MAGISTRADO, GENE CHARLES B.

TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

1. PANTRANCO v. PUBLIC SERVICE COMMISSION

FACTS

PANTRANCO, a holder of an existing Certificate of Public Convenience is applying to operate additional

buses with the Public Service Commission (PSC) has been engaged in transporting passengers in certain
provinces by means of public transportation utility. Patranco applied for authorization to operate 10
additional trucks. The PSC granted the application but added several conditions for PANTRANCO’s
compliance. One is that the service can be acquired by government upon payment of the cost price less
depreciation, and that the certificate shall be valid only for a definite period of time.

ISSUE

Whether or not PSC can impose said conditions. If so, wouldn’t this power of the PSC constitute undue
delegation of powers.

HELD

The Supreme Court held that there was valid delegation of powers. The theory of the separation of
powers is designed by its originators to secure action at the same time forestall overaction which
necessarily results from undue concentration of powers and thereby obtain efficiency and prevent
deposition. But due to the growing complexity of modern life, the multiplication of subjects of
governmental regulation and the increased difficulty of administering laws, there is a constantly growing
tendency toward the delegation of greater powers by the legislature, giving rise to the adoption, within
certain limits, of the principle of “subordinate legislation.”

All that has been delegated to the Commission is the administrative function, involving the use of
discretion to carry out the will of the National Assembly having in view, in addition, the promotion of public
interests in a proper and suitable manner.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

2. NATIONAL POWER CORPORATION v. COURT OF APPEALS

FACTS

PHIVIDEC Industrial Authority (PIA) granted CEPALCO a temporary authority to retail electric power the
PHIVIDEC Industrial Estate-Misamis Oriental (PIE-MO) for a period of five years with option to take over
the assets of CEPALCO in PIE-MO by PIA upon renewal of agreement. However, CEPALCO proved no
match to the power demands of PIE-MO. This prompted PIA to apply with the National Power Corporation
(NPC) for direct connection, which it approved.

Aggrieved, CEPALCO filed a civil case against NPC for violating its rights as the authorized operator of an
electric light and power system in the PIE-MO. In response, NPC claimed it is authorized in its Charter to
sell electric power in bulk to industrial enterprises. The Regional Trial Court (RTC) rendered its decision in
favor of CEPALCO and ordered NPC to desist. The case reached the Supreme Court which denied
NPC’s appeal.

Thereafter, PIA contracted the NPC for construction of transmission line to the substation of PIA. As
expected, CEPALCO filed a civil case against PIA and NPC to restrain the latter from continuing with the
said project. After a long legal battle, the case once again reached the Supreme Court whereby PIA
contents that it is a public utility which is empowered to operate and serve the power needs of the PIE-
MO.

ISSUE

Whether or not PIA is a public utility.

HELD

YES. The Supreme Court held that a public utility is business engaged in regularly supplying the public
with some commodity or service of public consequence, such as electricity, gas, water, transportation,
telephone or telegraph service.

In the present case, PIA is a subsidiary of PHIVIDEC with governmental and proprietary functions. In its
Charter, it stated that it is empowered to operate and maintain electric light and power systems necessary
or useful for the conduct of industry and commerce. Clearly, PIA is authorized to render indirect service to
the public by its administration of the PIE-MO. Hence, it is a public utility.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

3. AGAN, JR. v. PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC.

FACTS

Sometime in 1993, six business leaders consisting of John Gokongwei, Andrew Gotianun, Henry Sy, Sr.,
Lucio Tan, George Ty and Alfonso Yuchengco met with then President Fidel V. Ramos to explore the
possibility of investing in the construction and operation of a new international airport terminal. To signify
their commitment to pursue the project, they formed the Asia’s Emerging Dragon Corp. (AEDC) which
was registered with the Securities and Exchange Commission (SEC) on September 15, 1993.

On October 5, 1994, AEDC submitted an unsolicited proposal to the Government through the
DOTC/MIAA for the development of NAIA International Passenger Terminal III (NAIA IPT III) under a
build-operate-and-transfer arrangement pursuant to RA 6957 as amended by RA 7718 (BOT Law).1

On December 2, 1994, the DOTC issued an order constituting the Prequalification Bids and Awards
Committee for the implementation of the NAIA Terminal 3 Project. On March 27, 1995, then DOTC
Secretary Jose Garcia endorsed the proposal of AEDC to the National Economic and Development
Authority (NEDA). A revised proposal, however, was forwarded by the DOTC to NEDA on December 13,
1995. On January 5, 1996, the NEDA Investment Coordinating Council (NEDA ICC) – Technical Board
favorably endorsed the project to the ICC – Cabinet Committee which approved the same, subject to
certain conditions, on January 19, 1996. On February 13, 1996, the NEDA passed Board Resolution No.
2 which approved the NAIA IPT III project.

On September 20, 1996, the consortium composed of People’s Air Cargo and Warehousing Co., Inc.
(Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp. (Security Bank)
(collectively, Paircargo Consortium) submitted their competitive proposal to the PBAC. On September 23,
1996, the PBAC opened the first envelope containing the prequalification documents of the Paircargo
Consortium. On the following day, September 24, 1996, the PBAC prequalified the Paircargo Consortium.
On September 26, 1996, AEDC informed the PBAC in writing of its reservations as regards the Paircargo
Consortium, questioning its qualification.

On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and the Paircargo
Consortium containing their respective financial proposals. Both proponents offered to build the NAIA
Passenger Terminal III for at least $350 million at no cost to the government and to pay the government:
5% share in gross revenues for the first five years of operation, 7.5% share in gross revenues for the next
ten years of operation, and 10% share in gross revenues for the last ten years of operation, in accordance
with the Bid Documents. However, in addition to the foregoing, AEDC offered to pay the government a
total of P135 million as guaranteed payment for 27 years while Paircargo Consortium offered to pay the
government a total of P17.75 billion for the same period.

