Philippine American General Insurance Co., Inc. vs. MCG Marine Services, Inc.

Case
G.R. No. 135645
Ponente
Facts:
The case involves a dispute over the liability for the loss of cargo due to the sinking of the M/V
Peatheray Patrick-G.The petitioner, Philippine American General Insurance Co., Inc., insured the
cargo belonging to San Miguel Corporation and loaded it onto the said vessel, which was owned
by the respondents, MCG Marine Services, Inc. and Doroteo Gaerlan.
The ship sank, and the petitioner paid the insured amount to San Miguel Corporation.
The petitioner then sued the respondents to recover the amount it paid on the insured cargo.
The trial court ruled in favor of the petitioner, finding the respondents solidarily liable for the
loss.
However, the Court of Appeals reversed the decision of the trial court, relying on the findings of
the Board of Marine Inquiry.

Issue:
Whether the loss of the cargo was due to a fortuitous event.
If so, whether the respondents can be held liable for failing to exercise due diligence to
prevent the loss.

Ruling:
The Court of Appeals found that the loss was indeed caused by a fortuitous event of strong winds
and huge waves, which the captain of the vessel could not have foreseen.
The court also found that there was no negligence on the part of the crew of the vessel.
Therefore, the court affirmed the decision of the Court of Appeals, absolving the respondents of
liability for the loss of the cargo.
Ratio:
Common carriers are required to observe extraordinary diligence in the vigilance over the goods
transported by them and are presumed to be at fault or negligent if the goods are lost, destroyed,
or damaged.
However, this presumption does not arise if the loss is caused by a fortuitous event.
In this case, the court found that the loss was caused solely by the attendance of strong winds and
huge waves, which constituted a fortuitous event.
The court emphasized that even in cases of fortuitous events, a common carrier is still required to
exercise due diligence to prevent or minimize loss.
In this case, the court found that there was no negligence on the part of the crew of the vessel.

Lea Mer Industries Inc. vs. Malayan Insurance Co. Inc.

G.R. No. 161745

Facts:
The case involved a contract of carriage between Ilian Silica Mining and Lea Mer Industries, Inc.
for the shipment of 900 metric tons of silica sand. The cargo was to be transported from Palawan
to Manila on board the barge Judy VII, which was leased by Lea Mer Industries, Inc.
During the voyage, the barge sank, resulting in the loss of the cargo. Malayan Insurance Co.,
Inc., as the insurer, paid Vulcan Industrial and Mining Corporation, the consignee, the value of
the lost cargo. In the exercise of its right of subrogation, Malayan Insurance Co., Inc. demanded
reimbursement from Lea Mer Industries, Inc., which refused to comply. Malayan Insurance Co.,
Inc. filed a complaint with the Regional Trial Court (RTC) of Manila to collect the amount it had
paid Vulcan.

Issue:
Whether the survey report of the cargo surveyor, Jesus Cortez, could be admitted as
evidence.
Whether the loss of the cargo was due to a fortuitous event.
Whether the Court of Appeals erred in disregarding the testimonies of witnesses from the
MARINA and PAG-ASA.

Ruling:
The loss of the cargo was not due to a fortuitous event, but rather to the fault of Lea Mer
Industries, Inc. as a common carrier. Lea Mer Industries, Inc. failed to prove that it had exercised
extraordinary diligence or that the loss was due to a fortuitous event. The survey report of Jesus
Cortez was deemed inadmissible as evidence because he did not testify during the trial.
The Supreme Court affirmed the decision of the Court of Appeals, ordering Lea Mer Industries,
Inc. to pay Malayan Insurance Co., Inc. the value of the lost cargo.

There is a preponderance of evidence that the barge was not seaworthy

when it sailed for Manila. Respondent was able to prove that, in the hull of
the barge, there were holes that might have caused or aggravated the
sinking. Because the presumption of negligence or fault applied to petitioner,
it was incumbent upon it to show that there were no holes; or, if there were,
that they did not aggravate the sinking.

Ratio:
Common carriers are required to observe extraordinary diligence in the vigilance over the goods
entrusted to them. Common carriers are presumed to be at fault or negligent for any loss or
damage to the goods they transport, unless they can prove that they observed extraordinary
diligence or that the loss or damage was due to any of the exempting circumstances provided by
law. Lea Mer Industries, Inc. failed to prove that it had exercised extraordinary diligence or that
the loss was due to a fortuitous event. The evidence presented by Lea Mer Industries, Inc. was
insufficient to overcome the presumption of fault.
The survey report of Jesus Cortez was deemed inadmissible as evidence because he did not
testify during the trial.

