De Guzman v. CA, G.R. No.

L-47822, 22 December 1988

In this legal case, Pedro de Guzman, the petitioner, took action against Ernesto Cendana, the
respondent, regarding a dispute over the transportation of goods. Cendana, a junk dealer, used his
trucks to transport scrap material from Pangasinan to Manila for resale. He also occasionally transported
goods for others on his return trips. De Guzman contracted Cendana to haul 750 cartons of milk from
Makati to Urdaneta, but only 150 cartons were delivered due to a hijacking.

De Guzman sued Cendana, claiming he was a common carrier and should be held liable for the lost
goods. Cendana argued that he was not a common carrier and cited force majeure as a defense.

The central issue was whether Cendana could be classified as a common carrier. The Civil Code's
definition of "common carriers" was examined. The court determined that Cendana did qualify as a
common carrier, despite occasional services and lower fees.

Regarding liability, the court discussed the duties of extraordinary diligence for common carriers. They
highlighted Article 1734, which lists exempting causes for loss, and Article 1735, which presumes fault if
the cause isn't exempted. The hijacking in this case didn't fit the exempting causes, making Cendana
presumed at fault unless he proved extraordinary diligence.

However, the court found that the specific event—the hijacking—was a fortuitous event beyond
Cendana's control. The hijackers used grave threat and violence, and the loss was deemed outside the
carrier's control. Thus, Cendana was not held liable for the undelivered goods.

The Court of Appeals' decision was affirmed, determining that Cendana was not liable for the lost
merchandise. The petitioner's claim was denied, and the court ruled that Cendana was not a common
carrier and that the loss was due to a fortuitous event.

Fisher v. Yangco Steamship Co., G.R. No. L-8095 31 March 1915

In the case of F.C. Fisher v. Yangco Steamship Company, Fisher, a stockholder of Yangco Steamship
Company, filed a case against the company and government officials. The company's Board of Directors
had resolved not to carry explosives, but the Acting Collector of Customs demanded that they accept
such explosives for carriage. Fisher sought to compel the company to adhere to the board's resolution
and prevent officials from forcing the carriage of explosives. However, the Supreme Court dismissed the
complaint, stating that common carriers like Yangco cannot unreasonably refuse goods based on laws
governing their operation. The Court emphasized that carriers must not discriminate without substantial
reasons. The case highlighted the state's power to regulate carriers for the public interest. The Court
ruled that unless explosives' transport is proven unsafe, carriers cannot unjustly discriminate against
them. Consequently, the demurrer to evidence was sustained, and Fisher's petition was dismissed.

In the case of The United States v. Pascual Quinajon and Eugenio Quitoriano, the defendants were
charged with violating Act No. 98, a regulation related to commerce in the Philippine Islands. The
defendants were engaged in the transportation of passengers and merchandise at a port. They were
accused of charging different rates for unloading rice for the provincial government compared to other
shippers, thereby violating the prohibition on unjust discrimination under Act No. 98.

The court's decision analyzed the provisions of Act No. 98, which prohibited common carriers from
charging unequal rates for similar services. It emphasized that common carriers must charge the same
or analogous services at the same rate unless there are legitimate differences in handling and
transportation costs. The court upheld that discrimination in charges is prohibited if it favors certain
individuals, companies, or localities to the detriment of others.

The court also discussed the legality of special agreements with shippers, stating that such agreements
are permissible if they benefit the carrier's legitimate business interests and are not intended to
discriminate. However, the law requires that such agreements apply equally to all shippers under similar
conditions.

In the case, the defendants charged higher rates to the provincial government for unloading rice than
they did to other shippers, and the court concluded that this constituted unjust discrimination. The
court modified the lower court's judgment, ordering the defendants to return the excess amount they
collected from the provincial government, thus affirming the judgment with this modification.
 First Philippine Industrial Corporation v. Court of Appeals

The case involves First Philippine Industrial Corporation (FPIC) filing a complaint against the City of
Batangas for a business tax refund. FPIC is a company engaged in transporting petroleum products via
pipelines. The City of Batangas imposed a business tax on FPIC's gross receipts for the fiscal year 1993.
FPIC paid the tax under protest and subsequently filed a complaint for a tax refund, arguing that it
should be exempt from such taxes under the Local Government Code and the Petroleum Act.

