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TRANSPORTATION LAW CASE DIGESTS

I. CONTRACT OF TRANSPORTATION damages sought by the passenger. By contract of


A. CONCEPT, PARTIES AND PERFECTION carriage, the carrier assumes the express obligation to
transport the passenger to his destination safely and
DANGWA TRANSPORTATION vs. COURT OF observe extraordinary diligence with a due regard for
APPEALS all the circumstances, and any injury that might be
suffered by the passenger is right away attributable to
FACTS: the fault or negligence of the carrier. This is an
exception to the general rule that negligence must be
Private respondents filed a complaint for damages proved, and it is therefore incumbent upon the carrier
against petitioners for the death of Pedrito Cudiamat as to prove that it has exercised extraordinary diligence
a result of a vehicular accident which occurred on as prescribed in Articles 1733 and 1755 of the Civil
March 25, 1985 at Marivic, Sapid, Mankayan, Benguet. Code.
Petitioner Theodore M. Lardizabal was driving a
passenger bus belonging to petitioner corporation in a
reckless and imprudent manner and without due KOREAN AIRLINES CO. v. CA
regard to traffic rules and regulations and safety to
persons and property, it ran over its passenger, Pedrito
Cudiamat. Petitioners alleged that they had observed LIGHT RAIL TRANSIT AUTHORITY & RODOLFO
and continued to observe the extraordinary diligence ROMAN, versus
and that it was the victim's own carelessness and MARJORIE NAVIDAD, Heirs of the Late NICANOR
negligence which gave rise to the subject incident. NAVIDAD & PRUDENT SECURITY AGENCY

RTC pronounced that Pedrito Cudiamat was negligent, FACTS:


which negligence was the proximate cause of his
death. However, Court of Appeals set aside the Nicanor Navidad, then drunk, entered the EDSA LRT
decision of the lower court, and ordered petitioners to station after purchasing a "token" (representing
pay private respondents damages due to negligence. payment of the fare). While Navidad was standing on
the platform near the LRT tracks, Junelito Escartin, the
ISSUE: security guard assigned to the area approached him. A
misunderstanding or an altercation between the two
WON the CA erred in reversing the decision of the trial apparently ensued that led to a fist fight. No evidence,
court and in finding petitioners negligent and liable for however, was adduced to indicate how the fight started
the damages claimed. or who, between the two, delivered the first blow or
how Navidad later fell on the LRT tracks. At the exact
HELD: CA Decision AFFIRMED moment that Navidad fell, an LRT train, operated by
petitioner Rodolfo Roman, was coming in. Navidad was
The testimonies of the witnesses show that that the struck by the moving train, and he was killed
bus was at full stop when the victim boarded the same. instantaneously. The widow of Nicanor, Marjorie
They further confirm the conclusion that the victim fell Navidad, along with her children, filed a complaint for
from the platform of the bus when it suddenly damages against Junelito Escartin, Rodolfo Roman, the
accelerated forward and was run over by the rear right LRTA, the Metro Transit Organization, Inc. (Metro
tires of the vehicle. Under such circumstances, it Transit), and Prudent for the death of her husband. Trial
cannot be said that the deceased was guilty of court ruled in favor Navidads wife and against the
negligence. defendants Prudent Security and Junelito Escartin .
LRTA and Rodolfo Roman were dismissed for lack of
It is not negligence per se, or as a matter of law, for merit. CA held LRTA and Roman liable, hence the
one attempt to board a train or streetcar which is petition.
moving slowly. An ordinarily prudent person would
have made the attempt board the moving conveyance ISSUE:
under the same or similar circumstances. The fact that
passengers board and alight from slowly moving Whether or not there was a perfected contract of
vehicle is a matter of common experience both the carriage between Navidad and LRTA
driver and conductor in this case could not have been
unaware of such an ordinary practice. HELD:

Common carriers, from the nature of their business and AFFIRMED with MODIFICATION but only in that (a) the
reasons of public policy, are bound to observe award of nominal damages is DELETED and (b)
extraordinary diligence for the safety of the passengers petitioner Rodolfo Roman is absolved from liability
transported by the according to all the circumstances
of each case. A common carrier is bound to carry the Contract of carriage was deemed created from the
passengers safely as far as human care and foresight moment Navidad paid the fare at the LRT station and
can provide, using the utmost diligence very cautious entered the premises of the latter, entitling Navidad to
persons, with a due regard for all the circumstances. all the rights and protection under a contractual
relation. The appellate court had correctly held LRTA
It has also been repeatedly held that in an action based and Roman liable for the death of Navidad in failing to
on a contract of carriage, the court need not make an exercise extraordinary diligence imposed upon a
express finding of fault or negligence on the part of the common carrier. While the deceased might not have
carrier in order to hold it responsible to pay the then as yet boarded the train, a contract of carriage

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theretofore had already existed when the victim could not be held responsible for the value of the lost
entered the place where passengers were supposed to goods, such loss having been due to force majeure.
be after paying the fare and getting the corresponding
token therefor. ISSUE:

The law requires common carriers to carry passengers Whether or not Ernesto Cendana may, under the facts
safely using the utmost diligence of very cautious earlier set forth, be properly characterized as a
persons with due regard for all circumstances. Such common carrier?
duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of Whether or not high jacking with robbery can be
the trip but for so long as the passengers are within its properly regarded as a fortuitous event that can
premises and where they ought to be in pursuance to exempt the carrier?
the contract of carriage. The statutory provisions
render a common carrier liable for death of or injury to HELD:
passengers (a) through the negligence or willful acts of
its employees or b) on account of willful acts or The trial court rendered a Decision finding private
negligence of other passengers or of strangers if the respondent to be a common carrier and holding him
common carriers employees through the exercise of liable for the value of the undelivered goods as
due diligence could have prevented or stopped the act damages and as attorney's fees. The Court of Appeals
or omission. reversed the judgment of the trial court and held that
respondent had been engaged in transporting return
In case of such death or injury, a carrier is presumed to loads of freight "as a casual occupation a sideline to
have been at fault or been negligent, and by simple his scrap iron business" and not as a common carrier.
proof of injury, the passenger is relieved of the duty to
still establish the fault or negligence of the carrier or of Liability arises the moment a person or firm acts as a
its employees and the burden shifts upon the carrier to common carrier, without regard to whether or not such
prove that the injury is due to an unforeseen event or carrier has also complied with the requirements of the
to force majeure. The liability of the common carrier applicable regulatory statute and implementing
and that of the independent contractor is solidary. regulations and has been granted a certificate of public
convenience or other franchise. To exempt private
respondent from the liabilities of a common carrier
B. COMMON CARRIERS (Arts. 1731 to 1766 because he has not secured the necessary certificate
NCC) of public convenience, would be offensive to sound
1. Definitions of domestic shipping under public policy; that would be to reward private
R.A. No. 9295 and of public service respondent precisely for failing to comply with
under Commonwealth Act No. 146 applicable statutory requirements.
2. Common Carriage
Common carriers, "by the nature of their business and
PEDRO DE GUZMAN vs.COURT OF APPEALS and for reasons of public policy" 2 are held to a very high
ERNESTO CENDANA degree of care and diligence ("extraordinary diligence")
in the carriage of goods as well as of passengers.
FACTS: Article 1734 establishes the general rule that common
carriers are responsible for the loss, destruction or
Ernesto Cendana, a junk dealer, was engaged in buying deterioration of the goods which they carry, "unless the
up used bottles and scrap metal in Pangasinan, and same is due to any of the following causes only:
bring such material to Manila for resale. He utilized two (1) Flood, storm, earthquake, lightning or other natural
(2) six-wheeler trucks which he owned for hauling the disaster or calamity;
material to Manila. He charged freight rates which were (2) Act of the public enemy in war, whether
commonly lower than regular commercial rates for the international or civil;
cargo loaded in his vehicle. (3) Act or omission of the shipper or owner of the
goods;
Pedro de Guzman a merchant and authorized dealer of (4) The character-of the goods or defects in the
General Milk Company contracted with Cendana for the packing or-in the containers; and
hauling of 750 cartons of Liberty filled milk from a (5) Order or act of competent public authority.
warehouse of General Milk in Makati, Rizal. 150
cartons were loaded on a truck driven by Cendana The above list of causes of loss, destruction or
himself, while 600 cartons were placed on board the deterioration which exempt the common carrier for
other truck which was driven by Manuel Estrada, responsibility therefor, is a closed list. Causes falling
Cendanas driver and employee. The other 600 boxes outside the foregoing list, even if they appear to
never reached de Guzman, since the truck which constitute a species of force majeure fall within the
carried these boxes was hijacked somewhere along the scope of Article 1735, which provides as follows:
MacArthur Highway in Paniqui, Tarlac, by armed men In all cases other than those mentioned in numbers 1,
who took with them the truck, its driver, his helper and 2, 3, 4 and 5 of the preceding article, if the goods are
the cargo. Having failed to exercise the extraordinary lost, destroyed or deteriorated, common carriers are
diligence required of him by the law, he is held liable presumed to have been at fault or to have acted
for the value of the undelivered goods. Cendana denied negligently, unless they prove that they observed
that he was a common carrier and argued that he extraordinary diligence as required in Article 1733.
(Emphasis supplied)

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the hatches remained open throughout the duration of
The limits of the duty of extraordinary diligence in the the discharge. Each time a dump truck was filled up, its
vigilance over the goods carried are reached where the load of Urea was covered with tarpaulin. The port area
goods are lost as a result of a robbery which is was windy, certain portions of the route to the
attended by "grave or irresistible threat, violence or warehouse were sandy and the weather was variable,
force." In the instant case, armed men held up the raining occasionally while the discharge was in
second truck owned by private respondent which progress.
carried petitioner's cargo.
It took eleven (11) days for PPI to unload the cargo. A
The occurrence of the loss must reasonably be private marine and cargo surveyor, Cargo
regarded as quite beyond the control of the common Superintendents Company Inc. (CSCI), was hired by PPI
carrier and properly regarded as a fortuitous event. It is to determine the "outturn" of the cargo shipped, by
necessary to recall that even common carriers are not taking draft readings of the vessel prior to and after
made absolute insurers against all risks of travel and of discharge. The survey report submitted by CSCI to the
transport of goods, and are not held liable for acts or consignee (PPI) revealed a shortage in the cargo of
events which cannot be foreseen or are inevitable, 106.726 M/T and that a portion of the Urea fertilizer
provided that they shall have complied with the approximating 18 M/T was contaminated with dirt,
rigorous standard of extraordinary diligence. sand and rust and rendered unfit for commerce.

Cendana is not liable for the value of the undelivered Consequently, PPI sent a claim letter to Soriamont
merchandise which was lost because of an event Steamship Agencies (SSA), the resident agent of the
entirely beyond private respondent's control. Petition carrier, KKKK, representing the cost of the alleged
for Review on certiorari is hereby DENIED and the shortage in the goods shipped and the diminution in
Decision of the Court of Appeals dated 3 August 1977 value of that portion said to have been contaminated
is AFFIRMED. No pronouncement as to costs. with dirt. Respondent SSA was not able to respond to
this consignees claim for payment because according
to them, they only received a request for shortlanded
PLANTERS PRODUCTS, INC. VS. COURT OF certificate and not a formal claim.
APPEALS,
SORIAMONT STEAMSHIP AGENCIES AND KYOSEI Hence, PPI filed an action for damages with the Court
KISEN KABUSHIKI KAISHA of First Instance of Manila. The defendant carrier
G.R. No. 101503 September 15, 1993 argued that the strict public policy governing common
carriers does not apply to them because they have
FACTS: become private carriers by reason of the provisions of
the charter-party. The court a quo however sustained
Planters Products, Inc. (PPI), purchased from Mitsubishi the claim of the plaintiff against the defendant carrier
International Corporation (MITSUBISHI) of New York, for the value of the goods lost or damaged.
U.S.A., 9,329.7069 metric tons (M/T) of Urea 46%
fertilizer which the latter shipped in bulk on 16 June On appeal, respondent Court of Appeals reversed the
1974 aboard the cargo vessel M/V "Sun Plum" owned lower court and absolved the carrier from liability for
by private respondent Kyosei Kisen Kabushiki Kaisha the value of the cargo that was lost or
(KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San damaged. Relying on the 1968 case of Home Insurance
Fernando, La Union, Philippines, as evidenced by Bill of Co.v. American Steamship Agencies, Inc., the appellate
Lading No. KP-1 signed by the master of the vessel and court ruled that the cargo vessel M/V "Sun Plum"
issued on the date of departure. owned by private respondent KKKK was a private
carrier and not a common carrier by reason of the time
Prior to its voyage, a time charter-party on the vessel charterer-party. Accordingly, the Civil Code provisions
M/V "Sun Plum" pursuant to the Uniform General on common carriers which set forth a presumption of
Charter was entered into between Mitsubishi as negligence do not find application in the case at bar.
shipper/charterer and KKKK as shipowner, in Tokyo,
Japan. ISSUE: Whether a common carrier becomes a private
carrier by reason of a charter-party.
Before loading the fertilizer aboard the vessel, four (4)
of her holds were all presumably inspected by the HELD: The assailed decision of the Court of Appeals,
charterer's representative and found fit to take a load which reversed the trial court, is affirmed.
of urea in bulk pursuant to par. 16 of the charter-party .
After the Urea fertilizer was loaded in bulk by A "charter-party" is defined as a contract by which an
stevedores hired by and under the supervision of the entire ship, or some principal part thereof, is let by the
shipper, the steel hatches were closed with heavy iron owner to another person for a specified time or use; a
lids, covered with three (3) layers of tarpaulin, then contract of affreightment by which the owner of a ship
tied with steel bonds. The hatches remained closed or other vessel lets the whole or a part of her to a
and tightly sealed throughout the entire voyage. merchant or other person for the conveyance of goods,
on a particular voyage, in consideration of the payment
Petitioner unloaded the cargo from the holds into its of freight; Charter parties are of two types: (a) contract
steelbodied dump trucks which were parked alongside of affreightment which involves the use of shipping
the berth, using metal scoops attached to the ship, space on vessels leased by the owner in part or as a
pursuant to the terms and conditions of the charter- whole, to carry goods for others; and, (b) charter by
partly (which provided for an F.I.O.S. clause). However,

