10 Sps Cruz V Sun Holidays

9/9/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 622
G.R. No. 186312. June 29, 2010.*

SPOUSES DANTE CRUZ and LEONORA CRUZ,
petitioners, vs. SUN HOLIDAYS, INC., respondent.
Civil Law; Common Carriers; Definition of Common Carriers.

As De Guzman instructs, Article 1732 of the Civil Code defining
common carriers has deliberately refrained from making
distinctions on whether the carrying of persons or goods is the
carriers principal business, whether it is offered on a regular
basis, or whether it is offered to the general public. The intent of
the law is thus to not consider such distinctions. Otherwise, there
is no telling how many other distinctions may be concocted by
unscrupulous businessmen engaged in the carrying of persons or
goods in order to avoid the legal obligations and liabilities of
common carriers.
Same; Same; Degree of Diligence Required; From the nature of
their business and for reasons of public policy, common carriers
are bound to observe extraordinary diligence for the safety of the
passengers transported by them, according to all the circumstances
of each case.Under the Civil Code, common carriers, from the
nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence for the safety of the
passengers transported by them, according to all the
circumstances of each case. They are bound to carry the
passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due
regard for all the circumstances.
Same; Same; Negligence; Presumption of Negligence; When a
passenger dies or is injured in the discharge of a contract of
carriage, it is presumed that the common carrier is at fault or
negligent.When a passenger dies or is injured in the discharge
of a contract of carriage, it is presumed that the common carrier is
at fault or negligent. In fact, there is even no need for the court to
make an express finding of fault or negligence on the part of the
common carrier. This statutory presumption may only be
overcome by evidence that the carrier exercised extraordinary
diligence.
* THIRD DIVISION.
http://www.central.com.ph/sfsreader/session/0000015e65189d1c20a94c18003600fb002c009e/t/?o=False 1/15
390
390 SUPREME COURT REPORTS ANNOTATED
Cruz vs. Sun Holidays, Inc.
Same; Same; Same; Fortuitous Event; Element of a

Fortuitous Event.The elements of a fortuitous event are: (a)
the cause of the unforeseen and unexpected occurrence, or the
failure of the debtors to comply with their obligations, must have
been independent of human will; (b) the event that constituted
the caso fortuito must have been impossible to foresee or, if
foreseeable, impossible to avoid; (c) the occurrence must have
been such as to render it impossible for the debtors to fulfill their
obligation in a normal manner; and (d) the obligor must have
been free from any participation in the aggravation of the
resulting injury to the creditor.
Same; Same; Same; Same; To fully free a common carrier
from any liability, the fortuitous event must have been the
proximate and only cause of the loss.To fully free a common
carrier from any liability, the fortuitous event must have been the
proximate and only cause of the loss. And it should have
exercised due diligence to prevent or minimize the loss before,
during and after the occurrence of the fortuitous event.
Same; Same; Same; Damages; Liability of a common carrier
in breach of its contract of carriage resulting in the death of a
passenger.Article 1764 vis--vis Article 2206 of the Civil Code
holds the common carrier in breach of its contract of carriage that
results in the death of a passenger liable to pay the following: (1)
indemnity for death, (2) indemnity for loss of earning capacity and
(3) moral damages
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.
Fortun, Narvasa & Salazar for petitioners.
Sycip, Salazar, Hernandez & Gatmaitan for respondent.

CARPIO-MORALES, J.:
Spouses Dante and Leonora Cruz (petitioners) lodged a
Complaint on January 25, 2001[1] against Sun Holidays,
Inc.
_______________
[1] Records, pp. 2-6.
391
VOL. 622, JUNE 29, 2010 391

