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(J): 4 concur Facts: Pag-asa Sales Inc. entered into a contract to transport molasses from the province of Negros to Manila with Coastwise Lighterage Corp., using the latter’s dumb barges. The barges were towed in tandem by the tugboat MT Marica, which is likewise owned by Coastwise. Upon reaching Manila Bay, while approaching Pier 18, one of the barges, “Coastwise 9″, struck an unknown sunken object. The forward buoyancy compartment was damaged, and water gushed in through a hole “2 inches wide and 22 inches long”. As a consequence, the molasses at the cargo tanks were contaminated and rendered unfit for the use it was intended. This prompted the consignee, Pag-asa Sales, Inc. to reject the shipment of molasses as a total loss. Thereafter, Pagasa Sales, Inc. filed a formal claim with the insurer of its lost cargo, Philippine General Insurance Company (PhilGen) and against the carrier, Coastwise Lighterage. Coastwise Lighterage denied the claim and it was PhilGen which. paid the consignee, Pag-asa Sales the amount of P700,000.00 representing the value of the damaged cargo of molasses. In turn, PhilGen then filed an action against Coastwise Lighterage before the RTC of Manila, seeking to recover the amount of P700,000.00 which it paid to Pag-asa Sales for the latter’s lost cargo PhilGen now claims to be subrogated to all the contractual rights and claims which the consignee may have against the carrier, which is presumed to have violated the contract of carriage. The RTC (Branch 35) awarded the amount prayed for by PhilGen, i.e. the principal amount of P700,000.00 plus interest thereon at the legal rate computed from 29 March 1989, the date the complaint was filed until fully paid and another sum of P100,000.00 as attorney’s fees and costs. On Coastwise Lighterage’s appeal to the Court of Appeals, the award was affirmed on 17 December 1993. Hence, the petition for review. The Supreme Court denied the petition, and affirmed the appealed decision. 1. Liability of shipowner in contract of affreightment over vessels, as common carrier, remains in the absence of the stipulation When the charter party contract is one of affreightment over the whole vessels, rather than a demise, the liability of the shipowner for acts or negligence of its captain and crew, would remain in the absence of stipulation. Although a charter party may transform a common carrier into a private one, the same however is not true in a contract of affreightment on account of the distinctions between a contract of affreightment and a bareboat charter. Herein, Pag-asa Sales only leased three of Coastwise Lighterage’s vessels, in order to carry cargo from one point to another, but the possession, command mid navigation of the vessels remained with Coastwise Lighterage. The contract thus entered into with the consignee was one of affreightment. 2. Demise or bareboat charter of the vessel; Puromines vs. CA Under the demise or bareboat charter of the vessel, the charterer will generally be regarded as the owner for the voyage or service stipulated. The charterer mans the vessel with his own people and becomes the owner pro hac vice, subject to liability to others for damages caused by negligence. To create a demise, the owner of a vessel must completely and exclusively relinquish
possession, command and navigation thereof to the charterer anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party all. 3. Contract of affreightment; Puromines vs. CA A contract of affreightment is one in which the owner of the vessel leases part or all of its space to haul goods for others. It is a contract for special service to be rendered by the owner of the vessel and under such contract the general owner retains the possession, command and navigation of the ship, the charterer or freighter merely having use of the space in the vessel in return for his payment or the charter hire. An owner who retains possession of the ship though the hold is the property of the charterer, remains liable as carrier and must answer for any breach of duty as to the care, loading and unloading of the cargo . . .” 4. Presumption of negligence The law and jurisprudence on common carriers both hold that the mere proof of delivery of goods in good order to a carrier and the subsequent arrival of the same goods at the place of destination in bad order makes for a prima facie case against the carrier. It follows then that the presumption of negligence that attaches to common carriers, once the goods it is sports are lost, destroyed or deteriorated, applies to Coastwise Lighterage. This presumption, which is overcome only by proof of the exercise of extraordinary diligence, remained unrebutted in the present case. As a common carrier, Coastwise Lighterage is liable for breach of the contract of carriage, having failed to overcome the presumption of negligence with the loss and destruction of goods it transported, by proof of its exercise of extraordinary diligence. 5. Article 609 of the Code of Commerce Article 609 of the Code of Commerce, which subsidiarily governs common carriers (which are primarily governed by the provisions of the Civil Code) provides that “captains, masters, or patrons of vessels must be Filipinos, have legal capacity to contract in accordance with this code, and prove the skill capacity and qualifications necessary to command and direct the vessel, as established by marine and navigation laws, ordinances or regulations, and must not be disqualified according to the same for the discharge of the duties of the position.” 6. Carrier remised in observance of duties; Unlicensed patron presumes lack of skill and lack of familiarity to usual and safe routes taken by seasoned and authorized ones Far from having rendered service with the greatest skill and outmost foresight, and being free from fault, the carrier was culpably remiss in the observance of its duties. For one, Jesus R. Constantino, the patron of the vessel “Coastwise 9″ admitted that he was not licensed. Clearly, Coastwise Lighterage’s embarking on a voyage with an unlicensed patron violates Article 609 of the Code of Commerce. It cannot safely claim to have exercised extraordinary diligence, by placing a person whose navigational skills are questionable, at the helm of the vessel which eventually met the fateful accident. It may also logically, follow that a person without license to navigate, lacks not just the skill to do so, but also the utmost familiarity with the usual and safe routes taken by seasoned and legally authorized ones. Had the patron been licensed he could be presumed to have both the skill and the knowledge that would have prevented the vessel’s hitting the sunken derelict ship that lay on their way to Pier 18.
7. Article 2207 NCC Article 2207 of the Civil Code provides that “If the plaintiff’s property has been insured, and he has received indemnity from the insurance company for the injury or loses arising out of the wrong or breach of contract complained of the insurance company shall be subrogated to the rights of the insured against the wrongdoer or the person who violated the contract.” 8. Principle of subrogation explained Article 2207 NCC containing the equitable principle of subrogation has been applied in a long line of cases including Compania Maritima v. Insurance Company of North America; Firesman’s Fund Insurance Company v. Jamilla & Company, Inc., and Pan Malayan Insurance Corporation v. Court of Appeals, wherein the Court explained that “Article 2207 of the Civil Code is founded on the well-settled principle of subrogation. If the insured property is destroyed or damaged through the fault or negligence of a party other than the assured, then the insurer, upon payment to the assured will be subrogated to the rights of the assured to recover from the wrongdoer to the extent that the insurer has been obligated to pay. Payment by the insurer to the assured operated as an equitable assignment to the former of all remedies which the latter may have against the third party whose negligence or wrongful act caused the loss. The right of subrogation is not dependent upon, nor does it grow out of, any private of contract or upon written assignment of, claim. It accrues simply upon payment of the insurance claim by the insurer.” Herein, Coastwise Lighterage was liable for breach of the contract of carriage it entered into with the Pag-asa Sales. However, for the damage sustained by the loss of the cargo which the carrier was transporting, it was not the carrier which paid the value thereof to Pag-asa Sales but the latter’s insurer, PhilGen. Upon payment by insurer PhilGen of the amount of P700,000.00 to Pag-asa Sales, the consignee of the cargo of molasses totally damaged while being transported by Coastwise Lighterage, the former was, subrogated into all the rights which Pag-asa Sales may have had against the carrier, Coastwise Lighterage. Smith Bell vs. CA (GR 56294, 20 May 1991) En Banc, Feliciano (J): 14 concur Facts: On 3 May 1970, 3:50 a.m., on the approaches to the port of Manila near Caballo Island, a collision took place between the M/V “Don Carlos,” an inter-island vessel owned and operated by Carlos A. Go Thong and Company (”Go Thong”), and the M/S “Yotai Maru,” a merchant vessel of Japanese registry. The “Don Carlos” was then sailing south bound leaving the port of Manila for Cebu, while the “Yotai Maru” was approaching the port of Manila, coming in from Kobe, Japan. The bow of the “Don Carlos” rammed the portside (left side) of the “Yotai Maru” inflicting a 3 cm. gaping hole on her portside near Hatch 3, through which seawater rushed in and flooded that hatch and her bottom tanks, damaging all the cargo stowed therein. The consignees of the damaged cargo got paid by their insurance companies. The insurance companies in turn, having been subrogated to the interests of the consignees of the damaged cargo, commenced actions against Go Thong for damages sustained by the various shipments in the then CFI of Manila. 2 cases were filed in the CFI of Manila. The first case, Civil Case 82567, was commenced or 13 March 1971 by Smith Bell and Company (Philippines), Inc. and Sumitomo Marine and Fire Insurance Company Ltd., against Go Thong, in Branch 3, which was presided over by Judge Bernardo P. Fernandez. The second case, Civil Case 82556, was
Inc.00 or its equivalent in Philippine currency plus attorney’s fees of P30. In both cases.00 as attorney’s fees. Civil Cases 82567 (Judge Fernandez) and 82556 (Judge Cuevas) were tried under the same issues and evidence relating to the collision between the “Don Carlos” and the “Yotai Maru” the parties in both cases having agreed that the evidence on the collision presented in one case would be simply adopted in the other. that such negligence was the proximate cause of the collision and accordingly held Go Thong liable for damages to the insurance companies. Inc. J. Go Thong moved for reconsideration. and P19. In CA-GR 61320-R.640. It has been . The decision of Judge Fernandez in Civil Case 82567 was appealed by Go Thong to the Court of Appeals (CA-GR 61320-R). Hence. and the Tokyo Marine & Fire Insurance Co.79 with legal interest plus P3. without success. and reinstated and affirmed the decision of the trial court dated 22 September 1975 in its entirety. the Petition (GR L-48839.889. The decision of Judge Cuevas in Civil Case 82556 was also appealed by Go Thong to the Court of Appeals (CA-GR 61206-R). respectively.. Go Thong filed a Motion for Reconsideration. The Supreme Court is not compelled to adopt a definite and stringent rule on how its judgment shall be framed. the Court of Appeals through Reyes. L.163. to no avail. Go Thong then went to the Supreme Court on Petition for Review. Minute resolutions. with costs against Go Thong. Go Thong and Company v. et al.02 plus P5. Judge Fernandez awarded the insurance companies P19. Substantially identical assignments of errors were made by Go Thong in the 2 appealed cases before the Court of Appeals. Smith Bell and Company [Philippines].000. the Court of Appeals.. rendered a Decision on 8 August 1978 affirming the Decision of Judge Fernandez.. against Go Thong in Branch 4. Inc.00. the Manila CFI held that the officers and crew of the “Don Carlos” had been negligent. denied the Petition for lack of merit. reversed the Cuevas Decision and held the officers of the “Yotai Maru” at fault in the collision with the “Don Carlos. Cuevas. In its Resolution dated 6 December 1978. asked for reconsideration.filed on 15 March 1971 by Smith Bell and Company (Philippines). It has long been settled that the Supreme Court has discretion to decide whether a “minute resolution” should be used in lieu of a full-blown decision in any particular case and that a minute Resolution of dismissal of a Petition for Review on Certiorari constitutes an adjudication on the merits of the controversy or subject matter of the Petition. which was presided over by then Judge. while Judge Cuevas awarded the insurance companies on two (2) claims US$68.000.00 as attorney’s fees. the Motion was denied by the Supreme Court on 24 January 1979. 1. The Supreme Court reversed and set aside the Decision of the Court of Appeals dated 26 November 1980 in CA-GR 61206-R. and Tokyo Marine and Fire Insurance Company. Inc.B. the petition for review on certiorari. on 26 November 1980.).” and dismissed the insurance companies’ complaint. Carlos A. later Associate Justice of this Court. Smith Bell & Co. the Supreme Court.000. In CA-GR 61206-R. Effect That the Supreme Court denied Go Thong’s Petition for Review in a minute Resolution did not in any way diminish the legal significance of the denial so decreed by the Court. Serafin R.
Cause of action and judgments the same Although the subject matters of the 2 suits were not identical. 5. Go Thong. was not the very same cargo which had been damaged in the other case indemnity for which was also sought. The co-petitioner in both cases. Concepts of “bar by former judgment” and conclusiveness of judgment”. in the sense that the cargo which had been damaged in the one case and for which indemnity was sought. Substantial identity of the parties The parties in CA-GR. Court of Appeals. the ramming of the “Yotai Maru” by the “Don Carlos. the jurisdiction of which has not been questioned. CA In Tingson v.e. and so there is no need to fully explain the Court’s denial. Absence of identity of subject matter does not preclude application of res judicata Under the circumstances.. Res Judicata.stressed by the Court that the grant of due course to a Petition for Review is “not a matter of right.e.. the same right of the cargo owners to the safety and integrity of their cargo had been violated by the same casualty. Ltd. however. the owner of the vessel “Don Carlos. the Court distinguished one from the other the 2 concepts embraced in the principle of res judicata. was an insurance company and that both petitioners in the 2 cases represented the same interest. Ltd.. For one thing. the judgment on the merits in the first case constitutes an absolute bar to the subsequent action not only as to every matter which was offered and received to sustain or defeat the claim or demand. More importantly. there was a common petitioner in the 2 cases.e. the cargo owner’s interest as against the hull interest or the interest of the shipowner. Res Judicata. Res Judicata. “bar by former judgment” and “conclusiveness of judgment:” There is no question that where as between the first case where the judgment is rendered and the second case where such judgment is invoked. i. i. 61320-R involved Smith Bell and Company (Philippines). In other words. This is designated as ‘bar by former judgment. The cause of action was. there is identity of parties. 3. i....’ But where the second action between the same .” In sum. (Philippines). 2. and Sumitomo Marine and Fire Insurance Co. that the Decision sought to be reviewed and set aside is correct. while the present case involved Smith Bell and Co. the facts and law are already mentioned in the Court of Appeals’ opinion. 4.” The judgments in both cases were final judgments on the merits rendered by the 2 divisions of the Court of Appeals and by the Supreme Court. the same in the 2 cases. Res Judicata. CA-GR 61320-R and CA-GR 61206-R exhibited substantial identity of parties. both cases had been brought against the same defendant. subject-matter and cause of action. Inc. but also as to any other admissible matter which might have been offered for that purpose and to all matters that could have been adjudged in that case.” A minute Resolution denying a Petition for Review of a Decision of the Court of Appeals can only mean that the Supreme Court agrees with or adopts the findings and conclusions of the Court of Appeals. there being substantial identity of parties and identity of cause of action. but of sound judicial discretion. the Court believes that the absence of identity of subject matter. and Tokyo Marine and Fire Insurance Co. Tingson vs. Inc. in other words. although the co-petitioner in one was an insurance company different from the insurance company co-petitioner in the other case. however. will not preclude the application of res judicata.
This is the rule on ‘conclusiveness of judgment’ embodied in subdivision (c) of Section 49 of Rule 39 of the Revised Rules of Court. The first is the effect of a judgment as a bar to the prosecution of a second action upon the same claim. upon the determination of which the finding or judgment was rendered. L. “The doctrine of res judicata has two aspects.’” 7. In fine. the Court elaborated further the distinction between bar by former judgment which bars the prosecution of a second action upon the same claim. although no specific finding may have been made in reference thereto. only as those matters actually and directly controverted and determined and not as to matters merely involved therein. That Decision was affirmed by the Supreme Court in GR L-48839 in a Resolution dated 6 December 1978. where it was found that “Don Carlos” to have been negligent. demand or cause of action. demand or cause of action. Under this rule. and although such matters were directly referred to in the pleadings and were not actually or formally presented. and that of the Supreme Court. and necessarily adjudicated. The Reyes Decision thus became final and executory approximately 2 years before the Sison Decision was promulgated.parties is upon a different claim or demand. Res Judicata. directly and expressly raised. Reyes. and if a judgment necessarily presupposes certain premises. Reyes In Lopez v. it extends to questions ‘necessarily involved in an issue. the judgment in the prior action operates as an estoppel only as to those matters in issue or points controverted. the previous judgment is conclusive in the second case. Decision in CA-GR 61320-R conclusive as to negligence of Don Carlos Herein.. The second aspect is that it precludes the relitigation of a particular fact or issues in another action between the same parties on a different claim or cause of action. it will be considered as having settled that matter as to all future actions between the parties.” 6. controverted and litigated in CA-GR 61320-R. Thus. Go Thong was certainly bound by the ruling or judgment of Reyes. Applying the rule of conclusiveness of judgment. The general rule precluding the relitigation of material facts or questions which were in issue and adjudicated in former action are commonly applied to all matters essentially connected with the subject matter of the litigation. Reasons for the rule are that a judgment is an adjudication on all the matters which are essential to support it. in order to forestall or put an . Concepts of “bar by former judgment” and conclusiveness of judgment”. had long been settled by the Suprme Court Court and could no longer be relitigated in CA-GR 61206-R.B. the issue of which vessel (”Don Carlos” or “Yotai Maru”) had been negligent. if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter. or necessarily implied in the final judgment. was an issue that was actually. the question of which vessel had been negligent in the collision between the 2 vessels. or so negligent as to have proximately caused the collision between them. Compromise defined A compromise is an agreement between 2 or more persons who. Lopez vs. J. they are as conclusive as the judgment itself. 8. and that every proposition assumed or decided by the court leading up to the final conclusion and upon which such conclusion is based is as effectually passed upon as the ultimate question which is finally solved. and conclusiveness of judgment which bars the relitigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action.
” Nowhere. or where both green and red lights are seen anywhere but ahead. Factors constituting negligence on part of “Don Carlos”. 10.” 13. to cases in which. if both keep on their respective course. an adjustment which everyone of them prefers to the hope of gaining more. Rule 18 (a) of the . nor on the part of a plaintiff that his claim or demand is groundless or even doubtful. however. so as to involve risk of collision. and by night to cases in which each vessel is in such a position as to see both the sidelights of the other. The familiar rule is that “an offer of compromise is not an admission that anything is due. the decision of the Office of the President upholding the belated reversal by the Ministry of National Defense of the PCG’S decision holding the “Don Carlos” solely liable for the collision. since the compromise is arrived at precisely with a view to avoiding further controversy and saving the expenses of litigation. in such a manner as to involve risk of collision. adjust their differences by mutual consent. hypothetically and in contemplation of mutual concessions. Decision of PCG remains in effect Herein. each shall alter her course to starboard. in the compromise agreement did the owner of the “Yotai Maru” admit or concede that the “Yotai Maru” had been at fault in the collision. the owner of the “Yotai Maru” paid a sum of money to the owner of the “Don Carlos. which provides “(a) When two power-driven vessels are meeting end on. that the incidence of litigation should be reduced and its duration shortened to the maximum extent feasible. Basis of rule on compromises The above rule on compromises is anchored on public policy of the most insistent and basic kind. to cases where the red light of one vessel is opposed to the red light of the other or where the green light of one vessel is opposed to the green light of the other or where a red light without a green light or a green light without a red light is seen ahead.end to a law suit. pass clear of each other. Rule 18 (a) of the International Rules of the Road Rule 18 (a) of the International Rules of the Road.” An offer to compromise does not. or. balanced by the danger of losing more. by night. so that each may pass on the port side of the other. It is of the very nature of an offer of compromise that it is made tentatively. in legal contemplation. Administrative proceedings before the Board of Marine Inquiry. Upon the other hand. in other words. and is not admissible in evidence against the person making the offer. by day. 12. end does not apply to two vessels which must. to cases in which a vessel sees another ahead crossing her own course. involve an admission on the part of a defendant that he is legally liable. not admissible in evidence against person making the offer By virtue of the compromise agreement. This Rule only applies to cases where vessels are meeting end on or nearly end on. Compromise agreement not an admission that anything is due. 11. the basic decision of the PCG holding the “Don Carlos” solely negligent in the collision remains in effect. to the other. or nearly end on. It does not apply. The only cases to which it does apply are when each of two vessels is end on. is so deeply flawed as not to warrant any further examination. each vessel sees the masts of the other in a line or nearly in a line with her own. 9. by day. or nearly end on.
v.S. Proper look out defined A ”proper look-out” is one who has been trained as such and who is given no other duty save to act as a look-out and who is stationed where he can see and hear best and maintain good communication with the officer in charge of the vessel. 44 Fed.O. the master of the “Yotai Maru” ordered the vessel turned “hard starboard” at 3:45 a.” 15. page 273). Factors constituting negligence on part of “Don Carlos”.” The collision occurred at exactly 3:50 a. 21.m. U. He has only one duty.40 a. immediately before and during the collision.m. Under Rule 29 of the same set of Rules.m. the “Don Francisco” and was then at the starboard (right side) of the aforesaid vessel at 3. 14. that which its name implies — to keep a ‘look-out’. of course. it is hardly probable that neither German or Leo Enriquez may qualify as ‘look-out’ in the real sense of the word. It was in the process of overtaking “Don Francisco”’ that “Don Carlos” was finally brought into a situation where he was meeting end-on or nearly end -on ‘Yotai Maru’ thus involving risk of collision. “Don Carlos” was overtaking another vessel. So a deckhand who has other duties. For her part. 696). The navigating officer is not a sufficient ‘look-out’ (Larcen B.” and as the distance between them was rapidly shrinking. Nor should he be stationed in the bridge. 62. 548.S. Proper lookout The second circumstance constitutive of negligence on the part of the “Don Carlos” was its failure to have on board that might a “proper look-out” as required by Rule I (B). is not a proper ‘look-out’ (Brooklyn Perry Co. was at least in part due to the failure of the “Don Carlos” to maintain a proper look-out. 779) — Griffin on Collision. the “Yotai Maru” went “full astern engine. (Chamberlain v.” When the “Yotai Maru” saw that the “Don Carlos” was turning to port. 571). pages 277-278). Ward. Second Mate in command The third factor constitutive of negligence on the part of the “Don Carlos” relates to the fact that Second Mate Benito German was. As the “Yotai Maru” found herself on an “end-on” or a “nearly end-on” situation vis-a-vis the “Don Carlos. U. The “Don Carlos” also violated Rule 28 (c) for it failed to give the required signal of two (2) short horn blasts meaning “I am altering my course to port.” was the failure of the “Don Carlos” to comply with the requirements of Rule 18 (a) of the International Rules of the Road (”Rules”).International Rules of the Road The first of the factors. instead of turning to starboard as demanded by Rule 18 (a). Factors constituting negligence on part of “Don Carlos”. 16. in command of . N. and who must. at about 3:46 a. be vigilant. Myrtle. the “Yotai Maru” turned starboard (to its right) and at the same time gave the required signal consisting of one short horn blast. the “Yotai Maru” did comply with its obligations under Rule 18 (a).W. The failure of the “Don Carlos” to recognize in a timely manner the risk of collision with the “Yotai Maru” coming in from the opposite direction.m. Who is not a proper look out The ‘look-out’ should have no other duty to perform. The “Don Carlos” turned to portside (to its left). Herein. all consequences arising from the failure of the “Don Carlos” to keep a “proper look-out” must be borne by the “Don Carlos. and stopped her engines. Fed.. 14. Herein. 122. He should be as near as practicable to the surface of the water so as to be able to see low-lying lights (Griffin on Collision. which are constitutive of negligence on the part of the “Don Carlos. Neither the captain nor the [helmsman] in the pilothouse can be considered to be a ‘look-out’ within the meaning of the maritime law.
400.” to avoid the collision. the maximum speed of the “Yotai Maru” was thirteen (13) knots while that of the “Don Carlos” was eleven (11) knots. vs. 15. for P6. the parties signing for this purpose a Uniform General Charter dated 9 August 1979. Captain Rivera. the latter being necessarily much slower and much less maneuverable than the power-driven one. the “Yotai Maru” precisely took last minute measures to avert collision as it saw the “Don Carlos” turning to portside: the “Yotai Maru” turned “hard starboard” and stopped its engines and then put its engines “full astern.00 against all risks. G.04 to be discharged in Manila and the remaining 2. to the Philippines. the Court of Appeals not only chose to overlook all the above facts constitutive of negligence on the part of the “Don Carlos.” although its captain. 5.the “Don Carlos. No exclusive obligation upon one of the vessels to avoid the collision By imposing an exclusive obligation upon one of the vessels. There is. On 31 October 1979. Worst still aside from German’s being only a second mate. Baco River Plantation Company is simply inappropriate and inapplicable. both the “Don Carlos” and the “Yotai Maru” were power-driven and both were equipped with radar. the Rules. The goods were insured by the consignee with the Union Insurance Society of Canton.g. gives rise to no other conclusion except that said vessel had no chief mate. The fact that second mate German was allowed to be in command of ‘Don Carlos’ and not the chief or the sailing mate in the absence of Captain Rivera. Cruz (J): 4 concur Facts: Transcontinental Fertilizer Company of London chartered from Hongkong the motor vessel named “Hongkong Island” for the shipment of 8073. as already noted. Of the total shipment. was very much in the said vessel at the time. Urrutia vs. Urrutia and Company v. Odessa. 12 July 1990) Union Insurance Society of Canton. as the owner’s agent. USSR.” to absolve it from responsibility and to shift that responsibility exclusively onto the “Yotai Maru” the vessel which had observed carefully the mandate of Rule 18 (a).04 MT was for the account of Atlas Fertilizer Company as consignee. Moreover.” Maritime Agencies & Services vs. of course. the consignee filed a formal claim against Maritime. every reasonable ground to believe that his inability to grasp actual situation and the implication brought about by inadequacy of experience and technical know-how was mainly responsible and decidedly accounted for the collision of the vessels involved in the case. therefore. There was no explanation as to why the second mate was at the helm of the aforesaid vessel when Captain Rivera did not appear to be under any disability at the time. Inc. Maritime Agencies & Services.” it also in effect used the very negligence on the part of the “Don Carlos. necessity of look-out). imposed a special duty on the power-driven vessel to watch the movements of a sailing vessel. and unloaded part of the consignee’s goods. on the one hand. CA (GR 77638. is his apparent lack of sufficient knowledge of the basic and generally established rules of navigation (e. copy furnished Macondray. Ltd.214. then proceeded to Cebu on 19 October 1979. was appointed as the charterer’s agent and Macondray Company. Herein.779. the “Yotai Maru.35 MT (gross) bagged urea from Novorossisk. to discharge the rest of the cargo. CA (GR 77674) First Division. Inc.400. for the amount . Baco River Plantation not applicable Moreover. 16. For the collision in the Urrutia case was between a sailing vessel. Ltd. and a power-driven vessel. 3.000 MT in Cebu. The vessel arrived in Manila on 3 October 1979. on the other.
the petitions. to wit.54 plus interest at 12% plus attorney’s fees of P1.163. Ltd. and Macondray Company. the demise or “bareboat charter.163. On 20 April 1981. and its local agent Macondray & Co. All complied. on the basis of the evidence. Maritime Agencies & Services. Inc. Ltd. and receipt by the carrier or its authorized agent. a complaint for reimbursement of this amount. Inc.” the time charter and the voyage charter.86 pursuant to the insurance contract. 2. finds nothing to disprove the finding of the marine and cargo surveyors that of the 66. Ltd.” valued at P87.000. 65. to pay Union the sum of P36. which on demand paid the total indemnity of P113.. Maritime and Union filed separate motions for reconsideration which were both denied.. Ltd.1 63.54. Factual Findings of the trial court In his decision dated 4 January 1984. Inc. Inc.23.030. This sum should be the principal and primary liability and responsibility of the carrying vessel. the consignee then went to Union. were accordingly exempted from any liability. including Hongkong Island Company.383 shortlanded bags. this time against Viva Customs Brokerage.. and further holding that the parties shall bear their respective costs. with legal interest and attorney’s fees. plus 12% interest from 20 April 1981 until the whole amount is fully paid. and/or Viva Customs Brokerage. the complaint was amended to drop Viva and implead Macondray Company. represented by Macondray Co.030. until its final discharge at the port of Manila. Judge Artemon de Luna of the Regional Trial Court of Manila held that the Court.of P87. the consignee filed another formal claim.. finding the charterer Transcontinental Fertilizer Co. . Union then filed on 19 September 1980. and (b) Maritime Agencies & Services. the trial court rendered judgment. the parties being required to submit simultaneous memoranda. The Supreme Court set aside the decision of the appellate court. Hongkong Island Cos.. These claims having been rejected. against Hongkong Island Company. representing the value of 574 bags of net unrecovered spillage. after trial. Inc. for the amount of P36. Hence. modifying the decision appeal from.54. which rendered a decision on 28 November 1986. These two cases were consolidated and given due course. P600. On 12 January 1980. P1.123.. 1. the vessel’s responsibility commence upon the actual delivery to. although they pointed out that they were not involved in the petitions. Inc. as a new defendant. liable for the amount of P87.... Ltd. and reinstated that of the trial court as modified.390 bags of urea fertilizer.547 bags were “discharged ex-vessel” and there were shortlanded” “1.54 plus 12% interest from 20 April 1981 until the whole amount is fully paid. representing C & F value of the 1.23. On 4 January 1984. represented by its agent Maritime Agencies & Services. Maritime Agencies & Services appealed the decision to the Court of Appeals.383 bags. Inc. Categories of charters There are three general categories of charters. ordering (a) Hongkong Island Co. As subrogee of the consignee.163. to pay Union the sum of P87.000.00. Under the contract for the transportation of goods.00 as attorney’s fees and to pay ½ of the costs.00 as attorney’s fees and to pay ½ of the costs.
