported by evidence. This is a mere surmise made by the trial court considering the
time the pick- up left barrio Samoay and the time the accident occurred in relation to the
distance covered by the pick-up. And even if this is correct, still we say that such speed is not
unreasonable considering that they were travelling on a national road and the traffic then was
not heavy.

4. Injury to passenger has been proximately caused by own negligence

The incident may be attributed to lack of care on the part of the deceased considering that the
pick-up was open and he was then in crouching position. Indeed the law provides that “A
passenger must observe the diligence of a good father of a family to avoid injury to himself”
(Article 1761, new Civil Code), which means that if the injury to the passenger has been
proximately caused by his own negligence, the carrier cannot be held liable.

5. Unfortunate happening due to unforeseen accident

There is every reason to believe that the unfortunate happening was only due to an
unforeseen accident caused by the fact at the time the deceased was half asleep and must