Thus, the PBAC formally informed AEDC that it had accepted the price proposal submitted by the
Paircargo Consortium, and gave AEDC 30 working days or until November 28, 1996 within which to
match the said bid, otherwise, the project would be awarded to Paircargo. As AEDC failed to match the
proposal within the 30-day period, then DOTC Secretary Amado Lagdameo, on December 11, 1996,
issued a notice to Paircargo Consortium regarding AEDC’s failure to match the proposal.

On April 16, 1997, AEDC filed with the Regional Trial Court of Pasig a Petition for Declaration of Nullity of
the Proceedings, Mandamus and Injunction against the Secretary of the DOTC, the Chairman of the
PBAC, the voting members of the PBAC and Pantaleon D. Alvarez, in his capacity as Chairman of the
PBAC Technical Committee. On July 9, 1997, the DOTC issued the notice of award for the project to
PIATCO.
Multiple cases were filed to the Supreme Court praying for the injunction of the said contact and declaring
that the award to PIATCO was null and void.

Respondent PIATCO further alleges that this Court is without jurisdiction to review the instant cases as
factual issues are involved which this Court is ill-equipped to resolve. Moreover, PIATCO alleges that
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

submission of this controversy to this Court at the first instance is a violation of the rule on hierarchy of
courts. They contend that trial courts have concurrent jurisdiction with this Court with respect to a special
civil action for prohibition and hence, following the rule on hierarchy of courts, resort must first be had
before the trial courts.

ISSUE

Whether the Supreme Court is without jurisdiction to review the instant case for violation of the Rule of
hierarchy of Courts.

HELD

No, in the view of the Supreme Court, the crux of the instant controversy involves significant legal
questions. The facts necessary to resolve these legal questions are well established and, hence, need not
be determined by a trial court. The rule on hierarchy of courts will not also prevent this Court from
assuming jurisdiction over the cases at bar. The said rule may be relaxed when the redress desired
cannot be obtained in the appropriate courts or where exceptional and compelling circumstances justify
availment of a remedy within and calling for the exercise of this Court’s primary jurisdiction.

It is easy to discern that exceptional circumstances exist in the cases at bar that call for the relaxation of
the rule. Both petitioners and respondents agree that these cases are of transcendental importance as
they involve the construction and operation of the country’s premier international airport. Moreover, the
crucial issues submitted for resolution are of first impression and they entail the proper legal interpretation
of key provisions of the Constitution, the BOT Law and its Implementing Rules and Regulations. Thus,
considering the nature of the controversy before the Court, procedural bars may be lowered to give way
for the speedy disposition of the instant cases.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

4. THE ILOLILO ICE AND COLD STORAGE CO. v. PUBLIC UTILITY BOARD

FACTS

Petitioner maintains and operates a plant for the manufacture and sale of ice in the City of Iloilo. The
business of petitioner has been carried on with selected customers only. Sec of Public Utility Commission
upon investigation reported that petitioner should be considered a public utility. Petitioner alleges that it is
and has always been operating as a private enterprise.

ISSUE

Whether or not petitioner is a public utility.

HELD

NO. The criterion by which to judge of the character of the use is whether the public may enjoy it by right
or only by permission. The essential feature of a public use is that it is not confined to privileged
individuals, but is open to the indefinite public. The use is public if all persons have the right to the use
under the same circumstances. If the company did in truth sell ice to all persons seeking its service, it
would be a public utility. But if on the other hand, it was organized solely for particular persons under
strictly private contracts, and never was devoted by its owners to public use, it could not be held to be a
public utility without violating the due process of law clause of the Constitution. And the apparent and
continued purpose of the Iloilo Ice and Storage Company has been, and is, to remain a private enterprise
and to avoid submitting to the Public Utility law.

“Public use” means the same as “use by the public.” The essential feature of the public use is that it is not
confined to privileged individuals, but is open to the indefinite public. It is this indefinite or unrestricted
quality that gives it its public character. In determining whether a use is public, we must look not only to
the character of the business to be done, but also to the proposed mode of doing it. If the use is merely
optional with the owners, or the public benefit is merely incidental, it is not a public use, authorizing the
exercise of the jurisdiction of the public utility commission. There must be, in general, a right which the
law compels the owner to give to the general public. It is not enough that the general prosperity of the
public is promoted. Public use is not synonymous with public interest. The true criterion by which to judge
of the character of the use is whether the public may enjoy it by right or only by permission.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

5. PANGASINAN TRANSPORTATION CO., INC. v. THE PUBLIC SERVICE COMMISSION

FACTS

PANTRANCO, a holder of an existing Certificate of Public Convenience is applying to operate additional

buses with the Public Service Commission (PSC) has been engaged in transporting passengers in certain
provinces by means of public transportation utility. Patranco applied for authorization to operate 10
additional trucks. The PSC granted the application but added several conditions for PANTRANCO’s
compliance. One is that the service can be acquired by government upon payment of the cost price less
depreciation, and that the certificate shall be valid only for a definite period of time.

ISSUE

Whether or not PSC can impose said conditions. If so, wouldn’t this power of the PSC constitute undue
delegation of powers.

HELD

The Supreme Court held that there was valid delegation of powers. The theory of the separation of
powers is designed by its originators to secure action at the same time forestall overaction which
necessarily results from undue concentration of powers and thereby obtain efficiency and prevent
deposition. But due to the growing complexity of modern life, the multiplication of subjects of
governmental regulation and the increased difficulty of administering laws, there is a constantly growing
tendency toward the delegation of greater powers by the legislature, giving rise to the adoption, within
certain limits, of the principle of “subordinate legislation.”

