De Guzman v.

CA, 168 SCRA 612

FACTS:
● petitioner Pedro de Guzman a merchant and authorized dealer of General Milk Company
(Philippines) contracted with respondent for the hauling of 750 cartons of Liberty filled milk to
petitioner's establishment in Urdaneta.
● respondent loaded in Makati the merchandise on to his trucks: 150 cartons were loaded on a
truck driven by respondent himself, while 600 cartons were placed on board the other truck which
was driven by Manuel Estrada, respondent's driver and employee.
● Only 150 boxes of Liberty filled milk were delivered to petitioner. The other 600 boxes never
reached petitioner, since the truck which carried these boxes was hijacked somewhere along the
MacArthur Highway
● petitioner commenced action against private respondent in the Court of First Instance of
Pangasinan, demanding payment of P 22,150.00, the claimed value of the lost merchandise, plus
damages.
● Petitioner argued that private respondent, being a common carrier, and having failed to exercise
the extraordinary diligence required of him by the law, should be held liable for the value of the
undelivered goods.
● private respondent denied that he was a common carrier and argued that he could not be held
responsible for the value of the lost goods, such loss having been due to force majeure.
● RTC ruling: private respondent to be a common carrier and holding him liable for the value of the
undelivered goods
● CA ruling: respondent had been engaged in transporting return loads of freight "as a casual
occupation — a sideline to his scrap iron business" and not as a common carrier.

ISSUE: WON Respondent Ernesto Cendana is a common carrier? (yes)

HELD:
● The Civil Code defines "common carriers" in the following terms:

Article 1732. Common carriers are persons, corporations, firms or associations engaged in the
business of carrying or transporting passengers or goods or both, by land, water, or air for
compensation, offering their services to the public.

● The above article makes no distinction between one whose principal business activity is the
carrying of persons or goods or both, and one who does such carrying only as an ancillary activity
(in local Idiom as "a sideline").
● Article 1732 also carefully avoids making any distinction between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis.
● Neither does Article 1732 distinguish between a carrier offering its services to the "general public,"
i.e., the general community or population, and one who offers services or solicits business only
from a narrow segment of the general population.
● the concept of "common carrier" under Article 1732 may be seen to coincide neatly with
the notion of "public service," under the Public Service Act (Commonwealth Act No. 1416, as
amended) which at least partially supplements the law on common carriers set forth in the
Civil Code
● Under Section 13, paragraph (b) of the Public Service Act, "public service" includes:

... every person that now or hereafter may own, operate, manage, or control in the Philippines, for
hire or compensation, with general or limited clientele, whether permanent, occasional or
accidental, and done for general business purposes, any common carrier

● 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 back-hauling 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.
● REASONING NG CA WHY NOT COMMON CARRIER IS BECAUSE WALANG CERTIFICATE
OF PUBLIC CONVENIENCE, WRONG !! A certificate of public convenience is not a requisite for
the incurring of liability under the Civil Code provisions governing common carriers. That liability
arises the moment a person or firm acts as a common carrier, without regard to whether or not
such carrier has also complied with the requirements of the applicable regulatory statute and
implementing regulations and has been granted a certificate of public convenience or other
franchise.
● The business of a common carrier impinges directly and intimately upon the safety and well being
and property of those members of the general community who happen to deal with such carrier.
The law imposes duties and liabilities upon common carriers for the safety and protection of those
who utilize their services and the law cannot allow a common carrier to render such duties and
liabilities merely facultative by simply failing to obtain the necessary permits and authorizations.
● WITH REGARDS SA LOSS..NOT LIABLE. 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.
Bascos v. CA, 221 SCRA 318

FACTS:
● Rodolfo A. Cipriano representing (CIPTRADE for short) entered into a hauling contract with
Jibfair Shipping Agency Corporation whereby the former bound itself to haul the latter's 2,000
m/tons of soya bean meal from Magallanes Drive, Del Pan, Manila to the warehouse of Purefoods
Corporation in Calamba
● CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita Bascos (petitioner) to
transport and to deliver 400 sacks of soya bean meal worth P156,404.00 from the Manila to
Calamba
● Petitioner failed to deliver the said cargo. As a consequence of that failure, Cipriano paid Jibfair
Shipping Agency the amount of the lost goods in accordance with the contract
● Cipriano demanded reimbursement from petitioner but the latter refused to pay. Eventually,
Cipriano filed a complaint for a sum of money and damages for breach of contract of carriage
● petitioner interposed the following defenses:
(1) that there was no contract of carriage since CIPTRADE leased her cargo truck to load the
cargo from Manila Port Area to Laguna
(2) the truck carrying the cargo was hijacked
(3) hijacking was immediately reported to CIPTRADE and that petitioner and the police
exerted all efforts to locate the hijacked properties
(4) hijacking, being a force majeure, exculpated petitioner from any liability to CIPTRADE.
● RTC ruling: judgement rendered in favor of cipriano
● CA Ruling: affirmed RTC ruling

ISSUE: WON petitioner is a common carrier? (yes)

HELD:
● REASONING NG CA AND RTC: The Court of Appeals, in holding that petitioner was a common
carrier, found that she admitted in her answer that she did business under the name A.M. Bascos
Trucking and that said admission dispensed with the presentation by private respondent, Rodolfo
Cipriano, of proofs that petitioner was a common carrier. The respondent Court also adopted in
toto the trial court's decision that petitioner was a common carrier, Moreover, both courts
appreciated the following pieces of evidence as indicators that petitioner was a common carrier:
the fact that the truck driver of petitioner, Maximo Sanglay, received the cargo consisting of 400
bags of soya bean meal as evidenced by a cargo receipt signed by Maximo Sanglay; the fact that
the truck helper, Juanito Morden, was also an employee of petitioner; and the fact that control of
the cargo was placed in petitioner's care.
● PETITIONER ALLEGED: the contract between her and Rodolfo A. Cipriano, representing
CIPTRADE, was lease of the truck. She also stated that: she was not catering to the general
public. Thus, in her answer to the amended complaint, she said that she does business under the
same style of A.M. Bascos Trucking, offering her trucks for lease to those who have cargo to
move, not to the general public but to a few customers only in view of the fact that it is only a
small business
● Article 1732 of the Civil Code defines a common carrier as "(a) person, corporation or firm, or
association 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
● The test to determine a common carrier is "whether the given undertaking is a part of the
business engaged in by the carrier which he has held out to the general public as his occupation
rather than the quantity or extent of the business transacted.
● In this case, petitioner herself has made the admission that she was in the trucking business,
offering her trucks to those with cargo to move
● With regards sa liability, Common carriers are obliged to observe extraordinary diligence in the
vigilance over the goods transported by them. Accordingly, they are presumed to have been at
fault or to have acted negligently if the goods are lost, destroyed or deteriorated. There are very
few instances when the presumption of negligence does not attach and these instances are
enumerated in Article 1734. In those cases where the presumption is applied, the common carrier
must prove that it exercised extraordinary diligence in order to overcome the presumption.
● Petitioner's affidavit about the hijacking was based on what had been told her by Juanito Morden.
It was not a first-hand account. While it had been admitted in court for lack of objection on the part
of private respondent, the respondent Court had discretion in assigning weight to such evidence.
We are bound by the conclusion of the appellate court. In a petition for review on certiorari, We
are not to determine the probative value of evidence but to resolve questions of law. Secondly,
the affidavit of Jesus Bascos did not dwell on how the hijacking took place. Thirdly, while the
affidavit of Juanito Morden, the truck helper in the hijacked truck, was presented as evidence in
court, he himself was a witness as could be gleaned from the contents of the petition. Affidavits
are not considered the best evidence if the affiants are available as witnesses. 25 The
subsequent filing of the information for carnapping and robbery against the accused named in
said affidavits did not necessarily mean that the contents of the affidavits were true because they
were yet to be determined in the trial of the criminal cases.
Planters Products Inc. v. Court of Appeals, 226 SCRA 476 – sorry mahaba, i feel like kailangan talaga ung
sa facts but feel free to edit

LEGAL BASIS: Art. 1732 of the Civil Code

Raoul Colinvaux, the learned barrister-at-law (British Shipping Laws, Vol. 2, "Carver's Carriage by Sea," By Raoul
Colinvaux, Vol. 1, 12th Ed., Published by Stevens & Sons Limited of London, Printed in Great Britain, 1971)

FACTS: Petitioner Planters Products Inc. (PPI) purchased from Mitsubishi International Corporation (MITSUBISHI)
9,329.7069 metric tons (M/T) of Urea 46% fertilizer.

Prior to its voyage, a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General Charter was
entered into between Mitsubishi as shipper/charterer and private respondent Kyosei Kisen Kabushiki Kaisha
(KKKK), as shipowner, in Tokyo, Japan.

Mitsubishi shipped the urea fertilizer in bulk aboard the cargo vessel M/V “Sun Plum”.

Before loading the fertilizer aboard the vessel, four (4) of her holds were all presumably inspected by the charterer's
representative and found fit to take a load of urea in bulk. After the Urea fertilizer was loaded in bulk by stevedores
hired by and under the supervision of the shipper, the steel hatches were closed with heavy iron lids, covered with
three (3) layers of tarpaulin, then tied with steel bonds.

Upon arrival of the vessel at her port of call, the steel pontoon hatches were opened with the use of the vessel's
boom. Petitioner unloaded the cargo from the holds into its steelbodied dump trucks which were parked alongside
the berth, using metal scoops attached to the ship.

The hatches remained open throughout the duration of the discharge.

Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was transported to the
consignee's warehouse.

Midway to the warehouse, the trucks were made to pass through a weighing scale where they were individually
weighed for the purpose of ascertaining the net weight of the cargo. The port area was windy, certain portions of the
route to the warehouse were sandy and the weather was variable, raining occasionally while the discharge was in
progress.

It took 11 days for PPI to unload the cargo.

A private marine and cargo surveyor, Cargo Superintendents Company Inc. (CSCI), was hired by PPI to determine
the "outturn" of the cargo shipped, by taking draft readings of the vessel prior to and after discharge. The survey
report submitted by CSCI to the consignee (PPI) dated 19 July 1974 revealed a shortage in the cargo of 106.726
M/T and that a portion of the Urea fertilizer approximating 18 M/T was contaminated with dirt. The same results
were contained in a Certificate of Shortage/Damaged Cargo dated 18 July 1974 prepared by PPI which showed that
the cargo delivered was indeed short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having
been polluted with sand, rust and dirt.

Consequently, PPI sent a claim letter to Soriamont Steamship Agencies (SSA), the resident agent of the carrier,
KKKK, for P245,969.31 representing the cost of the alleged shortage in the goods shipped and the diminution in
value of that portion said to have been contaminated with dirt.

SSA refused to pay because they had nothing to do with the discharge of the shipment.

PPI filed an action for damages with the Court of First Instance of Manila.

CFI for PPI.

CA for KKKK. Relying on the 1968 case of Home Insurance Co. v. American Steamship Agencies, Inc.,17 the
appellate court ruled that the cargo vessel M/V "Sun Plum" owned by private respondent KKKK was a private carrier
and not a common carrier by reason of the time charterer-party. Accordingly, the Civil Code provisions on common
carriers which set forth a presumption of negligence do not find application in the case at bar.

Respondent-carrier KKKK’s contention:

1. The strict public policy governing common carriers does not apply to them because they have become
private carriers by reason of the provisions of the charter-party.

PPI’s contentions:
1. Since the possession and control of the vessel remain with the shipowner, absent any stipulation to the
contrary, such shipowner should made liable for the negligence of the captain and crew (common carrier)
2. CA erred in not applying the presumption of negligence against respondent carrier, and instead shifting the
onus probandi on the shipper to show want of due diligence on the part of the carrier, when he was not
even at hand to witness what transpired during the entire voyage

ISSUE: WON a charter-party between a shipowner and a charterer transforms a common carrier into a private one
as to negate the civil law presumption of negligence in case of loss or damage to its cargo

RULING: NO. This case involves a contract of affreightment where the charter-party provides for the hire of vessel
only, and the shipowner to supply the ship’s stores, pay for the wages of the master and the crew, and defray the
expenses for the maintenance of the ship.

Discussion:

A "charter-party" is defined as a contract by which an entire ship, or some principal part thereof, is let by the
owner to another person for a specified time or use; a contract of affreightment by which the owner of a ship or
other vessel lets the whole or a part of her to a merchant or other person for the conveyance of goods, on a
particular voyage, in consideration of the payment of freight.

Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space on vessels
leased by the owner in part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat
charter, by the terms of which the whole vessel is let to the charterer with a transfer to him of its entire command
and possession and consequent control over its navigation, including the master and the crew, who are his
servants.
Contract of affreightment may either be time charter, wherein the vessel is leased to the charterer for a fixed period
of time, or voyage charter, wherein the ship is leased for a single voyage. In both cases, the charter-party provides
for the hire of vessel only, either for a determinate period of time or for a single or consecutive voyage, the
shipowner to supply the ship's stores, pay for the wages of the master and the crew, and defray the expenses for
the maintenance of the ship.

The term "common or public carrier" is defined in Art. 1732 of the Civil Code. The definition extends to carriers
either by land, air or water which hold themselves out as ready to engage in carrying goods or transporting
passengers or both for compensation as a public employment and not as a casual occupation.

