G.R. No.
L-74811 December 14, 1988 Said article is the source of the doctrine of limited liability, which gives the ship
CHUA YEK HONG, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, MARIANO GUNO and DOMINADOR
OLIT, respondents.
FACTS:
Respondent is owner of M/V Luzviminda, a common carrier engaged in
coastwise trade from the different ports of Oriental Mindoro to the Port of
Manila. In October 1977, petitioner loaded 1,000 sacks of copra, valued at
P101,227.40 on board M/V Luzviminda for shipment to Manila. Said cargo,
however, did not reach Manila because the vessel capsized and sank with all
its cargo. Petitioner then instituted a complaint for damages on breach of
contract of carriage against private respondent. The trial court rendered a
decision in favour of the petitioners. On appeal, the appellate court ruled in
favour of the respondents applying article 587 of the Code of Commerce.
Unsuccessful in his motion for reconsideration, petitioner filed this petition.
ISSUE:
Whether or not the respondent court erred in applying the doctrine of limited
liability under Article 587 of the Code of Commerce
HELD:
“Article 587 of the Code of Commerce provides: The ship agents shall
be civilly liable for the indemnities in favour of third persons which may
arise from the conduct of the captain in the care of the goods which he
loaded on the vessel; but he may exempt himself therefrom by
abandoning the vessel with all the equipment and the freight it may
have earned during the voyage.”
The limited liability rule, however provides for exceptions: (1) where the injury
or death to a passenger is due either to the fault of the ship owner, or to the
concurring negligence of the ship owner and the captain (2) where the vessel
is insured; and (3) in workmen's compensation claims. In this case, there is
nothing in the records to show that the loss of the cargo was due to the fault of
the private respondent as ship owners, or to their concurrent negligence with
the captain of the vessel and there was no showing that the vessel was
insured. As the court held, there is nothing in the records showing such
negligence
agent’s or owner’s right of abandonment of the vessel and earned freight and
such abandonment provides the cessation of the responsibility of the ship
agent/owner. In other words, the ship agent/owner’s liability is merely co-
extensive with his interest in the vessel that a total loss thereof results in its
extinction, “no vessel, no liability.”
Also, the provisions of the Civil Code on common carriers do not apply in this
case since the circumstances of the case are not within those that can be
regulated by such provisions so the Code of Commerce and other special laws
shall apply. In sum, it is held that the respondents are freed from their liabilities
applying the limited liability rule for having totally lost the vessel and none of
the exceptions apply to them, the liability for the loss of the cargo of the copra
must be deemed extinguished.
INSURANCE COMPANY OF NORTH AMERICA VS. ASIAN TERMINALS
INC.
G.R. No. 180784 February 15, 2012
Doctrine: The term “carriage of goods” in the Carriage of Goods by Sea Act
(COGSA) covers the period from the time the goods are loaded to the vessel
to the time they are discharged therefrom.
The carrier and the ship may put up the defense of prescription if the action for
damages is not brought within one year after the delivery of the goods or the
date when the goods should have been delivered. It has been held that not
only the shipper, but also the consignee or legal holder of the bill may invoke
the prescriptive period. However, the COGSA does not mention that an
arrastre operator may invoke the prescriptive period of one year; hence, it
does not cover the arrastre operator.
Facts:
The trial court dismissed petitioner’s complaint for actual damages on the
ground of prescription under the Carriage of Goods by Sea Act. Thus, an
action was instituted to review the RTC’s decision.
On November 2002, Macro-Lite Corporation shipped to San Miguel
Corporation (SMC), through M/V DIMI P vessel, 185 packages (or 231,000
sheets) of electrolytic tin free steel, complete and in good order condition and
covered by Bill of Lading. The shipment had a declared value of US
$169,850.35 and was insured with petitioner against all risks under its marine
policy.
The carrying vessel arrived at the port of Manila and when the shipment was
discharged therefrom, it was noted than 7 packages were damaged and in bad
order. The shipment was then turned over to the custody of respondent (as
arrastre operator) for storage and safekeeping pending its withdrawal by the
consignee’s authorized customs broker, which was later withdrawn by the
customs broker from custody of the respondent.
An examination report was written and showed that an additional 5 packages
were found to be damaged and in bad order.
Consignee, SMC, filed separate claims against respondent and petitioner for
the damage of 11,200 sheets of electrolytic tin free steel. Petitioner, as insurer
of the cargo, paid the consignee the amount of Php 431,592.14 for the
damage caused to the shipment. Thereafter, petitioner formally demanded
reparation against respondent and as respondent failed to satisfy its demand,
petitioner filed an action for damages with the RTC.
The trial court dismissed the complaint because it was already barred by the
statute of limitations. It held that COGSA, embodied in CA 65, applies to this
case since the goods were shipped from a foreign port to the Philippines.
Under the said law, particularly paragraph 4, Section 3(6), the shipper has the
right to bring a suit within one year after the delivery of the goods or the date
when the goods should have been delivered.
Petitioner’s motion for recon was denied by the trial court. It submits that the
trial court’s dismissal of the complaint on the ground of prescription under the
COGSA is legally erroneous. It contends that the one-year limitation period for
bringing a suit in court under the COGSA is not applicable to this case.
Petitioner asserts that since the complaint was filed against respondent
arrastre operator only, without impleading the carrier, the prescriptive period
under the COGSA is not applicable to this case.
Moreover, petitioner contends that the term carriage of goods in the COGSA
covers the period from the time the goods are loaded to the vessel to the time
they are discharged therefrom. It points out that it sued respondent only for the
additional five (5) packages of the subject shipment that were found damaged
while in respondents custody, long after the shipment was discharged from the
vessel.
Issues:
(1) WON the one-year prescriptive period for filing a suit under the
COGSA applies to this action for damages against respondent arrastre
operator;
(2) WON petitioner is entitled to recover actual damages in the amount of
P431,592.14 from respondent.
Ruling:
(1) NO. The COGSA was accepted to be made applicable to all contracts
for the carriage of goods by sea to and from the Philippine ports in foreign
trade by virtue of CA 65. The term “carriage of goods” covers the period from
the time when the goods are loaded to the time when they are discharged from
the ship; thus, it can be inferred that the period of time when the goods have
been discharged from the ship and given to the custody of the arrastre
operator is not covered by the COGSA.
The prescriptive period for filing an action for the loss or damage of the goods
under the COGSA is found in paragraph 6, Section 3. It states that “in any
event, the carrier and the ship shall be discharged from all liability in respect of
loss or damage unless suit is brought within one year after delivery of the
goods or the date when the goods should have been delivered. Provided, that
if a notice of loss or damage, either apparent or concealed, is not given as
provided for in this section, that fact shall not affect or prejudice the right of the
shipper to bring suit within one year after the delivery of the goods or the date
when the goods should have been delivered.”
However, the COGSA does not mention that an arrastre operator may invoke
the prescriptive period of 1 year; hence, it does not cover the arrastre operator.
In fact, respondent arrastre operator’s responsibility and liability for losses and
damages are set forth in Section 7.01 of the Contract for Cargo Handling
Services executed between the Philippine Ports Authority and Marina Ports
Services, Inc. (now Asian Terminals, Inc.), which explicitly provides that the
consignee has a period of thirty (30) days from the date of delivery of the
package to the consignee within which to request a certificate of loss from the
arrastre operator. From the date of the request for a certificate of loss, the
arrastre operator has a period of fifteen (15) days within which to issue a
certificate of non-delivery/loss either actually or constructively. Moreover, from
the date of issuance of a certificate of non-delivery/loss, the consignee has
fifteen (15) days within which to file a formal claim covering the loss, injury,
damage or non-delivery of such goods with all accompanying documentation
against the arrastre operator.
Here, the verification and ascertainment of liability by respondent ATI had
been accomplished within thirty (30) days from the date of delivery of the
package to the consignee and within fifteen (15) days from the date of
issuance by the Contractor (respondent ATI) of the examination report on the
request for bad order survey. Although the formal claim was filed beyond the
15-day period from the issuance of the examination report on the request for
bad order survey, the purpose of the time limitations for the filing of claims had
already been fully satisfied by the request of the consignees broker for a bad
order survey and by the examination report of the arrastre operator on the
result thereof, as the arrastre operator had become aware of and had verified
the facts giving rise to its liability. Hence, the arrastre operator suffered no
prejudice by the lack of strict compliance with the 15-day limitation to file the
formal complaint.
(2) YES. Petitioner is entitled to actual damages in the amount of
P164,428.76 for the four (4) skids damaged while in the custody of
respondent.
It should be noted that the petitioner, who filed this action for damages for the
five (5) skids that were damaged while in the custody of respondent, was not
forthright in its claim, as it knew that the damages it sought in the amount of
P431,592.14, which was based on the Evaluation Report of its
adjuster/surveyor covered nine (9) skids. Based on the same Evaluation
Report, only four of the nine skids were damaged in the custody of respondent.
Petitioner should have been straightforward about its exact claim, which is
borne out by the evidence on record, as petitioner can be granted only the
amount of damages that is due to it.
Eastern Shipping Lines vs. IAC
150 SCRA 463
Facts:
In GR 69044, the M/S ASIATICA, a vessel operated by Eastern
Shipping Lines loaded at Kobe, Japan for Manila:
(1) 5,000 pieces of calorized lance pipes in 28 packages valued at
P256,039.00 consigned to Philippine Blooming Mills Co., Inc.,
(2) 7 cases of spare parts valued at P92,361.75, consigned to Central
Textile Mills, Inc.
Both sets of goods were insured for their value with Development
Insurance and Surety Corporation.
In GR 71478, the same vessel took on board :
1. 128 cartons of garment fabrics and accessories, in 2 containers,
consigned to Mariveles Apparel Corporation
2. two cases of surveying instruments consigned to Aman
Enterprises and General Merchandise.
The 128 cartons were insured for their value by Nisshin Fire & Marine
Insurance Co., for US$46,583.00. The 2 cases by Dowa Fire & Marine
Insurance Co., Ltd., for US$11,385.00. Enroute for Kobe, Japan, to Manila, the
vessel caught fire and sank, resulting in the total loss of ship and cargo. The
respective Insurers paid the corresponding marine insurance values to the
consignees concerned and were thus subrogated unto the rights of the latter
as the insured.
Eastern Shipping denied liability mainly on the ground that the loss
was due to an extraordinary fortuitous event; hence, it is not liable under the
law. The Trial Court rendered judgment in favor of Development Insurance in
the amounts of P256,039.00 and P92,361.75, respectively, with legal interest,
plus P35,000.00 as attorney’s fees and costs. Eastern Shipping took an appeal
to the then Court of Appeals which, on 14 August 1984, affirmed the decision
of the trial court. Eastern Shipping filed a petition for review on certiorari.
Nisshin, and Dowa, as subrogees of the insured, filed suit against
Eastern Shipping for the recovery of the insured value of the cargo lost
imputing unseaworthiness of the ship and non-observance of extraordinary
diligence by Eastern Shipping. Eastern Shipping denied liability on the
principal grounds that the fire which caused the sinking of the ship is an
exempting circumstance under Section 4(2) (b) of the Carriage of Goods by
Sea Act (COGSA); and that when the loss of fire is established, the burden of
proving negligence of the vessel is shifted to the cargo shipper. Trial Court
rendered judgment in favor of Nisshin and Dowa. CA affirmed decision. Hence
this petition on certiorari.
Issue:
Whether or not the carrier exercised extraordinary diligence.