All that has been delegated to the Commission is the administrative function, involving the use of
discretion to carry out the will of the National Assembly having in view, in addition, the promotion of public
interests in a proper and suitable manner.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

6. PHILIPPINE AIRLINES, INC. v. CIVIL AERONAUTICS BOARD

FACTS

Philippine Airlines (PAL) argue that the Civil Aeronautics Board (CAB) acted beyond its powers and
jurisidiction in taking cognizance of GrandAir’s application for the issuance of a Certificate of Public
Convenience (CPC), and in issuing a temporary operating permit (TOP) since GrandAir has not been
granted and does not possess a legislative franchise to engage in air transport services.

On the other hand, GrandAir posits that a legislative franchise is no longer a requirement for the issuance
of CPC. Further, the CAB justified its assumption of jurisdiction over GrandAir’s application on the basis of
Republic Act 766 which gives it specific power to issue any TOP or CPC.

ISSUE

Whether or not the CAB can issue CPC or TOP even though prospective applicant has no legislative
franchise.

HELD

YES. The Supreme Court ruled Congress has granted certain administrative agencies the power to grant
licenses for the operation of public utilities. In the present case, the CAB has been duly authorized by
Congress under RA 766 to authorize and issue TOP or CPC for the operation of domestic air transport
services even without a legislative franchise. Nevertheless, such delegation is not without limits since the
law had set specified standards and limitations on how authority should be exercised. Hence, CAB can
issue CPC or TOP even though prospective applicant has no legislative franchise.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

7. PEREÑA v. ZARATE

FACTS

Spouses Teodoro and Nanette Peres (Peres) were engaged in the business of transporting students from
their respective residences in Paraque City to Don Bosco in Pasong Tamo, Makati City, and back. They
employed Clemente Alfaro (Alfaro) as driver of the van. Spouses Nicolas and Teresita Zarate (Zarates)
contracted the Peres to transport their son Aaron to and from Don Bosco.

Considering that the students were due at Don Bosco by 7:15 a.m., and that they were already running
late because of the heavy vehicular traffic on the South Superhighway, Alfaro took the van to an alternate
route at about 6:45 a.m. by traversing the narrow path underneath the Magallanes Interchange. The
railroad crossing in the narrow path had no railroad warning signs, or watchmen, or other responsible
persons manning the crossing. In fact, the bamboo barandilla was up, leaving the railroad crossing open
to traversing motorists.

At about the time the van was to traverse the railroad crossing, PNR Commuter No. 302 (train), was in the
vicinity of the Magallanes Interchange travelling northbound. As the train neared the railroad crossing,
Alfaro drove the van eastward across the railroad tracks, closely tailing a large passenger bus. His view of
the oncoming train was blocked because he overtook the passenger bus on its left side. The train blew its
horn to warn motorists of its approach. The passenger bus successfully crossed the railroad tracks, but
the van driven by Alfaro did not. The impact threw nine of the 12 students in the rear, including Aaron, out
of the van. Aaron landed in the path of the train, which dragged his body and severed his head,
instantaneously killing him.

Thus, the Zarates sued the Peres for breach of contract of carriage and the PNR for quasi-delict. The
RTC ruled in favor of the Zarates. On appeal, the CA affirmed the findings of the RTC.

ISSUE

Whether or not the Peres are liable for breach of contract of carriage?

HELD

The petition has no merit. A common carrier is a 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 such services to the public. Contracts of common carriage are governed by the provisions on
common carriers of the Civil Code, the Public Service Act, and other special laws relating to
transportation. A common carrier is required to observe extraordinary diligence, and is presumed to be at
fault or to have acted negligently in case of the loss of the effects of passengers, or the death or injuries
to passengers. The true test for a common carrier is not the quantity or extent of the business actually
transacted, or the number and character of the conveyances used in the activity, but whether the
undertaking is a part of the activity engaged in by the carrier that he has held out to the general public as
his business or occupation.

Applying these considerations to the case before us, there is no question that the Peres as the operators
of a school bus service were: (a) engaged in transporting passengers generally as a business, not just as
a casual occupation; (b) undertaking to carry passengers over established roads by the method by which
the business was conducted; and (c) transporting students for a fee. Despite catering to a limited
clientele, the Peres operated as a common carrier because they held themselves out as a ready
transportation indiscriminately to the students of a particular school living within or near where they
operated the service and for a fee.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

8. NATIONAL STEEL CORPORATION v. COURT OF APPEALS

FACTS

National Steel Corporation (NSC) as charterer and Vlasons Shipping, Inc. (VSI) as oiwner, entered into a
Contract of Voyage Charter Hire whereby NSC hired VSI’s vessel, the MV Vlasons I to make one voyage
to load steel products at Iligan City and discharge them at North Harbor, Manila. The handling, loading
and unloading of the cargoes were the responsibility of the charterer.

The skids of tinplate and hot rolled sheets shipped were allegedly found to be wet and rusty. NSC alleged
negligence, prompting it to file a claim for damages against VSI who denied liability claiming that the MV
Vlasons I was seaworthy in all respects for the carriage of plaintiff’s cargo. Further, the said vessel was
not a “common carrier” inasmuch as she was under voyage charter contract with NSC as charterer under
the charter party.

ISSUE

Whether or not VSI was a common or private carrier.

HELD

PRIVATE CARRIER. The Supreme Court held that rhe true test of a common carrier is the carriage of
passengers or goods, provided it has space for all who opt to avail themselves of its transportation
service for a fee. A private carriage is undertaken by special agreement, and the carrier does not hold
itself out to carry goods for the general public.