” 8.” . the charterer obtaining the right to direct the movements of the vessel during the chartering period. even if in fact so caused. while the owner was responsible for the care of the cargo during the voyage. Demise charter A demise involves the transfer of full possession and control of the vessel for the period covered by the contract. stowage and discharging at the ports visited. Paragraph 2 of the Uniform General Charter Paragraph 2 of the Uniform General Charter reads “Owners are to be responsible for loss of or damage to the goods or for delay in delivery of the goods only in case the loss. The basic principle is that “the responsibility for cargo loss falls on the one who agreed to perform the duty involved” in accordance with the terms of most voyage charters. the charterer obtaining the right to use the vessel and carry whatever cargo it chooses. And the Owners are responsible for no loss or damage or delay arising from any other cause whatsoever. Vessel is also to give free use of sufficient light. be responsible. smell or evaporation from other goods or by the inflammable or explosive nature or insufficient package of other goods not to be considered as caused by improper or negligent stowage. Also slings. 7. Time charter A time charter is a contract to use a vessel for a particular period of time. 5. but for this clause. even from the neglect or default of the Captain or crew or some other person employed by the Owners onboard or ashore for whose acts they would. The voyage charter is a contract of affreightment and is considered a private carriage. Voyage charter A voyage charter is a contract for the hire of a vessel for one or a series of voyages usually for the purpose of transport in goods for the charterer. if required for night work. runners and ropes. Shore winchmen are to be employed and they are to be for Charterers’ or Shippers’ or Receivers’ account as the case may be. equipped and supplied or by the personal act or default of the Owners or their Manager. stowed and discharged free of expense to the vessel under the Master’s supervision. while manning and supplying the ship as well. Clause 17 of the Additional Clauses to Charterparty Clause 17 of Additional Clauses to Charterparty provides that “The cargo shall be loaded. if required at loading and discharging ports the vessel is to give free use of winches and power to drive them gear. Time lost through breakdown of winches or derricks is not to count as laytime. This is true in the present cases where the charterer was responsible for loading. or from unseaworthiness of the vessel on loading or commencement of the voyage or at any time whatsoever. Damage caused by contact with or leakage. the parties may freely contract respecting liability for damage to the goods and other matters. as on board. as on board. However. 4. 6.3. Responsibility for cargo loss in case of a voyage charter A voyage charter being a private carriage. damage or delay has been caused by the improper or negligent stowage of the goods or by personal want of due diligence on the part of the Owners or their Manager to make the vessel in all respects seaworthy and to secure that she is properly manned. although the owner retains possession and control.
in accordance with COGSA The period for filing the claim is one year. Philippines. that if a notice of loss for damage. As the bags were in good order when received in the vessel. Herein. The Supreme Court reversed. because there was no showing in that case that the vessel was at fault. Inc. that fact shall not effect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered. the trial court found that 1. which could only mean that they were damaged or lost on board the vessel before unloading of the shipment. becomes a private carrier. Such policy has no force where the public at large is not involved. the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. American Steamship Agencies. Home Insurance vs. As a private carrier. we held that the one-year period . The stipulation in the charter party absolving the owner from liability for loss due to the negligence of its agent would be void only if the strict public policy governing common carriers is applied. as a special law. Presumption of fault in damaged goods covered by clean bill of lading The present ruling cannot benefit Hongkong. 12. where it was held “Under the facts of this case. Stipulations exempting owner from liability in charter valid In Home Insurance Co. held the vessel liable in damages for loss of part of the cargo it was carrying.. prevails over the general provisions of the Civil Code on prescription of actions. Provided. a stipulation exempting the owner from liability for the negligence of its agent is not against public policy. the presumption is that they were damaged or lost during the voyage as a result of their negligent improper stowage. Civil Code provisions on common carrier should not be applied if carrier is acting as private carrier. 11. as in the case of a ship totally chartered for the use of a single party. in accordance with the Carriage of Goods by Sea Act.9. either apparent or concealed. Manila Railroad Co. the trial court rejected similar stipulations as contrary to public policy and. Application of the prescriptive period. Union Carbide vs. therein.” 14. Manila Railroad The period was applied by the Court in the case of Union Carbide. Section 3(6) of Commonwealth Act 65 Section 3(6) of that Act provides that “In any event. v. For this the ship owner should be held liable.. and is deemed valid. It is not denied that the entire cargo shipped by the charterer in Odessa was covered by a clean bill of lading. Inc. This was adopted and embodied by our legislature in Commonwealth Act 65 which.383 bags were shortlanded. Under American jurisprudence. American Steamship Agencies. Prescription of action. declaring that “the provisions of our Civil Code on common carriers were taken from Anglo-American law. 10. v. public not involved The Civil Code provisions on common carriers should not be applied where the carrier is not acting as such but as a private carrier. is not given as provided for in this section. a common carrier undertaking to carry a special cargo or chartered to a special person only. 13. Filing of claim within 1 year. Ruling cannot benefit Hongkong due to shortlanded bags. applying the provisions of the Civil Code on common carriers and of the Code of Commerce on the duties of the ship captain.
was correctly reckoned by the trial court from December 19. as agreed upon by the parties and as shown in the tally sheets. It thus cannot be considered a ship agent. As for the charterer’s agent. Charterer liable for damaged goods during unloading. Ltd. Notably. Transcontinental was disclosed as the charterer’s principal and there is no question that Maritime acted within the scope of its authority. That one-year period expired on December 19. it was barred by the statute of limitations. it was made liable for the acts of the ship captain who was responsible for the cargo while under the custody of the vessel. The liability imposable upon it cannot be borne by Maritime which. Hongkong and Macondray impleaded in GR 77674. when the last item was delivered to the consignee. when. 1961. 16. Union’s complaint was filed against Hongkong on 19 September 1980. Maritime acted in representation of the charterer and not of the vessel. Ramirez not applicable The ruling in the case of Switzerland General Insurance Co. The charterer did not represent itself as a carrier and indeed assumed responsibility only for the unloading of the cargo. 1962. 1962. As the charterer was itself the carrier. 18. however. it cannot be held solidarily liable with Transcontinental for the losses/damages to the cargo outside the custody of the vessel. is not answerable for injury caused by its principal. 17. In that case. the charterer represented itself on the face of the bill of lading as the carrier. Agent. It is a well-settled principle that the agent shall be liable for the act or omission of the principal only if the latter is undisclosed. Ramirez is not applicable. The vessel owner and the charterer did not stipulate in the Charterparty on their separate respective liabilities for the cargo. having assumed this activity under the charter party “free of expense to the vessel. as a mere agent.” 15. Claims against the vessel for the losses/damages sustained by that cargo were also received and processed by it. but tardily against Macondray on 20 April 1981. after the goods were already outside the custody of the vessel. v. Switzerland General Insurance vs.. which is what matters anyway. Issues not formally raised on appeal may be considered in the interest of justice . Present cases The one-year period in the present cases should commence on 20 October 1979. As a result. the charterer’s agent was also considered a ship agent and so was held to be solidarily liable with its principal. the cargo was discharged from the carrying vessel and delivered to the Manila Port Service. the charterer is liable therefor. Application of prescriptive period. As a mere charterer’s agent. The facts in the cases at bar are different. Inasmuch as the action was filed on December 21. the evidence showed that it represented the vessel when it took charge of the unloading of the cargo and issued cargo receipts (or tally sheets) in its own name.e. The loss/damage to the cargo was sustained while it was still on board or under the custody of the vessel. The consequence is that the action is considered prescribed as far as Macondray is concerned but not against its principal. In supervising the unloading of the cargo and issuing Daily Operations Report and Statement of Facts indicating and describing the day-to-day discharge of the cargo. i.” The difficulty is that Transcontinental has not been impleaded in these cases and so is beyond the Court’s jurisdiction. cannot be made liable for acts of disclosed principal As regards the goods damaged or lost during unloading.
19. and only those assigned will be considered. When interest commence The interest must also be reduced to the legal rate of 6%. but on 19 September 1980. Issues. Rafols contracted with Market Developers. they may nevertheless be considered in the interest of justice for a proper decision of the case. an unassigned error closely related to the error properly assigned. Inc. Tomol and Article 2209 of the Civil Code. . Ouano leased the said vessel to Florentino Rafols Jr. where they discussed at length their position vis-a-vis the claims of the other parties. or upon which a properly assigned error depends considered. and as for Maritime. consigned to Supreme Merchant Construction Supply. While an assignment of error which is required by law or rule of court has been held essential to appellate review. 20. Chua. Inc. Ouano vs. if it finds that their consideration is necessary in arriving at a just decision of the case. under a charter party. under an agreement denominated as a “Fixture Note” to transport 13. The consideration for the letting and hiring of said vessel was P60. At any rate. Julian O.R No. not on 20 April 1981. it cannot be held liable for the acts of its known principal resulting in injury to Union. even if they are not assigned as errors in their appeal.000. and Maritime cannot be held liable for acts of known principal The liability of Macondray can no longer be enforced because the claim against it has prescribed. 21. there are a number of cases which appear to accord to the appellate court a broad discretionary power to waive this lack of proper assignment of errors and consider errors not assigned. On 8 October 1980. 77674 and submitted their comment and later their memorandum.000 bags of cement from Iligan City to General Santos City.First of all. be properly considered by said court in deciding a case.00 as down payment and the balance of P30. date of the filing of the original complaint. conformably to our ruling in Reformina v. if they are questions raised in the trial court and are matters of record having some bearing on the issue submitted which the parties failed to raise or the lower court ignored. Interest of justice Besides. On 11 October 1980. Unassigned error closely related to error properly assigned. in the interest of justice. or upon which the determination of the question raised by the error properly assigned is dependent. It was also expressly stipulated that the charterer should operate the vessel for his own benefit and should not sublet or sub-charter the same without the knowledge and written consent of the owner. Ouano is the registered owner and operator of the motor vessel known as M/V Don Julio Ouano.000. CA (GR 95900. (MADE) through its group manager. will be considered by the appellate court notwithstanding the failure to assign it as error.000. Liability of Macondray can no longer enforced. with P30. the Court is clothed with ample authority to review matters. we note that they were formally impleaded as respondents in G. we reiterate the rule that even if issues are not formally and specifically raised on appeal. though not specifically raised in the pleadings in the appellate court.00 a month. Regalado (J): 3 concur Facts: Julius C. may. 23 July 1992) Second Division. and should commence. Secondly.00 to be paid within 20 days after actual departure of the vessel from the port of call.
and on 30 August 1990. of moral and exemplary damages.000. as charterer.000.00 representing the freight charges for the cement cargo.00 corresponding to the first 50% freight installment on the latter’s vessel `M/V Don Julio Ouano’ included as part of the purchase price paid by SMCSI to MADE. On 10 March 1981. et. Ouano filed a motion for reconsideration which was denied by the Court of Appeals on 15 October 1990. et. Hence. as shipper. for a bond to secure payment of the freightage. “to strongly request.00 attorney’s fees and expenses of litigation. but affirmed the decision with respect to Rafols.00 in concept. plus legal interest from 6 January 1981 date of filing of the original complaint. aside from moral and exemplary damages in the sum of P150. jointly and severally. paid Rafols the amount of P23. On appeal.000.(SMCSI) for a freightage of P46. seeking payment of P23. On 6 January 1981.000. with costs against Rafols. or even of Ouano himself who was then in General Santos City Port. attorney’s fees and expenses of litigation. while Ang and Chua filed theirs on 10 February 1982 and 31 May 1982. to pay Ouano P50. Said amount was agreed to be payable to Rafols by MADE in two installments. P23. Neither was there any demand made on Rafols. that is. SMCSI. to pay to Ouano the sum of P23.00. (1) ordering MADE. Chua. The Supreme Court denied the petition and affirmed the assailed judgment of the Court of Appeals.075. as shipper.000. including P1. Ang (Chua Pek Giok) and Rafols. .00. and absolved MADE. from the complaint. as consignee.075. the Court of Appeals reversed the decision. and (3) sentencing SMCSI and Ang. P4.00 incurred by Ouano for travel to General Santos City to coordinate in serving an alias summons per sheriff’s return of service. Rafols was declared in default for failure to file his answer despite due service of summons. Florentino Rafols makes good his commitment” to petitioner. On 25 May 1985. Chua and Rafols. Rafols had on board the M/V Don Julio Ouano his sobre cargo (jefe de viaje) when it departed from Iligan City until the cargo of cement was unloaded in General Santos City. and P5. respectively. and Rafols. nor to assert in any manner the maritime lien for unpaid freight over the cargo by giving notice thereof to the consignee SMCI. MADE.075. the petition for review on certiorari. to hold and keep in deposit either the whole or part of the cement cargo to answer for freightage. to pay Ouano P200. the trial court rendered a decision in favor of Ouano. (2) sentencing MADE. SMCSI. On 13 October 1980.000. if not demand to hold momentarily any payment or partial payment whatsoever due M/V Don Julio Ouano until Mr. the port of destination. The cement was sold in due course of trade by SMCSI to its customers in October and November 1980.00 upon loading of the cement at Iligan City and the balance of P23.al. On 20 October 1980.00 corresponding to the first installment of the freightage for the aforestated cargo of cement. The entire cargo was thereafter unloaded at General Santos City Port and delivered to the consignee. MADE filed its answer. al. jointly and solidarily. without any attempt on the part of either the captain of M/V Don Julio Ouano or the said sobre cargo of Rafols. et. jointly and severally. Ouano filed a complaint in the RTC of Cebu against MADE. The fixture note did not have the written consent of Ouano. Chua.075. al.150.00 upon completion of loading and receipt of the cement cargo by the consignee.00.00 attorney’s fees.000. Ouano wrote a letter to MADE through its manager. SMCSI.
with the payment of damages in either case. in order to bind a third person contractually. (2) At the time the fixture note was entered into between Rafols and MADE. Obligations of contracts limited to parties making them The obligation of contracts is limited to the parties making them and. the same. with certain exceptions not obtaining in the present case. in spite of a categorical prohibition may be a violation of the contract. the agreement between Rafols and MADE was for the former to transport the cement of the latter using either the “M/V Don Julio Ouano or substitute vessel at his discretion. negotiate for cargoes and receive freight payments. and. an expression of agent by such person is necessary. in any event. but the owner’s right of recourse is against the original charterer. and MADE and SMCSI were neither parties thereto nor were they aware of the provisions thereof. a written authorization signed by the wife of Ouano in his behalf. ordinarily. 4. the charter contract was entered into only by and between Ouano and Rafols. 2. under its terms.1. Contract neither favor nor prejudice third person It is a basic principle in civil law that. MADE and Chua not liable for damages for quasi-delict under Article 176 NCC MADE and Chua are not to be held liable for damages for a quasi-delict under Article 176 of the Civil Code for having failed to obtain his consent before entering into an agreement with Rafols. however. is a stranger to the contract. was shown by the former to the latter.” Hence. . can evidently be proof of good faith on the part of MADE and Chua who merely relied thereon. MADE and Chua not liable for damages for quasi-delict under Artice 1314 for inducing Rafols to violate charter party MADE and Chua could not be held guilty of inducing Rafols to violate the original charter party. The act of the charterer in sub-chartering the vessel. hence the latter cannot be held liable for the supposed non-compliance therewith. either for rescission or fulfillment. Herein. 5. Although the said authorization may have been made by the wife. Violation of charter party does not give rise to cause of action against sublessee or subcharterer. Owner’s recourse The violation of the prohibition in the contract against the sublease or sub-charter of the vessel without the vessel owner’s knowledge and written consent does not give rise to a cause of action against the supposed sublessee or sub-charterer. Contract binding upon contracting parties. 3. Parties to a contract cannot thereby impose any liability on one who. the decision to use the M/V Don Julio Ouano in transporting the cargo of MADE was solely that of Rafols. such contract can neither favor nor prejudice a third person. a contract can only bind the parties who had entered into it or their successors who assumed their personalities or their juridical positions. and that. authorizing Rafols to execute contracts. as a consequence. (3) As stated in the fixture note. only those who are parties to contracts are liable for their breach. The obligation to obtain the written consent of Ouano before subleasing or sub-chartering the vessel was on Rafols and not on MADE. (1) There is no evidence on record to show that MADE and Chua had knowledge of the prohibition imposed in the original charter party to sublease or sub-charter the vessel.
payments were actually made after 13 October 1980 by Rafols to Ouano. there are two distinct leases involved. The fact that the said checks . Payment not indication of bad faith or malice. Article 1652 NCC. the first freight installment was due and payable upon arrival of the assigned vessel at the port of loading. a stranger to the relationship between the lessee-sublessor and the sublessee. The lessee-sublessor is not an agent of the lessor nor is the lessor an agent of the lessee-sublessor. 10. To further withhold the payment of said installment would constitute a breach of MADE’s obligation under the foregoing contract. or his successor in interest.6.000. The sublessee has no right or authority to pay the sublease rentals to the lessor. 11. or any person authorized to receive it. 1980.00 dated October 13 and 21. said rentals being due and parable to the lessee-sublessor. and (b) a third postdated check for P32. the sublessee shall not be responsible beyond the amount of rent due from him. Rafols’ bouncing checks cannot be ascribable to MADE Herein. his rights and obligations vis-a-vis the lessor are not passed on to nor acquired by the sublessee. MADE. In such arrangement. Rights and obligations of parties In a sublease arrangement. The goods were loaded in the vessel on or before 9 October 1980. later. hence on that date the first freight installment was already due and demandable. under the fixture note. Sublessee subsidiary liable to lessor. No demand however was made against sublessee Although it is provided in Article 1652 of the Civil Code that the sublessee is subsidiarily liable to the lessor for any rent due from the lessee. MADE was under no obligation to pay Ouano since the freightage was payable to Rafols.00 issued on 9 November 1980. Leases involved in a sublease agreement. MADE could not withhold the payment of the freight to Rafols. Article 1240 of the Civil Code provides that “(p)ayment shall be made to the person in whose favor the obligation has been constituted. MADE could not withhold payment of freight In the absence of any positive action on the part of Ouano. His letter dated 13 October 1980 was only a request to hold momentarily any payment due for the use of M/V Don Julio Ouano until Rafols had made good his obligations to him. at the time of the extrajudicial demand by the lessor. Article 1240 NCC The act of MADE in paying the first freight installment to Rafols is not an indication of bad faith or malice. 8. to wit: (a) two checks in the total amount of P30. Ouano is deemed to have ratified the supposed sub-charter contract entered into by MADE and Rafols when he demanded the payment of the second freight installment as provided in the agreement and. Demand of second freight installment a ratification of the sub-charter contract Herein. in accordance with the terms of the sublease. As stated in the fixture note. but which are nonetheless distinct one from the other. the personality of the lessee qua lessee does not disappear. the principal lease and the sublease. 9. Herein. an interpleader case filed by MADE.” Consequently.000. The lessor is in the main and except only in the instances specified in the Civil Code. received the same by virtue of the decision of the CFI of Cebu in Civil Case R-19845. that is. was under obligation to pay the freight to Rafols. respectively. 7. Ouano made no demand for payment from MADE. Herein. There are two juridical relationships which co-exist and are intimately related to each other.
Lien on unpaid freight available when owner retains possession of goods Even on the assumption that Ouano had a lien on the cargo for unpaid freight. the same was deemed waived when the goods were unconditionally released to the consignee at the port of destination. 15. Kinds of charter party A charter party may. In such a contract. so that delivery of the goods to the consignee or a third person terminates. and. SMCSI and their agents. among other classifications. Shipowner’s lien on freight not in the nature of hypothecation The shipowner’s lien for freight is not in the nature of a hypothecation which will remain a charge upon the goods after he has parted with possession. The entire control and management of it is given up to him. this right may not be made use of where the goods have been delivered and were turned over to a third person without malice on the part of the third person and for a valuable consideration. but is simply the right to retain them until the freight is paid. in the absence of an express provision therefor. 14. and is therefore lost by an unconditional delivery of the goods to the consignee. Article 2241 whereof provides that credits for transportation of the goods carried. and provides the officers and provisions. The lien of a carrier for the payment of freight charges is nothing more than the right to withhold the goods. and that is the kind of charter party involved in the present case. the general owner has no lien on the cargo for the hire of the vessel. in short. the charterer is substituted in his place. The general owner loses his lien for freight. the period during which the lien shall subsist is 20 days. the lien. Therefore. be of two kinds: One is where the owner agrees to carry a cargo which the charterer agrees to provide. or constitutes a waiver of. The general owner. This second type is also known as a bareboat charter or otherwise referred to as a demise of the vessel. A carrier has such a lien only while it retains possession of the goods. even though there and other creditors and even if the shipper or consignee is insolvent. Period where lien subsists Under Article 667 of the Code of Commerce. the entire outfit. the charterer is substituted in place of the owner and becomes the owner for the voyage. who hires the vessel as one hires a house. and is inseparably associated with its possession and dependent upon it. the sale of the goods may be requested. has no remedy for the charter of his vessel but his personal action on the covenants of the charter party. however.bounced for insufficient funds cannot in any way be ascribable to MADE nor can it create or affect any liability which Ouano seeks to impute to MADE. Parenthetically. During this period. not only the entire capacity of the ship is let but the ship itself. In a charter party of the second kind. Article 667 of Code of Commerce as modified by Article 2241 NCC. . 13. this has been modified by the Civil Code. and the possession is passed to the charterer. It is a contract in which he trusts in the personal credit of the charterer. where the charter constitutes a demise of the ship and the charterer is the owner for the voyage. But. but the lien itself is not destroyed. for the price of the contract and incidental expenses shall constitute a preferred claim or lien on the goods carried until their delivery and for 30 days thereafter. and the second is where there is an entire surrender by the owner of the vessel to the charterer. takes her empty. 12. in whose favor the lien continues to exist when goods are taken on freight.
