CHAPTER 4 – DEFENSES OF A COMMON CARRIER

I.Kinds of Defenses
1. Necesito, et al. v. Paras, et al. G.R. No. L-10605, June 30, 1958

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

FACTS: Severina Garces and her son Precillano Necesito boarded a passenger truck of the Philippine Rabbit Bus
Lines driven by Francisco Bandonell. The truck entered a wooden bridge, but the front wheels swerved to the right.
The driver lost control, and after wrecking the bridge's wooden rails, the truck fell on its right side into a creek
where water was breast deep. Garces died due to drowning while Necesito suffered injuries. Two actions for
damages and attorney's fees totalling over P85,000 were filed with the Tarlac CFI against the carrier. The
carrier pleaded that the accident was due to "engine or mechanical trouble" independent or beyond the
control of the defendants or of the driver Bandonell.

RTC’s RULING:The trial court found that the bus was proceeding slowly due to the bad condition of the road and
that accident was due to the fracture of the truck’s right steering knuckle which could not be known by the carrier.
Thus, it dismissed the complaints holding that the accident was exclusively due to fortuitous events.

ISSUE: Whether or not the carrier is liable for the manufacturing defect of the steering knuckle, and whether the
evidence discloses that in regard thereto the carrier exercised the diligence required by law.

RULING: Yes. While the carrier is not an insurer of the safety of the passengers, a passenger is entitled to recover
damages from a carrier for an injury resulting from a defect in an appliance purchased from a manufacturer,
whenever it appears that the defect would have been discovered by the carrier if it had exercised the degree of care
which under the circumstances was incumbent upon it, with regard to inspection and application of the necessary
tests. In this connection, the manufacturer of the defective appliance is considered in law the agent of the carrier,
and the good repute of the manufacturer will not relieve the carrier from liability. The rationale of the carrier’s liability
is the fact that the passenger has no privity with the manufacturer of the defective equipment; hence, he has no
remedy against him, while the carrier usually has. Carrier’s liability rests upon negligence, his failure to exercise the
& degree of diligence that the law requires, and in case of a passengers death or injury the carrier bears the burden
of satisfying the court that he has duly discharged the duty of prudence required.
II.Proximate Causation
a. Absence of Causation as a Defense
1. Bacarro, et al. v. Court of Appeals, GR No. L- 34597, November 5, 1982
2. Calalas v. Court of Appeals, 332 SCRA 356

3. FGU Insurance Corporation v. GP Sarmiento Trucking Corporation, 386 SCRA 312

FACTS:
P. Sarmiento Trucking Corporation (GPS) undertook to deliver on 18 June 1994 thirty (30) units of Condura
S.D. white refrigerators driven by Lambert Eroles, from the plant site of Concepcion Industries, Inc., in Metro
Manila to the Central Luzon Appliances in Dagupan City. On its way, it collided with an unidentified truck,
causing it to fall into a deep canal, resulting in damage to the cargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion Industries, Inc., the value
of the covered cargoes in the sum of P204,450.00. FGU, in turn, being the subrogee of the rights and interests
of Concepcion Industries, Inc., sought reimbursement of the amount it had paid to the latter from GPS. Since
the trucking company failed to heed the claim, FGU filed a complaint for damages and breach of contract of
carriage against GPS and its driver Lambert Eroles. In its answer, respondents asserted that GPS was the
exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business as a
common carrier.
ISSUES:
1. WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON CARRIER AS DEFINED
UNDER THE LAW AND EXISTING JURISPRUDENCE.
2. WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER, MAY
BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO TRANSPORT
SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE CUSTODY AND
POSSESSION.

3. WHETHER THE DOCTRINE OF RES IPSA LOQUITUR IS APPLICABLE IN THE INSTANT CASE.

HELD:
On the first issue, the Court finds the conclusion of the trial court and the Court of Appeals to be amply
justified. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc., rendering or offering
its services to no other individual or entity, cannot be considered a common carrier. Common carriers are
persons, corporations, firms or associations engaged in the business of carrying or transporting passengers
or goods or both, by land, water, or air, for hire or compensation, offering their services to the public. Given
accepted standards, GPS scarcely falls within the term common carrier. The above conclusion
nothwithstanding, GPS cannot escape from liability.
In culpa contractual, upon which the action of petitioner rests as being the subrogee of Concepcion Industries,
Inc., the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a
corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to
be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of
the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that
which may have been lost or suffered. The effect of every infraction is to create a new duty, that is, to make
recompense to the one who has been injured by the failure of another to observe his contractual
obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence or of the
attendance of fortuitous event, to excuse him from his ensuing liability.
Respondent trucking corporation recognizes the existence of a contract of carriage between it and petitioners
assured, and admits that the cargoes it has assumed to deliver have been lost or damaged while in its
custody. In such a situation, a default on, or failure of compliance with, the obligation in this case, the delivery
of the goods in its custody to the place of destination - gives rise to a presumption of lack of care and
corresponding liability on the part of the contractual obligor the burden being on him to establish
otherwise. GPS has failed to do so.
Respondent driver, on the other hand, without concrete proof of his negligence or fault, may not himself be
ordered to pay petitioner. The driver, not being a party to the contract of carriage between petitioners principal
and defendant, may not be held liable under the agreement. A contract can only bind the parties who have
entered into it or their successors who have assumed their personality or their juridical position. Consonantly
with the axiom res inter alios acta aliis neque nocet prodest, such contract can neither favor nor prejudice a
third person. Petitioners civil action against the driver can only be based on culpa aquiliana, which,
unlike culpa contractual, would require the claimant for damages to prove negligence or fault on the part of
the defendant.
 A word in passing. Res ipsa loquitur, a doctrine being invoked by petitioner, holds a defendant liable where
the thing which caused the injury complained of is shown to be under the latters management and the accident
is such that, in the ordinary course of things, cannot be expected to happen if those who have its management
or control use proper care. It is not a rule of substantive law and, as such, it does not create an independent
ground of liability. Instead, it is regarded as a mode of proof, or a mere procedural convenience since it
furnishes a substitute for, and relieves the plaintiff of, the burden of producing specific proof of negligence. The
maxim simply places on the defendant the burden of going forward with the proof. Resort to the doctrine,
however, may be allowed only when (a) the event is of a kind which does not ordinarily occur in the absence
of negligence; (b) other responsible causes, including the conduct of the plaintiff and third persons, are
sufficiently eliminated by the evidence; and (c) the indicated negligence is within the scope of the defendant's
duty to the plaintiff.Thus, it is not applicable when an unexplained accident may be attributable to one of
several causes, for some of which the defendant could not be responsible.
Res ipsa loquitur generally finds relevance whether or not a contractual relationship exists between the
plaintiff and the defendant, for the inference of negligence arises from the circumstances and nature of the
occurrence and not from the nature of the relation of the parties. Nevertheless, the requirement that
responsible causes other than those due to defendants conduct must first be eliminated, for the doctrine to
apply, should be understood as being confined only to cases of pure (non-contractual) tort since obviously
the presumption of negligence in culpa contractual, as previously so pointed out, immediately attaches by a
failure of the covenant or its tenor. In the case of the truck driver, whose liability in a civil action is predicated
on culpa acquiliana, while he admittedly can be said to have been in control and management of the vehicle
which figured in the accident, it is not equally shown, however, that the accident could have been exclusively
due to his negligence, a matter that can allow, forthwith, res ipsa loquitur to work against him.
WHEREFORE, the order of the Regional Trial Court and the decision of the Court of Appeals, are AFFIRMED
only insofar as respondent Lambert M. Eroles is concerned, but said assailed order of the trial court and
decision of the appellate court are REVERSED as regards G.P. Sarmiento Trucking Corporation which,
instead, is hereby ordered to pay FGU Insurance Corporation the value of the damaged and lost cargoes in
the amount of P204,450.00.

4. Sabena Belgian World Airlines v. Court of Appeals and Ma. Paula San Agustin, GR No. 104685,
March 14, 1996

5. Calalas v. Court of Appeals, No. 122039, May 31, 2000

Eliza Sunga, then freshman at Siliman University , took a passenger jeepney owned and operated by petitioner
Vicente Calalas. As the jeepney was filled to capacity, Sunga was given by the conductor an extension seat, a wooden
stool at the back of the door at the rear end of the vehicle. When the jeepney stopped to a let passenger off and
Sunga was about to give way to the outgoing passenger, an Izuzu truck driven by Verena and owned by Salva bumped
the left rear portion of the jeepney. Sunga sustained multiple injuries and remained on a cast for three months. Sunga
filed a complaint for damages against Calalas, for breach of contract of carriage. Calalas, filed a third party complaint
against Francisco Salva, the owner of the truck. The lower court rendered judgment against Salva and absolved
Calalas of liability. It took cognizance of other case (Civil Case No. 3490), filed by Calalas against Salva and Verena
,for quasi-delict, in which branch 37 of the same court held Salva and his driver Verena jointly liable to Calalas for the
damage to his jeepney The CA reversed the lower courts ruling on the ground the ground that Sunga’s cause of action
was based on a contract of carriage, not quasi-deplict, and that the common carrier failed to exercise the diligence
required under the Civil Code. The appellate court dismissed the third-party complaint against Salva and adjudged
Calalas liable for damages to Sunga.

Held: In quasi-delict, the negligence or fault should be clearly established because it is the basis of the action, whereas
in breach of contract, the action can be prosecuted merely by proving the existence of the contract and the fact that
the obligor, in this case the common carrier, failed to transport his passenger safely to his destination. In case of death
 or injuries to passengers, Article 1756 of the Civil Code provides that common carriers are presumed to have been at
fault or have acted negligently unless they proved that they observed extraordinary diligence as defined in Arts. 1733
and 1755 of the Code. This provision necessarily shifts to the common carrier the burden of proof. It is immaterial that
the proximate cause of the collision between the jeepney and the truck was the negligence of the truck driver. The
doctrine of proximate cause is applicable only in action for quasidelict, not in actions involving breach of contract. The
doctrine is a device for imputing liability to a person where there is no relation between him and another party. In such
a case, the obligation is created by law itself. But, where there is a pre-existing contractual relation between parties,
it is the parties themselves who create the obligation, and the function of the law is merely to regulate the relation thus
created.

III.Defenses in the Carriage of Goods

a. Exclusivity of Defenses
6. Philippine Charter Insurance Corp. v. Unknown Owner of the Vessel M/V Honor, GR No. 161883, July 8,
2005

Petitioner Philippine Charter Insurance Corporation (PCIC) is the insurer of a shipment on board the vessel M/V
“National Honor,” represented in the Philippines by its agent, National Shipping Corporation of the Philippines
(NSCP).

The M/V “National Honor” arrived at the Manila International Container Terminal (MICT). The International Container
Terminal Services, Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of lading, and it
knew the contents of the crate. The following day, the vessel started discharging its cargoes using its winch crane.
The crane was operated by Olegario Balsa, a winchman from the ICTSI, exclusive arrastre operator of MICT.

Denasto Dauz, Jr., the checker-inspector of the NSCP, along with the crew and the surveyor of the ICTSI, conducted
an inspection of the cargo. They inspected the hatches, checked the cargo and found it in apparent good condition.
Claudio Cansino, the stevedore of the ICTSI, placed two sling cables on each end of Crate No. 1. No sling cable was
fastened on the mid-portion of the crate. In Dauz’s experience, this was a normal procedure. As the crate was being
hoisted from the vessel’s hatch, the mid-portion of the wooden flooring suddenly snapped in the air, about five feet
high from the vessel’s twin deck, sending all its contents crashing down hard, resulting in extensive damage to the
shipment. PCIC paid the damage, and as subrogee, filed a case against M/V National Honor, NSCP and ICTSI. Both
RTC and CA dismissed the complaint.

ISSUE: Whether or not the presumption of negligence is applicable in the instant case.

