64. SAVELLANO VS. NORTHWEST AIRLINES; G.R. No.

151783 July 8, 2003

FACTS: This is the case wherein petitioners Savellano who were the RTC Judge, his businesswoman wife
and son who is a vice Mayor departed from San Francisco on board a Northwest Airline wherein the pilot
made an emergency landing in Seattle after announcing that a fire had started in one of the plane's
engines. Passsengers were randomly divided into 2 groups, the first one taking the first route and the
second is the longer route. Selection was handled via computer reservation system. Savellanos took the
longer route. Upon arrival to Manila, they sued Northwest Airline for breach of coc and damages on the
ground that they suffered inconvenience, embarrassment and humiliation for taking the longer route.

ISSUE: Whether or not Savellano is entitled to MORAL, ACTUAL, NOMINAL, and EXEMPLARY damages.

HELD: No. Savellano is only entitled for nominal damages.

In the absence of bad faith, ill will, malice or wanton conduct, respondent cannot be held liable for moral
damages. Article 2219 of the Civil Code22 enumerates the instances in which moral damages may be
awarded. In a breach of contract, such damages are not awarded if the defendant is not shown to have
acted fraudulently or with malice or bad faith.

Northwest is not guilty of bad faith. It appears that the passengers of the distressed flight were randomly
divided into 2 groups. One group taking the first route and the other taking the longer route of flight. The
selection of who was to take the flight was handled via computer reservation system. Savellano failed to
present convincing evidence to back the allegation that Northwest was guilty of bad faith.

On exemplary damages, it is not proper. The Civil Code provides that "[i]n contracts and quasi-contracts,
the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless,
oppressive, or malevolent manner." The unexpected and sudden requirement of having to arrange connecting flights
in just a few hours, in addition to the Northwest employees' normal workload was difficult to satisfy perfectly. Northwest
is not liable for its imperfection of neglecting to consult with passengers beforehand.

Nominal damages are awarded in this case. The court considered that Savellano suffered the inconvenience of
having to wake up early to catch the flight and that they were business class passengers who paid more for better
service. It also considered Savellano's social and official status. The court awarded P150,000 as nominal damages in order
to vindicate and recognize their right to be notified and consulted.

Nominal damages are awarded in this case. The court considered that Savellano suffered the inconvenience of having to
wake up early to catch the flight and that they were business class passengers who paid more for better service. It also
considered Savellano's social and official status. The court awarded P150,000 as nominal damages in order to vindicate
and recognize their right to be notified and consulted.

After allegedly finding that their luggage had been ransacked, petitioners never lodged a complaint with any
Northwest airport personnel. Neither did they mention the alleged loss of their valuables in their November 22, 1991
demand letter.31 Hence, in accordance with the parties' contract of carriage, no claim can be heard or admitted
against respondent with respect to alleged damage to or loss of petitioners' baggage.

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Petitioner Victorino Savellano was a Cabugao, Ilocos Sur mayor for many terms, former Chairman of COMELEC and RTC
judge. His wife, Virginia is a businesswoman and operates several rural banks in Ilocos Sur while their son was the Vice
Mayor, who was then the subject during the incident. On October 27, 1991, they departed from San Francisco, USA on
board Northwest Airlines (NW), Business Class, bound for Manila using the NW round-trip tickets which were issued
respondent’s ticketing office. The pilot made an emergency landing in Seattle after announcing that a fire had started in
one of the plane's engines. "[Petitioners] and the other passengers proceeded to Gate 8 of the Seattle Airport where they
were instructed to go home to Manila the next day, 'using the same boarding passes with the same seating
arrangements'. A shuttle bus thereafter brought all passengers to the Seattle Red Lion Hotel.. At around midnight, they
were awakened by a phone call from Northwest's personnel saying that they would be take a Seattle-Tokyo-Manila route
on the flight back to Manila the next day. Upon arrival at the airport they were again advised that they would take an
alternative and longer route (Seattle - Los Angeles - Seoul- Manila) back to Manila.

Meanwhile, the other passengers took the first route. Upon arrival of Savellano at Manila, they were teased for taking the
longer and tiresome route. They also discovered that their luggage had been ransacked and the contents stolen.

Savellano demanded damages on the ground that they suffered inconvenience, embarrassment and humiliation for taking
the longer route and likewise alleged that their luggage had been ransacked.