Teresita and Sotera Cañezal. which is engaged in the business of transporting fuel products such as gasoline. vs. the damages the latter is adjudged to pay plaintiffs-appellees. In said case. Inc. On 15 September 1992. The Court affirmed the decision of the Court of Appeals insofar as it orders Sulpicio Lines. of 20 December 1987. Overseas Factors vs.493 as indicated in the Coast Guard Clearance. its registered operator Francisco Soriano.000 passengers. on 15 April 1997. plying the route of Manila/ Tacloban/ Catbalogan/ Manila/ Catbalogan/ Tacloban/ Manila. Inc. Bataan. the board of marine inquiry after investigation found that the MT Vector. and its owner and actual operator Vector Shipping Corporation. but possibly carrying an estimated 4. in turn. At about 10:30 p. On 22 March 1988. Inc. Third-party defendantappellee Vector Shipping Corporation and Francisco Soriano are held liable to . both unmanifested passengers but proved to be on board the vessel. 30 September 1999) First Division. is ineffectual and unavailing. (CA-GR CV 39626). Herein.16. On appeal to the Court of Appeals interposed by Sulpicio Lines. and passengers totaling 1. On the other hand. motor tanker MT Vector left Limay. Inc. loaded with 8. South Sea Shipping Co. All the crewmembers of MV Doña Paz died. Pardo (J): 3 concur. a complaint for “Damages Arising from Breach of Contract of Carriage” against Sulpicio Lines. insofar as it held Caltex liable under the third party complaint to reimburse/indemnify Sulpicio Lines. Cañezal and Corazon Cañezal damages as set forth therein. Hence the petition. the two vessels collided in the open sea within the vicinity of Dumali Point between Marinduque and Oriental Mindoro. the MV Doña Paz is a passenger and cargo vessel owned and operated by Sulpicio Lines. the Court of Appeal modified the trial court’s ruling and included petitioner Caltex as one of the those liable for damages.. et al. South Sea Shipping inapplicable The case of Overseas Factors. filed a third party complaint against Francisco Soriano. The Supreme Court granted the petition and set aside the decision of the Court of Appeals. kerosene.800 barrels of petroleum products shipped by Caltex. the cargo was still in the possession of the carrier whose officers and crew refused to unload the same unless the balance of the freight was paid. Only 24 survived the tragedy after having been rescued from the burning waters by vessels that responded to distress calls.. Inc. the cargo had already been unconditionally delivered to the consignee SMCI without protest. Sulpicio Lines (GR 131166. On 19 December 1987. et al. Sulpicio. filed with the RTC Manila. Among those who perished were public school teacher Sebastian Cañezal (47 years old) and his daughter Corazon Cañezal (11 years old). were at fault and responsible for its collision with MV Doña Paz. Inc. Caltex vs. by virtue of a charter contract between Vector Shipping and Caltex. making trips twice a week. Vector Shipping Corporation and Caltex (Philippines). the trial court rendered decision dismissing the third party complaint against Caltex. to pay the heirs of Sebastian E. enroute to Masbate. 1 took no part Facts: MT Vector is a tramping motor tanker owned and operated by Vector Shipping Corporation. The next day. the passenger ship MV Doña Paz left the port of Tacloban headed for Manila with a complement of 59 crew members including the master and his officers. On 13 February 1989. diesel and crude oil. Inc. while the two survivors from MT Vector claimed that they were sleeping at the time of the incident.m.
whatever damages. The respective rights and duties of a carrier depends on the nature of the contract of carriage The respective rights and duties of a shipper and the carrier depends not on whether the carrier is public or private. the ship owner to supply the ship’s store. notwithstanding the charter of the whole or portion of a vessel by one or . vs. the charterer mans the vessel with his own people and becomes. The charterer is free from liability to third persons in respect of the ship. the rights and the responsibilities of ownership rest on the owner. (3) voyage charter. 1. 4. subject to liability for damages caused by negligence. 2. In the case at bar. attorneys’ fees and costs the latter is adjudged to pay plaintiffs-appellees in the case. also known as a voyage charter. 3. Bareboat. 6. Charter party and contract of affreightment defined A charter party is a contract by which an entire ship. is let by the owner to another person for a specified time or use. or voyage charter. or a charter party or similar contract on the other. in consideration of the payment of freight. the owner for the voyage or service stipulated. but on whether the contract of carriage is a bill of lading or equivalent shipping documents on the one hand. Caltex and Vector entered into a contract of affreightment. Contract of affreightment Under a demise or bareboat charter. (2) time charter. pay for the wages of the master of the crew. In both cases. Kinds of contract of affreightment A contract of affreightment may be either time charter. the charter-party provides for the hire of the vessel only. the same however is not true in a contract of affreightment (Coastwise Lighterage Corp. wherein the leased vessel is leased to the charterer for a fixed period of time. wherein the ship is leased for a single voyage. and defray the expenses for the maintenance of the ship. Inc. CA) A public carrier shall remain as such. Categories of charter parties Charter parties fall into three main categories: (1) Demise or bareboat. If the charter is a contract of affreightment.reimburse/indemnify defendant Sulpicio Lines. Charterer’s liability: Bareboat charter vs. but not voyage charter. transforms common carrier into private carrier Although a charter party may transform a common carrier into a private one. a contract of affreightment is one by which the owner of a ship or other vessel lets the whole or part of her to a merchant or other person for the conveyance of goods. 5. which leaves the general owner in possession of the ship as owner for the voyage. either for a determinate period of time or for a single or consecutive voyage. or some principal part thereof. on a particular voyage. in effect.
When negligence shows bad faith. episodic or unscheduled basis. Article 1732. The parties entered into a voyage charter. MT Vector fits the definition of a common carrier under Article 1732 of the Civil Code (Common carriers are persons.more persons. the general community or population. the charter party agreement did not convert the common carrier into a private carrier. by land. offering their services to the public). which retains the character of the vessel as a common carrier. The failure of a common carrier to maintain in seaworthy condition the vessel involved in its contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code. (Planters Products vs. of the time and of the place. equip. water. Responsibility of carrier before voyage. Common carrier. Carriers are deemed to warrant impliedly the seaworthiness of the ship. among others. firms or associations engaged in the business of carrying or transporting passengers for passengers or goods or both. 8. Indubitably. CA). For a vessel to be seaworthy. and one who does such carrying only as an ancillary activity (in local idiom. Neither does Article 1732 distinguish between a carrier offering its services to the “general public. shall apply. and supply the ship. In the case at bar. or air for compensation. Article 1733 deliberately refrained from making such distinctions. 7. In the case at bar. Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service on a regular or scheduled basis and one offering such services on a an occasional. for the moment. (1) The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to (a) Make the ship seaworthy. It is only when the charter includes both the vessel and its crew. as in the case of a time-charter or voyage charter. as “a sideline”). corporations. Common carrier defined A common carrier is a person or corporation whose regular business is to carry passengers or property for all persons who may choose to employ and to remunerate him.. at least insofar as the particular voyage covering the charter-party is concerned. it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew. as in a bareboat or demise that a common carrier becomes private. the provisions of Article 1171 and 2201 paragraph 2. 10.e. (b) Properly man. 9. provided the charter is limited to the ship only. If the law does not state the . although her holds may. construed Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both. be the property of the charterer. and one who offers services or solicits business only from a narrow segment of the general population. Article 1173 of the New Civil Code Article 1173 of the Civil Code provides that “the fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons.” i. Seaworthiness Under Section 3 of the Carriage of Goods by Sea Act. a ship-owner in a time or voyage charter retains possession and control of the ship.
Caltex not liable for damages Caltex and Vector Shipping Corporation had been doing business since 1985. This business is impressed with a special public duty. the carrier being obliged by law to impliedly warrant its seaworthiness. and vigilance. the time and the place. shippers of goods. which the circumstances justly demand. that which is expected of a good father of a family shall be required. or the omission to do something which ordinarily regulate the conduct of human affairs. The duty rests upon the common carrier simply for being engaged in “public service. as commonly understood. whether the carrier possesses the necessary papers or that all the carrier’s employees are qualified. Negligence defined Negligence. or for about two years before the tragic incident occurred in 1987. Because of the implied warranty of seaworthiness. Caltex had the right to presume that the ship was seaworthy as even the Philippine Coast Guard itself was convinced of its seaworthiness. All things considered. Clearly. when transacting with common carriers. would do (Southeastern College vs. For these reasons. Reason for the applicability of Section 3 COGSA.diligence which is to be observed in the performance. . It may be the failure to observe that degree of care. as a mere voyage charterer. To demand more from shippers and hold them liable in case of failure exhibits nothing but the futility of our maritime laws insofar as the protection of the public in general is concerned. transportation has become more rapid. and Article 1755 NCC to carriers. not shipper and passengers. CA). passengers and shippers alike customarily presume that common carriers possess all the legal requisites in its operation. 13. precaution. genuineness of its licenses and compliance with all maritime laws. are not expected to inquire into the vessel’s seaworthiness. Considering the nature of transportation business. In the case at bar. especially because with the modern development of science and invention. Ordinary diligence required of shippers The provisions owed their conception to the nature of the business of common carriers. Such a practice would be an absurdity in a business where time is always of the essence. By the same token.” The Civil Code demands diligence which is required by the nature of the obligation and that which corresponds with the circumstances of the persons. 12. the nature of the obligation of Caltex demands ordinary diligence like any other shipper in shipping his cargoes. The public must of necessity rely on the care and skill of common carriers in the vigilance over the goods and safety of the passengers. a passenger or a shipper of goods is under no obligation to conduct an inspection of the ship and its crew. The charterer of a vessel has no obligation before transporting its cargo to ensure that the vessel it chartered complied with all legal requirements. is conduct which naturally or reasonably creates undue risk or harm to others.” 11. Past services rendered showed no reason for Caltex to observe a higher degree of diligence. more complicated and somehow more hazardous. passengers cannot be expected to inquire every time they board a common carrier. we find no legal basis to hold petitioner liable for damages.
Paula San Agustin was a passenger on board flight SN 284 of Sabena Belgian World Airlines originating from Casablanca to Brussels. When she arrived at Manila International Airport on 2 September 1987 and immediately submitted her Tag to facilitate the release of her luggage but the luggage was missing. She was advised to accomplish and submitted and filed on the same day.00 shoes/bag $150. but the airline refused to settle the claim. and (e) (t)he cost of the suit. namely: jewelries valued at $2. Belgium. This extraordinary responsibility.00. 2. the mere breach or non-fulfillment of the prestation gives rise to the presumption of fault on the part of the obligor. The Supreme Court affirmed the appealed decision.00 or its legal exchange in Philippine pesos. Fault or negligence. CA (GR 104685.00. Paula San Agustin (a) US$4. the airlines’s Local Manager. the trial court rendered judgment ordering Sabena Belgian World Airlines to pay Ma. She followed up her claim on 14 September 1987 but the luggage remained to be missing.000. luggage itself $10. Extraordinary diligence required on carriers Art. affirmed in toto the trial court’s judgment. or a total of $4. On 30 September 1987. common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. the petition for review. This rule is not different in the case of common carriers in the carriage of good father of a family but that of “extraordinary” care in the vigilance over the goods.000. After trial. Hence. in its decision of 27 February 1992.265. demanding immediate attention.00 or its exchange value. 14 March 1996) First Division: Vitug (J): 4 concur Facts: On 21 August 1987. . The appellate court.00.00 as moral damages.00. accessories $75. Sabena appealed the decision of the Regional Trial Court to the Court of Appeals. (c) P10. according to Art. On 15 September 1987. But unfortunately San Agustin was informed that the luggage was lost for the second time. When the source of an obligation is derived from a contract.265. 1736.Sabena Belgian World Airlines vs. the luggage was its content has not been found. with costs against Sabena Belgian World Airlines. (d) P10. San Agustin demanded from the defendant the money value of the luggage and its contents amounting to $4. 1733 of the [Civil] Code provides that from the very nature of their business and by reason of public policy. on the Occasion of San Agustin’s following up her luggage claim. 1. and of the place. Ma.265. At the time of the filling of the complaint.500. She was issued Tag 77143 on her valuables. she filed her formal complaint with the office of Ferge Massed. “(b) P30. of the time.000.350. She stayed overnight in Brussels and her luggage was left on board Flight SN 284. she was furnished copies of the airlines’s telexes with and information that the Brussel’s Office of defendant found the luggage and that they have assured by the airline that it has notified its Manila Office 1987. Rule in contracts and common carriers Fault or negligence consists in the omission of that diligence which is demanded by the nature of an obligation and corresponds with the circumstances of the person.00 as exemplary damages. attorney’s fees. clothes $1.
Proximate cause defined Proximate cause is that which. stating among other things.’ And Art. 4. jewelry. lightning. Art 1737 states that the common carrier’s duty to observe extraordinary diligence in the vigilance over the goods transported by them remains in full force and effect even when they are temporarily unloaded or stored in transits. either immediately or by setting other events in motion. have reasonable ground to expect at the moment of his act or default that an injury to some person might probably result therefrom. all constituting a natural and continuous chain of events. 1735 establishes the presumption that if the goods are lost. on 02 October 1929. earthquake. Poland. Tort doctrine not a defense in failure to observe extraordinary diligence The rules as to the extraordinary diligence required in carriers remain basically unchanged even when the contract is breached by tort (on the ground that Section 5(c). as amended by the Hague Protocol of 1955. produces injury and without which the result would not have occurred. unless they prove that they had observed extraordinary diligence as required in Article 1733. precious metals.lasts from the time the goods are unconditionally placed in the possession of and received by the consignee or person who has the right to receive them. generally observed by International carriers. (3) Act or omission of the shipper or owner of the goods. Article IX. unbroken by any efficient intervening cause. common carrier are presumed to have been at fault or to have acted negligently. negotiable papers. On 23 October 1987. or other natural disaster or calamity. The airline company is not thus entirely off track when it has likewise raised in its defense the tort doctrine cannot support its case. storm. as an ordinarily prudent and intelligent person. 5. It was supposed to arrive on the same flight that San Agustin took in returning to Manila on 2 September 1987. of the General Conditions of Carriage. that: “Passengers shall not include in his checked baggage. money. Fragiles or perishable articles. (5) Order or act of excepted causes obtains in the case. 7. Loss of baggage twice shows gross negligence It remained undisputed that San Agustin’s luggage was lost while it was in the custody of Sabena Belgian World Airlines. 3. 6. securities or other valuable”) although noncontradictory principles on quasi-delict may then be assimilated as also forming part of the governing law. Exceptions to extraordinary diligence requirement The only exceptions to the foregoing extraordinary responsibility of the common carrier is when the loss. destroyed or deteriorate. in natural and continues sequence. or deterioration of the goods is due to any of the following causes: (1) Flood. and the carrier may refuse to carry as checked baggage. she was advised that her luggage . destruction. (4) The character of the goods or defects in the packing or in the containers. each having a close causal connection with its immediate predecessors. under such circumstances that the person responsible for the event should. Proximate legal cause defined The proximate legal cause is that acting first and producing the injury. (2) Act of the public enemy in war. signed at Warsaw. the final event in the chain immediately affecting the injury as a natural and probable result of the cause which first acted. whether international or civil.
16 April. BA 19M. is considered to be equivalent to willful misconduct. CA (GR 121824. the attendance of gross negligence (given the equivalent of fraud or bad faith) holds the common carrier liable for all damages which can be reasonably attribute.had finally been found. PR 311 Y. or as an absolute limit of the extent of that liability. or for some Particular or exceptional type of damage. 23 April. 1 concur in result Facts: On 16 April 1989. it could exculpate itself completely. and the carrier’ or misconduct of its employees.” The Hague Protocol amended the Warsaw Convention by removing the provision that if the airline took all necessary steps to avoid the damage. bad faith. India.” Since BA had no direct flights from Manila to Bombay. 0840H. or destruction. Under domestic law and jurisprudence (the Philippines being the country of destination). for the “loss of said baggage not only once by twice underscore the wanton negligence and lack of care ” on the part of the carrier. 1730H. 16 April. GOP Mahtani decided to visit his relatives in Bombay. Status OK. (Alitalia vs. 8. 2100H. only to be told later that her luggage had been lost for the second time.” The same deletion was effected by the Montreal Agreement of 1966. done with intent to cause damage or recklessly and with knowledge that damage would probably result. Manila [MNL]. and . In anticipation of his visit. its servants or agents. including moral and exemplary damages. and declaring the stated limits of liability not applicable “if it is proved that the damage resulted from an act or omission of the carrier. The Convention does not thus operate as an exclusive enumeration of the instances of an airline’s liability. loss or damage to property or delay in its transport is not attributable to or attended by any wilful misconduct. Bombay [BOM]. Romero (J): 3 concur. in turn. Philippines is country of destination. misconduct or by such default on his part as. The latter.” or “if the damage is (similarly) caused by any agent of the carrier acting within the scope of his employment. No error in application of usual rules on extent of recoverable damages beyond the Warsaw limitations There is no error in the preponderant application to the case of the usual rules on the extent of recoverable damages beyond the Warsaw limitations. he obtained the services of a certain Mr. Status OK. Slight reflection readily leads to the conclusion that it should be deemed a limit of liability only in those cases where the cause of the death or injury to person. although unforeseen. 29 January 1998) Third Division. purchased a ticket from British Airways (BA) where the following itinerary was indicated (Manila [MNL]. Sabena Belgian World Airlines is ultimately guilty of “gross negligence” in the handling of San Agustin’s luggage. Hongkong [HKG] BA 20M. with its contents intact. Status OK. Intermediate Appellate Court) 9. Hongkong [HKG]. recklessness or otherwise improper conduct on the part of any official or employee for which the carrier is responsible. to the non-performance of the obligation. with the result that a passenger could recover unlimited damages upon proof of wilful misconduct. Gumar to prepare his travel plans. Thus. Warsaw convention denies the carrier availment of provisions limiting liability if damage is caused by willful misconduct or default The Warsaw Convention denies to the carrier availment “of the provisions which exclude or limit his liability if the damage is caused by his willful. PR 310Y. in accordance with the law of the court seized of the case. Mahtani had to take a flight to Hongkong via Philippine Airlines (PAL). British Airways vs.
00 for the value of the two (2) suit cases.” Back in the Philippines. hence. which however. confident that upon reaching Hongkong.Unfortunately. the law governing common carriers imposes an exacting standard. on 7 September 1995. ordering BA to pay Mahtani the sum of P7. Article 22 (1) of the Warsaw Convention In a contract of air carriage a declaration by the passenger of a higher value is needed to recover a greater amount.000. affirmed the trial court’s findings in toto. The Court dismissed BA’s third party complaint against PAL. specifically on 11 June 1990.upon arrival in Hongkong he had to take a connecting flight to Bombay on board BA. Culpability of airline for lost damages. with costs against BA. Hence. In determining the amount of compensatory damages in this kind of cases. unless the consignor has made. Article 22(2) of the Warsaw Convention provides that “In the transportation of checked baggage and goods. the trial court rendered its decision in favor of Mahtani. A business intended to serve the travelling public primarily. Declaration of higher value needed to recover greater amount. Nature of airline’s contract of carriage The nature of an airline’s contract of carriage partakes of two types. 2.00 Pesos for moral and actual damages and 20% of the total amount imposed against BA for attorney’s fees and costs of the action. No costs. BA appealed to the Court of Appeals. 1. Mahtani filed his complaint for damages and attorney’s fees against BA and Mr. it is imbued with public interest.00 representing the value of the contents of Mahtani’s luggage. reinstating the third-party complaint filed by British Airways dated 9 November 1990 against Philippine Airlines. the appeal by certiorary. After appropriate proceedings and trial. when Mahtani arrived in Bombay he discovered that his luggage was missing and that upon inquiry from the BA representatives.000. After patiently waiting for his luggage for one week. the liability of the carrier shall be limited to a sum of 250 francs per kilogram. Prior to his departure. Neglect or malfeasance by the carrier’s employees could predictably furnish bases for an action for damages. Dissatisfied. he was told that the same might have been diverted to London. BA finally advised him to file a claim by accomplishing the “Property Irregularity Report. Claimant must prove existence of factual basis for damages As in a number of cases. namely: a contract to deliver a cargo or merchandise to its destination and a contract to transport passengers to their destination. 3. US$400. P50. on 4 March 1993. Gumar before the trial court (Civil Case CEB-9076). the Court has assessed the airlines’ culpability in the form of damages for breach of contract involving misplaced luggage. the same would be transferred to the BA flight bound for Bombay. a special declaration of the value at delivery and has paid a supplementary sum if the case so . it is vital that the claimant satisfactorily prove during the trial the existence of the factual basis of the damages and its causal connection to defendant’s acts. Mahtani checked in at the PAL counter in Manila his two pieces of luggage containing his clothings and personal effects. The Supreme Court modified the decision of the Court of Appeals. at the time the package was handed over to the carrier.
such tariff being binding on the passenger regardless of the passenger’s lack of knowledge thereof or assent thereto. the objection must be made at the earliest opportunity. Benefits of limited liability subject to waiver The Court. its ruling regarding the amount is assuredly a question of fact. thus. lest silence when there is opportunity to speak may operate as a waiver of objections. who acts as third-party plaintiff to enforce against such thirdparty defendant a right for contribution. are entitled to great respect. that court ruled that “it has been repeatedly laid down as a rule of evidence that a protest or objection against the admission of any evidence must be made at the proper time. 5. Objection must be made at earliest opportunity It is a well-settled doctrine that where the proponent offers evidence deemed by counsel of the adverse party to be inadmissible for any reason. Gonda In the early case of Abrenica v. has ruled against blind reliance on adhesion contracts where the facts and circumstances justify that they should be disregarded. without any objection. by the defendant. BA has precisely failed in this regard. or may be inferred. No blind reliance on adhesion contracts. However. given the foregoing postulates. Factual findings of trial court entitled to great respect Needless to say. the inescapable conclusion is that BA had waived the defense of limited liability when it allowed Mahtani to testify as to the actual damages he incurred due to the misplacement of his luggage. its counsel failed not only to interpose a timely objection but even conducted his own cross-examination as well. Further. and that if not so made it will be understood to have been waived. 8. the inadmissibility of evidence is. or from the presentation of proof. indemnity. to compound matters for BA.” 4. however. Herein. factual findings of the trial court. 9. This doctrine is recognized in this jurisdiction. 6. or from the answer thereto. Tempengko The third-party complaint is a procedural device whereby a ‘third party’ who is neither a party nor privy to the act or deed complained of by the plaintiff. subrogation or any other relief. Gonda. The proper time to make a protest or objection is when. Firestone Tire Rubber vs. such right is a mere privilege which can be waived. Herein. Carrier not liable for loss of baggage in amount in excess of limits specified in tariff American jurisprudence provides that an air carrier is not liable for the loss of baggage in an amount in excess of the limits specified in the tariff which was filed with the proper authorities. in respect of . benefits of limited liability are subject to waiver such as when the air carrier failed to raise timely objections during the trial when questions and answers regarding the actual claims and damages sustained by the passenger were asked. Abrenica vs. a task within the competence of the Court of Appeals. Right to object actually a mere privilege that can be waived. unless he proves that the sum is greater than the actual value to the consignor at delivery. the latter has the right to object. a finding not reviewable by the Supreme Court.requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum. Nature of third party complaint. 7. from the question addressed to the witness. Proper time to object. Necessarily. may be brought into the case with leave of court. since the actual value of the luggage involved appreciation of evidence. as affirmed by the Court of Appeals.” Herein. Herein.
Consequently. Lufthansa issued a confirmed ticket to Tirso Antiporda covering five-leg trip aboard different airlines. from there on. since it was the one which issued the confirmed ticket. is one of agency Both BA and PAL are members of the International Air Transport Association (IATA). both members of the IATA. its agent or sub-contractor. In fact. and liable for damages which principal may suffer It is a well-settled rule that an agent is also responsible for any negligence in the performance of its function and is liable for damages which the principal may suffer by reason of its negligent act. carriage to be performed hereunder by several successive carriers is regarded as a single operation. 11. the fourth paragraph of the “Conditions of Contracts” of the ticket 32 issued by BA to Mahtani confirms that the contract was one of continuous air transportation from Manila to Bombay (”4. But the Rules permit defendant to bring in a third-party defendant or so to speak. Hence. 12. Were it not for this provision of the Rules of Court. wherein member airlines are regarded as agents of each other in the issuance of the tickets and other matters pertaining to their relationship.the plaintiff’s claim. Contractual relationship between BA and PAL. Court of Appeals. herein. had no cause of action against PAL. it merely acted as a ticketing agent for Air Kenya: In rejecting Lufthansa’s argument. In that case. as its subcontractor or agent.”) It is undisputed that PAL. when Antiporda transferred to Air Kenya. the contractual relationship between BA and PAL is one of agency. Air Kenya. however. 13. the Court of Appeals erred when it opined that BA. The third-party complaint is actually independent of and separate and distinct from the plaintiff’s complaint. and the latter the agent. the court ruled that “In the very nature of their contract. PAL a subcontractor or agent of BA The contract of air transportation was exclusively between Mahtani and BA. the former being the principal. the latter merely endorsing the Manila to Hongkong leg of the former’s journey to PAL. An action for damages was filed against Lufthansa which. in transporting Mahtani from Manila to Hongkong acted as the agent of BA. regardless of those instances when actual carriage was to be performed by various carriers. CA The pronouncement that BA is the principal is consistent with the ruling in Lufthansa German Airlines v. being the principal. one of the airlines which was to carry Antiporda to a specific destination “bumped” him off. to litigate his separate cause of action in respect of plaintiff’s claim against a third-party in the original and principal case with the object of avoiding circuitry of action and unnecessary proliferation of law suits and of disposing expeditiously in one litigation the entire subject matter arising from one particular set of facts. Lufthansa is clearly the principal in the contract of carriage with Antiporda and remains to be so. The . its obligation as a principal in the contract of carriage ceased. denied any liability. BA is principal. 10. it would have to be filed independently and separately from the original complaint by the defendant against the third-party. Therefore. Pronouncement consistent with Lufthansa vs. contending that its responsibility towards its passenger is limited to the occurrence of a mishap on its own line. Agent responsible for any negligence in performance of its function. Unfortunately.
instead of totally absolving PAL from any liability. the Japanese immigration official noted that Michael appeared shorter than his height as indicated in his passport. en employee of JAL endorsed their applications for shore pass and directed them to the Japanese immigration official. 2005 Facts: On March 27. Mahtani can only sue BA alone. fair and equitable to allow BA to sue PAL for indemnification. service and meals. Ltd. Proceedings in third party complaint in accord with doctrine against multiplicity of suits To deny BA the procedural remedy of filing a third-party complaint against PAL for the purpose of ultimately determining who was primarily at fault as between them. JAPAN AIRLINES VS. The trial court rendered a decision favor of the respondents. No. illustrates the principle which governs the particular situation. January 28. Held: The SC found that JAL did not breach its contract of carriage with respondents. the case. this is not to say that PAL is relieved from any liability due to any of its negligent acts.00 each for their accommodation. the CA affirmed in toto the decision of the trial court. Subsequently. respondents filed a complaint for damages claiming that JAL did not fully apprise them of their travel requirements and that they were rudely and forcibly detained at the Narita Airport. It is but logical. During their interview. not PAL. Mahtani can sue BA alone. A JAL employee was instructed that the respondents were to be “watched so as not to escape. Their itinerary included a stop-over in Narita and an overnight stay at Hotel Nikko Narita. while not exactly in point. such proceeding is in accord with the doctrine against multiplicity of cases which would entail receiving the same or similar evidence for both cases and enforcing separate judgments therefor. Because of this inconsistency. is without legal basis. Court of Appeals. since the latter was not a party to the contract. It may be . 1992. After all. respondents were denied shore pass entries and were detained at the Narita Airport Rest House where they were billeted overnight. Issue: Whether JAL is guilty of breach of contract.R. However. however.” 14. Upon arrival at Narita. acting as an agent of another carrier. It must be borne in mind that the purpose of a third-party complaint is precisely to avoid delay and circuity of action and to enable the controversy to be disposed of in one suit.” Respondents were charged US $400.issuance of confirmed Lufthansa ticket in favor of Antiporda covering his entire five-leg trip aboard successive carriers concretely attest to this. In that case. v. PAL however not relieved from liability Since the present petition was based on breach of contract of carriage. if it is proven that the latter’s negligence was the proximate cause of Mahtani’s unfortunate experience. 15. 161730. A shore pass is required of a foreigner aboard a vessel or aircraft who desires to stay in the neighborhood of the port of call for not more than 72 hours. respondents Michael and Jeanette Asuncion left Manila on board Japan Airlines’ (JAL) bound for Los Angeles. In China Air Lines. On appeal. security. ASUNCION G. and not PAL. is also liable for its own negligent acts or omission in the performance of its duties. the Court recognized that a carrier (PAL).