HELD: No. We agree with the contention of the petitioner that common carriers, from the nature of their business
and for reasons of public policy, are mandated 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. he Court has
defined extraordinary diligence in the vigilance over the goods as follows:

The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to
know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for sale,
carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and “to use
all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due
care in the handling and stowage, including such methods as their nature requires.”
The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles
are surrendered to or unconditionally placed in the possession of, and received by, the carrier for transportation until
delivered to, or until the lapse of a reasonable time for their acceptance, by the person entitled to receive them.]
>When the goods shipped are either lost or arrive in damaged condition, a presumption arises against the carrier of
its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable. To
overcome the presumption of negligence in the case of loss, destruction or deterioration of the goods, the common
carrier must prove that it exercised extraordinary diligence.

However, under Article 1734 of the New Civil Code, the presumption of negligence does not apply to any of the
following causes:

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.

It bears stressing that the enumeration in Article 1734 of the New Civil Code which exempts the common carrier for
the loss or damage to the cargo is a closed list. To exculpate itself from liability for the loss/damage to the cargo
under any of the causes, the common carrier is burdened to prove any of the aforecited causes claimed by it by a
preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove that the
carrier is negligent.

“Defect” is the want or absence of something necessary for completeness or perfection; a lack or absence of
something essential to completeness; a deficiency in something essential to the proper use for the purpose for which
a thing is to be used. On the other hand, inferior means of poor quality, mediocre, or second rate. A thing may be of
inferior quality but not necessarily defective. In other words, “defectiveness” is not synonymous with “inferiority.”

In the present case, the trial court declared that based on the record, the loss of the shipment was caused by the
negligence of the petitioner as the shipper: The same may be said with respect to defendant ICTSI. The breakage
and collapse of Crate No. 1 and the total destruction of its contents were not imputable to any fault or negligence on
the part of said defendant in handling the unloading of the cargoes from the carrying vessel, but was due solely to the
inherent defect and weakness of the materials used in the fabrication of said crate. The crate should have three solid
and strong wooden batten placed side by side underneath or on the flooring of the crate to support the weight of its
contents. x x x

Belgian Chartering and Shipping NV v. Phi. First Insurance Co., Inc., No. 143133, June 5, 2002
CMC Trading A.G. shipped on board the M/V Anangel Sky at Hamburg, Germany 242 coils of various Prime Cold
Rolled Steel sheets for transportation to Manila consigned to the Philippine Steel Trading Corporation.
- On July 28, 1990, M/V Anangel Sky arrived at the port of Manila and, within the subsequent days, discharged the
subject cargo. Four (4) coils were found to be in bad order.
- Finding the four (4) coils in their damaged state to be unfit for the intended purpose, the consignee Philippine
Steel Trading Corporation declared the same as total loss.
- Philippine First Insurance paid the claim of Philippine Steel and was thus subrogated.
- Philippine First then instituted a complaint for recovery of the amount paid to the consignee as insured.
- Belgian claims that the damage and/or loss was due to pre-shipment damage, to the inherent nature, vice or
defect of the goods, or to perils, danger and accidents of the sea, or to insufficiency of packing thereof, or to the act
or omission of the shipper of the goods or their representatives. Belgian further argued that their liability, if there be
any, should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws. Finally,
Belgian averred that, in any event, they exercised due diligence and foresight required by law to prevent any
damage/loss to said shipment.
- The RTC dismissed the complaint.
- The CA reversed and ruled that Belgian were liable for the loss or the damage of the goods shipped, because
they had failed to overcome the presumption of negligence imposed on common carriers. As to the extent of
Belgian’s liability, the CA held that the package limitation under COGSA was not applicable, because the words "L/C
No. 90/02447" indicated that a higher valuation of the cargo had been declared by the shipper.

Issues:
Whether the notice of loss was timely filed. (Belgian claims that pursuant to Section 3, paragraph 6 of COGSA,
respondent should have filed its Notice of Loss within three days from delivery. They assert that the cargo was
discharged on July 31, 1990, but that respondent filed its Notice of Claim only on September 18, 1990.)

Whether the package limitation of liability under COGSA is applicable. (Belgian contends that assuming that they are
liable their liability should be limited to US$500 per package as provided in the Bill of Lading and by Section 4(5)of
COGS

Held: NO. Mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at
their destination constitutes a prima facie case of fault or negligence against the carrier.
- In this case, Belgian failed to rebut the prima facie presumption of negligence. First, as stated in the Bill of Lading,
Belgian received the subject shipment in good order and condition in Germany. Second, prior to the unloading of the
cargo, an Inspection Report prepared and signed by representatives of both parties showed the steel bands broken,
the metal envelopes rust-stained and heavily buckled, and the contents thereof exposed and rusty. Third, Bad Order
Tally Sheet issued by Jardine Davies Transport Services stated that the four coils were in bad order and condition.
Normally, a request for a bad order survey is made in case there is an apparent or a presumed loss or damage.Fourth,
the Certificate of Analysis stated that, based on the sample submitted and tested, the steel sheets found in bad order
were wet with fresh water. Fifth, Belgian -- in a letteraddressed to the Philippine Steel --admitted that they were aware
of the condition of the four coils found in bad order and condition.
- YES. First, the provision of COGSA provides that the notice of claim need not be given if the state of the goods, at
the time of their receipt, has been the subject of a joint inspection or survey. Here, prior to unloading the cargo, an
Inspection Report as to the condition of the goods was prepared and signed by representatives of both parties.
Second, as stated in the same provision, a failure to file a notice of claim within three days will not bar recovery if it is
nonetheless filed within one year. This one-year prescriptive period also applies to the shipper, the consignee, the
insurer of the goods or any legal holder of the bill of lading.
- A claim is not barred by prescription as long as the one-year period has not lapsed. In the present case, the cargo
was discharged on July 31, 1990, while the Complaint51 was filed by respondent on July 25, 1991, within the one-
year prescriptive period.
- YES. In this case, there was no stipulation in the Bill of Lading limiting the carrier's liability. Neither did the shipper
declare a higher valuation of the goods to be shipped. This fact notwithstanding, the insertion of the words "L/C No.
90/02447 cannot be the basis for Belgian’s liability.
- First, a notation in the Bill of Lading which indicated the amount of the Letter of Credit obtained by the shipper for
the importation of steel sheets did not effect a declaration of the value of the goods as required by the bill. That notation
was made only for the convenience of the shipper and the bank processing the Letter of Credit.
- Second, a bill of lading is separate from the Other Letter of Credit arrangements. Thus, Belgian’s liability should be
computed based on US$500 per package and not on the per metric ton price declared in the Letter of Credit.

Delsan Transport Lines v. CA, No. 127897, November 15, 2001

The facts show that Caltex Philippines (Caltex for brevity) entered into a contract of affreightment with the petitioner,
Delsan Transport Lines, Inc., for a period of one year whereby the said common carrier agreed to transport Caltex’s
industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took
on board its vessel, MT Maysun 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the Caltex Oil
Terminal in Zamboanga City. The shipment was insured with the private respondent, American Home Assurance
Corporation. During the voyage, the vessel sank. The insurer paid Caltex and now seeks recovery under the right of
subrogation. The trial court found the vessel seaworthy and the incident was caused by force majeure hence, exempt
from liability. CA reversed the trial court’s decision, explaining that petitioner was liable as a common carrier due to
lack of manpower and absent any explanation why the vessel sank.

ISSUE: Whether or not there was an implied admission of seaworthiness thus precluding the right of recovery by private
respondent as insurer.
Whether or not the non-presentation of the marine insurance policy bars the complaint for recovery of sum of money
for lack of cause of action.

RULING: No. The payment made by the private respondent for the insured’s value of the lost cargo operates as waiver
of its (private respondent) right to enforce the term of the implied warranty against Caltex under the marine insurance
policy. However, the same cannot be validly interpreted as an automatic admission of the vessel’s seaworthiness by
the private respondent as to foreclose recourse against the petitioner for any liability under its contractual obligation as
a common carrier. The fact of payment grants the private respondent subrogatory right which enables it to exercise
legal remedies that would otherwise be available to Caltex as owner of the lost cargo against the petitioner common
carrier.

From the nature of their business and for reasons of public policy, common carriers are bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of passengers transported by them, according to all the
circumstance of each case.In the event of loss, destruction or deterioration of the insured goods, common carriers shall
be responsible unless the same is brought about, among others, by flood, storm, earthquake, lightning or other natural
disaster or calamity. In all other cases, if the goods are lost, destroyed or deteriorated, common carriers are presumed
to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence. The
said presumption was not overturned by petitioner in this case. Hence, private respondent as insurer can exercise its
right of subrogation against petitioner.

Thus, as the appellate court correctly ruled, petitioner’s vessel, MT Maysun, sank with its entire cargo for the reason
that it was not seaworthy. There was no squall or bad weather or extremely poor sea condition in the vicinity when the
said vessel sank. Anent the second issue, it is our view and so hold that the presentation in evidence of the marine
insurance policy is not indispensable in this case before the insurer may recover from the common carrier the insured
value of the lost cargo in the exercise of its subrogatory right. The subrogation receipt, by itself, is sufficient to establish
not only the relationship of herein private respondent as insurer and Caltex, as the assured shipper of the lost cargo of
industrial fuel oil, but also the amount paid to settle the insurance claim. The right of subrogation accrues simply upon
payment by the insurance company of the insurance claim.

a. Defenses in Carriage of Passengers

7. Briñas vs. People, 125 SCRA 687
8. Calalas vs. CA, 332 SCRA 356
9. Fortune Express, Inc. vs. CA, 305 SCRA 14
10. Japan Airlines vs. CA, 294 SCRA 19
11. Asia Lighterage and Shipping, Inc. v. Court of Appeals, GR No. 1472346, August 19, 2003
12. Pestano v. Sumayang, 346 SCRA 870
13. Philippine Rabbit Bus Lines vs. IAC, 189 SCRA 158
14. Tiu vs. Arriesgado, 437 SCRA 426

IV.Fortuitous Events
a. Requisites of Fortuitous Event

15. Lasam v. Smith, GR No. 19495, February 2, 1994

FACTS

Frank Smith was engaged in the business of carrying passengers for hire from the one point to another in the Province
of La Union and the surrounding provinces. Smith undertook to convey Honorio Lasam and Joaquina Sanchez in a
Ford automobile. On leaving, the automobile was operated by a licensed chauffeur, but the chauffeur allowed his
assistant, Remigio Bueno, to drive the car. Bueno held no driver’s license, but had some experience in driving, and
with the exception of some slight engine trouble. The defects developed in the steering gear so as to make accurate
steering impossible, and after zigzagging for a distance of about half a kilometer, the car left the road and went down
a steep embankment.

The automobile was overturned and the plaintiffs pinned down under it. Mr. Lasam escaped with a few contusions
and a “dislocated” rib but his wife received serious injuries, among which was a compound fracture of one of the
bones in her left wrist. Lasam brought the action to recover damages against Smith for the physical injuries sustained
in an automobile accident.
TC = ruled in favor of the Lasam.

Both the plaintiffs and the defendant appeal, Lasam maintained that the damages awarded are insufficient while the
Smith denies all liability for any damages whatever.

ISSUE: W/N SMITH IS LIABLE TO THE INJURIES CAUSED BY THE ACCIDENT

HELD:

Yes. Smith’s liability is contractual. The source of the its liability is the contract of carriage; that by entering into that
contract he bound himself to carry the plaintiffs safely and securely to their destination; and that having failed to do
so he is liable in damages unless he shows that the failure to fulfill his obligation was due to causes mentioned in
article 1105 of the Civil Code.
 Some extraordinary circumstance independent of the will of the obligor of his employees is an essential element of a
caso fortuito. This element is lacking. It is not suggested that the accident was due to an act of God or to adverse
road conditions which could not have been foreseen. The accident was caused either by defects in the automobile or
else through the negligence of its driver. Neither under the American nor Spanish law is a carrier of passengers an
absolute insurer against the risks of travel from which the passenger may protect himself by exercising ordinary care
and diligence. Here, the passengers had no means of avoiding the danger or escaping the injury.

