SARKIES TOURS PHILIPPINES, INC., PETITIONER, VS. INTERMEDIATE APPELLATE COURT, ARSENIO S. DIZON, JR. AND VIOLETA R. DIZON, RESPONDENTS.

This is a Petition for Review of the Decision of the Intermediate
Appellate Court in CA-G.R. No. 64228-R, to which we gave due course only in so
far as the
moral and exemplary damages awarded are concerned. The decretal portion of the judgment reads:

“WHEREFORE, premises considered, finding the Court a quo
in error in dismissing the complaint against Sarkies Tours Phils., Inc., the
decision insofar as it affects
Sarkies Tours Phil., Inc., is set aside and another one entered sentencing
Sarkies Tours Phils., Inc., jointly and solidarily, liable with Julian
Mendoza. Consequently, the appealed
decision is hereby modified to
read as follows:

‘PREMISES CONSIDERED, the plaintiffs having established their cause
of action against both Julian Mendoza and Sarkies Tours Phils., Inc., judgment
is hereby rendered condemning Julian Mendoza
and Sarkies Tours Phils., Inc., to pay plaintiffs, jointly and severally:

(a)  
P12,000.00 in actual dam­ages for the death of Merceditas
Dizon;

(b)  
P1,650.00 for loss of cash and personal belongings;

(c)  
P3,000.00 for funeral expenses;

(d)  
P100,000.00 for moral damages;

(e)  
P50,000.00 as exemplary damages;

(f)     P5,000.00
as attorney’s fees; and

(g)  
the costs of suit.”

SO ORDERED.”

A few weeks before June 12, 1971, petitioner Sarkies Tours
Phils., Inc. (SARKIES, for short) advertised in the newspapers its tour to
Corregidor on Independence Day, for a fee of “P10.00 per person
including: a) boat fare –
Manila-Corregidor­-Manila b) shrine fee and c) tour of Corregidor Island by
bus.” A day before the scheduled tour, private respondent spouses (the
DIZONS, for short), purchased six round-trip tickets from SARKIES. They
were issued an official receipt under the SARKIES letterhead. Also issued by SARKIES for each set of
tickets were one (1) blue ticket and one (1) white ticket, with the name
“SARKIES” appearing on both the blue and white tickets, while the
word “Edisco” was handwritten across the white ticket. With the DIZONS the next day, June 12, 1971,
were their four children Cecilia, Bernardita, Merceditas and Emerito. From the SARKIES main office at Filipinas Hotel, Roxas Boulevard, they were
transported on a SARKIES bus, together with other excursionists, to Muelle del
Banco Nacional, alongside the Pasig River, where they boarded the M/V
Edisco. Upon departure from Manila,
Manila Bay was then rather choppy (Folio, p. 77). The white tickets were collected on board by Julian V. MENDOZA,
while the blue tickets were collected upon boarding the SARKIES bus at
Corregidor Island.

The M/V Edisco, owned and operated by MENDOZA, is an oversized
motorized banca with outriggers, a
steel hull, a canvas awning and rattan chairs on the deck. It was not registered to ferry passengers,
nor was it licensed to operate as a watercraft. On that trip, it had 146 passengers on board and was overloaded
and lacked adequate lifesaving equipment.

Upon reaching Corregidor, the excursionists went on a guided tour
conducted by petitioner’s representative.

On the return trip to Manila, the weather was practically the
same as when they left but with intermittent rains (Folio, p. 77). Around 2:00 P.M., disaster struck after
about thirty minutes of cruising. The
boat leaned towards starboard and the chairs slid into the water in that
direction. In a matter of seconds, the
boat capsized. Private respondents and
their two children, Bernardita and Emerito, managed to clamber up the hull of
the boat and were rescued by a passing yacht. Another daughter, Cecilia, was picked up by one of the other watercrafts
that came to succor. Private
respondents lost cash and personal belongings. Merceditas, their six-year-old daughter was missing and could not be
located even after they reached Manila around 7:00 P.M. of that day. After six days of fruitless and heart-rending inquiries, private
respondents were summoned to Funeraria Quiogue were they identified a lifeless
body as that of their daughter, Merceditas. There were other fatalities.