Held:
 Eastern Shipping shall pay the Development Insurance the amount of
P256,039 for the 28 packages of calorized lance pipes, and P71,540 for the 7
cases of spare parts, with interest at the legal rate from the date of the filing of
the Complaint on 13 June 1978, plus P5,000 as attorney’s fees, and the costs.
The Court, on the other hand, in GR 71478, affirmed the judgment.
The evidence of the defendant did not show that extraordinary
diligence was observed by the vessel to prevent the occurrence of fire at
hatches nos. 2 and 3. Defendant’s evidence did not likewise show the amount
of diligence made by the crew, on orders, in the care of the cargoes. What
appears is that after the cargoes were stored in the hatches, no regular
inspection was made as to their condition during the voyage. The complete
defense afforded by the COGSA when loss results from fire is unavailing to
Eastern Shipping. The Carriage of Goods by Sea Act (COGSA), a special law,
is merely suppletory to the provisions of the Civil Code The fire may not be
considered a natural disaster or calamity, as it arises almost invariably from
some act of man or by human means. It does not fall within the category of an
act of God unless caused by lightning or by other natural disaster or calamity.
It may even be caused by the actual fault or privity of the carrier.
Alitalia v. IAC
WHO WON: Dra. Pablo
DOCTRINE:
- Under the Warsaw Convention, an air carrier is made liable for
damages for: 1) the death, wounding or other bodily injury of a
passenger if the accident causing it took place on board the aircraft or
in the course of its operations of embarking or disembarking; 2) the
destruction or loss of, or damage to, any registered luggage or goods,
if the occurrence causing it took place during the carriage by air;" and
3) delay in the transportation by air of passengers, luggage or goods.
In these cases, it is provided in the Convention that the "action for
damages, however, founded, can only be brought subject to conditions
and limits set out" therein.
- (DOCTRINE in Cathay Pacific Case but applicable to this case as
well) Although the Warsaw Convention has the force and effect of law
in this country, being a treaty commitment assumed by the Philippine
government, said convention does not operate as an exclusive
enumeration of the instances for declaring a carrier liable for breach of
contract of carriage or as an absolute limit of the extent of that liability.
The Warsaw Convention declares the carrier liable for damages in the
enumerated cases and under certain limitations. However, it must not
be construed to preclude the operation of the Civil Code and other
pertinent laws. It does not regulate, much less exempt, the carrier from
liability for damages for violating the rights of its passengers under the
contract of carriage, especially if willful misconduct on the part of the
carrier's employees is found or established.
FACTS:
- Dr. Felipa Pablo — an associate professor in the University of the
Philippines and a research grantee of the Philippine Atomic
Energy Agency — was invited to take part at a meeting of the
Department of Research and Isotopes of the Joint FAO-IAEA
Division of Atomic Energy in Food and Agriculture of the United
Nations in Ispra, Italy. She was invited in view of her specialized
knowledge in "foreign substances in food and the agriculture
environment." She accepted the invitation, and was then scheduled
by the organizers, to read a paper on "The Fate of Radioactive
Fusion Products Contaminating Vegetable Crops." The program
announced that she would be the second speaker on the first day of
the meeting. To fulfill this engagement, Dr. Pablo booked passage
on petitioner airline, ALITALIA.
- She arrived in Milan on the day before the meeting in accordance with
the itinerary and time table set for her by ALITALIA. She was
however told by the ALITALIA personnel there at Milan that her
luggage was "delayed inasmuch as the same was in one of the
succeeding flights from Rome to Milan."
- Dra. Pablo’s luggage consisted of two (2) suitcases: (1) contained
her clothing and other personal items; (2) her scientific papers, slides
and other research material. But the other flights arriving from Rome
did not have her baggage on board.
- She went to Rome to try to locate her bags herself. There, she
inquired about her suitcases in the domestic and international
airports, and filled out the forms prescribed by ALITALIA for
people in her predicament. However, her baggage could not be
found. Completely distraught and discouraged, she returned to
Manila without attending the meeting in Ispra, Italy.
- Dra. Pablo's suitcases were in fact located and forwarded to
Ispra, Italy, but only on the day after her scheduled appearance
and participation at the U.N. meeting there. Of course Dr. Pablo
was no longer there to accept delivery; she was already on her way
home to Manila. And for some reason or other, the suitcases were
not actually restored to Prof. Pablo by ALITALIA until eleven (11)
months later, and four (4) months after institution of her action.
- She then demanded that ALITALIA make reparation for the damages
thus suffered by her. ALITALIA offered her "free airline tickets to
compensate her for any alleged damages." She rejected the offer, and
forthwith commenced a civil action against the carrier.
 - CFI rendered judgment in Dr. Pablo's favor. IAC not only affirmed the
Trial Court's decision but also increased the award of nominal
damages payable by ALITALIA to P40K.
ISSUE: W/N the Warsaw Convention should be applied to limit ALITALIA’s
liability? NO
RULING:
Under the Warsaw Convention, an air carrier is made liable for damages for: 1)
the death, wounding or other bodily injury of a passenger if the accident
causing it took place on board the aircraft or in the course of its operations of
embarking or disembarking; 2) the destruction or loss of, or damage to, any
registered luggage or goods, if the occurrence causing it took place during the
carriage by air;" and 3) delay in the transportation by air of passengers,
luggage or goods. In these cases, it is provided in the Convention that the
"action for damages, however, founded, can only be brought subject to
conditions and limits set out" therein.
The Convention also purports to limit the liability of the carriers in the
following manner:
1. In the carriage of passengers the liability of the carrier for each
passenger is limited to the sum of 250,000 francs. Nevertheless, by
special contract, the carrier and the passenger may agree to a higher
limit of liability; 2. a) In the carriage of registered baggage and of
cargo, the liability of the carrier is limited to a sum of 250 francs per
kilogram, unless the passenger or consignor has made, at the time
when the package was handed over to the carrier, a special
declaration of interest in delivery at destination and has paid a
supplementary sum if the case so requires. In that case the carrier will
be liable to pay a sum not exceeding the declared sum, unless he
proves that sum is greater than the actual value to the consignor at
delivery; b) In the case of loss, damage or delay of part of
registered baggage or cargo, or of any object contained therein,
the weight to be taken into consideration in determining the
amount to which the carrier's liability is limited shall be only the
total weight of the package or packages concerned.
Nevertheless, when the loss, damage or delay of a part of the
registered baggage or cargo, or of an object contained therein,
affects the value of other packages covered by the same baggage
check or the same air way bill, the total weight of such package
or packages shall also be taken into consideration in determining
the limit of liability; 3. As regards objects of which the passenger
takes charge himself the liability of the carrier is limited to 5000 francs
per passenger. 4. The limits prescribed shall not prevent the court
from awarding, in accordance with its own law, in addition, the whole
or part of the court costs and of the other expenses of litigation
incurred by the plaintiff. The foregoing provision shall not apply if the
amount of the damages awarded, excluding court costs and other
expenses of the litigation, does not exceed the sum which the carrier
has offered in writing to the plaintiff within a period of six months from
the date of the occurrence causing the damage, or before the
commencement of the action, if that is later.
The Warsaw Convention however denies to the carrier availment "of the
provisions which exclude or limit his liability, if the damage is caused by his
willful misconduct or by such default on his part as, in accordance with the law
of the court seized of the case, is considered to be equivalent to willful
misconduct," or "if the damage is similarly caused by any agent of the carrier
acting within the scope of his employment.
In the case at bar, no bad faith or otherwise improper conduct may be
ascribed to the employees of petitioner airline; and Dr. Pablo's luggage
was eventually returned to her, belatedly, it is true, but without
appreciable damage.
NEVERTHELESS, some special species of injury was caused to Dr. Pablo
because petitioner ALITALIA misplaced her baggage and failed to deliver
it to her at the time appointed — a breach of its contract of carriage —
with the result that she was unable to read the paper and make the
scientific presentation (consisting of slides, autoradiograms or films,
tables and tabulations) that she had painstakingly labored over, at the
prestigious international conference, to attend which she had traveled
hundreds of miles, to her chagrin and embarrassment and the
disappointment and annoyance of the organizers. She felt, not
unreasonably, that the invitation for her to participate at the conference,
extended by the Joint FAO/IAEA Division of Atomic Energy in Food and
Agriculture of the United Nations, was a singular honor not only to
herself, but to the University of the Philippines and the country as well,
an opportunity to make some sort of impression among her colleagues
in that field of scientific activity. The opportunity to claim this honor or
distinction was irretrievably lost to her because of Alitalia's breach of its
contract.
Apart from this, there can be no doubt that Dr. Pablo underwent profound
distress and anxiety, which gradually turned to panic and finally despair.
Certainly, the compensation for the injury suffered by Dr. Pablo CANNOT
under the circumstances be restricted to that prescribed by the Warsaw
Convention for delay in the transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to
her luggage. As already mentioned, her baggage was ultimately delivered to
her in Manila, tardily but safely. She is however entitled to nominal damages
— which, as the law says, is adjudicated in order that a right of the plaintiff,
which has been violated or invaded by the defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered — and the SC agreed that the CA correctly set the amount thereof at
P40K.
G.R. No. 186312 June 29, 2010
SPOUSES DANTE CRUZ and LEONORA CRUZ, Petitioners,
vs.
SUN HOLIDAYS, INC., Respondent.
Facts: Spouses Cruz lodged a Complaint against Sun Holidays, Inc. with the
(RTC) of Pasig City for damages arising from the death of their son (Ruelito)
who perished with his wife on September 11, 2000 on board the boat M/B
Coco Beach III that capsized en route to Batangas from Puerto Galera,
Oriental Mindoro where the couple had stayed at Coco Beach Island Resort
(Resort) owned and operated by respondent.
The stay of the newly wed Ruelito and his wife at the Resort from September 9
to 11, 2000 was by virtue of a tour package-contract with respondent that
included transportation to and from the Resort and the point of departure in
Batangas.
Miguel C. Matute (Matute), a scuba diving instructor and one of the survivors,
gave his account of the incident that led to the filing of the complaint as
follows:
On September 11, 2000, Matute and 25 other Resort guests including
petitioners’ son and his wife trekked to the other side of the Coco Beach
mountain that was sheltered from the wind where they boarded M/B Coco
Beach III, which was to ferry them to Batangas.
Shortly after the boat sailed, it started to rain. As it moved farther away from
Puerto Galera and into the open seas, the rain and wind got stronger, causing
the boat to tilt from side to side and the captain to step forward to the front,
leaving the wheel to one of the crew members.
The waves got more unwieldy. After getting hit by two big waves which came
one after the other, M/B Coco Beach III capsized putting all passengers
underwater.
The passengers, who had put on their life jackets, struggled to get out of the
boat. Upon seeing the captain, Matute and the other passengers who reached
the surface asked him what they could do to save the people who were still
trapped under the boat. The captain replied "Iligtas niyo na lang ang sarili niyo"
(Just save yourselves).
Petitioners filed the Complaint, alleging that respondent, as a common carrier
because the transporting of its guests is an integral part of its resort business
and was guilty of negligence in allowing M/B Coco Beach III to sail
notwithstanding storm warning bulletins issued by (PAGASA) as early as 5:00
a.m. of September 11, 2000.