In the present case, VSI did not offer its services to the general public as it carried goods or persons only
for those it chose under the special contract of charter party. In fact, The most typical, although not the
only form of private carriage, is the charter party, a maritime contract by which the charterer, a party other
than the shipowner, obtains the use and service of all or some part of a ship for a period of time or a
voyage or voyages. Hence, VSI is a private carrier.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

9. FIRST PHILIPPINE INDUSTRIAL CORP. v. COURT OF APPEALS

FACTS

In January 1995, FPIC 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 FPIC  to pay
a local tax based on its gross receipts for the fiscal year 1993 pursuant to the LGC.[3] The respondent
City Treasurer assessed a business tax on the FPIC 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, FPIC paid the tax under protest in
the amount of P239,019.01 for the first quarter of 1993.

On January 20, 1994, FPIC filed a letter-protest[4] addressed to the respondent City Treasurer, alleging
exemption under Section 133 (j) of the LGC. City Treasurer denied the protest contending that FPIC
cannot be considered engaged in transportation business, thus it cannot claim. On June 15, 1994, FPIC
filed with the Regional Trial Court of Batangas City a complaint[6] for tax refund with prayer for a writ of
preliminary injunction against respondents City of Batangas and City Treasurer.

Respondents argued that FPIC cannot be exempt from taxes under Section 133 (j) of the LGC 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, RTC ruled against FPIC.
CA ruled against FPIC. Affirmed RTC. MR denied.

ISSUE

Whether or not FPIC is a common carrier.

HELD

YES. 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. Article 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 FPIC 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 FPIC has a
limited clientele does not exclude it from the definition of a common carrier.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

10. ASIA LIGHTERAGE AND SHIPPING, INC. v. COURT OF APPEALS

FACTS

Wheat in bulk was shipped by Marubeni American Corporation of Portland, Oregon on board the vessel
M/V NEO for delivery to the consignee, General Milling Corporation in Manila. The shipment was insured
by the private respondent Prudential Guarantee and Assurance, Inc. against loss or damage. The
carrying vessel arrived in Manila and the cargo was transferred to the custody of the petitioner Asia
Lighterage and Shipping, Inc. The petitioner was contracted by the consignee as carrier to deliver the
cargo to consignee's warehouse. On, 900 metric tons of the shipment was loaded on barge PSTSI III for
delivery to consignee. The cargo did not reach its destination.

It appears that the transport of said cargo was suspended due to a warning of an incoming typhoon. The
petitioner proceeded to pull the barge to Engineering Island off Baseco to seek shelter from the
approaching typhoon. A few days after, the barge developed a list because of a hole it sustained after
hitting an unseen protuberance underneath the water. The barge was then towed to ISLOFF terminal
before it finally headed towards the consignee's wharf. Upon reaching the Sta. Mesa spillways, the barge
again ran aground due to strong current. To avoid the complete sinking of the barge, a portion of the
goods was transferred to three other barges.

The next day, the towing bits of the barge broke. It sank completely, resulting in the total loss of the
remaining cargo. Private respondent indemnified the consignee. Thereafter, as subrogee, it sought
recovery of said amount from the petitioner, but to no avail. The private respondent filed a complaint
against the petitioner for recovery of the amount of indemnity, attorney's fees and cost of suit. The
Regional Trial Court ruled in favor of the private respondent. Petitioner appealed to the Court of Appeals
insisting that it is not a common carrier.

ISSUE

Whether or not the Petitioner is a common carrier.

HELD

YES. Petitioner is a common carrier whether its carrying of goods is done on an irregular rather than
scheduled manner, and with an only limited clientele. A common carrier need not have fixed and publicly
known routes. Neither does it have to maintain terminals or issue tickets. To be sure, petitioner 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.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

11. GATCHALIAN v. DELIM

FACTS

On July 11, 1973, petitioner Reynalda Gatchalian boarded as paying passenger a minibus owned by
respondents. While the bus was running along the highway, a “snapping sound” was heard, and after a
short while, the bus bumped a cement flower pot, turned turtle and fell into a ditch. The passengers were
confined in the hospital, and their bills were paid by respondent’s spouse on July 14. Before Mrs. Delim
left, she had the injured passengers sign an already prepared affidavit waiving their claims against
respondents. Petitioner was among those who signed. Notwithstanding the said document, petitioner filed
a claim to recover actual and moral damages for loss of employment opportunities, mental suffering and
inferiority complex caused by the scar on her forehead. Respondents raised in defense force majeure and
the waiver signed by petitioner. The trial court upheld the validity of the waiver and dismissed the
complaint. The appellate court ruled that the waiver was invalid, but also that the petitioner is not entitled
to damages.

ISSUE

Whether or not the Respondent was negligent.

HELD

YES. In case of death or injuries to passengers, a statutory presumption arises that the common carrier
was at fault or had acted negligently "unless it proves that it [had] observed extraordinary diligence as
prescribed in Articles 1733 and 1755." To overcome this presumption, the common carrier must show to
the court that it had exercised extraordinary diligence to present the injuries. The standard of
extraordinary diligence imposed upon common carriers is considerably more demanding than the
standard of ordinary diligence. A common carrier is bound to carry its passengers safely "as far as human
care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to
all the circumstances".

The records before the Court are bereft of any evidence showing that respondent had exercised the
extraordinary diligence required by law. The obvious continued failure of respondent to look after the
roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus
after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers,
constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the
part of respondent and his driver.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

12. ABOITIZ SHIPPING CORP. v. COURT OF APPEALS

FACTS

Anacleto Viana boarded the vessel M/V Antonia owned by petitioner Aboitiz Shipping Corp at the port at
San Jose, Occidental Mindoro, bound for Manila. The vessel arrived at Pier 4, North Harbor, Manila and
was taken over by Pioneer Stevedoring for the latter to unload the cargoes from the said vessel pursuant
to their Memorandum of Agreement. An hour after the passengers and Viana had disembarked the vessel
the crane operator began its unloading operation. While the crane was being operated, Viana who had
already disembarked the vessel remembered that some of his cargoes were still loaded there. He went
back and while he was pointing to the crew where his cargoes were, the crane hit him pinning him
between the side of the vessel and the crane resulting to his death. A complaint for damages was filed
against petitioner for breach of contract of carriage. Petitioner contends that Viana ceased to be a
passenger when he disembarked the vessel and that consequently his presence there was no longer
reasonable. CA affirmed the trial court’s order holding Aboitiz liable. Hence the petition.

