GACAL v PAL

GR L55300 March 15 1990

FACTS:
This is a petition for review on certiorari after the lower court ruled that it was attributed to force majeure
the damages sustained by the petitioners, who were passengers of flight from Davao to Manila via PAL,
which was hijacked by Commander Zapata and other 5 members of the Moro National Liberation Front
(MNLF) –three (3) armed with grenades, two (2) with .45 caliber pistols, and one with a .22 caliber pistol.
When the plane was about to leave in the runway, after being forced to refuel in Zamboanga from
Sabah-Libya, it was apprehended by two armored cars of the military leading to a battle which resulted to
the deaths of ten (10) passengers and three (3) hijackers, while plaintiffs were injured.

ISSUE: Will the PAL be exempted from its liability due to force majeure?

HELD:
Yes, PAL will be exempted. In order to constitute a caso fortuito or force majeure that would exempt from
liability under Art 1174 of the civil code, it is necessary that the following elements must occur: (a) the
cause of the breach of obligation must be independent of human will; (b) the event must be
unforeseeable or unavoidable; (c) the event must be such as to render it impossible for the debtor to fulfill
his obligation in a normal manner; (d) the debtor must be free from any participation in or aggravation of
the injury to the creditor. Applying the above guidelines, the failure to transport the petitioners safely
from Davao to Manila was due to the skyjacking incident staged buy the MNLF without connection to the
private respondent, hence, independent of will of PAL or its passengers. The events rendered it impossible
for PAL to perform its obligation in a normal manner and it cannot be faulted for negligence on the duty
performed by the military. The existence of force majeure has been established thus exempting PAL from
payment of damages.

SOUTHERN LINES v CA
(G.R. No. L-16629)

FACTS:
The City of Iloilo requisitioned for rice from the National Rice and Corn Corporation (NARIC) in Manila.
NARIC, pursuant to the order, shipped 1,726 sacks of rice consigned to the City of Iloilo on board the SS
“General Wright” belonging to the Southern Lines, Inc.

The City of Iloilo received the shipment and paid the total charged amount. However, it was discovered in
the bill of lading that there was shortage equivalent to 41 sacks of rice. The City of Iloilo filed a complaint
against NARIC and the Southern Lines, Inc. for the recovery of the amount representing the value of the
shortage of the shipment of rice. The lower court absolved NARIC, but held Southern Lines, Inc. liable to
pay the shortage. CA affirmed the trial court’s decision, hence, this petition.

ISSUES:
(1) W/N Southern Lines is liable for the loss or shortage of the rice shipped;
(2) W/N the action was filed on time.

RULING:
(1) YES. Under the provisions of Article 361, the defendant-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 the provisions of Article 362, the plaintiff, in order to hold the defendant liable, was
obliged to prove that the damages to the goods by virtue of their nature, occurred on account of its
negligence or because the defendant did not take the precaution adopted by careful persons.
The contention is untenable, for, 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. Petitioner itself frankly admitted that the strings
that tied the bags of rice were broken; some bags were with holes and plenty of rice were spilled inside
the hull of the boat, and that the personnel of the boat collected no less than 26 sacks of rice which they
had distributed among themselves. This finding, which is binding upon this Court, shows that the shortage
resulted from the negligence of petitioner.

(2) YES. Respondent filed the present action, within a reasonable time after the short delivery in the
shipment of the rice was made. It should be recalled that the present action is one for the refund of the
amount paid in excess, and not for damages or the recovery of the shortage; for admittedly the
respondent had paid the entire value of the 1726 sacks of rice, subject to subsequent adjustment, as to
shortages or losses. The bill of lading does not at all limit the time for filing an action for the refund of
money paid in excess.

GANZON v CA
GR. No. L-48757, 30 May 1988, 161 SCRA 646

FACTS:
Private respondent Tumambing contracted the services of petitioner Ganzon to haul 305 tons of scrap iron
from Bataan to the port of Manila on board the lighter LCT “Batman.” Petitioner sent his lighter with its
Captain Filomeno to dock at Mariveles, where respondent Tumambing delivered the scrap irons for
loading which also begun on the same day. Mayor Advincula arrived at the port and demanded P 5,000
shakedown from respondent. The two ended up in a heated argument where respondent had to be taken
to a hospital to be treated of a gunshot wound. After sometime, the loading of the scrap iron was resumed.
But now, the Acting Mayor together with 3 policemen ordered Captain Filomeno to dump the scrap iron
where the lighter was docked and the rest to be brought to NASSCO compound. Later, the Acting Mayor
issued a receipt stating that the Municipality had taken custody of the scrap iron. Respondent instituted
an action for damages against petitioner. Respondent Court found in favor for Tumambing.

