Baliwag Transit v CA, G.R. No.

80447
Doctrine:
Extraordinary diligence in contract of carriage
was bound to carry its passengers safely as far as human care and foresight could provide, and is
liable for injuries to them through the negligence
Art. 37. Capacity to act, wc is the power to do acts with legal effects, is acquired and maybe lost.

Spouses Lopez and Calipan together with their son George Lopez filed a complaint for damages against
Baliwang Transit.

George Lopez was a paying passenger of a bus driven by Leonardo Cruz when the former suffered
multiple serious physical injuries because of the reckless driving by the latter.

As a result, the complainants incurred 200k medical expenses and 10k incidental expenses.

Baliwag then filed a Third-Party Complaint against Fortune Insurance & Surety Company, Inc., on its
third-party liability insurance in the amount of P50,000.00. In its Answer, Fortune Insurance claimed
limited liability, the coverage being subject to a Schedule of Indemnities forming part of the insurance
policy.

On 14 November 1985 and 18 November 1985, respectively, Fortune Insurance and Baliwag each filed
Motions to Dismiss on the ground that George, in consideration of the sum of P8,020.50 had executed a
"Release of Claims"

RTC:

In an Order dated 29 August 1986, the Regional Trial Court of Bulacan, Branch 20, 1 dismissed the
Complaint and Third-party Complaint, ruling that since the contract of carriage is between Baliwag and
George L. Cailipan, the latter, who is of legal age, had the exclusive right to execute the Release of
Claims despite the fact that he is still a student and dependent on his parents for support.

CA:

Reversed the decision. No conformity with all parties especially the parents.

Issue: W/N the contract signed by George during case pendency is valid

SC: CA set aside.

Petition for review on certiorari by Baliwag assailing the appellate court’s judgment.

the real parties in interest, either as plaintiff or as defendant, must be parties to said contract

The general rule of the common law is that every action must be brought in the name of the party
whose legal right has been invaded or infringed. There is no question regarding the genuineness and due
execution of the Release of Claims. It is a duly notarized public document. It clearly stipulates that the
consideration of P8,020.50 received by George was "to release and forever discharge Fortune Insurance
and/or Baliwag from any and all liabilities now accrued or to accrue on account of any and all claims or
causes of action ... for personal injuries, damage to property, loss of services, medical expenses, losses
or damages of any and every kind or nature whatsoever, sustained by him on 17 December 1984 thru
Reckless Imprudence Resulting to Physical Injuries."

The Release of Claims had the effect of a compromise agreement since it was entered into for the
purpose of making a full and final compromise adjustment and settlement of the cause of action
involved. A compromise is a contract whereby the parties, by making reciprocal concessions, avoid a
litigation or put an end to one already commenced (Article 2028, Civil Code). The Release of Claims
executed by the injured party himself wrote finish to this litigation.

british Airways v CA

Doctrines:

Contract 3 requisites – consent, object, consideration

Contract to Carry – agreement to carry the passengers at a future date

Actual damages, moral damages, exemplary damages

In the instant case, the contract "to carry" is the one involved which is consensual
and is perfected by the mere consent of the parties.
FACTS:
First International Trading and General Services Co. (First Int'l), a duly licensed
domestic recruitment and placement agency, received a telex message from its
principal ROLACO Engineering and Contracting Services (ROLACO) in Jeddah, Saudi
Arabia to recruit Filipino contract workers in its behalf.

ROLACO paid British Airways, Inc. (BA) Jeddah branch the airfare tickets for 93 contract
workers with specific instruction to transport the workers to Jeddah on or before March
30, 1981

As soon as BA received a prepaid ticket advice from its Jeddah branch informed First
Int'l.
Thereafter, First Int'l instructed ADB Travel and Tours. Inc. (its travel agent) to book the
93 workers with BA but it failed

So First Int'l had to borrow P304,416.00 for the purchase of airline tickets from the
other airlines for the 93 workers who must leave immediately since the visas are valid
only for 45 days and the Bureau of Employment Services mandates that contract
workers must be sent to the job site within a period of 30 days.