ISSUE

Whether or not petitioner is still responsible as a carrier to Viana after the latter had already disembarked
the vessel.

HELD

YES. The rule is that the relation of carrier and passenger continues until the passenger has been landed
at the port of destination and has left the vessel owner’s dock or premises. Once created, the relationship
will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the
carrier’s conveyance or had a reasonable opportunity to leave the carrier’s premises. All persons who
remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers,
and what is a reasonable time or a reasonable delay within this rule is to be determined from all the
circumstances, and includes a reasonable time to see after his baggage and prepare for his departure.
The carrier-passenger relationship is not terminated merely by the fact that the person transported has
been carried to his destination if, for example, such person remains in the carrier’s premises to claim his
baggage.
The primary factor to be considered is the existence of a reasonable cause as will justify the presence of
the victim on or near the petitioner’s vessel. We believe there exists such a justifiable cause.  When the
accident occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from
petitioner’s vessel. As earlier stated, a carrier is duty bound not only to bring its passengers safely to their
destination but also to afford them a reasonable time to claim their baggage.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

13. TRANS-ASIA SHIPPING v. COURT OF APPEALS

FACTS

Respondent Atty. Renato Arroyo, a public attorney, bought a ticket from herein petitioner for the voyage of
M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City on November 12, 1991. At around 5:30
in the evening of November 12, 1991, respondent boarded the M/V Asia Thailand vessel during which he
noticed that some repairs were being undertaken on the engine of the vessel. The vessel departed at
around 11:00 in the evening with only one (1) engine running. After an hour of slow voyage, the vessel
stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some
passengers demanded that they should be allowed to return to Cebu City for they were no longer willing
to continue their voyage to Cagayan de Oro City. The captain acceded to their request and thus the
vessel headed back to Cebu City.

In Cebu City, plaintiff together with the other passengers who requested to be brought back to Cebu City,
were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Petitioner, the next
day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of defendant.
On account of this failure of defendant to transport him to the place of destination on November 12, 1991,
respondent Arroyo filed before the trial court “an action for damage arising from bad faith, breach of
contract and from tort,” against petitioner. The trial court ruled only for breach of contract. The CA
reversed and set aside said decision on appeal.

ISSUE

Whether or not the petitioner Trans-Asia was negligent.

HELD

YES. Before commencing the contracted voyage, the petitioner undertook some repairs on the cylinder
head of one of the vessel’s engines. But even before it could finish these repairs, it allowed the vessel to
leave the port of origin on only one functioning engine, instead of two. Moreover, even the lone
functioning engine was not in perfect condition as sometime after it had run its course, it conked out. This
caused the vessel to stop and remain adrift at sea, thus in order to prevent the ship from capsizing, it had
to drop anchor. Plainly, the vessel was unseaworthy even before the voyage began. 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.[21] The failure of a common carrier to maintain in seaworthy condition its
vessel involved in a contract of carriage is a clear breach of is duty prescribed in Article 1755 of the Civil
Code.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

14. NEGROS NAVIGATION CO., INC. v. COURT OF APPEALS

FACTS

Private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc. four special cabin
tickets. The tickets were for Voyage No. 457-A of the M/V Don Juan, leaving Manila and going to Bacolod.
Subsequently, the Don Juan collided off the Tablas Strait in Mindoro, with the M/T Tacloban City, an oil
tanker owned by the Philippine National Oil Company (PNOC) and the PNOC Shipping and Transport
Corporation (PNOC/STC). As a result, the M/V Don Juan sank. Several of her passengers perished in the
sea tragedy. The bodies of some of the victims were found and brought to shore, but the four members of
private respondents’ families were never found.

Private respondents filed a complaint against the Negros Navigation, the Philippine National Oil Company
(PNOC), and the PNOC Shipping and Transport Corporation (PNOC/STC), seeking damages for the
death. Petitioner, however, denied that the four relatives of private respondents actually boarded the
vessel as shown by the fact that their bodies were never recovered. Petitioner further averred that the
Don Juan was seaworthy and manned by a full and competent crew, and that the collision was entirely
due to the fault of the crew of the M/T Tacloban City.

In finding petitioner guilty of negligence and in failing to exercise the extraordinary diligence required of it
in the carriage of passengers, both the trial court and the appellate court relied on the findings of this
Court in Mecenas v. Intermediate Appellate Court, which case was brought for the death of other
passengers. In Mecenas, SC found petitioner guilty of negligence in (1) allowing or tolerating the ship
captain and crew members in playing mahjong during the voyage, (2) in failing to maintain the vessel
seaworthy and (3) in allowing the ship to carry more passengers than it was allowed to carry. Petitioner is,
therefore, clearly liable for damages to the full extent.

Petitioner criticizes the lower court’s reliance on the Mecenas case, arguing that, although this case arose
out of the same incident as that involved in Mecenas, the parties are different and trial was conducted
separately. Petitioner contends that the decision in this case should be based on the allegations and
defenses pleaded and evidence adduced in it or, in short, on the record of this case.

ISSUE

Whether the ruling in Mecenas v. Court of Appeals, finding the crew members of petitioner to be grossly
negligent in the performance of their duties, is binding in this case.

HELD

NO. Adherence to the Mecenas case is dictated by this Court’s policy of maintaining stability in
jurisprudence. Where, as in this case, the same questions relating to the same event have been put
forward by parties similarly situated as in a previous case litigated and decided by a competent court, the
rule of stare decisis is a bar to any attempt to relitigate the same issue.