In determining the extent of the liability for losses or damages resulting from negligence in the fulfillment of a
contractual obligation, the courts have “a discretionary power to moderate the liability according to the circumstances”.

As a consequence of her refusal to submit such an operation of Joaquina, a series of infections ensued and which
required constant and expensive medical treatment for several years. The court agreed that the Smith should not be
charged with these expenses.

NOTE:
Caso Fortuito- An event that takes place by accident and could not have been foreseen and though foreseen is
inevitable.

A caso fortuito presents the following essential characteristics:

(1) The cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his
obligation, must be independent of the human will.
(2) It must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be
impossible to avoid.
(3) The occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner.
And
(4) the obligor (debtor) must be free from any participation in the aggravation of the injury resulting to the creditor.”

16. Arada vs. CA, 210 SCRA 624

Facts: Alejandro Arada doing business under the name and style South Negros Enterprises is engaged in the
business of small scale shipping as a common carrier, servicing the hauling of cargoes of different corporations and
companies with 5 vessels it was operating. It entered into a contract with San Miguel Corporation to transport as a
common carrier cargoes of the latter from San Carlos City Negros Occidental to Mandaue City using one of its vessels
M/L Maya. The cargoes of San Mig Corp valued at 176, 824. 80.

The master crew applied for clearance to sail which was denied by the Phil Coast Guard due to a typhoon. However,
the next day, it was granted clearance as there was no storm and the sea was calm. So, ML Maya left for Mandaue
City. While it was navigating towards Cebu, a typhoon developed and said vessel sank with whatever was left if its
cargoes. The crew was rescued. The Board of Marine Inquiry exonerated Arada and his crew from administrative
liability. Meanwhile, San Miguel Corporation filed with the RTC for the recovery of the value of its cargoes anchored
on breach of contract of carriage. The RTC rendered its decision dismissing the claim of San Miguel for recovery of
the value of its cargoes. On appeal, the CA reversed the decision of the RTC. Hence, this petition.

Issue: WON Arada is liable for the loss of the cargo of San Miguel Corporation.

Held: Yes. South Negros Enterprises was exercising its function as a common carrier when it entered into a contract
with San Miguel Corp to carry and transport the latter’s cargoes. A common carrier both from the nature of its business
and for insistent reasons of public policy is burdened by law with the duty of exercising extraordinary diligence not only
in ensuring the safety of passengers, but in caring for the goods transported byit. The loss, or deterioration or
destruction of goods turned over to the common carrier for the conveyance to a designated destination raises instantly
a presumption of fault or negligence on the part of the carrier, save only in cases where such loss, destruction or
deterioration arises from extreme circumstances such as a natural disaster or calamity.
In order that a common carrier may be exempted from responsibility, the natural disaster must have been the proximate
cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize the loss before,
during and after the occurrence of the flood, storm or other natural disaster in order that the common carrier may be
exempted from liability from the destruction or deterioration of the goods.
In the case at bar, Southern Negros failed to observe extraordinary diligence over the cargo in question was negligent
previous to the sinking of the carrying vessel. The master crew knew that there was a typhoon coming before his
departure but did not check where it was. He should have verified first where the typhoon was before departing. The
master crew did not ascertain where the typhoon was headed by the use of his vessel’s barometer and radio. Neither
did the captain of the vessel monitor and record the weather conditions as required under Art.612 of the Code of
Commerce.
A common carrier is obliged to observed extraordinary diligence and the failure of the master crew to ascertain the
direction of the storm and the weather condition of the path they would be traversing, constitute lack of foresight and
minimum vigilance over its cargoes taking into account the surrounding circumstances of the case

17. Delsan Transport Lines, Inc. vs. CA, G.R. No. 127897, Nov. 15, 2001
18. Eastern Shipping Lines, Inc. vs. CA, 196 SCRA 570
19. Eastern Shipping Lines, Inc. vs. IAC, 150 SCRA 463
20. Japan Airlines v. Court of Appeals, et al., GR No. 118664, August 7, 1998
21. Maersk Line v. Court of Appeals and Efren V. Castillo, GR No. 94761, May 17, 1993
22. Necessito, et al. v. Paras, GR No. L-10605, June 30, 1958
23. Philippine American General Insurance Co., Inc. vs. MCG Marine Services, Inc., G.R. No. 135645,
March 8, 2002
24. Yobido vs. CA, 281 SCRA 1

b. Effect of Carrier’s Participations

c. Rationale

25. Tan Chiong Sian v. Inchausti, GR No. 6092, March 8, 1912

Three bill of lading were executed. To this end 3 bills of lading were executed (38, 39, and 76). The steamer Sorsogo
arrived at the port of Gubat on 28 November 1908 and as the lorcha Pilar the other vessel to which the merchandise
was to be transshipped for its transportation to Samar was not yet there. The cargo was unloaded and stored in the
defendant company’s warehouses at that port. The lorcha Pilar arrived several days later and the merchandise
owned by Sip and other goods were transported to Catarman, Samar.

On 5 December 1908, however, before the Pilar could leave for its destination a heavy and strong wind caused the
lorcha to wrecked and its cargo including Sip’s package were scattered. Workmen of Inchausti tried to save the
merchandize but it is already futile so they proceeded to have it sold at public auction before a notary for the sum of
P1,693.67

A complaint was filed against Inchausti because the same neither carried nor delivered his merchandise to Ong
Bieng Sip, in Catarman, but unjustly and negligently failed to do so, with the result that the said merchandise was
almost totally lost, and thus claimed the value of the merchandise which was P20,000, legal interest thereon from
25 November 1908, and the cost of the suit.

ISSUE(S): WON Inchausti is liable for the shipwreck?

 HELD: NO.

RTC- infavor of the Chinese man

SC- The Supreme Court reversed the judgment appealed from, and absolved Inchausti & Co., without special finding
as to costs; holding that Inchausti is not liable for the loss and damage of the goods shipped on the lorcha Pilar by
the Chinaman, Ong Bieng Sip, in asmuch as such loss and damage were the result of a fortuitous event or force
majeure, and there was no negligence or lack of care and diligence on the part of Inchausti or its agents.
Wreck of lorcha due to fortuitous event; Loss cannot be attributed to Inchausti or its agents
From the moment that it is held that the loss of the said lorcha was due to force majeure, a fortuitous
event, with no conclusive proof of negligence or of the failure to take the precautions such as diligent and careful
persons usually adopt to avoid the loss of the boat and its cargo, it is neither just nor proper to attribute the loss or
damage of the goods in question to any fault, carelessness, or negligence on the part of Inchausti and its agents
and, especially, the patron of the lorcha Pilar.

Inchausti took all measures for he salvage of goods recoverable after the accident. Herein, subsequent to the wreck,
Inchausti’s agent took all the requisite measures for the salvage of such of the goods as could be recovered after
the accident, which he did with the knowledge of the shipper, Ong Bieng Sip, and, in effecting their sale, he
endeavored to secure all possible advantage to the Chinese shipper; in all these proceedings, he acted in obedience
to the law

Article 1601 of the Civil Code prescribes that “Carriers of goods by land or by water shall be subject with regard to
the keeping and preservation of the things entrusted to them, to the same obligations as determined for innkeepers
by articles 1783 and 1784. The provisions of this article shall be understood without prejudice to what is prescribed
by the Code of Commerce with regard to transportation by sea and land.”

The general rule established in Article 840 is that the loss of the vessel and of its cargo, as the result of shipwreck,
shall fall upon the respective owners thereof, save for the exceptions specified in the second of the said articles.
These legal provisions are in harmony with those of articles 361 and 362 of the Code of Commerce, and are
applicable whenever it is proved that the loss of, or damage to, the goods was the result of a fortuitous event or of
force majeure; but the carrier shall be liable for the loss or the damage arising from the causes aforementioned, if it
shall have been proven that they occurred through his own fault or negligence or by his failure to take the same
precautions usually adopted by diligent and careful persons

Eastern Shipping Lines v. IAC, 150 SCRA 469

(G.R. No. L-69044): a vessel operated by petitioner Eastern Shipping Lines, Inc., loaded at Kobe, Japan for
transportation to Manila, 5000 pieces of calorized lance pipes in 28packages consigned to Philippine Blooming Mills
Co., Inc., and 7 cases of spare partsconsigned to Central Textile Mills, Inc.; both sets of goods were insured with
Development Insurance and Surety Corp.

(G.R. No. 71478): the same vessel took on board 128 cartons of garment fabrics and accessories, in 2 containers,
consigned to Mariveles Apparel Corporation, and two cases of surveying instruments consigned to Aman Enterprises
and General Merchandise the vessel caught fire and sank, resulting in the total loss of ship and cargo

ISSUES 1. which law should govern — the Civil Code provisions on Common carriers or theCarriage of Goods by
Sea Act?;
2. who has the burden of proof to show negligence of the carrier?
3. what is the extent of the carrier’s liability?

HELD: 1. The law of the country to which the goods are to be transported governs the liability of the common carrier
in case of their loss, destruction or deterioration. As thecargoes were transported from Japan to the Philippines, the
liability of Petitioner Carrier is governed primarily by the Civil Code. However, in all matters not regulated by said
Code,the rights and obligations of common carrier shall be governed by the Code of Commerceand by special laws.
Thus, the Carriage of Goods by Sea Act, a special law, is suppletory tothe provisions of the Civil Code.

2. Article 1735 of the Civil Code provides that all cases than those mention in Article 1734,the common carrier shall
be presumed to have been at fault or to have acted negligently,unless it proves that it has observed the extraordinary
diligence required by law. The burden is upon Eastern Shipping Lines to prove that it has exercised the extraordinary
diligence required by law.

Note: fire –not considered a natural disaster or calamity within the contemplation of Art.1734 for it arises almost
invariably from some act of man or by human means; it does notfall within the category of an act of God unless caused
by lightning or by other natural disaster or calamity having failed to discharge the burden of proving that it had
exercised the extraordinarydiligence required by law, Eastern Shipping Lines cannot escape liability for the loss of
thecargo. As it was at fault, it cannot seek the protective mantle of Sec. 4(2) of Carriage of Goods bySea Act which
provides: “Neither the carrier nor the ship shall be responsible for loss ordamage arising or resulting from x x x (b)
Fire, unless caused by the actual fault or privity of the carrier.”

There was actual fault of the carrier shown by lack of diligence in that when the smoke wasnoticed, the fire was
already big; that the fire must have started 24 hours before the samewas noticed; and that after the cargoes were
stored in the hatches, no regular inspectionwas made as to their condition during the voyage.

