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GLOBE V. NTC G.R. No. 143964.

G.R. No. 143964. July 26, 2004 NTC acted without jurisdiction in declaring that it had no authority
to render SMS, pointing out that the matter was not raised as
FACTS: an issue before it at all.

On 4 June 1999, Smart filed a Complaint with public They alleged that the Order is a patent nullity as it imposed an
respondent NTC,praying that NTC order the immediate administrative penalty for an offense for which neither it
interconnection of Smarts and Globes GSM networks. Smart nor Smart was sufficiently charged nor heard on in violation
alleged that Globe, with evident bad faith and malice, refused to of their right to due process.
grant Smarts request for the interconnection of SMS.
The CA issued a Temporary Restraining Order (TRO) on 31 Aug
Globe filed its Answer with Motion to Dismiss on 7 June 1999, 1999. In its Memorandum, Globe called the attention of the CA in
interposing grounds that the Complaint was premature, Smarts an earlier NTC decision regarding Islacom, holding that SMS is a
failure to comply with the conditions precedent required in deregulated special feature and does not require the prior
Section 6 of NTC Memorandum Circular 9-7-93,19 and its approval of the NTC.
omission of the mandatory Certification of Non-Forum Shopping.
On 19 July 1999, NTC issued the Order now subject of the
present petition. Whether NTC may legally require Globe to secure NTC approval
before it continues providing SMS.
According to NTC Both Smart and Globe were WON SMS is a Value Added Service (VAS) under Public
equally blameworthy for their lack of cooperation in the telecommunications Act (PTA) of 1995;
submission of the documentation required for interconnection
and for having unduly maneuvered the situation into the present HELD:
1. NO. The NTC may not legally require Globe to secure its
NTC held that since SMS falls squarely within the definition of approval for Globe to continue providing SMS. This does not
value-added (VAS) service or enhanced- imply though that NTC lacks authority to regulate SMS or to
service given in NTC Memorandum Circular No. 8-9- classify it as VAS. However, the move should be implemented
95 (MC No. 8-9-95) their implementation of SMS interconnection properly, through unequivocal regulations applicable to all entities
is mandatory.The NTC also declared that both Smart and Globe that are similarly situated, and in an even-handed manner. This
have been providing SMS without authority from it. should not be interpreted, however, as removing SMS from the
ambit of jurisdiction and review by the NTC. The NTC will
Globe filed with the CA a Petition for Certiorari and Prohibition to continue to exercise, by way of its broad grant, jurisdiction over
nullify and set aside the Order and to prohibit NTC from taking Globe and Smart’s SMS offerings, including questions of rates
any further action in the case. and customer complaints. Yet caution must be had. Much
complication could have been avoided had the NTC adopted a
Globe reiterated its previous arguments that the complaint should proactive position, promulgating the necessary rules and
have been dismissed for failure to comply with conditions regulations to cope up with the advent of the technologies it
precedent and the non-forum shopping rule.They claimed that superintends. With the persistent advent of new offerings in the
telecommunications industry, the NTC’s role will become more content the NTC may be with its attitude of sloth towards
crucial than at any time before. regulation, the effect may prove ruinous to the sector it regulates.

2. NO. There is no legal basis under the PTA or the Moreover, the Court realizes that the PTA of 1995 is not intended
memorandum circulars promulgated by the NTC to denominate to constrain the industry within a cumbersome regulatory regime.
SMS as VAS, and any subsequent determination by the NTC on The policy as pre-ordained by legislative fiat renders the
whether SMS is VAS should be made with proper regard for due traditionally regimented business in an elementary free state to
process and in conformity with the PTA. make business decisions, avowing that it is under this
atmosphere that the industry would prosper.
Is SMS a VAS, enhanced service, or a special
feature? Apparently, even the NTC is unsure. It had told Islacom It is disappointing at least if the deregulation thrust of the law is
that SMS was a special feature, then subsequently held that it skirted deliberately. But it is ignominious if the spirit is defeated
was a VAS. However, the pertinent laws and regulations had not through a crazy quilt of vague, overlapping rules that are
changed from the time of the Islacom letter up to the day the implemented haphazardly.
Order was issued. Only the thinking of NTC did.

