260 SUPREME COURT REPORTS ANNOTATED obtain.

In contracts or quasi-contracts, the obligor is

Trans-Asia Shipping Lines, Inc. vs. Court of Appeals liable for all the damages which may be reasonably
attributed to the non-performance of the obligation if
G.R. No. 118126. March 4, 1996. *

he is guilty of
TRANS-ASIA SHIPPING LINES, INC., _______________
petitioner, vs. COURT OF APPEALS and ATTY.
RENATO T. ARROYO, respondents.  THIRD DIVISION.
*

261
Common Carriers; The failure of a common carrier
to maintain in seaworthy condition its vessel involved VOL. 254, MARCH 4, 1996 261
in a contract of carriage is a clear breach of its duty Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
prescribed in Article 1755 of the Civil Code.—Before fraud, bad faith, malice, or wanton attitude.
commencing the contracted voyage, the petitioner Same;  Same; Anent a breach of a contract of
undertook some repairs on the cylinder head of one of common carriage, moral damages may be awarded if
the vessel’s engines. But even before it could finish the common carrier acted fraudulently or in bad faith.
these repairs, it allowed the vessel to leave the port of —Moral damages include moral suffering, mental
origin on only one functioning engine, instead of two. anguish, fright, serious anxiety, besmirched
Moreover, even the lone functioning engine was not in reputation, wounded feelings, moral shock, social
perfect condition as sometime after it had run its humiliation, or similar injury. They may be recovered in
course, it conked out. This caused the vessel to stop the cases enumerated in Article 2219 of the Civil Code,
and remain adrift at sea, thus in order to prevent the likewise, if they are the proximate result of, as in this
ship from capsizing, it had to drop anchor. Plainly, the case, the petitioner’s breach of the contract of
vessel was unseaworthy even before the voyage carriage. Anent a breach of a contract of common
began. For a vessel to be seaworthy, it must be carriage, moral damages may be awarded if the
adequately equipped for the voyage and manned with common carrier, like the petitioner, acted fraudulently
a sufficient number of competent officers and crew. or in bad faith.
The failure of a common carrier to maintain in Same;  Same; In contracts and quasi-contracts,
seaworthy condition its vessel involved in a contract of exemplary damages may be awarded if the defendant
carriage is a clear breach of its duty prescribed in acted in a wanton, fraudulent, reckless, oppressive or
Article 1755 of the Civil Code. malevolent manner.—Exemplary damages are
Same;  Damages;  In contracts or quasi-contracts, imposed by way of example or correction for the public
the obligor is liable for all the damages which may be good, in addition to moral, temperate, liquidated or
reasonably attributed to the non-performance of the compensatory damages. In contracts and quasi-
obligation if he is guilty of fraud, bad faith, malice, or contracts, exemplary damages may be awarded if the
wanton attitude.—Actual or compensatory damages defendant acted in a wanton, fraudulent, reckless,
represent the adequate compensation for pecuniary oppressive or malevolent manner. It cannot, however,
loss suffered and for profits the obligee failed to be considered as a matter of right; the court having to
decide whether or not they should be adjudicated. bench for, as earlier stated, the cause of the delay or
Before the court may consider an award for exemplary interruption was the petitioner’s failure to observe
damages, the plaintiff must first show that he is extraordinary diligence. Article 698 must then be read
entitled to moral, temperate or compensatory together with Articles 2199, 2200, 2201, and 2208 in
damages; but it is not necessary that he prove the relation to Article 21 of the Civil Code. So read, it
monetary value thereof. means that the petitioner is liable for any pecuniary
Same;  Same; Code of Commerce; Where the loss or loss of profits which the private respondent
delay in a contracted voyage is incurred after the may have suffered by reason thereof. For the private
commencement of such voyage, Article 698 of the respondent, such would be the loss of income if unable
Code of Commerce, not Article 1169 of the Civil Code, to report to his office on the day he was supposed to
applies.—The Court of Appeals did not grant the arrive were it not for the delay. This, however,
private respondent actual or compensatory damages, assumes that he stayed on the vessel and was with it
reasoning that no delay was incurred since there was when it thereafter resumed its voyage; but he did not.