Common or Public Carrier Private or Special Carrier

by reason of the nature of their business, should the exercise of ordinary diligence in the carriage of
observe extraordinary diligence in the vigilance over goods will suffice.
the goods they carry. (Art. 1733, CC)

in the case of loss, destruction or deterioration of the no such presumption applies to private carriers, for
goods, common carriers are presumed to have been at whosoever alleges damage to or deterioration of the
fault or to have acted negligently, and the burden of goods carried has the onus of proving that the cause
proving otherwise rests on them was the negligence of the carrier.
In this case, it is not disputed that respondent carrier, in the ordinary course of business, operates as a common
carrier, transporting goods indiscriminately for all persons. When petitioner chartered the vessel M/V "Sun Plum",
the ship captain, its officers and compliment were under the employ of the shipowner and therefore continued to be
under its direct supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to the
ship, with the duty of caring for his cargo when the charterer did not have any control of the means in doing so.
1. The steering of the ship;
2. The manning of the decks;
3. The determination of the course of the voyage and other technical incidents of maritime navigation were all
consigned to the officers and crew who were screened, chosen and hired by the shipowner.

It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or
portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-
charter or voyage-charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or
demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party
is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship,
although her holds may, for the moment, be the property of the charterer.

The Court quoted with approval the observations of Raoul Colinvaux, the learned barrister-at-law —
As a matter of principle, it is difficult to find a valid distinction between cases in which a ship is used to
convey the goods of one and of several persons. Where the ship herself is let to a charterer, so that he
takes over the charge and control of her, the case is different; the shipowner is not then a carrier. But where
her services only are let, the same grounds for imposing a strict responsibility exist, whether he is employed
by one or many. The master and the crew are in each case his servants, the freighter in each case is
usually without any representative on board the ship; the same opportunities for fraud or collusion occur;
and the same difficulty in discovering the truth as to what has taken place arises . . .”

NOTE:
WON reliance to the Home Insurance Co. case is proper
NO. The meat of the controversy therein was the validity of a stipulation in the charter-party exempting the
shipowners from liability for loss due to the negligence of its agent, and not the effects of a special charter on
common carriers. At any rate, the rule in the United States that a ship chartered by a single shipper to carry special
cargo is not a common carrier, does not find application in our jurisdiction, for we have observed that the growing
concern for safety in the transportation of passengers and /or carriage of goods by sea requires a more exacting
interpretation of admiralty laws, more particularly, the rules governing common carriers.

WON respondent carrier was able to overcome the presumption of negligence upon common carriers
YES.
In an action for recovery of damages against a common carrier on the goods shipped, the shipper or consignee
should first prove the fact of shipment and its consequent loss or damage while the same was in the possession,
actual or constructive, of the carrier. Thereafter, the burden of proof shifts to respondent to prove that he has
exercised extraordinary diligence required by law or that the loss, damage or deterioration of the cargo was due to
fortuitous event, or some other circumstances inconsistent with its liability.

The master of the carrying vessel, Captain Lee Tae Bo, testified that:
1. Before the fertilizer was loaded
2. The four (4) hatches of the vessel were cleaned, dried and fumigated.
3. After completing the loading of the cargo in bulk in the ship's holds, the steel pontoon hatches were closed
and sealed with iron lids, then covered with three (3) layers of serviceable tarpaulins which were tied with
steel bonds.
4. The hatches remained close and tightly sealed while the ship was in transit as the weight of the steel covers
made it impossible for a person to open without the use of the ship's boom.

It was also shown during the trial that:

1. The hull of the vessel was in good condition, foreclosing the possibility of spillage of the cargo into the sea
or seepage of water inside the hull of the vessel.
 2. When M/V "Sun Plum" docked at its berthing place, representatives of the consignee boarded, and in the
presence of a representative of the shipowner, the foreman, the stevedores, and a cargo surveyor
representing CSCI, opened the hatches and inspected the condition of the hull of the vessel.
3. The stevedores unloaded the cargo under the watchful eyes of the shipmates who were overseeing the
whole operation on rotation basis

Verily, the presumption of negligence on the part of the respondent carrier has been efficaciously overcome by the
showing of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo.

The period during which private respondent was to observe the degree of diligence required of it as a public carrier
began from the time the cargo was unconditionally placed in its charge after the vessel's holds were duly inspected
and passed scrutiny by the shipper, up to and until the vessel reached its destination and its hull was reexamined by
the consignee, but prior to unloading. This is clear from the limitation clause agreed upon by the parties in the
Addendum to the standard "GENCON" time charter-party which provided for an F.I.O.S., meaning, that the loading,
stowing, trimming and discharge of the cargo was to be done by the charterer, free from all risk and expense to the
carrier.

Article 1734 of the New Civil Code provides that common carriers are not responsible for the loss, destruction or
deterioration of the goods if caused by the charterer of the goods or defects in the packaging or in the containers.
The Code of Commerce also provides that all losses and deterioration which the goods may suffer during the
transportation by reason of fortuitous event, force majeure, or the inherent defect of the goods, shall be for the
account and risk of the shipper, and that proof of these accidents is incumbent upon the carrier. The carrier,
nonetheless, shall be liable for the loss and damage resulting from the preceding causes if it is proved, as against
him, that they arose through his negligence or by reason of his having failed to take the precautions which usage
has established among careful persons.

From the testimony of a chemical engineer, marine and cargo surveyor of CSCI who supervised the unloading, it
showed that it was highly improbable for sea water to seep into the vessel's holds during the voyage since the hull
of the vessel was in good condition and her hatches were tightly closed and firmly sealed, making the M/V "Sun
Plum" in all respects seaworthy to carry the cargo she was chartered for. If there was loss or contamination of the
cargo, it was more likely to have occurred while the same was being transported from the ship to the dump trucks
and finally to the consignee's warehouse.

Indeed, we agree with respondent carrier that bulk shipment of highly soluble goods like fertilizer carries with it the
risk of loss or damage. More so, with a variable weather condition prevalent during its unloading, as was the case at
bar. This is a risk the shipper or the owner of the goods has to face. Clearly, respondent carrier has sufficiently
proved the inherent character of the goods which makes it highly vulnerable to deterioration; as well as the
inadequacy of its packaging which further contributed to the loss. On the other hand, no proof was adduced by the
petitioner showing that the carrier was remise in the exercise of due diligence in order to minimize the loss or
damage to the goods it carried.

Fabre v. Court of Appeals, 259 SCRA 426

LEGAL BASIS:

FACTS:
Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model Mazda minibus. They used the bus
principally in connection with a bus service for school children which they operated in Manila. The couple had a
driver, Porfirio J. Cabil, whom they hired in 1981, after trying him out for two weeks. His job was to take school
children to and from the St. Scholastica's College in Malate, Manila.

On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged with
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, sot hat petitioner Cabil, who was unfamiliar with the area (it being his first trip to La Union), was forced to
take a detour through the town of Baay in Lingayen, Pangasinan. At 11:30 that night, petitioner Cabil came upon a
sharp curve on the highway, running on a south to east direction, which he described as "siete." 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.

Several passengers were injured. Private respondent Amyline Antonio was thrown on the floor of the bus and
pinned down by a wooden seat which came down by a wooden seat which came off after being unscrewed. It took
three persons to safely remove her from this portion. She was in great pain and could not move.

As a result of the accident, she is now suffering from paraplegia and is permanently paralyzed from the waist down.
Hence, a complaint was filed before the RTC against the Sps. Fabre and Cabil.

The driver, Cabil, asserted that:

1. He did not see the curve until it was too late. He said he was not familiar with the area and he could not
have seen the curve despite the care he took in driving the bus, because it was dark and there was no sign
on the road. He said that he saw the curve when he was already within 15 to 30 meters of it. He allegedly
slowed down to 30 kilometers per hour, but it was too late.

Sps. Fabre contended that:

1. They exercised due diligence in the selection and supervision of their employee.

RTC for plaintiff (respondents).

CA for plaintiff (respondents).

ISSUE:
1. WON the driver is guilty of negligence. (YES.)
2. WON the Sps. Fabre are guilty of negligence. (YES).
3. WON the Sps. Fabre may be held liable for breach of contract of carriage (YES).
4. WON the Sps. Fabre and the driver may be held solidarily liable. (YES).

RULING:

1. Yes. The driver is guilty of negligence (based on quasi-delict).

Indeed, it was admitted by Cabil that on the night in question, it was raining, and as a consequence, the
road was slippery, and it was dark. He averred these facts to justify his failure to see that there lay a sharp
curve ahead. However, it is undisputed that Cabil drove his bus at the speed of 50 kilometers per hour and
only slowed down when he noticed the curve some 15 to 30 meters ahead. 3 By then it was too late for him
to avoid falling off the road. Given the conditions of the road and considering that the trip was Cabil's first
one outside of Manila, Cabil should have driven his vehicle at a moderate speed. There is testimony 4 that
the vehicles passing on that portion of the road should only be running 20 kilometers per hour, so that at 50
kilometers per hour, Cabil was running at a very high speed.

Considering the foregoing — the fact that it was raining and the road was slippery, that it was dark, that he
drove his bus at 50 kilometers an hour when even on a good day the normal speed was only 20 kilometers
an hour, and that he was unfamiliar with the terrain, Cabil was grossly negligent and should be held liable
for the injuries suffered by private respondent Amyline Antonio.
2. Yes. The Sps. Fabre are guilty of negligence in the selection and supervision of their employee (based on
quasi-delict).

Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the presumption that his
employers, the Fabres, were themselves negligent in the selection and supervisions of their employee.

Due diligence in selection of employees is not satisfied by finding that the applicant possessed a
professional driver's license. The employer should also examine the applicant for his qualifications,
experience and record of service. 5 Due diligence in supervision, on the other hand, requires the
formulation of rules and regulations for the guidance of employees and issuance of proper instructions as
well as actual implementation and monitoring of consistent compliance with the rules.6

In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union, apparently did not consider the
fact that Cabil had been driving for school children only, from their homes to the St. Scholastica's College in
Metro Manila. 7 They had hired him only after a two-week apprenticeship. They had hired him only after a
two-week apprenticeship. They had tested him for certain matters, such as whether he could remember the
names of the children he would be taking to school, which were irrelevant to his qualification to drive on a
long distance travel, especially considering that the trip to La Union was his first. The existence of hiring
procedures and supervisory policies cannot be casually invoked to overturn the presumption of negligence
on the part of an employer.

3. Yes. The Sps. Fabre may be held liable for breach of contract of carriage.

As already stated, 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:

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.

As common carriers, the Fabres were bound to exercise "extraordinary diligence" for the safe transportation
of the passengers to their destination. This duty of care is not excused by proof that they exercise the
diligence of a good father of the family in the selection and supervision of their employee. As Art. 1759 of
the Code provides:

Common carriers are liable for the death of or injuries to passengers through the negligence or
willful acts of the former's employees although such employees may have acted beyond the scope
of their authority or in violation of the orders of the common carriers.

This liability of the common carriers does not cease upon proof that they exercised all the diligence
of a good father of a family in the selection and supervision of their employees.

The same circumstances detailed above, supporting the finding of the trial court and of the appellate court
that petitioners are liable under Arts. 2176 and 2180 for quasi delict, fully justify findings them guilty of
breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil Code.
 4. Yes. The Sps. Fabre and the driver, Cabil, may be held solidarily liable.

In Dangwa Trans. Co. Inc. v. Court of Appeals, on facts similar to those in this case, this Court held the bus
company and the driver jointly and severally liable for damages for injuries suffered by a passenger. Again,
in Bachelor Express, Inc. v. Court of
Appeals 15 a driver found negligent in failing to stop the bus in order to let off passengers when a fellow
passenger ran amuck, as a result of which the passengers jumped out of the speeding bus and suffered
injuries, was held also jointly and severally liable with the bus company to the injured passengers.

The same rule of liability was applied in situations where the negligence of the driver of the bus on which
plaintiff was riding concurred with the negligence of a third party who was the driver of another vehicle, thus
causing an accident. In Anuran v. Buño, 16 Batangas Laguna Tayabas Bus Co. v. Intermediate Appellate
Court, 17 and Metro Manila Transit Corporation v. Court of Appeals, 18 the bus company, its driver, the
operator of the other vehicle and the driver of the vehicle were jointly and severally held liable to the injured
passenger or the latters' heirs. The basis of this allocation of liability was explained in Viluan v. Court of
Appeals, 19 thus:

Nor should it make any difference that the liability of petitioner [bus owner] springs from contract while that
of respondents [owner and driver of other vehicle] arises from quasi-delict. As early as 1913, we already
ruled in Gutierrez vs. Gutierrez, 56 Phil. 177, that in case of injury to a passenger due to the negligence of
the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the
owners of the two vehicles are jointly and severally liable for damages. Some members of the Court,
though, are of the view that under the circumstances they are liable on quasi-delict. 20

It is true that in Philippine Rabbit Bus Lines, Inc. v. Court of Appeals 21 this Court exonerated the jeepney
driver from liability to the injured passengers and their families while holding the owners of the jeepney
jointly and severally liable, but that is because that case was expressly tried and decided exclusively on the
theory of culpa contractual. As this Court there explained:

The trial court was therefore right in finding that Manalo (the driver) and spouses Mangune and
Carreon (the jeepney owners) were negligent. However, its ruling that spouses Mangune and
Carreon are jointly and severally liable with Manalo is erroneous. The driver cannot be held jointly
and severally liable with carrier in case of breach of the contract of carriage. The rationale behind
this is readily discernible. Firstly, the contract of carriage is between the carrier is exclusively
responsible therefore to the passenger, even if such breach be due to the negligence of his driver.