Respondent denied being a common carrier, alleging that its boats are not
available to the general public as they only ferry Resort guests and crew
members. Nonetheless, it claimed that it exercised the utmost diligence in
ensuring the safety of its passengers; contrary to petitioners’ allegation, there
was no storm on September 11, 2000 as the Coast Guard in fact cleared the
voyage; and M/B Coco Beach III was not filled to capacity and had sufficient
life jackets for its passengers.
The Captain of M/B Coco Beach III, averred that the Resort customarily
requires four conditions to be met before a boat is allowed to sail, to wit: (1) the
sea is calm, (2) there is clearance from the Coast Guard, (3) there is clearance
from the captain and (4) there is clearance from the Resort’s assistant
manager. He added that M/B Coco Beach III met all four conditions on
September 11, 2000, but a subasco or squall, characterized by strong winds
and big waves, suddenly occurred, causing the boat to capsize.
Pasig RTC dismissed petitioners’ Complaint
The appellate court denied petitioners’ appeal, holding, among other things,
that the trial court correctly ruled that respondent is a private carrier which is
only required to observe ordinary diligence; that respondent in fact observed
extraordinary diligence in transporting its guests on board M/B Coco Beach III;
and that the proximate cause of the incident was a squall, a fortuitous event.
Issue: Whether or not respondent is a common carrier.
Held: YES.
Petitioners correctly rely on De Guzman v. Court of Appeals in characterizing
respondent as a common carrier.
The Civil Code defines "common carriers" in the following terms:
Article 1732. 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.
The above article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity (in local idiom, as "a sideline").
Article 1732 also carefully avoids making any distinction between a person or
enterprise offering transportation service on a regular or scheduled basis and
one offering such service on an occasional, episodic or unscheduled basis.
Neither does Article 1732 distinguish between a carrier offering its services to
the "general public," i.e., the general community or population, and one who
offers services or solicits business only from a narrow segment of the general
population. We think that Article 1733 deliberately refrained from making such
distinctions.
Indeed, respondent is a common carrier. Its ferry services are so intertwined
with its main business as to be properly considered ancillary thereto. The
constancy of respondent’s ferry services in its resort operations is underscored
by its having its own Coco Beach boats. And the tour packages it offers, which
include the ferry services, may be availed of by anyone who can afford to pay
the same. These services are thus available to the public.
That respondent does not charge a separate fee or fare for its ferry services is
of no moment. It would be imprudent to suppose that it provides said services
at a loss. The Court is aware of the practice of beach resort operators offering
tour packages to factor the transportation fee in arriving at the tour package
price. That guests who opt not to avail of respondent’s ferry services pay the
same amount is likewise inconsequential. These guests may only be deemed
to have overpaid.
When a passenger dies or is injured in the discharge of a contract of carriage,
it is presumed that the common carrier is at fault or negligent. In fact, there is
even no need for the court to make an express finding of fault or negligence on
the part of the common carrier. This statutory presumption may only be
overcome by evidence that the carrier exercised extraordinary diligence.
The evidence shows that PAGASA issued 24-hour public weather forecasts
and tropical cyclone warnings for shipping on September 10 and 11, 2000
advising of tropical depressions in Northern Luzon which would also affect the
province of Mindoro.
A very cautious person exercising the utmost diligence would thus not brave
such stormy weather and put other people’s lives at risk. The extraordinary
diligence required of common carriers demands that they take care of the
goods or lives entrusted to their hands as if they were their own. This
respondent failed to do.
Respondent’s insistence that the incident was caused by a fortuitous event
does not impress either.
To fully free a common carrier from any liability, the fortuitous event must have
been the proximate and only causeof the loss. And it should have exercised
due diligence to prevent or minimize the loss before, during and after the
occurrence of the fortuitous event.
Article 1764 vis-à-vis Article 2206 of the Civil Code holds the common carrier
in breach of its contract of carriage that results in the death of a passenger
liable to pay the following: (1) indemnity for death, (2) indemnity for loss of
earning capacity and (3) moral damages.
LOADMASTERS CUSTOMS SERVICES, INC. vs. GLODEL BROKERAGE
CORPORATION and R&B INSURANCECORPORATION
G.R. No. 179446 January 10, 2011
FACTS:
On August 28, 2001, R&B Insurance issued Marine Policy No. MN-
00105/2001 in favor of Columbia to insure the shipment of 132 bundles
of electric copper cathodes against All Risks. On August 28, 2001, the cargoes
were shipped on board the vessel "Richard Rey" from Isabela, Leyte, to Pier
10, North Harbor, Manila. They arrived on the same date.
Columbia engaged the services of Glodel for the release and withdraw
al of the cargoes from the pier and the subsequent delivery to its warehouses/
plants. Glodel, in turn, engaged the services of Loadmasters for the use of its
delivery trucks to transport the cargoes to Columbia’s warehouses/plants in
Bulacan and Valenzuela City. The goods were loaded on board twelve (12)
trucks owned by Loadmasters, driven by its employed drivers and
accompanied by its employed truck helpers. Six (6) truck loads
of copper cathodes were to be delivered to Balagtas, Bulacan, while the other
six (6)truck loads were destined for Lawang Bato, Valenzuela City. The
cargoes in six truckloads for Lawang Bato were duly delivered in Columbia’s
warehouses there. Of the six (6) trucks enroute to Balagtas, Bulacan, however,
only five (5) reached the destination. One (1) truck loaded with 11 bundles or
232 pieces of copper cathodes, failed to deliver its cargo. Later on, the said
truck, an Isuzu with Plate No. NSD-117, was recovered but without the copper
cathodes. Because of this incident, Columbia filed with R&B Insurance a claim
for insurance indemnity in the amount of P1,903,335.39 which was paid in the
amount of P1,896,789.62 after investigation and adjustment.
R&B Insurance, thereafter, filed a complaint for damages against both
Loadmasters and Glodel before the Regional Trial Court, Branch 14, Manila
(RTC), docketed as Civil Case No. 02-103040. It sought reimbursement of the
amount it had paid to Columbia for the loss of the subject cargo. It claimed that
it had been subrogated "to the right of the consignee to recover from the
party/parties who may be held legally liable for the loss."
Issue
1. Whether or not Loadmasters and Glodel are common carriers.
2. Whether Loadmasters and Glodel are solidarily liable.
3. Whether there is a Principal-Agent relationship between
Loadmasters and Glodel.
Held
Under Article 1732 of the Civil Code, common carriers are persons,
corporations, firms, or associations engaged in the business of carrying or
transporting passenger or goods, or both by land, water or air for
compensation, offering their services to the public. A common carrier is
distinguished from a private carrier wherein the carriage is generally
undertaken by special agreement and it does not hold itself out to carry goods
for the general public. The distinction is significant in the sense that the rights
and obligations of the parties to a contract of private carriage are governed
principally by their stipulations, not by the law on common carriers.
Loadmasters and Glodel, being both common carriers, are mandated
from the nature of their business and for reasons of public policy, to observe
the extraordinary diligence in the vigilance over the goods transported by them
according to all the circumstances of such case, as required by Article 1733 of
the Civil Code. When the Court speaks of extraordinary diligence, it is that
extreme measure of care and caution which persons of unusual prudence and
circumspection observe for securing and preserving their own property or
rights. This exacting standard imposed on common carriers in a contract of
carriage of goods is intended to tilt the scales in favor of the shipper who is at
the mercy of the common carrier once the goods have been lodged for
shipment. Thus, in case of loss of the goods, the common carrier is presumed
to have been at fault or to have acted negligently. This presumption of fault or
negligence, however, may be rebutted by proof that the common carrier has
observed extraordinary diligence over the goods.
With respect to the time frame of this extraordinary responsibility, the
Civil Code provides that the exercise of extraordinary diligence 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 a right
to receive them.
Premises considered, the Court is of the view that both Loadmasters
and Glodel are jointly and severally liable to R & B Insurance for the loss of the
subject cargo. Under Article 2194 of the New Civil Code, “the responsibility of
two or more persons who are liable for a quasi-delict is solidary.”
Loadmasters’ claim that it was never privy to the contract entered into
by Glodel with the consignee Columbia or R&B Insurance as subrogee, is not
a valid defense. It may not have a direct contractual relation with Columbia,
but it is liable for tort under the provisions of Article 2176 of the Civil Code on
quasi-delicts which expressly provide:
ART. 2176. Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the
damage done. Such fault or negligence, if there is no pre-existing
contractual relation between the parties, is called a quasi-delict and is
governed by the provisions of this Chapter.
In connection therewith, Article 2180 provides:
ART. 2180. The obligation imposed by Article 2176 is
demandable not only for one’s own acts or omissions, but also for
those of persons for whom one is responsible.
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks, even
though the former are not engaged in any business or industry.
It is not disputed that the subject cargo was lost while in the custody of
Loadmasters whose employees (truck driver and helper) were instrumental in
the hijacking or robbery of the shipment. As employer, Loadmasters should be
made answerable for the damages caused by its employees who acted within
the scope of their assigned task of delivering the goods safely to the
warehouse.
 Whenever an employee’s negligence causes damage or injury to
another, there instantly arises a presumption juris tantum that the employer
failed to exercise diligentissimi patris families in the selection (culpa in
eligiendo) or supervision (culpa in vigilando) of its employees. To avoid liability
for a quasi-delict committed by its employee, an employer must overcome the
presumption by presenting convincing proof that he exercised the care and
diligence of a good father of a family in the selection and supervision of his
employee. In this regard, Loadmasters failed.
Glodel is also liable because of its failure to exercise extraordinary
diligence. It failed to ensure that Loadmasters would fully comply with the
undertaking to safely transport the subject cargo to the designated destination.
It should have been more prudent in entrusting the goods to Loadmasters by
taking precautionary measures, such as providing escorts to accompany the
trucks in delivering the cargoes. Glodel should, therefore, be held liable with
Loadmasters. Its defense of force majeure is unavailing.
At this juncture, the Court clarifies that there exists no principal-agent
relationship between Glodel and Loadmasters, as erroneously found by the
CA. Article 1868 of the Civil Code provides: “By the contract of agency a
person binds himself to render some service or to do something in
representation or on behalf of another, with the consent or authority of the
latter.” The elements of a contract of agency are: (1) consent, express or
implied, of the parties to establish the relationship; (2) the object is the
execution of a juridical act in relation to a third person; (3) the agent acts as a
representative and not for himself; (4) the agent acts within the scope of his
authority.
Accordingly, there can be no contract of agency between the parties.
Loadmasters never represented Glodel. Neither was it ever authorized to
make such representation. It is a settled rule that the basis for agency is
representation, that is, the agent acts for and on behalf of the principal on
matters within the scope of his authority and said acts have the same legal
effect as if they were personally executed by the principal. On the part of the
principal, there must be an actual intention to appoint or an intention naturally
inferable from his words or actions, while on the part of the agent, there must
be an intention to accept the appointment and act on it. Such mutual intent is
not obtaining in this case.
There is no contribution between joint tortfeasors whose liability is
solidary since both of them are liable for the total damage. Where the
concurrent or successive negligent acts or omissions of two or more persons,
although acting independently, are in combination the direct and proximate
cause of a single injury to a third person, it is impossible to determine in what
proportion each contributed to the injury and either of them is responsible for
the whole injury. Where their concurring negligence resulted in injury or
damage to a third party, they become joint tortfeasors and are solidarily liable
for the resulting damage under Article 2194 of the Civil Code.
Calvo v. UCPB Gen Insurance
FACTS:
- Virgines Calvo is the owner of Transorient Container Terminal
Services, Inc (TCTSI), a sole proprietorship customs broker. 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.