First Int'l was again informed by BA that it had received a prepaid ticket advice from its
Jeddah branch for the transportation of 27 contract workers.

16 seats

After a series of cancellation, First Int'l sent a letter to BA demanding compensation for
the damages it had incurred by the repeated failure to transport its contract workers
despite confirmed bookings and payment of the corresponding travel taxes. First
Int'l received a telex message from ROLACO cancelling the hiring of the remaining
recruited workers due to the delay in transporting the workers to Jeddah.

CA Affirmed RTC: BA to pay First Int'l damages, attorneys fees and costs

Held:

There is no dispute as to the appellee's consent to the said contract "to carry" its
contract workers from Manila to Jeddah. The appellant's consent thereto, on the
other hand, was manifested by its acceptance of the PTA or prepaid ticket advice that
ROLACO Engineering has prepaid the airfares of the appellee's contract workers
advising the appellant that it must transport the contract workers on or before the
end of March, 1981 and the other batch in June, 1981.
The existence of this payment was never objected to nor questioned by the appellant in the
lower court. Thus, the cause or consideration which is the fare paid for the passengers
exists in this case.
The third essential requisite of a contract is an object certain. In this contract "to
carry", such an object is the transport of the passengers from the place of departure
to the place of destination as stated in the telex.
the facts clearly show that appellant was remiss in its obligation to transport the contract
workers on their flight despite confirmation and bookings made by appellee's travelling
agent.

Korean Airlines VS CA

Juanito Lapuz was contracted for employment in Saudi Arabia through Pan Pacific Recruiting
Services, Inc. He was supposed to leave via Korean Airlines, but was initially listed as a “chance
passenger”. According to Lapuz, he was allowed to check in and was cleared for departure.
When he was on the stairs going to the airplane, a KAL officer pointed at him and shouted,
“Down! Down!” and he was barred from taking the flight. When he asked for another booking,
his ticket was cancelled. He was unable to report for work and so he lost his employment. KAL
alleged that the agent of Pan Pacific was informed that there are 2 seats possibly available. He
gave priority to Perico, while the other seat was won by Lapuz through lottery. But because only
1 seat became available, it was given to Perico. The trial court adjudged KAL liable for damages.
The decision was affirmed by the Court of Appeals, with modification on the damages awarded.
Issues:
Whether there is already a contract of carriage between KAL and Lapuz to hold KAL liable for
breach of contract
The status of Lapuz as standby passenger was changed to that of a confirmed
passenger when his name was entered in the passenger manifest of KAL for its
Flight No. KE 903. His clearance through immigration and customs clearly shows that
he had indeed been confirmed as a passenger of KAL in that flight. KAL thus
committed a breach of the contract of carriage between them when it failed to bring
Lapuz to his destination.
This Court has held that a contract to transport passengers is different in kind and
degree from any other contractual relation. 3 The business of the carrier is mainly
with the traveling public. **It invites people to avail themselves of the comforts and
advantages it offers. The contract of air carriage generates a relation attended with a public
duty. Passengers have the right to be treated by the carrier's employees with kindness,
respect, courtesy and due consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from such employees. 4 So it is that
any discourteous conduct on the part of these employees toward a passenger gives the
latter an action for damages against the carrier.
The breach of contract was aggravated in this case when, instead of courteously
informing Lapuz of his being a "wait-listed" passenger, a KAL officer rudely shouted
"Down! Down!" while pointing at him, thus causing him embarrassment and public
humiliation.
**KAL argues that "the evidence of confirmation of a chance passenger status is not
through the entry of the name of a chance passenger in the passenger manifest nor the
clearance from the Commission on Immigration and Deportation, because they are merely
means of facilitating the boarding of a chance passenger in case his status is confirmed."
We are not persuaded.
The evidence presented by Lapuz shows that he had indeed checked in at the
departure counter, passed through customs and immigration, boarded the shuttle
bus and proceeded to the ramp of KAL's aircraft. In fact, his baggage had already
been loaded in KAL's aircraft, to be flown with him to Jeddah. The contract of
carriage between him and KAL had already been perfected when he was summarily
and insolently prevented from boarding the aircraft.**
Sps Fabre vs. CA
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")
Extraordinary negligence
Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of a Mazda minibus. They used the bus
principally in connection with a bus service for school children which they operated in Manila. It was driven
by Porfirio Cabil.