First Phil. Industrial Corp - JESICA

FIRST PHILIPPINE INDUSTRIAL CORPORATION, petitioner,

vs.
COURT OF APPEALS, HONORABLE PATERNO V. TAC-AN, BATANGAS CITY and ADORACION C.
ARELLANO, in her official capacity as City Treasurer of Batangas, respondents.

FACTS:
● Petitioner is a grantee of a pipeline concession under Republic Act No. 387, as amended, to
contract, install and operate oil pipelines.
● Sometime in January 1995, petitioner applied for a mayor's permit with the Office of the Mayor of
Batangas City. However, before the mayor's permit could be issued, the respondent City
Treasurer required petitioner to pay a local tax based on its gross receipts for the fiscal year 1993
 pursuant to the Local Government Code 3. The respondent City Treasurer assessed a business
tax on the petitioner amounting to P956,076.04 payable in four installments based on the gross
receipts for products pumped at GPS-1 for the fiscal year 1993 which amounted to
P181,681,151.00. In order not to hamper its operations, petitioner paid the tax under protest in the
amount of P239,019.01 for the first quarter of 1993.
● On January 20, 1994, petitioner filed a letter-protest addressed to the respondent City Treasurer,
the pertinent portion of which reads:
Please note that our Company (FPIC) is a pipeline operator with a government
concession granted under the Petroleum Act. It is engaged in the business of transporting
petroleum products from the Batangas refineries, via pipeline, to Sucat and JTF Pandacan
Terminals. As such, our Company is exempt from paying tax on gross receipts under
Section 133 of the Local Government Code of 1991 . . . .
Moreover, Transportation contractors are not included in the enumeration of contractors
under Section 131, Paragraph (h) of the Local Government Code. Therefore, the authority
to impose tax "on contractors and other independent contractors" under Section 143,
Paragraph (e) of the Local Government Code does not include the power to levy on
transportation contractors.
The imposition and assessment cannot be categorized as a mere fee authorized under
Section 147 of the Local Government Code. The said section limits the imposition of fees
and charges on business to such amounts as may be commensurate to the cost of
regulation, inspection, and licensing. Hence, assuming arguendo that FPIC is liable for the
license fee, the imposition thereof based on gross receipts is violative of the aforecited
provision. The amount of P956,076.04 (P239,019.01 per quarter) is not commensurate to
the cost of regulation, inspection and licensing. The fee is already a revenue raising
measure, and not a mere regulatory imposition.4
● On March 8, 1994, the respondent City Treasurer denied the protest contending that petitioner
cannot be considered engaged in transportation business, thus it cannot claim exemption under
Section 133 (j) of the Local Government Code.5
● On June 15, 1994, petitioner filed with the Regional Trial Court of Batangas City a complaint 6 for
tax refund with prayer for writ of preliminary injunction against respondents City of Batangas and
Adoracion Arellano in her capacity as City Treasurer.
● Traversing the complaint, the respondents argued that petitioner cannot be exempt from taxes
under Section 133 (j) of the Local Government Code as said exemption applies only to
"transportation contractors and persons engaged in the transportation by hire and common
carriers by air, land and water." Respondents assert that pipelines are not included in the term
"common carrier" which refers solely to ordinary carriers such as trucks, trains, ships and the like.
Respondents further posit that the term "common carrier" under the said code pertains to the
mode or manner by which a product is delivered to its destination.
● On October 3, 1994, the trial court rendered a decision dismissing the complaint
● On November 29, 1995, the CA rendered a decision affirming the trial court's dismissal of
petitioner's complaint.

ISSUE:
1. WON petitioner is a common carrier or a transportation contractor – YES
2. WON petitioner is exempted from business tax - YES
RULING:

1. There is merit in the petition.

A "common carrier" may be defined, broadly, as one who holds himself out to the public as
engaged in the business of transporting persons or property from place to place, for
compensation, offering his services to the public generally.

Art. 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or
association 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 test for determining whether a party is a common carrier of goods is:

1. He must be engaged in the business of carrying

goods for others as a public employment, and must
hold himself out as ready to engage in the
transportation of goods for person generally as a
business and not as a casual occupation;

2. He must undertake to carry goods of the kind to

which his business is confined;

3. He must undertake to carry by the method by

which his business is conducted and over his
established roads; and

4. The transportation must be for hire.

Based on the above definitions and requirements, there is no doubt that petitioner is a common
carrier. It is engaged in the business of transporting or carrying goods, i.e. petroleum products, for
hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all
persons who choose to employ its services, and transports the goods by land and for
compensation. The fact that petitioner has a limited clientele does not exclude it from the
definition of a common carrier.

As correctly pointed out by petitioner, the definition of "common carriers" in the Civil Code makes
no distinction as to the means of transporting, as long as it is by land, water or air. It does not
provide that the transportation of the passengers or goods should be by motor vehicle. In fact, in
the United States, oil pipe line operators are considered common carriers.

Under the Petroleum Act of the Philippines (Republic Act 387), petitioner is considered a
"common carrier." Thus, Article 86 thereof provides that:

Art. 86. Pipe line concessionaire as common carrier. — A pipe line

shall have the preferential right to utilize installations for the
 transportation of petroleum owned by him, but is obligated to utilize
the remaining transportation capacity pro rata for the transportation
of such other petroleum as may be offered by others for transport,
and to charge without discrimination such rates as may have been
approved by the Secretary of Agriculture and Natural Resources.

Republic Act 387 also regards petroleum operation as a public utility. Pertinent portion of Article 7
thereof provides:

that everything relating to the exploration for and exploitation of

petroleum . . . and everything relating to the manufacture, refining,
storage, or transportation by special methods of petroleum, is
hereby declared to be a public utility. (Emphasis Supplied)

The Bureau of Internal Revenue likewise considers the petitioner a "common carrier." In BIR
Ruling No. 069-83, it declared:

. . . since [petitioner] is a pipeline concessionaire that is engaged

only in transporting petroleum products, it is considered a common
carrier under Republic Act No. 387 . . . . Such being the case, it is
not subject to withholding tax prescribed by Revenue Regulations
No. 13-78, as amended.

2. There is no doubt that petitioner is a "common carrier" and, therefore, exempt from the
business tax as provided for in Section 133 (j), of the Local Government Code, to wit:

Sec. 133. Common Limitations on the Taxing Powers of Local Government

Units. — Unless otherwise provided herein, the exercise of the taxing
powers of provinces, cities, municipalities, and barangays shall not extend
to the levy of the following:

xxx xxx xxx

(j) Taxes on the gross receipts of

transportation contractors and persons
engaged in the transportation of passengers
or freight by hire and common carriers by air,
land or water, except as provided in this
Code.

It is clear that the legislative intent in excluding from the taxing power of the local government unit
the imposition of business tax against common carriers is to prevent a duplication of the so-called
“common carrier’s tax.” Petitioner is already paying three (3%) percent common carrier’s tax on its
gross sales/earnings under the National Internal Revenue Code. To tax petitioner again on its
gross receipts in its transportation of petroleum business would defeat the purpose of the Local
Government Code.
Loadstar Shipping Co - Medina

G.R. No. 131621 September 28, 1999

LOADSTAR SHIPPING CO., INC., petitioner,
vs.
COURT OF APPEALS and THE MANILA INSURANCE CO., INC., respondents.

Facts:
● Loadstar received on board its M/V Cherokee 705 bales of lawanit hardwood, 27 boxes and crates of
tilewood assemblies, and 49 bundles of mouldings R&W Apitong Bolidenized.
● The goods amounting to P6,067,178 were insured with Manila Insurance Co against various risks, including
total loss by total loss of the vessel.
● On its way to Manila, the vessel, along with its cargo, sank off Limasawa Island. Hence, Consignee made a
claim with Loadstar which was ignored. As insurer, MIC paid P6, 075,000 to the insured in full settlement of
its claim and executed a subrogation receipt therefor.
● MIC filed a complaint against Loadstar and Prudential Guarantee & Assurance Inc. [PGAI is the insurer of
the vessel, but was later dropped as a party after it paid the insurance proceeds to Loadstar]. MIC allege
that the sinking of the vessel was due to the fault and negligence of loadstar and its employees.
● Loadstar denied liability for the loss of the shipper’s goods and claimed that the sinking of its vessel was
due to force majeure.
● RTC ruled in favor of MIC.
● CA affirmed the decision of the RTC:
1. Loadstar cannot be considered a private carrier on the sole ground that there was a single shipper on that voyage.
2. As a common carrier, Code of commerce, not the Civil Code should apply in determining the rights and liabilities of the
parties.
3. The vessel was not seaworthy because it was undermanned on the day of the voyage. The vessel sank not because of force
majeure, but because it was not seaworthy.
○ Loadstar’s allegation that the sinking was probably due to the convergence of the winds as stated by PAGASA
expert was not duly proven; Hence, Limited liability rule is not applicable considering that in this case, there was
an actual finding of negligence on the part of the carrier.
4. Between MIC and Loadstar, the provisions of the bill of lading do not apply because such provisions bind only the
shipper/consignee and the carrier.
5. There was a clear breach of contract of carriage when the shipper’s goods never reached its destination.
6. Art. 361 of the Code of Commerce has been construed to mean that when goods are delivered on board a ship in good
order and condition, and the shipowner delivers them to the shipper in bad order and condition, it then devolves upon the
shipowner to both allege and prove that the goods were damaged by reason of some fact which legally exempts him from
liability. Transportation of the merchandise at the risk and venture of the shipper means that the latter bears the risk of loss
or deterioration of his goods arising from fortuitous events, force majeure, or the inherent nature and defects of the goods,
but not those caused by the presumed negligence or fault of the carrier, unless otherwise proved.
Issues:
1. Whether M/V Cherokee is a private or common carrier [Common Carrier]
2. Whether or not Loadstar observed due and/or ordinary diligence [No]

Ruling
1. M/V Cherokee is a common carrier.
● Petitioner submits that the vessel was a private carrier because it was not issued a certificate of public
convenience, it did not have a regular trip or schedule nor a fixed route, and there was only one shipper,
one consignee for a special cargo.
● Loadstar is a common carrier. It is not necessary that the carrier be issued a certificate of public
convenience, and this public character is not altered by the fact that the carriage of the goods in question
was periodic, occasional, episodic or unscheduled.
● Under the facts and circumstances obtaining in this case, LOADSTAR fits the definition of a common carrier
under Article 1732 of the Civil Code
○ 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.
● While it is true that the vessel had on board only the cargo of wood products for delivery to one consignee,
it was also carrying passengers as part of its regular business. Moreover, the bills of lading in this case
made no mention of any charter party but only a statement that the vessel was a "general cargo carrier."
Neither was there any "special arrangement" between LOADSTAR and the shipper regarding the shipment
of the cargo. The singular fact that the vessel was carrying a particular type of cargo for one shipper is not
sufficient to convert the vessel into a private carrier.

Note: De Guzman v. Court of Appeals

● A certificate of public convenience is not a requisite for the incurring of liability under the Civil Code
provisions governing common carriers. That liability arises the moment a person or firm acts as a
common carrier, without regard to whether or not such carrier has also complied with the
requirements of the applicable regulatory statute and implementing regulations and has been
granted a certificate of public convenience or other franchise.

2. No. Loadstar did not observe due or ordinary diligence.

The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of
carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.

Seaworthiness of M/V Cherokee

M/V Cherokee was not seaworthy when it embarked on its voyage. The vessel was not even sufficiently
manned at the time. For a vessel to be seaworthy, it must be adequately equipped for the voyage and
manned with a sufficient number of competent officers and crew.

Application of the Liability Theory

● The doctrine of limited liability does not apply where there was negligence on the part of the vessel
owner or agent.
● LOADSTAR was at fault or negligent in not maintaining a seaworthy vessel and in having allowed
its vessel to sail despite knowledge of an approaching typhoon.
● In any event, it did not sink because of any storm that may be deemed as force majeure, inasmuch
as the wind condition in the area where it sank was determined to be moderate. Since it was remiss
in the performance of its duties, LOADSTAR cannot hide behind the limited liability doctrine to
escape responsibility for the loss of the vessel and its cargo.
● As to loadstar’s claim that the Court of Appeals erred in holding it liable for the loss of the goods in
utter disregard of this Courts pronouncements in St. Paul Fire & Marine Ins. Co. v. Macondray &
Co., Inc., and National Union Fire Insurance v. Stolt-Nielsen Phils., Inc.
○ It was ruled in these two cases that after paying the claim of the insured for damages under
the insurance policy, the insurer is subrogated merely to the rights of the assured, that is, it
can recover only the amount that may, in turn, be recovered by the latter. Since the right of
the assured in case of loss or damage to the goods is limited or restricted by the provisions
in the bills of lading, a suit by the insurer as subrogee is necessarily subject to the same
limitations and restrictions.
● CA did not err in holding Loadstar liable for the loss of the good in this case.
 ● The cases relied on by Loadstar involved a limitation on the carriers liability to an amount fixed in
the bill of lading which the parties may enter into, provided that the same was freely and fairly
agreed upon (Articles 1749-1750).
● On the other hand, the stipulation in the case at bar effectively reduces the common carriers liability
for the loss or destruction of the goods to a degree less than extraordinary (Articles 1744 and
1745), that is, the carrier is not liable for any loss or damage to shipments made at owners risk.
Such stipulation is obviously null and void for being contrary to public policy.
● Three kinds of stipulations have often been made in a bill of lading.
■ First is one exempting the carrier from any and all liability for loss or damage
occasioned by its own negligence;
■ Second is one providing for an unqualified limitation of such liability to an agreed
valuation; and
■ Third is one limiting the liability of the carrier to an agreed valuation unless the
shipper declares a higher value and pays a higher rate of freight.
○ According to an almost uniform weight of authority, the first and second kinds of stipulations
are invalid as being contrary to public policy, but the third is valid and enforceable.
● Since the stipulation in question is null and void, it follows that when MIC paid the shipper, it was
subrogated to all the rights which the latter has against the common carrier, Loadstar.