no demand, as required by Article 1169 of the Civil Same;  Same; A common carrier, in allowing its
Code. This article, however, finds no application in this unseaworthy vessel to leave the port of origin and
case because, as found by the respondent Court, there undertake the contracted voyage, with full awareness
was in fact no delay in the commencement of the that it was exposed to perils of the sea, deliberately
contracted voyage. If any delay was incurred, it was disregarded its solemn duty to exercise extraordinary
after the commencement of such voyage, more diligence and obviously acted with bad faith and in a
specifically, when the voyage was subsequently wanton and reckless manner, thus making it liable for
interrupted when the vessel had to stop near Kawit moral and exemplary damages.—We likewise fully
Island after the only functioning engine conked out. As agree with the Court of Appeals that the petitioner is
to the rights and duties of the parties strictly arising liable for moral and exemplary damages. In allowing
out of such delay, the Civil Code is silent. its unseaworthy M/V Asia Thailand to leave the port of
262 origin and undertake the contracted voyage, with full
262 SUPREME COURT REPORTS ANNOTATED awareness that it was exposed to perils of the sea, it
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals deliberately disregarded its solemn duty to exercise
However, as correctly pointed out by the extraordinary diligence and obviously acted with bad
petitioner, Article 698 of the Code of Commerce faith and in a wanton and reckless manner.
specifically provides for such a situation. Same;  Same; Becoming alarmed, anxious, or
Same;  Same; Same;  Where the common carrier frightened at the stoppage of a vessel at sea in an
fails to observe extraordinary diligence resulting in unfamiliar zone at nighttime is not the sole
delay or interruption of the voyage, it shall be liable prerogative of the faint-hearted.—On this score,
for any pecuniary loss or loss of profits which the however, the petitioner asserts that the safety of the
passengers may suffer by reason thereof.—Of course, vessel and passengers was never at stake because the
this does not suffice for a resolution of the case at sea was “calm” in the vicinity where it stopped as
faithfully recorded in the vessel’s log book (Exhibit —as was not done in this case—and may not be
“4”). Hence, the petitioner concludes, the private deemed incorporated within a general prayer for “such
respondent was merely “over-reacting” to the situation other relief and remedy as this court may deem just
obtaining then. We hold that the petitioner’s defense and equitable.”
cannot exculpate it nor mitigate its liability. On
263 PETITION for review on certiorari of a decision of
VOL. 254, MARCH 4, 1996 263 the Court of Appeals.
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
the contrary, such a claim demonstrates beyond The facts are stated in the opinion of the Court.
cavil the petitioner’s lack of genuine concern for the      Jose M. Perez for petitioner.
safety of its passengers. It was, perhaps, only      Renato T. Arroyo for and in his own behalf.
providential that the sea happened to be calm. Even
so, the petitioner should not expect its passengers to DAVIDE, JR., J.:
act in the manner it desired. The passengers were not
stoics; becoming alarmed, anxious, or frightened at As formulated by the petitioner, the issue in this
the stoppage of a vessel at sea in an unfamiliar zone petition for review on certiorari under Rule 45 of
at nighttime is not the sole prerogative of the faint- the Rules of Court is as follows:
hearted. More so in the light of the many tragedies at 264
sea resulting in the loss of lives of hopeless 264 SUPREME COURT REPORTS ANNOTATED
passengers and damage to property simply because
common carriers failed in their duty to exercise
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
extraordinary diligence in the performance of their In case of interruption of a vessel’s voyage and the
obligations. consequent delay in that vessel’s arrival at its port of
Same;  Same; Attorney’s Fees;  Pleadings and destination, is the right of a passenger affected
Practice; To merit the award of attorney’s fees, it is thereby to be determined and governed by the vague
settled that the amount thereof must be proven, and Civil Code provision on common carriers, or shall it
that it must be specifically prayed for—it may not be be, in the absence of a specific provision thereon,
deemed incorporated within a general prayer for “such governed by Art. 698 of the Code of Commerce? 1

