LOADMASTERS CUSTOMS SERVICES, INC., vs.

GLODEL BROKERAGE CORPORATION and R&B INSURANCE

CORPORATION, / G.R. No. 179446 / January 10, 2011

FACTS:

The case is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing the
August 24, 2007 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 82822.

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 withdrawal 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. Of the six (6) trucks route to Balagtas, Bulacan, 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, 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 ofP1,903,335.39. After the investigation,
R&B Insurance paid Columbia the amount ofP1,896,789.62 as insurance indemnity.

R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and Glodel before the
Regional Trial Court, Branch 14, Manila (RTC), 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."

On November 19, 2003, the RTC rendered a decision holding Glodel liable for damages for the loss of the
subject cargo and dismissing Loadmasters’ counterclaim for damages and attorney’s fees against R&B Insurance.

Both R&B Insurance and Glodel appealed the RTC decision to the CA.

On August 24, 2007, the CA rendered that the appellee is an agent of appellant Glodel, whatever liability the
latter owes to appellant R&B Insurance Corporation as insurance indemnity must likewise be the amount it shall be
paid by appellee Loadmasters. Hence, Loadmasters filed the present petition for review on certiorari.

ISSUE:

Whether or not Loadmasters and Glodel are common carriers to determine their liability for the loss of the subject
cargo.

RULING:
The petition is PARTIALLY GRANTED. Judgment is rendered declaring petitioner Loadmasters Customs Services, Inc.
and respondent Glodel Brokerage Corporation jointly and severally liable to respondent

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. Loadmasters is a common carrier because it is engaged in the business of
transporting goods by land, through its trucking service. It is a common carrier as 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. Glodel is also considered a common carrier within the context of Article 1732. For as
stated and well provided in the case of Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc., a
customs broker is also regarded as a common carrier, the transportation of goods being an integral part of its
business.

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. 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.

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. 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.

For under 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.

xxxx

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.

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. Glodel
should, therefore, be held liable with Loadmasters. Its defense of force majeure is unavailing.

For the consequence, Glodel has no one to blame but itself. The Court cannot come to its aid on equitable
grounds. "Equity, which has been aptly described as ‘a justice outside legality,’ is applied only in the absence of,
and never against, statutory law or judicial rules of procedure." The Court cannot be a lawyer and take the cudgels
for a party who has been at fault or negligent.
Schmitz Transport & Brokerage Corp vs TVI, Industrial Insurance, Black Sea Shipping

Facts: SYTCO Pte Ltd. Singapore shipped from Ilyichevsk, Russia on board M/V "Alexander Saveliev" (a vessel
owned by Black Sea) 545 hot rolled steel sheets. The consignee is Little Giant and the cargoes were to be
discharged at the port of Manila. When the vessel arrived at the port of Manila, the Philippine Ports Authority
(PPA) assigned it a place of berth at the outside breakwater. Little Giant engaged the services Schmitz (a customs
broker) to secure the requisite clearances, to receive the cargoes from the shipside, and to deliver them to its (the
consignees) warehouse at Cainta, Rizal. Schmitz, in turn, engaged the services of TVI to send a barge and tugboat
at shipside. TVIs tugboat towed the barge to shipside. The tugboat, after positioning the barge alongside the
vessel, left and returned to the port terminal. Arrastre operator commenced to unload 37 of the 545 coils from the
vessel unto the barge. By 12:30 a.m. of October 27, 1991 the unloading unto the barge of the 37 coils was
accomplished. No tugboat pulled the barge back to the pier, however. At around 5:30 a.m. due to strong waves,
the crew of the barge abandoned it and transferred to the vessel. The barge pitched and rolled with the waves and
eventually capsized, washing the 37 coils into the sea. At 7:00 a.m., a tugboat finally arrived to pull the already
empty and damaged barge back to the pier. Earnest efforts on the part of both the consignee Little Giant and
Industrial Insurance to recover the lost cargoes proved futile.