. such duty does not extend to checking the veracity of every entry in these documents. the CA found that the evidence shows that petitioner represented the vessel. Hence. having no absolute relation with Trade & Transport. INC. also prepared for the needs of the vessel. Subject shipments were insured with Provident Insurance Corp. it. which duty includes arrangement for the entrance and clearance of the vessel. the Sailing Notice and Custom’s Clearance. that it has no control over the acts of the captain and crew of the carrier and cannot be held responsible for any damage arising from the fault or negligence of said captain and crew. A ship agent is the person entrusted with provisioning or representing the vessel in the port in which it may be found. 2005 Facts: CANPOTEX SHIPPING SERVICES LIMITED INC. that accordingly. Mr. Formal claims were then filed with Trade & Transport but MACONDRAY refused and failed to settle the same. that upon arrival at the port. de la Cruz. The trial court found that petitioner was appointed as local agent of the vessel.. petitioner will be considered as the ship agent and may be held liable as such. JAL should not be faulted for the denial of respondents’ shore pass applications. When the shipment arrived. PROVIDENT INSURANCE CORPORATION February. JAL could not vouch for the authenticity of a passport and the correctness of the entries therein. it can still be the ship agent of the vessel M/V Trade Carrier. VS. These acts all point to the conclusion that it was the entity that represented the vessel at the port of destination and was the ship agent within the meaning . Held: Although petitioner is not an agent of Trade & Transport. shipped on board the vessel M/V Trade carrier certain goods in favor of ATLAS FERTILIZER CORPORATION. as long as the latter is the one that provisions or represents the vessel. Petitioner’s employees were present at the port of destination one day before the arrival of the vessel. LIABILITIES MACONDRAY & CO. consignee discovered that the shipment sustained losses. as an agent. SHIP AGENT. Further. The latter prepared the Notice of Readiness. Provident paid for said losses. however. is responsible for any loss sustained by any party from the vessel owned by Trade & Transport. MACONDRAY denies liability over the losses. where they stayed until it departed. M/V Trade Carrier discharged the full amount of shipment as shown by the draft survey. They were also present during the actual discharging of the cargo.true that JAL has the duty to inspect whether its passengers have the necessary travel documents. The power to admit or not an alien into the country is a sovereign act which cannot be interfered with even by JAL.. INC. Issue: Whether or not MACONDRAY & CO. the representative of petitioner. the alleged operator of the vessel who transported the shipment. Moreover. MACONDRAY is the local representative of the shipper. As such. against all risks. the charterer of M/V Trade Carrier and not party to this case. This is not within the ambit of the contract of carriage entered into by JAL and herein respondents. the Completion Notice. whether acting as agent of the owner of the vessel or as agent of the charterer. the Statement of Facts.
NATIONAL TRUCKING AND FORWARDING CORPORATION (NTFC) and COOPERATIVE FOR AMERICAN RELIEF EVERYWHERE. Hence.. CARE and NTFC as plaintiffs filed an action for breach of contract of carriage against respondent as defendant. in case of loss of goods in transit. No. INC. at times when Jama had to attend to other business before a delivery was completed.and context of Article 586 of the Code of Commerce. Held: Article 1733 of the Civil Code demands that a common carrier observe extraordinary diligence over the goods transported by it. he instructed his subordinates to sign the delivery receipts for him. the delivery checkers required the surrender of the original bills of lading. the presumption of fault or negligence may be overturned by competent evidence showing that the common carrier has observed extraordinary diligence over the goods. petitioner NTFC allegedly did not receive the good and filed a formal claim for non-delivery of the goods shipped through respondent. LORENZO SHIPPING CORPORATION (LSC) G. the respondent’s agent unloaded the goods and delivered the same to petitioner’s warehouse. 153563.R. the common carrier is presumed under the law to have been at fault or negligent. 2005 Facts: The Philippine government entered into a contract of carriage of goods with petitioner NTFC whereby the latter shipped bags of non-fat dried milk through respondent LSC. Upon completion of each delivery. On reaching the port of Zamboanga City. petitioner’s branch supervisor in Zamboanga City. However. This exacting standard imposed on common carriers in a contract of carriage of goods is intended to tilt the scales in favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for shipment. The government through the DOH. Issue: Whether or not respondent is presumed at fault or negligent as common carrier for the loss or deterioration of the goods. Extraordinary diligence is that extreme measure of care and caution which persons of unusual prudence and circumspection use for securing and preserving their own property or rights. However. PRESUMPTION OF FAULT OR NEGLIGENCE REBUTTABLE REPUBLIC OF THE PHIL. Respondent explained that the cargo had already been delivered to Jama. the certified true copies showing that Jama was indeed the . the delivery checkers of respondent’s agent requested Jama to surrender the original bills of lading. Before each delivery. and in their absence. Prior to releasing the goods to Jama. Notwithstanding the precautions taken. but the latter merely presented certified true copies thereof. (CARE) VS. represented by the DEPARTMENT OF HEALTH. the delivery checkers asked Jama to sign the delivery receipts. February 7. The respondent has observed such extraordinary diligence in the delivery of the goods. EXTRAORDINARY DILIGENCE. The consignee named in the bills of lading issued by the respondent was Abdurahma Jama.
The 24-hour requirement under said stipulation is. cannot be construed as sufficient compliance with the said proviso. PROMPT NOTICE OF CLAIM MUST BE MADE WITHIN THE PRESCRIBED PERIOD AS STATED IN THE BILL OF LADING PROVIDENT INSURANCE CORP. 118030. Held: There can be no question about the validity and enforceability of Stipulation No. January 15. petitioner’s insistence that respondent carrier had knowledge of the damage because one of respondent’s officers supervised the unloading operations and signed a discharging receipt. G. a sine qua non for accrual of the right of action to recover damages against the carrier. INC. Respondent ASC argued that the claim or demand by petitioner had been waived. In addition. by agreement of the contracting parties. The cargo was insured by UCPB General Insurance Co.R. abandoned. Moreover. 7 of the Bill of Lading. DEFINITION: COMMON CARRIER IN GENERAL CALVO VS.R. 2002 Facts: A contract was entered into between Calvo and San Miguel Corporation (SMC) for the transfer of certain cargoes from the port area in Manila to the warehouse of SMC. March 19. No. Issue: Whether or not failure to make the prompt notice of claim as required is fatal to the right of petitioner to claim indemnification for damages.consignee of the goods. Considering that the prompt demand was necessary to foreclose the possibility of fraud or mistake in ascertaining the validity of claims. Petitioner PIC indemnified the consignee AFC for its damages and seeks reimbursement from respondent ASC for the value of the losses/damages to the cargo. a reading of the stipulation will readily show that upon the consignee or its agent rests the obligation to make the necessary claim within the prescribed period and not merely rely on the supposed knowledge of the damage by the carrier. 2004 Facts: The vessel MV Eduardo II received on board a shipment of plastic woven bags of fertilizer in good order and condition which was consigned to Atlas Fertilizer Corporation (AFC) and covered by a bill of lading. (PIC) VS. In the process of unloading at the port of destination. (ASC) G. COURT OF APPEALS and AZUCAR SHIPPING CORP. certain goods were found to have fallen overboard and some considered being unrecovered spillages. there was a need for the consignee or its agent to observe the conditions provided for in Stipulation No. No. or otherwise extinguished for failure of the consignee to comply with the required claim for damages set forth in Stipulation No. 148496. Inc. Hence. they required Jama or his designated subordinates to sign the delivery receipts upon completion of each delivery. 7 in the Bill of Lading.. UCPB GENERAL INSURANCE TERMINAL SERVICE. When the shipment arrived and unloaded from the . 7.
1990. a failure to file a Notice of Claim within three days will not bar recovery if it is . 2002 Facts: On June 13. CMC Trading A. it was found out that some of the goods were torn. she does not indiscriminately hold her services out to the public but only to selected parties. paid for the amount of the damages and as subrogee thereafter.R. it cannot indeed be doubted that it is a common carrier. contends that it is a private carrier not required to observe such extraordinary diligence in the vigilance over the goods. discharged the subject cargo. claim that pursuant to the Carriage of Goods by Sea Act (COGSA). the complaint was filed by respondent on July 25. an Inspection Report as to the condition of the goods was prepared and signed by representative of both parties. Germany 242 coils of various Prime Cold Rolled Steel Sheets for transportation to Manila consigned to the Philippine Steel Trading Corporation.. 1990.vessel. filed a suit against Calvo. G. INC. June 5. Petitioners. Calvo withdrew the cargo from the arrastre operator and delivered the same to SMC’s warehouse. 1990. M/V Anangel Sky arrived at the port of Manila and within the subsequent days. on the other hand. on the other hand. Issue: Whether or not Calvo is a common carrier liable for the damages for failure to observe extraordinary diligence in the vigilance over the goods. Held: The law makes no distinction between a carrier offering its services to the general community or solicits business only from a narrow segment of the general population. shipped on board the M/V Anangel Sky at Hamburg. at the time of their receipt. ONE-YEAR PRESCRIPTIVE PERIOD BELGIAN OVERSEAS CHARTERING AND SHIPPING N. and the consignee declared the same as total loss. Second. Note that the transportation of goods holds an integral part of Calvo’s business. Four coils were found to be in bad order. In this case.V. FIRST INSURANCE CO. As customs broker. Petitioner. Held: First. has been the subject of a joint inspection or survey. They assert that the cargo was discharged on July 31. 1990. 143133. VS.G. respondent should have filed its Notice of Loss within three days from delivery. When it was inspected. No. UCPB. FILING OF NOTICE OF CLAIM. PHIL. Issue: Whether or not failure to file a Notice of Claim shall bar respondent from recovery. 1990 but respondent filed its Notice of Claim only on September 18. COGSA provides that the notice of claim need not be given if the state of the goods. 1991. On July 28. being the insurer. The respondent filed its Notice of Claim only on September 18. prior to unloading the cargo.
The one-year prescriptive period also applies to the shipper. (GPS) G. FGU INSURANCE CORP. Held: The stipulation in the charter party exempting the ship owner from liability for negligence . aboard one of its trucks. Issue: Whether or not the stipulation in the charter party exempting the ship owner from liability for negligence of its agents is valid. A common carrier is one which offers its services whether to the public in general or to a limited clientele in particular but never on an exclusive basis. SARMIENTO TRUCKING CORP. 141910. GPS filed a motion to dismiss for failure to prove that it was a common carrier. 1991. No. the truck collided with an unidentified truck. FGU. The cargo was found to have shortages when it arrived. while the Complaint was filed by respondent on July 25. GPS does not fit the category of a common carrier although it is not freed from its liability based on culpa contractual. VS. HIC paid for said shortages and thereafter. On its way. the amount of the damage and filed a suit against GPS. VS. Held: Note that GPS is an exclusive contractor and hauler of Concepcion Industries. One day. Inc. the consignee. 1990.nonetheless filed within one year. Therefore. The cargo was discharged on July 31. Issue: Whether or not GPS falls under the category of a common carrier. it was to deliver certain goods of Concepcion Industries. offering its service to no other individual or entity. resulting in damage to the cargoes. demanded recovery of the amount from American Steamship Agencies (ASA). Inc. 2002 Facts: GPS is an exclusive contractor and hauler of Concepcion Industries. G. AMERICAN STEAMSHIP AGENCIES 23 SCRA 24 Facts: A Peruvian firm shipped on board its vessel certain goods with San Miguel Brewery as its consignee and Home Insurance Co. (HIC) as its insurer. The trial court ordered ASA to reimburse HIC since according to the Code of Commerce. within the one-year prescriptive period.P.R. insurer of the shipment paid to Concepcion Industries. the insurer of the goods or any legal holder of the bill of lading. Inc. STIPULATION IN THE CHARTER PARTY EXEMPTING LIABILITY HOME INSURANCE CO. “the ship agent is civilly liable for damages in favor of third persons due to the conduct of the carrier’s captain and that the stipulation in the charter party exempting the owner of the ship from liability is against public policy. August 6. Inc.
Held: A fortuitous event is an occurrence which could not be foreseen or which though foreseen. COURT OF APPEALS. No. v. INC. CA [G. Petitioners. Facts: Mayer. it was found out that some of the steel pipes were damaged. This factor of unforeseen-ability is lacking in this case for despite the report that the Maranaos were planning to burn FEI’s buses. The operations manager of FEI was advised to take precautionary measures but just the same. Because such steel pipes were insured with South Sea and Charter. they demanded from them the amount for such damage more than 2 years after the unloading of the goods. It was found out that a Maranao owns said jeepney and certain Maranaos were planning to take revenge by burning some of FEI’s buses. COURT OF APPEALS 305 SCRA 14 Facts: A bus of Fortune Express. INC.. The CA set aside the decision of the TC and dismissed . FORTUITOUS EVENT: EXEMPTION FROM LIABILITY FORTUNE EXPRESS. is inevitable. (FEI) figured in an accident with a jeepney which resulted in the death of several passengers including two Maranaos. Upon arrival. hence. Inc. three armed Maranaos were able to seize a bus of FEI and set it on fire. 124050. (South Sea) and the CHARTER INSURANCE CORPORATION (Charter). They denied paying for the repair of the pipes because allegedly such were due to factory defects. Mayer Steel Pipe Corp vs.R. June 19. SOUTH SEA SURETY AND INSURANCE CO. the public at large is not involved and strict public policy governing common carriers cannot be applied. Inc could not be held liable.of its agents is valid and not against public policy considering that the ship was totally chartered for the use of a single party. 1997] MAYER STEEL PIPE CORPORATION (Mayer) and HONGKONG GOVERNMENT SUPPLIES DEPARTMENT (Hongkong). Issue: Whether the seizure of the bus was a fortuitous event which Fortune Express. VS. by virtue of a contract. Respondents. nothing was really done by FEI to protect the safety of the passengers. shipped to Hongkong steel pipes. The TC found that the damage was not due to a factory defect thus ruled against the insurance companies.
Macondray & Co. the consignee.R. such were not discharged in Manila. the suit against the insurer must be filed within 1 year after the delivery of the goods or the date when they should be delivered. They are liable. and thus. The insurer’s liability is not extinguished because the insurer’s liability is based on the contract of insurance. The latter case is governed by the Insurance Code. only the carrier’s liability is extinguished if no suit is brought within 1 year. L-24064 February 29. thus the right of action against them did not prescribe. however. was the consignee of some machinery parts shipped on board a vessel owned by Macondray. 1968 Facts: A company in Manila. they should not be held liable because the right to file an action against them had already prescribed. Edwardson Manufacturing. affect the relationship between the shipper and the insurer. Inc (authorized agent of Barber Steamship Lines) G. Held: No. Isuue: Whether the Sea Act applies to the insurers.the complaint on the ground of prescription. Rizal Surety & Insurance vs. It defines the obligations of the carrier under the contract of carriage. It does not. the consignee and/or the insurer on the other hand. However. . that t based from the Sea Act. the Sea Act does not apply. The Sea Act governs the relationship between the carrier on the one hand and the shipper. Under the Sea Act. *************************** The Sea Act governs the relationship between the carrier on the one hand and the shipper. No. Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship shall be discharged from all liability for loss or damage to the goods if no suit is filed within one year after delivery of the goods or the date when they should have been delivered.
the carrier would still be liable for non-delivery of the goods. (formerly National Carbon Philippines. Carrier’s liability is extinguished. however. . The defendants invoked prescription based on the provisions of the Sea Act. Rizal now seeks to recover from the common carrier the maximum amount recoverable as based on the bill of lading. prescription applies. INC. 1977 UNION CARBIDE PHILIPPINES.). Held: Yes. vs. Whether or not the goods had been discharged is immaterial. No. the period for filing the same had already expired. L-27798 June 15. because such would be due to its own omission. In this case. contends that prescription does not apply when the goods had not been discharged from the vessel. Manila Railroad G. MANILA PORT SERVICE and AMERICAN STEAMSHIP AGENCIES. substituted by the PHILIPPINE NATIONAL RAILWAYS. Union Carbide Phil vs. they paid for their value. INC. thus the liability of the common carrier (or its agent) is extinguished. And because the corresponding bill of lading in this case stipulates that it is subject to the provisions of the Sea Act. as in this case. such shall be deemed to be incorporated therein. particularly the provision as to the prescription. MANILA RAILROAD CO.Because the goods were insured by Rizal. before the action was commenced. that the action should have been filed within 1 yr after the delivery of the goods or the date when the goods should have been delivered in order for the carrier to be held liable in case of loss or damage.. Inc. Rizal.R. Issue: Whether prescription applies.
So the consignee filed an admiralty case under the Sea Act against the carrier for the recovery of the amount for the 25 damaged bags and an arrastre case for the 25 pilfered bags and for the missing ones. while in the custody of the customs arrastre. Issue: WON the right to file the action already prescribed. In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods. When the shipment reached the consignee Union Carbide. American Steamship Facts: G. carrier’s agent. the action was filed beyond the one year period within which a carrier can be held liable in case of loss or damage of the goods. That if a notice of loss or damage. The TC dismissed the complaint on the ground of prescription (1 yr) relying on the Sea Act. that fact shall not affect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the date when the goods should have been delivered. Held: Yes. ********************************* In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered: Provided. “Delivery” as contemplated in the Sea Act means delivery to the customs arrastre operator. customs arrastre. . is not given as provided for in this section. No. Ang vs. 1967 A commercial bank. L-25047 March 18. The American Steamship. thus the bill of ladings of both transactions were indorsed to Ang. however. Both of them was not able to pay. some were also missing.R. aside from the 25 damaged bags which were then pilfered. agreed to sell separate a boat to Davao Merchandising and cases of hilano cop change to Teves. of which 25 bags were in bad condition before they even landed. either apparent or concealed. Yan Yue. In this case.Facts: One thousand bags of synthetic resins were delivered to Manila Port Service.
Issue: WON the provision of the Carrier of Goods Sea Act as to prescription is applicable in this case. the carrier agreed to transship the cargo to Cebu. The provision of law involved in this case speaks of "loss or damage". American Insurance Company vs. Since the final port of call was in Manila. but not nondelivery. it is not applicable. No. Held: No. the aforequoted provision of the Carriage of Goods by Sea Act stating that "In any event. thus. L-24515 November 18. it was found out that some were missing. Maritima Facts: G. paragraph 4 of the Carriage of Goods by Sea Act does not apply to cases of misdelivery or conversion. There being no loss or damage to the goods. The reason is not difficult to see.misdelivered the goods to Davao Merchandising and Teves. What is to be resolved — in order to determine the applicability of the prescriptive period of one year to the case at bar — is whether or not there was 'loss' of the goods subject matter of the complaint. The insurance company paid for the loss. the situation is different. Thus." does not apply. Ang filed separate complaints against American Steamship for alleged misdelivery of goods belonging to him. the goods were either rightly delivered or misdelivered. The carrier moved to dismiss the complaint on . American Steamship filed a motion to dismiss on the ground of prescription invoking the Carrier of Goods Sea Act. the carrier and the ship shall be discharged from all liability in respect of loss or damage unless it is brought within one year after delivery of the goods or the date of when the goods should have been delivered. In a case where the goods shipped were neither lost nor damaged in transit but were.R. Thus. The one-year prescriptive period under Section 3(6). on the contrary. but they were not lost. delivered in port to someone who claimed to be entitled thereto. 1967 A certain cargo was shipped in New York. Said one-year period of limitation is designed to meet the exigencies of maritime hazards. the final destination. and the special need for the short period of limitation in case of loss or damage caused by maritime perils does not obtain. ****************************************** The point that matters here is that the situation is either delivery or misdelivery. it now seeks recovery of the amount it paid from the carrier. When the cargo was unloaded.
which was Cebu City. the insurance company wanted to recover from Maritima the amount it paid. Thus. for which the corresponding freight had been prepaid. Held: Yes. there was a contract of carriage. Maritima vs. Insurace Comp of N. America.the ground of prescription invoking in its favor the provisions of the Carrier of Goods Sea Act since the action was filed beyond the 1yr period stated therein. and that its obligation to transship the cargo to Cebu was merely that of a "forwarding agent" of the shipper. While waiting for the ship. Maritima denies liability contending that there was no contract of carriage b/w them because. Maritima sent 2 of its wharfs to Davao where the hemps were loaded free of charge in preparation for its loading onto a ship. Macleod recovered from it the loss it suffered. The insurance company contends that the 1 yr prescriptive period does not apply since the cargo was a transshipment cargo. among others no bill of lading was issued in favor of Macleod. It was part of the carrier’s obligation under the contract of carriage and the fact that the transshipment was made via an inter-island vessel did not operate to remove the transaction from the operation of the Carriage of Goods by Sea Act. By subrogation. Issue: WON there was a contract of carriage between the shipper (Macleod) and the carrier (Maritima). one of the wharfs sank. Issue: WON the provision of the Carrier of Goods Sea Act with regard to the prescriptive period applies in this case although the shipment from Manila to Cebu was merely a through a forwarding agent and thus has no responsibility. the shipment of hemp from Davao to Manila and its subsequent transshipment to Boston. The use of the term "forwarding agent of the shipper" is not decisive in the issue. Held: Yes. Because all the shipments were insured by the Insurance Comp of N. The action is based on the contract of carriage up to the final port of destination. subsequently confirmed by a written agreement. the prescriptive period still applies. The transshipment of the cargo from Manila to Cebu was not a separate transaction from that originally entered into by the carrier. . that the discharge thereof in Manila terminated the obligation of Macondray as carrier. America 12 SCRA 213 Facts: Macleod contracted the services of Maritima by phone.
however. and with PAL for the second. Saludo then instituted an action for damages alleging that the carriers failed to exercise extraordinary diligence over the cargo received by them for shipment. and not merely with the formal execution of the bill of lading. when properly executed and delivered to a shipper. A bill of lading. Issue: WON TWA and PAL should be held liable. Airway bills were issued. To support such assertion. . . recitals in a bill of lading as to the goods shipped raise only a rebuttable . deny liability alleging that they did not receive the remains. However. a further reading and a more faithful quotation of this authority would reveal that (a) bill of lading may contain constituent elements of estoppel and thus become something more than a contract between the shipper and the carrier. Preparations were made by a funeral home for the shipment of the remains to the Phil. Saludo invoked the dictum that a bill of lading is prima facie evidence of the receipt of the goods by the carrier Respondents. there should be no limitations as to form.The bill of lading is not indispensable to contract of carriage provided that there is a meeting of the minds and from such meeting arise rights and obligations. Thus. The shipment was booked with TWA for the first route. Alhough an airway bill estops the carrier from denying receipt of goods of the quantity and quality described in the bill. the remains of Crispina were switched with another. Such issuance is not necessary to complete delivery and acceptance. . as between the shipper and the carrier. . there was delay in the delivery of the cargo. Held: No. CA Facts: 207 SCRA 498 Crispina Saludo died in Illinois. But somehow. Saludo vs. Hence. . Between the consignor of goods and receiving carrier. The liability of the carrier as common carrier begins with the actual delivery of the goods for transportation. The airway bills issued was not an evidence of receipt of delivery to the airline but merely a confirmation of the booking. is evidence that the carrier has received the goods described therein for shipment. when no goods have been delivered for shipment no recitals in the bill can estop the carrier from showing the true facts .
However. the contents remained inside the container for 6 moths.presumption that such goods were delivered for shipment. -------------------------------------A bill of lading serves two functions. This raises the presumption that it agreed to the entries and stipulations imposed therein. As a result. Second. the terms and conditions as well as the various entries contained therein were brought to its knowledge. It admits receiving the bill of lading but contends that its refusal in accepting the shipment proves that terms and conditions printed therein. Held: Yes. demurrage charges accrued for the consignee’s failure to discharge the shipment. the fact must outweigh the recital. thus as per agreement in the bill of lading. Keng Hua admits that it received the bill of lading. First. Inc Facts: 286 SCRA 257 Sea Land (carrier) received a sealed container for shipment to Keng Hua (consignee) in Manila. with full knowledge of its contents. namely. it is a contract by which three parties. The acceptance of a bill of lading by the shipper and the consignee." . Keng Hua did not immediately object to or dissent from any term or stipulation therein. Keng Hua accepted the bill of lading without interposing any objection as to its contents. Having been afforded an opportunity to examine the said document. Issue: WON the bill of lading is binding to the consignee (Keng Hua). the carrier. and the consignee undertake specific responsibilities and assume stipulated obligations. Keng Hua refused alleging that the bill of lading is not binding. RTC & Sea Land Service. Keng Hua vs CA. it is a receipt for the goods shipped." because the "acceptance of a paper containing the terms of a proposed contract generally constitutes an acceptance of the contract and of all of its terms and conditions of which the acceptor has actual or constructive notice. As between the consignor and a receiving carrier. A bill of lading was issued. the shipper. gives rise to the presumption that the same was a perfected and binding contract. Hence. Sea Land demanded from Keng Hua the payment of the charges. A "bill of lading delivered and accepted constitutes the contract of carriage even though not signed.
CA 286 SCRA 257 Va Reekum Paper – shipper. demurrage is the claim for damages for failure to accept delivery. -----------------------------------Here. is the compensation provided for in the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading.” And because a bill of lading is both a receipt and a contract. because of its failure to remove the cargoes from the containers. including the consignee. it demands refund contending that the bill of lading does not provide for the payment of container demurrage but only for a demurrage referring to damages for detention of vessels. Held: Yes. K-Line – carrier. Smith.Telengtan Bros. Whatever may be the interpretation of the consignee for the word “demurrage. (La Suerte Cigarette) vs. in its strict sense. Thus demmurage charges accrued. Consignee paid all the demurrage charges but was not able to obtain all of the shipment. Island Brokerage Co – consignee’s agent. Thus. The shipment was loaded on two vessels of K-Line. Essentially. the consignee was not able to discharge the shipment. Demurrage. its terms and conditions are conclusive on the parties. the consignee should pay only from the time of the arrival of the shipment up to the time when the customs arrastre refused action. But because the customs arrastre refused to act on the shipment due to a discrepancy in the bill of lading and the manifest. . Bell & Co – shipping agent La Suerte – consignee.” the fact is that the bill of lading provides for the payment of a demurrage for the detention of containers and other equipments for the so-called “free-time. This is so because customs arrastre’s ground for refusal was not due to the fault of the consignee but because of the fault of the carrier/shipping agent. Facts: Shipper contracted K-line for the shipment of container board liners. Issue: WON the consignee should pay the demurrage charges. A bill of lading was issued.
wants to acquire . One who adheres to the contract is in reality free to reject it in its entirety. specifying that the letter of credit issued to them by Co needed an on-board bill of lading and that transshipment is not allowed. Issue: WON Maersk Line should be liable. there had been a delay of two months in the delivery. Thus. refused to accept. Negligence was attributed to Maersk Line.Maersk Line vs. the two-month delay is not reasonable. the shipment was brought back to Manila by OOLC. such contract is not entirely prohibited. MMMC then contracted with OOLC to ship the anahaw fans. Held: Yes. CA & OOLC Facts: 201 SCRA 102 MMMC entered into a contract with Co in Japan for the export of anahaw fans. OOLC then demanded payment of such transport from MMMC. Trial court found Maersk Line liable relying on the character of the bill of lading as a contract of adhesion which is void. The provision of the bill of lading is a contract of adhesion. Nevertheless. The shipment was boarded on a vessel owned by Maersk Line. The buyer. due to a misshipment. Thus. CA Facts: 222 SCRA 108 Castillo ordered from Eli Lilly gelatin capsules. MMMC however. delivery of shipment or cargo should at least be made within a reasonable time. the questioned provision in the bill of lading has the effect of practically leaving the date of arrival of the subject shipment on the sole determination and will of the carrier. But the carrier denied liability alleging that there was no special contract under which it undertook to deliver the shipment on or before a specified date. However. among others. however. While it is true that common carriers are not obligated by law to carry and to deliver merchandise… unless such common carriers previously assume the obligation to deliver at a given date or time. In this case. Magellan Manufacturing (MMMC) vs. Castillo rejected the entire shipment and asked for damages.