More significantly, NTC never required ISLACOM to apply for Asian Terminals, Inc. v Allied Guarantee Insurance, Co. Inc.
prior approval in order to provide SMS, even after the Order to (2015)
that effect was promulgated against Globe and Smart. This fact
was admitted by NTC during oral arguments. NTCs treatment of Asian Terminals, Inc. v Allied Guarantee Insurance, Co., Inc. GR
Islacom, apart from being obviously discriminatory, puts into No. 182208, October 14, 2015
question whether or not NTC truly believes that SMS is VAS. NTC
is unable to point out any subsequent rule or regulation, enacted FACTS: Marina, the predecessor of Asian Terminals Inc., is an
after it promulgated the adverse order against Globe and Smart, arrastre operator based on Manila. On February 5, 1989, a
affirming the newly-arrived determination that SMS is VAS. shipment of kraft linear board was loaded and received from the
ports of Lake Charles, LA, and Mobile, Al, USA for transport and
In fact, as Smart admitted during the oral arguments, while it did delivery to San Miguel. Upon offloading, it was assessed that a
comply with the NTC Order requiring it to secure prior approval, total of 158 rolls were damaged during shipping. Further, upon
it was never informed by the NTC of any action on its request. the goods' withdrawal from arrastre and their delivery to the
While NTC counters that it did issue a Certificate of Registration customs broker, Dynamic and eventually to the consignee San
to Smart, authorizing the latter as a provider of SMS, such Miguel, another 54 rolls were found to have been damaged, for a
Certificate of Registration was issued only on 13 March 2003, or total of 212 rolls of damaged shipment worth P755,666.84.
nearly four (4) years after Smart had made its request.This
inaction indicates a lack of seriousness on the part of the NTC to Allied Insurance was the insurer of the shipment. Thus, it paid
implement its own rulings. Also, it tends to indicate the lack of San Miguel P755,666.84 and was subrogated in the latter's right.
belief or confusion on NTCs part as to how SMS should be Allied filed a Complaint against Transocean, Philippine
treated. Given the abstract set of rules the NTC has chosen to Transmarine, Dynamic and Marina seeking to be indemnified for
implement, this should come as no surprise. Yet no matter how the P755,666.84 it lost paying San Miguel.
ISSUES: Whether or not petitioner has been proven liable for the the goods that are in its custody and to deliver them in good
additional 54 rolls of damaged goods to respondent condition to the consignee, such responsibility also develops
upon the carrier. Both the arrastre and the carrier are, therefore,
RULING: Yes. Marina, the arrastre operator, from the above charged with and obligated to deliver the goods in good condition
evidence, was not able to overcome the presumption of to the consignee."
negligence. The Bad Order Cargo Receipts, the Turn Over
Survey of Bad Order Cargoes as well as the Request for Bad Since the relationship of an arrastre operator and a consignee is
Order Survey did not establish that the additional 54 rolls were in akin to that between a warehouseman and a depositor, then, in
good condition while in the custody of the arrastre. Said instances when the consignee claims any loss, the burden of
documents proved only that indeed the 158 rolls were already proof is on the arrastre operator to show that it complied with the
damaged when they were discharged to the arrastre operator and obligation to deliver the goods and that the losses were not due
when it was subsequently withdrawn from the arrastre operator to its negligence or that of its employees.
by [the] customs broker. Further, the Turn Over Inspector and
the Bad Order Inspector who conducted the inspections and who the broker, Dynamic, cannot alone be held liable for the additional
signed the Turn Over Survey of Bad [Order] Cargoes and the 54 rolls of damaged goods since such damage occurred during
Request for Bad Order Survey, respectively, were not presented the following instances: (1) while the goods were in the custody
by Marina as witnesses to verify the correctness of the document of the arrastre ATI; (2) when they were in transition from ATI's
and to testify that only 158 rolls was reported and no others custody to that of Dynamic (i.e., during loading to Dynamic's
sustained damage while the shipment was in its possession. trucks); and (3) during Dynamic's custody.

On the other hand, defendant Dynamic (which) in its capacity as While the trial court could not determine with pinpoint accuracy
broker, withdrew the 357 rolls of kraft linear board from the who among the two caused which particular damage and in what
custody of defendant Marina and delivered the same to the proportion or quantity, it was clear that both ATI and Dynamic
consignee, San Miguel Corporation's warehouse in Tabacalera failed to discharge the burden of proving that damage on the 54
at United Nations, Manila, is considered a common carrier. rolls did not occur during their custody. As for petitioner ATI, in
particular, what worked against it was the testimony, as cited
It is noteworthy to mention that "in general, the nature of the work above, that its employees' use of the wrong lifting equipment
of an arrastre operator covers the handling of cargoes at piers while loading the goods onto Dynamic's trucks had a role in
and wharves," causing the damage. Such is a finding of fact made by the trial
court which this Court, without a justifiable ground, will not
"To carry out its duties, the arrastre is required to provide cargo disturb,
handling equipment which includes, among others, trailer,
chassis for containers." The arrastre operator's principal work is that of handling cargo,
so that its drivers/operators or employees should observe the
Hence, the "legal relationship betw.een the consignee and the standards and measures necessary to prevent losses and
arrastre operator is akin to that of a depositor and the damage to shipments under its custody.
warehouseman. The relationship between the consignee and the
common carrier is similar to that of the consignee and the arrastre
operator. Since it is the duty of the arrastre to take good care of
In the performance of its obligations, an arrastre operator should
observe the same degree of diligence as that required of a
common carrier and a warehouseman. FACTS:
 Davao Union Marketing Corporation (DUMC) contracted
Being the custodian of the goods discharged from a vessel, an the services of PKS Shipping Company (PKS Shipping) for
arrastre operator's duty is to take good care of the goods and to
the shipment to Tacloban City of 75,000 bags of cement
turn them over to the party entitled to their possession. With such
worth P3,375,000.
a responsibility, the arrastre operator must prove that the losses
were not due to its negligence or to that of its employees. And to  DUMC insured the goods for its full value with Philippine
prove the exercise of diligence in handling the subject cargoes, American General Insurance Company (Philamgen).
petitioner must do more than merely show the possibility that
some other party could be responsible for the loss or the damage.  The goods were loaded aboard the dumb barge Limar
It must prove that it exercised due care in the handling thereof. I belonging to PKS Shipping.

