SOUTHERN LINES INC vs CA and CITY OF ILOILO

DOCTRINE:If the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary
observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury
resulting therefrom.

FACTS:

- The City of Iloilo requisitioned for rice from the National Rice and Corn Corporation (NARIC).
- NARIC shipped 1,726 sacks of rice consigned to the City of Iloilo on board of SS General Wright belong to
Southern Lines.
- The City of Iloilo received the shipment and paid the amount stated in the bill of lading (around Php 63K).
- However, at the bottom of the bill of lading, it was noted that City of Iloilo received the merchandise in the
same condition as when shipped, except that it received only 1,685 sacks.
- Upon actual weighing, it was discovered that the shortage was equal to 41 sacks of rice.
- Thus, the City of Iloilo filed a complaint against NARIC and Southern Lines for the recovery of the value of the
shortage of the shipment of rice (Php 6,486.35).
- The lower court absolved NARIC but sentenced Southern Lines to pay the amount.
- CA affirmed.
- Hence, this petition for review.
- Southern Lines claims exemption from liability by contending that the shortage in the shipment of rice was due
to such factors as shrinkage, leakage or spillage of the rice on account of the bad condition of the sacks at the time
it received the same and negligence of the agents of City of Iloilo in receiving the shipment.

ISSUES:

- Whether Southern Lines is liable for the loss or shortage of the rice shipped.YES
- Whether the City of Iloilo is precluded from filing an action for damages on account of its failure to present a
claim within 24 hours from receipt of the shipment as stated in the bill of lading.NO

HELD:

- YES. The SC held that the contention of Southern Lines with respect to the improper packing is untenable.Under
Art. 361 of the Code of Commerce, the carrier, in order to free itself from liability, was only obliged to prove that
the damages suffered by the goods were “by virtue of the nature or defect of the articles.” Under Art. 362, the
plaintiff, in order to hold the defendant liable, was obliged to prove that the damages to the goods is by virtue of
their nature, occurred on account of its negligence or because the defendant did not take the precaution adopted
by careful persons.It held that if the fact of improper packing is known to the carrier or his servants, or apparent
upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for
loss or injury resulting therefrom.

- NO. The SC noted that Southern Lines failed to plead this defense in its answer to City of Iloilo’s complaint and,
therefore, the same is deemed waived and cannot be raised for the first time.The SC also cited the finding of the
CA that City of Iloilo filed the action within a reasonable time; that the action is one for the refund of the amount
paid in excess, and not for damages or the recovery of shortage; the bill of lading does not at all limit the time for
the filing of action for the refund of money paid in excess.
Transportation Law Case Digest: Ganzon V. CA (1988)

G.R. No. L-48757 May 30, 1988

Lessons Applicable: Actionable Document

Laws Cited: Art. 1736,Art. 1734

FACTS: Gelacio > Ganzon (via Capt. Niza) > Lighter “Batman” (common carrier) (loaded half)

 November 28, 1956: Gelacio Tumambing (Gelacio) contracted the services of of Mauro B. Ganzon to haul 305
tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the light LCT “Batman”
 December 1, 1956: Gelacio delivered the scrap iron to Filomeno Niza, captain of the lighter, for loading which
was actually begun on the same date by the crew of the lighter under the captain’s supervisor.
 When about half of the scrap iron was already loaded, Mayor Jose Advincula of Mariveles, Bataan arrived and
demanded P5000 from Gelacio
 Upon resisting, the Mayor fired at Gelacio so he had to be taken to the hospital
 Loading of the scrap iron was resumed
 December 4, 1956: Acting Mayor Basilio Rub (Rub), accompanied by 3 policemen, ordered captain Filomeno
Niza and his crew to dump the scrap iron where the lighter was docked
 Later on Rub had taken custody of the scrap iron
 RTC: in favor of Gelacio and against Ganzon
ISSUE: W/N Ganzon should be held liable under the contract of carriage

HELD: YES. Petition is DENIED.

