Adolfo Santos v. Abraham Sibug and CA G.R. No. L-26815 May 26, 1981 Melencio-Herrera, J.

FACTS: Vicente Vidad duly authorized passenger jeepney operator prior to the accident date, Santos was the owner of a passenger jeep, but he had no certificate of public convenience for the operation of the vehicle as a public passenger jeep; he then transferred his jeep to the name of Vidad so that it could be operated under the latters certificate of public convenience; Santos, in effect, became a kabit operator on the accident date Sibug was bumped by a passenger jeepney operated by Vidad and driven by Severe Gragas; as a result thereof, Sibug filed a complaint for damages against Vidad and Gragas the trial court sentenced Vidad and Gragas, jointly and severally, to pay Sibug for the damages he suffered Sheriff of Manila levied on a motor vehicle registered in the name of Vidad (but owned by Santos) Santos presented a third-party claim with the Sheriff alleging actual ownership of the motor vehicle levied upon, and stating that registration thereof in the name of Vidad was merely to enable Santos to make use of Vidads CPC ISSUE: WON the subject motor vehicle owned by Santos should be attached to satisfy the money judgment against Vidad who is the registered owner of the same HELD: Yes. Sec. 20 (g) of the Public Service Act: ... it shall be unlawful for any public service or for the owner, lessee or operator thereof, without the approval and authorization of the Commission previously had ... (g) to sell, alienate, mortgage, encumber or lease its property, franchise, certificates, privileges, or rights, or any part thereof. Although Santos, as the kabit was the true owner, Vidad, as the registered owner/operator and grantee of the franchise, is directly and primarily responsible and liable for the damages caused to Sibug, the injured party, as a consequence of the negligent or careless operation of the vehicle. (Ratio: 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) Santos remedy, as the real owner of the vehicle, is to go against Vidad, the actual operator who was responsible for the accident, for the recovery of whatever damages Santos may suffer by reason of the execution

ADOLFO L. SANTOS vs. ABRAHAM SIBUG and COURT OF APPEALS G.R. No. L-26815 May 26, 19810 FACTS: Prior to April 26, 1963 (the ACCIDENT DATE), Vicente U. Vidad was a duly authorized passenger jeepney operator. Also prior to the ACCIDENT DATE, petitioner Adolfo L. Santos was the owner of a passenger jeep, but he had no certificate of public convenience for the operation of the vehicle as a public passenger jeep. SANTOS then transferred his jeep to the name of VIDAD so that it could be operated under the latter's certificate of public convenience. In other words, SANTOS became what is known in ordinary parlance as a kabit operator. For the protection of SANTOS, VIDAD executed a re-transfer document to the former, 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. On the ACCIDENT DATE, private respondent Abraham Sibug was bumped by a passenger jeepney operated by VIDAD and driven by Severe Gragas. As a result thereof, SIBUG filed a complaint for damages against VIDAD and Gragas with the Court of First Instance of Manila, Branch XVII, and after trial sentenced VIDAD and Gragas, jointly and severally, to indemnify SIBUG. On April 10, 1964, the Sheriff of Manila levied on a motor vehicle registered in the name of VIDAD. SANTOS thereafter filed a third-party claim with the Sheriff alleging actual ownership of the motor vehicle levied upon, 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. ISSUE: Whether petitioner Santos may prevent the levying of his vehicle. HELD: No. xxx In this case, SANTOS had fictitiously sold the jeepney to VIDAD, who had become the registered owner and operator of record at the time of the accident. It is true that VIDAD had executed a re-sale to SANTOS, but the document was not registered. Although SANTOS, as the kabit was the true owner as against VIDAD, the latter, as the registered owner/operator and grantee of the franchise, is directly and primarily responsible and liable for the damages caused to SIBUG, the injured party, as a consequence of the negligent or careless operation of the vehicle.] > 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. [ For the same basic reason, as the vehicle here in question was registered in VIDAD'S name, the levy on execution against said vehicle should be enforced so that the judgment in the BRANCH XVII CASE may be satisfied, notwithstanding the fact that the secret ownership of the vehicle belonged to another. SANTOS, 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 VIDAD. This is one way of curbing the pernicious kabit system that facilitates the commission of fraud against the travelling public.

