1.

Baliwag Transit v CA
GR No. 80447, January 31, 1989
Miko, 18 years and a passenger of RTIA bus incurred physical injuries when he was thrown out
of the bus driven by Mr. Galago, RTIA’s driver. In result, Miko was hospitalized for his treatment and the
expenses for his hospitalization were borne by his parents.
Thus, Sps Matapang filed a complaint against RTIA bus for the damages Miko incurred arising
from breach of contract of carriage committed by RTIA. However, RTIA reached out personally to Miko and
paid all the damages he incurred. Consequently, Miko signed a “Release of Claims” in favor of RTIA.
However, Sps Matapang averred that the Release of Claim was invalid because they , parents of Miko, did
not sign it. Now, RTIA asks for the dismissal of the complaint filed by Sps Matapang because RTIA was
already discharged of all its liabilities to Miko by virtue of the “Release of Claims” signed by Miko himself.

Question 1 : Are the Sps. Matapang party in the contract of carriage thus, can sue RTIA even without
Miko’s consent?
Suggested Answer:
No. Since the contract of carriage was between Miko and RTIA and given that Miko is already of
legal age, then his parents cannot invoke the breach of contract against RTIA because they are not
considered as party in the contract of carriage. Miko can already validly enter into a contract because he is
already capable of giving consent. Therefore, Sps Matapang, even though they are the parents of Miko
who was dependent from them, does not have legal standing to sue RTIA.

Question 2 : What is the effect of a “Release of Claims” signed by the aggrieved party?
Suggested Answer :
Release of Claims had the effect of a compromise agreement since it was entered into for the
purpose of making a full and final compromise adjustment and settlement of the cause of action involved. A
compromise is a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put
an end to one already commenced (Article 2028, Civil Code).

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
2. Sps Fabre v CA
GR No. 111127, July 26, 1996

Mr and Mrs Chiu were the owners of a minibus. They were using the said vehicle as a school bus
service for pupils of Corpus Christi school. The spouses hired Bernie as their driver. June 23, 2018, Xavier
University hired the minibus for the transportation for the retreat of their graduating students from XU
campus to Manressa back and forth. While travelling, they met an accident. The minibus hit a concrete
barriers that caused passengers to be injured, including Kulas Smith.
The Xavier University and Kulas then filed a criminal complaint against the driver and the trial
court decided in their favor. RTC ruled that the evidence clearly showed the negligence of the driver and
the spouses which ultimately resulted to the accident. The case was appealed but the Court of Appeals
affirmed the decision of the Trial Court. Sps Chiu filed a petition to the SC assailing the decision of the CA
and averred that there was no negligence on their part as they made sure that Bernie, possess a
professional driver’s license and that would suffice the requirement of due diligence.

Question 1: If you were to resolve the case, will you grant the petition of Sps. Chiu? Why or why not?

Suggested Answer :
No. If I were to decide the petition, I will not grant the petition of Sps Chiu. The mere fact that
their drove the minibus negligently, the Sps Chiu as owners of the bus already failed to exercise the
diligence of a good father of the family in the selection and supervision of their employee is fully supported
by the evidence on record. It is not enough that Bernie possesses a professional driver’s license for the
spouses to invoke exercise of due diligence. Pursuant to Arts. 2176 and 2180 of the Civil Code his
negligence gave rise to the presumption that his employers, the spouses were themselves negligent in the
selection and supervision of their employee. As a common carrier, they 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 exercised the diligence of a good father of the family in the selection and
supervision of their employee.
Thus, I will not grant the petition because the spouses are liable under Arts. 2176 and 2180 for
quasi delict fully justify that they are guilty of breach of contract of carriage under Arts. 1733, 1755 and
1759 of the Civil Code.

Question 2: Is the minibus owned by Sps Chiu a common carrier?

Suggested Answer:
Yes. 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.

