BALIWAG TRANSIT CORPORATION VS COURT OF APPEALS right to execute the Release of Claims despite the fact that he is still
he fact that he is still a student and
Facts: Spouses Sotero Cailipan, Jr. and Zenaida Lopez, and their son George, of
legal age, filed a complaint for damages for breach of contract of carriage against
petitioner Baliwag Transit (Baliwag, for brevity).
The Complaint alleged that George, who was a paying passenger on a Baliwag bus
on 17 December 1984, suffered multiple serious physical injuries when he was
thrown off said bus driven in a careless and negligent manner by Leonardo Cruz,
the authorized bus driver, along Barangay Patubig, Marilao, Bulacan.
Consequently, he was confined in the hospital for treatment, incurring about
P200,000.00 medical expenses, which were borne by his parents, plus other
incidental expenses of about P10,000.00.
Baliwag then filed a Third-Party Complaint against Fortune Insurance & Surety
Company, Inc.
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” dated 16 May 1985. These Motions were denied by the Trial Court as
they were filed beyond the time for pleading and after the Answer were already
filed.
Baliwag filed a Motion to Admit Amended Answer, which was granted by the Trial
Court. The Amended Answer incorporated the affirmative defense in the Motion
to Dismiss to the effect that George had been paid all his claims for damages
arising from the incident subject matter of the complaint when he executed the
following “Release of Claims”.
By way of opposition to petitioner’s affirmative defense, respondent Sotero
Cailipan, Jr. testified that he is the father of George, who at the time of the
incident was a student, living with his parents and totally dependent on them for
their support; that the expenses for his hospitalization were shouldered by his
parents; and that they had not signed the “Release of Claims.”
Regional Trial Court: The execution by George of the Release of Claims discharges
Baliwag and Fortune Insurance. The Court dismissed the Complaint and
Thirdparty 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
dependent on his parents for support.
Court of Appeals: “Release of Claims” cannot operate as a valid ground for the
dismissal of the case because it does not have the conformity of all the parties,
particularly George’s parents, who have a substantial interest in the case as they
stand to be prejudiced by the judgment because they spent a sizeable amount for
the medical bills of their son; that the Release of Claims was secured by Fortune
Insurance for the consideration of P8,020.50 as the full and final settlement of its
liability under the insurance policy and not for the purpose of releasing Baliwag
from its liability as a carrier in this suit for breach of contract.
Issue/s: Whether or not the Release of Claims signed by George is valid.
Ruling: Yes.
He was then of legal age, a graduating student of Agricultural Engineering, and
had the capacity to do acts with legal effect (Article 37 in relation to Article 402,
Civil Code). Thus, he could sue and be sued even without the assistance of his
parents.
The contract of carriage was between George, as the paying passenger, and
Baliwag, as the common carrier. As such carrier, Baliwag 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 or wilful acts of its employees
(Articles 1755 and 1759, Civil Code). Thus, George had the right to be safely
brought to his destination and Baliwag had the correlative obligation to do so.
Since a contract may be violated only by the parties thereto, as against each
other, in an action upon that contract, the real parties in interest, either as
plaintiff or as defendant, must be parties to said contract. In the absence of any
contract of carriage between Baliwag and George’s parents, the latter are not real
parties-in-interest in an action for breach of that contract.
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).
 SPS. FABRE VS COURT OF APPEALS
Facts: Petitioners Engracio Fabre, Jr. and his wife were owners of a 1982 model
Mazda minibus. 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 P3,000.00.
However, the bridge at Carmen was under repair, 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.
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. It went
to a full stop only after a series of impacts. Several passengers were injured
including private respondent Amyline Antonio. As a result of the accident, she is
now suffering from paraplegia and is permanently paralyzed from the waist
down. She underwent and adduced evidence regarding the cost of her treatment
and therapy.
RTC: Mr. & Mrs. Engracio Fabre, Jr. and Porfirio Cabil y Jamil pursuant to articles
2176 and 2180 of the Civil Code of the Philippines and said defendants are
ordered to pay jointly and severally to the plaintiffs.
CA: Sustained the ruling on Antonio but dismissed on the other plaintiffs for
failure to present enough evidence.
Issue/s: Whether or not Cabil was negligent.
Petitioner’s Contention: Petitioners contend that as casual employees do not
have security of tenure, the award of P600,000.00, considering Amyline Antonio’s
earnings, is without factual basis as there is no assurance that she would be
regularly earning these amounts.
Ruling: 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. These factual findings of the two courts we regard as final
and conclusive, supported as they are by the evidence.
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.
There is testimony4 that the vehicles passing on that portion of the road should
only be running 20 kilometers per hour.
Pursuant to Arts. 2176 and 2180 of the Civil Code his negligence gave rise to the
presumption that his employers, the Fabres, were themselves negligent in the
selection and supervision of their employee. 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.5 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.7
They had hired him only after a twoweek 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. As already stated, 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:
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 of
fering 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.
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.
As Art. 1759 of the Code provides: 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.