ISSUE: Whether or not Savellano is entitled to actual, moral and exemplary damages.

HELD: No. Savellano is only entitled for nominal damages.

On exemplary damages, it is not proper. The Civil Code provides that "[i]n contracts and quasi-contracts, the court may
award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner."
The unexpected and sudden requirement of having to arrange connecting flights in just a few hours, in addition to the
Northwest employees' normal workload was difficult to satisfy perfectly. Northwest is not liable for its imperfection of
neglecting to consult with passengers beforehand.

Nominal damages are awarded in this case. The court considered that Savellano suffered the inconvenience of having to
wake up early to catch the flight and that they were business class passengers who paid more for better service. It also
considered Savellano's social and official status. The court awarded P150,000 as nominal damages in order to vindicate
and recognize their right to be notified and consulted.

After allegedly finding that their luggage had been ransacked, petitioners never lodged a complaint with any
Northwest airport personnel. Neither did they mention the alleged loss of their valuables in their November 22, 1991
demand letter.31 Hence, in accordance with the parties' contract of carriage, no claim can be heard or admitted
against respondent with respect to alleged damage to or loss of petitioners' baggage.

Therefore, the Petition is hereby PARTIALLY GRANTED, and the assailed Decision MODIFIED. Respondent is ORDERED to
pay one hundred fifty thousand pesos (P150,000) to each of the three petitioners as nominal damages.

65. YOBIDO V. COURT OF APPEALS; G.R. No. 113003 October 17, 1997

FACTS: This is the case wherein spouses Tito and Leny Tumboy and their minor children boarded a Yobido
Liner bus boarded at Mangagoy to Davao City.

Along the road, the left front tire of the bus exploded. The bus fell into a ravine which resulted in the death
of 28-year old Tumboy and physical injuries to other passengers. The lower court rendered a decision dismissing
the action for lack of merit, asserting that the falling of the bus to the cliff was a result of no other outside factor than the
tire blow-out. The CA reversed its decision asserting that the explosion of the tire is not in itself a fortuitous event. The
cause of the blow-out, if due to a factory defect, improper mounting, excessive tire pressure, is not an unavoidable event

Issue/s:

Whether or not the Yobido (bus-owner) be exempt from liability because the tire blowout was no more
than a fortuitous event that could not have foreseen.

Ruling:

No. Under the circumstances of the present case, the explosion of the new tire may not be considered a
fortuitous event. It is settled that an accident caused either by defects in the automobile or through the
negligence of its driver is not a caso fortuito that would exempt the carrier from liability for damages.
A common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. The
common carrier must still prove that it was not negligent in causing the death or injury resulting from an
accident.

In culpa contractual, once a passenger dies or injured, the carrier is presumed to have been at fault or to
have acted negligently. This presumption may only be overcome by evidence that the carrier had observed
extraordinary diligence.

The Yobido failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she
cautioned the driver to slow down. These contradictory facts must, be resolved in favor of liability in view
of the presumption of negligence of the carrier in the law. Coupled with this is the established condition of
the road tough, winding and wet due to rain. It was incumbent upon the defense to establish that it took
precautionary measures considering partially dangerous condition of the road.

Yobido failed to discharge its duty to overthrow the presumption of negligence with clear and convincing
evidence.

Spouses Tito and Leny Tumboy and their minor children, Ardee and Jasmin, bearded at Mangagoy, Surigao del Sur, a
Yobido Liner bus bound for Davao City. Along the Road, the left front tire of the bus exploded. The bus fell into a ravine
around three (3) feet from the road and struck a tree. The incident resulted in the death of 28-year-old Tito Tumboy and
physical injuries to other passengers. A complaint for breach of contract of carriage, damages and attorney's fees was
filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido, its driver, before the
Regional Trial Court of Davao City. When the defendants therein filed their answer to the complaint, they raised the
affirmative defense of caso fortuito.

The lower court rendered a decision dismissing the action for lack of merit, asserting that the falling of the bus to the cliff
was a result of no other outside factor than the tire blow-out. The CA reversed its decision asserting that the explosion of
the tire is not in itself a fortuitous event. The cause of the blow-out, if due to a factory defect, improper mounting,
excessive tire pressure, is not an unavoidable event

ISSUE: Whether or not the explosion of a newly installed tire of a passenger vehicle is a fortuitous event
that exempts the carrier from liability for the death of a passenger.