The trial court dismissed FPIC's complaint, stating that FPIC was not exempt from the tax and that tax
exemptions should be strictly construed. FPIC appealed to the Court of Appeals, which affirmed the trial
court's decision, leading to FPIC's petition for review to the Supreme Court.

The Supreme Court ruled in favor of FPIC, stating that FPIC qualifies as a "common carrier" engaged in
transporting goods for hire, which makes it exempt from the business tax imposed by the City of
Batangas. The Court emphasized that the definition of "common carrier" does not require the use of
motor vehicles for transportation and that FPIC's operations as a pipeline company fall within the scope
of a common carrier. The Court further explained that the legislative intent behind the exemption in the
Local Government Code was to avoid double taxation on common carriers and that FPIC was already
subject to a common carrier's tax under the National Internal Revenue Code.

As a result, the Court granted FPIC's petition and reversed the decision of the Court of Appeals, allowing
FPIC to claim a refund of the business tax it had paid to the City of Batangas.

VLASONS SHIPPING, INC vs. CA and NATIONAL STEEL

CORPORATION
[G.R. No. 112350. December 12, 1997]

In two legal cases (G.R. No. 112350 and G.R. No. 112287) dated December 12, 1997,
involving VLASONS SHIPPING, INC (VSI), the National Steel Corporation (NSC), and a
vessel named MV 'VLASONS I', the main points were as follows:

Facts:

• NSC chartered VSI's vessel for a voyage to transport steel products.

• The cargo was found damaged upon arrival in Manila.
• NSC sued VSI for losses, alleging negligence and lack of diligence in managing the
vessel.

Issue:

• The main question was whether VSI was considered a common carrier or a private
carrier.

Held:

• The court determined that VSI was a private carrier.

• The vessel only carried goods for those it chose under a "special contract of charter
party."
• Private carriers have more flexibility in stipulating duties and obligations in their
contracts compared to common carriers.
• The strict provisions of the Civil Code related to common carriers don't necessarily apply
to private carriers, as they don't serve the general public.

In essence, the cases revolved around whether VSI was held to the same standards and
obligations as common carriers or whether it had more leeway due to being a private
carrier operating under a charter party. The court ruled that VSI was a private carrier and
thus held different obligations and liabilities compared to common carriers.

Valenzuela Hardwood and Industrial Supply, Inc. v. Court of Appeals and Seven Brothers Shipping
Corporation

In this legal case, Valenzuela Hardwood and Industrial Supply, Inc. (Valenzuela) appealed
against the Court of Appeals' decision in a dispute with Seven Brothers Shipping
Corporation (Seven Brothers) regarding a lost cargo of logs. The central question was
whether a stipulation in a charter party, which exempted the shipowner from liability for
any damages to the cargo, was valid. The Court of Appeals had affirmed the validity of
the stipulation.

Facts:
• Valenzuela entered into a charter party agreement with Seven Brothers to transport its
logs.
• The logs were lost due to the sinking of the vessel.
• Valenzuela had insured the logs and received indemnity from South Sea Surety and
Insurance Co., Inc.
• Valenzuela sought compensation from both Seven Brothers and South Sea.

Issue:

• The main issue was whether the stipulation in the charter party exempting Seven
Brothers from liability for the lost logs was valid.

Court's Ruling:

• The Court upheld the validity of the stipulation in the charter party.
• It explained that in a contract of private carriage, parties can freely stipulate their duties
and obligations, and such stipulations are binding on them.
• Unlike common carriers, private carriers do not involve the general public and have
more flexibility in their agreements.
• The Court cited the case of Home Insurance Co. vs. American Steamship Agencies, Inc.
to support the notion that a stipulation exempting a private carrier from liability, even
for the negligence of its agents, is valid.
• The Court rejected the application of certain Civil Code articles and case precedents that
were cited by Valenzuela, as they were inapplicable to private carriers or did not match
the factual context of the case.
• The Court also clarified that Valenzuela could not collect twice for the same loss since it
had already received indemnity from the insurance company.

In summary, the Court affirmed the validity of the stipulation exempting Seven Brothers
from liability for the lost cargo and denied Valenzuela's appeal.