(respondent) with the Regional Trial Court (RTC) of Pasig

City for damages arising from the death of their son
Ruelito C. Cruz (Ruelito) who perished with his wife on
September 11, 2000 on board the boat M/B Coco Beach III
that capsized en route to Batangas from Puerto Galera,
Oriental Mindoro where the couple had stayed at Coco
Beach Island Resort (Resort) owned and operated by
respondent.
The stay of the newly wed Ruelito and his wife at the
Resort from September 9 to 11, 2000 was by virtue of a tour
package-contract with respondent that included
transportation to and from the Resort and the point of
departure in Batangas.
Miguel C. Matute (Matute),[2] a scuba diving instructor
and one of the survivors, gave his account of the incident
that led to the filing of the complaint as follows:
Matute stayed at the Resort from September 8 to 11,
2000. He was originally scheduled to leave the Resort in
the afternoon of September 10, 2000, but was advised to
stay for another night because of strong winds and heavy
rains.
On September 11, 2000, as it was still windy, Matute
and 25 other Resort guests including petitioners son and
his wife trekked to the other side of the Coco Beach
mountain that was sheltered from the wind where they
boarded M/B Coco Beach III, which was to ferry them to
Batangas.
Shortly after the boat sailed, it started to rain. As it
moved farther away from Puerto Galera and into the open
seas, the rain and wind got stronger, causing the boat to
tilt from side to side and the captain to step forward to the
front, leaving the wheel to one of the crew members.
The waves got more unwieldy. After getting hit by two
big waves which came one after the other, M/B Coco Beach
III capsized putting all passengers underwater.
_______________
[2] TSN of September 12, 2002, pp. 2-22.
392

The passengers, who had put on their life jackets,

struggled to get out of the boat. Upon seeing the captain,
Matute and the other passengers who reached the surface
asked him what they could do to save the people who were
still trapped under the boat. The captain replied Iligtas
niyo na lang ang sarili niyo (Just save yourselves).
Help came after about 45 minutes when two boats
owned by Asia Divers in Sabang, Puerto Galera passed by
the capsized M/B Coco Beach III. Boarded on those two
boats were 22 persons, consisting of 18 passengers and four
crew members, who were brought to Pisa Island. Eight
passengers, including petitioners son and his wife, died
during the incident.
At the time of Ruelitos death, he was 28 years old and
employed as a contractual worker for Mitsui Engineering &
Shipbuilding Arabia, Ltd. in Saudi Arabia, with a basic
monthly salary of $900.[3]
Petitioners, by letter of October 26, 2000,[4] demanded
indemnification from respondent for the death of their son
in the amount of at least P4,000,000.
Replying, respondent, by letter dated November 7, 2000,
[5] denied any responsibility for the incident which it
considered to be a fortuitous event. It nevertheless offered,
as an act of commiseration, the amount of P10,000 to
petitioners upon their signing of a waiver.
As petitioners declined respondents offer, they filed the
Complaint, as earlier reflected, alleging that respondent, as
a common carrier, was guilty of negligence in allowing M/B
Coco Beach III to sail notwithstanding storm warning
bulletins issued by the Philippine Atmospheric,
Geophysical and
_______________
[3] Vide TSN of May 2, 2002, pp. 5-7; records, p. 4.
[4] Records, pp. 19-20.
[5] Id., at pp. 21-22.
393
VOL. 622, JUNE 29, 2010 393

Astronomical Services Administration (PAGASA) as early

as 5:00 a.m. of September 11, 2000.[6]
In its Answer,[7] respondent denied being a common

carrier, alleging that its boats are not available to the
general public as they only ferry Resort guests and crew
members. Nonetheless, it claimed that it exercised the
utmost diligence in ensuring the safety of its passengers;
contrary to petitioners allegation, there was no storm on
September 11, 2000 as the Coast Guard in fact cleared the
voyage; and M/B Coco Beach III was not filled to capacity
and had sufficient life jackets for its passengers. By way of
Counterclaim, respondent alleged that it is entitled to an
award for attorneys fees and litigation expenses
amounting to not less than P300,000.
Carlos Bonquin, captain of M/B Coco Beach III, averred
that the Resort customarily requires four conditions to be
met before a boat is allowed to sail, to wit: (1) the sea is
calm, (2) there is clearance from the Coast Guard, (3) there
is clearance from the captain and (4) there is clearance
from the Resorts assistant manager.[8] He added that M/B
Coco Beach III met all four conditions on September 11,
2000,[9] but a subasco or squall, characterized by strong
winds and big waves, suddenly occurred, causing the boat
to capsize.[10]
By Decision of February 16, 2005,[11] Branch 267 of the
Pasig RTC dismissed petitioners Complaint and
respondents Counterclaim.
Petitioners Motion for Reconsideration having been
denied by Order dated September 2, 2005,[12] they appealed
to the Court of Appeals.
_______________
[6] Vide Complaint, supra note 1.
[7] Records, pp. 28-35.
[8] Vide TSN of February 4, 2003, pp. 6-7.
[9] Id., at p. 8.
[10] TSN of March 4, 2003, pp. 5-6.
[11] Records, pp. 488-496.
[12] Id., at pp. 581-585.
394