4. Korean Airlines v. CA
Facts:
Prepared by: Uzziel G. Bacalso Transportation Law
Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
Juanito Lapuz was contracted for employment in Saudi Arabia through Pan Pacific
Recruiting Services, Inc. He was supposed to leave via Korean Airlines, but was
initially listed as a “chance passenger”. According to Lapuz, he was allowed to
check in and was cleared for departure. When he was on the stairs going to the
airplane, a KAL officer pointed at him and shouted, “Down! Down!” and he was
barred from taking the flight. When he asked for another booking, his ticket was
cancelled. He was unable to report for work and so he lost his employment. KAL
alleged that the agent of Pan Pacific was informed that there are 2 seats possibly
available. He gave priority to Perico, while the other seat was won by Lapuz through
lottery. But because only 1 seat became available, it was given to Perico. The trial
court adjudged KAL liable for damages. The decision was affirmed by the Court of
Appeals, with modification on the damages awarded
Korean Airlines v. CA
Facts:
Juanito Lapuz was contracted for employment in Saudi Arabia through Pan Pacific
Recruiting Services, Inc. He was supposed to leave via Korean Airlines, but was
initially listed as a “chance passenger”. According to Lapuz, he was allowed to
check in and was cleared for departure. When he was on the stairs going to the
airplane, a KAL officer pointed at him and shouted, “Down! Down!” and he was
barred from taking the flight. When he asked for another booking, his ticket was
cancelled. He was unable to report for work and so he lost his employment. KAL
alleged that the agent of Pan Pacific was informed that there are 2 seats possibly
available. He gave priority to Perico, while the other seat was won by Lapuz through
lottery. But because only 1 seat became available, it was given to Perico. The trial
court adjudged KAL liable for damages. The decision was affirmed by the Court of
Appeals, with modification on the damages awarded
Korean Airlines v. CA
Facts:
Juanito Lapuz was contracted for employment in Saudi Arabia through Pan Pacific
Recruiting Services, Inc. He was supposed to leave via Korean Airlines, but was
initially listed as a “chance passenger”. According to Lapuz, he was allowed to
check in and was cleared for departure. When he was on the stairs going to the
airplane, a KAL officer pointed at him and shouted, “Down! Down!” and he was
barred from taking the flight. When he asked for another booking, his ticket was
cancelled. He was unable to report for work and so he lost his employment. KAL
alleged that the agent of Pan Pacific was informed that there are 2 seats possibly
available. He gave priority to Perico, while the other seat was won by Lapuz through
lottery. But because only 1 seat became available, it was given to Perico. The trial
court adjudged KAL liable for damages. The decision was affirmed by the Court of
Appeals, with modification on the damages awarded

3. Korean Airlines v. CA
Facts: John Doe was hired in Singapore by X44 Recruiting Services, Inc. He was supposed to
leave via Ivana Airlines but was initially listed as a “chance passenger”. According to Doe, he was allowed
to check in and was cleared for departure. But when he was on the stairs going to the airplane, a plane
Prepared by: Uzziel G. Bacalso Transportation Law
Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
officer barred him from taking the flight. Doe immediately asked for another booking and his ticket was
cancelled. In result, Doe was unable to report for work and so he lost his employment. Ivana Airline alleged
that the agent of X44 Recruiting Services was informed that there are 2 seats possibly available but the
agent prioritized Harry while the other seat was won by Doe through lottery. But because only 1 seat was
available, it was given to Harry. The trial court adjudged Ivana Airlines liable for damages. The decision
was affirmed by the Court of Appeals, with modification on the damages awarded.
Question 1: Was there already perfected contract of carriage between Ivana Airlines and Doe?
Suggested Answer :
Yes. The status of Lapuz as standby passenger was changed to that of a confirmed passenger
when his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance
through immigration and customs clearly shows that he had indeed been confirmed as a passenger of KAL
in that flight. KAL thus committed a breach of the contract of carriage between them when it failed to bring
Lapuz to his destination. A contract to transport passengers is different in kind and degree from any other
contractual relation. The business of the carrier is mainly with the traveling public. It invites people to avail
themselves of the comforts and advantages it offers. The contract of air carriage generates a relation
attended with a public duty. Passengers have the right to be treated by the carrier's employees with
kindness, respect, courtesy and due consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from such employees. So it is that any discourteous
conduct on the part of these employees toward a passenger gives the latter an action for damages against
the carrier.
Question 2 : What kind of contract is a contract of carriage?
Suggested Answer :
A contract of carriage is a consensual contract and perfected by meeting of the minds between the
parties.