Pilapil vs. Court of Appeals

G.R. No. 52159
Facts:
Petitioner, Jose Pilapil, boarded a bus operated by respondent, Alatco Transportation Company,
Inc. While the bus was traveling from Iriga City to Naga City, an unidentified man threw a stone
at the bus, hitting the petitioner above his left eye. Petitioner suffered permanent damage to his
left eye and a scar above his eye. Petitioner filed a case for damages against the transportation
company, alleging negligence on their part for failing to prevent the stone-throwing incident.

Issue:
Can the transportation company be held liable for the injuries sustained by the petitioner
due to the stone thrown by a stranger?

Ruling:
The court ruled in favor of the transportation company and held that they cannot be held liable
for the injuries sustained by the petitioner.

Ratio:
Common carriers, such as the transportation company, are required to exercise extraordinary
diligence in the safe transport of their passengers. However, this does not make them insurers of
the absolute safety of their passengers. In consideration of the right granted to it by
the public to engage in the business of transporting passengers and goods, a
common carrier does not
give its consent to become an insurer of any and all risks to passengers and
goods. It merely undertakes to perform certain duties to the public as the law
imposes, and holds itself liable for any breach thereof.

The law only holds them liable for damages if there is negligence on their part.
The injury sustained by the petitioner was not due to any defect in the means of transport or the
negligence of the transportation company's employees. It was caused by a third party, a stranger,
over whom the carrier had no control or knowledge. Therefore, the presumption of negligence
against the carrier is rebutted, and they cannot be held liable.

Article 1763 of the Civil Code states that a common carrier is responsible for injuries suffered by
a passenger due to the willful acts or negligence of other passengers or strangers if the carrier's
employees could have prevented or stopped the act.
In this case, since the injury was caused by a stranger, the carrier's liability is only that of a good
father of a family, meaning they are not required to take unreasonable precautions against
unlawful acts of strangers.
It is the responsibility of Congress to enact laws to protect the public from such risks and dangers
of lawlessness in society.
The court cannot impose liability on the carrier beyond what is provided by law.
Therefore, the court affirmed the decision of the Court of Appeals, which reversed the judgment
of the trial court and held that the transportation company is not liable for the injuries sustained
by the petitioner.

Manay, Jr. vs. Cebu Air, Inc.

G.R. No. 210621
Facts:

Carlos S. Jose purchased 20 Cebu Pacific round-trip tickets from Manila to Palawan for himself
and on behalf of his relatives and friends. He specified the preferred date and time of departure
and return. On the day of their return flight, they were informed that nine of them could not be
admitted because their tickets were for the earlier flight that day. They had to rebook their
tickets, costing them an additional P7,000.00. They filed a complaint for damages against Cebu
Pacific, alleging negligence in encoding the flight schedules and mistreatment by the ground
personnel.

Issue:
Whether Cebu Air, Inc. is liable to the passengers for damages for the issuance of a plane
ticket with an allegedly erroneous flight schedule.

Ruling:
Cebu Pacific is not liable for damages.
The passengers were negligent in failing to exercise ordinary diligence in checking the flight
details before making the purchase. Once the ticket is paid for and printed, the purchaser is
presumed to have agreed to all its terms and conditions. The passengers had ample time to
correct any alleged mistake in the flight schedule. The passengers' own negligence was the cause
of their injury, and they are not entitled to damages.

Ratio:
Common carriers, such as airlines, are required to exercise extraordinary diligence in the
performance of their obligations under the contract of carriage.
This includes the obligation to provide accurate information to passengers before the purchase of
the ticket. Passengers also have a correlative duty to exercise ordinary diligence in checking the
flight details and ensuring their accuracy. If passengers fail to exercise ordinary diligence and
suffer damages as a result, they cannot hold the airline liable.

Construction Development Corp. of the Philippines vs. Estrella

G.R. No. 147791

Facts:
Date: December 29, 1978
Place: South Expressway, Philippines
Parties involved: Batangas Laguna Tayabas Bus Co. (BLTB), Construction Development
Corporation of the Philippines (CDCP), Rebecca G. Estrella, Rachel E. Fletcher
Events: A bus owned by BLTB and a tractor-truck owned by CDCP collided on the South
Expressway, resulting in injuries to Estrella and Fletcher.
Lower court: Trial court found BLTB and CDCP, as well as their drivers, liable for damages.
BLTB was held liable for breach of contract as a common carrier, while CDCP was held liable
for negligence and failure to exercise due diligence in the selection and supervision of its
employees.
Issue:
Whether BLTB and CDCP are jointly and severally liable for the damages suffered by Estrella
and Fletcher.