By Decision of August 19, 2008,[13] the appellate court

denied petitioners appeal, holding, among other things,
that the trial court correctly ruled that respondent is a
private carrier which is only required to observe ordinary

diligence; that respondent in fact observed extraordinary
diligence in transporting its guests on board M/B Coco
Beach III; and that the proximate cause of the incident was
a squall, a fortuitous event.
Petitioners Motion for Reconsideration having been
denied by Resolution dated January 16, 2009,[14] they filed
the present Petition for Review.[15]
Petitioners maintain the position they took before the
trial court, adding that respondent is a common carrier
since by its tour package, the transporting of its guests is
an integral part of its resort business. They inform that
another division of the appellate court in fact held
respondent liable for damages to the other survivors of the
incident.
Upon the other hand, respondent contends that
petitioners failed to present evidence to prove that it is a
common carrier; that the Resorts ferry services for guests
cannot be considered as ancillary to its business as no
income is derived therefrom; that it exercised
extraordinary diligence as shown by the conditions it had
imposed before allowing M/B Coco Beach III to sail; that
the incident was caused by a fortuitous event without any
contributory negligence on its part; and that the other case
wherein the appellate court held it liable for damages
involved different plaintiffs, issues and evidence.[16]
The petition is impressed with merit.
_______________
[13] Penned by Associate Justice Normandie B. Pizarro, with the
concurrence of Associate Justices Edgardo P. Cruz and Fernanda Lampas-
Peralta; CA Rollo, pp. 135-147.
[14] Id., at pp. 190-191.
[15] Rollo, pp. 18-31.
[16] Vide Comment, id., at pp. 60-81.
395
VOL. 622, JUNE 29, 2010 395

Petitioners correctly rely on De Guzman v. Court of

Appeals[17] in characterizing respondent as a common
carrier.
The Civil Code defines common carriers in the
following terms:
Article 1732. Common carriers are persons, corporations,

firms or associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or
air for compensation, offering their services to the public.
The above article makes no distinction between one whose
principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an
ancillary activity (in local idiom, as a sideline). Article 1732
also carefully avoids making any distinction between a
person or enterprise offering transportation service on a regular
or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does
Article 1732 distinguish between a carrier offering its services
to the general public, i.e., the general community or
population, and one who offers services or solicits business only
from a narrow segment of the general population. We think
that Article 1733 deliberately refrained from making such
distinctions.
So understood, the concept of common carrier under Article
1732 may be seen to coincide neatly with the notion of public
service, under the Public Service Act (Commonwealth Act No.
1416, as amended) which at least partially supplements the law
on common carriers set forth in the Civil Code. Under Section 13,
paragraph (b) of the Public Service Act, public service includes:
. . . every person that now or hereafter may own,
operate, manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general
business purposes, any common carrier, railroad, street
railway, traction railway, subway motor vehicle, either for
freight or passenger, or both, with or without fixed route
and whatever may be its classification, freight or carrier
service of any class, express service, steamboat, or
steamship line, pontines, ferries and wa-
_______________
[17] G.R. No. L-47822, December 22, 1988, 168 SCRA 612.
396

ter craft, engaged in the transportation of passengers or freight or

both, shipyard, marine repair shop, wharf or dock, ice plant, ice-
refrigeration plant, canal, irrigation system, gas, electric light,
heat and power, water supply and power petroleum, sewerage
system, wire or wireless communications systems, wire or
wireless broadcasting stations and other similar public services . .

.[18] (emphasis and underscoring supplied.)

Indeed, respondent is a common carrier. Its ferry
services are so intertwined with its main business as to be
properly considered ancillary thereto. The constancy of
respondents ferry services in its resort operations is
underscored by its having its own Coco Beach boats. And
the tour packages it offers, which include the ferry services,
may be availed of by anyone who can afford to pay the
same. These services are thus available to the public.
That respondent does not charge a separate fee or fare
for its ferry services is of no moment. It would be
imprudent to suppose that it provides said services at a
loss. The Court is aware of the practice of beach resort
operators offering tour packages to factor the
transportation fee in arriving at the tour package price.
That guests who opt not to avail of respondents ferry
services pay the same amount is likewise inconsequential.
These guests may only be deemed to have overpaid.
As De Guzman instructs, Article 1732 of the Civil Code
defining common carriers has deliberately refrained from
making distinctions on whether the carrying of persons or
goods is the carriers principal business, whether it is
offered on a regular basis, or whether it is offered to the
general public. The intent of the law is thus to not consider
such distinctions. Otherwise, there is no telling how many
other distinctions may be concocted by unscrupulous
businessmen engaged in the carrying of persons or goods in
order to avoid the legal obligations and liabilities of
common carriers.
_______________
[18] Id., at pp. 617-618.
397
VOL. 622, JUNE 29, 2010 397