HELD: No. The explosion of a newly installed tire of a passenger vehicle is NOT a fortuitous event that exempts the
carrier from liability for the death of a passenger.

Art. 1756. In case of death 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;
and Article 1755 also provides that a common carrier is bound to carry the passengers safely as far as human care and
foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.
Moreover, a common carrier may not be absolved from liability in case of force majeure or fortuitous event alone. The
common carrier must still prove that it was not negligent in causing the death or injury resulting from an accident.

In this case, while it may be true that the tire that blew-up was still good because the grooves of the tire were still visible,
this fact alone does not make the explosion of the tire a fortuitous event. No evidence was presented to show that the
accident was due to adverse road conditions or that precautions were taken by the jeepney driver to compensate for any
conditions liable to cause accidents.

The sudden blowing-up, therefore, could have been caused by too much air pressure injected into the tire coupled by the
fact that the jeepney was overloaded and speeding at the time of the accident.

90. SOUTHERN LINES, INC. VS. COURT OF APPEALS; G.R. No. L-16629 January 31, 1962

FACTS: Sometime in 1948, the City of Iloilo requisitioned for rice from the National Rice and Corn Corporation (hereafter
referred to as NARIC) in Manila. NARIC shipped 1,726 sacks of rice consigned to the City of Iloilo on board the SS
"General Wright" belonging to the Southern Lines, Inc. Each sack of rice weighed 75 kilos and the entire shipment as
indicated in the bill of lading had a total weight of 129,450 kilos. According to the bill of lading, the cost of the shipment
was P63,115.50 On September 3, 1948, the City of Iloilo received the shipment and paid the amount of P63,115.50.
However, it was noted that the foot of the bill of lading that the City of Iloilo 'Received the above mentioned merchandise
apparently in same condition as when shipped, save as noted below: actually received 1685 sacks with a gross weight of
116,131 kilos upon actual weighing. Total shortage ascertained 13,319 kilos." The shortage was equivalent to 41 sacks of
rice with a net weight of 13,319 kilos, the proportionate value of which was P6,486.35. The City of Iloilo filed a complaint
in the CFI against NARIC and the Southern Lines, Inc. for the recovery of the amount of P6,486.35 representing the value
of the shortage of the shipment of rice. After trial, the lower court absolved NARIC from the complaint, but sentenced the
Southern Lines, Inc. to pay the amount of P4,931.41 which is the difference between the sum of P6,486.35 and
P1,554.94 representing the latter's counterclaim for handling and freight. The Southern Lines, Inc. appealed to the Court
of Appeals which affirmed the judgment of the trial court. Hence, this petition for review.

ISSUE: Whether or not the defendant-carrier, the herein petitioner, is liable for the loss or shortage of the
rice shipped.

HELD: Yes. The defendant-carrier, the herein petitioner, is liable for the loss or shortage of the rice shipped.

Under the provisions of Article 361, the defendant-carrier in order to free itself from liability, was only obliged to prove
that the damages suffered by the goods were "by virtue of the nature or defect of the articles." Under the provisions of
Article 362, the plaintiff, in order to hold the defendant liable, was obliged to prove that the damages to the goods by
virtue of their nature, occurred on account of its negligence or because the defendant did not take the precaution
adopted by careful persons. (Government v. Ynchausti & Co., 40 Phil. 219, 223).

Petitioner claims exemption from liability by contending that the shortage in the shipment of rice was due to such factors
as the shrinkage, leakage or spillage of the rice on account of the bad condition of the sacks at the time it received the
same and the negligence of the agents of respondent City of Iloilo in receiving the shipment. The contention is untenable,
for, if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it
accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting thereform.
Furthermore, according to the Court of Appeals, "appellant (petitioner) itself frankly admitted that the strings that tied the
bags of rice were broken; some bags were with holes and plenty of rice were spilled inside the hull of the boat, and that
the personnel of the boat collected no less than 26 sacks of rice which they had distributed among themselves." This
finding, which is binding upon this Court, shows that the shortage resulted from the negligence of petitioner.

In the case at bar, the record shows that petitioner failed to plead this defense in its answer to respondent's complaint
and, therefore, the same is deemed waived (Section 10, Rule 9, Rules of Court), and cannot be raised for the first time at
the trial or on appeal.