ISSUE:
Whether or not petitioner Ganzon, a common carrier, can be exempt from liability by invoking order of
competent authority.

RULING:
No. The petitioner has failed to show that the loss of the scraps was due to any of the following causes
enumerated in Article 1734 of the Civil Code.
Before the appellee Ganzon could be absolved from responsibility on the ground that he was ordered by
competent public authority to unload the scrap iron, it must be shown that Acting Mayor Basilio Rub had
the power to issue the disputed order, or that it was lawful, or that it was issued under legal process of
authority. The appellee failed to establish this. Indeed, no authority or power of the acting mayor to issue
such an order was given in evidence. Neither has it been shown that the cargo of scrap iron belonged to
the Municipality of Mariveles.

The fact remains that the order given by the acting mayor to dump the scrap iron into the sea was part of
the pressure applied by Mayor Jose Advincula to shakedown the appellant for P5,000.00. The order of the
acting mayor did not constitute valid authority for appellee Mauro Ganzon and his representatives to carry
out. The petitioner was not duty bound to obey the illegal order to dump into the sea the scrap iron.

BACARROS v. CASTANO
(GR L-34597, 5 November 1982)

FACTS: Respondent Castano boarded a jeep driven by Petitioner Montefalcon who thereafter drove it at
around 40 kilometers per hour. While approaching Sumasap Bridge at the said speed, a cargo truck
coming from behind, blowing its horn to signal its intention to overtake the jeep. The jeep, without
changing its speed, gave way by swerving to the right, such that both vehicles ran side by side for a
distance of around
20 meters. Thereafter as the jeep was left behind, its driver was unable to return it to its former lane and
instead it obliquely or diagonally ran down an inclined terrain towards the right until it fell into a ditch
pinning down and crushing Castano’s right leg in the process. Castano filed a case for damages against
Rosita Bacarro, William Sevilla, and Felario Montefalcon. Defendants alleged that the jeepney was
sideswiped by the overtaking cargo truck. After trial, the CFI of Misamis Oriental ordered Bacarro, et.al. to
jointly and severally pay Castano. It was affirmed by the CA upon appeal.

ISSUES
1. Whether or not there was a contributory negligence on the part of the jeepney driver.
2. Whether or not extraordinary diligence is required of the jeepney driver.
3. Whether or not the sideswiping is a fortuitous event.

HELD:
1.) Yes. The fact is, petitioner-driver Montefalcon did not slacken his speed but instead continued to run
the jeep at about forty (40) kilometers per hour even at the time the overtaking cargo truck was running
side by side for about twenty (20) meters and at which time he even shouted to the driver of the truck.

2.) Yes. The fact is, there was a contract of carriage between the private respondent and the herein
petitioners in which case the Court of Appeals correctly applied Articles 1733, 1755 and 1766 of the Civil
Code which require the exercise of extraordinary diligence on the part of petitioner Montefalcon.

3.) The third assigned error of the petitioners would find fault upon respondent court in not freeing
petitioners from any liability, since the accident was due to a fortuitous event. But, We repeat that the
alleged fortuitous event in this case - the sideswiping of the jeepney by the cargo truck, was something
which could have been avoided considering the narrowness of the Sumasap Bridge which was not wide
enough to admit two vehicles. As found by the Court of Appeals, Montefalcon contributed to the
occurrence of the mishap.

BACHELOR EXPRESS, INC. V. COURT OF APPEALS

GR. No. 85691, 31 July 1990, 188 SCRA 216

FACTS:

– On Aug 1980, a bus owned by Bachelor Express, Inc. (BEI) and driven by Cresencio Rivera came from
Davao City on its way to Cagayan de Oro City passing Butuan City.
– While at Tabon-Tabon, Butuan City, the bus picked up a passenger and about 15 mins later, a
passenger at the rear portion suddenly stabbed a PC soldier which caused commotion and panic among
the passengers.
– When the bus stopped, passengers Ornominio Beter and Narcisa Rautraut were found lying down the
road, the former already dead as a result of head injuries and the latter also suffering from severe injuries
which caused her death later.
– The passenger assailant alighted from the bus and ran toward the bushes but was killed by the police.
Thereafter, the heirs of Ornominio Beter and Narcisa Rautraut, private respondents herein the parents of
Beter and Rautraut.
– RTC dismissed the complaint. Upon appeal, the decision was reversed and set aside. CA found BEI and
Rivera solidarily liable to pay the private respondents herein.