a mere sign-off from the customs broker's representative that he  December 22, 1988 9 pm: While Limar I was being towed
had received the subject shipment "in good order and condition by PKS’ tugboat MT Iron Eagle, the barge sank a couple
without exception" would not absolve the arrastre from liability, of miles off the coast of Dumagasa Point, in Zamboanga
simply because the representative's signature merely signifies del Sur, bringing down with it the entire cargo of 75,000
that said person thereby frees the arrastre from any liability for bags of cement.
loss or damage to the cargo so withdrawn while the same was in
the custody of such representative to whom the cargo was  DUMC filed a formal claim with Philamgen for the full
released, but it does not foreclose the remedy or right of the amount of the insurance. Philamgen promptly made
consignee (or its subrogee) to prove that any loss or damage to payment; it then sought reimbursement from PKS
the subject shipment occurred while the same was under the Shipping of the sum paid to DUMC but the shipping
custody, control and possession of the arrastre operator. company refused to pay so Philamgen to file suit against
PKS Shipping
As it is now established that there was negligence in both
petitioner ATI's and Dynamic's performance of their duties in the  RTC: dismissed the complaint - fortuitous event
handling, storage and delivery of the subject shipment to San  CA:Affirmed - not a common carrier but a casual
Miguel, resulting in the loss of 54 rolls of kraft linear board, both
shall be solidarily liable for such loss.
ISSUE: W/N PKS Shipping is NOT liable since it was NOT a
common carrier
Transportation Case Digest: Phil Am Gen Insurance Co, Et Al. V.
PKS Shipping Co (2003)
G.R. No. 149038 April 9, 2003
HELD: NO. Petition is DENIED
Lessons Applicable: Charter Party (Transportation)
 private or special carrier - character of the business,
such that if the undertaking is an isolated
transaction , not a part of the business or
Article 1732. Common carriers are persons, corporations, firms
occupation, and the carrier does not hold itself out
or associations engaged in the business of carrying or
to carry the goods for the general public or to a
transporting passengers or goods or both, by land, water, or air
limited clientele, although involving the carriage of
for compensation, offering their services to the public
goods for a fee
 Complementary is Section 13, paragraph (b), of the Public
 EX: charter party which includes both the
Service Act
vessel and its crew, such as in a bareboat or
demise, where the charterer obtains the use
and service of all or some part of a ship for a
public service" to be – period of time or a voyage or voyages and
"x x x every person that now or hereafter may own, operate, gets the control of the vessel and its crew.
manage, or control in the Philippines, for hire or  The regularity of its activities in this area indicates more
compensation, with general or limited clientele, whether than just a casual activity on its part
permanent, occasional or accidental, and done for general
business purposes, any common carrier, railroad, street railway,  The appellate court ruled, gathered from the testimonies
subway motor vehicle, either for freight or passenger, or both, and sworn marine protests of the respective vessel
with or without fixed route and whatever may be its classification, masters ofLimar I and MT Iron Eagle, that there was no
freight or carrier service of any class, express service, steamboat, way by which the barge’s or the tugboat’s crew could have
or steamship, or steamship line, pontines, ferries and water craft, prevented the sinking of Limar I. The vessel was suddenly
engaged in the transportation of passengers or freight or both, tossed by waves of extraordinary height of 6 to 8 feet and
shipyard, marine repair shop, wharf or dock, ice plant, ice buffeted by strong winds of 1.5 knots resulting in the entry
refrigeration plant, canal, irrigation system, gas, electric light, of water into the barge’s hatches. The official Certificate of
heat and power, water supply and power petroleum, sewerage Inspection of the barge issued by the Philippine
system, wire or wireless communication systems, wire or wireless Coastguard and the Coastwise Load Line Certificate
broadcasting stations and other similar public services would attest to the seaworthiness of Limar I and should
strengthen the factual findings of the appellate court.
 So understood, the concept of `common carrier’ under
Article 1732 may be seen to coincide neatly with the notion  Findings of fact of the Court of Appeals generally conclude
of `public service,’ under the Public Service Act this Court; none of the recognized exceptions from the rule
- (1) when the factual findings of the Court of Appeals and
 distinction between: the trial court are contradictory; (2) when the conclusion is
 common or public carrier a finding grounded entirely on speculation, surmises, or
conjectures; (3) when the inference made by the Court of
Appeals from its findings of fact is manifestly mistaken,
absurd, or impossible; (4) when there is a grave abuse of Note that GPS is an exclusive contractor and hauler of
discretion in the appreciation of facts; (5) when the Concepcion Industries, Inc.offering its service to noother
appellate court, in making its findings, went beyond the individual or entity. A common carrier is one which offers
issues of the case and such findings are contrary to the itsservices whether to the public in general or to a limited clientele