Torres-Madrid Brokerage, Inc. v. FEB Mitsui Marine Insurance Co., Inc. and Benjamin P. Manalastas,
doing business under the name of BMT Trucking Services

In the case of Torres-Madrid Brokerage, Inc. (TMBI) v. FEB Mitsui Marine Insurance Co.,
Inc. and Benjamin P. Manalastas, the court resolved a dispute related to the loss of
transported cargo. TMBI, a customs brokerage company, was hired by Sony Philippines,
Inc. to facilitate the transport of electronic goods from the port to its warehouse. TMBI
 subcontracted the delivery to BMT Trucking Services (BMT). However, during transit, a
truck carrying the cargo disappeared, and both the driver and the goods went missing.
Mitsui, the insurer of the goods, paid Sony for the loss and was subrogated to its rights.

The court determined that TMBI, despite not owning its own delivery trucks, was
considered a common carrier because it offered transport services as part of its
brokerage activities. As a common carrier, TMBI was held liable for the loss of the cargo,
unless it could prove that the loss fell under specific exemptions.

TMBI argued that the loss was due to a fortuitous event, namely, hijacking. However, the
court rejected this argument because TMBI had previously alleged that the cargo was
stolen by its driver, which contradicted its new claim. The court found TMBI liable for
breach of contract.

BMT, the subcontracted carrier, was also held liable to TMBI for the breach of their
contract of carriage. BMT was presumed to be at fault for the loss, and its failure to
prove that it observed extraordinary diligence led to its liability.

As a result, the court ordered TMBI to pay Mitsui for the loss of the cargo, and Benjamin
P. Manalastas (the owner of BMT) was ordered to reimburse TMBI for the amounts paid
to Mitsui. The court clarified that TMBI's liability was based on breach of contract, while
BMT's liability stemmed from its own breach of contract with TMBI.

Loadstar Shipping Co., Inc. v. Court of Appeals and the Manila Insurance Co., Inc

In this case, Loadstar Shipping Co., Inc. (Loadstar) is the petitioner appealing a decision
made by the Court of Appeals in favor of Manila Insurance Co., Inc. (MIC), the
respondent. The case revolves around a shipment of goods on board Loadstar's vessel,
M/V "Cherokee," which sank off Limasawa Island due to a storm. MIC, as the insurer of
the goods, paid the insured amount to the cargo owner and sought to recover the
amount from Loadstar, claiming that the sinking of the vessel was due to Loadstar's
negligence.

The court proceedings focused on several key issues:

1. Carrier Classification: Loadstar argued it was a private carrier, while MIC contended it
was a common carrier. The court determined that Loadstar was a common carrier based
on legal definitions and circumstances.
2. Seaworthiness: The court found that the vessel was not seaworthy when it embarked on
the voyage. Loadstar's negligence in not maintaining a seaworthy vessel and allowing it
to sail despite knowledge of an approaching typhoon contributed to the sinking.
3. Limited Liability: Loadstar claimed that its liability was limited due to contractual
provisions. However, the court declared such stipulations as null and void, and Loadstar
could not evade responsibility for loss or damage to the goods.
4. Prescription: Loadstar argued that the claim was barred by prescription (time limitation).
The court determined that the claim had not yet prescribed, and the one-year
prescriptive period under the Carriage of Goods by Sea Act applied.

In conclusion, the Supreme Court denied Loadstar's petition and upheld the Court of
Appeals' decision, holding Loadstar liable for the loss of the cargo due to its negligence
and lack of seaworthiness.

Sabena Belgian World Airlines v. Hon. Court of Appeals and Ma. Paula San Agustin

The case involves a dispute between SABENA Belgian World Airlines

(petitioner) and Ma. Paula San Agustin (respondent) regarding the airline's
liability for lost luggage. The respondent's luggage, containing valuable items,
was lost during a flight. She filed a complaint against the airline for damages.
The trial court ruled in favor of the respondent, awarding damages. The airline
appealed to the Court of Appeals, which upheld the trial court's decision.