ISSUE:
1. What was the proximate cause of the whole incident?
2. Whether or not the petitioner’ common carrier observed extraordinary diligence to safeguard the lives
of its passengers? NO

RULING:
1. Petitioner, in order to overcome the presumption of fault/negligence under the law, states that the
vehicular incident resulting in the death of the passengers Beter and Rautraut was caused by force
majeure/casa fortuito.

The following essential characteristics of casa fortuito are: (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.

The running amuck of the passenger was the proximate cause of the incident as it triggered off a
commotion and panic among passengers started running to the sole exit shoving each other resulting in
the falling off the passengers Beter and Rautraut causing them fatal injuries. The sudden act of the
passenger who stabbed another passenger in the bus is within context of force majeure.

MARANAN V. PEREZ
G.R. No. L-22272, 26 June 1967, 20 SCRA 412

FACTS:
Rogelio Corachea, on October 18, 1960, was a passenger 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 P6,000. 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 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 the defendant Perez. The claim against 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 the 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 provision 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 willful 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 event 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 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 or 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.

JAPAN AIRLINES V. COURT OF APPEALS

G.R. No. 118664, 7 August 1998, 294 SCRA 19

FACTS:
In 1991, private respondent Jose Miranda boarded Japan Airlines (JAL) flight No. JL 001 in San Francisco,
California bound for Manila. Likewise, on the same day private respondents Enrique Agana, Maria Angela
Nina Agana and Adelia Francisco left Los Angeles, California for Manila via JAL flight No. JL 061.
As an incentive for travelling on the said airline, both flights were to make an overnight stopover at Narita,
Japan, at the airlines expense, thereafter proceeding to Manila the following day.

Upon arrival at Narita, private respondents were lodged at Hotel Nikko Narita for the night. The next day,
private respondents, on the final leg of their journey, went to the airport to take their flight to Manila.
However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy Aquino International
Airport (NAIA), rendering it inaccessible to airline traffic. Hence, private respondents trip to Manila was
cancelled indefinitely.

To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-bound passengers due
to depart on June 16, 1991 and also paid for the hotel expenses for their unexpected overnight stay.
On June 16, 1991, much to the dismay of the private respondents, their long anticipated flight to Manila
was again cancelled due to NAIA’s indefinite closure. At this point, JAL informed the private respondents
that it would no longer defray their hotel and accommodation expense during their stay in Narita.
Since NAIA was only reopened to airline traffic on June 22, 1991, private respondents were forced to pay
for their accommodations and meal expenses from their personal funds from June 16 to June 21, 1991.
Their unexpected stay in Narita ended on June 22, 1991 when they arrived in Manila on board JL flight No.
741. Obviously, still reeling from the experience, private respondents, on July 25, 1991, commenced an
action for damages against JAL before the RTC of Quezon City.

To support their claim, private respondents asserted that JAL failed to live up to its duty to provide care
and comfort to its stranded passengers when it refused to pay for their hotel and accommodation
expenses from June 16 to 21, 1991 at Narita, Japan. In other words, they insisted that JAL was obligated to
shoulder their expenses as long as they were still stranded in Narita. On the other hand, JAL denied this
allegation and averred that airline passengers have no vested right to these amenities in case a flight is
cancelled due to force majeure.

The trial court rendered its judgment in favor of private respondents holding JAL liable for damages.
Undaunted, JAL appealed the decision of the CA, which, affirmed the trial court’s finding. JAL filed a
motion for reconsideration which proved futile and unavailing. Failing in its bid to reconsider the decision,
JAL has now filed this instant petition.

ISSUE:
Whether JAL, as a common carrier has the obligation to shoulder the hotel and meal expenses of its
stranded passengers until they have reached their final destination, even if the delay were caused by force
majeure.
RULING:
No. In a plethora of cases it was ruled that a contract to transport passengers is quite different in kind and
degree from any other contractual relation. It is safe to conclude that it is a relationship imbued with
public interest. Failure on the part of the common carrier to live up to the exacting standards of care and
diligence renders it liable for any damages that may be sustained by its passengers.
However, this is not to say that common carriers are absolutely responsible for all injuries or damages
even if the same were caused by a fortuitous event. To rule otherwise would render the defense of force
majeure, as an exception from any liability, illusory and ineffective.