Issue: Was Schmitz a common carrier? If yes, should Schmitz be held liable for the negligence of TVI?

Held: Yes on both counts. Schmitz, despite being a customs broker, in this case agreed to offload the goods on
behalf of Little Giant and even to truck the same goods to the warehouse of Little Giant. Article 1732 does not
distinguish between one whose principal business activity is the carrying of goods and one who does such carrying
only as an ancillary activity. The contention, therefore, of Schmitz that it is not a common carrier but a customs
broker whose principal function is to prepare the correct customs declaration and proper shipping documents as
required by law is bereft of merit. It suffices that Schmitz undertakes to deliver the goods for pecuniary
consideration. In Calvo v. UCPB General Insurance Co. Inc., the Court held that as the transportation of goods is an
integral part of a customs broker, the customs broker is also a common carrier. To declare otherwise "would be to
deprive those with whom [it] contracts the protection which the law affords them notwithstanding the fact that
the obligation to carry goods for [its] customers, is part and parcel of petitioners business." For Schmitz to be
relieved of liability, it should, following Article 1739 of the Civil Code, prove that it exercised due diligence to
prevent or minimize the loss, before, during and after the occurrence of the storm in order that it may be
exempted from liability for the loss of the goods. While Schmitz sent checkers and a supervisor on board the vessel
to counter-check the operations of TVI, it failed to take all available and reasonable precautions to avoid the loss.
After noting that TVI failed to arrange for the prompt towage of the barge despite the deteriorating sea conditions,
it should have summoned the same or another tugboat to extend help, but it did not

First Philippine Industrial Corp. vs. Court of Appeals

Facts: Petitioner is a grantee of a pipeline concession under R.A. No. 387, as amended, a contract, install and
operate oil pipelines. The original pipeline concession was granted in 1967 and renewed by the Energy Regulatory
Board in 1992.
Sometime in January 1995, petitioner applied for a mayor’s permit with the Office of the Mayor of Batangas City.
However, before the mayor’s permit could be issued, the respondent City Treasurer required petitioner to pay a
local tax based on its gross receipts for the fiscal year 1993 pursuant to the Local Government Code. The
respondent City Treasure assessed a business tax on the petitioner amounting to P956,076.04 payable in four
installments based on the gross receipts for products pumped at GPS-1 for the fiscal year 1993 which amounted to
P181,681,151.00. in order not to hamper its operations, petitioner paid the tax under protest in the amount of
P239, 019.01 for the first quarter of 1993.

On June 15, 1994, petitioner filed with the RTC of Batangas City a complaint for tax refund with prayer for writ of
preliminary injunction against respondents City of Batangas and Adoracion Arellano in her capacity as City
Treasurer. In its complaint, petitioner alleged, inter alia, that: (1) the imposition and collection of the business tax
on its gross receipts violates Sec. 133 of the Local Government Code; (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 contactors; and (3) the City Treasurer illegally and erroneously
imposed and collected the said tax, thus meriting the immediate refund of the tax paid.

Traversing the complaint, the respondents argued that petitioner cannot be exempt from taxes under Sec. 133 (J)
of the Local Government Code as said exemption applied only to “transportation contractors and persons engaged
in the transportation by hire and common carriers by air land and water.” Respondents assert that pipelines are
not included in the term “common carrier” which refers solely to ordinary carriers as trucks, trains, ships and the
like. Respondents further posit that the term “common carrier” under the said Code pertains to the mode or
manner by which a product is delivered to its destination.

Issue: Whether or not the petitioner is a common carrier so that in the affirmative, he is not liable to pay the
carriers tax under the Local Government Code of 1991?

Held: Petitioner is a common carrier.

A “common carrier” may be defined, broadly, as one who 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.

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 carrying of goods for others as a public employment, and must hold himself out as
ready to engage in the transportation of goods or persons 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.

