ASIA LIGHTERAGE AND SHIPPING V.
CA and one who does such carrying only
August 19, 2003
FACTS:
 3,150 tons of white wheat was shipped by
Marubeni American Corporation of Portland,
Oregon on board the vessel M/V NEO
CYMBIDIUM V-26 for delivery to the consignee
General Milling Corp. in Manila. The shipment
was insured by private respondent Prudential
Guarantee and Assurance Inc.
 The cargo arrived in Manila and was transferred
to the custody of Asia Lighterage, which was
contacted by the consignee to deliver the cargo
to their warehouse in Pasig City.
 900 tons was first loaded for delivery, but it did
not reach its destination since it was suspended
due to a warning of an incoming typhoon.
o The barge it was on sustained a hole
which was patched with clay and
cement. Upon its arrival to the
terminal before it reached the
consignee’s wharf, it again ran
aground. A portion of the goods were
transferred to three other barges.
o The next day, the barge sank
completely, resulting in the total loss
of the remaining cargo.
 A bidding was conducted to dispose of the
damaged cargo. On the same date, the
consignee sent a claim letter to the petitioner
and Prudential for the value of the lost cargo.
 Prudential indemnified the consignee, and then
sought recovery of the amount from the
petitioner.
 Prudential filed a complaint against the
petitioner recovery of the amount of indemnity.
 RTC: ordered petitioner to pay Prudential.
 CA: petitioner insisted that it is not a common
carrier. The CA affirmed the RTC.
ISSUE: Is the petitioner a common carrier? If it is, did it
exercise extraordinary diligence?
HELD: Yes. No.
 The petitioner is a common carrier.
o Art. 1732 CC: 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.
 Petitioner alleges that it is a private carrier since
it has no fixed and publicly known route,
maintains no terminals, and issues no tickets.
o The definition of common carriers in
Article 1732 of the Civil Code makes no
distinction between one whose
principal business activity is the
carrying of persons or goods or both,
as an ancillary activity.
o It does not distinguish between a
carrier offering its services to the
general public, and one who offers
services or solicits business only from a
narrow segment of the general
population.
 Test to Determine a Common Carrier
o 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.
o Petitioner is engaged in the business of
shipping and lighterage.
 Petitioner failed to exercise extraordinary
diligence.
o The barge completely sank after its
towing bits broke, resulting in the total
loss of its cargo. Petitioner claims that
this was caused by a typhoon, hence, it
should not be held liable for the loss of
the cargo.
o However, petitioner failed to prove
that the typhoon is the proximate and
only cause of the loss of the goods, and
that it has exercised due diligence
before, during and after the
occurrence of the typhoon to prevent
or minimize the loss.
o The partly-submerged vessel was
refloated but its hole was patched with
only clay and cement. The patch work
was merely a provisional remedy, not
enough for the barge to sail safely.
SPS CRUZ V. SUN HOLIDAYS
June 29, 2010
FACTS:
 Sps. Dante and Leonora Cruz had a son Ruelito
whom, along with his new wife, stayed onboard
the M/B Coco Beach III by virtue of a tour
package-contract from Sun Holidays.
 The boat capsized while it was en route to
Batangas from Puerto Galera, causing the death
of the couple.
 According to a scuba diving instructor Matute, it
rained shortly after the boat sailed. As the rain
and wind got stronger, the boat tilted from side
to side and the waved got unwieldy. After
getting hit by two big waves, the boat capsized.
o 8 passengers died, including Ruelito
and his wife.
 Sps. Cruz demanded indemnification from Sun
Holidays. Sun Holidays denied any responsibility
for the incident since it was a fortuitous event.
  Sps. Cruz filed a complaint alleging that Sun
Holidays was a common carrier and was guilty of
negligence in allowing the boat to sail
notwithstanding a storm warning.
 Sun Holidays 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.
 RTC: dismissed complaint.
 CA: denied appeal.
ISSUE: Is Sun Holidays a common carrier?
HELD: YES.