The court determined that the airline's liability is governed by the principle of
"extraordinary diligence" required of common carriers. The court found that
the airline's negligence led to the loss of the luggage, and it rejected the
airline's argument that the respondent's negligence contributed to the loss.
The court noted that the Warsaw Convention, which limits the liability of
international carriers, does not apply in cases of willful misconduct or gross
negligence. As the respondent's luggage was lost twice and there was gross
negligence on the part of the airline, the Warsaw limitations did not apply. The
court affirmed the award of damages, including moral and exemplary
damages, as well as attorney's fees and costs.
In summary, the court upheld the decision that the airline was grossly
negligent in handling the luggage and thus liable for damages beyond the
limitations set by the Warsaw Convention.

Spouses Dante Cruz and Leonora Cruz v. Sun Holidays, Inc

In this case, Spouses Dante and Leonora Cruz (petitioners) filed a Complaint against Sun
Holidays, Inc. (respondent), seeking damages for the death of their son Ruelito C. Cruz,
who died in a boat accident while staying at the Coco Beach Island Resort owned by the
respondent. The incident occurred when the boat M/B Coco Beach III, carrying Ruelito
and other passengers, capsized during a squall.

The trial court dismissed the complaint, finding that the respondent was not liable. The
Court of Appeals also denied the petitioners' appeal, ruling that the incident was a
fortuitous event and that the respondent had exercised extraordinary diligence.

However, the Supreme Court reversed the Court of Appeals' decision. It held that the
respondent was a common carrier based on the nature of its ferry services and its
offering of tour packages that included transportation. As a common carrier, the
respondent was required to observe extraordinary diligence for the safety of its
passengers.

The Court found that the respondent's ferry service was not rendered with the necessary
diligence, considering the weather conditions and the evidence that the boat had
suffered engine trouble before capsizing. Therefore, the Court awarded indemnity for
death, loss of earning capacity, moral damages, and exemplary damages to the
petitioners. The Court also granted attorney's fees and imposed interest on the amounts
awarded.

The case highlights the legal obligations of common carriers and the duty to exercise
extraordinary diligence in ensuring the safety of passengers, even in the face of
unexpected events.
Baliwag Transit Corp vs Court of Appeals

In this case, the petitioner, Baliwag Transit, was sued by the respondents, Spouses
Sotero Cailipan, Jr. and Zenaida Lopez, and their son George, for damages due to a
breach of contract of carriage. The complaint alleged that George, a paying passenger
on a Baliwag bus, suffered serious injuries when he was thrown off the bus due to the
negligence of the bus driver. Baliwag claimed that George's injuries were caused by his
own voluntary actions.

During the proceedings, George executed a "Release of Claims" in exchange for a sum
of money, acknowledging the receipt of the amount and releasing Fortune Insurance
and Baliwag from any liability arising from the incident. Baliwag argued that this release
should absolve them of liability.

The trial court ruled in favor of Baliwag, finding that George's release was valid since he
was of legal age and had the capacity to enter into the agreement. The court also ruled
that the suit was between George and Baliwag, and since George executed the release,
the complaint should be dismissed.

The Court of Appeals disagreed, stating that the release could not be used as a valid
ground for dismissal because it did not have the conformity of all parties involved,
particularly George's parents, who had a substantial interest in the case.

The Supreme Court reversed the decision of the Court of Appeals and upheld the trial
court's ruling. The Court held that since the contract of carriage was between George
and Baliwag, and George was of legal age and capable of acting on his own behalf, his
execution of the release was valid and effectively discharged Baliwag from liability. The
Court emphasized that the release's broad language included all claims and causes of
action arising from the incident. Therefore, the Court reinstated the trial court's decision,
dismissing the complaint and third-party complaint.

Compania Maritima vs
Insurance Company of
North America

In this case, Compañia Maritima was contracted by Macleod and Company to transport 2,645 bales
of hemp from Davao City to Manila and then to Boston, Massachusetts, USA. The shipment was
loaded onto Compañia Maritima's barges. However, one of the barges, LCT No. 1025, sank while
waiting to be loaded onto the S.S. Bowline Knot. The damaged cargo was insured with the Insurance
Company of North America, which paid an insurance amount to Macleod and Company. The
insurance company then sued Compañia Maritima for the amount it had paid.