On November 2, 1984 private respondent Word for the World Christian Fellowship Inc. (WWCF) arranged
with the 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 P3,000.00.
The usual route to Caba, La Union was through Carmen, Pangasinan. However, the bridge at Carmen was
under repair, so that 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 11:30 that night,
petitioner Cabil came upon a sharp curve on the highway. 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. Because
of the mishap, several passengers were injured particularly Amyline Antonio.

Criminal complaint was filed against the driver and the spouses were also made jointly liable. Spouses
Fabre on the other hand contended that they are not liable since they are not a common carrier. The RTC
of Makati ruled in favor of the plaintiff and the defendants were ordered to pay jointly and severally to the
plaintiffs. The Court of Appeals affirmed the decision of the trial court.

Issue: Whether or not petitioners were negligent.

Held:
Yes. Common carrier requires extraordinary diligence not just diligence of a good father of a family.
The Supreme Court held that this case actually involves a contract of carriage. Petitioners, the Fabres, did
not have to be engaged in the business of public transportation for the provisions of the Civil Code on
common carriers to apply to them. As this Court has held: 10 Art. 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.
De Guzman vs. CA
Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that
he gathered to Manila for resale using 2 six-wheeler trucks. On the return trip to Pangasinan,
respondent would load his vehicle with cargo which various merchants wanted delivered,
charging fee lower than the commercial rates. Sometime in November 1970, petitioner Pedro de
Guzman contracted with respondent for the delivery of 750 cartons of Liberty Milk. On
December 1, 1970, respondent loaded the cargo. Only 150 boxes were delivered to petitioner
because the truck carrying the boxes was hijacked along the way. Petitioner commenced an
action claiming the value of the lost merchandise. Petitioner argues that respondent, being a
common carrier, is bound to exercise extraordinary diligence, which it failed to do. Private
respondent denied that he was a common carrier, and so he could not be held liable for force
majeure. The trial court ruled against the respondent, but such was reversed by the Court of
Appeals.
Issue: Liable?
Held:
Through common carrier
**Article 1734 establishes the general rule that common carriers are responsible for the
loss, destruction or deterioration of the goods which they carry, "unless the same is due to
any of the following causes only:
(1) Flood, storm, earthquake, lightning or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character-of the goods or defects in the packing or-in the containers; and
(5) Order or act of competent public authority.
As noted earlier, 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, Article 1745 provides in relevant part:
Any of the following or similar stipulations shall be considered unreasonable, unjust and
contrary to public policy:
xxx xxx xxx
(5) that the common carrier shall not be responsible for the acts or omissions of his or its
employees;
(6) that the common carrier's liability for acts committed by thieves, or of robbers who do not
act with grave or irresistible threat, violence or force, is dispensed with or diminished; and
(7) that the common carrier shall not responsible for the loss, destruction or deterioration of
goods on account of the defective condition of the car vehicle, ship, airplane or other
equipment used in the contract of carriage. (Emphasis supplied)
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." We believe and so hold that 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."
First Philippine Industrial Corp vs. CA
Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in
January 1995, petitioner applied for mayor’s permit in Batangas. However, the Treasurer
required petitioner to pay a local tax based on gross receipts amounting to P956,076.04. In
order not to hamper its operations, petitioner paid the taxes for the first quarter of 1993
amounting to P239,019.01 under protest. On January 20, 1994, petitioner filed a letter-protest
to the City Treasurer, claiming that it is exempt from local tax since it is engaged in
transportation business. The respondent City Treasurer denied the protest, thus, petitioner filed
a complaint before the Regional Trial Court of Batangas for tax refund. Respondents assert that
pipelines are not included in the term “common carrier” which refers solely to ordinary carriers
or motor vehicles. The trial court dismissed the complaint, and such was affirmed by the Court
of Appeals.
Issue:

Issue:

Whether a pipeline business is included in the term “common carrier” so as to entitle the
petitioner to the exemption

Held:

Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation,
firm or association 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 test for determining whether a party is a common carrier of goods is:

(1) He must be 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;

(2) He must undertake to carry goods of the kind to which his business is confined;

(3) He must undertake to carry by the method by which his business is conducted and
over his established roads; and

(4) The transportation must be for hire.