admissions of both appellant and appellee; (6) when the in particular but never on anexclusive basis. Therefore, GPS
judgment of the Court of Appeals is premised on a does not fit the category of a common carrier although it is
misapprehension of facts; (7) when the Court of Appeals notfreedfrom its liability based on culpa contractual
failed to notice certain relevant facts which, if properly
Culpa Aquiliana vs. Culpa Contractual
considered, would justify a different conclusion; (8) when
the findings of fact are themselves conflicting; (9) when the Culpa Aquiliana:1. Only private concern.2. Repairs the damage
findings of fact are conclusions without citation of the by indemnification.3. Covers all acts that are faulty or negligent.4.
specific evidence on which they are based; and (10) when Preponderance of evidence.5. No reservation – it’s independent
the findings of fact of the Court of Appeals are premised from crime. (Andamo vs IAC, 191 SCRA 203)6. Employer’s
on the absence of evidence but such findings are liability is solidary (Fabre Jr. vs CA, 259 SCRA 426, ‘ 96) Culpa
contradicted by the evidence on record – would appear to Contractual(i) Pre-existing obligation between the parties(ii) Fault
be clearly extant in this instance. or negligence is incidental to the performance of the obligation(iii)
Defense of having exercised diligence of a good father of a family
is not available, just like in criminal action. Applied doctrine of
FGU INSURANCE CORP. VS. G.P. SARMIENTO TRUCKING Respondent Superior, or Master and Servant Rule.
CORP. (GPS)G.R. No. 141910. August 6, 2002Facts:
GPS is an exclusive contractor and hauler of Concepcion
FGU Insurance Corp. vs. GP Sarmiento Trucking Corp. and
Industries, Inc. One day, it wasto deliver certaingoods of
Lambert M. ErolesFacts
Concepcion Industries, Inc. aboard one of its trucks. On its way,
thetruck collided with an unidentified truck, resulting in damage Respondent GP Sarmiento Trucking Company (GTS) undertook
to the cargoes.FGU, insurer ofthe shipment paid to Concepcion to transport cargoesfor Concepcion Industries Inc. when it
Industries, Inc. the amount of the damage and filed a collided with an unidentified truck causing damage tothe
suitagainstGPS. GPS filed a motion to dismiss for failure to prove cargoes. Petitioner !G" insurer of the shipment paid to
that it was a common carrier. Concepcion Industries the#alue of the co#ered cargoes. Then
as su$rogee of Concepcion Industries Inc. petitioner!G" sued
GPS for $reach of contract of carriage for reim$ursement. Instead
Whether or not GPS falls under the category of a common of filing ananswer GPS filed a demurrer to e#idence claiming
carrier. that it could not $e held lia$le as acommon carrier $ecause it was
only a pri#ate carrier $eing the e%clusi#e hauler only
of Concepcion Industries Inc. since &' .The lower court granted
the motion ruling that plaintiff !G" failed to pro#e that GPSwas a P239,019.01 under protest. On January 20, 1994, petitioner filed
common carrier. The C affirmed the trial court*s order. a letter-protest to the City Treasurer, claiming that it is exempt
from local tax since it is engaged in transportation business. The
respondent City Treasurer denied the protest, thus, petitioner
+hether or not GPS is considered a common carrier and may $e filed a complaint before the Regional Trial Court of Batangas for
presumed negligentand therefore lia$le for damages. tax refund. Respondents assert that pipelines are not included in
the term “common carrier” which refers solely to ordinary carriers
uling or motor vehicles. The trial court dismissed the complaint, and
The Supreme Court held that GPS cannot $e considered a such was affirmed by the Court of Appeals.
common carrier as Issue:
itrenders ser#ice e%clusi#ely to Concepcion Industries,
that notwithstanding GPS cannotescape from lia$ility since in Whether a pipeline business is included in the term “common
carrier” so as to entitle the petitioner to the exemption
culpa contractual
mere proof of the e%istence of the
contractand the failure of its compliance -ustify Article 1732 of the Civil Code defines a "common carrier" as "any
person, corporation, firm or association engaged in the business
prima facie of carrying or transporting passengers or goods or both, by land,
a corresponding right of relief.Respondent dri#er howe#er water, or air, for compensation, offering their services to the
who is not a party to the contract of carriage may not public."
$e heldlia$le under the agreement without concrete proof of his The test for determining whether a party is a common carrier of
negligence or fault. ence the Supreme Court affirmed the goods is:
assailed order of the trial court and the C insofar as the
respondent dri#er was concerned $ut GPS trucking company (1) He must be engaged in the business of carrying goods for
was ordered topay the petitioner !G" the #alue of the damaged others as a public employment, and must hold himself out as
and lost cargoes. ready to engage in the transportation of goods for person
generally as a business and not as a casual occupation;
First Philippine Industrial Corp. vs. CA
(2) He must undertake to carry goods of the kind to which his
Facts: business is confined;
Petitioner is a grantee of a pipeline concession under Republic (3) He must undertake to carry by the method by which his
Act No. 387. Sometime in January 1995, petitioner applied for business is conducted and over his established roads; and