As to the issue of prescription

● MICs cause of action had not yet prescribed at the time it was concerned.
● Inasmuch as neither the Civil Code nor the Code of Commerce states a specific prescriptive period
on the matter, the Carriage of Goods by Sea Act (COGSA) which provides for a one-year period of
limitation on claims for loss of, or damage to, cargoes sustained during transit may be applied
suppletorily to the case at bar.
● This one-year prescriptive period also applies to the insurer of the good.
● In this case, the period for filing the action for recovery has not yet elapsed. Moreover, a stipulation
reducing the one-year period is null and void; it must, accordingly, be struck down.

Dispositive Portion:
WHEREFORE, the instant petition is DENIED and the challenged decision of 30 January 1997 of the Court
of Appeals in CA-G.R. CV No. 36401 is AFFIRMED. Costs against petitioner.
Crisostomo - KAE
G.R. No. 138334 August 25, 2003

ESTELA L. CRISOSTOMO, Petitioner,

vs.

The Court of Appeals and CARAVAN TRAVEL & TOURS INTERNATIONAL, INC., Respondents.

Facts:
· Estela 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 included the countries of England, Holland, Germany, Austria,
Liechstenstein, Switzerland and France.
· Without checking her travel documents, petitioner went to NAIA on Saturday, June 15, 1991,
to take the flight for the first leg of her journey from Manila to Hongkong. To petitioner’s
dismay, 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.
Subsequently, Crisostomo took another tour – the "British Pageant" – which included England,
Scotland and Wales in its itinerary, instead.
· Upon Crisostomo’s return, she demanded from Caravan Travel the reimbursement of what
she paid for the “Jewels of Europe” tour. Despite several demands, Caravan Travel refused to
reimburse the amount, contending that the same was non-refundable. Crisostomo thus filed a
complaint for breach of contract of carriage and damages, before the Regional Trial Court of
Makati City.

· In her complaint, Crisostomo alleged that her failure to join "Jewels of Europe" was due to
respondent’s fault since it did not clearly indicate the departure date on the plane ticket.
Respondent was also negligent in informing her of the wrong flight schedule through its
employee Menor. She insisted that the "British Pageant" was merely a substitute for the
"Jewels of Europe" tour, such that the cost of the former should be properly set-off against the
sum paid for the latter.

· For its part, Caravan Travel denied responsibility for Crisostomo’s failure to join the first tour.
Chipeco insisted that she was informed of the correct departure date, which was clearly and
legibly printed on the plane ticket. The travel documents were given to Crisostomo two days
ahead of the scheduled trip. She had only herself to blame for missing the flight, as she did
not bother to read or confirm her flight schedule as printed on the ticket.

· RTC – found Caravan Travel negligent in erroneously advising Crisostomo of her date of
departure.
· CA – found both parties negligent however ruled that Crisostomo being more negligent
because as a lawyer and well-traveled person, she should have known better than to simply
rely on what was told to her.
ISSUE: WON the Caravan Travel is guilty of negligence for its failure to observe extra-ordinary diligence
as a common carrier.

Held: No, because Caravan Travel is not a common carrier.

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.
Such person or association of persons are regarded as carriers and are classified as private or special
carriers and common or public carriers. A common carrier is defined under Article 1732 of the Civil Code
as 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.

It is obvious from the above definition that Caravan Travel is not an entity engaged in the
business of transporting either passengers or goods and is therefore, neither a private nor a
common carrier. It did not undertake to transport Crisostomo from one place to another since its
covenant with its customers is simply to make travel arrangements in their behalf. Caravan Travel’s
services as a travel agency include procuring tickets and facilitating travel permits or visas as well as
booking customers for tours.

While Crisostomo concededly bought her plane ticket through the efforts of Caravan Travel, this does not
mean that the latter ipso facto is a common carrier. At most, Caravan acted merely as an agent of the
airline, with whom Crisostomo ultimately contracted for her carriage to Europe. Caravan’s
obligation to Crisostomo in this regard was simply to see to it that petitioner was properly booked
with the airline for the appointed date and time. Her transport to the place of destination, meanwhile,
pertained directly to the airline

Furthermore, Contrary to Crisostomo’s claim, the evidence on record shows that Caravan exercised due
diligence in performing its obligations under the contract and followed standard procedure in rendering its
services to Crisostomo. As correctly observed by the lower court, the plane ticket issued to Crisostomo
clearly reflected the departure date and time, contrary to Crisostomo’s contention. The travel documents,
consisting of the tour itinerary, vouchers and instructions, were likewise delivered to petitioner two days
prior to the trip. Caravan also properly booked Crisostomo for the tour, prepared the necessary
documents and procured the plane tickets. It arranged petitioner’s hotel accommodation as well as food,
land transfers and sightseeing excursions, in accordance with its avowed undertaking.

Additional ruling:
Respondent’s failure to present Menor as witness to rebut petitioner’s testimony could not give rise to an
inference unfavorable to the former. Menor was already working in France at the time of the filing of the
complaint, thereby making it physically impossible for respondent to present her as a witness. Then too,
even if it were possible for respondent to secure Menor’s testimony, the presumption under Rule 131,
Section 3(e) would still not apply. The opportunity and possibility for obtaining Menor’s testimony
belonged to both parties, considering that Menor was not just respondent’s employee, but also
petitioner’s niece. It was thus error for the lower court to invoke the presumption that respondent willfully
suppressed evidence under Rule 131, Section 3(e). Said presumption would logically be inoperative if
the evidence is not intentionally omitted but is simply unavailable, or when the same could have been
obtained by both parties.
In sum, we do not agree with the finding of the lower court that Menor’s negligence concurred with the
negligence of petitioner and resultantly caused damage to the latter. Menor’s negligence was not
sufficiently proved, considering that the only evidence presented on this score was petitioner’s
uncorroborated narration of the events. It is well-settled that the party alleging a fact has the burden of
proving it and a mere allegation cannot take the place of evidence.
Cruz - TINE
G.R. No. 186312 June 29, 2010
SPOUSES DANTE CRUZ and LEONORA CRUZ, Petitioners,
vs. SUN HOLIDAYS, INC., Respondent.

FACTS:

● Spouses Cruz filed a Complaint for damages against Sun Holidays due to the death of their newly
wed son Ruelito and his wife, who boarded M/B Coco Beach III which capsized en route to
Batangas.
● Ruelito and his wife stayed at the Coco Beach Resort, owned by Sun Holidays. Their tour
package contract includes transportation to and from the resort.
● Matute, a scuba diver and one of the survivors. testified that they were originally scheduled to
leave on September 10, but because of the strong winds, they were advised to stay for another
night.
● The following day, they trekked to the other side of Coco Beach Mountain, which was sheltered
from the wind and from that place, they boarded M/B Coco Beach.
● After being hit by 2 big waves, M/B Coco Beach sank, putting all passengers underwater. Upon
seeing the captain, Matute and the other passengers who reached the surface asked the former
what they could do to save the people who were trapped, but the captain just told them to save
themselves.
● They were eventually rescued by 2 boats that passed by, but 8 passengers including Ruelito and
his wife died during the incident.
● Sun Holidays denied any responsibility for the incident which it considered to be a fortuitous
event, but it offered the amount of Php 10,000.

Sps Cruz filed a Complaint, alleging that Sun Holidays, as a common carrier was guilty of
negligence in allowing M/B Coco Beach to sail notwithstanding the storm warning bulletins issued by
PAGASA.

Sun Holidays denied being a common carrier, alleging that its boats are not available to the general
public as they only ferry guests and crew members. It also claimed that it exercised the utmost diligence
in ensuring the safety of its passengers, and contrary to petitioners’ allegation, there was no storm on
September 11, 2000 as the Coast Guard in fact cleared the voyage and M/B Coco Beach was not filled to
capacity and had sufficient life jackets for its passengers.

● Carlos Bonquin, the captain, averred that the resort customarily requires 4 conditions to be met
before a boat is allowed to sail: (1) the sea is calm, (2) there is clearance from the Coast Guard,
(3) there is clearance from the captain, and (4) there is clearance from the Resort’s assistance
manager. According to him, M/B Coco Beach met all the conditions, but a subasco or squall,
characterized by strong winds and big waves suddenly occurred, causing the boat to capsize.

RTC: dismissed the Complaint and the MR filed by the spouses, so they appealed to the Court of
Appeals.

CA: likewise denied the appeal, holding that the RTC correctly ruled that respondent is a private carrier
which is only required to observe ordinary diligence; that Sun Holidays in fact observed extraordinary
diligence in transporting its guests on board M/B Coco Beach, and that the proximate cause of the
incident was a squall a fortuitous event.

The Spouses filed this Petition for Review

Spouses Cruz contention: Sun Holidays is a common carrier, since by its tour package, the
transporting of its guests is an integral part of its resort business.

Sun Holidays contention: The resort’s ferry services cannot be considered as ancillary to its business
as no income is derived therefrom. It exercised extraordinary diligence when it imposed conditions before
allowing M/B Coco Beach to sail, and the incident was a fortuitous event without any contributory
negligence on its part.

ISSUE/S:

(1) WON respondent Sun Holidays is a common carrier? Yes.

(2) WON the incident was caused by a fortuitous event? No.

HELD:

(1) WON respondent Sun Holidays Inc. is a common carrier? Yes.

The Civil Code defines “common carriers”:

Article 1732. Common carriers are persons, corporations, firms or associations

engaged in the business of carrying or transporting passengers or goods or both, by
land, water, or air for compensation, offering their services to the public.

In the case of De Guzman v. CA, as cited by the spouses, the Court stated that the Civil Code
deliberately refrained from making distinctions on whether the carrying of persons or goods is the
carrier’s principal business, where it is offered on a regular basis, or whether it is offered to the
general public. The intent of the law is thus to not consider such distinctions.

It is clear that Sun Holidays is a common carrier . Its ferry services are so intertwined with its main
business as to be properly considered ancillary thereto. The constancy of respondent’s ferry services
in its resort operations is underscored by having its own Coco Beach boats. And the tour packages it
offers, which include the ferry services, may be availed of by anyone who can afford to pay the same.
These services are thus available to the public.

It also does not matter that the respondent does not charge a separate fee or fare for its ferry
services. The practice of beach resort operators is to offer tour packages which already include the
transportation fee/s.

From the nature of the business of common carriers and for reasons of public policy, they are
bound to observe extraordinary diligence for the safety of the passengers transported by
them. They are bound to carry the passengers safely as far as human care and foresight can
provide, using utmost diligence of very cautious persons, with due regard for all the
circumstances.

When a passenger dies or is injured in the discharge of a contract of carriage, it is presumed

that the common carrier is at fault or negligent. There is no need for the court to make an express
finding of fault or negligence on the part of the common carrier. This presumption may only be
overcome by evidence that the carrier exercised extraordinary diligence.

Moreover, evidence shows that PAGASA issued 24-hour public weather forecasts and tropical
cyclone warnings for shipping on September 10 and 11 advising of tropical depressions in Northern
 Luzon which would also affect Mindoro. As testified by Dr. Nilo, supervising weather specialist of
PAGASA, squalls are to be expected under such weather condition.

A very cautious person exercising the utmost diligence would thus not brave such stormy
weather and put other people’s lives at risk. The extraordinary diligence required of common
carriers demands that they take care of the goods or lives entrusted to their hands as if they
were their own.

(2) WON the incident was caused by a fortuitous event. NO.

The elements of a fortuitous event are: (a) the cause of the unforeseen and unexpected occurrence,
or the failure of the debtors to comply with their obligations, must have been independent of human will;
(b) the event that constituted the caso fortuito must have been impossible to foresee, or if foreseeable,
impossible to avoid; (c) the occurrence must have been such as to render it impossible for the debtors to
fulfill their obligation in a normal manner; and (d) obligor must have been free from any participation in
the aggravation of the resulting injury to the creditor.

To absolve a common carrier from any liability, the fortuitous event must have been the
proximate and only cause of the loss, and it should have exercised due diligence to prevent or
minimize the loss before, during and after the occurrence of the fortuitous event.

The occurrence of the squalls was expected under the weather condition of September 11.
Evidence also shows that M/B Coco Beach suffered engine trouble before it capsized and sank.
The incident was therefore not free from human intervention.

DECISION: WHEREFORE, the Court of Appeals Decision of August 19, 2008 is REVERSED and SET
ASIDE. Judgment is rendered in favor of petitioners ordering respondent to pay petitioners the following:
(1) ₱50,000 as indemnity for the death of Ruelito Cruz; (2) ₱8,316,000 as indemnity for Ruelito’s loss of
earning capacity; (3) ₱100,000 as moral damages; (4) ₱100,000 as exemplary damages; (5) 10% of the
total amount adjudged against respondent as attorneys fees; and (6) the costs of suit. The total amount
adjudged against respondent shall earn interest at the rate of 12% per annum computed from the finality
of this decision until full payment

LTFRB - Des

TOPIC: COMMON CARRIERS

G.R. No. 242860, March 11, 2019

THE LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD (LTFRB) AND THE
DEPARTMENT OF TRANSPORTATION (DOTR), PETITIONERS v.

