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National Steel Corporation V CA
283 SCRA 45 (contract of private carriage; diligence
required)
NATIONAL STEEL CORPORATION v. COURT OF APPEALS
G.R. No. 112287 December 12, 1997
Panganiban, J.
Doctrine:
The stringent provisions of the Civil Code on common
carriers protecting the general public cannot justifiably be
applied to a private carrier.
Facts:
Plaintiff National Steel Corporation (NSC) as Charterer and
defendant Vlasons Shipping, Inc. (VSI) as Owner, entered
into a Contract of Voyage Charter Hire whereby NSC hired
VSI’s vessel, the MV Vlasons I to make one voyage to load
steel products at Iligan City and discharge them at North
Harbor, Manila. The handling, loading and unloading of the
cargoes were the responsibility of the Charterer.
The skids of tinplates and hot rolled sheets shipped were
allegedly found to be wet and rusty. Plaintiff, alleging
negligence, filed a claim for damages against the
defendant who denied liability claiming that the MV
Vlasons I was seaworthy in all respects for the carriage of
plaintiff’s cargo; that said vessel was not a “common
carrier” inasmuch as she was under voyage charter
contract with the plaintiff as charterer under the charter
party; that in the course its voyage, the vessel
encountered very rough seas.
Issue:
Whether or not the provisions of the Civil Code on
common carriers pursuant to which there exists a
presumption of negligence against the common carrier in
case of loss or damage to the cargo are applicable to a
private carrier.
Held:
No. In a contract of private carriage, the parties may freely
stipulate their duties and obligations which perforce would
be binding on them. Unlike in a contract involving a
common carrier, private carriage does not involve the
general public. Hence, the stringent provisions of the Civil
Code on common carriers protecting the general public
cannot justifiably be applied to a ship transporting
commercial goods as a private carrier.
It has been held that the true test of a common carrier is
the carriage of passengers or goods, provided it has space,
for all who opt to avail themselves of its transportation
service for a fee [Mendoza vs. Philippine Airlines, Inc., 90
Phil. 836, 842-843 (1952)]. A carrier which does not qualify
under the above test is deemed a private carrier.
“Generally, private carriage is undertaken by special
agreement and the carrier does not hold himself out to
carry goods for the general public.
Because the MV Vlasons I was a private carrier, the ship
owner’s obligations are governed by the foregoing
provisions of the Code of Commerce and not by the Civil
Code which, as a general rule, places the prima
facie presumption of negligence on a common carrier.
Xxxxxxxxx
First Issue: Questions of Fact
Based on the foregoing, the determination of the following
factual questions is manifestly relevant: (1) whether VSI
exercised due diligence in making MV Vlasons I seaworthy
for the intended purpose under the charter party; (2)
whether the damage to the cargo should be attributed to
the willful negligence of the officers and crew of the vessel
or of the stevedores hired by NSC; and (3) whether the
rusting of the tinplates was caused by its own sweat or by
contact with seawater.
Xxxxx
as MV Vlasons I Seaworthy?
In any event, the records reveal that VSI exercised due
diligence to make the ship seaworthy and fit for the
carriage of NSCs cargo of steel and tinplates. This is shown
by the fact that it was drydocked and inspected by the
Philippine Coast Guard before it proceeded to Iligan City
for its voyage to Manila under the contract of voyage
[24]
charter hire. The vessels voyage from Iligan to Manila
was the vessels first voyage after drydocking. The
Philippine Coast Guard Station in Cebu cleared it
as seaworthy, fitted and equipped; it met all requirements
[25]
for trading as cargo vessel. The Court of Appeals itself
sustained the conclusion of the trial court that MV Vlasons
I was seaworthy. We find no reason to modify or reverse
this finding of both the trial and the appellate courts.
Xxxxxxxxx
That due diligence was exercised by the officers and the
crew of the MV Vlasons I was further demonstrated by the
fact that, despite encountering rough weather twice, the
new tarpaulin did not give way and the ships hatches and
cargo holds remained waterproof. As aptly stated by the
Court of Appeals, xxx we find no reason not to sustain the
conclusion of the lower court based on overwhelming
evidence, that the MV VLASONS I was seaworthy when it
undertook the voyage on August 8, 1974 carrying on board
thereof plaintiff-appellants shipment of 1,677 skids of
tinplates and 92 packages of hot rolled sheets or a total of
1,769 packages from NSCs pier in Iligan City arriving safely
at North Harbor, Port Area, Manila, on August 12,
[30]
1974; xxx.
Indeed, NSC failed to discharge its burden to show
negligence on the part of the officers and the crew of MV
Vlasons I. On the contrary, the records reveal that it was
the stevedores of NSC who were negligent in unloading
the cargo from the ship.
The stevedores employed only a tent-like material to cover
the hatches when strong rains occasioned by a passing
typhoon disrupted the unloading of the cargo. This tent-
like covering, however, was clearly inadequate for keeping
rain and seawater away from the hatches of the
ship. Vicente Angliongto, an officer of VSI, testified thus:
Pedro de Guzman V CA
GR No. L- 47922 Dec 22 1988 (requisite certificate of public
convenience)
De Guzman v. CA
Facts:
Respondent Ernesto Cendana was a junk dealer. He buys
scrap materials and brings those that he gathered to
Manila for resale using 2 six-wheeler trucks. On the return
trip to Pangasinan, respondent would load his vehicle with
cargo which various merchants wanted delivered, charging
fee lower than the commercial rates. Sometime in
November 1970, petitioner Pedro de Guzman contracted
with respondent for the delivery of 750 cartons of Liberty
Milk. On December 1, 1970, respondent loaded the cargo.
Only 150 boxes were delivered to petitioner because the
truck carrying the boxes was hijacked along the way.
Petitioner commenced an action claiming the value of the
lost merchandise. Petitioner argues that respondent, being
a common carrier, is bound to exercise extraordinary
diligence, which it failed to do. Private respondent denied
that he was a common carrier, and so he could not be held
liable for force majeure. The trial court ruled against the
respondent, but such was reversed by the Court of
Appeals.
Issues:
(1) Whether or not private respondent is a common carrier
(2) Whether private respondent is liable for the loss of the
goods
Held:
(1) Article 1732 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. 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. It appears to
the Court that private respondent is properly
characterized as a common carrier even though he merely
"back-hauled" goods for other merchants from Manila to
Pangasinan, although such backhauling was done on a
periodic or occasional rather than regular or scheduled
manner, and even though private respondent's principal
occupation was not the carriage of goods for others. There
is no dispute that private respondent charged his
customers a fee for hauling their goods; that fee
frequently fell below commercial freight rates is not
relevant here. A certificate of public convenience is not a
requisite for the incurring of liability under the Civil Code
provisions governing common carriers.
(2) Article 1734 establishes the general rule that common
carriers are responsible for the loss, destruction or
deterioration of the goods which they carry, "unless the
same is due to any of the following causes only:
a. Flood, storm, earthquake, lightning, or other natural
disaster or calamity;
b. Act of the public enemy in war, whether international or
civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or
in the containers; and
e. Order or act of competent public authority."
The hijacking of the carrier's truck - does not fall within
any of the five (5) categories of exempting causes listed in
Article 1734. Private respondent as common carrier is
presumed to have been at fault or to have acted
negligently. This presumption, however, may be
overthrown by proof of extraordinary diligence on the part
of private respondent. We believe and so hold that the
limits of the duty of extraordinary diligence in the vigilance
over the goods carried are reached where the goods are
lost as a result of a robbery which is attended by "grave or
irresistible threat, violence or force." we hold that the
occurrence of the loss must reasonably be regarded as
quite beyond the control of the common carrier and
properly regarded as a fortuitous event. It is necessary to
recall that even common carriers are not made absolute
insurers against all risks of travel and of transport of
goods, and are not held liable for acts or events which
cannot be foreseen or are inevitable, provided that they
shall have complied with the rigorous standard of
extraordinary diligence.
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Mr and Mrs Engracio Fabre Jr et al V CA
GR No.111127 July 26 1996 (a person need not be engaged
in the business of public transportation for the provisions
of the NCCP on common carriers to apply to them)
(Relate to Art 2176 and Art 2180 NCCP- negligence in the
selection and supervision of employees)
Fabre vs CA Case Digest
Fabre vs. Court of Appeals
259 SCRA 426
G.R. No. 111127
July 26, 1996
Facts: Petitioners Engracio Fabre, Jr. and his wife were
owners of a Mazda minibus. They used the bus principally
in connection with a bus service for school children which
they operated in Manila. It was driven by Porfirio Cabil.
On November 2, 1984 private respondent Word for the
World Christian Fellowship Inc. (WWCF) arranged with the
petitioners for the transportation of 33 members of its
Young Adults Ministry from Manila to La Union and back in
consideration of which private respondent paid petitioners
the amount of P3,000.00.
The usual route to Caba, La Union was through Carmen,
Pangasinan. However, the bridge at Carmen was under
repair, so that petitioner Cabil, who was unfamiliar with
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the area (it being his first trip to La Union), was forced to
take a detour through the town of Ba-ay in Lingayen,
Pangasinan. At 11:30 that night, petitioner Cabil came
upon a sharp curve on the highway. The road was slippery
because it was raining, causing the bus, which was running
at the speed of 50 kilometers per hour, to skid to the left
road shoulder. The bus hit the left traffic steel brace and
sign along the road and rammed the fence of one Jesus
Escano, then turned over and landed on its left side,
coming to a full stop only after a series of impacts. The bus
came to rest off the road. A coconut tree which it had hit
fell on it and smashed its front portion. Because of the
mishap, several passengers were injured particularly
Amyline Antonio.