Petitioner contends that, assuming that the Mecenas case applies, private respondents should be allowed
to claim only P43,857.14 each as moral damages because in the Mecenascase, the amount of
P307,500.00 was awarded to the seven children of the Mecenas couple. Here is where the principle of
stare decisis does not apply in view of differences in the personal circumstances of the victims. For that
matter, differentiation would be justified even if private respondents had joined the private respondents in
the Mecenas case. The doctrine of stare decisis works as a bar only against issues litigated in a previous
case. Where the issue involved was not raised nor presented to the court and not passed upon by the
court in the previous case, the decision in the previous case is not stare decisis of the question presently
presented. The Mecenas case cannot be made the basis for determining the award for attorney’s fees.
The award would naturally vary or differ in each case.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

15. SAN MIGUEL CORP. v. HEIRS OF SABINIANO INGUITO

FACTS

San Miguel Corporation entered into a Time Charter Party Agreement with Julius Ouano. SMC chartered
the M/V Doña Roberta owned by Julius Ouano for a period of two years... during the term of the charter,
SMC issued sailing orders to the Master of the MN Doña Roberta, Captain Sabiniano Inguito. In
accordance with the sailing orders, Captain Inguito obtained the necessary sailing clearance from the
Philippine Coast Guard. However, the vessel did not leave Mandaue City until 6:00 a.rn. of the following
day, November 12, 1990. Meanwhile, at 4:00 a.m. of November 12, 1990, typhoon Ruping was spotted.
The typhoon had maximum sustained winds of 240... kilometers per hour near the center with gustiness
of up to 280 kilometers per hour. At 7:00 a.m., November 12, 1990, one hour after the M/V Doña Roberta
departed from Mandaue City and while it was abeam Cawit Island off Cebu, SMC Radio Operator.
Moreno contacted Captain Inguito through the radio and advised him to take shelter. Captain Inguito
replied that they will proceed since the typhoon was far away from them, and that the winds were in their
favor. At 2:00 p.m., while the vessel was two kilometers abeam Boljoon Point, Moreno again
communicated with Captain Inguito and advised him to take shelter. The captain responded that they can
manage. Hearing this, Moreno immediately tried to get in touch with Rico Ouano to tell him that Captain
Inguito did not heed their advice. However, Rico Ouano was out of his office, so Moreno left the message
with the secretary. At 10:00 p.m., the M/V Doña Roberta was 25 miles approaching Sulauan Point.[9]
Moments later, power went out in Moreno's office and resumed at 11:40 p.m. He immediately made a
series of calls to the M/V Doña Roberta but he failed to get in touch with anyone in the vessel. At 1:15
a.m., November 13, 1990, Captain Inguito called Moreno over the radio and requested him to contact
Rico Ouano, son of Julius Ouano, because they needed a helicopter to rescue them. At 2:30 a.m. of
November 13, 1990, the M/V Doña Roberta sank. Out of the 25 officers and crew on board the vessel,
only five survived.

The heirs of the deceased captain and crew, as well as the survivors... filed a complaint for tort against
San Miguel Corporation and Julius Ouano. Julius Ouano filed an answer with cross-claim, alleging that
the proximate cause of the loss of the vessel and its officers and crew was the fault and negligence of
SMC, which had complete control and disposal of the vessel as charterer and which issued the sailing
order for its departure despite being forewarned of the impending typhoon. SMC countered that it was
Ouano who had the control, supervision and responsibilities over the navigation of the vessel.

Contrary to his allegation, SMC argued that the proximate cause of the sinking was Ouano's breach of his
obligation to provide SMC with a seaworthy vessel duly manned by competent crew members.

ISSUE

Whether or not the Petitioner has legal or contractual duty in this case.

HELD:

YES. A charter party is a contract by virtue of which the owner or the agent of a vessel binds himself to
transport merchandise or persons for a fixed price. It has also been defined as a contract by virtue of
which the owner or the agent of the vessel leases for a certain price the whole or a portion of the vessel
for the transportation of goods or persons from one port to another. A charter party may either be a (1)
bareboat or demise charter or (2) contract of affreightment. Under a demise or bareboat charter, the
charterer mans the vessel with his own people and becomes, in effect, the owner of the ship for the
voyage or service stipulated, subject to liability for damages caused by negligence.

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. Seaworthiness is defined as the sufficiency of the vessel in
materials, construction, equipment, officers, men, and outfit, for the trade or service in which it is
employed. It includes the fitness of a ship for a particular voyage with reference to its physical and
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

mechanical condition, the extent of its fuel and provisions supply, the quality of its officers and crew, and
its adaptability for the time of voyage proposed.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

16. FERNANDO v. NORTHWEST AIRLINES, INC.

FACTS

Sometime on December 20, 2001, Jesus Fernando arrived at the LA Airport via Northwest Airlines Flight
No. NW02 to join his family who flew earlier to the said place for a reunion for the Christmas holidays. He
was asked by the Immigration Officer to have his return ticket verified and validated since the date
reflected thereon. Instead the personnel of the respondent merely glanced at his ticket without checking
its status with the computer and peremptorily said that the ticket has been used and could not be
considered as valid. He presented his Elite Platinum World Perks Card but the personnel refused to
check the validity of the ticket in the computer, instead, looked at Jesus Fernando with contempt, then
informed the Immigration Officer that the ticket is not valid. 

The Immigration Officer brought Jesus Fernando to the interrogation room of the Immigration and
Naturalization Services (INS) where he was asked humiliating questions for more than two (2) hours.
When he was finally cleared by the Immigration Officer, he was granted only a twelve (12)-day stay in the
United States (US), instead of the usual six (6) months. He further incurred other expenses due to the
said incident. 