other relief and remedy as this court may deem just The petitioner considers it a “novel question of
and equitable.”—We cannot, however, give our law.” Upon a closer evaluation, however, of the
affirmance to the award of attorney’s fees. Under challenged decision of the Court of Appeals of 23
Article 2208 of the Civil Code, these are recoverable November 1994, vis-a-vis, the decision of 29 June
2

only in the concept of actual damages, not as moral 1992 in Civil Case No. 91-491 of the Regional Trial
damages nor judicial costs. Hence, to merit such an Court (RTC) of Cagayan de Oro City, Branch 24,  as 3

award, it is settled that the amount thereof must be well as the allegations and arguments adduced by
proven. Moreover, such must be specifically prayed for
the parties, we find the petitioner’s formulation of some passengers demanded that they should be
the issue imprecise. As this Court sees it, what allowed to return to Cebu City for they were no longer
stands for resolution is a common carrier’s liability willing to continue their voyage to Cagayan de Oro
for damages to a passenger who disembarked City. The captain aceeded [sic] to their request and
thus the vessel headed back to Cebu City.
from the vessel upon its return to the port of
At Cebu City, plaintiff together with the other
origin, after it suffered engine trouble and had to passengers who requested to be brought back to Cebu
stop at sea, having commenced the contracted City, were allowed to disembark. Thereafter, the vessel
voyage on one engine. proceeded to Cagayan de Oro City. Plaintiff, the next
The antecedents are summarized by the Court day, boarded the M/V Asia Japan for its voyage to
of Appeals as follows: Cagayan de Oro City, likewise a vessel of defendant.
Plaintiff [herein private respondent Atty. Renato On account of this failure of defendant to transport
Arroyo], a public attorney, bought a ticket [from] him to the place of destination on November 12, 1991,
defendant [herein petitioner], a corporation engaged plaintiff filed before the trial court a complaint for
in . . . inter-island shipping, for the voyage of M/V Asia damages against defendant. 4

Thailand vessel to Cagayan de Oro City from Cebu City In his complaint, docketed as Civil Case No. 91-
on November 12, 1991. 491, plaintiff (hereinafter private respondent)
At around 5:30 in the evening of November 12, alleged that the engines of the M/V Asia Thailand
1991, plaintiff boarded the M/V Asia Thailand vessel. At conked out in the open sea, and for more than an
that instance, plaintiff noticed that some repair works
hour it was stalled and at the mercy of the waves,
[sic] were being undertaken on the engine of the
vessel. The vessel departed at around 11:00 in the thus causing fear in the passengers. It sailed back
evening with only one (1) engine running. to Cebu City after it regained power, but for
After an hour of slow voyage, the vessel stopped unexplained reasons, the passengers, including
near Kawit Island and dropped its anchor thereat. After the private respondent, were arrogantly told to
half an hour of stillness, disembark without the necessary precautions
______________ against possible injury to them. They were thus
1
 Rollo, 3.
unceremoniously dumped, which only
2
 Annex “A” of Petition; Id., 11-22. Per Labitoria, E., J., with exacerbated the private respondent’s mental
Abad-Santos, Jr., Q., and Hofileña, H., JJ., concurring. distress. He further alleged that by reason of the
 Original Records (OR), Civil Case No. 91-491, 92-99; 100-107;
petitioner’s wanton, reckless, and willful acts, he
3

108-115. Per Judge Leonardo N . Demecillo.

265 was unnecessarily exposed to danger and, having
VOL. 254, MARCH 4, 1996 265 been stranded in Cebu City for a day, incurred
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals additional expenses and loss of income. He then
prayed that he be awarded P1,100.00,
P50,000.00, and P25,000.00 as compensatory, WHEREFORE, it not appearing from the evidence that
moral and exemplary damages, respectively. 5 plaintiff was left in the Port of Cebu because of the
In his pre-trial brief, the private respondent fault, negligence, malice or wanton attitude of
asserted that his complaint was “an action for defendant’s employees, the complaint is DISMISSED.
Defendant’s counterclaim is likewise dismissed it not
damages arising from bad faith, breach of
appearing also that filing of the case by plaintiff was
contract and from tort,” with the former arising motivated by malice or bad faith. 8

from the petitioner’s “failure to carry [him] to his The trial court made the following findings to
place of destination as contracted,” while the support its disposition:
latter from the “conduct of the [petitioner] In the light of the evidence adduced by the parties and
resulting [in] the infliction of emotional of the above provisions of the New Civil Code, the
______________ issue to be resolved, in the resolution of this case is
whether or not, defendant thru its employees in [sic]
 Rollo, 12-13.
4

 OR, Civil Case No. 91-491, 2-5.