Kabit System; Agent of the Registered Owner (2005) Procopio purchased an Isuzu passenger jeepney from Enteng, a holder of a certificate of public convenience for the operation of public utility vehicle plying the Calamba-Los Baos route. While Procopio continued offering the jeepney for public transport services, he did not have the registration of the vehicle transferred in his name. Neither did he secure for himself a certificate of public convenience for its operation. Thus, per the records of the Land Transportation Franchising and Regulatory Board, Enteng remained its registered owner and operator. One day, while the jeepney was traveling southbound, it collided with a ten-wheeler truck owned by Emmanuel. The driver of the truck admitted responsibility for the accident, explaining that the truck lost its brakes. Procopio sued Emmanuel for damages, but the latter moved to dismiss the case on the ground that Procopio is not the real party in interest since he is not the registered owner of the jeepney. Resolve the motion with reasons. (3%)
SUGGESTED ANSWER:

The motion to dismiss should be denied because Procopio, as the real owner of the jeepney, is the real party in interest. Procopio falls under the Kabit system. However, the legal restriction as regards the Kabit system does not apply in this case because the public at large is not deceived nor involved. (Lim v. Court of Appeals, G.R. No. 125817, January 16, 2002, citing Baliwag Transit v. Court of Appeals, G.R. No. 57493, January 7, 1987) In any event, Procoprio is deemed to be "the agent" of the

registered owner. (First Malayan Leasing v. Court of Appeals, G.R. No. 91378, June 9,1992; and "F" Transit Co., Inc. v. NLRC, G.R. Nos, 88195-96, January 27, 1994)

Natl Development Co. v. CA and Development Insurance & Surety Corp. G.R. No. L-49407 August 19, 1988 Maritime Co. of the Philippines v. CA and Development Insurance & Surety Corp. G.R. No. L-49469 August 19, 1988 Paras, J. FACTS: In accordance with a memorandum agreement entered into between defendants NDC and MCP, NDC appointed MCP as its agent to manage and operate Dona Nati vessel for and in its behalf and account E. Philipp Corporation loaded on board the vessel 1200 bales of American raw cotton consigned to the order of Manila Banking Corporation, Manila and the Peoples Bank and Trust Company acting for and in behalf of the Pan Asiatic Commercial Company, Inc., who represents Riverside Mills Corporatio; also loaded on the same vessel were the cargo of Kyokuto Boekui, Kaisa, Ltd., consigned to the order of Manila Banking Corporation consisting of 200 cartons of sodium lauryl sulfate and 10 cases of aluminum foil En route to Manila the vessel figured in a collision with a Japanese vessel as a result of which 550 bales of aforesaid cargo of American raw cotton as well as the cargo of Kyokuto Boekui, Kaisa, Ltd were lost and/or destroyed Development Insurance & Surety Corp. paid the insurance and filed an action for recovery of money against NDC and MCP ISSUES: 1. which laws govern loss or destruction of goods due to collision of vessels outside Philippine waters; 2. what is the extent of liability as well as the rules of prescription provided thereunder HELD: 1. [T]he law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration (Art. 1753). Since the goods in question are transported from San Francisco, California and Tokyo, Japan to the Philippines and that they were lost or due to a collision which was found to have been caused by the negligence or fault of both captains of the colliding vessels the laws of the Philippines will apply. Art 1735: in all other than those mentioned is Article 1734 thereof, the common carrier shall be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the extraordinary diligence required by law collision not one of those enumerated under Art. 1734; hence, carrier is presumed to be at fault or to have acted negligently 2. Art. 826 of the Code of Commerce: where collision is imputable to the personnel of a vessel, the owner of the vessel at fault, shall indemnify the losses and damages incurred after an expert appraisal. But more in point Art. 827, ditto: if the collision is imputable to both vessels, each one shall suffer its own damages and both shall be solidarily responsible for the losses and damages suffered by their cargoes Art 826 to 839, ditto: the shipowner or carrier is not exempt from liability for damages arising from collision due to the fault or negligence of the captain; primary liability is imposed on the shipowner or carrier in because of the accepted doctrine that the shipmaster or captain is merely the representative of the owner who has the actual or constructive control over the conduct of the voyage both the owner (NDC) and agent (MPC) of the offending vessel are liable for the damage done where both are impleaded; that in case of collision, both the owner and the agent are civillyjointly and severally responsible for the acts of the captain since the obligation

which is the subject of the action had its origin in a tortious act and did not arise from contract