mayor’s permit in Batangas. However, the Treasurer required
petitioner to pay a local tax based on gross receipts amounting to (4) The transportation must be for hire.
P956,076.04. In order not to hamper its operations, petitioner
paid the taxes for the first quarter of 1993 amounting to
Based on the above definitions and requirements, there is no Is a stipulation in a charter party that the “(o)wners shall not be
doubt that petitioner is a common carrier. It is engaged in the responsible for loss, split, short-landing, breakages and any kind
business of transporting or carrying goods, i.e. petroleum of damages to the cargo” valid?
products, for hire as a public employment. It undertakes to carry
for all persons indifferently, that is, to all persons who choose to HELD:
employ its services, and transports the goods by land and for Yes. Xxx [I]t is undisputed that private respondent had acted as
compensation. The fact that petitioner has a limited clientele does a private carrier in transporting petitioner’s lauan logs. Thus,
not exclude it from the definition of a common carrier. Article 1745 and other Civil Code provisions on common carriers
which were cited by petitioner may not be applied unless
Valenzuela Hardwood vs. CA
expressly stipulated by the parties in their charter party.
(GR 102316, 30 June 1997)
FACTS: In a contract of private carriage, the parties may validly stipulate
Valenzuela Hardwood and Industrial Supply, Inc. (VHIS) entered that responsibility for the cargo rests solely on the charterer,
into an agreement with the Seven Brothers whereby the latter exempting the shipowner from liability for loss of or damage to
undertook to load on board its vessel M/V Seven Ambassador the the cargo caused even by the negligence of the ship captain.
former’s lauan round logs numbering 940 at the port of Pursuant to Article 1306 of the Civil Code, such stipulation is valid
Maconacon, Isabela for shipment to Manila. VHIS insured the because it is freely entered into by the parties and the same is
logs against loss and/or damage with South Sea Surety and not contrary to law, morals, good customs, public order, or public
Insurance Co. policy. Indeed, their contract of private carriage is not even a
contract of adhesion. We stress that in a contract of private
The said vessel sank resulting in the loss of VHIS’ insured logs. carriage, the parties may freely stipulate their duties and
VHIS demanded from South Sea Surety the payment of the obligations which perforce would be binding on them. Unlike in a
proceeds of the policy but the latter denied liability under the contract involving a common carrier, private carriage does not
policy for non-payment of premium. VHIS likewise filed a formal involve the general public. Hence, the stringent provisions of the
claim with Seven Brothers for the value of the lost logs but the Civil Code on common carriers protecting the general public
latter denied the claim. cannot justifiably be applied to a ship transporting commercial
goods as a private carrier. Consequently, the public policy
The RTC ruled in favor of the petitioner.Both Seven Brothers and embodied therein is not contravened by stipulations in a charter
South Sea Surety appealed. The Court of Appeals affirmed the party that lessen or remove the protection given by law in
judgment except as to the liability of Seven Brothers.South Sea contracts involving common carriers.
Surety and VHIS filed separate petitions for review before the
Supreme Court. In a Resolution dated 2 June 1995, the Supreme x x x
Court denied the petition of South Sea Surety. The present
decision concerns itself to the petition for review filed by VHIS. The general public enters into a contract of transportation with
common carriers without a hand or a voice in the preparation
ISSUE: thereof. The riding public merely adheres to the contract; even if
the public wants to, it cannot submit its own stipulations for the pursuant to the terms and conditions of the charter-party. The
approval of the common carrier. Thus, the law on common hatches remained open throughout the duration of the discharge.
carriers extends its protective mantle against one-sided
stipulations inserted in tickets, invoices or other documents over
which the riding public has no understanding or, worse, no Upon arrival at petitioner’s warehouse a survey conducted over
choice. Compared to the general public, a charterer in a contract the cargo revealed a shortage and the most of the fertilizer was
of private carriage is not similarly situated. It can -- and in fact it contaminated with dirt. As such, Planters filed an action for
usually does -- enter into a free and voluntary agreement. In damages. The defendant argued that the public policy governing
practice, the parties in a contract of private carriage can stipulate common carriers do not apply to them because they have
the carrier’s obligations and liabilities over the shipment which, in become private carriers by reason of the provisions of the charter-
turn, determine the price or consideration of the charter. Thus, a party.
charterer, in exchange for convenience and economy, may opt to
set aside the protection of the law on common carriers. When the
charterer decides to exercise this option, he takes a normal Issue: Whether or not the charter-party contract between the
business risk. ship owner and the charterer transforms a common carrier into a
Planters Products vs. Court of Appeals private carrier?