The issues brought up in the case included whether there was a contract of carriage between the
carrier and the shipper despite the cargo not being loaded directly onto the ship, whether the carrier
was liable for the loss of the cargo, whether the insurance company could sue the carrier as the
assignee of the shipper's rights, whether the carrier's desistance from presenting certain evidence
constituted an admission, and whether the insurance company had the right to sue.

The court affirmed the decision of the lower court, finding that there was indeed a contract of
carriage between the carrier and the shipper even if the cargo was not directly loaded onto the ship.
The carrier was found liable for the loss due to insufficient precautions and not a fortuitous event.
The court upheld the insurance company's right to sue as an assignee of the shipper, and it
disregarded the carrier's desistance as implying an admission. The court also found that the
insurance company had the legal personality to maintain the action.

Sps. Perena vs Sps Nicolas

In the case of Spouses Perena vs. Spouses Nicolas, the Perena spouses were engaged in
a school bus service to transport students. In 1996, they were contracted to transport
the Zarate's son to school. One day, while transporting students, their van attempted to
overtake a bus near a railroad crossing. Due to loud music and poor visibility, the van
didn't notice an oncoming train's warning and was hit, resulting in the death of a
student, Aaron Zarate. The Zarate spouses sued for damages.

The main issues were whether the Perenas breached their contract as common carriers
and whether their actions were negligent. The Supreme Court ruled in favor of the
Zarate spouses, affirming that the Perenas were indeed common carriers and thus held
to the high standard of care required by law for such entities. The Court emphasized
that being a common carrier depends on the nature of the activity undertaken and
holding out to the public as ready to transport goods or persons for a fee. Despite
having a limited clientele, the Perenas qualified as common carriers as they offered
transportation services to students within their operational area for a fee.

The decision reinforced the responsibility of common carriers to exercise extraordinary

diligence in ensuring the safety of passengers and their cargo.
 LTFRB vs Valenzuela
In the case of The Land Transportation Franchising and Regulatory Board (LTFRB) and
the Department of Transportation (DOTR) vs. Hon. Carlos A. Valenzuela, DBDOYC, Inc.,
the issue revolved around the issuance of a writ of preliminary injunction in favor of
DBDOYC, Inc. (DBDOYC), which operates the Angkas motorcycle-hailing mobile
application. The LTFRB and DOTR, as petitioners, were restrained by the Regional Trial
Court of Mandaluyong City from regulating DBDOYC's business operations through the
Angkas app. The main points of the case are as follows:

1. The Department of Transportation and Communications issued Department Order No.

2015-11, amending existing regulations and introducing new classifications for public
transportation, including Transportation Network Companies (TNC) and Transportation
Network Vehicle Service (TNVS).
2. DBDOYC launched the Angkas app in December 2016, connecting motorcycle drivers
with potential passengers without obtaining the necessary TNC accreditation from the
LTFRB.
3. Despite warnings from the LTFRB, DBDOYC continued its operations without seeking
TNC accreditation.
4. DBDOYC filed a petition for declaratory relief with an application for a temporary
restraining order and writ of preliminary injunction against the LTFRB and DOTR.
DBDOYC argued that its app does not constitute public transportation, that its drivers
are not engaged in public service, and that existing regulations do not apply to its
business.
5. The Regional Trial Court issued a temporary restraining order and later a writ of
preliminary injunction, finding that DBDOYC's operations were not prohibited by law
and that it had a clear and unmistakable right to conduct its business.
6. The LTFRB and DOTR filed a petition for certiorari with the Supreme Court, arguing that
the RTC gravely abused its discretion in issuing the preliminary injunction.
7. The Supreme Court ruled in favor of the petitioners, determining that the RTC had
committed grave abuse of discretion. The Court pointed out that DBDOYC's operations,
facilitated by the Angkas app, had implications on public interest and public safety. Even
if DBDOYC's drivers were not classified as common carriers, their services were
accessible to the public through the app, and this warranted proper regulation.
8. The Court clarified that while the RTC's injunction was annulled, the main case for
declaratory relief should continue with further proceedings.