EVERETT STEAMSHIP CORP. VS COURT OF APPEALS
Facts: Halla Trading Co., a company based in Korea, shipped to Manila
secondhand cars and other articles on board the vessel Hanjin Busan 0238W. The
bill of lading covering the shipment, i.e., Bill of Lading No. HJSCPUSI14168303,2
which was prepared by the carrier Hanjin Shipping Co., Ltd. (Hanjin), named
respondent Shin Yang Brokerage Corp. (Shin Yang) as the consignee and indicated
that payment was on a “Freight Collect” basis, i.e., that the consignee/receiver of
the goods would be the one to pay for the freight and other charges in the total
amount of P57,646.00.
The shipment arrived in Manila on October 29, 2001. Thereafter, petitioner MOF
Company, Inc. (MOF), Hanjin’s exclusive general agent in the Philippines,
repeatedly demanded the payment of ocean freight, documentation fee and
terminal handling charges from Shin Yang. Shin yang failed and refused to pay
contending that it did not cause the importation of the goods, that it is only the
Consolidator of the said shipment, that the ultimate consignee did not endorse in
its favor the original bill of lading and that the bill of lading was prepared without
its consent. MOF filed a case for sum of money before the Metropolitan Trial
Court of Pasay City (MeTC Pasay).
Issue/s: Whether a consignee, who is not a signatory to the bill of lading, is
bound by the stipulations thereof.
MOF’S Contention: The bill of lading, which expressly stated Shin Yang as the
consignee, is the best evidence of the latter’s actual participation in the
transportation of the goods. Such document, validly entered, stands as the law
among the shipper, carrier and the consignee, who are all bound by the terms
stated therein. Besides, a carrier’s valid claim after it fulfilled its obligation cannot
just be rejected by the named consignee upon a simple denial that it ever
consented to be a party in a contract of affreightment, or that it ever participated
in the preparation of the bill of lading.
MOF claims that even if Shin Yang never gave its consent, it cannot avoid its
obligation to pay, because it never objected to being named as the consignee in
the bill of lading and that it only protested when the shipment arrived in the
Philippines, presumably due to a botched transaction between it and Halla
Trading Co. Furthermore, Shin Yang’s letters asking for the refund of container
deposits highlight the fact that it was aware of the shipment and that it
undertook preparations for the intended release of the shipment.
Shin yang’s Contention: Shin Yang contends that a bill of lading is essentially a
contract between the shipper and the carrier and ordinarily, the shipper is the
one liable for the freight charges. A consignee, on the other hand, is initially a
stranger to the bill of lading and can be liable only when the bill of lading specifies
that the charges are to be paid by the consignee.
Ruling:
Shin Yang consistently denied in all of its pleadings that it authorized Halla
Trading, Co. to ship the goods on its behalf; or that it got hold of the bill of lading
covering the shipment or that it demanded the release of the cargo. Basic is the
rule in evidence that the burden of proof lies upon him who asserts it, not upon
him who denies, since, by the nature of things, he who denies a fact cannot
produce any proof of it.17 Thus, MOF has the burden to controvert all these
denials, it being insistent that Shin Yang asserted itself as the consignee and the
one that caused the shipment of the goods to the Philippines. In civil cases, the
party having the burden of proof must establish his case by preponderance of
evidence. Here, MOF failed to meet the required quantum of proof. Other than
presenting a bill of lading, It did not even present any witness in support of its
allegation that it was Shin Yang which furnished all the details indicated in the bill
of lading and that Shin Yang consented to shoulder the shipment costs. There is
also nothing in the records which would indicate that Shin Yang was an agent of
Halla Trading Co. or that it exercised any act that would bind it as a named
consignee. Thus, the CA correctly dismissed the suit for failure of petitioner to
establish its cause against respondent.
BRITISH AIRWAYS, INC. VS. COURT OF APPEALS
Facts: First International Trading and General Services Co., a duly licensed
domestic recruitment and placement agency, received a telex message from its
principal ROLACO Engineering and Contracting Services in Jeddah, Saudi Arabia to
recruit Filipino contract workers in behalf of said principal.
During the early part of March 1981, said principal paid to the Jeddah branch of
petitioner British Airways, Inc. airfare tickets for 93 contract workers with specific
instruction to transport said workers to Jeddah on or before March 30, 1981.
As soon as petitioner received a prepaid ticket advice from its Jeddah branch to
transport the 93 workers, private respondent was immediately informed by
petitioner that its principal had forwarded 93 prepaid tickets. Thereafter, private
respondent instructed its travel agent, ADB Travel and Tours, Inc., to book the 93
workers with petitioner but the latter failed to fly said workers, thereby
compelling private respondent to borrow money in the amount of P304,416.00 in
order to purchase airline tickets from the other airlines.
Sometime in the first week of June, 1981, private respondent was again informed
by the petitioner that it had received a prepaid ticket advice from its Jeddah
branch for the transportation of 27 contract workers. Immediately, private
respondent instructed its travel agent to book the 27 contract workers with the
petitioner but the latter was only able to book and confirm 16 seats on its June
9,1981 flight.
On July 6,1981, private respondent paid the travel tax of the said workers as
required by the petitioner but when the receipt of the tax payments was
submitted, the latter informed private respondent that it can only confirm the
seats of the 12 workers on its July 7, 1981 flight. However, the confirmed seats of
said workers were again cancelled without any prior notice either to the private
respondent or said workers. The 12 workers were finally able to leave for Jeddah
after private respondent had bought tickets from the other airlines.