Based on the above definitions and requirements, there is no doubt that petitioner is a
common carrier. It 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. The fact that petitioner has a limited clientele does
not exclude it from the definition of a common carrier.

Asia Lighterage Shipping Inc vs CA

Facts: Wheat in bulk, was shipped by Marubeni American Corporation of Portland,
Oregon on board the vessel M/V NEO for delivery to the consignee, General Milling
Corporation in Manila. The shipment was insured by the private respondent Prudential
Guarantee and Assurance, Inc. against loss or damage. The carrying vessel arrived in
Manila and the cargo was transferred to the custody of the petitioner Asia Lighterage and
Shipping, Inc. The petitioner was contracted by the consignee as carrier to deliver the cargo
to consignee's warehouse. On, 900 metric tons of the shipment was loaded on barge PSTSI
III for delivery to consignee. The cargo did not reach its destination.
It appears that the transport of said cargo was suspended due to a warning of an incoming
typhoon. The petitioner proceeded to pull the barge to Engineering Island off Baseco to
seek shelter from the approaching typhoon. A few days after, the barge developed a list
because of a hole it sustained after hitting an unseen protuberance underneath the water.
The barge was then towed to ISLOFF terminal before it finally headed towards the
consignee's wharf. Upon reaching the Sta. Mesa spillways, the barge again ran aground
due to strong current. To avoid the complete sinking of the barge, a portion of the goods
was transferred to three other barges.
The next day, the towing bits of the barge broke. It sank completely, resulting in the total
loss of the remaining cargo. Private respondent indemnified the consignee.15Thereafter, as
subrogee, it sought recovery of said amount from the petitioner, but to no avail.
The private respondent filed a complaint against the petitioner for recovery of the amount
of indemnity, attorney's fees and cost of suit.
The Regional Trial Court ruled in favor of the private respondent.
Petitioner appealed to the Court of Appeals insisting that it is not a common carrier.
Issue: Whether the petitioner is a common carrier
Held: Common Carrier. Petitioner is a common carrier whether its carrying of goods is
done on an irregular rather than scheduled manner, and with an only limited clientele. A
common carrier need not have fixed and publicly known routes. Neither does it have to
maintain terminals or issue tickets. To be sure, petitioner fits the test of a common carrier
as laid down in Bascos vs. Court of Appeals. The test to determine a common carrier is
"whether the given undertaking is a part of the business engaged in by the carrier which he
has held out to the general public as his occupation rather than the quantity or extent of the
business transacted." In the case at bar, the petitioner admitted that it is engaged in the
business of shipping and lighterage, offering its barges to the public, despite its limited
clientele for carrying or transporting goods by water for compensation.
LRT Vs. NAVIDAD

FACTS:
 October 14, 1993, 7:30 p.m. : Drunk Nicanor Navidad (Nicanor) entered the EDSA
LRT station after purchasing a “token”.
 While Nicanor was standing at the platform near the LRT tracks, the guard Junelito
Escartin approached him.
 Due to misunderstanding, they had a fist fight
 Nicanor fell on the tracks and killed instantaneously upon being hit by a moving
train operated by Rodolfo Roman
 December 8, 1994: The widow of Nicanor, along with her children, filed a complaint
for damages against Escartin, Roman, LRTA, Metro Transit Org. Inc. and Prudent
(agency of security guards) for the death of her husband.
 LRTA and Roman filed a counter-claim against Nicanor and a cross-claim against
Escartin and Prudent
 Prudent: denied liability – averred that it had exercised due diligence in the
selection and surpervision of its security guards
 LRTA and Roman: presented evidence
 Prudent and Escartin: demurrer contending that Navidad had failed to prove that
Escartin was negligent in his assigned task
 RTC: In favour of widow and against Prudent and Escartin, complaint against LRT
and Roman were dismissed for lack of merit
 CA: reversed by exonerating Prudent and held LRTA and Roman liable