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demise or bareboat charter, by the terms of which the common carriers. At any rate, the rule in the United
whole vessel is let to the charterer with a transfer to States that a ship chartered by a single shipper to
him of its entire command and possession and carry special cargo is not a common carrier, does not
consequent control over its navigation, including the find application in our jurisdiction, for we have
master and the crew, who are his servants. Contract of observed that the growing concern for safety in the
affreightment may either be time charter, wherein the transportation of passengers and /or carriage of goods
vessel is leased to the charterer for a fixed period of by sea requires a more exacting interpretation of
time, or voyage charter, wherein the ship is leased for admiralty laws, more particularly, the rules governing
a single voyage. In both cases, the charter-party common carriers.
provides for the hire of vessel only, either for a
determinate period of time or for a single or In an action for recovery of damages against a
consecutive voyage, the shipowner to supply the ship's common carrier on the goods shipped, the shipper or
stores, pay for the wages of the master and the crew, consignee should first prove the fact of shipment and
and defray the expenses for the maintenance of the its consequent loss or damage while the same was in
ship. the possession, actual or constructive, of the carrier.
Upon the other hand, the term "common or public Thereafter, the burden of proof shifts to respondent to
carrier" is defined in Art. 1732 of the Civil Code. The prove that he has exercised extraordinary diligence
definition extends to carriers either by land, air or required by law or that the loss, damage or
water which hold themselves out as ready to engage in deterioration of the cargo was due to fortuitous event,
carrying goods or transporting passengers or both for or some other circumstances inconsistent with its
compensation as a public employment and not as a liability. To our mind, respondent carrier has
casual occupation. The distinction between a "common sufficiently overcome, by clear and convincing proof,
or public carrier" and a "private or special carrier" lies the prima facie presumption of negligence. Verily, the
in the character of the business, such that if the presumption of negligence on the part of the
undertaking is a single transaction, not a part of the respondent carrier has been efficaciously overcome by
general business or occupation, although involving the the showing of extraordinary zeal and assiduity
carriage of goods for a fee, the person or corporation exercised by the carrier in the care of the cargo. The
offering such service is a private carrier. period during which private respondent was to observe
the degree of diligence required of it as a public carrier
It is not disputed that respondent carrier, in the began from the time the cargo was unconditionally
ordinary course of business, operates as a common placed in its charge after the vessel's holds were duly
carrier, transporting goods indiscriminately for all inspected and passed scrutiny by the shipper, up to
persons. When petitioner chartered the vessel M/V and until the vessel reached its destination and its hull
"Sun Plum", the ship captain, its officers and was reexamined by the consignee, but prior to
compliment were under the employ of the shipowner unloading.
and therefore continued to be under its direct
supervision and control. Hardly then can we charge the Article 1734 of the New Civil Code provides that
charterer, a stranger to the crew and to the ship, with common carriers are not responsible for the loss,
the duty of caring for his cargo when the charterer did destruction or deterioration of the goods if caused by
not have any control of the means in doing so. This is the charterer of the goods or defects in the packaging
evident in the present case considering that the or in the containers. The Code of Commerce also
steering of the ship, the manning of the decks, the provides that all losses and deterioration which the
determination of the course of the voyage and other goods may suffer during the transportation by reason
technical incidents of maritime navigation were all of fortuitous event, force majeure, or the inherent
consigned to the officers and crew who were screened, defect of the goods, shall be for the account and risk of
chosen and hired by the shipowner. the shipper, and that proof of these accidents is
incumbent upon the carrier. The carrier, nonetheless,
It is therefore imperative that a public carrier shall shall be liable for the loss and damage resulting from
remain as such, notwithstanding the charter of the the preceding causes if it is proved, as against him,
whole or portion of a vessel by one or more persons, that they arose through his negligence or by reason of
provided the charter is limited to the ship only, as in his having failed to take the precautions which usage
the case of a time-charter or voyage-charter. It is only has established among careful persons.
when the charter includes both the vessel and its crew,
as in a bareboat or demise that a common carrier Thus, the petition is dismissed.
becomes private, at least insofar as the particular
voyage covering the charter-party is concerned. ESTRELLITA M. BASCOS vs. COURT OF
Indubitably, a shipowner in a time or voyage charter APPEALS and RODOLFO A. CIPRIANO G.R.
retains possession and control of the ship, although her No. 101089. April 7, 1993.
holds may, for the moment, be the property of the
charterer. FACTS:

Respondent carrier's heavy reliance on the case Rodolfo A. Cipriano representing Cipriano Trading
of Home Insurance Co. v. American Steamship Enterprise (CIPTRADE) entered into a hauling contract
Agencies, supra, is misplaced for the reason that the with Jibfair Shipping Agency Corp. whereby the former
meat of the controversy therein was the validity of a bound itself to haul the latters 2,000 m/tons of soya
stipulation in the charter-party exempting the bean meal from Magallanes Drive, Del Pan, Manila to
shipowners from liability for loss due to the negligence the warehouse of Purefoods Corporation in Calamba,
of its agent, and not the effects of a special charter on Laguna. To carry out its obligation, CIPTRADE, through

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Rodolfo Cipriano, subcontracted with Estrellita Bascos and one offering such service on an occasional,
to transport and to deliver 400 sacks of soya bean episodic or unscheduled basis. Neither does Article
meal from the Manila Port Area to Calamba, Laguna at 1732 distinguish between a carrier offering its services
the rate. But, Bascos failed to deliver the said cargo. As to the general public, i.e., the general community or
a consequence, Cipriano paid Jibfair Shipping Agency population, and one who offers services or solicits
the amount of the lost goods in accordance with the business only from a narrow segment of the general
contract. Cipriano demanded reimbursement from population.
Bascos but the latter refused to pay.
Common carriers are obliged to observe extraordinary
Eventually, Cipriano filed a complaint for a sum of diligence in the vigilance over the goods transported
money and damages with writ of preliminary by them. Accordingly, they are presumed to have been
attachment for breach of a contract of carriage. The at fault or to have acted negligently if the goods are
trial court granted the writ of preliminary attachment lost, destroyed or deteriorated. There are very few
and rendered a decision, ordering Bascos to pay for instances when the presumption of negligence does
actual damages with legal interest, attorneys fees and not attach and these instances are enumerated in
the costs of the suit. The court further denied the Article 1734. In those cases where the presumption is
Urgent Motion To Dissolve/Lift preliminary applied, the common carrier must prove that it
Attachment filed by Bascos for being moot and exercised extraordinary diligence in order to overcome
academic. the presumption.

Bascos appealed to the CA but the appellate court As to the second issue, the Court held that hijacking,
affirmed the trial courts judgment. Hence, the petition not being included in the provisions of Article 1734,
for review on certiorari. Petitioner, Bascos interposed must be dealt with under the provisions of Article 1735
the following defenses: that there was no contract of and thus, the common carrier is presumed to have
carriage since CIPTRADE leased her cargo truck to load been at fault or negligent. UArticle 1745 of the Civil
the cargo from Manila Port Area to Laguna; that Code provides that a common carrier is held
CIPTRADE was liable to petitioner for loading the cargo; responsible; and will not be allowed to divest or to
that the truck carrying the cargo was hijacked along diminish such responsibility even for acts of strangers
Paco, Manila; that the hijacking was immediately like thieves or robbers except where such thieves or
reported to CIPTRADE and that petitioner and the robbers in fact acted with grave or irresistible threat,
police exerted all efforts to locate the hijacked violence or force. Affidavits were not enough to
properties; and that hijacking, being a force majeure, overcome the presumption. (1) Bascoss affidavit about
exculpated petitioner from any liability to CIPTRADE the hijacking was based on what had been told her by
Juanito Morden. It was not a first-hand account. While it
ISSUE: had been admitted in court for lack of objection on the
WON petitioner was a common carrier. part of Cipriano, the lower court had discretion in
WON the hijacking referred to a force majeure. assigning weight to such evidence. (2) The affidavit of
Jesus Bascos did not dwell on how the hijacking took
HELD: place. (3) While the affidavit of Juanito Morden, the
truck helper in the hijacked truck, was presented as
The Supreme Court dismissed the petition and affirmed evidence in court, he himself was a witness as could be
the decision of the Court of Appeals. gleaned from the contents of the petition.

Petitioner is a common carrier. Article 1732 of the Civil


Code defines a common carrier as "(a) person, Mr. & Mrs. Engracio Fabre, Jr. vs. CA, et al.
corporation or firm, or association engaged in the 259 SCRA 426
business of carrying or transporting passengers or
goods or both, by land, water or air, for compensation, Facts:
offering their services to the public." The test to
determine a common carrier is "whether the given Petitioners Fabre and his wife were owners of a minibus
undertaking is a part of the business engaged in by the which they used principally in connection with a bus
carrier which he has held out to the general public as service for school children which they operated. The
his occupation rather than the quantity or extent of the couple had a driver, Porfirio Cabil, whom they hired
business transacted." In this case, petitioner herself after trying him out for two weeks. His job was to take
has made the admission that she was in the trucking school children to and from the St. Scholasticas
business, offering her trucks to those with cargo to College.
move. Judicial admissions are conclusive and no
evidence is required to prove the same. On November 2, 1984, private respondent Word for the
World Christian Fellowship Inc. arranged with
Moreover, in referring to Article 1732 of the Civil Code, petitioners for the transportation of 33 members from
it held in De Guzman vs. Court of Appeals that The Manila to La Union and back in consideration of which
above article makes no distinction between one whose they paid P3,000 to petitioners.
principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as The group left at 8:00 in the evening, petitioner Cabil
an ancillary activity (in local idiom, as a sideline). drove the minibus. The usual route to Caba, La Union
Article 1732 also carefully avoids making any was through Carmen, Pangasinan. However, the bridge
distinction between a person or enterprise offering at Carmen was under repair, so that petitioner Cabil,
transportation service on a regular or scheduled basis who was unfamiliar with the area (it being his first trip

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to La Union), was forced to take a detour through the his employers, the Fabres, were themselves
town of Ba-ay in Lingayen, Pangasinan. At 11:30 that negligent in the selection and supervision of their
night, petitioner Cabil came upon a sharp curve on the employee. Due diligence in selection of employees
highway, running on a south to east direction. The road is not satisfied by finding that the applicant
was slippery because it was raining, causing the bus, possessed a professional drivers license. The
which was running at the speed of 50 kilometers per employer should also examine the applicant for his
hour, to skid to the left road shoulder. The bus hit the qualifications, experience and record of service. In
left traffic steel brace and sign along the road and the case at bar, the Fabres, in allowing Cabil to
rammed the fence of one Jesus Escano, then turned drive the bus to La Union, apparently did not
over and landed on its left side, coming to a full stop consider the fact that Cabil had been driving for
only after a series of impacts. The bus came to rest off school children only, from their homes to the St.
the road. A coconut tree which it had hit fell on it and Scholasticas College in Metro Manila. They had
smashed its front portion. hired him only after a two-week apprenticeship.

Several passengers were injured. Private respondent 2. This case involves a contract of carriage.
Amyline Antonio was thrown on the floor of the bus and Petitioners, the Fabres, did not have to be engaged
pinned down by a wooden seat which came off after in the business of public transportation for the
being unscrewed. It took three persons to safely provisions of the Civil Code on common carriers to
remove her from this position. She was in great pain apply to them.
and could not move. Art. 1732. Common carriers are persons,
corporations, firms or associations engaged in the
A case was filed by the respondents against Fabre and business of carrying or transporting passengers or
Cabil. Amyline Antonio was found to be suffering from goods or both, by land, water, or air for
paraplegia and is permanently paralyzed from the compensation, offering their services to the public.
waist down. The RTC ruled in favor of respondents. Mr.
& Mrs. Fabre and Cabil were ordered to pay jointly and The above article makes no distinction between
severally actual, moral and exemplary damages, and one whose principal business activity is the
as well as amount of loss of earning capacity of Antonio carrying of persons or goods or both, and one who
and attorneys fees. The Court of Appeals affirmed the does such carrying only as an ancillary activity.
decision of the trial court with modification on the Neither does Article 1732 distinguish between a
award of damages. carrier offering its services to the general public,
i.e., the general community or population, and one
Issues: who offers services or solicits business only from a
1. Whether or not petitioners were negligent. narrow segment of the general population.
2. Whether or not petitioners were liable for the
injuries suffered by private respondents. As common carriers, the Fabres were bound to
3. Whether or not damages can be awarded and exercise extraordinary diligence for the safe
in the positive, up to what extent. transportation of the passengers to their
destination. This duty of care is not excused by
Held: proof that they exercised the diligence of a good
SC affirmed the decision of the CA but reverted father of the family in the selection and supervision
the amount of the award of damages to that ordered of their employee.
by the RTC. As Art. 1759 of the Code provides:
Common carriers are liable for the death of or
1. The finding that Cabil drove his bus negligently, injuries to passengers through the negligence or
while his employer, the Fabres, who owned the bus, wilful acts of the formers employees, although
failed to exercise the diligence of a good father of such employees may have acted beyond the scope
the family in the selection and supervision of their of their authority or in violation of the orders of the
employee is fully supported by the evidence on common carriers.
record. Indeed, it was admitted by Cabil that on the
night in question, it was raining, and, as a
consequence, the road was slippery, and it was First Philippine Industrial Corporation vs. Court
dark. However, it is undisputed that Cabil drove his of Appeals
bus at the speed of 50 kilometers per hour and G.R. No. 125948 December 29, 1998
only slowed down when he noticed the curve some
15 to 30 meters ahead. Given the conditions of the Facts:
road and considering that the trip was Cabils first
one outside of Manila, Cabil should have driven his Petitioner, First Phil. Industrial Corporation (FirstPhil for
vehicle at a moderate speed. There is testimony brevity) is a grantee of a pipeline concession under
that the vehicles passing on that portion of the Republic Act No. 387, as amended, to contract, install
road should only be running 20 kilometers per and operate oil pipelines. FirstPhil applied for a mayor's
hour, so that at 50 kilometers per hour, Cabil was permit, but before the mayor's permit could be issued,
running at a very high speed. Cabil was grossly the respondent City Treasurer required petitioner to
negligent and should be held liable for the injuries pay a local tax pursuant to the Local Government
suffered by private respondent Amyline Antonio. Code. Petitioner filed a letter-protest addressed to the
respondent City Treasurer, but the latter denied the
Pursuant to Arts. 2176 and 2180 of the Civil Code same contending that petitioner cannot be considered
his negligence gave rise to the presumption that engaged in transportation business, thus it cannot