 Article 1732 (CC). 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.
o 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.
o No distinction between regular basis
and occasional basis.
o No distinction between general public
and narrow segment of general public.
 “Common carrier” may be seen to coincide
neatly with the notion of "public service," under
the Public Service Act (CA 1416).
o 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
cannot be supposed that it operates at a loss.
 Sun Holiday did not exercise due diligence.
o To fully free a common carrier from
any liability, the fortuitous event must
have been the proximate and only
cause of 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.
o PAGASA issued a 24-hour weather
forecast. A very cautious person
exercising the utmost diligence would
thus not brave such stormy weather
and put other people’s lives at risk.
SCMITZ TRANSPORT & BROKERAGE CORP. V. TRANSPORT
VENTURE INC.
April 22, 2005
FACTS:
 SYTCO Singapore shipped from the port of
Ilyichevsk, Russia on board the M/V Alexander
Saveliev 545 hot rolled steel sheets.
 The cargoes, which were to be discharged at the
port of Manila in favor of the consignee, Little
Giant Steel Pipe Corporation, were insured
against all risks with Industrial Insurance.
 The vessel arrived in Manila. Schmitz Transport
was engaged by the consignee to receive the
cargoes and deliver them to the warehouse
engaged TVI to send a barge and a tugboat at
shipside.
 TVI’s tugboat towed the barge. 37 out of the 545
coils were unloaded onto the barge, during
which the weather became inclement due to an
approaching storm. The barge was not pulled
back to the pier.
 The barge capsized due to strong waves, and the
37 coils fell into the sea. Earnest efforts on the
part of both the consignee Little Giant and
Industrial Insurance to recover the lost cargoes
proved futile.
 Little Giant filed a claim against Industrial
Insurance. It then executed a subrogation
receipt.
 Industrial Insurance then filed a complaint
against Schmitz Transport and TVI for the
recovery of the amount it paid to Little Giant.
 RTC: declared defendants negligent.
 CA: affirmed.
ISSUE: Was there negligence on the part of the
defendants? If yes, may liability for the loss attach?
HELD: YES. Yes, to petitioner and TVI.
 When a fortuitous event occurs, Article 1174 of
the Civil Code absolves any party from any and
all liability arising therefrom.
o In order, to be considered a fortuitous
event, however, (1) the cause of the
unforeseen and unexpected
occurrence, or the failure of the debtor
to comply with his obligation, must be
independent of human will; (2) it must
be impossible to foresee the event
which constitute the caso fortuito, or if
it can be foreseen it must be
impossible to avoid; (3) the occurrence
must be such as to render it impossible
for the debtor to fulfill his obligation in
any manner; and (4) the obligor must
be free from any participation in the
 aggravation of the injury resulting to
the creditor.
 That no tugboat towed back the barge to the
pier after the cargoes were loaded is the
proximate cause of the loss of the cargoes.
o Had the barge been towed back
promptly to the pier, the deteriorating
sea conditions notwithstanding, the
loss could have been avoided. But the
barge was left floating in open sea until
big waves set in at 5:30 a.m., causing it
to sink along with the cargoes.
o Thus, the loss falls outside the doctrine
of fortuitous events.
 Petitioner and TVI are solidarily liable.
o TVI’s failure to tow back the barge was
the proximate cause of the loss.
Petitioner failed to take all precautions
to avoid the loss since it knew that TVI
failed to tow back the barge but did
not do anything about it.
CRISOSTOMO V. CA & CARAVAN TRAVEL
August 25, 2003
FACTS:
 Estela Crisostomo contracted the services of
Caravan Travel to arrange her booking, ticketing,
and accommodation in a tour of Europe. The
booking fee was waived because her niece
Meriam Menor was the ticketing manager.
 Menor went to Estela to deliver the travel
documents and tickets. She was paid in full and
told her aunt to go to NAIA on Saturday, 2 hours
before her flight.
 Estela did not check her travel documents. Upon
arrival at NAIA, she discovered that the flight had
already departed the previous day.