ISSUE: W/N LRTA and Roman should be liable according to the contract of carriage

HELD: NO. Affirmed with Modification: (a) nominal damages is DELETED (CANNOT co-
exist w/ compensatory damages) (b) Roman is absolved.
 Law and jurisprudence dictate that a common carrier, both from the nature of its
business and for reasons of public policy, is burdened with the duty off exercising
utmost diligence in ensuring the safety of passengers
 Civil Code:
 Art. 1755. A common carrier is bound to carry the passengers safely as far as
human care and foresight can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances
 Art. 1756. In case of death 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
 Art. 1759. Common carriers are liable for the death of or injuries to passengers
through the negligence or wilful acts of the former’s employees, although such
employees may have acted beyond the scope of their authority or in violation of the
orders of the common carriers

This liability of the common carriers does NOT cease upon proof that they
Exercised all the diligence of a good father of a family in the selection and
supervision of their employees

 Art. 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.
 Carriers presumed to be at fault or been negligent and by simple proof of injury, the
passenger is relieaved of the duty to still establish the fault or negligence of the
carrier or of its employees and the burden shifts upon the carrier to prove that the
injury is due to an unforeseen event or to force majeure
 Where it hires its own employees or avail itself of the services of an outsider or an
independent firm to undertake the task, the common carrier is NOT relieved of its
responsibilities under the contract of carriage
 GR: Prudent can be liable only for tort under Art. 2176 and related provisions in
conjunction with Art. 2180 of the Civil Code. (Tort may arise even under a contract,
where tort [quasi-delict liability] is that which breaches the contract)
 EX: if employer’s liability is negligence or fault on the part of the employee,
employer can be made liable on the basis of the presumption juris tantum that the
employer failed to exercise diligentissimi patris families in the selection and
supervision of its employees.
 EX to the EX: Upon showing due diligence in the selection and supervision of the
employee
 Factual finding of the CA: NO link bet. Prudent and the death of Nicanor for the
reason that the negligence of Escartin was NOT proven
 NO showing that Roman himself is guilty of any culpable act or omission, he must
also be absolved from liability
 Contractual tie bet. LRT and Nicanor is NOT itself a juridical relation bet. Nicanor
and Roman
 Roman can be liable only for his own fault or negligence
Sps Perena vs. Zarate

FACTS:

Spouses Teodoro and Nanette Peres (Peres) were engaged in the business of
transporting students from their respective residences in Paraque City to Don
Bosco in Pasong Tamo, Makati City, and back. They employed Clemente Alfaro
(Alfaro) as driver of the van. Spouses Nicolas and Teresita Zarate (Zarates)
contracted the Peres to transport their son Aaron to and from Don Bosco.

Considering that the students were due at Don Bosco by 7:15 a.m., and that they
were already running late because of the heavy vehicular traffic on the South
Superhighway, Alfaro took the van to an alternate route at about 6:45 a.m. by
traversing the narrow path underneath the Magallanes Interchange. The railroad
crossing in the narrow path had no railroad warning signs, or watchmen, or other
responsible persons manning the crossing. In fact, the bamboo barandilla was up,
leaving the railroad crossing open to traversing motorists.

At about the time the van was to traverse the railroad crossing, PNR Commuter
No. 302 (train), was in the vicinity of the Magallanes Interchange travelling
northbound. As the train neared the railroad crossing, Alfaro drove the van
eastward across the railroad tracks, closely tailing a large passenger bus. His view
of the oncoming train was blocked because he overtook the passenger bus on its
left side. The train blew its horn to warn motorists of its approach. The passenger
bus successfully crossed the railroad tracks, but the van driven by Alfaro did not.
The impact threw nine of the 12 students in the rear, including Aaron, out of the
van. Aaron landed in the path of the train, which dragged his body and severed
his head, instantaneously killing him.