MMMC had full knowledge of. the terms and conditions of the bill of lading thereby making the same conclusive as to it. Issue: WON OOLC should be held liable. OOLC however alleges that the bill of lading clearly states that there will be a transshipment and that petitioner consented to such agreement. the buyer’s refusal due to a transshipment was due to MMMC. and it cannot now be heard to deny having assented thereto. and actually consented to. it was discovered that the shipment was missing. Held: No. The acceptance of the bill without dissent raises the presumption that all the terms therein were brought to the knowledge of the shipper and agreed to by him and. in effect. Everett offered to pay only 100. alleging that it is OOLC’s fault why the buyer refused the acceptance of the shipment. CA & Hernandez Trading Facts: 297 SCRA 496 Hernandez Trading imported spare parts marked as MARCO from its supplier. The parts were shipped through Everett Steamship Corp. Upon arrival in Manila. This rule applies with particular force where a shipper accepts a bill of lading with full knowledge of its contents and acceptance under such circumstances makes it a binding contract. Issue: . he is estopped from thereafter denying that he assented to such terms. Everett Steamship Corp vs. Thus. in the absence of fraud or mistake. whatever amount they failed to obtain from the buyer Co.from OOLC.000 Yen invoking the bill of lading limiting its liability.
Upon discharge. A stipulation in the bill of lading limiting the common carrier's liability for loss or destruction of a cargo to a certain sum. Sweet Lines Facts: 212 SCRA 194 A foreign common carrier took on board cargoes for shipment to Manila and later on for transshipment to Davao. Tagum. it was found out that there was shortages in the cargo. it had itself to blame for not complying with the stipulations. on the ground that the action of Phil Am Gen & Tagum . After trial. liable to PhilAm Gen & Tagum. insured the cargoes with PhilAm Gen. The consignee. is sanctioned by law. PhilAm Gen vs.WON the limitation provided in the bill of lading is valid. Considering that the shipper did not declare a higher valuation. Held: Yes. unless the shipper or owner declares a greater value. and has been freely and fairly agreed upon. CA however reversed the decision. the TC ordered Sweet Lines. while some were damaged. among others. It is required that the stipulation limiting the common carrier's liability for loss must be reasonable and just under the circumstances. It was found that the stipulation in the bill of lading was reasonable and just under the circumstances. The shipper/supplier had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier.
etc. the parties to a contract of carriage may fix by agreement a shorter time for the bringing of suit on a claim for the loss of or damage to the shipment than that provided by the statute of limitations. -----------------------------------------In this case. loss. In this jurisdiction. being a contract of adhesion. they are not limitations of action. Suyom Facts: A Fuso Road tractor driven by Tutor rammed into the house cum of Tamayo which resulted in the death of Tamayo’s son and Oledan’s daughter. no right of action against the carrier can accrue in his favor. In the absence of any statutory limitation and subject only to the requirement on the reasonableness of the stipulated limitation period. Such limitation is not contrary to public policy for it does not in any way defeat the complete vestiture of the right to recover. Held: Yes. Issue: WON the stipulation as to the shortened period is valid. their performance must precede a suit for enforcement and the vesting of the right to file spit does not take place until the happening of these conditions. Batch 3 Equitable Leasing vs.prescribed relying on the stipulations of the bill of lading as to the shortened periods in the institution of an action in case of damage. this time limitation is actually a condition precedent to the accrual of a right of action against a carrier for damages caused to the merchandise. PhilAm Gen & Tagum asserts that such stipulation is void. Failure to claim from a criminal case finding . These are reasonable conditions precedent. Being conditions precedent. The shipper or the consignee must allege and prove the fulfillment of the condition and if he omits such allegations and proof. the action was filed way beyond the stipulated period of filing in the bill of lading. on the cargo. but merely requires the assertion of that right by action at an earlier period than would be necessary to defeat it through the operation of the ordinary statute of limitations. The validity of a contractual limitation of time for filing the suit itself against a carrier shorter than the statutory period therefor has generally been upheld as such stipulation merely affects the shipper's remedy and does not affect the liability of the carrier.
the registered owner of the tractor. BA Finance Corp vs. consequently. CA G. Thus. Hence. 2 WON BA Finance can escape liability by proving the actual/real owner of the truck. In contemplation of law. Issues: 1 WON BA Finance should be held liable. The registered owner of a certificate of public convenience is liable to the public for the injuries or damages suffered by passengers or third persons caused by the operation of said vehicle.R. it is directly and primarily responsible for the consequences of its operation. 1992 Facts: Amare. and in accordance with such proof. not having employed driver Tutor. Amare was found guilty beyond reasonable doubt of reckless imprudence. That such tractor was already sold to the owner of Fuso Road at the time of the accident.Tutor guilty of reckless imprudence. BA Finance wants to prove who the actual/real owner is at the time of the accident. the registered owner. BA Finance contends that it should not be held liable since it was not Amare’s employer at the time of the accident. Held: Yes. even though the same had been transferred to a third person. or that any damage or injury is caused by the vehicle on the public highways. regardless of sales made of a motor vehicle. Equitable contends that it should not be held liable for such damages which arose from the negligence of the driver Fuso Road. Under the same principle the registered . the actual operator and employer being considered as merely its agent. by virtue of a lease agreement. The same principle applies even if the registered owner of any vehicle does not use it for public service. Held: 1 Yes. BA Finance was found liable for damages since the truck was registered in its name. it could not have controlled or supervised him. Issue: WON Equitable should be held liable for damages in an action based on quasi delict for the negligent acts of a driver who was not its employee. The Court has consistently ruled that. respondents filed a civil case based on quasi delict against Equitable Leasing Corp. It also contends that the Isuzu truck was in the possession of Rock Component Phil. ----------------The main aim of motor vehicle registration is to identify the owner so that if any accident happens. Equitable should be held liable because it was the registered owner at the time of the accident. the driver of an Isuzu truck was involved in an accident which caused the death of three persons. among others. responsibility therefor can be fixed on a definite individual. 98275 November 13. No. the owner/operator of record is the employer of the driver. evade liability and lay the same on the person actually owning the vehicle. the registered owner is the lawful operator insofar as the public and third persons are concerned. BA Finance is liable.
an owner of a vehicle cannot be held liable for an accident involving the said vehicle if the same was driven without his consent or knowledge and by a person not employed by him. thus they filed a case for damages against driver Salbiniano and owner of the jeep Duavit. a registered owner who has already sold or transferred a vehicle has the recourse to a third-party complaint. does not relieve him directly of the responsibility that the law fixes and places upon him as an incident or consequence of registration. Duavit admits ownership of the jeep but contends that he should not be held liable since Salbiniano is not his employee and that the jeep was taken by Salbiniano without his (Duavit) consent. against the vendee or transferee of the vehicle. CA & Gonzales Facts: Gonzales purchased an Isuzu passenger jeepney from Vallarta. the jeepney collided with a ten-wheeler truck owned by Lim. He further asserts that an operator of the vehicle continues to be . he has a right to be indemnified by the real or actual owner of the amount that he may be required to pay as damage for the injury caused. The law. Failure to arrive to a settlement with Lim for the repair of the jeepney. 82318 May 18. 1989 Facts: Private respondents were on board a jeep when they met an accident with another jeep driven by Sabiniano. the law does not allow him. CA. Subsequently. While the registered owner is primarily responsible for the damage caused. and not Gonzales. Held: No. To hold the petitioner liable for the accident caused by the negligence of Sabiniano who was neither his driver nor employee would be absurd as it would be like holding liable the owner of a stolen vehicle for an accident caused by the person who stole such vehicle.R. Issue: Whether or not the owner of a private vehicle which figured in an accident can be held liable as an employer when the said vehicle was neither driven by an employee of the owner nor taken with his consent. Sarmiento & Catuar G. Duavit vs. Gonzales brought an action for damages against Lim & Gunnaban. driven by Gunnaban which resulted in the death of 1 passenger and injuries to all others. with its aim and policy in mind. Lim denied liability asserting that Vallarte. even if not used for a public service. This may appear harsh but nevertheless. Vallarta remained as the holder of a certificate of public convenience and the registered owner of the jeepney. should primarily be responsible to the public or to the third persons for injuries caused the latter while the vehicle is being driven on the highways or streets. is the real party in interest being the registered owner of the jeepney. in the same action brought against him to recover for the damage or injury done. This accident caused injuries to private respondents.owner of any vehicle. No. Lim & Gunnaban vs. 2 No.
its operator as he remains the operator of record; and that to recognize an operator under the kabit system as the real party in interest and to countenance his claim for damages is utterly subversive of public policy. Issue: WON Gonzales, an operator under the kabit system (considering that he is not the registered owner of the jeepney), may sue for damages against Lim. Or, WON Gonzales is a real party in interest. Held: Yes, Gonzales may sue. The evil sought to be prevented in enjoining the kabit system* does not exist. 1 Neither of the parties to the pernicious kabit system is being held liable for damages. 2 The case arose from the negligence of another vehicle in using the public road to whom no representation, or misrepresentation, as regards the ownership and operation of the passenger jeepney was made and to whom no such representation, or misrepresentation, was necessary. Thus it cannot be said that Gonzales and the registered owner of the jeepney were in stoppels for leading the public to believe that the jeepney belonged to the registered owner. 3 The riding public was not bothered nor inconvenienced at the very least by the illegal arrangement. On the contrary, it was private respondent himself who had been wronged and was seeking compensation for the damage done to him. Certainly, it would be the height of inequity to deny him his right. Thus, it is evident that private respondent has the right to proceed against petitioners for the damage caused on his passenger jeepney as well as on his business. ----------------N.B. The kabit system is an arrangement whereby a person who has been granted a certificate of public convenience allows other persons who own motor vehicles to operate them under his license, sometimes for a fee or percentage of the earnings. Although the parties to such an agreement are not outrightly penalized by law, thekabit system is invariably recognized as being contrary to public policy and therefore void and inexistent under Art. 1409 of the Civil Code. It would seem then that the thrust of the law in enjoining the kabit system is not so much as to penalize the parties but to identify the person upon whom responsibility may be fixed in case of an accident with the end view of protecting the riding public. The policy therefore loses its force if the public at large is not deceived, much less involved. Baliwag Transit Incs (BTI) vs CA & Martinez G.R. No. L-57493 January 7, 1987 Facts:
Martinez, claiming to be an employee of two bus lines operating under different grants of franchise but were issued only one ID Number: “Baliwag Transit” owned and operated by the late Tuazon and “Baliwag Transit Inc” (BTI) owned by de Tengco, (Martinez) filed a petition with the Social Security Commission to compel BTI to remit his premium contributions to SSS. BTI denied ever employing Martinez, and alleges that he was in fact employed by Tuason who operated a separate and distinct bus line from BTI. The Social Security Commission granted Martinez’s petition. On appeal, the CA reversed the decision of the commission, finding that Tuason was operating under the kabit system; that while Tuason was the owner and operator, his buses were not registered with the Public Service Commission in his own name; and thus ordered BTI to remit Martinez’ premiums to SSS. Issue: WON the issuance by SSS of one ID Number to the two bus lines necessarily indicates that one of them is operating under the kabit system. Held: No. The “Kabit System” has been defined by the Supreme Court as an arrangement “whereby a person who has been granted a certificate of convenience allows another person who owns motor vehicles to operate under such franchise for a fee.” The determining factor, therefore, is the possession of a franchise to operate which negates the existence of the “Kabit System” and not the issuance of one SSS ID Number for both bus lines from which the existence of said system was inferred. Thus, it is evident that both bus lines operated under their own franchises but opted to retain the firm name “Baliwag Transit” with slight modification, by the inclusion of the word “Inc.” in the case of herein petitioner, obviously to take advantage of the goodwill such firm name enjoys with the riding public. Conversely, the conclusion of the Court of Appeals that the late Pascual Tuazon, during the time material to this case operated his buses under the “Kabit System” on the ground that while he was actually the owner and operator, his buses were not registered with the Public Service Commission (now the Bureau of Land Transportation) in his own name, is not supported by the records. Philtranco & Manilhig vs. CA & Heirs of Acuesta G.R. No. 120553 June 17, 1997 Facts: Acuesta was riding his easy rider bicycle. One of the buses of Philtranco driven by Manilhig, on the other hand, was being pushed by some persons in order to start its engine. Subsequently, the engine started which occurred at the time when Acuesta was directly in front of the bus. Acuesta was run over by the bus. Trial court rendered a decision ordering Philtranco & Manilhig to be jointly and severally liable to the Heirs of Acuesta. CA affirmed, holding that Philtranco has a solidary liability with Manilhig under Art 2194 of the Civil Code. Issue: WON Philtranco’s liability is solidary (jointly & severally) with Manilhig. Or, WON Art 2194 is applicable.
Held: Yes. It had been consistently held that the liability of the registered owner of a public service vehicle, like petitioner Philtranco, for damages arising from the tortious acts of the driver is primary, direct, and joint and several orsolidary with the driver. As to solidarity, Article 2194 expressly provides: Art. 2194. The responsibility of two or more persons who are liable for a quasi-delict is solidary. Since the employer’s liability is primary, direct and solidary, its only recourse if the judgment for damages is satisfied by it is to recover what it has paid from its employee who committed the fault or negligence which gave rise to the action based on quasi-delict. Article 2181 of the Civil Code provides: Art. 2181. Whoever pays for the damage caused by his dependents or employees may recover from the latter what he has paid or delivered in satisfaction of the claim.
Tamayo vs. Aquino et al & Rayos 1959
G.R. Nos. L-12634 and L-12720
Facts: Epifania Gonzales (wife of Aquino) boarded a truck owned by Tamayo, holder of a certificate of public convenience to operate. Allegedly, while Epifania was making a trip aboard the truck, it bumped against a culvert on the side of the road, causing her death. Aquino et al filed an action for damages against Tamayo. Tamayo answered alleging that the truck is owned by Rayos, so he filed a 3rd party complaint against him (Rayos). The CFI ruled that Tamayo is the registered owner, under a public convenience certificate but such truck was sold to Rayos one month after the accident, but he (Tamayo) did not inform the Public Service Commission of the sale. CFI held Tamayo and Rayos jointly and severally liable to Aquino. CA affirmed, holding that, both the registered owner (Tamayo) and the actual owner and operator (Rayos) should be considered as joint tortfeasors and should be made liable in accordance with Article 2194 of the Civil Code (solidary). Issue: WON Art 2194 (solidary liability) is applicable; and, if NOT, how should Tamayo (holder of the cert. of public convenience) participate with Rayos (transferee/operator) in the damages recoverable. Held: No, Art 2194 is not applicable. The action instituted in this case is one for breach of contract, for failure of the defendant to carry safety the deceased for her destination. The liability for which he is made responsible, i.e., for the death of the passenger, may not be considered as arising from a quasi-delict. As the registered owner Tamayo and his transferee Rayos may not be held guilty of tort or a quasidelict; their responsibility is NOT SOLIDARY.
who operated the vehicle when the passenger died. its neglect was not so gross as to amount to bad faith or wantoness. Mrs. moral and exemplary damages. is the one directly responsible for the accident and death he should in turn be made responsible to the registered owner for what the latter may have been adjudged to pay. What is involved in this case is simple negligence. In the imposition of moral damages. his responsibility to the public or to any passenger riding in the vehicle or truck must be direct. Nonetheless. Fule’s luggage was wrongful or due to bad faith. The Madrid Office offered to pay about half of what she was asking. and a missing luggage. But as the transferee. Thus. ---------------------“[W]ith respect to moral damages. CA modified the decision by reducing the amount of moral and exemplary damages. there is still bad faith in making Mrs. so that he may thereby be relieved of the responsibility to the injured. the transferee acted merely as agent of the registered Batch 4 Sabena Belgian Airlines vs. They allegedly incurred medical and hotel expenses. CA Facts: Mrs. Held: Yes. there is no finding that the carrier’s delay in delivering Mrs. Fule made a letter-complaint to Sabena office. such as. delayed connecting flight to Barcelona. A certain Yancha made her sign a document in French language which she did not understand. the route: Manila-Brussels-Barcelona-Madrid.” (Ibid. at p. even if death does not result. that the rest would be paid by the Manila Office. the registered owner should not be allowed to prove that a third person or another has become the owner. considering that the rain through which Mrs. It turned out that the document was a quitclaim. they encountered inconveniences. Fule purchased three round trip tickets for herself and two children from Sabena. Fule et al had to walk was a slight drizzle. If the policy of the law is to be enforced and carried out. Here. While there is failure on the part of the carrier in protecting Mrs. Fule sign a quitclaim without informing her of its contents. During the trip. among others. walking under the drizzle after disembarking. The trial court awarded them actual. In operating the truck without transfer thereof having been approved by the Public Service Commission. among others. 13) As the appellate court found the petitioner guilty of bad faith in letting the respondent sign a quitclaim without her knowledge or understanding and contrary to . the defendant’s act must be wrongful or wanton or done in bad faith. Fule et al from the rain.As Tamayo is the registered owner of the truck. Issue: WON Sabena is liable to the Fules for damages arising from breach of contract of carriage. the rule is that the same are recoverable in a damage suit predicated upon a breach of contract of carriage only where (1) the mishap results in the death a of passenger and (2) it is proved that the carrier was guilty of fraud and bad faith.
what she was planning to do, the reduced award of moral and exemplary damages is proper and legal. Lopez vs Pan American World Airways (Pan Am) Facts: Senator Lopez et al made reservations for 1st class accommodations in a flight of Pan Am from Tokyo to San Francisco. The reservations were confirmed in a phone call. Tickets were also issued. However, Lopez et al were not accommodated in the first class for the reason that there was no accommodation for them. They instead took the tourist passengers without prejudice to any claim against Pan Am. Subsequently, a suit for damages was filed against Pan Am. Pan Am answered admitting its breach of the contract of carriage but however denied the allegation of bad faith. It contends that the failure to provide 1st class accommodations was made in honest mistake: That the accommodation was mistakenly cancelled, and expecting that there would be subsequent cancellation of bookings, they withheld the information regarding the cancellation from Lopez et al. Issue: WON Pan Am should be held liable for damages to Lopez et al. Held: Yes. The actuation of Pan Am may have been prompted by nothing more than the promotion of its self-interest in holding on to Senator Lopez and party as passengers in its flight and foreclosing on their chances to seek the services of other airlines that may have been able to afford them first class accommodations. All the time, in legal contemplation such conduct already amounts to action in bad faith. For bad faith means a breach of a known duty through some motive of interest or ill-will. “Self-enrichment or fraternal interest, and not personal ill-will, may well have been the motive; but it is malice nevertheless.” There being a clear admission in defendant’s evidence of facts amounting to a bad faith on its part in regard to the breach of its contracts with plaintiffs, it becomes unnecessary to further discuss the evidence adduced by plaintiffs to establish defendant’s bad faith. Among others, Lopez et al can be awarded moral damages (where the defendant acted fraudulently or in bad faith) and exemplary damages (where the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner). Zulueta vs. Pan Am Facts: Mr. Zulueta and his wife and child boarded a flight of Pan Am from Wake Island to the Phil. Mr. Zulueta, however, had to relieve himself and thus looked for a secluded place in the beach. As a result, he was delayed in boarding for some 20 or 30 minutes. While Mr. Zulueta was reaching the ramp, the captain of the plane demonstrated an intemperate and arrogant tone thereby impelling Mr. Zulueta to answer back. Thus, Mr. Zulueta was off-loaded. The airport manager of then sent Mr. Zulueta a letter stating that his stay in Wake Island would be for a minimum of one week during which he would be charged $13.30 per day. Issue: WON Pan Am should be held liable. Held:
Yes. Mr. Zulueta was off-loaded to retaliate and punish him for the embarrassment and loss of face thus suffered by defendant’s agent. The Zuluetas had a contract of carriage with the defendant, as a common carrier, pursuant to which the latter was bound, for a substantial monetary consideration paid by the former, not merely to transport them to Manila, but, also, to do so with “extraordinary diligence” or “utmost diligence.” The responsibility of the common carrier, under said contract, as regards the passenger’s safety, is of such a nature, affecting as it does public interest, that it “cannot be dispensed with” or even “lessenedby stipulation, by the posting of notices, by statements on tickets, or otherwise.” In the present case, the defendant did not only fail to comply with its obligation to transport Mr. Zulueta to Manila, but, also, acted in a manner calculated to humiliate him, to chastise him, to make him suffer, to cause to him the greatest possible inconvenience. ——————————————————— With regard to DAMAGES It is obvious, however, that in off-loading plaintiff at Wake Island, under the circumstances, defendant’s agents had acted with malice aforethought and evident bad faith. If “gross negligence” warrants the award of exemplary damages, with more reason is its imposition justified when the act performed is deliberate, malicious and tainted with bad faith. The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good. Defendant having breached its contracts in bad faith, the court, as stated earlier, may award exemplary damages in addition to moral damages PAL vs. Miano Facts: Miano took one of the flights of PAL (Mabuhay Class) bound to Germany. He allegedly checked in a brown suit case. Upon arrival in Germany, his luggage was missing. It was only after 11 days when he was bale to obtain such. Allegedly, he incurred expenses as a result of the delay. Thus, he wrote a demand letter to PAL. Having failed to recover, he instituted a claim for damages. The CFI rendered a decision ordering PAL to pay moral and exemplary damages, among others, to Miano. Issue: WON the award of moral & exemplary damages is proper. Held: No. Petitioner’s actuation was not attended by bad faith. In breach of contract of carriage by air, moral damages are awarded only if the defendant acted fraudulently or in bad faith. The established facts evince that petitioner’s late delivery of the baggage for eleven (11) days was not motivated by ill will or bad faith. In fact, it immediately coordinated with its Central Baggage Services to trace private respondent’s suitcase and succeeded in finding it. The award of exemplary damages is also not proper. The prerequisite for the award of exemplary damages in cases of contract or quasi-contract is that the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner. The undisputed facts do not so warrant the characterization of the action of petitioner.
Sulpicio Lines vs. CA Facts: Tito and his daughter Jennifer boarded a vessel owned by Sulpicio Lines in Manila, with them were several pieces of luggage. Despite the fact that Storm Signal No. 2 was announced (subsequently raised to No. 3), the vessel proceeded its transport to Tacloban. Subsequently, while traversing, the vessel capsized and Tito and Jennifer, along with other passengers were thrown in the sea. Tito survived, but Jennifer did not. Trial Court awarded actual, damages for death, moral and exemplary damages. Issue: WON the award of the damages is proper. Held: Actual – Not proper. There was no evidence showing the basis for the award. There is no showing that the value of the contents of the lost pieces of baggage was based on the bill of lading or was previously declared by Tito before he boarded the ship. Damages for Death – Proper. Deaths caused by a crime as quasi delict are entitled to actual and compensatory damages without the need of proof of the said damages. Moral Damages – Proper. in breach of contract of carriage, moral damages may be recovered when it results in the death of a passenger. Exemplary Damages – Proper. A common carrier is obliged to transport its passengers to their destinations with the utmost diligence of a very cautious person.The trial court found that petitioner failed to exercise the extraordinary diligence required of a common carrier, which resulted in the sinking. Thus, the sinking of the vessel was due to gross negligence. Trans World Airlines (TWA) vs. CA Facts: Vinluan, a practicing lawyer in Manila had to travel to several cities in Europe and US. While in Paris, he went to the office of TWA to confirm his reservation for first class accommodation. It was confirmed twice. During the time of the flight, he was told that there was no 1st class seat available. Hence, he was downgraded to economy. He protested but he was arrogantly treated by a TWA employee. And while waiting for his flight, he saw white Caucasians who arrived much later than him, in first class seats. Issue: WON Vinluan is entitled to damages. Held: Yes. 1 The discrimination is obvious and the humiliation to which private respondent was subjected is undeniable. Consequently, the award of moral and exemplary damages by the respondent court is in order. 2 Inattention and lack of care for the interest of its passengers who are entitled to its utmost consideration, particularly as to their convenience, amount to bad faith which entitles the passenger to the award of moral damages. More so in this case where instead of courteously informing private respondent of his being downgraded under the circumstances, he was angrily rebuffed by an employee of petitioner. Phil Rabbit Bus Lines vs. Esguerra
Issue: WON the award of damages is proper. Issue: WON the award of moral damages is proper. In other words. People of the Phil vs. The Court can only give credit to expenses which have been duly substantiated. the bus and a truck sideswiped each other. The award of actual damages must be reduced as well. coffin.A. The trial court awarded Esguerra moral damages. through the Philippine Travel Bureau in Manila three (3) “Visit the U. and moral damages. The Court of Appeals found that the two vehicles sideswiped each other at the middle of the road. his wife and his minor son. The victim’s lost earnings are to be computed according to the formula adopted by the Court in several decided cases. Fontanilla then bought two (2) additional coupons each for himself. This being the case. The Fontanillas proceeded to the US as planned. his wife and his son from petitioner at its office in Washington Dulles Airport. they used the 1st coupon. Only the costs of the tomb. More Facts: The More brothers were found guilty of murder for the killing of Valentino who sustained 18 stab wounds.” tickets for himself. The award of lost earning capacity must be increased. The exceptions are (1) where the mishap results in the death of a passenger. CA Facts: Respondent Aniceto Fontanilla purchased from petitioner United Airlines. Thus. The award is not meant to enrich the heirs of the victim but only to compensate them for injuries sustained to their feelings. They were ordered to pay by the trial court damages for funeral services and other expenses. The left forearm of Esguerra was hit. both vehicles were in their respective lanes and that they did not invade the lane of the other. It cannot be said therefore that there was fraud or bad faith on the part of the carrier’s driver. Held: No. the alleged expenses for food and drinks consumed during the wake must be disallowed for not having been competently proved.Facts: Esguerra boarded abus owned by Phil Rabbit Bus Lines from Manila to Pampanga. to wit: net earning capacity (“X”) equals life expectancy multiplied by gross annual income less living expenses. and (2) where it is proved that the carrier was guilty of fraud or bad faith. Held: The award of moral damages should be reduced. among others. the Fontanillas were issued tickets with corresponding boarding passes with the words “CHECK-IN . United Airlines vs. While in Bulacan. embalming and funeral services were properly receipted. as in the instant case.S. loss of income for 5 years. Moral damages are not recoverable in actions for damages predicated on a breach of the contract of transportation. After paying the penalty for rewriting their tickets. no moral damages are recoverable. The left arm was amputated. even if death does not result. There must also be an award for civil indemnity for death without need of evidence or proof of damages.