The second incident happened on January 29, 2002, the Fernandos were on their way back to the
Philippines. When the Fernandos reached the gate area where boarding passes need to be presented,
Northwest supervisor Linda Tang stopped them and demanded for the presentation of their paper tickets.
They failed to present the same since Northwest issued electronic tickets (attached to the boarding
passes) which they showed to the supervisor. The personnel rudely pulled them out of the queue.
Elizabeth Fernando explained to Linda Tang that the matter could be sorted out by simply verifying their
electronic tickets in her computer and all she had to do was click and punch in their Elite Platinum World
Perks Card number. But Linda Tang arrogantly told them that if they wanted to board the plane, they
should produce their credit cards and pay for their new tickets, otherwise Northwest would order their
luggage off-loaded from the plane. The Fernandos printed coupon tickets and rushe back to the boarding
gates since the plane was about to depart. But when the Fernandos reached the boarding gate, the plane
had already departed. Hence this petition. 

ISSUE

Whether or not there was a breach of contract of carriage.

HELD

YES. The Fernandos' cause of action against Northwest stemmed from a breach of contract of carriage. A
contract is a meeting of minds between two persons whereby one agrees to give something or render
some service to another for a consideration. There is no contract unless the following requisites concur:
(1) consent of the contracting parties; (2) an object certain which is the subject of the contract; and (3) the
cause of the obligation which is established.[30]

A contract of carriage is defined as one whereby a certain person or association of persons obligate
themselves to transport persons, things, or goods from one place to another for a fixed price. Under
Article 1732 of the Civil Code, this "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" is called a common carrier.Undoubtedly, a contract of carriage existed
between Northwest and the Fernandos. They voluntarily and freely gave their consent to an agreement
whose object was the transportation of the Fernandos from LA to Manila, and whose cause or
consideration was the fare paid by the Fernandos to Northwest.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

17. BRIÑAS v. PEOPLE

FACTS

Emelita Gesmundo, who were bound for Barrio Lusacan, Tiaong, same province. At about 2:00 p.m.,
Train No. 522 left Tagkawayan with the old woman and her granddaughter among the passengers. At
Hondagua the train's complement were relieved, with Victor Millan... taking over as engineman, Clemente
Brinas as conductor, and Hermogenes Buencamino as assistant conductor. Upon approaching Barrio
Lagalag in Tiaong at about 8:00 p.m. of that same night, the train slowed down and the conductor shouted
'Lusacan', Lusacan'. Thereupon, the... old woman walked towards the left front door facing the direction of
Tiaong, carrying the child with one hand and holding her baggage with the other. When Martina and
Emelita were near the door, the train suddenly picked up speed. As a result the old woman and the child...
stumbled and they were seen no more. It took three minutes more before the train stopped at the next
barrio, Lusacan, and the victims were not among the passengers who disembarked thereat.

Next morning, the Tiaong police received a report that two corpses were found along the railroad tracks at
Barrio Lagalag. Repairing to the scene to investigate, they found the lifeless body of a female child, about
2 feet from the railroad tracks, sprawled to the... ground with her belly down, the hand resting on the
forehead, and with the back portion of the head crushed. The investigators also found the corpse of an
old woman about 2 feet away from the railroad tracks with the head and both legs severed and the left
hand missing.

The head was located farther west between the rails. An arm was found midway from the body of the
child to the body of the old woman. Blood, pieces of scattered brain and pieces of clothes were at the
scene. Later, the bodies were identified as those of Martina Bool and Emelita Gesmundo. Among the
personal effects found on Martina was a train ticket.

The Court of First Instance of Quezon convicted defendant-appellant Clemente Briñas for double homi -
cide thru reckless imprudence but acquitted Hermogenes Buencamino and Victor Millan. On appeal, the
respondent Court of Appeals affirmed the judgment of the lower court. During the pendency of the
criminal prosecution in the Court of First Instance of Quezon, the heirs of the deceased victims filed with
the same court a separate civil action for damages against the Manila
Railroad Company

ISSUE

Whether or not damages are recoverable for the death of a passenger.

HELD

YES. The proximate cause of the death of the victims was the premature and erroneous announcement
of petitioner-appellant Briñas. This announcement prompted the two victims to stand and proceed to the
nearest exit. Without said announcement, the victims would have been safely... seated in their respective
seats when the train jerked as it picked up speed. The connection between the premature and erroneous
announcement of petitioner-appellant and the deaths of the victims is direct and natural, unbroken by any
intervening efficient causes.

Petitioner-appellant also argues that it was negligence per se for Martina Bool to go to the door of the
coach while the train was still in motion and that it was this negligence that was the proximate cause of
their deaths. We have carefully examined the records and we agree with the respondent court that the
negligence of petitioner-appellant in prematurely and erroneously announcing the next flag stop was the
proximate cause of the deaths of Martina Bool and Emelita Gesmundo. Any negligence... of the victims
was at most contributory and does not exculpate the accused from criminal liability.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

18. CHINA AIRLINES, LTD. v. INTERMEDIATE APPELLATE COURT

FACTS

Respondents Antonio Salvador and Rolando Lao planned to travel to Los Angeles, California to pursue a
cable business deal involving the distribution of Filipino films. Initially, Morelia Travel Agency booked their
flight with China Airlines (CAL). Upon discovering that Morelia charged higher rates than American
Express Travel (Amexco), they dropped the services of Morelia. Lao called Amexco claiming that he and
Salvador had a confirmed booking with CAL. Lao then gave to Amexco the record locator number that
CAL issued previously to Morelia. CAL confirmed the booking. When the respondents were at the airport,
CAL prevented them from boarding because their names were not in the passenger's manifest. CAL
cancelled the reservations when Morelia revoked the booking. But the respondents were able to get a
flight with Northwest Airlines.