- On July 14, 1990, the shipment in question, contained in 30 metal
vans, arrived in Manila on board "M/V Hayakawa Maru" and, after 24
hours, were unloaded from the vessel to the custody of the arrastre
operator, Manila Port Services, Inc.
- From July 23 to July 25, 1990, petitioner, pursuant to her contract with
SMC, withdrew the cargo from the arrastre operator and delivered it to
SMC's warehouse in Ermita, Manila.
- On July 25, 1990, the 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. The damage was placed at P93,112.
- SMC collected payment from respondent UCPB under its insurance
contract for the aforementioned amount.
- As subrogee of SMC, UCPB brought suit against petitioner in the RTC
which rendered judgment finding petitioner Calvo liable to respondent
for the damage to the shipment. It held that defendant by reason of the
nature of [her] business should have devised ways and means in order
to prevent the damage to the cargoes which it is under obligation to
take custody of and to forthwith deliver to the consignee. It held that
Calvo did not present any evidence on what precaution she performed
to prevent the said incident, hence the presumption is that the moment
the defendant accepts the cargo she shall perform such extraordinary
diligence because of the nature of the cargo.
- CA affirmed RTC’s decision.
- Petitioner contends that contrary to the findings of the trial court and
the CA, she is not a common carrier but a private carrier because, as
a customs broker and warehouseman, she does not indiscriminately
hold her services out to the public, but only offers the same to select
parties with whom she may contract in the conduct of her business.
ISSUE: W/N petitioner is a common carrier and is thus liable to respondent?
YES
RULING:
There is greater reason for holding petitioner to be a common carrier because
the transportation of goods is an integral part of her business. To uphold
petitioner's contention would be to deprive those with whom she contracts the
protection which the law affords them notwithstanding the fact that the
obligation to carry goods for her customers, as already noted, is part and
parcel of petitioner's business.
Now, as to petitioner's liability, Art. 1733 of the Civil Code provides:
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. .
..
In the case at bar, petitioner denies liability for the damage to the cargo. She
claims that the "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 nine days from July
notwithstanding the fact that some of the containers were deformed, cracked
or otherwise damaged.
Contrary to petitioner's assertion, the Survey Report of the Marine Cargo
Surveyors indicates that when the shipper transferred the cargo in question to
the arrastre operator, these were covered by clean Equipment Interchange
Report (EIR) and, when petitioner's employees withdrew the cargo from the
arrastre operator, they did so without exception or protest either with regard to
the condition of container vans or their contents.
To put it simply, Calvo received the shipment in good order and condition and
delivered the same to the consignee damaged. CA can only conclude that the
damages to the cargo occurred while it was in the possession of the
defendant-appellant. Whenever the thing is lost (or damaged) in the
possession of the debtor (or obligor), it shall be presumed that the loss
(or damage) was due to his fault, unless there is proof to the contrary. No
proof was proffered to rebut this legal presumption and the presumption
of negligence attached to a common carrier in case of loss or damage to
the goods.
Anent petitioner's insistence that the cargo could not have been damaged
while in her custody as she immediately delivered the containers to SMC's
compound, suffice it to say that to prove the exercise of extraordinary
diligence, petitioner 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 thereof. Petitioner
failed to do this.
Nor is there basis to exempt provision to apply petitioner from liability under
Art. 1734(4) because the rule is that if the improper packing or, in this case,
the defect/s in the container, is/are known to the carrier or his employees or
apparent upon ordinary observation, but he nevertheless accepts the same
without protest or exception notwithstanding such condition, he is not relieved
of liability for damage resulting therefrom.14 In this case, petitioner accepted
the cargo without exception despite the apparent defects in some of the
container vans. Hence, for failure of petitioner to prove that she exercised
extraordinary diligence in the carriage of goods in this case or that she is
exempt from liability, the presumption of negligence as provided under Art.
1735.
First Philippine Industrial Corp. v. CA, Paterno Tac-an, Bantangas City,
and Adoracion Arellano (treasurer of Batangas)
G.R. No. 125948 December 29, 1998
FACTS:
 FPIC – grantee of a pipeline concession under Republic Act No. 387, as
amended, to contract, install and operate oil pipelines
 It applied for a mayor’s permit with the Office of the Mayor of Batangas City.
Before the permit could be issued, it was required by the City Treasurer to
pay a local tax based on its gross receipts for the fiscal year 1993 pursuant
to the Local Government Code. It paid the tax under protest.
 It filed a complaint for tax refund alleging that 1) the imposition and
collection of the business tax on its gross receipts violates Section 133 of the
Local Government Code which grants tax exemption to common carriers; 2)
the authority of cities to impose and collect a tax on the gross receipts of
“contractors and independent contractors” under Sec. 141 (e) and 151 does
not include the authority to collect such taxes on transportation contractors
for, as defined under Sec. 131 (h), the term “contractors” excludes
transportation contractors; and, 3) the City Treasurer illegally and
erroneously imposed and collected the said tax, thus meriting the immediate
refund of the tax paid.
ISSUES: 1. WON FPIC is a common carrier; 2. WON it is exempted from
paying the taxes required by the City Treasurer
HELD: 1. Yes. FPIC is engaged in the business of transporting or carrying
goods, i.e. petroleum products, for hire as a public employment. It undertakes
to carry for all persons indifferently, that is, to all persons who choose to
employ its services, and transports the goods by land and for compensation.
 common carrier - holds himself out to the public as engaged in the business
of transporting persons or property from place to place, for compensation,
offering his services to the public generally (see also Art. 1732)
 test for determining whether a party is a common carrier of goods:
 a. engaged in the business of carrying goods for others as a public
employment, and must hold himself out as ready to engage in the
transportation of goods for person generally as a business and not as a
casual occupation;
 b. undertakes to carry goods of the kind to which his business is confined
 c. undertakes to carry by the method by which his business is conducted and
over his established roads
 d. transportation is for hire
 common service coincides with public service
 public service – includes every person that now or hereafter may own,
operate. manage, or control in the Philippines, for hire or compensation, with
general or limited clientele, whether permanent, occasional or accidental,
and done for general business purposes, any common carrier, railroad,
street railway, traction railway, subway motor vehicle, either for freight or
passenger, or both, with or without fixed route and whatever may be its
classification, freight or carrier service of any class, express service,
steamboat, or steamship line, pontines, ferries and water craft, engaged in
the transportation of passengers or freight or both, shipyard, marine repair
shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system
gas, electric light heat and power, water supply and power petroleum,
sewerage system, wire or wireless communications systems, wire or
wireless broadcasting stations and other similar public services (CA No.
1416, as amended, otherwise known as the Public Service Act)
 FPIC - considered a common carrier under Art. 86 of the Petroleum Act of
the Philippines (RA 387), which provides that: Art. 86. Pipe line
concessionaire as common carrier. — A pipe line shall have the preferential
right to utilize installations for the transportation of petroleum owned by him,
but is obligated to utilize the remaining transportation capacity pro rata for
the transportation of such other petroleum as may be offered by others for
transport, and to charge without discrimination such rates as may have been
approved by the Secretary of Agriculture and Natural Resources.
 FPIC is also a public utility pursuant to Art. 7 of RA 387 which states that
“everything relating to the exploration for and exploitation of petroleum . . .
and everything relating to the manufacture, refining, storage, or
transportation by special methods of petroleum, is hereby declared to be a
public utility”
 2. Yes. Legal basis is Section 133 (j), of the Local Government Code which
provides that “Unless otherwise provided herein, the exercise of the taxing
powers of provinces, cities, municipalities, and barangays shall not extend to
the levy of the following: Taxes on the gross receipts of transportation
contractors and persons engaged in the transportation of passengers or
freight by hire and common carriers by air, land or water, except as
provided in this Code”.
 Reason for the exception: to avoid duplication of tax
De Guzman v. CA and Cendana
FACTS:
- Respondent Ernesto Cendana, a junk dealer, was engaged in buying
up used bottles and scrap metal in Pangasinan which he would bring
to Manila for resale. He utilized two (2) six-wheeler trucks which he
owned for hauling the material to Manila.
- On the return trip to Pangasinan, respondent would load his vehicles
with cargo which various merchants wanted delivered to differing
establishments in Pangasinan. For that service, respondent charged
freight rates which were commonly lower than regular commercial
rates.
- Sometime in November 1970, petitioner Pedro de Guzman a merchant
and authorized dealer of General Milk Company (Philippines), Inc. in
Urdaneta, Pangasinan, contracted with respondent for the hauling of
750 cartons of Liberty filled milk from a warehouse of General
Milk in Makati, Rizal, to petitioner's establishment in Urdaneta on
or before 4 December 1970.
- Accordingly, respondent loaded in Makati the merchandise on to his
trucks: 150 cartons were loaded on a truck driven by respondent
himself, while 600 cartons were placed on board the other truck which
was driven by Manuel Estrada, respondent's driver and employee.
- Only 150 boxes of Liberty filled milk were delivered to petitioner.
The other 600 boxes never reached petitioner, since the truck
which carried these boxes was hijacked somewhere along the
MacArthur Highway in Paniqui, Tarlac, by armed men who took
with them the truck, its driver, his helper and the cargo.
- De Guzman commenced action against Cendena in the CFI of
Pangasinan, demanding payment of P 22,150 representing the
claimed value of the lost merchandise, plus damages and attorney's
fees. Petitioner argued that private respondent, being a common
carrier, and having failed to exercise the extraordinary diligence
required of him by the law, should be held liable for the value of the
undelivered goods.
- Cendena denied that he was a common carrier and argued that he
could not be held responsible for the value of the lost goods, such loss
having been due to force majeure.
- RTC found private respondent to be a common carrier and held him
liable for the value of the undelivered goods as well as P4K as
damages and P 2K as attorney's fees.
- CA reversed the judgment of the trial court and held that respondent
had been engaged in transporting return loads of freight "as a casual
 occupation — a sideline to his scrap iron business" and not as a
common carrier.
ISSUE/S:
- W/N Cendena may, under the facts presented, be properly
characterized as a common carrier?
- W/N Cendena, assuming it is a common carrier, may be held liable for
the loss of goods?
RULING:
1. YES. It appears to the Court that private respondent is properly
characterized as a common carrier even though he merely "back-hauled"
goods for other merchants from Manila to Pangasinan, although such back-
hauling was done on a periodic or occasional rather than regular or
scheduled manner, and even though private respondent's principal
occupation was not the carriage of goods for others. There is no dispute
that private respondent charged his customers a fee for hauling their goods;
that fee frequently fell below commercial freight rates is not relevant here.
A certificate of public convenience is not a requisite for the incurring of
liability under the Civil Code provisions governing common carriers.
That liability arises the moment a person or firm acts as a common
carrier, without regard to whether or not such carrier has also complied
with the requirements of the applicable regulatory statute and
implementing regulations and has been granted a certificate of public
convenience or other franchise. To exempt private respondent from the
liabilities of a common carrier because he has not secured the necessary
certificate of public convenience, would be offensive to sound public
policy; that would be to reward private respondent precisely for failing to
comply with applicable statutory requirements.
2. NO. The specific cause alleged in the instant case — the hijacking of the
carrier's truck — does not fall within any of the five (5) categories of exempting
causes listed in Article 1734. It would follow, therefore, that the hijacking of the
carrier's vehicle must be dealt with under the provisions of Article 1735, in
other words, that the private respondent as common carrier is presumed to
have been at fault or to have acted negligently. This presumption, however,
may be overthrown by proof of extraordinary diligence on the part of private
respondent.