Criminal complaint was filed against the driver and the
spouses were also made jointly liable. Spouses Fabre on
the other hand contended that they are not liable since
they are not a common carrier. The RTC of Makati ruled in
favor of the plaintiff and the defendants were ordered to
pay jointly and severally to the plaintiffs. The Court of
Appeals affirmed the decision of the trial court.
Issue: Whether the spouses Fabre are common carriers?
Held: Petition was denied. Spouses Fabre are common
carriers.
The Supreme Court held that this case actually involves a
contract of carriage. Petitioners, the Fabres, did not have
to be engaged in the business of public transportation for
the provisions of the Civil Code on common carriers to
apply to them. As this Court has held: 10 Art. 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 1732 deliberately
refrained from making such distinctions.
Estela L. Crisostomo V. CA and Caravan Travel and Tours
International Inc.
GR No. 138334 Aug 25 2005 (liability of travel agency)
Crisostomo v. CA, 409 SCRA 528 (2003)
Problem:
Estela L. Crisostomo contracted the services of Caravan
Travel and Tours International, Inc. to arrange and
facilitate her booking, ticketing and accommodation in a
tour dubbed "Jewels of Europe". The package tour cost her
P74, 322.70. She was given a 5% discount on the amount,
which included airfare, and the booking fee was also
waived because petitioner’s niece, Meriam Menor, was
former’s company’s ticketing manager.
Menor went to her aunt’s residence on a Wednesday to
deliver petitioner’s travel documents and plane tickets.
Estela, in turn, gave Menor the full payment for the
package tour. Menor then told her to be at the Ninoy
Aquino International Airport (NAIA) on Saturday, two
hours before her flight on board British Airways.

Without checking her travel documents, Estela went to
NAIA on Saturday, to take the flight for the first leg of her
journey from Manila to Hongkong. She discovered that the
flight she was supposed to take had already departed the
previous day. She learned that her plane ticket was for the
flight scheduled on June 14, 1991. She thus called up
Menor to complain.
Subsequently, Menor prevailed upon Estela to take
another tour the "British Pageant”, which cost P20,
881.00. She gave caravan travel and tours P7, 980.00 as
partial payment and commenced the trip in July 1991.
Upon petitioner’s return from Europe, she demanded from
respondent the reimbursement of P61, 421.70,
representing the difference between the sum she paid for
"Jewels of Europe" and the amount she owed respondent
for the "British Pageant" tour. Despite several demands,
respondent company refused to reimburse the amount,
contending that the same was non-refundable.
Estela filed a complaint against Caravan travel and Tours
for breach of contract of carriage and damages.
A) Will the action prosper?
B) Will she be entitled to damages?
Answer:
No, for there was no contract of carriage.
By definition, a contract of carriage or transportation is
one whereby a certain person or association of persons
obligate themselves to transport persons, things, or news
from one place to another for a fixed price.
From the above definition, Caravan Travel and Tours is not
an entity engaged in the business of transporting either
passengers or goods and is therefore, neither a private nor
a common carrier. Caravan Travel and Tours did not
undertake to transport Estela from one place to another
since its covenant with its customers is simply to make
travel arrangements in their behalf. Caravan travel and
tour’s services as a travel agency include procuring tickets
and facilitating travel permits or visas as well as booking
customers for tours.
While Estela concededly bought her plane ticket through
the efforts of respondent company, this does not mean
that the latter ipso facto is a common carrier. At most,
Caravan Travel and Tours acted merely as an agent of the
airline, with whom the former ultimately contracted for
her carriage to Europe.
B) No.
The negligence of the obligor in the performance of the
obligation renders him liable for damages for the resulting
loss suffered by the obligee. Fault or negligence of the
obligor consists in his failure to exercise due care and
prudence in the performance of the obligation as the
nature of the obligation so demands.
In the case at bar, Caravan Travel and Tours exercised due
diligence in performing its obligations under the contract
and followed standard procedure in rendering its services
to Estela. The plane ticket issued to petitioner clearly
reflected the departure date and time, contrary to Estela’s
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contention. The travel documents, consisting of the tour
itinerary, vouchers and instructions, were likewise
delivered to her two days prior to the trip. The Caravan
Travel and Tours also properly booked Estela for the tour,
prepared the necessary documents and procured the
plane tickets. It arranged Estela’s hotel accommodation as
well as food, land transfers and sightseeing excursions, in
accordance with its avowed undertaking.
From the foregoing, it is clear that the Caravan Travel and
Tours performed its prestation under the contract as well
as everything else that was essential to book Estela for the
tour.
Hence, Estela cannot recover and must bear her own
damage.
A. Distinguished from Towage, Arrastre
and Stevedoring
Cases:
Delgado Bros. Inc. V Home Insurance Inc.
No. L- 16567 March 27 1997 1961
1 SCRA 854 (3 functions of the Arrastre operator; has
nothing to do with the trade and business of navigation
nor to the use or operation of vessels))
Transportation Case Digest: Delgado Brothers, Inc. V.
Home Insurance, Inc. (1961)
G.R. No. L-16567 March 27, 1961
Lessons Applicable: Ancillary Contracts (Transportation)
FACTS:
February 17, 1955: Victor Bijou & Co. shipped at New York
for Manila aboard the vessel S.S. Leoville and consigned to
the Judy Philippines, Inc. of Manila, a shipment of 1 case
Linen Handkerchiefs and 2 cases cotton piece goods, for
which, the New York agent of said vessel, the Barber
Steamship Lines, Inc., issued Bill of Lading No. 119
shipment as insured with Home Insurance, Inc. by the
shipper and/or consignee
March 30, 1955: vessel arrived at the Port of Manila and
delivered 1 case of Linen Handkerchiefs in bad order, with
a shortage of 503 yards of Linen Print Handkerchiefs, to
the prejudice, loss and damage of shipper and or
consignee in the sum of P1,287.20 so they filed a claim
against Home Insurance Inc.
March 7, 1956: Home Insurance Inc. filed against
contractor Delgado Brothers Inc.
Trial Court: dismissed the case in favor of Home based on
its special defenses invoked in its answer
since no claim was filed within the 15-day period from the
date of the arrival of the goods before they could file a suit
in the court of proper jurisdiction within 1 year from the
date of said arrival at the Port of Manila, it is completely
relieved and released of any and all liability for loss or
damage under the law and in accordance with the
pertinent provisions of the management Contract with the
Bureau of Customs, covering the operation of the Arrastre
Service for the Port of Manila; and that petitioner in no
way acts as an agent of the carrying vessel or of the
importer or consignee
CA: reversed because of lack of jurisdiction it being a
maritime contract should be handled by the Municipal
Court
ISSUE: W/N the case has prescribed according to maritime
law (arrastre being a maritime case)
HELD: NO.
In case of controversy involving both maritime and
nonmaritime subject matter, where the principal matter
involved belongs to the jurisdiction of a court of common
law or of equity, admiralty will not take cognizance of
incidental maritime matters connected therewith but will
relegate the whole controversy to the appropriate tribunal

Both as to the nature of the functions and the place of
their performance (upon wharves and piers shipside),
Brother's services are clearly not maritime but arrastre
services
they are no different from those of a depositary or
warehouseman
To give admiralty jurisdiction over a contract as maritime,
such contract must relate to the trade and business of the
sea; it must be essentially and fully maritime in its
character; it must provide for maritime services, maritime
transactions, or maritime casualties.
Delgado Brothers, Inc. has nothing to do with the loading
or unloading of cargoes to and from the ships. Its
operation on and its responsibility for the merchandise
and goods begins from the time they are placed upon the
wharves or piers or delivered along sides of ships
Court of First Instance of Manila has jurisdiction in cases
where suit is brought directly against the carrier or
shipowner.
Respondent cannot invoke the rule against multiplicity of
suits, for the simple reason that said rule has to be
subservient to the superior requirement that the court
must have jurisdiction
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Under this provision, petitioner's functions as arrastre
operator are (1) to receive, handle, care for, and deliver all
merchandise imported and exported, upon or passing over
Government-owned wharves and piers in the Port of
Manila, (2) as well as to record or cheek all merchandise
which may be delivered to said port at shipside, and in
general, (3) to furnish light and water services and other
incidental services in order to undertake its arrastre
service. Note that there is nothing in those functions
which relate to the trade and business of navigation (1
Am. Jur. 564), nor to the use or operation of vessels (Id. at
568). Both as to the nature of the functions and the place
of their performance (upon wharves and piers shipside),
petitioner's services are clearly not maritime. As we held in
the Macondray case, they are no different from those of a
depositary or warehouseman. Granting, arguendo, that
petitioner's arrastre service depends on, assists, or
furthers maritime transportation (Id. at 565), it may be
deemed merely incidental to its aforementioned functions
as arrastre operator and does not, thereby, make
petitioner's arrastre service maritime in character.
To give admiralty jurisdiction over a contract as maritime,
such contract must relate to the trade and business of the
sea; it must be essentially and fully maritime in its
character; it must provide for maritime services, maritime
transactions, or maritime casualties. (The James T. Furber,
129 Fed. 808, cited in 66 L.R.A. 212; emphasis supplied.)
See also 2 C.J.S. 66, supra.