HON. CARLOS A. VALENZUELA, IN HIS CAPACITY AS PRESIDING JUDGE OF THE REGIONAL

TRIAL COURT OF MANDALUYONG CITY, BRANCH 213 AND DBDOYC, INC., RESPONDENTS.

Facts:

Private Respondent DBDOYC Inc., registered its business with the SEC and launched ANGKAS, an
online and on-demand motorcycle-hailing mobile application that pairs drivers of motorcycles with
potential passengers without however obtaining the mandatory CERTIFICATE OF TNC
ACCREDITATION from LTRFB.
LTFRB contended that respondent is a TRANSPORTATION NETWERK COMPANY (TNC), a new
classification of public transport conveyances enacted under DO 2015-11. DO 2015-11 amended DO 97-
1097 which set the standard classifications for public transport conveyances to be used as basis for
issuance of a Certificate of Public Convenience (CPC) for PUVs.

Under DO 2015-11, a TNC is defined as an "organization whether a corporation, partnership, sole

proprietor, or other form, that provides pre-arranged transportation services for compensation using an
online-enabled application or platform technology to connect passengers with drivers using their personal
vehicles."

Although DO 2015-11 made mention of TNVS, the term was not clearly defined until June 19, 2017,
when the DOTr issued DO 2017-118 which set the rules and procedures on the issuance of franchises
for public transport routes and services,9 including TNCs and TNVS.

Under DO 2017-11, TNVS is defined as "a [PUV] accredited with a [TNC], which is granted authority or
franchise by the LTFRB to run a public transport service."10 DO 2017-11 further provided in Item 2.2
thereof that "[m]otorcycles x x x are likewise not allowed as public transport conveyance

Private respondent clamed that:

(1) It is not a public transportation provider

(2) Angkas and its drivers are not engaged in the delivery of public service

(3) In the event it is declared that they are engaged in public service that requires issuance of CPC, DO
2017-11 should be declared invalid because it violates RA 4136 Sec 7 which does not prohibit
motorcycles from being used as PUV

(4) LTFRB and DOTr has no jurisdiction to regulate motorcycles for hire.

Petitioners argued that DBDOYC is a transportation provider and its accredited drivers are common
carriers engaged in rendering public service which is subject to their regulation.

Issue:

1) w/n private respondent is a TNC under DO 2015-11 (YES)

2) w/n the drivers of the Angkas app are engaged in rendering public service thus subject to regulation
as common carriers (YES)

RULING: Petition is meritorious.

1) Private respondent is a TNC

Under DO 2015-11, a TNC is defined as an "organization whether a corporation, partnership, sole

proprietor, or other form, that provides pre-arranged transportation services for compensation using
an online-enabled application or platform technology to connect passengers with drivers using their
personal vehicles;

As the DBDOYC itself describes, Angkas is a mobile application which seeks to "pair an available
and willing Angkas biker with a potential passenger, who requested for a motorcycle ride, relying
on geo-location technology." Accordingly, it appears that it is practically functioning as a booking
agent, or at the very least, acts as a third-party liaison for its accredited bikers. Irrespective of the
application's limited market scope, i.e., Angkas users, it remains that, on the one hand, these bikers offer
transportation services to wiling public consumers, and on the other hand, these services may be readily
accessed by anyone who chooses to download the Angkas app.

2) The drivers of the Angkas app are engaged in rendering public service thus subject to
regulation as common carriers

ü PUBLIC SERVICE

DOs 2015-11 and 2017-11 created new classifications in light of modernization. The issuances can be
traced from CA 146 (Public Service Act) Sec. 13(b) which states:

(b) The term "public service" includes every person that now or hereafter may own, operate, manage,
or control in the Philippines, for hire or compensation, with general or limited clientele, whether
permanent, occasional or accidental, and done for general business purposes, any common
carrier, railroad, street railway, traction railway, sub-way motor vehicle, either for freight or passenger,
or both with or without fixed route and whatever may be its classification,xxx

Sec. 15 likewise states that no public service shall operate in the PH w/o possessing a CPC.

As stated in the Public Service Act, the term "public service" covers any person who owns, operates,
manages, or controls in the Philippines, for hire or compensation, with general or limited clientele,
whether permanent, occasional or accidental, and done for general business purposes, any common
carrier.

The Civil Code defines "common carriers" in the following terms:

Article 1732. Common carriers are persons, corporations, firms or

associations engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or
air for compensation, offering their services to the public.

ü COMMON CARRIER

DBDOYC claims reprieve from the above-stated regulatory measures, claiming that it and its accredited
drivers are not common carriers or transportation providers. It argues that "[its] technology [only] allows a
biker willing to give a ride and a passenger willing to pay the set price to meet and contract with each
other. Under this set-up, an Angkas biker does not offer his/her service to an indefinite public.

In De Guzman v. Court of Appeals,53 the Court discussed the relation between Article 1732 of the Civil Code
and Section 13 (b) of the Public Service Act, explaining that Article 1732 of the Civil Code does not
distinguish between a carrier who offers its services to the general public and one who offers services
or solicits business only from a narrow segment of the general population:

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.
So understood, the concept of "common carrier" under Article 1732 may be
seen to coincide neatly with the notion of "public service," under the Public
Service Act (Commonwealth Act No. 1416, as amended) which at least partially
supplements the law on common carriers set forth in the Civil Code. x x x. 54
(Emphases and underscoring supplied)

Cangco v. MRR, 38 Phil 767

FACTS: Plaintiff, Jose Cangco, was in the employment of Manila Railroad Company in the capacity of clerk. On
January 20, 1915 around 7 to 8 p.m. Cangco, arose from his seat and took his position upon the steps of the coach,
seizing the upright guardrail with his right hand for support. As the train slowed down another passenger got off the
same car alighting safely. When the train had proceeded a little farther Cangco stepped off but 1 or both of his feet
came in contact with a sack of watermelons so his feet slipped from under him and he fell violently on the platform
and was drawn under the moving car, where his right arm was badly crushed and lacerated.

CFI: favored Manila Railroad Co. (MRR)- Cangco had failed to use due caution in alighting from the coach and was
therefore precluded form recovering.

ISSUE: WON Manila Railroad Co., should be held liable?

RULING: Yes.

It can not be doubted that the employees of the railroad company were guilty of negligence. It necessarily follows
that the defendant company is liable for the damage thereby occasioned unless recovery is barred by the plaintiff's
own contributory negligence. The Conceptions of liability, to-wit, the primary responsibility of the defendant
company and the contributory negligence of the plaintiff should be separately examined.

The foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for
the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of
the defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing
essentially, in legal viewpoint from that presumptive responsibility for the negligence of its servants, imposed by
article 1903 of the Civil Code, which can be rebutted by proof of the exercise of due care in their selection and
supervision. Article 1903 of the Civil Code is not applicable to obligations arising ex contractu, but only to extra-
contractual obligations — or to use the technical form of expression, that article relates only to culpa aquiliana and
not to culpa contractual.

Two things are apparent: (1) That when an injury is caused by the negligence of a servant or employee there
instantly arises a presumption of law that there was negligence on the part of the master or employer either in
selection of the servant or employee, or in supervision over him after the selection, or both; and (2) that that
presumption is juris tantum and not juris et de jure, and consequently, may be rebutted. It follows that if the
employer shows to the satisfaction of the court that in selection and supervision he has exercised the care and
diligence of a good father of a family, the presumption is overcome and he is relieved from liability.

As a general rule . . . it is logical that in case of extra-contractual culpa, a suing creditor should assume the burden
of proof of its existence, as the only fact upon which his action is based; while on the contrary, in a case of
negligence which presupposes the existence of a contractual obligation, if the creditor shows that it exists and that it
has been broken, it is not necessary for him to prove negligence.

The contract (contract of carriage) of the defendant to transport the plaintiff carried with it, by implication, the duty to
carry him in safety and to provide safe means of entering and leaving its trains (civil code, article 1258). That duty,
being contractual, was direct and immediate, and its non-performance could not be excused by proof that the fault
was morally imputable to defendant's servants

The direct and proximate cause of the injury suffered by plaintiff was his own contributory negligence in failing to
wait until the train had come to a complete stop before alighting. It is, therefore, important to ascertain if the
defendant was in fact guilty of negligence.

We are of the opinion that the correct doctrine relating to this subject is that expressed in Thompson's work on
Negligence, as follows:

The test by which to determine whether the passenger has been guilty of negligence in attempting to alight from a
moving railway train, is that of ordinary or reasonable care. It is to be considered whether an ordinarily prudent
person, of the age, sex and condition of the passenger, would have acted as the passenger acted under the
circumstances disclosed by the evidence. This care has been defined to be, not the care which may or should be
used by the prudent man generally, but the care which a man of ordinary prudence would use under similar
circumstances, to avoid injury.

It should not be overlooked that the plaintiff was, as we find, ignorant of the fact that the obstruction which was
caused by the sacks of melons piled on the platform existed; and as the defendant was bound by reason of its duty
as a public carrier to afford to its passengers facilities for safe egress from its trains, the plaintiff had a right to
assume, in the absence of some circumstance to warn him to the contrary, that the platform was clear. The place,
as we have already stated, was dark, or dimly lighted, and this also is proof of a failure upon the part of the
defendant in the performance of a duty owing by it to the plaintiff; for if it were by any possibility concede that it had
right to pile these sacks in the path of alighting passengers, the placing of them adequately so that their presence
would be revealed. Furthermore, the plaintiff was possessed of the vigor and agility of young manhood, and it was
by no means so risky for him to get off while the train was still moving as the same act would have been in an aged
or feeble person. Our conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet
slightly under way was not characterized by imprudence and that therefore he was not guilty of contributory
negligence.

Isaac v. A.L. Ammen, 101 Phil 1046

FACTS: : A. L. Ammen Transportation Co., Inc., the defendant, is a corporation engaged in the business of
transporting passengers. One of the buses which the defendant was operating is Bus No. 31. which plaintiff
boarded as a passenger. It bound for Pili, Camarines Sur, but before reaching his destination, the bus collided with
a motor vehicle, as a result of which the plaintiff's left arm was completely severed and the severed portion fell
inside the bus. He incurred expenses, excluding medical fees which were paid by the defendant. Plaintiff brought
action against defendants for damages.

Plaintiff Invokes the rule that, "when an action is based on a contract of carriage, as in this case, all that is
necessary to sustain recovery is proof of the existence of the contract of the breach thereof by act or omission.
Appellant seems to imply that once the contract of carriage is established and there is proof that the same was
broken by failure of the carrier to transport the passenger safely to his destination, the liability of the former
attaches. On the other hand, appellee contends that "if there is no negligence on the part of the common carrier but
that the accident resulting in injuries is due to causes which are inevitable and which could not have been avoided
notwithstanding the exercise of that high degree of care and skill which the carrier is bound to exercise for the safety
of his passengers", neither the common carrier nor the driver is liable therefor.

ISSUE: Won L. Ammen Transportation Co., Inc , as operator of the bus should be held liable?

Considering that the plaintiff chose to hold the defendant liable on its contractual obligation to carry him safely to his
place of destination, it becomes important to determine the nature and extent of the liability of a common carrier to a
passenger in the light of the law applicable in this jurisdiction.

RULING: No, The driver of the bus has done what a prudent man could have done to avoid the collision and in our
opinion this relieves appellee from legibility under our law.

We believe that the law concerning the liability of a common carrier has now suffered a substantial modification in
view of the innovations introduced by the new Civil Code. These innovations are the ones embodied in Articles
1733, 1755 and 1756 in so far as the relation between a common carrier and its passengers is concerned. (see
legal basis)

The Code Commission, in justifying this extraordinary diligence required of a common carrier, says the following:
This extraordinary diligence required of common carriers is calculated to protect the passengers from the tragic
mishaps that frequently occur in connection with rapid modern transportation. (Padilla)

From the above legal provisions, we can make the following restatement of the principles governing the liability of a
common carrier: (1) the liability of a carrier is contractual and arises upon breach of its obligation. There is breach if
it fails to exert extraordinary diligence according to all circumstances of each case; (2) a carrier is obliged to carry its
passenger with the utmost diligence of a very cautious person, having due regard for all the circumstances; (3) a
carrier is presumed to be at fault or to have acted negligently in case of death of, or injury to, passengers, it being its
duty to prove that it exercised extraordinary diligence; and (4) the carrier is not an insurer against all risks of travel.

The evidence would appear to support the finding of trial court. The was running at a moderate speed because it
had just stopped at the school; The pick-up car was at full speed and was running outside of its proper lane; The
driver of the bus, upon seeing the pick up’s manner of driving, swerved right of the road but gone over the stones or
gravel hence it could not move further right without endangering the safety of his passengers. And notwithstanding
all these efforts, the rear left side of the bus was hit by the pick-up car.

One who is placed in such a predicament cannot exercise such coolness or accuracy of judgment as is required of
him under ordinary circumstances and he cannot therefore be expected to observe the same judgment, care and
precaution as in the latter. For this reason, authorities abound where failure to observe the same degree of care that
as ordinary prudent man would exercise under ordinary circumstances when confronted with a sadden emergency
was held to be warranted and a justification to exempt the carrier from liability. Thus, it was held that "where a
carrier's employee is confronted with a sudden emergency, the fact that he is obliged to act quickly and without a
chance for deliberation must be taken into account, and he is held to the some degree of care that he would
otherwise be required to exercise in the absence of such emergency but must exercise only such care as any
ordinary prudent person would exercise under like circumstances and conditions, and the failure on his part to
exercise the best judgement the case renders possible does not establish lack of care and skill on his part which
renders the company, liable.