The duty of extraordinary diligence in the vigilance over goods is, under Article
1733, given additional specification not only by Articles 1734 and 1735 but also
by Article 1745, numbers 4, 5 and 6.
Under Article 1745 (6) above, a common carrier is held responsible —and will
not be allowed to divest or to diminish such responsibility— even for acts of
strangers like thieves or robbers, except where such thieves or robbers in
fact acted "with grave or irresistible threat, violence or force."
The limits of the duty of extraordinary diligence in the vigilance over the goods
carried are reached where the goods are lost as a result of a robbery which is
attended by "grave or irresistible threat, violence or force."
In the instant case, armed men held up the second truck owned by private
respondent which carried petitioner's cargo. The record shows that the
accused were charged with willfully and unlawfully taking and carrying
away with them the second truck, driven by Manuel Estrada and loaded
with the 600 cartons of Liberty filled milk destined for delivery at
petitioner's store in Urdaneta, Pangasinan. The decision of the trial court
shows that the accused acted with grave, if not irresistible, threat, violence or
force. Three (3) of the five (5) hold-uppers were armed with firearms. The
robbers not only took away the truck and its cargo but also kidnapped the
driver and his helper, detaining them for several days and later releasing them
in another province (in Zambales). The hijacked truck was subsequently found
by the police in Quezon City. CFI convicted all the accused of robbery, though
not of robbery in band.
Thus, the occurrence of the loss must reasonably be regarded as quite beyond
the control of the common carrier and properly regarded as a fortuitous event.
It is necessary to recall that even common carriers are not made
absolute insurers against all risks of travel and of transport of goods,
and are not held liable for acts or events which cannot be foreseen or are
inevitable, provided that they shall have complied with the rigorous
standard of extraordinary diligence.
Coastwise Lighterage Corporation v. CA
FACTS:
Pag-asa Sales Inc. entered into a contract to transport molasses from the
province of Negros to Manila with Coastwise Lighterage Corporation
(Coastwise for brevity), using the latter's dumb barges. The barges were towed
in tandem by the tugboat MT Marica, which is likewise owned by Coastwise.
Upon reaching Manila Bay, one of the barges, "Coastwise 9", struck an
unknown sunken object. The forward buoyancy compartment was damaged,
and water gushed in through a hole "two inches wide and twenty-two inches
long". As a consequence, the molasses at the cargo tanks were contaminated.
Pag-asa filed a claim against Philippine General Insurance Company, the
insurer of its cargo. Philgen paid P700,000 for the value of the molasses lost.
Philgen then filed an action against Coastwise to recover the money it paid,
claiming to be subrogated to the claims which the consignee may have against
the carrier. Both the trial court and the Court of Appeals ruled against
Coastwise.
ISSUE: Whether Coastwise was transformed into a private carrier by virtue of
the contract it entered into with Pag-asa, and whether it exercised the required
degree of diligence? NO
HELD:
Pag-asa Sales, Inc. only leased three of petitioner's vessels, in order to carry
cargo from one point to another, but the possession, command mid navigation
of the vessels remained with petitioner Coastwise Lighterage. Coastwise
Lighterage, by the contract of affreightment, was not converted into a private
carrier, but remained a common carrier and was still liable as such. The law
and jurisprudence on common carriers both hold that the mere proof of
delivery of goods in good order to a carrier and the subsequent arrival of the
same goods at the place of destination in bad order makes for a prima facie
case against the carrier. It follows then that the presumption of negligence that
attaches to common carriers, once the goods it is sports are lost, destroyed or
deteriorated, applies to the petitioner. This presumption, which is overcome
only by proof of the exercise of extraordinary diligence, remained unrebutted in
this case. Jesus R. Constantino, the patron of the vessel "Coastwise 9"
admitted that he was not licensed. Coastwise Lighterage cannot safely claim to
have exercised extraordinary diligence, by placing a person whose
navigational skills are questionable, at the helm of the vessel which eventually
met the fateful accident. It may also logically, follow that a person without
license to navigate, lacks not just the skill to do so, but also the utmost
familiarity with the usual and safe routes taken by seasoned and legally
authorized ones. Had the patron been licensed he could be presumed to have
both the skill and the knowledge that would have prevented the vessel's hitting
the sunken derelict ship that lay on their way to Pier 18. As a common carrier,
petitioner is liable for breach of the contract of carriage, having failed to
overcome the presumption of negligence with the loss and destruction of
goods it transported, by proof of its exercise of extraordinary diligence.
The distinction between the two kinds of charter parties (i.e. bareboat or
demise and contract of affreightment) is more clearly set out in the case of
Puromines, Inc. vs. Court of Appeals:
Under the demise or bareboat charter of the vessel, the charterer will generally
be regarded as the owner for the voyage or service stipulated. The charterer
mans the vessel with his own people and becomes the owner pro hac vice,
subject to liability to others for damages caused by negligence. To create a
demise, the owner of a vessel must completely and exclusively relinquish
possession, command and navigation thereof to the charterer, anything short
of such a complete transfer is a contract of affreightment (time or voyage
charter party) or not a charter party at all. In this case, there was no demise,
and only a contract of affreightment. Hence, the carrier was not transformed
into a private carrier.
On the other hand a contract of affreightment is one in which the owner of the
vessel leases part or all of its space to haul goods for others. It is a contract for
special service to be rendered by the owner of the vessel and under such
contract the general owner retains the possession, command and navigation of
the ship, the charterer or freighter merely having use of the space in the vessel
in return for his payment of the charter hire.
An owner who retains possession of the ship though the hold is the property of
the charterer, remains liable as carrier and must answer for any breach of duty
as to the care, loading and unloading of the cargo. Although a charter party
may transform a common carrier into a private one, the same however is not
true in a contract of affreightment on account of the aforementioned
distinctions between the two. PETITION DENIED.
Fabre, Jr. v. CA
WHO WON: Private respondents (Amyline Antonio, WWCF, etc.)
DOCTRINE: Due diligence in selection of employees is not satisfied by finding
that the applicant possessed a professional driver’s license. The employer
should also examine the applicant for his qualifications, experience and record
of service. Due diligence in supervision, on the other hand, requires the
formulation of rules and regulations for the guidance of employees and the
issuance of proper instructions as well as actual implementation and
monitoring of consistent compliance with the rules.
FACTS:
- Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982
model Mazda minibus. They used the bus principally in connection
with a bus service for school children which they operated in
Manila.
- The couple had a driver, Porfirio J. Cabil, whom they hired in 1981,
after trying him out for two weeks. His job was to take school
children to and from the St. Scholastica’s College in Malate,
Manila.
- Private respondent Word for the World Christian Fellowship Inc.
(WWCF) arranged with petitioners for the transportation of 33
members of its Young Adults Ministry from Manila to La Union and
back in consideration of which private respondent paid petitioners the
amount of P3K.
- The group was scheduled to leave at 5PM. However, as several
members of the party were late, the bus did not leave the Tropical Hut
at the corner of Ortigas Avenue and EDSA until 8PM. Petitioner
Porfirio Cabil drove the minibus.
 - The usual route to Caba, La Union was through Carmen, Pangasinan.
Petitioner Cabil, who was unfamiliar with the area (it being his
first trip to La Union), was forced to take a detour through the
town of Ba-ay in Lingayen, Pangasinan. At 11:30PM, he came
upon a sharp curve on the highway, running on a south to east
direction/“siete.” The road was slippery because it was raining,
causing the bus, which was running at the speed of 50 kilometers
per hour, to skid to the left road shoulder. The bus hit the left
traffic steel brace and sign along the road and rammed the fence
of one Jesus Escano, then turned over and landed on its left side,
coming to a full stop only after a series of impacts. The bus
came to rest off the road. A coconut tree which it had hit fell on it
and smashed its front portion.
- Several passengers were injured. Private respondent Amyline
Antonio was thrown on the floor of the bus and pinned down by a
wooden seat which came off after being unscrewed. It took three
persons to safely remove her from this position. She was in great pain
and could not move.
- The Lingayen police investigated the incident the next day and
subsequently filed a criminal complaint against the driver, Porfirio
Cabil. The case was later filed with the RTC Lingayen.
- Amyline Antonio, who was seriously injured, brought this case in the
RTC Makati. As a result of the accident, she is now suffering from
paraplegia and is permanently paralyzed from the waist down. During
the trial she described the operations she underwent and adduced
evidence regarding the cost of her treatment and therapy.
- RTC gave judgment for private respondents ordering petitioners Mr. &
Mrs. Engracio Fabre, Jr. and Porfirio Cabil pursuant to articles 2176
and 2180 to pay the respondents jointly and severally. CA affirmed.
ISSUE: W/N common carrier Fabres were negligent, and accordingly, liable to
private respondents? YES
RULING:
Pursuant to Arts. 2176 and 2180 of the Civil Code, Cabil’s negligence gave
rise to the presumption that his employers, the Fabres, were themselves
negligent in the selection and supervision of their employee.
The finding that Cabil drove his bus negligently, while his employer, the
Fabres, who owned the bus, failed to exercise the diligence of a good father of
the family in the selection and supervision of their employee is fully supported
by the evidence on record. Indeed, it was admitted by Cabil that on the night
in question, it was raining, and, as a consequence, the road was slippery, and
it was dark which according to him, was the reason for his failure to see that
there lay a sharp curve ahead. However, it is undisputed that Cabil drove his
bus at the speed of 50 kilometers per hour and only slowed down when he
noticed the curve some 15 to 30 meters ahead. By then it was too late for him
to avoid falling off the road. Given the conditions of the road and considering
that the trip was Cabil’s first one outside of Manila, Cabil should have driven
his vehicle at a moderate speed.
Due diligence in selection of employees is not satisfied by finding that the
applicant possessed a professional driver’s license. The employer should also
examine the applicant for his qualifications, experience and record of service.
Due diligence in supervision, on the other hand, requires the formulation of
rules and regulations for the guidance of employees and the issuance of
proper instructions as well as actual implementation and monitoring of
consistent compliance with the rules.
In the case at bar, the Fabres, in allowing Cabil to drive the bus to La Union,
apparently did not consider the fact that Cabil had been driving for school
children only, from their homes to the St. Scholastica’s College in Metro
Manila.They had hired him only after a two-week apprenticeship. They had
tested him for certain matters, such as whether he could remember the names
of the children he would be taking to school, which were irrelevant to his
qualification to drive on a long distance travel, especially considering that the
trip to La Union was his first. The existence of hiring procedures and
supervisory policies cannot be casually invoked to overturn the presumption of
negligence on the part of an employer.
As common carriers, the Fabres were bound to exercise “extraordinary
diligence” for the safe transportation of the passengers to their
destination. This duty of care is not excused by proof that they exercised the
diligence of a good father of the family in the selection and supervision of their
employee.
FGU Insurance v. GP Sarmiento Trucking and Lambert Eroles
FACTS:
- G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver 30
units of Condura S.D. white refrigerators aboard one of its Isuzu
trucks, driven by Lambert Eroles, from the plant site of Concepcion
Industries, Inc., along South Superhighway in Alabang, Metro Manila,
to the Central Luzon Appliances in Dagupan City. While the truck
was traversing the north diversion road along McArthur highway
in Barangay Anupol, Bamban, Tarlac, 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.
 - 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 with the RTC.