The case of Cebu Arrastre Service v. Collector of Internal
Revenue (G.R. No. L-7444, prom. May 30, 1956) cited by
respondent is irrelevant to the present case, considering
that the functions of the Cebu Arrastre Service involve the
loading, and unloading of coastwise vessels calling at the
port of Cebu and, are, therefore, of a "stevedore", subject
to the percentage tax under Section 191 of the Tax Code.
Similarly, the case of American Stevedores v. Porello (330
U.S. 446, 91 L. Ed. 1011) is inapplicable, involving as it
does, stevedores or longshoremen, not an arrastre
operator. In the instant case, Delgado Brothers, Inc. has
nothing to do with the loading or unloading of cargoes to
and from the ships. Its operation on and its responsibility
for the merchandise and goods begins from the time they
are placed upon the wharves or piers or delivered along
sides of ships. Evans v. New York & Pacific Steamship Co.,
Ltd., et al. (145 F. 841) cited by respondent is, likewise, not
in point. It should be noted that in said case, the New York
& Pacific Steamship Co. Ltd. (owner of the steamship
"Capac" and with whom appellant Evans has a contract
evidenced by a bill of lading) and not the warehouseman
or depositary Beards Erie Basin Stores, was the one sued
by said appellant Evans for recovery of the value of 20
bales of rubber which said steamship failed to deliver.
Hence, the District Court of New York properly held that
the contract with the steamship company was maritime in
Page 4 of 12
nature, over which it had jurisdiction to entertain and
decide. Undoubtedly, the Court of First Instance of Manila
has jurisdiction in cases where suit is brought directly
against the carrier or shipowner.
Cebu Arrastre Services V CIR
GR No. L- 7444 May 30 1956 (the function of stevedores is
loading and unloading of coastwise vessels calling at the
port)
CEBU ARRASTRE SERVICE, Petitioner-Appellant, vs.
COLLECTOR OF INTERNAL REVENUE, Respondent-
Appellee.
DECISION
MONTEMAYOR, J.:
This is an appeal from the decision of the Board of Tax
Appeals affirming the decision of the Collector of Internal
Revenue (later referred to as COLLECTOR), denying
exemption to the Petitioner-Appellant Cebu Arrastre
Service (later referred to as CEBU ARRASTRE) from the
percentage tax under section 191 of the National Internal
Revenue Code, and for refund of the amount of P2,867.02
already paid.
In 1952 the Cebu Arrastre, an association of persons
engaged in the handling of cargoes carried by coastwise
vessels stopping at the port of Cebu, thru its counsel Atty.
Jose Muaña petitioned the Collector of Internal Revenue
for the exemption and the refund based on the following
grounds:chanroblesvirtuallawlibrary
“(1) That they were a group of laborers who had recently
organized themselves into an arrastre service association
merely for the purpose of centralizing the collection of
handling charges and making direct payment to the men in
order to insure the compliance of the Minimum Wage Law
requirement.
“(2) That the work of the men of the said arrastre group is
under the direct supervision and control of the officers of
the ships.
“(3) That the Cebu Arrastre Service is engaged solely in
the loading and unloading of cargoes to and from the
boats and is not engaged in the transportation business.”
Acting upon the petition, the Collector referred the matter
to his agent in Cebu for investigation. Mr. Ignacio Quijano,
the Assistant Agent, conducted the investigation and filed
his report, the pertinent portions of which are as
follows:chanroblesvirtuallawlibrary
“1. The loading and unloading of cargoes to and from the
ship’s holds is done by the laborers under the ‘Cebu
Arrastre Service Co., Inc.’
“2. The supervision of the ship’s officers in the work is
confined only to the proper handling of the cargoes
according to their nature and to the proper placing of the
cargoes inside the ship’s holds.
“3. As to the laborers’ actuations outside of the handling
and placing of cargoes inside the ship’s holds the officers
of the ship have no supervision.
xxx xxx xxx
“6. The ‘Cebu Arrastre Service Co., Inc.’ is not engaged in
the transportation of the cargoes from the wharf to the
bodegas of the shippers. The shippers have their own
trucks or provide for the transportation of their cargoes
from the wharf to their bodegas.
“7. The laborers of the ‘Cebu Arrastre Service Co., Inc.’
help only in the loading of the cargoes from the wharf to
the shippers’ trucks, for the shippers’ trucks are provided
with their own ‘journales’.”
On the basis of said report the Collector denied the
petition, holding that inasmuch as the Cebu Arrastre was
engaged in the loading and unloading of vessels in port, it
may be considered a stevedore within the meaning of
section 191 of the Tax Code. In this connection, it may be
stated that section 191 of the Tax Code imposes a tax
equivalent to 3 per cent of the gross receipts on certain
businesses and business entities, among them stevedores.
In his brief counsel for Petitioner-Appellant bitterly assails
the proceedings had in this case, saying that it “has been
most inquisitorial, reminiscent of the ancient and
antiquated method of administering justice by which

the Defendant was condemned without benefit of
confrontation. The guarantee and protection jealousy
safeguarded by our Constitution has been completely
disregarded. The report of the BIR Agent was a mere
unilateral affair and its findings were arrived at without
the Petitioner-Appellants’ having had the slightest
opportunity to be confronted and his side heard.” We
have examined the record of the proceedings and find this
attack unfounded. Although the Board of Tax Appeals as
an appellate board usually considers only the evidence
that comes with the appeal, nevertheless, in this case a
hearing was had before it, and the very same counsel Atty.
Jose Muaña testified on behalf of the Cebu Arrastre, his
client and of which he was the president, but he failed to
present any evidence or give any testimony in support of
his present contention that the Cebu Arrastre is not
engaged in the work of loading cargoes into the holds of
the boat or unloading the same from it. But in his
memorandum filed with the Tax Board, he made
statements which the Tax Board liberally considered as
evidence but which the Board regarded as insufficient and
not entirely credible. We reproduce a portion of the
decision of the Tax Board on this
point:chanroblesvirtuallawlibrary
“In its memorandum filed with us in support of its petition
for review of the case, Petitioner’s counsel makes some
additional statements of facts wherein he avers that,
‘Their work (that of the company’s laborers) was simply
the handling of cargoes at the wharf almost mechanically
under the control and supervision of the shipping
companies. In cases where boats had booms their work
was simply to load on the wharf at the ships tackle by
placing the cargoes in the sling and hooking unto the
tackle, and unloading by unhooking the sling from the
tackle and discharging the cargoes on the wharf. In rare
cases where the boats have no booms, these men carry
the cargoes up to the deck for the stevedores on board to
store in the hold, in the case of loading, and carry cargoes
from the deck which have been unloaded from the hold by
the stevedores to the wharf.’
“We have here three descriptions of the kind of work
performed by the laborers of Petitionercorporation, of
which one is widely different from the other
two:chanroblesvirtuallawlibrary one is from the
investigator of the Bureau of Internal Revenue who says
that the laborers in question carry cargoes to and from the
pier to the hold of ships, which agrees with the description
appearing on the original request to the Collector by the
President and Counselor of the Corporation, the other
being the contention of the same official of the Arrastre
Service who, in his memorandum on appeal, would have
us believe that its workingmen merely place the cargoes in
the slings and then leave the ships tackle to lift and drop
them into the holds or dump them on decks, there to be
stowed by another set of workingmen, presumably not
connected at all with the Arrastre Service Corporation.
When ships are not provided with booms, cargoes are
carried by the Arrastre Service laborers over planks or
ladders to be dumped into the deck or into the hold, there
to be stowed by another set of stevedores not related to
the Corporation.
xxx xxx xxx
“The question, then revolves around the facts and around
the credibility of the description depicting the exact nature
of the work of the laborers working under the contracts
entered into by the Cebu Arrastre Co. Inc. with Cebu
shipowners. We just determine therefore, which of the
two conflicting versions comes nearer the reality of the
situation.
“We may say at the outset that the preponderance of
evidence is in favor of the version of the Assistant Agent of
the Bureau of Internal Revenue of Cebu. According to him
the loading and unloading of cargoes to and from the ships
holds is done by the laborers under the Cebu Arrastre
Service Co., Inc. and the ships officers supervision is
limited to the proper placing of the same inside the ships
hold, the inference being that said ‘proper placing’
(stowing) is being done by the corporation laborers. This is
Page 5 of 12
not contradicted by the version of the Petitioner as given
in its original petition wherein it
says:chanroblesvirtuallawlibrary The men working under
the Cebu Arrastre Service are same men of ‘Katubusanan
sa Mamumuo’ who have been handling the loading of the
boats of the Aboitiz & Co. and of the Philippine Navigation
Co. since 1947 up to the present.’ It says also, further
on:chanroblesvirtuallawlibrary ‘The Cebu Arrastre Service
is dedicated itself solely to the loading and unloading of
cargoes on the boats ..’ It is true that the President and
Counsel corrected this description in the memorandum on
appeal to the effect that laborers of the corporation do
not, except on rare occasions, engage in loading or
unloading the boat but limit their work on loading or
unloading pele-mele the slings of the boats under contract
with the Arrastre Service, but in the opinion of the Board
this amendment is not nearer to the truth than the original
version which was corroborated by the official who
investigated the case by order of the Collector of Internal
Revenue.
“It is noteworthy that in the agreement entered into by
the shipowners and the corporation mention is twice
made of the ‘arrastre service on the vessels’ (but never on
the piers) to be done by the laborers of the Cebu Arrastre
Service Inc. Another circumstance which may help in
obtaining a clear picture of the situation is that nowhere in
these papers is it contended that the stevedores actually
performing the stowing work belong to an organization
not related to the Petitioner.”