A circumstance which militates against the stand of appellant is the fact plaintiff’s left elbow while seated, was
outside the window, this being his position resulted in the severance of said left arm. It is therefore apparent that the
appellant is guilty of contributory negligence. Had he not placed his left arm on the window sill with a portion thereof
protruding outside, perhaps the injury would have been avoided as is the case with the other passenger.

It is true that such contributory negligence cannot relieve appellee of its liability but will only entitle it to a reduction
of the amount of damage caused (Article 1762, new Civil Code)
But, it is the prevailing rule that it is negligence per se for a passenger on a railroad voluntarily or inadvertently to
protrude his arm, hand, elbow, or any other part of his body through the window of a moving car beyond the outer
edge of the window or outer surface of the car, so as to come in contact with objects or obstacles near the track,
and that no recovery can be had for an injury which but for such negligence would not have been sustained.

Fores - WAYNE Phil.

Rabbit - WAYNE
LRTA - JESICA

G.R. No. 145804 February 6, 2003

LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN, petitioners,
vs.
MARJORIE NAVIDAD, Heirs of the Late NICANOR NAVIDAD & PRUDENT SECURITY AGENCY,
respondents.

FACTS:
● On 14 October 1993, about half an hour past seven o’clock in the evening, Nicanor Navidad, then
drunk, entered the EDSA LRT station after purchasing a "token" (representing payment of the
fare). While Navidad was standing on the platform near the LRT tracks, Junelito Escartin, the
security guard assigned to the area approached Navidad. A misunderstanding or an altercation
between the two apparently ensued that led to a fist fight. No evidence, however, was adduced to
indicate how the fight started or who, between the two, delivered the first blow or how Navidad
later fell on the LRT tracks. At the exact moment that Navidad fell, an LRT train, operated by
petitioner Rodolfo Roman, was coming in. Navidad was struck by the moving train, and he was
killed instantaneously.
● On 08 December 1994, the widow of Nicanor, herein respondent Marjorie Navidad, along with her
children, filed a complaint for damages against Junelito Escartin, Rodolfo Roman, the LRTA, the
Metro Transit Organization, Inc. (Metro Transit), and Prudent Security Agency (Prudent) for the
death of her husband. LRTA and Roman filed a counterclaim against Navidad and a cross-claim
against Escartin and Prudent. Prudent, in its answer, denied liability and averred that it had
exercised due diligence in the selection and supervision of its security guards.
● The LRTA and Roman presented their evidence while Prudent and Escartin, instead of presenting
evidence, filed a demurrer contending that Navidad had failed to prove that Escartin was negligent
in his assigned task.
● On 11 August 1998, the trial court rendered its decision in favor of the plaintiffs and against the
defendants Prudent Security and Junelito Escartin ordering the latter to pay jointly and severally
the plaintiffs.
● On 27 August 2000, the appellate court promulgated its now assailed decision exonerating
Prudent from any liability for the death of Nicanor Navidad and, instead, holding the LRTA and
Roman jointly and severally liable.

ISSUE:
WON LRTA is liable for the death of Nicanor Navidad, Jr. – YES
RULING:
Law and jurisprudence dictate that a common carrier, both from the nature of its business and for
reasons of public policy, is burdened with the duty of exercising utmost diligence in ensuring the safety of
passengers.4 The Civil Code, governing the liability of a common carrier for death of or injury to its
passengers, provides:

"Article 1755. A common carrier is bound to carry the passengers safely as far as human care
and foresight can provide, using the utmost diligence of very cautious persons, with a due regard
for all the circumstances.

"Article 1756. In case of death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755."

"Article 1759. Common carriers are liable for the death of or injuries to passengers through the
negligence or willful acts of the former’s employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers.

"This liability of the common carriers does not cease upon proof that they exercised all the
diligence of a good father of a family in the selection and supervision of their employees."

"Article 1763. A common carrier is responsible for injuries suffered by a passenger on account of
the willful acts or negligence of other passengers or of strangers, if the common carrier’s
employees through the exercise of the diligence of a good father of a family could have prevented
or stopped the act or omission."

The law requires common carriers to carry passengers safely using the utmost diligence of very cautious
persons with due regard for all circumstances. 5 Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so long as the passengers are
within its premises and where they ought to be in pursuance to the contract of carriage.

The statutory provisions render a common carrier liable for death of or injury to passengers (a) through
the negligence or wilful acts of its employees or b) on account of wilful acts or negligence of other
passengers or of strangers if the common carrier’s employees through the exercise of due diligence
could have prevented or stopped the act or omission.

In case of such death or injury, a carrier is presumed to have been at fault or been negligent, and by
simple proof of injury, the passenger is relieved of the duty to still establish the fault or negligence of the
carrier or of its employees and the burden shifts upon the carrier to prove that the injury is due to an
unforeseen event or to force majeure. In the absence of satisfactory explanation by the carrier on how
the accident occurred, which petitioners, according to the appellate court, have failed to show, the
presumption would be that it has been at fault, an exception from the general rule that negligence must
be proved.
The foundation of LRTA’s liability is the contract of carriage and its obligation to indemnify the victim
arises from the breach of that contract by reason of its failure to exercise the high diligence required of
the common carrier. In the discharge of its commitment to ensure the safety of passengers, a carrier may
choose to hire its own employees or avail itself of the services of an outsider or an independent firm to
undertake the task. In either case, the common carrier is not relieved of its responsibilities under the
contract of carriage.

Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions of
Article 2176 and related provisions, in conjunction with Article 2180, of the Civil Code. The premise,
however, for the employer’s liability is negligence or fault on the part of the employee. Once such fault is
established, the employer can then be made liable on the basis of the presumption juris tantum that the
employer failed to exercise diligentissimi patris families in the selection and supervision of its employees.
The liability is primary and can only be negated by showing due diligence in the selection and supervision
of the employee, a factual matter that has not been shown

Absent such a showing, one might ask further, how then must the liability of the common carrier, on the
one hand, and an independent contractor, on the other hand, be described? It would be solidary. A
contractual obligation can be breached by tort and when the same act or omission causes the injury, one
resulting in culpa contractual and the other in culpa aquiliana, Article 2194of the Civil Code can well
apply. In fine, a liability for tort may arise even under a contract, where tort is that which breaches the
contract.Stated differently, when an act which constitutes a breach of contract would have itself
constituted the source of a quasi-delictual liability had no contract existed between the parties, the
contract can be said to have been breached by tort, thereby allowing the rules on tort to apply.

There being, similarly, no showing that petitioner Rodolfo Roman himself is guilty of any culpable act or
omission, he must also be absolved from liability. Needless to say, the contractual tie between the LRT
and Navidad is not itself a juridical relation between the latter and Roman; thus, Roman can be made
liable only for his own fault or negligence.
NATIONAL DEV’T CO v. CA
G.R. No. L-49407 August 19, 1988
Petitioner-appellant: NATIONAL DEVELOPMENT COMPANYvs.
Respondents-appellees: THE COURT OF APPEALS and DEVELOPMENT INSURANCE & SURETY
CORPORATION,

Facts:
● 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.
● 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.
● 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.
● 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 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.
● On April 22, 1965, the Development Insurance and Surety Corporation filed before the then CFI 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
● RTC rendered a decision ordering the defendants MCP and NDC to pay jointly and solidarity to DISC. CA
promulgated its decision affirming the decision of the RTC.

Issue:
1. Which laws govern loss or destruction of goods due to collision of vessels outside Philippine waters, and
2. What is the extent of liability as well as the rules of prescription

Ratio:
1. 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.
This issue has already been laid to rest by this Court of Eastern Shipping Lines Inc. v. IAC
● 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.
○ 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.

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
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.

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.

2. Liability

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.

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); that in case of collision, both the owner and the agent
are civilly responsible for the acts of the captain

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]). 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.

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 cannot limit its liability for injury to a loss of goods where such
injury or loss was caused by its own negligence (Ysmael & Co., Inc. v. Barrette). 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 RTC and the CA acted correctly in not applying the law on averages (Articles 806 to 818, Code
of Commerce).

Both pilots were at fault for not changing their excessive speed despite the thick fog obstructing their visibility.
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.

Dispositive Portion:
PREMISES CONSIDERED, the subject petitions are DENIED for lack of merit and the assailed decision
of the respondent Appellate Court is AFFIRMED.
Tan Chiong v. Inchausti, 22 Phil 153

Topic: Exemption from liability; Natural Disaster

Summary: Ong Bien Sip contracted Inchausti to ship goods to be brought to Catarman, Samar. It was
alleged that the goods belong to Tan Chiong Sian(the one who brought the complaint). Inchausti has no
direct trip from Manila to Catarman so it has to bring the goods to Gubat, Sorsogon to be transferred to a
lorcha(a kind of vessel without a motor of its own) which will bring the goods to Catarman, Samar. While
they were in Gubat, and after the merchandise was already inside the lorcha, a storm came. The lorcha
was brought ashore wrecked and the goods cannot be delivered anymore. SC ruled that the patron and
crew of the lorcha acted without negligence and that the cause of the loss is force majeure. Inchausti was
not held liable.

Doctrine: The general rule established in the first of the foregoing articles is that the loss of the vessel
and of its cargo, as the result of shipwreck, shall fall upon the respective owners thereof, save for the
exceptions specified in the second of the said articles(If the wreck or stranding should arise through the
malice, negligence, or lack of skill of the captain, or because the vessel put to sea insufficiently repaired
and supplied, in which case the owner or the freighters may demand indemnity of the captain for the
damages caused to the vessel or cargo by the accident).

Facts: On 25 November 1908, Inchausti & Co. received in Manila from the Chinaman, Ong Bieng Sip,
205 bundles, bales or cases of goods to be conveyed by the steamer Sorsogon to the port of Gubat,
Province of Sorsogon, where they were to be transshipped to another vessel belonging to Inchausti and
by the latter transported to the pueblo of Catarman, Island of Samar, there to be delivered to the Chinese
shipper with whom Inchausti made the shipping contract. To this end 3 bills of lading were executed (38,
39, and 76). The steamer Sorsogon, which carried the goods, arrived at the port of Gubat on 28
November 1908 and as the lorcha Pilar, to which the merchandise was to be transshipped for its
transportation to Catarman, was not yet there, the cargo was unloaded and stored in the defendant
company’s warehouses at that port. Several days later, the lorcha Pilar arrived at Gubat and, after the
cargo it carried had been unloaded, the merchandise belonging to the Chinaman, Ong Bieng Sip,
together with other goods owned by Inchausti & Co., was taken aboard to be transported to Catarman.
On 5 December 1908, however, before the Pilar could leave for its destination, towed by the launch
Texas, there arose a storm, which, coming from the Pacific, passed over Gubat and, as a result of the
strong wind and heavy sea, the lorcha was driven upon the shore and wrecked, and its cargo, including
the Chinese shipper’s 205 packages of goods, scattered on the beach. Laborers or workmen of
Inchausti, by its order, then proceeded to gather up Tan Chiong Sian’s merchandise and, as it was
impossible to preserve it after it was salved from the wreck of the lorcha, it was sold at public auction
before a notary for the sum of P1,693.67.

On 11 January 1909, the Chinaman, Tan Chiong Sian or Tan Chinto, filed a written complaint, which was
amended on 28 January 1909, and again on 27 October 1909 against Inchausti & Co. alleging that
Inchausti neither carried nor delivered his merchandise to Ong Bieng Sip, in Catarman, but unjustly and
negligently failed to do so, with the result that the said merchandise was almost totally lost, and thus
claimed the value of the merchandise which was P20,000, legal interest thereon from 25 November
1908, and the cost of the suit. After the hearing of the case and the introduction of testimony by the
parties, judgment was rendered, on 18 March 1910, in favor of Tan Chiong Sian or Tan Chinto, against
Inchausti & Co., for the sum of P14,642.63, with interest at the rate of 6% per annum from 11 January
1909, and for the costs of the trial. Inchausti & Co. appealed from the judgment.

Issue: Whether the defendant is relieved from responsibility on the ground of force majeure.(Yes)

Held: The Supreme Court reversed the judgment appealed from, and absolved Inchausti & Co., without
special finding as to costs; holding that Inchausti is not liable for the loss and damage of the goods
shipped on the lorcha Pilar by the Chinaman, Ong Bieng Sip, inasmuch as such loss and damage were
the result of a fortuitous event or force majeure, and there was no negligence or lack of care and
diligence on the part of Inchausti or its agents.

Inchausti took precautions usually adopted by careful and diligent persons, as required by Article 362 of
the Code of Commerce.

Inchausti, his agents and the patron did take the measures which they deemed necessary and proper in
order to save the lorcha and its cargo from the impending danger; accordingly, the patron, as soon as he
was informed that a storm was approaching, proceeded to clear the boat of all gear which might offer
resistance to the wind, dropped the four anchors he had, and even procured an extra anchor from the
land, together with a new cable, and cast it into the water, thereby adding, in so far as possible, to the
stability and security of the craft, in anticipation of what might occur, as presaged by the violence of the
wind and the heavy sea; and Inchausti & Company’s agent furnished the articles requested by the patron
of the lorcha for the purpose of preventing the loss of the boat; thus did they all display all the diligence
and care such as might have been employed by anyone in similar circumstances, especially the patron
who was responsible for the lorcha under his charge; nor is it possible to believe that the latter failed to
adopt all the measures that were necessary to save his own life and those of the crew and to free himself
from the imminent peril of shipwreck.