EH 405 Page 6
TRANSPORTATION LAW CASE DIGESTS
claim exemption under Section 133 (j) of the Local and for compensation. The fact that petitioner has a
Government Code. limited clientele does not exclude it from the definition
of a common carrier.
FirstPhil filed with the RTC Batangas a complaint for tax
refund with prayer for writ of preliminary injunction The definition of "common carriers" in the Civil Code
against respondents, contending that the imposition of makes no distinction as to the means of transporting,
tax upon them violates Sec 133 of the Local as long as it is by land, water or air. It does not provide
Government Code. On the other hand, respondents that the transportation of the passengers or goods
assert that pipelines are not included in the term should be by motor vehicle. In fact, in the United
"common carrier" which refers solely to ordinary States, oil pipe line operators are considered common
carriers such as trucks, trains, ships and the like. carriers.
Respondents further posit that the term "common
carrier" under the said code pertains to the mode or Under the Petroleum Act of the Philippines (Republic
manner by which a product is delivered to its Act 387), petitioner is considered a "common carrier.",
destination. and at the same time, said act also regards petroleum
RTC dismissed the complaint, ruling that exemption operation as a public utility. BIR likewise considers the
granted under Sec. 133 (j) encompasses only "common petitioner a "common carrier." In so ruling, it held that,
carriers" so as not to overburden the riding public or since petitioner is a pipeline concessionaire that is
commuters with taxes. And that petitioner is not a engaged only in transporting petroleum products, it is
common carrier, but a special carrier extending its considered a common carrier under Republic Act No.
services and facilities to a single specific or "special 387. Such being the case, it is not subject to
customer" under a "special contract." withholding tax prescribed by Revenue Regulations No.
13-78, as amended.
The case was elevated by the petitioner to the CA, but
CA affirmed the decision of the RTC. Hence this Section 133 (j), of the Local Government Code,
petition. provides:
Sec. 133. Common Limitations on the Taxing Powers of
Issue: Local Government Units. Unless otherwise provided
herein, the exercise of the taxing powers of provinces,
WON the petitioner is a "common carrier" and, cities, municipalities, and barangays shall not extend
therefore, exempt from the business taxc to the levy of the following:
(j) Taxes on the gross receipts of transportation
Held: Petition was granted. CA decision was contractors and persons engaged in the transportation
REVERSED and SET ASIDE. of passengers or freight by hire and common carriers
by air, land or water, except as provided in this Code.
SC ruled in this case that petitioner is a common
carrier and thus, exempt from business tax. SC held that the legislative intent in excluding from the
taxing power of the local government unit the
A "common carrier" may be defined, broadly, as one imposition of business tax against common carriers is
who holds himself out to the public as engaged in the to prevent a duplication of the so-called "common
business of transporting persons or property from place carrier's tax."
to place, for compensation, offering his services to the
public generally. Art. 1732 of the Civil Code defines a
"common carrier" as "any person, corporation, firm or
association engaged in the business of carrying or
transporting passengers or goods or both, by land, LOADSTAR SHIPPING CO., INC., vs.
water, or air, for compensation, offering their services COURT OF APPEALS
to the public." The test for determining whether a party
is a common carrier of goods is: Facts:
1. He must be engaged in the business of carrying
goods for others as a public employment, and must On 19 November 1984, LOADSTAR received on board
hold himself out as ready to engage in the a) 705 bales of lawanit hardwood; b) 27 boxes and
transportation of goods for person generally as a crates of tilewood assemblies and the others ;and c) 49
business and not as a casual occupation; bundles of mouldings R & W (3) Apitong Bolidenized.
2. He must undertake to carry goods of the kind to On its way to Manila from the port of Nasipit, Agusan
which his business is confined; del Norte, the vessel, along with its cargo, sank off
3. He must undertake to carry by the method by which Limasawa Island. As a result of the total loss of its
his business is conducted and over his established shipment, the consignee made a claim with LOADSTAR
roads; and which, however, ignored the same. MIC filed a
4. The transportation must be for hire. complaint against LOADSTAR and PGAI, alleging that
the sinking of the vessel was due to the fault and
Based on the above definitions and requirements, negligence of LOADSTAR and its employees. LOADSTAR
there is no doubt that petitioner is a common carrier. It denied any liability for the loss of the shipper's goods
is engaged in the business of transporting or carrying and claimed that sinking of its vessel was due to force
goods, i.e. petroleum products, for hire as a public majeure. LOADSTAR submits that the vessel was a
employment. It undertakes to carry for all persons private carrier because it was not issued certificate of
indifferently, that is, to all persons who choose to public convenience, it did not have a regular trip or
employ its services, and transports the goods by land

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TRANSPORTATION LAW CASE DIGESTS
schedule nor a fixed route, and there was only "one
shipper, one consignee for a special cargo. Issue:

Issues: Whether or not Calvo is a common carrier liable for the


damages for failure to observe extraordinary diligence
(1) Is the M/V "Cherokee" a private or a common in the vigilance over the goods.
carrier?
(2) Did LOADSTAR observe due and/or ordinary Held:
diligence in these premises.
The contention has no merit. In De Guzman v. Court of
Held: Petition is dismissed: Appeals, the Court dismissed a similar contention and
held the party to be a common carrier, thus -
SC hold that LOADSTAR is a common carrier. It is not The Civil Code defines "common carriers" in the
necessary that the carrier be issued a certificate of following terms:
public convenience, and this public character is not "Article 1732. Common carriers are persons,
altered by the fact that the carriage of the goods in corporations, firms or associations engaged in the
question was periodic, occasional, episodic or business of carrying or transporting passengers or
unscheduled. The bills of lading failed to show any goods or both, by land, water, or air for compensation,
special arrangement, but only a general provision to offering their services to the public."
the effect that the M/V"Cherokee" was a "general cargo
carrier." 14 Further, the bare fact that the vessel was The law makes no distinction between a carrier offering
carrying a particular type of cargo for one shipper, its services to the general community or solicits
which appears to be purely coincidental, is not reason business only from a narrow segment of the general
enough to convert the vessel from a common to a population. Note that the transportation of goods holds
private carrier, especially where, as in this case, it was an integral part of Calvos business, it cannot indeed
shown that the vessel was also carrying passengers. be doubted that it is a common carrier.
Under Article 1732 of the Civil Code the Civil Code
defines "common carriers" in the following terms:
Art. 1732. Common carriers are persons, Asia Lighterage and Shipping Inc. v. CA
corporations, firms or associations engaged in the Gr, No. 147246, August 19, 2003
business of carrying or transporting passengers or
goods or both, by land, water, or air for compensation, FACTS:
offering their services to the public.
Petitioner was contracted as carrier by a corporation
On to the second assigned error, we find that the M/V from Portland, Oregon to deliver a cargo to the
"Cherokee" was not seaworthy when it embarked on its consignee's warehouse at Pasig City. The cargo,
voyage on 19 November 1984. The vessel was not however, never reached the consignee as the barge
even sufficiently manned at the time. "For a vessel to that carried the cargo sank completely, resulting in
be seaworthy, it must be adequately equipped for the damage to the cargo. Private respondent, as insurer,
voyage and manned with a sufficient number of indemnified the consignee for the lost cargo and thus,
competent officers and crew. The failure of a common as subrogee, sought recovery from petitioner. Both the
carrier to maintain in seaworthy condition its vessel trial court and the appellate court ruled in favor of
involved in a contract of carriage is a clear breach of its private respondent.
duty. The Court ruled in favor of private respondent.
Whether or not petitioner is a common carrier, the
CALVO VS. UCPB GENERAL INSURANCE TERMINAL Court ruled in the affirmative. The principal business of
SERVICE, INC. petitioner is that of lighterage and drayage, offering its
barges to the public, although for limited clientele, for
Facts: carrying or transporting goods by water for
compensation. Whether or not petitioner failed to
A contract was entered into between Calvo and San exercise extraordinary diligence in its care and custody
Miguel Corporation (SMC) for the transfer of certain of the consignee's goods, the Court also ruled in the
cargoes from the port area in Manila to the warehouse affirmative. The barge completely sank after its towing
of SMC. The cargo was insured by UCPB General bits broke, resulting in the loss of the cargo. Petitioner
Insurance Co., Inc. When the shipment arrived and failed to prove that the typhoon was the proximate and
unloaded from the vessel, Calvo withdrew the cargo only cause of the loss and that it has exercised due
from the arrastre operator and delivered the same to diligence before, during and after the occurrence.
SMCs warehouse. When it was inspected, it was found HCISED
out that some of the goods were torn. UCPB, being the
insurer, paid for the amount of the damages and as ISSUE:
subrogee thereafter, filed a suit against Calvo.
Petitioner, on the other hand, contends that it is a Whether or Not the petitioner is a common carrier.
private carrier not required to observe such
extraordinary diligence in the vigilance over the goods. RULING: YES.
As customs broker, she does not indiscriminately hold
her services out to the public but only to selected Petitioner is a common carrier whether its carrying of
parties. goods is done on an irregular rather than scheduled

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TRANSPORTATION LAW CASE DIGESTS
manner, and with an only limited clientele. A common typhoon is the proximate and only cause of the loss of
carrier need not have fixed and publicly known routes. the goods, and that it has exercised due diligence
Neither does it have to maintain terminals or issue before, during and after the occurrence of the typhoon
tickets. To be sure, petitioner fits the test of a common to prevent or minimize the loss. The evidence show
carrier as laid down in Bascos vs. Court of Appeals. The that, even before the towing bits of the barge broke, it
test to determine a common carrier is "whether the had already previously sustained damage when it hit a
given undertaking is a part of the business engaged in sunken object while docked at the Engineering Island.
by the carrier which he has held out to the general It even suffered a hole. Clearly, this could not be solely
public as his occupation rather than the quantity or attributed to the typhoon. The partly-submerged vessel
extent of the business transacted." In the case at bar, was refloated but its hole was patched with only clay
the petitioner admitted that it is engaged in the and cement. The patch work was merely a provisional
business of shipping and lighterage, offering its barges remedy, not enough for the barge to sail safely. Thus,
to the public, despite its limited clientele for carrying or when petitioner persisted to proceed with the voyage,
transporting goods by water for compensation. it recklessly exposed the cargo to further damage.