We quote the following definitions of stevedores,
viz:chanroblesvirtuallawlibrary
Stevedores is “one who works at, or one who is
responsible for, the unloading and loading of a vessel in
port. (Webster’s New International Dictionary, Second
Edition (unabridged), p. 2473).
A stevedore is a person employed in loading and unloading
a vessel. (The Owego, D. C. Wash., 292 F. 505, 507).
Stevedores are class of laborers at the ports whose
business it is to load and unload vessels. (The Senator, 21
F. 191).
“Stevedore” is defined as “one whose occupation is to load
and unload vessels in port”; chan roblesvirtualawlibraryin
other words, a contractor or a jobber for special business
ready to be employed by anybody at his line of work
(Rankin vs. Merchants and Miners Transp. Co., 73 Ga. 239,
54 Am. Rep. 874).
“Stevedore” and “longshoreman”, are synonymous terms
when interpreted in the light of the work they perform,
namely loading and unloading of vessels (Zampiere vs.
Willian Spencer and Son Corporation, 18b N.Y.S. 639, 640,
194 App. Div. 576).
Under the above definitions the Cebu Arrastre admittedly
engaged in the work of loading and unloading coastwise
vessels calling at the port of Cebu, should be regarded as a
stevedore and therefore subject to the percentage tax
under section 191 of the Tax Code. But even if we applied
the narrower and more specific concept of stevedore used
by the Tax Board, namely, that a stevedore is one who
places cargoes in the holds of ships in such a way that the
boat would maintain an even keel, and that even with the
movement of the boat, especially in rough weather, the
cargoes would not be displaced from their original
position, still, under the finding of fact made by the Tax
Board that the Cebu Arrastre is engaged in this work of
towing cargo either in the hold or even on the
deck, Appellant would be subject to the tax. We also agree
with the Tax Board that the purpose for which
the Petitioner-Appellant was organized, and the
supervision exercised by the ships’ officers over its work in
loading and unloading vessels including the towing of
cargo, has nothing to do with the tax liability of
the Petitioner-Appellant.
In view of the foregoing, the decision appealed from is
hereby affirmed, with costs in both instances.

B. Governing Laws
Art. 1766 NCCP (primacy over prior laws)
Art 1753 NCCP (in case of loss, destruction and
deterioration of goods the laws of the country of
destination shall apply)
Cases:
Eastern Shipping Lines Inc. V The Nisshin Fire and Marine
Insurance Co. et al
No. L- 71478 May 29 19987
150 SCRA 465, 469 (in case of loss, destruction or
deterioration of goods, the law of the country of
destination shall apply)
Eastern Shipping Lines Inc. VS IAC Case Digest
Eastern Shipping Lines Inc. VS. Intermediate Appellate
Court
(150 SCRA 463)
Facts: Sometime in or prior to June 1977, the M/S Asiatica,
a vessel operated by petitioner Eastern Shipping Lines Inc.,
loaded at Kobe, Japan for transportation to Manila loaded
5,000 pieces of calorized pipes valued at P256,039.00
which was consigned to Philippine Blooming Mills Co, Inc.
and 7 cases of spare parts valued at P92, 361.75 consigned
to Central Textile Mills. Both sets of goods were inured
against marine risk for their stated value with respondent
Development Insurance and Surety Corp.
In the same vessel, 2 containers of garment fabrics were
also loaded which was consigned to Mariveles Apparel
Corp worth $46,583. The said cargoes were consigned to
Nisshin Fire and Marine Insurance. Another cargo loaded
to the vessel was the surveying instruments consigned to
Aman Enterprises and General Merchandise and insured
against respondent Dowa Fire & Marine Insurance for
$1,385.00.
On the way to Manila, M/S Asiatica caught fire and sank.
This resulted to the loss of the ship and its cargoes. The
respective Insurers paid the corresponding marine
insurance values and were thus subrogated to the rights of
the insured.
The insurers filed a suit against the petitioner carrier for
recovery of the amounts paid to the insured. However,
petitioner contends that it is not liable on the ground that
the loss was due to an extraordinary fortuitous event.
Issue: Whether the Civil Code provisions on Common
Carriers or the Carriage of the Goods by Sea Act will
govern the case at bar?
Held: The law of the country to which the goods are to be
transported governs the liability of common carrier in case
of their loss, destruction or deterioration. The liability of
petitioner is governed primarily by the Civil Code however,
in all matters not regulated by the Civil Code, the Code of
Commerce and Special Laws will govern with respect to
the rights and obligations of the carrier. Therefore COGSA
is suppletory to the provisions of the Civil Code.
National Development Co. V CA et al
Nos. L- 49407 and L-49469, Aug 19 1988
164 SCRA 593, 603 (Immaterial that collision occurred in
foreign waters, the law of the country of destination shall
apply) note: collision is not regulated by NCCP provisions:
hence the special law, COGSA applies)
NATIONAL DEVELOPMENT COMPANY vs. THE COURT OF
APPEALS and DEVELOPMENT INSURANCE AND SURETY
CORPORATION
G.R. No. L-49407 19 August 1988
Facts:
Page 6 of 12
National Development Company (NDC) appointed
Maritime Company of the Philippines (MCP) as its agent to
manage and operate its vessel, ‘Dona Nati’, for and in
behalf of its account. In 1964, while en route to Japan
from San Francisco, Dona Nati collided with a Japanese
vessel, ‘SS Yasushima Maru’, causing its cargo to be
damaged and lost. The private respondent, as insurer to
the consigners, paid almost Php400,000.00 for said lost
and damaged cargo. Hence, the private respondent
instituted an action to recover from NDC.
Issue:
Which laws govern the loss and destruction of goods due
to collision of vessels outside Philippine waters?
Ruling:
In a previously decided case, it was held that the law of the
country to which the goods are to be transported governs
the liability of the common carrier in case of their loss,
destruction or deterioration pursuant to Article 1753 of
the Civil Code. It is immaterial that the collision actually
occurred in foreign waters, such as Ise Bay, Japan.
It appears, however, that collision falls among matters not
specifically regulated by the Civil Code, hence, we apply
Articles 826 to 839, Book Three of the Code of Commerce,
which deal exclusively with collision of vessels.
Alitalia V Intermediate Appellate Court
192 SCRA 9 1997 (application of treaties: since treaties
are part of the law of the land, in international air
transportation the Convention for the Unification of
Certain Rules Relating to the International Carriage by Air
or the “Warsaw Convention” with its amendments shall
apply.)
Alitalia v. IAC
Facts:
Dr. Felipa Pablo, an associate professor in the University of
the Philippines and a research grantee of the Philippine
Atomic Energy Agency, was invited to take part at a
meeting of the Department of Research and Isotopes in
Italy in view of her specialized knowledge in “foreign
substances in food and the agriculture environment”. She
would be the second speaker on the first day of the
meeting. Dr. Pablo booked passage on petitioner Alitalia.
She arrived in Milan on the day before the meeting, but
was told that her luggage was delayed and was in a
succeeding flight from Rome to Milan. The luggage
included her materials for the presentation. The
succeeding flights did not carry her luggage. Desperate,
she went to Rome to try to locate the luggage herself, but
to no avail. She returned to Manila without attending the
meeting. She demanded reparation for the damages. She
rejected Alitalia’s offer of free airline tickets and
commenced an action for damages. As it turned out, the
luggage was actually forwarded to Ispra, but only a day
after the scheduled appearance. It was returned to her
after 11 months. The trial court ruled in favor of Dr. Pablo,
and this was affirmed by the Court of Appeals.
Issues:
(1) Whether the Warsaw Convention should be applied to
limit Alitalia’s liability
(2) Whether Dr. Pablo is entitled to nominal damages
Held:
(1) Under the Warsaw Convention, an air carrier is made
liable for damages for:
a. The death, wounding or other bodily injury of a
passenger if the accident causing it took place on board
the aircraft or I the course of its operations of embarking
or disembarking;
b. The destruction or loss of, or damage to, any registered
luggage or goods, if the occurrence causing it took place
during the carriage by air; and
c. Delay in the transportation by air of passengers, luggage
or goods.

The convention however denies to the carrier availment of
the provisions which exclude or limit his liability, if the
damage is caused by his wilful misconduct, or by such
default on his part as is considered to be equivalent to
wilful misconduct. The Convention does not thus operate
as an exclusive enumeration of the instances of an airline's
liability, or as an absolute limit of the extent of that
liability. It should be deemed a limit of liability only in
those cases where the cause of the death or injury to
person, or destruction, loss or damage to property or
delay in its transport is not attributable to or attended by
any wilful misconduct, bad faith, recklessness, or
otherwise improper conduct on the part of any official or
employee for which the carrier is responsible, and there is
otherwise no special or extraordinary form of resulting
injury.
In the case at bar, no bad faith or otherwise improper
conduct may be ascribed to the employees of petitioner
airline; and Dr. Pablo's luggage was eventually returned to
her, belatedly, it is true, but without appreciable damage.
The fact is, nevertheless, that some species of injury was
caused to Dr. Pablo because petitioner ALITALIA misplaced
her baggage and failed to deliver it to her at the time
appointed - a breach of its contract of carriage. Certainly,
the compensation for the injury suffered by Dr. Pablo
cannot under the circumstances be restricted to that
prescribed by the Warsaw Convention for delay in the
transport of baggage.