- 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. Respondents further claimed that the
cause of damage was purely accidental. GPS instead of submitting
evidence, filed with leave of court a motion to dismiss the complaint by
way of demurrer to evidence on the ground that petitioner had failed to
prove that it was a common carrier.
- RTC granted the motion to dismiss. FGU appealed. CA rejected such
appeal and ruled in favor of petitioner.
ISSUE:
- W/N GPS may be considered as a common carrier as defined under
the law and existing jurisprudence? NO
- W/N GPS may be presumed to have been negligent when the goods it
undertook to transport safely were subsequently damaged while in its
custody? YES
RULING:
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, whether to the public in general or to a
limited clientele in particular, but never on an exclusive basis. The true test of a
common carrier is the carriage of passengers or goods, providing space for
those who opt to avail themselves of its transportation service for a fee. 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.
Respondent trucking corporation recognizes the existence of a contract of
carriage between it and petitioner’s 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 petitioner’s 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. Petitioner’s 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.
Planters Products, Inc. v. Court of Appeals
G.R. No. 101503
Facts:
Planters Products (Planters) purchased from Mitsubishi International
Corporation of USA of 9,000 metric tons of urea fertilizer which the latter
shipped abroad the cargo vessel owned by private respondent Kyosei Kisin
Kabushiki Kaisha (KKKK) from America to La Union. Prior to its voyage, a time
charter party was entered into between Mitusbishi as shipper/charterer and
KKKK as ship-owner. After the Urea fertilizer was loaded in bulk by stevedored
hired by the shipper, the steel hatches were closed with heavy iron lids which
remained closed during the entire journey.
Upon arrival of the vessel, the hatches were opened with the use of
the vessel boom. Planters unloaded the cargo from the holders into the steel
bodied dump trucks. Each time the dump trucks were filled up, its load of urea
was covered with tarpaulin before it was transported to the consignee’s
warehouse located some (50) fifty meteres from the wharf. It took (11) eleven
days from planters to unload the cargo. The report submitted by private marine
and cargo surveyors revealed a shortage in the cargo, and some portion in the
cargo was contaminated with dirt, rendering the same unfit for commerce.
Planters filed an action for damages bu the appellate court absolved the carrier
from liability.
Issues:
 1. Whether or not the respondent is a common carrier.
2. Whether or not the respondent is liable for damages.
Held:
1. The court rules the affirmative as to the respondent being a common
carrier. The term common carrier is defined in Article 1732 of the Civil
Code. The definition refers to carriers either by land, water, or air
which holds themselves out as ready to engage in carrying goods on
transporting passengers or both for compensation as a public
employment and not as a casual occupation; if the undertaking is a
single transaction, not a part of the general business or corporation,
although involving the carriage of goods for a fee, then the person or
corporation offering such services is a private carrier. In the case at
bar respondent carrier transports goods indiscriminately for all
persons. Being such, he is a common carrier.
2. The court rules the negative. True, being a common carrier,
respondent must have observed extraordinary diligence over the
goods it carries. In the case at bar it has been proven that the
respondent has sufficiently overcome this, by clear and convincing
proof, the prima facie presumption of negligence, due to the manner of
storage of the goals during the vogyage. In fact, it was pointed out that
there was a risk in shipping the urea due to its character.
CRISOSTOMO VS. CA
[G.R. NO. 138334; AUGUST 25, 2003]
TOPIC: DISTINCTION BETWEEN COMMON CARRIERS AND OTHER
TYPES OF CONTRACTS (TRAVEL AGENCY
FACTS:
1. Petitioner Estela L. Crisostomo (Crisostomo) contracted the services of
respondent Caravan Travel and Tours International, Inc. (Caravan) to arrange
and facilitate her booking, ticketing and accommodation in a tour dubbed
“Jewels of Europe”.
2. Pursuant to said contract, Meriam Menor (MENOR) who is also the niece of
Crisostomo, went to the latter’s residence to deliver the travel documents and
plane tickets. Crisostomo, in turn, gave Menor the full payment for the
package tour.
3. Without checking her travel documents, Crisostomo went to NAIA. However,
she discovered that the flight she was supposed to take had already departed
the previous day. She thus called up Menor to complain.
4. Subsequently, Menor prevailed upon Crisostomo to take another tour – the
“British Pageant” to which Crisostomo was asked to pay once again.
5. Upon Crisostomo’s return from Europe, she demanded from Caravan the
reimbursement of P61,421.70, representing the difference between the sum
she paid for “Jewels of Europe” and the amount she owed Caravan for the
“British Pageant” tour. Despite several demands, Caravan refused to
reimburse the amount, contending that the same was non-
refundable. Crisostomo thus filed a case.
6. Crisostomo alleged that her failure to join “Jewels of Europe” was due to
Caravan’s fault since it did not clearly indicate the departure date on the plane
ticket. Caravan was also negligent in informing her of the wrong flight
schedule through its employee Menor.
7. Caravan insisted that Crisostomo was informed of the correct departure
date, which was clearly and legibly printed on the plane ticket. The travel
documents were given two days ahead of the scheduled trip. Crisostomo had
only herself to blame for missing the flight, as she did not bother to read or
confirm her flight schedule as printed on the ticket.
8. RTC: Caravan was negligent in erroneously advising Crisostomo of the
wrong date. Crisostomo incurred contributory negligence for not checking her
travel documents. Caravan should reimburse Crisostomo but with deductions
due to her contributory negligence.
9. CA: Both parties were at fault. However, Crisostomo is more negligent
because as a lawyer and well-traveled person, she should have known better
than to simply rely on what was told to her. This being so, she is not entitled to
any form of damages.
10. Crisostomo appealed to SC. She contended that Caravan did not observe
the standard of care required of a common carrier when it informed her
wrongly of the flight schedule. She could not be deemed more negligent than
Caravan since the latter is required by law to exercise extraordinary diligence
in the fulfillment of its obligation. If she were negligent at all, the same is
merely contributory and not the proximate cause of the damage she suffered.
ISSUE: Whether or not a travel agency is a common carrier and is therefore
required to exercise extraordinary diligence.
HELD: No, a travel agency is not an entity engaged in the business of
transporting either passengers or goods and is therefore, neither a private nor
a common carrier.
RATIO: By definition, a contract of carriage or transportation is one whereby a
certain person or association of persons obligate themselves to transport
persons, things, or news from one place to another for a fixed price. Such
person or association of persons are regarded as carriers and are classified as
private or special carriers and common or public carriers. A common carrier is
defined under Article 1732 of the Civil Code as 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 is obvious from the above definition that respondent is not an entity engaged
in the business of transporting either passengers or goods. Respondent did
not undertake to transport petitioner from one place to another since its
covenant with its customers is simply to make travel arrangements in their
behalf. Respondent’s services as a travel agency include procuring tickets and
facilitating travel permits or visas as well as booking customers for tours.
The object of petitioner’s contractual relation with respondent is the latter’s
service of arranging and facilitating petitioner’s booking, ticketing and
accommodation in the package tour. In contrast, the object of a contract of
carriage is the transportation of passengers or goods. It is in this sense that
the contract between the parties in this case was an ordinary one for services
and not one of carriage.
CASE LAW/ DOCTRINE: a travel agency is not an entity engaged in the
business of transporting either passengers or goods and is therefore, neither a
private nor a common carrier. It goes without saying that a travel agency is not
required by law to exercise extra ordinary diligence.
Calalas v. Court of Appeals
332 SCRA 356
Facts:
Private respondent 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, on the other hand,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.
Issue:
Whether or not there was a breach of contract of carriage.
Held:
Iin 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 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 parties, it is the parties themselves who create
the obligation, and the function of the law is merely to regulate the relation thus
created.
OLEGARIO BRITO SY,
vs.
MALATE TAXI CAB & GARAGE, INC MALATE TAXICAB & GARAGE,
INC., third-party plaintiff-appellant,
vs.
JESUS DEQUITO Y DUPY, third-party defendant-appellee.
ENDENCIA, J.:
On June 26, 1952, at Dewey Boulevard in front of the Selecta Restaurant,
Olegario Brito Sy engaged a taxicab bearing plate No. Taxi-1130, owned and
operated by Malate Taxicab and Garage, Inc. and driven by Catalino Ermino,
to take him to his place of business at Dencia's Restaurant on the Escolta
where he was the general manager. Upon reaching the Rizal Monument he
told the driver to turn to the right, but the latter did not heed him and instead
countered that they better pass along Katigbak Drive. At the intersection of
Dewey Bolevard and Katigbak Drive, the taxi collided with an army wagon with
plate No. TPI-695 driven by Sgt. Jesus De quito, as a result of which Olegario
Brito Sy was jarred, jammed and jolted. He was taken to the Santa Isabel
Hospital suffering from bruises and contusions as well as fractured right leg.
Thereafter he was transferred to the Gonzales Orthopedic Clinic and was
accordingly operated on. He spent some P2,266.45 for medical bills and
hospitalization.
On September 30, 1952, Sy filed action against the Malate Taxicab & Garage,
Inc., based upon a contract of carriage, to recover the sums of P7,200 as
actual or compensatory damages, P20,000 as moral damages, P15,000 as
nominal and exemplary damages, and P3,000 a attorney's fees. On October 2,
1952, a copy of the complaint was served on and received by the defendant,
but the latter filed its answer only on October 20, 1952, wherein it alleged that
the collision subject of the complaint was not due to the negligence of its driver
but to that of Sgt. Jesus Dequito, the driver of the army wagon; and, by way of
counterclaim, sought to recover the sum of P1,000 as damages caused by the
alleged malicious and frivolous action filed against it.
The record reveals that upon plaintiff's motion filed on October 23, 1952, the
lower court ordered on October 25, 1952 that the answer which was filed by
defendant out of time be stricken out, and declared the Malate Taxicab &
Garage, Inc. in default. Thereafter, on October 30, 1952, plaintiff presented his
evidence, and on November 20, 1952 judgment was rendered awarding
plaintiff the sum of P14.000 as actual, compensatory, moral, nominal and
exemplary damages including attorney's fees and costs, with interest at the
legal rate from the filing of the action. Defendant then filed a motion on
December 17, 1952, for relief from the order of default and for new trial, which
was granted. Hence, plaintiff filed his reply to defendant's answer and
counterelaim, and by leave of court, the latter filed on February 24, 1953 a
third-party complaint against Sgt. Jesus Dequito alleging that the cause of the
collision between the taxicab and the army wagon was the negligence of the
army sergeant, and praying that whatever amount the court may assess
against it in the action filed by plaintiff, be paid to said third-party plaintiff, plus
an additional amount of P1,000 representing attorney's fees. It appears,
however, that the summons and copy of the third-party complaint were never
served upon third-party defendant Dequito in view of his continued assignment
from place to place in connection with his army duties, and for this reason the
main case was set for trial on May 10, 1953, obviously for the sole purpose of
disposing of the issue arising from plaintiffs complaint. On the day of the trial,
defendant failed to appear, whereupon plaintiff presented his evidence, and
judgment was rendered against the defendant in the total sum of P4,200
representing actual, compensatory and moral damages, as well as attorney's
fees, with interest at the legal rate from the filing of the action, plus costs of
suit. Aga nst said judgment defendant appealed to the Court of Appeals and
assigned in its brief two errors of the lower court, namely:
1. The trial court erred in not finding that the third-party complaint
involves a prejudicial question, and therefore, the main complaint
cannot be decided until the third-party complaint is decided.