Accordingly, there is no question that when a party is unable to fulfill his obligation because of force
majeure, the general rule is that he cannot be held liable for damages for non-performance. Corollarily,
when JAL was prevented from resuming its flight to Manila due to the effects of Mt. Pinatubo eruption,
whatever losses or damages in the form of hotel and meal expenses the stranded passengers incurred,
cannot be charged to JAL.

Furthermore, it has been held that airline passengers must take such risks incident to the mode of travel.
In this regard, adverse weather conditions or extreme climatic changes are some of the perils involved in
air travel, the consequences of which the passenger must assume or expect. After all, common carriers are
not the insurer of all risks.

CALALAS V. COURT OF APPEALS

G.R. No. 122039, 31 May 2000, 332 SCRA 870

FACTS:
Sunga, then a college freshman majoring in Physical Education at the Siliman University, took a passenger
jeepney owned and operated by petitioner Vicente Calalas. As the jeepney was filled to capacity of about
24 passengers, 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.

On the way to Poblacion Sibulan, Negros Occidental, the jeepney stopped to let a passenger off. As she
was seated at the rear of the vehicle, Sunga gave way to the outgoing passenger. Just as she was doing so,
an Isuzu truck driven by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of
the jeepney. As a result, Sunga was injured. She sustained a fracture of the “distal third of the left
tibia-fibula with severe necrosis of the underlying skin.”

ISSUE:
Whether or not petitioner is liable on his contract of carriage.
RULING:
In case of death or injuries to passengers, Art. 1756 of the Civil Code provides that common carriers are
presumed to have been at fault or to have acted negligently unless they prove 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 actions for quasi-delict,
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 the parties, it is the parties themselves
who create the obligation, and the function of the law is merely to regulate the relation thus created.
Insofar as contracts of carriage are concerned, some aspects regulated by the Civil Code are those
respecting the diligence required of common carriers with regard to the safety of passengers as well as the
presumption of negligence in cases of death or injury to passengers. It provides:

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

Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and
1746, Nos. 5,6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth
in articles 1755 and 1756.

Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with due regard for all the
circumstances.
Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as
prescribed by articles 1733 and 1755.

In the case at bar, upon the happening of the accident, the presumption of negligence at once arose, and
it became the duty of petitioner to prove that he had to observe extraordinary diligence in the care of his
passengers.

Now, did the driver of jeepney carry Sunga “safely as far as human care and foresight could provide, using
the utmost diligence of very cautious persons, with due regard for all the circumstances” as required by
Art. 1755? We do not think so. Several factors militate against petitioner’s contention. First, as found by
the Court of Appeals, the jeepney was not properly parked, its rear portion being exposed about two
meters from the broad shoulders of the highway, and facing the middle of the highway in a diagonal angle.
This is a violation of the R.A. No. 4136, as amended, or the Land Transportation and Traffic Code, which
provides:

Sec. 54. Obstruction of Traffic. – No person shall drive his motor vehicle in such a manner as to obstruct
or impede the passage of any vehicle, nor, while discharging or taking on passengers or loading or
unloading freight, obstruct the free passage of other vehicles on the highway.
Second, it is undisputed that petitioner’s driver took in more passengers than the allowed seating
capacity of the jeepney, a violation of 32(a) of the same law. It provides:

Exceeding registered capacity. – No person operating any motor vehicle shall allow more passengers or
more freight or cargo in his vehicle than its registered capacity. The fact that Sunga was seated in an
“extension seat” placed her in a peril greater than that to which the other passengers were exposed.
Therefore, not only was petitioner unable to overcome the presumption of negligence imposed on him for
the injury sustained by Sunga, but also, the evidence shows he was actually negligent in transporting
passengers.

We find it hard to give serious thought to petitioner’s contention that Sungas taking an “extension seat”
amounted to an implied assumption of risk. It is akin to arguing that the injuries to the many victims of the
tragedies in our seas should not be compensated merely because those passengers assumed a greater risk
of drowning by boarding an overloaded ferry. This is also true of petitioner’s contention that the jeepney
being bumped while it was improperly parked constitutes caso fortuito. A caso fortuito is an event which
could not be foreseen, or which, though foreseen, was inevitable.This requires that the following
requirements be present: (a) the cause of the breach is independent of the debtors will; (b) the event is
unforeseeable or unavoidable; (c) the event is such as to render it impossible for the debtor to fulfill his
obligation in a normal manner, and (d) the debtor did not take part in causing the injury to the
creditor.Petitioner should have foreseen the danger of parking his jeepney with its body protruding two
meters into the highway.