3. See Art. 1749.G.R. No. 69044: no stipulation in the Bills of Lading limiting the carrier’s liability for the lossor
destruction of the goods; no declaration of a higher value of the goods; Hence, Eastern Shipping Lines’ liability should
not exceed US $500 per package (as provided in 4(5) of theCOGSA), or its peso equivalent, at the time of payment
of the value of the goods lost, but inno case more than the amount of damage actually sustained

Edgar Cokaliong Shipping Lines, Inc. v. UCPB, GR No. 140618, June 25, 2003

December 11, 1991: Nestor Angelia (shipper and consignee) delivered to the petitioner Edgar Cokaliong Shipping
Lines, Inc. (now Cokaliong Shipping Lines), a cargo consisting of one (1) carton of Christmas decor and two (2) sacks
of plastic toys, to be transported on board the M/V Tandag from Cebu City for Tandag, Surigao del Sur. This cargo
is under Bill of Lading No. 58, in the amount of P6,500.00. Zosimo Mercado (another shipper and consignee) likewise
delivered cargo to petitioner consisting of two (2) cartons of plastic toys and Christmas decor, one (1) roll of floor mat
and one (1) bundle of various or assorted goods. This is under Bill of Lading No. 59, valued in the amount of
P14,000.00

Feliciana Legaspi (owner of the goods) insured the cargo, covered by BOL Nos. 59 and No. 58, with the UCPB
General Insurance Co., Inc., [respondent]. No. 59 was insured for P100,000 while No. 58 for P50,000. [*Note that
both amounts are far from the actual and declared value in the BOLs issued by Cokaliong] After the vessel had passed
by the Mandaue-Mactan Bridge, fire ensued in the engine room, and, despite earnest efforts of the officers and crew
of the vessel, the fire engulfed and destroyed the entire vessel resulting in the loss of the vessel and the cargoes
therein.
Feliciana Legaspi filed a claim, with [respondent], for the value of the cargos insured. The latter approved the claim.
For Bill of Lading No. 59, Legaspi received from UCPB P99,000.00 while for No. 58, P60,338.00. UCPB as subrogee
of Legaspi, filed a complaint anchored on torts against petitioner, with the RTC of Makati City, for the collection of the
total principal amount of P148,500.00. Respondent alleged that the loss of the cargo was due to the negligence of the
petitioner. Petitioner alleged that: (a) It was cleared by the Board of Marine Inquiry of any negligence in the burning
of the vessel; and (b) it cannot be held liable for the loss of the cargo beyond the value thereof declared in the Bill of
Lading.

ISSUES:
(1) Is petitioner liable for the loss of the goods? YES
(2) If it is liable, what is the extent of its liability? According to what was reflected in the Bill of Lading

HELD:
(1)Petitioner’s argument: the cause of the loss of the goods, subject of this case, was force majeure. It adds that its
exercise of due diligence was adequately proven by the findings of the Philippine Coast Guard.

SC: We are not convinced. The uncontroverted findings of the Philippine Coast Guard show that the M/V Tandag
sank due to a fire, which resulted from a crack in the auxiliary engine fuel oil service tank. The crack was located on
the side of the fuel oil tank, which had a mere two-inch gap from the engine room walling, thus precluding constant
inspection and care by the crew. Having originated from an unchecked crack in the fuel oil service tank, the fire could
not have been caused by force majeure. Broadly speaking, force majeure generally applies to a natural accident, such
as that caused by a lightning, an earthquake, a tempest or a public enemy. Hence, fire is not considered a natural
disaster or calamity. It does not fall within the category of an act of God unless caused by lighting or by other natural
disaster or calamity. It may even be caused by the actual fault or privity of the carrier.

Peril of fire is not comprehended within the exceptions in Article 1734; Article 1735 applies (please see provision)
Where loss of cargo results from the failure of the officers of a vessel to inspect their ship frequently so as to discover
the existence of cracked parts, that loss cannot be attributed to force majeure, but to the negligence of those officials.
Ensuring the seaworthiness of the vessel is the first step in exercising the required vigilance. Petitioner did not present
sufficient evidence showing what measures or acts it had undertaken to ensure the seaworthiness of the vessel. It
failed to show when the last inspection and care of the auxiliary engine fuel oil service tank was made, or some other
evidence to establish that it had exercised extraordinary diligence. It merely stated that constant inspection and care
were not possible, and that the last time the vessel was dry-docked was in November 1990.

(2)Respondent’s contention: petitioner’s liability should be based on the actual insured value of the goods, subject of
this case.
Petitioner’s: its liability should be limited to the value declared by the shipper/consignee in the Bill of Lading.

SC: Petitioner should not be held liable for more than what was declared by the shippers/consignees as the value of
the goods in the bills of lading.

Ratio: The records show that the Bills of Lading covering the lost goods contain the stipulation that in case of claim
for loss or for damage to the shipped merchandise or property, [t]he liability of the common carrier x x x shall not
exceed the value of the goods as appearing in the bill of lading.

A stipulation that limits liability is valid as long as it is not against public policy. Following provisions apply in the
present case:

Art. 1749. A stipulation that the common carriers liability is limited to the value of the goods appearing in the bill of
lading, unless the shipper or owner declares a greater value, is binding.
Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or
deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been freely and fairly
agreed upon.

Pursuant to the afore-quoted provisions of law, it is required that the stipulation limiting the common carriers liability
for loss must be reasonable and just under the circumstances, and has been freely and fairly agreed upon. In the
present case, the stipulation limiting petitioner’s liability is not contrary to public policy. The shippers/consignees may
recover the full value of the goods by the simple expedient of declaring the true value of the shipment in the Bill of
Lading. Other than the payment of a higher freight, there was nothing to stop them (Legaspi, et.al) from placing the
actual value of the goods therein. In fact, they committed fraud against the common carrier by deliberately
undervaluing the goods in their Bill of Lading, thus depriving the carrier of its proper and just transport fare.
Concededly, the purpose of the limiting stipulation in the Bill of Lading is to protect the common carrier. Such
stipulation obliges the shipper/consignee to notify the common carrier of the amount that the latter may be liable for
in case of loss of the goods. The common carrier can then take appropriate measures -- getting insurance, if needed,
to cover or protect itself. This precaution on the part of the carrier is reasonable and prudent.

e. Storm
The Philippine American General Insurance Co., Inc. v. MCG Marine Services, Inc. and Gaerland, No. 135645,
March 8, 2005
San Miguel Corporation insured several beer bottle cases with petitioner Philippine American General Insurance
Company. The cargo were loaded on board the M/V Peatheray Patrick -G to be transported from Mandaue City to
Bislig, Surigao del Sur. After having been cleared by the Coast Guard Station in Cebu the previous day, the vessel
left th e port of Mandaue City for Bislig, Surigao del Sur on March 2, 1987. The weather was calm when the vessel
started its voyage. The following day, M/V Peatheray Patrick -G listed and subsequently sunk off Cawit Point, Cortes,
Surigao del Sur. As a consequenc e thereof, the cargo belonging to San Miguel Corporation was lost. Petitioner paid
San Miguel Corporation the full amount of the cargo pursuant to the terms of their insurance contract, and as subrogee
filed with the Regional Trial Court (RTC) of Makati C ity a case for collection against private respondents to recover
the amount it paid. Meanwhile, the Board of Marine Inquiry conducted its own investigation and found that the cause
of the sinking of the vessel was the existence of strong winds and enormou s waves in Surigao del Sur, a fortuitous
event that could not have been for seen at the time the M/V Peatheray Patrick -G left the port of Mandaue City. It was
further held by the Board that said fortuitous event was the proximate and only cause of the vess el's sinking.

ISSUE: Whether or not respondent MGG should be held liable.

HELD: No. [Common carriers, from the nature of their business and for reasons of public policy, are mandated to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them. Owing to this high degree of di ligence required of them, common carriers, as a general rule, are presumed to
have been at fault or negligent if the goods transported by them are lost, destroyed or if the same deteriorated.
However, this presumption of fault or negligence does not aris e in the cases enumerated under Article 1734 of the
Civil Code: Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same
is due to any of the following causes only:(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 o f competent
public authority.] In order that a common carrier may be absolved from liability where the loss, destruction or
deterioration of the goods is due to a natural disaster or calamity, it must further be shown that the such natural
disaster or ca lamity was the proximate and only cause of the loss; there must be "an entire exclusion of human
agency from the cause of the injury of the loss."Moreover, even in cases where a natural disaster is the proximate
and only cause of the loss, a common carrier is still required to exercise due diligence to prevent or minimize loss
before, during and after the occurrence of the natural disaster, for it to be exempt from liability under the law for the
loss of the goods. If a common carrier fails to exercise due diligence --or that ordinary care which the circumstances
of the particular case demand -- to preserve and protect the goods carried by it on the occasion of a natural disaster,
it will be deemed to have been negligent, and the loss will not be considered a s having been due to a natural disaster
under Article 1734 (1). [In the case at bar, the issues may be narrowed down to whether the loss of the cargo was
due to the occurrence of a natural disaster, and if so, whether such natural disaster was the sole a nd proximate cause
of the loss or whether private respondents were partly to blame for failing to exercise due diligence to prevent the loss
of the cargo. The parties do not dispute that on the day the M/V Peatheray Patrick -G sunk, said vessel encountere d
strong winds and huge waves ranging from six to ten feet in height. The vessel listed at the port side and eventually
sunk at Cawit Point, Cortes, Surigao del Sur. The Court of Appeals, citing the decision of the Board of Marine Inquiry
in the administrative case against the vessel's crew (BMI --646-87), found that the loss of the cargo was due solely to
the existence of a fortuitous event, particularly the presence of strong winds and huge waves at Cortes, Surigao del
Sur on March 3, 1987:]

f. Hijacking
Bascos v. Court of Appeals and Cipriano, GR No. 101089, April 7, 1993
De Guzman v. Court of Appeals and Cendana, GR No. L-47822, December 12, 1988

g. Mechanical Defects
Son v. Cebu Autobus Company, 94 Phil 892
PU-Truck No. 312 of the defendant Cebu Autobus Company left Cebu City on September 17, 1948, at about 10:00
a.m. bound for Maya, municipality of Daan Bantayan, Cebu Province, arriving in the latter place at about 5:00 p.m. of
the same day. it passed the night in Maya. It left Maya, Daan Bantayan, Cebu, on its return trip to Cebu City at about
4:00 a.m. September 18, 1948, without having been inspected or examined by the mechanic. The plaintiff boarded
defendant's truck in barrio Maya. Daan Bantayan, Cebu, and loaded seven hogs for his home at Yati Liloan, Cebu,
paying the usual fare and freight. The plaintiff did not reach his destination safely, because the truck of the defendant
fell into a canal at kilometer. No. 56, barrio of Macaas, municipality of Catmon, Cebu. He was pinned down or pressed
by the truck on September 18, 1948, and, as a consequence, he suffered complete fractures on his pelvic bone.
Because of the shock and pain he lost his consciousness for sometime. He was brought to his house at Yati,
municipality of Liloan, Cebu, unconscious on board another truck. Later, on the same day, he was brought in a special
wagon to the City of Cebu, and was confined in the Velez Clinic for fourteen days, from September 18, 1948, to
October 2, 1948. On October 2, 1948, the plaintiff went out of the Velez Clinic, but according to Dr. Jacinto Velez,
physician and proprietor of the Velez Clinic, the plaintiff needed 60 days more of treatment and rest before he could
resume his former habitual work, inasmuch as he suffered complete fractures on his pelvic bone.

The evidence further shows that two hogs of the plaintiff loaded on TPU truck No. 312 of the defendant on September
18, 1948 died when the said truck fell into a canal at Macaas, Catmon, Cebu.