Article 1732 of the Civil Code defines common carriers


as persons, corporations, firms or associations engaged AF Sanchez Brokerage vs CA
in the business of carrying or transporting passengers (Dec 21, 2004)
or goods or both, by land, water, or air, for
compensation..offering their services to the public. Facts:
Petitioner contends that it is not a common carrier but
a private carrier. Allegedly, it has no fixed and publicly AF Sanchez is engaged in a broker business wherein its
known route, maintains no terminals, and issues no main job is to calculate customs duty, fees and charges
tickets. It points out that it is not obliged to carry as well as storage fees for the cargoes. Part also of the
indiscriminately for any person. It is not bound to carry services being given by AF Sanchez is the delivery of
goods unless it consents. In short, it does not hold out the shipment to the consignee upon the instruction of
its services to the general public. In De Guzman vs. the shipper.
Court of Appeals, we held that the definition of
common carriers in Article 1732 of the Civil Code Wyett engaged the services of AF Sanchez where the
makes no distinction between one whose principal latter delivered the shipment to Hizon Laboratories
business activity is the carrying of persons or goods or upon instruction of Wyett. Upon inspection, it was
both, and one who does such carrying only as an found out that at least 44 cartons containing
ancillary activity. We also did not distinguish between a contraceptives were in bad condition. Wyett claimed
person or enterprise offering transportation service on insurance from FGU. FGU exercising its right of
a regular or scheduled basis and one offering such subrogation claims damages against AF Sanchez who
service on an occasional, episodic or unscheduled delivered the damaged goods. AF Sanchez contended
basis. Further, we ruled that Article 1732 does not that it is not a common carrier but a brokerage firm.
distinguish between a carrier offering its services to
the general public, and one who offers services or Issue: Is AF Sanchez a common carrier?
solicits business only from a narrow segment of the Held:
general population.
Common carriers are bound to observe extraordinary
SC held that Art 1732 of the Civil Code in defining
diligence in the vigilance over the goods transported
common carrier does not distinguish whether the
by them. They are presumed to have been at fault or to
activity is undertaken as a principal activity or merely
have acted negligently if the goods are lost, destroyed
as an ancillary activity. In this case, while it is true that
or deteriorated. To overcome the presumption of
AF Sanchez is principally engaged as a broker, it
negligence in the case of loss, destruction or
cannot be denied from the evidence presented that
deterioration of the goods, deterioration of the goods,
part of the services it offers to its customers is the
the common carrier must prove that it exercised
delivery of the goods to their respective consignees.
extraordinary diligence. There are, however,
exceptions to this rule. Article 1734 of the Civil Code
Note:
enumerates the instances when the presumption of
AF Sanchez claimed that the proximate cause of the
negligence does not attach: Art. 1734. Common
damage is improper packing. Under the CC, improper
carriers are responsible for the loss, destruction, or
packing of the goods is an exonerating circumstance.
deterioration of the goods, unless the same is due to
But in this case, the SC held that though the goods
any of the following causes only: (1) Flood, storm,
were improperly packed, since AF Sanchez knew of the
earthquake, lightning, or other natural disaster or
condition and yet it accepted the shipment without
calamity; (2) Act of the public enemy in war, whether
protest or reservation, the defense is deemed waived.
international or civil; (3) Act or omission of the shipper
or owner of the goods; (4) The character of the goods
or defects in the packing or in the containers; (5) Order
Schmitz Transport and Brokerage Corp v Transort
or act of competent public authority.
Venture Inc., GR 150255 April 22,2005
In the case at bar, the barge completely sank after its
Facts:
towing bits broke, resulting in the total loss of its cargo.
Petitioner claims that this was caused by a typhoon,
On September 25, 1991, SYTCO Pte Ltd. Singapore
hence, it should not be held liable for the loss of the
shipped from the port of Ilyichevsk, Russia on board
cargo. However, petitioner failed to prove that the

EH 405 Page 9
TRANSPORTATION LAW CASE DIGESTS
M/V Alexander Saveliev 545 hot rolled steel sheets in corporation holds [itself] to the public for the
coil weighing 6,992,450 metric tons. The cargoes, purpose of transporting goods as [a] business,
which were to be discharged at the port of Manila in [it] is already considered a common carrier
favor of the consignee, Little Giant Steel Pipe regardless if [it] owns the vehicle to be used or
Corporation (Little Giant), were insured against all risks has to hire one. That petitioner is a common carrier,
with Industrial Insurance Company Ltd. (Industrial the testimony of its own Vice-President and General
Insurance) under Marine Policy No. M-91-3747-TIS. Manager Noel Aro that part of the services it offers to
The vessel arrived at the port of Manila and the its clients as a brokerage firm includes the
Philippine Ports Authority (PPA) assigned it a place of transportation of cargoes reflects so.
berth at the outside breakwater at the Manila South
Harbor. It is settled that under a given set of facts, a customs
broker may be regarded as a common carrier. Thus,
Schmitz Transport, whose services the consignee this Court, in A.F. Sanchez Brokerage, Inc. v. The
engaged to secure the requisite clearances, to receive Honorable Court of Appeals,[44] held:
the cargoes from the shipside, and to deliver them to The appellate court did not err in finding
its (the consignees) warehouse at Cainta, Rizal, in turn petitioner, a customs broker, to be also a
engaged the services of TVI to send a barge and common carrier, as defined under Article 1732
tugboat at shipside. TVIs tugboat Lailani towed the of the Civil Code, to wit,
barge Erika V to shipside. The tugboat, after Art. 1732. Common carriers are persons,
positioning the barge alongside the vessel, left and corporations, firms or associations
returned to the port terminal. Arrastre operator Ocean engaged in the business of carrying or
Terminal Services Inc. commenced to unload 37 of the transporting passengers or goods or
545 coils from the vessel unto the barge. By 12:30 both, by land, water, or air, for
a.m. of October 27, 1991 during which the weather compensation, offering their services to
condition had become inclement due to an the public.
approaching storm, the unloading unto the barge of the xxx
37 coils was accomplished. No tugboat pulled the Article 1732 does not distinguish between one whose
barge back to the pier, however. At around 5:30 a.m. principal business activity is the carrying of goods and
of October 27, 1991, due to strong waves, the crew of one who does such carrying only as an ancillary
the barge abandoned it and transferred to the vessel. activity. The contention, therefore, of petitioner that it
The barge pitched and rolled with the waves and is not a common carrier but a customs broker whose
eventually capsized, washing the 37 coils into the sea. principal function is to prepare the correct customs
declaration and proper shipping documents as required
Little Giant thus filed a formal claim against Industrial by law is bereft of merit. It suffices that petitioner
Insurance which paid it the amount of P5,246,113.11. undertakes to deliver the goods for pecuniary
Little Giant thereupon executed a subrogation receipt consideration.
in favor of Industrial Insurance. Industrial Insurance
later filed a complaint against Schmitz Transport, And in Calvo v. UCPB General Insurance Co. Inc.,[46]
TVI, and Black Sea through its representative this Court held that as the transportation of goods
Inchcape (the defendants) before the RTC of is an integral part of a customs broker, the
Manila, they faulted the defendants for customs broker is also a common carrier. For to
undertaking the unloading of the cargoes while declare otherwise would be to deprive those with
typhoon signal No. 1 was raised. The RTC held all whom [it] contracts the protection which the law
the defendants negligent. Defendants Schmitz affords them notwithstanding the fact that the
Transport and TVI filed a joint motion for obligation to carry goods for [its] customers, is part
reconsideration assailing the finding that they and parcel of petitioners business.
are common carriers. RTC denied the motion for
reconsideration. CA affirmed the RTC decision in
toto, finding that all the defendants were common PHIL CHARTER vs. M/V "NATIONAL HONOR,"
carriers Black Sea and TVI for engaging in the [G.R. No. 161833. July 8, 2005.]
transport of goods and cargoes over the seas as a
regular business and not as an isolated transaction, FACTS:
and Schmitz Transport for entering into a contract with
Little Giant to transport the cargoes from ship to port On November 5, 1995, J. Trading Co. Ltd. of Seoul,
for a fee. Korea, loaded a shipment of four units of parts and
accessories on board the vessel M/V "National Honor,"
Issue: represented in the Philippines by its agent, National
Shipping Corporation of the Philippines (NSCP). The
Whether or not Black Sea and TVI are common carriers shipment was contained in two wooden crates, namely,
Crate No. 1 and Crate No. 2, complete and in good
Held : order condition. Crate No. 1 contained the following
articles: one (1) unit Lathe Machine complete with
Contrary to petitioners insistence, this Court, as did parts and accessories; one (1) unit Surface Grinder
the appellate court, finds that petitioner is a common complete with parts and accessories; and one (1) unit
carrier. For it undertook to transport the cargoes from Milling Machine complete with parts and accessories.
the shipside of M/V Alexander Saveliev to the On the flooring of the wooden crates were three
consignees warehouse at Cainta, Rizal. As the wooden battens placed side by side to support the
appellate court put it, as long as a person or weight of the cargo. It was insured for P2,547,270.00

EH 405 Page 10
TRANSPORTATION LAW CASE DIGESTS
with the Philippine Charter Insurance Corporation condition, a presumption arises against the carrier of
(PCIC). its failure to observe that diligence, and there need not
be an express finding of negligence to hold it liable.
The M/V "National Honor" arrived at the Manila However, under Article 1734 of the New Civil Code,
International Container Terminal (MICT). The the presumption of negligence does not apply to any of
International Container Terminal Services, Incorporated the following causes:
(ICTSI) was the exclusive arrastre operator of MICT and 1. Flood, storm, earthquake, lightning or
was charged with discharging the cargoes from the other natural disaster or calamity;
vessel. Claudio Cansino, the stevedore of the ICTSI, 2. Act of the public enemy in war, whether
placed two sling cables on each end of Crate No. 1. No international or civil;
sling cable was fastened on the mid-portion of the 3. Act or omission of the shipper or owner of
crate. As the crate was being hoisted from the vessel's the goods;
hatch, the mid-portion of the wooden flooring suddenly 4. The character of the goods or defects in
snapped in the air, about five feet high from the the packing or in the containers;
vessel's twin deck, sending all its contents crashing 5. Order or act of competent public
down hard, resulting in extensive damage to the authority.
shipment.
It bears stressing that the enumeration in Article 1734
Blue Mono International Company, Incorporated of the New Civil Code which exempts the common
(BMICI) subsequently filed separate claims against the carrier for the loss or damage to the cargo is a closed
NSCP, the ICTSI, and its insurer, the PCIC, for list. Crate No. 1 was provided by the shipper of the
US$61,500.00. When the other companies denied machineries in Seoul, Korea. There is nothing in the
liability, PCIC paid the claim and was issued a record which would indicate that defendant ICTSI had
Subrogation Receipt for P1,740,634.50. On March 22, any role in the choice of the materials used in
1995, PCIC, as subrogee, filed with the RTC of Manila a fabricating this crate. Said defendant, therefore, cannot
Complaint for Damages against the "Unknown owner of be held as blame worthy for the loss of the machineries
the vessel M/V National Honor," NSCP and ICTSI, as contained in Crate No. 1.
defendants. ICTSI, for its part, filed its Answer with The CA affirmed the ruling of the RTC, thus:
Counterclaim and Cross-claim against its co-defendant The case at bar falls under one of the exceptions
NSCP, claiming that the loss/damage of the shipment mentioned in Article 1734 of the Civil Code, particularly
was caused exclusively by the defective material of the number (4) thereof, i.e., the character of the goods or
wooden battens of the shipment, insufficient packing defects in the packing or in the containers. The trial
or acts of the shipper. court found that the breakage of the crate was not due
to the fault or negligence of ICTSI, but to the inherent
The trial court rendered judgment for PCIC and ordered defect and weakness of the materials used in the
the complaint dismissed. According to the trial court, fabrication of the said crate.
the loss of the shipment contained in Crate No. 1 was
due to the internal defect and weakness of the Upon examination of the records, We find no
materials used in the fabrication of the crates. The CA compelling reason to depart from the factual findings
affirmed in TOTO the decision of the RTC. of the trial court. It appears that the wooden batten
used as support for the flooring was not made of good
ISSUE: materials, which caused the middle portion thereof to
give way when it was lifted. The shipper also failed to
WHETHER OR NOT THE COMMON CARRIER IS LIABLE indicate signs to notify the stevedores that extra care
FOR THE DAMAGE SUSTAINED BY THE SHIPMENT IN should be employed in handling the shipment.
THE HANDS OF THE ARRASTRE OPERATOR. Appellant's allegation that since the cargo arrived
safely from the port of [P]usan, Korea without defect,
HELD: THE RULING OF THE RTC AND CA WAS the fault should be attributed to the arrastre operator
UPHELD. who mishandled the cargo; is without merit. The cargo
fell while it was being carried only at about five (5) feet
The petitioner posits that the loss/damage was caused high above the ground. It would not have so easily
by the mishandling of the shipment by therein collapsed had the cargo been properly packed. The
respondent ICTSI, the arrastre operator, and not by its shipper should have used materials of stronger quality
negligence. The petition has no merit. to support the heavy machines. Not only did the
shipper fail to properly pack the cargo, it also failed to
We agree with the contention of the petitioner that indicate an arrow in the middle portion of the cargo
common carriers, from the nature of their business and where additional slings should be attached.
for reasons of public policy, are mandated to observe
extraordinary diligence in the vigilance over the goods While it is true that the crate contained machineries
according to all the circumstances of each case. The and spare parts, it cannot thereby be concluded that
extraordinary diligence in the vigilance over the the respondents knew or should have known that the
goods requires common carriers to render service with middle wooden batten had a hole, or that it was not
the greatest skill and foresight and "to use all strong enough to bear the weight of the shipment. The
reasonable means to ascertain the nature and statement in the Bill of Lading, that the shipment was
characteristic of goods tendered for shipment, and to in apparent good condition, is sufficient to sustain a
exercise due care in the handling and stowage, finding of absence of defects in the merchandise. Case
including such methods as their nature requires." When law has it that such statement will create a prima facie
the goods shipped are either lost or arrive in damaged