As a result of these incidents, private respondent sent a letter to petitioner
demanding compensation for the damages it had incurred by the latter's
repeated failure to transport its contract workers despite confirmed bookings and
payment of the corresponding travel taxes.
private respondent received a telex message from its principal cancelling the
hiring of the remaining recruited workers due to the delay in transporting the
workers to Jeddah.
Issue/s:
Ruling: Private respondent had a valid cause of action for damages against
petitioner. A cause of action is an act or omission of one party in violation of the
legal right or rights of the other.9 Petitioner's repeated failures to transport
private respondent's workers in its flight despite confirmed booking of said
workers clearly constitutes breach of contract and bad faith on its part. In
resolving petitioner's theory that private respondent has no cause of action in the
instant case, the appellate court correctly held that:
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.
Even if a PTA is merely an advice from the sponsors that an airline is authorized to
issue a ticket and thus no ticket was yet issued, the fact remains that the passage
had already been paid for by the principal of the appellee, and the appellant had
accepted such payment. 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.
Besides, appellant knew very well that time was of the essence as the prepaid
ticket advice had specified the period of compliance therewith, and with
emphasis that it could only be used if the passengers fly on BA. Under the
circumstances, the appellant should have refused acceptance of the PTA from
appellee's principal or to at least inform appellee that it could not accommodate
the contract workers.
EVERETT STEAMSHIP CORP. VS COURT OF APPEALS
Facts: Private respondent imported three crates of bus spare parts marked as
MARCO C/No. 12, MARCO C/No. 13 and MARCO C/No. 14, from its supplier,
Maruman Trading Company), a foreign corporation based in Japan. The crates
were shipped from Nagoya, Japan to Manila on board "ADELFAEVERETTE," a
vessel owned by petitioner's principal, Everett Orient Lines. The said crates were
covered by Bill of Lading No. NGO53MN.
Upon arrival at the port of Manila, it was discovered that the crate marked
MARCO C/No. 14 was missing. This was confirmed and admitted by petitioner in
its letter of January 13, 1992 addressed to private respondent, which thereafter
made a formal claim upon petitioner for the value of the lost cargo amounting to
One Million Five Hundred Fifty Two Thousand Five Hundred (Y1,552,500.00) Yen,
the amount shown in an Invoice No. MTM-941, dated November 14, 1991.
However, petitioner offered to pay only One Hundred Thousand (Y100,000.00)
Yen, the maximum amount stipulated under Clause 18 of the covering bill of
lading which limits the liability of petitioner.
Private respondent rejected the offer and thereafter instituted a suit for
collection docketed as Civil Case No. C-15532, against petitioner before the
Regional Trial Court.
On July 16, 1993, the trial court rendered judgment 2 in favor of private
respondent, ordering petitioner to pay: (a) Y1,552,500.00; (b) Y20,000.00 or its
peso equivalent representing the actual value of the lost cargo and the material
and packaging cost; (c) 10% of the total amount as an award for and as contingent
attorney's fees; and (d) to pay the cost of the suit. The Court subscribes to the
provisions of Article 1750 of the New Civil Code
Art. 1750. "A contract fixing the sum that may be recovered by the owner or
shipper for the loss, destruction or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been fairly and freely
agreed upon."
Issue/s: Whether or not private respondent, as consignee, who is not a signatory
to the bill of lading is bound by the stipulations thereof.
Ruling: it is required that the stipulation limiting the common carrier's liability for
loss must be "reasonable and just under the circumstances, and has been freely
and fairly agreed upon." The bill of lading subject of the present controversy
specifically provides, among others: 18. All claims for which the carrier may be
liable shall be adjusted and settled on the basis of the shipper's net invoice cost
plus freight and insurance premiums, if paid, and in no event shall the carrier be
liable for any loss of possible profits or any consequential loss. The carrier shall
not be liable for any loss of or any damage to or in any connection with, goods in
an amount exceeding One Hundred thousand Yen in Japanese Currency
(Y100,000.00) or its equivalent in any other currency per package or customary
freight unit (whichever is least) unless the value of the goods higher than this
amount is declared in writing by the shipper before receipt of the goods by the
carrier and inserted in the Bill of Lading and extra freight is paid as required.
(Emphasis supplied) The above stipulations are, to our mind, reasonable and just.
In the bill of lading, the carrier made it clear that its liability would only be up to
One Hundred Thousand (Y100,000.00) Yen. However, the shipper, Maruman
Trading, had the option to declare a higher valuation if the value of its cargo was
higher than the limited liability of the carrier. Considering that the shipper did not
declare a higher valuation, it had itself to blame for not complying with the
stipulations.
When private respondent formally claimed reimbursement for the missing goods
from petitioner and subsequently filed a case against the latter based on the very
same bill of lading, it (private respondent) accepted the provisions of the contract
and thereby made itself a party thereto, or at least has come to court to enforce
it.9 Thus, private respondent cannot now reject or disregard the carrier's limited
liability stipulation in the bill of lading. In other words, private respondent is
bound by the whole stipulations in the bill of lading and must respect the same.