... the records reveal that the appellee (respondent) filed the present action, within a reasonable time after the
short delivery in the shipment of the rice was made. It should be recalled that the present action is one for the
refund of the amount paid in excess, and not for damages or the recovery of the shortage; for admittedly the
appellee (respondent) had paid the entire value of the 1726 sacks of rice, subject to subsequent adjustment, as
to shortages or losses. The bill of lading does not at all limit the time for filing an action for the refund of money
paid in excess. 

Thus, petitioner is liable for the loss.

90. SOUTHERN LINES, INC. VS. COURT OF APPEALS; G.R. No. L-16629 January 31, 1962

FACTS: This is a case of loss or shortage of rice shipped in relation to partial and
defective delivery. NARIC shipped 1,726 sacks of rice consigned to the City of Iloilo on board the
SS "General Wright" belonging to the Southern Lines, Inc. According to the bill of lading, the cost of
the shipment was P63,115. The City of Iloilo received the shipment and paid the same. However,
there was a shortage on the total weight equivalent to 41 sacks of rice that was received by City of
Iloilo. So, the City of Iloilo filed a complaint against NARIC and the Southern Lines, Inc. for the
recovery of the total amount of the value of the shortage of the shipment of rice.

After trial, the lower court absolved NARIC from the complaint, but sentenced the Southern Lines,
Inc. to pay. The Southern Lines, Inc. appealed to the CA which affirmed the judgment of the trial
court. Hence, this petition for review.

ISSUE: Whether or not the defendant-carrier, the herein petitioner, is liable for the loss
or shortage of the rice shipped.

HELD: Yes. The defendant-carrier, the herein petitioner, is liable for the loss or shortage of the rice
shipped.

Under the provisions of Article 361, the defendant-carrier in order to free itself from liability, was only
obliged to prove that the damages suffered by the goods were "by virtue of the nature or defect of
the articles." 1734, character of the goods or defect in packaging or container. Under the provisions
of Article 362, the plaintiff, in order to hold the defendant liable, was obliged to prove that the
damages to the goods by virtue of their nature, occurred on account of its negligence or because
the defendant did not take the precaution adopted by careful persons.

Petitioner claims exemption from liability by contending that the shortage in the shipment of rice was
due to such factors as the shrinkage, leakage or spillage of the rice on account of the bad condition
of the sacks at the time it received the same and the negligence of the agents of respondent City of
Iloilo in receiving the shipment. The contention is untenable, for, if the fact of improper
packing is known to the carrier or his servants, or apparent upon ordinary observation,
but it accepts the goods notwithstanding such condition, it is not relieved of liability for
loss or injury resulting thereform. 

The strings that tied the bags of rice were broken; some bags were with holes and plenty of rice
were spilled inside the hull of the boat, and that the personnel of the boat collected no less than 26
sacks of rice which they had distributed among themselves." This finding, which is binding upon this
Court, shows that the shortage resulted from the negligence of petitioner.

Invoking the provisions of Article 366 of the Code of Commerce and those of the bill of lading,
petitioner further contends that respondent is precluded from filing an action for damages on account
of its failure to present a claim within 24 hours from receipt of the shipment. AND THE effect that
the requirement that the claim for damages must be made within 24 hours from delivery
is a condition precedent to the accrual of the right of action to recover damages.
As I mentioned earlier, the present action is one for the refund of the amount paid in excess, and not
for damages or the recovery of the shortage; for admittedly the appellee (respondent) had paid the
entire value of the 1726 sacks of rice, subject to subsequent adjustment, as to shortages or losses.
The bill of lading does not at all limit the time for filing an action for the refund of money
paid in excess.

The records reveal that the appellee (respondent) filed the present action, within a reasonable time
after the short delivery in the shipment of the rice was made. In the case at bar, the record
shows that petitioner failed to plead this defense in its answer to respondent's complaint
and, therefore, the same is deemed waived 

Under the provisions of Article 361, the defendant-carrier in order to free itself from liability, was only
obliged to prove that the damages suffered by the goods were "by virtue of the nature or defect of
the articles." Under the provisions of Article 362, the plaintiff, in order to hold the defendant liable,
was obliged to prove that the damages to the goods by virtue of their nature, occurred on account of
its negligence or because the defendant did not take the precaution adopted by careful
persons. (Government v. Ynchausti & Co., 40 Phil. 219, 223).