G.R. No. 101503 September 15, 1993

Held: A charter party may either her be time charter wherein the
vessel is leased to the charterer, wherein the ship is leased to the
Facts: Planters Product Inc. purchased from Mitsubishi charterer for a fixed period of time or voyage charter, wherein the
international corporation metric tons of Urea fertilizer, which the ship is leased for a single voyage. In both cases, the charter party
latter shipped aboard the cargo vessel M/V Sun Plum owned by provides for the hire of the vessel only, either for a determinate
private respondent Kyosei Kisen Kabushiki Kaisha. Prior to its time or for a single or consecutive voyage.
voyage, a time charter-party on the vessel respondent entered
into between Mitsubishi as shipper/charterer and KKKK as ship
owner, in Tokyo, Japan. It is therefor imperative that such common carrier shall remain as
such, notwithstanding the charter of the whole or part of the
vessel by one or more persons, provided the charter is limited to
Before loading the fertilizer aboard the vessel, (4) of her holds the ship only, as in the case of a time-charter or voyage-charter.
were presumably inspected by the charterer’s representative and It is only when the charter includes both ship and its crew as in
found fit to take a load of urea in bulk. After the Urea fertilizer was bareboat or demise that it becomes a private carrier.
loaded in bulk by stevedores hired by and under the supervision Undoubtedly, a shipowner in a time or voyage charter retains in
of the shipper, the steel hatches were closed with heavy iron lids. possession and control of the ship, although her holds may be
Upon arrival of vessel at port, the petitioner unloaded the cargo the property of the charterer.
Email ThisBlogThis!Share to TwitterShare to FacebookShare to the cargo had been discharged from the vessel and was already
Pinterest under the custody of the arrastre operator, ICTSI. This evidence,
however, does not disprove that the condenser fan –which
caused the fluctuation of the temperature in the refrigerated
container –was not damaged while the cargo was being unloaded
Charter Lines –DEFENDANT, Carrier, based in SGEDSA
from the ship. It is settled in maritime law jurisprudence that
Shipping Agency –Agent of RCLNetherlands Insurance –insured
cargoes while being unloaded generally remain under the
the goods shipped, paid claims, subrogated RCLTemic
custody of the carrier;RCL and EDSA Shipping failed to
Telefunken Microelectronices (Temic) –ConsigneeU Freight –
forwarding agent based in SG contracted services of Eagle
LinesEagle Lines –tasked by U Freight to transport cargo,
contracted services of RCL (as a ship owner)-Epoxy Molding CENTRAL SHIPPING COMPANY, INC., petitioner, vs.
Compound (the merchandise) was to be shipped from SG to INSURANCE COMPANY OF NORTH AMERICA, respondent.
Manila. -The merchandise is temperature sensitive thus it is
G.R. No. 150751 September 20, 2004
refrigerated in transit at O degrees Celsius. -Unloaded from the
ship in good condition, refrigerator was working well.-However, 121 SCRA 769
goods were damaged because temperature in the ref
fluctuated to 33 degree C allegedly because of burnt condenser
more of the ref container-Temic claimed from Netherlands, Facts: On July 25, 1990 at Puerto Princesa, Palawan, the
Netherlands paid the insurance claim-Netherlands filed a petitioner received on board its vessel, the M/V Central Bohol,
complaint for subrogation of insurance settlement against RCL - 376 pieces of Round Logs and undertook to transport said
RCL and agent EDSA Shipping denied any negligence in the shipment to Manila for delivery to Alaska Lumber Co., Inc. The
shipment, and that there is no valid subrogationISSUE/S:W/N cargo is insured for P3, 000, 000.00 against total lost under
RCL and EDSA Shipping is liable as CC under the theory of respondents MarineCargo Policy.
presumption of negligence?HELD:YES. SC held CC is
presumed to have been negligent if it fails to prove that it
exercised extraordinary vigilance over the goods it After loading the logs, the vessel starts its voyage. After few hours
transported.When the goods shipped are either lost or arrived of the trip, the ship tilts 10 degrees to its side, due to the shifting
in damaged condition, a presumption arises against the carrier of the logs in the hold. It continues to tilt causing the captain and
of its failure to observe that diligence, and there need not be an the crew to abandon ship. The ship sank.
express finding of negligence to hold it liable.RCL and EDSA
Shipping failed to prove that they did exercise that degree
of diligence required by law over the goods they transported. Respondent alleged that the loss is due to the negligence and
Indeed, there is sufficient evidence showing that the fault of the captain. While petitioner contends that the happening
fluctuation of the temperature in the refrigerated container is due to monsoons which is unforeseen or casa fortuito.
van, as recorded in the temperature chart, occurred after
Issue: Whether or not petitioner is liable for the loss of cargo? Transportation Law Case
Singapore Airlines Ltd. vs. Fernandez, GR 142305, Dec. 10,
Held: From the nature of their business and for reasons of public
policy, common carriers are bound to observe extraordinary FACTS:Respondent Andion Fernandez is an acclaimed soprano
diligence over the goods they transport, according to all the in the Philippines andabroad. At the time of the incident she was
circumstances of each case. In the event of loss, destruction or availing of an educational grant
deterioration of the insured goods, common carriers are
from the Federal Republic of Germany pursuing a Master’s
responsible; that is, unless they can prove that such loss,
Degree in Music
destruction or deterioration was brought about -- among others -
- by "flood, storm, earthquake, lightning or other natural disaster major in Voice. She was invited to sing before the King and
or calamity." In all other cases not specified under Article 1734 of Queen of Malaysiaon Feb. 3-4, 1991. For this purpose, she took
the Civil Code, common carriers are presumed to have been at an airline ticket from SingaporeAirlines (SAL) FOR THE
fault or to have acted negligently, unless they prove that they Frankfurt-Manila-Malaysia route. Respondent had to passby
observed extraordinary diligence. Manila in order to gather her wardrobe and rehearse with the
pianist. SALissued ticket for Flight SQ 27 leaving Frankfurt on
Jan. 27, 1991 for Singapore withconnections to Manila in the
The contention of the petitioner that the loss is due to casa fortuito morning of Jan. 28, 1991. On Jan. 27, 1991 SQ 27LEFT Frankfurt
exempting them from liability is untenable. Petitioner failed to but arrived two hours late in Singapore on Jan. 28, 1991. By
show that such natural disaster or calamity was the proximate then,the aircraft bound for Manila had already left. Upon
and only cause of the loss. Human agency must be entirely deplaning in Singapore,Fernandez approached the transit
excluded from the cause of injury or loss. In other words, the counter at Changi Airport and was told by alady employee that
damaging effects blamed on the event or phenomenon must not there were no more flights to Manila on that day and thatshe had
have been caused, contributed to, or worsened by the presence to stay in Singapore, if she wanted, she could fly to HK but at her
of human participation. The defense of fortuitous event or natural ownexpense. Respondent stayed with a relative in Singapore for
disaster cannot be successfully made when the injury could have the night. The nextday, she was brought back to the airport and
been avoided by human precaution. approached a counter for
immediate booking but was told by a male employee: “Can’t you
see I amdoing something.” She explained her predicament but
The monsoon is not the proximate cause of the sinking but is due
was told: “It’s yourproblem, not ours.”
to the improper stowage of logs. The logs were not secured by
cable wires, causing the logs to shift and later on the sinking the The respondent never made it to Manila and was forced to take
ship. This shows that they did not exercise extraordinary a direct flightto Malaysia on Jan. 29, 1991 through the efforts of
diligence, making them liable for such loss. her mother and a travelagency in Manila. Her mother had to travel
to Malaysia with the wardrobewhich caused them to incur its non-performance by the carrier.SAL failed to inform of the
expenses of delay in the turnaround aircraft in Frankfurt, neitherdid it ask if the
respondent and 25 other delayed passengers are amenable to

50,000.RTC Manila ordered SAL to pay respondent
in Singapore. Even SAL’s manual mandates that in cases of
₱ urgent

50k as actual damages, connections the head office of defendant in Singapore has to be
informed ofdelays so as to make needed arrangements for
₱ connecting passengers.When respondent conveyed her
250k asmoral damages, apprehension in Frankfurt of the impending

₱ delay, she was assured by petitioner’s personnel in Frankfurt that

she will be
100k as exemplary damages,
transported to Manila on the same date. The lady employee at
₱ the counter inSingapore only allowed respondent to use the
7 phone upon threat of suit, the