The bill of lading in question confirms petitioner's contention. To defeat the
carrier's limited liability, the aforecited Clause 18 of the bill of lading requires that
the shipper should have declared in writing a higher valuation of its goods before
receipt thereof by the carrier and insert the said declaration in the bill of lading,
with extra freight paid. These requirements in the bill of lading were never
complied with by the shipper, hence, the liability of the carrier under the limited
liability clause stands. The commercial Invoice No. MTM-941 does not in itself
sufficiently and convincingly show that petitioner has knowledge of the value of
the cargo as contended by private respondent. No other evidence was proffered
by private respondent to support is contention. Thus, we are convinced that
petitioner should be liable for the full value of the lost cargo.
GANZON VS COURT OF APPEALS
Facts: Tumambing contracted the services of Ganzon to haul 305 tons of scrap
iron from Mariveles to the port of Manila on board the lighter LCT “Batman”
Ganzon then sent his lighter “Batman” to Mariveles where it docked in three feet
of water.
On December 1, 1956, when about half of the scrap iron was already loaded,
Mayor Advincula of Mariveles, Bataan, arrived and demanded P5,000.00 from
Gelacio Tumambing. The latter resisted the shakedown and after a heated
argument between them, Mayor Jose Advincula drew his gun and fired at
Tumambing. The latter had to be taken to a hospital in Balanga, Bataan, for
treatment.
After sometime, the loading of the scrap iron was resumed. But on December 4,
1956, Acting Mayor Basilio Rub, accompanied by three policemen, ordered
captain Filomeno Niza and his crew to dump the scrap iron where the lighter was
docked. Later on Acting Mayor Rub issued a receipt stating that the Municipality
of Mariveles had taken custody of the scrap iron.
Issue/s:
Petitioner’s Contention: He insists that the scrap iron had not been
unconditionally placed under his custody and control to make- him liable.
However, he completely agrees with the respondent Court’s finding that on
December 1, 1956, the private respondent delivered the scraps to Captain
Filomeno Niza for loading in the lighter “Batman.”
Ruling:
By the said act of delivery, the scraps were unconditionally placed in the
possession and control of the common carrier, and upon their receipt by the
carrier for transportation, the contract of carriage was deemed perfected.
Consequently, the petitioner-carrier’s extraordinary responsibility for the loss,
destruction, or deterioration of the goods commenced, Pursuant to Art. 1736,
such extraordinary responsibility would cease only upon the delivery, actual or
constructive, by the carrier to the consignee, or to the person who has a right to
receive them.5 The fact that part of the shipment had not been loaded on board
the lighter did not impair the said contract of transportation as the goods
remained in the custody and control of the carrier, albeit still unloaded. The
petitioner has failed to show that the loss of the scraps was due to any of the
following causes enumerated in Article 1734 of the Civil Code, namely: Flood,
storm, earthquake, lightning, or other natural disaster or calamity; Act of the
public enemy in war, whether international or civil; Act or omission of the shipper
or owner of the goods; The character of the goods or defects in the packing or in
the containers; Order or act of competent public authority. Hence, the petitioner
is presumed to have been at fault or to have acted negligently.
It is in the second and third assignments of error where the petitioner maintains
that he is exempt from any liability because the loss of the scraps was due mainly
to the intervention of the municipal officials of Mariveles which constitutes a caso
fortuito as defined in Article 1174 of the Civil Code.7 We cannot sustain the
theory of caso fortuito. In the courts below, the petitioner’s defense was that the
loss of the scraps was due to an “order or act of competent public authority,” and
this contention was correctly passed upon by the Court of Appeals which ruled
that:
x x x In the second place, before the appellee Ganzon could be absolved from
responsibility on the ground that he was ordered by competent public
authority to unload the scrap iron, it must be shown that Acting Mayor Basilio
Rub had the power to issue the disputed order, or that it was lawful, or that it
was issued under legal process of authority. The appellee failed to establish
this. Indeed, no authority or power of the acting mayor to issue such an order
was given in evidence.
Now the petitioner is changing his theory to caso fortuito. Such a change of
theory on appeal we cannot, however, allow.
The petitioner was not duty bound to obey the illegal order to dump into the sea
the scrap iron. Moreover, there is absence of sufficient proof that the issuance of
the same order was attended with such force or intimidation as to completely
overpower the will of the petitioner’s employees. The mere difficulty in the
fulfillment of the obligation is not considered force majeure.
COMPANIA MARITIMA VS. COURT OF APPEALS
Facts: Concepcion is a civil engineer doing business under the name and style of
Consolidated Construction. Concepcion negotiated with petitioner, thru its
collector, Pacifico Fernandez, for the shipment to Cagayan de Oro City. The Reo
trucks and water tanks were safely unloaded within a few hours after arrival, but
while the payloader was about two (2) meters above the pier in the course of
unloading, the swivel pin of the heel block of the port block of Hatch No. 2 gave
way, causing the payloader to fall. The payloader was damaged.
Petitioner shipped the payloader to Manila where it was weighed at the San
Miguel Corporation. Finding that the payloader weighed 7.5 tons and not 2.5 tons
as declared in the Bill of Lading, petitioner denied the claim for damages of
Consolidated Construction
Issue/s: Whether or not the act of Concepcion in furnishing petitioner Compañia
Maritima with an inaccurate weight of 2.5 tons instead of the payloader’s actual
weight of 7.5 tons was the proximate and only cause of the damage on the Oliver
Payloader OC-12 when it fell while being unloaded by petitioner’s crew.