From the moment that it is held that the loss of the said lorcha was due to force majeure, a fortuitous
event, with no conclusive proof of negligence or of the failure to take the precautions such as diligent and
careful persons usually adopt to avoid the loss of the boat and its cargo, it is neither just nor proper to
attribute the loss or damage of the goods in question to any fault, carelessness, or negligence on the part
of Inchausti and its agents and, especially, the patron of the lorcha Pilar.

Subsequent to the wreck, Inchausti’s agent took all the requisite measures for the salvage of such of the
goods as could be recovered after the accident, which he did with the knowledge of the shipper, Ong
Bieng Sip, and, in effecting their sale, he endeavored to secure all possible advantage to the Chinese
shipper; in all these proceedings, he acted in obedience to the law.
Martini - DEANG

[G.R. No. 13972. July 28, 1919.] 39 Phil. 934

Martini v. Macondray

ii. Exemption from liability

1. Natural Disaster

Doctrine: Where cargo is, with the owner's consent, transported on the deck of a sea-going vessel upon a bill of
lading exempting the ship's company from liability for damage, the risk of any damage resulting from carriage on
deck, such as the damage caused by rain or the splashing aboard of sea water, must be borne by the owner.

SUMMARY:

Plaintiff Martini arranged with defendant company, as agents of the Eastern and Australian Steamship Company, for
the shipment of 219 cases/ packages of chemical products from Manila, Philippine Islands to Kobe, Japan. The
goods were embarked at Manila on the steamship Eastern, and were carried to Kobe on the deck of that ship.

Upon arrival at the port of destination it was found that the chemicals comprised in the shipment had
suffered damage from the effects of both fresh and' salt water; and the present action was instituted by the
plaintiff to recover the amount of the damage thereby occasioned.

CFI: In favor of plaintiffs for the sum of P34,997.56, with interest from March 24 1917, and costs of the proceeding.

Hence, defendant appealed.

Plaintiff: the agreement was that the cargo in question should be carried in the ordinary manner, that is, in the
ship's hold, and that the plaintiff never gave its consent for the goods to be carried on deck.

Defendant:
-Relies upon paragraph 19 of the several bills of lading issued for transportation of this cargo, which reads as
follows:
"19. Goods signed for on this bill of lading as carried on deck are entirely at shipper's risk, whether carried on
deck or under hatches, and the steamer is not liable for any loss or damage from any cause whatever."

ISSUE/S:
1.WON Martini & Company consented to the shipment of the cargo on deck? YES
2.WON defendant is liable for the damage which befell the cargo? NO

SC:
1st issue: The result of the discussion is that Martini & Company must be held to have assented to the
shipment of the cargo on deck and that they are bound by the bills of lading in the form in which they were
issued. The trial court in our opinion erred in holding otherwise, and in particular by ignoring, or failing to
give sufficient weight to the contract of guaranty.

2nd: [several cited authorities]

The foregoing authorities fully sustain the proposition that where the shipper consents to have his goods carried
on deck he takes the risks of any damage or loss sustained as a consequence of their being so carried

In the present case it is indisputable that the goods were injured during the voyage and solely as a
consequence of their being on deck, instead of in the ship's hold. The loss must therefore fall on the owner.
And this would be true, under the authorities, even though paragraph 19 of the bills of lading, quoted near
the beginning of this opinion, had not been made a term of the contract.

It is undoubtedly true that, upon general principle, and momentarily ignoring paragraph 19 of these bills of
lading, the ship's owner might be held liable for any damage directly resulting from a negligent failure to
exercise the care properly incident to the carriage of the merchandise on deck. So, if it had been shown
that, notwithstanding the stowage of these goods on deck, the damage could have been prevented, by the
exercise of proper skill and diligence in the discharge of the duties incumbent on the ship, the owner might
still be held.

But it should be borne in mind in this connection that it is incumbent on the plaintiff, if his cause of action
is founded on negligence of this character, to allege and prove that the damage suffered was due to failure
of the persons in charge of the cargo to use the diligence properly incident to carriage under these
conditions.

it is apparent that the damage here was caused by rain and sea water—the risk of which is inherently incident to
carriage on deck—the defendant cannot be held liable. It is not permissible for the court, in the absence of any
allegation or proof of negligence, to attribute negligence to the ship's employees in the matter of protecting
the goods from rains and storms. The complaint on the contrary clearly indicates that the damage done
was due to the mere fact of carriage on deck, no other fault or delinquency on the part of anybody being
alleged.

It will be observed that by the terms of paragraph 19 of the bills of lading, the ship is not to be held liable, In the
case of goods signed for as carried on deck, "for any loss or damage from any cause whatever." We are not to be
understood as holding that this provision would have protected the ship from liability for the consequences of
negligent acts, if negligence had been alleged and proved.

From the discussion in Manila -Railroad Co. vs. Compañía Transatlántica and Atlantic, Gulf & Pacific Co. (38
Phil. Rep., 875), it may be collected that the carrier would be held liable in such case, notwithstanding the
exemption contained in paragraph 19. But however that may be, damages certainly cannot be recovered on
the ground of negligence, even from a carrier, where negligence is neither alleged nor proved.
Eastern Shipping - Des

TOPIC: EXEMPTION FROM LIABILITY (NATURAL DISASTER)

G.R. No. L-69044 May 29, 1987

EASTERN SHIPPING LINES, INC., petitioner, vs. INTERMEDIATE APPELLATE COURT and
DEVELOPMENT INSURANCE & SURETY CORPORATION, respondents.

FACTS:

M/S Asiatica is a vessel operated by Petitioner which loaded various goods from Kobe, Japan for
transportation to Manila. All goods were insured against marine risks for their stated value with respective
insurance agencies.

Enroute for Kobe, Japan to Manila, the vessel caught fire and sank, resulting in total loss of ship and
cargo including the insured goods. The respective respondent insurers paid the corresponding marine
insurances values to the consignees and were thus subrogated unto the rights of the latter as the
insured.

Private respondents filed for the recovery of the amounts it had paid against the Petitioner who in turn
denied liability mainly on the ground that the loss was due to an extraordinary fortuitous event hence not
liable under the law as an exempting circumstance under Sec 4 (2)(b) of the Carriage of Goods by Sea
Act and when the loss by fire is established, the burden of proving negligence is shifted to the cargo
shipper.

ISSUE: W/N Petitioner is exempt from liability on the ground of loss due to fire as a natural
disaster/fortuitous event. (No)

RULING: Petitioner is liable for the loss cargo.

● On the law applicable

Under Art. 1753 of the NCC, “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.”

As the cargoes in question were transported from Japan to the Philippines, the liability of Petitioner
Carrier is governed primarily by the Civil Code.

However, 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 special laws. Thus, the Carriage of Goods by Sea Act, a
special law, is suppletory to the provisions of the Civil Code.

● On the burden of proof

Since the applicable law is the Civil Code, the same states that common carriers, from the nature of
their business and for reasons of public policy, are bound to observe extraordinary diligence in the
vigilance over goods, according to all the circumstances of each case.

Under Art. 1734, common carriers are responsible for the loss, destruction, or deterioration of the goods
unless the same is due to any of the following causes only:
 (1) Flood, storm, earthquake, lightning or other natural disaster or calamity;

xxx xxx xxx

Petitioner Carrier claims that the loss of the vessel by fire exempts it from liability under the phrase
"natural disaster or calamity. " However, we are of the opinion that fire may not be considered a
natural disaster or calamity. This must be so as it arises almost invariably from some act of man or by
human means. It does not fall within the category of an act of God unless caused by lightning or by
other natural disaster or calamity. It may even be caused by the actual fault or privity of the carrier.

As the peril of the fire is not comprehended within the exception in Article 1734, supra, Article 1735 of
the Civil Code provides that all cases than those mention in Article 1734, the common carrier
shall be presumed to have been at fault or to have acted negligently, unless it proves that it has
observed the extraordinary deligence required by law.

As founded by the RTC, concurred by the CA: according to the witnesses defendant placed in
hatches No, 2 and 3 of the vessel, Boatswain Ernesto Pastrana noticed that smoke was coming out from
hatch No. 2 and hatch No. 3; that where the smoke was noticed, the fire was already big; that the fire
must have started twenty-four 24 our the same was noticed; that carbon dioxide was ordered released
and the crew was ordered to open the hatch covers of No, 2 tor commencement of fire fighting by sea
water: that all of these effort were not enough to control the fire.

Pursuant to Article 1733, common carriers are bound to extraordinary diligence in the vigilance over
the goods. The evidence of the defendant did not show that extraordinary vigilance was observed
by the vessel to prevent the occurrence of fire at hatches numbers 2 and 3. Defendant's evidence
did not likewise show he amount of diligence made by the crew, on orders, in the care of the
cargoes. What appears is that after the cargoes were stored in the hatches, no regular inspection was
made as to their condition during the voyage. Consequently, the crew could not have even explain what
could have caused the fire. The defendant, in the Court's mind, failed to satisfactorily show that
extraordinary vigilance and care had been made by the crew to prevent the occurrence of the fire. The
defendant, as a common carrier, is liable to the consignees for said lack of deligence required of it under
Article 1733 of the Civil Code.

And even if fire were to be considered a "natural disaster" within the meaning of Article 1734 of the Civil
Code, it is required under Article 1739 of the same Code that the "natural disaster" must have been
the "proximate and only cause of the loss," and that the carrier has "exercised due diligence to
prevent or minimize the loss before, during or after the occurrence of the disaster. " This Petitioner
Carrier has also failed to establish satisfactorily.

Nor may Petitioner Carrier seek refuge from liability under the Carriage of Goods by Sea Act, It is
provided therein that:

Sec. 4(2). Neither the carrier nor the ship shall be responsible for loss or damage arising or resulting
from:

(b) Fire, unless caused by the actual fault or privity of the carrier.

xxx xxx xxx

In this case, both the Trial Court and the Appellate Court, in effect, found, as a fact, that there was "actual
fault" of the carrier shown by "lack of diligence" in that "when the smoke was noticed, the fire was already
big; that the fire must have started twenty-four (24) hours before the same was noticed; " and that "after
the cargoes were stored in the hatches, no regular inspection was made as to their condition during the
voyage." The foregoing suffices to show that the circumstances under which the fire originated
and spread are such as to show that Petitioner Carrier or its servants were negligent in
connection therewith. Consequently, the complete defense afforded by the COGSA when loss results
from fire is unavailing to Petitioner Carrier.
Asia Lighterage - KAE
G.R. No. 147246 August 19, 2003

ASIA LIGHTERAGE AND SHIPPING, INC., petitioner,

vs.

COURT OF APPEALS and PRUDENTIAL GUARANTEE AND ASSURANCE, INC., respondents.

· On June 13, 1990, 3,150 metric tons of Better Western White Wheat in bulk, valued at was
shipped by Marubeni American Corporation of Portland, Oregon on board the vessel M/V
NEO CYMBIDIUM V-26 for delivery to the consignee, General Milling Corporation in Manila,
as evidenced by Bill of Lading No. PTD/Man-4.
· On July 25, 1990, the carrying vessel arrived in Manila and the cargo was transferred to the
custody of the Asia Lighterage and Shipping, Inc. The Asia Lighterage was contracted by the
consignee as carrier to deliver the cargo to consignee's warehouse at Bo. Ugong, Pasig City.
· It appears that on August 17, 1990, the transport of said cargo was suspended due to a
warning of an incoming typhoon. On August 22, 1990, the petitioner proceeded to pull the
barge to Engineering Island off Baseco to seek shelter from the approaching typhoon. PSTSI
III was tied down to other barges which arrived ahead of it while weathering out the storm that
night. A few days after, the barge developed a list because of a hole it sustained after hitting
an unseen protuberance underneath the water.
· The cargo sank, hence the Prudential Guarantee And Assurance, Inc had been constrained
to indemnify the consignee in the amount of P4,104,654.22.15 Thereafter, as subrogee, it
sought recovery of said amount from the Asia Lighterage, but to no avail.
· On July 3, 1991, the Prudential Guarantee And Assurance, Inc filed a complaint against the
Asia Lighterage for recovery of the amount of indemnity, attorney's fees and cost of suit.
· RTC – found Asia Lighterage liable to pay the indemnity
· Asia Lighterage insisted that it is not a common carrier and appealed to the CA but the latter
affirmed the RTC ruling.

The issues to be resolved are:

(1) Whether the petitioner is a common carrier; and, - YES

(2) Assuming the petitioner is a common carrier, whether it exercised extraordinary diligence in its
care and custody of the consignee's cargo. - YES

First issue: Asia Lighterage is a common carrier:

Asia Lighterage contends that it is not a common carrier but a private carrier. Allegedly, it has no fixed
and publicly known route, maintains no terminals, and issues no tickets. It points out that it is not obliged
to carry indiscriminately for any person. It is not bound to carry goods unless it consents. In short, it does
not hold out its services to the general public. The Court disagreed and cited the case of De Guzman vs.
Court of Appeals, where it held that the definition of common carriers in Article 1732 of the Civil Code
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. It also did not distinguish 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. Further, we ruled that Article 1732 does not
distinguish between a carrier offering its services to the general public, and one who offers services or
solicits business only from a narrow segment of the general population.

In the case at bar, the principal business of the Asia Lighterage is that of lighterage and drayage and it
offers its barges to the public for carrying or transporting goods by water for compensation. It is clearly a
common carrier.