EH 405 Page 11
TRANSPORTATION LAW CASE DIGESTS
presumption only as to the external condition and not obligations of the parties to a contract of private
to that not open to inspection. carriage are governed principally by their stipulations,
not by the law on common carriers. The Contract in the
present case was one of affreightment, as shown by
LEA MER INDUSTRIES INC VS MALAYAN the fact that it was petitioner's crew that manned the
INSURANCE CO, INC. tugboat M/V Ayalit and controlled the barge Judy VII.
GR No. 161745, SEPTEMBER 30, 2005
Common carriers are bound to observe extraordinary
FACTS: diligence in their vigilance over the goods and the
safety of the passengers they transport, as required by
Ilian Silica Mining entered into a contract of carriage the nature of their business and for reasons of public
with the petitioner, Lea Mer Industries Inc. for the policy. Extraordinary diligence requires rendering
shipment of 900 metric tons of silica sand worth service with the greatest skill and foresight to avoid
P565,000. The cargo was consigned to Vulcan damage and destruction to the goods entrusted for
Industrial and Mining Corporation and was to be carriage and delivery.
shipped from Palawan to Manila. The silica sand was
boarded to Judy VII, the vessel leased by Lea Mer. Common carriers are presumed to have been at fault
However, during the course of its voyage, the vessel or to have acted negligently for loss or damage to the
sank which led to the loss of the cargo. goods that they have transported. This presumption
can be rebutted only by proof that they observed
Consequently, the respondent, as the insurer, paid extraordinary diligence, or that the loss or damage was
Vulcan the value of the lost cargo. Malayan Insurance occasioned by any of the following causes:
Co., Inc. then collected from the petitioner the amount "(1) Flood, storm, earthquake, lightning, or other
it paid to Vulcan as reimbursement and as its exercise natural disaster or calamity;
on the right of subrogation. Lea Mer refused to pay "(2) Act of the public enemy in war, whether
which led Malayan to institute a complaint with the international or civil;
RTC. The RTC dismissed the complaint stating that the "(3) Act or omission of the shipper or owner of the
loss was due to a fortuitous event, Typhoon Trining. goods;
Petitioner did not know that a typhoon was coming and "(4) The character of the goods or defects in the
that it has been cleared by the Philippine Coast Guard packing or in the containers;
to travel from Palawan to Manila. The CA reversed the "(5) Order or act of competent public authority."
ruling of the trial court for the reason that said vessel
was not seaworthy when it sailed to Manila. Jurisprudence defines the elements of a "fortuitous
event" as follows: (a) the cause of the unforeseen and
ISSUE: unexpected occurrence, or the failure of the debtors to
Whether or not the petitioner is liable for the loss of the comply with their obligations, must have been
cargo. independent of human will; (b) the event that
constituted the caso fortuito must have been
HELD: impossible to foresee or, if foreseeable, impossible to
avoid; (c) the occurrence must have been such as to
CA reversed. Common carriers are persons, render it impossible for the debtors to fulfill their
corporations, firms or associations engaged in the obligation in a normal manner; and (d) the obligor must
business of carrying or transporting passengers or have been free from any participation in the
goods, or both by land, water, or air when this aggravation of the resulting injury to the creditor. To
service is offered to the public for compensation. excuse the common carrier fully of any liability, the
Petitioner is clearly a common carrier, because it offers fortuitous event must have been the proximate and
to the public its business of transporting goods through only cause of the loss. Moreover, it should have
its vessels. Thus, the Court corrects the trial court's exercised due diligence to prevent or minimize the loss
finding that petitioner became a private carrier when before, during and after the occurrence of the
Vulcan chartered it. Charter parties are classified as fortuitous event. As required by the pertinent law, it
contracts of demise (or bareboat) and affreightment, was not enough for the common carrier to show that
which are distinguished as follows: there was an unforeseen or unexpected occurrence. It
had to show that it was free from any fault a fact it
"Under the demise or bareboat charter of the vessel, miserably failed to prove.
the charterer will generally be considered as owner for
the voyage or service stipulated. The charterer mans
the vessel with his own people and becomes, in effect, LOADSTAR SHIPPING CO., INC., v. CA
the owner pro hac vice, subject to liability to others for
damages caused by negligence. To create a demise, Facts:
the owner of a vessel must completely and exclusively
relinquish possession, command and navigation On 19 November 1984, LOADSTAR received on board
thereof to the charterer; anything short of such a a) 705 bales of lawanit hardwood; b) 27 boxes and
complete transfer is a contract of affreightment (time crates of tilewood assemblies and the others ;and c) 49
or voyage charter party) or not a charter party at all." bundles of mouldings R & W (3) Apitong Bolidenized.
On its way to Manila from the port of Nasipit, Agusan
The distinction is significant, because a demise or del Norte, the vessel, along with its cargo, sank off
bareboat charter indicates a business undertaking that Limasawa Island. As a result of the total loss of its
is private in character. Consequently, the rights and shipment, the consignee made a claim with LOADSTAR

EH 405 Page 12
TRANSPORTATION LAW CASE DIGESTS
which, however, ignored the same. MIC filed a The cargo, consigned to San Miguel Brewery, Inc., now
complaint against LOADSTAR and PGAI, alleging that San Miguel Corporation, and insured by Home
the sinking of the vessel was due to the fault and Insurance Company for $202,505, arrived in Manila and
negligence of LOADSTAR and its employees. LOADSTAR was discharged into the lighters of Luzon Stevedoring
denied any liability for the loss of the shipper's goods Company. When the cargo was delivered to consignee
and claimed that sinking of its vessel was due to force San Miguel Brewery Inc., there were shortages
majeure. LOADSTAR submits that the vessel was a amounting to P12,033.85, causing the latter to lay
private carrier because it was not issued certificate of claims against Luzon Stevedoring Corporation, Home
public convenience, it did not have a regular trip or Insurance Company and the American Steamship
schedule nor a fixed route, and there was only "one Agencies, owner and operator of SS Crowborough.
shipper, one consignee for a special cargo.
Because the others denied liability, Home Insurance
Issues: Company paid the consignee P14,870.71. Having been
refused reimbursement by both the Luzon Stevedoring
(1) Is the M/V "Cherokee" a private or a common Corporation and American Steamship Agencies, Home
carrier? Insurance Company, as subrogee to the consignee,
(2) Did LOADSTAR observe due and/or ordinary filed against them before the Court of First Instance a
diligence in these premises. complaint for recovery of P14,870.71 with legal
interest, plus attorney's fees.
Held: Petition is dismissed:
In answer, Luzon Stevedoring Corporation alleged that
SC hold that LOADSTAR is a common carrier. It is not it delivered with due diligence the goods in the same
necessary that the carrier be issued a certificate of quantity and quality that it had received the same from
public convenience, and this public character is not the carrier. It also claimed that plaintiff's claim had
altered by the fact that the carriage of the goods in prescribed under Article 366 of the Code of Commerce
question was periodic, occasional, episodic or stating that the claim must be made within 24 hours
unscheduled. The bills of lading failed to show any from receipt of the cargo.
special arrangement, but only a general provision to American Steamship Agencies denied liability by
the effect that the M/V"Cherokee" was a "general cargo alleging that under the provisions of the Charter party
carrier." 14 Further, the bare fact that the vessel was referred to in the bills of lading, the charterer, not the
carrying a particular type of cargo for one shipper, shipowner, was responsible for any loss or damage of
which appears to be purely coincidental, is not reason the cargo. Furthermore, it claimed to have exercised
enough to convert the vessel from a common to a due diligence in stowing the goods and that as a mere
private carrier, especially where, as in this case, it was forwarding agent, it was not responsible for losses or
shown that the vessel was also carrying passengers. damages to the cargo.
Under Article 1732 of the Civil Code the Civil Code
defines "common carriers" in the following terms: The Court of First Instance absolved the Luzon
Art. 1732. Common carriers are persons, Stevedoring Corporation from any liability and ordered
corporations, firms or associations engaged in the the American Steamship Agencies to pay the sum.
business of carrying or transporting passengers or Hence, this petition.
goods or both, by land, water, or air for compensation,
offering their services to the public. ISSUE:

On to the second assigned error, we find that the M/V Is the stipulation in the charter party of the owner's
"Cherokee" was not seaworthy when it embarked on its non-liability valid so as to absolve the American
voyage on 19 November 1984. The vessel was not Steamship Agencies from liability for loss?
even sufficiently manned at the time. "For a vessel to
be seaworthy, it must be adequately equipped for the RULING:
voyage and manned with a sufficient number of
competent officers and crew. The failure of a common Judgment was reversed and American Steamship
carrier to maintain in seaworthy condition its vessel Agencies was absolved liability.
involved in a contract of carriage is a clear breach of its The bills of lading provided at the back thereof that
duty. the bills of lading shall be governed by and subject
to the terms and conditions of the charter party, if
any, otherwise, the bills of lading prevail over all
CEBU SALVAGE CORP. v. PHIL HOME ASSURANCE the agreements.

3. Private Carriage o Section 2, paragraph 2 of the charter party,


provides that the owner is liable for loss or
Home Insurance Co. v. American Steamship damage to the goods caused by personal want
Agencies of due diligence on its part or its manager to
23 SCRA 24 make the vessel in all respects seaworthy and
to secure that she be properly manned,
FACTS: equipped and supplied or by the personal act
or default of the owner or its manager. Said
"Consorcio Pesquero del Peru of South America" paragraph, however, exempts the owner of the
shipped freight pre-paid at Chimbate, Peru, 21,740 jute vessel from any loss or damage or delay
bags of Peruvian fish meal through SS Crowborough. arising from any other source, even from the

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TRANSPORTATION LAW CASE DIGESTS
neglect or fault of the captain or crew or some City and discharge them at North Harbor, Manila. On
other person employed by the owner on board, arrival and upon opening the three hatches containing
for whose acts the owner would ordinarily be the shipment, nearly all the skids of tinplates and hot
liable except for said paragraph.. rolled sheets were allegedly found to be wet and rusty.
NSC filed a complaint for damages but RTC dismissed
The Court of First Instance declared the contract as the complaint
contrary to Article 587 of the Code of Commerce
making the ship agent civilly liable for indemnities Issues:
suffered by third persons arising from acts or 1. whether VSI contracted with NSC as a common
omissions of the captain in the care of the goods carrier or as a private carrier
and Article 1744 of the Civil Code under which a 2. Whether or not the provisions of the Civil Code
stipulation between the common carrier and the of the Philippines on common carriers pursuant
shipper or owner limiting the liability of the former to which there exist[s] a presumption of
for loss or destruction of the goods to a degree less negligence against the common carrier in case
than extraordinary diligence is valid provided it be of loss or damage to the cargo are applicable
reasonable, just and not contrary to public policy. to a private carrier.
The release from liability in this case was held
unreasonable and contrary to the public policy on Held:
common carriers.
1. VSI was not a common carrier but a private
o Under American jurisprudence, a common carrier. It is undisputed that VSI did not offer its
carrier undertaking to carry a special cargo or services to the general public. The extent of
chartered to a special person only, becomes a VSI's responsibility and liability over NSC's
private carrier.8 As a private carrier, a cargo are determined primarily by the
stipulation exempting the owner from liability stipulations in the contract of carriage or
for the negligence of its agent is not against charter party and the Code of Commerce. The
public policy, and is deemed valid burden of proof lies on the part of NSC and not
o he Civil Code provisions on common carriers the VSI.
should not be applied where the carrier is not
acting as such but as a private carrier. The Article 1732 of the Civil Code defines a
stipulation in the charter party absolving the common carrier as "persons, corporations,
owner from liability for loss due to the firms or associations engaged in the business
negligence of its agent would be void only if of carrying or transporting passengers or goods
the strict public policy governing common or both, by land, water or air, for
carriers is applied. Such policy has no force compensation, offering their services to the
where the public at large is not involved, as in public." It has been held that the true test of a
the case of a ship totally chartered for the use common carrier is the carriage of passengers
of a single party. or goods, provided it has space, for all who opt
to avail themselves of its transportation service
And furthermore, in a charter of the entire vessel, for a fee. A carrier which does not qualify under
the bill of lading issued by the master to the the above test is deemed a private carrier.
charterer, as shipper, is in fact and legal "Generally, private carriage is undertaken by
contemplation merely a receipt and a document of special agreement and the carrier does not
title not a contract, for the contract is the charter hold himself out to carry goods for the general
party. The consignee may not claim ignorance of public. . . ."
said charter party because the bills of lading
expressly referred to the same. Accordingly, the 2. Because the MV Vlason I was a private carrier,
consignees under the bills of lading must likewise the shipowner's obligations are governed by
abide by the terms of the charter party. And as the provisions of the Code of Commerce and
stated, recovery cannot be had thereunder, for loss not by the Civil Code which, as a general rule
or damage to the cargo, against the shipowners, places the prima facie presumption of
unless the same is due to personal acts or negligence on a common carrier.
negligence of said owner or its manager, as
distinguished from its other agents or employees. IN A CONTRACT OF PRIVATE CARRIAGE, THE
In this case, no such personal act or negligence has BURDEN OF PROOF IN CASE OF ACCIDENT IS
been proved. ON THE CARRIER but the court exempts VSI
due to force majeure.