(2) She is not, of course, entitled to be compensated for
loss or damage to her luggage. She is however entitled to
nominal damages which, as the law says, is adjudicated in
order that a right of the plaintiff, which has been violated
or invaded by the defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the
plaintiff that for any loss suffered and this Court agrees
that the respondent Court of Appeals correctly set the
amount thereof at PhP 40,000.00.
The Court also agrees that respondent Court of Appeals
correctly awarded attorney’s fees to Dr. Pablo and the
amount of PhP 5,000.00 set by it is reasonable in the
premises. The law authorizes recovery of attorney’s
fees inter alia where, as here, the defendant’s act or
omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest or
where the court deems it just and equitable.
C. SUMMARY OF RULES
The rules with respect to applicable laws are summarized
as follows:
a. Coastwise shipping
1. NCCP Arts 1732 – 1766 primary law
2. Code of Commerce - suppletory
b. Carriage from foreign ports to Philippine ports
1. NCCP primary law
2. Code of Commerce – suppletory (all matters
not regulated by the NCCP;
3. NDC V CA 164 SCRA 59
4. Carriage of Goods by Sea Act ( COGSA)
suppletory to NCCP
NATIONAL DEVELOPMENT COMPANY, petitioner-
appellant,
vs.
THE COURT OF APPEALS and DEVELOPMENT INSURANCE &
SURETY CORPORATION, respondents-appellees.
No. L-49469 August 19, 1988
MARITIME COMPANY OF THE PHILIPPINES, petitioner-
appellant,
vs.
THE COURT OF APPEALS and DEVELOPMENT INSURANCE &
SURETY CORPORATION, respondents- appellees.
Balgos & Perez Law Office for private respondent in both
cases.
Page 7 of 12
PARAS, J.:
These are appeals by certiorari from the decision * of the
Court of Appeals in CA G.R. No: L- 46513-R entitled
"Development Insurance and Surety Corporation plaintiff-
appellee vs. Maritime Company of the Philippines and
National Development Company defendant-appellants,"
affirming in toto the decision ** in Civil Case No. 60641 of
the then Court of First Instance of Manila, Sixth Judicial
District, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered ordering the
defendants National Development Company and Maritime
Company of the Philippines, to pay jointly and severally, to
the plaintiff Development Insurance and Surety Corp., the
sum of THREE HUNDRED SIXTY FOUR THOUSAND AND
NINE HUNDRED FIFTEEN PESOS AND EIGHTY SIX
CENTAVOS (364,915.86) with the legal interest thereon
from the filing of plaintiffs complaint on April 22, 1965
until fully paid, plus TEN THOUSAND PESOS (Pl0,000.00) by
way of damages as and for attorney's fee.
On defendant Maritime Company of the Philippines' cross-
claim against the defendant National Development
Company, judgment is hereby rendered, ordering the
National Development Company to pay the cross-claimant
Maritime Company of the Philippines the total amount
that the Maritime Company of the Philippines may
voluntarily or by compliance to a writ of execution pay to
the plaintiff pursuant to the judgment rendered in this
case.
With costs against the defendant Maritime Company of
the Philippines.
(pp. 34-35, Rollo, GR No. L-49469)
The facts of these cases as found by the Court of Appeals,
are as follows:
The evidence before us shows that in accordance with a
memorandum agreement entered into between
defendants NDC and MCP on September 13, 1962,
defendant NDC as the first preferred mortgagee of three
ocean going vessels including one with the name 'Dona
Nati' appointed defendant MCP as its agent to manage
and operate said vessel for and in its behalf and account
(Exh. A). Thus, on February 28, 1964 the E. Philipp
Corporation of New York loaded on board the vessel
"Dona Nati" at San Francisco, California, a total of 1,200
bales of American raw cotton consigned to the order of
Manila Banking Corporation, Manila and the People's Bank
and Trust Company acting for and in behalf of the Pan
Asiatic Commercial Company, Inc., who represents
Riverside Mills Corporation (Exhs. K-2 to K7-A & L-2 to L-7-
A). Also loaded on the same vessel at Tokyo, Japan, were
the cargo of Kyokuto Boekui, Kaisa, Ltd., consigned to the
order of Manila Banking Corporation consisting of 200
cartons of sodium lauryl sulfate and 10 cases of aluminum
foil (Exhs. M & M-1). En route to Manila the vessel Dofia
Nati figured in a collision at 6:04 a.m. on April 15, 1964 at
Ise Bay, Japan with a Japanese vessel 'SS Yasushima Maru'
as a result of which 550 bales of aforesaid cargo of
American raw cotton were lost and/or destroyed, of which
535 bales as damaged were landed and sold on the
authority of the General Average Surveyor for Yen 6,045,-
500 and 15 bales were not landed and deemed lost (Exh.
G). The damaged and lost cargoes was worth P344,977.86
which amount, the plaintiff as insurer, paid to the
Riverside Mills Corporation as holder of the negotiable bills
of lading duly endorsed (Exhs. L-7-A, K-8-A, K-2-A, K-3-A, K-
4-A, K-5-A, A- 2, N-3 and R-3}. Also considered totally lost
were the aforesaid shipment of Kyokuto, Boekui Kaisa Ltd.,
consigned to the order of Manila Banking Corporation,
Manila, acting for Guilcon, Manila, The total loss was
P19,938.00 which the plaintiff as insurer paid to Guilcon as
holder of the duly endorsed bill of lading (Exhibits M-1 and
S-3). Thus, the plaintiff had paid as insurer the total

amount of P364,915.86 to the consignees or their
successors-in-interest, for the said lost or damaged
cargoes. Hence, plaintiff filed this complaint to recover
said amount from the defendants-NDC and MCP as owner
and ship agent respectively, of the said 'Dofia Nati' vessel.
(Rollo, L-49469, p.38)
On April 22, 1965, the Development Insurance and Surety
Corporation filed before the then Court of First Instance of
Manila an action for the recovery of the sum of
P364,915.86 plus attorney's fees of P10,000.00 against
NDC and MCP (Record on Appeal), pp. 1-6).
Interposing the defense that the complaint states no cause
of action and even if it does, the action has prescribed,
MCP filed on May 12, 1965 a motion to dismiss (Record on
Appeal, pp. 7-14). DISC filed an Opposition on May 21,
1965 to which MCP filed a reply on May 27, 1965 (Record
on Appeal, pp. 14-24). On June 29, 1965, the trial court
deferred the resolution of the motion to dismiss till after
the trial on the merits (Record on Appeal, p. 32). On June
8, 1965, MCP filed its answer with counterclaim and cross-
claim against NDC.
NDC, for its part, filed its answer to DISC's complaint on
May 27, 1965 (Record on Appeal, pp. 22-24). It also filed
an answer to MCP's cross-claim on July 16, 1965 (Record
on Appeal, pp. 39-40). However, on October 16, 1965,
NDC's answer to DISC's complaint was stricken off from
the record for its failure to answer DISC's written
interrogatories and to comply with the trial court's order
dated August 14, 1965 allowing the inspection or
photographing of the memorandum of agreement it
executed with MCP. Said order of October 16, 1965
likewise declared NDC in default (Record on Appeal, p. 44).
On August 31, 1966, NDC filed a motion to set aside the
order of October 16, 1965, but the trial court denied it in
its order dated September 21, 1966.
On November 12, 1969, after DISC and MCP presented
their respective evidence, the trial court rendered a
decision ordering the defendants MCP and NDC to pay
jointly and solidarity to DISC the sum of P364,915.86 plus
the legal rate of interest to be computed from the filing of
the complaint on April 22, 1965, until fully paid and
attorney's fees of P10,000.00. Likewise, in said decision,
the trial court granted MCP's crossclaim against NDC.
MCP interposed its appeal on December 20, 1969, while
NDC filed its appeal on February 17, 1970 after its motion
to set aside the decision was denied by the trial court in its
order dated February 13,1970.
On November 17,1978, the Court of Appeals promulgated
its decision affirming in toto the decision of the trial court.
Hence these appeals by certiorari.
NDC's appeal was docketed as G.R. No. 49407, while that
of MCP was docketed as G.R. No. 49469. On July 25,1979,
this Court ordered the consolidation of the above cases
(Rollo, p. 103). On August 27,1979, these consolidated
cases were given due course (Rollo, p. 108) and submitted
for decision on February 29, 1980 (Rollo, p. 136).
In its brief, NDC cited the following assignments of error:
I
THE COURT OF APPEALS ERRED IN APPLYING ARTICLE 827
OF THE CODE OF COMMERCE AND NOT SECTION 4(2a) OF
COMMONWEALTH ACT NO. 65, OTHERWISE KNOWN AS
THE CARRIAGE OF GOODS BY SEA ACT IN DETERMINING
THE LIABILITY FOR LOSS OF CARGOES RESULTING FROM
THE COLLISION OF ITS VESSEL "DONA NATI" WITH THE
YASUSHIMA MARU"OCCURRED AT ISE BAY, JAPAN OR
OUTSIDE THE TERRITORIAL JURISDICTION OF THE
PHILIPPINES.
Page 8 of 12
II
THE COURT OF APPEALS ERRED IN NOT DISMISSING THE
C0MPLAINT FOR REIMBURSEMENT FILED BY THE INSURER,
HEREIN PRIVATE RESPONDENT-APPELLEE, AGAINST THE
CARRIER, HEREIN PETITIONER-APPELLANT. (pp. 1-2, Brief
for Petitioner-Appellant National Development Company;
p. 96, Rollo).