In summary, the case involved the issuance of a writ of preliminary injunction to

DBDOYC, Inc., preventing the LTFRB and DOTR from regulating its Angkas app-based
motorcycle services. The Supreme Court ruled in favor of the LTFRB and DOTR, annulling
the injunction and emphasizing the need for proper regulation in the interest of public
safety.

Planters Products Inc vs Court of Appeals

In the case of Planters Products, Inc. (PPI) vs. Court of Appeals, Soriamont Steamship
Agencies, and Kyosei Kisen Kabushiki Kaisha, the issue revolves around whether a
charter-party between a shipowner and a charterer can transform a common carrier into
a private one, negating the presumption of negligence in case of cargo loss or damage.

PPI purchased a large amount of Urea 46% fertilizer from Mitsubishi International
Corporation and shipped it on the cargo vessel M/V "Sun Plum" owned by Kyosei Kisen
Kabushiki Kaisha (KKKK) from Alaska to the Philippines. A charter-party was entered into
between Mitsubishi and KKKK, and the cargo was loaded in bulk onto the vessel's holds.

Upon arrival in the Philippines, PPI found a shortage and contamination in the cargo. PPI
filed a claim against Soriamont Steamship Agencies (SSA), the resident agent of KKKK.
The trial court ruled in favor of PPI, but the Court of Appeals reversed this decision,
absolving the carrier from liability.

The main issue was whether the charter-party transformed KKKK from a common carrier
to a private carrier, affecting the presumption of negligence. The Court held that the
charter-party retained the vessel's possession and control with the shipowner. A
shipowner in a time or voyage charter retains possession and control of the ship,
making it a common carrier. The Court found that KKKK had exercised diligence in
handling the cargo and that PPI failed to prove negligence on the part of the carrier.

The Court also emphasized that the cargo, Urea fertilizer, was susceptible to
deterioration and that bulk shipping of such goods carried inherent risks. Therefore, the
carrier's exercise of diligence and the nature of the cargo's vulnerability to loss or
damage were taken into account in determining the carrier's liability.

In conclusion, the Court affirmed the decision of the Court of Appeals, absolving the
carrier from liability, as it was able to prove that it had exercised due diligence, and the
nature of the cargo's vulnerability to loss or damage was considered in determining
liability.
Oriental Assurance Corp vs Manuel Ong
In the case of Oriental Assurance Corp. v. Ong (G.R. No. 189524, October 11, 2017), the
parties involved were JEA Steel Industries, Inc. (consignee), Asian Terminals (arrastre
contractor), Manuel Ong (truck owner), and Oriental Assurance Corp (insurer). The case
revolved around a shipment of aluminum-zinc-alloy-coated steel sheets that were
damaged during transportation. The timeline of events included the arrival of the
shipment, storage by the arrastre contractor, loading onto trucks, and delivery to the
consignee's plant. Eleven of the steel coils were found to be damaged upon delivery.

Oriental Assurance Corp., the insurer, paid JEA Steel for the damaged coils and then
sought indemnity from Ong and Asian Terminals. Oriental filed a lawsuit, claiming that
both Ong and Asian Terminals were responsible for the damage. The trial court
dismissed the complaint, finding no evidence of their liability. Oriental appealed, and the
Court of Appeals ruled that while Asian Terminals failed to prove they exercised due
diligence, Oriental's claim was barred by prescription because it was filed beyond the
specified period.

The main issues were whether Ong was liable for the cargo damage and whether the
claim against Asian Terminals was barred by prescription. The Court of Appeals found
that the damage had occurred before the coils were loaded onto Ong's trucks,
absolving him of liability. It also held that Oriental's claim against Asian Terminals was
indeed barred by prescription due to the failure to file a timely notice of claim.

The court emphasized that Oriental, as the insurer, became subrogated to the rights of
the consignee upon payment of the insurance claim. Therefore, Oriental was bound by
the terms and conditions of the gate pass and the management contract between Asian
Terminals and the consignee. This meant that the claim had to be filed within a specified
period.