5k as attorney’s fees and male employee at the counter marked “Immediate Attention to
Passengers withImmediate Booking” was rude to her.
costs of suit.CA affirmed RTC decision.ISSUE:Did SAL break the
contract of carriage?RULING:Yes, when an airline issues a ticket Petition is denied. CA decision affirmed.
to a passenger, confirmed for a particularflight on a certain date, Arada v. CAFacts: Alejandro Arada doing business under
a contract of carriage arises. The passenger has everyright to the name and style South Negros Enterprises is engaged in
expect that he be transported on that flight and on that date. If he the business of small scale shipping as a common carrier,
does servicing the hauling of cargoes of different corporationsand
companies with 5 vessels it was operating. It entered into a
contract with San Miguel Corporation totransport as a common
Transportation Law Case carrier cargoes of the latter from San Carlos City Negros
not, then the carrier opens itself to a suit for a breach of contract Occidental to Mandaue Cityusing one of its vessels M/L Maya.
of carriage. Acontract of carriage requires common carriers to The cargoes of San Mig Corp valued at 176, 824. 80.The master
transport passengers safely ashuman care and foresight can crew applied for clearance to sail which was denied by the Phil
provide (Art. 1755, NCC). In an action for brechof a contract of Coast Guard due to a typhoon.However, the next day, it was
carriage, the aggrieved party does not have to prove that granted clearance as there was no storm and the sea was calm.
thecommon carrier was at fault or was negligent. All that is So, ML Maya leftfor Mandaue City. While it was navigating
necessary is to provethe existence of the contract and the fact of towards Cebu, a typhoon developed and said vessel sank
withwhatever was left if its cargoes. The crew was rescued. The weather conditions as required under Art.612 of the Code of
Board of Marine Inquiry exonerated Arada and hiscrew from Commerce.A common carrier is obliged to
administrative liability.Meanwhile, San Miguel Corporation filed observed extraordinary diligence and the failure of the master
with the RTC for the recovery of the value of its cargoes anchored crew to ascertainthe direction of the storm and the weather
on breach of contract of carriage.The RTC rendered its decision condition of the path they would be traversing, constitute lack
dismissing the claim of San Miguel for recovery of the value of its of foresight and minimum vigilance over its cargoes taking
cargoes. Onappeal, the CA reversed the decision of the into account the surrounding circumstances of the case.
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 Gatchalian vs Delim Case Digest
it entered into acontract with San Miguel Corp to carry and
transport the latter’s cargoes. A common carrier both from Gatchalian v Delim and Court of Appeals
thenature of its business and for insistent reasons of public policy 203 SCRA 126
is burdened by law with the duty of exercisingextraordinary
diligence not only in ensuring the safety of passengers, but in
caring for the goods transported byit. The loss, or deterioration or Facts: Gatchalian boarded the respondent’s “Thames” minibus
destruction of goods turned over to the common carrier for at San Eugenio, Aringay, La Union bound of the same province.
the conveyance to adesignated destination raises instantly a On the way, a snapping sound was suddenly heard at one part of
presumption of fault or negligence on the part of the carrier, the bus and shortly thereafter, the vehicle bumped a cement
save onlyin cases where such loss, destruction or deterioration flower pot on the side of the road, went off the road and fell into
arises from extreme circumstances such as a naturaldisaster or a ditch. Several passengers including the petitioner was injured.
calamity.In order that a common carrier may be exempted from They were taken into an hospital for treatment. While there,
responsibility, the natural disaster must have been the proximate private respondent’s wife Adela Delim visited and paid for the
cause of the loss. However, the common carrier must exercise expenses, hospitalization and transportation fees. However,
due diligence to prevent or minimizethe loss before, during and before she left, she had the injured passengers including the
after the occurrence of the flood, storm or other natural disaster petitioner sign an already prepared Joint Affidavit constituting a
in order that thecommon carrier may be exempted from liability waiver of any future complaint. However, notwithstanding this
from the destruction or deterioration of the goods.In the case at document, petitioner filed an action Ex Contractu to recover
bar, Southern Negros failed to observe extraordinary diligence compensatory and Actual Damages. Private respondent denied
over the cargo in question wasnegligent previous to the sinking liability on the ground that it was an accident and the Joint which
of the carrying vessel. The master crew knew that there was a constitutes as a waiver. The trial court dismissed the complaint
typhoon coming before his departure but did not check where it based on the waiver and the CA affirmed.
was. He should have verified first where the typhoon was
beforedeparting. The master crew did not ascertain where the
typhoon was headed by the use of his vessel’s barometer and Issue: Whether or not the private respondent has successfully
radio. Neither did the captain of the vessel monitor and record the proved that he exercised extraordinary diligence.
An armored car subsequently bumped the stairs leading inside
the plane. That commenced the battle between the military and
Held: The court held that they failed to prove extraordinary
the hijackers, which led ultimately to the liberation of the plane’s
diligence. After a snapping sound was suddenly heard at one part
surviving crew and passengers with the final score of ten
of the bus, the driver didn’t even bother to stop and look f anything
passengers and three hijackers dead.
had gone wrong with the bus. With regard to the waiver, it must
to be valid and effective, couched in clear and unequivocal terms
which leave no doubt as to the intention of the person to give up
Issue: Whether or not hijacking is a case fortuito or force
a right or benefit which legally pertains to him. In this case, such
majeure, which would exempt an aircraft from liability for,
waiver is not clear and unequivocal. When petitioner signed the
damages to its passengers and personal belongings that were
waiver, she was reeling from the effects of the accident and while
lost during the incident?
reading the paper, she experienced dizziness but upon seeing
other passengers sign the document, she too signed which
bothering to read to its entirety. There appears substantial doubt
whether the petitioner fully understood the joint affidavit. Held: In order to constitute a caso fortuito 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
Gacal vs. Philippine Airlines
to render it impossible for the debtor to fulfill his obligation in a
(183 SCRA 189, G.R. No. 55300 March 16, 1990) normal manner; (d) the debtor must be free from any participation
in or aggravation of the injury to the creditor.