On its part, MCP assigned the following alleged errors:
I
THE RESPONDENT COURT OF APPEALS ERRED IN NOT
HOLDING THAT RESPONDENT DEVELOPMENT INSURANCE
AND SURETY CORPORATION HAS NO CAUSE OF ACTION AS
AGAINST PETITIONER MARITIME COMPANY OF THE
PHILIPPINES AND IN NOT DISMISSING THE COMPLAINT.
II
THE RESPONDENT COURT OF APPEALS ERRED IN NOT
HOLDING THAT THE CAUSE OF ACTION OF RESPONDENT
DEVELOPMENT INSURANCE AND SURETY CORPORATION IF
ANY EXISTS AS AGAINST HEREIN PETITIONER MARITIME
COMPANY OF THE PHILIPPINES IS BARRED BY THE
STATUTE OF LIMITATION AND HAS ALREADY PRESCRIBED.
III
THE RESPONDENT COURT OF APPEALS ERRED IN
ADMITTING IN EVIDENCE PRIVATE RESPONDENTS EXHIBIT
"H" AND IN FINDING ON THE BASIS THEREOF THAT THE
COLLISION OF THE SS DONA NATI AND THE YASUSHIMA
MARU WAS DUE TO THE FAULT OF BOTH VESSELS INSTEAD
OF FINDING THAT THE COLLISION WAS CAUSED BY THE
FAULT, NEGLIGENCE AND LACK OF SKILL OF THE
COMPLEMENTS OF THE YASUSHIMA MARU WITHOUT THE
FAULT OR NEGLIGENCE OF THE COMPLEMENT OF THE SS
DONA NATI
IV
THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING
THAT UNDER THE CODE OF COMMERCE PETITIONER
APPELLANT MARITIME COMPANY OF THE PHILIPPINES IS A
SHIP AGENT OR NAVIERO OF SS DONA NATI OWNED BY
CO-PETITIONER APPELLANT NATIONAL DEVELOPMENT
COMPANY AND THAT SAID PETITIONER-APPELLANT IS
SOLIDARILY LIABLE WITH SAID CO-PETITIONER FOR LOSS
OF OR DAMAGES TO CARGO RESULTING IN THE COLLISION
OF SAID VESSEL, WITH THE JAPANESE YASUSHIMA MARU.
V
THE RESPONDENT COURT OF APPEALS ERRED IN FINDING
THAT THE LOSS OF OR DAMAGES TO THE CARGO OF 550
BALES OF AMERICAN RAW COTTON, DAMAGES WERE
CAUSED IN THE AMOUNT OF P344,977.86 INSTEAD OF
ONLY P110,000 AT P200.00 PER BALE AS ESTABLISHED IN
THE BILLS OF LADING AND ALSO IN HOLDING THAT
PARAGRAPH 1O OF THE BILLS OF LADING HAS NO
APPLICATION IN THE INSTANT CASE THERE BEING NO
GENERAL AVERAGE TO SPEAK OF.
VI
THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING
THE PETITIONERS NATIONAL DEVELOPMENT COMPANY
AND COMPANY OF THE PHILIPPINES TO PAY JOINTLY AND
SEVERALLY TO HEREIN RESPONDENT DEVELOPMENT
INSURANCE AND SURETY CORPORATION THE SUM OF
P364,915.86 WITH LEGAL INTEREST FROM THE FILING OF
THE COMPLAINT UNTIL FULLY PAID PLUS P10,000.00 AS
AND FOR ATTORNEYS FEES INSTEAD OF SENTENCING SAID
PRIVATE RESPONDENT TO PAY HEREIN PETITIONERS ITS
COUNTERCLAIM IN THE AMOUNT OF P10,000.00 BY WAY

OF ATTORNEY'S FEES AND THE COSTS. (pp. 1-4, Brief for
the Maritime Company of the Philippines; p. 121, Rollo)
The pivotal issue in these consolidated cases is the
determination of which laws govern loss or destruction of
goods due to collision of vessels outside Philippine waters,
and the extent of liability as well as the rules of
prescription provided thereunder.
The main thrust of NDC's argument is to the effect that the
Carriage of Goods by Sea Act should apply to the case at
bar and not the Civil Code or the Code of Commerce.
Under Section 4 (2) of said Act, the carrier is not
responsible for the loss or damage resulting from the "act,
neglect or default of the master, mariner, pilot or the
servants of the carrier in the navigation or in the
management of the ship." Thus, NDC insists that based on
the findings of the trial court which were adopted by the
Court of Appeals, both pilots of the colliding vessels were
at fault and negligent, NDC would have been relieved of
liability under the Carriage of Goods by Sea Act. Instead,
Article 287 of the Code of Commerce was applied and both
NDC and MCP were ordered to reimburse the insurance
company for the amount the latter paid to the consignee
as earlier stated.
This issue has already been laid to rest by this Court of
Eastern Shipping Lines Inc. v. IAC (1 50 SCRA 469-470
[1987]) where it was held under similar circumstance "that
the law of the country to which the goods are to be
transported governs the liability of the common carrier in
case of their loss, destruction or deterioration" (Article
1753, Civil Code). Thus, the rule was specifically laid down
that for cargoes transported from Japan to the Philippines,
the liability of the carrier is governed primarily by the Civil
Code and in all matters not regulated by said Code, the
rights and obligations of common carrier shall be governed
by the Code of commerce and by laws (Article 1766, Civil
Code). Hence, the Carriage of Goods by Sea Act, a special
law, is merely suppletory to the provision of the Civil Code.
In the case at bar, it has been established that the goods in
question are transported from San Francisco, California
and Tokyo, Japan to the Philippines and that they were
lost or due to a collision which was found to have been
caused by the negligence or fault of both captains of the
colliding vessels. Under the above ruling, it is evident that
the laws of the Philippines will apply, and it is immaterial
that the collision actually occurred in foreign waters, such
as Ise Bay, Japan.
Under Article 1733 of the Civil Code, common carriers
from the nature of their business and for reasons of public
policy are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the
passengers transported by them according to all
circumstances of each case. Accordingly, under Article
1735 of the same Code, in all other than those mentioned
is Article 1734 thereof, the common carrier shall be
presumed to have been at fault or to have acted
negigently, unless it proves that it has observed the
extraordinary diligence required by law.
It appears, however, that collision falls among matters not
specifically regulated by the Civil Code, so that no
reversible error can be found in respondent courses
application to the case at bar of Articles 826 to 839, Book
Three of the Code of Commerce, which deal exclusively
with collision of vessels.
More specifically, Article 826 of the Code of Commerce
provides that where collision is imputable to the personnel
of a vessel, the owner of the vessel at fault, shall
indemnify the losses and damages incurred after an expert
appraisal. But more in point to the instant case is Article
827 of the same Code, which provides that if the collision
is imputable to both vessels, each one shall suffer its own
Page 9 of 12
damages and both shall be solidarily responsible for the
losses and damages suffered by their cargoes.
Significantly, under the provisions of the Code of
Commerce, particularly Articles 826 to 839, the shipowner
or carrier, is not exempt from liability for damages arising
from collision due to the fault or negligence of the captain.
Primary liability is imposed on the shipowner or carrier in
recognition of the universally accepted doctrine that the
shipmaster or captain is merely the representative of the
owner who has the actual or constructive control over the
conduct of the voyage (Y'eung Sheng Exchange and
Trading Co. v. Urrutia & Co., 12 Phil. 751 [1909]).
There is, therefore, no room for NDC's interpretation that
the Code of Commerce should apply only to domestic
trade and not to foreign trade. Aside from the fact that the
Carriage of Goods by Sea Act (Com. Act No. 65) does not
specifically provide for the subject of collision, said Act in
no uncertain terms, restricts its application "to all
contracts for the carriage of goods by sea to and from
Philippine ports in foreign trade." Under Section I thereof,
it is explicitly provided that "nothing in this Act shall be
construed as repealing any existing provision of the Code
of Commerce which is now in force, or as limiting its
application." By such incorporation, it is obvious that said
law not only recognizes the existence of the Code of
Commerce, but more importantly does not repeal nor limit
its application.
On the other hand, Maritime Company of the Philippines
claims that Development Insurance and Surety
Corporation, has no cause of action against it because the
latter did not prove that its alleged subrogers have either
the ownership or special property right or beneficial
interest in the cargo in question; neither was it proved
that the bills of lading were transferred or assigned to the
alleged subrogers; thus, they could not possibly have
transferred any right of action to said plaintiff- appellee in
this case. (Brief for the Maritime Company of the
Philippines, p. 16).
The records show that the Riverside Mills Corporation and
Guilcon, Manila are the holders of the duly endorsed bills
of lading covering the shipments in question and an
examination of the invoices in particular, shows that the
actual consignees of the said goods are the
aforementioned companies. Moreover, no less than MCP
itself issued a certification attesting to this fact.
Accordingly, as it is undisputed that the insurer, plaintiff
appellee paid the total amount of P364,915.86 to said
consignees for the loss or damage of the insured cargo, it
is evident that said plaintiff-appellee has a cause of action
to recover (what it has paid) from defendant-appellant
MCP (Decision, CA-G.R. No. 46513-R, p. 10; Rollo, p. 43).