Under the Civil Code, common carriers, from the nature

of their business and for reasons of public policy, are bound
to observe extraordinary diligence for the safety of the
passengers transported by them, according to all the
circumstances of each case.[19] They are bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious

persons, with due regard for all the circumstances.[20]
When a passenger dies or is injured in the discharge of a
contract of carriage, it is presumed that the common
carrier is at fault or negligent. In fact, there is even no
need for the court to make an express finding of fault or
negligence on the part of the common carrier. This
statutory presumption may only be overcome by evidence
that the carrier exercised extraordinary diligence.[21]
Respondent nevertheless harps on its strict compliance
with the earlier mentioned conditions of voyage before it
allowed M/B Coco Beach III to sail on September 11, 2000.
Respondents position does not impress.
The evidence shows that PAGASA issued 24-hour public
weather forecasts and tropical cyclone warnings for
shipping on September 10 and 11, 2000 advising of tropical
depressions in Northern Luzon which would also affect the
province of Mindoro.[22] By the testimony of Dr. Frisco Nilo,
supervising weather specialist of PAGASA, squalls are to
be expected under such weather condition.[23]
A very cautious person exercising the utmost diligence
would thus not brave such stormy weather and put other
peoples lives at risk. The extraordinary diligence required
of
_______________
[19] CIVIL CODE, Art. 1733.
[20] Id., Art. 1755.
[21] Diaz v. Court of Appeals, G.R. No. 149749, July 25, 2006, 496
SCRA 468, 472.
[22] Vide records, pp. 268-276.
[23] Vide TSN of December 13, 2001, pp. 3-19.
398

common carriers demands that they take care of the goods

or lives entrusted to their hands as if they were their own.
This respondent failed to do.
Respondents insistence that the incident was caused by
a fortuitous event does not impress either.
The elements of a fortuitous event are: (a) the cause of
the unforeseen and unexpected occurrence, or the failure of
the debtors to comply with their obligations, must have
been independent of human will; (b) the event that
constituted the caso fortuito must have been impossible to

foresee or, if foreseeable, impossible to avoid; (c) the
occurrence must have been such as to render it impossible
for the debtors to fulfill their obligation in a normal
manner; and (d) the obligor must have been free from any
participation in the aggravation of the resulting injury to
the creditor.[24]
To fully free a common carrier from any liability, the
fortuitous event must have been the proximate and only
cause of the loss. And it should have exercised due
diligence to prevent or minimize the loss before, during and
after the occurrence of the fortuitous event.[25]
Respondent cites the squall that occurred during the
voyage as the fortuitous event that overturned M/B Coco
Beach III. As reflected above, however, the occurrence of
squalls was expected under the weather condition of
September 11, 2000. Moreover, evidence shows that M/B
Coco Beach III suffered engine trouble before it capsized
and sank.[26] The incident was, therefore, not completely
free from human intervention.
The Court need not belabor how respondents evidence
likewise fails to demonstrate that it exercised due diligence
to
_______________
[24] Lea Mer Industries, Inc. v. Malayan Insurance Co., Inc., G.R. No.
161745, September 30, 2005, 471 SCRA 698, 707-708.
[25] Ibid.
[26] Records, pp. 279-280.
399
VOL. 622, JUNE 29, 2010 399

prevent or minimize the loss before, during and after the

occurrence of the squall.
Article 1764[27] vis--vis Article 2206[28] of the Civil
Code holds the common carrier in breach of its contract of
carriage that results in the death of a passenger liable to
pay the following: (1) indemnity for death, (2) indemnity for
loss of earning capacity and (3) moral damages.
Petitioners are entitled to indemnity for the death of
Ruelito which is fixed at P50,000.[29]
As for damages representing unearned income, the
formula for its computation is:
_______________
[27] Art. 1764. Damages in cases comprised in this Section shall be
awarded in accordance with Title XVIII of this Book concerning Damages.
Article 2206 shall also apply to the death of a passenger caused by the
breach of contract by a common carrier.
[28] Art. 2206. The amount of damages for death caused by a crime or
quasi-delict shall be at least three thousand pesos, even though there may
have been mitigating circumstances. In addition:
(1) The defendant shall be liable for the loss of the earning capacity of
the deceased, and the indemnity shall be paid to the heirs of the latter;
such indemnity shall in every case be assessed and awarded by the court,
unless the deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death;
(2) If the deceased was obliged to give support according to the
provisions of article 291, the recipient who is not an heir called to the
decedent's inheritance by the law of testate or intestate succession, may
demand support from the person causing the death, for a period not
exceeding five years, the exact duration to be fixed by the court;
(3) The spouse, legitimate and illegitimate descendants and
ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased.
[29] Tiu v. Arriesgado, G.R. No. 138060, September 1, 2004, 437 SCRA
426, 451-452.