In summary, the court ruled that Ong was not liable for the cargo damage, and
Oriental's claim against Asian Terminals was barred by prescription due to the insurer's
subrogation and failure to adhere to the filing requirements outlined in the relevant
contracts.
 Cebu Arrastre Service vs Collector of Internal Revenue

In 1952, the Cebu Arrastre Service, an association of laborers handling cargo at the Port
of Cebu, petitioned the Collector of Internal Revenue for tax exemption and refund of
around P2,867.02. The association's reasons for exemption were:

1. They were a group of laborers organized to centralize the collection of handling charges
and ensure compliance with the Minimum Wage Law.
2. Their work was supervised by the ship's officers, focusing on proper handling and
placing of cargoes in the ship's holds.
3. They were engaged solely in loading and unloading, not transportation.

The investigation, conducted by Mr. Ignacio Quijano, concluded that the laborers of
Cebu Arrastre Service loaded and unloaded cargoes under the supervision of ship's
officers. However, ship officers didn't supervise laborers outside of cargo handling. The
service didn't transport cargo to shippers' bodegas; shippers had their own trucks and
personnel for that. The laborers assisted in loading cargo onto shippers' trucks.

Based on this report, the Collector of Internal Revenue denied the petition, considering
Cebu Arrastre Service as a stevedore subject to a tax under Section 191 of the Tax Code.

Atty. Jose Muana, representing Cebu Arrastre Service, disputed the report and the denial
of exemption. It was revealed that the laborers under Cebu Arrastre Service were the
same individuals from Katubusan sa Mamumuo who had been handling loading for
Aboitiz and Co. and Philippine Navigation Co. since 1947.

Crisostomo vs Court ofAppeals

In the case of Estela L. Crisostomo v. The Court of Appeals and Caravan Travel & Tours
International, Inc., petitioner Estela L. Crisostomo contracted the services of respondent
Caravan Travel & Tours International, Inc. for a tour package called "Jewels of Europe."
The contract involved booking, ticketing, and accommodation arrangements for a
European tour. However, due to a miscommunication regarding the departure date,
petitioner missed her flight and demanded reimbursement for the amount paid for the
"Jewels of Europe" tour. She was subsequently offered a different tour package, "British
Pageant," which she took at a lower cost.
Petitioner sued for breach of contract of carriage and damages, claiming that
respondent was negligent and demanding a refund of the difference between the two
tour packages. The trial court ruled in favor of the petitioner, ordering the respondent to
reimburse her for the difference in cost, with interest and attorney's fees. The Court of
Appeals reversed the decision, ruling that both parties were at fault but that petitioner's
negligence was greater, thereby denying her the refund and ordering her to pay the
balance for the "British Pageant" package.

The Supreme Court upheld the Court of Appeals' decision, emphasizing that respondent
Caravan Travel & Tours International, Inc. was not a common carrier, but a travel agency.
The standard of care applicable to their contract was that of a good father of a family,
not the extraordinary diligence required of common carriers. The Court noted that
petitioner's claim of negligence on the part of respondent's employee was not
sufficiently proven and that petitioner, as a lawyer and well-traveled individual, should
have exercised due diligence in her own affairs. The Court held that respondent had
fulfilled its obligations diligently, and therefore petitioner could not recover damages.

In conclusion, the Supreme Court affirmed the Court of Appeals' decision and denied
petitioner's appeal.

Erezo vs Jepte

The case of Gaudioso Erezo et al. v. Aguedo Jepte involves an appeal from a judgment
made by the Court of First Instance of Manila. The judgment ordered the defendant,
Aguedo Jepte, to pay the plaintiff, Gaudioso Erezo, P3,000 for the death of Ernesto
Erezo, the son of the plaintiff. The case arose from a collision between a truck owned by
the defendant and a taxicab, resulting in injuries to Ernesto Erezo, who later died.

Defendant Aguedo Jepte claimed that the truck actually belonged to the Port
Brokerage, of which he was a broker, and that the trucks of the corporation were
registered in his name due to a convenience arrangement for paying registration fees.
However, the court held that the defendant's representation as the owner of the truck,
as evidenced by its registration, allowed the government and affected parties to rely on
this representation. As a result, the defendant was held liable for the damages caused by
the truck's operation.

The defendant appealed, arguing that he was no longer the owner of the truck at the
time of the accident, and therefore should not be held responsible. The court, however,
upheld the principle that the registered owner of a vehicle is primarily responsible for
damages caused by the vehicle's operation, even if ownership has been transferred. The
court emphasized that motor vehicle registration is intended to identify the owner for
purposes of liability determination in case of accidents.