MCP next contends that it can not be liable solidarity with
NDC because it is merely the manager and operator of the
vessel Dona Nati not a ship agent. As the general
managing agent, according to MCP, it can only be liable if
it acted in excess of its authority.
As found by the trial court and by the Court of Appeals,
the Memorandum Agreement of September 13, 1962
(Exhibit 6, Maritime) shows that NDC appointed MCP as
Agent, a term broad enough to include the concept of
Ship-agent in Maritime Law. In fact, MCP was even
conferred all the powers of the owner of the vessel,
including the power to contract in the name of the NDC
(Decision, CA G.R. No. 46513, p. 12; Rollo, p. 40).
Consequently, under the circumstances, MCP cannot
escape liability.
It is well settled that both the owner and agent of the
offending vessel are liable for the damage done where
both are impleaded (Philippine Shipping Co. v. Garcia
Vergara, 96 Phil. 281 [1906]); that in case of collision, both
the owner and the agent are civilly responsible for the acts

of the captain (Yueng Sheng Exchange and Trading Co. v.
Urrutia & Co., supra citing Article 586 of the Code of
Commerce; Standard Oil Co. of New York v. Lopez Castelo,
42 Phil. 256, 262 [1921]); that while it is true that the
liability of the naviero in the sense of charterer or agent, is
not expressly provided in Article 826 of the Code of
Commerce, it is clearly deducible from the general
doctrine of jurisprudence under the Civil Code but more
specially as regards contractual obligations in Article 586
of the Code of Commerce. Moreover, the Court held that
both the owner and agent (Naviero) should be declared
jointly and severally liable, since the obligation which is
the subject of the action had its origin in a tortious act and
did not arise from contract (Verzosa and Ruiz, Rementeria
y Cia v. Lim, 45 Phil. 423 [1923]). Consequently, the agent,
even though he may not be the owner of the vessel, is
liable to the shippers and owners of the cargo transported
by it, for losses and damages occasioned to such cargo,
without prejudice, however, to his rights against the
owner of the ship, to the extent of the value of the vessel,
its equipment, and the freight (Behn Meyer Y Co. v.
McMicking et al. 11 Phil. 276 [1908]).
As to the extent of their liability, MCP insists that their
liability should be limited to P200.00 per package or per
bale of raw cotton as stated in paragraph 17 of the bills of
lading. Also the MCP argues that the law on averages
should be applied in determining their liability.
MCP's contention is devoid of merit. The declared value of
the goods was stated in the bills of lading and
corroborated no less by invoices offered as evidence '
during the trial. Besides, common carriers, in the language
of the court in Juan Ysmael & Co., Inc. v. Barrette et al., (51
Phil. 90 [1927]) "cannot limit its liability for injury to a loss
of goods where such injury or loss was caused by its own
negligence." Negligence of the captains of the colliding
vessel being the cause of the collision, and the cargoes not
being jettisoned to save some of the cargoes and the
vessel, the trial court and the Court of Appeals acted
correctly in not applying the law on averages (Articles 806
to 818, Code of Commerce).
MCP's claim that the fault or negligence can only be
attributed to the pilot of the vessel SS Yasushima Maru
and not to the Japanese Coast pilot navigating the vessel
Dona Nati need not be discussed lengthily as said claim is
not only at variance with NDC's posture, but also contrary
to the factual findings of the trial court affirmed no less by
the Court of Appeals, that both pilots were at fault for not
changing their excessive speed despite the thick fog
obstructing their visibility.
Finally on the issue of prescription, the trial court correctly
found that the bills of lading issued allow trans-shipment
of the cargo, which simply means that the date of arrival
of the ship Dona Nati on April 18,1964 was merely
tentative to give allowances for such contingencies that
said vessel might not arrive on schedule at Manila and
therefore, would necessitate the trans-shipment of cargo,
resulting in consequent delay of their arrival. In fact,
because of the collision, the cargo which was supposed to
arrive in Manila on April 18, 1964 arrived only on June 12,
13, 18, 20 and July 10, 13 and 15, 1964. Hence, had the
cargoes in question been saved, they could have arrived in
Manila on the above-mentioned dates. Accordingly, the
complaint in the instant case was filed on April 22, 1965,
that is, long before the lapse of one (1) year from the date
the lost or damaged cargo "should have been delivered" in
the light of Section 3, sub-paragraph (6) of the Carriage of
Goods by Sea Act.
PREMISES CONSIDERED, the subject petitions are DENIED
for lack of merit and the assailed decision of the
respondent Appellate Court is AFFIRMED.
SO ORDERED.
Page 10 of 12
c. Carriage from Philippine ports to foreign ports
1. The laws of the country to which the goods
are to be transported Art 1753 NCCP;
Case:
NDC V CA 164 SCRA 593
d. Overland transportation
1. NCCP
H. Nature of Business
Cases:
Fisher V Yangco Steamship Co., et al
No. 8095 Nov 5 1914 and March 31 1915
Fisher vs. Yangco Steamship Case Digest
Fisher vs. Yangco Steamship
(31 Phil 1)
Facts: The complained alleges that plaintiff is a stockholder
in Yangco Steamship
Company, the owner of the large steam vessels, duly
licensed to engage in the coastwise trade of the Philippine
Island; that on or about June 10, 1912, the directors of the
company, adopted a resolution which was thereafter
ratified and affirmed by the stockholders of the company
“expressly declaring and providing that the classes of
merchandise to be carried by the company in its business
as common carrier do not include dynamite, powder or
other explosives, and expressly prohibiting the officers,
agents an d servants of the company from offering to
carry, accepting for carriage or carrying said dynamite,
powder or other explosives.”
Issue: Whether the refusal of the owner and officer of a
steam vessel, to accept for carriage dynamite, powder or
other explosives for carriage can be held to be a lawful
act?
Held: The traffic in dynamite gun powder and other
explosive is vitally essential to the material and general
welfare of the inhabitants of this islands and it these
products are to continue in general use throughout the
Philippines they must be transported from water to port to
port in various island which make up the Archipelago.
It follows that a refusal by a particular vessel engage as a
common carrier of merchandise in coastwise trade in the
Philippine Island to accept such explosives for carriage
constitutes a violation.
The prohibition against discrimination penalized under the
statute, unless it can be shown that there is so Real and
substantial danger of disaster necessarily involved in the
courage of any or all of this article of merchandise as to
render such refusal a due or unnecessary or a reasonable
exercise or prudence and discreation on the part of the
ship owner.xxxxxxxxxxxxxxxxxxxxxxx
The nature of the business of a common carrier as a public
employment is such that it is clearly within the power of
the state to impose such just and reasonable regulations
thereon in the interest of the public as the legislator may
deem proper. Of course such regulations must not have
the effect of depriving an owner of his property without
due process of law, nor of confiscating or appropriating
private property without just compensation, nor of
limiting or prescribing irrevocably vested rights or
privileges lawfully acquired under a charter or franchise.
But aside from such constitutional limitations, the
determination of the nature and extent of the regulations
which should be prescribed rests in the hands of the
legislator.
Common carriers exercise a sort of public office, and have
duties to perform in which the public is interested. Their
business is, therefore, affected with a public interest, and
is subject of public regulation. (New Jersey Steam Nav.
Co. vs. Merchants Bank, 6 How., 344, 382;
Munn vs. Illinois, 94 U.S., 113, 130.) Indeed, this right of

regulation is so far beyond question that it is well settled
that the power of the state to exercise legislative control
over railroad companies and other carriers "in all respects
necessary to protect the public against danger, injustice
and oppression" may be exercised through boards of
commissioners. (New York etc. R. Co. vs. Bristol, 151 U.S.,
556, 571; Connecticut etc. R. Co. vs. Woodruff, 153 U.S.,
689.)
Regulations limiting of passengers the number of
passengers that may be carried in a particular vehicle or
steam vessel, or forbidding the loading of a vessel beyond
a certain point, or prescribing the number and
qualifications of the personnel in the employ of a common
carrier, or forbidding unjust discrimination as to rates, all
tend to limit and restrict his liberty and to control to some
degree the free exercise of his discretion in the conduct of
his business. But since the Granger cases were decided by
the Supreme Court of the United States no one questions
the power of the legislator to prescribe such reasonable
regulations upon property clothed with a public interest as
he may deem expedient or necessary to protect the public
against danger, injustice or oppression. (Munn vs. Illinois,
94 U.S., 113, 130; Chicago etc. R. Co. vs. Cutts, 94 U.S.,
155; Budd vs. New York, 143 U.S., 517;
Cotting vs. Goddard, 183 U.S., 79.) The right to enter the
public employment as a common carrier and to offer one's
services to the public for hire does not carry with it the
right to conduct that business as one pleases, without
regard to the interest of the public and free from such
reasonable and just regulations as may be prescribed for
the protection of the public from the reckless or careless
indifference of the carrier as to the public welfare and for
the prevention of unjust and unreasonable discrimination
of any kind whatsoever in the performance of the carrier's
duties as a servant of the public.
Business of certain kinds, including the business of a
common carrier, holds such a peculiar relation to the
public interest that there is superinduced upon it the right
of public regulation. (Budd vs. New York, 143 U.S., 517,
533.) When private property is "affected with a public
interest it ceases to be juris privati only." Property
becomes clothed with a public interest when used in a
manner to make it of public consequence and affect the
community at large. "When, therefore, one devotes his
property to a use in which the public has an interest, he, in
effect, grants to the public an interest in that use, and
must submit to be controlled by the public for the
common good, to the extent of the interest he has thus
created. He may withdraw his grant by discontinuing the
use, but so long as he maintains the use he must submit to
control." (Munn vs. Illinois, 94 U.S., 113; Georgia R. & Bkg.