400

Net Earning Capacity = life expectancy x (gross annual income

- reasonable and necessary living expenses).
Life expectancy is determined in accordance with the formula:
2 / 3 x [80 age of deceased at the time of death][30]

The first factor, i.e., life expectancy, is computed by
applying the formula (2/3 x [80 age at death]) adopted in
the American Expectancy Table of Mortality or the
Actuarial of Combined Experience Table of Mortality.[31]
The second factor is computed by multiplying the life
expectancy by the net earnings of the deceased, i.e., the
total earnings less expenses necessary in the creation of
such earnings or income and less living and other
incidental expenses.[32] The loss is not equivalent to the
entire earnings of the deceased, but only such portion as he
would have used to support his dependents or heirs. Hence,
to be deducted from his gross earnings are the necessary

expenses supposed to be used by the deceased for his own
needs.[33]
In computing the third factornecessary living expense,
Smith Bell Dodwell Shipping Agency Corp. v. Borja[34]
teaches that when, as in this case, there is no showing that
the living expenses constituted the smaller percentage of
the gross income, the living expenses are fixed at half of
the gross income.
Applying the above guidelines, the Court determines
Ruelitos life expectancy as follows:
_______________
[30] Candano Shipping Lines, Inc. v. Sugata-on, G.R. No. 163212,
March 13, 2007, 578 SCRA 221, 235.
[31] Lambert v. Heirs of Ray Castillon, G.R. No. 160709, February 23,
2005, 452 SCRA 285, 294.
[32] Ibid.
[33] Magbanua v. Tabusares, Jr., G.R. No. 152134, June 4, 2004, 431
SCRA 99, 104.
[34] G.R. No. 143008, June 10, 2002, 383 SCRA 341, 351.
401
VOL. 622, JUNE 29, 2010 401

Life expectancy = 2/3 x [80 - age of deceased at the time of death]

2/3 x [80 - 28]
2/3 x [52]
Life expectancy = 35

Documentary evidence shows that Ruelito was earning a
basic monthly salary of $900[35] which, when converted to
Philippine peso applying the annual average exchange rate
of $1 = P44 in 2000,[36] amounts to P39,600. Ruelitos net
earning capacity is thus computed as follows:
Net Earning Capacity = life expectancy x (gross annual income -

reasonable and necessary living expenses).
= 35 x (P475,200 - P237,600)
= 35 x (P237,600)
Net Earning Capacity = P8,316,000

Respecting the award of moral damages, since
respondent common carriers breach of contract of carriage
resulted in the death of petitioners son, following Article

1764 vis--vis Article 2206 of the Civil Code, petitioners are
entitled to moral damages.
Since respondent failed to prove that it exercised the
extraordinary diligence required of common carriers, it is
presumed to have acted recklessly, thus warranting the
award too of exemplary damages, which are granted in
contractual obligations if the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner.[37]
_______________
[35] Vide records, pp. 258-259.
[36] For reference, vide Bangko Sentral ng Pilipinas Treasury
Department Reference Exchange Rate Bulletins at
www.bsp.gov.ph/dbank_reports/ExchangeRates.
[37] Vide Yobido v. Court of Appeals, 346 Phil. 1, 13; 281 SCRA 1, 12
(1997).

402

Under the circumstances, it is reasonable to award

petitioners the amount of P100,000 as moral damages and
P100,000 as exemplary damages.[38]
Pursuant to Article 2208[39] of the Civil Code, attorney's
fees may also be awarded where exemplary damages are
awarded. The Court finds that 10% of the total amount
adjudged against respondent is reasonable for the purpose.
Finally, Eastern Shipping Lines, Inc. v. Court of
Appeals[40] teaches that when an obligation, regardless of
its source, i.e., law, contracts, quasi-contracts, delicts or
quasi-delicts is breached, the contravenor can be held liable
for payment of interest in the concept of actual and
compensatory damages, subject to the following rules, to
wit
1. When the obligation is breached, and it consists in
the payment of a sum of money, i.e., a loan or forbearance
of money, the interest due should be that which may have
been stipulated in writing. Furthermore, the interest due
shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of
interest shall be 12% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under
and subject to the provisions of Article 1169 of the Civil