2. The trial court erred in not deciding or making an express finding as
to whether the defendant appellant Malate Taxicab & Garage, Inc. was
responsible for the collision, and hence, civilly responsible to the
plaintiff-appellee.
Finding the quoted assignment of errors as involving a purely question of law,
the Court of Appeals, by virtue of the provisions of section 17, paragraph 6 of
the judiciary Act of 1948, as amended, certified the case to this Court for
adjudication, in its Resolution of February 7, 1955.
We find no merit in the first assignment of error that the third-party complaint is
a pre-judicial question. As enunciated by this Court in Berbari vs. Concepcion,
40 Phil. 837, "Pre-judicial question in understood in law to be that which
precedes the criminal action, or that which requires a decision before final
judgment is rendered in the principal action with which said question is closely
connected. Not all previous questions are pre-judicial questions are
necessarily previous", although all pre-judicial questions are necessarily
previous." In the present case, the third-party complaint is not a pre-judicial
question, as the issue in the main action is not entirely dependent upon those
in the third-party complaint; on the contrary, it is the third-party complaint that
is dependent upon the main case at least in the amount of damages which
defendant appellant seeks to be reimbursed in its third-party complaint.
Furthermore, the complaint is based on a contractual obligation of
transportation of passenger which defendant-appellant failed to carry out, and
the action is entirely different and independent from that in the third-party
complaint which is based an alleged tortious act committed by the third-party
defendant Sgt. Dequito. The main case, therefore, is entirely severable and
may be litigated independently. Moreover, whatever the outcome of the third-
party complaint might be would not in any way affect or alter the contractual
liability of the appellant to plaintiff. If the collision was due to the negligence of
the third-party defendant, as alleged, then defendant appellant may file a
separate civil action for damages based on tort ex-delicto or upon quasi-delict,
as the case may be.
Coming to the second assignment of error that the lower court erred in not
making an express findings as to whether defendant appellant was responsible
for the collision, we find the same to be unjustified. The pertinent, provisions of
the new Civil Code under the heading Common Carriers, are the following:
ART. 1733. Common carriers, from the nature of their business and for
reason 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 1745, Nos. 5, 6, and 7, while
the extraordinary diligence for the safety of the passengers is further
set forth in articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers to
safety as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for all the
circumstances.
ART. 1756. In case of death of or injuries to passengers, common
carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in articles 1733 and 1755.
(Emphasis supplied.)
Evidently, under these provisions of law, the court need not make an express
finding of fault or negligence on the part of the defendant appellant in order to
hold it responsible to pay the damages sought for by the plaintiff, for the action
initiated therefor is based on a contract of carriage and not on tort. When
plaintiff rode on defendant-appellant's taxicab, the latter assumed the express
obligation to transport him to his destination safely, and to observe
extraordinary diligence with a due regard for all the circumstances, and any
injury that might be suffered by the passenger is right away attributable to the
fault or negligence of the carrier (Article 1756, supra). This is an exception to
the general rule that negligence must be proved, and it was therefore
incumbent upon the carrier to prove that it has exercised extraordinary
diligence as prescribed in Articles 1733 and 1755 of the new Civil Code. It is
noteworthy, however, that at the hearing in the lower court defendant-appellant
failed to appear and has not presented any evidence at all to overcome and
overwhelm the presumption of negligence imposed upon it by law; hence,
there was no need for the lower court to make an express finding thereon in
view of the provisions of the aforequoted Article 1756 of the new Civil Code.
Wherefore, the decision of the lower court is hereby affirmed with cost against
the appellant.
PILAPIL v. CA
December 22, 1989 | Padilla, J. | Petition for Review on Certiorari |
Responsibility for acts of strangers and co-passengers
PETITIONER: Jose Pilapil
RESPONDENT: Court of Appeals and Alatco Transportation Company,
Inc.
SUMMARY: Pilapil boarded private respondent’s bus. On the way to
Naga, he was hit by a stone hurled by a bystander along the national
highway which resulted to the partial loss of his left eye’s vision. He then
instituted a claim for recovery of damages. The trial court ruled in favor of
petitioner. The appellate court reversed. The SC affirmed the judgment
and held that the transportation company is not liable.
DOCTRINE: A tort committed by a stranger which causes injury to a
passenger does not accord the latter a cause of action against the
carrier. The negligence for which a common carrier is held responsible is
the negligent omission by the carrier's employees to prevent the tort from
being committed when the same could have been foreseen and
prevented by them. Further, under Article 17631, it is to be noted that
when the violation of the contract is due to the willful acts of strangers,
the degree of care essential to be exercised by the common carrier for
the protection of its passenger is only that of a good father of a family.
FACTS:
1. On 16 September 1971, Pilapil boarded a bus owned by respondent in
Iriga City bound for Naga at about 6 PM. While the bus was reached
the vicinity of a cemetery in Camarines Sur, an unidentified man, a
bystander along said national highway, hurled a stone at the left side
of the bus. The stone hit Pilapil above his left eye. Respondent’s
personnel immediately brought Pilapil to the provincial hospital where
he was confined and treated.
2. Considering that the sight of his left eye was impaired, petitioner was
taken to Dr. Malabanan of Iriga City where he was treated for another
week. Since there was no improvement in his left eye's vision,
1
Article 1763. A common carrier is responsible for injuries suffered by a passenger on
account of the wilful acts or negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the diligence of a good father of a
family could have prevented or stopped the act or omission.
 petitioner went to V. Luna Hospital, Quezon City where he was treated
by Dr. Capulong. Despite the treatment accorded to him by Dr.
Capulong, petitioner lost partially his left eye's vision and sustained a
permanent scar above the left eye.
3. Petitioner instituted an action for recovery of damages sustained as a
result of the stone-throwing incident.The trial court rendered judgment
in favor of petitioner and ordered the private respondent to pay P10k
as actual damages, P5k as moral and exemplary damages, P300 as
reimbursement for medical expenses, and P1k as attorney’s fees. On
appeal, the judgment was reversed and set aside.
4. Petitioner argues that the nature of the business of a transportation
company requires the assumption of certain risks, and the stoning of
the bus by a stranger resulting in injury to petitioner-passenger is one
such risk from which the common carrier may not exempt itself from
liability. Pilapil also claims that the carrier was negligent on the ground
that the injury could have been prevented if the latter installed mesh-
work grills to cover the windows of its bus.
ISSUE: WoN the transportation company is liable for Pilapil’s injury—NO.
RULING: Judgment AFFIRMED.
RATIO:
1. In consideration of the right granted to it by the public to engage in the
business of transporting passengers and goods, a common carrier
does not give its consent to become an insurer of any and all risks to
passengers and goods. It merely undertakes to perform certain duties
to the public as the law imposes, and holds itself liable for any breach
thereof.
2. Under Article 1733 of the Civil Code, common carriers are required to
observe extraordinary diligence for the safety of the passenger
transported by them, according to all the circumstances of each case.
The requirement of extraordinary diligence imposed upon common
carriers is restated in Article 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." Further, in case of death of or injuries to
passengers, the law presumes said common carriers to be at fault or
to have acted negligently. Thus, it is clear that neither the law nor the
nature of the business of a transportation company makes it an insurer
of the passenger's safety, but that its liability for personal injuries
sustained by its passenger rests upon its negligence, its failure to
exercise the degree of diligence that the law requires.
3. Although the suggested precaution could have prevented the injury
complained of, the rule of ordinary care and prudence is not so
exacting as to require one charged with its exercise to take doubtful or
unreasonable precautions to guard against unlawful acts of strangers.
The carrier is not charged with the duty of providing or maintaining
vehicles as to absolutely prevent any and all injuries to passengers.
Where the carrier uses cars of the most approved type, in general use
by others engaged in the same occupation, and exercises a high
degree of care in maintaining them in suitable condition, the carrier
cannot be charged with negligence in this respect.
Belgian Overseas Chartering and Shipping vs Philippine First Insurance
Co. Inc.
DOCTRINE – Common carrier should observe the precaution to avoid
damage or destruction of the goods entrusted to it for safe carriage and
delivery.
FACTS:
CMC Trading A.G. shipped on board the M/V ‘Anangel Sky’ at Germany 242
coils of various Prime Cold Rolled Steel sheets for transportation to Manila
consigned to the Philippine Steel Trading Corporation. M/V Anangel Sky
arrived at the Manila Port. Subsequently, it discharged subject cargo. 4 coils
were found to be in bad order. Finding the 4 coils in their damaged state to be
unfit for the intended purpose, the consignee Philippine Steel Trading
Corporation (PSTC) declared the same as total loss. Despite receipt of a
formal demand, Belgian Overseas Chartering and Shipping NV ( BOCSNV )
and Jardine Davies Transport Services Inc. (JDTSI) refused to submit to the
consignee’s claim. Consequently, PFIC paid the consignee 506, 086.50 and
was subrogated to the latter’s rights and causes of action against BOCSNV
and JDTSI.
PFIC instituted a complaint for recovery of the amount paid by them, to the
consignee as insured. RTC rendered judgment dismissing the complaint as
well as the defendant’s counterclaim.
On appeal. CA reversed and set aside the decision of the Trial Court and
ordered BOCSNV and JDTSI jointly and severally pay PFIC actual damages
representing the value of damaged cargo, attorney’s fees and cost of suit.
ISSUE:
Whether petitioners have overcome the presumption of negligence of a
common carrier.
HELD:
No. The words “metal envelopes rust strained and slightly dented” were noted
on the Bill of Lading; however, there is no showing that BOCSNV and JDTSI
exercised due diligence to forestall or lessen the loss. Having been in the
service for several years, the master of the vessel should have known at the
outset that metal envelopes in the said state would eventually deteriorate when
not properly stored while in the transit. Equipped with the proper knowledge of
the nature of steel sheets in coils and of the proper way of transporting them,
the master of the vessel and his crew should have undertake precautionary
measures to avoid possible deterioration of the cargo. But none of these
measures was taken. Having failed to discharge the burden of proving that
they have exercised the extraordinary diligence required by law, BOCSNV and
JDTSI cannot now escape liability for the damage to the 4 coils.
Herein, (1) as stated in the bill of lading BOCSNV and JDTSI received the
subject shipment in good order and condition in Germany; (2) prior to the
unloading of the cargo, an inspection report prepared and signed by
representative of both parties showed the steel bonds, the metal envelopes
rust-strained and heavily buckled and the contents thereof exposed and rust;
(3) Bad order tally sheet stated that the 4 coils were In bad order and
condition; (4) certificate of analysis stated that based on the sample submitted
and tested, the steel sheets found in bad order were wet with fresh water and
(5) BOCSNV and JDTSI in their letter addressed to the Philippine Steel
Coating Inc., they admitted that they were aware of the condition of the 4 coil
found in bad order and condition. All these conclusively prove the fact of
shipment in good order and condition and the consequent damage to the 4
coild while in the possession of the petitioner, who notably failed to explain
why.
REPUBLIC OF THE PHILIPPINES, represented by the DEPARTMENT OF
HEALTH, NATIONAL TRUCKING AND FORWARDING CORPORATION
(NTFC), and COOPERATIVE FOR AMERICAN RELIEF EVERYWHERE,
INC. (CARE Philippines) vs. LORENZO SHIPPING CORPORATION
G.R. No. 153563, [February 7, 2005], 491 PHIL 151-160)
Facts: On June 5, 1987, the Republic of the Philippines, through the
Department of Health (DOH), and the Cooperative for American Relief
Everywhere, Inc. (CARE) signed an agreement wherein CARE would acquire
from the United States government donations of non-fat dried milk and other
food products. In turn, the Philippines would transport and distribute the
donated commodities to the intended beneficiaries in the country.