Philamgem vs. PKS Shipping Company

Facts:

Davao Union Marketing Corporation (DUMC) contracted the services of respondent PKS Shipping
Company (PKS Shipping) for the shipment to Tacloban City of seventy-five thousand (75,000) bags of
cement worth Three Million Three Hundred Seventy-Five Thousand Pesos (P3,375,000.00). DUMC
insured the goods for its full value with petitioner Philippine American General Insurance Company
(Philamgen). During the transport, the barge where the bags of cement were loaded, sank. Upon demand
of payment by DUMC, Philamgen immediately paid them. Hence, it sought reimbursement from PKS
Shipping but the latter refused.

Issue:

(1) Whether PKS Shipping is a common carrier or a private carrier; and

(2) WON PKS Shipping exercised the required diligence over the goods they carry. Or, WON PKS
Shipping is liable.

Held:

(1) PKS Shipping is a common carrier.

PKS Shipping has engaged itself in the business of carrying goods for others, although for a
limited clientele, undertaking to carry such goods for a fee. The regularity of its activities in this area
indicates more than just a casual activity on its part. Neither can the concept of a common carrier change
merely because individual contracts are executed or entered into with patrons of the carrier.

(2) PKS Shipping is not liable.

The vessel was suddenly tossed by waves of extraordinary height of six (6) to eight (8) feet and
buffeted by strong winds of 1.5 knots resulting in the entry of water into the barge’s hatches. The official
Certificate of Inspection of the barge issued by the Philippine Coastguard and the Coastwise Load Line
Certificate would attest to the seaworthiness of Limar I. As such, under Art. 1733, NCC, common carriers
are exempt from liability for loss, destruction, or deterioration of the goods due to any of the following
causes, among others:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity x x x

Fabre vs. Court of Appeals

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 the spouses Fabre are common carriers?

Held: Petition was denied. Spouses Fabre are common carriers.

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. 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
1732 deliberately refrained from making such distinctions.

FGU Insurance Corp vs G.P Sarmiento, 385 SCRA 312 ‘02

Facts:

GPS was contracted by Conception Industry to transport 30 units of Condura Ref from Alabang, Makati to
Dagupan city. On the way GPS truck collided with another truck, resulting to damages of cargo of former truck.
FGU-insurer of the damaged cargoes paid and as subrogee sued GPS for breach of contract of carriage.

GPS asserted that it is not engaged as a common carrier and that the cause of the damages was purely
accidental.
Held:

It being shown that GPS was exclusively contractor and hauler of Conception Industry, rendering services to
no other persons or entities, GPS cannot be considered as a common carrier engaged in the transportation
business for hire offering its services to the public in general. However, GPS is liable culpa contractual. The mere
proof of existence of contract of carriage and the failure to comply therewith, justify, prima facie, corresponding
right of relief.

As the driver of the insured was not shown to be at fault, he cannot be ordered to pay FGU because the
driver is not the party to the contract of carriage. FGU’s civil action against the driver can only be based on culpa
aquiliana which requires proof of fault on the part of the defendant unlike culpa contractual.

GPS liable to pay under culpa contractual in which liability arises or attaches upon failure of the comply with
the contract on which the presumption of negligence immediately arises

Planters Products vs. Court of Appeals

G.R. No. 101503 September 15, 1993

Facts: Planters Product Inc. purchased from Mitsubishi international corporation metric tons of Urea
fertilizer, which the latter shipped aboard the cargo vessel M/V Sun Plum owned by private respondent
Kyosei Kisen Kabushiki Kaisha. Prior to its voyage, a time charter-party on the vessel respondent entered
into between Mitsubishi as shipper/charterer and KKKK as ship owner, in Tokyo, Japan.

Before loading the fertilizer aboard the vessel, (4) of her holds were presumably inspected by the
charterer’s representative and found fit to take a load of urea in bulk. After the Urea fertilizer was loaded
in bulk by stevedores hired by and under the supervision of the shipper, the steel hatches were closed
with heavy iron lids. Upon arrival of vessel at port, the petitioner unloaded the cargo pursuant to the terms
and conditions of the charter-party. The hatches remained open throughout the duration of the discharge.