Pedro de Guzman v. Court of Appeals G.R. No. L-47822, December 22, 1988 PARTIES: Pedro de Guzman, petitioner Court of Appeals and Ernesto Cendana, respondents BRIEF STATEMENT OF THE CASE: Breach of the contract to carry Extraordinary diligence needed over common carriers BRIEF STATEMENT OF THE FACTS: Ernesto Cendana was engaged in buying up used bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap material, respondent would bring such material to Manila for resale. He utilized (2) two six-wheeler trucks which he owned for the purpose. Upon returning to Pangasinan, he would load his vehicle with cargo belonging to different merchants to different establishments in Pangasisnan which respondents charged a freight fee for. Sometime in November 1970, herein petitioner Pedro de Guzman, a merchant and dealer of General Milk Company Inc. in Pangasinan contracted with respondent for hauling 750 cartons of milk. Unfortunately, only 150 cartons made it, as the other 600 cartons were intercepted by hijackers along Marcos Highway. Hence, petitioners commenced an action against private respondent. In his defense, respondent argued that he cannot be held liable due to force majuere, and that he is not a common carrier and hence is not required to exercise extraordinary diligence. On appeal before the Court of Appeals, Cendana urged that the trial court had erred in considering him a common carrier; in finding that he had habitually offered trucking services to the public; in not exempting him from liability on the ground of force majeure; and in ordering him to pay damages and attorneys fees. The Court of Appeals reversed the judgment of the trial court and held that Cendana had been engaged in transporting return loads of freight as a casual occupation a sideline to his scrap iron business and not as a common carrier. De Guzman came to the Supreme Court by way of a Petition for Review. ISSUES: 1. Is respondent a common carrier? 2. Is the respondent liable for the loss of the cartons of milk due to force majeure? ARGUMENTS: 1. Herein respondent is considered as a common carrier. Article 1732 of the New Civil Code avoids any distinction between one whose principal business activity is the carrying of persons or goods or both and one who does such carrying only as an ancillary activity. It also avoids a distinction between a person or enterprise offering transportation services on a regular or scheduled basis and one offering such services on an occasional, episodic, and unscheduled basis. 2. Respondent is not liable for the value of the undelivered merchandise .

Article 1734 of the Civil Code- The general rule is established by the article that common carriers are responsible for the loss, destruction or deterioration of the goods which they carry, unless the same is due to any of the following causes only: a. Flood, storm, earthquake, lightning or other natural disasters; b. Act of the public enemy, whether international or civil; c. Act or omission of the shipper or owner of the goods; d. Character of the goods or defects in the packing; e. Order or act of competent public authority. Applying the above article, we note firstly that the specific cause alleged in the instant case the hijacking of the carrier's truck does not fall within any of the five (5) categories of exempting causes listed in Article 1734. It would follow; therefore, that the hijacking of the carrier's vehicle must be dealt with under the provisions of Article 1735, in other words, the private respondent as common carrier is presumed to have been at fault or to have acted negligently. This presumption, however, may be overthrown by proof of extraordinary diligence on the part of private respondent. Article 1745: Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy: xxx xxx xxx (5) that the common carrier shall not be responsible for the acts or omissions of his or its employees; (6) that the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished; and (7) that the common carrier shall not responsible for the loss, destruction or deterioration of goods on account of the defective condition of the car vehicle, ship, airplane or other equipment used in the contract of carriage. (Emphasis supplied) Under Article 1745 (6) above, a common carrier is held responsible and will not be allowed to divest or to diminish such responsibility even for acts of strangers like thieves or robbers, except where such thieves or robbers in fact acted "with grave or irresistible threat, violence or force." We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the goods carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force." The decision of the trial court shows that the armed men who held up the second truck owned by private respondent acted with grave, if not irresistible, threat, violence or force, which is an exception of the general rule of Article 1745 (6). RULING: The Petition for Review on certiorari is hereby DENIED and the Decision of the Court of Appeals dated 3 August 1977 is AFFIRMED.

The occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary diligence. We, therefore, agree with the result reached by the Court of Appeals that private respondent Cendana is not liable for the value of the undelivered merchandise which was lost because of an event entirely beyond private respondent's control.