The theory of the defendant is that the accident was unforeseen, or even if foreseen, was inevitable. This theory
cannot be sustained. Whether the accident was caused by the defect of the engine of the truck of the defendant, or
by the negligence of the driver, or by the breakage of the drag-link spring, the defendant is civilly liable to the plaintiff
for the damages suffered by him. The evidence shows the drag-link spring of the truck in question was not inspected
or examined when it left Maya, Daan Bantayan, Cebu, on September 1, 1948, for Cebu City. If it were inspected or
examined, the accident might have been avoided. The plaintiff had no means of avoiding the danger or escaping the
injury. When he boarded at dawn of September 18, 1948, in Maya, Daan Bantayan. Cebu, defendant's TPU Truck
No. 312, bound for his home at Yati Liloan, Cebu, and loaded on said truck seven hogs, he had every right to presume
the truck perfectly in good condition which could transport him safely and securely to his destination. He paid the
regular fare and the freight of the seven hogs. The trial court based its decision in favor of the plaintiff upon the finding
that the defendant had defaulted in its contract of carriage due to the accident, regardless of whether it was caused
by a defect of the engine of the defendant's truck, by the negligence of its driver, or by the breakage of the drag-link
spring; the evidence showing that the said drag-link spring was not inspected or examined when the vehicle left Maya,
Daan Bantayan, Cebu, for Cebu City.
 26. Necessito v. Paras, GR No. L-10605, June 30, 1958
27. Lasam v. Smith, 45 Phil 607
28. Coca-Cola Bottler’s Philippines v. Court of Appeals, 227 SCRA 293
29. Landingin v. Pantranco, Nos. L-28014-15, May 29, 1970

FACTS:

o In the morning of April 20, 1963, Leonila Landingin and Estrella Garcia were among the passengers in the
bus driven by defendant Marcelo Oligan and owned and operated by PANTRANCO on an excursion trip from
Dagupan City to Baguio City and back.
o Upon reaching an uphill point at Kennon Road, Baguio City, on the onward trip, Oligan caused the bus to stop
for a few moments. The motor ceased to function, causing the bus to slide back unchecked. When Oligan
suddenly swerved and steered the bus toward the mountainside, Leonila and Estrella, together with several
other passengers, were thrown out of the bus through its open side unto the road, suffering serious injuries.
Leonila and Estrella died at the hospital on the same day.
o Oligan had been charged with and convicted of multiple homicide and multiple slight physical injuries on
account of the death of Leonila and Estrella and of the injuries suffered by four others. His case is pending in
CA.
o Petitioners sued for damages in connection with the death of their daughters, Leonila Landingin and Estrella
Garcia, due to the alleged negligence of the defendants and/or breach of contract of carriage. They prayed
for awards of moral, actual and exemplary damages.

Landingin and Garcia: The bus was open on one side and enclosed on the other, in violation of the PSC rules.
PANTRANCO acted with negligence, fraud and bad faith in pretending to have previously secured a special permit for
the trip when in truth it had not done so.

Pantranco: At time of accident, driver was driving at the slow speed of about 10 kph; that while the driver was steering
his bus toward the mountainside after hearing a sound coming from under the rear end of the bus, Leonila and Estrella
recklessly, and in disobedience to his shouted warnings and advice, jumped out of the bus causing their heads to hit
the road or pavement; that the bus was then being driven with extraordinary care, prudence and diligence; that
PANTRANCO observed the care and diligence of a good father of a family to prevent the accident as well as in the
selection and supervision of its employees, particularly of driver; and that the decision convicting the said defendant
was not yet final, the same having been appealed to CA where it was still pending.

Two cases were tried jointly.

CFI: in favor of PANTRANCO, accident caused by fortuitous event. CFI made the ff findings:
o Upon reaching the fatal spot at Camp 8, a sudden snapping or breaking of metal below the floor of the bus
was heard, and the bus abruptly stopped, rolling back a few moments later.
o Some of the passengers jumped out of the bus, while others stepped down. Driver maneuvered the bus safely
to and against the side of the mountain where its rear end was made to rest, ensuring the safety of the many
passengers still inside the bus. While doing this he advised the passengers not to jump, but to remain seated.
o Leonila and Estrella were not thrown out of the bus, but that they panicked and jumped out;
o Malfunctioning of the motor resulted from the breakage of the cross-joint and the day before, the said cross-
joint was duly inspected and found to be in order.
o No negligence on PANTRANCO’s part. It exercised the requisite care in the selection and supervision of its
employees, including the defendant driver. Accident was caused by a fortuitous event.
PANTRANCO appealed, because while they were absolved, they were ordered to pay spouses Landingins the amount
of P6,500.00 and P3,500.00 to Garcias not in payment of liability because of any negligence on the part of the
defendants but as an expression of sympathy and goodwill.1

ISSUE: Did the court err in ordering PANTRANCO to assume pecuniary liability? NO. But was error for the trial
court to dismiss the complaints because accident is not caused by fortituous event. There was breach of contract of
carriage. Therefore awards made by the court should be considered in the concept of damages for breach of contracts
of carriage.

SUPREME COURT:

1. PANTRANCO was guilty of breach of contract of carriage. It will be noted that in each of the two complaints
it is averred that two buses including the one in which the two deceased girls were riding, were hired to
transport the excursionist passengers from Dagupan City to Baguio City, and return, and that the said two
passengers did not reach destination safely.
2. As a common carrier, PANTRANCO was duty bound to carry its passengers "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." (Article 1755) PANTRANCO did NOT measure up to the degree of care and foresight required
it under the circumstances. The court below found that the cross-joint of the bus in which the deceased were
riding broke, which caused the malfunctioning of the motor, which in turn resulted in panic among some of the
passengers. This is a finding of fact which this Court may not disturb. But conclusion that "the accident
was caused by a fortuitous event" is in large measure conjectural and speculative. In Lasam vs.
Smith this Court held that an accident caused by defects in the automobile is not a caso fortuito. The
rationale of the carrier's liability is the fact that "the passenger has neither the choice nor control over
the carrier in the selection and use of the equipment and appliances in use by the carrier."
3. When a passenger dies or is injured, the presumption is that the common carrier is at fault or that it acted
negligently. This presumption is only rebutted by proof on the carrier's part that it observed the "extraordinary
diligence”. CFI considered the presumption rebutted on the strength of defendants-appellants' evidence that
only the day before the incident, the crossjoint in question was duly inspected and found to be in order. It
does not appear, however, that the carrier gave due regard for all the circumstances in connection
with the said inspection. The bus in which the deceased were riding was heavily laden with
passengers, and it would be traversing mountainous, circuitous and ascending roads. Thus the entire
bus, including its mechanical parts, would naturally be taxed more heavily than it would be under
ordinary circumstances. The mere fact that the bus was inspected only recently and found to be in
order would not exempt the carrier from liability unless it is shown that the particular circumstances
under which the bus would travel were also considered.

Judgment appealed from is modified. PANTRANCO is ordered to pay the amounts stated in the judgment appealed from, as
damages for breach of contracts, with interest at the legal rate from the date of the filing of the complaints.

b. Tire Blowouts
30. Juntilla v. Fontanar, GR No. L-45637, May 31, 1958
a. Other Invalid Defenses
5. Public Enemy
Bascos v. Court of Appeals and Cipriano, GR No. 101089, April 7, 1993
6. Nature of Goods and Improper Packing
Philippine Charter Insurance vs Unknown Owner

FACTS: Petitioner Philippine Charter Insurance Corporation (PCIC) is the insurer of a shipment on board the vessel
M/V “National Honor,” represented in the Philippines by its agent, National Shipping Corporation of the Philippines
(NSCP).

The M/V “National Honor” arrived at the Manila International Container Terminal (MICT). The International Container
Terminal Services, Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of lading, and it knew
the contents of the crate. The following day, the vessel started discharging its cargoes using its winch crane. The crane
was operated by Olegario Balsa, a winchman from the ICTSI, exclusive arrastre operator of MICT.

Denasto Dauz, Jr., the checker-inspector of the NSCP, along with the crew and the surveyor of the ICTSI, conducted
an inspection of the cargo. They inspected the hatches, checked the cargo and found it in apparent good condition.
Claudio Cansino, the stevedore of the ICTSI, placed two sling cables on each end of Crate No. 1. No sling cable was
fastened on the mid-portion of the crate. In Dauz’s experience, this was a normal procedure. As the crate was being
hoisted from the vessel’s hatch, the mid-portion of the wooden flooring suddenly snapped in the air, about five feet high
from the vessel’s twin deck, sending all its contents crashing down hard, resulting in extensive damage to the shipment.

PCIC paid the damage, and as subrogee, filed a case against M/V National Honor, NSCP and ICTSI. Both RTC and
CA dismissed the complaint.

ISSUE: Whether or not the presumption of negligence is applicable in the instant case.

HELD: No.We agree with the contention of the petitioner that common carriers, from the nature of their business and
for reasons of public policy, are mandated 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. he Court has
defined extraordinary diligence in the vigilance over the goods as follows:

The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know
and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to it for sale, carriage
and delivery. It requires common carriers to render service with the greatest skill and foresight and “to use all
reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care
in the handling and stowage, including such methods as their nature requires.”

The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles
are surrendered to or unconditionally placed in the possession of, and received by, the carrier for transportation until
delivered to, or until the lapse of a reasonable time for their acceptance, by the person entitled to receive them.] >When
the goods shipped are either lost or arrive in damaged condition, a presumption arises against the carrier of its failure
to observe that diligence, and there need not be an express finding of negligence to hold it liable. To overcome the
presumption of negligence in the case of loss, destruction or deterioration of the goods, the common carrier must prove
that it exercised extraordinary diligence.

However, under Article 1734 of the New Civil Code, the presumption of negligence does not apply to any of the following
causes:

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.
It bears stressing that the enumeration in Article 1734 of the New Civil Code which exempts the common carrier for
the loss or damage to the cargo is a closed list. To exculpate itself from liability for the loss/damage to the cargo under
any of the causes, the common carrier is burdened to prove any of the aforecited causes claimed by it by a
preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove that the
carrier is negligent.

“Defect” is the want or absence of something necessary for completeness or perfection; a lack or absence of something
essential to completeness; a deficiency in something essential to the proper use for the purpose for which a thing is to
be used. On the other hand, inferior means of poor quality, mediocre, or second rate. A thing may be of inferior quality
but not necessarily defective. In other words, “defectiveness” is not synonymous with “inferiority.”

x x x

In the present case, the trial court declared that based on the record, the loss of the shipment was caused by the
negligence of the petitioner as the shipper:

The same may be said with respect to defendant ICTSI. The breakage and collapse of Crate No. 1 and the total
destruction of its contents were not imputable to any fault or negligence on the part of said defendant in handling the
unloading of the cargoes from the carrying vessel, but was due solely to the inherent defect and weakness of the
materials used in the fabrication of said crate.

The crate should have three solid and strong wooden batten placed side by side underneath or on the flooring of the
crate to support the weight of its contents. x x x
Southern Lines, Inc. vs CA

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

RULLING: 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.

Asian Terminals vs. Simon Enterprises, Inc.,

Facts: Simon Enterprise Inc. (Simon) has entered into contract with Contiquincybunge Export Company
(Contiquincybunge) as its consignee of the shipped Soybean Meal. On October 25, 1995 and on November 25, 1995
Contiquincybunge has made a shipment through M/V Sea Dream and M/V Tern respectively at the Port of Darrow,
Louisiana, U.S.A. For the first shipment, Contiquincybunge made a shipment of 6,825.144 metric tons of U.S. Soybean
Meal which when the M/V Sea Dream arrived at the Port of Manila the bulk of soybean meal was received by the Asian
Terminals, Inc. (ATI), for shipment to Simon. However, when it reached its receiver Simon, it was already short by
18.556 metric tons. For the second shipment, Contiquincybunge made shipment, through M/V Tern, of 3,300.000 metric
tons of U.S. Soybean Meal in Bulk for delivery to Simon at the Port of Manila. The shipment was received by ATI again
for delivery to Simon. However, the shipped cargos were found lacking 199.863 metric tons.

Simon has filed an action for damages against the unknown owner of the vessels M/V Sea Dream and M/V Tern, its
local agent Inter-Asia Marine Transport, Inc., and petitioner ATI alleging that it suffered the losses through the fault or
negligence of the said defendants. The case of the unknown owner of the vessel M/V Sea Dream has been settled in
release and quitclaim and therefore has been stricken out of the case, leaving M/V Tern, its local agent Inter-Asia
Marine Transport, Inc., and petitioner ATI’s case remaining. The RTC has ruled that the defendants be solidarily liable
for the damages incurred by Simon.