Ruling:
“Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following
causes only: x x x     x x x     x x x “(3) Act or omission of the shipper or owner of
the goods.”
Petitioner claims absolute exemption under this provision upon the reasoning
that private respondent’s act of furnishing it with an inaccurate weight of the
payloader constitutes misrepresentation within the meaning of “act or omission
of the shipper or owner of the goods” under the above-quoted article.
The general rule under Articles 1735 and 1752 of the Civil Code is that common
carriers are presumed to have been at fault or to have acted negligently in case
the goods transported by them are lost, destroyed or had deteriorated. To
overcome the presumption of liability for the loss, destruction or deterioration of
the goods under Article 1735, the common carriers must prove that they
observed extraordinary diligence as required in Article 1733 of the Civil Code. The
responsibility of observing extraordinary diligence in the vigilance over the goods
is further expressed in Article 1734 of the same Code, the article invoked by
petitioner to avoid liability for damages.
Petitioner seems to have overlooked the extraordinary diligence required of
common carriers in the vigilance over the goods transported by them by virtue of
the nature of their business, which is impressed with a special public duty. Thus,
Article 1733 of the Civil Code provides:
“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 futher
expressed in Articles 1734, 1735 and 1745, Nos. 5, 6 and 7, x x x”
Petitioner used a 5-ton capacity lifting apparatus to lift and unload a visibly heavy
cargo like a payloader. Private respondent has, likewise, sufficiently established
the laxity and carelessness of petitioner’s crew in their methods of ascertaining
the weight of heavy cargoes offered for shipment before loading and unloading
them, as is customary among careful persons. It must be noted that the weight
submitted by private respondent Concepcion appearing at the left-hand portion
of Exhibit 812 as an addendum to the original enumeration of equipment to be
shipped was entered into the bill of lading by petitioner, thru Pacifico Fernandez,
a company collector, without seeing the equipment to be shipped.13 Mr.
Mariano Gupana, assistant traffic manager of petitioner, confirmed in his
testimony that the company never checked the information entered in the bill of
lading.14 Worse, the weight of the payloader as entered in the bill of lading was
assumed to be correct by Mr. Felix Pisang, Chief Officer of MV Cebu.. Pisang took
the bill of lading on its face value and presumed the same to be correct by merely
“seeing” it.
While petitioner has proven that private respondent Concepcion did furnish it
with an inaccurate weight of the pay-loader, petitioner is nonetheless liable, for
the damage caused to the machinery could have been avoided by the exercise of
reasonable skill and attention on its part in overseeing the unloading of such a
heavy equipment. And circumstances clearly show that the fall of the payloader
could have been avoided by petitioner’s crew.
udent course for petitioner. While the act of private respondent in furnishing
petitioner with an inaccurate weight of the payloader cannot successfully be used
as an excuse by petitioner to avoid liability to the damage thus caused, said act
constitutes a contributory circumstance to the damage caused on the payloader,
which mitigates the liability for damages of petitioner in accordance with Article
1741 of the Civil Code, to wit: “Art. 1741. If the shipper or owner merely
contributed to the loss, destruction or deterioration of the goods, the proximate
cause thereof being the negligence of the common carrier, the latter shall be
liable in damages, which however, shall be equitably reduced.”
KOREAN AIRLINES CO., LTD. VS. COURT OF APPEALS
Facts:
Lapuz, an automotive electrician, was contracted for employment in Jeddah,
Saudi Arabia, for a period of one year through Pan Pacific Overseas Recruiting
Services, Inc. He was supposed to leave on November 8, 1980, via Korean Airlines.
Initially, he was “wait-listed,”. When two of such passengers did not appear,
Lapuz and another person by the name of Perico were given the two unclaimed
seats.
According to Lapuz, he was allowed to check in with one suitcase and one
shoulder bag at the check-in counter of KAL. He passed through the customs and
immigration sections for routine check-up and was cleared for departure as
Passenger No. 157 of KAL Flight No. KE 903. Together with the other passengers,
he rode in the shuttle bus and proceeded to the ramp of the KAL aircraft for
boarding. However, when he was at the third or fourth rung of the stairs, a KAL
officer pointed to him and shouted “Down! Down!” He was thus barred from
taking the flight.
KAL, alleged that Pan Pacific Recruiting Services Inc. coordinated with KAL for the
departure of 30 contract workers, of whom only 21 were confirmed and 9 were
wait-listed passengers. The agent of Pan Pacific, Jimmie Joseph, after being
informed that there was a possibility of having one or two seats becoming
available, gave priority to Perico, who was one of the supervisors of the hiring
company in Saudi Arabia. The other seat was won through lottery by Lapuz.
However, only one seat became available and so, pursuant to the earlier
agreement that Perico was to be given priority, he alone was allowed to board.
Issue/s:
Ruling: 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. 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. 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.
DANGWA TRANSPORTATION, CO., INC. VS. COURT OF APPEALS
Facts:
Private respondents filed a complaint for damages against petitioners for the
death of Cudiamat as a result of a vehicular accident which occurred on March
25, 1985 at Marivic, Sapid, Mankayan, Benguet. Among others, it was alleged that
on said date, while petitioner Theodore M. Lardizabal was driving a passenger bus
belonging to petitioner corporation in a reckless and imprudent manner and
without due regard to traffic rules and regulations and safety to persons and
property, it ran over its passenger, Pedrito Cudiamat.