 Menor suggested that Estela take another tour
(the British Pageant) and asked her to pay
another $785. Estela partially paid and went on
the tour.
 Upon Estela’s return, she demanded from
respondent a reimbursement representing the
difference between the sums she paid for the 2
tours. Respondent refused to reimburse Estela,
and she filed a complaint for breach of contract
of carriage and damages.
 Estela alleged 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 ticket. Respondent was also negligent
in informing her of the wrong flight schedule
through its employee Menor.
 RTC: ordered respondent to refund Estela, citing
negligence. CA: held that Estela is more
negligent because she should not have relied on
what was told to her.
ISSUE: Is the respondent a common carrier? Did it not
observe the standard of care required of a common
carrier?
HELD: NO. It is thus not bound under the law to observe
extraordinary diligence in the performance of its
obligation, as petitioner claims.
 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.9 Such person or
association of persons are regarded as carriers
and are classified as private or special carriers
and common or public carriers.
o 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.
 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 acted merely as an agent of the
airline, with whom petitioner ultimately
contracted for her carriage to Europe.
Respondent’s obligation to petitioner in this
regard was simply to see to it that petitioner was
properly booked with the airline for the
appointed date and time. Her transport to the
place of destination, meanwhile, pertained
directly to the airline.
TORRES-MADRID BROKERAGE V. FEB. MITSUI INSURANCE
& BENJAMIN MANALASTAS
July 11, 2016
FACTS:
 A shipment of electronic goods from Thailand
and Malaysia arrived at the Port of Manila for
Sony PH. Sony had engaged TMBI to facilitate,
process, withdraw, and deliver the shipment
from the port to its warehouse in Biñan, Laguna.
 TMBI did not own any delivery trucks. It then
subcontracted Manalastas’ trucking company
BMT. TMBI notified Sony.
 4 BMT trucks picked up the shipment, but could
not immediately undertake the delivery because
of the truck ban and that the following day was a
Sunday.
 On the rescheduled date, 4 trucks left but only 3
trucks arrived at the Sony warehouse.
  The missing truck, driven by Lapesura, was found responsibility over the cargo. Article
abandoned in Muntinlupa with the shipment 1735 of the Civil Code presumes that it
missing. was at fault.
 A complaint was filed with the NBI against
Lapesura for hijacking.
 TMBI notified Sony of the loss, and then
demanded from BMT payment for the lost
shipment. BMT refused to pay.
 Sony filed an insurance claim with Mitsui, the
insurer of the goods. After paying Sony, Mitui
was subrogated to its rights and sent TMBI a
demand letter for the payment of the lost goods.
ISSUE: Is BMT liable for the cost of the lost goods? Is it a
common carrier?
HELD: YES.
 A brokerage may be considered a common
carrier if it also undertakes to deliver the goods
for its customers.
 The law does not distinguish between one whose
principal business activity is the carrying of
goods and one who undertakes this task only as
an ancillary activity.
 That TMBI does not own trucks and has to
subcontract the delivery of its clients’ goods, is
immaterial. As long as an entity holds itself to
the public for the transport of goods as a
business, it is considered a common carrier
regardless of whether it owns the vehicle used or
has to actually hire one.
 The only exceptions from liability for a common
carrier:
(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 of omission of the shipper or owner of
the goods;
(4) The character of the goods or defects in the
packing or in the containers;
(5) Order or act of competent public authority.
 For all other cases - such as theft or robbery – a
common carrier is presumed to have been at
fault or to have acted negligently, unless it can
prove that it observed extraordinary diligence.
The theft or the robbery of the goods is not
considered a fortuitous event or a force majeure
 Despite the subcontract, TMBI remained
responsible for the cargo. Under Article 1736, a
common carrier’s extraordinary responsibility
over the shipper’s goods lasts from the time
these goods are unconditionally placed in the
possession of, and received by, the carrier for
transportation, until they are delivered, actually
or constructively, by the carrier to the consignee.
o That the cargo disappeared during
transit while under the custody of BMT
– TMBI’s subcontractor – did not
diminish nor terminate TMBI’s