However. the Court’s ruling in said case should be read in consonance with existing laws. The appellate court. Held: No. then the carrier opens itself to a suit for breach of contract of carriage. For the indignity and inconvenience of being refused a confirmed seat on the last minute. ——————————————————————— What law is applicable. It is true that the tickets were “rewritten” in Washington. erred in applying the laws of the United States as. based on breach of contract of carriage. CA & TWA Facts: Sps Zalamea and their daughter purchased 3 airline tickets from TWA from its Manila agent for a flight to New York to LA. such fact did not change the nature of the original contract of carriage entered into by the parties in Manila. of the appointed date. Although. the Philippine Law or the US Law? he Philippine Law. entitling passengers concerned to an award of moral damages. of the Civil Aeronautics Board which provides that overbooking not exceeding 10% of the seating capacity of the aircraft shall not be considered as a deliberate and willful act of non-accommodation. Trial court awarded the Zalameas moral damages. However. the contract of carriage was to be performed in the United States. Where an airline had deliberately overbooked. Issue: Whether or not said policies (that overbooking of flights is a common and accepted practice in the US. 7. Held: No. Economic Regulations No. as amended. on a certain date.REQUIRED. a contract of carriage arises. Philippine law is the applicable law. the tickets were purchased through petitioner’s agent in Manila.” for a United Airlines flight. particularly. When an airline issues a ticket to a passenger confirmed on a particular flight. Those having full fare tickets were given priority among those in the wait-list. The CA. However. Cesar Zalamea was able to board such flight because he was holding the full fare ticket. said passenger is entitled to moral damages.C. no fraud nor bad faith could be imputed on respondent TransWorld Airlines. the Fontanillas were not able to board said flight because allegedly. thus does not amount to bad faith) were incorporated or deemed written on petitioners’ contracts of carriage. and the passenger has every right to except that he would fly on that flight and on that date. however. Thus. they were placed on the wait-list because the number of passengers who had checked in before them had already taken all of the seats. however. Sps Zalamea vs. reversed this. If he does not. . All three tickets were confirmed and reconfirmed. it took the risk of having to deprive some passengers of their seats in case all of them would show up for check in. D. Two tickets were purchased at a discounted rate of 75% while one was purchased in its full value. they did not have assigned seat numbers. Issue: Whether or not the Fontanillas were able to prove with adequate evidence his allegations of breach of contract in bad faith. Existing jurisprudence explicitly states that overbooking amounts to bad faith. among others. Since it is a matter of record that overbooking of flights is a common and accepted practice of airlines in the United States. however. in the case at bar. holding that moral damages are recoverable in a damage suit predicated upon a breach of contract of carriage only where there is fraud or bad faith.
If the cause of . or other natural disaster or calamity. it was also issued a Permit to Sail. Petitioners now allege that there was negligence on the part of the carrier. destruction or deterioration of the goods was due to the following: (a) flood. The charter-party agreement between North Front Shipping Services. or some principal part thereof. the consignee rejected all the cargo and demanded payment of damages from the common carrier. The trial court ruled that only ordinary diligence was required since the charter-party agreement converted North Front Shipping into a private carrier. earthquake. it has the burden of proving that it observed extraordinary diligence in order to avoid responsibility for the lost cargo. If indeed. It did not even endeavor to establish that the loss. lightning. Thus. and Republic Flour Mills Corporation did not in any way convert the common carrier into a private carrier. Evidently. the consignee: Republic Floor Mills.666 metric tons and some of the merchandise was already moldy and deteriorating. The failure of respondent TWA to so inform them when it could easily have done so thereby enabling respondent to hold on to them as passengers up to the last minute amounts to bad faith. (b) act of the public enemy in war. storm. Inc. Such conscious disregard of petitioners’ rights makes respondent TWA liable for moral damages Batch 2 Tabacalera Insurance vs. (c) act or omission of the shipper or owner of the goods. Upon refusal. The vessel was inspected by representatives of the shipper prior to the transport and was found fitting to carry the cargo. is let by the owner to another person for a specified time or usex x x Having been in the service since 1968.. Hence. This is a closed list. the insurance companies (petitioners) were obliged to pay. the master of the vessel and his crew should have undertaken precautionary measures to avoid or lessen the cargo’s possible deterioration as they were presumed knowledgeable about the nature of such cargo.TWA failed to show that there are provisions to that effect. respondent TWA placed its self-interest over the rights of petitioners under their contracts of carriage. (e) order or act of competent public authority. A “charter-party” is defined as a contract by which an entire ship. (d) the character of the goods or defects in the packing or in the containers. The goods were successfully delivered but it was not immediately unloaded by the consignee. did it fail to exercise the required diligence and thus should be held liable? Held: North Front Shipping is a common carrier. North Front Shipping Facts: Sacks of grains were loaded on board a vessel owned by North Front Shipping (common carrier). There were a shortage of 23. Equipped with this knowledge. But none of such measures was taken. whether international or civil. Issues: WON North Front Shipping is a common carrier. the master of the vessel would have known at the outset that corn grains that were farm wet and not properly dried would eventually deteriorate when stored in sealed and hot compartments as in hatches of a ship.
the fire cannot be considered as a fortuitous event. then the carrier is rightly liable therefor. loss or deterioration is other than the enumerated circumstances. Thus. All the cargoes of ESLI were delivered to their respective consignees but with corresponding additional freight and salvage charges. its captain and its crew: (1) The acetylene cylinder which was fully loaded should not have been stored in the accommodation area near the engine room where the heat generated therefrom could cause the acetylene cylinder to explode by reason of spontaneous combustion. However. it is presumed that ESLI was negligent and should be held liable to PHAC. CA Facts: Eeastern Shipping Lines Inc. The consignee Republic Flour Mills Corporation is guilty of contributory negligence. Issue: WON the fire was a fortuitous event. Philippine Home Assurance Corp (PHAC) vs. fire may not be considered a natural disaster or calamity since it almost always arises from some act of man or by human means.destruction. among others. a small fire was detected on the acetylene cylinder located in the accommodation area near the engine room. This resulted in a flash of flame throughout the accommodation area. Japan. It was seasonably notified of the arrival of the barge but did not immediately start the unloading operations. Held: No. (3) The fact that the acetylene cylinder was checked. The vessel was abandoned. the destruction. (ESLI) loaded on board a vessel (SS Easter Explorer) several shipment for carriage to several consignees. . All the charges were paid by PHAC. tested and examined and subsequently certified as having complied with the safety measures and standards by qualified experts before it was loaded in the vessel only shows to a great extent that negligence was present in the handling of the acetylene cylinder after it was loaded and while it was on board the ship. PHAC now seeks recovery from ESLI alleging that they were negligent. (2) Respondent ESLI should have known that by storing the acetylene cylinder in the accommodation area supposed to be reserved for passengers. WON ESLI should be held liable for the additional charges. ESLI argues. that the fire was a fortuitous event. loss or deterioration of the cargo cannot be attributed solely to the carrier. it unnecessarily exposed its passengers to grave danger and injury. In our jurisprudence. It cannot be an act of God unless caused by lightning or a natural disaster or casualty not attributable to human agency. While the vessel was off Okinawa. Thus. There is strong evidence indicating that the acetylene cylinder caught fire because of the fault and negligence of respondent ESLI.
particularly as to their convenience. that a contract of air carriage generates a relation attended with a public duty and any discourteous conduct on the part of a carriers employee toward a passenger gives the latter an action for damages and. the Mirandas were compelled to haggle for hotel accommodations. to put it mildly. the passengers saw a cargo truck at the shoulder of the national highway. or any other kind of deceit. the fact that private respondents were practically compelled to haggle for accommodations. when they withheld information from private respondents that they could actually be accommodated in a hotel of their choice. the spouses boarded a flight by PAL with 5 pieces of baggage. Held: YES. and a kerosene lamp appeared to serve as a warning light. Because of this. is rather demeaning and it partakes of discourtesy magnified by PALs condescending attitude. While it may be true that there was no direct evidence on record of blatant rudeness on the part of PAL employees towards the Mirandas. What the law considers as bad faith which may furnish the ground for an award of moral damages would be bad faith in securing the contract and in the execution thereof. While in Nueva Ecija. Allegedly. as well as in the enforcement of its terms. Moreover. CA Facts: Leticia Garcia and her son boarded a bus owned by Baliwag bound for Cabanatuan City. they were told by a PAL personnel that their baggage were ofloaded at Honolulu due to weight limitations. It is now firmly settled that moral damages are recoverable in suits predicated on breach of a contract of carriage where it is proved that the carrier was guilty of fraud or bad faith. and when he was able to step on the . Upon arrival at Manila. more so. The Court has time and again ruled.PAL vs. mental anguish. a situation unbefitting persons of their stature. CA Facts: Spouses Miranda. Moreover. as well as the subsequent connecting flight to Surigao. and it cannot be over-emphasized. Issue: WON PAL should be held liable to the Mirandas for an award of moral damages. their flight to Surigao was also cancelled due to mechanical problems. they missed their connecting flight to Cebu. failed to notice the truck and the kerosene lamp. On return to the Philippines. Baliwag Transit vs. But the driver of the bus was driving at fast speed. went to the US on a regular flight of PAL. Inattention to and lack of care for the interests of its passengers who are entitled to its utmost consideration. it cannot be denied that the PAL employees herein concerned were definitely less than candid. they incurred additional expenses. While in Cebu. amount to bad faith which entitles the passenger to an award of moral damages. residents of Surigao City. etc. Such unprofessional and prescribed conduct is attributable to petitioner airline in the case at bar and the adverse doctrinal rule is accordingly applicable to it. where there is bad faith.
. Leticia and Allan Garcia to their destination safe and sound. V. The cargo was received by the Visayan Cebu Terminal Company. Held: YES. it was too late. and injuries to Leticia and her son and to some other passengers. The passengers pleaded for its driver to slow down. The bus rammed into the cargo truck causing the death of the bus driver and the helper of the cargo truck driver. But after it was delivered . Leticia Garcia testified that the bus was running at a very high speed despite the drizzle and the darkness of the highway. 6 cases of films and/or photographic supplies consigned to the order of I. Leticia also revealed that the driver was smelling of liquor. and the films were found to be in good condition. Baliwag breached its contract of carriage when it failed to deliver its passengers.. The records are bereft of any proof to show that Baliwag exercised extraordinary diligence. In a contract of carriage. the court need not even make an express finding of fault or negligence on the part of the common carrier. Unless the presumption is rebutted. the bus driver was conversing with a co-employee. it is presumed that the common carrier was at fault or was negligent when a passenger dies or is injured. I. All these prove the bus driver’s wanton disregard for the physical safety of his passengers. Issue: WON Baliwag Transit should be held liable. This statutory presumption may only be overcome by evidence that the carrier exercised extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. Felix Cruz testified that immediately before the collision. As a common carrier. with due regard for all the circumstances. Inc. During the discharge. but their plea was ignored. A Bill of Lading was issued where the carrier and the consignee have stipulated to limit the responsibility of the carrier for the loss or damage that may be caused to the goods before they are actually delivered.break. using the utmost diligence of a very cautious person. The films were discharged at the port of Cebu by the stevedoring company hired by petitioner as agent of the carrier. Binamira Facts: Delta Photo Supply Company of New York shipped on board the M/S “FERNSIDE” at New York. A common carrier is bound to carry its passengers safely as far as human care and foresight can provide.A. U. Ludo & Luym Corp. On the contrary. the evidence demonstrates its driver’s recklessness. the arrastre operator appointed by the Bureau of Customs.V. Another passenger.S. Binamira. She could smell him as she was seated right behind the driver. vs. the cargo was inspected by both the stevedoring company and the arrastre operator. which make Baliwag as a common carrier liable for damages under Article 1759 of the Civil Code.
1737. or the Civil Code. exceptions and conditions. the same was examined by a surveyor and found out that some films and supplies were missing. Lines should not esceed %500. It is true that. In accepting the bill of lading. Klepper Facts: Klepper shipped his goods on board a lift van owned American Pres. The parties may agree to limit the liability of the carrier considering that the goods have still to go through the inspection of the customs authorities before they are actually turned over to the consignee. destruction or deterioration. And this is precisely what was done by the parties herein. however. Held: NO. Lines his at Yokohama.to respondent after 3 days. 1736. said section is merely suppletory to the provisions of the Civil Code. While the lift van was being unloaded. This means the law of the Philippines. This is a situation where we may say that the carrier losses control of the goods because of a custom regulation and it is unfair that it be made responsible for what may happen during the interregnum. Issue: WON the carrier is responsible for the loss though the films were lost after the shipment was discharged from the ship and placed in the possession and custody of the customs arrastre.00. the shipper. consignee and owner of the goods agree to be bound by all its stipulations. But this shall only apply when the loss. it fell on the pier and its contents spilled and scattered. In the bill of lading that was issued covering the shipment in question. Held: YES. destruction or deterioration of the goods it assumes to carry from one place to another unless the same is due to any to any of the causes mentioned in Article 1734 on the new Civil Code. “In all matters not regulated by this Code. both the carrier and the consignee have stipulated to limit the responsibility of the carrier for the loss or damage that may be caused to the goods before they are actually delivered. a common carrier is responsible for the loss. Therefore.00 invoking in its favor the bill of lading. whether written. Issue: WON the liability of the American Pres. American President Lines vs. printed or stamped on the front or backx x x .00 per package unless the value of the goods had been declared by the shipper and inserted in the bill of lading. although Section 4 (5) of the Carriage of Goods by Sea Act states that the carrier shall not be liable in an amount exceeding $500. The CA. as a rule. and not after it has lost control of them. 1738). Article 1753 of the civil code provides that the la w of the country to which the goods are to be transported shall govern the liability of the common carrier in case of loss. Under Article 1766. Japan. destruction or deterioration takes place while the goods are in the possession of the carrier.” and in the Civil Code there are provisions that govern said rights and obligations (Arts. Petitioner contends that its liability should not exceed $500. the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws. refused this ar gument and reasoned that the bill of lading was not signed nor agreed upon by the parties.
In the Bill of Lading. Held: NO. 1. however. Said warehouse. The inserted provision was not contrary to law. . Philippine Steam Navigation Co. there was a stipulation wherein the parties agreed to limit the responsibility of the carrier for the loss or damage that may be caused to the shipment. Issue: WON the common carrier should be held responsible for the damage. Before the fire. and valid and binding upon the passenger regardless of the latter’s lack of knowledge or assent to the regulation’. There is nothing in the record to show that appellant carrier. In fact. Thus. the latter having no control whatsoever over the same. it would be unfair to impute negligence to the appellant. Negros Occidental. 2. but had demanded that the same be withdrawn. complete and in good order. was burned by a fire with unknown orgin destroying the cargoes. pursuant to such demand. where fortuitous event or force majeure is the immediate and proximate cause of the loss. Since the warehouse belonged to and was maintained by the government. incurred in delay in the performance of its obligation. The storage of the goods in the Customs warehouse pending withdrawal thereof by the appellees was undoubtedly made with their knowledge and consent. Bico was able to discharge some of her cargoes. It appears that appellant had not only notified appellees of the arrival of their shipment. Upon arrival of the vessel at Pulupandan. Nor can the appellant or its employees be charged with negligence. ‘Such provision has been held to be a part of the contract of carriage. unto the warehouse of the Bureau of Customs. the obligor is exempt from liability for non-performance.Servando vs. The latter could not have foreseen the event. The burning of the customs warehouse was an extraordinary event which happened independently of the will of the appellant. morals or public policy. Facts: Appelles Servando and Bico loaded on board respondent’s vessel certain cargoes to be transported from Manila to Pulupandan. 3. appellee Uy Bico had taken delivery of 907 cavans of rice before the burning of the warehouse. the cargoes were discharged. 4.
which was the object of the agency. This is the full import of Article 1736. cannot be held responsible for the failure of the principal to accomplish the object of the agency. the appellant cannot be made answerable for the value of the missing goods. Lloyd and C. the character of appellant’s possession also changes. Held: NO. deceit or fraud. which acted as appellant’s substitute in storing the goods awaiting transshipment.Samar Mining Company (appellee )vs. However. its personality changes from that of carrier to that of agent of the consignee. or to the person who has a right to receive them. Charp Company. in effect. Issue: WON the appellants as carrier are responsible for non-delivery to the port of destination. In this case. actual delivery of the goods from appellant as carrier to the same appellant as agent of the consignee. the completion of which was aborted by circumstances beyond its control. Upon such delivery. Article 1736 is applicable to the instant suit. Inc. the appellant. as erstwhile carrier. ceases to be responsible for any loss or damage that may befall the goods from that point onwards. nor received. with appellant acting as agent of the consignee. there was. the carrier may be relieved of the responsibility for loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee. At the hiatus between these two undertakings of appellant which is the moment when the subject goods are discharged in Manila. It is true that the transshipment of the goods. was not fully performed. . appellant had commenced said performance. Under said article. from possession in its own name as carrier. into possession in the name of consignee as the latter’s agent. as applied to the case. two undertakings appeared embodied and/or provided for in the Bill of Lading in question. Such being the case. Germany to Manila. the second. ————————————“Transship” means: to transfer for further transportation from one ship or conveyance to another The rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws. (appellants) Facts: Samar Mining Corp made an importation of goods from Germany to Manila. An agent who carries out the orders and instructions of the principal without being guilty of negligence. The goods were never delivered. Upon arrival of the vessel at the port of Manila the importation was unloaded and delivered in good order and condition to the warehouse of AMCYL. Thus. by the consignee at the port of destination – Davao. and a transshipment of the same goods from Manila to Davao evidenced by a bill of lading issued to Samar Mining. But even as agent of the consignee.F. THE TRANSSHIPMENT OF THE SAME GOODS from Manila to Davao. The first is FOR THE TRANSPORT OF GOODS from Bremen.
Tumambing was injured by a gunshot from the Mayor. (2) Act of the public enemy in war. or to the person who has a right to receive them. lightning. The Acting Mayor with three policemen. upon resistance. Hence. PhilAm Gen vs.Ganzon vs. Besides. (3) Act or omission of the shipper or owner of the goods. He then issued a receipt stating the the Municipality of Mariveles had taken custody of the scrap iron. By the said act of delivery. namely: (1) Flood. 1736. destruction or deterioration of the goods commenced. the petitioner is presumed to have been at fault or to have acted negligently. Issue: WON the carrier should be held liable. Pursuant to Art.00. storm. the loading of the scrap iron resumed. Tumambing delivered the scrap iron to Niza. or other natural disaster or calamity. ordered Niza and his crew to drop the scrap iron to the water. the petitioner-carrier’s extraordinary responsibility for the loss. The loading begun on the same day of the delivery. CA Facts: Tumambing contracted the services of Ganzon to haul 305 tons of scrap iron from Mariveles. Held: YES. The petitioner has failed to show that the loss of the scraps was due to any of the following causes enumerated in Article 1734 of the Civil Code. by the carrier to the consignee. such extraordinary responsibility would cease only upon the delivery. When about half of the scrap was loaded. the contract of carriage was deemed perfected. After sometime. Consequently. earthquake. the scraps were unconditionally placed in the possession and control of the common carrier. actual or constructive.000. however. Bataan to Manila on board its lighter. the captain of the lighter. the intervention of the municipal officials was not In any case. whether international or civil. of a character that would render impossible the fulfillment by the carrier of its obligation. the Mayor demanded from Tumambing P5. PKS Shipping Facts: Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS Shipping Company (PKS Shipping) for the shipment to Tacloban City of seventy-five thousand . and upon their receipt by the carrier for transportation. (4) The character of the goods or defects in the packing or in the containers. The petitioner was not duty bound to obey the illegal order to dump into the sea the scrap iron. (5) Order or act of competent public authority.
D. WON PKS Shipping is liable. a businessman engaged in the buy and sell of dry goods in Laoang. among others: (1) Flood. Philamgen immediately paid them. Upon demand of payment by DUMC. (2) PKS Shipping is not liable. NCC. Issue: (1) Whether PKS Shipping is a common carrier or a private carrier.000. the bus fell into the river. or deterioration of the goods due to any of the following causes.375. it sought reimbursement from PKS Shipping but the latter refused. and (2) WON PKS Shipping exercised the required diligence over the goods they carry. Petitioner alleges. As such. The regularity of its activities in this area indicates more than just a casual activity on its part. boarded the bus of herein petitioner JB Line bounded from Manila to N. Neither can the concept of a common carrier change merely because individual contracts are executed or entered into with patrons of the carrier. because the bus fell into a river while traversing the Bugko Bailey Bridge. destruction. Held: A contract of carriage exists. Mercader died. he later died of asphyxia secondary to drowning. Samar. WON petitioners are liable for the death of Mercader. PKS Shipping has engaged itself in the business of carrying goods for others. earthquake. although for a limited clientele. . petitioners are liable.00). However. storm. among others. Samar. or other natural disaster or calamity x x x Baritua vs.(75. DUMC insured the goods for its full value with petitioner Philippine American General Insurance Company (Philamgen). Or. Petitioners failed to transport D. Although he survived the fall. the barge where the bags of cement were loaded. as a result. N. 1733. Or. lightning. Samar. while said bus was traversing the Beily Bridge in N. The vessel was suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet and buffeted by strong winds of 1. Held: (1) PKS Shipping is a common carrier. The official Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise Load Line Certificate would attest to the seaworthiness of Limar I.000) bags of cement worth Three Million Three Hundred Seventy-Five Thousand Pesos (P3. thus. undertaking to carry such goods for a fee. Hence. that there is no statement in the complaint of Mercader that he was issued any passenger-freight ticket. common carriers are exempt from liability for loss. Mercader Facts: The late Dominador Mercader.5 knots resulting in the entry of water into the barge’s hatches. Mercader to his destination. Issue: WON a contract of carriage existed between petitioners and Mercader. sank. under Art. During the transport.
with due regard for all the circumstances. D. PhilAm vs.500 cases of 1-litter Coca-Cola softdrinks bottle to be transported from Zamboanga City to Cebu City. Inc vs. through the Philippine Travel Bureau in Manila three (3) “Visit the U. the Fontanillas were not able to board said flight but instead were able to board United Airlines Flight No. by the nature of its business and for reasons of public policy. private respondents submitted a copy of the boarding pass. However. The Fontanillas proceeded to the US as planned. The vessel left Zamboanga in a fine weather but the same sank in the waters of Zamboanga del Norte. the tickets were purchased through petitioner’s agent in Manila. It must be noted that a common carrier. such fact did not change the nature of the original contract of carriage entered into by the parties in Manila. United Airlines. CA Facts: Coca-Cola Bottlers loaded on board MV Asilda. however. the said pass did not indicate any seat number. Fontanilla then bought two (2) additional coupons each for himself. a vessel owned by respondent FELMAN. unless it proves that it observed extraordinary diligence as prescribed in Articles 1733 and 1755 of the Civil Code. 7.m.A. 803. Although.” for United Airlines Flight No. and that Linda Allen punched in something into the computer is specious and not supported by the evidence on record. CA Facts: Respondent Aniceto Fontanilla purchased from petitioner United Airlines.. In support of their allegations.” tickets for himself. Philippine law is the applicable law. in the case at bar. he immediately proceeded to the check-in counter. erred in applying the laws of the United States as. Aniceto Fontanilla’s assertion that upon arrival at the airport at 9:45 a. Coca-Cola Bottlers filed a . In case of death or injuries to passengers. is bound to carry passengers safely as far as human care and foresight can provide. the Fontanillas were issued tickets with corresponding boarding passes with the words “CHECK-IN REQUIRED.S. 1108. the contract of carriage was to be performed in the United States. If indeed the Fontanillas checked in at the designated time as they claimed. Explicitly printed on the boarding pass are the words “Check-In Required.The Court agreed with the findings of both the RTC and the CA that fateful morning. The appellate court. The shipment was insured by petitioner PHILAMGEN. It is supposed to do so by using the utmost diligence of very cautious persons.C. his wife and his minor son Mychal. his wife and his son from petitioner at its office in Washington Dulles Airport. why then were they not assigned seat numbers? (2) The Philippine Law. it is presumed to have been at fault or to have acted negligently. Issue: (1) Whether or not private respondents were able to prove with adequate evidence his allegations of breach of contract in bad faith. the Philippine Law or the US Law? Held: (1) No. they used the 1st coupon. After paying the penalty for rewriting their tickets. It is true that the tickets were “rewritten” in Washington.” Curiously. however. and (2) What law is applicable.
was not able to rebut this presumption. Nocum vs. the circumstance that must be considered in measuring a common carrier’s duty towards its passengers is the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them.” Article 1733 qualifies the extraordinary diligence required of common carriers for the safety of the passengers transported by them to be “according to all the circumstances of each case. Laguna Tayabas Bus Company Facts: Herminio L.” In this case. FELMAN. “(c)ommon carriers. loaded in said bus and declared to its conductor as containing clothes and miscellaneous items by a co-passenger. the shipowner. Held: YES. was injured as a consequence of the explosion of firecrackers. Nocum was a passenger in appellant’s Bus No. The Bus Company has succeeded in rebutting the presumption of negligence by showing that it has exercised extraordinary diligence for the safety of its passengers. common carriers are presumed to have acted negligently. filed an insurance claim with PHILAMGEN. Laguna. Issue: WON FELMAN is liable for loss of the cargo due to its failure to observe the extraordinary diligence required by Art. the bus . NCC. (Hence. 120 then making a trip within the barrio of Dita. The injuries suffered by Nocum were not due to mechanical defects but to the explosion of firecrackers. not to speak of his own. It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers. He cannot be subjected to any unusual search.claim for damages against FELMAN which it denied. contained in a box. 1733. Not to be lightly considered must be the right to privacy to which each passenger is entitled. when he protests the innocuousness of his baggage and nothing appears to indicate the contrary. PHILAMGEN now seeks recourse against FELMAN. Held: No. Municipality of Bay. from the nature of their business and for reasons of public policy. as in the case at bar. The sinking of the vessel was due to its unseaworthiness even at the time of its departure from the port of Zamboanga. thus. Issue: WON the bus company was negligent. Under Art 1733 of the Civil Code. “according to the circumstances of the (each) case. hence liable for the injuries suffered by Nocum. according to all the circumstances of each case …” In the event of loss of goods. It was top-heavy as an excessive amount of cargo was loaded on deck.