Facts: Plaintiffs Franklin Gacal, his wife and three others were
passengers of PAL plane at Davao Airport for a flight to Manila, Applying the above guidelines, the failure to transport the
not knowing that the flight, were Commander Zapata with other petitioners safely from Davao to Manila was due to the skyjacking
members of Moro National Liberation Front. They were armed incident staged buy the MNLF without connection to the private
with grenades and pistols. After take off, the members of MNLF respondent, hence, independent of will of PAL or its passengers.
announced a hijacking and directed the pilot to fly directly to
Libya, later to Sabah. They were, however, forced to land in
Zamboanga airport for refueling, because the plane did not have The events rendered it impossible for PAL to perform its
enough fuel to make direct flight to Sabah. When the plane began obligation in a normal manner and it cannot be faulted for
to taxi at the runaway of Zamboanga airport, it was met by two negligence on the duty performed by the military. The existence
armored cars of the military. of force majeure has been established thus exempting PAL from
payment of damages.
an panic among the passengers such that the passengers started
Bachelor Express vs. CAG.R. No. 85691, July 31, 1990FACTS:A running to the sole exit shoving each other resulting in the falling
bus owned by Bachelor express and driven by Cresencio Rivera off the bus by passengers Beter and Rautraut causing them fatal
was thesitus of a stampeded which resulted in the death of injuries. Thesudden act o the passenger who stabbed another
passengers Ornominio Beterand Narcisa Rautraut. A passenger passenger in the bus is within the context of force
at the rear portion suddenly stabbed a PC soldier which majeure.However, in order that a common carrier may be
causedcommotion and panic among the passengers. When the absolved from liability in case of force majeure, it is not enough
bus stopped, the two saidpassengers were found lying on the that the accident was caused by force majeure. The common
road and dead because of head injuries. Thepassenger-assailant carrier must still prove that it was not negligent I causing
ran alighted the bus and ran towards the bushes but was killedby theinjuries resulting from such accident.The CC was negligent in
the police. The heirs of the deceased filed a complaint for “a sum the provision of safety precautions so that its passengers may be
of money”against Bachelor Express, the owner, and the driver transported safely to their destinations. The door was not locked
Rivera. RTC dismissed complaint and later on reversed and as to prevent the passengers from alighting. The conductor
found Bachelor Express, its owner and the driver solidarily liable. opened the door when the passengers started shouting. The door
Bachelor Express, Inc. denies liability for the death of Beter and was forced open by the onrushing passengers. The speed of the
Rautraut on its posture that the death of the said passengers was bus was not slow, 30/40. Appeals the bus driver did not
caused by a third person who was beyond its control and immediately stop the bus at the height of the commotion; the bus
supervision; that the accident resulting in the death of was speeding from a full stop; the victims fell from the bus
doorwhen it was opened or gave way while the bus was still
the two passengers was caused by force majeure over which the
running; the conductor
CC did not have any control. (1174) ISSUE:Whether or not
Bachelor Express is liable. RULING:The liability is anchored on panicked and blew his whistle after people had already fallen off
culpa contractual. Bachelor Express, being a CC, is presumed to the bus; and the bus was not properly equipped with doors in
have acted negligently unless itcan prove that it had observed accordance with lawit is clear that the petitioners have failed to
extraordinary diligence in accordance with Art. 1733and 1755. A overcome the presumption of fault and negligence found in the
caso fortuito presents the following essential characteristics: (1) law governing common carriers.
The causeof the unforeseen and unexpected occurrence, or of
Aboitiz shipping vs. General Accident Fire and Life
the failure of the debtor tocomply with his obligation, must be
independent of the human will. (2) It must beimpossible to foresee (GR No. 100446 January 21, 1993)
the event which constitutes the caso fortuito, or if it can
beforeseen, it must be impossible to avoid. (3) The occurrence
must be such as torender it impossible for the debtor to fulfill his Facts: Petitioner is a corporation engaged in the business of maritime trade
obligation in a normal manner. And(4) the obligor (debtor) must as a carrier. As such, it owned and operated the M/V P/ ABOITIZ, a common
be free from any participation in the aggravation of theinjury carrier that sank on voyage from Hong Kong to Manila. Private respondent
resulting to the creditor.The running amuck of the passenger was GAFLAC is a foreign insurance company pursuing its remedy as a subrogee
the proximate cause of the incident as it triggered off a commotion of several cargo consignees whose respective cargo sank with the said
vessel and for which it has priory paid. The sinking of vessel gave rise to
filling of suit to recover the lost cargo either by shippers, their successors-in-
interest, or the cargo insurers like GAFLAC as subrogees. The sinking was
initially investigated by the Board of Marine Inquiry, which found that such
sinking was due to fortuitous event.

Issue: Whether or not the doctrine of limited liability is applicable to the


Held: The real an hypothecary nature of maritime law simple means that
the liability of the carrier in connection with losses related to maritime
contracts is confined to the vessel, which is hypothecated for such
obligations or which stands as the guaranty for their settlement. It has its
origin by reason of the conditions and risks attending maritime trade in its
earliest years when such trade was replete with innumerable and unknown
hazards since vessels had to go through largely uncharted waters to ply their
trade. Thus, the liability of the vessel owner and agent arising form the
operation of such vessel were confined to the vessel itself, its equipment,
freight and insurance, if any, which limitation served to induce capitalist into
effectively wagering their resources against consideration of the large
attainable in the trade.