Upon arrival at petitioner’s warehouse a survey conducted over the cargo revealed a shortage and the
most of the fertilizer was contaminated with dirt. As such, Planters filed an action for damages. The
defendant argued that the public policy governing common carriers do not apply to them because they
have become private carriers by reason of the provisions of the charter-party.

Issue: Whether or not the charter-party contract between the ship owner and the charterer transforms a
common carrier into a private carrier?

Held: A charter party may either her be time charter wherein the vessel is leased to the charterer,
wherein the ship is leased to the charterer for a fixed period of time or voyage charter, wherein the ship is
leased for a single voyage. In both cases, the charter party provides for the hire of the vessel only, either
for a determinate time or for a single or consecutive voyage.

It is therefor imperative that such common carrier shall remain as such, notwithstanding the charter of the
whole or part of the vessel by one or more persons, provided the charter is limited to the ship only, as in
the case of a time-charter or voyage-charter. It is only when the charter includes both ship and its crew as
in bareboat or demise that it becomes a private carrier. Undoubtedly, a shipowner in a time or voyage
charter retains in possession and control of the ship, although her holds may be the property of the
charterer.

Transportation Case Digest: Planters Products Inc v. CA (1993)

G.R. No. 101503 September 15, 1993

Lessons Applicable: Charter Party (Transportation)

FACTS:

June 16 1974: Mitsubishi International Corporation (Mitsubishi) of New York, U.S.A., 9,329.7069 M/T of Urea 46%
fertilizer bought by Planters Products, Inc. (PPI) on aboard the cargo vessel M/V "Sun Plum" owned by private
Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San Fernando, La Union, Philippines,
as evidenced by Bill of Lading

May 17 1974: a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General Charter was
entered into between Mitsubishi as shipper/charterer and KKKK as shipowner, in Tokyo, Japan

Before loading the fertilizer aboard the vessel, 4 of her holds were all presumably inspected by the charterer's
representative and found fit

The hatches remained closed and tightly sealed throughout the entire voyage

July 3, 1974: PPI unloaded the cargo from the holds into its steelbodied dump trucks which were parked alongside
the berth, using metal scoops attached to the ship, pursuant to the terms and conditions of the charter-partly

hatches remained open throughout the duration of the discharge

Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was transported to the
consignee's warehouse located some 50 meters from the wharf

Midway to the warehouse, the trucks were made to pass through a weighing scale where they were individually
weighed for the purpose of ascertaining the net weight of the cargo.

The port area was windy, certain portions of the route to the warehouse were sandy and the weather was
variable, raining occasionally while the discharge was in progress.

Tarpaulins and GI sheets were placed in-between and alongside the trucks to contain spillages of the ferilizer

It took 11 days for PPI to unload the cargo

Cargo Superintendents Company Inc. (CSCI), private marine and cargo surveyor, was hired by PPI to determine the
"outturn" of the cargo shipped, by taking draft readings of the vessel prior to and after discharge

shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating 18 M/T was
contaminated with dirt

Certificate of Shortage/Damaged Cargo prepared by PPI

short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having been polluted with sand, rust
and dirt
PPI sent a claim letter 1974 to Soriamont Steamship Agencies (SSA), the resident agent of the carrier, KKKK, for
P245,969.31 representing the cost of the alleged shortage in the goods shipped and the diminution in value of that
portion said to have been contaminated with dirt

SSA: what they received was just a request for shortlanded certificate and not a formal claim, and that they "had
nothing to do with the discharge of the shipment

RTC: failure to destroy the presumption of negligence against them, SSA are liable

CA: REVERSED - failed to prove the basis of its cause of action

ISSUE: W/N a time charter between a shipowner and a charterer transforms a common carrier into a private one
as to negate the civil law presumption of negligence in case of loss or damage to its cargo