For damages based on the drowning of MERCEDITAS, the DIZONS filed
a complaint against SARKIES and MENDOZA before the then Court of First Instance
of Manila. Answering, SARKIES alleged
that it was not the owner nor charterer of M/V Edisco; that it is only a
booking agent and not a carrier; and that it had acted with due diligence and
care in relying on MENDOZA’s representations that his vessel was duly
authorized to operate and was seaworthy.

MENDOZA denied liability claiming that he was not the registered
owner but merely a passenger of the capsized vessel together with his son who
also perished in the tragedy; that the contract of carriage was between SARKIES
and private respondents, and that the marine accident was due to force majeure. MENDOZA
was declared in default for failure to appear
during the pre-trial.

After trial on the merits, the Trial Court exonerated SARKIES
from liability on the ground that it was “neither an agent nor the
operator of M/V Edisco”; that it had merely booked private respondents
with M/V Edisco, one of the three private carriers, in addition to a Philippine
Navy boat, plying the route from Manila to Corregidor, and attributed sole
responsibility to MENDOZA, whom it found to be the owner-operator of M/V
Edisco, for negligence consisting of “unscrupulous conversion of a fishing
boat into a ferry boat without first securing a license to operate as
such.”

On appeal to the then Court of Appeals, the Appellate Tribunal
reversed and held both SARKIES and MENDOZA jointly and severally liable for the
damages for the reason that the relationship between SARKIES and the
excursionists was “a single operation … which in effect guaranteed them
safe passage all throughout” (Rollo, p. 98).

We concur with that view. The issue, we had resolved to
consider, as earlier mentioned, is in respect of the award of moral and
exemplary damages.

The award of exemplary damages
should be eliminated. In Munsayac vs.
De Lara, 23 SCRA 1086, 1089 (1968), it was said:

“It is not enough to say that an example should be made, or
corrective measures be employed, for the public good especially in accident
cases where public carriers are involved. The causative negligence in such cases
is personal to the employees actually in charge of the vehicles, and
it is they who should be made to pay this kind of damages by way of example or
correction, unless by the demonstrative tolerance or approval of the owners
they themselves can be held at fault and their fault is of
the character described in article 2232 of the Civil Code.”

In the case at bar, there is no showing that SARKIES acted
“in a wanton …. or malevolent manner” (Art. 2232, Civil Code).

As to the award of moral damages, while we find them justly due,
under the factual milieu, however, we consider the sum of P100,000.00 excessive
and in the exercise of our discretion, hereby reduce them to P30,000.00.

In its Answer to the Complaint of the DIZONS, SARKIES included a
cross-claim against MENDOZA as the owner/operator of the EDISCO. Considering that actual negligence for the
drowning of MERCEDITAS was the responsibility of MENDOZA, it is but fair that
SARKIES should have a right of action against MENDOZA for reimbursement. Although Article 2181 of the Civil Code is
not technically invocable, its principle should be applied in favor of
SARKIES. The provision of the Civil
Code on common carriers is based on Anglo-American Law (Maranan v. Perez, 20 SCRA 412 [1967]). In regards to Grand Trunk R. Co. v. Latham,
63 Me. 177, the following was said:

“Where a railroad company had been compelled to pay a judgment
for damages for injuries sustained by a passenger as a result of the
maltreatment and misconduct of the conductor … the Court (held) that the
servant was liable to his master for all loss and damage sustained by it.”
(110 A.L.R. 836).

ACCORDINGLY, the judgment of the then Court of
Appeals (now Intermediate Appellate Court) in its CA-G.R. No. 64228-R, in
respect of petitioner, is modified by (1) eliminating exemplary damages
therefrom; (2) reducing the adjudged moral damages from P100,000.00 to P30,000.00; and (3) ordering Julian V. Mendoza to
pay and/or reimburse petitioner any and all expenses and damages to be paid by
petitioner to the private respondents. The other parts of the judgment are confirmed. The judgment of the Trial Court in respect of Julian V. Mendoza,
is maintained.

No pronouncement as to costs.

SO ORDERED.

Teehankee, (Chairman), Plana, Vasquez, Relova, and Gutierrez, Jr., JJ., concur.