 Ganzon thru his employees, actually received the scraps is freely admitted.
 Pursuant to Art. 1736, such extraordinary responsibility would cease only upon the delivery, actual or
constructive, by the carrier to the consignee, or to the person who has a right to receive them.
 The fact that part of the shipment had not been loaded on board the lighter did not impair the said contract of
transportation as the goods remained in the custody and control of the carrier, albeit still unloaded.
 failed to show that the loss of the scraps was due to any of the following causes enumerated in Article 1734 of
the Civil Code, namely:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether 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 or act of competent public authority.

Hence, the petitioner is presumed to have been at fault or to have acted negligently.

 By reason of this presumption, the court is not even required to make an express finding of fault or negligence
before it could hold the petitioner answerable for the breach of the contract of carriage.
 exempted from any liability had he been able to prove that he observed extraordinary diligence in the
vigilance over the goods in his custody, according to all the circumstances of the case, or that the loss was due
to an unforeseen event or to force majeure. As it was, there was hardly any attempt on the part of the
petitioner to prove that he exercised such extraordinary diligence.
 We cannot sustain the theory of caso fortuito - "order or act of competent public authority"(Art. 1174 of the
Civil Code)
 no authority or power of the acting mayor to issue such an order was given in evidence. Neither has it been
shown that the cargo of scrap iron belonged to the Municipality of Mariveles.
 Ganzon was not duty bound to obey the illegal order to dump into the sea the scrap iron.
 Moreover, there is absence of sufficient proof that the issuance of the same order was attended with such
force or intimidation as to completely overpower the will of the petitioner's employees. The mere difficulty in
the fullfilment of the obligation is not considered force majeure.
MRR vs Ballesteros Facts: The material facts, as found by respondent court in its
decision, are as follows: Private respondents here, plaintiffs below, were
passengers on petitioner's bus, the driver of which was Jose Anastacio. In
Bayombong, Nueva Vizcaya, Anastacio stopped the bus and got off to replace a
defective spark plug. While he was thus engaged, one Dionisio Abello, an auditor
assigned to defendant company by the General Auditing Office, took the wheel and
told the driver to sit somewhere else. With Abello driving, the bus proceeded on its
way, from time to time stopping to pick up passengers. Anastacio tried twice to
take the wheel back but Abello would not relinquish it. Between Km 328 and 329,
they hit Nocum, a freight truck bound for Manila, since Nocum was evading
potholes. The left front fender + side hit the left side of the bus resulting in
extensive damages to the bus and injuries to 17 of its passengers Issue: Held: the
acts of the bus personnel, particularly in allowing Mr. Abello to drive despite two
occasions when the bus stopped and the regular driver could have taken over,
constitute reckless imprudence and wanton injurious conduct on the part of the
MRR employees. Apply Art 1763 and Sec 48(b) of the Motor Vehicle Law ART. 1763.
A common carrier is responsible for injuries suffered by a passenger on account of
the willful acts or negligence of other passengers or of strangers, if the common
carrier's employees through the exercise of the diligence of a good father of a
family could have prevented or stopped the act or omission. Sec. 48(b). No
professional chauffeur shall permit any unlicensed person to drive the motor
vehicle under his control, or permit a person, sitting beside him or in any other part
of the car, to interfere with him in the operation of the motor vehicle, by allowing
said person
Transportation Case Digest: PAL V. CA (1981)

G.R. No. L-46558 July 31, 1981

Lessons Applicable: Exceptions to Contracting Parties (Transportation)

FACTS:

 December 1950, he complained toPAL through its authorized official about the slow reaction and poor
judgment of Captain Bustamante. Notwithstanding said complaint, defendant allowed the pilot to continue
flying.
 January 8, 1951: Jesus V. Samson flew as co-pilot on a regular flight from Manila to Legaspi with stops at Daet,
Camarines Norte and Camarines Sur, with Captain Bustamante as commanding pilot of a PAL C-47 plane
 on attempting to land the plane at Daet airport, Captain Bustamante due to his very slow reaction and poor
judgment overshot the airfield and as a result, notwithstanding the diligent efforts of the Samson to avert an
accident, the airplane crashlanded beyond the runway; that the jolt caused the head of the plaintiff to hit and
break through the thick front windshield of the airplane causing him severe brain concussion, wounds and
abrasions on the forehead with intense pain
 instead of expert and proper medical treatment called for by the nature and severity of his injuries, PAL simply
referred him to a company physician, a general medical practitioner, who limited the treatment to the
exterior injuries without examining the severe brain concussion
 several days after the accident, PAL called back the Samson to active duty as co-pilot, and was never given
any examination
 he had been having periodic dizzy spells and had been suffering from general debility and nervousness
 December 21, 1953: he was discharged due to his physical disabilityCFI: PAL to pay the Samson
 P1988,000.00 as unearned income or damages
 P50,000.00 for moral damages
 P20,000.00 as attorney’s fees
 P5,000.00 as expenses of litigation
 CA: modified entitled to the legal rate of interest n unearned income
ISSUE: W/N PAL was negligent and was liable

HELD: YES. affirmed with slight modification in that the correct amount of compensatory damages is P204,000.00

 Even the doctors presented by PAL admit vital facts about the brain injury. Dr. Bernardo and Dr. Reyes admits
that due to the incident, the plaintiff continuously complained of his fainting spells, dizziness and headache
everytime he flew as a co-pilot and everytime he went to the clinic no less than 25 times
 We also find the imputation of gross negligence by respondent court to PAL for having allowed Capt. Delfin
Bustamante to fly on that fateful day of the accident on January 8, 1951 to be correct
 Bustamante was sick. He admittedly had tumor of the nasopharynx (nose)
 The fact that the complaint was not in writing does not detract anything from the seriousness thereof,
considering that a miscalculation would not only cause the death of the crew but also of the passengers.
 One month prior to the crash-landing, when the pilot was preparing to land in Daet, plaintiff warned him that
they were not in the vicinity of Daet but above the town of Ligao. The plane hit outside the airstrip. In another
instance, the pilot would hit the Mayon Volcano had not Samson warned him.
 At least, the law presumes the employer negligent imposing upon it the burden of proving that it exercised
the diligence of a good father of a family in the supervision of its employees.
 PAL would want to tie Samson to the report he signed about the crash-landing. The report was prepared by
his pilot and because the latter pleaded that he had a family too and would have nowhere to go if he lost his
job, Samson’s compassion would not upturn the truth about the crash-landing


Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.

Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, and 1745, Nos. 5,
6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and
1756.

Art. 1755. A common carrier is bound to carry the passenger safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733
and 1755.

Article 2205 of the New Civil Code of the Philippines “damages may be recovered for loss or impairment of earning
capacity in cases of temporary or permanent personal injury."
Art. 1711. Owners of enterprises and other employers are obliged to pay compensation for the death or injuries to
their laborers, workmen, mechanics or other employees, even though the event may have been purely accidental
or entirely due to a fortuitous cause, if the death or personal injury arose out of and in the course of the
employment. The employer is also liable for compensation if the employee contracts any illness or disease caused
by such employment or as the result of the nature of the employment. If the mishap was due to the employee’s
own notorious negligence, or voluntary act, or drunkenness, the employer shall not be liable for compensation.
When the employee’s lack of due care contributed to his death or injury, the compensation shall be equitably
reduced.

Art. 1712. If the death or injury is due to the negligence of a fellow-worker, the latter and the employer shall be
solidarily liable for compensation. If a fellow-worker’s intentional or malicious act is the only cause of the death or
injury, the employer shall not be answerable, unless it should be shown that the latter did not exercise due
diligence in the selection or supervision of the plaintiffs fellow-worker.

Articles 1169, 2209 and 2212 of the Civil Code govern when interest shall be computed.

 The correct amount of compensatory damages upon which legal interest shall accrue from the filing of the
complaint is P204,000.00 as herein computed and not P198,000.00