Co. vs. Smith, 128 U.S., 174; Budd vs. New York, 143 U.S.,
517; Louisville etc. Ry. Co. vs. Kentucky, 161 U.S., 677,
695.)
Of course this power to regulate is not a power to destroy,
and limitation is not the equivalent of confiscation. Under
pretense of regulating fares and freight the state can not
require a railroad corporation to carry persons or property
without reward. Nor can it do that which in law amounts
to a taking of private property for public use without just
compensation, or without due process of law. (Chicago
etc. R. Co. vs. Minnesota, 134 U.S., 418; Minneapolis
Eastern R. Co. vs. Minnesota, 134 U.S., 467.) But the
judiciary ought not to interfere with regulations
established and palpably unreasonable as to make their
enforcement equivalent to the taking of property for
public use without such compensation as under all the
circumstances is just both to the owner and to the public,
that is, judicial interference should never occur unless the
case presents, clearly and beyond all doubt, such a flagrant
attack upon the rights of property under the guise of
regulations as to compel the court to say that the
regulation in question will have the effect to deny just
compensation for private property taken for the public
use. (Chicago etc. R. Co. vs. Wellman, 143 U.S., 339;
Smyth vs. Ames, 169 U.S., 466, 524; Henderson Bridge
Co. vs. Henderson City, 173 U.S., 592, 614.)
Xxxxxxxxxxxxxxxxxxxxxxxxxxxx
Page 11 of 12
The amended complaint, however, presents for
adjudication in original prohibition proceedings in this
court questions of a wholly different character from those
submitted in the original complaint.
In so far as it reiterates the allegation s of the former
complaint to the effect that the respondent officials are
unlawfully coercing the steamship company by virtue and
under color of the provisions of an invalid or
unconstitutional statute, it is manifest, of course, that the
amended complaint is no less subject to criticism than was
the original complaint. If, therefore, the action can be
maintained upon its allegations that those officials are
coercing the company to carry explosives on vessels
which, as a matter of fact, are not suitably equipped for
that purpose, and which from the nature of the business in
which they are engaged should not be required to carry
explosives.
It will readily be seen, under our former opinion, that
these allegations raise no question as to the validity or
constitutionality of any statute; that the real question
which plaintiff seeks to submit to this court in original
prohibition proceedings is whether the respondent
officials of the Government are correctly exercising the
discretion and authority with which they have been
clothed; and that his contention in the amended complaint
is not, as it was in the original complaint, that these
officials are acting without authority and in reliance upon
an invalid and unconstitutional statute, but rather that
they are exercising their authority improvidently, unwisely
or mistakenly.
Under the provisions of sections 226 and 516 of the Code
of Civil Procedure jurisdiction in prohibition proceedings is
conferred upon the courts when the complaint alleges
"the proceedings of any inferior tribunal, corporation,
board, or person, whether exercising functions judicial or
ministerial, were without or in excess of the jurisdiction of
such tribunal, corporation, board or person." It is manifest
therefore that the allegations of the amended complaint,
even if true, will not sustain the issuance of a writ of
prohibition without further amendment unless they be
construed to in effect a charge that the respondent
officials are abusing the discretion conferred upon them in
the exercise of their authority in such manner that the acts
complained of should be held to be without or in excess of
their jurisdiction.
31 Phil 1,18 (common carriers exercise a sort of public
office and have duties to perform in which the public is
interested; they are subject to regulation by the State)
KMU Labor Center V Hon Jesus B Garcia, Jr., et al
No 115381 Dec 23 1994
239 SCRA 386, 391 (common carriers are impressed with
public interest and concern)
Kilusang Mayo Uno vs. Garcia
KILUSANG MAYO UNO LABOR CENTER vs.HON. JESUS B.
GARCIA, JR., the LAND TRANSPORTATION FRANCHISING
AND REGULATORY BOARD, and the PROVINCIAL BUS
OPERATORS ASSOCIATION OF THE PHILIPPINES G.R. No.
115381 December 23, 1994
FACTS :
Then Secretary of DOTC, Oscar M. Orbos, issued
Memorandum Circular No. 90-395 to then LTFRB
Chairman, Remedios A.S. Fernando allowing provincial bus
operators to charge passengers rates within a range of
15% above and 15% below the LTFRB official rate for a
period of one (1) year.
This range was later increased by LTFRB thru a
Memorandum Circular No. 92-009 providing, among
others, that "The existing authorized fare range system of
plus or minus 15 per cent for provincial buses and
jeepneys shall be widened to 20% and -25% limit in 1994
with the authorized fare to be replaced by an indicative or

reference rate as the basis for the expanded fare range."
Sometime in March, 1994, private respondent PBOAP,
availing itself of the deregulation policy of the DOTC
allowing provincial bus operators to collect plus 20% and
minus 25% of the prescribed fare without first having filed
a petition for the purpose and without the benefit of a
public hearing, announced a fare increase of twenty (20%)
percent of the existing fares.
On March 16, 1994, petitioner KMU filed a petition before
the LTFRB opposing the upward adjustment of bus fares,
which the LTFRB dismissed for lack of merit.
ISSUE:
Whether or not the authority given by respondent LTFRB
to provincial bus operators to set a fare range of plus or
minus fifteen (15%) percent, later increased to plus twenty
(20%) and minus twenty-five (-25%) percent, over and
above the existing authorized fare without having to file a
petition for the purpose, is unconstitutional, invalid and
illegal.
HELD:
Yes.
xxx
Under section 16(c) of the Public Service Act, the
Legislature delegated to the defunct Public Service
Commission the power of fixing the rates of public
services. Respondent LTFRB, the existing regulatory body
today, is likewise vested with the same under Executive
Order No. 202 dated June 19, 1987. x x x However,
nowhere under the aforesaid provisions of law are the
regulatory bodies, the PSC and LTFRB alike, authorized to
delegate that power to a common carrier, a transport
operator, or other public service.
Review De Guzman case (the law imposes duties and
liabilities upon common carriers for the safety and
protection of those who utilize their
services.)xxxxxxxxxxxxxxxxxxxx
Public utilities are privately owned and operated
businesses whose service are essential to the general
public. They are enterprises which specially cater to the
needs of the public and conduce to their comfort and
convenience. As such, public utility services are impressed
with public interest and concern. The same is true with
respect to the business of common carrier which holds
such a peculiar relation to the public interest that there is
superinduced upon it the right of public regulation when
private properties are affected with public interest, hence,
they cease to be juris privati only. When, therefore, one
devotes his property to a use in which the public has an
interest, he, in effect grants to the public an interest in
that use, and must submit to the control by the public for
the common good, to the extent of the interest he has
1
thus created.
An abdication of the licensing and regulatory government
agencies of their functions as the instant petition seeks to
show, is indeed lamentable. Not only is it an unsound
administrative policy but it is inimical to public trust and
public interest as well.
Xxxxxxxxxxxxx
On the presumption of public need.
A certificate of public convenience (CPC) is an
authorization granted by the LTFRB for the operation of
land transportation services for public use as required by
law. Pursuant to Section 16(a) of the Public Service Act, as
amended, the following requirements must be met before
a CPC may be granted, to wit: (i) the applicant must be a
citizen of the Philippines, or a corporation or co-
partnership, association or joint-stock company
constituted and organized under the laws of the
Philippines, at least 60 per centum of its stock or paid-up
Page 12 of 12
capital must belong entirely to citizens of the Philippines;
(ii) the applicant must be financially capable of
undertaking the proposed service and meeting the
responsibilities incident to its operation; and (iii) the
applicant must prove that the operation of the public
service proposed and the authorization to do business will
promote the public interest in a proper and suitable
manner. It is understood that there must be proper notice
and hearing before the PSC can exercise its power to issue
a CPC.
While adopting in toto the foregoing requisites for the
issuance of a CPC, LTFRB Memorandum Circular No. 92-
009, Part IV, provides for yet incongruous and
contradictory policy guideline on the issuance of a CPC.
The guidelines states:
The issuance of a Certificate of Public Convenience is
determined by public need. The presumption of public
need for a service shall be deemed in favor of the
applicant, while the burden of proving that there is no
need for the proposed service shall be the
oppositor's. (Emphasis ours).
The above-quoted provision is entirely incompatible and
inconsistent with Section 16(c)(iii) of the Public Service Act
which requires that before a CPC will be issued, the
applicant must prove by proper notice and hearing that
the operation of the public service proposed will promote
public interest in a proper and suitable manner. On the
contrary, the policy guideline states that the presumption
of public need for a public service shall be deemed in favor
of the applicant. In case of conflict between a statute and
an administrative order, the former must prevail.
By its terms, public convenience or necessity generally
16
means something fitting or suited to the public need. As
one of the basic requirements for the grant of a CPC,
public convenience and necessity exists when the
proposed facility or service meets a reasonable want of
the public and supply a need which the existing facilities
do not adequately supply. The existence or
non-existence of public convenience and necessity is
therefore a question of fact that must be established by
evidence, real and/or testimonial; empirical data; statistics
and such other means necessary, in a public hearing
conducted for that purpose. The object and purpose of
such procedure, among other things, is to look out for, and
protect, the interests of both the public and the existing
transport operators.