NATIONAL STEEL CORPORATION vs. COURT OF NSC must prove that the damage to its
APPEALS (1997) shipment was caused by VSI's willful
negligence or failure to exercise due diligence
Facts: in making MV Vlason I seaworthy and fit for
holding, carrying and safekeeping the cargo.
NSC hired MV Vlasons I, a private vessel owned by VSI. The burden of proof was placed on NSC by the
They entered into a contract of voyage charter hire parties' agreement.
wherein the contract states that NSC hired VSI's vessel
to make one voyage to load steel products at Iligan

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TRANSPORTATION LAW CASE DIGESTS
VALENZUELA HARDWOOD AND INDUSTRIAL private carriage is not even a contract of adhesion. We
SUPPLY v. CA stress that in a contract of private carriage, the parties
may freely stipulate their duties and obligations which
FACTS: perforce would be binding on them. Unlike in contract
involving a common carrier, private carriage does not
Plaintiff shipped at Maconcon Port, Isabela 940 round involve the general public. Hence, the stringent
logs on board M/V Seven Ambassador, a vessel owned provisions of the Civil Code on common carriers
by defendant Seven Brothers Shipping Corporation. protecting the general public cannot justifiably be
Plaintiff insured the logs against loss and/or damage applied to a ship transporting commercial goods as a
with defendant South Sea Surety and Insurance Co., private carrier. Consequently, the public policy
Inc. for P2M and the latter issued its Marine Cargo embodied therein is not contravened by stipulations in
Insurance Policy on said date. In the meantime, the a charter party that lessen or remove the protection
M/V Seven Ambassador sank resulting in the loss of the given by law in contracts involving common carriers.
plaintiffs insured logs.
The provisions of our Civil Code on common carriers
Plaintiff demanded from defendant South Sea Surety were taken from Anglo-American law. Under American
and Insurance Co., Inc. the payment of the proceeds of jurisprudence, a common carrier undertaking to carry a
the policy but the latter denied liability under the special cargo or chartered to a special person only,
policy. Plaintiff likewise filed a formal claim with becomes a private carrier. As a private carrier a
defendant Seven Brothers Shipping Corporation for the stipulation exempting the owner from liability for the
value of the lost logs but the latter denied the claim. negligence of its agent is not against public policy and
is deemed valid. Such doctrine We find reasonable. The
Court of Appeals affirmed in part the RTC judgment by Civil Code provisions on common carriers should not be
sustaining the liability of South Sea Surety and applied where the carrier is not acting as such but as a
Insurance Company ("South Sea"), but modified it by private carrier. The stipulation in the charter party
holding that Seven Brothers Shipping Corporation absolving the owner from liability for loss due to the
("Seven Brothers") was not liable for the lost cargo. negligence of its agent would be void only if the strict
public policy governing common carriers is applied.
ISSUE: Such policy has no force where the public at large is
not involved as in this case of a ship totally chartered
Whether defendants shipping corporation and the for the use of a single party. (Home Insurance Co. vs.
surety company are liable to the plaintiff for the latter's American Steamship Agencies Inc., 23 SCRA 24, April
lost logs. 4, 1968)
HELD:

The charter party between the petitioner and private FGU INSURANCE v. G.P. SARMIENTO
respondent stipulated that the "(o)wners shall not be
responsible for loss, split, short-landing, breakages and
any kind of damages to the cargo" VALID Crisostomo vs. CA
G.R. No. 138334 August 25, 2003
There is no dispute between the parties that the
proximate cause of the sinking of M/V Seven FACTS:
Ambassadors resulting in the loss of its cargo was the
"snapping of the iron chains and the subsequent rolling In May 1991, petitioner Estela L. Crisostomo contracted
of the logs to the portside due to the negligence of the the services of respondent Caravan Travel and Tours
captain in stowing and securing the logs on board the International, Inc. to arrange and facilitate her booking,
vessel and not due to fortuitous event." Likewise ticketing and accommodation in a tour dubbed Jewels
undisputed is the status of Private Respondent Seven of Europe. The package tour included the countries of
Brothers as a private carrier when it contracted to England, Holland, Germany, Austria, Liechstenstein,
transport the cargo of Petitioner Valenzuela. Even the Switzerland and France at a total cost of
latter admits this in its petition. P74,322.70.Petitioner was given a 5% discount on the
amount, which included airfare, and the booking fee
Private respondent had acted as a private carrier in was also waived because petitioners niece, Meriam
transporting petitioner's lauan logs. Thus, Article 1745 Menor, was respondent companys ticketing manager.
and other Civil Code provisions on common carriers
which were cited by petitioner may not be applied Pursuant to said contract, Menor went to her aunts
unless expressly stipulated by the parties in their residence on June 12, 1991 a Wednesday to deliver
charter party. petitioners travel documents and plane
tickets.Petitioner, in turn, gave Menor the full payment
In a contract of private carriage, the parties may for the package tour.Menor then told her to be at the
validly stipulate that responsibility for the cargo rests Ninoy Aquino International Airport (NAIA) on
solely on the charterer, exempting the shipowner from Saturday,two hours before her flight on board British
liability for loss of or damage to the cargo caused even Airways.
by the negligence of the ship captain. Pursuant to
Article 1306 of the Civil Code, such stipulation is valid Without checking her travel documents, petitioner
because it is freely entered into by the parties and the went to NAIA on Saturday, June 15, 1991, to take the
same is not contrary to law, morals, good customs, flight for the first leg of her journey from Manila to
public order, or public policy. Indeed, their contract of Hongkong. To petitioners dismay, she discovered that

EH 405 Page 15
TRANSPORTATION LAW CASE DIGESTS
the flight she was supposed to take had already her carriage to Europe. Respondents obligation to
departed the previous day.She learned that her plane petitioner in this regard was simply to see to it that
ticket was for the flight scheduled on June 14, 1991. petitioner was properly booked with the airline for the
She thus called up Menor to complain. appointed date and time. Her transport to the place of
destination, meanwhile, pertained directly to the
Subsequently, Menor prevailed upon petitioner to take airline.
another tour the British Pageant which included
England, Scotland and Wales in its itinerary. For this The object of petitioners contractual relation with
tour package, petitioner was asked anew to pay respondent is the latters service of arranging and
US$785.00 or P20,881.00 (at the then prevailing facilitating petitioners booking, ticketing and
exchange rate of P26.60). She gave respondent accommodation in the package tour. In contrast, the
US$300 or P7,980.00 as partial payment and object of a contract of carriage is
commenced the trip in July 1991. the transportation of passengers or goods. It is in this
sense that the contract between the parties in this
Upon petitioners return from Europe, she demanded case was an ordinary one for services and not one of
from respondent the reimbursement of P61,421.70, carriage. Petitioners submission is premised on a
representing the difference between the sum she paid wrong assumption.It is thus not bound under the law to
for Jewels of Europe and the amount she owed observe extraordinary diligence in the performance of
respondent for the British Pageant tour. Despite its obligation, as petitioner claims.
several demands, respondent company refused to
reimburse the amount, contending that the same was Since the contract between the parties is an ordinary
non-refundable.Petitioner was thus constrained to file a one for services, the standard of care required of
complaint against respondent for breach of contract of respondent is that of a good father of a family under
carriage and damages, which was docketed as Civil Article 1173 of the Civil Code.This connotes reasonable
Case No. 92-133 and raffled to Branch 59 of the care consistent with that which an ordinarily prudent
Regional Trial Court of Makati City. person would have observed when confronted with a
similar situation. The test to determine whether
After due proceedings, the trial court rendered a negligence attended the performance of an obligation
decision in favor of Estela Crisostomo. is: did the defendant in doing the alleged negligent act
But it was reversed by the Court of Appeals. Hence, use that reasonable care and caution which an
this petition. ordinarily prudent person would have used in the same
situation?If not, then he is guilty of negligence.
ISSUE:
we do not agree with the finding of the lower court
Is the Caravan Travel and Tours liable for that Menors negligence concurred with the negligence
reimbursement and damages? of petitioner and resultantly caused damage to the
latter. Contrary to petitioners claim, the evidence on
HELD: Petition DENIED. record shows that respondent exercised due diligence
in performing its obligations under the contract and
By definition, a contract of carriage or transportation is followed standard procedure in rendering its services to
one whereby a certain person or association of persons petitioner. As correctly observed by the lower court, the
obligate themselves to transport persons, things, or plane ticket. issued to petitioner clearly reflected the
news from one place to another for a fixed price.Such departure date and time, contrary to petitioners
person or association of persons are regarded as contention. The travel documents, consisting of the
carriers and are classified as private or special carriers tour itinerary, vouchers and instructions, were likewise
and common or public carriers.A common carrier is delivered to petitioner two days prior to the trip.
defined under Article 1732 of the Civil Code as persons, Respondent also properly booked petitioner for the
corporations, firms or associations engaged in the tour, prepared the necessary documents and procured
business of carrying or transporting passengers or the plane tickets. It arranged petitioners hotel
goods or both, by land, water or air, for compensation, accommodation as well as food, land transfers and
offering their services to the public. sightseeing excursions, in accordance with its avowed
undertaking. Therefore, it is clear that respondent
It is obvious from the above definition that respondent performed its prestation under the contract as well as
is not an entity engaged in the business of transporting everything else that was essential to book petitioner
either passengers or goods and is therefore, neither a for the tour.
private nor a common carrier. Respondent did not
undertake to transport petitioner from one place to
another since its covenant with its customers is simply Hence, petitioner cannot recover and must bear her
to make travel arrangements in their behalf. own damage.
Respondents services as a travel agency include
procuring tickets and facilitating travel permits or visas
as well as booking customers for tours. 4. Distinction from towage, arrester and
stevedoring
While petitioner concededly bought her plane ticket 5. Governing Laws
through the efforts of respondent company, this does 6. Registered Owner Rule and Kabit System
not mean that the latter ipso facto is a common carrier.
At most, respondent acted merely as an agent of the C. OBLIGATIONS OF PARTIES AND DEFENSES
airline, with whom petitioner ultimately contracted for 1. Duties of Common Carrier

EH 405 Page 16
TRANSPORTATION LAW CASE DIGESTS
have a complete contract of carriage the
COMPAIA MARITIMA v. INSURANCE COMPANY OF consummation of which has already begun: the shipper
NORTH AMERICA delivering the cargo to the carrier, and the latter taking
G.R. No. L-18965 October 30, 1964 possession thereof by placing it on a lighter manned by
its authorized employees, under which Macleod
FACTS: became entitled to the privilege secured to him by law
for its safe transportation and delivery, and the carrier
Macleod and Company of the Philippines contracted to the full payment of its freight upon completion of the
the services of the Compaia Maritima, a shipping voyage.
corporation, for the shipment of 2,645 bales of hemp
from the former's Sasa private pier at Davao City to The receipt of goods by the carrier has been said to lie
Manila and for their subsequent transhipment to at the foundation of the contract to carry and deliver,
Boston, Massachusetts, U.S.A. on board the S.S. Steel and if actually no goods are received there can be no
Navigator. This oral contract was later on confirmed by such contract. The liability and responsibility of the
a formal and written booking issued by Macleod's carrier under a contract for the carriage of goods
branch office in Sasa and handcarried to Compaia commence on their actual delivery to, or receipt by,
Maritima's branch office in Davao in compliance with the carrier or an authorized agent. ... and delivery to a
which the latter sent to Macleod's private wharf on lighter in charge of a vessel for shipment on the vessel,
which the loading of the hemp was completed on where it is the custom to deliver in that way, is a good
October 29, 1952. These two lighters were manned delivery and binds the vessel receiving the freight, the
each by a patron and an assistant patron. The patrons liability commencing at the time of delivery to the
of both barges issued the corresponding carrier's lighter. ... and, similarly, where there is a contract to
receipts. carry goods from one port to another, and they cannot
be loaded directly on the vessel and lighters are sent
During the night of October 29, 1952, or at the early by the vessel to bring the goods to it, the lighters are
hours of October 30, LCT No. 1025 sank, resulting in for the time its substitutes, so that the bill of landing is
the damage or loss of 1,162 bales of hemp loaded applicable to the goods as soon as they are placed on
therein. The total damages totaled to P60,421.02. the lighters. (80 C.J.S., p. 901, emphasis supplied)
Since Macleods products were insured by Insurance
Company of North America, it executed a subrogation The liability of the carrier as common carrier begins
contract where Macleod assigned all rights to the with the actual delivery of the goods for transportation,
Insurance Company of North America to the damaged and not merely with the formal execution of a receipt
and insured cargo. Unable to collect from Compania or bill of lading; the issuance of a bill of lading is not
Maritima, Company of North America filed this case in necessary to complete delivery and acceptance. Even
court. The trial court ordered Compania Maritima to where it is provided by statute that liability commences
pay Macleod the damages it incurred due to its sinking. with the issuance of the bill of lading, actual delivery
The CA affirmed the decision of the lower court and acceptance are sufficient to bind the carrier.
prompting the petitioner to elevate the case to the
Supreme Court.
SERVANDO vs. PHILIPPINE STEAM NAVIGATION
ISSUE: CO.

(1) Was there a contract of carriage between the FACTS:


carrier and the shipper even if the loss occurred when
the hemp was loaded on a barge owned by the carrier On November 6, 1963, appellees Clara Uy Bico and
which was loaded free of charge and was not actually Amparo Servando loaded on board the appellant's
loaded on the S.S. Bowline Knot which would carry the vessel, FS-176, for carriage from Manila to Pulupandan,
hemp to Manila and no bill of lading was issued Negros Occidental. In the bills of lading issued for the
therefore? cargoes in question, the parties agreed to limit the
responsibility of the carrier for the loss or damage that
HELD: may be caused to the shipment by inserting therein
the following stipulation:
1. This issue should be answered in the affirmative. The Clause 14. Carrier shall not be responsible for loss or
oral contract was later confirmed by a formal and damage to shipments billed 'owner's risk' unless such
written booking issued by the shipper's branch office, loss or damage is due to negligence of carrier. Nor shall
Davao City, in virtue of which the carrier sent two of its carrier be responsible for loss or damage caused by
lighters to undertake the service. It also appears that force majeure, dangers or accidents of the sea or other
the patrons of said lighters were employees of the waters; war; public enemies; . . . fire . ...
carrier with due authority to undertake the
transportation and to sign the documents that may be Upon arrival of the vessel at Pulupandan, in the
necessary therefor. morning of November 18, 1963, the cargoes were
The fact that the carrier sent its lighters free of charge discharged, complete and in good order, unto the
to take the hemp from Macleod's wharf at Sasa warehouse of the Bureau of Customs. At about 2:00 in
preparatory to its loading onto the ship Bowline Knot the afternoon of the same day, said warehouse was
does not in any way impair the contract of carriage razed by a fire of unknown origin, destroying appellees'
already entered into between the carrier and the cargoes. Before the fire, however, appellee Uy Bico was
shipper, for that preparatory step is but part and parcel able to take delivery of 907 cavans of rice 2 Appellees'
of said contract of carriage. In other words, here we

EH 405 Page 17
TRANSPORTATION LAW CASE DIGESTS
claims for the value of said goods were rejected by the fire caused by the negligence of the defendant's
appellant employees while loading cases of gasoline and
petroleon products. But unlike in the said case, there is
SC RULING not a shred of proof in the present case that the cause
of the fire that broke out in the Custom's warehouse
We sustain the validity of the above stipulation; there was in any way attributable to the negligence of the
is nothing therein that is contrary to law, morals or appellant or its employees. Under the circumstances,
public policy. the appellant is plainly not responsible