B. the goods having been landed. it is the City Court which will have jurisdiction and not the CFI. as in the instant case. Compañia Maritima. but rather the CFI within its exclusive admiralty and maritime jurisdiction. itself. Elite Shirt Factory contends that the liability of the carrier. on the ground that the fire started from the section occupied by such. but thereafter denied the judgment of execution and set aside its previous decision. was no longer as a common carrier but as a depository. if the bodega was owned NOT by Compania Maritima. N. Compañia Maritima. Judge Cornejo of the city court favoured shipper Elite for the recovery of damages from common carrier Compania Maritima. stored in its bodega but subsequently burned. THE REASON: the warehouse in which the cargo was deposited at the time it was burned was owned by the carrier. Hence. hence. the instant case is included in the exclusive jurisdiction of the CFI. Issue: Does the exclusive jurisdiction conferred on a Court of First instance over admiralty and maritime cases include the suit where the shipper files a claim against the carrier. and squarely applicable in the instant case: There is need for evidence of circumstances indicating cause or causes for apprehension that the passenger’s baggage is dangerous and that it is failure of the common carrier’s employee to act in the face of such evidence that constitutes the cornerstone of the common carrier’s liability in cases similar to the present one. Hon. filed with the City Court of Manila a complaint against Compania Maritima for reimbursement. City court will have jurisdiction when: the common carrier is liable as DEPOSITORY. CFI will have jurisdiction when: the carrier is liable as a common carrier. a fire broke.B. Thus. allegedly damaged. The latter filed an answer impleading Phil. Steam Navigation as third party defendant. as in this case. but in accord to the circumstance of the case. the ground: Judge had no jurisdiction. While such cargo was stored in the bodega owned by Compania Maritima. Elite Shirt Factory vs. in other jurisdictions. . Elite Shirt. the jurisdiction of the court of first instance under the specific provision of the Judiciary Act is undeniable.company’s failure to confiscate the baggage cannot be considered as a negligent act.) N. the proceeding in effect is one for a breach of a contract of shipment. Cornejo Facts: Elite Shirt Factory (shipper) delivered to Compania Maritima (common carrier) several cartons of merchandise for shipment to several consignees. from the time the shipment was deposited in its warehouse. it is the City Court which has jurisdiction. no delivery having been made to the consignee as a result? Held: YES. The cargo was burned before Compania Maritima could deliver it to the consignees. When.
Held: (1) The registered owner. who is the registered owner and operator thereof. one of its passengers. And it is also for this reason that there is no need of first proving the insolvency of the driver Brigido Avorque before damages can be recovered from the carrier. she has no subsidiary liability. One day. but on a breach of the carrier’s contractual obligation to carry his passengers safely to their destination (culpa contractual). Manila Railroad Facts: Jose Cangco was an employee of the Manila Railroad Co. Rosario Avorque. but direct and immediate (Articles 1755. not on the employer’s subsidiary liability under the Revised Penal Code. (2) No. or any privilege pertaining thereto. supplied by the company. The requires the approval of the Public Service Commission in order that a franchise. 1756. As an employee of the company. for in culpa contractual. which entitled him to ride upon the company’s train free of charge. the liability of the carrier is not merely subsidiary or secondary. he used a pass. while Cangco stepped off the car. Issue: (1) Who should be held liable for the death of Medina – the registered owner or the absolute owner? (2) WON Rosario Avorque has a subsidiary liability under the RPC for damages arising from her driver’s criminal act. one or both of his feet came in contact . Cresencia Facts: A passenger jeepney driven by Brigido Avorque smashed into a Meralco post resulting in the death of Vicente Medina. may be sold or leased without infringing the certificate issued to the grantee x x x As the sale of the jeepney was admittedly without the approval of the Public Service Commission.Medina vs. Guillermo Cresencia is the registered owner of the jeepney as well as the registered operator. and based. Cangco vs. On the other hand. continued to be liable to the Commission and the public for the consequences incident to its operation. Medina’s action for damages is independent of the criminal case filed against Brigido Avorque. after the jeepney having been repeatedly sold from one buyer after another. Guillermo Cresencia. is its current absolute owner as well as the employer of driver Brigido. and 1759. New Civil Code).
the liability created by article 1903 is imposed by reason of the breach of the duties inherent in the special relations of authority or superiority existing between the person called upon to repair the damage and the one who. Our conclusion is that the conduct of the plaintiff in undertaking to alight while the train was yet slightly under way was not characterized by imprudence and that therefore he was not guilty of contributory negligence. of the age. when such acts or omissions cause damages which amount to the breach of a contact. Test in determining Contributory Negligence of plaintiff: Thompson’s work on negligence—The test by which to determine whether the passenger has been guilty of negligence in attempting to alight from a moving railway train. but the care which a man of ordinary prudence would use under similar circumstances. ---------------------------N. 3. Issue: Whether the liability of Manila Railroad constitutes culpa aquiliana or culpa contractual. those which arise from contract. CA Facts: . The contract of defendant to transport plaintiff carried with it. sex and condition of the passenger. This care has been defined to be. the duty to carry him in safety and to provide safe means of entering and leaving its trains (civil code. and proof of exercise of the utmost diligence and care in this regard does not relieve the master of his liability for the breach of his contract. whereas in contractual relations the vinculum exists independently of the breach of the voluntary duty assumed by the parties when entering into the contractual relation. the liability of masters and employers for the negligent acts or omissions of their servants or agents.B. not the care which may or should be used by the prudent man generally. That duty. and culpa contractual as a mere incident to the performance of a contract 2. It is to be considered whether an ordinarily prudent person. being contractual. by implication. is not based upon a mere presumption of the master’s negligence in their selection or control. was direct and immediate. as the source of an obligation. His arm was badly crashed and lacerated. Contributory Negligence on the part of Cangco: None. Culpa Contractual and Culpa Aquiliana Distinguished: (read from full text) 1. Held: The liability constitutes culpa contractual (Contract of Carriage). is that of ordinary or reasonable care.” PAL vs. would have acted as the passenger acted under the circumstances disclosed by the evidence. by his act or omission. was the cause of it. to avoid injury. rests upon the fact that in cases of non-contractual obligation it is the wrongful or negligent act or omission itself which creates the vinculum juris. and its non-performance could not be excused by proof that the fault was morally imputable to defendant’s servants. culpa aquiliana. On the other hand.with a sack of watermelons with the result that his feet slipped from under him and he fell violently on the platform. article 1258).
nay injuries and even death to all aboard the plane. On return to Manila. The duty to exercise the utmost diligence on the part of common carriers is for the safety of passengers as well as for the members of the crew or the complement operating the carrier. For having allowed Bustamante to fly as a First Officer on January 8. lapse or neglect thereof will certainly result to the damage. After about thirty minutes of cruising. the boat leaned towards the starboard. And this must be so for any omission. The MV Edisco owned and operated by Mendoza was not registered nor was it licensed to operate as a watercraft. At least. The law is clear in requiring a common carrier to exercise the highest degree of care in the discharge of its duty and business of carriage and transportation under Art. NCC. IAC Facts: The Dizons purchased 6 round trip tickets from Sarkies for a tour to Corregidor form Manila. NCC. passengers and crew members alike. the law presumes the employer negligent imposing upon it the burden of proving that it exercised the diligence of a good father of a family in the supervision of its employees. The white tickets were collected on board by Julian Mendoza. Sarkies Tours Phil vs. while the blue tickets were collected upon boarding the Sarkies bus. the daughter of the spouses Dizon. as an answer. the airplane in the case at bar. And for the negligence of defendant’s employee. 1733.Private respondent Jesus Samson was a regular co-pilot of PAL. 1755 and 1756. the weather was the same as when they left. Merceditas. Sarkies. they made a crash landing at Daet where Samson suffered physical injuries in the head. it is liable. Issue: WON PAL was negligent as a common carrier in allowing Bustamante to fly as a First Officer the day of the accident. WON the same carrier is liable for the accident even if Bustamante was not sick. 1732. prejudice. died. The word “Edisco” was however handwritten on the white ticket. petitioner is a common carrier. 1951. As a result. the evidence shows that overshooting of the runway and crash-landing at the mangrove was caused by the pilot for which acts the defendant must answer for damages caused thereby. the boat capsized. As defined in Art. Samson alleges that the accident was due to the gross negligence of PAL in allowing Bustamante who was suffering from a long standing tumor of the Nasopharynx but was also allowed by the Civil Aeronautics Administration to fly as a copilot. defendant is guilty of gross negligence and therefore should be made liable for the resulting accident. Or. included a cross-claim against Mendoza. During one of his flights from Manila to Legazpi with Captain Delfin Bustamante. and back. and that because of the tumor Bustamante has a slow reaction and poor judgment. They were given two tickets both with the name SARKIES appearing therein. (Even) assuming that the pilot was not sick or that the tumor did not affect the pilot in managing the plane. among others. The Dizons filed a complaint for damages against Sarkies. Held: YES and YES. .
Held: Yes.INTERMEDIATE APPELLATE COURT. and hence. the following was said: “Where a railroad company had been compelled to pay a judgment for damages for injuries sustained by a passenger as a result of the maltreatment and misconduct of the conductor…the Court (held) that the servant was liable to his master for all loss and damage sustained by it. the latter must be given an opportunity to improve its service. its principle should be applied in favor of Sarkies. and cancelling the authority given to the Bohol Land Transportation Co. to make special trips.. No. In Grand Trunk R. there being another in existence with the proper certificate.” BOHOL LAND TRANSPORTATION CO. should it be deficient or adequate. No. 1928. OCAMPO and FRANCISCA P. ISSUE: Whether or not tha acts of the PSC are valid. xxx x x x [W]e are of opinion and so hold: (1) That before giving a certificate of public necessity and convenience to a transportation company or common land carrier. Co. L-64693 April 27.R. INC. (2) that before a total or partial revocation of a certificate of public necessity and convenience. Sarkies should have a right of action against Mendoza. praying for the review and reversal of an order issued by the Public Service Commission on November 23. in its certificate of public convenience and utility. 63 Me. Considering that actual negligence for the drowning of Merceditas was the responsibility of Mendoza. Although Article 2181 of the Civil Code is not technically invocable. vs. will not sustain the issuance of a certificate of public necessity and convenience. GARCIA. 1929 FACTS: This is a petition filed by the Bohol Land Transportation Co.R. HELD: No.Issue: WON. 31244 September 23. 1984] FACTS: . [G. admitting the application of respondent Nazario S. LITA ENTERPRISES. under the Civil Code.NAZARIO S. Jureidini. JUREIDINI G. vs. The provision of the Civil Code on common carriers is based on Anglo-American Law. (3) that the mere possession of a public mail contract is not a sufficient indication of the convenience and necessity of a new transportation line. 177. the party thereby affected must be notified and heared. it is but fair that Sarkies should have a right of action against Mendoza for reimbursement. granting him a certificate of public necessity and convenience to operate regularly fourteen trucks in the Province of Bohol where the petitioner and appellant is a common carrier. vs Latham. NICASIO M.
00 per taxicab unit.. neither may recover what he has given by virtue of the contract. however. Two of the vehicles of respondent spouses were levied upon and sold at public auction. About a year later one of said taxicabs driven by their employee. heir of the victim. petitioner's trade name. they contracted with petitioner Lita Enterprises. Thereafter. Unquestionably.00 and a monthly rental of P200. Mrs. one Florante Galvez. Since they had no franchise to operate taxicabs. the aforesaid cars were registered in the name of petitioner Lita Enterprises. purchased in installment from the Delta Motor Sales Corporation five (5) Toyota Corona Standard cars to be used as taxicabs. the spouses Nicasio M. the "kabit system" is invariably recognized as being contrary to public policy and. It provides: ART. Abuse of this privilege by the grantees thereof cannot be countenanced. died from the head injuries sustained therefrom. but will leave them both where it finds them. collided with a motorcycle whose driver. and each must bear the consequences of his acts. Manuel Concordia. while a civil case for damages was instituted by Rosita Sebastian Vda. against Lita Enterprises. neither can seek relief from the courts. Upon this premise. is on the part of both contracting parties. as registered owner of the taxicab in the latter case. Hence. Emeterio Martin. a writ of execution was issued. de Galvez. the parties herein operated under an arrangement. remained with tile spouses Ocampo who operated and maintained the same under the name Acme Taxi. The defect of inexistence of a contract is permanent and incurable. The "kabit system" has been Identified as one of the root causes of the prevalence of graft and corruption in the government transportation offices. was adjudged liable for damages by the CFI. HELD: No. Article 1412 of the Civil Code denies them such aid. whereby a person who has been granted a certificate of convenience allows another person who owns motors vehicles to operate under such franchise for a fee. Inc. ISSUE: Whether or not petitioner has a cause of action against defendants. Inc.Sometime in 1966. void and inexistent under Article 1409 of the Civil Code. Possession. Ocampo and Francisca Garcia. to turn over the registration papers to him. but the latter allegedly refused. therefore. Having entered into an illegal contract. Nicasio Ocampo decided to register his taxicabs in his name. To effectuate Id agreement. Inc. In the words of Chief Justice Makalintal. he and his wife filed a complaint against Lita Enterprises. This decision having become final. Inc. herein private respondents.. A certificate of public convenience is a special privilege conferred by the government . it was flagrant error on the part of both the trial and appellate courts to have accorded the parties relief from their predicament. He requested the manager of petitioner Lita Enterprises. or demand the performance of the other's undertaking. Although not outrightly penalized as a criminal offense. for the use of the latter's certificate of public convenience in consideration of an initial payment of P1. It constitutes an imposition upon the goo faith of the government. Petitioner Lita Enterprises. the following rules shall be observed: (1) when the fault. through its representative. and cannot be cured by ratification . It is a fundamental principle that the court will not aid either party to enforce an illegal contract. Inc. if the act in which the unlawful or forbidden cause consists does not constitute a criminal offense. commonly known as the "kabit system". Inc. "this is a pernicious system that cannot be too severely condemned. A criminal case was eventually filed against the driver Emeterio Martin. 1412..000. de Galvez and the Sheriff of Manila for reconveyance of motor vehicles with damages.
On March 16. As this Court said in Eugenio v. Remedios A. 92-009 providing. or damages for its violation. the LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD. Perdido. or damages for its property agreed to be sold or delivered. Under American jurisdiction. 115381 December 23. authorized to delegate that power to a common carrier. which the LTFRB dismissed for lack of merit. . later increased to plus twenty (20%) and minus twenty-five (25%) percent. 202 dated June 19. that where the parties are in pari delicto. The rule has sometimes been laid down as though it was equally universal. in equity or at law. over and above the existing authorized fare without having to file a petition for the purpose.or by prescription. xxx Under section 16(c) of the Public Service Act. or other public service. JR. This range was later increased by LTFRB thru a Memorandum Circular No. private respondent PBOAP. petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus fares. 1994. KILUSANG MAYO UNO LABOR CENTER vs. 1987. Respondent LTFRB. JESUS B. or to recover the property agreed to be sold or delivered. issued Memorandum Circular No. HELD: Yes." Although certain exceptions to the rule are provided by law.HON. is unconstitutional. announced a fare increase of twenty (20%) percent of the existing fares. We see no cogent reason why the full force of the rule should not be applied in the instant case. invalid and illegal. 1994." The principle of in pari delicto is well known not only in this jurisdiction but also in the United States where common law prevails. availing itself of the deregulation policy of the DOTC allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first having filed a petition for the purpose and without the benefit of a public hearing. Orbos. is likewise vested with the same under Executive Order No. x x x However. among others. GARCIA. the PSC and LTFRB alike. ISSUE: Whether or not the authority given by respondent LTFRB to provincial bus operators to set a fare range of plus or minus fifteen (15%) percent. that "The existing authorized fare range system of plus or minus 15 per cent for provincial buses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized fare to be replaced by an indicative or reference rate as the basis for the expanded fare range. a transport operator. the Legislature delegated to the defunct Public Service Commission the power of fixing the rates of public services..S. and the PROVINCIAL BUS OPERATORS ASSOCIATION OF THE PHILIPPINES G. No. 90-395 to then LTFRB Chairman. the existing regulatory body today. Oscar M. no suit can be maintained for its specific performance. 1994 FACTS : Then Secretary of DOTC. from an illegal contract. Fernando allowing provincial bus operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year. no affirmative relief of any kind will be given to one against the other. "the mere lapse of time cannot give efficacy to contracts that are null void.R." Sometime in March. nowhere under the aforesaid provisions of law are the regulatory bodies. the doctrine is stated thus: "The proposition is universal that no action arises.
respondent Sangguniang Panlungsod enacted Resolution No. “provided. The flaws in Resolution No.) The physical realities of constructing CATV system – the use of public streets. 205. and operate a CATV system in Batangas City.BATANGAS CATV. pursuant to Resolution No. As a result. This is primarily because the CATV system commits the indiscretion of crossing public properties. 210. We are convinced that respondents strayed from the well recognized limits of its power. xxx The logical conclusion. a petition for injunction alleging that respondent Sangguniang Panlungsod has no authority to regulate the subscriber rates charged by CATV operators because under Executive Order No. therefore. however.R. September 29. (It uses public properties in order to reach subscribers. xxx Like any other enterprise. Sometime in November 1993. install.O. ISSUE : may a local government unit (LGU) regulate the subscriber rates charged by CATV operators within its territorial jurisdiction? HELD: No. 138810. Section 8 of the Resolution provides that petitioner is authorized to charge its subscribers the maximum rates specified therein. 1986. xxx But. rights of ways. we cannot sustain Resolution No. is that in light of the above laws and E. the NTC exercises regulatory power over CATV operators to the exclusion of other bodies. the founding of structures. the National Telecommunications Commission (NTC) has the sole authority to regulate the CATV operation in the Philippines. vs. 210 granting petitioner a permit to construct. Branch 7.00 to P180. THE COURT OF APPEALS. INC. petitioner increased its subscriber rates from P88. CATV operation maybe regulated by LGUs under the general welfare clause. Batangas City.00 per month. respondent Mayor wrote petitioner a letter threatening to cancel its permit unless it secures the approval of respondent Sangguniang Panlungsod. No. . 436. while we recognize the LGUs’ power under the general welfare clause. THE BATANGAS CITY SANGGUNIANG PANLUNGSOD and BATANGAS CITY MAYOR [G. Petitioner then filed with the RTC. that any increase of rates shall be subject to the approval of the Sangguniang Panlungsod. 210. 2004] FACTS: On July 28. 210 are: (1) it violates the mandate of existing laws and (2) it violates the State’s deregulation policy over the CATV industry. No. and the parceling of large regions – allow an LGU a certain degree of regulation over CATV operators.
a certificate of public convenience was issued to respondent corporation on January 24. . 70 Phil 221). of the members of the Association . the proceeds of which shall be utilized for Christmas programs of the drivers and other benefits. . and on the strength of defendants' registration as a collective body with the Securities and Exchange Commission. with the main purpose of representing plaintiff-appellee for whatever contract and/or agreement it will have regarding the ownership of units. 9 . 1992 FACTS: It appears that a certificate of public convenience to operate a jeepney service was ordered to be issued in favor of Lungsod Silangan to ply the Cogeo-Cubao route sometime in 1983 on the justification that public necessity and convenience will best be served. and in the absence of existing authorized operators on the lined apply for . 30 SCRA 409). INC. On the other hand. THE COURT OF APPEALS. .. ISSUE : Whether or not the petitioner usurped the property right of the respondent. 58 Phil. 1985 and assumed the dispatching of passenger jeepneys . . a certificate of public convenience does not confer upon the holder any proprietary right or interest or franchise in the route covered thereby and in the public highways (Lugue v. x x x A certification of public convenience is included in the term "property" in the broad sense of the term. . LUNGSOD SILANGAN TRANSPORT SERVICES. 1969. . cannot be taken or interfered with without due process of law. which represents the right and authority to operate its facilities for public service. Defendant-Association's Answer contained vehement denials to the insinuation of take over and at the same time raised as a defense the circumstance that the organization was formed not to compete with plaintiff-cooperative.. This development as initiated by defendants-appellants gave rise to the suit for damages. adopting a Bandera' System under which a member of the cooperative is permitted to queue for passenger at the disputed pathway in exchange for the ticket worth twenty pesos. insofar as the interest of the State is involved. Nov . . In the instant case. . However. 100727 March 18. a certificate of public convenience is an authorization issued by the Public Service Commission for the operation of public services for which no franchise is required by law. PSC. . CORP. L22545.LGUs must recognize that technical matters concerning CATV operation are within the exclusive regulatory power of the NTC. No. admitted that it is not authorized to transport passengers . a certificate of public convenience can be sold by the holder thereof because it has considerable material value and is considered as valuable asset (Raymundo v. 889). Under the Public Service Law. v. Villegas. led by Romeo Oliva decided to form a human barricade on November 11. et al. a certificate of public convenience as property.. 1983 to operate a public utility jeepney service on the Cogeo-Cubao route. defendant-Association was registered as a nonstock. Appropriate . it is affected with a public interest and must be submitted to the control of the government for the common good (Pangasinan Transportation Co. It. . with respect to other persons and other public utilities. Hence. Although there is no doubt that it is private property. and the like. Perturbed by plaintiffs' Board Resolution No. . 28. however. . non-profit organization with the Securities and Exchange Commission on October 30. defendants-appellants.R. G. 1985 . Luneta Motor Co. COGEO-CUBAO OPERATORS AND DRIVERS ASSOCIATION vs. HELD: Yes. xxx Under the Public Service Law.
seeking to restrain the District Collector of Customs from interfering with his salvage operation. at that time. does not own the vessel or any of its cargo but claimed a preferred maritime lien under a Salvage Agreement dated June 8. The motion was denied. In filing the case. Apparently not content with his administrative remedies. the Court finds the decision of the RTC of Manila. in so far as it relates to the vessel M/V "Star Ace.000). Mandamus and Damages before the RTC of SFLU. On January 7. Urbino initially filed two motions in the seizure and detention cases: a Motion to Dismiss and a Motion to Lift Warrant of Seizure and Detention. The Commissioner of Customs. The vessel and the cargo had an appraised value. .I. subsequently. Urbino then elevated the matter to the CA.. 1989. La Union (SFLU) for needed repairs.R." to be void as jurisdiction was never acquired over the vessel. of more or less Two Hundred Million Pesos (P200. 1989. This meant that he brought an action in rem under the Code of Commerce under which the vessel may be attached and sold. When the Bureau of Customs later became suspicious that the vessel’s real purpose in docking was to smuggle its cargo into the country. entered the Port of San Fernando. v.L.THE COURT OF APPEALS G. Golingco. Sr. Urbino sought relief with the regular courts by filing a case for Prohibition. Hence. To protect his claim. The RTC of SFLU dismissed the case for lack of jurisdiction because of the pending seizure and detention cases. Ammen Transportation Co. Respondent Cesar S. the trial court found that petitioner association forcibly took over the operation of the jeepney service in the Cogeo-Cubao route without any authorization from the Public Service Commission and in violation of the right of respondent corporation to operate its services in the said route under its certificate of public convenience. xxx First of all. 111202-05 January 31. advising the CA that it intends to question the jurisdiction of the CA before this Court. 02-89 and 03-89 and. Nos.actions may be maintained in courts by the holder of the certificate against those who have not been authorized to operate in competition with the former and those who invade the rights which the former has pursuant to the authority granted by the Public Service Commission (A." coming from Singapore laden with cargo. in this petition the Commissioner of Customs assails the Resolution "F" recited above and seeks to prohibit the CA from continuing to hear the case. 280).000. Urbino. ISSUE: Whether Urbino's claim is a preferred lien in this case. Urbino had impleaded the vessel as a defendant to enforce his alleged maritime lien. 43 Phil. 2006 FACTS: The whole controversy revolves around a vessel and its cargo. two Warrants of Seizure and Detention were issued for the vessel and its cargo. filed a Motion to Suspend Proceedings. HELD: No. COMMISSIONER OF CUSTOMS vs. seizure proceedings were instituted under S. In the case at bar. Nos. the vessel M/V "Star Ace. in response.
VALDELLON [G. Valdellon is the owner of a two-door commercial apartment located at No. and the decision cannot be binding and the writ of execution issued in connection therewith is null and void. even if true. While Urbino contends that the Commissioner of Custom’s custody was illegal. it is equivalent to an attachment from the time of its existence. as a defendant. and not by the regular courts as a collateral matter to enforce his lien. MARIKINA AUTO LINE TRANSPORT CORPORATION and FREDDIE L. despite his lien’s constructive attachment. 2006] FACTS: Erlinda V. the Bureau of Customs had acquired jurisdiction over the res ahead and to the exclusion of the RTC of Manila. Thus. does not deprive the Commissioner of Customs of jurisdiction thereon. And to remove further doubts that the forfeiture case takes precedence over the RTC of Manila case. This is a question that ought to be resolved in the seizure and forfeiture cases.R. the RTC of Manila decision never attained finality as to the defendant vessel. as well. PEOPLE OF THE PHILIPPINES and ERLINDA V. because of its nature. On the other hand. 31 Kamias Road. Moreover. in contrast. which are now pending with the CTA. The forfeiture proceedings conducted by the Bureau of Customs are in the nature of proceedings in rem and jurisdiction was obtained from the moment the vessel entered the SFLU port. 152040 March 31. A maritime lien. the basic operative fact for the institution and perfection of proceedings in rem is the actual or constructive possession of the res by the tribunal empowered by law to conduct the proceedings." This is clearly an admission that the RTC of Manila did not have jurisdiction over the res. inasmuch as no jurisdiction was acquired over it. The warrants of seizure and detention.However. on the other hand. The Court is aware that Urbino seeks to enforce a maritime lien and. it should be noted that forfeiture retroacts to the date of the commission of the offense. when the vessel and its cargo are ordered forfeited. Nevertheless. such fact. The Marikina Auto Line Transport Corporation (MALTC) is the owner-operator of a . Neither was accomplished by the RTC of Manila. 1989. Accordingly. was entered into on June 8. on his mere assertion that the administrative proceedings were a nullity. Urbino still cannot claim an advantage as his lien only came about after the warrant of seizure and detention was issued and implemented. there is no question that forfeiture proceedings were instituted and the vessel was seized even before the filing of the RTC of Manila case. Quezon City. in this case the day the vessel entered the country. in this case the earliest retroactive date can only be the date of the Salvage Agreement. the effect will retroact to the moment the vessel entered Philippine waters. relates back to the period when it first attached. upon which Urbino based his lien. Urbino has circumvented the rule that regular trial courts are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted in the Bureau of Customs. the trial court must have obtained either actual or constructive possession over it. were issued on January 19 and 20. SUELTO vs. In his comment to the petition. despite its being in the custody of customs officials. No. 1989. The Salvage Agreement. By simply filing a case in rem against the vessel. Urbino plainly stated that "petitioner has actual[sic] physical custody not only of the goods and/or cargo but the subject vessel. M/V Star Ace. This means that to acquire jurisdiction over the vessel.