HELD: NO. petition is DISMISSED

When PPI chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the
employ of the shipowner and therefore continued to be under its direct supervision and control. Hardly then can
we charge the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the
charterer did not have any control of the means in doing so

carrier has sufficiently overcome, by clear and convincing proof, the prima facie presumption of negligence. The
hatches remained close and tightly sealed while the ship was in transit as the weight of the steel covers made it
impossible for a person to open without the use of the ship's boom.

bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage. More so, with a
variable weather condition prevalent during its unloading

This is a risk the shipper or the owner of the goods has to face. Clearly, KKKK has sufficiently proved the inherent
character of the goods which makes it highly vulnerable to deterioration; as well as the inadequacy of its packaging
which further contributed to the loss.

On the other hand, no proof was adduced by the petitioner showing that the carrier was remise in the exercise of
due diligence in order to minimize the loss or damage to the goods it carried.

Crisostomo v. CA

G.R. No. 138334, August 25, 2003, 409 SCRA 528

FACTS:
Petitioner contracted the services of respondent Caravan Travel and Tours International, Inc. to arrange and
facilitate her booking, ticketing and accommodation in a tour dubbed Jewels of Europe. Pursuant to said contract,
the travel documents and plane tickets were delivered to the petitioner who in turn gave the full payment for the
package tour on June 12, 1991. Without checking her travel documents, petitioner went to NAIA on Saturday, June
15, 1991, to take the flight for the first leg of her journey from Manila to Hongkong. To petitioner’s dismay, she
discovered that the flight she was supposed to take had already departed the previous day. She learned that her
plane ticket was for the flight scheduled on June 14, 1991. She thus called up Menor to complain. Subsequently,
Menor prevailed upon petitioner to take another tour- the British Pageant. Upon petitioner’s return from Europe,
she demanded from respondent the reimbursement of the difference between the sum she paid for Jewels of
Europe and the amount she owed respondent for the British Pageant tour.

Petitioner filed a complaint against respondent for breach of contract of carriage and damages alleging that her
failure to join Jewels of Europe was due to respondent’s fault since it did not clearly indicate the departure date on
the plane, failing to observe the standard of care required of a common carrier when it informed her wrongly of
the flight schedule. For its part, respondent company, denied responsibility for petitioner’s failure to join the first
tour, insisting that petitioner was informed of the correct departure date, which was clearly and legibly printed on
the plane ticket. The travel documents were given to petitioner two days ahead of the scheduled trip. Respondent
further contend that petitioner 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.

ISSUE:

Whether or not Caravan Travel & Tours International Inc. is negligent in the fulfilment of its obligation to petitioner
Crisostomo thus granting to the petitioner the consequential damages due her as a result of breach of contract of
carriage.

RULING:

Contention of petitioner has no merit. 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. Respondent is not an entity engaged in the business of transporting either
passengers or goods and is therefore, neither a private nor a common carrier. 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 service of arranging and facilitating
petitioners 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. Since the contract between the parties is an
ordinary one for services, the standard of care required of respondent is that of a good father of a family under
Article 1173 of the Civil Code. The evidence on record shows that respondent exercised due diligence in
performing its obligations under the contract and followed standard procedure in rendering its services to
petitioner. As correctly observed by the lower court, the plane ticket issued to petitioner clearly reflected the
departure date and time, contrary to petitioner’s contention. The travel documents, consisting of the tour
itinerary, vouchers and instructions, were likewise delivered to petitioner two days prior to the trip. Respondent
also properly booked petitioner for the tour, prepared the necessary documents and procured the plane tickets. It
arranged petitioner’s hotel accommodation as well as food, land transfers and sightseeing excursions, in
accordance with its avowed undertaking. The evidence on record shows that respondent company performed its
duty diligently and did not commit any contractual breach. Hence, petitioner cannot recover and must bear her
own damage.