4. First Philippine Industrial Corp. v. CA

300 Scra 661, December 29, 1998

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
 FACTS: Philippine Senter Industrial Corp (petitioner) was granted of a pipeline concession under
R.A. 387 to contract, install and operate oil pipelines. The first pipeline concession was granted in 1967 and
was renewed by the Energy Regulatory Board in 1992. In 1995, Philippine Senter for a Mayor's permit in
Villanueva, Misamis Oriental. The municipal Treasurer required petitioner to pay a local tax based on its
gross receipts for the fiscal year in 1993 pursuant to the Local Government Code. To avoid hampering its
operations, petitioner paid the amount of tax for the first quarter under protest. Petitioner argued that as a
pipeline operator with a government concession engaged in transporting petroleum products via pipeline
and as such, it is exempted from payment of tax based on gross receipts as provided under Section 133 of
the Local Government Code. Respondent municipal treasurer, however, refused to make reimbursement
on the ground that petitioner is not a common carrier engaged in transportation business by land, water or
air.
Question 1: Is the contention of the municipal treasurer correct?
Suggested Answer:
No, the contention of the municipal treasurer is wrong. Based on Article 1732 of the Civil Code,
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.
Question 2: What can be a common carrier?
Suggested Answer :
Article 1732 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. Article 1877 deliberately refrained from making such
distinctions.

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
5. Pedro de Guzman v. Court of Appeals
G.R. No. L-47822, December 22, 1988
Facts : Marco Singson was engaged in buying up used bottles and scrap metal in Puerto,
Cagayan de Oro City. When he thinks that his collection of scraps are of sufficient, he would bring such
scrap material to Iligan City for resale using his own 10-wheeler truck. Upon returning to Puerto, he would
load his vehicle with cargo belonging to different merchants to different establishments in Puerto Market
which respondents charged a freight fee for. Sometime in November 2020, herein petitioner Peter Piper, a
merchant and dealer of Malaska Milk Company contracted with respondent for hauling 750 cartons of
milk. Unfortunately, only 150 cartons made it, as the other 600 cartons were intercepted by hijackers along
Libertad National Highway. Hence, petitioners commenced an action against private respondent. In his
defense, respondent argued that he cannot be held liable due to force majuere, and that he is not a
common carrier and hence is not required to exercise extraordinary diligence.
Singson appealed before the CA and averred that the trial court had erred in considering him a
common carrier; in finding that he had habitually offered trucking services to the public; in not exempting
him from liability on the ground of force majeure; and in ordering him to pay damages and attorney’s fees.
CA reversed the judgment of the trial court and held that Singson 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. Peter Piper elevated the case to the Supreme Court.
Question 1: Decide on the petition.
Suggested Answer.
The Court of Appelas erred in ruling that Singson is not a common carrier because of the mere
fact the Singson was only engaged in casual transporting business. Article 1732 of the New Civil Code
avoids any 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 avoids a distinction between a
person or enterprise offering transportation services on a regular or scheduled basis and one offering such
services on an occasional, episodic, and unscheduled basis. It is clear by express provision of the law that
Singson is a common carrier.
Question 2 : What is extraordinary diligence?
Suggested Answer:
Extraordinary diligence is an extreme measure of care and caution which every prudent and
thoughtful person exercises under similar circumstance.
Based on Article 1732 of the Civil Code, 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
Prepared by: Uzziel G. Bacalso Transportation Law
Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
a common carrier.
Based on Article 1732 of the Civil Code, 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.
Based on Article 1732 of the Civil Code, 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.