Unsatisfied with the RTC ruling, the owner of the M/V Tern, and Inter-Asia Marine Transport, Inc. appealed to CA on
the issue whether RTC has erred in finding that they did not exercise extraordinary diligence in the handling of the
goods. On the other hand, the petitioner ATI has also appealed to CA on the issue that the RTC, the court-a-quo,
committed serious and reversible error in holding ATI solidarily liable with co-defendant appellant Inter-Asia Marine
Transport, Inc. contrary to the evidence presented. The CA ruled that the RTC ruling be assailed with some
modifications on the basis that M/V Tern and Inter-Asia Marine Transport, Inc. have failed to establish that they
exercised extraordinary diligence in transporting the goods or exercised due diligence to forestall or lessen the loss as
provided in Article 1742 of the Civil Code. And on ATI’s RTC ruling, it was assailed as well on the basis that the
stevedore of the M/V Tern has witnessed that during the dischargement of the cargo, there has been spillage done by
the stevedores of ATI which is an evidence that ATI has been negligible in handling the goods.

ATI filed a motion for reconsideration at CA but was denied. It then filed a petition for certiorari with the sole issue of
whether the appellate court erred in affirming the decision of the trial court holding petitioner ATI solidarily liable with
its co-defendants for the shortage incurred in the shipment of the goods to respondent.

The issue involves questions of facts which cannot be entertained by SC for it is not a trier of facts under rule 45 of the
1997 rules of civil procedure. However, the said rule 45 is not ironclad and has certain exceptions. The issue raised by
ATI was merited to be entertained by SC under the rule 4, when the judgment is based on a misapprehension of facts.

Issue: Whether the appellate court erred in affirming the decision of the trial court holding petitioner ATI solidarily liable
with its co-defendants for the shortage incurred in the shipment of the goods to respondent.

Ruling: The petition for review on certiorari was granted to ATI. The SC agreed to ATI’s claim that the CA erred in
affirming the decision of the trial court holding petitioner ATI solidarily liable with its co-defendants for the shortage
incurred in the shipment of the goods to respondent. The CA misapprehended the following facts:

First, petitioner ATI is correct in arguing that the respondent failed to prove that the subject shipment suffered actual
shortage, as there was no competent evidence to prove that it actually weighed 3,300 metric tons at the port of origin.
Second, as correctly asserted by petitioner ATI, the shortage, if any, may have been due to the inherent nature of the
subject shipment or its packaging since the subject cargo was shipped in bulk and had a moisture content of 12.5%.

Third, SC agreed with the petitioner ATI that respondent has not proven any negligence on the part of the former.

A.F. SANCHEZ BROKERAGE INC., v. CA and FGU INSURANCE CORPORATION

A common carrier is liable to the resulting damage to the goods if the improper packaging is known to the carrier or his
employees or is apparent upon ordinary observation, but he nevertheless accepts the same without protest or
exception.

FACTS: Respondent FGU Insurance Corporation (FGU) brought an action for reimbursement against petitioner A.F.
Sanchez Brokerage Inc. (Sanchez Brokerage) to collect the amount paid by the former to Wyeth-Suaco Laboratories
Inc. (Wyeth-Suaco) as insurance payment for the goods delivered in bad condition.

A.F. Brokerage refused to admit liability for the damaged goods which it delivered from Philippines Skylanders, Inc.
(PSI) to Wyeth-Suaco as it maintained that the damage was due to improper and insufficient export packaging,
discovered when the sealed containers were opened outside the PSI warehouse.

The Regional Trial Court of Makati dismissed the said complaint; however, the decision was subsequently reversed
and set aside by the Court of Appeals, finding that Sanchez Brokerage is liable for the carriage of cargo as a ―common
carrier‖ by definition of the New Civil Code.

ISSUE: Whether or not the FGU Insurance is liable for the delivery of the damaged goods

HELD: As defined under Article 1732 of the Civil Code, common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or both by land, water or air for
compensation, offering their services to the public. It does not distinguish between one whose principal business activity
is the carrying of goods and one who does such carrying only as an ancillary activity. The contention therefore of
Sanchez Brokerage that it is not a common carrier but a customs broker whose principal function is to prepare the
correct customs declaration and proper shipping documents as required by law is bereft of merit. It suffices that
petitioner undertakes to deliver the goods for pecuniary consideration.

In this light, Sanchez Brokerage as a common carrier is mandated to observe, under Article 1733 of the Civil Code,
extraordinary diligence in the vigilance over the goods it transports according to all the circumstances of each case. In
the event that the goods are lost, destroyed or deteriorated, it is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence.

The concept of ―extra-ordinary diligence‖ was explained in Compania Maritima v. Court of Appeals. The extraordinary
diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the
required precaution for avoiding damage to or destruction of the goods entrusted to it for sale, carriage and delivery. It
requires common carriers to render service with the greatest skill and foresight and ―to use all reasonable means to
ascertain the nature and characteristics of goods tendered for shipment and to exercise due care in the handling and
storage including such methods as their nature requires.

It was established that Sanchez Brokerage received the cargoes from the PSI warehouse in good order and condition
and that upon delivery by petitioner some of the cargoes were found to be in bad order as noted in the Delivery Receipt
and as indicated in the Survey and Destruction Report.
While paragraph no. 4 of Article 1734 of the Civil Code exempts a common carrier from liability if the loss or damage
is due to the character of the goods or defects in the packaging or in the containers, the rule is that if the improper
packaging is known to the carrier or his employees or is apparent upon ordinary observation, but he nevertheless
accepts the same without protest or exception notwithstanding such condition, he is not relieved of liability for the
resulting damage. If the claim of Sanchez Brokerage that some of the cartons were already damaged upon delivery to
it were true, then it should naturally have received the cargo under protest or with reservation duly noted on the receipt
issued by PSI but it made no such protest or reservation.

CALVO vs UCPB GEN INSURANCE

FACTS: At the time material to this case, Transorient Container Terminal Services, Inc. (TCTSI) owned by Virgines
Calvo entered into a contract with San Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting
paper and 124 reels of kraft liner board from the Port Area in Manila to SMC's warehouse at the Tabacalera Compound,
Romualdez St., Ermita, Manila. The cargo was insured by respondent UCPB General Insurance Co., Inc.July 14,
1990: arrived in Manila on board "M/V Hayakawa Maru" and later on unloaded from the vessel to the custody of the
arrastre operator, Manila Port Services, IncJuly 23 to July 25, 1990: Calvo withdrew the cargo from the arrastre operator
and delivered it to SMC's warehouse in Ermita, Manila. July 25, 1990: goods were inspected by Marine Cargo
Surveyors, who found that 15 reels of the semi-chemical fluting paper were "wet/stained/torn" and 3 reels of kraft liner
board were likewise torn. SMC collected payment from UCPB the total damage of P93,112 under its insurance
contract. UCPB brought suit against Calvo as subrogee of SMC. Calvo: Art. 1734(4) The character of the goods or
defects in the packing or in the containers. spoilage or wettage" took place while the goods were in the custody of
either the carrying vessel "M/V Hayakawa Maru," which transported the cargo to Manila, or the arrastre operator, to
whom the goods were unloaded and who allegedly kept them in open air for 9 days notwithstanding the fact that some
of the containers were deformed, cracked, or otherwise damaged

ISSUE: W/N Calvo can be exempted from liability under Art. 1734(4)

HELD: NO. CA AFFIRMED. Mere proof of delivery of goods in good order to a carrier, and of their arrival at the place
of destination in bad order, makes out a prima facie case against the carrier, so that if no explanation is given as to
how the injury occurred, the carrier must be held responsible extraordinary responsibility lasts from the time the goods
are unconditionally placed in the possession of and received by the carrier for transportation until the same are
delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive the
same

Calvo must do more than merely show the possibility that some other party could be responsible for the damage. It
must prove that it used "all reasonable means to ascertain the nature and characteristic of goods tendered for transport
and that it exercised due care in the handling

BELGIAN OVERSEAS vs. PHILIPPINE FIRST INSURANCE CO., INC.,

Proof of the delivery of goods in good order to a common carrier and of their arrival in bad order at their destination
constitutes prima facie fault or negligence on the part of the carrier. If no adequate explanation is given as to how the
loss, the destruction or the deterioration of the goods happened, the carrier shall be held liabletherefor.

Facts: On June 13, 1990, CMC Trading A.G. shipped on board the M/V 'Anangel Sky' at Hamburg, Germany 242coils
of various Prime Cold Rolled Steel sheets for transportation to Manila consigned to the Philippine SteelTrading
Corporation. On July 28, 1990, M/V Anangel Sky arrived at the port of Manila and, within the subsequent days,
discharged the subject cargo. Four (4) coils were found to be in bad order. Finding the four(4) coils in their damaged
state to be unfit for the intended purpose, the consignee Philippine Steel Trading Corporation declared the same as
total loss. Petitioners refused to submit to the consignee's claim. Consequently, respondent paid the consignee and
was subrogated to the latter's rights. Subsequently, respondent instituted this complaint for recovery of the amount paid
by them, to the consignee as insured. Petitioners imputed that the damage and/or loss was due to pre-shipment
damage. In addition thereto, theyargued that their liability, if there be any, should not exceed the limitations of liability
provided for in the bill of lading and other pertinent laws. Finally, they averred that, in any event, they exercised due
diligence andforesight required by law to prevent any damage/loss to said shipment. RTC dismissed the Complaint
because respondent had failed to prove its claims. In reversing the trial court, the CA ruled that petitioners were liable
for the loss or the damage of the goods shipped, because they had failed too vercome the presumption of negligence
imposed on common carriers.

Issue: Whether or not a notation in the bill of lading at the time of loading is sufficient to show pre-shipment damage
and to exempt herein defendants from liability.

Held: NO. Mere proof of delivery of the goods in good order to a common carrier and of their arrival in badorder at their
destination constitutes a prima facie case of fault or negligence against the carrier
If noadequate explanation is given as to how the deterioration, the loss or the destruction of the goods happened,the
transporter shall be held responsible. Petitioners failed to rebut the prima facie presumption of negligencein the case
at bar. True, the words "metal envelopes rust stained and slightly dented" were noted on the Bill of Lading; however,
there is no showing that petitioners exercised due diligence to forestall or lessen theloss Having failed to
discharge the burden of proving that they have exercised the extraordinary diligencerequired by law, petitioners
cannot escape liability for the damage to the four coils.

Philippine Charter Insurance Corp. v. Unknown Owner of the Vessel M/V Honor, GR No.
161883, July 8, 2005
Sulpico Lines, Inc. v. Fist Lepanto – Taisho Insurance Corp., GR No. 140349, June 29, 2005
7. Order of Public Authority
Ganzon v. CA

Facts: Tumambing contracted the services of Ganzon for the latter to haul 305 tons of scrap iron from Mariveles,
Bataan to the port of Manila on board the lighter LCT “Batman”. Accordingly, Ganzon sent his lighter “Batman” to
Mariveles. Tumambing then delivered the scrap iron for loading to Filomeno Niza, the lighter’s captain. However,
when about half of the scrap iron was being loaded, Mayor Advincula of Mariveles, Bataan, demanded P5,000 from
Tumambing. The latter refused, an altercation started, until Mayor Advincula fired his gun at Tumambing, who was
later brought to a hospital in Balanga, Bataan. After sometime, the loading of the scrap iron resumed. However,
Acting Mayor Basilio Rub, accompanied by 3 policemen, ordered Captain Niza and its crew to dump the scrap iron
where the lighter was docked. The remaining scrap iron was confiscated and brought to the compound of NASSCO.
A receipt was issued by the Acting Mayor stating that he had taken custody of the scrap iron. Hence, Tumambing
filed an action against Ganzon for damages based on culpa contractual. Ganzon claims that he should not be liable
because the scrap iron has not been unconditionally placed under his custody and control.

Issue Whether or not Ganzon is liable for Tumambing’s loss.