5 the night of November 12, 1991, committed fraud,
266 negligence, bad faith of malice when it left plaintiff in
266 SUPREME COURT REPORTS ANNOTATED the Port of Cebu when it sailed back to Cagayan de
Oro City after it has [sic] returned from Kawit Island.
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals Evaluation of the evidence of the parties tended to
distress” to the private respondent. 6
show nothing that defendant committed fraud. As
After due trial, the trial court rendered its early as 3:00 p.m. of November 12, 1991, defendant
decision  and ruled that the action was only for
7
did not hide the fact that the cylinder head cracked.
breach of contract, with Articles 1170, 1172, and Plaintiff even saw during its repair. If he had doubts as
1173 of the Civil Code as applicable law—not to the vessel’s capacity to sail, he had time yet to take
Article 2180 of the same Code. It was of the another
______________
opinion that Article 1170 made a person liable for
damages if, in the performance of his obligation, 6
 Id., 43.
he was guilty of fraud, negligence, or delay, or in 7
 Supra note 3.
any manner contravened the tenor thereof;
8
 OR, Civil Case No. 91-491, 99.
267
moreover, pursuant to Article 2201 of the same
Code, to be entitled to damages, the non- VOL. 254, MARCH 4, 1996 267
performance of the obligation must have been Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
tainted not only by fraud, negligence, or delay, boat. The ticket could be returned to defendant and
corresponding cash [would] be returned to him.
but also bad faith, malice, and wanton attitude. It
Neither could negligence, bad faith or malice on the
then disposed of the case as follows: part of defendant be inferred from the evidence of the
parties. When the boat arrived at [the] Port of Cebu If plaintiff, therefore, was not able to [m]ake the trip
after it returned from Kawit Island, there was an that night of November 12, 1991, it was not because
announcement that passengers who would like to defendant maliciously did it to exclude him [from] the
disembark were given ten (10) minutes only to do so. trip. If he was left, it was because of his fault or
By this announcement, it could be inferred that the negligence. 9

boat will [sic] proceed to Cagayan de Oro City. If _______________

plaintiff entertained doubts, he should have asked a
member of the crew of the boat or better still, the  OR, Civil Case No. 91-491, 97-99.
9

268
captain of the boat. But as admitted by him, he was of
the impression only that the boat will not proceed to 268 SUPREME COURT REPORTS ANNOTATED
Cagayan de Oro that evening so he disembarked. He Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
was instead, the ones [sic] negligent. Had he been Unsatisfied, the private respondent appealed to
prudent, with the announcement that those who will the Court of Appeals (CA-G.R. CV No. 39901) and
disembark were given ten minutes only, he should submitted for its determination the following
have lingered a little by staying in his cot and inquired assignment of errors: (1) the trial court erred in
whether the boat will proceed to Cagayan de Oro City
not finding that the defendant-appellee was guilty
or not. Defendant cannot be expected to be telling
[sic] the reasons to each passenger. Announcement by
of fraud, delay, negligence, and bad faith; and (2)
microphone was enough. the trial court erred in not awarding moral and
The court is inclined to believe that the story of exemplary damages. 10

defendant that the boat returned to the Port of Cebu In its decision of 23 November 1994,  the Court
11

because of the request of the passengers in view of of Appeals reversed the trial court’s decision by
the waves. That it did not return because of the applying Article 1755 in relation to Articles 2201,
defective engines as shown by the fact that fifteen 2208, 2217, and 2232 of the Civil Code and,
(15) minutes after the boat docked [at] the Port of accordingly, awarded compensatory, moral, and
Cebu and those who wanted to proceed to Cagayan de exemplary damages as follows:
Oro disembarked, it left for Cagayan de Oro City. WHEREFORE, premises considered, the appealed
The defendant got nothing when the boat returned decision is hereby REVERSED and SET ASIDE and
to Cebu to let those who did not want to proceed to another one is rendered ordering defendant-appellee
Cagayan de Oro City including plaintiff disembarked. to pay plaintiff-appellant:
On the contrary, this would mean its loss instead
because it will have to refund their tickets or they will 1. 1.P20,000.00 as moral damages;
use it the next trip without paying anymore. It is hard 2. 2.P10,000.00 as exemplary damages;
therefore, to imagine how defendant by leaving 3. 3.P5,000.00 as attorney’s fees;
plaintiff in Cebu could have acted in bad faith, 4. 4.Cost of suit.
negligently, wantonly and with malice.
 SO ORDERED. 12
To justify its award of damages, the Court of
It did not, however, allow the grant of damages Appeals ratiocinated as follows:
for the delay in the performance of the It is an established and admitted fact that the vessel
petitioner’s obligation as the requirement of before the voyage had undergone some repair work on
demand set forth in Article 1169 of the Civil Code the cylinder head of the engine. It is likewise admitted
had not been met by the private respondent. by defendant-appellee that it left the port of Cebu City
Besides, it found that the private respondent with only one engine running. Defendant-appellee
averred:
offered no evidence to prove that his contract of
x x x The dropping of the vessel’s anchor after running
carriage with the petitioner provided for liability in slowly on only one engine when it departed earlier must
case of delay in departure, nor that a designation have alarmed some nervous passengers x x x
of the time of departure was the controlling The entries in the logbook which defendant-
motive for the establishment of the contract. On appellee itself offered as evidence categorically stated
the latter, the court a quo observed that the therein that the vessel stopped at Kawit Island
private respondent even admitted he was because of engine trouble. It reads:
2330 HRS STBD ENGINE EMERGENCY STOP
unaware of the vessel’s departure time, and it was 2350 HRS DROP ANCHOR DUE TO ENGINE TROUBLE, 2
only when he boarded the vessel that he became ENGINE STOP.
aware of such. Finally, The stoppage was not to start and synchronized
________________ [sic] the engines of the vessel as claimed by
defendant-appellee. It was because one of the engines
 Rollo, 12.
10