6. Compania Maritima vs Insurance Company of North America

Mr. Calungsod contracted, by telephone the services of the Avoidiz Express, a shipping
corporation, for the shipment of 2,645 bales of hemp from the former's Sasa private pier at Davao City to
Manila and for their subsequent trans-shipment to Canada. Unfortunately, the barge sank sank, resulting in
the damage or loss of 1,162 bales of hemp loaded therein. All abaca shipments of Macleod were insured
with the Insurance Company of North America against all losses and damages. The insurance company
paid all the damages and losses incurred by Mr Calungsod and sugrogated all its rights against Avoidiz
Express to the insurance company. Failure to receive any amount due, the insurance company filed a
complaint against Avoidiz Express.
Question 1: Was there a valid contract of carriage between Avoidiz Express and Mr. Calugsod?
Suggested Answer:
Yes. The receipt of goods by the carrier has been said to lie at the foundation of the contract to carry
and deliver, and if actually no goods are received there can be no such contract. The liability and
responsibility of the carrier under a contract for the carriage of goods commence on their actual delivery
to, or receipt by, the carrier or an authorized agent and delivery to a lighter in charge of a vessel for
shipment on the vessel, where it is the custom to deliver in that way, is a good delivery and binds the
vessel receiving the freight, the liability commencing at the time of delivery to the lighter and, similarly,
where there is a contract to carry goods from one port to another, and they cannot be loaded directly
on the vessel and lighters are sent by the vessel to bring the goods to it, the lighters are for the time its

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
substitutes, so that the bill of landing is applicable to the goods as soon as they are placed on the
lighters.

Question 2: What is control and possession doctrine?

The control and possession doctrine whenever the control and possession of goods passes to the
carrier and nothing remains to be done by the shipper, then it can be said with certainty that the relation of
shipper and carrier has been establishedQuestion 1: What is control and possession doctrine?