Besides, the agreement contained in the above quoted


Clause 14 is a mere iteration of the basic principle of MAERSK LINE vs. CA
law written in Article 1 1 7 4 of the Civil Code:
Article 1174. Except in cases expressly specified by the FACTS:
law, or when it is otherwise declared by stipulation, or
when the nature of the obligation requires the Petitioner Maersk Line is engaged in the transportation
assumption of risk, no person shall be responsible for of goods by sea, doing business in the Philippines
those events which could not be foreseen, or which, through its general agent Compania General de
though foreseen, were inevitable. Tabacos de Filipinas while private respondent Efren
Castillo, on the other hand, is the proprietor of Ethegal
Thus, where fortuitous event or force majeure is the Laboratories, a firm engaged in the manutacture of
immediate and proximate cause of the loss, the obligor pharmaceutical products.
is exempt from liability for non-performance. The
Partidas, 4 the antecedent of Article 1174 of the Civil Private respondent ordered from Eli Lilly. Inc. (ELI) of
Code, defines 'caso fortuito' as 'an event that takes Puerto Rico through its agent in the Philippines, Elanco
place by accident and could not have been foreseen. Products, 600,000 empty gelatin capsules for the
Examples of this are destruction of houses, unexpected manufacture of his pharmaceutical products. The
fire, shipwreck, violence of robbers.' shipper ELI advised Castillo as consignee that the
gelatin capsules contained in 6 drums were already
In its dissertation of the phrase 'caso fortuito' the shipped on board MV "Anders Maerskline for shipment
Enciclopedia Juridicada Espanola 5 says: "In a legal to the Philippines via Oakland, California, which
sense and, consequently, also in relation to contracts, according to the memo sent, was to arrive on April 3,
a 'caso fortuito' presents the following essential 1977.
characteristics: (1) the cause of the unforeseen and
unexpected occurrence, or of the failure of the debtor For reasons unknown, the cargo of capsules were
to comply with his obligation, must be independent of mishipped and diverted to Richmond, Virginia, USA and
the human will; (2) it must be impossible to foresee the then transported back Oakland, Califorilia causing it to
event which constitutes the 'caso fortuito', or if it can arrive 2 months after it was specified in the memo.
be foreseen, it must be impossible to avoid; (3) the Castillo refused to receive the delivery of the goods
occurrence must be such as to render it impossible for due to the delay. Castillo filed before the rescission of
the debtor to fulfill his obligation in a normal manner; the contract and damages against ELI.
and (4) the obligor must be free from any participation
in the aggravation of the injury resulting to the ELIs argument was that it the subject shipment was
creditor." In the case at bar, the burning of the customs transported in accordance with the provisions of the
warehouse was an extraordinary event which covering bill of lading and that its liability under the
happened independently of the will of the appellant. law on transportation of good attaches only in case of
The latter could not have foreseen the event. loss, destruction or deterioration of the goods as
provided for in Article 1734 of Civil Code and ELI filed a
There is nothing in the record to show that appellant croos-claim against Maerskline. issues having been
carrier ,incurred in delay in the performance of its joined, private respondent moved for the dismissal of
obligation. It appears that appellant had not only the complaint against Eli Lilly, Inc.on the ground that
notified appellees of the arrival of their shipment, but the evidence on record shows that the delay in the
had demanded that the same be withdrawn. In fact, delivery of the shipment was attributable solely to
pursuant to such demand, appellee Uy Bico had taken petitioner.
delivery of 907 cavans of rice before the burning of the
warehouse. RTC: ruled in favor of Castillo on the ground that breach
in the performance of their obligation consisting of
Nor can the appellant or its employees be charged with their negligence to deliver the goods on time.
negligence. The storage of the goods in the Customs CA: Affirmed the Decision of the RTC.
warehouse pending withdrawal thereof by the
appellees was undoubtedly made with their knowledge ISSUE:
and consent. Since the warehouse belonged to and was
maintained by the government, it would be unfair to W/N maerskline may be held liable for the delay
impute negligence to the appellant, the latter having
no control whatsoever over the same. Ruling:

The lower court in its decision relied on the ruling laid The SC, in their ruling made reference to the
down in Yu Biao Sontua vs. Ossorio 6, where this Court stipulations in the bill of lading. A provision in said bill
held the defendant liable for damages arising from a of lading states that The Carrier does not undertake

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TRANSPORTATION LAW CASE DIGESTS
that the goods shall arive at the port of discharge or constrained to return the amount involved to
the place of delivery at any particular time or to meet SOLIDBANK; petitioner then demanded payment from
any particular market or use and save as is provided in respondent WALLEM in writing but to no avail.
clause 4 the Carrier shall in no circumstances be liable
for any direct, indirect or consequential loss or damage On 25 September 1991 petitioner sought collection of
caused by delay. According to the SC, the aforequoted the value of the shipment of US$20,223.46 or its
provision at the back of the bill of lading, in fine print, equivalent of P546,033.42 from respondents before the
is a contract of adhesion. Generally, contracts of Regional Trial Court of Manila, based on delivery of the
adhesion are considered void since almost all the shipment to GPC without presentation of the bills of
provisions of these types of contracts are prepared and lading and bank guarantee.
drafted only by one party, usually the carrier.
Nonetheless, settled is the rule that bills of lading are On 14 May 1993, the trial court favored Pet, ordering
contracts not entirely prohibited. The questioned China Ocean Shipping and Wallem to pay, jointly and
provision in the subject bill of lading has the effect of severally. The Court of Appeals appreciated the
practically leaving the date of arrival of the subject evidence in a different manner; it set aside the
shipment on the sole determination and will of the decision of the trial court and dismissed the complaint
carrier. together with the counterclaims. Hence, the petition for
review.
While it is true that common carriers are not obligated
by law to carry and to deliver merchandise, and ISSUES:
persons are not vested with the right to prompt
delivery, unless such common carriers previously (1) Duration and extent of a common carriers
assume the obligation to deliver at a given date or time extraordinary responsibility. WON delivery to
(Mendoza v. Philippine Air Lines, Inc., 90 Phil. 836 GPC was proper.
[1952]), delivery of shipment or cargo should at least (2) WON respondents are liable to petitioner for
be made within a reasonable time. releasing the goods to GPC without the bills of
In the case before us, we find that a delay in the lading or bank guarantee.
delivery of the goods spanning a period of two (2)
months and seven (7) days falls was beyond the realm RULING:
of reasonableness. It was due to petitioners
negligence that the goods were mishipped to 1.) YES.
Richmond, Virginia. Art. 1736 of the NCC. The extraordinary
responsibility of the common carriers lasts from the
time the goods are unconditionally placed in the
MACAM vs. CA possession of, and received by the carrier for
[G.R. No. 125524. August 25, 1999] transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to
FACTS: the person who has a right to receive them, without
prejudice to the provisions of article 1738.
On 4 April 1989 petitioner Macam shipped on board the
vessel Nen Jiang, owned and operated by respondent We emphasize that the extraordinary responsibility of
China Ocean Shipping Co., through local agent the common carriers lasts until actual or constructive
respondent WALLEM, 3,500 boxes of watermelons and delivery of the cargoes to the consignee or to the
1,611 boxes of fresh mangoes; the two sets of fruits person who has a right to receive them. PAKISTAN
were covered by two bills of lading and were exported BANK was indicated in the bills of lading as consignee
through their respective Letters of Credit both issued whereas GPC was the notify party. However, in the
by Pakistan Bank. The shipment was bound for export invoices GPC was clearly named as
Hongkong with PAKISTAN BANK as consignee and Great buyer/importer. Petitioner also referred to GPC as such
Prospect Company of Kowloon, Hongkong (GPC) as in his demand letter to respondent WALLEM and in his
notify party. On 6 April 1989, per letter of credit complaint before the trial court.
requirement, copies of the bills of lading and This premise draws us to conclude that the
commercial invoices were submitted to petitioner's delivery of the cargoes to GPC as buyer/importer
depository bank, Consolidated Banking Corporation which, conformably with Art. 1736 had, other than the
(SOLIDBANK), which paid petitioner in advance the consignee, the right to receive them was proper.
total value of the shipment of US$20,223.46.
2.) NO.
Upon arrival in Hongkong, the shipment was (1) Contrary to petitioners claims, the Court
delivered by respondent WALLEM directly to GPC (the agrees with respondents that it was his (Macams)
buyer-importer), not to PAKISTAN BANK, (2) and practice to ask the shipping lines to immediately
without the required bill of lading having been release shipment of perishable goods through
surrendered. Subsequently, GPC failed to pay telephone calls by himself or his people. He no
PAKISTAN BANK such that the latter, still in possession longer required presentation of a bill of lading nor of a
of the original bills of lading, refused to pay petitioner bank guarantee as a condition to releasing the goods
through SOLIDBANK. Since SOLIDBANK already pre- in case he was already fully paid. Thus, taking into
paid petitioner the value of the shipment, it demanded account that subject shipment consisted of perishable
payment from respondent WALLEM through five (5) goods and SOLIDBANK pre-paid the full amount of the
letters but was refused. Petitioner was thus allegedly value thereof, it is not hard to believe the claim of
respondent WALLEM that petitioner indeed requested

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TRANSPORTATION LAW CASE DIGESTS
the release of the goods to GPC without presentation of
the bills of lading and bank guarantee. W.O.N. Delsan is liable based on Article 1734 of the
NCC and W.O.N. the rule on contributory negligence
Respondents submitted in evidence a telex dated 5 should be applied against Caltex.
April 1989 as basis for delivering the cargoes to GPC
without the bills of lading and bank guarantee. The HELD:
telex instructed delivery of various shipments to the
respective consignees without need of presenting the Petition is DENIED. CA is affirmed.
bill of lading and bank guarantee per the respective
shippers request since for prepaid shipt ofrt charges Art. 1734. Common carriers are responsible for the
already fully paid (sic). loss, destruction, or deterioration of the goods, unless
the same is due to any of the following causes only:
It has been the practice of petitioner to request the
shipping lines to immediately release perishable 1) Flood storm, earthquake, lightning, or other natural
cargoes such as watermelons and fresh mangoes disaster or calamity;
through telephone calls by himself or his people. In 2) Act of the public enemy in war, whether
transactions covered by a letter of credit, bank international or civil;
guarantee is normally required by the shipping lines 3) Act or omission of the shipper or owner of the goods;
prior to releasing the goods. But for buyers using 4) The character of the goods or defects in the packing
telegraphic transfers, petitioner dispenses with the or in the containers;
bank guarantee because the goods are already fully 5) Order or act of competent public authority.
paid. In his several years of business relationship with
GPC and respondents, there was not a single instance Delsan failed to prove its claim that there was a
when the bill of lading was first presented before the contributory negligence on the part of the owner of the
release of the cargoes. goods Caltex. Dlesan, as the owner of the vessel, was
obliged to prove that the loss was caused by one of the
In view of petitioners utter failure to establish the excepted causes if it were to seek exemption from
liability of respondents over the cargoes, no reversible responsibility. 7 Unfortunately, it miserably failed to
error was committed by respondent court in ruling discharge this burden by the required quantum of
against him. proof.

WHEREFORE, the petition is DENIED. Delsans argument that it should not be held liable for
the loss of diesel oil due to backflow because the same
had already been actually and legally delivered to
DELSAN TRANSPORT LINES, INC vs. AMERICAN Caltex at the time it entered the shore tank holds no
HOME ASSURANCE CORPORATION water. It had been settled that the subject cargo was
G.R. No. 149019, August 15, 2006 still in the custody of Delsan because the discharging
thereof has not yet been finished.

FACTS:
2. Defenses of Common Carrier
Delsan is a domestic corporation which owns and Fire as Cause
operates the vessel MT Larusan. On the other hand,
respondent American Home Assurance Corporation DSR-SENATOR LINES AND C.F. SHARP AND
(AHAC for brevity) is a foreign insurance company duly. COMPANY, INC. vs. FEDERAL PHOENIX
It is engaged, among others, in insuring cargoes for ASSURANCE CO., INC.
transportation within the Philippines. G.R. No. 135377. October 7, 2003

Unloading operations commenced, discharging of the Facts:


diesel oil. The discharging had to be stopped on
account of the discovery that the port bow mooring of Berde Plants, Inc. (Berde Plants) delivered 632 units of
the vessel was intentionally cut or stolen by unknown artificial trees to C.F. Sharp and Company, Inc. (C.F.
persons. Because there was nothing holding it, the Sharp, for transportation and delivery to the
vessel drifted westward, ultimately caused the diesel consignee. The cargo was loaded in M/S "Arabian
oil to spill into the sea. Senator."

As a result of spillage and backflow of diesel oil, Caltex Federal Phoenix Assurance Company, Inc. (Federal
sought recovery of the loss from Delsan, but the latter Phoenix Assurance) insured the cargo against all risks
refused to pay. As insurer, AHAC paid Caltex. AHAC, as in the amount of P941,429.61.
Caltexs subrogee, instituted Civil Case against Delsan.
caused by the spillage. It likewise prayed that it be M/S "Arabian Senator" left the Manila South Harbor for
indemnified for damages suffered Saudi Arabia with the cargo on board. When the vessel
arrived in Khor Fakkan Port, the cargo was reloaded on
Delsan insists that the rule on contributory negligence board DSR-Senator Lines' feeder vessel, bound for Port
against Caltex, the shipper-owner of the cargo, and the Dammam, Saudi Arabia. However, while in transit, the
diesel oil was already completely delivered to Caltex. vessel and all its cargo caught fire.