 Supra note 2.
11
of the vessel broke down; it was because of the
 Rollo, 21.
12 disability of the vessel which from the very beginning
269 of the voyage was known to defendant-appellee.
VOL. 254, MARCH 4, 1996 269 Defendant-appellee from the very start of the
voyage knew for a fact that the vessel was not yet in
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals its sailing condition because the second engine was
the respondent Court found no reasonable basis still being repaired. Inspite of this knowledge,
for the private respondent’s belief that demand defendant-appellee still proceeded to sail with only
was useless because the petitioner had rendered one engine running.
it beyond its power to perform its obligation; on Defendant-appellee at that instant failed to exercise
the contrary, he even admitted that the petitioner the diligence which all common carriers should
had been assuring the passengers that the vessel exercise in transporting or carrying passengers. The
would leave on time, and that it could still perform law does not merely require extraordinary diligence in
its obligation to transport them as scheduled. the performance of the obligation. The law mandates
270
270 SUPREME COURT REPORTS ANNOTATED “panicky passenger” or a “nervous person,” but this
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals will not relieve defendant-appellee from the liability it
incurred for its failure to exercise utmost diligence. 13

that common carrier[s] should exercise utmost

xxx
diligence in the transport of passengers.
As to the second assigned error, we find that
Article 1755 of the New Civil Code provides:
ART. 1755. A common carrier is bound to carry the plaintiff-appellant is entitled to the award of moral and
passengers safely as far as human care and foresight can exemplary damages for the breach committed by
provide, using the utmost diligence of very cautious defendant-appellee.
persons, with a due regard for all the circumstances. ________________
Utmost diligence of a VERY CAUTIOUS person
 Rollo, 14-16.
13
dictates that defendant-appellee should have pursued
271
the voyage only when its vessel was already fit to sail.
Defendant-appellee should have made certain that the VOL. 254, MARCH 4, 1996 271
vessel [could] complete the voyage before starting [to] Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
sail. Anything less than this, the vessel [could not] As discussed, defendant-appellee in sailing to Cagayan
sail . . . with so many passengers on board it. de Oro City with only one engine and with full
However, defendant-appellant [sic] in complete knowledge of the true condition of the vessel, acted in
disregard of the safety of the passengers, chose to bad faith with malice, in complete disregard for the
proceed with its voyage even if only one engine was safety of the passengers and only for its own personal
running as the second engine was still being repaired advancement/interest.
during the voyage. Defendant-appellee disregarded The Civil Code provides:
the not very remote possibility that because of the Art. 2201.
disability of the vessel, other problems might occur xxx
which would endanger the lives of the passengers In case of fraud, bad faith, malice or wanton attitude, the
obligor shall be responsible for all damages which may be
sailing with a disabled vessel.
reasonably attributed to the non-performance of the
As expected, . . . engine trouble occurred. obligation.
Fortunate[ly] for defendant-appellee, such trouble only Plaintiff-appellant is entitled to moral damages for
necessitated the stoppage of the vessel and did not the mental anguish, fright and serious anxiety he
cause the vessel to capsize. No wonder why some suffered during the voyage when the vessel’s engine
passengers requested to be brought back to Cebu City. broke down and when he disembarked from the vessel
Common carriers which are mandated to exercise during the wee hours of the morning at Cebu City
utmost diligence should not be taking these risks. when it returned. 14