7. Fisher vs. Yangco

Facts : Jimmy Sy is a stockholder in the BB Steamship Company, the owner of a large number of
steam vessels, duly licensed to engage in the coastwise trade of the Philippine Islands. The directors of the
company adopted a resolution "expressly declaring and providing that the classes of merchandise to be
carried by the company in its business as a common carrier do not include dynamite, powder or other
explosives, and expressly prohibiting the officers, agents and servants of the company from offering to
carry, accepting for carriage or carrying said dynamite, powder or other explosives;"
Darwin Ang, the acting Collector of Customs demanded and required of the company the
acceptance and carriage of such explosives; also, he has refused and suspended the issuance of the
necessary clearance documents of the vessels of the company unless and until the company consents to
accept such explosives for carriage. Jimmy is advised and believes that should the company decline to
accept such explosives for carriage, the respondent Attorney-General of the Philippine Islands and the
prosecuting attorney of the Manila intend to institute proceedings against the company, its managers,
agents and servants, to enforce the requirements of the acting-collector of Customs as to the acceptance of
such explosives for carriage. As a consequence, the manager, agents and servants of the company decline
and refuse to cease the carriage of such explosives.
This case was filed by plaintiff to enjoin the steamship company from accepting for carriage on
any of its vessels, dynamite, powder or other explosives, under any conditions whatsoever; to prohibit the
Collector of Customs and the prosecuting officers of the government from all attempts to compel the
company to accept such explosives for carriage on any of its vessels under any conditions whatsoever; and
Prepared by: Uzziel G. Bacalso Transportation Law
Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
to prohibit these officials from any attempt to invoke the penal provisions of Act No. 98, in any case of a
refusal by the company or its officers to do so.
Petitioner argues that a common carrier in the Philippine Islands may decline to accept for carriage
any shipment of merchandise of a class which it expressly or impliedly declines to accept from all shippers
alike, because, as he contends "the duty of a common carrier to carry for all who offer arises from the
public profession he has made, and is limited by it." As such, petitioner argued, the prohibition imposed on
BB Steamship is a prohibition on its liberty by requiring it to engage in business against its will.
Question 1: Is the refusal of the owner and officers of BB Steamship lawful?
Suggested Answer:
In construing Act 98 for the alleged violation, the test is whether the refusal of BB Steamship to
carry the explosives without qualification or conditions may have the effect of subjecting any person or
locality or the traffic is such explosives to an unduly unreasonable or unnecessary prejudice or
discrimination. Common carriers in this jurisdiction cannot lawfully decline to accept a particular class of
goods unless it appears that for some sufficient reason the discrimination for such is reasonable and
necessary. BB Steamship has not met those conditions. Thus, their refusal to accept carriage was not
justifiable.
Question 2 : What is the rationale behind the prohibition against refusal to carry?
The nature of the business of a common carrier as a public employment is such that it is within the power
of the State to impose such just regulations in the interest of the public as the legislator may deem proper.
8 . Kilusang Mayo Uno vs. Garcia
Facts :
The Department of Transportation and Communication (DOTC) and the Land Transportation
Franchising and Regulatory Board (LTFRB) released memoranda allowing provincial bus operators to
charge passengers rates within 15% above and below the official LTFRB rate for a period of one year.
Provincial Bus Operators Association of the Philippines applied for fare rate increase. This was opposed by
the Avilon Foundation, Inc. and Amy Chong a as they were exorbitant and unreasonable.
Question 1 :  Do provincial bus operators have authority to reduce and increase fare rates based on the
order of the LTFRB?
Suggested Answer:
The Legislature delegated to the defunct Public Service Commission the power of fixing rates of public
services and the LTFRB is likewise vested with the same. Such delegation is permitted in order to adapt to
the increasing complexity of modern life. The authority given by the LTFRB to the provincial bus operators
to set a fare range is illegal and invalid as it is tantamount to an undue delegation of legislative authority.
Potestas delegata non delegari protest. What has been delegated cannot be delegated. A further
delegation of power would constitute a negation of the duty in violation of the trust reposed in the delegate
mandated to discharge it directly. The policy of allowing the provincial bus operators to change their fares
would lead to a chaotic situation and would leave the riding public at the mercy of transport operators
Prepared by: Uzziel G. Bacalso Transportation Law
Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
Question 2: What is the presumption of public need for a service?
Suggested Answer :
The presumption of public need for a service shall be deemed in favor of the applicant, while the burden of
proving that there is no need for the proposed service shall be the oppositor's.
.

9. Filcar v Espinas
G.R. No. 174156, June 20, 2012
Gabby Perez was driving his car along Gusa National Highway when he was suddenly hit by
another car. Upon verifying with the LTO in Bulua, Perez found out that the learned owner of the car that
hit him is from Donzal Motors. The said car was actually assigned to Donzal’s Corporate Secretary Atty.
Melvar and, at the time of the incident, was driven by Atty. Melvar’s personal driver, Carlos Compra. Then,
Perez an action for damages against Donzal Motors. Donzal denied liability, claiming that the incident was
not due to its fault or negligence Carlos Compra was not its employee but that of Atty.Melvar...
Question 1 : Is Donzal Motors liable for the damages incurred by Perez?
Suggested Answer :
Yes, Donzal Motors is primarily and directly liable because as registered owner, is deemed the
employer of the driver, Carlos Compra, and is thus vicariously liable under Article 2176 in relation with
Article 2180 of the Civil Code.
As a general rule, one is only responsible for his own act or omission. Thus, a person will generally
be held liable only for the torts committed by himself and not by another. This general rule is laid down in
Article 2176 of the Civil Code, which provides to wit:

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.
. The law, however, provides for exceptions when it makes certain persons liable for the act or
omission of another. One exception is an employer who is made vicariously liable for the tort committed by
his employee. Article 2180 of the Civil Code states:
Article 2180. The obligation imposed by Article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom one is responsible.
Employers shall be liable for the damages caused by their employees and household helpers acting within
the scope of their assigned tasks, even though the former are not engaged in any business or industry.
Question 2 : What is a quasi-delict?
Suggested Answer :
Article 2176 of the Civil Code states, among others, that whoever by act or omission causes
damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is called a quasi-delict.