Instead of bringing Pedrito immediately to the nearest hospital, the said driver, in
utter bad faith and without regard to the welfare of the victim, first brought his
other passengers and cargo to their respective destinations before bringing said
victim to the Lepanto Hospital where he expired.
Petitioner’s Contention: that they had observed and continued to observe the
extraordinary diligence required in the operation of the transportation. company
and the supervision of the employees, even as they add that they are not
absolute insurers of the safety of the public at large. Further, it was alleged that it
was the victim's own carelessness and negligence which gave rise to the subject
incident, hence they prayed for the dismissal of the complaint plus an award of
damages in their favor by way of a counterclaim.
Issue/s: Whether or not the driver is negligent.
Ruling:
Yes. The testimony of petitioners' own witnesses shows that the victim fell from
the platform of the bus when it suddenly accelerated forward and was run over
by the rear right tires of the vehicle, as shown by the physical evidence on where
he was thereafter found in relation to the bus when it stopped. Under such
circumstances, it cannot be said that the deceased was guilty of negligence.
The contention of petitioners that the driver and the conductor had no
knowledge that the victim would ride on the bus, since the latter had supposedly
not manifested his intention to board the same, does not merit consideration.
When the bus is not in motion there is no necessity for a person who wants to
ride the same to signal his intention to board. A public utility bus, once it stops, is
in effect making a continuous offer to bus riders.
It is the duty of common carriers of passengers, including common carriers by
railroad train, streetcar, or motorbus, to stop their conveyances a reasonable
length of time in order to afford passengers an opportunity to board and enter,
and they are liable for injuries suffered by boarding passengers resulting from the
sudden starting up or jerking of their conveyances while they are doing so.
Moreover, the circumstances under which the driver and the conductor failed to
bring the gravely injured victim immediately to the hospital for medical treatment
is a patent and incontrovertible proof of their negligence.
DE GUZMAN VS. COURT OF APPEALS
Facts: Cendaña, a junk dealer, was engaged in buying up used bottles and scrap
metal in Pangasinan. Upon gathering sufficient quantities of such scrap material,
respondent would bring such material 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.
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, on 1 December 1970, 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
by armed men.
Petitioner’s Contention: Petitioner commenced action against private
respondent, demanding payment of P22,150.00, 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.
Respondent’s Contention: He 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.
Issue/s:
1. Whether or not Cendaña may be properly characterized as a common
carrier.
2. Whether or not Cendaña is liable as a common carrier.
Ruling:
1st Issue:
Yes. 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”).
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 backhauling 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 that fee frequently fell below commercial freight rates is not
relevant here.
2nd Issue:
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.”
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.
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.”
The decision of the trial court shows that the accused acted with grave, if not
irresistible, threat, violence or force.3 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).
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.
FIRST PHILIPPINE INDUSTRIAL CORPORATION VS. COURT OF APPEALS
Facts:
Petitioner is a grantee of a pipeline concession under RA No. 387, as amended, to
contract, install and operate oil pipelines. It applied for a mayor’s permit. Before
it 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. 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.
Petitioner filed a letter-protest addressed to the respondent City Treasurer. The
respondent City Treasurer denied the protest contending that petitioner cannot
be considered engaged in transportation business, thus it cannot claim exemption
under Section 133 (j) of the Local Government Code.
Issue/s: Whether or not petitioner is a common carrier or a transportation
contractor.
Ruling:
The petitioner is a common carrier.
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.
BASCOS VS. COURT OF APPEALS
Facts:
Cipriano representing CIPTRADE) entered into a hauling contract with Jibfair
Shipping Agency Corporation whereby the former bound itself to haul the latter’s
2,000 m/tons of soya bean meal from Magallanes Drive, Del Pan, Manila to the
warehouse of Purefoods Corporation in Calamba, Laguna.
To carry out its obligation, CIPTRADE, through Cipriano, subcontracted with
Bascos (petitioner) to transport and to deliver 400 sacks of soya bean meal worth
P156,404.00 from the Manila Port Area to Calamba, Laguna at the rate of P50.00
per metric ton. Petitioner failed to deliver the said cargo. As a consequence of
that failure, Cipriano paid Jibfair Shipping Agency the amount of the lost goods.
Cipriano demanded reimbursement from petitioner but the latter refused to pay.
Eventually, Cipriano filed a complaint for a sum of money and damages with writ
of preliminary attachment4 for breach of a contract of carriage.
Petitioner’s Contention: The truck carrying the cargo was hijacked along Canonigo
St., Paco, Manila on the night of October 21, 1988; that the hijacking was
immediately reported to CIPTRADE and that petitioner and the police exerted all
efforts to locate the hijacked properties; that after preliminary investigation, an
information for robbery and carnapping were filed against Jose Opriano, et al;
and that hijacking, being a force majeure, exculpated petitioner from any liability
to CIPTRADE.
Issue/s: Whether or not the loss of the goods is due to force majeure.
Ruling: No.