The government entered into a contract of carriage of goods with National
Trucking and Forwarding Corporation (NTFC). Thus, the latter shipped 4,868
bags of non-fat dried milk through herein Lorenzo Shipping Corporation (LSC).
The consignee named in the bills of lading issued by the LSC was
Abdurahman (NTFC’s branch supervisor in Zamboanga City).
On reaching the port of Zamboanga City, LSC's agent, Efren Ruste Shipping
Agency, unloaded the goods to NTFC’s warehouse. Before each delivery,
Rogelio Rizada and Ismael Zamora, both delivery checkers of Efren Ruste
Shipping Agency, requested Abdurahman to surrender the original bills of
lading, but the latter merely presented certified true copies thereof. Upon
completion of each delivery, Rogelio and Ismael asked Abdurahman to sign
the delivery receipts. However, at times when Abdurahman had to attend to
other business before a delivery was completed, he instructed his
subordinates to sign the delivery receipts for him.
Notwithstanding the precautions taken, the NTFC allegedly did not receive the
goods. Thus, NTFC filed a formal claim for non-delivery of the goods shipped
to LSC.
LSC explained that the cargo had already been delivered to NTFC’s
supervisor. NTFC then decided to investigate the loss of the goods. But before
the investigation was over, Abdurahman Jama resigned as branch supervisor
of NTC.
NTFC filed an action for breach of contract of carriage LSC. The RTC and CA
dismissed the complaint of NTFC.
Issue: WON LSC is presumed at fault or negligent as common carrier for the
loss or deterioration of the goods?
Ruling: No. LSC exercised extra ordinary diligence. Although the original bills
of lading remained with NTFC, LSC's agents demanded from Abdurahman the
certified true copies of the bills of lading. They also asked the latter and in his
absence, his designated subordinates, to sign the cargo delivery receipts.
According to LSC, this practice is its standard operating procedure. This SOP
finds support in Article 353 of the Code of Commerce which states that
“After the contract has been complied with, the bill of lading which the carrier
has issued shall be returned to him, and by virtue of the exchange of this title
with the thing transported, the respective obligations and actions shall be
considered cancelled, . . .
In case the consignee, upon receiving the goods, cannot return the bill of
lading subscribed by the carrier, because of its loss or of any other cause, he
must give the latter a receipt for the goods delivered, this receipt producing the
same effects as the return of the bill of lading. “
Conformably with the aforecited provision, the surrender of the original bill of
lading is not a condition precedent for a common carrier to be discharged of its
contractual obligation. If surrender of the original bill of lading is not possible,
acknowledgment of the delivery by signing the delivery receipt suffices. This is
what LSC did.
We also note that some delivery receipts were signed by Abdurahman's
subordinates and not by Abdurahman himself as consignee. Further, delivery
checkers Rogelio and Ismael testified that Abdurahman was always present at
the initial phase of each delivery, although on the few occasions when
Abdurahman could not stay to witness the complete delivery of the shipment,
he authorized his subordinates to sign the delivery receipts for him. This, to our
mind, is sufficient and substantial compliance with the requirements.
We further note that, strangely, NFTC made no effort to disapprove
Abdurahman's resignation until after the investigation and after he was cleared
of any responsibility for the loss of the goods. With Abdurahman outside of its
reach, NFTC cannot now pass to LSC what could be Abdurahman's
negligence, if indeed he were responsible.
No double recovery rule G.R. No. L-24837 June 27, 1968
JULIAN C. SINGSON and RAMONA DEL CASTILLO
vs.
BANK OF THE PHILIPPINE ISLANDS and SANTIAGO FREIXAS, in his
capacity as President of the said Bank
FACTS: Singson, was one of the defendants in a civil case in which judgment
had been rendered sentencing him and his co-defendants therein, namely,
Celso Lobregat and Villa-Abrille & Co., to pay a certain sum to the plaintiff.
Philippine Milling Co., Singson and Lobregat had seasonably appealed from
said judgment, but not Villa-Abrille & Co., as against which said judgment,
accordingly, became final and executory. In due course, a writ of garnishment
was subsequently served upon the Bank of the Philippine Islands — in which
the Singsons had a current account — insofar as Villa-Abrille's credits against
the Bank were concerned. Upon receipt of the said Writ of Garnishment, a
clerk of the bank upon reading the name of the Singson in the title of the Writ
of Garnishment as a party defendants, without further reading the body of the
said garnishment prepared a letter for the signature of the President of the
Bank informing the plaintiff Julian C. Singson of the garnishment of his
deposits by the plaintiff in that case. Subsequently, two checks were issued by
the plaintiff Julian C. Singson, one in favor of B. M. Glass Service and another
in favor of the Lega Corporation, and drawn against the said Bank, were
deposited by the said drawers. The checks were, however, dishonored by the
bank on the belief that Singson has no more control over the same. The said
B. M. Glass Service closed Singson’s credit account with them. In view
thereof, plaintiff Julian C. Singson wrote the defendant bank claiming that his
name was not included in the Writ of Garnishment. The President of the bank
took steps to verify this information and after having confirmed the same,
apologized to the plaintiff and told that the action of garnishment from his
account had already been removed. Thus, the defendants lost no time to
rectify the mistake that had been inadvertently committed, resulting in the
temporary freezing of the account of the plaintiff with the said bank for a short
time. With this, Singson commenced the present action against the Bank and
its president, Santiago Freixas, for damages in consequence of said illegal
freezing of plaintiffs' account. The CFI of Manila rendered judgment dismissing
the complaint upon the ground that plaintiffs cannot recover from the
defendants upon the basis of a quasi-delict, because the relation between the
parties is contractual in nature. The lower court held that plaintiffs' claim for
damages cannot be based upon a tort or quasi-delict, their relation with the
defendants being contractual in nature. From this decision, the plaintiff
appealed directly to the SC.
ISSUE: Whether or not is entitled to damages.
DECISION: The SC held that the existence of a contract between the parties
does not bar the commission of a tort by the one against the order and the
consequent recovery of damages therefor. However, considering the facts and
circumstances in the case at bar, that the wrong done to the plaintiff was
remedied as soon as the President of the bank realized the mistake he and his
subordinate employee had committed, the SC only awarded nominal
damages. In addition, since damages has already been awarded under
quasi-delict, Singson cannot recover other damages based on the
contract, otherwise, it would be against the rule prohibiting double
recovery.
FAR EAST BANK AND TRUST COMPANY V. C.A. & LUISA. LUNA
G.R. No. 108164 February 23, 1995
FACTS:
Private respondent Luis A. Luna applied for, and was accorded, a Fareast card
issued by petitioner FEBTC.
Clarita informed FEBTC that she lost her credit card. In order to replace the
lost card, Clarita submitted an affidavit of loss. In cases of this nature,
the bank's internal security procedures and policy would be torecord the lost
card, along with the principal card, as a "HotCard" or "Cancelled Card" in its
master file.
Luis then tendered a despedida lunch for a close friend. When he presented
his fareast card to pay for the lunch, the card was not honored, forcing him to
pay in cash the bill. Naturally, Luis felt embarrassed by this incident.
Private respondent Luis Luna, through counsel, demanded from FEBTC the
payment of damages. Adrian V. Festejo, a vice-president of the bank,
expressed the bank's apologies, admitting that they have failed to inform Luis
about its security policy.
Private respondents then filed a complaint for damages in the RTC, which
rendered a decision ordering FEBTC to pay private respondents moral
damages, exemplary damages, and attorney’s fees.
ISSUE:
Whether or not private respondents are entitled of moral damages.
HELD:
NO. In culpa contractual, moral damages may be recovered where the
defendant is shown to have acted in bad faith or with malice in the breach of
the contract.
Concededly, the bank was negligent for failing to inform Luis of his own card's
cancellation. Nothing in the findings of the trial court and the appellate court
can sufficiently indicate any deliberate intent on the part of FEBTC to cause
harm to private respondents. The failure to inform Luis is not considered to be
so gross that it would amount to malice or bad faith. Malice or bad faith implies
a conscious and intentional design to do a wrongful act for a dishonest
purpose or moral obliguity; it is different from the negative idea of negligence in
that malice or bad faith contemplates a state of mind affirmatively operating
with furtive design or ill-will.
Article 21 of the Code contemplates a conscious act to cause harm. In relation
to a breach of contract, its application can be warranted only when the
defendant's disregard of his contractual obligation is so deliberate as to
approximate a degree of misconduct certainly no less worse than fraud or bad
faith. Most importantly, Article 21 is a mere declaration of a general principle in
human relations that clearly must, in any case, give way to the specific
provision of Article 2220 of the Civil Code authorizing the grant of moral
damages in culpa contractual solely when the breach is due to fraud or bad
faith.
The decision is modified by deleting the award of moral and exemplary
damages to private respondents; in its stead, petitioner is ordered to pay
nominal damages sanctioned under Article 2221 of the Civil Code
F.C. Fisher v. Yangco Steamship Co.
G.R. No. L-8095 March 31, 1915
FACTS:
 Fisher is a stockholder in the Yangco Steamship Company. The directors of
the company adopted a resolution which was thereafter ratified and affirmed
by the shareholders of the company, expressly declaring and providing that
the classes of merchandise to be carried by the company in its business as a
common carrier do not include dynamite, powder or other explosives, and
expressly prohibiting the officers, agents and servants of the company from
offering to carry, accepting for carriage said dynamite, powder or other
explosives.
 Then Acting Collector of Customs demanded and required of the company
the acceptance and carriage of such explosives. He has refused and
suspended the issuance of the necessary clearance documents of the
vessels of the company unless and until the company consents to accept
such explosives for carriage. Fisher was advised that should the company
decline to accept such explosives for carriage, the respondent Attorney-
General of the Philippine Islands and the respondent prosecuting attorney of
the city of Manila intend to institute proceedings under the penal provisions
of sections 4, 5, and 6 of Act No. 98 of the Philippine Commission against
the company, its managers, agents and servants.
 Notwithstanding the demands of Fisher, the manager, agents and servants
of the company decline and refuse the carriage of such explosives.
ISSUE: WON the acts complained of had the effect of making or giving an
unreasonable or unnecessary preference or advantage to any person, locality
or particular kind of traffic, or of subjecting any person, locality, or particular
kind of traffic to any undue or unreasonable prejudice or discrimination
HELD: No.
 There may be some vessels engaged in business as common carriers of
merchandise, which for lack of suitable deck space or storage rooms might
be justified in declining to carry kerosene oil, gasoline, and similar products,
even when offered for carriage securely packed in cases; and few vessels
are equipped to transport those products in bulk. But in any case of a refusal
to carry such products which would subject any person, locality or the traffic
in such products would be necessary to hear evidence before making an
affirmative finding that such prejudice or discrimination was or was not
unnecessary, undue or unreasonable. The making of such a finding would
involve a consideration of the suitability of the vessel for the transportation of
such products; the reasonable possibility of danger or disaster resulting from
their transportation in the form and under the conditions in which they are
offered for carriage; the general nature of the business done by the carrier
and, in a word, all the attendant circumstances which might affect the
question of the reasonable necessity for the refusal by the carrier to
undertake the transportation of this class of merchandise.