Ruling Yes, Ganzon is liable. Ratio Decidendi. Ganzon may be exempt from liability if the loss of the scrap iron was
due to any of the causes enumerated under Art. 1734 of the NCC. However, Ganzon was not able to prove the
same. Art 1743 provides as follows: Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following causes only: (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 of 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. Lastly, the SC cannot sustain Ganzon’s claim that the
cause of the loss was a caso fortuito considering that in the courts below, his defense was that the loss of the scrap
iron was due to an “order or act of a competent public authority”. Such change in theory on appeal cannot be allowed.
In any case, the intervention of the municipal officials is not of such character as would render the fulfilment of
Ganzon’s obligation impossible. According to the SC, the scrap iron could have still been delivered in accordance
with the contract of carriage after the dispute has been settled.
 8. Defenses in Carriage of Passengers
9. Acts of Employees
a. Passenger has no duty to inquire

Silverio Merhcan v. Mendoza

FACTS: Respondents Arsenio Mendoza, Leonarda Ilaya and Zenaida Mendoza boarded a bus owned and operated
by Philippine Rabbit Bus Lines driven by Silverio Marchan. While travelling on its way to Manila, it fell into a ditch
causing the passengers inside the bus to be thrown out to the ground resulting in their multiple injuries. Thereafter,
Marchan was convicted for serious, less serious and slight physical injuries through reckless imprudence.

As such, respondents filed to recover damages from herein petitioners. Petitioners, on the other hand, contends there
is can be no implied contract of carriage between them and the passengers, hence, there can be no basis for the
recovery of damages from breach of contract.

ISSUE: Whether or not Article 1759 is applicable in the present case.

HELD: YES, there is a contract of carriage between the parties and Article 1759 is applicable in the case at bar.
Respondents were waiting for a passenger bus and the moment they boarded the bus being driven by Marchan, they
were treated as passengers thereto, for they paid their corresponding fees. The riding public is not expected to inquire
from time to time before hey board the passenger bus whether or not the driver who is at the steering wheel of said
bus was authorized to drive said vehicle or that said driver is acting within the scope of his authority and observing the
existing rules and regulations required of him by the management.

Common carriers cannot escape liability “for the death of or injuries to passengers through the negligence and willful
acts of the former’s employees, although such employees may have acted beyond the scope of their authority or in
violation of orders”. Clearly, the applicability of Article 1759 is indisputable.

Maranan vs. Perez

Facts: Rogelio Corachea, a passenger in a taxicab owned and operated by Pascual Perez, was stabbed and killed by
the driver, Simeon Valenzuela. Valenzuela was found guilty for homicide by the Court of First Instance and was
sentenced to suffer Imprisonment and to indemnify the heirs of the deceased in the sum of P6000. While pending
appeal, mother of deceased filed an action in the Court of First Instance of Batangas to recover damages from Perez
and Valenzuela. Defendant Perez claimed that the death was a caso fortuito for which the carrier was not liable. The
court a quo, after trial, found for the plaintiff and awarded her P3,000 as damages against defendant Perez. The claim
against defendant Valenzuela was dismissed. From this ruling, both plaintiff and defendant Perez appealed to this
Court, the former asking for more damages and the latter insisting on non-liability. Defendant-appellant relied solely on
the ruling enunciated in Gillaco vs. Manila Railroad Co. that the carrier is under no absolute liability for assaults of its
employees upon the passengers.

Issue: Whether or not Perez should be held liable for the death of the passenger?

Held: Yes. The basis of the carrier's liability for assaults on passengers committed by its drivers rests on the principle
that it is the carrier's implied duty to transport the passenger safely. As between the carrier and the passenger, the
former must bear the risk of wrongful acts or negligence of the carrier's employees against passengers, since it, and
not the passengers, has power to select and remove them. Common carriers are liable for the death of or injuries to
passengers through the negligence or willful acts of the former’s employees, although such employees may have acted
beyond the scope of their authority or in violation of the orders of the common carriers. The liability of the common
carriers does not cease upon proof that they exercised all the diligence of a good father of a family in the selection and
supervision of their employees. (Art. 1759)

The attendant facts and controlling law of that case and the one at bar were very different. In the Gillaco case, the
passenger was killed outside the scope and the course of duty of the guilty employee. The Gillaco case was decided
under the provisions of the Civil Code of 1889 which, unlike the present Civil Code, did not impose upon common
carriers absolute liability for the safety of passengers against willfull assaults or negligent acts committed by their
employees. The death of the passenger in the Gillaco case was truly a fortuitous event which exempted the carrier
from liability. It is true that Art. 1105 of the old Civil Code on fortuitous events has been substantially reproduced in Art.
1174 of the Civil Code of the Philippines but both articles clearly remove from their exempting effect the case where
the law expressly provides for liability in spite of the occurrence of force majeure. The Civil Code provisions on the
subject of Common Carriers are new and were taken from Anglo-American Law. The basis of the carrier's liability for
assaults on passengers committed by its drivers rested either on the doctrine of respondent superior or the principle
that it was the carrier's implied duty to transport the passenger safely. Under the second view, upheld by the majority
and also by the later cases, it was enough that the assault happens within the course of the employee's duty. It was
no defense for the carrier that the act was done in excess of authority or in disobedience of the carrier's orders. The
carrier's liability here was absolute in the sense that it practically secured the passengers from assaults committed by
its own employees.

Yu Con v. Ipil, GR No. L-10195, December 29, 1916

b. Rationale
Baliwag Transit, Inc. vs. CA, 256 SCRA 746
LRTA vs. Natividad, 397 SCRA 75
Mallari, Sr. v. Court of Appeals, 324 SCRA 147
Maranan vs. Perez, 20 SCRA 412
Pestano v. Sumayang, GR No. 139875, December 4, 2000
Raynera vs. Hiceta
G.R. No. 120027 | April 21, 1999

FACTS:
1. Petitioner Edna Raynera was the widow of Reynaldo Raynera and the mother and legal guardian of the minors
Rianna and Reianne
2. Respondents Freddie Hiceta and Jimmy Orpilla were the owner and driver, respectively, of an Isuzu truck-
trailer, involved in the accident.
3. March 23, 1989, at about 2am:
- Reynaldo Raynera was on his way home. He was riding a motorcycle traveling on the southbound lane
of East Service Road, Cupang, Muntinlupa.
- The Isuzu truck was travelling ahead of him at 20 to 30 kilometers per hour. The truck was loaded with
two (2) metal sheets extended on both sides, two (2) feet on the left and three (3) feet on the right. There
were two (2) pairs of red lights, about 35 watts each, on both sides of the metal plates.
- The asphalt road was not well lighted.
- At some point on the road, Reynaldo Raynera crashed his motorcycle into the left rear portion of the
trucktrailer, which was without tail lights.
- Due to the collision, Reynaldo sustained head injuries and truck helper Geraldino D. Lucelo rushed him
to the Parañaque Medical Center.
- Upon arrival at the hospital, the attending physician, Dr. Marivic Aguirre, pronounced Reynaldo Raynera
dead on arrival.
4. At the time of his death, Reynaldo was the manager of the Engineering Department, Kawasaki Motors (Phils.)
Corporation; 32 y/o; had a life expectancy of 65 y/o; annual net earnings of not less than P73,500
5. Heirs of deceased demanded from respondents payment of damages arising from the death of Reynaldo
Raynera as a result of the vehicular accident
6. Respondents refused to pay the claims
 7. Petitioners filed with RTC Manila a complaint for damages against respondents owner and driver of Isuzu
truck
- Sought recovery of damages for the death of Raynera caused by the negligent operation of the truck-
trailer at nighttime on the highway, without tail lights
8. Respondents:
- Truck was travelling slowly on the service road, not parked improperly at a dark portion of the road, with
no tail lights, license plate and early warning device
9. TC: in favor of petitioners; found respondents negligent because the truck had no license plate and tail lights;
there were only 2 pairs of red lights, 50 watts each, on both sides of the steel plates; the truck was improperly
parked in a dark area; the respondents’ negligence was the immediate and proximate cause of Raynera’s
death; reduced responsibility of respondents by 20% on account of victim’s own negligence
10. Respondents appealed to CA
11. CA: Raynera’s bumping into the left rear portion of the truck was the proximate cause of his death, and
consequently, absolved respondents from liability
12. Hence, this petition for review on certiorari

ISSUE: Whether or not respondents were negligent; If so, whether such negligence was the proximate cause
of the death of Reynaldo Raynera

HELD: NO

RATIO:
“Negligence is the omission to do something which a reasonable man, guided by those considerations which ordinarily
regulate the conduct of human affairs, would do, or the doing of something, which a prudent and reasonable man would
not do.”

Proximate cause is “that cause, which, in natural and continuous sequence, unbroken by any efficient intervening
cause, produces the injury, and without which the result would not have occurred.”

During the trial, it was established that the truck had no tail lights. The photographs taken of the scene of the accident
showed that there were no tail lights or license plates installed on the Isuzu truck. Instead, what were installed were
two (2) pairs of lights on top of the steel plates, and one (1) pair of lights in front of the truck. With regard to the rear of
the truck, the photos taken and the sketch in the spot report proved that there were no tail lights.

Despite the absence of tail lights and license plate, respondents’ truck was visible in the highway. It was traveling at a
moderate speed, approximately 20 to 30 kilometers per hour. It used the service road, instead of the highway, because
the cargo they were hauling posed a danger to passing motorists. In compliance with the Land Transportation Traffic
Code (Republic Act No. 4136), respondents installed 2 pairs of lights on top of the steel plates, as the vehicle’s cargo
load extended beyond the bed or body thereof.

We find that the direct cause of the accident was the negligence of the victim. Traveling behind the truck, he had
the responsibility of avoiding bumping the vehicle in front of him. He was in control of the situation. His motorcycle was
equipped with headlights to enable him to see what was in front of him. He was traversing the service road where the
prescribed speed limit was less than that in the highway.

Traffic investigator Cpl. Virgilio del Monte testified that two pairs of 50watts bulbs were on top of the steel plates, which
were visible from a distance of 100 meters. Virgilio Santos admitted that from the tricycle where he was on board, he
saw the truck and its cargo of iron plates from a distance of ten (10) meters. In light of these circumstances, an accident
could have been easily avoided, unless the victim had been driving too fast and did not exercise due care and prudence
demanded of him under the circumstances.
It has been said that drivers of vehicles “who bump the rear of another vehicle” are presumed to be “the cause of the
accident, unless contradicted by other evidence.” The rationale behind the presumption is that the driver of the rear
vehicle has full control of the situation as he is in a position to observe the vehicle in front of him.