In this case, petitioner alleged that hijacking constituted force majeure which
exculpated her from liability for the loss of the cargo. In De Guzman vs. Court of
Appeals, the Court held that hijacking, not being included in the provisions of
Article 1734, must be dealt with under the provisions of Article 1735 and thus, the
common carrier is presumed to have been at fault or negligent. To exculpate the
carrier from liability arising from hijacking, he must prove that the robbers or the
hijackers acted with grave or irresistible threat, violence, or force. This is in
accordance with Article 1745 of the Civil Code which provides:
“Art. 1745. Any of the following or similar stipulations shall be considered
unreasonable, unjust and contrary to public policy: x x x     x x x (6) That the
common carrier’s liability for acts committed by thieves, or of robbers who do
not act with grave or irresistible threat, violences or force, is dispensed with or
diminished;”
Petitioner’s affidavit about the hijacking was based on what had been told her by
Juanito Morden. It was not a first-hand account. Secondly, the affidavit of Jesus
Bascos did not dwell on how the hijacking took place. Thirdly, while the affidavit
of Juanito Morden, the truck helper in the hijacked truck, was presented as
evidence in court, he himself was a witness as could be gleaned from the
contents of the petition. Affidavits are not considered the best evidence if the
affiants are available as witnesses. The subsequent filing of the information for
carnapping and robbery against the accused named in said affidavits did not
necessarily mean that the contents of the affidavits were true because they were
yet to be determined in the trial of the criminal cases.
The presumption of negligence was raised against petitioner. It was petitioner’s
burden to overcome it. Thus, contrary to her assertion, private respondent need
not introduce any evidence to prove her negligence. Her own failure to adduce
sufficient proof of extraordinary diligence made the presumption conclusive
against her.
CRUZ VS. SUN HOLIDAYS, INC.
Facts:
Matute stayed at the Resort from September 8 to 11, 2000. He was originally
scheduled to leave the Resort, but was advised to stay for another night because
of strong winds and heavy rains.
As it was still windy, 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. After getting hit by two big waves
which came one after the other, M/B Coco Beach III capsized putting all
passengers underwater.
Help came after about 45 minutes. Eight passengers, including petitioners’ son
and his wife, died during the incident. Petitioners demanded indemnification
from respondent for the death of their son.
Petitioner’s Contention: Respondent, as a common carrier, was guilty of
negligence in allowing M/B Coco Beach III to sail notwithstanding storm warning
bulletins issued by the PAGASA.
Respondent’s Contention: It 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.
Issue/s:
1. Whether or not respondent is a common carrier.
2. Whether or not respondent s liable.
Ruling: Yes.
1st Issue: As De Guzman instructs, 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. The
intent of the law is thus to not consider such distinctions.
2nd Issue: Yes. 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.[22] By the testimony of Dr. Frisco Nilo, supervising
weather specialist of PAGASA, squalls are to be expected under such weather
condition.
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.
Respondent cites the squall that occurred during the voyage as the fortuitous
event that overturned M/B Coco Beach III. However, the occurrence of squalls
was expected under the weather condition of September 11, 2000. Moreover,
evidence shows that M/B Coco Beach III suffered engine trouble before it
capsized and sank. The incident was, therefore, not completely free from human
intervention.
VALENZUELA HARDWOOD AND INDUSTRIAL SUPPLY, INC. VS. CA
Facts:
Valenzuela Hardwood and Industrial Supply, Inc. entered into an agreement with
the defendant Seven Brothers (Shipping Corporation) whereby the latter
undertook to load on board its vessel M/V Seven Ambassador the former’s lauan
round logs numbering 940 at the port of Maconacon, Isabela for shipment to
Manila.
Plaintiff insured the logs against loss and/or damage with defendant South Sea
Surety and Insurance Co., Inc. for P2,000,000.00 and the latter issued its Marine
Cargo Insurance Policy No. 84/24229 for P2,000,000.00 on said date.
The vessel sank on 25 January 1984 resulting in the loss of the plaintiff’s insured
logs.
The South Sea Surety and Insurance Co., Inc. cancelled the insurance policy it
issued as of the date of the inception for non-payment of the premium due in
accordance with Section 77 of the Insurance Code. Plaintiff demanded from
defendant South Sea Surety and Insurance Co., Inc. the payment of the proceeds
of the policy but the latter denied liability under the policy.
Regional Trial Court: Both Sea Surety and Insurance Co., and Seven Brothers
Shipping Corporation are liable.
Court of Appeals: Only Sea Surety and Insurance Co., is liable. The Seven Brothers
is not liable since there is a stipulation in the charter party that the ship owner
would be exempted from liability in case of loss.
Issue/s: Whether or not the stipulation in the charter party executed between the
petitioner and the private respondent exempting the latter from liability for the
loss of petitioner’s logs is valid.
Ruling:
Yes, it is valid. It should be noted at the outset that there is no dispute between
the parties that the proximate cause of the sinking of M/V Seven Ambassadors
resulting in the loss of its cargo was the “snapping of the iron chains and the
subsequent rolling of the logs to the portside due to the negligence of the captain
in stowing and securing the logs on board the vessel and not due to fortuitous
event.” Likewise undisputed is the status of Private Respondent Seven Brothers as
a private carrier when it contracted to transport the cargo of Petitioner
Valenzuela. Even the latter admits this in its petition.