On this premise, plaintiff-appellant should not be Moral damages are recoverable in a damage suit
faulted why he chose to disembark from the vessel predicated upon a breach of contract of carriage where
with the other passengers when it returned back to it is proved that the carrier was guilty of fraud or bad
Cebu City. Defendant-appellee may call him a very faith even if death does not result. 15
 Fraud and bad faith by defendant-appellee having while for all other matters not regulated thereby,
been established, the award of moral damages is in the Code of Commerce and special laws. 20

order. 16
Under Article 1733 of the Civil Code, the
To serve as a deterrent to the commission of similar petitioner was bound to observe extraordinary
acts in the future, exemplary damages should be
diligence in ensuring the safety of the private
imposed upon defendant-appellee.  Exemplary
17

damages are designed by our civil law to permit the

respondent. That meant that the petitioner was,
courts to reshape behavior that is socially deleterious pursuant to Article 1755 of the said Code, bound
in its consequence by creating . . . negative incentives to carry the private respondent safely as far as
or deterrents against such behavior. 18 human care and foresight could provide, using the
_______________ utmost diligence of very cautious persons, with
due regard for all the circumstances. In this case,
 Id., 19-20, citing Article 2217, Civil Code.
14

 Id., citing China Airlines, Ltd. vs. Intermediate Appellate

15
we are in full accord with the Court of Appeals
Court, 169 SCRA 226 [1989]; Sabena Belgina World Airlines vs. that the petitioner failed to discharge this
Court of Appeals, 171 SCRA 620 [1989]. obligation.
 Id., citing Bert Osmeña & Associates vs. Court of
16
Before commencing the contracted voyage, the
Appeals, 120 SCRA 395 [1983].
 Rollo, 19-20, citing Rotea vs. Halili, 109 Phil. 495 [1960].
17
petitioner undertook some repairs on the cylinder
 Id., citing Mecenas vs. Court of Appeals, 180 SCRA
18 head of one of the vessel’s engines. But even
83 [1989]. before it could finish these repairs, it allowed the
272 vessel to leave the port of origin on only one
272 SUPREME COURT REPORTS ANNOTATED functioning engine, instead of two. Moreover,
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals even the lone functioning engine was not in
Moral damages having been awarded, exemplary perfect condition as sometime after it had run its
damages maybe properly awarded. When entitlement course, it conked out. This caused the vessel to
to moral damages has been established, the award of stop and remain adrift at sea, thus in order to
exemplary damages is proper. 19

prevent the ship from capsizing, it had to drop

The petitioner then instituted this petition and anchor. Plainly, the vessel was unseaworthy even
submitted the question of law earlier adverted to. before the voyage began. For a vessel to be
Undoubtedly, there was, between the petitioner seaworthy, it must be adequately equipped for the
and the private respondent, a contract of common voyage and manned with a sufficient number
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,  Id., citing De Leon vs. Court
19
of Appeals, 165 SCRA
166 [1988].
 Article 1766, Civil Code.
20
 273 Moral damages include moral suffering, mental
VOL. 254, MARCH 4, 1996 273 anguish, fright, serious anxiety, besmirched
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals reputation, wounded feelings, moral shock, social
of competent officers and crew.  The failure of a
21 humiliation, or similar injury. They may be
common carrier to maintain in seaworthy recovered in the cases enumerated in Article 2219
condition its vessel involved in a contract of of the Civil Code, likewise, if they are the
carriage is a clear breach of its duty prescribed in proximate result of, as in this case, the
Article 1755 of the Civil Code. petitioner’s breach of the contract of
As to its liability for damages to the private carriage. Anent a breach of a contract of common
24

respondent, Article 1764 of the Civil Code carriage, moral damages may be awarded if the
expressly provides: common carrier, like
ART. 1764. Damages in cases comprised in this _________________
Section shall be awarded in accordance with Title XVIII
 Chan Keep vs. Chan Gioco, 14 Phil. 5 [1909].
21
of this Book, concerning Damages. Article 2206 shall
 Articles 2199 and 2200.
22

also apply to the death of a passenger caused by the  Article 2201.

23

breach of contract by common carrier.  Article 2217.