Cangco v. Manila Railroad Co., No. 12191, October 14, 1918

9. Acts of Other Passengers and Third Persons
Bachelor Express vs. CA, 188 SCRA 217
De Guzman v. Court of Appeals and Cendana, GR No. L-47822, December 12, 1988
Fortune Express, Inc. v. Court of Appeals, et al., GR No. 119756, March 18, 1999
Gacal vs. PAL, 183 SCRA 189
Mendoza and Lim v. Sps. Gomez, G.R. No. 160110, June 18, 2014
Pilapil v. Court of Appeals et al., GR No. 52159, December 22, 1989
Bacarro et al. v. Castano, No. 34597, November 5, 1982
10. Acts of the Shipper or the Passenger
a. Contributory Negligence of the Shipper
Sealoader Shipping Corporation v. Grand Cement Manufacturing, et al., GR Nos. 167363,
December 15, 2010
b. Contributory Negligence of the Passenger
Fortune Express, Inc. v. Court of Appeals, GR No. 119756, March 18, 1999
c. Causation
Cervantes v. Court of Appeals, GR No. 125138, March 2, 1999
d. Avoidable Consequences
e. Assumption of Risk
Japan Airlines v. Court of Appeals, GR No. 118664, August 7, 1998
Calalas v. Court of Appeals, GR No. 122039, May 31, 2000
f. Doctrine of Last Clear Chance
Philippine Rabit Bus Lines , Inc. v. IAC, et al., GR Nos. 66102-4, August 30, 1990
Bustamante v. Court of Appeals, No. 89880, February 6, 1991
Tiu v. Arriesgado, 437 SCRA 426
Isaac v. AL Ammen Trasportation Co., Inc., GR No. L-9671, August 23, 1957
Compania Maritima v. Court of Appeals, GR No. L-31379, August 29, 1988
Cangco v. Manila Railroad Co., GR No. 12191, October 14, 1918
Del Prado v. Manila Electric Co., GR No. 29462, March 7, 1929
Philippine National Railways v. Court of Appeals, GR No. L-55347, October 4, 1985
11. Notice of Claim
a. Claim in Overland Transportation and Coastwise Shipping
MCC Industrial Sales Corporation v. Ssyangyong Corporation, 536 SCRA 408
Philippine American General Insurance Co., Inc. v. Sweetlines, Inc. et al, GR No. 87434,
August 5, 1992
Government of the Philippine Islands v. Inchausti & Co., GR No. L – 6957, February 14, 1913
b. Notice of Claim in International Carriage of Goods by Sea
Philippine American General Insurance Co., Inc. v. Sweetlines, Inc. et al, GR No. 87434,
August 5, 1992
UCPB General Insurance Co., Inc. v. Aboitiz Shipping Corp., et al., GR No. 168433, February
10, 2009
Philippine Charter Insurance Corporation v. Chemoil Lighterage Corporation, GR No. 136888,
June 29, 2005
Southern Lines Inc. v. Court of Appeals, GR No. L-16629, January 31, 1962
Roldan v. Ponzo & Co., GR No. L-11325, December 7, 1917
EE Elser Inc. et al. v. Court of Appeals, et al., GR No. L-6517, November 29, 1954
Lorenzo Shipping v. Court of Appeals, September 28, 1999
12. Prescription in Overland Transportation and Coastwise Shipping
 i. Prescription in International Carriage of Goods
Roldan v. Ponzo & Co., GR No. L-11325, December 7, 1917
Asian Terminals, Inc. v. Philam Insurance Co., Inc., GR No. 181163, July 24, 2013
Belgian Overseas Chartering and Shipping NV v. Philippine First Insurance Co., Inc.
GR No. 143133, June 5, 2002

Dole Philippines v. Maritime Co., 148 SCRA 118

Ang v. Compania Maritima et al., GR No. L-30805, December 26, 1984
Mitsui v. Court of Appeals, 287 SCRA 366
Cua v. Wallem Philippines Shipping, Inc. GR No. 171337, July 11, 2012
ii. Prescription and Subrogation
Fil Merchants v. Alejandro, 145 SCRA 42 (1986)
Vector Shipping Corporation v. American Home Assurance Co., GR No. 159213, July
3, 2013
14. Notice of Claim and Prescription in Air Transportation
i. Rules under the Warsaw Convention
Federal Express v. American Home Assurance, GR No. 150094, August 18, 2004
PAL v. Savillo, July 4, 2008
15. Limiting Stipulations
Lara vs. Valencia, 104 Phil. 65

NATURE: Action for damages

SUMMARY: Deceased Lara went to Parang to classify Valencia's logs but during said period he contracted malaria
fever so he wanted to return to Davao immediately. Since there were no available buses, he, together with other
passengers, asked for a ride in Valencia's pick-up up to Cotabato. However, there were still no buses so they continued
towards Davao in Valencia's pick-up. On the way, Lara, fell and suffered fatal injuries which caused his death. CFI held
Valencia civilly liable. SC: Reverse CFI. Lara is only an accommodation passenger and therefore, Valencia is only
required to observe ordinary care, and is not in duty bound to exercise extraordinary diligence as required of a common
carrier by our law. There is nothing there to indicate that Valencia has acted with negligence or without taking the
precaution that an ordinary prudent man would have taken under similar circumstances. Incident can be attributed to
lack of care on the part of the deceased considering that the pick-up was open and he was then in a crouching position.
DOCTRINE: The owner or operator of an automobile owes the duty to an invited guest to exercise reasonable care in
its operation, and not unreasonably to expose him to danger and injury by increasing the hazard of travel. A passenger
must observe the diligence of a good father of a family to avoid injury to himself", which means that if the injury to the
passenger has been proximately caused by his own negligence, the carrier cannot be held liable.

FACTS:
 Deceased Demetrio Lara, Sr. was an inspector of the Bureau of Forestry stationed in Davao with an annual
salary of P1,800 while defendant Valencia is engaged in the business of exporting logs from his lumber
concession in Cotabato.
 Lara went to said concession upon instructions of his chief to classify the logs of Valencia which were about
to be exported and loaded on a ship anchored in the port of Parang. The work of Lara lasted for 6 days during
which he contracted malaria fever and for that reason he evinced a desire to return immediately to Davao.
However, at that time, there was no available bus that could take him back to Davao
 Jan 9, 1954 (AM): Lara, who was then in a hurry to return to Davao, asked Valencia if he could take him
in his pick-up as there was then no other means of transportation, to which Valencia agreed, and in
that same morning the pick-up left Parang bound for Davao taking along 6 passengers who were gov't
employees, including Lara.
o The pick-up has a front seat where the driver and 2 passengers can be accommodated and the back
has a steel flooring enclosed with a steel walling of 16 to 17 inches tall on the sides and with a 19
inches tall walling at the back.
 Before leaving Parang, the sitting arrangement was as follows:
 o Valencia was at the wheel and seated with him in the front seat were Mrs. Valencia and Nicanor
Quinain
o On the back of the pick-up were 2 improvised benches placed on each side, and seated on the right
bench were Ricardo Alojipan and Antonio Lagahit, and on the left one Bernardo and Pastor
Geronimo.
o A person by the name of Leoning was seated on a box located on the left side while in the middle
Lara sat on a bag.
 Before leaving Parang, Valencia invited Lara to sit with him on the front seat but Lara declined. It was their
understanding that upon reaching barrio Samoay, Cotabato, the passengers (including Lara) were to alight
and take a bus bound for Davao, but when they arrived at that place, only Bernardo alighted and the other
passengers requested Valencia to allow them to ride with him up to Davao because there was then no
available bus that they could take in going to that place. Valencia again accommodated the passengers.
 When they continued their trip, the sitting arrangement of the passengers remained the same, Lara being
seated on a bag in the middle with his arms on a suitcase and his head covered by a jacket.
 Upon reaching Km. 96, barrio Catidtuan, Lara accidentally fell from the pick-up and as a result he
suffered serious injuries.
 Valencia stopped the pick-up to see what happened to Lara. He sought the help of the residents of that place
and applied water to Lara but to no avail.
 They brought Lara to the nearest place where they could find a doctor and not having found any they took
him to St. Joseph's Clinic of Kidapawan. But when Lara arrived he was already dead.
 From there they proceeded to Davao City and immediately notified the local authorities. An investigation was
made regarding the circumstances surrounding the death of Lara but no criminal action was taken against
defendant.
 An action for damages was brought by plaintiffs (relatives of Lara) against Valencia in CFI of Davao for
Lara's death allegedly caused by the negligent act of Valencia.
 Valencia denied the charge of negligence and set up certain affirmative defenses and a counterclaim.
 CFI: Valencia failed to observe ordinary care or diligence in transporting the deceased from Parang to Davao.
Pay Lara et al: (a) P10k (MD) (b) P3k (ED) and (c) P1k (AF)
o The journey from Cotabato to Davao is not less than 8 hours, the road is in poor condition, uneven,
with protruding rocks and potholes that make up not stable in their vehicle. Lara was sick of a certain
severity, had the body and swollen face, attacked by malaria, headaches and rashes on the face
and body.
o Valencia ought to know that it was extremely dangerous to carry 5 passengers in the back of the
pick-up, particularly for the health of Lara. He did not exercise the proper precautions to avoid
possible fatal accidents.
o Lara's refusal to occupy the front seat does not constitute a defense because Valencia, knowing the
poor health of Lara, should not have allowed him to return to Davao in his pickup. If he wanted to
accommodate Lara, he should have provided Lara of an automobile to return to Davao or left Lara
in Samoay to catch a passenger bus from Cotabato to Davao. (di ako sure, Spanish e)
 Both parties appealed to SC because the damages claimed in the complaint exceed the sum of P50,000.
o Lara et al: CFI erred in disregarding their claim of P41,400 as AD and P3000 as AF
o Valencia: Death of Demetrio Lara, Sr. was not due to his negligence but to unavoidable accident.

ISSUE: Whether Valencia as driver & owner of the vehicle should be held liable for the death of his passenger, Lara
Sr.?
(NO)
RATIO:
 The accident occurred not due to the negligence of Valencia but to circumstances beyond his control and so
he should be exempt from liability.
  Deceased Lara, as well as his companions who rode in the pick-up of Valencia were merely accommodation
passengers who paid nothing for the service and so they can be considered as invited guests within
the meaning of the law.
 As accommodation passengers or invited guests, Valencia as owner and driver of the pick-up owes to them
merely the duty to exercise reasonable care so that they may be transported safely to their destination.

OBLIGATION OF OWNER TO INVITED GUESTS/ACCOMMODATION PASSENGERS: REASONABLE/ORDINARY

CARE
 The owner or operator of an automobile owes the duty to an invited guest to exercise reasonable care
in its operation, and not unreasonably to expose him to danger and injury by increasing the hazard of
travel.
 An owner of an automobile owes a guest the duty to exercise ordinary or reasonable care to avoid injuring
him.
 5 Am. Jur., 626-627: Since one riding in an automobile is no less a guest because he asked for the privilege
of doing so, the same obligation of care is imposed upon the driver as in the case of one expressly invited
to ride".
 Valencia, therefore, is only required to observe ordinary care, and is not in duty bound to exercise
extraordinary diligence as required of a common carrier by our law (Articles 1755 and 1756, new Civil
Code).

ORDINARY CARE: PRESENT

 Facts found CFI are not sufficient to show that Valencia has failed to take the precaution necessary to conduct
his passengers safely to their place of destination. There is nothing there to indicate that Valencia has
acted with negligence or without taking the precaution that an ordinary prudent man would have taken
under similar circumstances.
 Lara went to the lumber concession of Valencia in answer to a call of duty which he was bound to perform
because of the requirement of his office and he contracted the malaria fever in the course of the performance
of that duty.
 Valencia was not in duty bound to take the deceased in his own pick-up to Davao because from Parang to
Cotabato there was a line of transportation that regularly makes trips for the public, and if Valencia agreed to
take the deceased in his own car, it was only to accommodate him considering his feverish condition and his
request that he be so accommodated.
 The passengers who rode in the pick-up of Valencia took their respective seats therein at their own choice
and not upon indication of Valencia with the particularity that Valencia invited the deceased to sit with
him in the front seat but which invitation the deceased declined.
 It was Lara's own desire to be at the back so that he could sit on a bag and travel in a, reclining position
because such was more convenient for him due to his feverish condition.
 Unfortunate happening was only due to an unforeseen accident caused by the fact that at the time Lara was
half asleep and must have fallen from the pick-up when it ran into some stones causing it to jerk considering
that the road was then bumpy, rough and full of stones.
 CFI: Pick-up was running at more than 40 kmh
 SC: Not supported by the evidence. This is a mere surmise made by CFI considering the time the pick-up left
barrio Samoay and the time the accident occured in relation to the distance covered by the pick-up. And even
if this is correct, such speed is not unreasonable considering that they were traveling on a national road and
the traffic then was not heavy.
 DUTY OF PASSENGER: Incident can be attributed to lack of care on the part of the deceased considering
that the pick-up was open and he was then in a crouching position. "A passenger must observe the
diligence of a good father of a family to avoid injury to himself" (Article 1761, new Civil Code), which
means that if the injury to the passenger has been proximately caused by his own negligence, the
carrier cannot be held liable.
DISPOSITIVE: Decision appealed from is reversed.