10. National Development Company vs. CA

G.R. No. L-49407 19 August 1988

Philippine Development Company appointed Marvellous Company of the Philippines as its agent to
manage and operate its vessel, ‘Princess Sara, for and in behalf of its account. In 2010, while en route to
Japan from San Francisco, Princess Sara collided with Uzumaki Shippuden, a Japanese vessel, causing
its cargo to be damaged and lost. The private respondent, as insurer to the consigners, paid almost
Php400,000.00 for said lost and damaged cargo. Hence, the private respondent instituted an action to
recover from Philippine Development Bank.
Question 1 : Which laws govern the loss and destruction of goods due to collision of vessels outside
Philippine waters?
Suggested Answer:
Jurisprudence provides that that the law of the country to which the goods are to be transported
governs the liability of the common carrier in case of their loss, destruction or deterioration pursuant to
Article 1753 of the Civil Code. It is immaterial that the collision actually occurred in foreign waters, such as
Prepared by: Uzziel G. Bacalso Transportation Law
Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
Ise Bay, Japan. It appears, however, that collision falls among matters not specifically regulated by the Civil
Code, hence, we apply Articles 826 to 839, Book Three of the Code of Commerce, which deal exclusively
with collision of vessels. 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.
Question 2 : Can Marvellous Company be jointly and severally liable along with PDC?
Suggested Answer : The agreement between PDC and Marvellous Company shows that the latter was
appointed as agent, a term broad enough to include the concept of ship agent in maritime law.  In fact
Marvelous Company was even conferred all the powers of the owner of the vessel, including the power to
contract in the name of the Philippine Development Corp.  Both owner and agent should be declared jointly
and severally liable since the obligation which is the subject of the action had its origin in a fortuitous act
and did not arise from contract. 

11. Lita Enterprises Inc. vs. Intermediate Appellate Court

Mr. Pablo Domingo purchased 5 brand new Toyota Altis to be used as taxicab. However, he does
not have franchise to operate taxicabs. Thus, he contracted with Abuzz Farm Taxi through its
representative, for the use of the latter’s certificate of public convenience in consideration of an initial
payment of P1,000.00 and a monthly rental of P200.00 per taxicab unit.
To effectuate said agreement, the aforesaid cars were registered in the name of petitioner Abuzz
Farm Taxis but the possession, however, remained with the Mr Domingo. Unfortunately, one of said
taxicabs driven by their employee, Eris Ponce, collided with a motorcycle whose driver, one Eric Baja died
from the head injuries sustained therefrom.
A criminal case was eventually filed against the driver Eris Ponce, while a civil case for damages
was instituted by the heir of the victim, against Abuzz Farm Taxi ,as he is registered owner of the taxicab.
Question 1 : Can Abuzz Farm be held liable for damages?
Suggested Answer :
Prepared by: Uzziel G. Bacalso Transportation Law
Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
 Yes. Unquestionably, the parties herein operated under an arrangement, comonly known as the "kabit
system", whereby a person who has been granted a certificate of convenience allows another person who
owns motors vehicles to operate under such franchise for a fee. A certificate of public convenience is a
special privilege conferred by the government . Abuse of this privilege by the grantees thereof cannot be
countenanced. Although not outrightly penalized as a criminal offense, the "kabit system" is invariably
recognized as being contrary to public policy and, therefore, void and inexistent under Article 1409 of the
Civil Code, It is a fundamental principle that the court will not aid either party to enforce an illegal contract,
but will leave them both where it finds them.
Question 2 : Can Abuzz farm go after Mr Domingo?
Suggested Answer:
No, both Abuzz Farm Taxi and Mr Domingo are barred because they are both in pari delicto. Since
Kabit system is recognized as contrary to public policy, both of them do not possess clean hands to ask the
court for relief.