24

The damages comprised in Title XVIII of the Civil 274

Code are actual or compensatory, moral, nominal, 274 SUPREME COURT REPORTS ANNOTATED
temperate or moderate, liquidated, and Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
exemplary. the petitioner, acted fraudulently or in bad faith. 25

In his complaint, the private respondent claims Exemplary damages are imposed by way of
actual or compensatory, moral, and exemplary example or correction for the public good, in
damages. addition to moral, temperate, liquidated or
Actual or compensatory damages represent the compensatory damages.  In 26
contracts
adequate compensation for pecuniary loss and quasicontracts, exemplary damages may be
suffered and for profits the obligee failed to awarded if the defendant acted in a wanton,
obtain. 22
fraudulent, reckless, oppressive or malevolent
In contracts or quasi-contracts, the obligor is manner.  It cannot, however, be considered as a
27

liable for all the damages which may be matter of right; the court having to decide
reasonably attributed to the non-performance of whether or not they should be
the obligation if he is guilty of fraud, bad faith, adjudicated.  Before the court may consider an
28

malice, or wanton attitude. 23

award for exemplary damages, the plaintiff must
first show that he is entitled to moral, temperate
or compensatory damages; but it is not necessary interruption is due to fortuitous event or force
that he prove the monetary value thereof. 29 majeure, but with a right to indemnity if the
The Court of Appeals did not grant the private interruption should have been caused by the captain
respondent actual or compensatory damages, exclusively. If the interruption should be caused by the
disability of the vessel and a passenger should agree
reasoning that no delay was incurred since there
to await the repairs, he may not be required to pay
was no demand, as required by Article 1169 of the any increased price of passage, but his living expenses
Civil Code. This article, however, finds no during the stay shall be for his own account.
application in this case because, as found by the This article applies suppletorily pursuant to Article
respondent Court, there was in fact no delay in 1766 of the Civil Code.
the commencement of the contracted voyage. If Of course, this does not suffice for a resolution
any delay was incurred, it was after the of the case at bench for, as earlier stated, the
commencement of such voyage, more specifically, cause of the delay or interruption was the
when the voyage was subsequently interrupted petitioner’s failure to observe extraordinary
when the vessel had to stop near Kawit Island diligence. Article 698 must then be read together
after the only functioning engine conked out. with Articles 2199, 2200, 2201, and 2208 in
As to the rights and duties of the parties strictly relation to Article 21 of the Civil Code. So read, it
arising out of such delay, the Civil Code is silent. means that the petitioner is liable for any
However, as correctly pointed out by the pecuniary loss or loss of profits which the private
petitioner, Article 698 of the Code of Commerce respondent may have suffered by reason thereof.
specifically provides for such a situation. It reads: For the private respondent, such would be the loss
In case a voyage already begun should be interrupted, of income if unable to report to his office on the
the passengers shall be obliged to pay the fare in
day he was supposed to arrive were it not for the
proportion to the distance covered, without right to
recover for losses and damages if 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
25
 Article 2220. See Necesito vs. Paras, 104 Phil. 75, 82-83 some passengers resolved not to complete the
[1958].
26
 Article 2229. voyage, the vessel had to return to its port of
27
 Article 2232. origin and allow them to disembark. The private
28
 Article 2233. respondent then took the petitioner’s other vessel
29
 Article 2234.
275 the following day, using the ticket he had
VOL. 254, MARCH 4, 1996 275 purchased for the previous day’s voyage.
Any further delay then in the private
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
respondent’s arrival at the port of destination was
caused by his decision to disembark. Had he respondent was merely “over-reacting” to the
remained on the first vessel, he would have situation obtaining then. 31

reached his destination at noon of 13 November We hold that the petitioner’s defense cannot
1991, thus been able to report to his office in the exculpate it nor mitigate its liability. On the
afternoon. He, therefore, would have lost only the contrary, such a claim demonstrates beyond cavil
salary for half of a day. But actual or the petitioner’s lack of genuine concern for the
compensatory damages must be proved,  which 30
safety of its passengers. It was, perhaps, only
the private respondent failed to do. There is no providential that the sea happened to be calm.
convincing evidence that he did not receive his Even so, the petitioner should not expect its
salary for 13 November passengers to act in the manner it desired. The
_________________ passengers were not stoics; becoming alarmed,
anxious, or frightened at the stoppage of a vessel
 Article 2199.
30