The court acknowledged that the defendant has the option to pursue indemnification
from the actual owner of the truck, but the inconvenience of such action does not justify
relieving the registered owner of liability. The court held that the defendant's recourse
was to seek indemnification from the actual owner through a third-party complaint.

In summary, the court ruled that the registered owner of a vehicle is primarily liable for
damages caused by the vehicle's operation, even if ownership has been transferred, due
to the purpose of motor vehicle registration in identifying responsible parties. However,
the registered owner has the right to seek indemnification from the actual owner
through a separate legal action.

Abelardo Lim vs Court of Appeals

In the case of Abelardo Lim and Esmadito Gunnaban v. Court of Appeals and Donato H.
Gonzales, the issue revolves around whether a new owner of a passenger jeepney, who
obtained it through the kabit system (an arrangement where a person operates a vehicle
under another person's license), can sue for damages resulting from an accident
involving the jeepney. Donato Gonzales purchased a passenger jeepney from the
registered owner, but he did not transfer the registration or obtain a separate license for
its operation. The jeepney, owned by the registered holder, collided with a truck owned
by Abelardo Lim and driven by Esmadito Gunnaban. The trial court and Court of Appeals
ruled in favor of Gonzales, awarding him damages for the collision.

Petitioners, Lim and Gunnaban, argue that the kabit system is against public policy and
should not grant legal personality to Gonzales to sue. However, the court emphasizes
that the kabit system is void and inoperative but is also not the issue in this case. The
main concern is the liability for the accident. The court states that as long as the
jeepney's operation is ongoing and it is being used on the road, its owner should be
responsible for damages, regardless of the kabit arrangement.

The court determines that Gonzales has the right to seek damages for the collision. It
notes that the aim of the law is to identify the responsible party in case of accidents
involving public utility vehicles, and the policy of protecting the riding public is not
compromised in this case. The court finds that the damages awarded to Gonzales are
based on a reasonable estimate of the damage to the jeepney and the income lost from
his transportation business. However, the court modifies the imposition of legal interest
on the damages, ruling that it should be applied from the time the judgment of the
lower court is made until the finality of its decision. If the damages remain unpaid
thereafter, the interest rate will be increased.

In conclusion, the court upholds the right of the new owner under the kabit system to
sue for damages resulting from an accident involving the vehicle, and it awards
damages to Gonzales while modifying the application of legal interest on the damages.

Lita Enterprise Inc Vs IAC

In the case of Lita Enterprises, Inc. v. Second Civil Cases Division, Intermediate Appellate
Court, Nicasio M. Ocampo, and Francisca P. Garcia, the issue revolves around an illegal
contract in which the parties engaged in the "kabit system," wherein a person with a
certificate of public convenience allows another person to operate vehicles under their
franchise for a fee. The court emphasizes that "ex pacto illicito non oritur actio" (no
action arises out of an illicit bargain), and neither party can seek relief from the courts
due to the illegal nature of the contract.

The spouses Nicasio M. Ocampo and Francisca Garcia purchased Toyota Corona cars
from Delta Motor Sales Corporation and entered into an agreement with Lita
Enterprises, Inc. to use the latter's certificate of public convenience for the operation of
the cars as taxicabs. The cars were registered in the name of Lita Enterprises, Inc., but
the possession and operation remained with Ocampo and Garcia. A collision occurred
involving one of the taxicabs, resulting in a criminal case and a civil case for damages.
Lita Enterprises, Inc. was held liable for damages.

Lita Enterprises, Inc. tried to recover from Ocampo and Garcia in another case, arguing
that they should be liable for the damages they were held responsible for. However, the
court applies the principle of "in pari delicto" (in equal fault), stating that no action can
arise from an illegal contract, and neither party can seek affirmative relief against the
other. The court highlights that the "kabit system" is contrary to public policy and void
under the law. Therefore, the court nullifies all proceedings related to the case and
annuls the decisions rendered by lower courts.

In summary, the court applies the principle that parties engaged in an illegal contract
cannot seek relief from the courts, especially in cases involving the "kabit system," which
is considered void and against public policy.