To be sure, Asia Lighterage fits the test of a common carrier as laid down in Bascos vs. Court of Appeals.
The test to determine a common carrier is "whether the given undertaking is a part of the business
engaged in by the carrier which he has held out to the general public as his occupation rather than the
quantity or extent of the business transacted." In the case at bar, the petitioner admitted that it is engaged
in the business of shipping and lighterage, offering its barges to the public, despite its limited clientele for
carrying or transporting goods by water for compensation.

Second issue: Asia Lighterage failed to exercise extraordinary diligence in its care and custody of
consignee’s goods, hence liable to pay indemnity.

Common carriers are bound to observe extraordinary diligence in the vigilance over the goods
transported by them. They are presumed to have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated. To overcome the presumption of negligence in the case of loss,
destruction or deterioration of the goods, the common carrier must prove that it exercised extraordinary
diligence. There are, however, exceptions to this rule. Article 1734 of the Civil Code enumerates the
instances when the presumption of negligence does not attach:

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following causes only:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or omission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.

In the case at bar, the barge completely sank after its towing bits broke, resulting in the total loss
of its cargo. Asia Lighterage claims that this was caused by a typhoon, hence, it should not be
held liable for the loss of the cargo. However, it failed to prove that the typhoon is the proximate
and only cause of the loss of the goods, and that it has exercised due diligence before, during
and after the occurrence of the typhoon to prevent or minimize the loss. The evidence show that,
even before the towing bits of the barge broke, it had already previously sustained damage when it hit a
sunken object while docked at the Engineering Island. It even suffered a hole. Clearly, this could not be
solely attributed to the typhoon. The partly-submerged vessel was refloated but its hole was patched with
only clay and cement. The patch work was merely a provisional remedy, not enough for the barge to sail
safely. Thus, when petitioner persisted to proceed with the voyage, it recklessly exposed the cargo to
further damage.

A part of the testimony of Robert Boyd, Cargo Operations Supervisor also revealed that Asia Lighterage
still headed to the consignee's wharf despite knowledge of an incoming typhoon. During the time that the
barge was heading towards the consignee's wharf on September 5, 1990, typhoon "Loleng" has already
entered the Philippine area of responsibility.

Accordingly, the Asia Lighterage cannot invoke the occurrence of the typhoon as force majeure to
escape liability for the loss sustained by the private respondent. Surely, meeting a typhoon head-on falls
short of due diligence required from a common carrier. More importantly, the officers/employees
themselves of Asia Lighterage admitted that when the towing bits of the vessel broke that caused
its sinking and the total loss of the cargo upon reaching the Pasig River, it was no longer affected
by the typhoon. The typhoon then is not the proximate cause of the loss of the cargo; a human factor,
i.e., negligence had intervened.
Flores v. Miranda, 105 Phil 266
FACTS: Miranda, respondent, is a passenger of a jeepney. While the vehicle was descending the Sta. Mesa bridge
at an excessive rate of speed, the driver lost control and hitting the bridge wall. Five of the passengers were injured,
including the respondent who suffered a fracture of the upper right humerus. The driver was charged with serious
physical injuries through reckless imprudence, and upon interposing a plea of guilty was sentenced accordingly.
Miranda was awarded Php5,000 for actual and attorney’s fees; Php10,000 for moral damages.
the appellate court which found, among other things, that is registered in the name of Paz Fores.

It is also contended by petitioner that one day before the accident happened, she allegedly sold the passenger jeep
that was involved therein to a certain Carmen Sackerman.

Re: Basis of liability for damages

ISSUE: WON the award of moral damages is correct?

RULING: No, because moral damages are not recoverable in actions predicated on breach of contract of carriage,
in absence of fraud or bad faith on the part of the common carrier.

The doctrines relied upon by CA were predicated upon our former law of damages, before judicial discretion in fixing
them became limited by the express provisions of the new Civil Code (previously quoted). Hence, the aforesaid
rulings are now inapplicable.

Anent the moral damages ordered to be paid to the respondent, the same must be discarded. We have repeatedly
that moral damages are not recoverable in damage actions predicted on a breach of the contract of transportation,
in view of Articles 2219 and 2220 of the new Civil Code, which provide as follows:

Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that,
under circumstances, such damages are justify due. The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith.

By contrasting the provisions of these two article it immediately becomes apparent that:

(a) In case of breach of contract (including one of transportation) proof of bad faith or fraud ( dolus), i.e., wanton or
deliberately injurious conduct, is essential to justify an award of moral damages; and
(b) That a breach of contract cannot be considered included in the descriptive term "analogous cases" used in Art.
2219; not only because Art. 2220 specifically provides for the damages that are caused by contractual breach, but
because the definition of quasi-delict in Art. 2176 of the Code expressly excludes the cases where there is a
"preexisting contractual relation between the parties."

The exception to the basic rule of damages now under consideration is a mishap resulting in the death of a
passenger, in which case Article 1764 makes the common carrier expressly subject to the rule of Art. 2206, that
entitles the deceased passenger to "demand moral damages for mental anguish by reason of the death of the
deceased". But the exceptional rule of Art. 1764 makes it all the more evident that where the injured passenger
does not die, moral damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith.
We think it is clear that the mere carelessness of the carrier's driver does not per se constitute of justify an inference
of malice or bad faith on the part of the carrier; and in the case at bar there is no other evidence of such malice to
support the award of moral damages by the Court of Appeals. To award moral damages for breach of contract,
therefore, without proof of bad faith or malice on the part of the defendant, as required by Art. 220, would be to
violate the clear provisions of the law, and constitute unwarranted judicial legislation.

Upon the other hand, the advantageous position of a party suing a carrier for breach of the contract of
transportations explains, to some extent, the limitations imposed by the new Code on the amount of the recovery.
The action for breach of contract imposes on the defendant carrier a presumption of liability upon mere proof of
injury to the passenger; that latter is relieved from the duty to established the fault of the carrier, or of his
employees, and the burden is placed on the carrier to prove that it was due to an unforseen event or to force
majeure (Cangco vs. Manila Railroad Co). Moreover, the carrier, unlike in suits for quasi-delict, may not escape
liability by proving that it has exercised due diligence in the selection and supervision of its employees (Art. 1759,
new civil code)

The difference in conditions, defenses and proof, as well as the codal concept of quasi-delict as essentially extra
contractual negligence, compel us to differentiate between action ex contractu, and actions quasi ex delicto, and
prevent us from viewing the action for breach of contract as simultaneously embodying an action on tort. Neither
can this action be taken as one to enforce on employee's liability under Art. 103 of the Revised Penal Code, since
the responsibility is not alleged to be subsidiary, nor is there on record any averment or proof that the driver of
appellant was insolvent. In fact, he is not even made a party to the suit.

It is also suggested that a carrier's violation of its engagement to safety transport the passenger involves a breach
of the passenger's confidence, and therefore should be regarded as a breach of contract in bad faith, justifying
recovery of moral damages under Art. 2220. This theory is untenable, for under it the carrier would always be
deemed in bad faith, in every case its obligation to the passenger is infringed, and it would be never accountable for
simple negligence; while under the law (Art. 1756). the presumption is that common carriers acted negligently (and
not maliciously), and Art. 1762 speaks of negligence of the common carrier.

ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in article 1733
and 1755.
ART. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or
injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages shall be
equitably reduced.

The distinction between fraud, bad faith or malice in the sense of deliberate or wanton wrong doing and negligence
(as mere carelessness) is too fundamental in our law to be ignored (Arts. 1170-1172); their consequences being
clearly differentiated by the Code.

ART. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable
shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties
have foreseen or could have reasonably foreseen at the time the obligation was constituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be
reasonably attributed to the non-performance of the obligation.

It is to be presumed, in the absence of statutory provision to the contrary, that this difference was in the mind of the
lawmakers when in Art. 2220 they limited recovery of moral damages to breaches of contract in bad faith. It is true
that negligence may be occasionally so gross as to amount to malice; but that fact must be shown in evidence, and
a carrier's bad faith is not to be lightly inferred from a mere finding that the contract was breached through
negligence of the carrier's employees.

Re: Necessity for the approval of CPC

ISSUE: WON the approval of the Public Service Commission necessary for the sale of a public service vehicle
even without conveying therewith the authority to operate the same?

RULING: Yes. Section 20 of the Public Service Act (Commonwealth Act No. 146) provides: Subject to established
limitations and exceptions and saving provisions to the contrary, it shall be unlawful for any public service or for the
owner, lessee or operator thereof, without the previous approval and authority of the Commission previously had –

(g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights, or any
part thereof; xxx, with those of any other public service. The approval herein required shall be given, after notice to
the public and after hearing the persons interested at a public hearing, xxx Provided, however, That nothing herein
contained shall be construed to prevent the transaction from being negotiated or completed before its approval or to
prevent the sale, alienation, or lease by any public service of any of its property in the ordinary course of its
business.

We have held in the recent cases of Montoya vs. Ignacio, that a transfer contemplated by the law, if made without
the requisite approval of the Public Service Commission, is not effective and binding in so far as the responsibility of
the grantee under the franchise in relation to the public is concerned. Petitioner assails the applicability of the cited
cases as the operator did not convey, by lease or by sale, the vehicle independently of his rights under the
franchise. The provisions of the statute are clear and prohibit the sale, alienation, of the property, franchise,
certificate, privileges or rights, of the owner or operator of the public service Commission. The law was designed
primarily for the protection of the public interest; and until the approval of the public Service Commission, it still
under the service of the owner or operator standing in the records which the public has a right to rely upon.The
proviso contained in the aforequoted law means only that the sale without the required approval is still valid and
binding between the parties.

Phil. Rabbit v. IAC, 189 SCRA 159

FACTS: A jeepney, owned by Sps Mangune, carrying passengers was bound for Carmen, Rosales, Pangasinan.
Upon reaching barrio Sinayoan, San Manuel, Tarlac, the right rear wheel of the jeepney was detached, so it was
running in an unbalanced position. It made a U-turn, invading and eventually stopping on the western lane of the
road and practically occupied and blocked the greater portion of the western lane. A bus of petitioner Philippine
Rabbit Bus Lines, Inc.) driven by Tomas delos Reyes, which very shortly after the said occurrence, the bus bumped
from behind the right rear portion of the jeepney. As a result of the collision, three passengers of the jeepney died
while the other jeepney passengers sustained physical injuries.

Complaints for recovery of damages were then filed before the Court of First Instance of Pangasinan. In all three
cases, spouses Mangune and Carreon, Manalo, Rabbit and delos Reyes were all impleaded as defendants.
Plaintiffs anchored their suits against spouses Mangune and Carreon and Manalo on their contractual liability. As
against Rabbit and delos Reyes, plaintiffs based their suits on their culpability for a quasi-delict. C FI: ruled that
Manalo and spouses Mangune and Carreon were negligent ordering the defendant, Isidro Mangune, Guillerma
Carreon and Tranquilino Manalo, to pay jointly and severally, cross-claimant Phil. Rabbit Bus Lines.; CA: reverses
by finding delos Reyes negligent.

ISSUE: WON Sps. Mangue owner of the jeepney involved and as common carrier, should be held liable?

RULING: Yes. We find that the proximate cause of the accident was the negligence of Manalo and spouses
Mangune and Carreon. They all failed to exercise the precautions that are needed precisely pro hac vice.

In culpa contractual, the moment a passenger dies or is injured, the carrier is presumed to have been at fault or to
have acted negligently, and this disputable presumption may only be overcome by evidence that he had observed
extra-ordinary diligence as prescribed in Articles 1733, 1755 and 1756 of the New Civil Code or that the death or
injury of the passenger was due to a fortuitous event.

The negligence of Manalo was proven during the trial by the unrebutted testimonies of a Police Investigator, that
Manalo's conviction for the crime of Multiple Homicide and Multiple Serious Injuries with Damage to Property thru
Reckless Imprudence, and the application of the doctrine of res ipsa loquitur supra. The negligence of spouses
Mangune and Carreon was likewise proven during the trial.

To escape liability, defendants Mangune and Carreon offered to show thru their witness Natalio Navarro, an alleged
mechanic, that he periodically checks and maintains the jeepney of said defendants, the last on Dec. 23, the day
before the collision, which included the tightening of the bolts. This notwithstanding the right rear wheel of the
vehicle was detached while in transit. As to the cause thereof no evidence was offered. Said defendant did not even
attempt to explain, much less establish, it to be one caused by a caso fortuito. . . .
In any event, "[i]n an action for damages against the carrier for his failure to safely carry his passenger to his
destination, an accident caused either by defects in the automobile or through the negligence of its driver, is
not a caso fortuito which would avoid the carriers liability for damages

The trial court was therefore right in finding that Manalo and spouses Mangune and Carreon were negligent .
However, its ruling that spouses Mangune and Carreon are jointly and severally liable with Manalo is erroneous.
The driver cannot be held jointly and severally liable with the carrier in case of breach of the contract of
carriage. The rationale behind this is readily discernible. Firstly, the contract of carriage is between the carrier and
the passenger, and in the event of contractual liability, the carrier is exclusively responsible therefore to the
passenger, even if such breach be due to the negligence of his driver. In other words, the carrier can neither shift
his liability on the contract to his driver nor share it with him, for his driver's negligence is his. Secondly, if We make
the driver jointly and severally liable with the carrier, that would make the carrier's liability personal instead of merely
vicarious and consequently, entitled to recover only the share which corresponds to the driver, contradictory to the
explicit provision of Article 2181 of the New Civil Code.