ISSUE

Whether or not the common carrier is liable for moral damages.

HELD

NO. The Petitioners are not entitled to moral damages because not every case of mental anguish, fright
or anxiety calls for the award of moral damages. Further, they are not entitled to exemplary damages
because CAL was not in bad faith and its employees did not act in a wanton, fraudulent, reckless,
oppressive or malevolent manner.

The Respondents did not shell out any money for their CAL tickets. Respondents would have been
entitled to the price difference between the tickets of CAL and Northwest had the latter cost more than the
former but this was not the case. Evidence shows that Northwest tickets ($625) cost less than CAL tickets
($629). The court cannot order reimbursement of the Northwest tickets because this would have enabled
respondents to fly for free. The cost of the tickets were a necessary expense that private respondents
could not pass on to CAL.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

19. PEOPLE v. BAYLON

FACTS

BUENAVENTURA BAYLON alias "TURA" is accused of the crime of rape by Sonia Aldas, who was 12
years old by then. The decision of the trial court found the accused Buenaventura Baylon guilty beyond
reasonable doubt of the crime of rape defined and penalized under Art. 335, Revised Penal Code as
amended, and hereby sentences him to suffer the indivisible penalty of reclusion perpetua and to
indemnify the offended party the sum of Ten Thousand Pesos (P10,000.00) as moral damages and to pay
the costs.
 
ISSUE

Whether or not moral damages be awarded.

RULING

NO. There was no proof of pecuniary loss is necessary in order that moral, nominal, temperate, liquidated
or exemplary damages may be adjudicated. The assessment of such damages, except liquidated ones, is
left to the discretion of the court, according to the circumstances of each case." (Art. 2216, Civil Code).
Moral damages include physical suffering, mental anguish, fright, serious anxiety, besmirched reputation,
wounded feelings, moral shock, social humiliation, and similar injury. Though incapable of pecuniary
computation, moral damages may be recovered if they are the proximate result of the defendant's
wrongful act or omission.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

20. R&B SURETY & INSURANCE CO., INC. v. INTERMEDIATE APPELLATE COURT

FACTS

Maria Isabel Diaz obtained a loan from PNB in the amount of Php 20,000 and submitted a surety bond of
R&B Surety & Insurance Co., Inc. for the sum of Php 20,000. In turn, defendants executed an indemnity
agreement with the chattel mortgage to indemnify the plaintiff. Complaint was filed against the
defendants. Defendant Eliseo Santos filed his answer to the complaint wherein he admits signing the
indemnity agreement but claims that "all the time he thought he was and actually intended to be a
character witness only." In his counterclaim, he asks for attorney's fees, expenses of litigation and other
damages in unspecified amounts against the plaintiff. Defendant Angelina Uson filed a separate answer,
stating her signatures appearing on the indemnity agreement are all forgeries. By way of counterclaim
against the plaintiff, she asks for P100,000.00 as moral damages and a sum equivalent to 25% of the
amount of damages she may recover as and for counsel fees. By way of crossclaim against defendant
Maria Isabel Diaz, she asks for the payment of moral damages and attorney's fees in like amounts for
forging or causing to be forged her signature in the indemnity agreement. Maria Isabel Diaz did not file
her answer to the complaint or the crossclaim of defendant Angelina Uson, and she was declared in
default in both cases.  CFI ruled in favor R&B and held Diaz and Santos liable, dismissed the complaint
against Uson and the counterclaims are dismissed. IAC modified the decision and held R&B to pay Uson
moral damages on a finding that R & B acted in bad faith when it filed the action against Uson.

ISSUE

Whether or not moral damages should be awarded.

HELD

NO. Moral damages are emphatically not intended to enrich a complainant at the expense of a defendant;
they are awarded only to enable the injured party to obtain means, diversion or amusements that will
serve to alleviate the moral suffering he has undergone, by reason of the defendants culpable action. In
other words, the award of moral damages is aimed at a restoration, within the limits of the possible of the
spiritual status quo ante, and it must be proportionate to the suffering inflicted. In the absence of a
wrongful act or omission or of fraud or bad faith, petitioner cannot be adjudged to pay moral damages.
MAGISTRADO, GENE CHARLES B. TRANSPORTATION LAW
JD 3-4 CASE DIGEST – WEEK 1

21. BASCOS v. COURT OF APPEALS

FACTS

Cipriano Trading Enterprise (CIPTRADE), as represented by Rodolfo Cipriano, entered into a hauling
contract with Jibfair Shipping Agency to haul 2,000 m/tons of soya bean meal from Del Pan, Manila to
Calamba, Laguna. CIPTRADE subcontracted with Petitioner bascos to transport and deliver 400 sacks of
soya bean at rate of 50 per metric ton. Petitioner failed to deliver. As a consequence, Cipriano paid Jibfair
the amount of lost goods.

Cipriano demanded reimbursement from petitioner but the latter refused to pay. Cipriano filed a complaint
for sum of money with damages with writ of preliminary attachment for breach of a contract of carriage.
The Trial Court granted the writ of preliminary attachment. Petitioner interposed that there was no contract
of carriage since CIPTRADE leased her cargo truck and that the truck carrying the cargo was hijacked in
Paco, Manila. The trial court rendered in favor of Ciprianos and petitioner was order to pay the amount for
actual damage and attorney’s fees. On appeal, the Court of Appeals affirmed the trial court’s decision.

ISSUE

Whether or not the hijacking referred to as force majeure.

HELD

NO. The Court affirm the holding of the respondent court that the loss of the goods was not due to force
majeure. Common carriers are obliged to observe extraordinary diligence in the vigilance over the goods
transported by them. 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. To exculpate the carrier from liability arising from hijacking, he must prove that the robbers
or the hijackers acted with grave or irresistible threat, violence, or force.