12. Dangwa Transportation

G.R. No. 95582 , October 7, 1991
When Sailor Bus was at full stop, Francis hastely alighted but Enrico Cemeni, the bus driver
suddenly accelerated forward. Pedro was ran over by the rear right tires of the vehicle. Enrico, intead to
rushing Francis to the hospital, he opted first to bring his other passengers and cargo to their respective
destinations before bringing Pedro to Lepanto Hospital where Francis died.
A case was filed against Sailor bus and Enrico but Sailor Bus contends that they not liable for
negligence of Enrico because they already exercise extraordinary diligence upon supervision of their
employees even as they are not absolute insurers of the public at large.
Question 1: Is Sailor Bus’ liable for the negligence of Enrico?
Suggested Answer:
Yes, because by the contract of carriage, the carrier assumes the express obligation to transport
the passenger to his destination safely and observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by the passenger is right away attributable to the fault
or negligence of the carrier. Failure of Enrico to give ample time to Francis to be on board already

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
constitute negligence and the failure to immediately bring Francis to the hospital despite his serious
condition is a patent and incontrovertible proof of their negligence.
Question 2: What is continuing offer rule?
Suggested Answer:
Under the continuing offer rule , when a public utility stops, it is in effect making a continuous offer
to bus riders. In effect, the driver then must stop his conveyances at a reasonable length of time in order to
afford a passenger to be on board.

13. Everett Seamship Corp. vs. CA

Nikko Trading Co., Inc imported 5 crates of motorcycle spare parts from Hesogawi Trading
Company, Ltd. a foreign corporation based in Japan. The crates (covered by Bill of Lading No.
NGO53MN) were shipped on board of Madammoiselle, a vessel  owned by Forrester Steamship Corp.
Upon arrival at the port of Manila, it was discovered that one of the crates was missing. So, Nikko
Trading made a formal claim for P1,552,500.00, as shown in an Invoice No. MTM-941, dated November
14, 2019. Forrester Streamship Corp. offered to pay only P100,000.00 the maximum amount stipulated
under Clause 18 of the covering bill of lading. Nikko Trading rejected the offer and thereafter instituted a
suit for collection. RTC ruled in favor of Nikko Trading and was affirmed by the CA but deleted the
attorney’s fee. Forrester elevated the case to SC.
QUESTION 1 : Is stipulation in the Bill of Lading limiting the liability of a common carrier valid?
Suggested Answer:
. Yes, a stipulation in the bill of lading limiting the common carrier’s liability for loss or destruction of
a cargo to a certain sum, unless the shipper or owner declares a greater value, is sanctioned by law,
particularly Articles 1749 and 1750 of the Civil Code which provide:

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
ART. 1749.  A stipulation that the common carrier’s liability is limited to the value of the goods appearing in the bill of
lading, unless the shipper or owner declares a greater value, is binding.
ART. 1750.  A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been freely and fairly
agreed upon.
Article 24 of the Civil Code which mandates that “(i)n all contractual, property or other relations, when one of the
parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender
age or other handicap, the courts must be vigilant for his protection.
Hekogawi Trading has been extensively engaged in the trading business. It can not be said to be ignorant
of the business transactions it entered into involving the shipment of its goods to its customers.  Moreover,
Hekogawi Trading has not been heard to complain that it has been deceived or rushed into agreeing to ship
the cargo in petitioner’s vessel.  In fact, it was not even impleaded in this case.
Question 2: What is a bill of lading?
Suggested Answer:
A bill of lading) is a legal document issued by a carrier to a shipper that details the type, quantity and
destination of the goods being carried. A bill of lading also serves as a shipment receipt when the carrier
delivers the goods at a predetermined destination. This document must accompany the shipped products,
no matter the form of transportation, and must be signed by an authorized representative from the carrier,
shipper and receiver.

14. Equitable Leasing Corporation vs Suyom

G.R. No. 143360 September 5, 2002

A Fortuner was driven by Mr. Dy along Macapagal drive when it accidentally hit the house of
Paciana Deloso causing death, injuries and damage to her house. Upon investigation, it was discover
than the vehicle driven by Mr Dy was actually registered in the name of Perla Leasing Corp. Case was
instituted against Mr. Dy and Perla Leasing Corp.