37. HELD: No.00 settlement which Valdellon refused. that is. – Unless a different course of action is required in the interest of the safety and the security of life. in an emergency case. At around 2:00 p. The sudden emergency rule was enunciated by this Court in Gan v. ISSUE: Whether or not the sudden emergency rule applies in the case at bar. and to the left when overtaking persons or vehicles going the same direction. was assigned as the regular driver of the bus. Valdellon filed a criminal complaint for reckless imprudence resulting in damage to property against Suelto. Kamuning. Restriction as to speed.—(a) Any person driving a motor vehicle on a highway shall drive the . negligent. xxx It was the burden of petitioners herein to prove petitioner Suelto’s defense that he acted on an emergency. thus: Sec. 35.000. he had to swerve the bus to the right to avoid colliding with a passenger jeep coming from EDSA that had overtaken another vehicle and intruded into the lane of the bus. as amended. its employee. Suelto maintained that. Suelto was driving the aforementioned passenger bus along Kamias Road.passenger bus with Plate Number NCV-849. is not guilty of negligence if he fails to adopt what subsequently and upon reflection may appear to have been a better method unless the emergency in which he finds himself is brought about by his own negligence. Valdellon demanded payment of P148. Both the trial court and the CA ruled in against herein petitioners. and when turning to the left in going from one highway to another. person or property. Valdellon also filed a separate civil complaint against Suelto and the bus company for damages. 1992.440. 4136. and is required to act without time to consider the best means that may be adopted to avoid the impending danger. Section 35 of the law provides. otherwise known as the Land Transportation and Traffic Code. or because of unreasonable difficulty of operation in compliance herewith. motorists are mandated to drive and operate vehicles on the right side of the road or highway: SEC. on October 3. Suelto. every vehicle shall be conducted to the right of the center of the intersection of the highway.23 thus: [O]ne who suddenly finds himself in a place of danger. every person operating a motor vehicle or an animal-drawn vehicle on a highway shall pass to the right when meeting persons or vehicles coming toward him. Quezon City.00 to cover the cost of the damage to the terrace. Court of Appeals. going towards Epifanio de los Santos Avenue (EDSA). he was not. Under Section 37 of Republic Act No. in law. The bus suddenly swerved to the right and struck the terrace of the commercial apartment owned by Valdellon located along Kamuning Road. The bus company and Suelto offered a P30. Driving on right side of highway.m.
the damages would have been less severe. And. the trial court correctly rejected petitioner Suelto’s defense. thereby causing damage to the property of private respondent. they should have filed a third-party complaint against the driver of the offending passenger jeepney and the owner/operator thereof. where the Court stated that "physical evidence is of the highest order." Such a conclusion finds support in the decision of the Supreme Court in People vs. the severe damages sustained could not have resulted had the accused acted as a reasonable and prudent man would. What is more probable is that the accused had to swerve to the right and hit the commercial apartment of the plaintiff because he could not make a full stop as he was driving too fast in a usually crowded street. at the time of the impact. and of any other condition then and there existing. . he was violating any traffic regulation. he could have easily reduced his speed and come to a full stop when he noticed the jeep. It speaks more eloquently than a hundred witnesses. Petitioner Suelto’s reliance on the sudden emergency rule to escape conviction for the crime charged and his civil liabilities based thereon is. if the claim of petitioners were true. in his testimony in court. In addition to this. "It seems highly improbable that the said damages were not caused by a strong impact. In the former. But. C. Such glaring inconsistencies on material points render the testimony of the witness doubtful and shatter his credibility. 173 SCRA 118. Were he more prudent in driving. However." The pictures submitted do not lie. Ison. having due regard for the traffic. he could have avoided the incident or even if he could not avoid the incident. As already maintained and concluded. the variance between testimony and prior statements renders the witness unreliable.same at a careful and prudent speed. G. in light of his contradictory testimony vis-à-vis his Counter-Affidavit submitted during the preliminary investigation: It is clear from the photographs submitted by the prosecution (Exhs. H & I) that the commercial apartment of Dr. it is presumed that a person driving a motor vehicle has been negligent. Valdellon sustained heavy damage caused by the bus being driven by Suelto. he said that it was to avoid a passenger jeepney coming from EDSA that was overtaking by occupying his lane. futile. the bus was traveling at a high speed when Suelto tried to avoid the passenger jeepney. nor at a speed greater than will permit him to bring the vehicle to a stop within the assured clear distance ahead. Article 2185 of the New Civil Code provides that "unless there is proof to the contrary. The damages could not have been caused except by a speeding bus. Furthermore. having been taken immediately after the incident. he stated that the reason why he swerved to the right was because he wanted to avoid the passenger jeepney in front of him that made a sudden stop. and no person shall drive any motor vehicle upon a highway at such a speed as to endanger the life. limb and property of any person. if at the time of mishap." By his own admission. The accused was not diligent as he claims to be. In relation thereto. Such inconsistency results in the loss in the credibility of the witness and his testimony as to his prudence and diligence. it is quite reasonable to conclude that. not greater nor less than is reasonable and proper. petitioner Suelto violated the Land Transportation and Traffic Code when he suddenly swerved the bus to the right. D. thus. the accused has made conflicting statements in his counter-affidavit and his testimony in court. Moreover. the width of the highway. Had the accused not been speeding.
to indemnify SIBUG. Santos was the owner of a passenger jeep. In other words. petitioner Adolfo L. as the registered owner/operator and grantee of the franchise. SANTOS vs. 1964. Although SANTOS. xxx In this case. but the document was not registered. 1963 (the ACCIDENT DATE). SANTOS had fictitiously sold the jeepney to VIDAD. As a result thereof. Vicente U. private respondent Abraham Sibug was bumped by a passenger jeepney operated by VIDAD and driven by Severe Gragas. as a consequence of the negligent or careless operation of the vehicle. SANTOS became what is known in ordinary parlance as a kabit operator. who had become the registered owner and operator of record at the time of the accident. and after trial sentenced VIDAD and Gragas. ISSUE: Whether petitioner Santos may prevent the levying of his vehicle. but he had no certificate of public convenience for the operation of the vehicle as a public passenger jeep. SANTOS. is directly and primarily responsible and liable for the damages caused to SIBUG. On April 10.] > This ruling is based on the principle that the operator of record is considered the operator of the vehicle in contemplation of law as regards the public and third persons even if the vehicle involved in the accident had been sold to another where such sale had not been approved by the then Public Service Commission. as the kabit was the true owner as against VIDAD. and stating that registration thereof in the name of VIDAD was merely to enable SANTOS to make use of VIDAD'S Certificate of Public Convenience. HELD: No. SANTOS then transferred his jeep to the name of VIDAD so that it could be operated under the latter's certificate of public convenience. the latter. VIDAD executed a re-transfer document to the former. the Sheriff of Manila levied on a motor vehicle registered in the name of VIDAD.ADOLFO L. as the vehicle here in question was registered in VIDAD'S name. For the protection of SANTOS. Also prior to the ACCIDENT DATE. the levy on execution against said vehicle should be enforced so that the judgment in the BRANCH XVII CASE may be satisfied. It is true that VIDAD had executed a re-sale to SANTOS. 19810 FACTS: Prior to April 26. jointly and severally. the injured party. Branch XVII. notwithstanding the fact that the secret ownership of the vehicle belonged to another. SIBUG filed a complaint for damages against VIDAD and Gragas with the Court of First Instance of Manila. L-26815 May 26. [ For the same basic reason.R. Vidad was a duly authorized passenger jeepney operator. SANTOS thereafter filed a third-party claim with the Sheriff alleging actual ownership of the motor vehicle levied upon. which was to be a private document presumably to be registered if and where it was decided that the passenger jeep of SANTOS was to be withdrawn from the kabit arrangement. ABRAHAM SIBUG and COURT OF APPEALS G. On the ACCIDENT DATE. as the kabit should not be allowed to defeat the levy on his vehicle and to avoid his responsibilities as a kabit owner for he had led the public to believe that the vehicle belonged to . No.
This is one way of curbing the pernicious kabit system that facilitates the commission of fraud against the travelling public. July 8. PCIC paid the damage.” . placed two sling cables on each end of Crate No. As the crate was being hoisted from the vessel’s hatch. INC. They inspected the hatches. National Shipping Corporation of the Philippines (NSCP). filed a case against M/V National Honor. including such methods as their nature requires. The crane was operated by Olegario Balsa. NSCP and ICTSI. and as subrogee. or destruction of the goods entrusted to it for sale. are mandated to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. exclusive arrastre operator of MICT. about five feet high from the vessel’s twin deck. The M/V “National Honor” arrived at the Manila International Container Terminal (MICT). Claudio Cansino. 161833. the checker-inspector of the NSCP. Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of lading. It requires common carriers to render service with the greatest skill and foresight and “to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment. sending all its contents crashing down hard.R. ISSUE: Whether or not the presumption of negligence is applicable in the instant case. a winchman from the ICTSI. No.” represented in the Philippines by its agent. this was a normal procedure. and it knew the contents of the crate. 2005] FACTS: Petitioner Philippine Charter Insurance Corporation (PCIC) is the insurer of a shipment on board the vessel M/V “National Honor. he Court has defined extraordinary diligence in the vigilance over the goods as follows: The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to. In Dauz’s experience. along with the crew and the surveyor of the ICTSI. No sling cable was fastened on the mid-portion of the crate. HELD: No. Denasto Dauz. the vessel started discharging its cargoes using its winch crane. We agree with the contention of the petitioner that common carriers. the mid-portion of the wooden flooring suddenly snapped in the air. UNKNOWN OWNER OF THE VESSEL M/V “NATIONAL HONOR. conducted an inspection of the cargo.. resulting in extensive damage to the shipment. The International Container Terminal Services. from the nature of their business and for reasons of public policy.VIDAD. Jr. according to all the circumstances of each case. 1. the stevedore of the ICTSI.” NATIONAL SHIPPING CORPORATION OF THE PHILIPPINES and INTERNATIONAL CONTAINER SERVICES. and to exercise due care in the handling and stowage. carriage and delivery. checked the cargo and found it in apparent good condition. The following day. Both RTC and CA dismissed the complaint. PHILIPPINE CHARTER INSURANCE CORPORATION vs. [G.
storm. Act of the public enemy in war. At the same time. the common carrier is burdened to prove any of the aforecited causes claimed by it by a preponderance of evidence. A thing may be of inferior quality but not necessarily defective. and received by. Skyland also entered into a separate contract with petitioner Cargolift. If the carrier succeeds. In other words. Bataan. 5. and there need not be an express finding of negligence to hold it liable.. No. inferior means of poor quality.. It bears stressing that the enumeration in Article 1734 of the New Civil Code which exempts the common carrier for the loss or damage to the cargo is a closed list. Order or act of competent public authority.] >When the goods shipped are either lost or arrive in damaged condition. destruction or deterioration of the goods. “Defect” is the want or absence of something necessary for completeness or perfection. L. To overcome the presumption of negligence in the case of loss. for the latter’s tugboats to tow the aforesaid barge. However.The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of. and SKYLAND BROKERAGE. INC G. Acuario Marketing Corp. earthquake. Inc. the carrier for transportation until delivered to. or second rate. by the person entitled to receive them. 2. mediocre. a lack or absence of something essential to completeness. Acuario II barge for use by the latter in transporting electrical posts from Manila to Limay. under Article 1734 of the New Civil Code. Flood. “defectiveness” is not synonymous with “inferiority. 3. Act or omission of the shipper or owner of the goods. June 27. 146426.” CARGOLIFT SHIPPING. vs. 2006 FACTS: Respondent L. To exculpate itself from liability for the loss/damage to the cargo under any of the causes.R. the common carrier must prove that it exercised extraordinary diligence. ACUARIO MARKETING CORP. or until the lapse of a reasonable time for their acceptance. a deficiency in something essential to the proper use for the purpose for which a thing is to be used. INC. ("Skyland") entered into a time charter agreement whereby Acuario leased to Skyland its L. whether international or civil. the burden of evidence is shifted to the shipper to prove that the carrier is negligent. the presumption of negligence does not apply to any of the following causes: 1. The character of the goods or defects in the packing or in the containers. . lightning or other natural disaster or calamity. On the other hand. ("Acuario") and respondent Skyland Brokerage. a presumption arises against the carrier of its failure to observe that diligence. 4.
the tugboat failed to pull the barge to a safer distance due to engine malfunction. August 22. sought reimbursement from Skyland. the exercise of ordinary prudence by petitioner means ensuring that its tugboat is free of mechanical problems. POLIAND INDUSTRIAL LIMITED vs. Needless to say. failing which. petitioner was required to observe the due diligence of a good father of the family. the engine malfunction could have been discovered or avoided. Fault or negligence of the obligor consists in his failure to exercise due care and prudence in the performance of the obligation as the nature of the obligation so demands. thus prompting the barge patron to alert the tugboat captain of the M/T Count to tow the barge farther out to sea.’s Successors v. There is simply no basis for petitioner’s assertion that Skyland contractually assumed the risk of any engine trouble that the tugboat may encounter. The negligence of the obligor in the performance of the obligation renders him liable for damages for the resulting loss suffered by the obligee. 2005] . However. Thus. the least that petitioner could have done was to ensure that the M/T Count or any of its other tugboats would be able to secure the barge at all times during the engagement. No. filed a third-party complaint against petitioner alleging that it was responsible for the damage sustained by the barge. On appeal. ISSUE: Whether or not petitioner should be held liable. Skyland. in the performance of its contractual obligation to Skyland. DEVELOPMENT BANK OF THE PHILIPPINES [G. It was informed by the skipper of the tugboat that the damage was sustained in Bataan. La Compania Maritima where the Court explained that a tug and its owners must observe ordinary diligence in the performance of its obligation under a contract of towage. Skyland merely procured petitioner’s towing service but in no way assumed any such risk. It was learned later the due to strong winds and large waves.R. the barge repeatedly hit its hull on the wall. it filed a suit before the RTC which was granted. HELD: Yes. NATIONAL DEVELOPMENT COMPANY. While adverse weather has always been a real threat to maritime commerce. This much was held in the old but still relevant case of Baer Senior & Co.021.20 for the repairs. in turn.After the whole operation was concluded. if petitioner only subjected the M/T Count to a more rigid check-up or inspection. In the case at bar. it was affirmed by the CA. 143866. thereby causing the barge to sustain a hole in its hull. the barge was brought to Acuario’s shipyard where it was allegedly discovered by that the barge was listing due to a leak in its hull. pursuant to the contract. This is especially true when considered with the fact that Acuario’s barge was wholly dependent upon petitioner’s tugboat for propulsion. The M/T Count was exclusively controlled by petitioner and the latter had the duty to see to it that the tugboat was in good running condition. The barge was not equipped with any engine and needed a tugboat for maneuvering. and. Acuario spent the total sum of P97.
which reads: SECTION 21. or other necessaries to any vessel. 1521. the expense must be incurred upon the order of the owner of the vessel or its authorized person and prior to the recording of the ship mortgage. Under the law.D. No. provisions. it must be shown to be one of the enumerated claims which Section 17. No. P. Such maritime lien is described under Section 21. hence.FACTS: Poliand is an assignee of the of the rights of Asian Hardwood over the outstanding obligation of National Development Corporation (NDC). which may be enforced by suit in rem. the latter being the owner of Galleon which previously secured credit accommodations from Asian Hardwood for its expenses on provisions. One of such claims enumerated under Section 17. As stated in Section 21. Poliand has a maritime lien which is more superior than DBP’s mortgage lien. upon the order of the owner of such vessel. Under the aforequoted provision. 1521 which is considered to be superior to the preferred mortgage lien is a maritime lien arising prior in time to the recording of the preferred mortgage. P.D. use of dry dock or marine railway. unused stores and oil. persons entitled to such lien. ISSUE: Whether POLIAND has a maritime lien enforceable against NDC or DBP or both. — Any person furnishing repairs. whether foreign or domestic. 1521. As long as an expense on the vessel is indispensable to the maintenance and navigation of the vessel.” The ship modification cost may properly be classified under this broad category because it was a necessary expenses for the vessel’s navigation. No. bonded stores. and repair and docking of the GALLEON vessels. it must be established that the credit was extended to the vessel itself. 1521. No.D. The trial court found that GALLEON’s advances obtained from Asian Hardwood were used to cover for the payment of bunker oil/fuel. it does not have a status superior to DBP’s preferred mortgage lien. A collection suit was filed after repeated demands of Poliand for the satisfaction of the obligation from Galleon. 1521. The trial court also found that the advances from Asian Hardwood were spent for ship modification cost and the crew’s salary and wages. oil. P. No. DBP later transferred ownership of the vessel to NDC. P. Maritime Lien for Necessaries.D. a maritime lien may consist in “other necessaries spent for the vessel. repair. P. shall have a maritime lien on the vessel. 1521 declares as having preferential status in the event of the sale of the vessel. or of a person authorized by the owner. it may properly be treated as a maritime lien for . P.D. Galleon also obtained loans from Japanese lenders to finance acquisition of vessels which was guaranteed by DBP in consideration of a promise by Galleon to secure a first mortgage on the vessels. No. DBP contends that a ship modification cost is omitted under Section 17.D. These expenses clearly fall under Section 21. towage. among others. “Before POLIAND’s claim may be classified as superior to the mortgage constituted on the vessel. NDC and DBP went unheeded. HELD: Yes. supplies. and it shall be necessary to allege or prove that credit was given to the vessel.
A maritime lien is akin to a mortgage lien in that in spite of the transfer of ownership." However. the maritime lien subsists. No. Notwithstanding the subsequent transfer of the vessels to NDC. The expression “action in rem” is. certificate.necessaries under Section 21. Only NDC is liable on the maritime lien x x x [O]nly NDC is liable for the payment of the maritime lien. The State shall encourage equity participation in public utilities by the general public. with a shareholding of 60-40 respectively. or authorization be exclusive in character or for a longer period than fifty years. INC. the following provision of the Article XII of the Constitution applies: “Sec. COURT OF APPEALS. in its narrow application. JG SUMMIT HOLDINGS. to top the winning bid of JG Summit Holdings over PHILSECO.. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital. HELD: No.D. No. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment. used only with reference to certain proceedings in courts of admiralty wherein the property alone is treated as responsible for the claim or obligation upon which the proceedings are based. the Court holds the latter liable on the maritime lien. P. alteration. the enforcement of a maritime lien is in the nature and character of a proceeding quasi in rem. nor shall such franchise. or repeal by the Congress when the common good so requires. which established the Committee on Privatization (COP) and Asset Privatization Trust (APT).R. vs.” . certificate. and all the executive and managing officers of such corporation or association shall be citizens of the Philippines. 1521. the latter allowed Kawasaki Heavy Industries to choose a company to which it has stockholdings. the lien is not extinguished. ASSET PRIVATIZATION TRUST and PHILYARDS HOLDINGS G. 2000 FACTS: National Investment and Development Corporation (NIDC) and Kawasaki Heavy Industries entered into a Joint Venture Agreement in a shipyard business named PHILSECO. November 20. or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens. it follows the vessel. Considering that DBP subsequently transferred ownership of the vessels to NDC. The maritime lien is inseparable from the vessel and until discharged. COMMITTEE ON PRIVATIZATION. 11. No franchise.5. 124293. ISSUE: Whether or not respondents’ act is valid. JG Summit protested alleging that such act would effectively increase Kawasaki’s interest in PHILSECO—a shipyard is a public utility--and thus violative of the Constitution. A shipyard such as PHILSECO being a public utility as provided by law. NIDC’s interest was later transferred to the National Government. Pursuant to President Aquino’s Proclamation No. and allowed for the disposition of the government’s nonperforming assets. Hence.
312. HELD: No.000. notwithstanding the negligence of his opponent. they can only do so to the extent allowed them by paragraphs 1. it has been held that the fault of the first vessel in failing to exhibit proper lights or to take the proper side of the channel will relieve from liability one who negligently runs into such vessels before he sees it. wherein the loss is divided in cases of mutual and concurring negligence. P5. collided with the lunch Euclid owned by the plaintiff. on the other hand. the other vessel is not necessarily liable for the mere failure to recognize the perilous situation. 7 Cyc. TEODORO R. March 10. The NIDC. owned by the defendant. 1914 FACTS: The steamer Subic. having timely warning of the danger of collision.000 to be borne by the plaintiff himself. This action was brought to recover the value of the Euclid. may purchase even beyond 60% of the total shares. As a government corporation and necessarily a 100% Filipino-owned corporation. that where the previous act of negligence of one vessel has created a position of danger.000 to be paid the plaintiff by the defendant.4.3 of the JVA or under the proportion of 60%-40% of the shares of stock. should the NIDC opt to sell its shares of stock to a third party.2 and 1. and that the loss should be divided equally between the respective owners. 313. WILLIAMS vs. 374. in the Bay of Manila at an early hour on the morning of January 9. YANGCO G. No. the most that can be said in . In cases of a disaster arising from the mutual negligence of two parties. Thus. C. (Pollock on Torts. From this judgment both defendant and plaintiff appealed.xxx Notably. that it becomes liable for the failure to make use of this last clear opportunity to avoid the accident.4 of the JVA accorded the parties the right of first refusal “under the same terms. 1911. L-8325.) So. is considered wholly responsible for it under the common-law rule of liability as applied in the courts of common law of the United States. under the English rule which conforms very nearly to the common-law rule as applied in the American courts. B. Kawasaki could only exercise its right of first refusal to the extent that its total shares of stock would not exceed 40% of the entire shares of stock of SNS or PHILSECO. In the case at bar.” This phrase implies that when either party exercises the right of first refusal under paragraph 1. and P5. paragraph 1.. there is nothing to prevent its purchase of stocks even beyond 60% of the capitalization as the Constitution clearly limits only foreign capitalization. But this rule (which is not recognized in the courts of admiralty in the United States. The court below held from the evidence submitted that the Euclid was worth at a fair valuation P10. that where the previous application by the further rule. that both vessels were responsible for the collision. fails to use proper care to avoid it. pp.R. ISSUE: Whether or not plaintiff should not be held liable on account of doctrine of last clear chance—the defendant having the last opportunity to avoid the collision. (See cases cited in Notes. and the Euclid sank five minutes thereafter. as also where the error of one vessel has exposed her to danger of collision which was consummated by he further rule. and it is only when in fact it does discover it in time to avoid the casualty by the use of ordinary care. although it will not be a defense to one who.). 311. the party who has a last clear opportunity of avoiding the accident.
They indemnified the shippers and were consequently subrogated to their rights. discover the perilous situation of the launch in time to avoid the accident by the exercise of ordinary care. Ltd. INC vs. in fact. Aboitiz had unfortunately failed to discharge.. The rule on limited liability should be applied in accordance with the latest ruling in Aboitiz Shipping Corporation v. the cargo carrier.support of plaintiff's contention is that there was negligence on the part of the officers on defendant's vessel in failing to recognize the perilous situation created by the negligence of those in charge of plaintiff's launch. upon which point we expressly reserve our decision at this time. the plaintiff cannot escape the legal consequences of the contributory negligence of his launch." . that claimants be treated as "creditors in an insolvent corporation whose assets are not enough to satisfy the totality of claims against it. COURT OF APPEALS and ABOITIZ SHIPPING CORPORATION G. Aboitiz was subsequently declared as in default and allowed Monarch and Tabacalera to present evidence ex-parte. HELD: Yes. Because Aboitiz refused to compensate Monarch.] That Aboitiz failed to discharge the burden of proving that the unseaworthiness of its vessel was not due to its fault and/or negligence should not however mean that the limited liability rule will not be applied to the present cases. 92735..R. The failure of Aboitiz to present sufficient evidence to exculpate itself from fault and/or negligence in the sinking of its vessel in the face of the foregoing expert testimony constrains us to hold that Aboitiz was concurrently at fault and/or negligent with the ship captain and crew of the M/V P. But since it does not appear from the evidence that they did. and that had they recognized it in time. ISSUE: Whether or not the doctrine of limited liability applies in the instant case. 2000 FACTS: Monarch and Tabacalera are insurance carriers of lost cargoes. the initial burden of proof of negligence or unseaworthiness rests on the claimants. This burden. [This is in accordance with the rule that in cases involving the limited liability of shipowners. 1993. the burden of proof as to lack of privity or knowledge on its part with respect to the matter of negligence or unseaworthiness is shifted to it. No. even were we to hold that the doctrine is applicable in the jurisdiction. once the vessel owner or any party asserts the right to limit its liability. The peculiar circumstances here demand that there should be no strict adherence to procedural rules on evidence lest the just claims of shippers/insurers be frustrated.] promulgated on January 21. Aboitiz. However. June 8. interests and actions against Aboitiz. it filed two complaints against Aboitiz which were consolidated and jointly tried. they might have avoided the accident. General Accident Fire and Life Assurance Corporation. it is very clear that under the above set out limitation to the rule. Aboitiz rejected responsibility for the claims on the ground that the sinking of its cargo vessel was due to force majeure or an act of God. MONARCH INSURANCE CO.
both the trial and the appellate courts. Inc. HELD: No. found that the sinking was not due to the typhoon but to its unseaworthiness. While in Hong Kong. To avoid the typhoon. applies in this case. However. the cargo was transferred to M/V P. the shipowner shall be liable to the full-extent of the damage. to limit its liability to the amount of the insurance proceeds. These factual findings of the Court of Appeals. which limits respondent’s award of damages to its pro-rata share in the insurance proceeds.. 2006 FACTS: Societe Francaise Des Colloides loaded a cargo of textiles and auxiliary chemicals from France on board a vessel owned by Franco-Belgian Services. These findings are conclusive not only on the parties but on this Court as well. affirming those of the trial court are not to be disturbed on appeal. NEW INDIA ASSURANCE COMPANY. Inc. but the captain and his crew were saved. ISSUE: Whether the limited liability doctrine. it was still at the fringe of the typhoon when its hull leaked. The cargo was consigned to General Textile. 1980. Both the trial and the appellate courts found that the sinking was not due to the typhoon but to its unseaworthiness. Before departing. On October 31. x x x An exception to the limited liability doctrine is when the damage is due to the fault of the shipowner or to the concurrent negligence of the shipowner and the captain.R. Aboitiz for transshipment to Manila.ABOITIZ SHIPPING CORPORATION vs. 156978 May 2. petitioner has the burden of showing that it exercised extraordinary diligence in the transport of the goods it had on board in order to invoke the limited liability doctrine. Differently put. in Manila and insured by respondent New India Assurance Company. but must be accorded great weight. In which case. the vessel sank. Ltd. However. . we find that petitioner failed to discharge this burden. the vessel received a report of a typhoon moving within its general path. Evidence on record showed that the weather was moderate when the vessel sank. petitioner has the burden of proving that the unseaworthiness of its vessel was not due to its fault or negligence. It initially attributed the sinking to the typhoon and relied on the BMI findings that it was not at fault. the vessel changed its course. Considering the evidence presented and the circumstances obtaining in this case. xxx In the present case.. in this case. No. But while at sea. LTD G. the vessel was advised by the Japanese Meteorological Center that it was safe to travel to its destination.