MINDANAO TERMINAL AND BROKERAGESERVICE, INC.- versus -PHOENIX ASSURANCE

COMPANY OF NEW YORK/MCGEE & CO., INC G.R. No. 162467 May 8, 2009 Tinga, J.:

FACTS: Del Monte Philippines, Inc. contracted petitioner Mindanao Terminal and Brokerage

Service, Inc., a stevedoring company, to load and stow a shipment of 146,288 cartons

of fresh green Philippine bananas and 15,202cartons of fresh pineapples belonging to Del

Monte Fresh Produce International, Inc. into the cargo hold of the vessel M/V Mistrau. The

vessel was docked at the port of Davao City and the goods were to be transported by it to

the port of Inchon, Korea in favor of consignee Taegu Industries, Inc. Del Monte Produce

insured the shipment under an "open cargo policy" with private respondent Phoenix

Assurance Company of New York , a non-life insurance company, and private respondent

McGee & Co. Inc. (McGee), the underwriting manager/agent of Phoenix. The vessel set sail

from the port of Davao City and arrived at the port of Inchon, Korea. It was then discovered

upon discharge that some of the cargo was in bad condition. The Marine Cargo Damage

Surveyor of Incok Loss and Average Adjuster of Korea, through its representative Byeong

Yong Ahn (Byeong),surveyed the extent of the damage of the shipment. In a survey report, it

was stated that16,069 cartons of the banana shipment and2,185 cartons of the pineapple

shipment were so damaged that they no longer had commercial value. Mindanao Terminal

loaded and stowed the cargoes aboard theM/V Mistrau. The vessel set sail from the port of
Davao City and arrived at the port of Inchon, Korea. It was then discovered upon discharge

that some of the cargo was in bad condition. Del Monte Produce filed a claim under the open

cargo policy for the damages to its shipment. McGee’s Marine Claims Insurance Adjuster

evaluated the claim and recommended that payment in the amount of $210,266.43 be

made. Phoenix and McGee instituted an action for damages against Mindanao Terminal After

trial, the RTC held that the only participation of Mindanao Terminal was to loathe cargoes on

board theM/V Mistrauunderthe direction and supervision of the ship’s officers, who would not

have accepted the cargoes on board the vessel and signed theforeman’s report unless they

were properly arranged and tightly secured to withstand voyage across the open seas.

Accordingly, Mindanao Terminal cannot be held liable for whatever happened to the cargoes

after it had loaded and stowed them. Moreover, citing the survey report, it was found by the

RTC that the cargoes were damaged on account of a typhoon whichM/V Mistrauhad

encountered during the voyage. It was further held that Phoenix and McGee had no cause of

action against Mindanao Terminal because the latter,whose services were contracted by Del

Monte, a distinct corporation from Del Monte Produce, had no contract with the assured Del

Monte Produce. The RTC dismissed the complaint and awarded the counterclaim of

Mindanao Terminal in the amount of P83,945.80 as actual damages and P100,000.00 as

attorney’s fees.

ISSUE: Whether or not Phoenix and McGee have a cause of action and whether

Mindanao Terminal is liable for not having exercised extraordinary diligence in the transport

and storage of the cargo.

RULING: No, in the present case, Mindanao Terminal, as a stevedore, was only charged with

the loading and stowing of the cargoes from the pier to the ship’s cargo hold; it

was never the custodian of the shipment of Del Monte Produce. A stevedore is

not a common carrier for it does not transport goods or passengers; it is not akin to a

warehouseman for it does not store goods for profit. **Phoenix and McGee appealed to the

Court of Appeals. The appellate court reversed and set aside the decision The same court
ordered Mindanao Terminal to pay Phoenix and McGee “the total amount of $210,265.45

plus legal interest from the filing of the complaint until fully paid and attorney’s fees of 20%

of the claim." It sustained Phoenix’s and McGee’s argument that the damage in the cargoes

was the result of improper stowage by Mindanao Terminal.** Mindanao Terminal filed a

motion for reconsideration, which the Court of Appeals denied in its 26 February 2004

resolution. Hence, the present petition for review.