ISSUE:

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TRANSPORTATION LAW CASE DIGESTS
Consequently, Federal Phoenix Assurance paid Berde
Plants P941,429.61 corresponding to the amount of JAPAN AIRLINES vs. ASUNCION
insurance for the cargo. In turn Berde Plants executed
in its favor a "Subrogation Receipt" Thus, Federal FACTS:
Phoenix Assurance filed a complaint for damages
against DSR-Senator Lines and C.F. Sharp Respondents Michael and Jeanette Asuncion left Manila
on board Japan Airlines (JAL) bound for LA. Their
RTC rendered a Decision in favor of Federal Phoenix itinerary included a stop-over in Narita and an
Assurance overnight stay at Hotel Nikko Narita. Upon arrival at
Narita, JAL endorsed their applications for shore pass
On appeal, the Court of Appeals rendered a Decision and directed them to the Japanese immigration official.
affirming the RTC Decision A shore pass is required of a foreigner aboard a vessel
or aircraft who desires to stay in the neighborhood of
Issue: the port of call for not more than 72 hours.

WON the liability was extinguished when the vessel During their interview, the Japanese immigration
carrying the cargo was gutted by fire official noted that Michael appeared shorter than his
height as indicated in his passport. Because of this
Ruling: inconsistency, respondents were denied shore pass
entries and were brought instead to the Narita Airport
Article 1734 of the Civil Code provides: Rest House where they were billeted overnight.
"Art. 1734. Common carriers are responsible for
the loss, destruction, or deterioration of the goods, Respondents were charged US$400.00 each for their
unless the same is due to any of the following causes accommodation, security service and meals.
only:
(1) Flood, storm, earthquake, lightning, or other Respondents filed a complaint for damages claiming
natural disaster or calamity; that JAL did not fully apprise them of their travel
(2) Act of the public enemy in war, whether requirements and that they were rudely and forcibly
international or civil; detained at Narita Airport.
(3) Act or omission of the shipper or owner of the
goods; JAL denied the allegations of respondents. It
(4) The character of the goods or defects in the maintained that the refusal of the Japanese
packing or in the containers; immigration authorities to issue shore passes to
(5) Order or act of competent public authority." respondents is an act of state which JAL cannot
interfere with or prevail upon. Consequently, it cannot
Fire is not one of those enumerated under the above impose upon the immigration authorities that
provision which exempts a carrier from liability for loss respondents be billeted at Hotel Nikko instead of the
or destruction of the cargo. airport resthouse.

Even if fire were to be considered a natural disaster ISSUE:


within the purview of Article 1734, it is required under
Article 1739 of the same Code that the natural WON JAL is guilty of breach of contract.
disaster must have been the proximate and only cause
of the loss, and that the carrier has exercised due HELD:
diligence to prevent or minimize the loss before, during
or after the occurrence of the disaster. Under Article 1755 of the Civil Code, a common carrier
such as JAL is bound to carry its passengers safely as
Common carriers are obliged to observe extraordinary far as human care and foresight can provide, using the
diligence in the vigilance over the goods transported utmost diligence of very cautious persons, with due
by them. Accordingly, they are presumed to have been regard for all the circumstances. When an airline
at fault or to have acted negligently if the goods are issues a ticket to a passenger, confirmed for a
lost, destroyed or deteriorated. There are very few particular flight on a certain date, a contract of
instances when the presumption of negligence does carriage arises. The passenger has every right to
not attach and these instances are enumerated in expect that he be transported on that flight and on that
Article 1739. In those cases where the presumption is date and it becomes the carriers obligation to carry
applied, the common carrier must prove that it him and his luggage safely to the agreed destination. If
exercised extraordinary diligence in order to overcome the passenger is not so transported or if in the process
the presumption. of transporting he dies or is injured, the carrier may be
held liable for a breach of contract of carriage.
Respondent Federal Phoenix Assurance raised the
presumption of negligence against petitioners. We find that JAL did not breach its contract of carriage
However, they failed to overcome it by sufficient proof with respondents. It may be true that JAL has the duty
of extraordinary diligence. to inspect whether its passengers have the necessary
travel documents, however, such duty does not extend
Petition is DENIED to checking the veracity of every entry in these
documents. JAL could not vouch for the authenticity of
a passport and the correctness of the entries therein.
Shore Pass Requirement The power to admit or not an alien into the country is a

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TRANSPORTATION LAW CASE DIGESTS
sovereign act which cannot be interfered with even by approximating 18 M/T was contaminated with dirt,
JAL. This is not within the ambit of the contract of sand and rust and rendered unfit for commerce.
carriage entered into by JAL and herein respondents.
As such, JAL should not be faulted for the denial of Consequently, PPI sent a claim letter to Soriamont
respondents shore pass applications. Steamship Agencies (SSA), the resident agent of the
carrier, KKKK, representing the cost of the alleged
shortage in the goods shipped and the diminution in
Exercise of Extraordinary Diligence, value of that portion said to have been contaminated
Inherent Character of Goods and with dirt. Respondent SSA was not able to respond to
Inadequacy of Packaging this consignees claim for payment because according
to them, they only received a request for shortlanded
PLANTERS PRODUCTS, INC. VS. COURT OF certificate and not a formal claim.
APPEALS,
SORIAMONT STEAMSHIP AGENCIES AND KYOSEI Hence, PPI filed an action for damages with the Court
KISEN KABUSHIKI KAISHA of First Instance of Manila. The defendant carrier
G.R. No. 101503 September 15, 1993 argued that the strict public policy governing common
carriers does not apply to them because they have
FACTS: become private carriers by reason of the provisions of
the charter-party. The court a quo however sustained
Planters Products, Inc. (PPI), purchased from Mitsubishi the claim of the plaintiff against the defendant carrier
International Corporation (MITSUBISHI) of New York, for the value of the goods lost or damaged.
U.S.A., 9,329.7069 metric tons (M/T) of Urea 46%
fertilizer which the latter shipped in bulk on 16 June On appeal, respondent Court of Appeals reversed the
1974 aboard the cargo vessel M/V "Sun Plum" owned lower court and absolved the carrier from liability for
by private respondent Kyosei Kisen Kabushiki Kaisha the value of the cargo that was lost or
(KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San damaged. Relying on the 1968 case of Home Insurance
Fernando, La Union, Philippines, as evidenced by Bill of Co.v. American Steamship Agencies, Inc., the appellate
Lading No. KP-1 signed by the master of the vessel and court ruled that the cargo vessel M/V "Sun Plum"
issued on the date of departure. owned by private respondent KKKK was a private
carrier and not a common carrier by reason of the time
Prior to its voyage, a time charter-party on the vessel charterer-party. Accordingly, the Civil Code provisions
M/V "Sun Plum" pursuant to the Uniform General on common carriers which set forth a presumption of
Charter was entered into between Mitsubishi as negligence do not find application in the case at bar.
shipper/charterer and KKKK as shipowner, in Tokyo,
Japan. ISSUE: Whether a common carrier becomes a private
carrier by reason of a charter-party.
Before loading the fertilizer aboard the vessel, four (4)
of her holds were all presumably inspected by the HELD: The assailed decision of the Court of Appeals,
charterer's representative and found fit to take a load which reversed the trial court, is affirmed.
of urea in bulk pursuant to par. 16 of the charter-party .
After the Urea fertilizer was loaded in bulk by A "charter-party" is defined as a contract by which an
stevedores hired by and under the supervision of the entire ship, or some principal part thereof, is let by the
shipper, the steel hatches were closed with heavy iron owner to another person for a specified time or use; a
lids, covered with three (3) layers of tarpaulin, then contract of affreightment by which the owner of a ship
tied with steel bonds. The hatches remained closed or other vessel lets the whole or a part of her to a
and tightly sealed throughout the entire voyage. merchant or other person for the conveyance of goods,
on a particular voyage, in consideration of the payment
Petitioner unloaded the cargo from the holds into its of freight; Charter parties are of two types: (a) contract
steelbodied dump trucks which were parked alongside of affreightment which involves the use of shipping
the berth, using metal scoops attached to the ship, space on vessels leased by the owner in part or as a
pursuant to the terms and conditions of the charter- whole, to carry goods for others; and, (b) charter by
partly (which provided for an F.I.O.S. clause). However, demise or bareboat charter, by the terms of which the
the hatches remained open throughout the duration of whole vessel is let to the charterer with a transfer to
the discharge. Each time a dump truck was filled up, its him of its entire command and possession and
load of Urea was covered with tarpaulin. The port area consequent control over its navigation, including the
was windy, certain portions of the route to the master and the crew, who are his servants. Contract of
warehouse were sandy and the weather was variable, affreightment may either be time charter, wherein the
raining occasionally while the discharge was in vessel is leased to the charterer for a fixed period of
progress. time, or voyage charter, wherein the ship is leased for
a single voyage. In both cases, the charter-party
It took eleven (11) days for PPI to unload the cargo. A provides for the hire of vessel only, either for a
private marine and cargo surveyor, Cargo determinate period of time or for a single or
Superintendents Company Inc. (CSCI), was hired by PPI consecutive voyage, the shipowner to supply the ship's
to determine the "outturn" of the cargo shipped, by stores, pay for the wages of the master and the crew,
taking draft readings of the vessel prior to and after and defray the expenses for the maintenance of the
discharge. The survey report submitted by CSCI to the ship.
consignee (PPI) revealed a shortage in the cargo of
106.726 M/T and that a portion of the Urea fertilizer

EH 405 Page 22
TRANSPORTATION LAW CASE DIGESTS
Upon the other hand, the term "common or public Thereafter, the burden of proof shifts to respondent to
carrier" is defined in Art. 1732 of the Civil Code. The prove that he has exercised extraordinary diligence
definition extends to carriers either by land, air or required by law or that the loss, damage or
water which hold themselves out as ready to engage in deterioration of the cargo was due to fortuitous event,
carrying goods or transporting passengers or both for or some other circumstances inconsistent with its
compensation as a public employment and not as a liability. To our mind, respondent carrier has
casual occupation. The distinction between a "common sufficiently overcome, by clear and convincing proof,
or public carrier" and a "private or special carrier" lies the prima facie presumption of negligence. Verily, the
in the character of the business, such that if the presumption of negligence on the part of the
undertaking is a single transaction, not a part of the respondent carrier has been efficaciously overcome by
general business or occupation, although involving the the showing of extraordinary zeal and assiduity
carriage of goods for a fee, the person or corporation exercised by the carrier in the care of the cargo. The
offering such service is a private carrier. period during which private respondent was to observe
the degree of diligence required of it as a public carrier
It is not disputed that respondent carrier, in the began from the time the cargo was unconditionally
ordinary course of business, operates as a common placed in its charge after the vessel's holds were duly
carrier, transporting goods indiscriminately for all inspected and passed scrutiny by the shipper, up to
persons. When petitioner chartered the vessel M/V and until the vessel reached its destination and its hull
"Sun Plum", the ship captain, its officers and was reexamined by the consignee, but prior to
compliment were under the employ of the shipowner unloading.
and therefore continued to be under its direct
supervision and control. Hardly then can we charge the Article 1734 of the New Civil Code provides that
charterer, a stranger to the crew and to the ship, with common carriers are not responsible for the loss,
the duty of caring for his cargo when the charterer did destruction or deterioration of the goods if caused by
not have any control of the means in doing so. This is the charterer of the goods or defects in the packaging
evident in the present case considering that the or in the containers. The Code of Commerce also
steering of the ship, the manning of the decks, the provides that all losses and deterioration which the
determination of the course of the voyage and other goods may suffer during the transportation by reason
technical incidents of maritime navigation were all of fortuitous event, force majeure, or the inherent
consigned to the officers and crew who were screened, defect of the goods, shall be for the account and risk of
chosen and hired by the shipowner. the shipper, and that proof of these accidents is
incumbent upon the carrier. The carrier, nonetheless,
It is therefore imperative that a public carrier shall shall be liable for the loss and damage resulting from
remain as such, notwithstanding the charter of the the preceding causes if it is proved, as against him,
whole or portion of a vessel by one or more persons, that they arose through his negligence or by reason of
provided the charter is limited to the ship only, as in his having failed to take the precautions which usage
the case of a time-charter or voyage-charter. It is only has established among careful persons.
when the charter includes both the vessel and its crew,
as in a bareboat or demise that a common carrier Thus, the petition is dismissed.
becomes private, at least insofar as the particular
voyage covering the charter-party is concerned.
Indubitably, a shipowner in a time or voyage charter Exercise of Extraordinary Diligence and
retains possession and control of the ship, although her Doctrine of Last Clear Chance
holds may, for the moment, be the property of the Fortuitous Event
charterer.

Respondent carrier's heavy reliance on the case


of Home Insurance Co. v. American Steamship
Agencies, supra, is misplaced for the reason that the
meat of the controversy therein was the validity of a
stipulation in the charter-party exempting the
shipowners from liability for loss due to the negligence
of its agent, and not the effects of a special charter on
common carriers. At any rate, the rule in the United
States that a ship chartered by a single shipper to
carry special cargo is not a common carrier, does not
find application in our jurisdiction, for we have
observed that the growing concern for safety in the
transportation of passengers and /or carriage of goods
by sea requires a more exacting interpretation of
admiralty laws, more particularly, the rules governing
common carriers.

In an action for recovery of damages against a


common carrier on the goods shipped, the shipper or
consignee should first prove the fact of shipment and
its consequent loss or damage while the same was in
the possession, actual or constructive, of the carrier.

EH 405 Page 23