276 at sea in an unfamiliar zone at nighttime is not the

276 SUPREME COURT REPORTS ANNOTATED sole prerogative of the faint-hearted. More so in
the light of the many tragedies at sea resulting in
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals
the loss of lives of hopeless passengers and
1991 nor that his absence was not excused.
damage to property simply because common
We likewise fully agree with the Court of
carriers failed in their duty to exercise
Appeals that the petitioner is liable for moral and
extraordinary diligence in the performance of their
exemplary damages. In allowing its unseaworthy
obligations.
M/V Asia Thailand to leave the port of origin and
We cannot, however, give our affirmance to the
undertake the contracted voyage, with full
award of attorney’s fees. Under Article 2208 of the
awareness that it was exposed to perils of the sea,
Civil Code, these are recoverable only in the
it deliberately disregarded its solemn duty to
concept of actual damages,  not as moral
32

exercise extraordinary diligence and obviously

damages  nor judicial costs.  Hence, to merit such
33 34

acted with bad faith and in a wanton and reckless

an
manner. On this score, however, the petitioner _______________
asserts that the safety of the vessel and
passengers was never at stake because the sea 31
 Brief for Defendant-Appellee, 9; Rollo, 33.
was “calm” in the vicinity where it stopped as 32
 Fores vs. Miranda, 105 Phil. 266, 272 [1959]; PCIB vs.
Intermediate Appellate Court, 196 SCRA 29, 39 [1991].
faithfully recorded in the vessel’s log book (Exhibit 33
 Mirasol vs. de la Cruz, 84 SCRA 337, 342 [1978].
“4”). Hence, the petitioner concludes, the private 34
 Damasen vs. Hernando, 104 SCRA 111, 116-117 [1981].
277
 VOL. 254, MARCH 4, 1996 277 CA-G.R. CV No. 39901 is AFFIRMED subject to the
Trans-Asia Shipping Lines, Inc. vs. Court of Appeals modification as to the award for attorney’s fees
award, it is settled that the amount thereof must which is hereby SET ASIDE. Costs against the
be proven.  Moreover, such must be specifically
35 petitioner.
_________________
prayed for—as was not done in this case—and
may not be deemed incorporated within a general 35
 See Warner, Barnes & Co., Ltd. vs. Luzon Surety Co.,
prayer for “such other relief and remedy as this Inc., 95 Phil. 925 [1954].
court may deem just and equitable.”  Finally, it36
36
 Mirasol vs. de la Cruz, supra note 33, at 343.
37
 See Scott Consultants & Resource Development vs. Court
must be noted that aside from the following, the of Appeals, 242 SCRA 393, 405-406 [1995].
body of the respondent Court’s decision was 278
devoid of any statement regarding attorney’s 278 SUPREME COURT REPORTS ANNOTATED
fees: Lachica vs. Flordeliza
Plaintiff-appellant was forced to litigate in order that
SO ORDERED.
he can claim moral and exemplary damages for the
suffering he encurred [sic]. He is entitled to attorney’s      Narvasa (C.J.,
fees pursuant to Article 2208 of the Civil Code. It Chairman), Melo, Francisco and Panganiban,
states: JJ., concur.
Article 2208. In the absence of stipulation, attorney’s fees Petition denied, judgment affirmed subject to
and expenses of litigation, other than judicial costs cannot modification.
be recovered except: Notes.—It may logically follow that a person
without license to navigate lacks not just the skill
1. 1.When exemplary damages are awarded;
2. 2.When the defendant’s act or omission has to do so but also the utmost familiarity with the
compelled the plaintiff to litigate with third persons usual and safe routes taken by seasoned and
or to incur expenses to protect his interest. legally authorized ones. (Coastwise Lighterage
Corporation vs. Court of Appeals, 245 SCRA
This Court holds that the above does not satisfy 796 [1995])
the benchmark of “factual, legal and equitable The discretion of the court to award attorney’s
justification” needed as basis for an award of fees demands factual, legal and equitable
attorney’s fees.  In sum, for lack of factual and
37
justification, without which the award is a
legal basis, the award of attorney’s fees must be conclusion without a premise and improperly left
deleted. to speculation and conjecture. (Consolidated Bank
WHEREFORE, the instant petition is DENIED and and Trust Company (Solidbank) vs. Court of
the challenged decision of the Court of Appeals in Appeals, 246 SCRA 193 [1995])
 ——o0o——

© Copyright 2020 Central Book Supply, Inc. All rights

reserved.