ABOITIZ SHIPPING CORPORATION vs. CA

Facts: Anacleto Viana boarded the vessel owned by defendant ABOITIZ, at the port at San Jose, Occidental Mindoro, bound for Manila. Said vessel arrived at Pier 4, North Harbor, Manila, and the passengers therein disembarked, a gangplank having been provided connecting the side of the vessel to the pier. Instead of using said gangplank Anacleto Viana disembarked on the third deck which was on the level with the pier. After said vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement between the third party defendant Pioneer Stevedoring Corporation and defendant Aboitiz. The crane owned by the third party defendant and operated by its crane operator Alejo Figueroa was placed alongside the vessel and one hour after the passengers of said vessel had disembarked, it started operation by unloading the cargoes from said vessel. While the crane was being operated, Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him between the side of the vessel and the crane. He was thereafter brought to the hospital where he later died. Private respondents Vianas filed a complaint for damages against Aboitiz for breach of contract of carriage. Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely under the control of Pioneer as the which handled the unloading of cargoes from the vessel of Aboitiz. It is also averred that since the crane operator was not an employee of Aboitiz, the latter cannot be held liable under the fellow-servant rule. Judgment is rendered in favor of the plantiffs. The trial court absolved Pioneer from liability for failure of the Vianas and Aboitiz to preponderantly established a case of negligence against the crane operator which the court ruled is never presumed. Aboitiz appealed the same to respondent Court of Appeals which affirmed the findings of of the trial court except as to the amount of damages awarded to the Vianas. Hence the instant petition.

Issue: Whether or not the responsibility of Aboitiz to the victim ceased when it disembarked from the vessel.

Held: No. The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. Once created, the relationship will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's

premises. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his departure. The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if, for example, such person remains in the carrier's premises to claim his baggage. When the accident occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from petitioner's vessel. Even if he had already disembarked an hour earlier, his presence in petitioner's premises was not without cause. The victim had to claim his baggage which was possible only one hour after the vessel arrived since it was admittedly standard procedure in the case of petitioner's vessels that the unloading operations shall start only after that time. Consequently, under the foregoing circumstances, the victim Anacleto Viana is still deemed a passenger of said carrier at the time of his tragic death. As found by the Court of Appeals, the evidence does not show that there was a cordon of drums around the perimeter of the crane, as claimed by petitioner. It also adverted to the fact that the alleged presence of visible warning signs in the vicinity was disputable and not indubitably established. Thus, we are not inclined to accept petitioner's explanation that the victim and other passengers were sufficiently warned that merely venturing into the area in question was fraught with serious peril. Hence, Aboitiz is negligent. Pioneer had taken the necessary safeguards insofar as its unloading operations were concerned, a fact which appears to have been accepted by the plaintiff therein by not impleading Pioneer as a defendant, and likewise inceptively by Aboitiz by filing its third-party complaint only after ten months from the institution of the suit against it. Parenthetically, Pioneer is not within the ambit of the rule on extraordinary diligence required of, and the corresponding presumption of negligence foisted on, common carriers like Aboitiz.

Eastern Shipping Lines, Inc. v. CA and The First Nationwide Assurance Corp. G.R. No. 97412 July 12, 1994 Vitug, J. FACTS: 13 coils of uncoated 7-wire stress relieved wire strand for pre-stressed concrete were shipped on board a vessel owned and operated by Eastern Shipping Lines at Kobe, Japan, for delivery to Stresstek Post-Tensioning Phils., Inc. in Manila while en route from Kobe to Manila, the carrying vessel encountered very rough seas and stormy weather; the coils wrapped in burlap cloth and cardboard paper were stored in the lower hold of the hatch of the vessel which was flooded with water; the water entered the hatch when the vessel encountered heavy weather en route to Manila; upon request, a survey of bad order cargo was conducted at the pier in the presence of the representatives of the consignee and E. Razon, Inc. and it was found that 7 coils were rusty on one side each; upon survey conducted at the consignees warehouse it was found that the wetting of the cargo was caused by fresh water that entered the hatch when the vessel encountered heavy weather; all 13 coils were extremely rusty and totally unsuitable for the intended purpose The First Nationwide Assurance Corp. indemnified the consignee in the amount of P171,923.00 for damage and loss to the insured cargo ISSUE: WON Eastern Shipping Lines is liable HELD: Yes. under Art. 1733, common carriers are bound to observe extra-ordinary vigilance over goods according to all circumstances of each case Art. 1735: In all cases other than those mentioned in Art. 1734, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence Since the carrier has failed to establish any caso fortuito, the presumption by law of fault or negligence on the part of the carrier applies; and the carrier must present evidence that it has observed the extraordinary diligence required by Article 1733 of the Civil Code in order to escape liability for damage or destruction to the goods that it had admittedly carried in this case. But no evidence was presented; hence, the carrier cannot escape liability.