Thus, the Zarates sued the Peres for breach of contract of carriage and the PNR
for quasi-delict. The RTC ruled in favor of the Zarates. On appeal, the CA
affirmed the findings of the RTC.

ISSUE: Whether or not the Peres are liable for breach of contract of carriage?

HELD: The petition has no merit.

CIVIL LAW: common carrier; extraordinary diligence

A common carrier is a person, corporation, firm or association engaged in the

business of carrying or transporting passengers or goods or both, by land, water,
or air, for compensation, offering such services to the public. Contracts of
common carriage are governed by the provisions on common carriers of the Civil
Code, the Public Service Act, and other special laws relating to transportation. A
common carrier is required to observe extraordinary diligence, and is presumed
to be at fault or to have acted negligently in case of the loss of the effects of
passengers, or the death or injuries to passengers. The true test for a common
carrier is not the quantity or extent of the business actually transacted, or the
number and character of the conveyances used in the activity, but whether the
undertaking is a part of the activity engaged in by the carrier that he has held out
to the general public as his business or occupation.

Applying these considerations to the case before us, there is no question that the
Peres as the operators of a school bus service were: (a) engaged in transporting
passengers generally as a business, not just as a casual occupation; (b)
undertaking to carry passengers over established roads by the method by which
the business was conducted; and (c) transporting students for a fee. Despite
catering to a limited clientele, the Peres operated as a common carrier because
they held themselves out as a ready transportation indiscriminately to the
students of a particular school living within or near where they operated the
service and for a fee.
Article 1755 of the Civil Code specifies that the common carrier should "carry the
passengers safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for all the
circumstances." To successfully fend off liability in an action upon the death or
injury to a passenger, the common carrier must prove his or its observance of
that extraordinary diligence; otherwise, the legal presumption that he or it was at
fault or acted negligently would stand.

According to Article 1759 of the Civil Code, their liability as a common carrier did
not cease upon proof that they exercised all the diligence of a good father of a
family in the selection and supervision of their employee. The Peres were liable
for the death of Aaron despite the fact that their driver might have acted beyond
the scope of his authority or even in violation of the orders of the common
carrier. DENIED.
Spouses Cruz vs. Sun Holidays, Inc.
GR No. 186312
29 June 2010

FACTS
Spouses Cruz files a complaint for damages against Sun Holidays arising from the death of their son who
perished with his wife on board the boat M/B Coco Beach III that capsized en route Batangas from Puerto
Galera where the couple had stayed at Coco Beach Island Resort owned and operated by respondent. Their
stay 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. Eight of the passengers, including petitioners’ son and his
wife, died during the accident. Sun denied any responsibility for the incident which it considered to be a
fortuitous event. Petitioners allege that as a common carrier, Sun was negligent in allowing the boat to sail
despite the storm warning bulletins issued by PAGASA. Respondent denied being a common carrier,
alleging that its boats are not available to the public but are only used as ferry resort carrier. It also claimed
to have exercised the utmost diligence in ensuring the safety of its passengers, and that contrary to
petitioners’ allegation, there was no storm as the Coast Guard in fact cleared the voyage. M/B Coco Beach
III was not filled to capacity and had sufficient life jackets for its passengers.

RTC dismissed the complaint. CA denied the appeal holding that Sun is a private carrier which is only
required to observe ordinary diligence and that the proximate cause of the incident was a fortuitous event.

ISSUE
Whether M/B Coco Beach III breached a contract of carriage

HELD
Respondent is a common carrier. Its ferry services are so intertwined with its 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.

In the De Guzman case, Article 1732 of the Civil Code defining “common carriers” has deliberately
refrained from making distinctions on whether the carrying of persons or goods is the carrier’s principal
business, whether it is offered on a regular basis, or whether it is offered to the general public.

Under the Civil Code, common carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary diligence for the safety of the passengers transported by them,
according to all the circumstances of each case. They are 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.

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.