Code.
2. When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum. No
interest, however, shall be adjudged on unliquidated claims
or damages except when or until the demand can be
established with reasonable certainty. Accordingly, where
the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made
judicially or extrajudi-
_______________
[38] Vide Victory Liner, Inc. v. Gammad, G.R. No. 159636, November
25, 2004, 444 SCRA 355, 370.
[39] Art. 2208. 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;
[40] G.R. No. 97412, July 12, 1994, 234 SCRA 78, 95-97.
403
VOL. 622, JUNE 29, 2010 403

cially (Art. 1169, Civil Code) but when such certainty

cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from
the date the judgment of the court is made (at which time
the quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the
amount finally adjudged.
3. When the judgment of the court awarding a sum of
money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such
finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of
credit. (emphasis supplied).
Since the amounts payable by respondent have been
determined with certainty only in the present petition, the
interest due shall be computed upon the finality of this
decision at the rate of 12% per annum until satisfaction, in
accordance with paragraph number 3 of the immediately

cited guideline in Eastern Shipping Lines, Inc.
WHEREFORE, the Court of Appeals Decision of August
19, 2008 is REVERSED and SET ASIDE. Judgment is
rendered in favor of petitioners ordering respondent to pay
petitioners the following: (1) P50,000 as indemnity for the
death of Ruelito Cruz; (2) P8,316,000 as indemnity for
Ruelitos loss of earning capacity; (3) P100,000 as moral
damages; (4) P100,000 as exemplary damages; (5) 10% of
the total amount adjudged against respondent as attorneys
fees; and (6) the costs of suit.
The total amount adjudged against respondent shall
earn interest at the rate of 12% per annum computed from
the finality of this decision until full payment.
SO ORDERED.
Brion, Bersamin, Abad** and Villarama, Jr., JJ.,

concur.
_______________
** Additional member per Special Order No. 843 dated May 17, 2010.
404

Judgment reversed and set aside.
Note.A common carrier is bound by law to exercise

extraordinary diligence and utmost care in ensuring for the
safety and welfare of its passengers with due regard for all
the circumstances. (Philippine Airlines, Inc vs. Court of
Appeals, 566 SCRA 124 [2008])
o0o
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9/9/2017 SUPREME COURT REPORTS ANNOTATED VOLUME 622

G.R. No. 186312. June 29, 2010.*

Civil Law; Common Carriers; Definition of Common Carriers.

390 SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

Same; Same; Same; Fortuitous Event; Element of a

PETITION for review on certiorari of a decision of the

VOL. 622, JUNE 29, 2010 391

(respondent) with the Regional Trial Court (RTC) of Pasig

392 SUPREME COURT REPORTS ANNOTATED

Cruz vs. Sun Holidays, Inc.

The passengers, who had put on their life jackets,

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Astronomical Services Administration (PAGASA) as early

In its Answer,[7] respondent denied being a common

394 SUPREME COURT REPORTS ANNOTATED

By Decision of August 19, 2008,[13] the appellate court

private carrier which is only required to observe ordinary

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Petitioners correctly rely on De Guzman v. Court of

Article 1732. Common carriers are persons, corporations,

396 SUPREME COURT REPORTS ANNOTATED

ter craft, engaged in the transportation of passengers or freight or

wireless broadcasting stations and other similar public services . .

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Under the Civil Code, common carriers, from the nature

provide, using the utmost diligence of very cautious

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common carriers demands that they take care of the goods

constituted the caso fortuito must have been impossible to

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prevent or minimize the loss before, during and after the

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Net Earning Capacity = life expectancy x (gross annual income

to be deducted from his gross earnings are the necessary

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Life expectancy = 2/3 x [80 - age of deceased at the time of death]

Net Earning Capacity = life expectancy x (gross annual income -

resulted in the death of petitioners son, following Article

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Under the circumstances, it is reasonable to award

and subject to the provisions of Article 1169 of the Civil

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cially (Art. 1169, Civil Code) but when such certainty

accordance with paragraph number 3 of the immediately

Brion, Bersamin, Abad** and Villarama, Jr., JJ.,

404 SUPREME COURT REPORTS ANNOTATED

Judgment reversed and set aside.

Note.A common carrier is bound by law to exercise

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