PHIL. RABBIT BUS LINES V. INTERMEDIATE APPELLATE COURT

G.R. No. 66102-04, 30 August 1990, 189 SCRA 158

FACTS:
On December 24, 1966,passengers boarded the jeepney owned by spouses Isidro Mangune and Guillerma
Carreon and driven by Tranquilino Manalo at Pampanga bound for Pangasinan for P24.00. Upon reaching
Tarlac, the right rear wheel of the jeepney detached causing it to run in an unbalanced position. Driver
Manalo stepped on the brake, causing the jeepney to make a U-turn, invading and eventually stopping on
the opposite lane of the road (the jeepney’sfront faced the south (from where it came) and its rear faced
the north (towards where it was going).The jeepney occupied and blocked the greater portion of the
western lane, which is the right of way of vehicles coming from the north.
Petitioner Phil. Rabbit Bus Lines claims that almost immediately after the sudden U-turn the busbumped
the right rear portion of the jeep. Defendants, on the other hand, claim that the bus stoppeda few
minutes before hitting the jeepney. Either way, as a result of the collision, three passengers of the jeepney
(Catalina Pascua, Erlinda Meriales and Adelaida Estomo) died while the other jeepneypassengers
sustained physical injuries.A criminal complaint was filed against the two drivers for Multiple Homicide.
The case against delosReyes (driver of Phil. Rabbit) was dismissed for insufficieny of evidence. Manalo
(jeepney driver) was convicted and sentenced to suffer imprisonment.

Three complaints for recovery of damages were then filed before the CFI of Pangasinan: (1) Spouses
Casiano Pascua and Juana Valdez sued as heirs of Catalina Pascua while Caridad Pascua sued in her behalf;
(2) Spouses Manuel Millares and Fidencia Arcica sued as heirs of Erlinda Meriales; and (3) spouses
Mariano Estomo and Dionisia Sarmiento sued as heirs of Adelaida Estomo. All three cases impleaded
spouses Mangune and Carreon, Manalo (jeepney owners), Rabbit and delos Reyes as defendants. Plaintiffs
anchored their suits against spouses Mangune andCarreon and Manalo on their contractual liability. As
against Rabbit and delos Reyes, plaintiffs basedtheir suits on their culpability for a quasi-delict.
The respondent court applied primarily (1) the doctrine of last clear chance, (2) the presumption that
drivers who bump the rear of another vehicle guilty and the cause of the accident unless contradicted by
other evidence, and (3) the substantial factor test concluded that delos Reyes was negligent.

ISSUE: Whether or not the doctrine of last clear chance is applicable in this case.

RULING:
No. The doctrine is not applicable.
The principle about “the last clear” chance, would call for application in a suit between the owners and
drivers of the two colliding vehicles. It does not arise where a passenger demands responsibility from the
carrier to enforce its contractual obligations. For it would be inequitable to exempt the negligent driver of
the jeepney and its owners on the ground that the other driver was likewise guilty of negligence.” This
was the ruling in Anuran, et al. v. Buño et al., G.R. Nos. L-21353 and L-21354, May 20, 1966, 17 SCRA 224.
Thus, the respondent court erred in applying said doctrine.

On the presumption that drivers who bump the rear of another vehicle guilty and the cause of the
accident, unless contradicted by other evidence, the respondent court said:
. . . the jeepney had already executed a complete turnabout and at the time of impact was already facing
the western side of the road. Thus the jeepney assumed a new frontal position vis a vis, the bus, and the
bus assumed a new role of defensive driving. The spirit behind the presumption of guilt on one who
bumps the rear end of another vehicle is for the driver following a vehicle to be at all times prepared of a
pending accident should the driver in front suddenly come to a full stop, or change its course either
through change of mind of the front driver, mechanical trouble, or to avoid an accident. The rear vehicle is
given the responsibility of avoiding a collision with the front vehicle for it is the rear vehicle who has full
control of the situation as it is in a position to observe the vehicle in front of it.
The above discussion would have been correct were it not for the undisputed fact that the U-turn made by
the jeepney was abrupt.The jeepney, which was then traveling on the eastern shoulder, making a straight,
skid mark of approximately 35 meters, crossed the eastern lane at a sharp angle, making a skid mark of
approximately 15 meters from the eastern shoulder to the point of impact (Exhibit “K” Pascua). Hence,
delos Reyes could not have anticipated the sudden U-turn executed by Manalo. The respondent court did
not realize that the presumption was rebutted by this piece of evidence.

BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. V. PHILIPPINE FIRST INSURANCE CO.

FACTS:
- 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 letter addressed 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.