As adverted to earlier, it is undisputed that private respondent had acted as a
private carrier in transporting petitioner’s lauan logs. Thus, Article 1745 and other
Civil Code provisions on common carriers which were cited by petitioner may not
be applied unless expressly stipulated by the parties in their charter party. In a
contract of private carriage, the parties may validly stipulate that responsibility
for the cargo rests solely on the charterer, exempting the shipowner from liability
for loss of or damage to the cargo caused even by the negligence of the ship
captain.
Hence, the stringent provisions of the Civil Code on common carriers protecting
the general public cannot justifiably be applied to a ship transporting commercial
goods as a private carrier. Consequently, the public policy embodied therein is
not contravened by stipulations in a charter party that lessen or remove the
protection given by law in contracts involving common carriers.
COASTWISE LIGHTERAGE CORPORATION VS. COURT OF APPEALS
Facts:
Pag-asa Sales, Inc. entered into a contract to transport molasses from the
province of Negros to Manila with Coastwise, using the latter’s dumb barges. The
barges were towed in tandem by the tugboat MT Marica, which is likewise owned
by Coastwise.
One of the barges, “Coastwise 9,” struck an unknown sunken object. As a
consequence, the molasses at the cargo tanks were contaminated and rendered
unfit for the use it was intended. This prompted the consignee, Pagasa Sales, Inc.
to reject the shipment of molasses as a total loss.
Pag-asa Sales, Inc. filed a formal claim with the insurer of its lost cargo, herein
private respondent, Philippine General Insurance Company (PhilGen, for short)
and against the carrier, herein petitioner, Coastwise Lighterage.
Coastwise Lighterage denied the claim and it was PhilGen which paid the
consignee, Pag-asa Sales, Inc., the amount of P700,000.00 representing the value
of the damaged cargo of molasses. In turn, PhilGen then filed an action against
Coastwise Lighterage to recover the amount it paid to Pag-asa for the latter’s lost
cargo.
Issue/s:
1. Whether or not petitioner Coastwise was transformed into a private
carrier, by virtue of the contract of affreightment which it entered into
with the consignee, Pag-asa Sales, Inc..
2. Whether or not the insurer was subrogated into the rights of the
consignee against the carrier, upon payment by the insurer of the value
of the consignee’s goods lost while on board one of the carrier’s vessels.
Ruling:
1st Issue: Petitioner admits that the contract it entered into with the consignee
was one of affreightment. We agree. 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 and 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.
It follows then that the presumption of negligence that attaches to common
carriers, once the goods it transports are lost, destroyed or deteriorated, applies
to the petitioner.
Clearly, petitioner Coastwise Lighterage’s embarking on a voyage with an
unlicensed patron violates this rule. It 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. 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.
2nd Issue: Undoubtedly, upon payment by respondent insurer PhilGen of the
amount of P700,000.00 to Pag-asa Sales, Inc., the consignee of the cargo of
molasses totally damaged while being transported by petitioner Coastwise
Lighterage, the former was subrogated into all the rights which Pag-asa Sales, Inc.
may have had against the carrier, herein petitioner Coastwise Lighterage.
CRISOSTOMO VS. COURT OF APPEALS
Facts: Crisostomo 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” which includes 7 countries.
Petitioner was given a 5% discount on the amount, which included airfare, and
the booking fee was also waived because petitioner’s niece, Meriam Menor, was
respondent company’s ticketing manager.
Pursuant to said contract, Menor deliver petitioner’s travel documents and plane
tickets. Petitioner, in turn, gave Menor the full payment for the package tour.
Menor then told her to be at the Ninoy Aquino International Airport (NAIA) on
Saturday, two hours before her flight on board British Airways.
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
Hong Kong. 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”—which included England, Scotland and
Wales in its itinerary. For this tour package, petitioner was asked anew to pay
US$785.00 or P20,881.00 (at the then prevailing exchange rate of P26.60). She
gave respondent US$300 or P7,980.00 as partial payment and commenced the
trip in July 1991. Upon petitioner’s return from Europe, she demanded from
respondent the reimbursement of P61,421.70, representing the difference
between the sum she paid for “Jewels of Europe” and the amount she owed
respondent for the “British Pageant” tour. Despite several demands, respondent
company refused to reimburse the amount, contending that the same was non-
refundable. Petitioner was thus constrained to file a complaint against
respondent for breach of contract of carriage and damages.
Petitioner’s Contention: 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. She insisted that the “British Pageant” was merely a substitute for the
“Jewels of Europe” tour, such that the cost of the former should be properly set-
off against the sum paid for the latter.
Respondent’s Contention: Petitioner was informed of the correct departure date,
which was clearly and legibly printed on the plane ticket. “British Pageant” was
not a substitute for the package tour that petitioner missed. This tour was
independently procured by petitioner after realizing that she made a mistake in
missing her flight for “Jewels of Europe”.
Regional Trial Court: Respondent was negligent in erroneously advising petitioner
of her departure date through its employee, Menor, who was not presented as
witness to rebut petitioner’s testimony. However, petitioner should have verified
the exact date and time of departure by looking at her ticket and should have
simply not relied on Menor’s verbal representation. The trial court thus declared
that petitioner was guilty of contributory negligence and accordingly, deducted
10% from the amount being claimed as refund.

Court of Appeals: Both are guilty at fault. The petitioner is more negligent than
respondent 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. MR denied.

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