Ruling:
BLTB and CDCP are jointly and severally liable for the damages suffered by Estrella and
Fletcher.
Ratio:
The Supreme Court cited previous cases that established the joint liability of the owner of the
other vehicle involved in a collision with a common carrier.
BLTB, as a common carrier, had the duty to ensure the safety of its passengers. Its failure to do
so made it liable for breach of contract.
CDCP was held liable for the negligence of its driver and for failing to exercise due diligence in
the selection and supervision of its employees.

Issue:
Whether the award of damages, attorney's fees, and legal interest is upheld.
Ruling:
The award of damages, attorney's fees, and legal interest is upheld.
Ratio:
The Court of Appeals modified the amount of damages awarded, but the Supreme Court affirmed
the decision.
The Supreme Court upheld the award of damages, attorney's fees, and legal interest based on the
findings of the trial court and the Court of Appeals.

Issue:
Whether the amount of moral damages awarded should be reduced.
Ruling:
The amount of moral damages awarded is reduced.
Ratio:
The Supreme Court agreed with the Court of Appeals that moral damages should be awarded to
Estrella and Fletcher.
However, the Supreme Court found that the amount awarded by the Court of Appeals was
excessive and reduced it.

Issue:
Whether CDCP's claim against its insurance company, Phoenix, should be dismissed.
Ruling:
CDCP's claim against Phoenix is dismissed.
Ratio:
CDCP filed a third-party complaint against Phoenix, but the trial court dismissed this claim,
ruling that it had already prescribed.
The Supreme Court affirmed the dismissal, stating that CDCP failed to file a written notice of
claim within six months from the date of the accident, as required by the law.

Conclusion:
The Supreme Court affirmed the decision of the Court of Appeals, holding BLTB and CDCP
jointly and severally liable for damages.
The court upheld the award of damages, attorney's fees, and legal interest, but reduced the
amount of moral damages.
CDCP's claim against its insurance company, Phoenix, was dismissed as it had already
prescribed.

Loadstar Shipping Co., Inc. vs. Pioneer Asia Insurance Corp.

G.R. No. 157481

Facts:
Loadstar Shipping Co., Inc. entered into a voyage-charter agreement with Northern Mindanao
Transport Company, Inc. for the carriage of 65,000 bags of cement from Iligan City to Manila.
The shipment was covered by Loadstar's Bill of Lading.
During the voyage, the vessel M/V Weasel, owned and operated by Loadstar, was forced
aground, resulting in the loss of the entire shipment of cement.
The consignee demanded reimbursement from Loadstar, but the company refused to pay.
Pioneer Asia Insurance Corp., which had insured the shipment, paid the consignee and obtained
subrogation rights against Loadstar.
Pioneer Asia Insurance Corp. filed a complaint against Loadstar, alleging negligence in the
selection and supervision of its agents and employees.
The Regional Trial Court (RTC) ruled in favor of Pioneer Asia Insurance Corp., ordering
Loadstar to pay damages and attorney's fees.
Loadstar appealed to the Court of Appeals, which affirmed the RTC's decision with modification
on the amount of attorney's fees.

Issue:
Whether Loadstar should be considered a common carrier or a private carrier.
Whether Loadstar exercised the required diligence in the transport of the goods.

Ruling:
Loadstar was considered a common carrier.
Loadstar failed to exercise extraordinary diligence in the transport of the goods.

Ratio:
Loadstar was deemed a common carrier despite the existence of the voyage-charter agreement
because the charter was limited to the ship only and did not involve both the vessel and its crew.
As a common carrier, Loadstar was required to observe extraordinary diligence in the vigilance
over the goods it transported.
The records reveal that petitioner took a shortcut route, instead of the
usual
route, which exposed the voyage to unexpected hazard. Petitioner has
only
itself to blame for its misjudgment.
Loadstar failed to prove that it exercised extraordinary diligence and that the loss of the cargo
was due to a fortuitous event.
The loss was a result of Loadstar's gross negligence in taking a shortcut route and exposing the
voyage to unexpected hazards.
The Court affirmed the award of attorney's fees and litigation expenses, limiting it to ten percent
(10%) of the total claim as stipulated in the contract between the parties.