On its defense, Perla Corporation argued that the Fortuner was already sold to Mr Dy, as
evidenced by the Deed of Sale in Mr Dy’s favor. The vehicle was never in the control and possession of
the corporation but it was actually on Mr Dy by virtue of the leasing agreement entered both of them
entered into.

Question 1: Is Perla Leasing Corpration liable for quasi-delict?

Suggested Answer :

Yes. Perla is liable for the deaths and the injuries complained of, because it was the registered
owner of the tractor at the time of the accident. The Court has consistently ruled that, regardless of
Prepared by: Uzziel G. Bacalso Transportation Law
Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
sales made of a motor vehicle, the registered owner is the lawful operator insofar as the public and third
persons are concerned.

Question 2 : Can Perla use the Deed of Sale executed in favor of Mr Dy to escape liability?

Suggested Answer :

No. Because even though there was a DOS executed in favor Mr Dy, the said Deed of Sale was
not registered with the LTO.

Since Perla Leasing Corp remained the registered owner of the tractor, it could not escape
primary liability for the deaths and the injuries arising from the negligence of the driver.

15. GACAL v. PAL

G.R. No. 55300, March 15, 1990
Rancholas, Farhan, and Rajul boarder on Zest Plane going to Palawan. Few minutes after take
off, the plane was hijacked by 6 rebels led with their Commander named Virus. Virus commanded the Pilot
to fly to Afghanistan but the pilot said they will run out of fuel. So the pilot landed the plane to Zamboanga
airport instead. Unfortunately, military personnel were already waiting for the landing of the plane and the
hijackers hostaged all the passengers. Eventually, the military and the hijackers engaged in a fight and
several passengers died and many were injured. Rancholas was nit hurt but his two close friends were
injured and brought to the hospital. Rancholas filed an action for damages against Zest Plane for the
expenses they incurred because of the unfortunately incident. Zest Plane invoked force majeure.
Question 1: Is Zest Plane liable for the damages?
Suggested Answer :
No. The existence of force majeure has been established exempting respondent PAL from the
payment of damages to its passengers who suffered death or injuries in their persons and for loss of their
baggage. The source of a common carrier‘s legal liability is the contract of carriage, and by entering into
said contract, it binds itself to carry the passengers safely as far as human care and foresight can provide.
There is breach of this obligation if it fails to exert extraordinary diligence according to all the circumstances

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law
of the case in exercise of the utmost diligence of a very cautious person. The failure to transport petitioners
safely from Davao to Manila was due to the skyjacking incident, all members of the MNLF, without any
connection with private respondent, hence, independent of the will of either the airline or of its passengers.
Under normal circumstances, Zest Plane might have foreseen the skyjacking incident which could have
been avoided had there been a more thorough frisking of passengers and inspection of baggages as
authorized by R.A. No. 6235. But the incident in question occurred during Martial Law where there was a
military take-over of airport security including the frisking of passengers and the inspection of their luggage
preparatory to boarding domestic and international flights.

Question 2: What constitutes fortuitous event?

Suggested Answer:
In order to constitute a caso fortuito or force majeure that would exempt a person from liability
under Article 1174 of the Civil Code, it is necessary that the following elements must concur: (a) the cause
of the breach of the obligation must be independent of the human will (the will of the debtor or the obligor);
(b) the event must be either unforeseeable or unavoidable; (c) the event must be such as to render it
impossible for the debtor to fulfill his obligation in a normal manner; and (d) the debtor must be free from
any participation in, or aggravation of the injury to the creditor. Caso fortuito or force majeure, by definition,
are extraordinary events not foreseeable or avoidable, events that could not be foreseen, or which, though
foreseen, are inevitable.

Prepared by: Uzziel G. Bacalso Transportation Law

Juris Doctor 3 Atty. Chester Castaños
Xavier Ateneo Law